Kalyani Steels Ltd
Directors Reports
To,
The Members,
The Directors have pleasure in presenting the Fiffiieth Annual Report on the business
and operations of the Company together with the Audited Financial Statements for the
Financial Year ended March 31, 2023.
1. Financial Highlights
( Rs in Million)
|
2022-23 |
2021-22 |
Total Income |
19,557.58 |
17,523.86 |
Total Expenditure |
16,537.00 |
13,674.65 |
Finance Cost |
280.96 |
132.09 |
Depreciation & amortization expenses |
489.02 |
458.76 |
Profit before Exceptional Item and Tax |
2,250.60 |
3,258.36 |
Exceptional Item |
— |
— |
Profit before Tax |
2,250.60 |
3,258.36 |
Tax Expenses : |
|
|
- Current Tax |
632.50 |
886.00 |
- Deferred Tax |
(52.42) |
(56.79) |
- Taxation in respect of earlier years |
0.25 |
— |
Profit affier Tax |
1,670.27 |
2,429.15 |
2. Dividend
Based on the Company's performance, the Directors are pleased to recommend a
dividend of Rs 10/- per Equity Share of Rs 5/- each (i.e. 200%), for the
financial year ended March 31, 2023, for approval of the members. The Board has
recommended dividend based on the parameters laid down in the Dividend Distribution
Policy, adopted by the Company pursuant to Regulation 43A of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015.
The dividend on Equity Shares, if approved by the members would involve cash
out" flow of Rs 436.53 Million and shall be subject to deduction of income tax
at source.
3. Reserves
During the year under review, the Company does not propose to transfer any amount to
the General Reserve. An amount of Rs 14,177 Million is proposed to be retained as
Retained Earnings.
4. Performance of the Company
The steel industry faced numerous challenges in FY 2022-23 caused by external
negative global headwinds such as volatility in raw material & commodity prices,
in" ationary pressures, rising interest rates, supply chain related issues due to
Russia-Ukraine war, depreciating rupee etc.
One of the key commodities for alloy steel industry, Ferro Moly exhibited a steep
& sudden increase of more than 100% from April, 2022 at $ 48/Kg to $ 99.3/Kg in
February, 2023 before coming down to $ 78/Kg in March, 2023. Such price volatility in
commodity prices puts negative pressure on the profitability of the Company. Despite such
a volatile & complex business environment, the Company has delivered extremely well
results during FY 2022-23. The Company achieved Revenue from Operations of Rs 18,994
Million against Rs 17,060 Million in FY 2021-22. The Profit before tax is Rs 2,251
Million against Rs 3,258 Million in FY 2021-22.
The automotive sector is a key contributor to the Company's business portfolio. FY
2022-23 has seen remarkable growth in passenger vehicles (PV) sales at 4.5 Million
vehicles at a growth of 29% over
FY 2021-22. With 4.5 Million vehicles sales, PV has crossed the pre-pandemic levels.
Further, the growth momentum is expected to continue even in FY 2023-24. Commercial
Vehicles, Two Wheelers & Three Wheelers are yet to catch up with the pre-pandemic
numbers but have exhibited growth. Increased auto sales would further improve the business
performance of the Company in FY 2023-24.
The alloy steel sector would also observe rising demand from sunrise sectors such as
Renewable Energy, Hydrogen electrolyzer & storage solutions, H2 fuel cells,
sustainable heating solutions etc. where specialty alloys steel products would be used.
The Company is continuously investing in R&D to develop new steel grades suitable for
a variety of applications catering to these segments. This would also help the Company to
increase its profitability in the near future.
