Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting the 33nd Annual Report of the
Company along with audited accounts for the year ended 31st March,
2015.
(Rs. Lacs)
Financial Parameters 2014-15 2013-14
Sales (Net of Excise Duty) - 1909.70
Other Income 208.66 275.60
Loss before Interest,Depreciation &
Exceptional Items 121.26 938.48
Interest & Finance Charges 51.93 389.43
Depreciation 446.70 342.98
Loss for the year before Exceptional Items 619.89 1670.89
Exceptional Items expenditure /(income) 116.25 103.41
Provision for Tax - -
Loss for the year carried to Balance Sheet 736.14 1774.30
OPERATIONS :
During the year under review there was no production of sponge iron due
to Plant being shut from 9th August, 2013 on account of sudden stoppage
of coal supply by Central Coalfields Limited, Ranchi, a Unit of Coal
India Limited against our long term Fuel Supply Agreement. The reason
for stoppage of coal supply was that Ministry of Coal had allocated a
Captive Coal Mine - Macherkunda Coal Block in the year 2008 and as per
terms & conditions the Mine was to be operative by February, 2013. The
Mine could not be developed due to various reasons beyond our control
i.e. depending upon the Govt.of India for clearance. The Coal Block was
later cancelled on 20th November, 2012 by Ministry of Coal, Govt.of
India. The Company challenged this by filing a Writ Petition No.
W.P.(C) 1660 in the year 2013 in the Hon'ble Jharkhand High Court.
Further, all Coal Blocks were also cancelled by Hon'ble Supreme Court
of India vide its Order dated 25th September, 2014 and our Macherkunda
Coal Block was also amongst these Coal Blocks. Since the Policy about
renewal of Fuel Supply Agreement (FSA) after de-allocation of Captive
Coal Blocks was not clear, hence they stopped the coal supply. Later on
in a Special Meeting of Standing Linkage Committee (Long Term) held on
3rd December, 2014 under the Chairmanship of Additional Secretary
(Coal), Ministry of Coal decided that all EUP which were already having
long term linkage should get coal from the respective Coal companies.
Accordingly, we approached the Chairman-CCL, Ranchi and he advised to
withdraw our Writ Petition No. W.P.(C) No.1660 of 2013. He further
suggested that once the said writ petition is withdrawn, CCL would
proceed in the matter for renewal of Fuel Supply Agreement. The
Company has made an interlocutory application for withdrawal of the
said writ petition before Hon'ble Jharkhand High Court. We hope that
the matter would be resolved with the withdrawal of the said Writ
Petition by the said High Court.
IRON ORE MINE:
The Company was allotted Ghatkuri Iron Ore Mine in April, 2007 in the
State of Jharkhand with 406.40 hectares of land and consisting of
reserves estimated at 35.65 million tons. However, the Geological
Survey was conducted by Department of Geology, Ministry of Mines, Govt.
of Jharkhand and report was released in February, 2012 wherein they
have assessed the Ore reserve to be about 11.00 Million Tons. The
Company has requested for the allocation for an additional Iron Ore
Mine to compensate the difference in allocated quantity and for revised
geological reserves. The draft Mining Plan prepared by MECON was
submitted with Ministry of Mines on 3rd September, 2012 based on the
revised reserves of 11.00 million tons.
The Indian Bureau of Mines, Ministry of Mines, Govt. of India vide its
letter dated 06-02-2014 have communicated the mining plan is not
approved. The Company expects a total capital investment of around
Rs.45.00 Crores for the development and anticipates the commencement of
production of iron ore by 2016.
COAL MINE:
As already reported the Macherkunda Coal Block allocated to the Company
for captive mining of coal has been de-allocated by the Ministry of
Coal, Government of India. The Government of India has filed a number
of transfer petitions in the Honb'le Supreme Court for transfer of the
coal block cases which were pending in various high courts. The Supreme
Court has expressed its view that all coal block allocations on and
after 2003 are illegal. The Supreme Court has vide its order dated 25th
September, 2014 has cancelled allocation of all but 4 coal blocks
allocated from 2003. The Macherkunda Coal Block was among the all
cancelled coal blocks.The Company has made an application to Ministry
of Coal, Govt. of India for return of Bank Guarantee of Rs. 2.81 cr.
Vide its letter dated 15th October, 2014.
5 MW POWER PLANT / STEEL PLANT
The Company from the existing power plant generates 5 MW Power based on
dolo char being produced in the manufacturing of sponge iron. Since the
Company is not able to consume the total dolo char, the Company has
entered into an agreement with G.S. Phambutor Pvt. Limited (GSP) to
install a 5 MW Power Plant. Whenever the existing power plant goes
under regular maintenance, the Company has to generate power from DG
Set, which is highly uneconomical. During such time the Company will
take the power from GSP and for the rest of the period GSP will consume
the power in induction furnace to produce pencil ingot. The 5 MW power
plant is at commissioning stage. Once the sponge iron plant starts its
operations to said power plant will be commissioned and steps for
setting up induction furnace will initiated.
DIVIDEND
In view of the loss incurred by the Company, no dividend has been
proposed for the financial year ended 31st March, 2015
FIXED DEPOSITS:
During the year under review, your Company did not accept any deposits
within the meaning of provisions of Chapter V - Acceptance of Deposits
by Companies of the Companies Act, 2013 read with the Companies
(Acceptance of Deposits) Rules, 2014.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186.
The Company has not given any loans, guarantees or made any investments
under Section 186 of Companies Act, 2013 during the financial year
2014-15.
INTERNAL CONTROL SYSTEM
The Company has a well placed, proper and adequate internal control
system, which ensures that all assets are safeguarded and protected and
that the transactions are authorised, recorded and reported correctly.
The Company's internal control system comprises audit and supplemented
by internal audit checks from the Internal Auditor M/s.Sarat Jain & Co.
The Internal Auditors independently evaluate the adequacy of internal
controls and concurrently audit the majority of the transactions in
value terms. Independence of the audit and compliance is ensured by
direct reporting of Internal Auditors to the Audit Committee of the
Board.
NOMINATION AND REMUNERATION POLICY OF THE COMPANY The Board of the
Company in its meeting held on 12th May, 2015 has approved and adopted
the Company's Nomination and Remuneration policy. Any member interested
in hard copy of the said policy may inspect the same at the Registered
Office of the Company or write to the Company Secretary for a copy. The
same is also disclosed in the Company's website www.bsil.org.in.
Details of the Committee is provided in the corporate governance report
annexed with this report.
