annual report - bseindia.com as managing director of the company including salary, ......

BHUWALKA STEEL INDUSTRIES LIMITED"Bhuwalka Centre", No.71, IIICross, Residency Road, Bangalore- 560 025.

ANNUAL REPORT2014 - 2015

BHUWALKASTEEL INDUSTRIES LIMITED

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BOARD OF DIRECTORS : Shri. Suresh Kumar BhuwalkaChairman and Managing Director

Shri. Ajay Kumar BhuwalkaShri. Ankit Bhuwalka

AUDITORS : M/s. ASR AssociatesChartered AccountantsBellary

BANKERS : Canara BankIDBI Bank Ltd.Indian Overseas Bank

REGD. OFFICE : No.71, III CrossResidency RoadBangal ore - 560 025

CIN NUMBER : L27209KA1981PLC004343

FACTORIES : 1) at 10th MileOld Madras Road,Bangalore - 560 049.

2) 204, Mauji KhupriTaluka Wada, District ThaneMumbai - 421 312.

SHARE TRANSFER AGENTS : Integrated Enterprises (India) Ltd.No. 30, Ramana ResidencyGround Floor, 4th CrossSampige Road, MalleswaramBangalore - 560 003.

Annual Report 2014- 2015

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NOTICENotice is hereby given that the 33rd Annual General Meeting will be held on Monday, the 9th November, 2015,at 12.30 P.M. at Hotel Woodlands, No. 5, Raja Ram Mohan Roy Road, Bangalore - 560 025 to transact thefollowing business.

ORDINARY BUSINESS:

1. To receive Consider and adopt the Audited Financial Statements (including consolidated financial statements)of the Company for the financial year ended March 31, 2015, and the Reports of the Directors’ and theAuditors’ thereon.

2. Re-appointment of Mr. Suresh Bhuwalka as a Director liable to retire by rotation

To consider and to pass the following resolution as an Ordinary Resolution:

“RESOLVED THAT Mr. Suresh Bhuwalka (DIN 00092058), who retires by rotation and being eligible offershimself for re-appointment, be and is hereby re-appointed as a Director of the Company liable to retireby rotation.”

3. Appointment of Statutory Auditor

To consider and to pass the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 139, 142 and other applicable provisions, if any,of the Companies Act, 2013 and The Companies (Audit and Auditors) Rules, 2014, (including any statutorymodification(s) or re-enactment(s) thereof for the time being in force), M/S. ASR Associates, CharteredAccountants, having ICAI Firm Registration No.8877S, who have offered themselves for re-appointmentand have confirmed their eligibility to be appointed as Auditors, in terms of provisions of Section 141 of theAct, and Rule 4 of the Rules, be and are hereby re-appointed as Statutory Auditors of the Company for theCompany’s for the financial years 2015-16 to 2017-18 and to hold office from the conclusion of this AnnualGeneral Meeting until the conclusion of the 34th Annual General Meeting of the Company on suchremuneration as may be agreed upon by the Board of Directors and the Auditors, in addition to service taxand re-imbursement of out of pocket expenses incurred by them in connection with the audit of Accounts ofthe Company.

SPECIAL BUSINESS:

4. Appointment of Managing Director

To consider and if thought fit, to pass with or without modification, the following resolution as anOrdinary Resolution:

“RESOLVED THAT pursuant to the Provisions of Section 196, 197, 203 and all other applicable provisions ofthe Companies Act, 2013, if any, consent of the company be and is hereby accorded for the appointment ofShri Ajay Kumar Bhuwalka as Managing Director for a period of 5 years with effect from 13.11.2014 on amonthly remuneration of Rs.90,000/- and other benefits and perquisites and such other benefits as per thecompany’s rules wherever applicable “.

“RESOLVED FURTHER THAT the Board of Directors, be and are hereby authorised to alter, vary, andmodify the terms and conditions of appointment of Shri. Ajay Kumar Bhuwalka, from time to time, during histenure as Managing Director of the Company including salary, perquisites, allowances payable to him, providedhowever that the total remuneration payable to him shall not at any time exceed the limit prescribed underSchedule V and all other applicable provisions of the Companies Act, 2013.”

NOTES:

1. A Member entitled to attend and vote at the Meeting is entitled to appoint a Proxy to attend and vote instead ofhimself and the Proxy need not be a Member of the Company.

