To the Members
Your Directors have pleasure in presenting the 33rd Annual Report of the Companytogether with the audited financial statements of the Company for the financial year ended31st March 2019.
FINANCIAL HIGHLIGHT (STANDALONE)
Your Company's performance for the year ended 31st March 2019 is summarized as under :
| || ||(Rs. In Lakhs) |
|Particulars ||2018-19 ||2017-18 |
|Sales (Net of Taxes) ||8718.95 ||4205.90 |
|Finance Cost ||0.20 ||2.41 |
|Depreciation ||1207.37 ||1306.83 |
|Profit/(Loss) before Tax ||(973.03) ||(4513.60) |
|Income Tax || || |
|-Current Tax ||- ||- |
|-Deferred Tax ||294.17 ||(64.16) |
|Profit/(Loss) after Tax ||(1267.20) ||(4449.44) |
TRANSFER TO RESERVE
During the year under review the Company has incurred loss of Rs. 1267.20 lakhs aftertax.
The Company has incurred loss therefore your directors do not recommend any dividendfor the year ended 31st March 2019.
STATE OF COMPANY'S AFFAIRS
During the year under review the performance of the Company has become better thanprevious year. The Company has restarted it production in full capacity which wassuspended in last quarter of financial year 2016-17 and was remained suspended for thefirst quarter of financial year 2017-18 . Due to fund crisis and non availability of basicraw material your Company had suffered a huge loss of Rs. 44.94 crores last year. Apartfrom all these challenges your Company got into an off take agreement with M/s Ultra techCement Limited around July 2017 for a term of 3 year. The same is renewed on 13th May2019 for a further period of 7 year. The current capacity of Patratu Unit is 300000 tonsper year in comparison to last year of 240000 tons per year. Your Company strives toincrease its production day by day. It has set a goal of achieving a production of 2Million tons per year in future.
The Company has been running through a very bad phase due to substantial financialburden (secured and unsecured financial creditor of Rs. 235 Crore). The Company had set upan integrated plant in patratu Jharkhand but due to non availability of Lime Stone theCompany was forced to stop the production of Patratu Plant. Due to discontinuation ofproduction the Company could not met its finance cost and subsequently the account becameNPA. Hence the Company has taken into the securitization process by its secured creditori.e. State Bank of India and Central Bank of India under Securitisation and Reconstructionof Financial Assets and Enforcement of Securities Interest Act 2002. State Bank of Indiaand Central Bank of India assigned their debts (around 76% of the total financial debts)to M/s UV Asset Reconstruction Company Limited an ARC (Asset Reconstruction Company). UVAsset Reconstruction Company Limited has also in process to take over the debt of otherFinancial Creditors i.e. United Bank of India and West Bengal Financial Corporation.Simultaneously the ARC has offered to settle our all financial debts for a sum of Rs. 133Crore in response to which the Company made a counter offer of Rs.100 Crore. The matteris still in negotiation stage.
CHANGE IN THE NATURE OF BUSINESS
During the year under review there was no change in the nature of the business of theCompany.
MATERIAL CHANGES AND COMMITMENTS
UV Asset Reconstruction Company Limited took over the debts owned by State Bank ofIndia and Central Bank of India. The Company also extended its agreement with Ultra TechCement Limited for further period upto 10 years.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS
It appeared to the Company that under the Securitization process the operations of theCompany can be restricted by the secured creditors. So the Company went to the High Courtof Jharkhand. The Company Proclaimed that it is ready to give all the surplus revenue asrepayment to the secured creditor after meeting the operational and other necessaryexpenses of the Company so that it could not affect the overall going concern of theCompany. UV Asset Reconstruction Company Limited agreed to the term by adding one clausethat all the payment will be made by the Company only after their approval. In order tomaintain transparency and in the best interest of the stakeholders the Company agreed tothe terms of UV Asset Reconstruction Company Limited.
