Tata Steel BSL Ltd(Merged) Directors Report.

To the Members,

Your Directors take pleasure in presenting the 38th Annual Report on the business and operations of Tata Steel BSL Limited (‘Company’), along with the summary of standalone and consolidated financial statements for the financial year ended March 31, 2021.

A. FINANCIAL RESULTS

(Rs. crore)

Particulars Standalone Consolidated
2020-21 2019-20 2020-21 2019-20
Gross revenue from operations 21,418.63 18,199.14 21,418.63 18,199.14
Total expenditure before finance cost, depreciation (net of expenditure transferred to capital) 15,968.04 15,896.30 15,970.54 15,848.97
Operating Profit 5,450.59 2,302.84 5,448.09 2,350.17
Add: Other income 117.42 106.51 91.67 70.50
Profit / (Loss) before finance cost, depreciation, exceptional items and taxes 5,568.01 2,409.35 5,539.76 2,420.67
Less: Finance costs 1,622.26 1,695.91 1,529.21 1,654.77
Profit / (Loss) before depreciation, exceptional items and taxes 3,945.75 713.44 4,010.55 765.90
Less: Depreciation 1,479.77 1,431.63 1,491.28 1,463.41
Profit / (Loss) before share of profit / (loss) of joint ventures & associates, exceptional items & tax 2,465.98 (718.19) 2,519.27 (697.51)
Share of profit / (loss) of Joint Ventures & Associates - - - -
Profit / (Loss) before exceptional items & tax 2,465.98 (718.19) 2,519.27 (697.51)
Add / (Less): Exceptional Items (Refer note) - 69.02 - 69.02
Profit / (Loss) before taxes 2,465.98 (649.17) 2,519.27 (628.49)
Less: Tax Expense / (income) - - 1.11 -
(A) Profit/(Loss) after taxes 2,465.98 (649.17) 2,518.16 (628.49)
(B) Net Profit / (loss) for the period 2,465.98 (649.17) 2,518.16 (628.49)
Total Profit / (Loss) for the period attributable to:
Owners of the Company - - 2,518.16 (628.49)
Non-controlling interests - - - -
(C) Total Other Comprehensive Income / (Loss) 3.40 (7.47) 0.50 (8.63)
(D) Total Comprehensive Income for the period [B + C] 2,469.38 (656.64) 2,518.66 (637.12)

Notes: The exceptional items include:

(Rs. crore)

Particulars Year ended March 31, 2021 Year ended March 31, 2020
(i) E_ects of implementation of resolution plan - 153.60
(ii) Provision for impairment in property, plant & equipment and other assets - (84.58)
Total - 69.02

a. Provision for impairment on property, plant & equipment

Provision for impairment of property, plant and equipment for FY2020-21 was NIL; previous year Rs.84.58 crore.

b. Exceptional items recognized in previous year financial statements

Effects of implementation of resolution plan Rs.153.60 crore and Provision for impairment in property, plant & equipment and other assets _[84.58] crore.

B. FINANCIAL PERFORMANCE AND STATE OF AFFAIRS

During the year, the total turnover from operations was Rs.21,418.63 crore (previous year: Rs.18,199.14 crore). The increase in turnover was mainly on account of increase in sales by 4% along with improvement in realisations driven by better market conditions.

During the year, the Company recorded a net profit of Rs.2,465.98 crore (previous year: Net Loss Rs.649.17 crore). The basic earnings per share stood at _22.55 for FY2020-21. There was no change in the nature of business during FY2020-21.

C. CAPEX AND LIQUIDITY

The Company has spent _143.97 crore on capital projects, largely towards balancing facilities and essential sustenance capital projects. As on March 31, 2021, the liquidity position of the Company was Rs.719 crore [excluding Fixed Deposit(s) (‘FD’) under Lien of Rs.17 crore for opening of Letters of Credit with Banks] as against Rs.724 crore as on March 31, 2020 [excluding Fixed Deposit(s) (‘FD’) under Lien of Rs.129 crore for opening of Letters of Credit with Banks]. Further, the Company has undrawn borrowing facilities amounting to Rs.2,832 crore, at the end of the reporting year to which the Company had access.

D. DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, (‘SEBI Listing Regulations’) the Board of Directors of the Company has formulated and adopted the Dividend Distribution Policy (‘Policy’). The Policy is annexed to this report as Annexure -1 and is also available on our website at https://tatasteelbsl.co.in/Investor%20Relations%20pdf/ Policies/Dividend%20Distribution%20Policy.pdf

E. DIVIDEND

The net profit of the Company for FY2020-21 was Rs.2,465.98 crore. Considering the performance and the state of affairs of the Company and keeping in mind the COVID-19 pandemic, the Board of Directors does not recommend any dividend for the financial year ended March 31, 2021.

F. TRANSFER TO RESERVES

The Company does not propose to transfer any amount to its reserves.

G. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis as required in terms of the SEBI Listing Regulations forms part of the Annual Report.

H. IMPACT OF COVID_19

The outbreak of the COVID-19 pandemic led to an unprecedented health crisis and disrupted economic activities and trade globally.

