Bihar Sponge Iron Ltd Directors Report.

To the Members,

The Directors have pleasure in presenting the 39th Annual Report of the Company along with audited accounts for the year ended 31st March, 2021.

(Rs. Lacs)

Financial Parameters 2020-21 2019-20
Sales (Net of GST) 2208.71 -
Other Income 220.94 586.51
Profit / (Loss) before Interest, Depreciation & 750.89 246.18
Exceptional Items
Interest & Finance Charges 24.76 0.96
Depreciation 292.46 329.24
Profit/(Loss) for the year before Exceptional Items 433.67 (84.02)
Exceptional Items -Net income / (Expenditure) (37.53) 1.42
Provision for Tax - -
Profit/(Loss) for the year carried to Balance Sheet 396.14 (82.60)


India is the largest producer of sponge iron globally, and accounts for 30% of the world production. According to National Steel Policy, 2017, the aim is to increase the DRI production from 37.14 million tons to 80 million tons by 2030-31. India has huge untapped potential for the growth in the sponge iron industry, as it has still one of the lowest steel consumptions per capita (74.3 Kg.).

The industrys prospects are looking bright, prices of HRC are currently at an all-time high of INR 66,000 per tonne as of May21, vs INR 37,000 per tonne as of May20. Additionally, demand of Sponge Iron has been very strong after extended lockdowns with steel demand expected to rebound by 19.8% to exceed 2019 level in 2021.


The Company was constrained to shut its Plant and Operations since 9th August, 2013 on account of sudden stoppage of coal supply by Central Coalfields Limited, a Unit of Coal India Limited against long term Fuel Supply Agreement. The Coal available through online auction from various Coal Companies was of lower grades and was also available at high price, therefore, it was not economically viable for the company to operate with the costlier coal.

In the month of August, 2020, the Company was approached by Mr. Manoj Kumar Agarwal on behalf of Vanraj Steels Private Limited to enter into an arrangement with them thereby, permitting Vanraj Steels Private Limited to utilize the Sponge Iron Plant to undertake and operate the business of manufacturing and selling sponge iron as well as utilize the Railway Siding. The aforesaid proposal was discussed by the Promoters at length and only with a view to earn some revenue, the Company entered into a Facility User Agreement dated 30.12.2020 with Vanraj Steels Private Limited, Mr. Manoj Kumar Agarwal and Parasnath Advisory Private Limited.

The Company had undertaken overhauling and renovation work of the plant and the same is in full swing. The overhauling work is likely to be completed by 31st August, 2021 pursuant to which the plant will be permitted to be utilized by Vanraj Steels Private Limited as is agreed under the Agreement dated 30.12.2020.

With the restart of the plant, the management is quite hopeful that the Company shall gradually start earning surplus and the losses incurred by the Company in the past will get wiped out in due course and thereafter, the Company will be able to operate profitably in normal course of its business.

The financial statements, as such have been prepared on a going concern basis on the strength of managements plan of revival including restructuring of liabilities, operation of the plant through a third party ensuring generation of revenue.


The Company from the existing power plant generates 5 MW of power based on dolo char being produced in the manufacturing of sponge iron. Since the Company is not able to consume the entire dolo char, the Company had entered into an agreement with G S Pharmbutor Pvt. Ltd. (GSP) to install a 5 MW Power Plant. Whenever the existing power plant goes under regular maintenance, the Company had to generate power from its DG Set, which is highly uneconomical. During such time the Company will now take the power from GSP and for the rest of the period, GSP will consume the power or sell it to Jharkhand State Electricity Board. The 5 MW power plant is ready to be commissioned. The Company has been informed that once the sponge iron plant starts its operations, the said power plant will be commissioned as well.


The Company has been receiving constant demands from employees and local residents for establishment of a higher educational institution, for the development of the area and to create employment opportunities for the residents. Due to lack of basic infrastructural facilities like institutions imparting higher education at Chandil, the attrition of employees was quite high, resulting in substantial loss to the Company. Considering the necessity of providing higher and technical education, the Company has set up a trust for establishment of educational institution named BSIL Umesh Modi Educational Trust. This step has been taken by the Company voluntarily.


In view of the continuous losses incurred by the Company in the past, no dividend has been proposed for the financial year ended 31st March, 2021.


The paid up Equity Share Capital as on March 31, 2021 is 9020.54 lakhs. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.


During the year under review, your Company has not accepted any deposits within the meaning of provisions of Chapter V - Acceptance of Deposits by Companies of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.


The Company does not have any Subsidiary, Associate or Joint Venture Company as on 31st March, 2021.


There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of financial year and the date of report.



Since last reported, the following changes have taken place in the Board of Directors:

In accordance with the provisions of Section 152 of the Companies Act, 2013 and Article 128 of the Articles of Association of the Company, Smt. KumKum Modi (DIN: 00522904) retires by rotation at forthcoming Annual General Meeting and being eligible offers herself for re-appointment.