2. The instrument appointing a Proxy shall be deposited at the Registered Office of the Company not less than48 hours before the time of holding the Meeting.

3. The Register of Members and Share Transfer Book of the Company will remain closed from 6th November,2015 to 09th November, 2015 (both days inclusive).

4. Queries on accounts and Operations of the company, if any, may please be sent to the company at least 15days in advance of the Meeting.

5. Members are requested to bring their copies of the Annual Report to the meeting.


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6. Members/proxies should bring their attendance slip sent herewith duly filled in for recording the attendance atthe meeting.

7. Statement containing the details of Directors seeking appointment/re-appointment at the forthcoming AnnualGeneral Meeting is attached.

8. Members are requested to notify the Registrars and Transfer Agents of the Company, Integrated Enterprises(India) Ltd., No.30, Ramana Residency, 4th cross, Sampige Road, Malleswaram, Bangalore 560 003 or thecompany at its Registered Office of any change in address quoting their Folio Number(s), in respect of sharesheld in electronic form, instructions regarding change in address be furnished to members’ Depository Participantonly.

9. In view of the Green Initiative, Members are also requested to inform the Registrars and Transfer Agents ofthe Company, Integrated Enterprises (India) Ltd., No.30, Ramana Residency, 4th cross, Sampige Road,Malleswaram, Bangalore 560 003 or the Company at its Registered Office their ‘EMAIL IDS’ to enable theCompany to communicate and deliver the information / notices / documents etc. to all the shareholderselectronically.

10. Explanatory statement pursuant to section 102 of the Companies Act, 2013 for the special business isannexed hereto.

Registered Office: By Order of the BoardNo.71, III CrossResidency RoadBangalore - 560 025 (AJAY KUMAR BHUWALKA)Date :29th September,2015 Managing Director

The instructions for shareholders voting electronically are as under:(i) The voting period begins on November 6, 2015 (9:00 AM) and ends on November 8, 2015 (5:00 PM). During this

period shareholders’ of the Company, holding shares either in physical form or in dematerialized form, as onthe cut-off date November 2, 2015 of may cast their vote electronically. The e-voting module shall be disabledby CDSL for voting thereafter.

(ii) The shareholders should log on to the e-voting website www.evotingindia.com.(iii) Click on Shareholders.(iv) Now Enter your User ID

a. For CDSL: 16 digits beneficiary ID,b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID,c. Members holding shares in Physical Form should enter Folio Number registered with the Company.

(v) Next enter the Image Verification as displayed and Click on Login.(vi) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earlier

voting of any company, then your existing password is to be used.(vii)If you are a first time user follow the steps given below:

For Members holding shares in Demat Form and Physical FormPAN Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department (Applicable

for both demat shareholders as well as physical shareholders) Members who have not updated their PAN with the Company/Depository Participant

are requested to use the first two letters of their name and the 8 digits of thesequence number in the PAN field.

In case the sequence number is less than 8 digits enter the applicable number of 0’sbefore the number after the first two characters of the name in CAPITAL letters. Eg.If your name is Ramesh Kumar with sequence number 1 then enter RA00000001 inthe PAN field.


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DOB Enter the Date of Birth as recorded in your demat account or in the company recordsfor the said demat account or folio in dd/mm/yyyy format.

Dividend Bank Details Enter the Dividend Bank Details as recorded in your demat account or in the companyrecords for the said demat account or folio. Please enter the DOB or Dividend Bank Details in order to login. If the details are not

recorded with the depository or company please enter the member id / folio numberin the Dividend Bank details field as mentioned in instruction (iv).

(viii) After entering these details appropriately, click on “SUBMIT” tab.(ix) Members holding shares in physical form will then directly reach the Company selection screen. However,

members holding shares in demat form will now reach ‘Password Creation’ menu wherein they arerequired to mandatorily enter their login password in the new password field. Kindly note that thispassword is to be also used by the demat holders for voting for resolutions of any other company onwhich they are eligible to vote, provided that company opts for e-voting through CDSL platform. It isstrongly recommended not to share your password with any other person and take utmost care to keepyour password confidential.

(x) For Members holding shares in physical form, the details can be used only for e-voting on the resolutionscontained in this Notice.

(xi) Click on the EVSN for the relevant <Company Name> on which you choose to vote.(xii) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO”

for voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolutionand option NO implies that you dissent to the Resolution.