During FY2020-21, the Government of India had imposed a stringent nation-wide lockdown which severely impacted manufacturing activities. The Government of India and the respective State Governments had clarified that the Steel Sector fell within the ambit of Essential Services and Process Industries, where, continuous operations of the plant facilities were important, and therefore, exempt from the lockdown measures and could continue to operate albeit subject to the various directions issued by the central and state governments from time to time. Keeping in mind the above, the practical constraints of continuing operations and dispatches and the safety and health of its employees and other stakeholders, the Company suspended operations at its downstream facilities and service centres at Khopoli, Chakan and Aurangabad in Maharashtra, Sahibabad in Uttar Pradesh, Manesar in Haryana and Ludhiana in Punjab. Further, the operations at the Cold Rolling Mill and downstream units at the Company’s Integrated Steel Plant at Angul were also suspended and the steel making facilities at Angul were operating significantly below capacity. Steel demand was affected as key steel consuming sectors struggled to operate due to weakening economic activity, working capital constraints, shortage of manpower and logistical issues.

The health and safety of our employees and the communities in which we operate and running our operations safely and efficiently so that we can continue to serve our customers, continues to be the first and foremost priority of the Company. As the outbreak spread in India, the Company initiated measures to safeguard the health, welfare and safety of all its employees across locations, including working from home, staggered shift timings, working in designated PODs to minimise exposure and continuous communication to re-enforce the importance of social distancing, safe working practices across our plants and general hygiene. The Company also remained focussed on conserving cash and undertook measures to ensure adequate liquidity during the year under review.

I. MATERIAL DEVELOPMENTS DURING THE FINANCIAL YEAR

The following key events took place in the Company during FY2020-21:

(i) Composite Scheme of Amalgamation of Tata Steel BSL Limited and Bamnipal Steel Limited into and with Tata Steel Limited

The Board of Directors at its meeting held on April 25, 2019, had approved a Composite Scheme for Amalgamation of TSBSL and Bamnipal Steel Limited, a wholly owned subsidiary of Tata Steel Limited and TSBSL’s holding company, into and with Tata Steel Limited (‘Scheme’). The Company received ‘No Observation Letters’ from both BSE Limited and the National Stock Exchange of India Limited on August 26, 2019. The Company had filed an application with Hon’ble National Company Law Tribunal, Mumbai Bench (Hon’ble NCLT) seeking necessary directions to convene a meeting of its equity shareholders.

Pursuant to the directions of the Hon’ble NCLT, a meeting of the equity shareholders of the Company (‘Meeting’) was convened and held on Friday, March 26, 2021 through Video Conferencing / Other Audio-Visual Means (‘VC’/’OAVM’) to consider and if thought fit, approve the Scheme. The Scheme was approved by the shareholders by requisite majority at the said Meeting. Pursuant to the shareholders’ approval, the Company filed the Company Scheme Petition with the Hon’ble NCLT with the prayer that the Scheme of Amalgamation of Bamnipal Steel Limited and Tata Steel BSL Limited into and with Tata Steel Limited be sanctioned with effect from the Appointed Date as defined in the Scheme and be binding on the Petitioner Companies and all its shareholders, creditors, stakeholders and all concerned persons. The Scheme will be implemented once sanctioned by the Honble NCLT. Upon implementation of the Scheme, the equity shareholders of the Company will be entitled to fully paid shares of Tata Steel Limited in the ratio as set out in the Scheme. The Scheme will enable both companies to realise benefits of greater synergies between their businesses, yield beneficial results and avail pooled resources in the interest of maximising value to the shareholders and other stakeholders.

(ii) Investment in Bhushan Steel (South) Limited

During the year, the Company subscribed to 12,50,000 equity shares of Rs.10 (Rupees Ten) per share at par, on a rights basis for a total amount of Rs.1,25,00,000/- (Rupees One crore and twenty-five lakhs) of Bhushan Steel (South) Limited, a wholly-owned subsidiary of the Company.

(iii) Discharge from SFIO proceedings

Members were informed that the Delhi High Court had allowed the Writ Petition filed by the Company and Bhushan Energy Limited (now known as ‘Angul Energy Limited’) (‘AEL’) challenging the Complaint, order of cognizance and the summons issued by the Special Judge (Companies Act) / Additional Sessions Judge – 03, Dwarka Courts, New Delhi (‘Special Court’), to appear before the Special Court in relation to a criminal complaint (‘Complaint’) filed by the SFIO against the Company and AEL.

Pursuant to the order of the Delhi High Court, the Company and AEL filed an application with the Special Court to place on record the copy of order passed by the Honble High Court of Delhi. The Special Judge took note of the Hon’ble Delhi High Court’s order setting aside the SFIO complaint against the Company and discharged the Company and AEL from the ongoing SFIO proceedings before the Special Court in terms of directions passed by the Hon’ble Delhi High Court.

J. CREDIT RATINGS

There has been no change in the credit ratings assigned to the Company’s facilities since the last year. The details of the credit ratings of the Company are available on its website https://tatasteelbsl.co.in/stock-exchange-_lings/credit-ratings/

K. MATERIAL CHANGES POST CLOSURE OF FINANCIAL YEAR

There are no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate i.e., March 31, 2021 and the date of this Report.

L. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company is committed towards improving the quality of life of the communities in the areas it operates, through its various CSR initiatives. The Company has in place a Corporate Social Responsibility and Sustainability Committee (‘CSR&S Committee’) and a Corporate Social Responsibility & Sustainability Policy (‘CSR&S Policy’). The CSR&S Committee comprises Shashi Kant Maudgal (Independent Director & Chairman of the CSR&S Committee), Ms. Neera Saggi (Independent Director), Mr. Anand Sen (Non – Executive Director) and Mr. Rajeev Singhal (Managing Director). The CSR&S Committee met once during the year. The details of the meetings held and attendance of Members during the year are given in the Corporate Governance Report. The CSR&S Policy provides guidelines to conduct CSR activities of the Company. The CSR&S Policy enables the Committee to assist the Board in formulating, monitoring and reviewing the CSR&S strategy and the amount of expenditure to be incurred on various CSR&S activities. Further, the CSR&S Policy provides for the Committee to review and recommend to the Board the annual budget for CSR&S.

The CSR & S Policy is available on the website of the Company at https:// tatasteelbsl.co.in/wp-content/themes/bsl/pdf/Investors/CSR%20and%20 Sustainability%20Policy.pdf Considering the performance of the Company in the previous 3 (three) financial years, the Company was not mandatorily required to incur any expenditure towards CSR&S activities during the FY2020-21. However, as a good corporate citizen, an amount of Rs.7.55 crore was spent in FY2020-21 towards various CSR&S activities. These activities are in alignment with the focus initiatives of the Tata Group that lay emphasis on four thrust areas – Education, Health, Livelihoods and Rural & Urban infrastructure.

M. CORPORATE GOVERNANCE

The Corporate Governance Report for FY2020-21 as stipulated under the SEBI Listing Regulations forms part of the Annual Report. We consider it our inherent responsibility to disclose timely and accurate information regarding the operations and performance, leadership and governance of the Company. Pursuant to the SEBI Listing Regulations, the Certificate from a Practicing Company Secretary, on compliance with the corporate governance norms forms part of the Corporate Governance Report.

1. Board and Committee Meetings

The Board met five (5) times during the year, on May 20, 2020, July 30, 2020, October 14, 2020, January 19, 2021 and March 22, 2021. The intervening gap between the meetings was within the period as prescribed under the Companies Act, 2013 (‘Act’) and the SEBI Listing Regulations. The Committees of the Board usually meet the day before or on the day of the Board meeting, or as and when the need arises. Details of composition, meetings held and attendance at such meetings of the Board and its Committees are provided in the Corporate Governance Report.

The requisite quorum was present at all the meetings.

2. Selection of New Directors and Board Membership Criteria

The Nomination and Remuneration Committee (‘NRC’) works with the Board to identify the requisite skills and expertise of Board members in order to ensure a Board with diverse backgrounds and wide experience in business, industry, government, and public service. Characteristics expected of all Directors include independence, integrity, high personal and professional ethics, sound business judgement, ability to participate constructively in deliberations and willingness to exercise authority in a collective manner. The Company has in place a Policy on Appointment and Removal of Directors (‘Policy’). The objective of the Policy is to lay down criteria and terms and conditions with regards to the identification of persons who are qualified to become Directors (executive, non-executive and independent) including their qualifications, positive attributes and independence as well as to lay down criteria to identify persons who may be appointed as the Senior Management of the Company. The salient features of the Policy are:

(i) It acts as a guideline for matters relating to appointment and re-appointment of directors.

(ii) It contains guidelines for determining qualifications, positive attributes for directors, and independence of a director.

(iii) It lays down the criteria for Board Membership.

(iv) It sets out the approach of the Company on board diversity.

(v) It lays down the criteria for determining independence of a director, in case of appointment of an Independent Director. The Policy is available on the website of the Company at https:// tatasteelbsl.co.in/wp-content/themes/bsl/pdf/Investors/Policy%20 on%20appointment%20and%20removal%20of%20Directors.pdf During the year under review, there has been no change to the Policy.

3. Familiarization Programme for Independent Directors

All new Directors, including the Independent Directors (‘IDs’) inducted to the Board are provided orientation on the Company’s business operations, products, organization structure as well as the Board constitution and its procedures through various programmes / presentations. At various Board meetings during the year, presentations were made to the Board on safety, health and environment, company policies, changes in the regulatory environment applicable to the Company, the industry, market and customers, operations and other relevant matters. During the year under review, no new Independent Director was inducted to the Board. Details of orientation given to the Independent Directors in the areas of business, strategy, governance, operations, safety, health, environment are available on the website of the Company at https://tatasteelbsl.co.in/wp-content/themes/ bsl/pdf/Investors/Safety%20Health%20and%20Environment%20 Policy.pdf

4. Board Evaluation

The Board has carried out an evaluation of the effectiveness of its functioning, that of the Committees and of individual Directors, pursuant to the provisions of the Act and SEBI Listing Regulations. Feedback from Directors was sought on various parameters including:

(i) Structure, composition and role clarity of the Board and Committees;

(ii) Effectiveness of the deliberations and process management;

(iii) Board/Committee culture and dynamics;

(iv) Quality of relationship between Board Members and the Management;

(v) Degree of fulfilment of key responsibilities towards stakeholders (by way of monitoring corporate governance practices, participation in the long-term strategic planning, etc.);

(vi) Extent of co-ordination and cohesiveness between the Board and its Committees;

(vii) Quality of relationship between Board Members and the Management.

