Mar 31, 2018
DIRECTORSâ REPORT
To the Members,
Bhushan Steel Limited
The Reconstituted Board of Directors presents to the Members the 35th Annual Report of the Company, which includes the Directorsâ Report (âAnnual Reportâ).
In accordance with the applicable provisions of the Insolvency and Bankruptcy Code 2016 (âIBC/Codeâ), the Corporate Insolvency Resolution Process (âCIRP Processâ) of Bhushan Steel Limited (âCompanyâ) was initiated by the Financial Creditors of the Company. The Financial Creditors petition to initiate the CIRP Process was admitted by the National Company Law Tribunal (âNCLTâ) on July 26, 2017 (âInsolvency Commencement Dateâ). Mr. VijayKumar V. Iyer was appointed as the Interim Resolution Professional (âIRPâ) to manage the affairs of the Company. Subsequently, Mr. Iyer was confirmed as the Resolution Professional (âRPâ) by the committee of creditors (âCoCâ). On appointment of the IRP/RP, the powers of the Board of Directors of the Company were suspended.
The RP invited expressions of interest and submission of a resolution plan in accordance with the provisions of the Code. Of the various resolution plans submitted, the CoC approved the resolution plan submitted by Tata Steel Limited (âTSLâ). The RP submitted the CoC approved resolution plan to the NCLT on March 23, 2018 for its approval and the NCLT approved the resolution plan submitted by TSL and approved by the CoC (âApproved Resolution Planâ), on May 15, 2018 (âIBC/NCLT Orderâ). Pursuant to the NCLT order, TSL acquired the shares of the Company through its wholly-owned subsidiary, Bamnipal Steel Limited, on May 18, 2018 (âAcquisitionâ). Post the Acquisition, a new Board was constituted in the current financial year i.e. on May 18, 2018 (âReconstituted Boardâ or âBoardâ) and a new management was put in place. In accordance with the provisions of the Code and the NCLT order, the approved resolution plan is binding on the Company and its employees, members, creditors, guarantors and other stakeholders involved.
Members may kindly note that, the Directors of the Reconstituted Board (âDirectorsâ) were not in office for the period to which this report primarily pertains. During the CIRP Process (i.e. between July 26, 2017 to May 15, 2018), the RP was entrusted with the management of the affairs of the Company. Prior to the Insolvency Commencement Date, the erstwhile Board of Directors had the oversight on the management of the affairs of the Company. The Reconstituted Board is submitting this report in compliance with the provisions of the Companies Act, 2013, the rules and regulations framed thereunder (âActâ) and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 (âListing Regulationsâ). The Reconstituted Board is not to be considered responsible to discharge fiduciary duties with respect to the oversight on financial and operational health of the Company and performance of the management for the period prior to the Acquisition.
IBC is a new legislation in India and the Approved Resolution Plan of the Company is amongst the first such resolution plan approved under the IBC. Members are requested to read this report in light of the fact that the Reconstituted Board and the new management is currently implementing the resolution plan.
A.FINANCIAL RESULTS
Rs. Crore
Particulars |
Bhushan Steel Standalone |
Bhushan Steel Group |
||
2017-18 |
2016-17 |
2017-18 |
2016-17 |
|
Gross revenue from operations |
17,404.43 |
15,027.30 |
17,404.43 |
15,027.30 |
Total expenditure before finance cost, depreciation (net of expenditure transferred to capital) |
15,199.57 |
12,105.28 |
15,200.29 |
12,106.08 |
Operating Profit |
2,204.85 |
2,922.02 |
2,204.14 |
2,921.22 |
Add: Other income |
95.08 |
71.96 |
95.08 |
71.96 |
Profit/(Loss) before finance cost, depreciation, exceptional items and taxes |
2,299.93 |
2,993.98 |
2,299.22 |
2,993.18 |
Less: Finance costs |
6,304.90 |
5,426.76 |
6,304.90 |
5,426.76 |
Profit / (Loss) before depreciation, exceptional items and taxes |
(4,004.97) |
(2,432.78) |
(4,005.68) |
(2,433.58) |
Less: Depreciation |
1,785.66 |
1,685.61 |
1,785.66 |
1,685.61 |
Profit / (Loss) before share of profit/(loss) of joint ventures & associates, exceptional items & tax |
(5,790.63) |
(4,118.39) |
(5,791.34) |
(4,119.19) |
Share of profit / (loss) of Joint Ventures & Associates |
- |
- |
- |
(121.65) |
Profit / (Loss) before exceptional items & tax |
(5,790.63) |
(4,118.39) |
(5,791.34) |
(4,240.84) |
Add/(Less): Exceptional Items |
(23,344.68) |
(6.69) |
(23,096.69) |
(6.69) |
Profit / (Loss) before taxes |
(29,135.31) |
(4,125.08) |
(28,888.03) |
(4,247.53) |
Less: Tax Expense / (income) |
(4,321.84) |
(623.96) |
(4,321.84) |
(623.96) |
(A) Profit/(Loss) after taxes |
(24,813.47) |
(3,501.12) |
(24,566.19) |
(3,623.57) |
(B) Net Profit / (Loss) for the Period |
(24,813.47) |
(3,501.12) |
(24,566.19) |
(3,623.57) |
Total Profit / (Loss) for the period attributable to: |
 |
 |
 |
 |
Owners of the Company |
 |
 |
(24,565.88) |
(3,623.57) |
Non-controlling interests |
 |
 |
(0.31) |
(8.72) |
(C) Total other comprehensive income / (Loss) |
(2.93) |
(0.61) |
(2.87) |
1.84 |
(D) Total comprehensive income for the period [ B + C ] |
(24,816.40) |
(3,501.73) |
(24,569.06) |
(3,621.73) |
Notes: The exceptional items include:
Particulars |
Year ended March 31, 2018 |
Year ended March 31, 2017 |
(i)Â Provision for impairment in property, plant & equipment and other assets |
(20,759.02) |
(6.69) |
(ii)Â Provision for impairment in financial assets |
(238.34) |
- |
(iii)Â Other exceptional items (refer note below) |
(2,347.33) |
- |
 |
(23,344.68) |
(6.69) |
 (i) Provision for impairment on non-current assets includes non- cash write down of fixed assets, Capital Work in Progress (CWIP) Rs. 19,112.80 crore, Provision for MAT credit Rs. 806.06 crore, provision for impairment of investment in associate companies Bhushan Energy Limited and others Rs. 368.81 crore, provision for certain non-current advances Rs. 471.36 crore. The previous year provision of Rs. 6.69 crore relates to provision on account of investment exposure in joint venture with Andal East Coal Company Pvt. Ltd.
 (ii) Provision for impairment of finance assets of Rs. 34 crore represents impairment of coal block advances paid towards acquisition of de-allocated coal mine of Rs. 148.34 crore and provision for security deposits paid to Bhushan Energy limited of Rs. 90 crore.
 (iii) Other exceptional items for the year ended March 31, 2018 include prior period items of Rs. 2,019.91 crore comprising of the following:
 a) Amortisation of leasehold land accounted as operating lease - The Company has taken land properties on operating lease in previous years, which earlier were accounted as finance Upon change in their classification as operating lease, the cumulative effect of amortisation from inception until previous year ended March 31, 2017 has been recognised in current yearâs profit or loss in âexceptional itemsâ.
 b) Accounting effect of oxygen plant accounted as finance lease - The Company entered into sale and leaseback arrangement for oxygen plant in earlier  years  (under the erstwhile management) which was accounted as operating However, the terms of the lease require such arrangement to be classified as finance lease. Consequently, the asset has been recognised with corresponding finance lease obligation. Cumulative effect of reversal of operating lease rentals and booking of depreciation and finance cost from inception until previous year ended March 31, 2017 has been recognised in current yearâs profit or loss in âexceptional itemsâ.
 (iv) Post the Acquisition, pursuant to the Approved Resolution Plan, the new management has with effect from May 18, 2018 taken complete control of the operations of the Further, the effect of the Approved Resolution Plan on the financial statements (standalone and  consolidated)  of  the  Company for the quarter and year ended March 31, 2018 had to be carefully assessed in order to prepare the financial statements in a manner such that as far as reasonably possible, the said financial statements present a true and fair view for the quarter and year ended March 31, 2018. It is for these reasons, that the financial statements were approved by the Audit Committee and adopted by the Board of Directors as of date. Considering the extra-ordinary situation under which the financial statements for the quarter and year ended March 31, 2018 was prepared, the Company made an application to the Securities and Exchange Board of India (âSEBIâ) seeking extension of time to file the financial results. However, the request was not acceded to by SEBI.
B. FINANCIAL PERFORMANCE AND STATE OF AFFAIRS
During the year, the total turnover from operations was Rs. 17,404.43 crore. The increase in turnover was mainly due to increase in sales volume and increase in average realizations. During the year, the company recorded a net loss of Rs. 24,813.47 crore (previous year: Net Loss was Rs. 3,501.12 crore). The increase in loss is primarily due to higher exceptional charges over previous year. The basic and diluted earnings per share for financial year 2017 â 18 were at (Rs. 1,095.45).
In accordance with the provisions of the Insolvency and Bankruptcy Code, the Company was admitted to the CIRP Process pursuant to the order of the NCLT on July 26, 2017. Pursuant to the IBC Order dated May 15, 2018, shares of the Company have been acquired by Bamnipal Steel Limited, a wholly-owned subsidiary of TSL. It is to be noted that during the CIRP Process (i.e. between July 26, 2017 to May 15, 2018), RP and prior to the Insolvency Commencement Date, the erstwhile Board of Directors were entrusted with and responsible for the management of the affairs of the Company.
C. DIVIDEND
In view of the net loss incurred during the financial year ended March 31, 2018, the Reconstituted Board does not recommend any dividend to the shareholders of the Company.
D. TRANSFER TO RESERVES
In view of the losses incurred by the Company, no amount has been transferred to reserves.
E. CAPEX AND LIQUIDITY
During the year, the Company has spent Rs. 314 crore on capital projects, largely towards balancing facilities and essential sustenance capital projects.
As on March 31, 2018, the liquidity position of the Company was Rs. 492 crore (excluding FD under Lien of Rs. 426 crore for LC opening) as against Rs. 129 crore as on March 31, 2017 (excluding FD under Lien of Rs. 26 crore).
During the year under review, the banking facilities of the company were frozen and no headroom was available as the Company was admitted to the CIRP Process.
F. MATERIAL CHANGES POST CLOSURE OF FINANCIAL YEAR
Pursuant to the Acquisition, the following key events took place in the Company:
 (i) Increase in Authorized Capital of the Company
Pursuant to the NCLT order, the Board approved the increase in authorized capital of the Company from Rs. 300 crore (Rupees Three Hundred Crore) consisting of 40,00,00,000 (Forty Crore) equity shares of Rs. 2/- each and 2,20,00,000 (Two Crore Twenty Lakh) preference shares of Rs. 100/- each to Rs. 9,520 crore (Rupees Nine Thousand Five Hundred Twenty Crore) consisting of 4650,00,00,000 (Four Thousand Six Hundred Fifty crore) equity shares of Rs. 2/- each and 2,20,00,000 (Two Crore Twenty Lakh) preference shares of Rs. 100/- each.
 (ii) Acquisition of control of the Company by Bamnipal Steel Limited
Pursuant to the NCLT order and approved resolution plan, on May 18, 2018, 79,44,28,986 (Seventy Nine Crore Forty Four Lakhs Twenty Eight Thousand Nine Hundred and Eighty Six) equity shares at Rs. 2/- per share for cash was allotted to Bamnipal Steel Limited (âBamnipalâ), a wholly owned subsidiary of TSL. Pursuant to the allotment, Bamnipal holds 72.65% of the paid-up capital of the Company and has been classified as the promoter of the Company. Further, the erstwhile Promoters have been re-classified as retail shareholders.
 (iii) Allotment of equity shares to eligible financial creditors
Pursuant to the NCLT order and Approved Resolution Plan, on May 18, 2018, 7,24,96,036 (Seven Crore Twenty Four Lakh Ninety Six Thousand and Thirty Six) equity shares at Rs. 2/- per share were allotted to eligible financial creditors on conversion of their existing loan to the extent of the shares allotted to them.
Further debts of  eligible  financial  creditors  were  also  paid (Rs. 35,200 crore) in the manner provided in the Approved Resolution Plan.
 (iv) Reconstitution of the Board of Directors
Consequent to the NCLT Order dated May 15, 2018, all the Directors as of the date of the order were deemed to have vacated/resigned from their office. Post the  Acquisition,  a new Board was constituted on May 18, 2018 consisting of Mr. Krishnava Dutt as Additional Director (Independent), Mr. Anand Sen, Mr. Shuva Mandal, Mr. Dibyendu Dutta as Additional Directors (Non-Executive) and Mr. Rajeev Singhal as Additional Director (Executive). Mr. Krishnava Dutt has been appointed for a period of 5 (five) years effective May 18, 2018.
On June 7, 2018, the Board appointed Ms. Neera Saggi and Mr. Shashi Kant Maudgal as Additional Directors (Independent) for a period of 5 (five) years.
On July 11, 2018, the Board appointed Mr. T.V. Narendran and Mr. Koushik Chatterjee as Additional (Non-Executive) Directors. Mr. Shuva Mandal and Mr. Dibyendu Dutta resigned as Members of the Board effective July 12, 2018.
On August 9, 2018, the Board appointed Mr. Srikumar Menon as Additional Director (Independent) for a period of 5 (five) years.
The approval of the shareholders for appointment of all Directors except Mr. Srikumar Menon was obtained through postal ballot. The results of the postal ballot were declared on August 21, 2018.
 (v) Key Managerial Personnel.
Mr. Nittin Johari resigned as the Chief Financial Officer of the Company effective May 18, 2018.
Mr. Neeraj Singal ceased to be the Managing Director effective May 18, 2018. Pursuant to the Acquisition, the Board appointed Mr. Rajeev Singhal as Managing Director of the Company for a period of 3 (three) years effective May 18, 2018. The Board also appointed Mr. Sanjib Nanda as Chief Financial Officer of the Company for a period of 3 (three) years effective May 18, 2018.
Mr. O. P. Davra is the Company Secretary and Compliance Officer of the Company.
 (vi) Redemption of redeemable preference shares
During the period, the Company redeemed 1,82,59,885 (One Crore Eighty Two Lakhs Fifty Nine Thousand Eight Hundred and Eighty Five) redeemable preference shares for an amount of ? 100 per preference shareholder.
 (vii) Re-classification of erstwhile promoters
Post the Acquisition, the Company submitted an application with the stock exchanges where its securities are listed, for re- classifying (i) Neeraj Singal; (ii) Brij Bhushan Singal; (iii) Ritu Singal; (iv) Aishwarya Singal; (v) Brij Bhushan Singal (HUF); and (vi) Bhushan Infrastructure Private Limited (collectively referred to as the âErstwhile Promoter Groupâ) as public shareholders under Regulation 31A of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015. The Company received the approval from BSE Limited and National Stock Exchange of India Limited on June 25, 2018.
G. CORPORATE SOCIAL RESPONSIBILITY (âCSRâ)
The Company incurred losses in the preceding three financial years. Thus the Company was not required to spend any money for CSR activities during the financial year 2017-18.
Post the Acquisition, the Board has reconstituted the CSR Committee and renamed it as Corporate Social Responsibility and Sustainability Committee.
On the recommendation of the newly constituted Corporate Social Responsibility and Sustainability Committee, the Board has adopted a new Corporate Social Responsibility and Sustainability Policy effective July 11, 2018.
The Corporate Social Responsibility and Sustainability Policy is available on the website of the Company www.bhushansteel.com. A web link for the same is provided in the Corporate Governance Report.
H. CORPORATE GOVERNANCE
The Corporate Governance Report for financial year 2017-18 as stipulated under the Listing Regulations forms part of the Annual Report. The certificate from a practicing Company Secretary confirming compliance with the conditions of corporate governance forms part of the Corporate Governance Report.
1. Board Meetings
The Board met six times during the year, the details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Act and the Listing Regulations.