(xiii) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.(xiv) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will be

displayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” andaccordingly modify your vote.

(xv) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.(xvi) You can also take out print of the voting done by you by clicking on “Click here to print” option on the Voting page.(xvii) If Demat account holder has forgotten the same password then Enter the User ID and the image verification

code and click on Forgot Password & enter the details as prompted by the system.(xviii) Note for Non – Individual Shareholders and Custodians

Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodian are required tolog on to www.evotingindia.com and register themselves as Corporates.

A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed [email protected].

After receiving the login details a compliance user should be created using the admin login andpassword. The Compliance user would be able to link the account(s) for which they wish to vote on.

The list of accounts should be mailed to [email protected] and on approval of theaccounts they would be able to cast their vote.

A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued infavour of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer toverify the same.

(xix) Mr. Manoj Rajan, Practicing Company Secretary (Membership No. ACS 19865 & CP No. 13851) has beenappointed as the Scrutinizer to scrutinize the e-voting process in a fair and transparent manner.

(xx) The results declared along with the Scrutinizer’s Report shall be placed on the Company’s websitewww.autoaxle.com and on the website of CDSL within three (3) days of passing of the resolutions at theAGM of the Company and communicated to the Stock Exchanges.

(xxi) In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions(“FAQs”) and e-voting manual available at www.evotingindia.com, under help section or write an email [email protected].


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Explanatory statement pursuant to Section 102

Item No.4

Sri Ajay Kumar Bhuwalka was appointed as the Managing Director on the Board of the Company on 13th November,2014 by the Board of Directors in Place of Shri. Suresh Kumar Bhuwalka, Chairman & Managing Director.Shri Suresh Kumar continues as Director and Chairman and he is looking after day to day affairs of the Company.Directors are proposing to reappoint him as such for a further period of 5 years w.e.f. 01.11.2014 subject toapproval of members at the annual general meeting on a monthly remuneration of Rs.90,000/-, and other benefitsand perquisites and such other benefits as per the company’s rules wherever applicable. Terms and Conditionsof the appointment are as follows:

1. PeriodFive years commencing from 13th November, 2014

2. RemunerationSubject to overall limit laid down under Section 197 & 198 of the Companies, 2013 and provisions of ScheduleV, Mr. Ajay Kumar Bhuwalka shall be entitled to receive from Company remuneration of Rs. 90,000/- permonth:-

The aforesaid perquisites other than benefits of Provident Fund, Gratuity Fund, and Leave encashment, shallbe restricted to the annual salary of Mr. Ajay Kumar Bhuwalka.

Provided that the total remuneration payable to him by way of salary, commission, perquisites, contributionstowards Provident Fund, and Gratuity Fund on his account shall not exceed the limits calculated in accordancewith Section 197 & 198 of the Companies, 2013.

In the event of loss or inadequacy of profits in any year during the tenure of office, the remuneration payableto him for that year shall be determined and allocated by the Board within the ceiling limit laid down inparagraphs (A) of Section II of Part II of Schedule V to the Companies Act, 2013.

3. TerminationThis appointment may be terminated by any party herein, by giving to the other party, a six months noticein writing.

4. The Managing Director shall not be entitled to any sitting fees for attending the meetings of the Board ofDirectors/ committee of Directors

5. The appointment of Mr. Ajay Kumar Bhuwalka as Managing Director and remuneration payable to him are inline with Schedule V to the Companies Act, 2013 subject to the approval of members to be obtained at thisAnnual General Meeting and to the extent any of the provisions herein are inconsistent or contrary to terms ofsuch approval, the latter will prevail.

All the directors are concerned or interested in the above resolution.

Registered Office: By Order of the BoardNo.71, III CrossResidency RoadBangalore - 560 025 (AJAY KUMAR BHUWALKA)Date: 29th September,2015 Managing Director


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Details of Directors seeking appointment / re-appointment at 33rd Annual General Meeting (In pursuanceof Clause 49 of Listing Agreement)

Name of Director Shri Suresh Kumar Bhuwalka

Date of Birth 01.11.1950

Qualification B.Com

Expertise in specific functional area More than 37 years experience as Industrialistin Manufacturing

List of other companies Nava Karnataka Steels Pvt. Ltd.,in which Directorship held Benaka Sponge Iron Pvt. Ltd.,

Mahesh Sponge Iron & Power Ltd.,Shri Durga Trade Links Pvt. Ltd.,Bhuwalka Metal Industries Pvt. Ltd.,Bhuwalka Jewellers Ltd.,Bhuwalka Steel Industries FZC

Chairman/ Member of the Committees of the Share Transfer Committee CharimanBoard of Directors of other CompaniesIn which he is a Director


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DIRECTORS’ REPORT

TO THE MEMBERS OF

BHUWALKA STEEL INDUSTRIES LIMITED:

Your Directors have pleasure in presenting before you the 33rd Annual Report of the Company together withAudited Statement of Accounts for the Twelve Months Period ended 31st March, 2015.