The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017. The Chairman of the Board had one-on-one meetings with the IDs and the Chairperson of the Nomination and Remuneration Committee (NRC) had one-on-one meeting with the Executive and Non-Executive Directors. These meetings were intended to obtain Directors’ inputs on effectiveness of the Board/ Committee processes. The Board considered and discussed the inputs received from the Directors. Further, the Independent Directors at their meeting held on March 22, 2021 reviewed the performance of the non-Independent Directors, the Board as a whole and Chairman of the Board after taking into account views of the Executive Director and other Non-Executive Directors. The Nomination and Remuneration Committee reviewed the performance of the individual directors and the Board as a whole. In the Board meeting that followed the meeting of the Independent Directors and the meeting of the NRC, the performance of the Board, its Committees, and individual directors was discussed. During FY2021-22 the Board will focus on assessing high risk issues impacting the organisation.

5. Remuneration Policy for the Board and Senior Management

In terms of the provisions of Section 178(3) of the Act, the Company has in place a policy for Remuneration for Directors, Key Managerial Personnel and all other employees of the Company (‘Remuneration Policy’). As part of the policy, the Company strives to ensure that:

(i) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

(ii) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(iii) Remuneration to Directors, KMP and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals. The Remuneration Policy lays down parameters on which remuneration is decided and paid to the Managing Director, Executive Directors, KMPs and employees of the Company. The salient features of the Remuneration Policy are as below:

(i) It lays down the parameters on which remuneration (including commission and sitting fees) is to be paid to Independent Directors and Non-Executive Directors of the Company.

(ii) It lays down parameters on which remuneration (including fixed salary, benefits and perquisites, bonus/performance linked incentives and retirement benefits) are to be paid to Managing Director, whole-time directors, KMPs and employees of the Company.

(iii) It lays down the parameters for remuneration payable to Director for services rendered in other capacity.

The Remuneration Policy is available on the website of the Company at https://tatasteelbsl.co.in/wp-content/themes/bsl/pdf/Investors/ Remuneration%20Policy%20of%20directors%20KMPs%20&%20 Employees.pdf There has been no change in the Remuneration Policy during the year.

6. Particulars of Employees

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report as Annexure - 2. Remuneration is as per the Remuneration Policy of the Company.

7. Independent Directors’ Declaration

The Company has received the necessary declarations from each of its Independent Directors in accordance with Section 149(7) of the Act, read with Regulations 16(1)(b) and 25(8) of the SEBI Listing Regulations confirming that they meet the criteria of independence as laid out in Section 149(6) of the Act and Regulations 16(1)(b) and 25(8) of the SEBI Listing Regulations. In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience [including pro_ciency in terms of Section 150(1) of the Act and applicable rules thereunder] of all Independent Directors on the Board. In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have undertaken requisite steps towards renewal of their registration in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs. The Independent Directors have complied with the Code for Independent Directors as prescribed in Schedule IV to the Act.

8. Directors and Key Managerial Personnel

The shareholders at the Annual General Meeting of the Company held on September 21, 2020 approved the re-appointment of Mr. Koushik Chatterjee (DIN: 00004989) as a Director of the Company liable to retire by rotation.

Re-appointment of Director retiring by rotation

In accordance with the provisions of the Act, Mr. Anand Sen (DIN: 00237914) will retire at the ensuing Annual General Meeting (‘AGM’) and being eligible, seeks reappointment. The Board recommends his re-appointment. The necessary resolution for re-appointment of Mr. Anand Sen (DIN: 00237914) forms part of the Notice convening the ensuing AGM scheduled to be held on Friday, August 06, 2021 (‘Notice’). The profile and particulars of experience, attributes and skills that qualify Mr. Sen for Board membership are disclosed in the said Notice.

Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on the date of this Report are as under: i. Mr. Rajeev Singhal - Managing Director ii. Mr. Sanjib Nanda – Chief Financial Officer; and iii. Ms. Nisha Anil Seth – Company Secretary & Compliance Officer. The remuneration and other details of the Key Managerial Personnel for FY2020-21 are provided in the Annual Return. The link to the Annual Return is provided in this Report. During the year under review, there has been no change in the Key Managerial Personnel of the Company.

9. Audit Committee

The Audit Committee comprises Mr. Krishnava Dutt (Independent Director and Chairman), Ms. Neera Saggi (Independent Director), Mr. Srikumar Menon (Independent Director) and Mr. Koushik Chatterjee (Non – Executive Director). The Audit Committee met 5 (Five) times during the year. The details of the meetings held and attendance of Members during the year are given in the Corporate Governance Report. The Audit Committee has adopted a Charter for its functioning. The Company Secretary acts as the Secretary to the Committee. During the year under review, there were no instances when the recommendations of the Audit Committee were not accepted by the Board. The primary objective of the Audit Committee is to monitor and provide effective supervision of the Management’s financial reporting process, to ensure accurate and timely disclosures, with the highest levels of transparency, integrity and quality of financial reporting.