2. Selection of New Directors and Board Membership Criteria
Post the Acquisition, the Board of Directors of the Company has been reconstituted.The Board on the recommendation of the Nomination and Remuneration Committee (ââNRC/Commmitteeâ) has approved and adopted a revised Policy for Appointment & Removal of Directors. This Policy covers different parameters including board diversity, membership criteria and criteria for determining independence of Directors.
Characteristics expected of all Directors include independence, integrity, high personal and professional ethics, sound business judgement, ability to participate constructively in deliberations and willingness to exercise authority in a collective manner.
The Policy on Appointment and Removal of Directors is annexed to this Report (Annexure â 1) and is also available on our website www.bhushansteel.com. A web link for the same is also provided in the Corporate Governance Report.
3. Board Evaluation
Pursuant to the provisions of the Act and Listing Regulations, the Board is required to carry an annual evaluation of its own performance, the directors individually as well as the evaluation of the working of various committees.
During financial year 2017-18, the Independent Directors met on March 16, 2018 to discuss and review the performance of the erstwhile Board and the management.
Subsequent to the Acquisition,the then existing Directors of the Company were deemed to have vacated their office effective May 18, 2018.
4. Compensation Policy for the Board and Senior Management
Post the Acquisition, based on the recommendations of the NRC, the Board has approved and adopted a revised Remuneration Policy for Directors, Key Managerial Personnel and all other employees of the Company (âRemuneration Policyâ) effective July 11, 2018.
As part of this policy, the Company will strive to achieve alignment between pay and long-term sustainable performance.
The Remuneration Policy is annexed to this report (Annexure â 2) and is also available on the website of the Company www.bhushansteel.com. A weblink of the same is provided in the Corporate Governance Report.
5. Particulars of Employees
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report (Annexure -3).
In addition, there are no employees drawing remuneration in excess of the limits sets out in the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
6. Independent Directors Declaration
Post the Acquisition, the Reconstituted  Board  comprises four Independent Directors. The Company has received the necessary  declaration  from  each  of  the  four  Independent
Directors in accordance with Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence as laid out in Section 149(6) of the Act and the Listing Regulations.
7. Directors
The year under review saw the following changes to the Board of Directors:
Induction to the Board
Mr. Vineet Prakash Jain, Nominee Director of Punjab National Bank was appointed as Nominee Director effective November 14, 2017 in place of Mr. Rajesh Yaduvanshi who resigned as Member of the Board effective October 25, 2017.
Cessation of Directorship
Mr. Rajesh Yaduvanshi, Nominee Director of Punjab National Bank resigned as Member of the Board effective October 25, 2017.
Mr. Kapil Vaish and Mr. M. V. Suryanaryana, Independent Directors, resigned as Members of the Board effective November 14, 2017 and January 05, 2018 respectively.
Mr. Nittin Johari, Whole Time Director and Chief Financial Officer resigned as Member of the Board effective November 27, 2017.
Directorships post May 15, 2018
Post closure of financial year 2017-18 and pursuant to the Acquisition, the Board of Directors of the Company was reconstituted, details of which are covered under the head âMaterial Changes Post Closure of Financial Yearâ.
Re-appointment
In accordance with the provisions of the Act, Mr. Anand Sen will retire at the ensuing AGM and being eligible, seeks re- appointment. The Board recommends and seeks your support in confirming the re-appointment of Mr. Anand Sen as a Director on the Reconstituted Board.
8. Audit Committee
The Audit Committee met five times during the year. The details of the meetings held and attendance of Members during the year are given in the Corporate Governance Report.
Pursuant to the Acquisition, the Audit Committee has been re-constituted and on July 11, 2018 the Board has approved the charter for the functioning of the Audit Committee. The Company Secretary acts as the Secretary to the Committee.
9.Internal Financial Control Systems
Pursuant to the Acquisition, the Company is putting in place a framework for Internal Financial Controls, commensurate with the size, scale and complexity of the Companyâs operations.
10. Risk Management
Post the Acquisition, the Company is putting in place an enterprise risk management framework for identifying risks and opportunities that may have a bearing on the organizationâs objectives, assessing them in terms of likelihood and magnitude of impact and determining a response strategy.The Board to the best of its knowledge states that, there are at present no such risks that threaten the existence of the Company.
11. Vigil Mechanism
Post the Acquisition, the Board, on the recommendations of the Audit Committee, has approved a new vigil mechanism that provides a formal mechanism for all Directors, employees and vendors to approach the Ethics Counselor/Chairman of the Audit Committee and make protective disclosures about the unethical behaviour, actual or suspected fraud or violation of the Tata Code of Conduct (âTCoCâ).
The Vigil Mechanism comprises 3 policies viz., the Whistle Blower Policy for Directors & Employees, Whistle Blower Policy for Vendors and Whistle Blower Reward and  Recognition Policy for Employees. The same is available on our website, www.bhushansteel.com. A weblink for the same is provided in the Corporate Governance Report.
The Whistle Blower Policy for Directors & Employees is an extension of the TCoC that requires every Director or Employee to promptly report to the Management any actual or possible violation of the TCoC or any event where he or she becomes aware of, which could affect the business or reputation of the Company.
The Whistle Blower Policy for Vendors provides protection to vendors from any victimization or unfair trade practices by the Company.
The Whistle Blower Reward and Recognition Policy for Employees has been implemented in order to encourage employees to genuinely blow the whistle on any misconduct or unethical activity taking place in the Company.
During the financial year 2017-18, the Company did not receive any whistleblower complaints.
12. Related Party Transactions
The Company is a party to certain contracts with related parties. The terms of these contracts with related parties appear onerous on the Company. The Reconstituted Board and the new management will deal with these contracts in accordance with the applicable law, Approved Resolution Plan and the IBC Order. The new management is also in the process of identifying, and analysing other contracts entered into by the Company. The process is ongoing and the members are requested to read this report in light of the fact that efforts are still ongoing to understand and acclimatize to the issues that potentially exist in the Company, which has only recently come out from the CIRP Process.
The Company reserves its right under the applicable laws and in terms of the Approved Resolution Plan to seek appropriate remedies in respect of such onerous contracts with the related parties.
13.Disclosure as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has zero tolerance for sexual harassment at workplace and post the Acquisition has adopted a revised policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder.
The Company has complied with the provisions relating to the constitution of the Internal Complaints Committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
During the financial year 2017-18, the Company did not receive any complaint of sexual harassment.
14. Directorsâ Responsibility Statement
Members may kindly note that, the Directors of the Reconstituted Board were not in office for the period to which this report primarily pertains. During the CIRP Process (i.e. between July 26, 2017 to May 15, 2018), RP and prior to the Insolvency Commencement Date, the erstwhile Board of Directors was entrusted with and responsible for the management of the affairs of the Company. The Reconstituted Board is submitting this report in compliance with the Act and Listing Regulations and the Directors, as on date, are not to be considered responsible to discharge fiduciary duties with respect to the oversight on financial and operational health of the Company and performance of the management for the period prior to the Acquisition.
IBC is a new legislation in India and the Approved Resolution Plan of the Company is amongst the first such resolution plan approved under the IBC and the members are requested to read this report in light of the fact that the Reconstituted Board and the new management is currently implementing the resolution plan.
As pointed out above, the Reconstituted Board of Directors have been in office only since May 18, 2018. Consequently, the Reconstituted Board has only a limited overview of the effectiveness of the internal financial and other controls of the Company for the fiscal year 2018.
Accordingly, pursuant to Section 134(5) of the Act, the Reconstituted Board of Directors, based on the knowledge/ information gained by them, about the affairs of the Company, in a limited period of time and based on understanding of the then existing processes of the Company and to the best of their knowledge state:
a) that in the preparation of the annual accounts for the financial year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;
b) that we have selected such accounting policies and made judgments and estimates that are reasonable and prudent so as to give a reasonably true and fair view of the state of affairs of the Company at the end of the financial year ended March 31, 2018 and of the profit or loss of the Company for that period; and
c) that the annual accounts for the financial year ended March 31, 2018 have been prepared on a going concern
15. Subsidiaries, Joint Ventures and Associates
The Company has 3 (three) wholly-owned subsidiary companies in India and 4 (four) subsidiaries in Australia as on March 31, 2018. Further the Company has 3 (three) associate companies and 1 (one) joint venture as on March 31, 2018.
The Consolidated Financial Statements presented by the Company include financial results of all its subsidiaries. The Audited Financial Statements of the subsidiary companies have been reviewed by the Audit Committee and the Board.
Most of the subsidiaries and joint ventures of the Company have not commenced operations and their contribution to the overall performance of the Company is insignificant.
Pursuant to an order of Honâble Calcutta High Court dated January 24, 2017, Andal East Coal Company Pvt. Ltd, a joint venture of the Company is under liquidation.
Further, Bhushan Energy Limited  (âBELâ),  an  associate  of the Company, has been admitted to the corporate insolvency resolution process under the Code since January 08, 2018 and is managed by the resolution professional approved by the committee of creditors. The Board of BEL has been suspended.
In terms of the applicable Accounting Standards, the Company has lost significant influence over BEL and this has been accordingly dealt with while preparing the consolidated financial statements of the Company.
A report on the performance and the financial position of the subsidiaries, associates and joint venture as per Form AOC-1 is attached to this report (Annexure â 4).
16.Auditors
Statutory Auditors
Members of the Company at the Annual General Meeting (âAGMâ) held on September 16, 2017, ratified the appointment of M/s. Mehrotra & Mehrotra, Chartered Accountants as the statutory auditor from the conclusion of the 34th AGM till the conclusion of the 35th AGM.
Post the Acquisition, M/s. Mehrotra & Mehrotra, Chartered Accountants resigned as the statutory auditor of the Company with effect from May 29, 2018.
The Board, on the recommendation of the Audit Committee, appointed M/s Walker Chandiok & Co LLP, Chartered Accountants (Registration No: 001076N/N500013) (âWCCâ) as the statutory auditor to fill the vacancy caused by the resignation of the existing statutory auditor, subject to the approval of the shareholders. WCC shall hold office upto the conclusion of the ensuing AGM. The Company sought the approval of members of the Company in respect of the aforesaid appointment by postal ballot notice dated July 11, 2018. The results of the postal ballot were announced on August 21, 2018. The resolution appointing WCC as statutory auditors of the Company was duly passed.
The tenure of WCC as the statutory auditor will expire on the conclusion of the ensuing AGM. The Board, on the recommendation of the Audit Committee, has proposed the appointment of WCC as the statutory auditor for a period of 5 (five) years. The resolution for appointment of auditors forms part of the notice convening the next AGM.
WCC has audited the book of accounts of the Company for the financial year ended March 31, 2018 and has issued a qualified auditorsâ report thereon. The qualifications in the auditorâs report are as given hereunder:
a) The statutory auditors of the Company have expressed a qualified opinion on the standalone and consolidated financial results  of  the  Company  for  the  year  ended March 31, The cumulative impact of the same on turnover, total expenditure, profit or loss and earning per share of the Company for the year ended is Rs. Nil, Rs. 2,019.11 crore, Rs. 1,968.76 crore and decrease of Rs. 86.92 per share respectively. As the qualification pertains to the prior period adjustments in the financial results for the year ended March 31, 2018, there is no cumulative impact thereof on the balance sheet of the Company as of that date.
In connection with the same qualification, the auditors expressed that during the period under review  (April 2017 through March 2018) the Internal Financial Controls over financial reporting is materially weak. Given that the qualification pertains to the prior period, we are not in a position to comment on the said qualification. However, the Company is putting in place appropriate systems and processes to strengthen the internal financial controls.
b) The auditors report that the Directors of the Company as on March 31, 2018, were disqualified from being appointed as Directors in terms of Section 164(2) of the Post the NCLT order dated May 15, 2018, the erstwhile Directors of the Company are deemed to have resigned/vacated the office. Hence none of the erstwhile Directors continue as Members of the Board.
c) The statutory auditors of the Company have stated in their report that âPursuant to the initiation of CIRP and the requirements of Section 25(2)(j) of IBC, the Resolution Professional appointed by the NCLT identified certain transactions covered under Sections 43 to 51 and 66 of the These transactions were submitted with NCLT. Crystallisation of amount / Future course of action will be carried out based on the judgement/order of NCLT. Further, based on the information and explanations provided to us, certain former key management personnel of the Company are subject matter of investigations by the Government Authorities, which is currently underway and the Company is yet to get any communication in this respect from the government agencies till the balance sheet date. Except these transactions, no fraud by the Company or on the Company by its officers or employees has been noticed during the period covered by our audit.â
The qualification/emphasis of matter in the auditors report pertains to the period prior to the Directors of the Reconstituted Board taking office. The Reconstituted Board is continuously working from May 18, 2018, towards analyzing the financial and operational affairs of the Company for any fraudulent transactions, errors or omissions.
The Company states that it will address the issues arising from the discovery of fraudulent transactions or any other issues relating to the financial and operational affairs of the Company, if and when discovered, in accordance with law. The Company reserves its right under the applicable laws to seek appropriate remedies.
Cost Auditors
In terms of Section 148 of the Act, the Company is required to maintain cost records and have the audit of its cost records conducted by a cost accountant. Cost records are made and maintained by the Company as required under Section 148(1) of the Act. The Board of Directors at its meeting held on July 5, 2017 appointed M/s Kabra & Associates, Cost Auditors to conduct the Cost Audit for the Financial Year 2017-2018.
For the financial year ending March 31, 2019, the Board of Directors of the Company has, on the recommendation of the Audit Committee, approved the appointment of M/s Shome & Banerjee as the cost auditors of the Company. M/s Shome & Banerjee have vast experience in the field of cost audit.
In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the cost auditors as recommended by the Audit Committee and approved by the Board has to be ratified by the members of the Company. Accordingly, an appropriate resolution for the proposed remuneration of Rs. 7 Lakhs (Rupees Seven lakhs) plus applicable taxes and out-of-pocket expenses payable to the cost auditors for the Financial Year ending March 31, 2019, forms part of the notice convening the next AGM.
Secretarial Auditors
Section 204 of the Act inter-alia requires every listed company to annex with its Boardâs report, a secretarial audit report given by a Company Secretary in practice, in the prescribed form.
The Board appointed R. K Rai, practicing Company Secretaries, as secretarial auditor to conduct a secretarial audit of the Company for the financial year 2017-18. The secretarial auditor has made certain observations in the report. Pursuant to the Acquisition and the IBC Order dated May 15, 2018 passed by the NCLT, there has been a change in the Board and the management of the Company. Given that the observations pertain to the prior period, we are not in a position to comment on the said observations.
The  Secretarial  Audit  report  for  financial  year  2017-18  is annexed to this report (Annexure â 5).
Post-Acquisition, the Board, at its meeting held on August 9, 2018 has appointed M/s PI & Associates to conduct a secretarial audit of the Company for the financial year 2018-19.
18. Annual Return
In terms of the provisions of Act and the amendments thereto the annual return of the Company is placed on the website of the Company. Weblink of the same is given below:
http://www.bhushan-group.org/Investor%20Relations%20pdf/ Forms/Form%20MGT-7-%202017-18.pdf
19. Significant and Material Orders passed by the Regulators or Courts
On May 15, 2018, the NCLT approved the resolution plan submitted by TSL. Pursuant to the IBC Order, Bamnipal acquired the shares of the Company on May 18, 2018 in accordance and compliance with the provisions of the Code.
The IBC Order was challenged by the members of the Erstwhile Promoter Group of the Company and various other parties before the National Company Law Appellate Tribunal (âNCLATâ). The NCLAT, while dismissing the appeals, has confirmed and upheld the NCLT Order as passed by the NCLT thereby approving the Acquisition, through its order dated August 10, 2018.
It is pertinent to reiterate that the Approved Resolution Plan is binding on the Company and its employees, members, creditors, guarantors and other stakeholders involved. Contravention of any provisions of the Approved Resolution Plan may attract penal consequences in accordance  with  the  provisions  of the Code. Accordingly, the Company will be taking measures towards ensuring a smooth implementation of the Approved Resolution Plan.
Besides the above, to the best of our knowledge, there seems to have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Companyâs operations.
However, membersâ attention is drawn to the statement on contingent liabilities, commitments in the notes forming part of the financial statements.
