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Updated:22 May, 2020, 15:42 PM IST

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Updated:22 May, 2020, 16:01 PM IST


Dear Shareholders,

Your Directors are pleased to present their 26th Annual Report of the Company along with the Statement of Accounts for the financial year ended 31 March, 2016.


During the year under review, your Company has achieved its highest ever production of hot metal of 433,437 tonnes with all round improvement in performance including various operating parameters such as production, sales, consumption norms, yield and costs.

Sales performance was also satisfactory as all pig iron produced was sold despite depressed market conditions. However, the Company witnessed a steep drop of 16% in foundry grade sales price during first three quarters of the year. There was an improvement of 8% in prices in the last quarter of the year due to general increase in steel prices as a result of imposition of minimum import price by Government of India. Despite fall in pig iron prices, your Company sustained its performance due to lower costs of major raw materials i.e. iron ore, coke etc. and significant improvement in the Dl Pipe business.

On standalone basis, the Company has made a Profit after Tax ("PAT") of Rs. 50.61 crores, which is 39% lower as compared to PAT of Rs. 83.66 crores of last year mainly due to lower realization on account of pig iron prices. On a consolidated basis, the Company delivered its best ever performance with PAT at Rs. 122.79 crores which is 12.5% higher compared to Rs.109.14 crores of last year mainly due to significant improvement in the overall performance of the Company's subsidiary, Tata Metaliks Dl Pipes Limited ("TMDIPL"). TMDIPL has recorded a 183% growth in the PAT at Rs. 72.18 crores compared to the previous year and a 20% increase in production of finished ductile iron pipes at 133,210 tonnes.


The Board recommended a dividend of Rs. 21– per Ordinary Equity Share on 2,52,88,000 Ordinary Equity Shares ofRs. 10 each for the year ended 31 March, 2016. This marks the resumption of dividend after a gap of 7 years.

The Board has also recommended a dividend of Rs. 8.50/– per Non Cumulative Redeemable Preference Shares of Rs. 100 each for the year ended 31 March, 2016.

The dividend on Ordinary Equity Shares is subject to the approval of the shareholders at the Annual General Meeting ("AGM") scheduled to be held on 29 June, 2016. The total dividend pay–out works out to Rs. 16.32 crores of the net profit for the standalone results.

The Register of Members and Share Transfer Books will remain closed from 23 June, 2016 to 29 June, 2016 (both days inclusive) for the purpose of payment of dividend for the Financial Year ended 31 March, 2016 and the AGM.

Change in Share Capital

There has been no change in the capital structure of the Company during the year under review.


During the year under review, the Company has not accepted any deposits under the Companies Act, 2013 ("Act"). Change in nature of Business

During the year under review, there has been no change in the nature of business of the Company.

Consolidation of Projects

Your Company is in the process of improving its operational costs and efficiencies through the following strategic projects which are under implementation:–

Coke Oven Project on BOOT basis having a capacity of 10,000 tonnes/month of BF grade coke. This project is likely to be commissioned during Q1 of FY 2016–17;

10 MW Power Plant utilizing the exhaust flue gases from Coke Ovens which is likely to be commissioned during Q1 of FY 2016–17;

Relining and upgrading of MBF#1 (from 225 m3to 305 m3), which is likely to be commissioned during Q3 of FY 2016–17.

Customer Focus

Tata Group's focus on "Customer Promise" through 3–Ds (Develop deep insight, Deliver outstanding products and services, Delight customers at all touch points) has also been practiced in your Company to enhance its customer–centricity. Key initiatives which were taken during the year in Dl pipe business were (i) improvement in delivery compliance of smaller diameter pipes for customers and (ii) production of high value zinc–aluminum coated Tata Ductura pipes for global customers. Besides these, for both the products, pig iron and Dl pipes, the Company delivered high quality products consistently to the customers. Company's customer–centric approach was validated by the customers through customer satisfaction studies by external agency, in which it received high rating especially on customer relationship management. The Company with the help of Research & Development team of Tata Steel is in the process of developing improved product offerings for Dl pipe customers.

Industry Outlook

The year 2015–16 has been one of the most challenging periods in recent times since the financial crisis of 2008 in terms of global slowdown, oversupply of steel products from China, and oversupply and lower demand of pig iron due to weak industrial activities in India. For the second consecutive year, pig iron exports from India dropped by 60% year on year, which resulted in state owned integrated steel manufacturers dumping pig iron in the domestic market leading to fall in price of pig iron. However, with some protective measures announced by the government, the iron and steel prices showed some improvement during the last quarter of 2015–16.