10. Internal Financial Control Systems

The Board of Directors of the Company is responsible for ensuring that Internal Financial Controls have been laid down in the Company and that such controls are adequate and operating effectively. The Internal Financial Controls are based on the Tata Code of Conduct, policies and procedures adopted by the Management, corporate strategies, management reviews and the risk management framework. The Company’s Internal Financial Controls are commensurate with the nature of its business, the size, and complexity of its operations and such Internal Financial Controls with reference to the Financial Statements are adequate and operating effectively.

11. Risk Management

The Company is committed to a proactive approach to risk management which is based on the principles of

(i) creating risk awareness

(ii) anticipating and taking preventing action to manage/mitigate risks

(iii) implementing a uniform risk management policy and

(iv) capability building.

The Company has adopted a framework of enterprise risk management (‘ERM’) to identify and mitigate the risks to the objectives and operations of the Company. The objective of the ERM Framework at Tata Steel BSL is to develop a risk intelligent culture that supports decision-making and helps improve performance.

The ERM Governance framework of the Company comprises the Board of Directors, Risk Management Committee (‘RMC’) and the Apex Review Forum to oversee the risk management policy and provide guidelines for implementing the ERM framework and ERM process across the Company. The ERM team is led by the Chief Financial Officer who acts as the Chief Risk Officer of the Company. The RMC inter-alia assists the Board of Directors in fulfilling its oversight responsibilities with regard to ERM process. As on March 31, 2021, the RMC comprised Mr. Srikumar Menon (Independent Director & Chairman), Mr. Shashi Kant Maudgal (Independent Director), Mr. Anand Sen (Non-Executive Director), Mr. Rajeev Singhal (Managing Director) and Mr. Sanjib Nanda (Chief Financial Officer). The RMC met on March 05, 2021. The details of the meetings held and attendance of Members during the year are given in the Corporate Governance Report. The Company Secretary acts as the Secretary to the RMC. The RMC has adopted a Charter for its functioning. Further, the Board at its meeting held on March 22, 2021 adopted a revised Risk Management Policy of the Company. During the year under review, the Company has been continuously working on strengthening the ERM process and framework including updating risk dashboards for existing risks, analysing and prioritizing risks, development of new risk dashboards and continuous training and development. The Company’s risk preparedness enabled it to manage the uncertainties caused due to the pandemic.

12. Vigil Mechanism and Whistle Blower Policy

The Company has in place a vigil mechanism that provides a formal mechanism for the Directors, employees and vendors to approach the Chairman of the Audit Committee or the Ethics Counselor and make protective disclosures about the unethical behaviour, actual or suspected fraud or violation of the Tata Code of Conduct (‘TCoC’), or ethics policy, thereby ensuring that the activities of the Company are conducted in a fair and transparent manner. The Vigil Mechanism comprises the Whistle Blower Policy for Directors & Employees, Whistle Blower Policy for Vendors, the Whistle Blower Reward and Recognition Policy for Employees. Apart from this the Company has adopted the Conflict of Interest Policy for employees, the Gift and Hospitality Policy, the Anti-Bribery and Anti–Corruption Policy and the Anti-Money Laundering Policy. The Vigil Mechanism is available on our website at https:// tatasteelbsl.co.in/wp-content/themes/bsl/pdf/Investors/Vigil%20 Mechanism%20%20Policy.pdf The Whistle Blower Policy for Directors & Employees is an extension of the TCoC that requires every Director or Employee to promptly report to the Management any actual or possible violation of the TCoC or any event where he or she becomes aware of, which could affect the business or reputation of the Company. The Whistle Blower Policy for Vendors provides protection to vendors from any victimization or unfair trade practices by the Company. The Whistle Blower Reward and Recognition Policy for Employees has been implemented in order to encourage employees to genuinely blow the whistle on any misconduct or unethical activity taking place in the Company. The Company has a Conflict of Interest (COI) policy that requires employees to act in the best interest of the Company without any conflicts and declare conflicts, if any (real, potential or perceived). The Company has also adopted the Anti-Bribery and Anti-Corruption (‘ABAC’) and Anti-Money Laundering (‘AML’) Policies. The key elements of the policies are risk assessment, third party due diligence, training & awareness, and audit & reporting. The Gift and Hospitality Policy requires employees to take the right decisions when they are offered gifts or hospitality while conducting business or offcial transactions on behalf of the Company. The Policy is in consonance with ABAC and AML policies. The links to the ABAC and AML policies and the Gift and Hospitality Policy are provided in the Corporate Governance Report.

During the year under review, the Company launched a web portal where any ethical dilemma/query could be raised by an employee and responded to by the Ethics function. During the year under review, the Company also undertook a series of theme based awareness campains for its employees and third parties through departmental events, training and interaction sessions and dilemma resolution workshops. Graphical communication through ‘ANTARDHVANI’ and ‘ATIKRAMAN’ was also done. The Company celebrated the month of July 2020 as Ethics Month centred around the theme ‘Responsible ME, Responsible WE’. Many engagement activities such as Short _lm, Poster, Slogan & Essay competitions, Round Table discussion, Screening of Web-series ‘Decorum’, etc. were carried out for the employees. Interactive sessions for Vendors and Customers on the ABAC & AML policies were also organised. During the year under review, the Company received 161 whistle blower complaints, of which 112 complaints have been resolved and actions are underway for the pending 49 cases. During the year under review, no person has been denied access to the Chairman of the Audit Committee. There has been no change in the Vigil Mechanism and policies thereunder during FY2020-21.

