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Uttam Galva Steels Ltd.

BSE: 513216 Sector: Metals & Mining
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OPEN 8.20
CLOSE 7.92
VOLUME 563567
52-Week high 9.76
52-Week low 3.56
Mkt Cap.(Rs cr) 112
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Uttam Galva Steels Ltd. (UTTAMSTL) - Director Report

Company director report


The Members

We on behalf of Uttam Galva Steels Limited present the 36th Annual Reporton the Business and Operations of the Company along with the Audited Financial Statementsfor the Financial Year ended 31st March 2021.


The Hon'ble National Company Law Tribunal Mumbai Bench (NCLT) had vide its orderdated 1st October 2020 admitted the application filed by the State Bank of India for theinitiation of the Corporate Insolvency Resolution Process (CIRP) in your Companypursuance to the Insolvency and Bankruptcy Code 2016 read with the rules and regulationsframed thereunder and as amended from time to time (IBC Code). Mr. Milind Kasodekar wasappointed as Interim Resolution Professional (IRP) to manage the affairs of the Companyand thereafter he was appointed as the Resolution Professional (RP) of the Company at thefirst meeting of the Committee of Creditors (CoC) held on 4th November 2020.

In view of the commencement of CIRP in your Company the role and responsibilities ofthe Board of Directors are being fulfilled by the Resolution Professional in accordancewith Sections 17 and 23 of IBC Code and powers of the Board of Directors are suspended.The CoC approved the resolution plan submitted by AM Mining India Private Limited on 2ndJune 2021. The RP of your Company has filed an application with the AdjudicatingAuthority on 5th June 2021 for approval of the said Resolution Plan.





Financial Year ended 31st March 2021 Financial Year ended 31st March 2020 Financial Year ended 31st March 2021 Financial Year ended 31st March 2020
Gross Sales Turnover 647.13 490.96 654.21 521.18
Other Income (+/-) 16.00 32.21 16.00 32.46
Profit/ (Loss) before Interest Tax Depreciation and Amortization 13.28 3.01 (1.11) (13.91)
Interest (34.95) 390.87 (34.91) 390.89
Profit/ (Loss) before Tax Depreciation and Amortization 48.24 (387.86) 33.81 (404.80)
Depreciation/ Amortization 233.50 247.61 233.50 247.75
Profit/ (Loss) from Operations (185.26) (635.48) (199.69) (652.55)
Exceptional Items (+/-) 41.26 765.44 41.26 765.44
Profit/ (Loss) before Tax (226.52) (1400.92) (240.95) (1417.99)


During this year your Company has achieved a turnover of Rs. 647.13 Crores as againstRs. 490.96 Crores in the previous year Your Company has incurred loss (before exceptionalitems & tax) of Rs. 185.26 Crores as against loss of Rs. 635.48 Crores in the previousyear.

During the year Consolidated turnover of the company was Rs. 654.21 Crores as againstRs. 521.18 Crores in the previous year and the consolidated Loss (before exceptional items& tax) of Rs. 199.69 Crores as against loss of Rs. 652.55 Crores in the previous year.

The Financial year 2020-21 was worldwide challenging year due to Covid-19. Plant ofyour Company was completely shut

for almost 45 days of the financial year under review due to lockdown. However yourcompany has managed to produce 566839 MT as compare to 581389 MT in the previous financialyear. During the year your company has carried out its manufacturing activities on jobwork basis mainly for Arcelormittal Nippon Steel India Limited.


Due to heavy Losses no dividend is recommended.


Due to the outbreak of Novel CoronavirusRs. (Covid 2019) the Government of Indiaannounced a nationwide lockdown with effect from 25th March 2020 to combat thespread of the Covid-19 virus. As per the guidelines issued by Government

of Maharashtra and Health authorities and for the safety and well-being of theemployees of your company the plants and head office were closed with immediate effect.

As per the guidelines issued by Ministry of Home Affairs (MHA) on 3rd May2020 manufacturing of Steel products was classified as an essential service under theEssential Services and Management Act (ESMA) and hence Government permitted steel plantsto continue their operations during the lock down. In view of the said guidelines alongwith the permission from the local administration and after taking necessary safetymeasures your company has resumed its operations at plant from 4th May 2020gradually in phased manner. All the employees of the head office have since been workingfrom home.


