TO THE MEMBERS OF
BHUWALKA STEEL INDUSTRIES LIMITED:
Your Directors have pleasure in presenting before you the 33rd Annual Report of the
Company together with Audited Statement of Accounts for the Twelve Months Period ended
31st 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 to
31.03.2015 as against previous year figures which are for 6 months period. Total income
from operations during the period of twelve months under review was Rs. 39285.29 lakhs as
compared to Rs. 16838.80 lakhs in the previous year (6 months). The company has made a
profit of Rs.332.98 lakhs as compared to previous year the Company has suffered a loss
after tax of Rs. 19,29.30 lakhs (after extra ordinary items). Main reason for losses was
Lower capacity utilization of production capacities due to inadequate working capital
during most of the period of reported FY.
Company is endeavoring hard to overcome the issues of poor demand in Infra and Real
Estate by innovative marketing strategies and also focusing in optimizing its capacity
utilization. However short of working capital is impacting the efforts negatively.
Company is taking Suitable measures to resolve the banking issue, which will provide
flexibility to infuse fresh funds and sell noncore assets to improve liquidity for working
capital and consequently increase capacity utilization. The management is hopeful that
these measures will enable to increase the volumes and also the profitability and
liquidity of the company.
3. DIVIDEND
Your Directors express their inability to recommend any dividend in view of huge losses
incurred 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 Private
Limited. Subsidiary Company is into manufacturing of sponge Iron products from iron ore
and pallets. While preparing consolidated financials of the company, Financials of M/s
Benaka Sponge Iron Private Limited has been consolidated as per Accounting Standard- 21 of
ICAI.
During the financial year 2014-15 the company has disinvested its total investments
in 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 technology,
manufacturing 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 Companies
Act, 2013 read with Companies (Particulars of Employees) Rules, 1975 as amended. Hence,
this information is not given.
11. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE
COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS
RELATE AND THE DATE OF THE REPORT
Due to non servicing of the debt post re-structuring the company Account has been
classified as NPA by the bankers. The company however is taking suitable measure to
resolve the same.
12. DETAILS OF DIRECTORS AND KMP:
Sri Suresh Kumar Bhuwalka retires by rotation at the forthcoming Annual General Meeting
and 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 retired
with effect from 14/02/2015 due to withdrawal of Nomination by the appointing Authority
i.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 Board
Meeting held on 13.11.2014 and the same is being considered in the ensuing Annual General
Meeting being held on 9/11/2015.
13. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE
FINANCIAL STATEMENTS PURSUANT TO RULE 8 (5) (viii) OF COMPANIES (ACCOUNTS) RULES, 2014:
The Company has an adequate Internal financial control system, commensurate with the
size of its business operations.
14. SECRETARIAL AUDIT REPORT:
Mr. Manoj Rajan, Practicing Company Secretary Membership No. ACS 19865 was appointed to
conduct the Secretarial Audit of the Company for the Financial Year 2014-15, as required
under section 204 of Act and Rules made their under. The Secretarial Audit Report, in the
prescribed 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 dates
08.05.2014, 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 taken
for the appointment of Independent Directors.
17. COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION
AND DISCHARGE OF THEIR DUTIES
As per provisions of Section 178(1) constitution of Nomination and Remuneration
Committee 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 the
Year together with justification are annexed herewith in Form AOC-2 as "Annexure
B".
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 dates
08.05.2014, 30.05.2014, 13.08.2014, 13.11.2014, 14.02.2015.
The Company has established a vigil mechanism and oversees through the committee, the
genuine concerns expressed by the employees and other Directors. The Company has also
provided adequate safeguards against victimization of employees and Directors who express
their concerns. The Company has also provided direct access to the chairman of the Audit
Committee on reporting issues concerning the interests of co employees and the Company.