Sh. Rajeev Kumar Agarwal was re-appointed as an Independent Director for a second term of five consecutive years in the Annual General Meeting held on 23rd September, 2020.

Mr. Raj Kumar Sharma was appointed as Manager designated as "Senior General Manager" w.e.f. 28th July, 2020 for one year and re-appointed agian for one year w.e.f. 28th July, 2021.

Mr. Anirudh Kumar Modi regularized as Director on 23rd September, 2020.

Mr. Rajeev Kumar Agarwal passed away on 05th December, 2020.

Mr. Madan Lal, Independent Director resigned on 15th January, 2021 due to his personal reasons.

Mr. Vijay Kumar Modi appointed as an Additional Independent Director on 28th December, 2020 subject to the approval of the shareholders in the ensuing Annual General Meeting.

Re-appointment of Mr. Rohit Garg for second term of five consecutive years w.e.f. 14th November, 2021 to 13th November, 2026 subject to the approval of the shareholders in the ensuing Annual General Meeting.

None of the Directors of the Company are disqualified under Section 164 (2) of the Companies Act, 2013. Your directors have made necessary disclosures as required under various provisions of the Companies Act, 2013.

Composition of Key Managerial Personnel

Pursuant to the relevant provisions of Section 203 of the Act, the Company has the following KMPs:

Name Designation
1. Mr. Raj Kumar Sharma* Senior- General Manager
2. Mr. Anil Kumar Sinha Chief Financial Officer
3. Ms. Himani Mittal** Company Secretary & Compliance Officer

* Mr. Raj Kumar Sharma is re-appointed for a term of one year w.e.f. 28th July, 2021 as Manager designated as "Senior General Manager".

** Ms. Himani Mittal resigned from the post of Company Secretary & Compliance Officer w.e.f. the close of business hours dated 31st July, 2021 and in her place, the Board has appointed Mr. Vimal Prasad Gupta as Company Secretary & Compliance Officer of the Company w.e.f. 1st August, 2021.


All the Independent Director(s) have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations.


Pursuant to the provisions of Section 134 of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Independent Directors at their meeting without participation of the Non-Independent Directors and Management, considered/evaluated the Boards performance, Performance of the Chairman and other Non-Independent Directors.

The Board subsequently evaluated the performance of the Independent Directors as per the criteria laid down and has recommended their continuation on the Board of the Company. The working of its Committees (Audit, Nomination and Remuneration and Stakeholders Relationship Committee) and Independent Directors (without participation of the Director being evaluated) were also evaluated. The criteria for performance evaluation have been detailed in the Corporate Governance Report.


During the year 2020-21, four(4) Board Meetings were convened and held. Details of the same are given in the Corporate Governance Report which forms part of this report. The intervening gap between any two meetings was within the period prescribed under the Act, and the Listing Regulations.


Pursuant to Section 134 (5) of the Companies Act, 2013 the Directors of your Company declare as under:

(a) that in the preparation of the annual accounts, the applicable accounting standard had been followed along with proper explanation relating to 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 and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding 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; and

(e) that the directors, had laid down and implemented internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) That the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.


Statutory Auditor

M/s. K. K. Jain and Co., Chartered Accountants (Firm Registration No.002465N), Statutory Auditors of the Company was appointed in 35th Annual General Meeting of the Company till the conclusion of 40th Annual General Meeting.


Notes to accounts referred to in the Auditors Report are self-explanatory and therefore, do not require call for any further explanation. However the following has not been recognized as explained below:

a. Rs. 3,64,771 thousand against currency fluctuation of foreign currency loan has not been recognized as the Company has filed Letters Patent Appellate Jurisdiction (LPA) before the Divisional Bench of High Court of Jharkhand, Ranchi and it is hopeful that the decision will be in favour of the Company.

b. Rs. 21,528 thousands recovered by South Eastern Coal Fields Ltd as penalty on account of short lifting of coal quantity in terms of Fuel Supply Agreement as the matter has been disputed by the Company under writ petition filed before the Honble High Court of Chhattisgarh. The Company is hopeful that it would get an order in its favour in the said proceedings.

c. Interest on unsecured loan taken from Promoters and other parties from 10.08.2013 to 31.03.2021 has not been taken into account as the Company will approach the lenders for the waiver of the interest on unsecured loan.

d. Interest on Soft Loan taken from the Government of Jharkhand under the Industrial Rehabilitation Scheme 2003 amounting to Rs. 4,83,309 thousand from 10.08.2013 to 31.03.2021 has not been provided as the Company will make a representation to the concerned Government Authority for waiver upon re-start of the Companys operations.

Further due to shut down of the plant and suspension of operation from 9th August, 2013, various dues could not be paid on the due date. Necessary steps are being taken to re-start the Company and payment of such dues shall be made after re-start of operations of the Company.