The summary of the order passed by the court is "all the receipts of the BurnpurCement Limited will be credited to an escrow account and all the payments will be paidonly after approval of UV Asset Reconstruction Company Limited. The surplus funds aftermeeting the expenses to be used for repayment of loan of UV Asset Reconstruction CompanyLimited."
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Directors had laid down internal financial controls procedures to be followed bythe Company which ensure compliance with various policies practices and statutes inkeeping with the organization's pace of growth and increasing complexity of operations fororderly and efficient conduct of its business. The Audit Committee of the Board from timeto time evaluated the internal financial control of the Company.
DETAILS OF SUBSIDIARY JOINT VENTURE OR ASSOCIATES
During the year under review the Company has no Subsidiary Joint Venture orAssociate.
During the year under review your Company has not accepted any deposits from thepublic.
Pursuant to Section 139 of the Companies Act 2013 at the 32nd Annual General Meeting(AGM) of the Company M/s. K. Pandeya & Co. Chartered Accountant (FRN 000135C) wasappointed as the Statutory Auditor of the Company for a term of 5 (Five) consecutive yearsup to the conclusion of the 37th AGM of the Company to be held in the calendar year 2023.
Auditors' Report to the Members of the Company does not contain any qualification oradverse remark. Financial Statements and the notes thereon are self-explanatory and needno further explanation.
During the year under review your Company has neither issued and allotted any freshequity shares (including ESOP) nor has granted any stock options and sweat equity. As on31st March 2019 none of the Directors of the Company hold instruments convertible intoequity shares of the Company.
EXTRACT OF ANNUAL RETURN
Extract of the Annual Return as on the financial year ended March 312019 in Form MGT-9as per Section 134(3)(a) of the Companies Act 2013 read with Rule 8 of Companies Act(Accounts) Rules 2014 and Rule 12 of Companies (Management and Administration) Rules2014 is annexed hereto and forms part of this report as "Annexure A" and alsouploaded on the Company's Website at www.burnpurcement.com
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The details of Energy conservation Technology Absorption Foreign Exchange Earningsand Outgo are as mentioned in the "Annexure B" attached with this report.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
The Management Discussions & Analysis Report forms part of this Annual Report
DIRECTORS AND KEY MANAGERIAL PERSONNEL :
a) Details of Directors retiring by rotation
During the year under review Mr. Aman Jain is liable to retire by rotation and offerhimself eligible for reappointment in accordance with the provisions of the Companies Act2013.
b) Appointment/ Re-appointment of Directors
Mrs. Sweety Jain (DIN 08319473) has been appointed as an Additional Director of theCompany w.e.f. January 17 2019 and she will retire at the conclusion of the ensuingAnnual General Meeting.
The first term of 5 (five) consecutive years as an Independent Director of the Companyof Mr. Prem Prakash Sharma and Mr. Subrata Mookerjee shall come to an end on theconclusion of the ensuing 33rd Annual General Meeting of the Company.
On the recommendation of the Nomination and Remuneration Committee the Board ofDirectors of the Company at their meeting held on 17th May 2019 subject to the approvalof the members of the Company at the ensuing 33rd Annual General Meeting have appointed
(i) Mrs. Sweety Jain as an Non-executive Director (Non Independent) liable to retireby rotation with effect from the ensuing Annual General Meeting
(ii) Mr. Prem Prakash Sharma (DIN: 00788601) as an Independent Director of the Companyfor a second term of 5 (five) consecutive years with effect from 30th September 2019
(iii) Mr. Subrata Mookerjee (DIN: 01220872) as an Independent Director of the Companyfor a second term of 5 (five) consecutive years with effect from 30th September 2019
c) Appointment /Resignation of Key Managerial Personnel
During the year under review and till the date of board's report Mr. Pawan Pareek hasbeen appointed as CFO of the Company w.e.f. April 16 2018.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declaration from the Independent Director(s) of the Companydeclaring that they meet the criteria of independence both as under sub-section (6) ofSection 149 of the Companies Act 2013 and under Regulation 16 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
Based on the declarations disclosures received from the Independent Directors and onevaluation of the relationships disclosed the following Non-executive Directors areIndependent Directors in terms of the Regulation 16 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and Section 149(6) of the Companies Act 2013.
