Mar 31, 2022
Your Directors take pleasure in presenting the 4th Integrated Report (prepared as per the framework set forth by the International Integrated Reporting Council) and the 39th Annual Accounts on the business and operations of Tata Steel Long Products Limited (''TSLP'' or ''Company''), along with the summary of the standalone financial statements for the year ended March 31, 2022.
A. Financial Results
(? crores) |
||
Particulars |
2021-22 |
2020-21 |
Revenue from operations |
6,801.63 |
4,749.87 |
Total expenditure before finance cost, depreciation |
5,624.08 |
3,651.45 |
Operating Profit |
1177.55 |
1,098.42 |
Add: Other income |
137.51 |
78.23 |
Profit before finance cost, depreciation, exceptional items and taxes |
1315.06 |
1,176.65 |
Less: Finance costs |
109.96 |
234.63 |
Profit before depreciation, exceptional items and taxes |
1205.10 |
942.02 |
Less: Depreciation and amortisation expenses |
319.58 |
327.19 |
Profit/(Loss) before exceptional items & tax |
885.52 |
614.83 |
Add/(Less): Exceptional Items |
(27.14) |
- |
Profit before taxes |
858.38 |
614.83 |
Less: Tax Expense |
228.51 |
42.86 |
(A) Net Profit/(Loss) for the Period |
629.87 |
571.97 |
Total Profit/(Loss) for the period attributable to: |
||
Owners of the Company |
629.87 |
571.97 |
Non-controlling interests |
- |
- |
(B) Total other comprehensive income |
(0.74) |
5.31 |
(C) Total comprehensive income for the period [A B] |
629.13 |
577.28 |
Retained Earnings: Balance brought forward from the previous year |
192.02 |
(379.95) |
Add: Profit for the period |
629.87 |
571.97 |
Add: Other movements within equity |
- |
- |
Balance |
821.89 |
192.02 |
Which the Directors have apportioned as under to:- |
||
(i) Dividend on Ordinary Shares |
22.55 |
- |
(ii) Tax on dividends |
- |
- |
Total Appropriations |
22.55 |
- |
Retained Earnings: Balance to be carried forward |
799.34 |
192.02 |
Note: There is no subsidiary of the Company as on the closing date of financial year 2021-22. Accordingly, financial result is prepared on standalone basis and not comparable with previous financial year on consolidated basis. |
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 the Dividend Distribution Policy (the ''Policy'').
The Policy is available on our website at https://www. tatasteellp.com/storage/2021/09/Dividend-Distribution-Policy_TSLP_Revised.pdf
For Financial Year 2021-22, the Board has recommended a dividend of ?12.50/- per equity share (previous year: ?5.00/- per equity share).
The Board has recommended dividend based on the parameters laid down in the Dividend Distribution Policy and dividend will be paid out of the profits for the year.
The dividend on Equity Shares is subject to the approval of the Shareholders at the Annual General Meeting (''AGM'') scheduled to be held on Tuesday, July 12, 2022, and will be paid on and from Saturday, July 16, 2022.
Based on the Equity Shares as on the date of this report, the dividend, if approved would result in a cash outflow of ?56.38 crores. The dividend on Equity Shares is 125% of the paid-up value of each share. The total dividend payout works out to 8.95% (Previous year: 3.94%) of the net profit of FY 2021-22.
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 Share Transfer Books of the Company will remain closed from Friday, July 1, 2022, to Tuesday, July 12, 2022 (both days inclusive) for the purpose of payment of dividend and AGM for the financial year ended March 31, 2022.
The Board of Directors has decided to retain the entire amount of profit, remaining after payment of dividend, for FY 2021-22 in the statement of profit and loss.
During the year under review, the Company has spent ?91.92 crores on capital projects; largely towards environment and sustenance projects.
The Company''s liquidity position is ?13,766.98 crores as on March 31, 2022, comprising of ?12,639.58 crores in cash and cash equivalent and balance in undrawn credit lines.
The Management Discussion and Analysis Report as required in terms of the SEBI Listing Regulations is annexed to this Report (Annexure 1).
In continuation with our commitment to stakeholders, in Financial Year 2017-18, we transitioned from compliance-based reporting to governance-based reporting by adopting the
Our 4th Integrated Report highlights the measures taken by the Company towards inorganic growth that contributes towards long-term sustainability and value creation, while embracing different skills, continuous innovation, sustainable growth and a better quality of life.
The second wave of COVID-19 pandemic struck like a storm in the very first quarter of FY22 throughout the country with record number of infections. While India was facing issue of limited medical oxygen availability due to high demand, steel plants played a crucial role in strengthening India''s fight against COVID by diverting industrial oxygen to healthcare centers. This led to a throttled production for the steel plants, but the company remained resilient and was able to achieve higher than planned sales enabled by scenario-based approach, advanced planning and exploring export option. Later from Q2 FY22, when demand picked up and oxygen availability improved, your Company was able to ramp up its production and achieved highest ever rolled product sales after acquisition of steel business of Usha Martin Limited. During FY22, your Company produced 684 KT of crude steel (6% growth y-o-y) and 672 KT of rolled products witnessing an increase of 26% on y-o-y basis. 839 KT of DRI was produced in FY22 registering a 5% y-o-y growth. Constant efforts of debottlenecking and increasing yield of steel making unit have reaped benefits. Rolled product deliveries stood at 646 KT, 22% y-o-y growth, enabled by market demand and robust customer approval pipelines built over last two years. Special steel sales mix increased to 75% in FY22 as against 60% in FY21 reaffirming company''s focus on value maximisation through product portfolio enrichment. DRI sales got limited to 594 KT because of the higher internal consumption by Gamharia unit.
While operational robustness was visible in the company''s performance in FY22, your company has also demonstrated its endeavor to exceed customer''s expectation through number of initiatives viz. i) Reduction in customer complaints to benchmark level; ii) Launch of customer service team for key customers to enhance engagement and provide quick resolution of their issues; and iii) Development of new products. Your Company has also put in-place effective strategies to create a constructive work culture that values and care for employees. In FY22, company rolled out policies like Jyotishmati program, WIN (Women Interactive Engagement) and RISE policy to promote diversity and inclusion. Corporate brand building also gained significant momentum in FY22 through improved presence and followers on social media coupled with digitalising the platform for customers and vendors. In addition, volunteerism is getting actively visualised across the company with enthused participation by employees and their families.
a. Acquisition of Neelachal Ispat Nigam Limited
During the year under review, your Company has been identified as the winner of the bidding process to acquire a 93.71% equity stake in the Neelachal Ispat Nigam Limited (''NINL'') in accordance with the process being run by Department of Disinvestment & Public Asset Management (DIPAM), Government of India. NINL represents a critical and strategic acquisition for your Company with around one million tons per annum of steelmaking capacity, 2500 acres of land for future growth and iron ore reserves of around 100 million tonnes. After completion of the acquisition process, NINL will become the core of your Company''s growth aspirations, as it is intended to not only restart the one-million ton steel plant expeditiously but also begin work immediately to build a 4.5 million tonnes per annum state of the art long products complex in the next few years, and further expand it to 10 million tonnes per annum by around 2030. As part of the larger Tata Steel ecosystem, the location of NINL complex presents opportunities to leverage synergies with existing infrastructure, bring to bear the best operating practices and expertise in mining as well as project management to create significant value. The Company has a clear strategy to build its business across long products, including branded products, downstream solutions and specialty high-end products. The company will benefit from the significant growth in these areas as India builds greater infrastructure and industrialises at pace through the Atmanirbhar Bharat Program of the Government. This investment also reflects the Tata Group''s commitment to the state of Odisha and the communities around our operations. The total consideration of ^12,100 Crore reflects the enterprise value (including all recorded liabilities) as part of the acquisition of 93.71% equity stake in NINL. The transaction is expected to be closed within the first quarter of FY 2022-23 as per the process and timelines announced by DIPAM, Government of India.
Ministry of Coal ("MoC"), in earlier years, issued notices to the Company for invocation of bank guarantee of ''32.50 crores submitted towards performance of conditions for allocation of Radhikapur (East) Coal Block, which was contested by the Company in the Hon''ble High Court of Delhi. Further, in accordance with the directives from the Hon''ble High Court of Delhi, the Company had extended the validity of the bank guarantee up to April 15, 2021 and MoC vide its letter dated August 10, 2021 intimated the Company that based on the recommendations of the Inter-Ministerial Group, it has decided to release the bank guarantee. The aforesaid bank guarantee was returned back during the year ended March 31, 2022, and accordingly, there is no financial impact on the Company in relation to the aforesaid bank guarantee matter.
The Inter-Ministerial Group (IMG), upon hearing the case noted that the delay in exercising performance obligations was not attributable to your Company. IMG also noted that your Company could not start production for the reasons beyond its control and as the BG was linked only with coal productions, they recommended for return of the original BG to the Company, being the prior allottee of the Radhikapur (East) Coal Block.
In view of the aforesaid IMG decision / recommendations, your Company has been released from all liabilities on account of purported delay in achieving the milestones prescribed in the Allocation Letter dated February 7, 2006.
Pursuant to the judgment of Hon''ble Supreme Court of India, the Government of India had promulgated the Coal Mines (Special Provision) Rules, 2014 and subsequent amendments ("Rules"), for allocation of the coal mines through auction and matters related thereto. In terms of the said Rules, the prior allottee (i. e. the Company) shall be compensated for the expenses incurred towards land and mine infrastructure. As part of 11th tranche of auction under The Coal Mines Act 2015, the Ministry of Coal (MoC) has carried out an auction of the coal block in November 2020 and EMIL Mines and Mineral Resources Limited (EMMRL) was declared as the successful bidder by the Nominated Authority on December 24, 2020. The MoC issued the vesting order dated March 3, 2021 in favour of EMMRL and directed the Company to hand over all the rights/ licenses/ approvals and documents to EMMRL. The Company has handed over the documents in respect of title deeds of land and possession of buildings and other required details on April 6, 2021 to EMMRL in compliance with the vesting order. The Company is pursuing its claim for compensation against the investment made towards land & mine Infrastructure with the appropriate authorities like MoC, Odisha Industrial Infrastructure Development Corporation (''IDCO'') and Controller of Coal etc. Vide its letters dated September 7, 2021 & December 6, 2021, IDCO has recommended for payment of cost of land along with interest thereon @12% till the date of allotment of the coal block to EMMRL. The Nominated Authority, MoC has conducted a joint meeting with the Company, IDCO & EMMRL on March 4, 2022, to address the issue of compensation payable to prior allotee pertaining to land w.r.t. Radhikapur East Coal Mine. The Company is awaiting decision from MoC on the determination of the just, fair & adequate compensation in respect of the aforesaid amounts incurred by the Company. Based on assessment of the matter by the Company including evidence supporting the expenditure and claim and an external legal opinion obtained by the Company in respect of the recoverability of the amount, no provision is considered necessary.
The Board at its meeting held on November 13, 2020, had approved the following schemes of amalgamation:-
1. Scheme of Amalgamation of Tata Metaliks Limited (''TML'') into and with Tata Steel Long Products Limited (''TSLP''); and
2. Scheme of Amalgamation of Indian Steel and Wire Products Limited (''ISWP'') into and with TSLP.
Subsequent to the Board''s approval, the Company had filed the respective schemes of amalgamation with the Stock Exchanges, viz. BSE Limited and National Stock Exchange of India Limited on November 14, 2020.
In respect of the scheme of amalgamation of ISWP into the Company, the Company has received letters from Stock Exchanges stating that the SEBI has returned the Scheme observing non-compliance with the securities law provisions.
In respect of the scheme of amalgamation of TML into the Company, the Stock Exchanges have requested the Company for additional information on the scheme and the Company is in the process of appropriately responding to the same.
During the year under review, the Company has increased the Authorised Share Capital of the Company from the existing ''2,075 crores divided into ''75,00,00,000 (Rupees Seventy Five crores only) equity share capital divided into 7,50,00,000 (Seven crores Fifty Lakh) Equity Shares of ''10 each, and ''20,00,00,00,000 (Rupees Two Thousand crores only) preference share capital divided into 20,00,00,000 (Twenty crores) Non-Convertible Redeemable Preference Shares of ''100 each to ''15,375 crores (Rupees Fifteen Thousand Three Hundred and Seventy-five crores) comprising:
⢠''75,00,00,000 (Rupees Seventy-Five crores only) equity share capital divided into 7,50,00,000 (Seven crores Fifty lakhs) Equity Shares of ''10 each; and
⢠''1,53,00,00,00,000 (Rupees Fifteen Thousand Three Hundred crores only) preference share capital divided into 1,53,00,00,000 (One Hundred and Fifty-three crores) Non-Convertible Redeemable Preference Shares of ''100 each; by creation of 1,33,00,00,000 (One Hundred and Thirty-three crores) Non-Convertible Redeemable Preference Shares of ''100 each.
Accordingly, the capital clause in the Memorandum and Articles of Association of the Company was suitably altered.
During the year under review, your Company has issued and allotted 1,27,00,00,000 (One Hundred Twenty Seven Crore) Non-Convertible Redeemable Preference Shares ("NCRPS") of face value of ''100/- each, aggregating ''12,700 crores, carrying a dividend rate of 0.01% p.a., to the Promoter i.e. Tata Steel Limited, on a private placement basis.
There was no other change in the capital structure of the Company.
The Company enjoys a sound reputation for its prudent financial management and its ability to meet financial obligations. The details of Credit Rating forms part of the Corporate Governance Report.
We can define corporate sustainability as the strategy whereby a business delivers its goods and services in a manner that is both environmentally sustainable and supports its economic growth. Apart from this, Corporate sustainability also aims to create long-term stakeholder value through the implementation of a business strategy that focuses on the ethical, social, environmental, cultural, and economic dimensions of doing business. The strategies created are intended to foster longevity, transparency, and proper employee development within business organisations.
The most broadly accepted criterion for corporate sustainability constitutes a firm''s efficient use of natural capital. This eco-efficiency is usually calculated as the economic value added by a firm in relation to its aggregated ecological impact.
Eco-efficiency coupled with socio-efficiency are concerned primarily with increasing economic sustainability. In this process they instrumentalise both natural and social capital aiming to benefit from win-win situations. Some point towards eco-effectiveness, socio-effectiveness, sufficiency, and eco-equity as four criteria that need to be met if sustainable development is to be reached.
Sustainability is no longer a choice but a business imperative for sustenance and growth. Accordingly, as part of the Company''s 2030 strategy, we have defined Sustainability Leadership as one of the strategic objectives. We need to adopt a two-pronged approach to realise our sustainability target. One with strategic intervention to adopt benchmark technology for our facilities to reduce carbon footprint and the second one for cultural changes amongst all our stakeholders to embrace circularity concept i.e. "closing the loop" by focusing on full life
cycle resource productivity. Underpinning this approach, the Company''s strategies are on low carbon transition, reducing dependence on freshwater consumption, maximising value from waste and exploring opportunities in the circular economy, enhancing biodiversity in the areas where the Company has its operations, building a sustainable and resilient supply chain and customer focused product stewardship.
5S and VWM (Visual Workplace Management) are new initiatives taken this year to improve housekeeping and safety at workplace. TPM circles with defined responsibilities are formed with defined goals to improve workplace. Self-assessment and cross functional audits involving experts from other group companies are conducted regularly to sustain and improve shop floor ambience and safety. Conducting business responsibly is a cornerstone of the Company''s strategy and culture. The most important aspect of conducting business is to ensure the total safety across all corners of operations. In spite of taking all requisite steps towards safety, it is with deep regret that we report one fatality that took place at Vijay-II Iron Ore Mines. Keeping in mind the incident, the Company has adopted a holistic approach for its sustainability framework by giving focused impetus in areas of Safety, Health and Environment ("SHE"). Establishing high safety standards and enhancing safety performance at work are among the key priorities of the organisation. Efforts initiated during earlier years on capability building through structured trainings to evolve a mature safety culture is sustained. The Felt Leadership safety training for the employees continues to progress steadily to sensitise and build leadership competence on safety. Other strategies such as demonstration of visible leadership on the shop-floor by identification & elimination of Commonly Accepted Unsafe Practices (E-CAUP) by Senior Leaders; Identification & correction of Fatality Potential unsafe conditions (Safety Observations) by Middle level leaders; Identification & stoppage of fatality & serious injury potential unsafe acts (Site Severity Audits) by front line leaders were sustained to bring a holistic approach in field of safety management. Incident reporting and analysis was made more robust.