M/s. Sarat Jain & Associates, Chartered Accountants, Noida, conducted Internal Audit periodically and submitted their reports to Audit Committee. Their Repots have been reviewed by the Audit Committee.


M/s. Soniya Gupta & Associates, Company Secretaries (PCS Registration No. 8136) were appointed as the Secretarial Auditor of the Company in relation to the financial year 2020-21, in terms of Section 204 of the Companies Act, 2013.

The Secretarial Audit Report for financial year 2020-21 is attached as "Annexure - A" with this report.

The observation in secretarial audit report are self-explanatory and therefore do not call for any further explanation. Further due to shutdown of the plant and suspension of operations since 09.08.2013 various dues could not be paid on due date. Necessary steps are being taken to re-start the Company and payment of all such dues shall be made after re-start of operations of the Company.


The Company has not given any loans, guarantees or made any investments under Section 186 of Companies Act, 2013 during the financial year 2020-21.


The Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.

With respect to the Auditors opinion on above, it is clarified that Central Coalfields Ltd. had stopped supply of linkage coal as per Fuel Supply Agreements (expired in April, 2013 & not renewed) to the Company w.e.f. 5th February 2013. Due to nonsupply of Coal by CCL, the company was constrained to suspend its operations w.e.f. 9th August 2013.

Since the suspension of the operations, there has been continuous labour unrest, entry in factory premises was restricted due to which physical verification of inventories of Raw-Materials and Stores & Spare Parts and Fixed Assets could not be carried out.


As per Section 134(3) (n) of the Companies Act, 2013, The Company has adopted a Risk Management Policy which is reviewed on a periodic basis in order to recognize and reduce exposure the risks wherever possible. The Companys Risk management policies are based on the philosophy on achieving the substantial growth and managing risks involved.


In accordance with the requirements under Section 178 of the Companies Act, 2013 and Listing Regulations, the Committee formulated a Nomination and Remuneration policy to govern the nomination/appointment and remuneration of Directors, Key Managerial Personnels other employees, senior Management of the Company. Details of Composition of Committee are given in the Corporate Governance Report.

The aforesaid policy can be accessed on the Companys website


In compliance of Section 177 (9) & (10) of the Companies Act, 2013 and in terms of Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has set up a whistle blower policy which can be viewed on the Companys website In terms of the said policy, the Directors and employees are given direct access to the Chairman of the Audit Committee to report on alleged wrong doings.

Your Company hereby affirms that no Director/ employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.


All the Related party Transactions entered by the Company during the financial year were done in the ordinary course of business and at Arms Length. The Audit Committee granted omnibus approval for the said related party transactions (which are repetitive in nature) and the same was reviewed by the Audit Committee and the Board of Directors.

During the year, your Company had entered into materially significant transactions

i.e. transactions exceeding ten percent of the annual consolidated turnover with Related Parties and the same are within the limits approved by the Shareholders of the Company. Furthermore, suitable disclosures as are required under IND AS - 24 have been made in the Notes to the Financial Statements.

The details of these transactions, as required to be provided under section 134(3) (h) of the Companies Act, 2013 are disclosed in Form AOC-2 as Annexure-B and forms part of this report.

The Board of Directors of the Company, at its meeting held on 13th February, 2019, re-framed a policy on materiality to regulate transactions between the Company and its related parties, in compliance with the applicable provisions of the Act, and regulation 23 of the Listing Regulations, as amended,

The policy as approved by the Board is uploaded and can be viewed on the Company website


The details of the extract of the Annual Return as per the provisions of Section 92 of Companies Act, 2013 read with Rule 12 of Companies (Management and Administration) Rules, 2014 is available on the website of the Company at www.


Disclosure with respect to remuneration of Directors and employees as required under section 197 (12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Board report for the year ended 31st March, 2021 are given in Annexure- C to this Report.


The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 of the Companies Act, 2013 read with rule (8)(3) of the Companies Account Rules, 2014 is enclosed in Annexure- D and forms part of this report.


A report on Corporate Governance along with a Auditors Certificate confirming compliance of conditions of Corporate Governance as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual report.


In terms of Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report is annexed as Annexure-E and form part of this report.


The equity shares of your Company continue to be listed on BSE Ltd. and listing fee for the Financial Year 2021-22 has been paid.


The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India as approved by Central Government as required under Section 118(10) of the Companies Act, 2013.


During FY 2020-21, no complaint was received from any employee and hence no complaint is outstanding as on March 31, 2021 for redressal.


Your Directors take this opportunity to place on record their sincere thanks to all stakeholders, various departments of Central Government, the Government of Bihar and Jharkhand, Financial Institutions and Banks for their valuable assistance. Your Directors equally acknowledge the trust reposed by you in the Company. The Directors also wish to place on record their appreciation for the all-round support and co-operation received from the employees at all levels.

For & on behalf of the Board
of Bihar Sponge Iron Limited
U.K. Modi
Place : New Delhi Chairman & President
Date: 20.07.2021 DIN:00002757