20. INFORMATION PURSUANT TO RULE 5 ( 2) OF COMPANIES ( APPOINTMENT & REMUNERATION
OF MANAGERIAL PERSONNEL) RULES, 2014
The Company has not appointed any employee(s) in receipt of remuneration exceeding the
limits specified under Rule 5 (2) of Companies (Appointment & Remuneration of
Managerial Personnel) Rules, 2014.
21. AUDITORS:
The Auditors, M/s. ASR Associates, Chartered Accountants, Bellary, retire at the
conclusion of the forthcoming Annual General Meeting and being eligible offer themselves
for 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 provided
pursuant to Section 186 of the Companies Act, 2013 during the year under review and hence
the said provisions are not applicable.
23. DETAILS OF SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNAL
IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATION IN FUTURE
There are no significant material orders passed by the Regulators / Courts / Tribunal
which 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 not
required.
24. Risk Management Policy:
The Company has developed & implemented Risk Management Policy. However, Company
has not come across any element of risk which may threaten the existence of the Company.
25. AUDITORS REPORT: a) As reported by Statutory Auditors in their Audit,
there have been delays in servicing undisputed statutory liabilities during 2014-15 on
time. Further certain payments have been delayed beyond 180 days. Amount of these delays
have been detailed in point no. (vii) (a) and (b) of annexure of Paragraph 1 (CARO) of the
Auditors Report.
Managements Reply:- Company has been going through tough financial condition during FY
14-15 due to operational and cash losses. This situation occurred due to lower production
level and bad demand scenario of Companys product during such period. Owing to cash
losses and liquidity constraints, company could not mobilize funds for statutory dues and
hence same were delayed unintentionally. Company has already taken measure to improve its
position 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 the
Auditors Report i.e. "The Companys accumulated losses at the end of the Financial
Year were more than 50% of the net worth. The company has incurred cash losses in the
current Financial Year. The Company has to comply with provisions of The Sick Industrial
Companies Act, 1985 (SICA ACT) as applicable to the Company post this event."
Managements Reply: - Management has taken Appropriate steps to resolve all financial
issues effecting the company and taking measure to safeguard the companys interest from
further erosion in its networth.
As the Net worth of the company has eroded more than 50% we have applied for
registration with The Sick Industrial Companies Act, 1985 (SICA ACT). c ) As reported in
point no. 11 of the annexure of Paragraph 1 (CARO) of the Auditors Report i.e.
"Based on our Audit procedures and as per the information and explanations given by
the management, the company has defaulted in repayment of loans and interest to Banks and
Financial Institutions. Consequently the banks have served notice U/S 13 of the SARFESI
Act.
Managements Reply: - As mentioned above to the reply of a) Company could not arrange
funds for timely banking repayments due to cash losses and liquidity constraints and hence
banking repayments were delayed unintentionally. Company has already taken measure to
improve this issue and has approached the bankers for a solution in this matter. The
matter is under consideration by the bankers. The company has also approached DRT in
response to the SARFESI notice issued by the bankers.
For further clarification on Auditors observation, The Notes on accounts referred to
in the Auditors Report are self explanatory and therefore do not call for any additional
comments 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, the
applicable accounting standards have been followed and that there are no material
departures; b) 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 the year; c ) that the directors had
taken proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act, 2013, to safeguard the assets of the
Company and for preventing and detecting fraud and other irregularities; d) that the
directors had prepared the annual accounts on a ‘going concern basis. e) the
directors, in the case of a listed company, had laid down internal financial controls to
be followed by the company and that such internal financial controls are adequate and were
operating effectively. f) They have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
27. REPORT ON CORPORATE GOVERNANCE:
Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, the following
form part of this Annual Report: a) Management Discussion and Analysis; b) Report on
Corporate Governance; c ) Auditors Certificate regarding compliance of conditions of
Corporate Governance
28. ACKNOWLEDGEMENTS:
Your Directors wish to place on record their appreciation for the continued support,
encouragement and cooperation extended by all the stakeholders namely; Financial
Institutions, Bankers, shareholders, customers and suppliers.
Your Directors also place on record their appreciation for the contributions made by
the 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 |
+91-9892691696