WHISTLE BLOWER POLICY:
Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7
of the Companies (Meetings of Board and its Powers) Rules, 2014 and
Clause 49 of the Listing Agreement, the Board of director of the
Company in its meeting held on 6th February, 2015 has approved and
adopted vigilance mechanism - Whistle Blower Policy. This Policy
inter-alia provides a direct access to the Chairman of the Audit
Committee. Your Company hereby affirms that no Director/ employee has
been denied access to the Chairman of the Audit Committee and that no
complaints were received during the year. The said policy is available
in the Company website, www.bsil.org. in. Any member interested in
hard copy of the said policy may inspect the same at the Registered
Office of the Company or write to the Company Secretary for a copy.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES.
All transactions entered by the Company with Related Parties were in
the Ordinary Course of Business and at Arm's Length pricing basis. The
Audit Committee granted omnibus approval for the transactions (which
are repetitive in nature) and the same was reviewed by the Audit
Committee and the Board of Directors.
There were no materially significant transactions with Related Parties
during the financial year 2014-15 which were in conflict with the
interest of the Company. Suitable disclosures as required under AS-18
have been made in the Notes to the financial statements.
The Board had approved policies on Related Party Transactions. The
policies have been uploaded on the Company's website: www.bsil.org.in.
Any member interested in hard copy of the said policy may inspect the
same at the Registered Office of the Company or write to the Company
Secretary for a copy.
The particulars of contract and arrangements entered into by the
Company with related parties referred to in sub-section (1) of section
188 of the Companies Act, 2013 read with clause 49 of the Listing
Agreement is disclosed separately in Form No. AOC -2 as Annexure-D and
forms part of this report.
EXTRACT OF THE ANNUAL RETURN
The extract of the Annual Return for 2014-15 in Form No. MGT - 9 is
given separately as Annexure - E, which form part of the Board's
report.
SECRETARIAL AUDIT
The Board of Directors of the Company have appointed M/s. R Singhal&
Associates, Company Secretaries (PCS Registration No. 10699) as the
Secretarial Auditor of the Company in relation to the financial year
2014-15, in terms of Section 204 of the Companies Act, 2013. The
Secretarial Audit Report for financial year 2014-15 done is separately
annexed as Annexure-F with this report and is available on the
Company's website www.bsil.org.in.
The observation in secretarial audit report are self explanatory and
therfore do not call for any further explanation. Further due to
shutdown of the plant and suspension of operation from 09.08.2013
various dues could not be paid on due dates. Necessary steps are being
taken to re-start the Company and payment of all such dues shall be
made after re-start of operation of the Company.
MANAGERIAL REMUNERATION:
Disclosures required u/s 197(12) of the Companies Act, 2013 read with
Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rule, 2014 relating to ratio of the remunration of each
director to the median employee's remuneration and other details shall
be provided on request, in accordance with the provisions of Section
136 of the Act. The relevant information could not be provided as the
plant is under shut and the operations has been suspended from
09.08.2013, thereby the salary, wages and allowances of the employees
is unascertained.
In terms of the provisions of Section 197(12) of the Companies Act,
2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, non of the employee
is drawing remuneration in excess of the limits set out in the said
Rules.
DIRECTORS :
A) CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL
Since the last Annual General Meeting, the following changes have taken
place in the Board of Directors:
Mr. Satish Kumar Gupta,Whole Time Director designated as Director
(Works) of the Company is re-appointed as Whole Time Director
designated as Director (Works) w.e.f. 13-12-2014 for a period of 3
years.
In accordance with the provisions of Section 160 of the Companies Act,
2013 and Article 128 of the Articles of Association of the Company,
Mrs. Kumkum Modi retires by rotation and are eligible for
re-appointment.
Mr. G. W. Elsenheimer ceased to be the director of the Company under
Section 167 of the Companies Act, 2013.
Mr. G. C. Jain has resigned as director of the Company w.e.f. 15th
April, 2015. Mr. R. K. Agarwal, Mr. Jagan Nath Khurana, and Mr. Madan
Lal the independent directors of the Company pursuant to section 149
(10) of the Companies Act, 2013 shall hold the office as directors for
a term of 5 years w.e.f.12th May, 2015, 12th May, 2015 and 14th
November, 2014 respectively, subject to the approval of shareholders.
Mr. B. K. Goel is appointed as Chief Financial Officer of the Company
w.e.f. 6th February, 2015.
None of the directors of the Company are disqualified under Section 164
(2) of the Companies Act, 2013. Your directors have made necessary
disclosures as required under various provisions of the Companies Act,
2013.
B) DECLARATION BY AN INDEPENDENT DIRECTORS
The Company has received declaration by all Independent Director(s)
that they meet the criteria of independence as provided in sub-section
(6) of Section 149 of the Companies Act, 2013. The declaration received
from the independent directors were placed at the meeting of the Board
of directors of the Company held on 12th May, 2015. Any member
interested in hard copy of the said policy may inspect the same at the
Registered Office of the Company or write to the Company Secretary for
a copy.
C) FORMAL ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, Independent Directors at their meeting without
the participation of the Non-independent Directors and Management,
considered/ evaluated the Boards' performance, Performance of the
Chairman and other Non-independent Directors
The Board subsequently evaluated its own performance, the working of
its Committees (Audit, Nomination and Remuneration and Stakeholders
Relationship Committee) and Independent Directors (without
participation of the relevant Director).The criteria for performance
evaluation have been detailed in the Corporate Governance Report which
is attached as Annexure- B to this Report.
D) NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
The Board of the Company met for the four times, i.e. on 29th May,
2014, 19th September, 2014, 14th November, 2014 and 6th February, 2015
during financial year 2014-15,
E) DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act, 2013 the Directors of
your Company declare as under:
(a) that in the preparation of the annual accounts, the applicable
accounting standard had been followed along with proper explanation
relating to material departures;
(b) that 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) that the directors had prepared the annual accounts on a going
concern basis; and
(e) that the directors, in the case of a listed company, had laid down
internal financial controls to be followed by the company and that such
internal financial controls are adequate and were operating
effectively.
Explanation-For the purposes of this clause, the term "internal
financial controls" means the policies and procedures adopted by the
company for ensuring the orderly and efficient conduct of its business,
including adherence to company's policies, the safeguarding of its
assets, the prevention and detection of frauds and errors, the accuracy
and completeness of the accounting records, and the timely preparation
of reliable financial information;
(f) That 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.
AUDIT COMMITTEE
The composition of an Audit Committee is disclosed in the corporate
governance report annexed with this report and forms part of it.