Pursuant to the regulation 34 read with the Schedule V of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 your management wish to report as follows:

(i) Industry Structure & Developments:

Production parameters measuring performance during Financial Year 2020-21 demonstratedan overall decline compared to the previous financial year. The Government of Indiapublishes that production of crude steel at 102.49 MT and finished steel at 94.66 MTwhich is declined by 6.1% and 7.8% respectively. The consumption of finished steel at93.43 MT also fell by 6.7% over previous fiscal. However half year of the financial year2020-21 demonstrated a distinct rebound in the industry that was supported by bothconsumption segments- domestic and exports. In fact during this period the finishedsteel export at 10.79 MT was almost 30% higher than the previous year.

(ii) Opportunities & Threats:

Steel industry has been one of the bulwarks of India's rapid infrastructuredevelopment. And with the Indian government targeting a $5 trillion economy by fiscal2025 this is one industry whose fortune looks bright despite the recent turbulence due tothe Covid-19 pandemic. Prevailing industry structure however limits businessopportunities as well as challenge profitability of standalone processors with limitedworking capital. Volatility in supply and high raw material prices along with volatilefinished steel prices create mismatch and affect the planning and production of the steelwith long term view.

(iii) Segment-wise or Product-wise Performance:

Since your Company operates only in one Segment segment-wise or product- wise analysisof performance is not applicable.

(iv) Outlook :

After contracting by 0.2% in the 2020 the World Steel Association forecasts globalsteel demand to grow by 5.8% during 2021 and 2.7% in 2022. India is projected to grow andmeet or slightly exceed 2019 consumption levels during Calendar year 2021.

However second wave of COVID-19 has affected domestic sentiment. Outlook remainscautious amidst projection of various scenarios linked to a third-wave as well asunsustainable demand-supply ratio of Finished Steel in India.

(v) Risks and Concerns:

Your Company has time to time identified measured and monitored all inherent risks andregularly reported to the management. The management decides measures required to overcomethese risks and ensures implementation of proper risk mitigation plans. In accordance withRegulation 17 of the Securities Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 your Company has duly put in place criticalrisk management framework across the Company for identification and evaluation of allpotential risks.

(vi) Internal Control Systems and their adequacy:

Your Company has in place proper and adequate internal control systems commensuratewith its business operations. Internal control systems are designed to ensure reliabilityof financial reporting compliance with policies procedures applicable laws andregulations.

Your Company has also established and maintained the Internal Financial Control toensure safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of accounting records and timely preparation of financialinformation as required under the Companies Act 2013.

(vii) Discussion on Financial Performance with respect to Operational Performance andstate of Company's affairs:

During the year your Company continues to face severe working capital constraints.This has resulted in the Company operating the plant mainly on a job-work basis and thattoo at sub-optimal capacity of less than 60%.

(viii) Human Resources Development and Industrial Relations:

Your company believes our employees are our most valuable asset and to ensure theirsafety and wellbeing standard operation procedures (SOPs) specific to COVID 19 were putin place. As per the Government directive

regular training on appropriate COVID behaviors thermal screening social distancingwearing of masks usage of sanitizers and frequent cleaning and disinfectant of commonlyused surfaces and participation in the nationwide vaccination drive were made mandatory.

Your Company employs more than 820 employees. Your company has put in place an onlineLearning Management System (LMS) for strengthening and providing uninterrupted learning& development opportunities to our employees. Your Company is having harmonious andcordial Industrial Relations with its employees both at plant and offices. Your Companyhas constituted an 'Employee Grievance Redressal CommitteeRs. for its employees. Suitableprocesses and mechanisms are in place to ensure that the grievance of any employee iseffectively addressed in a fair and just manner Your Company is committed and compliant toall statutory compulsions under various applicable Acts. Your company amongst many otherpolicies has in place an Anti-Sexual Harassment Policy in line with the requirements ofthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. An Internal Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this policy.


All the Related Party Transactions (RPT) entered into during the year under reviewwere at arm's length basis and in the ordinary course of business. These transactions werein compliance with the applicable provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (hereinafter "ListingRegulations") as amended from time to time. The policy on Related Party Transactionsas approved by the Board of Directors prior to the commencement of the CIRP has beenuploaded on the website of the Company i.e. www.uttamgalva. com.

All the Related Party Transactions prior to the commencement of CIRP were approved bythe Audit Committee. Further in terms of the provisions of the IBC Code all the relatedparty transactions after the commencement of CIRP i.e. 1st October 2020 till31st March 2021 were approved by the CoC.

