The Directors have pleasure in presenting the 33nd Annual Report of the
Company along with audited accounts for the year ended 31st March,
Financial Parameters 2014-15 2013-14
Sales (Net of Excise Duty) - 1909.70
Other Income 208.66 275.60
Loss before Interest,Depreciation &
Exceptional Items 121.26 938.48
Interest & Finance Charges 51.93 389.43
Depreciation 446.70 342.98
Loss for the year before Exceptional Items 619.89 1670.89
Exceptional Items expenditure /(income) 116.25 103.41
Provision for Tax - -
Loss for the year carried to Balance Sheet 736.14 1774.30
During the year under review there was no production of sponge iron due
to Plant being shut from 9th August, 2013 on account of sudden stoppage
of coal supply by Central Coalfields Limited, Ranchi, a Unit of Coal
India Limited against our long term Fuel Supply Agreement. The reason
for stoppage of coal supply was that Ministry of Coal had allocated a
Captive Coal Mine - Macherkunda Coal Block in the year 2008 and as per
terms & conditions the Mine was to be operative by February, 2013. The
Mine could not be developed due to various reasons beyond our control
i.e. depending upon the Govt.of India for clearance. The Coal Block was
later cancelled on 20th November, 2012 by Ministry of Coal, Govt.of
India. The Company challenged this by filing a Writ Petition No.
W.P.(C) 1660 in the year 2013 in the Hon''ble Jharkhand High Court.
Further, all Coal Blocks were also cancelled by Hon''ble Supreme Court
of India vide its Order dated 25th September, 2014 and our Macherkunda
Coal Block was also amongst these Coal Blocks. Since the Policy about
renewal of Fuel Supply Agreement (FSA) after de-allocation of Captive
Coal Blocks was not clear, hence they stopped the coal supply. Later on
in a Special Meeting of Standing Linkage Committee (Long Term) held on
3rd December, 2014 under the Chairmanship of Additional Secretary
(Coal), Ministry of Coal decided that all EUP which were already having
long term linkage should get coal from the respective Coal companies.
Accordingly, we approached the Chairman-CCL, Ranchi and he advised to
withdraw our Writ Petition No. W.P.(C) No.1660 of 2013. He further
suggested that once the said writ petition is withdrawn, CCL would
proceed in the matter for renewal of Fuel Supply Agreement. The
Company has made an interlocutory application for withdrawal of the
said writ petition before Hon''ble Jharkhand High Court. We hope that
the matter would be resolved with the withdrawal of the said Writ
Petition by the said High Court.
IRON ORE MINE:
The Company was allotted Ghatkuri Iron Ore Mine in April, 2007 in the
State of Jharkhand with 406.40 hectares of land and consisting of
reserves estimated at 35.65 million tons. However, the Geological
Survey was conducted by Department of Geology, Ministry of Mines, Govt.
of Jharkhand and report was released in February, 2012 wherein they
have assessed the Ore reserve to be about 11.00 Million Tons. The
Company has requested for the allocation for an additional Iron Ore
Mine to compensate the difference in allocated quantity and for revised
geological reserves. The draft Mining Plan prepared by MECON was
submitted with Ministry of Mines on 3rd September, 2012 based on the
revised reserves of 11.00 million tons.
The Indian Bureau of Mines, Ministry of Mines, Govt. of India vide its
letter dated 06-02-2014 have communicated the mining plan is not
approved. The Company expects a total capital investment of around
Rs.45.00 Crores for the development and anticipates the commencement of
production of iron ore by 2016.
As already reported the Macherkunda Coal Block allocated to the Company
for captive mining of coal has been de-allocated by the Ministry of
Coal, Government of India. The Government of India has filed a number
of transfer petitions in the Honb''le Supreme Court for transfer of the
coal block cases which were pending in various high courts. The Supreme
Court has expressed its view that all coal block allocations on and
after 2003 are illegal. The Supreme Court has vide its order dated 25th
September, 2014 has cancelled allocation of all but 4 coal blocks
allocated from 2003. The Macherkunda Coal Block was among the all
cancelled coal blocks.The Company has made an application to Ministry
of Coal, Govt. of India for return of Bank Guarantee of Rs. 2.81 cr.