Moving forward in 2016–17, although no immediate improvement in pig iron demand is foreseen, government's supporting measures in terms of minimum import price, safeguard duty and firming up of raw material prices may lead to an increase in iron and steel market prices. However, since raw material prices are expected to increase marginally, pressure on margins in iron and steel business is likely to continue.Casting industry is expected to get a boost when "Make in India" program of the government picks up with growth in engineering, automobile, construction, sanitation and pipe sectors. Further, government's increased expenditure on providing drinking water and sanitation to the entire population and development of several smart cities across the country would keep the Dl pipe demand robust for the next few years.


Four Board Meetings were held during the year under review. For details of the meetings, please refer to the Corporate Governance Report, which forms part of this report.


Mr. Koushik Chatterjee retires by rotation at the forthcoming AGM and is eligible for re–appointment.

On the recommendation of Nomination & Remuneration Committee, the Board of Directors of the Company on 30 March, 2016 has re–appointed Mr. Sanjiv Paul, as the Managing Director of the Company for a further period of 3 (three) years w.e.f. 1 April, 2016 subject to the approval of the members at the following AGM.

Declaration by Independent Directors

In compliance with section 149(7) of the Act, all Independent Directors have given declaration that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Dr. Pingali Venugopal, Mr. Krishnava Dutt and Mr. Ashok Basu, Independent Directors are already familiar with the nature and industry, business plan and other aspects of the Company since they have been directors of the Company for a long time. However, the familiarization program of Independent Directors with the company in respect of their roles, duties and responsibilities and related matters are being uploaded on to the Company's website at the link investors/shareholderinformation.aspx

Directors' Responsibility Statement

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and the reviews performed by the Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2015–16.

Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that–

a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) The Directors had prepared the annual accounts on a going concern basis;

e) The Directors had laid down proper Internal Financial Controls ("IFC") and such IFC are adequate and were operating effectively;

f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Directors appointment and remuneration policy

The Company's Policy on Directors' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which forms part of this Report.

Board Evaluation

In line with the requirement of Regulation 25(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations

2015, a meeting of the Independent Directors of the Company was held on 10 February, 2016, wherein the performance of the non–independent directors including Chairman was evaluated.

The Board, based on the recommendation of the Nomination and Remuneration Committee ("NRC"), evaluated the effectiveness of its functioning and that of the Committees and of individual directors by seeking their inputs on various aspects of Board/Committee Governance.

The aspects covered in the evaluation included the contribution to and monitoring of corporate governance practices, participation in the long–term strategic planning and fulfillment of Directors' obligations and fiduciary responsibilities, including but not limited to active participation at the Board and Committee meetings.

Key Managerial Personnel

Following officials are appointed as the Key Managerial Personnel ("KMP") of the Company: –Mr. Sanjiv Paul, Managing Director; Mr. Subhra Sengupta, Chief Financial Officer; and

Mr. Sankar Bhattacharya, Chief–Corporate Governance & Company Secretary

Remuneration and other details of the KMP are mentioned in the extract of the Annual Return which forms part of this report.

Internal Financial Control

Your Company has adequate internal control system in place, commensurate with the size, scale and complexity of the operations. The Company has already carried out an audit on internal financial control by third party. The Statutory Auditor has also commented on the internal financial control on financial reporting in their report.

Audit Committee

The Audit Committee comprises of 4 (four) Members of which 3 (three) are independent including Chairman. All recommendations made by the Audit Committee were accepted by the Board during FY 2015–16.

Corporate Social Responsibility

Our philosophy does not rest on philanthropy alone but dovetails the community need with the organizational involvement, adding value in all initiatives with the Community.

Social Context

The Company has been fulfilling its vision of "Reaching Tomorrow First" by committing itself even before the law made CSR a mandatory requirement in 2014, by implementing various CSR initiatives around its plant. The plant is located in No. 4 Kalaikunda Gram Panchayat of Paschim Medinipur district of West Bengal having 57 villages, of which 36 villages with 54 % SC/ST population are located within a radius of 5 km from the plant. Nearly 10,000 inhabitants of these 36 villages form the "Core Beneficiaries" of the various CSR & Affirmative Action ("AA") interventions planned and executed by the Company.

In order to understand the needs of the community, a Need Assessment Survey was carried out during August 2014 articulating the needs and expectations of the community and provided the inputs required to formulate the Company's CSR &AA strategy. Based on the prevailing social and business challenges, your Company has focused its energy and resources on the following broad interventions:–

a) Education

b) Employability

c) Employment

d) Entrepreneurship

e) Essential Amenities

Priority Interventions

The Company's focused CSR & AA interventions are directed towards EDUCATION, i.e. create a pedigree of educated youth in the years to follow through increasing access as well as quality of education and also simultaneously on EMPLOYBILITY, i.e. imparting marketable skills to the available educated youth.