1. FINANCIAL RESULTS:

(Rs. in Lakhs)

Particulars 2014 – 15 2013 – 14(12 months) (6 months)

Total Income 39285.29 16838.80

Profit/(Loss) before Interest, Depreciation and Taxation (1383.07) (1069.70)

Less: - Interest 5.61 1151.56Less:- Depreciation/Amortization 522.05 304.09

Profit/(Loss) Before Tax before Extraordinary item (1910.73) (2525.36)

Add:- Profit from Extraordinary item 1311.98 –Profit/(Loss) Before Tax After Extraordinary item (598.74) (2525.36)

Less:- Income Tax for the year(including FBT and Deferred taxation) 931.73 596.05

Less:- Income tax for earlier years – –

Profit After Tax 332.98 (1929.30)

Add: Balance of profit brought forward From last year (1337.27) 592.03

Appropriations:

Proposed Dividend with Dividend taxon Equity shares – –

Balance of Profit carried forward (1004.30) (1337.27)

2. OPERATIONS REVIEW:

The current year operational figures are for 12 months period from 01.04.2014 to 31.03.2015 as againstprevious year figures which are for 6 months period. Total income from operations during the period of twelvemonths under review was Rs. 39285.29 lakhs as compared to Rs. 16838.80 lakhs in the previous year(6 months). The company has made a profit of Rs.332.98 lakhs as compared to previous year the Companyhas suffered a loss after tax of Rs. 19,29.30 lakhs (after extra ordinary items). Main reason for losses wasLower capacity utilization of production capacities due to inadequate working capital during most of the periodof reported FY.

Company is endeavoring hard to overcome the issues of poor demand in Infra and Real Estate by innovativemarketing strategies and also focusing in optimizing its capacity utilization. However short of working capitalis impacting the efforts negatively.

Company is taking Suitable measures to resolve the banking issue, which will provide flexibility to infuse freshfunds and sell noncore assets to improve liquidity for working capital and consequently increase capacityutilization. The management is hopeful that these measures will enable to increase the volumes and also theprofitability and liquidity of the company.

3. DIVIDEND

Your Directors express their inability to recommend any dividend in view of huge losses incurred by theCompany.

4. DISCLOSURES OF AMOUNTS, IF ANY, TRANSFER TO ANY RESERVES.

It is not proposed to carry any amount to any reserves from the profits of the Company. Hence, disclosureunder Section 134 (3) (j) of the companies act, 2013 is not required.


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5. SUBSIDIARY COMPANY

Company currently has only one wholly owned Subsidiary, M/s. Benaka Sponge Iron Private Limited. SubsidiaryCompany is into manufacturing of sponge Iron products from iron ore and pallets. While preparing consolidatedfinancials of the company, Financials of M/s Benaka Sponge Iron Private Limited has been consolidated asper Accounting Standard- 21 of ICAI.

During the· financial year 2014-15 the company has disinvested its total investments in joint venture companyBhuwalka Steel Industries FZC, UAE.

6. Deposit

The Company has not accepted any deposit during the year.

7. CONSERVATION OF ENERGY:

Total energy consumption and energy consumed per unit of production as per Form ‘A’ is annexed - formingpart of this Report.

8. TECHNOLOGY ABSORPTION:

The Company is keeping abreast of the latest developments in product technology, manufacturing processand methods and using indigenous technology.

9. FOREIGN EXCHANGE EARNINGS AND OUTGOINGS:

Foreign Exchange Earnings and Expenditure are given under Point 8 (E) and 8 (F) of Note ‘23’ forming part ofthe Accounts for the Period ended 31st March, 2015.

10. PERSONNEL:

Industrial Relations remained cordial through out the year.