We have always believed that protecting the environment in which we operate & live are among our highest priorities. The Company has established an Environmental policy, Climate change policy and Energy policy and key tenants of the policies always guide in identifying and successfully managing the Environmental issues, energy usages, reduction in greenhouse gases ("GHG") and water conservation. Over the years we are continuously focusing on lowering the dust emission and other gaseous pollution from our industry by adopting the state-of-the-art-technologies. The Electro-Static Precipitators (ESP) of captive power plant and sinter plant were recently
upgraded to ensure emission much below the standards set by the government.
Fugitive emission is a major challenge at Gamharia plant. To address this concern an engineering study was initiated through a competent agency in syndication with Tata Steel Limited - Jamshedpur Plant ("TSJ"). Study identified major gaps in existing environmental control systems and additional systems/ major upgradation of existing Pollution Control Systems was proposed to reduce PM10 level within acceptable levels. Around 40 projects were identified covering all departments. Estimated capex requirement for executing the projects is ?127.78 crores. Board approval for 11 projects under Phase I at an estimated CAPEX of ?42.78 Crore is obtained and are under implementation.
For reduction in water consumption, Regular audits and monitoring are done to identify gaps and required engineering solutions are provided to bridge the gaps. Maximising the use of treated effluent water from Effluent Treatment Plant ("ETP") and Sewage Treatment Plant ("STP") was a major de bottle neck project which significantly reduced the freshwater consumption. Apart from this, the replacement of damaged water-cooled duct and combustion chamber of SMS also contributed significantly to achieve the goal in reducing fresh-water consumption.
Your Company continues to adopt several technologies to lower down the CO2 emission and have conceptualised some other best practices for adoption in its steel manufacturing, such as utilisation of waste heat for power generation and use of less carbon intensive substances in steel making, use of char for power generation, scrap charge at SMS etc. The Company believes that new technologies, will be fundamental means for industries to reduce their carbon footprints exponentially to achieve the global targets of climate change and has aligned its goals accordingly. LTP projects such as replacement of furnace oil with NG (natural gas) in mills, reducing dependence on coal-based power generation etc. are actively pursued.
I n one of new initiatives, Life Cycle Assessment (LCA) for finished product was initiated this year. Based on international assessment methodologies, LCA study of finished product was done to evaluate the impact on major environment indices vis. GHG (green-house gas) emission, Acidification and Eutrophication potential, energy and fresh-water consumption.
Corporate Social Responsibility at TSLP derives inspiration from its CSR vision "Enriching the lives of people in our operating locations, to build a happy community, through participative and sustainable interventions". The company
has always demonstrated its consciousness towards societal care through several programs and projects over the years, with an objective to build an inclusive & harmonious neighbourhood. To provide guidelines in fulfilment of its CSR objective, a CSR Policy has been implemented, which is available on the company website at https://www.tatasteellp.com/storage/2021/12/CSR-Policy-for-circulation.pdf.
During the year, the company has spent ?2.99 crores, primarily for addressing the needs of communities located in proximity of its operating locations in Gamharia, Joda & Vijay II Iron-ore Mines. Company''s CSR strategic interventions have been divided into 5 primary dimensions-Education, Health & Sanitation, Livelihood, Youth Engagement and Essential Services, besides a few signature projects. Company''s CSR initiatives are also aligned with the framework on Affirmative Action (AA) prepared as per the Tata Group guidelines. All the programs are implemented through a set of short and long-term projects and activities and the effectiveness of core programs have also been subjected to an impact assessment study, in spite of not having mandatory applicability at locations where the interventions have matured. Over the past 3 years, the company has been successful in implementing several CSR initiatives, which have impacted the lives of 51,000 people and have also won recognitions in the areas of Social Excellence.
The Annual Report on CSR activities, in terms of Section 135 of the Companies Act, 2013 (''Act'') and the Rules framed thereunder, is annexed to this report (Annexure 2).
At TSLP, we ensure that we evolve and follow the corporate governance guidelines and best practices diligently, not just to boost long-term shareholder value, but also to respect rights of the minority. We consider it our inherent responsibility to disclose timely and accurate information regarding the operations and performance, leadership and governance of the Company.
Pursuant to the SEBI Listing Regulations, the Corporate Governance Report along with the Certificate from a Practicing Company Secretary, certifying compliance with conditions of Corporate Governance, is annexed to this Report (Annexure 3).
The Board met ten 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 the day before or on the day of the Board meeting, or whenever the need arises for transacting business. Details of composition of the Board and its
Committees as well as details of Board and Committee meetings held during the year under review and Directors attending the same are given in the Corporate Governance Report forming part of this Report.
The Nomination and Remuneration Committee (''NRC'') engages with the Board to determine 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. Thereafter, the NRC recommends to the Board the selection of new Directors
Characteristics expected of all Directors include independence, integrity, high personal and professional ethics, sound business judgement, ability to participate constructively in deliberations, and willingness to exercise authority in a collective manner. The Company has in place a Policy on Appointment & Removal of Directors (''Policy'').
The salient features of the Policy are:
⢠It acts as a guideline for matters relating to appointment and re-appointment 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. During the year under review, there has been no change to the Policy. The Policy is available on the website of the Company at https://www.tatasteellp.com/storage/2021/09/ Policy-on-appointment-and-removal-of-Directors. pdf
Familiarisation Programme for Directors
As a practice, all new Directors (including Independent Directors) inducted to the Board go through a structured orientation programme. Presentations are made by the Senior Management giving an overview of the operations, to familiarise 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. Visits to plant and mining locations are organised for
the new Directors to enable them to understand the business better.
During the year under review, no new Independent Directors were inducted to the Board. Details of orientation given to the existing independent directors in the areas of strategy, operations & governance, safety, health and environment, and industry trends, are available on the website of the Company at https://www.tatasteellp. com/storage/2022/06/Familiarization-Independent-Directors-2021-22.pdf
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 sought the feedback of Directors on various parameters including:
⢠Degree of fulfillment of key responsibilities towards 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 above criteria are based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.
The Chairman of the Board had one-on-one meetings with the Independent Directors (''IDs'') and the Chairman of NRC had one-on-one meetings with each Executive and Non-Executive, Non-Independent Directors. These meetings were intended to obtain Directors'' inputs on effectiveness of the Board/ Committee processes.
I n a separate meeting of IDs, the performance of the Non-Independent Directors, the Board as a whole and the Chairman of the Company was evaluated, taking into account the views of Executive Director and other NonExecutive Directors.
The Nomination and Remuneration Committee reviewed the performance of the individual directors and the Board as a whole.
I n the meeting of the independent directors followed by the meetings of Nomination and Remuneration Committee and the Board, the performance of the Board, its committees, and individual directors was discussed.
The evaluation process endorsed the Board Members'' confidence in the ethical standards of the Company, the resilience of the Board and the Management in navigating the Company during challenging times, cohesiveness amongst the Board Members, constructive relationship between the Board and the Management and the openness of the Management in sharing strategic information to enable Board Members to discharge their responsibilities and fiduciary duties.
Based on the recommendations of NRC, the Board has approved the Remuneration Policy for Directors, Key Managerial Personnel (''KMPs''), and all other employees of the Company. As part of the policy, the Company strives to ensure that:
⢠The level and composition of remuneration is reasonable and sufficient to attract, retain, and motivate Directors of the quality required to run the Company successfully;
⢠Relationship between remuneration and performance is clear and meets appropriate performance benchmarks; and
⢠Remuneration to Directors, KMPs, and Senior Management involves a balance between fixed and incentive pay, reflecting short, medium and long-term performance objectives appropriate to the working of the Company and its goals.
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 Non-Executive 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 rest of the employees.
⢠It lays down the parameters for remuneration payable to Director for services rendered in other capacity.
During the year under review, there has been no change to the Policy. The Policy is available on the website of the Company at https://www.tatasteellp.com/ storage/2021/09/Remuneration-Policy-TSLP.pdf
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 (Annexure 4).
In terms of the provisions of Section 197(12) of the Act, read with Rules 5(2) and 5(3) 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 as set out in the said Rules forms part of this report.
Directors
During the year under review, there was no change in the Board of Directors of the Company.
In terms of the provisions of the Act, Mr. T. V. Narendran (DIN: 03083605), Director of the Company, retires at the ensuing AGM and is eligible for re-appointment. The necessary resolution for re-appointment of Mr. Narendran forms part of the Notice convening the ensuing AGM scheduled to be held on Tuesday, July 12, 2022.
The profile and particulars of experience, attributes and skills that qualify Mr. Narendran for Board membership, are disclosed in the said Notice.
The Company has received necessary declaration from each Independent Director 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 Regulations 16(1)(b) of the SEBI Listing Regulations.
In the opinion of the Board, there has been no change in the circumstances which may affect their status as independent directors 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 and applicable rules thereunder) of all Independent Directors 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, Independent Directors of the Company have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.
I n terms of Section 203 of the Act, the Key Managerial Personnel of the Company as on the date of this report are as follows:-
1. Mr. Ashish Anupam - Managing Director;
2. Mr. Sanjay Kumar Shrivastav - Joint Chief Financial Officer; and
3. Mr. Sankar Bhattacharya - Company Secretary and Compliance Officer.
During the year under review, Mr. S.K. Mishra superannuated and retired as the Chief Financial Officer of the Company effective June 1, 2021. The Board placed and recorded its appreciation for his valuable services rendered during his tenure of association with the Company.
Apart from the above, no other changes took place in the key managerial personnel of the Company since last reporting.
The Audit Committee is duly constituted as per the provisions of the Act, applicable Rules framed thereunder read with the SEBI Listing Regulations. The Committee has adopted a Charter for its functioning. The primary objective of the Committee is to monitor and supervise the Management''s financial reporting process to ensure accurate and timely disclosures with highest levels of transparency, integrity and quality of financial reporting.
The Audit Committee comprises of:-
1. Mr. Srikumar Menon (Chairman)-Independent;
2. Mr. Shashi Kant Maudgal-Independent;
3. Ms. Neeta Karmakar-Independent; and
4. Mr. Koushik Chatterjee - Non-Independent.
During the year under review, there was no instance where the recommendations of the Audit Committee was not accepted by the Board.
The Company''s internal control systems commensurate with the nature of its business, the size, and complexity of its operations and such internal financial controls with reference to the Financial Statements are adequate. Details on the Internal Financial Controls of the Company forms part of Management Discussion and Analysis forming part of this Integrated Report and Annual Accounts 2021-22.
The Company has a Board-level Risk Management Committee of Independent Directors and executive members of Tata Steel with diverse set of expertise. The Committee consists of the board members to oversee the risk management policy, to provide guidelines for implementing the ERM framework and also reviews the key risks and mitigation plan of the Company. The Audit Committee 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. Further details have been covered in the Management Discussion and Analysis Report, which forms part of this report.
The Company has a well-defined Vigil Mechanism policy in place that provides 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 availed 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, may approach the Ethics Counsellor to make any such protected disclosure.
During the year under review, the Company received 24 whistle blower complaints and 4 complaints were pending to be investigated and resolved as at the end of the year. The Vigil Mechanism includes policies viz. Whistle Blower Policy, Gifts Policy, Anti Bribery, Anti-Corruption Policy and Anti Money laundering Policy, as adopted by the Company, which are available on the website of the Company at https://www.tatasteellp.com/corporate-policies/
Disclosure as per the 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 thereunder.
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 no complaints of sexual harassment.
I n line with the requirements of the Act and the SEBI Listing Regulations, the Company has formulated a Policy on Related Party Transactions (''RPTs'') and the same can be accessed on the Company''s website at https://www. tatasteellp.com/storage/2022/04/Policy-on-Related-Party-Transactions-1.pdf
During the year under review, all related party transactions entered into by the Company, were approved by the Audit Committee and were at arm''s length and in the ordinary course of business. Prior omnibus approval is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and on an arm''s length basis. The Company did not have any contracts or arrangements with related parties in terms of Section 188(1) of the Act. There were material related party transactions entered into by the Company during the year under review.
The disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is annexed to this report (Annexure - 5)
Details of related party transactions entered into by the Company, in terms of IND AS-24 have been disclosed in the notes to the standalone financial statements forming part of this Integrated Report.
Based on the framework of internal financial controls established and maintained by the Company, work performed by the Internal, Statutory, Cost and Secretarial Auditors and external agencies including audit of internal financial controls over financial reporting by the statutory 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 2021-22.
Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability confirms that:
a) i n the preparation of the annual accounts, the applicable accounting standards have been followed and that there were no material departures;
b) 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 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 the Companies Act, 2013 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 to be followed by the Company and that such internal financial controls are adequate and are operating effectively;
f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations, the Business Responsibility Report (BRR) on initiatives taken from an environmental, social and governance perspective, is annexed to this report (Annexure 6). The said report is also available on the Company''s website at https://www.tatasteellp.com/ performance-corporategovernance/
The Company had a wholly owned subsidiary i.e. TSIL Energy Limited. The shareholders of TSIL Energy Limited have approved Voluntary Liquidation of the Company on September 25, 2021. The liquidation application is currently pending before the NCLT, Cuttack Bench for approval. As there is no subsidiary as on the date of this report, no separate reporting is made under Form AOC-1.
There is no associate or joint venture company as defined under the Act.
Statutory Auditors
Pursuant to the provisions of Section 139 of the Act, read with Companies (Audit and Auditors) Rules, 2014, as amended from time to time, Messrs. Price Waterhouse & Co. Chartered Accountants LLP (Firm Registration Number: 304026E / E300009) (''PWC''), were appointed as statutory auditors from the conclusion of the thirty-fourth Annual General Meeting ("AGM") held on August 4, 2017 for a period of 5 years commencing from the conclusion of the thirty-fourth AGM held on August 4, 2017 until the conclusion of the thirty-ninth AGM of the Company to be held in the year 2022. In terms of the provisions of the Act, 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 PWC as statutory auditors of the Company expires at the conclusion of the 39th AGM of the Company scheduled to be held on July 12, 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 PWC as statutory auditors of the Company for a second term of five years to hold office from the conclusion of the 39th AGM to be held on July 12, 2022 through the conclusion of the 44th AGM of the Company to be held in the year 2027.
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.
In terms of Section 148 of the Act, the Company is required to maintain cost records and have the audit of its cost records conducted by a Cost Accountant. Cost records are prepared and maintained by the Company as required under Section 148(1) of the Act.
The Board of Directors has, on the recommendation of Audit Committee, has appointed Messrs. Shome & Banerjee, Cost Accountants, (Firm Registration Number: 000001) as Cost Auditor to audit the cost statements of the Company for the 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.
I n accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, as amended, the Board, based on the recommendation of the Audit Committee, has approved an increased remuneration to ?6.60 lakhs plus applicable taxes and reimbursement of out-of-pocket expenses payable to the Cost Auditors for conducting cost audit of the Company for FY 2022-23. The same is placed for ratification of Members and forms part of the Notice of the AGM.
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.
The Board had appointed Messrs. S. M. Gupta & Co., (Registration no. P1993WB046600) Practicing Company Secretaries, as the Secretarial Auditor to conduct the Secretarial Audit of the Company for FY 2021-22 and their report is annexed to this report (Annexure 7). There are no qualifications, observations, adverse remark or disclaimer in the said report.
The Board has appointed Mr. P.V. Subramaniam, a Company Secretary in Whole-time Practice (CP No.2077 / ACS 4585) as the Secretarial Auditor to conduct the Secretarial Audit of the Company for FY 2022-23.
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.tatasteellp.com/extracts-of-annual-return/
There have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company''s future operations. However, Members'' attention is drawn to the statement on contingent liabilities, commitments in the notes forming part of the Financial Statements.
Particulars of loans, guarantees given or investments made during the year under review in accordance with Section 186 of the Act is annexed to this report (Annexure 8).
Details of the energy conservation, technology absorption and foreign exchange earnings and outgo are annexed to this report (Annexure 9).
During the year under review, the Company has not accepted any deposits from public in terms of the Act. Further, no amount on account of principal or interest on deposits from public was outstanding 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.
The Directors regret the loss of life due to COVID-19 pandemic and are deeply grateful and have immense respect for every person who risked their life and safety to fight this pandemic. We thank our customers, vendors, dealers, investors, business associates and bankers for their continued support during the year. We place on record our appreciation of the contribution made by employees at all levels. Our resilience to meet challenges was made possible by their hard work, solidarity, co-operation and support.