5. Commissioning of Coke Making Facility and partial commissioning of Waste Heat
Recovery (WHR) based Captive Power Plant
The members are aware that the Company had planned to set up a 200,000 TPA Non-recovery
/ Heat recovery, stamp charged Coke Oven with Modiffied wet Quenching of hot coke and
17-18 MW captive power plant to be operated utilizing waste heat energy of fiue gas
generated from Coke Oven. The electrical power so produced shall be used for captive
consumption and the surplus, if any, will be sold to external agencies. The Broad
Speciffications were as follows : l Coke Oven
? Annual capacity (Dry coke) – 0.2 MT
? No. of Ovens – 72 (Divided in two batteries of 36 ovens each) l Heat
Recovery Captive Power Plant
? Power generation capacity – 17-18 MW
? Generation voltage – 11KV
Respecting its commitment to the Atmanirbhar Bharat campaign, the process technology
adopted was indigenous coke-making technology with all latest innovations incorporated for
a high degree of technological performance and product quality.
It is a pleasure to inform you that the Company has commissioned the Coke oven plant
with all its auxiliaries and utility systems and started its commercial production from
March 31, 2023. The production has already attained the designed capacity and the product
quality is amongst the best in the industry.
The power plant with the turbine - generator with all the balance of plant (BOPs) with
one of the two boilers has also been commissioned, while the second boiler to be added to
the steam circuit is going to be commissioned shortly.
6. State of Company's Afiairs
Discussion on the state of Company's a" airs has been covered as part of the
Management Discussion and Analysis (MD&A). MD&A for the year under review, as
stipulated under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, is presented in a separate section forming part of the Annual Report.
7. Corporate Governance
The Company aspires to reach highest standards of Corporate Governance and adhere to
the Corporate Governance Requirements set out by SEBI.
The Report on Corporate Governance as stipulated under SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, is presented in a separate section forming
part of the Annual Report.
The requisite certificate from Secretarial Auditors of the Company viz. M/s. SVD &
Associates, Company Secretaries, Pune certifying compliance of the conditions of Corporate
Governance is attached to Report on Corporate Governance.
8. Deposits
During the year under review, the Company has not accepted any deposit under Chapter
V of the Companies Act, 2013.
9. Directors
In terms of the provisions of the Companies Act, 2013 and the Articles of
Association of the Company, Mrs.Sunita B. Kalyani and Mr.Amit B. Kalyani, Directors of the
Company, are retiring by rotation at the ensuing Annual General Meeting and being
eligible, have offiered themselves for re-appointment.
These re-appointments form part of the Notice of the Annual General Meeting and the
Resolutions are recommended for your approval. Proffiles of these Directors, are given in
the Report on Corporate Governance for reference of the members.
The Company has received declarations from all Independent Directors that they meet the
criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and
Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015.
9.1 Board Evaluation
The Nomination and Remuneration Policy of the Company empowers the Nomination and
Remuneration Committee to formulate a process for effective evaluation of the performance
of individual Directors, Committees of the Board and the Board as a whole, in accordance
with the provisions of the Companies Act, 2013 Act and SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
The Board formally assesses its own performance based on parameters which, inter alia,
include performance of the Board on deciding long term strategy planning, structure,
composition and role clarity of the Board and Committees, discharging of governance and
ffifiduciary duties, handling critical issues etc.
The performance of the committees was evaluated by the Board afier seeking inputs from
the committee members on the basis of criteria such as composition of the committee,
effectiveness of the committee meetings, information and functioning.
The parameters for the performance evaluation of the Directors include contribution
made at the Board / Committee meetings, attendance, instances of sharing best practices,
domain knowledge, vision, strategy, engagement with senior management etc.
In a separate meeting of independent directors, the performance of Non-Independent
Directors and the Board as a whole was evaluated. Additionally, they also reviewed
performance of the Chairman of the Board, taking into account the views of Executive and
Non-executive Directors. They also assessed the quality, quantity and timeliness of "
flow of information between the Company management and the Board that is necessary for the
Board to effectively and reasonably perform their duties. The above evaluations were then
discussed in the Board meeting and performance evaluation of Independent Directors was
done by the entire Board, excluding the Independent Director being evaluated.
9.2 Nomination & Remuneration Policy
The Nomination and Remuneration Policy of the Company, inter alia, provides that the
Nomination and Remuneration Committee shall formulate the criteria for appointment of
Directors on the Board of the Company and persons holding Senior Management positions in
the Company, including their remuneration and other matters as provided under Section 178
of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015. The Policy is available on the website of the Company. (Web-link :
http://www.kalyanisteels.com/profile/policies/).