During the year there was no transaction with any related parties which exceeds thethreshold limit as specified in the Companies Act 2013 and in the Listing Regulations andhence none of the transactions can be termed as material transaction. Therefore thedisclosure of material related party transactions in the Form AOC- 2 as referred inSection 188 read with Section 134(3)(h) of the Companies Act 2013 is not required to beannexed herewith.


In view of commencement of CIRP role and responsibilities of the Board of Directors asspecified in the Listing Regulations required to be fulfilled by RP and the requirementsof composition of board of directors constitution of the Committee(s) meetings and termsof reference of the committee(s) as required under Listing Regulations are no longerapplicable.

A detailed report on Corporate Governance as required under Regulation 34 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 as may be amended fromtime to time forms part of this Report as 'Annexure I'. The AuditorsRs. Certificate oncompliance with the Corporate Governance requirements by the Company is attached to theReport.


Pursuant to Section 135 of Companies Act 2013 read with the Companies (CorporateSocial Responsibility Policy) Rules 2014 as amended from time to time; and before thecommencement of CIRP your Company had duly constituted Corporate Social ResponsibilityCommittee under the Chairmanship of Shri G S Sawhney and two other Members are Shri RajivMunjal and Shri Surendra Sharma. The Committee had prior to the commencement of CIRPframed the Corporate Social Responsibility Policy of the Company which is available on theCompany's website. Due to heavy losses during the previous financial year the Company wasnot mandatorily required to spend any amount on CSR activities in the financial year202021. Thus report for CSR activities is not required to be annexed herewith.


During the year under review there were following changes in the Board of Directors:

(i) Appointment/ Re-appointment :

During the year under review no director was neither appointed nor re-appointed.

(ii) Resignation/ Cessation :

First tenure of five years of Shri Rajiv Kumar Dubey as an Independent Director wascompleted on 29th October 2020 and therefore he ceased to be a director witheffect from that date.

(iii) Key Managerial Personnel (KMP):

The following are the Key Managerial Personnel of the Company.

• Shri Anuj R Miglani: Chief Executive Officer till 30th September2020

• Shri Gursharan Singh Sawhney: Chief Financial Officer

• Shri Raggvendra Agrawal: Company Secretary

During the year there is no change in the role of Chief Financial officer and CompanySecretary. REMUNERATION OF THE DIRECTORS/ KEY MANAGERIAL PERSONNEL (KMP)/ EMPLOYEES

Your Company has in place a policy for selection and appointment of Directors SeniorManagement and their remuneration. A brief detail of the policy is given in the CorporateGovernance Report and also posted on our website

During the year no Employee of the Company other than the Managing Director has drawnremuneration of Rupees Eight Lakhs and Fifty Thousands per month or more. Moreover afterthe commencement of CIRP i.e. 1st October 2020 the Managing Director hasdecided not to draw any remuneration from the Company.

The information required pursuant to Section 197(12) read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as may be amended fromtime to time in respect to remuneration to the Whole Time Directors and Key ManagerialPersonnel is prepared separately forming part of this report. In terms of Section 136(1)of the Companies Act 2013 the Report and Accounts are being sent to the Membersexcluding the aforesaid information which is available for inspection by the Members atthe registered office of the Company on any working day up to the date of the ensuingAnnual General Meeting.


Since your Company is under the CIRP the powers of the Board of Directors aresuspended and such powers are vested with the Resolution Professional pursuant toSection 17 of the IBC


In light of the aforesaid and pursuant to the requirements of Section 134(3)(c) and134(5) of the Act with respect to DirectorsRs. Responsibility Statement it is herebyconfirmed by the Chief Financial Officer and the Resolution Professional that:

i) In the preparation of the annual financial statements for the year ended 31stMarch 2021 the applicable Accounting Standards have been followed along with the properexplanation relating to material departures if any.

ii) Appropriate Accounting Policies have been selected and applied consistently.Judgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as on 31st March 2021 and of the Profit and LossAccount for the Financial Year ended 31st March 2021 .

iii) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act

2013 for safeguarding the assets of the Company and preventing & detecting fraudand other irregularities.

iv) The Annual Accounts have been prepared on a going concern basis.

v) The Internal Financial Controls were in place and that there are adequate and wereoperating effectively.

vi) Proper systems are in place to ensure compliance of all laws applicable to theCompany and that such systems are adequate and operating effectively.