20. Particulars of Loans, Guarantees or Investments
There were no loans or guarantees given or investments madeduring the financial year 2017-18.21.
21.Energy  Conservation,  Technology  Absorption  and Foreign Exchange Earnings and Outgo
Details of the energy conservation, technology absorption and foreign exchange earnings and outgo are annexed to this Report (Annexure â 6).
22. Deposits
During the year, the Company has not accepted any public deposits under the Act.
23. Secretarial Standards
The Company has in place proper systems to ensure compliance with the provisions of the applicable secretarial standards issued by the Institute of Company Secretaries of India and such systems are adequate and operating effectively.
ACKNOWLEDGEMENTS
The Directors thank the Companyâs customers, vendors, dealers, suppliers and investors for their continuous support.
The Directors also thank the Government of India, various State Governments particularly the States of Orissa, Maharashtra & Uttar Pradesh, Government of Australia, Banks, Financial Institutions, shareholders and debenture holders and concerned Government departments and agencies for their continued support.
Your Directors wish to place on record their deep sense of appreciation & gratitude to the Companyâs employees for their hard work, co-operation and support.
On behalf of the Board of Directors
sd/-
TV NARENDRAN
Chairman DIN: 03083605
Jamshedpur August 22, 2018Â
Mar 31, 2017
BOARD''S REPORT
Dear Shareholders,
The directors are pleased to present the 34th Annual Report and the Audited Statement of Accounts for the financial year ended March 31, 2017.
FINANCIAL RESULTS
(Rs, Lacs)
Particulars |
Year Ended |
|
31st March 2017 |
31st March 2016 |
|
Gross Revenue |
1502730.17 |
1312406.77 |
Profit /Loss Before Depreciation and Tax |
(243947.46) |
(246462.30) |
Depreciation & Amortization |
168561.21 |
172952.46 |
Profit /Loss Before Tax |
(412508.67) |
(419414.76) |
Provision for Deferred Tax |
(62396.54) |
(86426.96) |
Profit /Loss After Tax |
(350112.13) |
(332987.80) |
Total Comprehensive Income |
(350173.36) |
(332899.79) |
Profit /Loss brought forward from Previous Year |
(416374.86) |
(83387.06) |
Profits/Loss available for appropriation |
(766486.99) |
(416374.86) |
- As per IND - AS DIVIDEND
In view of the loss incurred during the financial year ended March 31,2017, the Board does not consider it expedient to recommend any dividend. OPERATIONS AND THE STATE OF COMPANY''S AFFAIRS GROSS REVENUE AND EXPORTS:
During the year your Company has achieved the Gross sales of Rs, 15027 Crores in comparison of previous year''s level of Rs, 13124 Crores.
Further the company has achieved the Export Turnover of Rs, 2863 Crores, registering a growth of 139% over previous year''s level of Rs, 1198 crores. The export turnover during the FY 2016-17 is higher due to increase demand of HR coil in international market. First time our company has started to export HR coil in such a huge quantity. The major shipment has been exported to South East Asia and Europe.
With a firm commitment and through sustained efforts, your company continues to maintain good rapport with Global Customers. Our quality products and timely delivery have found wide acceptance in the highly competitive international market. Our products are being exported across the globe.
COMPLETION OF BALANCE CAPEX FACILITIES :
Your company is under implementation of completion of balance capex facilities like Coke Dry Quenching and Reheating Furnace. These facilities are expected to be completed in FY 2017-18.
FINANCE:
The Working Capital facilities for its Sahibabad, Khopoli and Orissa Plants were last sanctioned for the FY 2014-15. Thereafter no enhancement in working capital facilities were sanctioned to the company.
IRON ORE MINES
The Company has bagged Kalmong west iron ore mine in Sundergarh district in an auction. The Iron Ore mine has a reserve of 92 million tonne.
ISSUE AND REDEMPTION OF PREFERENCE SHARES
The Company has made an allotment of 6,00,000 3% Redeemable Cumulative Preference Shares of Rs, 100 each on 31st March 2017 and redeemed 4,89,900 Redeemable Cumulative Preference shares of Rs, 100 each as per the terms of the Issue out of the proceeds of the fresh issue of shares.
INSOLVENCY PROCESS
The lenders have decided to take company into National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code due to the default made by the Company in repayment of borrowings and interest thereon.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
Changes in the composition of the Board of Directors and other Key Managerial Personnel
Smt. Monica Aggarwal joined the Board as an Additional Independent Director in its meeting held on 12th December 2016.
There is no change in the Key managerial personnel of the Company during the year under review except the appointment of Mr. Neeraj Singal as Chief Executive Officer (CEO) and Mr. Nittin Johari as Chief Financial Officer (CFO) w.e.f. 05.07.2017.
Currently the Board of Directors of the Company consists of 17 directors, out of which Nine are Independent directors, Three are Nominee directors, Four are Executive directors and One is Non-executive Chairman.
Independent Directors'' Declarations
All Independent directors have given declarations that they meet the criteria of independence as laid down under section 149 of the Companies Act, 2013 which has been relied on by the Company and placed at the Board meeting.
Retirement by rotation
In terms of Section 152 of the Companies Act, 2013 Mr. Nittin Johari and Mr. Rahul Sen Gupta Directors would retire by rotation at the forthcoming AGM and is eligible for re-appointment. Mr. Nittin Johari and Mr. Rahul Sen Gupta, Directors of the Company have offered themselves for the reappointment.
Further as per the requirement of Companies Act, 2013, the following policies of the Company are attached herewith marked as Annexure ''A'' and Annexure ''B''.
a) Policy for selection of Directors and determining Directors independence; and
b) Remuneration Policy for Directors, Key Managerial Personnel and other employees.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to the provision of Section 135 of the Companies Act 2013 read with CSR Rules the Company has constituted a CSR Committee consisting of three Directors, of which one is Independent Director. The composition, terms of reference etc. of the CSR Committee are laid out in the Corporate Governance Report which forms part of this Annual Report.
The CSR policy of the Company has been uploaded on the Company''s website www.bhushansteel.com.
In pursuance of the provisions of the Companies Act, 2013 and CSR Policy of the Company it is required to spend two percent of the average net profits of the Company for the three immediately preceding financial years. The Company incurred heavy losses in preceding two financial years and the average net profit for three financial year is in negative thus the company was not required to spend any money for CSR activities during the current financial year ending March 31, 2017.
However the Company is firm on its commitment to incur the sum on CSR activities required to be spent during the financial years 2014-15 and 2015-16 as soon as financial position of the Company improves and there is adequate cash flows.
RESPONSIBILITY STATEMENT
The Responsibility Statement of the Corporate Social Responsibility (CSR) Committee of the Board of Directors of the Company, is reproduced below:
''The implementation and monitoring of Corporate Social Responsibility (CSR) Policy, is in compliance with CSR objectives and policy of the Company.''
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company has also implemented several best corporate governance practices as prevalent globally. The report on Corporate Governance as stipulated under the Listing Agreement forms an integral part of this Report and presented in a separate section as Annexure ''C''. The requisite certificate from the Auditors of the Company confirming compliances with the conditions of corporate governance is part of the report on Corporate Governance.
MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT
Management''s Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2) of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 is presented in a separate section as Annexure ''D'' forming part of the Report.
CONSOLIDATED FINANCIAL STATEMENT
In accordance with the Companies Act, 2013 ("the Act") and Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accounting for Investments in Associates and AS - 27 on Financial Reporting of Interests in Joint Ventures, the audited consolidated financial statement is provided in the Report.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company has three (3) Subsidiary Companies as on March 31, 2017. The members may refer to the financial statements forming part of the Annual Report as required under the provisions of Section 129(3) of the Companies Act, 2013.
The Consolidated Financial Statements presented by the Company include financial results of all its subsidiaries, joint ventures and associates. The Audited Financial Statements of the Subsidiary Companies have been reviewed by the Audit Committee and the Board.
A policy for determining material subsidiaries is displayed on the website of the Company- www.bhushansteel.com.
No Company has become Joint venture during the financial year 2016-17. A report on the performance and the financial position of the Subsidiaries, Associates and Joint venture as per Form AOC-1 are presented in the consolidated financial statement and hence not repeated here for the sake of brevity. Most of the Subsidiaries and Joint venture of the Company have not commenced operations and their contribution to the overall performance of the Company is insignificant.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
The Company has a Board approved policy on Related Party Transactions, which has been disclosed on the website of the Company and can be viewed at www.bhushansteel.com
All Related Party Transactions that were entered into during the financial year were on an arm''s length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 (''the Act'') and SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 and the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in Form AOC-2 is not required.
There were no materially significant Related Party Transactions made by the Company during the year that would have required Shareholder approval as per provision of Companies Act 2013 read with applicable rules and Regulation 23 of SEBI(Listing Obligations and Disclosures Requirements) Regulations, 2015.
All related Party Transactions are placed before the Audit Committee for approval. Prior Omnibus approval of the Audit Committee is obtained for the transactions which are of for seen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted along with a statement giving details of all related party transactions is placed before the Audit Committee from time to time.
RISK MANAGEMENT
Bhushan Steel follows well-established and detailed risk assessment and minimization procedures, which are periodically reviewed by the Board. The Company has in place a business risk management framework for identifying risks and opportunities that may have a bearing on the organization''s objectives, assessing them in terms of likelihood and magnitude of impact and determining a response strategy.
The Senior Management assists the Board in its oversight of the Company''s management of key risks, including strategic and operational risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks under the aegis of the overall business risk management framework.
INTERNAL FINANCIAL CONTROLS
The Board has laid down Internal Financial Controls within the meaning of the explanation to Section 134 (5) (e) of the Companies Act, 2013. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2016-17.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required by Section 134(3) (c) of the Companies Act, your directors state that:
a) in the preparation of the annual accounts for the year ended March 31, 2017, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the loss of the Company for the year ended 31st March 2017;
c) the Directors have taken proper and sufficient care 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;
d) the Directors have prepared the annual accounts on a ''going concern'' basis;
e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.
The Policy is displayed at Company''s website -www.bhushansteel.com.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its own performance, the directors individually as well as the evaluation of the working of various committees. The Independent directors also carried out the evaluation of the Chairman and the non-independent directors, the details of which are covered in the Corporate Governance Report.
Criteria for evaluation of Directors - For the purpose of proper evaluation, the Directors of the Company have been divided into 3 (three) categories i.e. Independent, Non-independent and nonexecutive and executive directors. The criteria for evaluation includes factors such as engagement, strategic planning and vision, team spirit and consensus building, effective leadership, domain knowledge, management qualities, team work abilities, result, achievements, understanding and awareness etc.
AUDITORS AND AUDITORS'' REPORT Statutory Auditors
M/s Mehra Goel & Co., Chartered Accountants and M/s. Mehrotra & Mehrotra , Chartered Accountants, Joint Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting. M/s. Mehrotra & Mehrotra are eligible for re-appointment and have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment.
The Notes on financial statement referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. The Auditors'' Report contain one qualification/ reservation etc which is self-explanatory and do not call for any further comments.
Cost Auditors
The Board on the recommendation of the Audit Committee has appointed M/s Kabra & Associates as cost auditors for conducting the audit of cost records of the Company for the financial year 2016-17. In terms of the Section 148 of the Companies Act,2013 and the rules made there under, remuneration of the Cost Auditors was ratified by the members of the Company in the Annual General meeting.
Secretarial Audit
The Board has appointed R. K Rai, Practising Company Secretary, to conduct Secretarial Audit for the financial year 2016-17. The Secretarial Audit Report for the financial year ended March 31, 2017 is annexed herewith marked as Annexure ''E'' to this Report. The remarks in the Secretarial Audit Report are self-explanatory and do not call for any further comments.
DISCLOSURES:
CSR Committee
The CSR Committee comprises Mr. B. B. Singal (Chairman), Mr. B. B. Tandon, and Mr.Nittin Johari as other members.
Audit Committee
The Audit Committee comprises Mr. B. B. Tandon (Chairman), Mr. B. B. Singal, Mr. M. V. Suryanarayana and Mr. Ashwani Kumar as other members.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee comprises Mr. M.V. Suryanarayana (Chairman), Mr. B. B. Singal and Mr. B. B. Tandon as other members.
NUMBER OF MEETINGS OF THE BOARD
Five meetings of the Board of Directors were held during the year. For further details, please refer report on Corporate Governance presented as Annexure ''C'' to this Report.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED
Particulars of loans given, investments made guarantee given and securities provided, if any are given in the financial statement.
POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an Internal Complaints Committee, known as the Prevention of Sexual Harassment (POSH) Committee, to inquire into complaints of sexual harassment and recommend appropriate action.
The Company has not received any complaint of sexual harassment during the financial year 2016-17.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under subsection 3(m) of Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules 2014 are provided in Annexure ''F'' to this Report.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as Annexure ''G'' to this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197(12) of the Act read with Rules 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing disclosures pertaining to remuneration and also the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annexure ''H'' to this Report.
DEPOSITS
The Company has not accepted any deposits from the Public falling within the purview of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENCE ACCOUNT
Aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of the year- 3 Shareholders holding 171 Shares
Number of shareholders who approached listed entity for transfer of shares from suspense account during the year- 1 shareholder holding 150 Shares
Number of shareholders to whom shares were transferred from suspense account during the year- 1 shareholder holding 150 Shares
Aggregate number of shareholders and the outstanding shares in the suspense account lying at the end of the year-2 Shareholders holding 21 Shares
The voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.
TRANSFER OF UNCLIAMED AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF).
Pursuant to the provisions of Section 124 (5) of the Companies Act, 2013, the declared dividends, which remained unpaid/ unclaimed for a period of seven years have been transferred by the Company to the IEPF established by the Central Government pursuant to Section 125 of the said Act.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There were no significant and material orders passed against the Company by the regulators or courts or tribunals during financial year 2016-17 impacting the going concern status and Company''s operations in future.
MATERIAL CHANGES AND COMMITMENTS
There was no change in the nature of the business of the Company. There were no material changes and commitments affecting the financial position of the Company occurring between 31st March, 2017 and the date of this Report.
ACKNOWLEDGEMENT
Your Directors would like to express their gratitude & appreciation for the valuable guidance & support received from Government of India, Government of Australia, various State Governments particularly including States of Orissa, Maharashtra & Uttar Pradesh; Banks and the financial Institutions; various stakeholders such as Shareholders, Debenture-holders, Customers, Dealers, Suppliers and all the business associates among others. Your Directors also wish to place on record their deep sense of appreciation & gratitude to all Company''s employees for their continuous commitment & enormous personal efforts as well as their collective contribution towards the growth of the Company.
The Directors look forward to their continued support in future.
for and on behalf of the Board of Directors,
(B. B. SINGAL)
CHAIRMAN
Place : New Delhi
Dated : 05.07.2017
Mar 31, 2015
Dear Members,
The directors are pleased to present the 32nd Annual Report and the
Audited Statement of Accounts for the financial year ended March 31,
2015.
FINANCIAL RESULTS
(Rs. in Lacs)
Year ended
March 31, March 31,
2015 2014
Gross Revenue 1173501.72 1060042.90
Profit Before Depreciation (31655.01) 105929.84
and Tax
Depreciation & Amortisation 93839.85 96396.41
Profit Before Tax (125494.86) 9533.43
Provision for Current Taxation - 1998.25
MAT Credit Utilised / - (1998.25)
Available for set-off
Provision for Deferred Tax (112.06) 3241.07
Income tax paid for earlier years - 96.40
Profit After Tax (125382.80) 6195.96
Profit brought forward from 1112.74 2176.32
Previous Year
Profits available for appropriation (124270.06) 8372.28
DIVIDEND
In view of the loss incurred during the year the Board does not
consider it expedient to recommend any dividend.
As per the terms of the issue, during the financial year the Company
has paid interim dividend on Redemption of 7, 36, 751 Redeemable
Cumulative Preference Shares to ICICI Bank Ltd. and IL & FS Trust
Company Ltd.
STATE OF COMPANY'S AFFAIRS
* GROSS REVENUE AND EXPORTS:
During the year your Company has incurred losses due to high interest
cost, fall in sale prices of finished goods and under-utilisation of
plants capacity due to various reasons. Large import from China,
Russia, Japan etc. at lower prices also affecting our sales
realisation.