1. Mr. Prem Prakash Sharma
2. Mr. Subrata Mookerjee
Pursuant to Section 134(3)(p) Schedule IV (VIII) of the Companies Act 2013 andRegulation 17(10) and 19(4) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Regulations) theperformance evaluation of Directors Board and Committee was done at three levels by theIndependent Directors at a separate meeting Nomination and Remuneration Committee and theBoard. Firstly the Board of Directors has carried out an annual evaluation of performanceof independent directors its own the Committees and individual directors based on theevaluation marking by the Directors. Secondly the independent directors of the Company attheir meeting held on 30th March 2019 carried out the evaluation of performance of thenon-independent directors the Board and the Chairman of the Company as per the prescribedcriteria adopted by the Board. Lastly the Nomination and Remuneration Committee of theCompany carried out evaluations as appropriate and whenever required as per the prescribedcriteria adopted by the Board. The performance was evaluated by the Board on the basis ofthe criteria such as the composition of Board and Committee and structure effectivenessof Board and committee processes information and functioning. The performance wasconsidered satisfactory.
FAMILIARIZATION PROGRAMME FOR BOARD MEMBERS
The Company is required to conduct the Familiarization Programme for IndependentDirectors (IDs) in terms of Regulation 25(7) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 to familiarize them about the Company their rolesrights responsibilities in the Company and various updates and notifications underCompanies Act 2013 Listing Regulations 2015 Reserve Bank of India Guidelines and otherstatutes applicable to the Company.
The details of such Familiarization Programme for Directors may be viewed at thewebsite of the Company at www. burnpurcement.com
NUMBER OF BOARD MEETINGS
During the financial year 2018-19 the Board of Directors had Seven (7) meetings. Thesewere held on 16th April 2018 28th May 2018 27th July 2018 13th August 2018 14thNovember 2018 17th January 2019 and 30th March 2019. The details in relation toattendance at the meetings are disclosed in the Corporate Governance section which forms apart of this report.
COMMITTEES OF THE BOARD
During the financial year ended March 312019 the Company has three committees asmentioned below :
1. Audit Committee
2. Stakeholders Relationship Committee
3. Nomination and Remuneration Committee
The Composition terms of reference and other details of the Committee forms part ofthe Corporate Governance Report as annexed hereto. All the recommendations made by theAudit Committee during the year were accepted by the Board.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The Composition terms of reference and other details of the Committee forms part ofthe Corporate Governance Report forming part of this Annual Report.
NOMINATION AND REMUNERATION COMMITTEE
The Composition terms of reference and other details of the Committee forms part ofthe Corporate Governance Report forming part of this Annual Report. The Nomination andRemuneration Policy is annexed with the Annual report and also posted on the website ofthe Company at www.burnpurcement.com
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Board of Directors of the Company has established a Vigil Mechanism for Directorsand employees and adopted the Whistle Blower Policy in terms of Section 177 of theCompanies Act 2013 and Regulation 22 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 to report concerns about unethical behavior wrongfulconduct and violation of Company's Code of conduct or ethics policy. The details of whichhave been given in the Corporate Governance Report annexed to this Report and also postedon the website of the Company at www. burnpurcement.com
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS OUTSTANDING DURING THE FINANCIAL YEAR
Particulars of the Loans/guarantee/advances/ and Investments outstanding during thefinancial year are fully disclosed in the Note no. 6 attached to the annual accounts whichare attached with this report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the year under review the Company has not entered into contracts orarrangements or transactions with the related parties in accordance with the provisions ofSection 188 of the Companies Act 2013 and rules thereof.
Accordingly no transactions are reported in Form AOC-2 in terms of Section 134 of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014.
The Policy on Related Party Transaction as approved by the Board has been posted on thewebsite of the Company at www.burnpurcement.com
CORPORATE SOCIAL RESPONSIBILITY
As the Company is suffering loss the CSR is not applicable on your Company.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197(12) of the Companies Act 2013 read with Rule5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 thedetails are annexed as "Annexure C" to the Annual Report.