Vide its letter dated 15th October, 2014.
5 MW POWER PLANT / STEEL PLANT
The Company from the existing power plant generates 5 MW Power based on
dolo char being produced in the manufacturing of sponge iron. Since the
Company is not able to consume the total dolo char, the Company has
entered into an agreement with G.S. Phambutor Pvt. Limited (GSP) to
install a 5 MW Power Plant. Whenever the existing power plant goes
under regular maintenance, the Company has to generate power from DG
Set, which is highly uneconomical. During such time the Company will
take the power from GSP and for the rest of the period GSP will consume
the power in induction furnace to produce pencil ingot. The 5 MW power
plant is at commissioning stage. Once the sponge iron plant starts its
operations to said power plant will be commissioned and steps for
setting up induction furnace will initiated.
In view of the loss incurred by the Company, no dividend has been
proposed for the financial year ended 31st March, 2015
During the year under review, your Company did not accept 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.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186.
The Company has not given any loans, guarantees or made any investments
under Section 186 of Companies Act, 2013 during the financial year
INTERNAL CONTROL SYSTEM
The Company has a well placed, proper and adequate internal control
system, which ensures that all assets are safeguarded and protected and
that the transactions are authorised, recorded and reported correctly.
The Company''s internal control system comprises audit and supplemented
by internal audit checks from the Internal Auditor M/s.Sarat Jain & Co.
The Internal Auditors independently evaluate the adequacy of internal
controls and concurrently audit the majority of the transactions in
value terms. Independence of the audit and compliance is ensured by
direct reporting of Internal Auditors to the Audit Committee of the
NOMINATION AND REMUNERATION POLICY OF THE COMPANY The Board of the
Company in its meeting held on 12th May, 2015 has approved and adopted
the Company''s Nomination and Remuneration policy. Any member interested
in hard copy of the said policy may inspect the same at the Registered
Office of the Company or write to the Company Secretary for a copy. The
same is also disclosed in the Company''s website www.bsil.org.in.
Details of the Committee is provided in the corporate governance report
annexed with this report.
WHISTLE BLOWER POLICY:
Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7
of the Companies (Meetings of Board and its Powers) Rules, 2014 and
Clause 49 of the Listing Agreement, the Board of director of the
Company in its meeting held on 6th February, 2015 has approved and
adopted vigilance mechanism - Whistle Blower Policy. This Policy
inter-alia provides a direct access to the Chairman of the Audit
Committee. 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. The said policy is available
in the Company website, www.bsil.org. in. Any member interested in
hard copy of the said policy may inspect the same at the Registered
Office of the Company or write to the Company Secretary for a copy.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES.
All transactions entered by the Company with Related Parties were in
the Ordinary Course of Business and at Arm''s Length pricing basis. The
Audit Committee granted omnibus approval for the transactions (which
are repetitive in nature) and the same was reviewed by the Audit
Committee and the Board of Directors.
There were no materially significant transactions with Related Parties
during the financial year 2014-15 which were in conflict with the
interest of the Company. Suitable disclosures as required under AS-18
have been made in the Notes to the financial statements.
The Board had approved policies on Related Party Transactions. The
policies have been uploaded on the Company''s website: www.bsil.org.in.
Any member interested in hard copy of the said policy may inspect the
same at the Registered Office of the Company or write to the Company
Secretary for a copy.
The particulars of contract and arrangements entered into by the
Company with related parties referred to in sub-section (1) of section
188 of the Companies Act, 2013 read with clause 49 of the Listing
Agreement is disclosed separately in Form No. AOC -2 as Annexure-D and
forms part of this report.