The Company achieved the Gross sales of Rs. 11,73,502 Lacs as compared
to previous year's level of Rs. 10,60,043 Lacs.
The Export Turnover of the Company during the year was Rs. 1,53,641
Lacs as compared to previous year's level of Rs. 1,90,096 Lacs. The
export turnover during the FY 2014-15 is lower due to subdued demand in
international market.
With a firm commitment and through sustained efforts, your company
continues to maintain good rapport with Global Customers. Our quality
products and timely delivery have found wide acceptance in the highly
competitive international market.
Our products are being exported across the globe.
* EXPANSION PROJECT:
Your company is under implementation of Captive Power Plant of 165 MW
in Odisha. After implementation of this Project, BSL's Captive Power
Plant capacity in Meramandali shall become 307 MW. Further, in
aggregate the total Captive Power Plant capability at Sahibabad,
Khapoli & Orissa shall rise to 355 MW. The facility is expected to be
complete by 1st April 2016.
In addition to the above, the company shall also be completing the Coal
Washery & Raw Material Handling System, Downstream Facilities, Boilers,
Coke Dry Quenching & HSM Extension and Reheating Furnace. The
facilities are expected to be complete in FY 2016 & FY 2017.
Your company is implementing/installing various additional equipments
to stabilize operation of their Meramandali plant by optimizing
logistics, energy conservation and meeting environmental guidelines,
infrastructure facilities etc.
* FINANCE:
The Company has raised corporate loan of Rs. 4,16,300 Lacs out of total
sanctioned corporate loan of Rs. 4,30,000 Lacs. Further the Company has
raised rupee term loan of Rs. 2,43,900 Lacs out of Rs. 2,70,000 Lacs
for Additional, Modifications and Replacement (AMR) Scheme Project at
Orissa.
The Working Capital facilities for Sahibabad, Khopoli and Orissa Plants
have been appraised by PNB, the lead Bank, for Rs. 1228000 Lacs (Fund
Base limit of Rs. 5,65,100 Lacs and Non Fund Based limit of Rs.
6,62,900 Lacs) for the Financial year 2014-15.
* LONG TERM VIABILITY PLAN
Lenders through the various meeting (Steering Committee and Joint
Lenders' Forum) have approved Long Term Viability and agreed to
structure the debt in accordance with extant guidelines of RBI. Rupee
term loans are structured into loan with 25 year tenor as per the
recent scheme of RBI on debt flexible structuring. Lenders are in the
process of obtaining sanctions for the implementation of the Long Term
Viability plan from their respective boards. The proposed long term
viability plan has also been approved in meeting of Independent
Evaluation Committee (IEC). Accordingly the company's long term
borrowings maturity period has been classified as per the above scheme.
* CREDIT RATING:
The Long Term rating of your company is Care BB (Double BB) by Credit
Analysis & Research Ltd as per the provisions of BASEL II guidelines of
RBI.
The Short Term rating of your company is Care A4 by Credit Analysis &
Research Ltd as per the provisions of BASEL II guidelines of RBI.
ISSUE AND REDEMPTION OF PREFERENCE SHARES
The Company has made allotment of 63,00,000 12% Redeemable Cumulative
Preference Shares of Rs. 100 each and redeemed 6,58,801 10% Redeemable
Cumulative Preference shares of Rs. 100 each in the month of June 2015
as per the terms of the Issue out of the proceeds of the fresh issue of
shares.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Changes in the composition of the Board of Directors and other Key
Managerial Personnel
Mr. Ashwani Kumar, Mr. Sahil Goyal, Mr. Pradeep Patni, Mr. Sushant
Jain, Mr. Rakesh Singhal, Mr. Pankaj Sharma and Mr. Kapil Vaish were
appointed as additional independent directors of the Company.
Mr. Mohan Lal, Mr. V. K. Mehrotra and Mr. Sushant Jain ceased to be
directors of the Company during the year. The Board placed on record
its appreciation of the valuable contribution and guidance provided by
them.
Mr. A. K. Deb and Mr. S. R. Sharma have been nominated by State Bank of
India and Punjab National Bank respectively on the Board of the Company
during the year. Later on Punjab National Bank vide letter dated June
10, 2015 has withdrawn Mr. S. R. Sharma as their Nominee Director and
recommended Dr. Rajesh Yaduvanshi, Field General Manager Delhi Zone as
their Nominee Director who was inducted on the Board of the Company in
its meeting held on 14.08.2015.
Currently the Board of Directors of the Company consists of 16
directors, out of which Eight are Independent directors, Three are
Nominee directors, Four are Executive directors and One is
Non-executive Chairman.
Due to the loss incurred during the year, the Company has applied to
the Central Government for the approval of managerial remuneration. The
approval from Central Government is still awaited.
Independent Directors' Declarations
All Independent directors have given declarations that they meet the
criteria of independence as laid down under section 149 of the
Companies Act, 2013 which has been relied on by the Company and placed
at the Board meeting.
Retirement by rotation
In terms of Section 152 of the Companies Act, 2013 Mr. Nittin Johari
and Mr. Rahul Sen Gupta, Directors would retire by rotation at the
forthcoming AGM and is eligible for re-appointment. Mr. Nittin Johari
and Mr. Rahul Sen Gupta, Directors of the Company have offered
themselves for the reappointment.
Further as per the requirement of Companies Act, 2013 and Listing
Agreement, the following policies of the Company are attached herewith
marked as Annexure 'A' and Annexure 'B'.
a) Policy for selection of Directors and determining Directors
independence; and
b) Remuneration Policy for Directors, Key Managerial Personnel and
other employees.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
During the year under review, the Board constituted a CSR Committee
consisting of three Directors, of which one is Independent Director.
The CSR Committee at its meeting held on November 14, 2014, recommended
to the Board the CSR policy formulated by it, following which the
policy document was approved by the Board. The composition, terms of
reference etc. of the CSR Committee are laid out in the Corporate
Governance Report which forms part of this Annual Report.
Further, the CSR policy of the Company has been uploaded on the
Company's website www.bhushansteel.com .
In pursuance of the provisions of the Companies Act, 2013 and CSR
Policy of the Company it is required to spend two percent of the
average net profits of the Company for the three immediately preceding
financial years. The average net profits for three financial years
were Rs. 891.52 Cr. and the Company was required to spent 2% i.e. Rs.
17.83 Cr. on CSR activities. However the Company has incurred losses
amounting to Rs. 1253.83 Cr. during the financial year 2014-15. And it
is facing uphill task in meeting its financial Obligations. Hence the
Company is unable to spend any funds on CSR Activities for the time
being. The Company will incur the sum on CSR activities as soon as
financial position ofthe Company improved.
RESPONSIBILITY STATEMENT
The Responsibility Statement of the Corporate Social Responsibility
(CSR) Committee of the Board of Directors of the Company, is reproduced
below:
'The implementation and monitoring of Corporate Social Responsibility
(CSR) Policy, is in compliance with CSR objectives and policy of the
Company.'
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of corporate
governance and adhere to the corporate governance requirements set out
by SEBI. The Company has also implemented several best corporate
governance practices as prevalent globally. The report on Corporate
Governance as stipulated under the Listing Agreement forms an integral
part of this Report and presented in a separate section as Annexure
'C'. The requisite certificate from the Auditors of the Company
confirming compliances with the conditions of corporate governance is
part of the report on Corporate Governance.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review,
as stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges, is presented in a separate section as Annexure 'D' forming
part of the Report.
CONSOLIDATED FINANCIAL STATEMENT
In accordance with the Companies Act, 2013 ("the Act") and Accounting
Standard (AS) - 21 on Consolidated Financial Statements read with AS -
23 on Accounting for Investments in Associates and AS - 27 on Financial
Reporting of lnterests in Joint Ventures, the audited consolidated
financial statement is provided in the Annual Report.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Consolidated Financial Statements presented by the Company include
financial results of all its subsidiaries, joint ventures and
associates. The Audited Financial Statements of the Subsidiary
Companies have been reviewed by the Audit Committee and the Board.
The Board of Directors at its Meeting held on November 14, 2014 has
formulated a policy for determining material subsidiaries pursuant to
the provisions of the Listing Agreement with the stock exchanges. The
same is displayed on the website of the Company- www.bhushansteel.com.
No Company has become Joint venture during the financial year 2014-15.
A report on the performance and the financial position of the
Subsidiaries, Associates and Joint venture as per form AOC-1 are
presented in the consolidated financial statement and hence not
repeated here for the sake of brevity.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
The Company undertake various transactions with related parties in the
ordinary course of business. The Company has a Board approved policy on
Related Party Transactions, which has been disclosed on the website of
the Company and can be viewed at www.bhushansteel.com
All Related Party Transactions that were entered into during the
financial year were on an arm's length basis, in the ordinary course of
business and were in compliance with the applicable provisions of the
Companies Act, 2013 ('the Act1) and Listing agreement and the
provisions of Section 188 of the Companies Act, 2013 are not attracted.
Thus disclosure in Form AOC-2 is not required. There were no materially
significant Related Party Transactions made by the Company during the
year that would have required Shareholder approval under Clause 49 of
the Listing Agreement.
All related Party Transactions are placed before the Audit Committee
for approval. Prior Omnibus approval of the Audit Committee is obtained
for the transactions which are of forseen and repetitive nature. The
transactions entered into pursuant to the omnibus approval so granted
alongwith a statement giving details of all related party transactions
is placed before the Audit Committee.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THR REGULATORS OR COURTS OR
TRIBUNAL IMPACTING THE GOING CONCERN STATUS OF THE COMPANY
There are no significant and/or material orders passed by the
Regulators or Courts or Tribunals impacting the going concern status of
the Company.
CBI had registered an FIR on 01.08.2014 against Mr. Neeraj Singal, Vice
Chairman and Managing Directors of the Company and others. Mr. Neeraj
Singal, was granted bail vide order date 27.09.2014. The matter is
currently pending before court and the prosecution agency had not field
the charge- sheet till date. However this case is not going to impact
the going concern status of the Company.
RISK MANAGEMENT
Bhushan Steel follows well-established and detailed risk assessment and
minimisation procedures, which are periodically reviewed by the Board.
The Company has in place a business risk management framework for
identifying risks and opportunities that may have a bearing on the
organization's objectives, assessing them in terms of likelihood and
magnitude of impact and determining a response strategy.
The Senior Management assists the Board in its oversight of the
Company's management of key risks, including strategic and operational
risks, as well as the guidelines, policies and processes for monitoring
and mitigating such risks under the aegis of the overall business risk
management framework.
INTERNAL FINANCIAL CONTROLS
The Board has laid down Internal Financial Controls within the meaning
of the explanation to Section 134 (5) (e) of the Companies Act, 2013.
During the year, such controls were tested and no reportable material
weakness in the design or operation were observed.
Based on the framework of internal financial controls and compliance
systems established and maintained by the Company, work performed by
the Internal Auditors and the reviews performed by Management and the
relevant Board Committees, including the Audit Committee, the Board is
of the opinion that the Company's internal financial controls were
adequate and effective during the financial year 2014-15.
DIRECTORS' RESPONSIBILITY STATEMENT
As required by Section 134(3)(C) of the Company Act 2013, your
Directors state that:
a) in the preparation of the annual accounts for the year ended March
31, 2015, the applicable accounting standards read with requirements
set out under Schedule III to the Act, have been followed and there are
no material departures from the same;
b) the Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2015 and of the loss of the Company for
the year ended 31 March, 2015 on that date;
c) the Directors have taken proper and sufficient care 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;
d) the Directors have prepared the annual accounts on a 'going concern'
basis;
e) the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and are operating effectively; and
f) the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are
adequate and operating effectively.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy, to provide a formal
mechanism to the Directors and employees to report their concerns about
unethical behaviour, actual or suspected fraud or violation of the
Company's Code of Conduct or ethics policy. The Policy provides for
adequate safeguards against victimization of employees who avail of the
mechanism and also provides for direct access to the Chairman of the
Audit Committee. It is affirmed that no personnel of the Company has
been denied access to the Audit Committee.
The Vigil Mechanism/ Whistle Blower Policy is displayed at Company's
website-www.bushansteel.com.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and clause 49 of
the Listing Agreement, the Board has carried out an annual evaluation
of its own performance, the directors individually as well as the
evaluation of the working of various committees. The Independent
directors also carried out the evaluation of the Chairman and the
non-independent directors, the details of which are covered in the
Corporate Governance Report.
* Criteria for evaluation of Directors - For the purpose of proper
evaluation, the Directors of the Company have been divided into 3
(three) categories i.e. Independent, Non-independent and non- executive
and executive directors. The criteria for evaluation includes factors
such as engagement, strategic planning and vision, team spirit and
consensus building, effective leadership, domain knowledge, management
qualities, team work abilities, result, achievements, understanding and
awareness etc.
AUDITORS AND AUDITORS' REPORT Statutory Auditors
M/s Mehra Goel & Co., Chartered Accountants and M/s. Mehrotra &
Mehrotra , Chartered Accountants, Joint Statutory Auditors of the
Company, hold office till the conclusion of the ensuing Annual General
Meeting and are eligible for re-appointment. They have confirmed their
eligibility to the effect that their re-appointment, if made, would be
within the prescribed limits under the Act and that they are not
disqualified for re-appointment. The Notes on financial statement
referred to in the Auditors' Report are self-explanatory and do not
call for any further comments. The Auditors' Report contain one
qualification/ reservation etc.
Cost Auditors
The Board has appointed M/s Kabra & Associates as cost auditors for
conducting the audit of cost records of the Company for the financial
year 2014-15.
Secretarial Audit
The Board has appointed R. S. Bhatia, Practising Company Secretary, to
conduct Secretarial Audit for the financial year 2014-15. The
Secretarial
Audit Report for the financial year ended March 31, 2015 is annexed
herewith marked as Annexure 'E' to this Report. The remarks in the
Secretarial Audit Report are self explanatory and do not call for any
further comments.
DISCLOSURES:
* CSR Committee
* The CSR Committee comprises Mr. B. B. Singal (Chairman), Mr. B. B.
Tandon, and Mr. Nittin Johari as other members.
* Audit Committee
The Audit Committee comprises Mr. B. B. Tandon (Chairman), Mr. B. B.
Singal, Mr. M. V. Suryanarayana and Mr. Ashwani Kumar as other members.
NUMBER OF MEETINGS OF THE BOARD
Five meetings of the Board of Directors were held during the year. For
further details, please refer report on Corporate Governance presented
as Annexure 'C' to this Report.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND
SECURITIES PROVIDED
Particulars of loans given, investments made guarantee given and
securities provided, if any are given in the financial statement.
POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT
WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and
has adopted a Policy on Prevention, Prohibition and Redressal of Sexual
Harassment at the Workplace, in line with the provisions of the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 and the Rules there under. The Policy aims to
provide protection to employees at the workplace and prevent and
redress complaints of sexual harassment and for matters connected or
incidental thereto, with the objective of providing a safe working
environment, where employees feel secure. The Company has also
constituted an Internal Complaints Committee, known as the Prevention
of Sexual Harassment (POSH) Committee, to inquire into complaints of
sexual harassment and recommend appropriate action.
The Company has not received any complaint of sexual harassment during
the financial year 2014-15.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The particulars relating to conservation of energy, technology
absorption, foreign exchange earnings and outgo, as required to be
disclosed under sub-section 3(m) of Section 134 of the Companies Act,
2013 read with Companies (Accounts) Rules 2014 are provided in Annexure
'F' to this Report.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as Annexure
'G' to this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197(12) of the Act read with
Rules 5 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, a statement showing disclosures pertaining to
remuneration and also the names and other particulars of the employees
drawing remuneration in excess of the limits set out in the said rules
are provided in the Annexure 'H' to this Report.
ACKNOWLEDGEMENT
Your Directors would like to express their gratitude & appreciation for
the valuable guidance & support received from Government of India,
Government of Australia, various State Governments particularly
including States of Orissa, Maharashtra & Uttar Pradesh; Banks and the
financial Institutions; various stakeholders such as Shareholders,
Debenture- holders, Customers, Dealers, Suppliers and all the business
associates among others. Your Directors also wish to place on record
their deep sense of appreciation & gratitude to all Company's employees
for their continuous commitment & enormous personal efforts as well as
their collective contribution towards the growth of the Company.
