Dear Shareholders,
It is a privilege to speak to you at the conclusion of the fiscal year
2022-23.
Let me begin by addressing the operating environment during the year
gone by. Nonetheless, it was a challenging year for the steel industry. Globally, the
industry made swift progress on the back of strong post-Covid recovery and growing
infrastructure investments around the world.
However, the conflict in Ukraine aggravated existing inflationary
pressures. Gas and coal prices surged, leading to a sharp increase in steel prices. The
economic crisis induced by the war resulted in lower demand for steel and it redirected
trade flows. Moreover, during the fiscal, customs duty of 45% was levied on the export of
Iron Ore Pellets.
Despite these challenges, our production during the year touched 1.51
Million Tonnes (Mt) and we dispatched 1.46 Million Tonnes of iron ore pellets, in
comparison to production and dispatch of 2.03 Mt and 2.07 Mt respectively in FY2022.
Besides, we recorded capacity utilisation of 43% during the fiscal year.
As far as our financial performance is concerned, our Revenue from
Operations stood at H1543.42 crores. Our income from Sale of Services (O&M Operations
and Mineral Exploration Services) during the year was H20.47 crores, against H 24.91
crores in the previous year. However, revenue from export declined by 46% to H1361.43
crores in comparison to H2928.97 crores in the previous financial year. Due to the
imposition of higher export duty, we did not carry out exports after the order was passed.
Coupled with it, higher prices in the domestic market severely affected our margins by the
end of the year.
At KIOCL, we leverage over four decades of experience to strengthen our
foothold in the industry. With our strategic location in Karnataka, we seek to expand our
operations by developing and commencing mining operation at the Devadari Iron Ore Mine.
Our efforts in this direction have been successful as the Government of
Karnataka executed the Mining Lease deed on January 2, 2023, granting us the mining lease
for Iron and Manganese Ore over an area of 388 hectares for a period of 50 years. This
development allows us to diversify into mining operations and optimise production capacity
at our Pellet Plant.
We believe, as a result of this, we are well-positioned to take
advantage of growing global demand for iron ore.
Corporate Social
Responsibility - Growth with Goodness
Along with a focus on business growth, we continue to fulfil our
obligation towards people and communities. It encourages us to undertake CSR projects
encompassing the domain of healthcare and nutrition. We also directed efforts to promote
education, provide access to clean drinking water, ensure environmental sustainability and
promote skill development programmes for the marginalised sections of society. Moreover,
we give preference to Aspirational Districts identified by the NITI Aayog to enhance our
contributions in areas where it can make a significant difference.
During the fiscal, we have spent H589.96 lakhs towards our CSR
activities. This also includes funding for ongoing projects in FY 2022-23 and is expected
to be completed by the next fiscal year. Additionally, we have availed the set-off of
H34.98 lakhs during the FY 2022-23.
Future Outlook
As we move forward, we are strategically redefining our approach to
uncover new opportunities. We are continuously expanding and diversifying our operations.
Along with foraying into mining operations, we are establishing a DISP Plant with a
capacity of 2.0 LTPA, and a Coke Oven Plant with a capacity of 1.80 LTPA as backward
integration projects.
Additionally, we plan to make necessary modifications to the Blast
Furnace Unit to improve its economic
Corporate
viability. We remain determined to explore new markets and segments to
retain our competitive edge and reduce costs through process optimisation. Alongside, our
continuous investment in people empower us with the expertise required to sustain growth
and efficiency across our operations. Statutory Reports
Corporate Governance
The philosophy of your Company in relation to corporate governance is
to ensure transparency, disclosures and reporting that confirms fully with the laws and
regulations of the country in Financial Statements order to promote ethical conduct
& practices throughout the organisation for enhancing stakeholders' value. Your
Company is committed to complying with the provisions of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 relating to Corporate Governance and the
guidelines on Corporate Governance for CPSE issued by Department of Public Enterprises,
GoI from time to time.
Acknowledgement
As I conclude, I would like to express my sincere thanks to our
dedicated team who helped us navigate a tough year. I am also grateful to our shareholders
for their continued support. Finally, I would like to thank the Ministry of Steel, Central
and State Governments, Regulatory authorities, our customers and all other stakeholders
for being partners in our journey.
Warm Regards
Sd/-
T. Saminathan
Chairman-cum-Managing Director