We thank the Government of India, the State Governments and other regulatory authorities and government agencies for their support and look forward to their continued support in the future.
On behalf of the Board of Directors
Sd/-
T. V. Narendran
Kolkata Chairman
April 19, 2022 (DIN: 03083605)
Mar 31, 2019
Dear Members,
The Directors take pleasure in presenting the Integrated Report and Annual Accounts of the Company for the financial year ended March 31, 2019.
FINANCIAL RESULTS
Standalone |
Consolidated |
|||
Particulars |
FY 2018-19 FY 2017-18 |
FY 2018-19 |
FY 2017-18 |
|
(Rs. lakhs) |
(Rs. lakhs) |
(Rs. lakhs) |
(Rs. lakhs) |
|
(i) Sales and other income |
1,04,972 |
85,966 |
1,04,978 |
85,971 |
(ii) Profit before interest, depreciation and taxes |
20,237 |
22,574 |
20,242 |
22,576 |
Less: Interest |
302 |
325 |
302 |
325 |
Profit /(loss) before depreciation and taxes |
19,935 |
22,249 |
19,940 |
22,251 |
(iii) Less: Depreciation and amortisation expenses |
1,158 |
1,230 |
1,158 |
1,230 |
(iv) Profit Before Taxes |
18,777 |
21,018 |
18,782 |
21,021 |
(v) Tax Expense |
6,343 |
6,933 |
6,343 |
6,933 |
(vi) Profit after tax |
12,433 |
14,086 |
12,439 |
14,088 |
OPERATIONS Sponge Iron
During the year (FYâ19) the kilns made a record production of 4,36,045 MT (at 112 % of designed capacity) which is higher by 5% as compared to 4,17,094 MT of DRI production during the previous year (FYâ18). During the year, all three kilns could surpass their previous records and achieve the best ever performance level. The daily average production rate during the year was 1,323 MT/day.
The sale of sponge iron was 4,37,331 MT which is higher by 6% as against the sale of 4,13,506 MT during previous year. The product dispatch through containerised rakes improved further to meet the customer requirement and contain cost.
Power
During the year, the total generation of power was 199.78 MKWH as compared to 199.24 MKWH during the previous year which is an increase of 0.27 % and export was 143.47 MKWH as compared to 143.63 MKWH during FYâ18 which has decreased by 0.11 %.
MARKET
During FYâ19 it was anticipated that steel industry would grow at 9% and similar growth was also anticipated in domestic steel consumption of bars & rods. Steel and cement industry had sustained growth trajectory because of growth in infrastructure and construction sector with a boosted Gross Value Added (âGVAâ) growth rate of 9.2% in comparison to last year. Manufacturing industrial production index during April, 2018 - January, 2019 was 4.4%.
Demand of long product remained subdued in later part of the financial year due to crisis in Non-Banking Financial Company (âNBFCâ) and real estate sector, inventory of unsold properties has increased resulting in drop of new launches. This has resulted in poor offtake of Thermo Mechanical Treatment (âTMTâ) bars.
It is anticipated that the markets are going to recover in FYâ20, as Government spend on infrastructure and construction sectors will continue to increase.
UPDATE ON RADHIKAPUR COAL BLOCK
In the month of November 2012, Ministry of Coal (âMoCâ) issued notices to the Company for invocation of bank guarantee of Rs.3,250 lakhs submitted towards performance of conditions for allocation of coal block against which the Company had filed a writ petition in the Honâble High Court of Delhi, which directed the Company to keep the bank guarantee valid till November 30, 2015 by which date the MoC was directed to take decision. Meanwhile, the bank guarantee expired and had not been renewed, since no communication had been received from MoC. Subsequently, MoC issued a notice dated December 28, 2015, stating that the bank guarantee be invoked and the aforesaid amount be deposited. Consequent to MoCâs notice, the Company has moved to the Honâble High Court of Delhi, where the matter is pending adjudication. The Company has been advised and has obtained a legal opinion that as the original allocation has been declared illegal and cancelled by the Honâble Supreme Court, the bank guarantee pertaining to such allocation (which is non-est and void ab initio) shall consequently be deemed to be invalid and void ab initio. Pending finalisation of the matter, the amount continues to be disclosed as a contingent liability.
During pendency of the aforesaid matters in Honâble High Court of Delhi, the Honâble Supreme Court of India vide its order dated September 24, 2014 had cancelled allocation of 214 coal blocks including the Radhikapur (East) Coal Block which was allotted to the Company on February 07, 2006. The amount incurred on the Radhikapur (East) Coal Block upto March 31, 2019 aggregates to Rs.18,040.96 lakhs (March 31, 2018: Rs.18,040.96 lakhs).
Pursuant to the judgment of Honâble Supreme Court of India, the Government of India had promulgated Coal Mines (Special Provision) Rules, 2014 (âRulesâ) for allocation of the coal mines through auction and matters related thereto. In terms of the said Rules, the successful bidder will be called upon to pay to the prior allocattee the expenses incurred by the prior allocattee towards land and mine infrastructure. Pursuant to the judgement dated March 09, 2017 of the Honâble High Court of Delhi in W.P (c) 973/2015, the directives of MoC vide its letter dated February 01, 2018 and as per the details prescribed by the Nominated Authority, the Company has furnished the required statement of expenses and other details in the prescribed format on February 22, 2018. Relying on the legal position and legal opinion obtained by the Company, in respect of the recoverability of the amount, no provision is considered necessary.
DIVIDEND
The Board of Directorsâ of the Company has recommended a dividend of Rs.12.50 per share (i.e. 125 %) on 1,54,00,000 equity shares of Rs.10 each for the financial year ended March 31, 2019, subject to the approval of the shareholders at the ensuing Annual General Meeting. The total outgo on account of dividend (ex-taxes) will be Rs.1,925/lakhs, resulting in a payout of 15.48 % of the profit after tax of the Company.
The Register of Members and Share Transfer Books of the Company will be closed from Monday, July 08, 2019 to Monday, July 15, 2019 (both days inclusive) for the purpose of Annual General Meeting and dividend for the financial year 2018-19.
TRANSFER TO RESERVES
The Directors do not propose to transfer any amount to the general reserve.
CHANGES IN SHARE CAPITAL
Authorised Share Capital
During the year, your Company has increased its authorised share capital from 2,500 lakhs to 2,07,500 lakhs comprising of Equity Share Capital of Rs.7,500 lakhs and Preference Share Capital of Rs.2,00,000 lakhs.
Other than stated above, there was no change in the share capital of the Company during the financial year.
CREDIT RATING
Your Company enjoys a sound reputation for its prudent financial management and its ability to meet financial obligations. The details of Credit Rating forms part of the Corporate Governance Report.
INTEGRATED REPORT
Your Company has transitioned from compliance based reporting to governance based reporting and adopted the framework developed by the International Integrated Reporting Council.
In continuation with our efforts towards enhancing stakeholder value, we are happy to present to you our first Integrated Report which endeavours to articulate the measures undertaken by the Company.
SUBSIDIARY COMPANY
Your Company has a wholly owned Subsidiary i.e. âTSIL Energy Limitedâ There is no associate or joint venture company as defined under the Companies Act, 2013.
Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of TSIL Energy Limited in Form AOC-1 is annexed as an Annexure A.
Pursuant to the provisions of Section 136 of the Companies Act, 2013, the financial statements of the Company, consolidated financial statements along with the relevant documents and separate audited accounts of TSIL Energy Limited are available on the website of the Company at www.tatasponge.com.
INTERNAL PROCESS & FINANCIAL CONTROL
Improvement in the business processes and systems across all functions is a continuous process, in line with the Tata Business Excellence Model that the Company has adopted. The Company continues to maintain Integrated Management System (IMS) comprising of Quality Management System (ISO: 9001), Environment Management System (ISO: 14001) and Occupational Health, Safety & Accountability Management System (ISO: 18001).
The Company has an internal control system commensurate with the size, scale and complexity of its operations. The scope of authority of the Internal Audit function is defined in the Internal Audit Charter. The Companyâs internal controls are tested for adequacy and effectiveness by the Internal Auditor and Statutory Auditors of the Company on a regular basis.
LISTING FEES
The Annual Listing Fee for the year 2019-20 has been paid to the Stock Exchanges where the Companyâs shares are listed.
CORPORATE SUSTAINABILITY
Our commitment to sustainability is anchored firmly in Tata groupâs ethos and values, which have been revitalised with a concerted focus on the customer success, trust, passion, change and performance. The balance between economic success, environmental protection and social responsibility has been an integral part of our corporate culture for years now.
At Tata Sponge, sustainability also means creating distinct values for all its stakeholdersâ customers, shareholders, employees, suppliers and community in a balanced manner. This is apparent from the high perceptional scores given by the stakeholders, year-on-year, in the feedback surveys conducted by the Company. Over the years, the Company has effectively focused on the key sustainability drivers and aspires to enhance them in future.
The concept of inclusive growth through Affirmative Action (AA) had been adopted by the Company in the past. Further efforts have been made by the Company during the year to strengthen the actions.
CORPORATE SOCIAL RESPONSIBILITY (âCSRâ)
The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure B of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which is a part of this report. The CSR policy is available on the website of the Company at www.tatasponge.com. During the year, the Company has spent Rs.236.25 lakhs on CSR activities.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has a vigil mechanism by way of internal reviews and a third party helpline, escalating system of ethical concerns etc.
The Company also has a âWhistle Blower Policyâ; which is available on the website of the Company, namely www.tatasponge.com.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACES
The Company has zero tolerance for sexual harassment at workplace and 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 thereunder.
Further, the Company has Internal Complaint Committees for various locations of the Company in compliance with the above mentioned Act and Rules. During the financial year 2018-19, no complaint was received by the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
As required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, particulars regarding conservation of energy, technology absorption, foreign exchange earnings and outgo are annexed to this report as Annexure C.
SAFETY & ENVIRONMENT
The Company is committed at providing a safe and healthy working environment and achieving an injury and illness free work place.
In recognition of Companyâs best practices in Safety, Health and Environment, the Company emerged as a winner at the âCll-best practices in health, safety and Environmentâ and got the prestigious âKalinga Safety Awardâ for its contribution towards achieving and maintaining the best safety standards and practices. The Company has also received â5-star ratingâ from State Pollution Control Board for achieving and maintaining the best pollution control standards.
Over the years, the Company has been setting benchmarks in its industry vertical in achieving 100% compliance and getting all the clearances e.g. Consent to Establish and Consent to Operate for enhancement in production from 4,25,000 TPA to 4,65,000 TPA, producing power from waste heat in its twin captive power plants, keeping emissions well under prescribed norms and becoming a zero - effluent discharge Company.
PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report as an Annexure D(i).
In terms of the provisions of Section 197 (12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration) 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 forms part of the report as an Annexure D(ii).
CORPORATE GOVERNANCE
Your Company believes that facilitation of effective, entrepreneurial and prudent management helps in delivering long term success of the Company. The fundamental objective of corporate governance in Tata Sponge is to boost and maximise shareholder value and protect the interest of other stakeholders.
In terms of Regulation 34(3) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance, together with certificate from the Companyâs Secretarial Auditors, forms part of this Report.
BOARD MEETINGS/ BOARD COMMITTEE MEETINGS
A calendar of meetings is prepared and circulated in advance to the Directors. During the year ten (10) meetings of Board and five (5) Audit Committee meetings were held, details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All recommendations made by the Audit Committee were accepted by the Board during the financial year 2018-19. The details of other Board Committee meetings held during the year are given in the Corporate Governance Report, which forms part of this Annual Report.
BOARD EVALUATION
The Nomination and Remuneration Committee and the Board of Directors of the Company had laid down the process and criteria for annual performance evaluation of the Board, its Committees and individual Directors. The Board of Directors have carried out an evaluation of its own performance, its Committees and that of its individual Directors in compliance with the provisions of the Act and Listing Regulations.
The evaluation process covered aspects such as Board structure and composition, frequency of Board Meetings, participate in the long term strategic planning, contribution to and monitoring of corporate governance practices and the fulfilment of Directorsâ obligation and fiduciary responsibilities, including but not limited to, active participation at the Board and Committee meetings.
The Board at its meeting reviewed the performance of the Board as a whole, its Committees and individual Directors, taking into account feedback of the Nomination and Remuneration Committee and the Independent Directors which included the evaluation of the Chairman and Non-Independent Directors of the Company.
INDEPENDENT DIRECTORSâ MEETING:
During the year under review, the Independent Directors met on March 30, 2019, inter alia, to:
a) Review the performance of Non-Independent Directors and the Board of Directors as a whole;
b) Review the performance of the Chairman of the Company, taking into account the views of the Executive and Non- Executive Directors.
c) Assess the quality, content and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform its duties.
All the Independent Directors were present at this meeting.
The observations made by the Independent Directors have been adopted and put into force.
INDEPENDENT DIRECTORSâ DECLARATION
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
APPOINTMENT AND REMUNERATION POLICY FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT PERSONNEL
Your Company has a well-defined policy for appointment of Directors, Key Managerial Personnel (KMP) and Senior Management including their remuneration. 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 Companyâs policy on Directors, Key Managerial Personnel and Senior Management Employees and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which is a part of this report and is also available on the website of the Company www.tatasponge.com.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The 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 can be accessed at www.tatasponge.com.
BOARD DIVERSITY
The Company recognises and embraces the importance of a diverse Board in its success. The Company believes that a truly diverse Board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help the Company to retain its competitive advantage.
DIRECTOR(S)
During the year under review, the following changes took place in the Board of Directors of the Company:
Inductions
The Board of Directors of your Company, based on the recommendation of Nomination and Remuneration Committee (âNRCâ), approved the following appointments on the Board of the Company:
1. Appointment of Mr. T.V. Narendran (DIN: 03083605), as an Additional (Non-Executive, Non-Independent) Director w.e.f., January 12, 2019. The Board also appointed Mr. T. V. Narendran as Chairman of the Company w.e.f., January 12, 2019.
2. Appointment of Mr. Koushik Chatterjee (DIN: 00004989), as an Additional (Non-Executive, Non-Independent) Director of the Company w.e.f., January 12, 2019.
3. Appointment of Dr. Sougata Ray (DIN: 00134136), as an Additional (Non-Executive, Independent) Director of the Company w.e.f., January 12, 2019.
4. Appointment of Mr. Bimlendra Jha (DIN: 02170280), as an Additional (Non-Executive, Non-Independent) Director of the Company w.e.f., January 12, 2019.
5. Appointment of Mr. Ashish Anupam (DIN: 08384201) as an Additional (Non-Executive, Non-Independent) Director w.e.f. March 14, 2019.
The resolution for confirming the above appointment(s), except Mr. Bimlendra Jha (DIN: 02170280) who stepped down from the Board w.e.f. February 07, 2019, forms part of the Notice convening the Annual General Meeting (âAGMâ) scheduled to be held on July 15, 2019.
The profile and particulars of experience, attributes and skills that qualify the above Directors for the Board membership are disclosed in the Notice convening the AGM to be held on July 15, 2019.
Re-Appointment
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Companyâs Articles of Association, Mrs. Meena Lall (DIN: 05133322) (Non-Executive Non-Independent Director), retires by rotation at the ensuing Annual General Meeting of the Company and, being eligible, offers herself for re-appointment.
The profile and particulars of experience, attributes and skills that qualify Mrs. Meena Lall (DIN: 05133322) for the Board membership are disclosed in the Notice convening the AGM to be held on July 15, 2019.
Cessations
During the year, Mr. Krishnava Dutt (DIN: 02792753), Independent Director, stepped down from the Board of the Company with effect from October 11, 2018, owing to his other personal commitments. There were no other material reasons for Mr. Duttâs resignation, other than the reason stated.
Mr. A.M. Misra (DIN: 01477289), stepped down as Chairman and Director of the Company w.e.f. January 12, 2019, owing to his other engagements.
Mr. R. Ranganath (DIN: 06725337), stepped down as Director of the Company w.e.f., January 12, 2019, owing to his other engagements.
Mr. Bimlendra Jha (DIN: 02170280), Additional (Non-Executive, Non-Independent) Director of the Company, stepped down from the Board w.e.f. February 07, 2019, owing to his other engagements.
The Board places on record its appreciation for their invaluable contribution and guidance.