9.3 Meetings of the Board
During the Financial Year 2022-23, four Board Meetings were convened and held. Also
a separate meeting of Independent Directors as prescribed under Schedule IV of the
Companies Act, 2013 was held. The details of meetings of Board of Directors are provided
in the Report on Corporate Governance that forms part of this Annual Report.
10. Directors' Responsibility Statement
Pursuant to the requirements under Section 134(5) of the Companies Act, 2013, with
respect to Directors' Responsibility Statement, it is hereby confirmed that :
i) in the preparation of the annual accounts for the year ended March 31, 2023, the
applicable accounting standards have been followed and that there are no material
departures;
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 affiairs of the Company as at March 31, 2023 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 for the year ended March 31, 2023,
on a going concern basis;
v) the Directors have laid down internal financial controls to be followed by the
Company and that such internal financial controls are adequate and were operating
effectively; and
vi) the Directors have devised proper systems to ensure compliance with the provisions
of all applicable laws and that such systems are adequate and operating effectively.
11. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings &
Outgo
The information on conservation of energy, technology absorption and foreign
exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the
Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed
herewith as Annexure "A".
12. Corporate Social Responsibility
The Company has been carrying out various Corporate Social Responsibility (CSR)
activities in the areas of education, health, water, sanitation etc. These activities are
carried out in terms of Section 135 read with Schedule VII of the Companies Act, 2013 and
Companies (Corporate Social Responsibility Policy) Rules, 2014.
The Annual Report on CSR Activities undertaken by the Company is annexed herewith as
Annexure "B". The CSR Policy is available on the Company's website. (Web-link :
http://www.kalyanisteels.com/profile/policies/)
13. Related Party Transactions
All transactions with related parties were reviewed and approved by the Audit
Committee and were in accordance with the Policy on dealing with and materiality of
related party transactions and the related party framework, formulated and adopted by the
Company.
All contracts or arrangements entered into by the Company with Related Parties during
the financial year were on an arm's length basis and in the ordinary course of business.
Pursuant to Section 134 of the Companies Act, 2013 read with Rule 8(2) of the Companies
(Accounts) Rules, 2014, the particulars of transactions with related parties, are provided
in Form AOC-2, which is annexed herewith as Annexure "C". Related party
disclosures as per Ind AS have been provided in Note 38 to the Financial Statements.
The policy on Related Party Transactions in line with the requirements of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 and as approved by the Board is
uploaded on the Company's website. (Web-link :
http://www.kalyanisteels.com/profile/policies/)
14. Risk Management
Risk management, which aims at managing the impact of uncertainties, is an Integral
part of the Company's strategy setting and decision making process. The Company regularly
identiffies uncertainties and afier assessing them, devises short-term and long-term plans
to mitigate any risk which could materially impact on the Company's goals. This process of
identifying and assessing the risks is a two-way process with inputs being taken from
employees across the organization.
The Risk Management Committee of the Company is entrusted by the Board to frame,
implement and monitor the risk management plan for the Company. The committee is
responsible for reviewing the risk management plan and ensuring its effectiveness. 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.
The policy on Risk Management as approved by the Board is uploaded on the Company's
website.
(Web-link : http://www.kalyanisteels.com/profile/policies/)
15. Audit Committee
As on March 31, 2023, the Audit Committee comprises of Mr.S.K. Adivarekar, Chairman
of the Committee and Independent Director, Mr.B.N. Kalyani, Promoter Non-Executive
Director, Mr.B.B. Hattarki and Mrs.Shruti A. Shah, Independent Directors.
All the recommendations made by the Audit Committee were deliberated and accepted by
the Board during the Financial Year 2022-23.
16. Auditors and Auditor's Report
M/s. Kirtane & Pandit LLP, Chartered Accountants, Pune (Firm Registration
No.105215W / W100057), are the
Auditors of the Company and they hold ofice till the conclusion of the Fi"
y-Fourth Annual General Meeting to be held in the year 2027.