Further in accordance with Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 there are no employees in the Companydrawing remuneration in excess of the limits set out in the said rules.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorsof the Company has appointed Mr. Rajesh Ghorawat Practising Company Secretary to conductthe Secretarial Audit for the financial year 2018-19. The Secretarial Audit Report for theFinancial Year 2018-19 is appended as Annexure D' which is self-explanatory. Thesaid Report does not contain any qualification reservation or adverse remark.
The Company is committed to maintaining the premier standards of Corporate Governanceand adhering to the Corporate Governance requirements as set out by Securities andExchange Board of India. The Report on Corporate Governance as stipulated under Regulation34(3) read with Schedule V of the Listing Regulations 2015 forms part of the AnnualReport.
The Certificate from the Auditors of the Company confirming compliance with theconditions of Corporate Governance also forms part of this Annual Report.
Further declaration by Mr. Ashok Gutgutia Managing Director stating that the membersof the Board of Directors and Senior Management Personnel have affirmed compliance withthe Code of Conduct of the board of Directors and Senior Management are annexed with thisReport.
MD & CFO CERTIFICATION
Certificate from Mr. Ashok Gutgutia Managing Director and Mr. Pawan Pareek ChiefFinancial Officer pursuant to Regulation 17(8) read with Schedule II of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 for the year under review formspart of this Annual Report.
The Company has in place a mechanism to identify assess monitor and mitigate variousrisks that may impact key business objectives of your Company.
Your Company has adopted the Risk Management Policy in order to ensure that all thecurrent and future material risk exposures of the Company are identified assessedquantified appropriately mitigated and managed to establish a framework for theCompany's risk management process and to ensure its wide implementation to ensuresystematic and uniform assessment of risks to enable compliance with appropriateregulations wherever applicable through the adoption of best practices and to assurebusiness growth with financial stability.
Major risks identified by the businesses and functions are systematically addressedthrough mitigating actions on a continuing basis. These are discussed at Audit Committeeand the same is even referred to the Board of Directors of the Company if any.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of the provisions on the Directors' Responsibility Statement referred inSection 134 (5) of the Companies Act 2013 your Director's confirm that
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe loss of the Company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013
The Company is committed to provide safe and conducive work environment to itsemployees and has formulated "Policy for Prevention of Sexual Harassment" toprohibit prevent or deter any acts of sexual harassment at workplace and to provide theprocedure for the redressal of complaints pertaining to sexual harassment therebyproviding a safe and healthy work environment. During the year under review no case ofsexual harassment was reported.
There have been no frauds reported by the auditors of the Company under sub-section(12) of section 143 of the Companies Act 2013 and to Central Government as per CompaniesAmendment Act 2015.
As per the provision of Section 148 of the Companies Act 2013 the Company's costrecords for the year ended March 2019 are being audited/ reviewed by Cost Auditor M/s SomDas & Associates. The Cost Audit Report for the year ended 31st March 2019 was filledin accordance with Cost Audit (Report) Rule 2001 within the stipulated time. For theFinancial Year 2019-20 the Board of Directors of the Company has re-appointed M/s Som Das& Associate cost auditor to audit the cost records of the Company as per therecommendation of the Audit Committee. The remuneration of the of the cost auditor shallbe ratified by the shareholders of the Company in the ensuing Annual General Meeting.
Your Directors express their deep sense of gratitude to the Financial InstitutionsBanks Government Authorities dealers suppliers business associates and Company'svalued customers and the esteemed Shareholders for the faith they continue to repose inthe Company and look forward to their continued support in future.
The Directors also warmly thank all the employee of the Company for their contributionto Company's performance and progress.
| ||For and on behalf of the Board || |
|Place : Kolkata ||ASHOK GUTGUTIA ||AMAN JAIN |
|Date : 17.05.2019 ||Vice-Chairman and Managing Director ||Director |