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Bhuwalka Steel Industries Ltd.

BSE: 513333 Sector: Metals & Mining
NSE: BUWALKASTL ISIN Code: INE069C01013
BSE LIVE 15:12 | 05 Dec 5.30 -0.27
(-4.85%)
OPEN

5.30

HIGH

5.30

LOW

5.30

NSE LIVE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 5.30
PREVIOUS CLOSE 5.57
VOLUME 509
52-Week high 9.39
52-Week low 5.30
P/E
Mkt Cap.(Rs cr) 5.50
Buy Price 0.00
Buy Qty 0.00
Sell Price 5.30
Sell Qty 536.00
OPEN 5.30
CLOSE 5.57
VOLUME 509
52-Week high 9.39
52-Week low 5.30
P/E
Mkt Cap.(Rs cr) 5.50
Buy Price 0.00
Buy Qty 0.00
Sell Price 5.30
Sell Qty 536.00

Bhuwalka Steel Industries Ltd. (BUWALKASTL) - Director Report

Company director report

TO THE MEMBERS OF

BHUWALKA STEEL INDUSTRIES LIMITED:

Your Directors have pleasure in presenting before you the 33rd Annual Report of theCompany together with Audited Statement of Accounts for the Twelve Months Period ended31st March 2015.

1 . FINANCIAL RESULTS:

(Rs. in Lakhs)
Particulars 2014 – 15 2013 – 14
(12 months) (6 months)
Total Income 39285.29 16838.80
Profit/(Loss) before Interest Depreciation and Taxation (1383.07) (1069.70)
Less: - Interest 5.61 1151.56
Less:- Depreciation/Amortization 522.05 304.09
Profit/(Loss) Before Tax before Extraordinary item (1910.73) (2525.36)
Add:- Profit from Extraordinary item 1311.98
Profit/(Loss) Before Tax After Extraordinary item (598.74) (2525.36)
Less:- Income Tax for the year(including FBT and Deferred taxation) 931.73 596.05
Less:- Income tax for earlier years
Profit After Tax 332.98 (1929.30)
Add: Balance of profit brought forward From last year (1337.27) 592.03
Appropriations:
Proposed Dividend with Dividend taxon Equity shares
Balance of Profit carried forward (1004.30) (1337.27)

2. OPERATIONS REVIEW:

The current year operational figures are for 12 months period from 01.04.2014 to31.03.2015 as against previous year figures which are for 6 months period. Total incomefrom operations during the period of twelve months under review was Rs. 39285.29 lakhs ascompared to Rs. 16838.80 lakhs in the previous year (6 months). The company has made aprofit of Rs.332.98 lakhs as compared to previous year the Company has suffered a lossafter tax of Rs. 1929.30 lakhs (after extra ordinary items). Main reason for losses wasLower capacity utilization of production capacities due to inadequate working capitalduring most of the period of reported FY.

Company is endeavoring hard to overcome the issues of poor demand in Infra and RealEstate by innovative marketing strategies and also focusing in optimizing its capacityutilization. However short of working capital is impacting the efforts negatively.

Company is taking Suitable measures to resolve the banking issue which will provideflexibility to infuse fresh funds and sell noncore assets to improve liquidity for workingcapital and consequently increase capacity utilization. The management is hopeful thatthese measures will enable to increase the volumes and also the profitability andliquidity of the company.

3. DIVIDEND

Your Directors express their inability to recommend any dividend in view of huge lossesincurred by the Company.

4. DISCLOSURES OF AMOUNTS IF ANY TRANSFER TO ANY RESERVES.

It is not proposed to carry any amount to any reserves from the profits of the Company.Hence disclosure under Section 134 (3) (j) of the companies act 2013 is not required.

5. SUBSIDIARY COMPANY

Company currently has only one wholly owned Subsidiary M/s. Benaka Sponge Iron PrivateLimited. Subsidiary Company is into manufacturing of sponge Iron products from iron oreand pallets. While preparing consolidated financials of the company Financials of M/sBenaka Sponge Iron Private Limited has been consolidated as per Accounting Standard- 21 ofICAI.

During the financial year 2014-15 the company has disinvested its total investmentsin joint venture company Bhuwalka Steel Industries FZC UAE.

6. Deposit

The Company has not accepted any deposit during the year.