KEY MANAGERIAL PERSONNEL:
The following are the Key Managerial Personnel of the Company:
1. Mr. Sanjay Kumar Pattnaik - Managing Director
2. Mr. S. K. Mishra - Chief Financial Officer
3. Mr. Sanjay Kasture - Chief Risk & Compliance Officer and Company Secretary
During the year, there was no change in the key managerial personnel of the company.
DIRECTORSâ RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, Cost and Secretarial Auditors and external consultant(s) including audit of internal financial controls over financial reporting by the statutory auditors, reviews performed by the management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the financial year 2018-19.
Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of its knowledge and ability, confirm that:
(i) in the preparation of annual financial statements, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
(ii) the directors 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 2018-19 and of the profit of the company for that period;
(iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the directors have prepared the annual accounts on a going concern basis;
(v) the directors had laid down proper internal financial controls and such internal financial controls are adequate and were operating effectively; and
(vi) 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.
GOVERNANCE GUIDELINES
The Companyâs governance guidelines on Board effectiveness cover aspects relating to composition and role of the Board, Chairman and Directors, Board diversity, term of Directors, retirement age and committees of the Board. The guidelines also cover key aspects relating to nomination, appointment, induction and development of Directors, Directors remuneration, oversight on subsidiary performances, code of conduct, Board effectiveness reviews and various mandates of Board Committees.
AUDIT COMMITTEE
The Audit Committee is duly constituted as per the provisions of the Companies Act, 2013, applicable Rules framed thereunder read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. 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.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the year under review, purchase of Iron ore from Tata Steel Limited, promoter of the Company, constitutes majority of the transactions entered with related parties. The transactions, being material, were approved by the shareholders during the year. All the transactions with related parties were on an armâs length basis and were in the ordinary course of business.
All related party transactions are placed before the Audit Committee and the Board for approval.
The particulars of material contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, is given in prescribed Form AOC - 2 attached herewith as Annexure E.
The policy on Related Party Transactions as approved by the Board is displayed on the website of the Company at www.tatasponge.com. Membersâ attention is also drawn on Notes to Financial Statements which sets out details of related party transactions.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review, as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of this Annual Report.
AUDITORS (a) Statutory Auditors
Pursuant to the provisions of Section 139 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, as amended from time to time, Messrs. Price Waterhouse & Co Chartered Accountants LLP (Firm Registration Number: 304026E/E-300009), were appointed as statutory auditors from the conclusion of the Thirty-fourth Annual General Meeting (AGM) held on August 04, 2017 till the conclusion of the Thirty-ninth AGM of the Company in 2022, subject to ratification of their appointment by Members at every AGM, if so required under the Act. The requirement to place the matter relating to appointment of auditors for ratification by Members at every AGM has been done away by the Companies (Amendment) Act, 2017 with effect from May 07, 2018. Accordingly, no resolution is being proposed for ratification of appointment of statutory auditors at the ensuing AGM and a note in respect of same has been included in the Notice for this AGM.
There is no Audit qualification for the year under review.
(b) Cost Auditor
Pursuant to Section 148 of the Companies Act, 2013 (âthe Actâ) read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the Company is required to maintain cost records and have the audit of its cost records conducted by a Cost Accountant. Cost records are made and maintained by the Company as required under Section 148 (1) of the Act. The Board of Directors, on the recommendation of Audit Committee, has appointed Messrs. Shome & Banerjee, Cost Accountants, (Firm Registration Number: 000001) as Cost Auditor to audit the cost records of the Company for the financial year 2019-20. As required under the Companies Act, 2013, a resolution seeking memberâs approval for the ratification of remuneration payable to the Cost Auditor forms part of the Notice convening the ensuing Annual General Meeting of the Company.
(c) Secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration) Rules, 2014, the Company has appointed Messrs. S. M. Gupta & Co., a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company for the financial year 2019-20. During the year, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
The Secretarial Audit Report for the financial year 2018-19 is annexed herewith as Annexure F.
COMMENTS ON STATUTORY AUDITORSâ REPORT/ SECRETARIAL AUDIT REPORT
There are no qualifications, reservations or adverse remarks or disclaimers made either by the Statutory Auditors or by the Secretarial Auditors in their report for the year under review.
The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company during the year under review.
EXTRACT OF ANNUAL RETURN
The extract of annual return in Form MGT 9 as required under Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014 is enclosed as Annexure G and can be accessed in âInvestorsâ section of the Companyâs website âwww.tatasponge.comâ.
DISCLOSURES WITH RESPECT TO EMPLOYEES STOCK OPTION SCHEME
The Company does not have any Employees Stock Option Scheme.
RISK MANAGEMENT
The Company has a Risk Management framework in place to identify, assess, monitor and mitigate various risks to the business. This framework seeks to minimise adverse impact on the business objectives and enhance the Companyâs competitive advantage.
The framework also defines the risk management approach across the enterprise at various levels. Risk Management forms an integral part of the Companyâs planning process.
Risk Management Committee of the Board reviews the process of risk management. The details of the Committee and its terms of reference are set out in the Corporate Governance Report which forms part of the Boardâs Report. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis, which forms part of this report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY
Details of loans, guarantees or investments are given in the notes to financial statements.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORY BODIES/ COURTS
During the financial year under review, no significant or material orders were passed by the Regulatory/ Statutory Authorities or the Courts which would impact the going concern status of the Company and its future operations.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
Acquisition of Steel business undertaking of Usha Martin Limited
The Board of Directors of the Company at their meeting held on October 24, 2018 had approved the acquisition of steel business undertaking of Usha Martin Limited through slump sale on a going concern basis.
Further, the Company, on April 09, 2019, completed the acquisition of steel business undertaking including captive power plants pursuant to a cash consideration (after adjustment for negative working capital and debt like items) payable to Usha Martin Limited of Rs.4,09,400 lakhs, subject to further hold backs of Rs.64,000 lakhs, pending transfer of some of the assets including mines and certain land parcels.
AWARDS
During the year under the review, the following awards were received by the Company:
(i) Kalinga Safety Award;
(ii) Industry Leader Recognition to Tata Sponge in TBEM;
(iii) IIM National Quality Award;
(iv) CII SHE Award;
(v) CMO Asiaâs 8th Best CSR Practices Award;
(vi) TBExG Recognition for Affirmative Action;
(vii) CII Productivity Award.
DEPOSITS
During the year under review, the Company has not accepted any âDepositsâ; as defined under the Companies Act, 2013.
INDUSTRIAL RELATIONS
During the year under review, industrial relations remained harmonious and cordial.
ACKNOWLEDGEMENT
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 unstinted support and co-operation during the year.
Cautionary Statement: Statement in the Directorsâ Report and Management Discussion & Analysis Report describing the Companyâs expectations may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may vary materially from those expressed in the statement. Important factors that could influence the Companyâs operation include global and domestic demand and supply conditions affecting selling prices, new capacity additions, availability of critical materials and their costs, changes in government policies and tax laws, economic development of the country and such other factors which are material to the business of the Company. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements on the basis of any subsequent developments, information or events.
On behalf of the Board of Directors
T.V. Narendran
Mumbai Chairman
April 18, 2019 (DIN: 03083605)
Mar 31, 2017
Dear Members,
The Directors take pleasure in presenting the Thirty-fourth Annual Report on the business and operations of the Company and its financial results for the year ended March 31,2017.
FINANCIAL RESULTS
|
|
Standalone |
Consolidated |
||
|
Particulars |
FY 2016-17 (Rs. Lakh) |
FY 2015-16 (Rs. Lakh) |
FY 2016-17 (Rs. Lakh) |
FY 2015-16 (Rs. Lakh) |
(i) |
Sales (Net of Excise Duty) and other income |
65,218 |
67,071 |
65,223 |
67,076 |
(ii) |
Profit before interest, depreciation and taxes |
9,868 |
6,162 |
9,871 |
6,167 |
|
Less: Interest |
244 |
538 |
244 |
538 |
|
Profit /(loss) before depreciation and taxes |
9,624 |
5,624 |
9,627 |
5,629 |
(iii) |
Less: Depreciation and amortization expenses |
1,277 |
1,289 |
1,277 |
1,289 |
(iv) |
Profit Before Taxes |
8,347 |
4,335 |
8,350 |
4,340 |
(V) |
Tax Expense |
2,473 |
1,146 |
2,473 |
1,146 |
(Vi) |
Profit after tax |
5,874 |
3,189 |
5,877 |
3,194 |
âThe Company has adopted Indian Accounting Standard (referred to as âIndAS) with effect from April 01, 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 (the Act) read with the relevant rules issued there under and the other accounting principles generally accepted in India.â
DIVIDEND
The Board has recommended a dividend of Rs 11 per share (i.e. 110%) on 1,54,00,000 equity shares of Rs.10 each for the financial year ended March 31, 2017 subject to approval of the shareholders at the ensuing Annual General Meeting. The total outgo on account of dividend (ex-taxes) will be Rs. 1,694 lakhs.
TRANSFER TO RESERVE
The Company proposes to retain the entire amount of Rs 5,874 lakhs in the statement of profit & loss account.
OPERATIONS
Sponge Iron
During the year (FY''17) the kilns produced 390,000 MT (100% of rated capacity) which is higher by 8.2% as compared to 360,446 MT of DRI production during the previous year (FY''16). During the year, daily production level was 1,247 TPD and average operating days were 313 days. Debottlenecking of Kiln 1, procurement of excellent quality of raw materials and process improvements have resulted in the enhanced production during the year.
The Company continues to enjoy uninterrupted supply of iron ore requirement from Tata Steel. During the year, the Company sourced 95% of iron ore from Tata Steel.
Based on the experience gained in the past from using imported coal of superior quality having a positive impact on the quality of sponge iron, the Company sourced 96% of coal of different grades from South Africa.
The sale of sponge iron has been 392,782 MT which is higher by 7.4% as against the sale of 365,815 MT during previous year. Increase in the dispatch was consequent to the higher production. As a part of customer engagement initiative, the Company dispatched sponge iron through containerized rakes during the year, which has also helped in enhancing efficiency and controlling cost.
Power
In FYâ17, the total generation of power was 185.47 million Kwh vis-a-vis to 162.83 million Kwh during the last year, an increase of 13%. The power export was 132.49 million Kwh as compared to 113.59 million Kwh during FY''16, an increase by 16.6%.
MARKET
Even though the market conditions for steel and sponge iron were volatile during the year, the Company could maintain profitability due to record sponge iron dispatches of 3,92,782 MT, positive cash flow and focus on segments for higher net realization. The demand for steel and sponge iron recovered during the later part of the year. During the second half of the financial year, real estate segment recovered partly and there was an increased spending in infrastructure areas , which led to sustained demand and increase in price on month to month basis.
Further, the intention of Government to increase funding in infrastructure, affordable housing, smart cities etc will generate positive demand for steel and sponge iron. The Government has also supported the steel industry in curtailing cheap imports and supporting usage of locally made steel.
The above factors will have a positive impact for both sponge iron and steel industry during FYâ18.
UPDATE ON RADHIKAPUR COAL BLOCK
The Radhikapur (East) Coal Block stands de-allocated and reallotment has not happened yet. The Ministry of Coal (âMoCâ) vide its letter dated December 28, 2015, has reiterated its decision for encashment of the Bank Guarantee of Rs. 32.50 cr. The Bank
Guarantee has since expired. The Company has filed a writ petition before Hon''ble High Court of Delhi challenging the decision of MoC. Pending finalization of the matter, the Bank Guarantee amount continues to be disclosed as Contingent Liability as at the end of the year.
During pendency of the aforesaid matters in Hon''ble High Court of Delhi, the Hon''ble Supreme Court of India vide its order dated September24, 2014 has cancelled allocation of214 coal blocks including the Radhikapur (East) Coal Block which was allotted to the Company on February 7, 2006. The expenditure incurred on the Radhikapur (East) Coal Block as on March 31, 2017 aggregates to Rs. 18,040.96 lakhs (March 31, 2016: Rs. 18,040.96 lakhs).
Pursuant to the judgment of Hon''ble Supreme Court of India, the Government of India has promulgated Coal Mines (Special Provision) Rules, 2014 (âRulesâ) for allocation of the coal mines through auction and matters related thereto. In terms of the said Rules, the successful bidder will be called upon to pay to the prior allocattee the expenses incurred by the prior allocatee towards land and mine infrastructure. Pursuant to MoC''s directive seeking the details of expenses vide letter dated December 26, 2014, the Company has furnished the required statement of expenses on January 5, 2015. Based on the Rules and necessary legal opinion obtained by the Company, no provision is considered necessary.
SUBSIDIARY COMPANY
Your Company has a wholly owned subsidiary i.e. âTSIL Energy Limitedâ. There is no associate or joint venture company as defined under the Companies Act, 2013.
Pursuant to provisions of Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of TSIL Energy Limited in Form AOC-1 is annexed as Annexure A.
Pursuant to provisions of Section 136 of the Companies Act, 2013, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts of TSIL Energy Limited are available on the website of the Company.
INTERNAL PROCESS & FINANCIAL CONTROL
Improvement in the business processes and systems across all functions is a continuous process, in line with the Tata Business Excellence Model that the Company has adopted. The company continues to maintain Integrated Management System (IMS) comprising of Quality Management System (ISO: 9001). Environment Management System (ISO: 14001) and Occupational Health, Safety & Accountability Management System (ISO: 18001).
The Company has an internal control system commensurate with the size, scale and complexity of its operations. The scope of authority of the Internal Audit function is defined in the Internal Audit Charter. The Company''s internal controls are tested for adequacy and effectiveness by the Internal Auditor and Statutory Auditors on a regular basis.
LISTING FEES
The Annual Listing Fee for the financial year 2016-17 had been paid to those Stock Exchanges where the Company''s shares are listed.
CORPORATE SUSTAIN ABILITY
As a member of Tata Group and as a responsible corporate citizen the Company continues to undertake steps towards welfare of society around it, community initiatives, periphery development, environment protection and improvement in harmony with the normal business and contributing to exchequer through various taxes/duties etc. At the same time, the Company continued its focus on employees'' health and safety, skill development and superior living conditions. The Company has taken a serious note of threat of global warming and climate change. Through a specific study, the Company has measured carbon foot print of its operations and is taking steps to reduce the Green House Gas emissions. Corporate sustainability is aligned with Triple Bottom Line approach by complying with -
- the UN Global Compact by addressing its ten principles
- Guidelines of Tata Council for Community Initiatives (TCC)
The concept of inclusive growth through Affirmative Action (AA) has been adopted by the Company in the past. Further efforts have been made by the Company during the year to strengthen the actions.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
During the year, the Company has spent Rs. 219.21 lakhs (previous year Rs. 277.49 lakhs) on CSR Activities. An Annual Report on CSR Activities is annexed herewith as Annexure B in the prescribed format.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has a vigil mechanism by way of internal reviews and a third party helpline, escalating system of ethical concerns etc. The Company also has a âWhistle Blower Policyâ, which is available on the website of the Company, namely www.tatasponge.com.
PREVENTION OF SEXUAL HARASSMENT AT WORK PLACES
The Company has zero tolerance for sexual harassment at workplace and 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 framed there under.
Further, the Company has Internal Complaint Committees for various locations of the Company in compliance with the above mentioned Act and Rules. During the financial year 2016-17, one complaint was received and the same was resolved. No case remained pending at the end of the year.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
As required under Section 134(3)(m)of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, particulars regarding conservation of energy, technology absorption, foreign exchange earnings and outgo are annexed to this report as Annexure C.
SAFETY, HEALTH & ENVIRONMENT
The Company is committed to providing a safe and healthy working environment and achieving an injury and illness free work place. In recognition of Company''s best practices in Safety, Health and Environment, the Company received the Cll Excellence award in Safety, Health and Environment during the year. During the year under review, there was no lost time injury incident reported.
Over the years, the Company has been setting benchmarks in its industry vertical in reducing its carbon footprint through the 3Rs (Reduce, Reuse and Recycle), producing power from waste heat in its twin captive power plants, keeping emissions well under prescribed norms and becoming a zero - affluent discharge Company.
PARTICULARS OF EMPLOYEES
The particulars of employees are given in Annexure D to this Report as required under Section 197(12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
DIRECTOR(S)
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company''s Articles of Association, Mrs. Meena Lall (Non-Executive Director), retires by rotation at the forthcoming Annual General Meeting and, being eligible offers herself for re-appointment.
