Your directors are pleased to present the 34th Annual Report and the Audited Statementof Accounts for the financial year ended March 2017.
|Particulars ||Year Ended |
| ||31st March 2017 ||31st March 2016 |
|Gross Revenue ||1502730.17 ||1312406.77 |
|Profit /Loss Before Depreciation and ||(243947.46) ||(246462.30) |
|Tax || || |
|Depreciation & Amortisation ||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
In view of the loss incurred during the financial year ended March 312017 the Boarddoes not consider it expedient to recommend any dividend. OPERATIONS AND THE STATE OFCOMPANYS AFFAIRS
GROSS REVENUE AND EXPORTS:
During the year your Company has achieved the Gross sales of ` 15027 Crores incomparison of previous years level of ` 13124 Crores.
Further the company has achieved the Export Turnover of ` 2863 Crores registering agrowth of 139% over previous years level of ` 1198 crores. The export turnoverduring 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 majorshipment has been exported to South East Asia and Europe.
With a firm commitment and through sustained efforts your company continues tomaintain good rapport with Global Customers. Our quality products and timely delivery havefound wide acceptance in the highly competitive international market. Our products arebeing exported across the globe.
COMPLETION OF BALANCE CAPEX FACILITIES :
Your company is under implementation of completion of balance capex facilities likeCoke Dry Quenching and Reheating Furnace. These facilities are expected to be completed inFY 2017-18.
The Working Capital facilities for its Sahibabad Khopoli and Orissa Plants were lastsanctioned for the FY 2014-15. Thereafter no enhancement in working capital facilitieswere 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 600000 3% Redeemable Cumulative PreferenceShares of ` 100 each on 31st March 2017 and redeemed 489900 Redeemable CumulativePreference shares of ` 100 each as per the terms of the Issue out of the proceeds of thefresh issue of shares.
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 inrepayment 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 itsmeeting held on 12th December 2016.
There is no change in the Key managerial personnel of the Company during the year underreview except the appointment of Mr. Neeraj Singal as Chief ExecutiveOfficer(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 whichNine are Independent directors Three are Nominee directors Four are Executive directorsand One is Non-executive Chairman.
Independent Directors Declarations
All Independent directors have given declarations that they meet the criteria ofindependence as laid down under section 149 of the Companies Act 2013 which has beenrelied 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 SenGupta Directors would retire by rotation at the forthcoming AGM and is eligible forre-appointment. Mr. Nittin Johari and Mr. Rahul Sen Gupta Directors of the Company haveoffered themselves for the reappointment.
Further as per the requirement of Companies Act 2013 the following policies of theCompany are attached herewith marked as Annexure A and Annexure B.a) P olicy 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 Rulesthe Company has constituted a CSR Committee consisting of three Directors of which one isIndependent Director. The composition terms of reference etc. of the CSR Committee arelaid out in the Corporate Governance Report which forms part of this Annual Report. TheCSR policy of the Company has been uploaded on the Companys websitewww.bhushansteel.com.
In pursuance of the provisions of the Companies Act 2013 and CSR Policy of the Companyit is required to spend two percent of the average net profits of the Company for thethree immediately preceding financial years. The Company incurred heavy losses inpreceding two financial years and the average net profitforthreefinancialyear is innegative thus the company was not required to spend any money for CSR activities duringthe current financial year ending March 31 2017. However the Company is firm on itscommitment to incur the sum on CSR activities required to be spent during the financialyears 2014-15 and 2015-16 as soon as financial position of the Company improves and thereis adequate cash flows.
The Responsibility Statement of the Corporate Social Responsibility (CSR) Committee ofthe 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.
The Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements set out by SEBI. The Company has alsoimplemented several best corporate governance practices as prevalent globally. The reporton Corporate Governance as stipulated under the Listing Agreement forms an integral partof this Report and presented in a separate section as Annexure C.
The requisite certificate from the Auditors of the Company confirming compliances withthe conditions of corporate governance is part of the report on Corporate Governance.
MANAGEMENTS DISCUSSION AND ANALYSIS REPORT
Managements Discussion and Analysis Report for the year under review asstipulated under Regulation 34(2) of SEBI (Listing Obligations and DisclosuresRequirements) Regulations 2015 is presented in a separate section as AnnexureD forming part of the Report.