The Notes on Financial Statements referred to in the Auditor's Report are
self-explanatory and hence do not call for any further comments. The Auditor's Report does
not contain any qualification, reservation, adverse remark or disclaimer.
During the year under review, the Auditors of the Company have not reported any fraud
as specified under Section 143(12) of the Companies Act, 2013 to the Audit Committee.
17. Cost Auditors
The Board of Directors, on the recommendation of the Audit Committee, has appointed
M/s S.R. Bhargave & Co., Cost Accountants, Pune for conducting the cost audit of the
Company for Financial Year 2023-24.
As required under the Companies Act, 2013, the remuneration payable to the Cost
Auditors is required to be ratified by the members of the Company. Accordingly, resolution
seeking members' ratiffication for remuneration to be paid to Cost Auditors is included at
Item No.7 of the Notice convening Annual General Meeting.
18. Secretarial Audit and Secretarial Standards
Pursuant to provisions of Section 204 of the Companies Act, 2013, the Board had
appointed M/s. SVD & Associates, Company Secretaries, Pune, to undertake Secretarial
Audit of the Company for the Financial Year 2022-23. The Secretarial Audit Report for the
Financial Year ended March 31, 2023, is annexed herewith as Annexure "D". The
Secretarial Audit Report does not contain any qualification, reservation, adverse remark
or disclaimer.
The Company is compliant with the Secretarial Standards issued by the Institute of
Company Secretaries of India and approved by Central Government under Section 118(10) of
the Companies Act, 2013.
19. Information pursuant to Rule 5 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014
The information required pursuant to Section 197(12) of the Companies Act, 2013 read
with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, has been provided in Annexure "E".
In terms of Section 136 of the Companies Act, 2013, the Report and Accounts are being
sent to the shareholders excluding the information required under Rule 5(2) and (3) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Any
shareholder interested in obtaining the same may write to the Company Secretary at
investor@kalyanisteels.com.
20. Annual Return
In accordance with Section 92(3) read with Section 134(3)(a) of the Companies Act,
2013, the Annual Return of the Company as on March 31, 2022, filed with Registrar of
Companies, is available on the Website of the Company at www.kalyanisteels.com
21. Whistle Blower Policy
The Company promotes ethical behaviour in all its business activities, in line with
the best governance practices. The Company has a robust vigil mechanism through its
Whistle Blower Policy, approved and adopted by the Board of Directors of the Company in
compliance with the provisions of the Companies Act, 2013 and the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015. The Whistle Blower Policy is
available on the Company's website. (Web-link :
http://www.kalyanisteels.com/profile/policies/)
The Policy provides a formal channel whereby the employees / directors can report the
instances of unethical behavior, actual or suspected fraud or any violation of the Code of
Conduct and / or laws applicable to the Company, report the instances of leakage of
unpublished price sensitive information and seek redressal. This mechanism provides
appropriate protection to the genuine Whistle Blower, who avail of the mechanism. During
the year under review, the Company has not received any complaint under the said
mechanism.
22. Particulars of Loans, Guarantees or Investments Particulars of Loans, Guarantees
and Investments covered under Section 186 of the Companies Act, 2013, forms part of the
notes to the Financial Statements provided in this Annual Report.
23. Internal Financial Controls
The Company's internal financial control systems are commensurate with the nature of
its business, the size and complexity of its operations and such controls with reference
to the Financial Statements are adequate.
The Internal Financial Control Systems over financial reporting ensures that all
transactions are authorized, recorded and reported correctly in a timely manner. The
Company has laid down Standard Operating Procedures, Policies and Authority to guide the
operations of the business. Functional heads are responsible to ensure compliance with all
laws and regulations and also with the policies and procedures laid down by the
management.
24. Material Changes and Commitments, if any, afiecting Financial Position of the
Company
There are no adverse material changes or commitments that occurred afier March 31,
2023, which may a" ect the financial position of the Company or may require
disclosure.
25. Signi" cant and Material Orders
There are no significant and material orders passed by the regulators or courts or
tribunals impacting the going concern status and Company's operations in future.