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
During the year under review, Mr. Digambar Pandurang Deshpande superannuated from the services of the Company with effect from October31, 2016. The Board of Directors place on record their appreciation towards Mr. Deshpandeâs contribution during his tenure as Director of the Company.
The Board in its meeting held on October21, 2016, has appointed Mr. Sanjay Kumar Pattnaik as Managing Director with effect from November 01, 2016. Necessary resolutions together with the explanatory statement have been included in the Notice of Thirty-Fourth Annual General Meeting as the above appointment/re-appointment are subject to the approval of the shareholders.
DIRECTORSâ RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, Cost and Secretarial Auditors and external consultant(s) including audit of internal financial controls over financial reporting by the statutory auditors, 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 2016-17.
Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:
(i) in the preparation of annual financial statements, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
(ii) 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 2016-17 and of the profit of the company for that period;
(iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the directors have prepared the annual accounts on a going concern basis;
(v) the directors had laid down proper internal financial controls and such internal financial controls are adequate and were operating effectively; and
(vi) 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.
BOARD EVALUATION
The Board had carried out an annual performance evaluation of its own performance and that of its Committees and individual directors. The manner in which the evaluation was carried out has been explained in the Corporate Governance Report.
INDEPENDENT DIRECTORSâ MEETING
During the year under review, the Independent Directors met on March 22,2017, inter alia, to:
a) Review the performance of Non Independent Directors, and the Board of Directors as a whole;
b) Review the performance of the Chairman of the Company, taking into account the views of the Executive and Non-Executive Directors;
c) Assess the quality, content and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform its duties.
All the Independent Directors were present at this meeting.
The observations made by the Independent Directors have been adopted and put into force.
APPOINTMENT AND REMUNERATION POLICY FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection, appointment and remuneration of Directors, Senior Management Personnel and Key Managerial Personnel (âKMPâ). This Policy is described in the Corporate Governance Report.
KEY MANAGERIAL PERSONNEL
The following are the Key Managerial Personnel of the Company:
1. Mr. Sanjay Kumar Pattnaik-Managing Director
2. Mr. S. K. Mishra - Chief Financial Officer
3. Mr. Sanjay Kasture - Company Secretary
During the year, Mr. Digambar Pandurang Deshpande, superannuated as Managing Director of the Company with effect from October31,2016.
The Board in its meeting held on October 21, 2016 has appointed Mr. Sanjay Kumar Pattnaik as Managing Director with effect from November01,2016.
BOARD MEETINGS/ BOARD COMMITTEE MEETINGS
A calendar of meetings is prepared and circulated in advance to the Directors. During the year six (6) Board meetings and five (5) Audit Committee meetings were held, details of which are given in the Corporate Governance Report. The gap between the meetings was within the period prescribed under the Companies Act, 2013/ SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All recommendations made by the Audit Committee were accepted by the Board during the financial year 2016-17. All other Committees have also met during the year and have helped the Board to provide direction to the management.
PARTICULARS OF CONTRACTS ORARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013
During the year under review, purchase of Iron ore from Tata Steel Limited, promoter of the Company, constitutes majority of the transactions entered with related parties. The transactions, being material, were approved by the shareholders during the year. All the transactions with related parties were on an arm''s length basis and were in the ordinary course of business.
All related party transactions are placed before the Audit Committee and the Board for approval.
The particulars of material contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, is given in prescribed FormAOC-2as Annexure-E.
The policy on Related Party Transactions as approved by the Board is displayed on the website of the Company, viz, www.tatasponge.com. Members'' attention is also drawn on Notes to Financial Statements which sets out details of related party transactions.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review, as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of this Annual Report.
CORPORATE GOVERNANCE REPORT:
As per Regulation 34(3) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on corporate governance, together with a certificate from the Company''s Secretarial Auditors, forms part of this Report.
AUDITORS
(a) STATUTORY AUDITORS
Under Section 139 of the Companies Act, 2013 and the rules made there under, it is mandatory to rotate the Statutory Auditors on completion of their term of five consecutive years. The Rules also lays down the transitional period that can be served by the existing auditors depending on the number of consecutive years for which an audit firm has been functioning as auditor in the same company. The incumbent auditors, Messrs Deloitte Haskins & Sells, Chartered Accountants (Firm Registration No. 302009E) have served the Company for over 10 years before the Act was notified and will be completing the maximum number of transitional period (three years) at the ensuing Thirty Fourth Annual General Meeting.
Based on the recommendation of the Audit Committee, the Board in its meeting held on Tuesday, June 06, 2017, appointed Messrs Price Waterhouse & Co. Chartered Accountants LLP (Firm Registration No. 304026E/E-300009) ("PWCâ) as the Statutory Auditors of the Company. PWC will hold office for a period of five consecutive years from the conclusion of the Thirty Fourth Annual General Meeting of the Company till the conclusion of the Thirty Ninth Annual General Meeting to be held in 2022. As required under the Companies Act, 2013, a resolution seeking member''s approval for the appointment of Statutory Auditor forms part of the Notice convening the Annual General Meeting.
There is no audit qualification for the year under review.
(b) COST AUDITOR
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out cost audit every year. The Board of Directors, on the recommendation of Audit Committee, has appointed Messrs Shome & Banerjee, Cost Accountants, (Firm Registration Number: 000001) as Cost Auditor to audit the cost statements of the Company for the financial year 2017
18. As required under the Companies Act, 2013, a resolution seeking member''s approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their ratification.
(C) SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Messrs S. M. Gupta & Company, a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company for the financial year 2017-18.
The Secretarial Audit Report for the financial year 2016-17, is annexed herewith as Annexure - F.
COMMENTS ON AUDITORS / SECRETARIAL AUDIT REPORT
There are no qualifications, reservations or adverse remarks or disclaimers made either by the Statutory Auditors or by the Secretarial Auditors in their report for the year under review. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company during the year under review.
EXTRACT OF ANNUAL RETURN
The extract of the Annual Return as provided under Section 92(3) of the Companies Act, 2013 in the prescribed Form MGT - 9 is annexed herewith as Annexure - G.
DISCLOSURES WITH RESPECT TO EMPLOYEES STOCK OPTION SCHEME
The Company does not have any Employees Stock Option Scheme.
RISK MANAGEMENT
The Company has a Risk Management framework in place to identify, assess, monitor and mitigate various risks to the business. This framework seeks to minimize adverse impact on the business objectives and enhance the Company''s competitive advantage. The framework also defines the risk management approach across the enterprise at various levels. Risk Management forms an integral part of the Company''s planning process.
A Risk Management Committee of the Board reviews the process of risk management. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board''s Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BYTHE COMPANY
Details of loans, guarantees or investments are given in the notes to financial statements.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORY BODIES/COURTS
During the financial year under review, no significant or material orders were passed by the Regulatory/ Statutory Authorities or the Courts which would impact the going concern status of the Company and its future operations.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
During the year under review, there has been no material changes and commitments affecting the financial position of the Company.
AWARDS
During the year, following awards were received by the Company:-
a) Conferred the Productivity Award 2016 for Significant Improved Productivity during the year 2016byCII (Eastern Region).
b) Tata Sponge Power Plant Quality Circle Team, PRATIBHA received the NCQC Excellence Award.
c) Received the Cll Excellence Award on Safety, Health & Environment 2015.
d) Tata Sponge Power Plant Quality Circle Team, PRATIBHA received the CCQC 2016 Gold Award.
DEPOSITS
During the year, the Company has not accepted any âDepositsâ, as defined under Companies Act, 2013.
ACKNOWLEDGEMENT
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
sd/-
Kolkata A.M. Misra
June06,2017 Chairman
Mar 31, 2015
Dear Members,
The Directors take pleasure in presenting the Thirty-second Annual
Report on the business and operations of the company and its financial
results for the year ended 31st March, 2015.
FINANCIAL RESULTS
Standalone
Current Previous
year year
(Rs. Lac) (Rs.Lac)
(i) Sales (Net of Excise Duty) and other 84522 81764
income
(ii) Profit before depreciation 14941 16754
(iii)Depreciation and amortisation expenses 1294 1775
(iv) Profit before taxes 13647 14979
(v) Current Tax 4294 5661
(vi) Deferred Tax 164 (799)
(vii) Profit after tax 9189 10117
(viii)Profit brought forward from previous 1807 1472
year
Adjustment for change in useful life (80) -
of assets
(ix) Profit available for appropriation 10916 11589
(x) Dividend : 100% (2013-14 : 100 %) 1540 1540
(xi) Tax on Dividend 314 262
(xii) Transfer to General Reserve 7000 7980
(xiii)Surplus carried to Balance Sheet 2062 1807
Consolidated
Current Previous
year year
(Rs. Lac) (Rs.Lac)
(i) Sales (Net of Excise Duty) and other 84528 81767
income
(ii) Profit before depreciation 14946 16757
(iii)Depreciation and amortisation expenses 1294 1775
(iv) Profit before taxes 13652 14982
(v) Current Tax 4294 5661
(vi) Deferred Tax 164 (799)
(vii) Profit after tax 9194 10119
(viii)Profit brought forward from previous 1802 1465
year
Adjustment for change in useful life (80) -
of assets
(ix) Profit available for appropriation 10916 11584
(x) Dividend : 100% (2013-14 : 100 %) 1540 1540
(xi) Tax on Dividend 314 262
(xii) Transfer to General Reserve 7000 7980
(xiii)Surplus carried to Balance Sheet 2062 1802
DIVIDEND
3. The Board has recommended a dividend of Rs.10/- per share
(i.e.100%) on 1,54,00,000 equity shares of Rs.10 each for the financial
year ended 31st March, 2015, subject to approval of the shareholders at
the ensuing Annual General Meeting. The total outgo on account of
dividend (ex-taxes) will be Rs.1540 lac equalling to previous year.
OPERATIONS
Sponge Iron
4. During the year, all the three kilns produced 3,65,324 MT of sponge
iron compared to 3,76,432 MT in the previous year. The capacity
utilisation was lower at 94 % as compared to 97 % in the previous year.
The company sourced almost all of its iron ore requirement from Tata
Steel. It sourced half of its coal requirement from auctions of Coal
India, other half was imported. The linkage coal continues to remain
unavailable, with Coal India and Ministry of Coal connecting it to coal
block allocation. While some of the linkage quota is connectable, the
whole is not. The Company has disputed this interpretation.
The despatch of sponge iron during the year was 3,62,912 MT as compared
to 3,74,782 MT in the previous year. Decrease in the despatch was
consequent to lower production.
Power
5. During the year, the total generation of power from the two power
plants (of 7.5MW and 18.5 MW capacity) was 173 million kwh out of which
121 million kwh of surplus power was exported, compared with generation
of 196 million kwh and export of 141 million kwh in the previous year.
The decrease in the generation and sale of power was consequential to
(i) lower availability of waste gas from the kilns due to lower
production of sponge iron and (ii) increase in steam consumption.
MARKET
6. The year commenced on a positive note for sponge iron industry with
good demand. However, this trend could not sustain in later half of the
year mainly due to sluggish economic growth, though with help of good
performance in the first half of the year and by using strategic
initiatives in marketing, the Company could improve the net realisation
by about 3 % over the previous year. There was no due from debtors at
the close of the year.
FINANCE
7. Despite the increase in the average net realisation from sale of
sponge iron, the earning per share has declined to Rs 59.67 as compared
to previous year (Rs.65.69) due to lower sales volume. The company
continued to be debt free during the year. Sale of power, waste
materials and earning from financial activities supported the earnings.
DE-ALLOCATION OF COAL BLOCK
8. The work in connection with development of coal block at Radhikapur
(East) in Talcher coalfields was started in 2006-07. The Company had
made significant progress in private land acquisition during 2013-14.
However, the Hon'ble Supreme Court of India vide its order dated 24th
Sept, 2014 , has cancelled allocation of several coal blocks including
Radhikapur (East) coal block which was allotted to the Company on 7th
Feb, 2006. The carrying value of investments made in this coal block
was Rs 18074.18 lac as on 31st March, 2015. The Company had lodged a
claim with the Nominated Authority of Ministry of Coal for refund of
the invested amount. However, the claim has not reached the finality.
During the year 2013-14 the Ministry of Coal ordered for forfeiture of
the Bank Guarantee worth Rs.32.50 crore alleging delay in
operationalizing the coal block. However, the company had taken up the
matter with appropriate Court of Law against this order on the plea
that the delays in licensing/approvals are causing this delay. The
Hon'ble High Court of Delhi vide its order dated 30th Oct, 2014 has
granted a stay on invocation of Bank Guarantee . The High Court also
directed the Company to keep the Bank Guarantee valid till 28th May,
2015. Pending finalisation of the matter the BG amount continues to be
disclosed as Contingent Liability as at the end of the year.
SUBSIDIARY COMPANY
9. The Company has a wholly owned subsidiary namely, "TSIL Energy
Limited" incorporated on 20th November, 2012, with an authorised share
capital of Rs.10 crore and paid up capital of Rs.1,06,00,600 (10,60,060
equity shares of Rs.10 each). The consolidated accounts also include
figures of this subsidiary from 1st April, 2014 to 31st March, 2015.
CONSOLIDATED FINANCIAL STATEMENTS
10. The Audited Consolidated Financial Statements based on the
Financial Statements received from the subsidiary Company, TSIL Energy
Limited, 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 other applicable Accounting Standards
issued by The Institute of Chartered Accountants of India.
The consolidated financial statements presented by your Company include
financial information of the subsidiary, i.e. TSIL Energy Limited,
prepared in compliance with applicable Accounting Standards. The
Ministry of Corporate Affairs, Government of India, 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 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, At/Post - Joda,
Dist-Keonjhar Orissa - 758 034, and that of the subsidiary company at
Tata Sponge Administrative Building, Bileipada, Post - Baneikala, Joda,
Dist-Keonjhar, Orissa - 758 038.
Further a statement containing salient features of the financial
statements of this subsidiary Company is included in the Annual Report
in the format prescribed under Section 129(3) of the Companies, At,
2013 read with the Rule made thereunder. This reflects performance and
financial position of the subsidiary company as per Rule 8 (1) of the
Companies (Accounts) Rules, 2014.
INTERNAL SYSTEM AND PROCESS
11. Efforts are going on to improve the business processes across all
functions in accordance with Tata Business Excellence Model. The
company continued to maintain Integrated Management System (IMS)
comprising of Quality Management System (ISO : 9001). Environment
Management System (ISO:14001) and Occupational Health, Safety &
Accountability Management System (ISO: 18001).
AWARDS
12. During the year the Company received National Sustainability Award
(First) for 2013-14 from Indin Institute of Metals, Ferrous Division,
Pune and the Kalinga Safety Award for 2013-14.
LISTING FEES
13. The Annual Listing Fee for the year 2014-15 had been paid to those
Stock Exchanges where the company's shares are listed.
CORPORATE SUSTAINABILITY
14. As a member of Tata Group and as a responsible corporate citizen
the company continues to undertake steps towards welfare of society
around it, community initiatives, periphery development, environment
protection and improvement in harmony with the normal business and
contributing to exchequer through various taxes/duties etc. At the same
time, the company continued its focus on employees' health and safety,
skill development and superior living conditions. The company has taken
a serious note of threat of global warming and climate change.Through a
specific study, the company has measured carbon foot print of its
operations and is taking steps to reduce the Green House Gas emissions.
Corporate sustainability is aligned with Triple Bottom Line approach by
complying with -
* the UN Global Compact by addressing its ten principles
* Guidelines of Tata Council for Community Initiatives (TCCI)
CORPORATE SOCIAL RESPONSIBILITY
15 The Company has a Corporate Social Responsibility Committee
comprising of four directors which stood as follows as on 31st March,
2015 :
Mr.R. Ranganath (Non-executive Director) - Chairman
Mr.Manoj T. Thomas (Non-executive and Independent Director) - Member
Mr. D P Deshpande (the Managing Director)-Member
Mr. Sanjay Kumar Pattnaik ( the Executive Director)- Member
The terms of reference and scope of work is same as prescribed in
Section 135 of the Companies Act, 2013, and the Rules thereunder. The
Committee met four times during the year to discharge its
responsibilities. As part of its initiatives under "Corporate Social
Responsibility" (CSR) the Company has undertaken projects in the areas
of Education, Livelihood, Health, Water and Sanitation, Environment,
Rural development etc . An Annual Report on CSR activities is annexed
herewith as Annexure - C in the prescribed format. During the year the
Company has spent Rs 259.02 lakh towards CSR activities.