We believe in the truism that education is the ultimate levelerto change people's life and this "E" is being given the deepest engagement and importance it deserves.Our precise intervention has been:–

a) To encourage primary school education by providing stationery items;

b) Scholarship to meritorious students;

c) Improve infrastructure of primary schools at Amba, Maheshpur and Kendupal;

d) Improve quality of education for high school students through extra coaching class at Gokulpur High School;


To develop a pedigree of skilled manpower for the nation, there have been a basket of interventions in the area of marketable skills/ training to local youth. It is directed towards the educated youth from AA community from the surrounding villages. This is to arm them with requisite skills to increase their employability quotient locally as well as nationally, thereby enabling a sustainable livelihood for them and includes the following initiatives:–

a) Sponsoring Two Year ITI Course in Fitter & Electrical trades;

b) In–plant One Year "On – the – Job" Training to ITI / Diploma / B.Sc. qualified youths;

c) Sponsoring Two Year Mid Wifery Nursing Course for matriculate girls;

d) Sponsoring "Loader cum Excavator Operator" Training in partnership with Tata–Hitachi;

e) Sponsoring "Project SABLA", a Government project (Rajiv Gandhi Scheme for Empowerment of Adolescent Girls) being CM coordinated program for providing short – term skill training;

f) Setting up of Skill Development Centre –Your Company is committed towards establishing a Skill Development Centre in FY'17 for imparting marketable skills to local youth of the community to enable them earn a sustainable livelihood, either through employment or as entrepreneurs.


The spirit of positive discrimination towards developing entrepreneurs from AA community in Company's value chain is adopted. In addition to vendor development, the Company has also initiated a pilot project wherein a group of farmers are being nurtured and supported technically and financially to take up multi–cropping and cultivation of cash crop (capsicum) to enable them increase their household income. More projects on promoting agriculture have been planned based on the outcome of this pilot project.

Essential Amenities

Due to the rural background of the community in which we are operating, most of villages lack basic infrastructure amenities like potable drinking water, roads, drainage system, toilet facilities etc. Three drinking water projects have been implemented on "Community – Corporate" partnership model wherein one time infrastructure including a deep boring along with a network of water pipeline with overhead tanks is being provided by the Company. After completion,the same have been handed over to respective village committees who then operate and maintain the facility. Every household contributes towards the cost of operating and maintaining the drinking water projects.

The Company has been recognized for the "Water Project" at the Tata Group level as one of the Good Practices in 2015–16.

In addition, drainage system and toilet blocks are being provided in villages in a phased manner. Starting FY'17, Plain Cement Concrete roads will also be provided in villages in a phased manner to improve basic infrastructure in surrounding villages.


In addition to above, various health related initiatives are organized e.g. blood donation camps conducting health check–up camps with distribution of free medicines for women & children, organizing various types of health awareness camps on alcoholism, hygiene etc. in various villages throughout the year.


A number of initiatives have been promoted on the environment front, like industrial water treatment, waste water recirculation system in sinter pant, installing sprinklers on dusty areas including roads and spreading greenery to name a few.

Assisting Community during Natural Calamity

More than 200 persons from surrounding villages were affected due to cyclone Komen which had hit Paschim Medinipur during the period Jul/Aug 2015 rendering several of them homeless due to incessant rainfall. 200 nos. of polythene sheets were provided to affected families immediately which enabled them to rebuild their damaged homes.

CSR & AA plays a significant role amongst the employees across all levels of the Company through a Tata Group wide initiative called 'Tata Engage', wherein individual employees are encouraged to volunteer for CSR. Your Company has been awarded at the Tata Group level with"Highest Participation Award" in 2015 – 16. Specifically, CSR is a channel for bringing more of the whole self to work, an alignment with the values of the organization, and/or being able to contribute to a higher purpose. In other words, CSR & AA are seamlessly embedded in the organization.

The disclosure required under Schedule–VII of the Companies Act, 2013 is given in Annexure – A, which forms part of this report.

The average net profit of the Company for last 3 (three) years was Rs. 53.58 crores and 2% of the same is i.e. Rs. 1.07 crores. The Company has spent Rs. 1.12 croreson CSR in 2015–16 which is more than the requirement as the Act.

Corporate Governance

Pursuant to Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance along with reports on Management Discussion & Analysis and Certificate from a Practicing Company Secretary regarding compliance of conditions of Corporate Governance are made part of this Report.


Your Company has one wholly owned subsidiary, TMDIPL. There is no associate and joint venture Company as defined under the Act.There has been no material change in the nature of business of TMDIPL during the year under review.

Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of TMDIPL in Form AOC–1 in Annexure – "B" is attached to the financial statements of the Company.

Pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of TMDIPL are available on the website of the Company.

Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT – 9 in Annexure "C"as per provisions of the Act and rules framed thereunder is annexed to this Report.

Particulars of loans, guarantees or investments

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

Related Party Transactions

All related party transactions ("RPT") entered into during FY 2015–16 were on arm's length basis and also in the ordinary course of business. No material RPT was made by the Company with Promoters, Directors, KMP or other designated persons during FY 2015–16, except those reported.

All RPT was placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained on a yearly basis for the transactions which were foreseen and were repetitive in nature. The transactions entered into pursuant to the omnibus approval so granted were audited and a statement giving details of all RPTs was placed before the Audit Committee for its monitoring on quarterly basis. The statement was supported by a Certificate duly signed by the Managing Director and the Chief Financial Officer. The policy on RPT as approved by the Board is uploaded on the Company's website at the link www,

In view of the above, the disclosure required under the Act in form AOC–2 is not applicable for the FY 2015–16.

None of the Directors or KMP has any pecuniary relationships or transactions vis–a–vis the Company during FY 2015–16.

Significant material orders passed by Regulators/ Courts

There were no significant material orders passed by the Regulators/ Courts/ Tribunals impacting the going concern status and Company's operations in future.

There were also no material changes and commitments after the closure of the year till the date of this report, which affect the financial position of the Company.

Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo

Details of energy conservation, technology absorption and foreign exchange earnings and outgo are annexed to this report in Annexure "D".

Particulars of Employees

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report in Annexure –"E".ln terms of the provisions of Section 197(12) of the Act read with sub–rules (2) and (3) of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Report.

However, having regard to the provisions of the first proviso to Section 136(1) of the Act, the details are excluded in the report sent to members. The required information is available for inspection at the registered office and the same shall be furnished on request.

Statutory Auditors

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, Messrs. Deloitte Haskins & Sells, Chartered Accountants, were appointed as the statutory auditors of the Company at the 24th AGM held in the year 2014 and will hold office till the conclusion of the 27th AGM to be held in the year 2017, subject to ratification of their appointment at every AGM.

Cost Auditors

M/s. Shome & Banerjee, Cost Accountants were appointed as the Cost Auditors of the Company for the financial year 2016–17.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Mr. P V Subramanian, Practicing Company Secretary to undertake the Secretarial Audit of the Company for the year ended 31 March, 2016. The Secretarial Audit Report is annexed in Annexure –"F" herewith and forms part of this report.

Auditors' qualification

There are no qualifications in the reports of the Statutory Auditors, Cost Auditors and Secretarial Auditors.

Risk Management

The Company has a framework in line with Tata Steel's risk management process of identifying, prioritizing and mitigating risks which may impact attainment of short and long term business goals of the Company. The risk management framework is interwoven with strategic planning, deployment and capital project evaluation process of the Company. The process aims to analyze the internal and external environment and manage economic, financial, market, operational, compliance and sustainability risks and capitalizes opportunities for business success.

The Company has already identified the key risks areas which may affect the business goals and periodically revisits the relevance of the identified risks and progress of the mitigation plans undertaken. In order to strengthen the governance framework, the Board has constituted a Risk Management Committee consisting of Directors and KMP which monitors and evaluates the effectiveness of risk management framework of the Company and strengthens it.

Prevention of Sexual Harassment at Workplace

The Company has in place a Policy in line with the requirements of The Sexual Harassment of Women at the Work place (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee ("ICC") is in place to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees etc.,) are covered under this Policy.

The following is a summary of sexual harassment complaints received and disposed of during the year 2015–16:–

No. of complaints received – NIL

No. of complaints disposed of–NIL

Vigil Mechanism

The Company has adopted Vigil Mechanism policy that provides a formal mechanism for all Directors, employees and vendors of the Company to approach the Ethics Counselor/Chairman of the Audit Committee and make protective disclosures about the unethical behavior, actual or suspected fraud or violation of the Tata Code of Conduct ("TCoC").

The Vigil Mechanism comprises of whistle blower policy for directors, employees and vendors.


The Company is considering the withdrawal of Scheme of amalgamation from Hon'ble High Court, Calcutta due to various factors including inordinate delay in obtaining requisite regulatory and statutory approvals along with significant dilution in intended synergies that were envisaged in April 2013. A Committee of Directors has been constituted to consider and approve the proposal of withdrawal of Scheme from Calcutta High Court.


The Board takes this opportunity to sincerely thank all its stakeholders i.e. shareholders, customers, suppliers, contractors, bankers, employees, government agencies, local authorities and the immediate society for their un–stinted support and cooperation during the year.

On behalf of the Board of Directors

Koushik Chatterjee


Date : 28 April, 2016  

Place : Mumbai

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