CONSOLIDATED FINANCIAL STATEMENT
In accordance with the Companies Act 2013 ("the Act") and AccountingStandard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accountingfor Investments in Associates and AS - 27 on Financial
Reporting of Interests in Joint Ventures the audited consolidated financial statementis 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 asrequired under the provisions of Section 129(3) of the Companies Act 2013. TheConsolidated Financial Statements presented by the Company include financial results ofall its subsidiaries joint ventures and associates.
Audited Financial Statements of the Subsidiary Companies have been reviewed by theAudit Committee and the Board. A policy for determining material subsidiaries is displayedon the website of the Company- www.bhushansteel.com.
No Company has become Joint venture during the financial year 2016-17 A report on theperformance and the financial position of the Subsidiaries Associates and Joint ventureas per Form AOC-1 are presented in the consolidated financial statement and hence sake ofbrevity. Most of the Subsidiaries and Joint venture of the Company have not commencedoperations and their contribution to the overall performance of the Company isinsignificant.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
The Company has a Board approved policy on Related Party Transactions which has beendisclosed on the website of the Company and can be viewed at www.bhushansteel.com AllRelated Party Transactions that were entered into during the financial year were on anarms length basis in the ordinary course of business and were in compliance withthe applicable provisions of the Companies Act 2013 (the Act) and SEBI(Listing Obligations and Disclosures Requirements) Regulations 2015 and the provisions ofSection 188 of the Companies Act 2013 are not attracted. Thus disclosure in Form AOC-2 isnot required.
There were no materially significant Related Party Transactions made by Company duringthe year that would have required Shareholder approval as per provision of Companies Act2013 read with applicable rules and Regulation 23 of SEBI(Listing Obligations andDisclosures 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 areof forseen and repetitive nature. The transactions entered into pursuant to the omnibusapproval so granted alongwith a statement giving details of all related party transactionsis placed before the Audit Committee from time to time.
Bhushan Steel follows well-established and detailed risk assessment and minimisationprocedures which are periodically reviewed by the Board. The Company has in place abusiness risk management framework for identifying risks and opportunities that may have abearing on the organizations objectives assessing them in terms of likelihood andmagnitude of impact and determining a response strategy.
The Senior Management assists the Board in its oversight of the Companysmanagement of key risks including strategic and operational risks as well as theguidelines policies and processes for monitoring and mitigating such risks under theaegis of the overall business risk management framework.
INTERNAL FINANCIAL CONTROLS
The Board has laid down Internal Financial Controls within the meaning of theexplanation to Section 134 (5) (e) of the Companies Act 2013. During the year suchcontrols were tested and no reportable material weakness in the design or operation wereobserved.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the Internal Auditors and thereviews performed by Management and the relevant Board Committees including the AuditCommittee the Board is of the opinion that the Companysinternalfinancialcontrolswere 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 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;
b) the Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2017 and of the loss ofthe Company for the year ended 31st March 2017;
c) the Directors have taken proper and sufficient care for maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities; .
d) the Directors have prepared the annual accounts on a going concernbasis;
e) the Directors have laid down internal financial controls to be followed not repeatedby the Company and that such internal financial controls are adequate here for the and areoperating effectively; and
f) the Directors have devised proper systems to ensure compliance with the provisionsof 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 theDirectors and employees to report their concerns about unethical behaviour actual orsuspected fraud or violation of the Companys Code of Conduct or ethics policy. ThePolicy provides for adequate safeguards against victimization of employees who avail ofthe 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 accessto the Audit Committee.
The Policy is displayed at Companys website www.bhushansteel.com.
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015 the Board has carried out an annualevaluation of its own performance the directors individually as well as the evaluation ofthe working of various committees. The Independent directors also carried out theevaluation of the Chairman and the non-independent directors the details of which arecovered in the Corporate Governance Report.
Cri teria for evaluation of Directors For the purpose of proper evaluation theDirectors of the Company have been divided into 3 (three) categories i.e. IndependentNon-independent and non-executive and executive directors. The criteria for evaluationincludes factors such as engagement strategic planning and vision team spirit andconsensus building effective leadership domain knowledge management qualities teamwork abilities result achievements understanding and awareness etc.