The Directors look forward to their continued support in future.
for and on behalf of the Board of Directors,
Place : New Delhi (B. B. SINGAL)
Dated : 14th August, 2015 CHAIRMAN
Mar 31, 2014
Dear shareholders,
The directors are pleased to present the 31st annual report and the
audited statement of accounts for the financial year ended March 31,
2014.
FINANCIAL HIGHLIGHTS
(Rs in Lacs)
Particulars Year ended
March 31, March 31,
2014 2013
gross revenue 1060042.90 1180001.85
profit Before Depreciation and Tax 105929.84 204485.93
Depreciation & amortisation 96396.41 83086.19
profit Before Tax 9533.43 121399.74
provision for Current taxation 1998.25 24289.36
Mat Credit Utilised/ available for
set-off (1998.25) (24175.00)
provision for Deferred tax 3241.07 30396.35
income tax paid for earlier years 96.40 -
profit After Tax 6195.96 90889.03
profit brought forward from Previous Year 2176.32 893.09
profits available for appropriation which 8372.28 91782.12
the Directorsappropriated as under:
proposed Dividend on equity shares 1132.57 1132.58
proposed Dividend on preference shares 777.99 11.48
provision for Dividend tax 324.70 194.43
interim Dividend on preference shares 224.69 895.47
Dividend tax on interim Dividend 38.19 145.27
transfer to Debenture redemption 3200.00 26962.50
reserve
transfer to Capital redemption reserve 693.34 -
transfer to general reserve 700.00 60000.00
premium paid on redemption of preference 168.06 264.07
shares
Balance carried forward to Balance sheet 1112.74 2176.32
Total 8372.28 91782.12
INTERIM DIVIDEND ON PREFERENCE SHARES
interim dividend have been paid at the time of redemption of following
cumulative redeemable preference shares:
i) Rs10.00 per share on 693334 10% redeemable Cumulative preference
shares;
ii) Rs10.00 per share on 1200000 10% redeemable Cumulative preference
shares;
iii)Rs 25.00 per shares on 400000 25% non-convertible Cumulative
redeemable preference shares;
iv) Rs4.00 per shares on 17249 4% non-convertible Cumulative redeemable
preference shares.
FINAL DIVIDEND
the Board of Directors recommended the following dividend for approval
by the members at the ensuing annual general Meeting:
i) Dividend of Rs.10.00 per share on 82,35,433 10% redeemable Cumulative
preference shares proportionately from the date of allotment till 31st
March 2014;
ii) Dividend of Rs.4.00 per share on 3,36,751 4% non-convertible
Cumulative redeemable preference shares ;
iii) Dividend of Rs.2.00 per share on 14,00,000 2% redeemable Cumulative
preference shares proportionately from the date of allotment till 31st
March 2014;
iv) Dividend of Rs.0.50 per share on equity shares for the year ended
31st March, 2014.
GROSS REVENUE AND EXPORTS
During the year your Company has achieved the gross sales of of Rs. 10600
Crore in comparison of previous year''s level of Rs. 11800 Crore.
further the company has achieved the export turnover of Rs. 1901 crore,
registering a growth of 4.85 % over previous year''s level of Rs. 1813
crore.
Export & Marketing
Our products are being exported across the globe and with a firm
commitment and through sustained efforts, your company continues to
maintain good rapport with global Customers. our quality products and
timely delivery have found wide acceptance in the highly competitive
international market.
the company is marketing its products through in-house marketing
department as well as through trading houses / agents world-wide. the
company has also established an office in Dubai for covering the markets
of Middle east, sudan & ethopia etc. timely delivery of quality
material has been our strength and on that basis we have been getting
repeat business with our many customers for last so many years.
PROJECTS UNDER IMPLEMENTATION
Your company is implementing various projects at integrated steel plant
at orissa to augment steelmaking capacity, to augment availability of
Coke, washed Coal & Captive power, to optimize cost and to comply with
regulations. Details of these projects are given below:
Capacity Expansion Projects
i. Debottlenecking of the Hr facility to increase Hr capacity by 0.5
Mtpa to 4.9 Mtpa. this project is expected to be commissioned in fY
2015
ii. implementation of 0.35 Mtpa Colled rolling cum electrical steel
Complex at an estimated project cost of Rs. 1563 crores. the facility is
expected to be complete by July 2015.
iii. Completion of Coke oven plant (1.3 Mtpa), Coal washery (2.5 Mtpa),
2 Dri Kilns (aggregate capacity of 0.34 Mtpa) and 197 Mw power plant.
Effciency, Cost Reduction & Environmental Compliance Initiatives
iv. Addition, modifications and Replacement (AMR) Scheme Project at
orissa to stabilize operation by optimizing logistics and energy
conservation and to comply with environmental guidelines. the estimated
project cost is Rs. 3892 crores and the project is expected to be
completed by March 2015.
FINANCE
During the year the Company has faced multiple challenges due to
suppressed economic conditions and delay in stabilizing phase iii
operations due to unfortunate accident. on account of these challenges,
the long term Credit rating of the Company was also down-graded to Care
BB (Double BB) and short term Credit rating was downgraded to Care a4
(a four).
Despite these challenges, your company''s bankers have demonstrated
continued confdence on the company and during the year following major
credit facilities were extended :
1. Corporate loan of Rs. 4200 crores for shoring up of net working
Capital/ normal capex requirements of the company. the company has tied
up corporate loan of Rs. 3575 crs out of Rs.4200 crs from 14 banks and the
tie up for the balance amount is in process.
2. Term Loan of Rs. 2700 crores for Addition, modifications and
Replacement (AMR) scheme project at orissa. the company has tied up the
term loan of Rs. 1560 crs out of term loan of Rs. 2700 crs from 8 banks and
the tie up for the balance amount is in process.
3. Enhancement of Working Capital facilities by working Capital
Consortium lead by pnB for Rs. 11390 crore (fund Based limit of Rs. 5390
crore and non fund Based limit of Rs. 6000 crore).
DIRECTORS
in accordance with the provisions of the Companies act, 2013 and
Company''s articles of association, Mr. Brij Bhushan singal and Mr. p.
K. aggarwal, Directors are liable to retire by rotation at the ensuing
annual general Meeting.
Being eligible Mr. Brij Bhushan singal and Mr. p. K. aggarwal, have
offered themselves for re-appointment.
Your Directors recommend their re-appointment and necessary items for
members'' approval for their re-appointment form part of the notice of
annual general Meeting.
FIXED DEPOSIT
The Company has not accepted any fixed deposit from the Public and as
such no amount of principal or interest was outstanding on the date of
the Balance sheet.
AUDITORS & AUDITORS'' REPORT
M/s. Mehra goel & Co., Chartered accountants, new Delhi, the Company''s
auditors will retire at the conclusion of the ensuing annual general
Meeting. M/s. Mehra goel & Co., Chartered accountants have informed the
Company that if appointed, their appointment will be within the
prescribed limits U/s 141(3)(g) of the Companies act, 2013 and they are
not disqualified for re-appointed. Accordingly members'' approval is
being sought for their re-appointment as the auditors of the Company at
the ensuing annual general Meeting.
the notes on financial statements referred to in the auditors'' report
are self- explanatory and do not call for any further comments.
COST AUDITORS
M/s Kabra & associates, Cost accountants, new Delhi was appointed as
Cost auditors for conducting the audit of cost records of the Company
for the financial year 2013-14.
DIRECTORS'' RESPONSIBILITY STATEMENT
pursuant to the requirements under section 217 (2aa) of the Companies
act 1956 with respect to the Directors responsibility statement, the
Directors based on the representations received from operating
Management, hereby confirm that :- i) in the preparation of the Annual
Accounts for the financial year ended March 31, 2014, the applicable
accounting standards read with requirements set out under schedule vi
to the Companies act, 1956 have been followed and there are no material
departures from the same;
ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2014 and of the profit of the Company for
the year ended on that date;
iii) the Directors have taken proper and suffcient care to the best of
their knowledge and ability for the maintenance of adequate accounting
records in accordance with the provisions of the Companies act, 1956
for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities; and
iv) the Directors have prepared the annual accounts of the Company on a
''going concern'' basis.
AUDIT COMMITTEE
pursuant to the provisions of section 292a of the Companies act, 1956
(as amended), and in accordance with the requirements of Clause 49 of
the listing agreement(s), the Board of Directors of the Company has
constituted a Committee of Board of Directors as audit Committee.
presently the Committee consists of four (4) Directors namely (1) Mr.
B.B. tandon (2) Mr. B.B. singal (3) M r. M.v. suryanarayana and (4) Mr.
v.K. Mehrotra
Mr. B. B. tandon is the Chairman of the audit Committee. audit
Committee shall have such powers and authority as provided under the
aforesaid provisions and shall act in accordance with the terms of
reference to be specified in writing by the Board of Directors from time
to time.
CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE
pursuant to section 135 (1) of the Companies act, 2013 which comes into
force with effect from 1st april 2014, the Company has constituted
Corporate social responsibility (Csr) Committee comprising M r. B.B.
singal, being its Chairman and Mr. nittin Johari and Mr. B.B. tandon as
its members. the Corporate social responsibility Committee shall
institute a transparent monitoring mechanism for implementation of Csr
projects or programs or activities undertaken by Company.
PARTICULARS OF EMPLOYEES
the information required under section 217 (2a) of the Companies act,
1956 read with the Companies (particulars of employees) rules, 1975, as
amended, is given in the annexure  ''a'' forming part of this report.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN
EXCHANGE EARNINGS AND OUTGO
Your company is committed for conservation of energy and developing &
absorbing new technologies. During the year under review, your company
took various initiatives w.r.t. conservation of energy and developing
new technologies. information pursuant to section 217(1)(e) of the
Companies act, 1956 read with the Companies (Disclosure of particulars
in the report of Board of Directors) rules, 1988 regarding conservation
of energy, technology absorption, foreign exchange earnings and outgo
are given in annexure Rs.B'' forming part of this report.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PRO- TECTION FUND
pursuant to the provisions of section 205a(5) and 205C of the Companies
act, 1956 the Company has transferred the amount which remained unpaid
or unclaimed for a period of seven years to the investor education
protection fund.
further the Company has uploaded the details of unpaid and unclaimed
amounts lying with the Company on its website www.bhushansteel. com
and also on the website of Ministry of Corporate affairs pursuant to
the provisions of investor education and protection fund (uploading of
information regarding unpaid and unclaimed amounts lying with the
Companies) rules 2012.
CORPORATE GOVERNANCE
Your Company has complied with the requirements of Clause 49 of the
listing agreement regarding Corporate governance with the stock
exchanges. Management Discussion & analysis, Corporate governance
Report and necessary certifcates are forming part of this Report.
HUMAN RESOURCE DEVELOPMENT
Your Company achieved a record level of turnover due to the untiring
efforts put in by the people at all levels. industrial relations remain
cordial throughout the year and the Board records its appreciation for
the contribution of all employees towards the growth of the company
without which the achievements made would not have been possible.
SHIFTING OF REGISTERED OFFICE
The Registered office of the Company was shifted from F-Block, 1st
Floor, international trade tower, nehru place, new Delhi - 110019 to
Bhushan Centre, ground floor, Hyatt regency Complex, Bhikaji Cama
place, new Delhi - 110066 w.e.f. 15.05.2014.
CONSOLIDATED FINANCIAL STATEMENTS
Your Directors have pleasure in attaching the Consolidated financial
statements pursuant to Clause 32 of listing agreement entered into with
the stock exchanges and prepared in accordance with the accounting
standards prescribed by the institute of Chartered accountants of
india, in this regard.
SUBSIDIARIES
The consolidated financial statements presented by the Company include
financial information of its subsidiaries prepared in compliance with
applicable accounting standards. as per the general exemption given by
Ministry of Corporate affairs vide general circular no. 2/ 2011, the
Company is exempted under section 212(8) of the Companies act, 1956
from attaching to its Balance sheet, the individual annual reports of
its subsidiary Companies.
as per the terms of the general circular no. 2/ 2011, a statement
containing brief financial details of the Company''s Subsidiaries for the
year ended March 31, 2014 is included in the annual report. the annual
accounts of these subsidiaries and the related detailed information
will be made available to any investor of the company / its
subsidiaries of seeking such information at any point and are also
available for inspection by any investors of the Company/its
subsidiaries at the Corporate office of the Company and that of the head
offices of the respective subsidiary Companies.
Detail of subsidiaries of the Company are covered in the annual report.
ACKNOWLEDGEMENTS:
Your Directors would like to express their gratitude & appreciation for
the valuable guidance & support received from government of india,
government of australia, various state governments particularly
including states of orissa, Maharashtra & Uttar pradesh; Banks and the
financial institutions; various stakeholders such as shareholders,
Debenture-holders, Customers, Dealers, suppliers and all the business
associates among others. Your Directors also wish to place on record
their deep sense of appreciation & gratitude to all Company''s employees
for their continuous commitment & enormous personal efforts as well as
their collective contribution towards the growth of the Company.
the Directors look forward to their continued support in future.
for and on behalf of the Board of Directors,
sd/-
place : new Delhi (B. B. Singal)
Dated : 12th august, 2014 Chairman
Mar 31, 2013
Dear Shareholders,
The directors are pleased to present the 30th Annual Report and the
Audited Statement of Accounts for the financial year ended March 31,
2013.
FINANCIAL HIGHLIGHTS
(Rs. in Lacs)
Particulars Year ended
March 31, March 31,
2013 2012
Profit Before Depreciation and Tax 204485.93 198515.54
Depreciation & Amortisation 83086.19 61992.95
Profit Before Tax 121399.74 136522.59
Provision for Current Taxation 24289.36 27315.10
MAT Credit Utilised / (available for (24175.00) (27190.00)
set off)
Provision for Deferred Tax 30396.35 34050.00
Profit After Tax 90889.03 102347.49
Profit brought forward from Previous 893.09 377.69
Year
Profits available for 91782.12 102725.18
appropriation which the Directors
appropriated as under:
Proposed Dividend on Equity Shares 1132.58 1061.79
Proposed Dividend on Preference 11.48 4.07
Shares
Provision for Dividend Tax 194.43 172.91
Interim Dividend on Preference 895.47 750.50
Shares
Dividend Tax on Interim Dividend 145.27 121.93
Transfer to Debenture Redemption 26962.50 8475.00
Reserve
Release from Debenture Redemption - -
Reserve
Transfer to General Reserve 60000.00 90000.00
Premium paid on Redemption of 264.07 1245.89
Preference Shares
Balance carried forward to Balance 2176.32 893.09
Sheet
Total 91782.12 102725.18
INTERIM DIVIDEND ON PREFERENCE SHARES
Pursuant to the approval given by Directors on 23.03.2013 interim
dividend have been paid on cumulative redeemable preference shares as
under:
i) Rs.10.00 per share on 77,95,267 10% Redeemable Cumulative Preference
Shares (Series I, Series II, Series V, Series VI, Series VII and Series
VIII);
ii) Rs.25.00 per share on 4,00,000 25% Non convertible cumulative
Redeemable Preference shares (Series III);
iii) Rs.4.00 per share on 3,99,000 4% Non convertible cumulative
Redeemable Preference shares (Series IV).
Since the above dividend on preference shares paid for the whole of
year 2012-13 therefore said interim dividend shall be treated as final
dividend.
FINAL DIVIDEND
The Board of Directors recommended the following dividend for approval
by the members at the ensuing Annual General Meeting:
i) Dividend of Rs.10.00 per share on 16,10,100 10% Redeemable
Cumulative Preference Shares (Series IX and Series X) proportionately
from the date of allotment till 31st March 2013;
ii) Dividend of Rs.0.50 per share on Equity Shares for the year ended
31st March, 2013.
GROSS REVENUE AND EXPORTS
The Gross Revenue of the Company has increased to Rs.11800 Crore,
registering a growth of 9.33% over previous year''s level of Rs.10793
Crore.