Further there has not been any instance where the Board had not
accepted any recommendation of the Audit Committee.
AUDITORS:
M/s. Thakur Vaidyanath Aiyar and Co., Chartered Accountants (Firm
Registration No.000038N), Auditors of the Company retire at the
conclusion of the ensuing Annual General Meeting and being eligible,
offer themselves for re-appointment. The Company has received a letter
from them to the effect that their re-appointment, if made would be
within the prescribed limits under Section 139 of the Companies Act,
2013 and the Audit Committee of the Company has recommended their
appointment as statutory Auditors for two consecutive years starting
from the conclusion of 33rd AGM to the conclusion of 35th AGM of the
Company.
ACCOUNTS AND AUDIT:
Notes to accounts referred to in the Auditor's Report are
self-explanatory and there fore, do not call for any further
explanation. However the following has not been recognized as explained
below:
a. Rs. 2,32,381 thousand against currency fluctuation of foreign
currency loan has not been recognized as the Company has filed Letters
Patent Appellate Jurisdiction (LPA) before the Divisional Bench of High
Court of Jharkhand, Ranchi and it is hopeful that the decision will be
in favour of the Company.
b. Rs. 21,528 thousands recovered by South Eastern Coal Fields Ltd as
penalty on account of short lifting of coal quantity in terms of Fuel
Supply Agreement as the matter has been disputed by the Company under
writ petition filed before the Hon'ble High Court of Chhattisgarh. It
is hopeful that the Company would get the order in its favour.
c. Interest on unsecured loan taken from Promoters and other parties
from 10.08.2013 to 31.03.2015 has not been taken on accounts as the
Company has applied to the lenders for the waiver of the interest on
unsecured loan.
d. Interest on Soft Loan taken from the Government of Jharkhand under
the Industrial Rehabilitation Scheme 2003 amounting to Rs. 81,331
thousands has not been provided as the Company will make representation
for waiver on re-start of the Company operation.
e. Salaries, Wages, Allowances, Contribution to PF including interest
on overdue amount as well as employee benefit expenses w.e.f.
10.08.2013 to 31.03.2015 has not been provided in view of the shut down
of the plant and suspension of operation from 9th August, 2013.
Further due to shut down of the plant and suspension of operation from
9th August, 2013 various dues could not be paid on due dates. Necessary
steps are being taken to re-start the Company and payment of such dues
shall be made after re-start of operation of the Company.
SUBSIDIARY COMPANY
Chandil Power Limited has become a subsidiary company of the Company
pursuant to Section 4 (1) (a) of the Companies Act, 1956 and Section
2(87) of the Companies Act, 2013 and in accordance with the general
circular No. 2/2011 dated 8 February, 2011 issued by the Ministry of
Corporate Affairs, Government of India the balance sheet, profit and
loss account and other documents as required to be attached with
balance sheet are not attached with the balance sheet of the Company.
The same will be made available to any member of the Company, who may
be interested in obtaining the same. The Annual accounts and related
documents of the subsidiary company will also be kept open for
inspection at the registered office of the Company. Further the
consolidation of accounts is not required as Chandil Power has become
subsidiary by virtue of control on of composition of Board of Directors
of Chandil Power Limited and the Company do not hold any shares in
Chandil Power Limited.Chandil Power Limited ceased to be subsidiary of
the Company w.e.f. 29th September, 2014.
CORPORATE GOVERNANCE:
A separate report on Corporate Governance is attached as Annexure B to
this report. The Auditors' Certificate confirming compliance of
conditions of Corporate Governance and CEO/CFO Certificate as required
under Clause 41 of the Listing Agreement is included in the said
Corporate Governance Report.
MANAGEMENT DISCUSSION ANALYSIS REPORT
In terms of Clause 49 of the Listing Agreement with the Stock Exchange,
Management Discussion and Analysis Report is annexed as Annexure - C
and form part of this report.
LISTING IN STOCK EXCHANGE:
The equity shares of the Company continues to be listed in the Bombay
Stock Exchange and listing fee for the Financial Year 2015-16 has been
paid.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS
AND OUTGO:
Information pursuant to Section 134 of the Companies Act, 2013 and
rules made there under, a statement giving the required information
relating to energy conservation, technology absorption, foreign
exchange earnings and outgo is annexed hereto as Annexure-A and form
part of this report.
ACKNOWLEDGEMENT:
Your Directors take this opportunity to place on record their sincere
thanks to all stakeholders, various departments of Central Government,
the Government of Bihar and Jharkhand, Financial Institutions and Banks
for their valuable assistance. Your Directors equally acknowledge the
trust reposed by you in the Company. The Directors also wish to place
on record their appreciation for the all round support and co-operation
received from the employees at all levels.
For & on behalf of the Board
Place: New Delhi S.K. Gupta B.D. Garg
Date: 12.05.2015 Director-works Director
DIN: 03537417 DIN 00002792
Mar 31, 2014
To the Members,
The Directors have pleasure in presenting the 32nd Annual Report of the
Company along with audited accounts for the year ended 31st March,
2014.
(Rs. Lacs)
Financial Parameters 2013-14 2012-13
Sales (Net of Excise Duty) 1909.70 12054.16
Other Income 275.60 146
Profit / (Loss) before Interest,
Depreciation & Exceptional Items (938.48) (1759.86)
Interest & Finance Charges 389.43 977.56
Depreciation 342.98 346.27
Profit/(Loss) for the year before
Exceptional Items (1670.89) (3083.69)
Exceptional ltems-income/(expenditure) (103.41) 476.12
Provision for Tax - -
Profit / (Loss) for the year carried to
Balance Sheet (1774.30) 2607.57
OPERATIONS
During the year under review production of sponge iron was 9634 MT as
against 60,873 M.T. in the previous year. The Company could not achieve
full production due to sudden closure as a result of non supply of coal
from Central Coalfields Limited, as the Company was getting the supply
of coal from CCL under a Fuel Supply Agreement. Ministry of Coal,
Government of India vide its letter No. 38011 / 2 / 2007 - CA - 1
dated 5th August 2008, has allocated Macherkunda Coal Block to the
Company in the area of Central Coalfields Limited for captive mining of
coal. However, due to events beyond the control of the company, the
Central Government cancelled the allocation of Coal Block by its letter
dated 20"'' November, 2012. The company has since challenged the
de-allocation of Coal Block by filing a Writ Petition being W.P.(C)
No.7331 of 2012 before the Hon''ble Jharkhand High Court in which an
interim order was passed on 12*1 December 2012. The interim order
continues to operate in this matter.