There are no employees of the categories specified under Section 134 of the Companies Act, 2013 read withCompanies (Particulars of Employees) Rules, 1975 as amended. Hence, this information is not given.

11. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIALSTATEMENTS RELATE AND THE DATE OF THE REPORT

Due to non servicing of the debt post re-structuring the company Account has been classified as NPA by thebankers. The company however is taking suitable measure to resolve the same.

12. DETAILS OF DIRECTORS AND KMP:

Sri Suresh Kumar Bhuwalka retires by rotation at the forthcoming Annual General Meeting and being eligible,offer himself for re-appointment.

During the year Mr. Munish Mohan, Nominee Director appointed in the place of Smt. Visalakshi Vasanthanwho retired with effect from 08/05/2014 and Mr. Munish Mohan retired with effect from 14/02/2015 due towithdrawal of Nomination by the appointing Authority i.e., IDBI Bank Ltd. and Mr. K C Kondaiah retired witheffect from 08/05/2014.

Mr. Ajay Kumar Bhuwalka appointed as Managing Director of the Company in the Board Meeting held on13.11.2014 and the same is being considered in the ensuing Annual General Meeting being held on9/11/2015.

13. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TOTHE FINANCIAL STATEMENTS PURSUANT TO RULE 8 (5) (viii) OF COMPANIES (ACCOUNTS) RULES,2014:

The Company has an adequate Internal financial control system, commensurate with the size of its businessoperations.

14. SECRETARIAL AUDIT REPORT:

Mr. Manoj Rajan, Practicing Company Secretary Membership No. ACS 19865 was appointed to conduct theSecretarial Audit of the Company for the Financial Year 2014-15, as required under section 204 of Act andRules made their under. The Secretarial Audit Report, in the prescribed Form MR-3 is annexed to this report.

15. BOARD MEETING:

During the financial year 2014-15, the Board met 6 times on the following dates 08.05.2014, 30.05.2014,14.08.2014, 13.11.2014, 14.02.2015 and 20.03.2015.


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16. DECLARATION OF INDEPENDENT DIRECTORS

Presently there are no Independent Directors on Board. However, steps are being taken for the appointmentof Independent Directors.

17. COMPANY’S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATIONAND DISCHARGE OF THEIR DUTIES

As per provisions of Section 178(1) constitution of Nomination and Remuneration Committee is being constituted.

18. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES MADEPURSUANT TO SECTION 188 OF THE COMPANIES ACT, 2013.

Details of each of the related party transaction entered into by the Company during the Year together withjustification are annexed herewith in Form AOC-2 as “Annexure B”.

19. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM

The Audit Committee consists of the following members;

a) Mr. K C Kondaiah, Independent Director - Upto 30.5.2014b) Mr. Ajay Kumar Bhuwalkac) Suresh Kumar Bhuwalka - Upto 30.5.2014d) Mr. Ankit BhuwalkaDuring the financial year 2014-15, the Committee met 5 times on the following dates 08.05.2014, 30.05.2014,13.08.2014, 13.11.2014, 14.02.2015.The Company has established a vigil mechanism and oversees through the committee, the genuine concernsexpressed by the employees and other Directors. The Company has also provided adequate safeguardsagainst victimization of employees and Directors who express their concerns. The Company has also provideddirect access to the chairman of the Audit Committee on reporting issues concerning the interests of coemployees and the Company.

20. INFORMATION PURSUANT TO RULE 5 (2) OF COMPANIES (APPOINTMENT & REMUNERATION OFMANAGERIAL PERSONNEL) RULES, 2014

The Company has not appointed any employee(s) in receipt of remuneration exceeding the limits specifiedunder Rule 5 (2) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014.

21. AUDITORS:

The Auditors, M/s. ASR Associates, Chartered Accountants, Bellary, retire at the conclusion of the forthcomingAnnual General Meeting and being eligible offer themselves for re-appointment.

22. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT, 2013

There was no loan given or guarantee given or investment made or security provided pursuant to Section 186of the Companies Act, 2013 during the year under review and hence the said provisions are not applicable.

23. DETAILS OF SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNALIMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATION IN FUTUREThere are no significant material orders passed by the Regulators / Courts / Tribunal which would impact thegoing concern status of the Company and its future operations. Hence, disclosure pursuant to Rule 8 (5) (vii)of Companies (Accounts) Rules, 2014 is not required.