AUDITORS AND AUDITORS REPORT
M/s Mehra Goel & Co. Chartered Accountants and M/s. Mehrotra & Mehrotra Chartered Accountants Joint Statutory Auditors of the Company hold office till theconclusion of the ensuing Annual General Meeting. M/s. Mehrotra & Mehrotra areeligible for re-appointment and have confirmed their eligibility to the effect that theirre-appointment if made would be within the prescribed limits under the Act and that theyare not disqualified for re-appointment.
The Notes on financial statement referred to in the Auditors Report areself-explanatory and do not call for any further comments. The Auditors Reportcontain one qualification/ reservation etc which is self-explanatory and do not call forany further comments.
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 forthe financial year 2016-17. In terms of the Section 148 of the Companies Act2013 and therules made thereunder remuneration of the Cost Auditors was ratified by the members ofthe Company in the Annual General meeting.
The Board has appointed R. K Rai Practising Company Secretary to conduct SecretarialAudit for the financial year 2016-17. The Secretarial Audit Report for the financial yearended 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 anyfurther comments.
CSR C ommittee
The CSR Committee comprises
Mr. B. B. Singal (Chairman) Mr. B. B.
Tandon and Mr.Nittin Johari as other members.
A udit Committee
The A udit Committee comprises Mr. B. B. Tandon (Chairman) B. Singal Mr. M. V.Suryanarayana and Mr. Ashwani Kumar as other members.
Nomin ation and Remuneration Committee
The Nomination and Remuneration Committee comprises 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 detailsplease refer report on Corporate Governance presented as Annexure C to thisReport.
PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIES PROVIDED
Particulars of loans given investments made guarantee given and securities providedif 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 aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at the Workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under. The Policy aims to provideprotection to employees at the workplace and prevent and redress complaints of sexualharassment and for matters connected or incidental thereto with the objective ofproviding a safe working environment where employees feel secure. The Company has alsoconstituted an Internal Complaints Committee known as the Prevention of Sexual Harassment(POSH) Committee to inquire into complaints of sexual harassment and recommendappropriate action.
The Company has not received any complaint of sexual harassment during the financialyear 2016-17.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under subsection 3(m) of Section134 of the Companies Act 2013 read with Companies (Accounts) Rules 2014 are provided inAnnexure F to this Report.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as Annexure Gto 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 theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 a statementshowing disclosures pertaining to remuneration and also the names and other particulars ofthe employees drawing remuneration in excess of the limits set out in the said rules areprovided in the Annexure H to this Report.
The Company has not accepted any deposits from the Public falling within the purview ofSection 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
Aggr egate number of shareholders and the outstanding shares in the suspense accountlying at the beginning of the year- 3 Shareholders holding 171 Shares Number ofshareholders who approached listed entity for transfer of shares from suspense accountduring the year- 1 shareholder holding 150 Shares Number of shareholders to whom shareswere transferred from suspense account during the year- 1 shareholder holding 150 SharesAggr egate number of shareholders and the outstanding shares in the suspense account lyingat the end of the year-2 Shareholders holding 21 Shares The voting rights on these sharesshall 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 declareddividends which remained unpaid/ unclaimed for a period of .seven years have beentransferred by the Company to the IEPF establishedM.V. by the Central Government pursuantto 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 theregulators or courts or tribunals during financial year 2016-17 impacting the goingconcern status and Companys operations in future.
MATERIAL CHANGES AND COMMITMENTS
There was no change in the nature of the business of the Company. There were nomaterial changes and commitments affecting the financial position of the Company occurringbetween 31st March 2017 and the date of this Report.
Your Directors would like to express their gratitude & appreciation for thevaluable guidance & support received from Government of India Government ofAustralia various State Governments particularly including States of Orissa Maharashtra& Uttar Pradesh; Banks and the financial Institutions; various stakeholders such asShareholders Debenture-holders Customers Dealers Suppliers and all the businessassociates among others. Your Directors also wish to place on record their deep sense ofappreciation & gratitude to all Companys employees for their continuouscommitment & enormous personal efforts as well as their collective contributiontowards the growth of the Company. The Directors look forward to their continued supportin future.
| ||for and on behalf of the Board of Directors |
| ||(B. B. SINGAL) |
| ||CHAIRMAN |
|Place : New Delhi || |
|Dated : 05.07.2017 || |