7. CONSERVATION OF ENERGY:

Total energy consumption and energy consumed per unit of production as per Form‘A' is annexed - forming part of this Report.

8. TECHNOLOGY ABSORPTION:

The Company is keeping abreast of the latest developments in product technologymanufacturing process and methods and using indigenous technology.

9. FOREIGN EXCHANGE EARNINGS AND OUTGOINGS:

Foreign Exchange Earnings and Expenditure are given under Point 8 (E) and 8 (F) of Note‘23' forming part of the Accounts for the Period ended 31st March 2015.

10. PERSONNEL:

Industrial Relations remained cordial through out the year.

There are no employees of the categories specified under Section 134 of the CompaniesAct 2013 read with Companies (Particulars of Employees) Rules 1975 as amended. Hencethis information is not given.

11. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT

Due to non servicing of the debt post re-structuring the company Account has beenclassified as NPA by the bankers. The company however is taking suitable measure toresolve the same.

12. DETAILS OF DIRECTORS AND KMP:

Sri Suresh Kumar Bhuwalka retires by rotation at the forthcoming Annual General Meetingand being eligible offer himself for re-appointment.

During the year Mr. Munish Mohan Nominee Director appointed in the place of Smt.Visalakshi Vasanthan who retired with effect from 08/05/2014 and Mr. Munish Mohan retiredwith effect from 14/02/2015 due to withdrawal of Nomination by the appointing Authorityi.e. IDBI Bank Ltd. and Mr. K C Kondaiah retired with effect from 08/05/2014.

Mr. Ajay Kumar Bhuwalka appointed as Managing Director of the Company in the BoardMeeting held on 13.11.2014 and the same is being considered in the ensuing Annual GeneralMeeting being held on 9/11/2015.

13. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS PURSUANT TO RULE 8 (5) (viii) OF COMPANIES (ACCOUNTS) RULES 2014:

The Company has an adequate Internal financial control system commensurate with thesize of its business operations.

14. SECRETARIAL AUDIT REPORT:

Mr. Manoj Rajan Practicing Company Secretary Membership No. ACS 19865 was appointed toconduct the Secretarial Audit of the Company for the Financial Year 2014-15 as requiredunder section 204 of Act and Rules made their under. The Secretarial Audit Report in theprescribed Form MR-3 is annexed to this report.

15. BOARD MEETING:

During the financial year 2014-15 the Board met 6 times on the following dates08.05.2014 30.05.2014 14.08.2014 13.11.2014 14.02.2015 and 20.03.2015.

16. DECLARATION OF INDEPENDENT DIRECTORS

Presently there are no Independent Directors on Board. However steps are being takenfor the appointment of Independent Directors.

17. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION

AND DISCHARGE OF THEIR DUTIES

As per provisions of Section 178(1) constitution of Nomination and RemunerationCommittee is being constituted.

18. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES MADE

PURSUANT TO SECTION 188 OF THE COMPANIES ACT 2013.

Details of each of the related party transaction entered into by the Company during theYear together with justification are annexed herewith in Form AOC-2 as "AnnexureB".

19. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM

The Audit Committee consists of the following members;

a) Mr. K C Kondaiah Independent Director - Upto 30.5.2014
b) Mr. Ajay Kumar Bhuwalka
c ) Suresh Kumar Bhuwalka - Upto 30.5.2014
d) Mr. Ankit Bhuwalka

During the financial year 2014-15 the Committee met 5 times on the following dates08.05.2014 30.05.2014 13.08.2014 13.11.2014 14.02.2015.

The Company has established a vigil mechanism and oversees through the committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the chairman of the AuditCommittee on reporting issues concerning the interests of co employees and the Company.

20. INFORMATION PURSUANT TO RULE 5 ( 2) OF COMPANIES ( APPOINTMENT & REMUNERATIONOF MANAGERIAL PERSONNEL) RULES 2014

The Company has not appointed any employee(s) in receipt of remuneration exceeding thelimits specified under Rule 5 (2) of Companies (Appointment & Remuneration ofManagerial Personnel) Rules 2014.

21. AUDITORS:

The Auditors M/s. ASR Associates Chartered Accountants Bellary retire at theconclusion of the forthcoming Annual General Meeting and being eligible offer themselvesfor re-appointment.

22. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE

COMPANIES ACT 2013

There was no loan given or guarantee given or investment made or security providedpursuant to Section 186 of the Companies Act 2013 during the year under review and hencethe said provisions are not applicable.

23. DETAILS OF SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNAL

IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE

There are no significant material orders passed by the Regulators / Courts / Tribunalwhich would impact the going concern status of the Company and its future operations.Hence disclosure pursuant to Rule 8 (5) (vii) of Companies (Accounts) Rules 2014 is notrequired.

24. Risk Management Policy:

The Company has developed & implemented Risk Management Policy. However Companyhas not come across any element of risk which may threaten the existence of the Company.

25. AUDITORS' REPORT: a) As reported by Statutory Auditor's in their Auditthere have been delays in servicing undisputed statutory liabilities during 2014-15 ontime. Further certain payments have been delayed beyond 180 days. Amount of these delayshave been detailed in point no. (vii) (a) and (b) of annexure of Paragraph 1 (CARO) of the

Auditor's Report.

Management's Reply:- Company has been going through tough financial condition during FY14-15 due to operational and cash losses. This situation occurred due to lower productionlevel and bad demand scenario of Company's product during such period. Owing to cashlosses and liquidity constraints company could not mobilize funds for statutory dues andhence same were delayed unintentionally. Company has already taken measure to improve itsposition by utilization of current assets and these dues will be paid on highest priority.

b) In Reply of Point no. ( viii) of the annexure of Paragraph 1 ( CARO) of theAuditor's Report i.e. "The Company's accumulated losses at the end of the FinancialYear were more than 50% of the net worth. The company has incurred cash losses in thecurrent Financial Year. The Company has to comply with provisions of The Sick IndustrialCompanies Act 1985 (SICA ACT) as applicable to the Company post this event."Management's Reply: - Management has taken Appropriate steps to resolve all financialissues effecting the company and taking measure to safeguard the company's interest fromfurther erosion in its networth.

As the Net worth of the company has eroded more than 50% we have applied forregistration with The Sick Industrial Companies Act 1985 (SICA ACT). c ) As reported inpoint no. 11 of the annexure of Paragraph 1 (CARO) of the Auditor's Report i.e."Based on our Audit procedures and as per the information and explanations given bythe management the company has defaulted in repayment of loans and interest to Banks andFinancial Institutions. Consequently the banks have served notice U/S 13 of the SARFESIAct.

Management's Reply: - As mentioned above to the reply of a) Company could not arrangefunds for timely banking repayments due to cash losses and liquidity constraints and hencebanking repayments were delayed unintentionally. Company has already taken measure toimprove this issue and has approached the bankers for a solution in this matter. Thematter is under consideration by the bankers. The company has also approached DRT inresponse to the SARFESI notice issued by the bankers.

For further clarification on Auditor's observation The Notes on accounts referred toin the Auditors' Report are self explanatory and therefore do not call for any additionalcomments under section 217(3) of the Companies Act 1956.

26. DIRECTORS' RESPONSIBILITY STATEMENT AS PER SECTION 217 (2AA):

Your Directors hereby confirm: a) that in the preparation of the annual accounts theapplicable accounting standards have been followed and that there are no materialdepartures; b) that the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the company for the year; c ) that the directors hadtaken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 to safeguard the assets of theCompany and for preventing and detecting fraud and other irregularities; d) that thedirectors had prepared the annual accounts on a ‘going concern' basis. e) thedirectors in the case of a listed company had laid down internal financial controls tobe followed by the company and that such internal financial controls are adequate and wereoperating effectively. f) They have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

27. REPORT ON CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges the followingform part of this Annual Report: a) Management Discussion and Analysis; b) Report onCorporate Governance; c ) Auditors' Certificate regarding compliance of conditions ofCorporate Governance

28. ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation for the continued supportencouragement and cooperation extended by all the stakeholders namely; FinancialInstitutions Bankers shareholders customers and suppliers.

Your Directors also place on record their appreciation for the contributions made bythe employees of the Company at all levels.

FOR AND ON BEHALF OF THE BOARD
(AJAY KUMAR BHUWALKA)
MANAGING DIRECTOR
Place : Bangalore ( ANKIT BHUWALKA)
Date : 29th September 2015 DIRECTOR

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