26. Familiarization Programme
Detailed presentations are made to the entire Board including independent Directors
from time to time on various matters such as the Company's operations and business plans,
strategic plans, plant operations, regulatory updates etc. The Functional heads are
invited from time to time to present before the Board, key matters pertaining to their
area of expertise.
Apart from the above, the Directors are regularly briefed and updated on the
Company's policies and procedures, business model, the industry and operating environment
that the Company operates in. For newly appointed directors detailed induction program
involving the brieffing on the Company's philosophy on Governance, Ethics and Compliance
coupled with the Company's policies and interactions with the leadership team is in place.
The details of programmes for familiarization of Independent Directors with the Company
are put up on Website of the Company. (Web-link :
http://www.kalyanisteels.com/profile/policies/)
27. Subsidiaries, Joint Ventures or Associate Companies
As on March 31, 2023, the Company has one associate and one joint venture company. A
statement containing the salient features of the financial statement of the associate and
joint venture in the prescribed format AOC–1 is annexed hereto as Annexure
"F".
The Policy for determining ‘Material' subsidiaries has been displayed on the
Company's website. (Web-link : http://www.kalyanisteels.com/profile/policies/)
Lord Ganesha Minerals Private Limited (LGMPL), subsidiary of the Company, had made
voluntary application on February 9, 2022, to the Registrar of Companies (ROC), Pune
(Maharashtra), for striking offiits name from the Register of Companies, pursuant to the
provisions of Section 248 of the Companies Act, 2013. The final order of the ROC approving
striking offithe name was passed on April 26, 2022.
28. Business Responsibility and Sustainability Report
The Securities and Exchange Board of India (‘SEBI'), in May, 2021, introduced new
sustainability related reporting requirements to be reported in the speciffic format of
Business Responsibility and Sustainability Report (‘BRSR'). BRSR is a notable
departure from the existing Business Responsibility Report (‘BRR') and a significant
step towards giving platform to the companies to report the initiatives taken by them in
areas of environment, social and governance. Further, SEBI has mandated top 1,000 listed
companies, based on market capitalization, submission of BRSR from FY 2022-23 onwards.
In accordance with the aforesaid SEBI requirement, Business Responsibility and
Sustainability Report is provided as a part of this Annual Report, as Annexure
"G".
29. Transfer to Investor Education and Protection Fund (IEPF)
Pursuant to provisions of the Companies Act, 2013, read with the Investor Education
and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF
Rules) the declared dividends, which are unpaid or unclaimed for a period of seven (7)
years and the shares thereof, shall be transferred by the Company to the Investor
Education and Protection Fund (IEPF) established by the Central Government. The
shareholders have an option to claim the amount of the dividend transferred and / or
shares from IEPF. No claim shall be entertained against the Company for the dividend
amounts and shares so transferred. During the year, no unpaid or unclaimed dividend and
the shares thereof, were liable to be transferred to IEPF.
30. Obligation of Company under The Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013
The Company has zero tolerance for sexual harassment of women at workplace and has
adopted a Policy for prevention, prohibition and redressal of sexual harassment at
workplace, in terms of provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 (POSH Act) and the rules framed
thereunder. All women employees (permanent, temporary, contractual and trainees), as well
as any women visiting the Company's ofice premises are covered under the Policy.
The Company has constituted an Internal Complaints Committee under the POSH Act. During
the year under review, no complaints were received by the Committee.
31. Acknowledgement
The Directors would like to express their sincere appreciation of the co-operation
received from the Central Government, the Government of Maharashtra, the Government of
Karnataka, Karnataka Industrial Area Development Board, Financial Institutions and the
Bankers. The Directors also wish to place on record their appreciation for the commitment
displayed by all employees at all levels, resulting in the successful performance of the
Company during the year.
The Directors also take this opportunity to express their deep gratitude for the
continued co-operation and support received from its valued shareholders.
The Directors express their special thanks to Mr.B.N. Kalyani, Chairman of the Company,
for his relentless actions for the progress of the Company.
for and on behalf of the Board of Directors
Place : Pune |
B.N. Kalyani |
Date : April 28, 2023 |
Chairman |
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