24. Risk Management Policy:

The Company has developed & implemented Risk Management Policy. However, Company has not comeacross any element of risk which may threaten the existence of the Company.

25. AUDITORS’ REPORT:a) As reported by Statutory Auditor’s in their Audit, there have been delays in servicing undisputed statutory

liabilities during 2014-15 on time. Further certain payments have been delayed beyond 180 days. Amountof these delays have been detailed in point no. (vii) (a) and (b) of annexure of Paragraph 1 (CARO) of theAuditor’s Report.

Management’s Reply:- Company has been going through tough financial condition during FY 14-15 due tooperational and cash losses. This situation occurred due to lower production level and bad demandscenario of Company’s product during such period. Owing to cash losses and liquidity constraints,company could not mobilize funds for statutory dues and hence same were delayed unintentionally.Company has already taken measure to improve its position by utilization of current assets and thesedues will be paid on highest priority.


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b) In Reply of Point no. (viii) of the annexure of Paragraph 1 (CARO) of the Auditor’s Report i.e. “TheCompany’s accumulated losses at the end of the Financial Year were more than 50% of the net worth. Thecompany has incurred cash losses in the current Financial Year. The Company has to comply withprovisions of The Sick Industrial Companies Act, 1985 (SICA ACT) as applicable to the Company post this event.”Management’s Reply: - Management has taken Appropriate steps to resolve all financial issues effectingthe company and taking measure to safeguard the company’s interest from further erosion in its networth.As the Net worth of the company has eroded more than 50% we have applied for registration with The SickIndustrial Companies Act, 1985 (SICA ACT).

c) As reported in point no. 11 of the annexure of Paragraph 1 (CARO) of the Auditor’s Report i.e. “Based onour Audit procedures and as per the information and explanations given by the management, the companyhas defaulted in repayment of loans and interest to Banks and Financial Institutions. Consequently thebanks have served notice U/S 13 of the SARFESI Act.

Management’s Reply: - As mentioned above to the reply of a) Company could not arrange funds for timely bankingrepayments due to cash losses and liquidity constraints and hence banking repayments were delayed unintentionally.Company has already taken measure to improve this issue and has approached the bankers for a solution in thismatter. The matter is under consideration by the bankers. The company has also approached DRT in response tothe SARFESI notice issued by the bankers.

For further clarification on Auditor’s observation, The Notes on accounts referred to in the Auditors’ Report are selfexplanatory and therefore do not call for any additional comments under section 217(3) of the Companies Act, 1956.

26. DIRECTORS’ RESPONSIBILITY STATEMENT AS PER SECTION 217 (2AA): Your Directors hereby confirm:

a) that in the preparation of the annual accounts, the applicable accounting standards have been followedand that there are no material departures;

b) that the directors had selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company at the end of the financial year and of the profit of the company for the year;

c) that the directors had taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 2013, to safeguard the assets of theCompany and for preventing and detecting fraud and other irregularities;

d) that the directors had prepared the annual accounts on a ‘going concern’ basis.

e) the directors, in the case of a listed company, had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operating effectively.

f) They have devised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems were adequate and operating effectively.

27. REPORT ON CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, the following form part of thisAnnual Report:a) Management Discussion and Analysis;b) Report on Corporate Governance;c) Auditors’ Certificate regarding compliance of conditions of Corporate Governance

28. ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation for the continued support, encouragement and co-operation extended by all the stakeholders namely; Financial Institutions, Bankers, shareholders, customersand suppliers.

Your Directors also place on record their appreciation for the contributions made by the employees of theCompany at all levels.

FOR AND ON BEHALF OF THE BOARD

(AJAY KUMAR BHUWALKA)

MANAGING DIRECTOR

Place : Bangalore (ANKIT BHUWALKA)Date : 29th September , 2015 DIRECTOR


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A n n e AFORM “A”

ANNEXURE TO DIRECTOR’S REPORT

A. POWER AND FUEL CONSUMPTION: Rolled products

Current Year Previous Year2014-15* 2013-14**

01. ELECTRICITY:a) Purchased

Units 41,89,410 13,68,243Total Amount(Rs.) 381,13,255 129,06,662Rate/Unit(Rs.) 9.10 9.43

b) Own Generation NIL NIL

02. FURNACE OIL:Quantity (Ltrs) - -Total Amount (Rs.) - -Average Rate (Rs.) - -

03. COAL & OTHERS:Quantity (Tonnage) 4,368 1,461Total Amount (Rs.) 292,17,815 92,85,672Average Rate (Rs.) 6,689 6,354

B. CONSUMPTION PER UNIT OF PRODUCTION:

Production (MTs) 16,932 6,359Electricity(Units) 247 215Furnace Oil (Ltrs.) - -Coal & Others (Kgs) 258 230