Further the company has achieved the Export Turnover of Rs.1813 crore.
The Export Turnover of most of the Exporters in the country has a
negative trend due to the recession in international market during the
last year.
With a firm commitment and through sustained efforts, your company
continues to maintain good rapport with Global Customers. Our quality
products and timely delivery have found wide acceptance in the highly
competitive international market.
Our products are being exported across the globe.
EXPANSION PROJECT:
Your company is under implementation of 0.35 MTPA capacity Colled
Rolling cum Electrical Steel (CRNGO) Complex at estimated project cost
of Rs.1563 crores at Meramandali, Orissa.
In addition to the above, the company shall also be completing the Coke
oven plant (1.3 MTPA), Coal Washery (2.5 MTPA) and 2 DRI Kilns
(aggregate capacity of 0.34 MTPA) and 197 MW Power Plant at the
existing site of Integrated steel plant at Orissa in the current
financial year i.e. 2013-14.
In order to maintain its leadership position in downstream segment of
steel industry and to maximize the margins, the company is setting up
the downstream capacity of 1.8 MTPA, where the company shall come up
with PLTCM of 1.8 MTPA and CAL of 1 MTPA with the estimated capex of
Rs.5995 crores at Meramandali, Orissa to fully utilize its additional
HR capacity. With this the company''s total downstream production
capacity shall be increased to about 4 MTPA by FY 2017.
FINANCE:
During the year the Company has tied up the term loans in foreign
currency and rupee for its expansion plans and for the requirement of
funds for its normal capital expenditure. The Company has tied up Rupee
Term Loan of Rs.1042 crores from Axis Bank as Syndication lead bank for
our CRNGO project at Orissa.
The Working Capital facilities for Sahibabad, Khopoli and Orissa Plants
have been appraised by PNB, the lead Bank, for Rs.11390 crore (Fund
Based limit of Rs.5390 crore and Non Fund Based limit of Rs.6000 crore)
for the Financial year 2013-14.
CREDIT RATING:
The Long Term rating of your company is Care A by Credit Analysis &
Research Ltd as per the provisions of BASEL II guidelines of RBI.
The Credit Analysis & Research Ltd (CARE) has rated the short term
rating at the highest rating of A1 (A One Plus) for short term credit
facilities of the Company.
QUALITY
In today''s global competition and open economy, quality plays a vital
role in marketing the products and stay ahead of others. Therefore,
great emphasis is given to manufacturing products that meet high
standards of quality in the global market and customer satisfaction.
Proactive efforts are directed towards determining customers''
requirements and achieving all- round customer satisfaction. This is
primarily achieved through automated systems (reducing manual handling
to a minimum), high attention to complaint resolution, online
communication and information exchange, quality circles etc.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and
Company''s Articles of Association, Sh. Rahul Sen Gupta, Sh. V.K.
Mehrotra and Sh. B.B. Tandon, Directors are liable to retire by
rotation at the ensuing Annual General Meeting.
Being eligible Sh. Rahul Sen Gupta, Sh. V.K. Mehrotra and Sh. B.B.
Tandon, have offered themselves for re-appointment.
Necessary items for members'' approval for their re-appointment form
part of the notice of Annual General Meeting. Your Directors recommend
their re-appointment.
RIGHT ISSUE OF EQUITY SHARES
Pursuant to the Letter of Offer dated January 9, 2013, the Company has
issued 14157220 Equity Shares of Rs.2/- each at a price of Rs.335 each
(including a Premium of Rs.333/- per Equity Shares) aggregating to
Rs.47426.69 Lacs on Right Basis to the eligible Shareholders of the
Company in the ratio of one equity share for every 15 equity shares
held on the record date, being January 16, 2013. Shareholders were
required to pay Rs.167.50 per equity Share on Application and remaining
Rs.167.50 per equity Share towards first and final Call.
On February 16, 2013 the Company has made an allotment of 14157220
partly paid Right Equity Shares. Pursuant to the Board of Directors
Resolution dated April 20, 2013, first and final Call Money Notices
dated May 4, 2013 have been sent to the allottees of party paid Right
Equity Shares for payment of remaining amount of Rs.167.50 per Equity
Share.
FIXED DEPOSIT
The Company has not accepted any fixed deposit from the Public and as
such no amount of principal or interest was outstanding on the date of
the Balance Sheet.
AUDITORS & AUDITORS'' REPORT
M/s. Mehra Goel & Co., Chartered Accountants, New Delhi, the Company''s
Auditors will retire at the conclusion of the ensuing Annual General
Meeting. M/s. Mehra Goel & Co., Chartered Accountants have informed the
Company that if appointed, their appointment will be within the
prescribed limits U/s 224 (IB) of the Companies Act, 1956. Accordingly
members'' approval is being sought for their re- appointment as the
Auditors of the Company at the ensuing Annual General Meeting.
The Notes on Financial Statements referred to in the Auditors'' Report
are self- explanatory and do not call for any further comments.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement under sub Section 2AA of Section 217 with
respect to the Directors Responsibility Statement, it is hereby
confirmed that :-
i) in the preparation of the Annual Accounts for the financial year
ended March 31, 2013, the applicable accounting standards read with
requirements set out under Schedule VI to the Companies Act, 1956 have
been followed and there are no material departures from the same;
ii) the directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2013 and of the Profit of the Company
for the year ended on that date;
iii) the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
iv) the Directors have prepared the annual accounts of the Company on a
''going concern'' basis.
AUDIT COMMITTEE
Pursuant to the provisions of Section 292A of the Companies Act, 1956
(as amended), and in accordance with the requirements of Clause 49 of
the Listing Agreement(s), the Board of Directors of the Company has
reconstituted a Committee of Board of Directors as Audit Committee
consisting of Sh. B. B. Tandon, Sh. B. B. Singal, Sh. M.V.
Suryanarayana, and Sh. V. K. Mehrotra as its members. Sh. B. B. Tandon
is the Chairman of the Audit Committee. Audit Committee shall have such
powers and authority as provided under the aforesaid provisions and
shall act in accordance with the terms of reference to be specified in
writing by the Board of Directors from time to time.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 217 (2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975,
the particulars of Employees are given in Annexure - ''A'' forming part
of this Report.
PARTICULARS OF CONSERVATION OF ENERGY, 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
Board of Directors) Rules, 1988 regarding conservation of energy,
technology absorption, foreign exchange earnings and outgo are given in
Annexure ''B'' forming partofthis Report.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS
Your Company has implemented the conditions of Corporate Governance as
contained in clause 49 of the Listing Agreement with the Stock
Exchanges. A report on Corporate Governance and Management Discussion &
Analysis along with necessary certificates are given in Annexure ''C''
''D'' ''E'' and ''F'' forming part of this Report.
HUMAN RESOURCE DEVELOPMENT
Your Company achieved a record level ofturnover due to the untiring
efforts put in by the people at all levels. Industrial relations remain
cordial throughout the year and the Board records its appreciation for
the contribution of all employees towards thegrowthofthe company
without which the achievements made would not have been possible.
CONSOLIDATED FINANCIAL STATEMENTS
Your Directors have pleasure in attaching the Consolidated Financial
Statements pursuant to Clause 32 of Listing Agreement entered into with
the Stock Exchanges and prepared in accordance with the Accounting
Standards prescribed by the Institute of Chartered Accountants of
India, in this regard.
SUBSIDIARIES
The consolidated financial statements presented by the Company include
financial information of its subsidiaries prepared in compliance with
applicable Accounting Standards. As per the general exemption given by
Ministry of Corporate Affairs vide General circular no. 2/ 2011, the
Company is exempted under Section 212(8) of the Companies Act, 1956
from attaching to its Balance Sheet, the individual annual Reports of
its subsidiary Companies.
As per the terms of the General circular no. 2/2011, a statement
containing brief financial details of the Company''s Subsidiaries for
the year ended March 31, 2013 is included in the Annual Report. The
annual accounts of these subsidiaries and the related detailed
information will be made available to any investor of the company / its
subsidiaries of seeking such information at any point and are also
available for inspection by any investors of the Company/its
subsidiaries at the Corporate Office of the Company and that of the
head offices ofthe respective subsidiary Companies.
Detail of subsidiaries of the Company are covered in the Annual Report.
ACKNOWLEDGEMENTS:
Your Directors would like to express their appreciation for the
assistance and co-operation received from Government authorities,
financial Institutions, Banks, and various stakeholders such as
Shareholders, Debentureholders, Customers, Dealers, Suppliers and
Investors during the year under review. The Directors look forward to
their continued support in future.
Your Directors also wish to place on record their deep sense of
appreciation for the committed services by the Executives, Staff and
Workers of the Company at all levels towards the growth of the Company.
for and on behalf of the Board of Directors,
Sd/-
Place : New Delhi (B. B. SINGAL)
Dated : 27th May, 2013 CHAIRMAN
Mar 31, 2012
Dear Shareholders,
The directors are pleased to present the 29th Annual Report and the
Audited Statement of Accounts for the financial year ended March
31,2012.
FINANCIAL HIGHLIGHTS
(Rs.in Lacs)
Particulars Year ended
March 31, March 31,
2012 2011
Profit Before Depreciation and 198515.54 165349.58
Tax
Depreciation & Amortisation 61992,95 27784,53
Profit Before Tax 136522.59 137565.05
Provision for Current Taxation 27315,10 27420,75
MAT Credit Utilised (27190,00) (27242,30)
Provision for Deferred Tax 34050,00 36878,01
Profit After Tax 102347.49 100508.59
Profit brought forward from Previous 377.69 7208.33
Year
Profits available for 102725.18 107716.92
appropriation
Which the Directors appropriated as
under:
Proposed Dividend on Equity Shares 1061,79 1061,79
Proposed Dividend on Preference 4.07 370.14
Shares
Provision for Dividend Tax 172.91 232.30
Interim Dividend on Preference 750.50
Shares
Dividend Tax on Interim Dividend 121.93
Transfer to Debenture Redemption 8475.00 5475.00
Reserve
Release from Debenture Redemption (1000.00)
Reserve
Transfer to General Reserve 90000.00 101200.00
Premium paid on Redemption of 1245.89
Preference Shares
Balance carried forward to Balance 893.09 377.69
Sheet
Total 102725.18 107716.92
INTERIM DIVIDEND ON PREFERENCE SHARES
Pursuant to the approval given by Directors vide circular resolution
dated 27.03.2012 interim dividend have been paid on cumulative
redeemable preference shares as under:
i) Rs.10.00 per share on 51,68,600 10% Redeemable Cumulative Preference
Shares (Series I, Series II and Series V);
ii) Rs.25.00 per share on 4,00,000 25% Non convertible cumulative
Redeemable Preference shares (Series III);
iii) Rs.4.00 per share on 3,99,000 4% Non convertible cumulative
Redeemable Preference shares (Series IV).
Since the above dividend on preference shares paid for the whole of
year 201112 therefore said interim dividend shall be treated as final
dividend.
DIVIDEND
The Board of Directors recommended the following dividend for approval
by the members at the ensuing Annual General Meeting:
i) Dividend of Rs.10.00 per share on 26,26,667 10% Redeemable Cumulative
Preference Shares proportionately from the date of allotment till 31st
March 2012;
ii) Dividend of Rs.0.50 per share on Equity Shares for the year ended
31st March, 2012.
HIGHLIGHTS
During the year, your Company has installed the Large Dia ERW Pipe
plant at Khopoli with the capacity of 0.285 MTPA.
The Gross sales of the Company have increased to Rs.10793 Crore,
registering a growth of 42% over previous year's level of Rs.7576 Crore.
EXPANSION PROJECT
The company had commissioned 1.9 MTPA of HRC plant in FY 2011 at Orissa
and now is in the process of enhancing the HR capacity to 4.40 MTPA,
this brownfield expansion is at advance stage of implementation and
trial runs are expected to start in the current financial year. With
the start up of HR plant at Orissa the company's dependence on others
to supply us primary steel ended, resulting full control of margins.
The company plans to utilize all its HR capacity to manufacture the
downstream products as it has leadership position in value added
segment for automobile and white goods sector.
At present the company has total downstream capacity of 1.54 MTPA at
its Sahibabad and Khopoli plants out of which the major capacity is
available to auto and white goods sector and the balance capacity is
used for Galvanised and other value added products. The company has
almost 100% order book for auto and white goods sector.
Further the company has started trial production of 0.45 MTPA Colled
Rolled Complex. With this the company shall utilize its HR capacity of
around 2 MTPA and after the expansion of HR capacity during the current
financial year the company shall be long on HRC.
The company has option to sell the surplus HR in the market or to
further downstream/value addition the same to capture the full value
chain and maximize the margins.
In order to maintain its leadership position in this segment and to
maximize the margins, the company proposes to set up the downstream
capacity of 1.8 MTPA, where the company is planning to set up PLTCM of
1.8 MTPA and CAL of 1 MTPA with the capex of around Rs.6000 crores to
fully utilize its additional HR capacity. The PLTCM and CAL line shall
have the world class facility with latest technology and lower
conversion cost as compared to the existing facilities. For the output
of this mill the company has entered into the technical collaboration
with Sumitomo Metals, Japan which will help the company to market the
product under their brand name in the overseas markets.
In addition to the above, the company shall also be completing the Coke
oven plant (1.3 MTPA), Coal Washery (2.5 MTPA) and 2 DRI Kilns
(aggregate capacity of 0.34 MTPA) and 197 MW Power Plant at the
existing site of Integrated steel plant at Orissa.
With this the company will be able to improve in its margins.
FINANCE
During the year the Company has tied up the term loans in foreign
currency and rupee for its expansion plans and for the requirement of
funds for its normal capital expenditure. The Company has also tied up
ECB for USD 250 Million from State Bank of India, Singapore for our
Debottlenecking project at Orissa.
The Working Capital facilities for Sahibabad, Khopoli and Orissa Plants
have been appraised by PNB, the lead Bank, for Rs.8589 crore (Fund Based
limit of Rs.3626 crore excluding export credit and Non Fund Based limit
of Rs.4963 crore) for the Financial year 201213.
CREDIT RATING
The Long Term rating of your company is Care A by Credit Analysis &
Research Ltd as per the provisions of BASEL II guidelines of RBI.
The Credit Analysis & Research Ltd (CARE) has rated the short term
rating at the highest rating of A1 (A One Plus) for short term credit
facilities of the company.
EXPORTS
During the year, the company has achieved the Export Turnover of Rs.1455
Crore. The Export Turnover of most of the Exporters in the country has
a negative trend due to the recession in international market during
the last year.
With a firm commitment and through sustained efforts, your company
continues to maintain good rapport with Global Customers. Our quality
products and timely delivery have found wide acceptance in the highly
competitive international market.
Our products are being exported across the globe.
QUALITY
In today's global competition and open economy, quality plays a vital
role in marketing the products and stay ahead of others. Therefore,
great emphasis is given to manufacturing products that meet high
standards of quality in the global market and customer satisfaction.
Proactive efforts are directed towards determining customers'
requirements and achieving all round customer satisfaction. This is
primarily achieved through automated systems (reducing manual handling
to a minimum), high attention to complaint resolution, online
communication and information exchange, quality circles etc.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956, and
Company's Articles of Association Mr. Mohan Lai, Mr. M. V. Suryanarayna
and Mr. Nittin Johari, Directors are liable to retire by rotation at
the ensuing Annual General Meeting.
Being eligible Mr. Mohan Lal, Mr. M. V. Suryanarayna and Mr. Nittin
Johari have offered themselves for reappointment.
Necessary resolutions for members' approval for their reappointment
form part of the notice of Annual General Meeting. Your Directors
recommend their reappointment.
FIXED DEPOSIT
The company has not accepted any fixed deposit from the Public and as
such no amount of principal or interest was outstanding on the date of
the Balance Sheet.
AUDITORS & AUDITORS' REPORT
M/s. Mehra Goel & Co., Chartered Accountants, New Delhi, the Company's
Auditors will retire at the conclusion of the ensuing Annual General
Meeting. M/s. Mehra Goel & Co., Chartered Accountants have informed the
Company that if appointed, their appointment will be within the
prescribed limits U/s 224 (IB) of the Companies Act, 1956. Accordingly
members' approval is being sought for their re appointment as the
Auditors of the Company at the ensuing Annual General Meeting.