13. Related Party Transactions

During the year under review, all related party transactions entered into by the Company, were approved by the Audit Committee and were at arm’s length and in the ordinary course of business. Prior omnibus approval was obtained for related party transactions of repetitive nature and entered in the ordinary course of business and on an arm’s length basis. The Company did not have any contracts or arrangements with related parties in terms of Section 188(1) of the Act. During the year under review, the Company entered into material related party contracts with Tata Steel Global Procurement Company Pte. Ltd. and Tata Steel Limited. The transactions were approved by the shareholders by way of postal ballot. The particulars of material contracts or arrangements with related parties entered into by the Company during FY2020-21 are given in prescribed Form AOC-2 (Annexure - 3) and in the Corporate Governance Report. Details of related party transactions entered into by the Company, in terms of Ind AS-24 are disclosed in the notes to the standalone/ consolidated financial statements forming part of this Annual Report. The policy on related party transactions, as approved by the Board, is available on the Company’s website at https://tatasteelbsl.co.in/ wp-content/themes/bsl/pdf/Investors/Related%20Party%20 Transactions%20Policy.pdf

14. Disclosure as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance for sexual harassment at workplace. Post its acquisition in May 2018, the Company has adopted a revised policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. The Company has complied with the provisions relating to the constitution of the Internal Committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, the Company received 3 complaints of sexual harassment. All 3 complaints have been resolved by taking appropriate actions and there is no pending complaint as on the date of this report.

15. Directors’ Responsibility Statement

Based on the framework for internal financial controls established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external agencies including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by the Management and the relevant Board committees, including Audit Committee, the Board is of the opinion that, the Company’s internal financial controls were adequate and effective during FY2020-21. Accordingly, pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirms that:

(i) in the preparation of the annual accounts for FY2020-21, the applicable accounting standards have been followed and that there were no material departures;

(ii) they have 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 loss of the Company for that period;

(iii) they have 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;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

16. Business Responsibility Report

Pursuant to Regulation 34(2) of the SEBI Listing Regulations, the top 1,000 listed companies (based on market capitalisation calculated as on March 31 of every financial year) are required to prepare a Business Responsibility Report (‘BRR’), describing the initiatives taken by the Company from an environmental, social and governance perspective. The BRR forms part of the Annual Report for FY2020-21.

17. Subsidiaries, Joint Ventures and Associates

The Company has 4 (four) subsidiaries in India and 4 (four) subsidiaries in Australia as on March 31, 2021. The Consolidated Financial Statements presented by the Company for the year ended March 31, 2021 are prepared in accordance with Section 129(3) of the Act and include the financial results of all its subsidiary and joint venture companies, which forms part of this Annual Report. The Company has 1 (one) joint venture company, Andal East Coal Company Pvt. Ltd. as on March 31, 2021. Pursuant to an order of Hon’ble Calcutta High Court dated January 24, 2017, Andal East Coal Company Pvt. Ltd, is under liquidation. The Company has 2 (two) associate companies as on March 31, 2021, viz. Jawahar Credit and Holdings Private Limited and Bhushan Capital and Credit Services Private Limited. These entities are connected with the members of previous management. Your Company does not have any visibility on the business and operations of these 2 (two) associate companies.

In accordance with the provisions of Section 136 of the Act and the amendments thereto, read with the SEBI Listing Regulations, the audited Financial Statements, including the consolidated financial statements and related information of the Company and financial statement of the subsidiary companies are available on our website at www.tatasteelbsl.co.in.

A report on the performance and the financial position of the subsidiaries, associates and joint venture as per Form AOC-1 is annexed to this report as Annexure - 4. During the year under review, there has been no material change in the business of the Companys subsidiaries and joint venture company.

18. Auditors

Statutory Auditors

The Members of the Company at the Annual General Meeting of the Company held on September 25, 2018 approved the appointment of M/s Walker Chandiok & Co LLP, Chartered Accountants (Registration No: 001076N/N500013) as the Statutory Auditor of the Company for a period of five years commencing from the conclusion of the 35th AGM held on August 21, 2018 until the conclusion of the 40th AGM of the Company to be held in the year 2023. The report of the Statutory Auditor forms part of the Annual Report. The said report does not contain any qualification, reservation, adverse remark or disclaimer. During the year under review, the Statutory Auditors did not report any matter under Section 143(12) of the Act, and therefore no details are required to be disclosed under Section 134(3)(ca) of the Act. In terms of the provisions relating to statutory auditors forming part of the Companies Amendment Act, 2017, notified on May 7, 2018, rati_cation of appointment of Statutory Auditors at every AGM is no more a legal requirement. Accordingly, the Notice convening the ensuing AGM does not carry any resolution on rati_cation of appointment of Statutory Auditors.

Cost Auditors

In terms of Section 148 of the Act, the Company is required to maintain cost records and have the audit of its cost records conducted by a Cost Accountant. Cost records are maintained by the Company as required under Section 148(1) of the Act. Based on the recommendation of the Audit Committee, the Board of Directors of the Company at its meeting held on April 21, 2021, approved the appointment of M/s. Shome & Banerjee, Cost Accountants (Firm Registration No.00001), as the Cost Auditor of the Company to conduct Cost Audit for the year ending March 31, 2022. M/s Shome & Banerjee have vast experience in the field of cost audit and have been conducting the audit of the cost records of the Company since the acquisition.