The allocation and subsequent de-allocation of coal block has adversely
affected the existing coal linkage of the company due to confusion
arising out of Tapering Linkage Policy dated 261" February, 2010 issued
by the Ministry of Coal (MoC). The company''s stand is that it is
entitled to receive coal as per their existing Coal Linkage. Disputes
arose between the company, Ministry of Coal and CCL on the
interpretation of the Policy which resulted in another Writ Petition
before the Hon''ble Jharkhand High Court being W.P.(C) No.1660 of 2013.
Pursuant to an Order dated 261" June, 2014 passed by Hon''ble High Court
in the aforesaid Writ Petition, the company has filed an application
for execution of a fresh Fuel Supply Agreement (FSA) on which CCL is to
take an informed decision which has not yet happened.
Thereafter, the company has also filed an Application before the
Hon''ble High Court being I.A No.6999 of 2013 praying for urgent
directions upon CCL to supply coal and also execute a fresh FSA. The
said application is still pending. Owing to the aforesaid reasons, the
company was forced to shut down the Plant and operations have been
suspended since 91" August, 2013 due to lack of supply of coal.
Vide Office Memorandum a "Inter-Ministerial Committee" constituted by
Government of India, Ministry of Coal, New Delhi has recommended supply
of coal on priority basis to End-Use Plants which are having long term
linkage and their existing linkage was converted into Tapering Linkage
consequently upon allocation of Coal Block. .
Ministry of Steel, Govt.of India, New Delhi has informed that issues
related with our Company has been noted by the Ministry and would be
included for discussion with Chief Secretary, Jharkhand during the
forthcoming meeting scheduled in the near future.
They have also informed that a Project Monitoring Group (PMG) under the
Cabinet Secretariat is functioning for taking up such issues for
resolution and advised us to upload our issues at the web portal of
PMG. As per their advise, we have uploaded our issue at PMG web portal.
We hope CCL, Ranchi will restore our Fuel Supply Agreement and will
start supplying coal against our linkage very soon. As and when the
Company starts getting coal supplies from CCL, Ranchi the Plant will
start its operation.
IRON ORE MINE ;
The Company was allotted Ghatkuri Iron Ore Mine in April, 2007 in the
State of Jharkhand with 406.40 hectares of land and consisting of
reserves estimated at 35.65 million tons. However, the Geological
Survey was conducted by Department of Geology, Ministry of Mines, Govt,
of Jharkhand and report was released in February, 2012 wherein they
have assessed the iron ore reserve to be about 11.00 Million Tons. The
Company has requested for the allocation for an additional Iron ore
mine to compensate the difference in allocated quantity and for revised
geological reserves. The draft Mining Plan prepared by MECON is already
submitted with Ministry of Mines on 3rd September, 2012 based on the
revised reserves of 11.00 million tons. The Company expects a total
capital investment of around Rs.45.00 Crores for the development and
anticipates the commencement of production of iron ore by 2016.
COALMINE
Ministry of Coal, Government of India vide its letter No. 38011 / 2 /
2007 - CA -1 dated 5th August 2008, has allocated Macherkunda Coal
Block to the Company for captive mining of coal to meet its coal
requirement. The allocation of the aforesaid coal block was subject to
certain conditions together with milestones that were required to be
achieved by the Company as fixed by the Ministry of Coal. However,
notwithstanding all bonafide effort by the Company and due to inter
departmental issues within the Government which were beyond the power
and control of the Company, there was a delay in achieving the
milestones. Thereafter the Central Government, without affording any
opportunity of hearing to the Company, proceeded to accept the
recommendations purported to have been made by the Inter Ministerial
Group (IMG) and consequently vide an order dated 20th November 2012,
communicated its decision to de-allocate the Macherkunda Coal Block.
Upon the de-allocation of the Macherkunda coal block, the Company had
filed a Writ Petition before the Jharkhand High Court, being W.P. (C)
No. 7331 of 2012 challenging the decision of the Ministry of Coal to
de-allocate the coal block. The Hon''ble Jharkhand High Court, by an
order dated 12th December 2012 has been pleased to pass the following
interim order:"Until further order, no coercive steps shall be taken
against the Petitioners pursuant to the impugned order".
5 MW POWER PLANT / STEEL PLANT
The Company from the existing power plant generates 5 MW Power based on
dolo char being produced in the manufacturing of sponge iron. Since the
Company is not able to consume the total dolo char, the Company has
entered into an agreement with G.S. Phambutor Pvt. Limited (GSP) to
install a 5 MW Power Plant. Whenever the existing power plant goes
under regular maintenance, the Company has to generate power from DG
Set, which is highly uneconomical. During such time the Company will
take the power from GSP and for the rest of the period GSP will consume
the power in induction furnace to produce pencil ingot. It is expected
that the 5 MW power plant and induction furnace will be commissioned by
June, 2014.
FIXED DEPOSITS:
The Company has neither invited nor accepted any deposits from the
public within the meaning of Section 58 A of the Companies Act, 1956
during the year under review.
BOARD OF DIRECTORS:
Since the last Annual General Meeting, the following changes have taken
place in the Board of Directors:
Mr. U.K. Modi seized to be the Managing Director of the Company w.e.f.
28m February, 2014 and shall continue to be the Chairman of the
Company.
Mr. B. K. Thakur was appointed as additional Director and then
Whole-time Director of the Company designated as Director- Finance,
w.e.f. 20,n December, 2013 has resigned w.e.f. 20-12-2013.
Mr. K. K. Jain has resigned as director of the Company w.e.f. 28''" May,
2013. Mr. Satish Kumar Gupta was appointed as additional director and
was later appointed as Whole Time Director designated as Executive
Director (Works) of the Company w.e.f. 13-12-2013.
In accordance with the provisions of 160 of the Companies Act, 2013 and
Article 128 of the Articles of Association of the Company, Mrs. Kumkum
Modi, Mr. Jayesh Modi retires by rotation and are eligible for
re-appointment. Mr. G. C. Jain, Mr. B. D. Garg, Mr. J. C. Chawla, Dr.
Shyam Vyas and Mr. G. W. Elsenheimer the independent directors of the
Company shall pursuant to section 149 (10) of the Companies Act, 2013
hold the office as directors for a term of 5 years w.e.f.29* May, 2014.
None of the directors of the Company are disqualified under Section 164
(2) of the Companies Act, 2013. Your directors have made necessary
disclosures as required under various provisions of the Companies Act,
2013.