EXTRACT OF THE ANNUAL RETURN
The extract of the Annual Return for 2014-15 in Form No. MGT - 9 is
given separately as Annexure - E, which form part of the Board''s
The Board of Directors of the Company have appointed M/s. R Singhal&
Associates, Company Secretaries (PCS Registration No. 10699) as the
Secretarial Auditor of the Company in relation to the financial year
2014-15, in terms of Section 204 of the Companies Act, 2013. The
Secretarial Audit Report for financial year 2014-15 done is separately
annexed as Annexure-F with this report and is available on the
Company''s website www.bsil.org.in.
The observation in secretarial audit report are self explanatory and
therfore do not call for any further explanation. Further due to
shutdown of the plant and suspension of operation from 09.08.2013
various dues could not be paid on due dates. Necessary steps are being
taken to re-start the Company and payment of all such dues shall be
made after re-start of operation of the Company.
Disclosures required u/s 197(12) of the Companies Act, 2013 read with
Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rule, 2014 relating to ratio of the remunration of each
director to the median employee''s remuneration and other details shall
be provided on request, in accordance with the provisions of Section
136 of the Act. The relevant information could not be provided as the
plant is under shut and the operations has been suspended from
09.08.2013, thereby the salary, wages and allowances of the employees
In terms of the provisions of Section 197(12) of the Companies Act,
2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, non of the employee
is drawing remuneration in excess of the limits set out in the said
A) CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL
Since the last Annual General Meeting, the following changes have taken
place in the Board of Directors:
Mr. Satish Kumar Gupta,Whole Time Director designated as Director
(Works) of the Company is re-appointed as Whole Time Director
designated as Director (Works) w.e.f. 13-12-2014 for a period of 3
In accordance with the provisions of Section 160 of the Companies Act,
2013 and Article 128 of the Articles of Association of the Company,
Mrs. Kumkum Modi retires by rotation and are eligible for
Mr. G. W. Elsenheimer ceased to be the director of the Company under
Section 167 of the Companies Act, 2013.
Mr. G. C. Jain has resigned as director of the Company w.e.f. 15th
April, 2015. Mr. R. K. Agarwal, Mr. Jagan Nath Khurana, and Mr. Madan
Lal the independent directors of the Company pursuant to section 149
(10) of the Companies Act, 2013 shall hold the office as directors for
a term of 5 years w.e.f.12th May, 2015, 12th May, 2015 and 14th
November, 2014 respectively, subject to the approval of shareholders.
Mr. B. K. Goel is appointed as Chief Financial Officer of the Company
w.e.f. 6th February, 2015.
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,
B) DECLARATION BY AN INDEPENDENT DIRECTORS
The Company has received declaration by all Independent Director(s)
that they meet the criteria of independence as provided in sub-section
(6) of Section 149 of the Companies Act, 2013. The declaration received
from the independent directors were placed at the meeting of the Board
of directors of the Company held on 12th May, 2015. Any member
interested in hard copy of the said policy may inspect the same at the
Registered Office of the Company or write to the Company Secretary for
C) FORMAL ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, Independent Directors at their meeting without
the 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 its own performance, the working of
its Committees (Audit, Nomination and Remuneration and Stakeholders
Relationship Committee) and Independent Directors (without
participation of the relevant Director).The criteria for performance
evaluation have been detailed in the Corporate Governance Report which
is attached as Annexure- B to this Report.
D) NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
The Board of the Company met for the four times, i.e. on 29th May,
2014, 19th September, 2014, 14th November, 2014 and 6th February, 2015
during financial year 2014-15,
E) DIRECTORS RESPONSIBILITY STATEMENT:
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, 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
Explanation-For the purposes of this clause, the term internal
financial controls means the policies and procedures adopted by the
company for ensuring the orderly and efficient conduct of its business,
including adherence to company''s 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 information;
(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.