In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration (Rs.7 Lakh plus applicable taxes and re-imbursement of out of pocket expenses) payable to the cost auditors as recommended by the Audit Committee and approved by the Board has to be rati_ed by the members of the Company. Accordingly, the appropriate resolution forms part of the Notice convening the AGM. The Cost Audit Report of the Company for the Financial Year ended March 31, 2020 was filed by the Company in XBRL mode on November 02, 2020.

Secretarial Auditors

Section 204 of the Act, inter-alia, requires every listed company to annex to its Board’s report, a Secretarial Audit Report given in the prescribed form, by a Company Secretary in practice. The Board of Directors appointed M/s PI & Associates (Firm Registration No. P2014UP035400), Practicing Company Secretaries, as the Secretarial Auditor to conduct the Secretarial Audit of the Company for FY2020-21 and their report is annexed to this report as Annexure - 5. There are no qualifications, observations, adverse remark or disclaimer in the said Report. The Board has re-appointed M/s PI & Associates as Secretarial Auditor, to conduct the secretarial audit of the Company for FY2021-22.

19. Other Disclosures

Members are aware that the Company was acquired by Bamnipal Steel Limited, a wholly owned subsidiary of Tata Steel Limited, on May 18, 2018 under the corporate insolvency resolution process (CIRP) of the Insolvency and Bankruptcy Code, 2016 (IBC) and a new Board of Directors and new management was appointed

(New Management).

(a) As previously reported, the New Management had initiated the process of analysing contracts entered into by your Company prior to the CIRP and had reserved its right to seek appropriate remedies. As part of the ongoing process, your Company had identified contracts, terms of which appear onerous and such contracts were entered into with entities connected with the members of previous management:

i. Prior to the conclusion of CIRP, the Company had entered into various lease/leave and license agreements for residential and commercial/warehouse (Premises) purposes across India (Rental Agreements). The Company under the New Management had decided not to continue with these Rental Agreements as it was of the view that these agreements were not entered into on arms-length basis and, in certain cases, the Premises leased/licensed under such Rental Agreements were not being used for the Company purposes. The Company has sent legal notices to the lessors/licensors and has also initiated legal proceeding in respect of three such Rental Agreements for recovery of due amounts. One of the related party i.e. Goldstar Cement Private Limited has also filed an Civil Suit against the Company seeking alleged due amounts under the contract executed between the parties. The Company is defending the said civil suit and is also in process of filing its counter claim for recovery of its due amounts. The Company is also in process of initiating appropriate legal proceedings in relation to the remaining Rental Agreements, after the normalization of the functioning of the Courts, which remains affected due to the ongoing COVID-19 pandemic.

ii. Prior to conclusion of the CIRP, the Company had entered into a lease agreement (Vistrat Lease Agreement) with Vistrat Real Estates Pvt. Ltd (Vistrat). The Company terminated the Vistrat Lease Agreement on June 11, 2018 and the leased premises was vacated on September 10, 2018. The Hon’ble National Company Law Tribunal, New Delhi (NCLT) in it order dated February 26, 2019 has noted that Vistrat was a related party of the Company during the tenure of the erstwhile Management and transaction between the Company and Vistrat was deemed to be a preferential transaction. The Company is in process of initiating appropriate legal proceedings to recover amount as deemed due to the Company, after the normalization of the functioning of the Courts, which remains affected due to the ongoing COVID-19 pandemic.

iii. Prior to the conclusion of CIRP, the Company had entered into agreements for exports to certain non-resident entities which were connected to the erstwhile promoters (Non-Resident Entities) and the Company had also entered into arrangements for payment of commissions in relation to exports made to certain third parties. Such contracts and commission related arrangements were not entered into on an arms’ length basis. The Company has also not realized payments from the Non-Resident Entities for such exports within the period prescribed under the applicable FEMA Regulations (Export Proceeds). Accordingly, the New Management had sent legal notices to such Non-resident entities demanding recovery of the Export Proceeds or such other amount as deemed due to the Company. The Company has recovered the full value of the Export Proceeds in one case and in relation to all other non-realized Export Proceeds, the Company has either initiated appropriate proceedings or currently is in the advance stage of initiating appropriate legal proceedings. iv. Prior to the commencement of CIRP, the Company had entered into a sale and lease back transaction in relation to 4 (four) oxygen plants (Oxygen Plants) with Brace Iron and Steel Private Limited (Brace). In terms of the said sale and lease back transaction, first the Company transferred/sold the Oxygen Plants to Brace and thereafter, near simultaneously Brace leased the same Oxygen Plants back to the Company (Lease Agreement). During the above stated process of analyzing the contracts entered into by your Company and also pursuant to receipt of a complaint filed by the Serious Fraud Investigation Office (SFIO) against the Company and others, which was subsequently quashed against the Company by the Delhi High Court, the New Management had noticed following key issues with the sale and lease back transaction:

(a) the rental under the Lease Agreement is not in line with market standard and hence required revision;

(b) Brace had failed to adhere to its obligations under the Lease Agreement;

(c) there are amounts receivable from Brace; and

(d) sale and lease back transaction itself is questionable as mentioned in the SFIO Complaint. The Company had brought these issues to the notice of Brace and its parent entities. However, Brace has disputed these issues. Currently, dispute on all matters relating to the sale and lease back transaction is pending for the final determination of the Arbitral Tribunal constituted in terms of the Lease Agreement.