There is no adverse qualification/remarks in the Auditors' Report
therefore do not call for any further comments.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under sub Section 2AA of Section 217 with
respect to the Directors Responsibility Statement, it is hereby
confirmed that :
i) in the preparation of the Annual Accounts for the financial year
ended March 31, 2012, the applicable accounting standards read with
requirements set out under Schedule VI to the Companies Act, 1956 have
been followed and there are no material departures from the same;
ii) the directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2012 and of the Profit of the Company
for the year ended on that date;
iii) the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
iv) the Directors have prepared the annual accounts of the Company on a
"going concern' basis.
AUDIT COMMITTEE
Pursuant to the provisions of Section 292A of the Companies Act, 1956
(as amended), and in accordance with the requirements of Clause 49 of
the Listing Agreement(s), the Board of Directors of the Company has
reconstituted a Committee of Board of Directors as Audit Committee
consisting of Sh. B. B. Tandon, Sh. B. B. Signal,
Sh. M.V. Suryanarayana, and Sh. V. K. Mehrotra as its members. Sh. B.
B. Tandon is the Chairman of the Audit Committee. Audit Committee shall
have such powers and authority as provided under the aforesaid
provisions and shall act in accordance with the terms of reference to
be specified in writing by the Board of Directors from time to time.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 217 (2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975,
the particulars of Employees are given in Annexure W forming part of
this Report.
PARTICULARS OF CONSERVATION OF ENERGY, 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
Board of Directors) Rules, 1988 regarding conservation of energy,
technology absorption, foreign exchange earnings and outgo are given in
Annexure " B' forming part of this Report.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS
Your Company has implemented the conditions of Corporate Governance as
contained in clause 49 of the Listing Agreement with the Stock
Exchanges. A report on Corporate Governance and Management Discussion &
Analysis along with necessary certificates are given in Annexure 'C,
'D', 'E' and T' forming part of this Report.
HUMAN RESOURCE DEVELOPMENT
Your Company achieved a record level of turnover due to the untiring
efforts put in by the people at all levels. Industrial relations remain
cordial throughout the year and the Board records its appreciation for
the contribution of all employees towards the growth of the company
without which the achievements made would not have been possible.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standards AS21 on Consolidated
Financial Statements read with Accounting Standards AS23 on Accounting
for Investments in Associates, the audited Consolidated Financial
Statements are provided in the Annual Report.
SUBSIDIARIES
The consolidated financial statements presented by the Company include
financial information of its subsidiaries prepared in compliance with
applicable Accounting Standards. As per the general exemption given by
Ministry of Corporate Affairs vide General circular no. 2/ 2011, the
Company is exempted under Section 212(8) of the Companies Act, 1956
from attaching to its Balance Sheet, the individual annual Reports of
its subsidiary Companies.
During the year Paragon Securities Private Limited, Parakeet Finvest
Private Limited, Perpetual Securities Private Limited, Marsh Capital
Services Private Limited, Bhushan Capital and Credit Services Private
Limited and Jawahar Credit and Holding Private Limited becomes the
subsidiaries and Bhushan Steel Global FZE ceased to be the subsidiary
of the Company.
As per the terms of the General circular no. 2/ 2011, a statement
containing brief financial details of the Company's Subsidiaries for
the year ended March 31, 2012 is included in the Annual Report. The
annual accounts of these subsidiaries and the related detailed
information will be made available to any investor of the company/ its
subsidiaries at any point and are also available for inspection by any
investors of the Company/its subsidiaries at the Corporate Office of
the Company and that of the head offices of the respective subsidiary
Companies.
Detail of subsidiaries of the Company are covered in the Annual Report.
GROUP
Pursuant to intimation from the promoters, the name of the Promoters
and entities comprising the 'group' as defined under the Monopolies and
Restrictive Trade Practices (MRTP) Act, 1969 are disclosed herein
below.
Persons constituting group coming within the definition of 'group' as
defined in the Monopolies and Restrictive Trade Practices (MRTP) Act,
1969 for the purpose of Regulation 10 of the Securities and Exchange
Board of India (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011 include the following:
Bhushan Energy Ltd. Bhushan Aviation Ltd. Bhushan Buildwell Pvt. Ltd.
Bhushan Infrastructure Pvt. Ltd. Bhushan Energy Trading Pvt. Ltd.
Bhushan Placement Services Pvt. Ltd. Bhushan General Traders Pvt. Ltd.
Bhushan Consumer Electronics Pvt. Ltd.
ACKNOWLEDGEMENTS
Your Directors would like to express their appreciation for the
assistance and cooperation received from Government authorities,
financial Institutions, Banks, and various stakeholders such as
Shareholders, Debentureholders, Customers, Dealers, Suppliers and
Investors during the year under review. The Directors look forward to
their continued support in future.
Your Directors also wish to place on record their deep sense of
appreciation for the committed services by the Executives, Staff and
Workers of the Company at all levels towards the growth of the Company.
for and on behalf of the Board of Directors,
Place : New Delhi (B. B. SINGAL)
Dated : July 31, 2012 CHAIRMAN
Mar 31, 2011
The Members,
The directors have pleasure in placing before you the 28th Annual
Report together with the Audited Statement of Accounts for the
year ended 31st March, 2011.
FINANCIAL HIGHLIGHTS:
(Rs. in Lacs)
Particulars Year ended
March 31,2011 March 31,2010
Profit Before Depreciation and Tax 165349.58 136050.05
Depreciation & Amortisation 27784.53 20913.56
Profit Before Tax 137565.05 115136.49
Provision for Current Taxation 27420.75 19570.00
MAT Credit Utilised (27242.30) 2665.00
Provision for Deffered Tax 36878.01 8321.83
Profit After Tax 100508.59 84579.66
Profit brought forward from
Previous Year 7208.33 7318.24
Profits available for appropriation 107716.92 91897.90
which the
Directors appropriated as under:
Proposed Dividend on Equity Shares 1061.79 1061.79
Dividend on Preference Shares 370.14 23.31
Provision for Dividend Tax 232.30 180.22
Transfer to Debenture Redemption Reserve5475.00 1975.00
Release from Debenture Redemption
Reserve (1000.00) --
Transfer to General Reserve 101200.00 81449.25
Balance carried forward to Balance
Sheet 377.69 7208.33
Total 107716.92 91897.90
DIVIDEND:
The Directors recommend following dividend on Preference Shares
proportionately from the date of allotment till 31 st March 2011:
i) Rs.10.00 per share on 51,68,600 10% Redeemable Cumulative Preference
Shares;
ii) Rs.25.00 per share on 8,00,000 25% Non convertible cumulative
Redeemable Preference shares;
iii) Rs.4.00 per share on 9,00,000 4% Non convertible cumulative
Redeemable Preference shares and
Dividend of Rs.0.50 per share on Equity Shares for the year ended 31st
March, 2011 for approval by the Members at the ensuing Annual General
Meeting.
HIGHLIGHTS:
During the year, your Company has partially installed the Phase II of
the integrated steel plant at Orissa with the production facility of
Hot Roll Coil Mill (1.90 Mtpa]
The Gross sales of the Company has increased to Rs.7576 Crore,
registering a growth of 26% over previous year's level of Rs.6003 Crore.
EXPANSION PROJECT:
The company started its backward integration with capacity of 1.9 MTPA
of hot rolled steel at its integrated steel plant at Orissa coupled
with another capacity expansion (a brownfield one) which shall enhance
the HR capacity to 4.40 MTPA by Oct. 201 2. With the start up of HR
plant of 1.9 MTPA at Orissa the company's dependence on others to
supply us primary steel ended up resulting in full control of margins.
The company plans to utilize all its HR capacity to manufacture the
downstream products as it has leadership position in value added
segment for automobile and white goods sector.
At present the company has total downstream capacity of 1.25 MTPA at
its Sahibabad and Khopoli plants out of which only 0.60 MTPA is
available to auto and white goods sector and the balance capacity is
used for Galvanised and other value added products. The company has
almost 100% order book for auto and white goods sector and is not able
to full fill the additional requirements of the fast growing auto
market.
Further the company is also coming up with 0.50 MTPA ERW API pipe plant
at Khopoli and 0.45 MTPA Colled Rolled Complex at Orissa which shall be
ready by FY 1 3. Thus the company shall utilize its HR capacity of
around 2.3 MTPA and after the expansion of HR capacity in Oct. 1 2 the
company shall have surplus HR available of around 2.1 MTPA.
The company has option to sell the surplus HR in the market or to
further downstream/value addition the same to capture the full value
chain and maximize the margins.
In order to maintain its leadership position in this segment and to
maximize the margins the company proposes to set up the downstream
capacity of 1.8 MTPA, where the company shall set up PLTCM of 1.8 MTPA
and CAL of 1 MTPA with the capex of around Rs.5000 crores to fully
utilize its additional HR capacity. The PLTCM and CAL line shall have
the world class facility with latest technology and lower conversion
cost as compared to the existing facilities.
With the PLTCM and CAL line the company shall capture the fast growing
domestic automotive and consumer goods segments and shall also help the
company to make its presence in the overseas auto market also.
In addition to the above, the company shall also be completing the 2nd
Coke oven plant (1.3 MTPA), Coal Washery (2.5 MTPA) and 2 DRI Kilns
(aggregate capacity of 0.34 MTPA) and 197 MW Power Plant at the
existing site of Integrated steel plant at Orissa.
With this the company will be able to achieve the improvements in its
margins.
FINANCE:
The company has tied up ECA for EURO 180 Million form DZ Bank AG for
Brownfield project phase III.
During the year, the company has tied up Rupee Term Loan of Rs.600 crore
from Central Bank of India for the Cold Rolling Mill project, ECB for
USD 125 million from ICICI Bank Limited and Rupee Term Loan for Rs.1032
crore from Axis Bank Syndication for Coke Oven, Coal Washery and 2 DRI
Kilns project and Rupee Term loan of Rs.725 crore from Canara Bank
Syndication for its 197 MW Power Project at Orissa.
The Working Capital facilities for Sahibabad, Khopoli and Orissa Plants
have been appraised by PNB, the lead Bank, for Rs.5656 crore (Fund Base
limit of Rs.2231 crore excluding export credit and Non Fund Based limitof
Rs.3425 crore) for the Financial year 2010-11
CREDIT RATING:
The Long Term rating of your company is Care A by Credit Analysis &
Research Ltd as per the provisions of BASEL II guidelines of RBI.
The Credit Analysis & Research Ltd (CARE) has rated the short term
rating at the highest rating of PR1 (PR One Plus) for short term
creditfacilities of the company.
EXPORTS:
During the year, the company has achieved the Export Turnover of Rs.1206
crore. The Export Turnover of most of the Exporters in the country has
a negative trend due to the recession in international market during
the last year.
With a firm commitment and through sustained efforts, your company
continues to maintain good rapport with Global Customers. Our quality
products and timely delivery have found wide acceptance in the highly
competitive international market.
Our products are being exported across the globe.
CHANGE IN SHARE CAPITAL:
i) Increase in Authorised Share Capital
The Authorised Share Capital of the Company has been increased from
X150 Crore to Rs.225 Crore by creation of 75,00,000 Preference Shares of
Rs.100 each.
ii) Issue and allotment of Preference Shares :
The Company has issued and allotted 32,00,300 Preference Shares of Rs.100
each.
QUALITY:
In today's global competition and open economy, quality plays a vital
role in marketing the products and stay ahead of others. Therefore,
great emphasis is given to manufacturing products that meet high
standards of quality in the global market and customer satisfaction.
Proactive efforts are directed towards determining customers'
requirements and achieving all- round customer satisfaction. This is
primarily achieved through automated systems (reducing manual handling
to a minimum), high attention to complaint resolution, online
communication and information exchange, quality circles etc.
DIRECTORS:
In accordance with the provisions of the Companies Act, 1956, the
Company's Articles of Association and approval given by the
Shareholders Sh. Brij Bhushan Singal, Sh. P K. Aggarwal and Sh. B.
B.Tandon, Directors are liable to retire by rotation at the ensuing
Annual General Meeting. Being eligible Sh. Brij Bhushan Singal, Sh. P.
K. Aggarwal and Sh. B. B. Tandon have offered themselves for
re-appointment.
Necessary resolutions for members' approval for their appointment/
re-appointmentform part of the notice of Annual General Meeting.
Your Directors recommend their appointment / re-appointment.
FIXED DEPOSIT:
The company has not accepted any fixed deposit from the Public and as
such no amount of principal or interest was outstanding on the date of
the Balance Sheet.
AUDITORS & AUDITORS' REPORT:
M/s. Mehra Goel & Co., Chartered Accountants, New Delhi, the Company's
Auditors will retire at the conclusion of the ensuing Annual General
Meeting. M/s. Mehra Goel & Co., Chartered Accountants have informed the
Company that if appointed, their appointment will be within the
prescribed limits U/s 224 (1 B) of the Companies Act, 1956.
Accordingly, members'approval is being sought for their re-appointment
as the Auditors of the Company at the ensuing Annual General Meeting.
There is no adverse qualification/remarks in the the Auditors'Report
therefore do not call for any further comments.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under sub section 2AA of Section 217 of the
Companies Act, 1956 with respect to the Directors Responsibility
Statement, the Directors' of your Company declare as under :-
i) that in the preparation of the Annual Accounts, the applicable
accounting standards had been followed and there are no material
departures;
ii) 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 of the Company for that period;
iii) that 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;
iv) that the directors had prepared the annual accounts on a going
concern basis.
AUDIT COMMITTEE:
Pursuant to the provisions of Section 292A of the Companies Act, 1956
(as amended), and in accordance with the requirements of Clause 49 of
the Listing Agreement(s), the Board of Directors of the Company has
constituted a Committee of Board of Directors as Audit Committee
consisting of Sh. B. B.Tandon, Sh. B. B. Singal, Sh. M.V.
Suryanarayana, and Sh. V. K. Mehrotra as its members. Sh. B. B.Tandon
is the Chairman of the Audit Committee. Audit Committee shall have such
powers and authority as provided under the aforesaid provisions and
shall act in accordance with the terms of reference to be specified in
writing by the Board of Directors from time to time.
PARTICULARS OF EMPLOYEES:
In terms of the provisions of Section 217 (2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975,
the particulars of Employees are given in Annexure-A forming part of
this Report.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN
EXCHANGE EARNINGS AND OUTGO:
Information pursuant to Section 21 7(1 )(e) of the Companies Act, 1956
read with the Companies (Disclosure of particulars in the
Report of Board of Directors) Rules, 1988 regarding conservation of
energy, technology absorption, foreign exchange earnings and outgo are
given in Annexure'B1 forming part of this Report.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS:
Your Company has implemented the conditions of Corporate Governance as
contained in clause 49 of the Listing Agreement with the Stock
Exchanges. A report on Corporate Governance and Management Discussion &
Analysis along with necessary certificates are given in Annexure 'C,
'D', 'E' and 'F' forming part of this Report.
HUMAN RESOURCE DEVELOPMENT:
Your Company achieved a record level of turnover due to the untiring
efforts put in by the people at all levels. Industrial relations remain
cordial throughout the year and the Board records its appreciation for
the contribution of all employees towards the growth of the company
without which the achievements made would not have been possible.
SUBSIDIARIES:
The consolidated financial statements presented by the Company include
financial information of its subsidiaries prepared in compliance with
applicable Accounting Standards. As per the general exemption given by
Ministry of Corporate Affairs vide General circular no. 2/ 2011, the
Company is exempted under Section 212(8) of the Companies Act, 1956
from attaching to its Balance Sheet, the individual annual Reports of
its subsidiary Companies.
As per the terms of the General circular no. 2/ 2011, a statement
containing brief financial details of the Company's Subsidiaries for
the year ended March 31, 2011 is included in the Annual Report. The
annual accounts of these subsidiaries and the related detailed
information will be made available to any investor of the company / its
subsidiaries of seeking such information at any point and are also
available for inspection by any investors of the Company/its
subsidiaries at the Corporate Office of the Company and that of the
head offices of the respective subsidiary Companies.