STATUTORY AUDITORS AND THEIR REPORT Pursuant to the provisions of Section 139 of theCompanies Act 2013 read with Companies (Audit and Auditors) Rules 2014 as amended fromtime to time M/s. Todarwal & Todarwal Chartered Accountants (Firm Registration No.111009W) were appointed as statutory auditors from the conclusion of the 35thAnnual General Meeting (AGM) held on 25th September 2020 till the conclusionof the 40th AGM of the Company.

The Statutory Auditors have given a confirmation to the effect that they are eligibleto continue with their appointment and that they have not been disqualified in any mannerfrom continuing as Statutory Auditors. Pursuant to the amendments made to Section 139 ofthe Companies Act 2013 by the Companies (Amendment) Act 2017 effective from 7thMay 2018 the requirement of seeking ratification of the Members for the appointment ofthe Statutory Auditors has been withdrawn. Moreover the Resolution professional of theCompany has also confirmed the appointment of Statutory Auditors till the conclusion of 40thAGM of the Company in their meeting held on 31st May 2021.

Notes to the accounts as referred in the Auditor's report are self-explanatory and doesnot contain any qualifications and therefore do not call for any further comments andexplanations.


As per Section 148 of the Act read with Companies (Cost Records and Audits) Rules2014 as amended and on the recommendation of the Audit Committee the ResolutionProfessional of your Company has reappointed M/s. Manisha & Associates Cost Auditorsto conduct the Cost audit for Steel and Power Plant of the Company for the Financial Year202122.

As required under the Companies Act 2013 a resolution seeking MembersRs. approval forthe remuneration payable to the Cost Auditors forms part of the notice of this AnnualGeneral Meeting for their ratification. The Cost Audit Report of the Company for theFinancial Year ended 31st March 2021 was duly filed with Central Governmentwithin the stipulated time as prescribed under Companies Act 2013 read with Companies(Cost Records and Audit) Rules 2014.


The Secretarial Audit of the Company for the financial year 2020-21 was carried out byM/s. JNG & Co. Practicing Company Secretaries (C.P. No. 8108). The Secretarial AuditReport is annexed hereto and part of the Board Report as an 'Annexure II'. The said reportdoes not contain any qualification reservation or adverse remarks.


The Company has Seven Wholly-Owned Subsidiary Companies

and One step down subsidiary of the Company namely:

i) Uttam Galva Holdings Limited in Dubai;

ii) Atlantis International Services Limited in British Virgin Islands;

iii) Uttam Galva Steels Netherlands B.V. in Netherlands;

iv) Neelraj International Trade Limited in British Virgin Islands;

v) Uttam Galva Steels BVI Limited in British Virgin Islands;

vi) Uttam Exports BVI Ltd. in British Virgin Islands;

vii) Uttam Galva North America Inc.; and

viii) Uttam Galva International FZE (Step down Subsidiary) in Jebel Ali Free Zone in

United Arab Emirates the subsidiary of Uttam Galva Holdings Limited Dubai.

Apart from the aforesaid subsidiaries your Company also has Two Joint VentureCompanies namely:

(i) Texturing Technology Private Limited; and

(ii) Moira Madhujore Coal Limited.


The Consolidated Financial Statements of the Company for the Financial Year ended 31stMarch 2021 are prepared in compliance with the applicable provisions of the CompaniesAct including Indian Accounting Standards specified under Section 133 of the Act. Theaudited consolidated financial statements together with the AuditorsRs. Report thereonform part of the Annual Report. Pursuant to Section 129(3) of the Act a Statementcontaining salient features of the financial statements of each of the Subsidiaries andJoint Venture Companies in the prescribed Form AOC-1 is annexed to this report as'Annexure III'.

Since in one of the subsidiary namely Uttam Galva Steels (BVI) Limited lenders haveappointed receiver due to default in repayment made by that subsidiary. Your Company isnot able to exercise control in that subsidiary. Hence account of the said subsidiary isnot consolidated.

In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany

and financial statements of each of the subsidiary will be available on our These documents will also be available for inspection during businesshours at the Registered Office of the Company.