AUDITORS:
i. M/s. Thakur, VaidyanathAiyar and Co., Chartered Accountants (Firm
Registration No.000038N), Auditors of the Company retire at the
conclusion of the ensuing Annual General Meeting and being eligible,
offer themselves for re-appointment. The Company has received a letter
from them to the effect that their re-appointment, if made would be
within the prescribed limits under Section 139 of the Company Act, 2013
and the Audit Committee of the Company has recommended their
appointment as statutory Auditors of the Company.
ii. M/s M.K. Singhal& Co., Cost Accountants has been appointed by the
Board of 8lh February, 2014 and Directors of the Company on the
recommendation of the Audit Committee, as Cost Auditors of the Company
for the Financial Year 2013-14. The Company has received a letter from
them to the effect that their appointment, if made would be within the
prescribed limits under Section 139 of the Company Act, 2013. The
Certificate of independence and arms length relationship with the
Company and are not disqualified for such appointment within the
meaning of Section141/148 of the Companies Act, 2013 has been received.
ACCOUNTS AND AUDIT REPORT:
The Notes to Accounts referred to in the Auditors'' Report are self
explanatory and, therefore, do not call for any further comments.
However the following has nbt been recognized as explained below:
 Rs. 2754.09 lacs against currency rate fluctuation of Foreign
Currency Loan has not been recognized as the same is pending before
Court and the Company is hopeful that the decision will be in favour of
the Company.
 Penalty of Rs. 215.28 lacs recovered by South Eastern Coalfields Ltd.
for short lifting of coal, has not been recognized as the same is
pending before Court and the Company is hopeful that the decision will
be in favour of the Company.
 Rs. 171.79 forfeited by CCL as additional price under tapering
linkage policy has not recognized, as the 40 % increase in price of
coal was illegal and the Company has made representation before the
Ministry of Coal for release of forfeited amount.
Interest on unsecured loan amounting to Rs. 6863.90 lacs has not been
taken recognized as the Company had applied to the unsecured lenders
for the waiver of the interest.
Interest on soft loan amounting to Rs. 305.26 lacs has not been
provided as the Company will apply for waiver of interest on soft loan
when the Company re-start operation.
The salary and wages from lO" August, 2013 has not been provided in
view of shutdown of plant and suspension of operation from 10lh August,
2013.
Further due to low production as a result of non-availability of coal
from CCL against linkage resulting to shut down of the plant &
suspension of the operation from 9"1 August, 2013, the various dues
could not be paid on due dates. Necessary steps for the payment of such
dues along with interest for the delayed period are being taken.
SUBSIDIARY COMPANY
Chandil Power Limited has become a subsidiary company of the Company
pursuant to Section 4 (1) (a) of the Companies Act, 1956 and Section
2(87) of the Companies Act, 2013 and in accordance with the general
circular No. 2/2011 dated 8''" February, 2011 issued by the Ministry of
Corporate Affairs, Government of India the balance sheet, profit and
loss account and other documents as required to be attached with
balance sheet are not attached with the balance sheet of the Company.
The same will be made available to any member of the Company, who may
be interested in obtaining the same. The Annual accounts and related
documents of the subsidiary company will also be kept open for
inspection at the registered office of the Company. Further the
consolidation of accounts is not required as Chandil Power has become
subsidiary by virtue of control on of composition of Board of Directors
of Chandil Power Limited and the Company do not hold any shares in
Chandil Power Limited.
MANAGEMENT DISCUSSION ANALYSIS REPORT
In terms of Clause 49 of the Listing Agreement with the Stock Exchange,
Management Discussion and Analysis Report is annexed and form part of
this report.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 217 (2AA) of the Companies Act, 1956 and Section
134 of the Companies Act, 2013 the Directors of your Company declare as
under:
(i) That in the preparation of the Annual Accounts, the applicable
Accounting Standards had been followed along with proper explanation
relating to material departures.
(ii) That the Company has 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 or
Loss of the Company for that period.
(iii) That proper and sufficient care has been taken for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
(iv) That the annual accounts have been prepared on a going concern
basis. DIVIDEND In view of the loss incurred by the Company, no
dividend has been proposed for the financial year ended 31"1 March,
2014.
CORPORATE GOVERNANCE:
A separate report on Corporate Governance is attached as Annexure to
the Annual Report. The Auditors'' Certificate confirming compliance of
conditions of Corporate Governance is included in the said Corporate
Governance Report.
LISTING IN STOCK EXCHANGE:
The equity shares of the Company continues to be listed in the Bombay
Stock Exchange and listing fee for the Financial Year 2014-15 has been
paid. PARTICULARS OF EMPLOYEES:
None of the employee of the Company fall under the purview of Section
217(2A) of the Companies Act, 1956 read with the Companies (Particulars
of Employees) Rules, 1975 and Section 134 of the Companies Act, 2013
and Rules made there under.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS
AND OUTGO:
Information pursuant to Section 217(1) (e) of the Companies Act, 1956
read with the Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, 1988, (as amended) and Section 134 of the
Companies Act, 2013 and rules made there under, a statement giving the
required information relating to energy conservation, technology
absorption, foreign exchange earnings and outgo is annexed hereto as
Annexure-A and form part of this report.
ACKNOWLEDGEMENT:
Your Directors take this opportunity to place on record their sincere
thanks to all stakeholders, various departments of Central Government,
the Government of Bihar and Jharkhand, Financial Institutions and Banks
for their valuable assistance. Your Directors equally acknowledge the
trust reposed by you in the Company. The Directors also wish to place
on record their appreciation for the all round support and co-operation
received from the employees at all levels.
For & on behalf of the Board
Place : New Delhi Umesh K. Modi
Dated : 29-05-2014 (Chairman)
Mar 31, 2013
To the Members,
The Directors have pleasure in presenting the 31s1 Annual Report of the
Company along with audited accounts for the year ended 31st March,
2013.
(Rs. in Lacs)
Financial Parameters 2012-13 2011-12
Sales (Net of Excise Duty) 12,054.16 17,146.42
Other Income 146.00 85.78
Profit / (Loss) before
Interest,
Depreciation & Exceptional Items (1,759.86) (710.85)
Interest & Finance Charges 977.56 1,011.68
Depreciation 346.27 347.98
Profit/(Loss) for the year before
Exceptional Items (3,083.69) (2,070.51)
Exceptional ltems-
income/(expenditure) 476.12 (0.08)
Provision for Tax
Profit / (Loss) for the year
carried to Balance Sheet (2,607.57) (2,070.59)
OPERATIONS
During the year under review production of sponge iron was 60,873 M.T.
as against 83,495 M.T. in the previous year. The Company could not
achieve full production due to unprecedented tow availability of iron
ore, coal and working capital shortage.