* Power and Fuel Consumption for the period of 12 months from 1-April-2014 to 31-March-2015

** Power and Fuel Consumption for the period of 6 months from 1-October-2013 to 31-March-2014


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“Annexure B”- Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies(Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the Company with related partiesreferred to in sub-section (1) of section 188 the Companies Act, 2013, including arms’ length transactions underthird proviso thereto:

Details of material contracts or arrangement or transactions at arm’s length basis:

SL. Particulars Details Nature of RelationshipNo.

a) Name (s) of the related Benaka Sponge Iron Private Limited Subsidiary Company party & nature Bhuwalka Steel Industries FZC Parties where Control Existsof relationship Balchand Suresh Kumar Parties where Control Exists

Bhuwalka Jewellers Limited Parties where Control ExistsBhuwalka Metal Industries Private Limited Parties where Control ExistsShri Durga Trade Links Private Limited Parties where Control ExistsNava Karnataka Steels Private Limited Parties where Control ExistsMahesh Sponge Iron and Power Limited Parties where Control ExistsSuresh Kumar Bhuwalka Key Management

Personnel- DirectorAjay Kumar Bhuwalka Key Management

Personnel- ManagingDirector

Ankit Bhuwalka Key ManagementPersonnel- Director

b) Nature of contracts/arrangements/transaction

Sl No Nature of Transaction Subsidiary Key Management Parties wherePersonel Control Exit

1 Purchases 22.39 – 5939.522 Sales NIL – 21080.523 Expenses NIL 11.50 –4 Income NIL – –5 Outstanding-Debt NIL – 459.486 Outstanding - Credit NIL 2773.41 646.47


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Form No. MR-3Secretarial Audit Report

(For the period from 01-04-2014 to 31-03-2015)

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules, 2014]

To,The Board of DirectorsBhuwalka Steel Industries LimitedBhuwalka Centre71, 3rd crossResidency Road,Bangalore

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence togood corporate practices by Bhuwalka Steel Industries Limited (hereinafter called the Company). SecretarialAudit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on our verification of the books, papers, minute books, forms and returns filed and other records maintainedby the Company and also the information provided by the Company, its officers, agents and authorizedrepresentatives during the conduct of secretarial audit and the audited financials of the company including theAuditor’s Report, we hereby report that in our opinion, the Company has, during the audit period ended on31-03-2015, generally complied with the statutory provisions listed hereunder and also that the Company hasproper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to thereporting made hereinafter:

I have examined the books, papers, minute books, forms and returns filed and other records maintained byBhuwalka Steel Industries Limited(“The Company”) for the period ended on 31-03-2015 according to theprovisions of:

I. The Companies Act, 2013 (the Act) and the Rules made thereunder;

II. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the Rules made thereunder; -

III. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

IV. Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent ofForeign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;- NA

V. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act,1992 (‘SEBI Act’) to the extent applicable to the Company:-

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,2011;

b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;

c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations,2009;

d. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents)Regulations, 1993 regarding the Companies Act and dealing with client;

e. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and

f. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;

g. The Company has generally complied with the requirements under the Equity Listing Agreements enteredinto with BSE Limited, the non-compliancesobserved are listedin Annexure-1,basedon the information anddocuments made available to me by the company or its officers agents; and

h. The Memorandum and Articles of Association.

I have also examined compliance with the applicable clauses of the following:

i) Secretarial Standards issued by The Institute of Company Secretaries of India as Applicable.


15

ii) The Listing Agreements entered into by the Company with the BSE Limited,. During the period underreview the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines,Standards, Listing Agreements etc mentioned abovesome of the non-compliances observed are listed inAnnexure-1, based on the information and documents made available to me.