COMPOSITION OF THE AUDIT COMMITTEE:
16. As prescribed under sub section 3 of the Section 177 of the
CompaniesAct, 2013 the Composition of the Audit Committee is given in
the Corporate Governance Report which is part of the Directors Report.
Further, there was no instance when the Board has not accepted any
recommendation of the Audit Committee.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY:
17. The Company has a vigil mechanism named as Whistle Blower Policy
text of which is available on the website of the Company , namely
www.tatasponge.com.
MEASURES FOR PREVENTION OF SEXUAL HARASSMENT AT WORKPLACES
18. The Company has zero tolerance for sexual harassment at workplace
and 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 thereunder.
Further, the Company has an Internal Complaint Committees for various
locations of the Company in compliance with the above mentioned Act and
Rules. For the financial year 2014-15, no case of sexual harassment was
pending at the beginning , no case was received during the year nor any
case remained pending at the close of the year.
INCLUSIVE GROWTH
19. The concept of inclusive growth through Affirmative Action (AA)
has been adopted by the company in the past. Further efforts have been
made by the company during the year to strengthen the actions.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO.
20. As required under Sub-section 3(m) of Section 134 of the Companies
Act, 2013, read with the Rule 8 of the Companies (Accounts) Rules,
2014, particulars regarding conservation of energy, technology
absorption, foreign exchange earnings and outgo are annexed to this
report as Annexure B
PARTICULARS OF EMPLOYEES
21. The particulars of employees are given in Annexure - A to this
Report as required under Section 197 of the CompaniesAct, 2013 read
with Rule 5 (2) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules 2014.
DIRECTORS
22. Mr. D. P. Deshpande retires by rotation and, being eligible,
offers himself for re-appointment.
23. In accordance with the provisions of Section 149, 152 and other
applicable provisions of the Companies Act, 2013 and Rules made
thereunder, it is proposed to appoint Mr. P. C. Parakh who is currently
a non-executive independent director of the company and who meets the
criteria for independence as provided in Section 149(6) of the
Companies Act, 2013, as independent director for a period of 5 years or
earlier on attaining the age of retirement fixed by the Company.
24. Dr O N Mohanty was appointed Additional Director we f 16th July,
2014 and Mr Sanjay Kumar Pattnaik, Mr Krishnava Dutt and Mrs Meena Lall
were also appointed as Additional Directors we f 16th August, 2014,
and who hold office up to the date of the forthcoming Annual General
Meeting of the company ,each have been proposed in writing by a
shareholder for the office of Director.
The Board commends appointment of Dr O N Mohanty, Mr Sanjay Kumar
Pattnaik, Mr Krishnava Dutt and Mrs Meena Lall as Directors.
All Independent Directors have given declarations that they meet the
criteria of independence as laid down under Section 149 (6) of the
CompaniesAct, 2013 and Clause 49 of the Listing Agreement.
25. Based on the recommendation of the Nomination and Remuneration
Committee, the Board, in its meeting held on 12th August, 2014,
appointed Mr Sanjay Kumar Pattnaik as Executive director we f 16th
August, 2014 for a period of three years i e up to 15th August, 2017.
The Notice of the Annual General Meeting includes the Resolution and
terms and conditions for his appointment as Executive Director as the
same is subject to approval of the shareholders.
The Board commends appointment of Mr Pattnaik as the Executive
Director.
26. Mr Manikanta Naik and Mr D B Sundararamam resigned from the Board
during the year. The Board of Directors placed on record its sincere
thanks and gratitude for their contribution to the company.
DIRECTORS' RESPONSIBILITY STATEMENT
27. Based on the framework of internal financial controls and
compliance systems established and maintained by the Company, work
performed by the Internal, Statutory, Cost and Secretarial auditors and
external consultant(s) 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 2014-15.
Accordingly, pursuant to Section 134(5) of the CompaniesAct, 2013, the
Board of Directors, to the best of their knowledge and ability, confirm
that:
(i) in the preparation of annual financial statements, the applicable
accounting standards have been followed along with proper explanation
relating to material departures, if any;
(ii) the directors 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 2014-15 and of the
profit of the company for that period;
(iii) the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
(iv) the directors have prepared the annual accounts on a going concern
basis;
(v) 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;
BOARD EVALUATION
28. Pursuant to the provisions of the Companies Act, 2013 and Clause
49 of the Listing Agreement, the Board has carried out an annual
performance evaluation of its own performance and that of its
Committees and individual directors. The manner in which the evaluation
has been carried out has been explained in the Corporate Governance
Report.
INDEPENDENT DIRECTORS' MEETING:
29. During the year under review, the Independent Directors met on
19th Jan, 2015, inter alia, to:
* Review the performance of Non Independent Directors, and the Board of
Directors as a whole;
* Review the performance of the Chairman of the Company, taking into
account the views of the Executive and Non Executive Directors.
* Assess the quality, content and timeliness of flow of information
between the Company management and the Board that is necessary for the
Board to effectively and reasonably perform its duties.
All the Independent Directors were present at this meeting.
APPOINTMENT AND REMUNERATION POLICY FOR DIRECTORS, KEY MANAGERIAL
PERSONNEL AND OTHER EMPLOYEES
30. The Board has, on the recommendation of the Nomination and
Remuneration Committee, framed a policy for selection and appointment
of Directors, Senior Management Personnel and Key Managerial Personnel
and their remuneration. This Policy is described in the Corporate
Governance Report.
DIRECTORS REMUNERATION vis-a-vis MEDIAN EMPLOYEES' REMUNERATOIN etc:
31. Particulars of Directors' remuneration vis-a-vis median employees'
remuneration etc. as required under Section 197 (12) and Rule 5 of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, is given in Annexure - D to this Report.
BOARD MEETINGS
32. A calendar of meetings is prepared and circulated in advance to
the Directors. During the year eight Board meetings and four Audit
Committee meetings were held details of which are given in the
Corporate Governance Report. The gap between the meetings was within
the period prescribed under the CompaniesAct, 2013
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
33. All the related party transactions that were entered into during
the financial year were on an arm's length basis and were in the
ordinary course of business. There are no materially significant
related party transactions made by the Company with promoters,
Directors, Key Managerial Personnel or other designated persons which
may have a potential conflict with the interest of the Company at
large. Further, there was only one material Related Party transaction
(as defined in clause 49 of the Listing Agreement) with the promoters,
i.e. Tata Steel Ltd for purchase of Iron ore in the ordinary course of
business and also at arm's length basis. This transaction was approved
by the shareholders during the year.
All related party transactions are placed before the Audit Committee as
also the Board for approval. Prior omnibus approval is obtained on a
quarterly bases for the transactions which are of a foreseen and
repetitive nature. The transactions entered into pursuant to the
omnibus approval so granted are audited and a statement giving details
of all elated party transactions is placed before the Audit Committee
and the Board for their approval on quarterly basis. The statement is
supported by a Certificate from the Managing Director and the Chief
Financial Officer. The Company has developed a Related Party
Transactions Manual for the purpose of identification and monitoring of
such transactions.
The policy on Related Party Transactions as approved by the Board is
displayed on the website of the Company, viz, www.tatasponge.com.
Members' attention is also drawn on Note No 34 of Financial Statements
which sets out details of Related Party transactions.
REPORT ON CORPORATE GOVERNANCE
34. Pursuant to Clause 49 of the Listing Agreements with the Stock
Exchanges, the followings form part of this Annual Report :
(i) Managing Director's declaration regarding compliance of Code of
Conduct by Board Members and Senior Management personnel;
(ii) Management Discussion and Analysis;
(iii) Report on the Corporate Governance;
(iv) Auditors' Certificate regarding compliance of conditions of
Corporate Governance.
AUDIT/AUDITORS
35 (a) The Auditors, Messrs Deloitte Haskins & Sells, Chartered
Accountants, retire at the conclusion of the ensuing Annual General
Meeting and, being eligible, offer themselves for reappointment.
(b) The Board had appointed M/s. Shome & Banerjee as Cost Auditors for
the year 2015-16 in its meeting held on 20th April, 2015. Their
remuneration is subject to ratification by shareholders at the ensuing
Annual General Meeting.
(c) Pursuant to the provisions of Section 204 of the CompaniesAct, 2013
and the Companies (Appointment and Remuneration of Managerial
Personnel) Rule, 2014 the Company has appointed M/s S. M. Gupta &
Company, a firm of Company Secretaries in Practice, to undertake the
Secretarial Audit of the Company. The Report of the Secretarial Audit
is annexed herewith as Annexure - E
EXTRACT OF ANNUAL RETURN
36. The extract of the Annual Return in form MGT 9 is annexed herewith
as Annexure - F DISCLOSURES WITH RESPECT TO EMPLOYEES STOCK OPTION
SCHEME
37. The Company does not have any Employees Stock Option Scheme. Hence
no disclosure is required.
RISK MANAGEMENT
38. Pursuant to provision of Clause 49 of the Listing Agreement, the
Company has constituted a Risk Management Committee. The details of the
Committee and its terms of reference are set out in the Corporate
Governance Report forming part of the Board's Report.
The Company has a robust Risk Management framework to identify,
evaluate business risks and opportunities. This framework seeks to
minimize adverse impact on the business objectives and enhance the
Company's competitive advantage. The framework also defines the risk
management approach across the enterprise at various levels. Risk
Management forms an integral part of the Company's planning process.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
39. There are no significant or material orders passed by the
Regulators or the Courts which would impact the going concern status of
the Company and its future operations. However, the Hon'ble Supreme
Court of India vide its order dated 24th Sept, 2014 has cancelled the
allocation of Radhikapur (East) coal block wherein the Company had
incurred, invested and advanced (including deposits/advances to IDCOL
and other parties) the money equal to Rs 214 crore. Subsequently, the
Union Government promulgated The Coal Mines (Special Provisions)
Ordinance, 2014 which intended to take appropriate actions to deal
wiith situation arising pursuant to the Hon'ble Supreme Court's
decision. The management, based on its understanding and interpretation
of the Ordinance and on the basis of legal advice, believes that the
financial loss or operational impact, if any, will not be significant.
Further, the Company has lodged a claim with Ministry of Coal for
refund of this amount along with interest totalling to Rs 328.23 crore
as compensation to prior allotttee , i e the Company.
DEPOSITS
40. The Company does not have any Deposit from public at the close of
the year. Hence, no disclosure is required in this connection.
ACKNOWLEDGEMENT
41. 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
Jamshedpur (A.M. Misra )
20th April, 2015 Chairman
Mar 31, 2013
The Directors take pleasure in presenting the Thirtieth Annual Report
on the business and operations of the company and its financial results
for the year ended 31st March, 2013.
FINANCIAL RESULTS
Standalone Consolidated
Current
year Previous
year Current
year Previous
year
(Rs. Lac) (Rs.Lac) (Rs. Lac) (Rs. Lac)
2 (i) Sales (Net of Excise
Duty) and other income 82732 65693 82732 -
(ii) Profit before
depreciation 14378 13044 14371 -
(iii) Depreciation and
amortisation expenses 1788 1837 1788 -
(iv) Profit before taxes 12590 11207 12583 -
(v) Current Tax 4342 4290 4342 -
(vi) Deferred Tax (295) (651) (295) -
(vii) Profit after tax 8543 7568 8536 -
(viii) Profit brought
forward from previous year 1470 1434 1470 -
(ix) Profit available for
appropriation 10013 9002 10006 -
(x) Dividend : 80% (2011-
2012 : 80%) 1232 1232 1232 -
(xi) Tax on Dividend 209 200 209 -
(xii) Transfer to General
Reserve 7100 6100 7100 -
(xiii) Surplus carried to
Balance Sheet 1472 1470 1465 -
DIVIDEND
3. The Board has recommended a dividend of Rs.8/- per share (i.e.80%)
on 1,54,00,000 equity shares of Rs.10 each for the financial year ended
31st March, 2013, subject to approval of the shareholders at the
ensuing Annual General Meeting. The total outgo on account of dividend
(ex-taxes) will be Rs.1232 lac, which is equal to previous year.
OPERATIONS
4. During the year, all the three kilns produced 3,60,697 MT of sponge
iron compared to 2,72,106 MT in the previous year. The capacity
utilisation was higher at 92% as compared to 70% in the previous year,
which happened mainly due to better availability of iron ore.
The iron ore supply, which was adversely affected during the previous
year, has been restored to a large extent resulting in to higher
capacity utilisation during the year.
The company is no more getting coal under linkage which has been
stopped by Ministry of Coal linking it to coal block development. The
company had to largely source its coal requirement from domestic market
through e- auctions and imports. The indigenous coal was optimally used
along with imported coal.
The despatch of sponge iron during the year was 3,59,912 MT as compared
to 2,73,766 MT in the previous year. Increase in the despatch was
consequent to higher production.
POWER
5. During the year, the total generation of power from the two power
plants (of 7.5MW and 18.5 MW capacity) was 179 million kwh out of which
124 million kwh of surplus power was exported to the State Grid
regularly up to January, 2013, compared with generation of 134.39
million kwh and sale of 88.31 million kwh in the previous year. As the
State Grid did not require power from February, 2013, the same is sold
through power exchange. The increase in the generation and sale of
power was consequential to higher availability of waste gas from the
kilns due to higher production of sponge iron.
FINANCE
6. The market for steel has remained sluggish and therefore sponge
iron market was subdued. The price of Sponge Iron decreased in the
later part of the year. Earning per share has improved to Rs.55.47 as
compared to previous year (Rs.49.14) due to higher sales volume. The
company continued to be debt free during the year. Sale of waste
materials and earning from financial activities supplemented the
margin.
DEVELOPMENT OF COAL BLOCK
7. The work in connection with development of coal block at Radhikapur
(East) and Utkal-F in Talcher coalfields was started in 2006-07. The
Company has made significant progress in private land acquisition and
the land lease agreement is expected in the coming financial year. The
coal block is expected to become operational in next two to three
years. So far the company has spent an amount of Rs.204 crore till
March, 2013, by way of funding from internal accruals.
During the year the Ministry of Coal ordered for forfeiture of the Bank
Guarantee worth Rs.32.50 crore alleging delay in operationalizing the
coal block. However, the company has taken up the matter with
appropriate Court of Law against this order on the plea that the delays
in licensing/approvals are causing this delay.
SUBSIDIARY COMPANY
8. A wholly owned subsidiary namely, "TSIL Energy Limited" has
been incorporated on 20th November, 2012, with an authorised share
capital of Rs.10 crores and an initial subscribed and paid up capital
of Rs.6,00,600 (60,060 equity shares of Rs.10 each). The company has
already received the Certificate of Commencement of Business on 21st
February, 2013. The consolidated accounts also include figures of this
subsidiary from 20th November, 2012 to 31st March, 2013.
CONSOLIDATED FINANCIAL STATEMENTS
9. The Audited Consolidated Financial Statements based on the
Financial Statements received from the subsidiary Company, TSIL Energy
Limited, 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 other applicable Accounting
Standards 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. TSIL Energy Limited,
prepared in compliance with applicable Accounting Standards. The
Ministry of Corporate Affairs, Government of India, 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 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, At/Post - Joda,
Dist-Keonjhar Orissa - 758 034, and that of the subsidiary company at
Tata Sponge Administrative Building, Bileipada, Post - Baneikala, Joda,
Dist-Keonjhar, Orissa - 758 038.
TATA BUSINESS EXCELLENCE MODEL (TBEM)
10. Further efforts were made by the company to improve its business
processes across all functions. During the year the company
participated in dip stick assessment and maintained the score band of
551 - 650.
INTEGRATED MANAGEMENT SYSTEM (IMS) FOR QMS, EMS AND OHSAS:
11. The company continued to maintain Integrated Management System
(IMS) comprising of Quality Management System (ISO : 9001). Environment
Management System (ISO:14001) and Occupational Health, Safety &
Accountability Management System (ISO: 18001). The performance on these
fronts has been mentioned in the Triple Bottom Line report given
elsewhere in the Annual Report.
AWARDS
12. During the year the company received the ESH (Environment Safety &
Health) Awards 2012 constituted by CII, Orissa, and won 2nd prize
(National Sustainability Award) from CII. The company also won the
"TPM
Excellence Award'' in Category - A from JIPM, Japan. Your company is
the first one in sponge iron industry to bag the award in the country.
The Company has also won the CII (EASTERN Region) "Quality Award"
and "Energy Conservation Award" for the year 2012-13.