IRON ORE:
Iron ore is one of the major raw material for the production of sponge
iron and due to fast growth of small sponge iron plants in Odisha and
Jharkhand, there has been an acute shortage of iron ore in the market.
Further Govt, of Odisha introduced online registration under the
guidance of Indian
Beureo of Mines, which almost stopped the mining activities in the
State of Odisha.
Moreover Sponge Iron manufacturers were asked to submit details of
yearly Iron
re procurement data, along with the production compilation of the data
for verification, which took long time. Thereafter hindrance in supply
of iron ore again appeared due to demand of forest clearance from mines
owner by Odisha Govt. As a result 60% of the mines were closed for the
want of enviromenlal clearance.
COAL:
Ministry of Coal, Government of India has allocated Macherkunda Coal
Block to the
Company for captive mining of coal to meet its coal requirement. The
allocation of the aforesaid coal block was subject to certain
conditions together with milestones that were required to be achieved
by the Company as fixed by the Ministry of Coal.
One of the condition to the allocation of said coal mine was the Coal
Tapering Linkage Policy issued by the Ministry of Coal (MoC), vide
Notification being No. 23011/39/2008-CPD dated 26* February 2010 by
virtue of which the Company''s existing linkage of coal would be tapered
on and from 5ln February 2013 (being the normative date of production
from the coal mine allocated) in the forthcoming 4 years by 25 % in
each year and an additional price of 40% over the notified basic
price of coal would be charged.
The Company had linkages with Central Coalfields Limited (CCL) for
supply 1,21,500 MT of B/C grade coal and 1,30,500 MT of E/F grade coal
per annum. CCL has stopped supplying the linkage coal to the Company
from 5,h February, 2013 on the basis of said Coal Linkage policy.
Since the allocated Macharkunda coal block has been de-allocated by
Ministry of Coal vide their letter dated 20th November, 2012 the
tapering policy do not apply to the Company. The Company has challenged
the aforesaid action of the MoC, Coal India Limited and CCL by filing a
writ petition before the Hon''ble Jharkhand High Court. In the last
hearing held on 141h May, 2013 the Hon''ble Court granted one last
opportunity and directed the Union of India to file its counter
affidavit, failing which the officer concerned will have to appear
before the Court to answer as to why the counter affidavit is not being
filed in spite of directions. The Court has also directed CCL to file
its response.
Further, the MoC has also constituted a Committee under the
Chairmanship of Additional Secretary of Coal, to look into the matter,
we are hopeful that the issue would be resolved soon.
Further during the period under review insufficient coal rakes were
supplied by CCL due to non availability of rakes caused as a reason of
priority being given to Power Sector.
IRON ORE MINE ;
The Company was allotted Ghatkuri Iron Ore Mine in April, 2007 in the
State of Jharkhand with 406.40 hectares of land and consisting of
reserves estimated at 35.65 million tons. However, the Geological
Survey was conducted by Department of Geology, Ministry of Mines, Govt,
of Jharkhand and report was released in February, 2012 wherein they
have assessed the iron ore reserve to be about 11.00
Million Tons.
The Company has requested for the allocation for an additional Iron ore
mine to compensate the difference in allocated quantity and for revised
geological reserves.
The draft Mining Plan prepared by MECON is already submitted with
Ministry of Mines on 3rd September, 2012 based on the revised reserves
of 11.00 million tons.
The Company expects a total capital investment of around Rs.45.00
Crores for the development and anticipates the commencement of
production of iron ore by 2015. COAL MINE
Ministry of Coal, Government of India vide its letter No. 38011 / 2 /
2007 - CA - 1 dated 5lh August 2008, has allocated Macherkunda Coal
Block to the Company for captive mining of coal to meet its coal
requirement. The allocation of the aforesaid coal block was subject to
certain conditions together with milestones that were required to be
achieved by the Company as fixed by the Ministry of Coal. However,
notwithstanding all bonafide effort by the Company and due to inter
departmental issues within the Government which were beyond the power
and control of the Company, there was a delay in achieving the
milestones. Thereafter the Central Government, without affording any
opportunity of hearing to the Company, proceeded to accept the
recommendations purported to have been made by the Inter Ministerial
Group (IMG) and consequently vide an order dated 20,h November 2012,
communicated its decision to de-allocate the Macherkunda Coal Block.
Upon the de-allocation of the Macherkunda coal block, the Company had
filed a Writ Petition before the Jharkhand High Court, being W.P. (C)
No. 7331 of 2012 challenging the decision of the Ministry of Coal to
de-allocate the coal block. The Hon''ble Jharkhand High Court, by an
order dated 12lh December 2012 has been pleased to pass the following
interim order:"Until further order, no coercive steps shall be taken
against the Petitioners pursuant to the impugned order". 20 MW POWER
PLANT:
Your Company has entered into an Agreement with Chandil Power Ltd.(CPL)
for the sale of hot gases being generated by the Company during
production of sponge iron, which at present is a waste and being
discharged into the air. The sale price of hot gas will be based on its
calorific value. The hot gases will be used by CPL for generating power
in its proposed 20MW WHRSG based Power Plant. The Company will get
additional revenue from the sale of hot gases and will also get benefit
of carbon credit.
CPL has applied for various Govt, approvals necessary for putting up
the Plant. The Company has also applied to Govt, of Jharkhand for
their permission to sub- lease 22.36 acres of land to Chandil Power
Ltd. required for the Power Plant as the same has to set up in the
vicinity of BSIL for smooth flow of hot gases. The necessary permission
is under consideration of Govt, of Jharkhand. Further, the term loan
sanctioned by Indian Renewable Energy Development Agency Limited
("IREDA") to Chandil Power Ltd. on 30th September 2010 for setting up
of the 20 MW Power Plant has now been sought to be closed on the basis
that NOC for the sub-lease of the land has not been submitted by the
Company till date. Chandil Power Limited shall apply for fresh loan to
IREDA after the Company receives the permission from Government of
Jharkhand to sub-lease the land. 5 MW POWER PLANT/STEEL PLANT
The Company from the existing power plant generates 5 MW Power based on
dolo char being produced in the manufacturing of sponge iron. Since the
Company is not able to consume the total dolo char, the Company has
entered into an agreement with G.S. Phambutor Pvt. Limited (GSP) to
install a 5 MW Power Plant. Whenever the existing power plant goes
under regular maintenance, the Company has to generate power from DG
Set, which is highly uneconomical. During such time the Company will
take the power from GSP and for the rest of the period GSP will consume
the power in induction furnace to produce pencil ingot. It is expected
that the 5 MW power plant and induction furnace will be commissioned by
June, 2013. FIXED DEPOSITS:
The Company has neither invited nor accepted any deposits from the
public within the meaning of Section 58A of the Companies Act, 1956,
during the year under review.