Detail of subsidiaries of theCompanyarecovered in the Annual Report.
GROUP:
Pursuant to intimation from the promoters, the name of the Promoters
and entities comprising the 'group' as defined under the Monopolies and
Restrictive Trade Practices (MRTP) Act, 1969 are disclosed herein
below.
Persons constituting group coming within the definition of 'group' as
defined in the Monopolies and Restrictive Trade Practices (MRTP) Act,
1969 for the purpose of Regulation 3(1 )(e) (i) of the Securities and
Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997 include the following :
Bhushan Energy Ltd. Bhushan Aviation Ltd. Bhushan Buildwell Pvt. Ltd.
Bhushan Infrastructure Pvt. Ltd. Bhushan Energy Trading Pvt. Ltd.
Bhushan Placement Services Pvt. Ltd. Bhushan General Traders Pvt. Ltd.
Bhushan Consumer Electronics Pvt. Ltd. Ajay & Archana Mittal Family
Private Trust
ACKNOWLEDGEMENTS:
Your Directors wish to place on record their gratitude for the valuable
guidance and support given by Government of India, various State
Government departments, financial Institutions, Banks, and various
stakeholders such as Shareholders, Debenture holders, Customers,
Dealers, Suppliers and Investors during the year under review. The
Directors look forward to their continued support in future.
Your Directors also wish to place on record their deep sense of
appreciation for the committed services of the Executives, Staff and
Workers of the Company at all levels towards the growth of the Company.
For and on behalf of the
Board of Directors,
Sd/-
Place: New Delhi (B. B. SINGAL)
Dated : July 29, 2011 CHAIRMAN
Mar 31, 2010
The directors have pleasure in placing before you the 27th Annual
Report together with the Audited Statement of Accounts for the year
ended 31st March, 2010.
FINANCIAL HIGHLIGHTS:
(Rs in Lacs)
Year ended
March 31, 2010 March 31, 2009
Profit Before Depreciation
and Tax 136050.05 79519.22
Depreciation & Amortisation 20913.56 23440.67
Profit Before Tax 115136.49 56078.55
Provision for Current Taxation 19570.00 5315.00
MAT Credit Utilised 2665.00 3525.00
Provision for Deferred Tax 8321.83 4958.10
Provision for FBT - 150.00
Profit After Tax 84579.66 42130.45
Profit brought forward from
Previous Year 7318.24 18405.03
Profits available for appropriation 91897.90 60535.48
Which the Directors appropriated
as under:
Proposed Dividend on Equity Shares 1061.79 1061.79
Dividend on Preference Shares 23.31 -
Provision for Dividend Tax 180.22 180.45
Transfer to Debenture Redemption
Reserve 1975.00 1975.00
Transfer to General Reserve 81449.25 50000.00
Balance carried forward to Balance
Sheet 7208.33 7318.24
Total 91897.90 60535.48
DIVIDEND :
The Directors recommend dividend of Re. 1.00 per share on 10%
Redeemable Cumulative Preference Shares, proportionately from the date
of allotment till 31st March 2010 and dividend of Rs. 2.50 per share on
Equity Shares for the year ended 31st March, 2010 for approval by the
Members at the ensuing Annual General Meeting.
HIGHLIGHTS:
During the year, your Company has partially installed the Phase II of
the integrated steel plant at Orissa with the production facility of
Hot Roll Coil Mill (1.90 Mtpa)
Your Company has also acquired Bowen Energy Ltd, Australia through
Wholly-owned subsidiary, which has coking coal mines in Queensland,
Australia.
The total income of the Company has increased to Rs 6003 Crore,
registering a growth of 10.96 % over previous years level of Rs 5410
Crore.
EXPANSION PROJECT:
The Company commenced the implementation of its integrated steel plant
at Meramandali, Orissa in January 2005 as a backward integration to
produce HR Coils in phased manner. The Phase I of the Green field
integrated steel plant had already started commercial production in
2007 with production facilities of Sponge Iron ( 680000 tpa), Billets (
300000 tpa), and power plant ( 110 MW). The phase II of this project
has also been partially installed with the production capacity of Hot
Roll Coil Mill (1.90 Mtpa) . With this the implementation risk attached
with Phase II of Orissa project has been mitigated. We are the only
major player to complete the Greenfield steel project of 3 Million
Tonne in India during last 14-15 years.
Production of HR Coil from this project is being utilized capitively in
our Sahibabad and Khopoli Plants for manufacturing CR Coils, Colour
Coated Sheets etc. which will help in improving EBITDA per tonne
significantly of your Company in years to come. Captive use of HR
Coils will also remove the off take/marketing risk of the Orissa Plant
and will help the Company in mitigating the risk of main raw material
i.e. HR Coil.
The Company has been allocated Iron Ore Mines and Coal Mines by the
Orissa Government, the initial statutory clearances and land
acquisition work on both the mines have started. Both the Mines are
likely to be operational within a period of two to three years. The
Company has also acquired Bowen Energy Ltd, Australia through
Wholly-owned subsidiary, having coking coal mines in Queensland,
Australia. Substantial part of the exploration work on these mines have
also been started.
The Companys Brownfield project Phase III at Orissa is scheduled for
completion on October 2012, which is in addition to Phase II capacity,
envisaging setting up of 3 MTPA Crude Steel Capacity to ensure optimum
utilization of infrastructure and resources at the existing plant of
Hot Rolling (HR) mill to its full capacity. With the completion of
Phase III the total finished goods capacity of the company will
increased to 4.7 MTPA.
FINANCE:
The total project cost for the phase III of Orissa Project is envisaged
at Rs 6583 Crore. Out of which the Rupee Term Loan of Rs 2733 Crore
from SBI Syndication and ECA for Euro 70 Million from Natixis and
Bayerische Landes Bank had already been tied up. During the year the
Company has tied up with ECB for USD 300 Million from State Bank of
India for phase III of Orissa Project.
The ECA for USD 49.55 millions from Deutsche Bank AG, Tokyo and Rupee
Term Loan for Rs 556 Crore from IDBI syndication has been tied up for
our upcoming ERW pipe plant at Khopoli.
The Working Capital facilities for Sahibabad, Khopoli and Orissa Plants
have been appraised by PNB, the lead Bank, for Rs 4360 Crore (Fund
Based limit of Rs 1380 Crore, excluding export credit and Non Fund
Based limit of Rs 2980 Crore) for the Financial year 2009-10 and Rs
5656 Crore (Fund Based limit of Rs 2231 Crore excluding export credit
and Non Fund Based limit of Rs 3425 Crore) for the Financial year
2010-11
CREDIT RATING:
The Long Term rating of the Company has revised from Care A to Care A+
by Credit Analysis & Research Ltd as per the provisions of BASEL II
guidelines of RBI.
The Credit Analysis & Research Ltd (CARE) has also revised the short
term rating for short term credit facilities of the Company from PR1
(PR One) to PR1+ (PR One Plus).
EXPORTS:
Efforts of your Company on Export front, to respond to the National
priority, continue to be rewarding with the achievement of Export
Turnover of Rs 1217 crore in spite of the recession in Global economy.
Whereas the Export Turnover of most of the Exporters in the country has
a negative trend due to the recession in international market during
the last year.
With a firm commitment and through sustained efforts, your Company
continues to maintain good rapport with Global Customers. Our quality
products and timely delivery have found wide acceptance in the highly
competitive international market.
Our products are being exported across the globe.
CHANGE IN SHARE CAPITAL
i) Increase in Authorised Share Capital:
The Authorised Share Capital of the Company has been increased from Rs.
95 Crore to Rs. 150 Crore by creation of 55,00,000 Preference Shares of
Rs. 100 each.
ii) Issue and allotment of Preference Shares:
The Company has issued and allotted 36,68,300 Preference Shares of Rs.
100 each.
JOINT VENTURE COMPANY Ã ANDAL EAST COAL COMPANY PRIVATE LIMITED:
Ministry of Coal, Government of India has allotted Andal East Coal
Block jointly to Bhushan Steel Limited, Jai Balaji Steel Limited and
Rashmi Cement Limited. As per the terms of the allotment, three
companies have formed a Joint Venture Company under the name and style
of Andal East Coal Company Private Limited for mining of coal from
Andal East Coal Block. The Joint Venture Company shall do all the
necessary jobs for exploration and mining of Coal for the allotted coal
block. The coal extracted from the mine shall be distributed among the
allocates in the proportion of their assessed requirements in the
Allotment Letter.
SPECIAL PURPOSE VEHICLE- ANGUL SUKINDA RAILWAY LIMITED
Bhushan Steel Limited along with Railway Vikas Nigam Limited and Jindal
Steel & Power Limited has formed a Special Purpose Vehicle (SPV) under
the name and style of Angul Sukinda Railway Limited for the
construction of new railway line in the jurisdiction of East Coast
Railway between Angul in Angul district, Orissa to Sukinda Road in
Jajpur district , Orissa. With this the Company will be able to achieve
easy movement of iron ore from mines to the plant at a lower cost.
QUALITY:
In todays global competition and open economy, quality plays a vital
role in marketing the products and stay ahead of others. Therefore,
great emphasis is given to manufacturing products that meet high
standards of quality in the global market and customer satisfaction.
Proactive efforts are directed towards determining customers
requirements and achieving all- round customer satisfaction. This is
primarily achieved through automated systems (reducing manual handling
to a minimum), high attention to complaint resolution, online
communication and information exchange, quality circles etc.
DIRECTORS:
LIC has withdrawn Sh. M. V. Suryanarayana, as a Nominee Director w. e.
f. 13th August, 2009 from the Board of Directors of the Company and
nominated Ms. Sunita Sharma w.e.f. 11th January, 2010 as a Nominee
Director of LIC on the Board of Directors of the Company.
Mr. Ravi Kant Srivastava has resigned from the directorship of the
Company w. e. f. 22nd October, 2009.
Your Directors place on record their sincere appreciation of the
valuable guidance and advice received from Sh. M.V. Suryanarayana,
Nominee director and Mr. Ravi Kant Srivastava, Director during their
tenure on the Board of the Company.
In accordance with the provisions of the Companies Act, 1956, Companys
Articles of Association and approval given by the Shareholders, Sh.
Nittin Johari, Sh. Rahul Sen Gupta and Sh. V. K. Mehrotra, Directors
are liable to retire by rotation at the ensuing Annual General Meeting.
Being eligible Sh. Nittin Johari, Sh. Rahul Sen Gupta and Sh. V. K.
Mehrotra have offered themselves for re-appointment.
During the year, Sh. M. V. Suryanarayana was appointed as Additional
Director w.e.f. 13th October, 2009 and he would hold office as a
Director upto the date of this Annual General Meeting. A Notice has
been received from member signifying his intention to propose his
appointment as Director along with security deposit as per provisions
of Section 257 of the Companies Act, 1956.
Necessary resolutions for members approval for their appointment /
re-appointment form part of the notice of Annual General Meeting.
Your Directors recommend their appointment / re-appointment.
FIXED DEPOSIT:
The Company has not accepted any fixed deposit from the Public and as
such no amount of principal or interest was outstanding on the date of
the Balance Sheet.
AUDITORS & AUDITORS REPORT :
M/s. Mehra Goel & Co., Chartered Accountants, New Delhi, the Companys
Auditors will retire at the conclusion of the ensuing Annual General
Meeting. M/s. Mehra Goel & Co., Chartered Accountants have informed the
Company that if appointed, their appointment will be within the
prescribed limits U/s 224 (1B) of the Companies Act, 1956. Accordingly,
members approval is being sought for their re-appointment as the
Auditors of the Company at the ensuing Annual General Meeting.
There is no adverse qualifications/ remarks in the Auditor Report
therefore, do not call for any further comments.
DIRECTORS RESPONSIBILITY STATEMENT :
Pursuant to the requirement under sub Section 2AA of Section 217 with
respect to the Directors Responsibility Statement, the Directors of
your Company declare as under :- i) that in the preparation of the
Annual Accounts, the applicable accounting standards had been followed
and there are no material departures;
ii) that the directors had selected such accounting policies and
applied them consistently and made judgments and estimate that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
Profit of the Company for that period; iii) that 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;
iv) that the directors had prepared the annual accounts on a going
concern basis.
AUDIT COMMITTEE :
Pursuant to the provisions of Section 292A of the Companies Act, 1956
(as amended), and in accordance with the requirements of clause 49 of
the listing agreement(s), the Board of Directors of the Company has
reconstituted a Committee of Board of Directors as Audit Committee
consisting of Sh. B. B. Tandon, Sh. B. B. Signal, Sh. M.V.
Suryanarayana, and Sh. V. K. Mehrotra as its members. Sh. B. B. Tandon
is the Chairman of the Audit Committee. Audit Committee shall have such
powers and authority as provided under the aforesaid provisions and
shall act in accordance with the terms of reference to be specified in
writing by the Board of Directors from time to time.
PARTICULARS OF EMPLOYEES:
In terms of the provisions of Section 217 (2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975,
the particulars of Employees are given in Annexure à A forming part
of this Report.
PARTICULARS OF CONSERVATION OF ENERGY, 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
Board of Directors) Rules, 1988 regarding conservation of energy,
technology absorption, foreign exchange earnings and outgo are given in
Annexure `B forming part of this Report.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS:
Your Company has implemented the conditions of Corporate Governance as
contained in clause 49 of the Listing Agreement with the Stock
Exchanges. A report on Corporate Governance and Management Discussion &
Analysis along with necessary certificates are given in Annexure C,
D ,Eand F forming part of this Report.
HUMAN RESOURCE DEVELOPMENT :
Your Company achieved a record level of turnover due to the untiring
efforts put in by the people at all levels. Industrial relations remain
cordial throughout the year and the Board records its appreciation for
the contribution of all employees towards the growth of the Company
without which the achievements made would not have been possible.
SUBSIDIARIES:
The consolidated financial statements presented by the Company include
financial information of its subsidiaries prepared in compliance with
applicable Accounting Standards. The Company has been granted exemption
under Section 212(8) of the Companies Act, 1956 for the year ended
March 31, 2010 by the Ministry of Corporate Affairs from attaching to
its Balance Sheet, the individual Annual Reports of its subsidiary
Companies. As per the terms of the Exemption Letter, a statement
containing brief financial details of the Companys Subsidiaries for
the year ended 31st March, 2010 is included in the Annual Report. The
annual accounts of these subsidiaries and the related detailed
information will be made available to any investor of the Company / its
subsidiaries of seeking such information at any point and are also
available for inspection by any investors of the Company/its
subsidiaries at the Corporate Office of the Company and that of the
head offices of the respective subsidiary Companies.
Detail of subsidiaries of the Company are covered in the Annual Report.
GROUP:
Pursuant to intimation from the promoters, the name of the Promoters
and entities comprising the group as defined under the Monopolies and
Restrictive Trade Practices (MRTP) Act, 1969 are disclosed herein
below.
Persons constituting group coming within the definition of group as
defined in the Monopolies and Restrictive Trade Practices
(MRTP) Act, 1969 for the purpose of Regulation 3(1)(e) (i) of the
Securities and Exchange Board of India (Substantial Acquisition of
Shares and Takeovers) Regulations, 1997 include the following :
Bhushan Energy Ltd.
Bhushan Aviation Ltd.
Bhushan Buildwell Pvt. Ltd.
Bhushan Infrastructure Pvt. Ltd.
Bhushan Energy Trading Pvt. Ltd.
Bhushan Placement Services Pvt. Ltd.
Bhushan General Traders Pvt. Ltd.
Bhushan Consumer Electronics Pvt. Ltd.
ACKNOWLEDGEMENTS:
Your Directors wish to place on record their gratitude for the valuable
guidance and support given by Government of India, various State
Government departments, financial Institutions, Banks, and various
stake holders such as Shareholders, Debenture holders, Customers,
Dealers, Suppliers and Investors during the year under review. The
Directors look forward to their continued support in future.
Your Directors also wish to place on record their deep sense of
appreciation for the committed services of the Executives, Staff and
Workers of the Company at all levels towards the growth of the Company.
for and on behalf of the
Board of Directors,
Sd/-
Place : New Delhi (B. B. SINGAL)
Dated : July 31, 2010 CHAIRMAN
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