(b) The Company was impleaded in a proceeding initiated by the Directorate of Enforcement (‘ED’) relating to the confirmation of a provisional attachment order (‘PAO’) of Rs.50,00,000 (‘PMLA Proceeding’). The said amount of Rs.50,00,000 was seized by the Central Bureau of Investigation (‘CBI’) in relation to an allegation of payment of illegal grati_cation made against the previous Managing Director of the Company. The charge sheet filed by the CBI before CBI Court in the predicate offence did not name the Company as an accused and/ or contain direct allegations against Tata Steel BSL Limited as a company, but only contained allegations against erstwhile Managing Director of Bhushan Steel Limited. Vide Order dated September 24, 2018, the Adjudicating Authority, PMLA was pleased to disallow the original complaint for confirmation of the provisional attachment order against all the defendants including the Company. This has been disclosed in the Annual Report of the Company for FY2018-19. The ED has filed an appeal against the order of the Adjudicating Authority, PMLA before the Appellate Tribunal, Prevention of Money Laundering Act and notice has been issued. Your Company is contesting the appeal filed by the ED and has filed its response/reply to the said appeal.

c) Prior to the commencement of the CIRP i.e before Tata Steel Limited acquired the control of the Company and a new management was appointed, the Assistant Commissioner, Central Excise Division III, Ghaziabad had filed a criminal complaint against the Company mainly alleging that accused had indulged in undervaluation in relation to sale of certain products. The Criminal Complaint was filed with the Court of Chief Judicial Magistrate, Meerut (CJM) in 2011. The Company has directed its counsel to take all necessary steps to seek a quashing of the complaint and the summoning order issued by the CJM on the grounds of CIRP, provisions of IBC and consistent with the Company’s efforts to address liabilities arising from or connected to period prior to the CIRP.

d) The Company has been arrayed as party to a petition filed by Union of India through Serious Fraud Investigation Office (SFIO) against Shriraj Investment and Finance Limited along with 7 other companies (related parties of the Company prior to CIRP) (Respondents) before the National Company Law Tribunal, Allahabad (NCLT). It is pertinent to mention that the Company has been arrayed as only a proforma respondent and no relief has been claimed/sought against it. The Company has already filed its reply to the petition and is in process of taking appropriate steps for removal/deletion of its name from the array of parties.

e) The Company has been arrayed as party to a petition filed by Union of India through Serious Fraud Investigation Office (SFIO) against Purbanchal Rolling Mills and Industries Private Limited (Purbanchal) and Other, before the National Company Law Tribunal, Guwahati (NCLT). It is pertinent to mention that the Company has been arrayed only as proforma respondent and no relief has been claimed/sought against it. The Company is in process of filing an appropriate response/ reply to the petition and for removal/deletion of its name from the array of parties.

20. Annual Return for FY2020-21

The Annual Return for FY2020-21 as per provisions of the Act and Rules thereto, is available on the Company’s website at https:// tatasteelbsl.co.in/Investor%20Relations%20pdf/Notice/Annual%20 Return%20in%20format%20of%20%20MGT%207%20as%20 on%20March%2031%202021.pdf

21. Significant Material Orders passed by the Regulators or Courts

There have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations. However, Members’ attention is drawn to the statement on contingent liabilities, commitments in the notes forming part of the Financial Statements.

22. Particulars of Loans, Guarantees or Investments

Save as provided in the Notes to Accounts, the Company did not give any loans, directly or indirectly to any person (other than to employees) or to any other body corporates, nor did it give any guarantee or provide any security in connection with a loan to any other body corporate or person during the financial year under review. The loans provided to employees are also in compliance with Section 186 of the Act.

23. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Details of the energy conservation, technology absorption and foreign exchange earnings and outgo are annexed to this Report as

Annexure – 6. 24. Deposits

During the year, the Company has not accepted any deposits from the public in terms of the Act. Further, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

25. Secretarial Standards

The Company has in place proper systems to ensure compliance with the provisions of the applicable Secretarial Standards issued by

The Institute of Company Secretaries of India and such systems are adequate and operating effectively.

26. Acknowledgements

Your Directors would like to place on record their appreciation for Senior Leadership Team and all the employees of the Company for their efforts and contribution to the Company’s performance during pandemic. Your Directors would also like to thank the Company’s customers, vendors, dealers, suppliers and investors for their continuous support especially during such unprecedented times. Your Directors wish to take the opportunity to place on record their sincere appreciation and gratitude to the Government of India, various State Governments particularly the States of Orissa, Maharashtra, Uttar Pradesh, Tamil Nadu and Haryana, Government of Australia, Banks, Financial Institutions, shareholders and concerned Government departments and agencies for their continued support.

On behalf of the Board of Directors
sd/-
T. V. NARENDRAN
Jamshedpur Chairman
April 21, 2021 DIN: 03083605