Your Company has well-versed pollution control devices namely Air Pollution Controldevice (scrubber followed by fume extraction system and adequate height of chimney) toensure level of pollutant parameter which are well within the standard norms. Your Companyhas zero water discharge unit and 100% of Industrial waste water is being recycled andreused in the process. Your Company is yearly submitting Hazardous waste return andEnvironment Statement Report to Maharashtra Pollution Control Board. The Company iscontinuously endeavoring to improve the health and quality of life for the peoplesurrounding its plants.


i) Number of Meetings of the Board of Directors:

During the period under review but prior to the commencement of the CIRP the Board ofDirectors met two times. The details regarding the attendance and the date of BoardMeetings are provided in the Corporate Governance Report. The intervening gap between theMeetings was within the period prescribed under the Companies Act 2013 and Regulations 17of the Listing Regulation 2015.

ii) Audit Committee

The Audit Committee comprises of three members and all of them are IndependentDirectors. The Members possess adequate knowledge of Accounts Audit Finance etc. Thecomposition of the Audit Committee meets the requirements of Section 177 of the CompaniesAct 2013 and Regulation 18 of the Listing Regulation 2015. During the period underreview but prior to the commencement of the CIRP the Audit Committee met two times. Therewere no recommendations of the Audit Committee that have not been accepted by the Board.

iii) Annual Return

Subsequent to the enforcement of the relevant provision of the Companies Amendment Act2017 the Annual Return in Form MGT 7 shall be available on the website of the Company.Weblink is

iv) Particulars of Loans Guarantee or Investment:

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

v) Significant and material orders passed by the Regulators or the Courts:

During the year under review in pursuant to the application made by the State Bank ofIndia the Hon'ble National Company Law Tribunal Mumbai bench vide order dated 1stOctober 2020 has initiated the Corporate Insolvency Resolution Process in your Companyunder the provisions of the Insolvency and Bankruptcy Code 2016 (IBC Code). Thereafterin accordance with Section 17 of the Code the powers of the Board are suspended and ShriMilind Kasodekar was appointed as the Interim Resolution Professional of the Company whowas subsequently confirmed as Resolution Professional (RP) by the Committee of Creditorsconstituted under IBC Code.

vi) Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo:

a) Conservation of Energy

The Company has an Energy Conservation Cell which ensures implementation of the EnergyConservation efforts & Energy Management Policy. Conservation of energy is acontinuous activity and the Company continually strives to conserve energy. During theyear under review followings steps have been taken by the Company to conserve energy atits Plant:

• Monitor and Optimize process parameters in the combustion system of all thethermal equipment's in the Plant. This includes Incinerators Galvanizing furnaceAnnealing furnace Acid Re-generation Plant Boilers etc.

• During the year under review the Company has not taken any steps for utilizingalternate source of energy.

• During this year under review no capital expenditure has been incurred inenergy conservation equipment.

• Energy conservation has been carried out by effective process optimization.

b) Technology Absorption

The Company's products are manufactured by using in-house know-how and no outsidetechnology is being used for manufacturing activities. The Company constantly strives formaintenance and improvement in quality of its products and entire Research &Development activities are directed to achieve the aforesaid goal.

c) Foreign Exchange Earnings & Outgo

During the year under review the Company has made expenditure in foreign currency. Thedetails of the foreign exchange earnings & outgo of the Company for the Financial Year2020-21 are as below:

Particulars 2020-21 2019-20
Foreign Exchange Earnings -- --
Value of Direct Imports 8.56 4.03
Expenditure in Foreign Currency 1.23

vii) Compliance with Secretarial Standards:

The Company confirms compliance with the applicable requirements of SecretarialStandards 1 and 2.

viii) Other Disclosures/ Reporting :

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions pertaining to these items during the yearunder review:

a. Details relating to deposits covered under Chapter V of the Act.

b. Issue of Equity shares with differential rights as to dividend voting or otherwise.

c. Issue of Shares (including sweat equity shares) to employees of the Company underany scheme.

d. Neither the Managing Director nor the Whole Time Directors of the Company receiveany remuneration or commission from any of its subsidiaries.


The Management of your Company would like to express their appreciation to the CentralState & Local Governments Authorities Regulatory Bodies Financial InstitutionsBanks Customers of the Company for their continued support and cooperation.

The Management of your Company also like to place on record their sincere appreciationfor the total commitment dedication and hard work put in by every Member of the UttamGalva Family.

For and on behalf of Uttam Galva Steels Limited
Gursharan Singh Sawhney
Chief Financial Officer
Taken on Record by
Place: Mumbai Milind Kasodekar
Date: 30/10/2021 Resolution Professional