BOARD OF DIRECTORS:
Since the last Annual General Meeting, the following changes have taken
place in the Board of Directors:
Mr. B. K. Thakur was appointed as additional Director and then
Whole-tme Director of the Company designated as Director- Finance,
w.e.f. 20,h December, 2013. Mr. B.K. Luthra resigned as Director of
the Company with effect from 23,d August, 2012.
Mr. K.K. Jain has resigned as director of the Company w.e.f. 28th May,
2013. Bihar State Industrial Development Corporation (BSIDC) had
withdrawn the nomination of Mr. Dipak Kumar Singh and has nominated Mr.
Sudhir Kumar vide their letter dated No. 133/G dated 15th April, 2013.
In accordance with the provisions of section 257 of the Companies Act,
1956 and Article 128 of the Articles of Association of the Company,
Mrs. Kum Kum Modi, Mr. B. D. Garg and Mr, G C. Jain retires by
rotation and are eligible for re-appointment. None of the directors of
the Company are disqualified under Section 274 (1) (g) of the Companies
Act, 1956. Your directors have made necessary disclosures as required
under various provisions of the Companies Act, 1956. AUDITORS:
i. M/s. Thakur, Vaidyanath Aiyar and Co., Chartered Accountants (Firm
Registration NO.000038N), Auditors of the Company retire at the
conclusion of the ensuing Annual General Meeting and being eligible,
offer themselves for re-appointment. The Company has received a letter
from them to the effect that their re-appointment, if made would be
within the prescribed limits under Section 224 (1B) of the Company Act,
1956.
ii. M/s M.K. Singhal & Co., Cost Accountants has been appointed by the
Board of Directors of the Company on the recommendation of the Audit
Committee, as Cost Auditors of the Company for the Financial Year
2012-13. The Company has received a letter from them to the effect that
their appointment, if made would be within the prescribed limits under
Section 224 (1B) of the Company Act, 1956. The Certificate of
independence and arms length relationship with the Company and are not
disqualified for such appointment within the meaning of Section
226/233-B (5) of the Companies Act, 1956 has been received. ACCOUNTS
AND AUDIT REPORT:
The Notes to Accounts referred to in the Auditors'' Report are self
explanatory and, therefore, do not call for any further comments.
However, in respect of delays/ non-payment of part of statutory dues
the Board of Directors wish to explain as under:
Due to low production as a result of non-availability of coal from CCL,
the said dues could not be paid on due dates. Necessary steps for the
payment of such dues along with interest for the delayed period are
being taken. SUBSIDIARY COMPANY
Chandil Power Limited has become a subsidiary company of the Company
pursuant to Section 4 (1) (a) of the Companies Act, 1956. In accordance
with the general circular No. 2/2011 dated 8m February, 2011 issued by
the Ministry of Corporate Affairs, Government of India the balance
sheet, profit and loss account and other documents as required to be
attached with balance sheet are not attached with the balance sheet of
the Company. The same will be made available to any member of the
Company, who may be interested in obtaining the same. The Annual
accounts and related documents of the subsidiary company will also be
kept open for inspection at the registered office of the Company.
Further the consolidation of accounts is not required as Chandil Power
has become subsidiary by virtue of control on of composition of Board
of Directors of Chandil Power Limited and the Company do not hold any
shares in Chandil Power Limited. MANAGEMENT DISCUSSION ANALYSIS REPORT
In terms of Clause 49 of the Listing Agreement with the Stock Exchange,
Management Discussion and Analysis Report is annexed and form part of
this report. DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors
of your Company declare as under:
(i) That in the preparation of the Annual Accounts, the applicable
Accounting Standards had been followed along with proper explanation
relating to material departures. (ii) That the Company has 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 or Loss of the Company for that
period. (iii) That proper and sufficient care has been taken for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities. (iv) That
the annual accounts have been prepared on a going concern basis.
CORPORATE GOVERNANCE:
A separate report on Corporate Governance is attached as Annexure to
the Annual Report. The Auditors'' Certificate confirming compliance of
conditions of Corporate Governance is included in the said Corporate
Governance Report. PARTICULARS OF EMPLOYEES:
None of the employee of the Company fall under the purview of Section
217(2A) of the Companies Act, 1956 read with the Companies (Particulars
of Employees) Rules, 1975.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS
AND OUTGO :
Information pursuant to Section 217(1) (e) of the Companies Act, 1956
read with the Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, 1988, (as amended) a statement giving the
required information relating to energy conservation, technology
absorption, foreign exchange earnings and outgo is annexed hereto as
Annexure-A and form part of this report. ACKNOWLEDGEMENT:
Your Directors take this opportunity to place on record their sincere
thanks to all stakeholders, various departments of Central Government,
the Government of Bihar and Jharkhand, Financial Institutions and Banks
for their valuable assistance. Your Directors equally acknowledge the
trust reposed by you in the Company. The Directors also wish to place
on record their appreciation for the all round support and co-operation
received from the employees at all levels. i
For & on behalf of thaVBoard
Place New Delhi Urnqsh
Dated: 28-05-2013 (Chairman & Managing''Director)
Mar 31, 2010
The Directors have pleasure in presenting the 28lh Annual Report of the
Company along with audited accounts for the year ended 31st March,
2010. FINANCIAL RESULTS :
Rs. In lacs
2009-10 2008-09
Sales (Net of Excise Duty) 1,79,94.89 2,14,03.28
Other Income 1,95.99 1,20.34
Profit / (Loss) before Interest,
Depreciation & IncomeTax 3,95.37 1,88.85
Interest & Finance Charges 5,93.61 6,63.65
Depreciation 5,75.65 6,51.06
Profit/(Loss) for the year before
Extra Oridinary Items &
Provision for Tax (7,73.89) (11,25.87)
Provision for Tax
- Fringe Benefit Tax (Net) 1.02 18.17
- Wealth Tax 0.33 0.64
Profit / (Loss) for the year
carried to Balance Sheet (7,75.24) (11,44.68)
OPERATIONS :
During the year under review, production was 1,41,265 MT of sponge iron
as against 1,36,372 MT of sponge iron in the previous year. The Company
could not achieve higher production due to political instability in the
state of Jharkhand, frequent bandh" called by MCC/ Naxals,
unprecedented low availability of iron ore and insufficient supply of
coal racks by Central Coal Field Limited.