LISTING FEES
13. The Annual Listing Fee for the year 2012-13 had been paid to those
Stock Exchanges where the company''s shares are listed.
DIRECTORS
14. Mr. D. K. Banerjee retires by rotation and, being eligible, offers
himself for re-appointment.
15. Mr. P. C. Parakh retires by rotation and, being eligible, offers
himself for re-appointment.
16. Mr. D. B. Sundararamam, who was appointed Additional Director
w.e.f. 1st December, 2012, and who holds office up to the date of the
forthcoming Annual General Meeting of the company, has been proposed in
writing by a shareholder for the office of Director.
17. Mr. Suresh Thawani ceased to be the Managing Director of the
company on and from 1st April, 2013. He had served the company for more
than 6 years and significantly contributed towards all round
development of the company. The Board of Directors placed on record
their sincere thanks and gratitude for his contribution to the company.
18. In the Board meeting held on 29th March, 2013, Mr. D. P. Deshpande
was appointed Additional Director of the company w.e.f. 1st April,
2013. He holds office up to the date of the forthcoming Annual General
Meeting of the company and has been proposed in writing by a
shareholder for the office of Director.
The Board commends appointment of Mr. D. K. Banerjee, Mr. P. C. Parakh,
Mr. D. B. Sundararamam and Mr. D. P. Deshpande.
19. Consequent upon the retirement of Mr. Suresh Thawani, the Board in
its meeting held on 29th March, 2013, appointed Mr. D. P. Deshpande as
the Managing Director of the company w.e.f. 1st April, 2013. Necessary
resolutions together with the explanatory statement have been included
in the Notice of the Thirtieth Annual General Meeting as his
appointment is subject to approval of the shareholders.
CORPORATE SUSTAINABILITY
20. As a member of Tata Group and as a responsible corporate citizen
the company continues to undertake steps towards welfare of society
around it, community initiatives, periphery development, environment
protection and improvement in harmony with the normal business and
contributing to exchequer through various taxes/duties etc. At the same
time, the company continued its focus on employees'' health and
safety, skill development and superior living conditions. The company
has taken a serious note of threat of global warming and climate
change. Through a specific study, the company has measured carbon foot
print of its operations and is taking steps to reduce the Green House
Gas emissions.
Corporate sustainability is aligned with Triple Bottom Line approach by
complying with -
- the UN Global Compact by addressing its ten principles
- Guidelines of Tata Council for Community Initiatives (TCCI)
A detailed report on Corporate Sustainability based on Triple Bottom
Line approach is appearing elsewhere in the Annual Report.
INCLUSIVE GROWTH
21. The concept of inclusive growth through Affirmative Action has
been adopted by the company in the past. Further efforts have been
made by the company during the year to strengthen the actions.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO.
22. As required under Sub-section 1(e) of Section 217 of the Companies
Act, 1956, read with the Companies (Disclosure of Particulars in the
Report of 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
23. As required under Sub-section 2A of Section 217 of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975, as amended from time to time, the particulars of such employees
are given in a statement annexed to this report.
DIRECTORS'' RESPONSIBILITY STATEMENT
24. Pursuant to Section 217(2AA) of the Companies Act, 1956, the
Directors, based on the representations received 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, in the selection of accounting policies, consulted the
statutory Auditors and have 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 2012-13 and of the profit of the company for that
period;
(iii) they have 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 the company and for preventing and
detecting fraud and other irregularities;
(iv) they have prepared the annual accounts on a going concern basis.
REPORT ON CORPORATE GOVERNANCE
25. Pursuant to Clause 49 of the Listing Agreements with the Stock
Exchanges, the followings form part of this Annual Report :
(i) Managing Director''s declaration regarding compliance of Code of
Conduct by Board Members and Senior Management personnel;
(ii) Management Discussion and Analysis;
(iii) Report on the Corporate Governance;
(iv) Auditors'' Certificate regarding compliance of conditions of
Corporate Governance.
VOLUNTARY DELISTING OF THE COMPANY''S EQUITY SHARES FROM CERTAIN STOCK
EXCHANGES
26. The Equity Shares of the company have been voluntarily delisted
from The Stock Exchange, Ahmedabad and The Delhi Stock Exchange
Association Ltd. during 2004-05, from Bhubaneswar Stock Exchange during
2006-07 and from Calcutta Stock Exchange Association Ltd. during the
year 2008-09.
Shares of the company are actively traded in the National Stock
Exchange of India Ltd. and Bombay Stock Exchange Ltd.
AUDITORS
27 (a) The Auditors, Messrs Deloitte Haskins & Sells, Chartered
Accountants, retire at the conclusion of the ensuing Annual General
Meeting and, being eligible, offer themselves for reappointment.
(b) The Board has appointed M/s.Shome & Banerjee as Cost Auditors for
the year 2012-13.
ACKNOWLEDGEMENT
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
(A.M. Misra)
Chairman
Jamshedpur
22nd April, 2013
Mar 31, 2012
The Directors take pleasure in presenting the Twenty-ninth Annual
Report on the business and operations of the company and its financial
results for the year ended 31st March, 2012.
FINANCIAL RESULTS
Current year Previous year
(Rs. Lac) (Rs. Lac)
2. (i) Sales (Net of Excise Duty)
and other income 65693 69487
(ii) Profit before depreciation 13044 16880
(iii) Depreciation and amortisation
expenses 1837 1852
(iv) Profit before taxes 11207 15028
(v) Current Tax 4290 5560
(vi) Deferred Tax (651) (666)
(vii) Profit after tax 7568 10134
(viii) Profit brought
forward from previous year 1434 1232
(ix) Profit available for
appropriation 9002 11366
(x) Dividend: 80% (2010-2011 : 80%) 1232 1232
(xi) Tax on Dividend 200 200
(xii) Transfer to General Reserve 6100 8500
(xiii) Surplus carried to Balance Sheet 1470 1434
DIVIDEND
3. The Board has recommended a dividend of Rs. 8/- per share (i.e.
80%) on 1,54,00,000 equity shares of Rs.10 each for the financial year
ended 31st March, 2012, subject to approval of the shareholders at the
ensuing Annual General Meeting. The total outgo on account of dividend
(ex-taxes) will be Rs. 1232 lac, which is equal to previous year.
OPERATIONS
4. During the year, all the three kilns produced 2,72,106 MT of sponge
iron compared to 3,83,002 MT in the previous year. The capacity
utilisation was lower at 70% as compared to 98% in the previous year.
The under-utilistion of capacity was mainly due to frequent disruptions
in supply of iron ore due to factors beyond company's control which
prevailed over last three quarters of the year.
Supply of linkage coal has been stopped by Ministry of Coal. The
company had to largely source coal from domestic market through
e-auctions and imports. The indigenous coal was optimally used along
with imported coal. Planned operations could not be carried out due to
paucity of iron ore and frequent shutdown of the kilns. However, the
down-time was gainfully used to maintenance and modification projects.
The despatch of sponge iron during the year was 2,73,766 MT as compared
to 3,80,273 MT in the previous year. Reduction in the despatch was
consequent to lower production due to the reasons stated above.
POWER
5. During the year, the total generation of power from the two power
plants (of 7.5MW and 18.5 MW capacity) was 134.39 million kwh out of
which 88.31 million kwh of surplus power was exported to the State Grid
compared with generation of 191.37 million kwh and sale of 133.77
million kwh in the previous year. The downfall in the generation and
sale of power was consequential to lower availability of waste gas from
the kilns due to lower production of sponge iron.
The Board in its meeting held in March, 2011, had approved the
installation of an AFBC boiler based power plant with a capacity of 25
MW to utilise the waste. This was subject to obtaining necessary
approvals / clearances etc. The project implementation has not started
till date because of the undue delay in getting statutory clearances,
change in eco-dynamics and identification of a long term buyer.
FINANCE
6. The market for steel and therefore sponge iron was stable with
little fluctuations in demand. Disruption in supply of iron ore led to
short-fall in production and despatch. The price of Sponge Iron
improved in the later part of the year. Price of iron ore and coal
registered sharp increase during the year and these reflected in the
price of Sponge Iron too. Earning per share dropped to Rs.49.14 as
compared to previous year (Rs. 65.80). The company continued to be debt
free during the year. The loss in revenue due to lower production was
partly compensated by sale of waste materials and earning from
financial activities.
DEVELOPMENT OF COAL BLOCK
7. The work in connection with development of coal block at Radhikapur
(East) and Utkal-F in Talcher coalfields was started in 2006-07. The
Company has made significant progress in land acquisition and has
deposited requisite money with Government of Orissa for 1st phase of
land requirement. After a good progress, the land acquisition process
took a pause due to technical reasons of land acquisition process being
followed. The coal block is expected to become operational from end
2013-14. So far all expenditure has been funded out of internal
generations only.
TATA BUSINESS EXCELLENCE MODEL (TBEM)
8. Further efforts were made by the company to improve its business
processes across all functions. During the year the company
participated in JRD-QV Quality Award competition and scored over 550
marks twice in a row. During the year. the management emphasised the
need to implement the Business Excellence Plans at all relevant areas.
INTEGRATED MANAGEMENT SYSTEM (IMS) FOR QMS,EMS,AND OHSAS:
9. The company continued to maintain Integrated Management System
(IMS) comprising of Quality Management System(ISO : 9001). Environment
Management System(ISO:14001) and Occupational Health, Safety &
Accountability Management System(ISO: 18001). The performance on these
fronts has been mentioned in the Triple Bottom Line report given
elsewhere in the Annual Report.
AWARDS
10. CII (Eastern Region) Quality Award - The company has yet again won
the CII (ER) Quality Award 2012 in an industry wide contest.
11. IIM National Quality Award - The Company, for the sixth time, won
the National Quality Award instituted by the Indian Institute of Metals
for the year 2010-11 under the category of Pig Iron/Rolling Mill/DRI.
12. HRD Thinker Award - The company won the 'HRD Thinker Award ( a
cash award and gold medal) instituted by the Indian Society of Training
& Development, New Delhi, on its unique internal training programme of
employees called 'Empowered Associate' or e-associate.
LISTING FEES
13. The Annual Listing Fee for the year 2011-12 had been paid to those
Stock Exchanges where the company's shares are listed.
DIRECTORS
14. Mr.N.P. Sinha retires by rotation and, being eligible, offers
himself for re-appointment.
15. Mr.S.P. Mehrotra, who is due to retire at the forthcoming Annual
General Meeting, had informed the company that he did not wish to seek
reappointment. Therefore, it is proposed to appoint Mr.S. Srikanth as a
Director on the Board of Directors of the company at the forthcoming
Annual General Meeting in place of Mr.S.P. Mehrotra.
16. Mr. Rajesh Chintak retires by rotation and, being eligible, offers
himself for re-appointment.
The company has received notice from a member of the company proposing
the candidature of Mr.S. Srikanth as Director of the company.
The Board placed on record its deep appreciation of the sincere
services and invaluable advice rendered to the company by Mr.S.P.
Mehrotra during his association as Director on the Board of Directors
of the company.
17. Mr.Manoj Thankachan Thomas, who was appointed Additional Director
w.e.f. 12th September, 2011, and who holds office up to the date of the
forthcoming Annual General Meeting of the company, has been proposed in
writing by a shareholder for the office of Director.
The Board commends appointment of Mr.N.P. Sinha, Mr.S. Srikanth, Mr.
Rajesh Chintak and Mr.Manoj Thankachan Thomas.
CORPORATE SUSTAINABILITY
18. As a member of Tata Group and as a responsible corporate citizen
the company has been undertaking steps towards welfare of society
around it, community initiatives, periphery development, environment
protection and improvement in harmony with the normal business and
contributing to exchequer through various taxes/duties etc. At the same
time, the company continued its focus on employees' health and safety,
skill development and superior living conditions. The company has taken
a serious note of threat of global warming and climate change. Through
a specific study, the company has measured carbon foot print of its
operations and is taking steps to reduce the Green House Gas emissions.
Corporate sustainability is aligned with Triple Bottom Line approach by
complying with -
- the UN Global Compact by addressing its ten principles
- Guidelines of Tata Council for Community Initiatives (TCCI)
A detailed report on Corporate Sustainability based on Triple Bottom
Line approach is appearing elsewhere in the Annual Report.
INCLUSIVE GROWTH
19. The concept of inclusive growth through Affirmative Action has
been adopted by the company in the past. Further efforts have been
made by the company during the year to strengthen this concept.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO.
20. As required under Sub-section 1(e) of Section 217 of the Companies
Act, 1956, read with the Companies (Disclosure of Particulars in the
Report of 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
21. As required under Sub-section 2A of Section 217 of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975, as amended from time to time, the particulars of such employees
are given in a statement annexed to this report.
DIRECTORS' RESPONSIBILITY STATEMENT
22. Pursuant to Section 217(2AA) of the Companies Act, 1956, the
Directors, based on the representations received 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, in the selection of accounting policies, consulted the
statutory Auditors and have 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 2011-12 and of the profit of the company for that
period;
(iii) they have 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 the company and for preventing and
detecting fraud and other irregularities;
(iv) they have prepared the annual accounts on a going concern basis.
REPORT ON CORPORATE GOVERNANCE
23. Pursuant to Clause 49 of the Listing Agreements with the Stock
Exchanges, the followings form part of this Annual Report :
(i) Managing Director's declaration regarding compliance of Code of
Conduct by Board Members and Senior Management personnel;
(ii) Management Discussion and Analysis;
(iii) Report on the Corporate Governance;
(iv) Auditors' Certificate regarding compliance of conditions of
Corporate Governance.
VOLUNTARY DELISTING OF THE COMPANY'S EQUITY SHARES FROM CERTAIN STOCK
EXCHANGES
24. The Equity Shares of the company have been voluntarily delisted
from The Stock Exchange, Ahmedabad and The Delhi Stock Exchange
Association Ltd. during 2004-05, from Bhubaneswar Stock Exchange during
2006-07 and from Calcutta Stock Exchange Association Ltd. during the
year 2008-09.
Shares of the company are actively traded in the National Stock
Exchange of India Ltd. and Bombay Stock Exchange Ltd.
AUDITORS
25 (a) The Auditors, Messrs Deloitte Haskins & Sells, Chartered
Accountants, retire at the conclusion of the ensuing Annual General
Meeting and, being eligible, offer themselves for reappointment.
(b) During the year, the Central Government prescribed the Cost
Accounting Records to be maintained by the Company and also mandated
that Cost Audit of eligible products/services be carried out.
Therefore, the Board had appointed M/s.Shome & Banerjee as Cost
Auditors for the year 2011-12 and also for 2012-13.
ACKNOWLEDGEMENT
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
(A.M. Misra)
Chairman
Jamshedpur,
23rd April, 2012
Mar 31, 2011
The Directors take pleasure in presenting the Twenty-eighth Annual
Report on the business and operations of the company and its financial
results for the year ended 31st March, 2011.
FINANCIAL RESULTS
Current year Previous year
(Rs. Lac) (Rs. Lac)
2. (i) Sales (Net of Excise Duty) and
other income 69487 54194
(ii) Profit before depreciation 16880 14560
(iii) Depreciation and other non-cash expenses 1852 1938
(iv) Profit before taxes 15028 12622
(v) Provision for Current Tax 5560 4608
(vi) Provision for Deferred Tax (666) (440)
(vii) Fringe Benefit Tax - 2
(viii) Profit after tax 10134 8452
(ix) Profit brought forward from previous year 1232 917
(x) Profit available for appropriation 11366 9369
(xi) Dividend: 80% (2009-2010: 80%) 1232 1232
(xii) Tax on Dividend 200 205
(xiii) Transfer to General Reserve 8500 6700
(xiv) Surplus carried to Balance Sheet 1434 1232
DIVIDEND
3. The Board has recommended a dividend of Rs.8/- per share (i.e. 80%)
on 1,54,00,000 equity shares of Rs.10 each for the financial year ended
31st March, 2011, subject to approval of the shareholders at the
ensuing Annual General Meeting. The total outgo on account of dividend
(excluding dividend distribution tax) will be Rs. 1232 lac.
OPERATIONS
4. During the year, all three kilns were in operation and achieved the
highest ever production of 3,83,002 MT of sponge iron compared to
3,59,333 MT in the previous year. The capacity utilisation was 98 % as
compared to 92% in the previous year, i.e. an increase of 6%.