The composition of an Audit Committee is disclosed in the corporate
governance report annexed with this report and forms part of it.
Further there has not been any instance where the Board had not
accepted any recommendation of the Audit Committee.
M/s. Thakur Vaidyanath Aiyar and Co., Chartered Accountants (Firm
Registration No.000038N), Auditors of the Company retire at the
conclusion of the ensuing Annual General Meeting and being eligible,
offer themselves for re-appointment. The Company has received a letter
from them to the effect that their re-appointment, if made would be
within the prescribed limits under Section 139 of the Companies Act,
2013 and the Audit Committee of the Company has recommended their
appointment as statutory Auditors for two consecutive years starting
from the conclusion of 33rd AGM to the conclusion of 35th AGM of the
ACCOUNTS AND AUDIT:
Notes to accounts referred to in the Auditor''s Report are
self-explanatory and there fore, do not call for any further
explanation. However the following has not been recognized as explained
a. Rs. 2,32,381 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 Hon''ble High Court of Chhattisgarh. It
is hopeful that the Company would get the order in its favour.
c. Interest on unsecured loan taken from Promoters and other parties
from 10.08.2013 to 31.03.2015 has not been taken on accounts as the
Company has applied to the lenders for the waiver of the interest on
d. Interest on Soft Loan taken from the Government of Jharkhand under
the Industrial Rehabilitation Scheme 2003 amounting to Rs. 81,331
thousands has not been provided as the Company will make representation
for waiver on re-start of the Company operation.
e. Salaries, Wages, Allowances, Contribution to PF including interest
on overdue amount as well as employee benefit expenses w.e.f.
10.08.2013 to 31.03.2015 has not been provided in view of the shut down
of the plant and suspension of operation from 9th August, 2013.
Further due to shut down of the plant and suspension of operation from
9th August, 2013 various dues could not be paid on due dates. Necessary
steps are being taken to re-start the Company and payment of such dues
shall be made after re-start of operation of the Company.
Chandil Power Limited has become a subsidiary company of the Company
pursuant to Section 4 (1) (a) of the Companies Act, 1956 and Section
2(87) of the Companies Act, 2013 and in accordance with the general
circular No. 2/2011 dated 8 February, 2011 issued by the Ministry of
Corporate Affairs, Government of India the balance sheet, profit and
loss account and other documents as required to be attached with
balance sheet are not attached with the balance sheet of the Company.
The same will be made available to any member of the Company, who may
be interested in obtaining the same. The Annual accounts and related
documents of the subsidiary company will also be kept open for
inspection at the registered office of the Company. Further the
consolidation of accounts is not required as Chandil Power has become
subsidiary by virtue of control on of composition of Board of Directors
of Chandil Power Limited and the Company do not hold any shares in
Chandil Power Limited.Chandil Power Limited ceased to be subsidiary of
the Company w.e.f. 29th September, 2014.
A separate report on Corporate Governance is attached as Annexure B to
this report. The Auditors'' Certificate confirming compliance of
conditions of Corporate Governance and CEO/CFO Certificate as required
under Clause 41 of the Listing Agreement is included in the said
Corporate Governance Report.
MANAGEMENT DISCUSSION ANALYSIS REPORT
In terms of Clause 49 of the Listing Agreement with the Stock Exchange,
Management Discussion and Analysis Report is annexed as Annexure - C
and form part of this report.
LISTING IN STOCK EXCHANGE:
The equity shares of the Company continues to be listed in the Bombay
Stock Exchange and listing fee for the Financial Year 2015-16 has been
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS
Information pursuant to Section 134 of the Companies Act, 2013 and
rules made there under, a statement giving the required information
relating to energy conservation, technology absorption, foreign
exchange earnings and outgo is annexed hereto as Annexure-A and form
part of this report.
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
Place: New Delhi S.K. Gupta B.D. Garg
Date: 12.05.2015 Director-works Director
DIN: 03537417 DIN 00002792