The Company has been allotted iron ore mine of 406.40 hectors, at
Ghatkuri Forest Reserve, Dist. Singhbhum, Jnarkhand. The drilling job
in the said mine started on 27* February, 2009. The same has been
completed and report is under preparation and expected to be completed
by 3rd week of August, 2010. The Mining Plan/EMP/EMI and Forest
Clearance Plan will be prepared and will be submitted to the respective
ministries.
The Company has also been allotted for captive use a coal block in the
Macherkunda Coal Block, in the state of Jharkhand. The Company has
obtained the Geological Report from Central Mine Planning & Design
Institute Limited (CMPDIL), a unit of Govt, of India, for developing of
Mine Plan and Environmental Plan. The Company has applied to Govt, of
Jharkhand for mining lease of the aforesaid coal block. The application
is still pending before the District Mining Officer, Latehar. The
Company has awarded the contract for developing Mining Plan, EMP/EMI
and Project Report to CMPDIL and expect the reports by January/February
2011.
Once the said iron ore & coal mines become operational, the Company
will be in a position to meet internally its total requirement of iron
ore and coal. This will result in substantial savings in cost of
raw-materials, optimizing overheads with capacity operation and will
contribute to the profitability of the Company.
Your Company has entered into an agreement with Chandil Power Limited,
for the sale of hot gases generated by it during production of sponge
iron, which at present is a waste and is being discharged into air. The
sale price of hot gases will be based on its calorific value. The hot
gases will be used by Chandil Power Limited for generating power, in
its proposed 20 MW WHRSG Based Power Plant.
Chandil Power Ltd. has entered into an agreement with Tata Power
Limited for the sale
of power. It has applied for various Government approvals necessary for
putting up the
plant Arrangement of funds is at final stage of approval.
At present the Company is passing through a difficult phase but the
future of the
Company is encouraging, once the iron ore mine, coal mine and power
plant
becomes operational. Not only your Company will turn profitable, it
will take future
expansion of capacity to 1 million tones.
FIXED DEPOSITS:
The Company has neither invited nor accepted deposits from the public
within the
meaning of Section 58A of the Companies Act, 1956, during the year
under review.
BOARD OF DIRECTORS:
Since the last Annual General Meeting, the following changes have taken
place in the Board of Directors:
Mr. Jayesh Modi was appointed as an Additional Director of the Company
with effect from 18th June, 2010.
Mr. B.K. Luthra was appointed as an Additional Director of the Company
w.e.f. 18th June, 2010.He was also appointed as the Whole Time
Director, designated as Executive Director (Works) of the Company with
effect from that date for a period of one year, subject to your
approval.
Notices in writing alongwith requisite deposits under Section 257 of
the Compainies Act 1956, have been received from the members of the
Company proposing Mr. Jayesh Modi and Mr. B. K. Luthra as candidates
for the office of Directors.
Mr. Vijay Kumar Modi alternate Director to Dr. W. Janke ceased to hold
office on 26* February, 2010, on arrival of Dr. W. Janke to attend the
meeting of Board of Directors. Mr. Vijay Kumar Modi has again been
appointed as an Alternate Director to Dr. W. Janke with effect from
18th June, 2010. LIC has withdrawn nomination of Mr. Meghander Kumar
from 27th January, 2010. The Board places on record its deep sense of
appreciation for the wise counsel, valuable guidance and Co-operation
extended by Mr. Maghendar Kumar during his tenure of the Directorship.
In accordance with the provisions of Section 256 of the Companies Act,
1956 and Article 128 of the Articles of Association of the Company, Mr.
K. K. Jain and Dr. W. Janke retire by rotation and are eligible for
re-appointment.
AUDITORS:
M/s. Thakur, Vaidyanath Aiyar and Co., Chartered Accountants (Firm
Registration No.000038N), Auditors of the Company retire at the
conclusion of the ensuing Annual General Meeting and being eligible,
offer themselves for re-appointment. The Company has received a letter
from them to the effect that their re-appointment, if made would be
within the prescribed limits under Section 224 (1B) of the Company Act,
1956.
ACCOUNTS AND AUDIT REPORT:
The Notes to Accounts referred to in the Auditors Report are self
explanatory and, therefore, do not call for any further comments.
However, in respect of delays in payment of Statutory Dues and Secured
Loans (principle installments and interest) the Board of Directors wish
to explain as under- Due to increase in raw material prices and non
availability of working capital facility from Banks, the said dues
could not be paid on due dates. However, all the said dues have been
paid to respective accounts of Government & Secured Creditors along
with the interest for the delayed period at the contractual rates.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors
of your Company declare as under:
(i) That in the preparation of the Annual Accounts, the applicable
Accounting Standards had been followed along with proper explanation
relating to material departures.
(ii) That the Company has 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 or
Loss of the Company for that period.
(iii) That proper and sufficient care has been taken for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
(iv) That the annual accounts have been prepared on a going concern
basis.
CORPORATE GOVERNANCE:
A separate report on Corporate Governance is attached as Annexure to
the Annual Report. The Auditors Certificate confirming compliance of
conditions of Corporate Governance is included in the said Corporate
Governance Report. PARTICULARS OF EMPLOYEES
The particulars of employees required under section 217(2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 are annexed to this report as Annexure - A and form part of
this report.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS
AND OUTGO:
Information pursuant to Section 217(1) (e) of the Companies Act, 1956
read with the Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, 1988, (as amended) a statement giving the
required information relating to energy conservation, technology
absorption, foreign exchange earnings and outgo is annexed hereto as
Annexure-B and form part of this report.
ACKNOWLEDGEMENT:
Your Directors take this opportunity to place on record their sincere
thanks to all stakeholders, various departments of Central Government,
the Government of Bihar and Jharkhand, Financial Institutions and Banks
for their valuable assistance. Your Directors equally acknowledge the
trust reposed by you in the Company. The Directors also wish to place
on record their appreciation for the all round support and co-operation
received from the employees at all levels.
For & on behalf of the Board
Place: New Delhi Umesh Kumar Modi
Date : 13th August, 2010 (Chairman & Managing Director)