Iron ore and coal are two major raw materials for making sponge iron in
rotary kilns. Tata Steel Ltd supplied entire quantity of iron ore. Coal
India supplied negligible coal against linkages. The company had to
largely source coal from domestic sources through e-auctions and
imports. The indigenous coal was optimally used along with imported
coal. Improved operating practices resulted into longer campaign life
of Kilns. Substantial reduction in down time of kilns for repairs and
maintenance was achieved by focussing on modern project management
techniques.
The despatch of sponge iron during the year was the highest ever at
3,80,273 MT as compared to 3,61,207 MT in the previous year, i.e. an
increase of 5%.
POWER
5. During the year, both the power plants (of 7.5MW and 18.5 MW
capacity) together produced 191.37 million kwh of power and 133.77
million kwh of surplus power was sold compared with generation of
181.39 million kwh and sale of 125.01 million kwh in the previous year.
There was improvement in supply of power from various power plants to
State-Grid. This led to reduction in price of power during course of
the year.
The Board in its meeting held in March, 2011, has approved the
installation of an AFBC boiler based power plant with a capacity of 25
MW to utilise the solid waste. The project will be financed with
internal generation and borrowings. This is subject to obtaining
necessary approvals / clearances etc.
FINANCE
6. The market for steel and therefore sponge iron was normal with
seasonal fluctuations in demand and prices. Prices of iron ore and coal
gradually firmed up during the year and these reflected in the price of
product too. Earning per share increased to Rs.65.80 as compared to
previous year (Rs. 54.88). The company remained debt free during the
year
DEVELOPMENT OF COAL BLOCK
7. The work in connection with development of coal block at Radhikapur
(East) and Utkal-F in Talcher coalfields was started in 2006-07. The
Company made significant progress in land acquisition and has deposited
requisite money with Government of Orissa for 1st phase of land
requirement. Depending upon the money needed, the financial tie-up for
the coal block will be completed in next few months. The coal block is
expected to become operational from 2012-13.
TATA BUSINESS EXCELLENCE MODEL (TBEM)
8. Further efforts were made by the company to improve its business
processes across all functions. During the year the company
participated in JRD-QV duality Award competition and scored over 550
marks thereby declared as "Emerging Industry Leader". During the year,
the spirit of achieving excellence was reinforced across the
organisation through appropriate training and communication by the
management.
INTEGRATED MANAGEMENT SYSTEM (IMS) FOR QMS.EMS.ANDOKSAS:
9. The company continued to maintain Integrated Management System
(IMS) comprising of Quality Management System(ISO : 9001), Environment
Management System(ISO:14001) and Occupational Health, Safety &
Accountability Management System(ISO: 18001). The performance on these
fronts has been mentioned in the Triple Bottom Line report given
elsewhere in the Annual Report.
AWARDS
10. In recognition of companys effective pollution control measures
with adoption of sound environment management practices, the Orissa
State Pollution Control Board has conferred the company with Pollution
Control Appreciation Award for2010.
11.; The Company continues to maintain high product quality standards.
During the year it won, yet again, the prestigious Oil (Eastern Region)
Quality award for the year 2010. The company was also certified as a
Model TQM Company for 2010 in an industry wide contest.
LISTING FEES
12. The Annual Listing Fee for the year 2010-11 had been paid to those
StockExchanges whece the companys shares are listed.
DIRECTORS
13. Mr. K.K. Varughese retires by rotation and, being eligible, offers
himself for re-appointment.
14. Mr. Arun Misra retires by rotation and, being eligible, offers
himself for re-appointment.
15. Mr. P. K. Lahiri, who is also due to retire at the forthcoming
Annual General Meeting, had informed the company that he does not wish
to seek reappointment. A resolution pursuant to Section 256 of the
Companies Act, 1956, for not filling the vacancy caused by the
retirement of Mr. P. K. Lahiri has been included in the Notice of the
28th Annual General Meeting.
The Board placed on record its deep appreciation of the sincere
services and invaluable advice rendered to the company by Mr. P. K.
Lahiri during his long association as a Director of the company.
CORPORATE SUSTAINABILITY
16. As a member of Tata Group and as a responsible corporate citizen,
the company has been undertaking steps towards welfare of society
around it, community initiatives, periphery development, environment
protection and improvement in harmony with the normal business and
contributing to exchequer through various taxes/duties etc. At the same
time, the company continued its focus on employees health and safety,
skill development and superior living conditions. The company has taken
a serious note of threat of global warming and climate change. Through
a specific study, the company has measured carbon foot prints and is
taking steps to reduce the Green House Gas emissions.
Corporate sustainability is aligned with Triple Bottom Line approach by
complying with -
- The UN Global Compact by addressing its ten principles
- Guidelines of Tata Council for Community Initiatives (TCCI)
A detailed report on Corporate Sustainability based on Triple Bottom
Line approach is appearing elsewhere in the Annual Report.
INCLUSIVE GROWTH
17. The concept of inclusive growth through Affirmative Action has
been adopted by the company in the past. Further efforts have been
made by the company during the year to strengthen this concept.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO.
18. As required under Sub-section 1 (e) of Section 217 of the
Companies Act, 1956, read with the Companies (Disclosure of Particulars
in the Report of 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
19. As required under Sub-section 2A of Section 217 of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975, as amended from time to time, the particulars of such employees
are given in a statement annexed to this report.
DIRECTORS RESPONSIBILITY STATEMENT
20. Pursuant to Section 217(2AA) of the Companies Act, 1956, the
Directors, based on the representations received 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, in the selection of accounting policies, consulted the
statutory Auditors and have 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 2010-11 and of the profit of the company for that
period;
(iii) they have 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 the company and for preventing and
detecting fraud and other irregularities;
(iv) they have prepared the annual accounts on a going concern basis.
REPORT ON CORPORATE GOVERNANCE
21. Pursuant to Clause 49 of the Listing Agreements with the Stock
Exchanges, the followings form part of this Annual Report:
(i) Managing Directors declaration regarding compliance of Code of
Conduct by Board Members and Senior Management personnel;
(ii) Management Discussion and Analysis;
(iii) Report on the Corporate Governance;
(iv) Auditors Certificate regarding compliance of conditions of
Corporate Governance.
VOLUNTARY DELISTING OF THE COMPANYS EQUITY SHARES FROM CERTAIN STOCK
EXCHANGES
22. The Equity Shares of the company have been voluntarily delisted
from The Stock Exchange, Ahmedabad and The Delhi Stock Exchange
Association Ltd. during 2004-05, from Bhubaneswar Stock Exchange during
2006-07 and from Calcutta Stock Exchange Association Ltd. during the
year 2008-09.
Shares of the company are actively traded in the National Stock
Exchange of India Ltd. and Bombay Stock Exchange Ltd.
AUDITORS
23. The Auditors, Messrs Deloitte Haskins & Sells, Chartered
Accountants, retire at the conclusion of the ensuing Annual General
Meeting and, being eligible, offer themselves for reappointment.
ACKNOWLEDGEMENT
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 unstinted support and co-operation during
the year.
On behalf of the Board of Directors
(A.M. Misra)
Chairman
Jamshedpur,
6th May, 2011
Mar 31, 2010
The Directors take pleasure in presenting the Twenty-seventh Annual
Report on the business and operations of the company and its financial
results fortheyear ended 31st March, 2010.
FINANCIAL RESULTS
Current year Previous year
(Rs. Lac) (Rs. Lac)
2. (i) Sales (Net of Excise
Duty) and other income 54194 62828
(ii) Profit before depreciation 14560 19948
(iii) Depreciation and other
non-cash expenses 1938 1831
(iv) Profit for the year 12622 18117
(v) Provision for Current Tax 4608 6285
(vi) Provision for Deferred
Tax write back (440) (262)
(vii) Fringe Benefit Tax 2 27
(viii) Profit after tax 8452 12067
(ix) Profit brought forward from
previous year 917 948
(x) Profit available for
appropriation 9369 13015
(xi) Dividend: 80% <2008-2009: 80%) 1232 - 1232
(xii) Tax on Dividend 205 209
(xiii) Transfer to General Reserve 6700 10657
(xiv) Surplus carried to
Balance Sheet 1232 917
DIVIDEND
3. TheBoardhas recommended a dividend of Rs8 per share (ie 80%) on
1,54,00,000 equity shares of Rs. 10 each for the financial year ended
31st March, 2010, subject to approval of the shareholders at the
ensuing Annual General Meeting. The total outgo on account of dividend
(ex-taxes) will be Rs. 1232 lacs which equals to previous year.
OPERATIONS
4. During the year, all the three kilns were in operation and produced
3,59,333 MT of sponge iron compared to 3,42,074 MT in the previous
year. The capacity utilisation was 92% as compared to 88% in the
previous year, i.e. an increase of 4%.
Iron ore and coal are two major raw materials for making sponge iron in
rotary kilns. Tata Steel Ltd supplied entire quantity of iron ore. The
supply of coal against linkage from Coal India Ltd was less than
requirement. In addition, ash percentage in the linkage coal has been
steadily going up. The company had to source the balance requirement of
coal from domestic market and imports. The indigeneous coal was
optimally used along with imported coal. Improved operating practices
resulted into longer campaign life. Substantial reduction in down time
of kiln for repairs and maintenance was achieved by focussing on modern
project management techniques.
The despatch of sponge iron during the year was 3,61,207 MT as compared
to 3,42,920 MT in the previous year, i.e. an increase of 5%.
FINANCE
5. There were signs of recovery of the economy after severe melt down
in later part of the year 2008. However, the year saw very unstable
market for steel and related products due to which selling price of
Sponge Iron varied all along the year impacting the margin. Earning per
share declined to Rs. 54.88 as compared to previous year (Rs. 78.35).
However, the company remained debt free during the year.
POWER
6. During the year, both the power plants (of 7.5MW and 18.5 MW
capacity) together produced 181.39 million kwh of power and 125.02
million kwh of surplus power was sold compared with generation of
181.01 million kwh and sale of 124.82 million kwh in the previous year.
There was marginal increase in the selling price of power from March,
2009 which helped the company in generating additional revenue.
DEVELOPMENT OF COALBLOCK
7. The preliminary work in connection with development of coal block
at Radhikapur (East) and Utkal-F in Talcher coalfields was started in
2006-07. The Company made progress in land acquisition and has
deposited money with Government of Orissa for a part of land. The
financial tie-up for the coal block will be completed shortly. The coal
block is expected to become operational from 2012-13.
TATA BUSINESS EXCELLENCE MODEL (TBEM)
8. Further efforts were made by the company to improve its business
processes across a!! functions. During the year the company
participated in JRD-QV Quality Award competition and scored for the
first time more than 500 marks thereby winning Active Promotion Award.
During the year, the spirit of achieving excellence was reinforced
across the organisation through appropriate training and communication
by the management.
INTEGRATED MANAGEMENT SYSTEM (IMS) FOR QMS, EMS, AND OHSAS:
9. During previous year the company had qualified for the Integrated
Management System (IMS) comprising of Quality Management System(ISO :
9001) Environment Management System(ISO:14001) and Occupational Health,
Safety & Accountability Management System(ISO: 18001) The performance
on these fronts has been mentioned in the Triple Bottom Line report
given elsewhere in the Annual Report. The Company also adopted a
Climate Change policy as a part of Tata Group initiative,
AWARDS
10. in recognition of the relentless efforts by the company towards
combating climate change, the company won for the second time the "Good
Green Governance (G3) Award" constituted by Shristi Foundation for the
year 2008. It was also adjudged winner in the Metal & Mining Category
for its outstanding achievement in Environment Management and was
awarded the GreenTech Environment Excellence Gold Award for the year
2009 instituted by Greentech Foundation. Further, in recognition of the
companys initiatives to implement economical and sustainable ways of
designing, manufacturing and commercial use of materials and products
to minimise the impact on the environment and human health, itwasgiven
Green IndiaAward 2009 by Frost & Sullivan
11. The Company continues to maintain high product quality standards.
During the year it won the prestigious CM (Eastern Region) Quality
award. The company was also certified as a Model TQM Company for
2008-09 in an industrywide contest.
LISTING FEES
12. The Annual Listing Fee for the year 2009-10 had been paid to those
Stock Exchanges where the companys shares are listed.
DIRECTORS
13. Mr.A.D. Baijai, who has been on the Board of your Company both as
director as weil as the Chairman, relinqished his office w.e.f. 2nd
August, 2009.
The Board placed on record its deep appreciation of the sincere
services and invaluable advice rendered to the company by Mr. A.D.
Baijai during his association as a Director and subsequently as the
Chairman of the Board of Directors of the company.
14. Mr. A. M. Misra was nominated as a Special Director by Tata Steel
Limited according to the provisions of Article 110 of the Articles of
Association of the company and assumed the post of Chairman of the
company w.e.f. 2nd August, 2009. According to the Article 110, the
Special Director so nominated shall not be liable to retire by
rotation.
15. Mr. D.K. Banerjee retires by rotation and, being eligible, offers
himself for re-appointment.
16. Mr.P.C. Parakh retires by rotation and, being eligible, offers
himself for re-appointment.
17. Mr.Suresh Thawani retires by rotation and, being eligible, offers
himself for re-appointment. MANAGING DIRECTOR
1S. The Board at its meeting held on 21 st January, 2010 has
reappointed Mr. Suresh Thawani as Managing Director of the company from
10th March, 2010 to 31 st March, 2013. Necessary resolutions together
with the explanatory statement have been included in the Notice of
Twenty-seventh Annual General Meeting as the above reappointment is
subject to the approval of the shareholders.
CORPORATE SUSTAINABILITY
19. As a member of Tata Group and as a responsible corporate citizen
the company has been undertaking steps towards welfare of society
around it, community initiatives, periphery development, environment
protection and improvement in harmony with the normal business and
contributing to exchequer through various taxes/duties etc. At the same
time, the company continued its focus on employees health and safety,
skill development and superior living conditions. The company has taken
a serious note of threat of global warming and climate change. Through
a specific study, the company has measured carbon foot prints and is
taking steps to reduce the Green House Gas emissions.
Corporate sustainability is aligned with Triple Bottom Line approach by
complying with -
- the UN Global Compact by addressing its ten principles
- Guidelines of Tata Council for Community Initiatives (TCCI)
Adetailed report on Corporate Sustainability based on Triple Bottom
Line approach is appearing elsewhere in the Annual Report.
INCLUSIVE GROWTH
20. The concept of inclusive growth through Affirmative Action has
been adopted by the company In the past. Further efforts have been made
by the company during the year to strengthen this concept.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO.
21. As required under Sub-section 1{e)ofSection217oftheCompaniesAct,
1956, read with the Companies (Disclosure of Particulars in the Report
of 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
22. As required under Sub-section 2Aof Section 217 of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975, as amended from time to time, the particulars of such employees
are given in a statement annexed to this report.
DIRECTORS RESPONSIBILITY STATEMENT
23. Pursuant to Section 217(2AA) of the Companies Act, 1956, the
Directors, based on the representations received 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, in the selection of accounting policies, consulted the
statutory Auditors and have 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 2009-10 and of the profit of the company for that
period;
(iii) they have 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 the company and for preventing and
detecting fraud and other irregularities;
(iv) they have prepared the annual accounts on a going concern basis.
REPORT ON CORPORATE GOVERNANCE
24. Pursuant to Clause 49 of the Listing Agreements with the Stock
Exchanges, the followings form part of this Annual Report:
(i) Managing Directors declaration regarding compliance of Code of
Conduct by Board Members and Senior Management personnel;
(ii) Management Discussion and Analysis;
(iii) Report on the Corporate Governance;
(iv) Auditors Certificate regarding compliance of conditions of
Corporate Governance. VOLUNTARY DELISTING OF THE COMPANYS EQUITY
SHARES FROM CERTAIN STOCK EXCHANGES
25. The Equity Shares of the company have been voluntarily delisted
from The Stock Exchange, Ahmedabad and The Delhi Stock Exchange
Association Ltd. during 2004-05, from Bhubaneswar Stock Exchange during
2006-07 and from Calcutta Stock Exchange Association Ltd. during the
year 2008-09.
Shares of the company are actively traded in the National Stock
Exchange of India Ltd. and Bombay Stock Exchange Ltd.
AUDITORS
26. The Auditors, Messrs Deioitte Haskins & Sells, Chartered
Accountants, retire at the conclusion of the ensuing Annual General
Meeting and, being eligible, offer themselves for reappointment.
ACKNOWLEDGEMENT
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
Jamshedpur A. M. Misra
22nd April, 2010 Chairman
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