1. I further report that the Company has, in my opinion, was not in full compliance withthe provisionsof the CompaniesAct, 2013 and the Rules made under that Act as notified by Ministry of CorporateAffairs and the Memorandum and Articles of Association of the Company, and few of the noncompliance observed are as mentioned below:

a) Maintenance of various statutory registers and documents and making necessary entries therein. -Registers are found to be maintained and are in process of updation Register of Memberswas closedfrom 23-09-2014 to 26-09-2014 in the previous year as per the terms of listing agreement.

b) Forms, returns, documents and resolutions required to be filed with the Registrar of Companies and theCentral Governmentare found to be generally filed.

- The Board Resolution passedwith regard to acceptance of Financials and Board’s Report for the FY2014-15 and;

- For the appointment of Managing Director on 13-11-2014;

c) Service of documents by the Company on its Members, Auditors and the Registrar of Companies;

d) Notice of Board meetings and Committee meetings of Directors were found as sent regularly to the stockexchanges through e-mail or through courier as confirmed by the management but the same is notpublished in the newspapers as per the listing agreement due to Company being in financial crunch asinformed by the Management;

e) The meetings of Directors and Committees of Directors were conducted in compliance with the Act,except that the quarterly results of the Company were not published in the news papers as per listingagreement due to Company being in financial crunch as informed by the mangement. However, outcomeof the board meeting was found as uploaded on the BSE website upon adotion of Quarterly resultaregularly;

f) The 32ndAnnual General Meeting was held on 27th September, 2014;

g) Minutes of proceedings of General Meetings and of the Board and its Committee meetings are maintained;

h) Approvals of the Members, the Board of Directors, the Committees of Directors and the governmentauthorities, wherever required were secured;

i) Constitution of the Board of Directors / Committee(s) of Directors, appointment, retirement andreappointment of Directors including the Managing Director and Whole-time Directors has not been incompliance with the Act and the same has been mentioned in detail in Annexure-1;

j) Payment of remuneration to Directors including the Managing Director and Whole-time Directors is incompliance,

k) Appointment and remuneration of Auditors is in compliance but the Company being involved in manufacturingbusiness has not appointedtheCost Auditors;

l) Transfers and transmissions of the Company’s shares and issue and dispatch of duplicate certificates ofshares is being done by Register and Transfer Agent (Integrated Enterprises (India) Ltd) in compliancewith listing agreement;

m) Declaration and payment of dividends; - NA

n) Transfer of certain amounts as required under the Act to the Investor Education and Protection Fund anduploading of details of unpaid and unclaimed dividends on the Ministry of Corporate Affairs is donehowever, the details of the same is not hosted on the website of the Company;

o) Borrowings and registration, modification and satisfaction of charges wherever applicable;

p) Investment of the Company’s funds including investments and loans to others;

q) Form of balance sheet as prescribed under Part I, form of statement of profit and loss as prescribed underPart II and General Instructions for preparation of the same as prescribed in Schedule VI to the Act;

r) Directors’ report is prepared in accordance as per new format;

s) Contracts, common seal, registered office and publication of name of the Company; and


16

t) Generally, all other applicable provisions of the Act and the Rules made under the Act however few of theobservations identified by usare listed in Annexure 1 are not complied with.

2. I further report that:

The Board of Directors of the Company is NOT duly constituted with proper balance of Executive Directors,Non-Executive Directors and Independent Directors. With regard toprocess for changes in the compositionof the Board of Directors that took place during the period under review were carried out in compliance withthe provisions of the Actexcept that resignation of Mr. K C Kondaiah, dated 08-05-2014, Mr.Munish Mohandate 14-02-2015were not intimated to Stock Exchange.Post the changes, the composition is not as per theClause 49A of the Listing Agreement

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes onagenda were sent at least seven days in advance, and a system exists for seeking and obtaining furtherinformation and clarifications on the agenda items before the meeting and for meaningful participation atthe meeting.

Majority decision is carried through while the dissenting members’ views are captured and recorded aspart of the minutes.

The Company has obtained all necessary approvals under the various provisions of the Act; and

There was no prosecution initiated and no fines or penalties were imposed during the year under reviewunder the Act, SEBI Act, SCRA, Depositories Act, Listing Agreement and Rules, Regulations and Guidelinesframed under these Acts against / on the Company, its Directors and Officers.

The Directors have complied with the disclosure requirements in respect of their eligibility of appointment,( there is no Independent Director on Board) and compliance with the Code of Business Conduct & Ethicsfor Directors and Management Personnel;

3. The Company has complied with the provisions of the Securities Contracts (Regulation) Act, 1956 and theRules made under that Act, with regard to maintenance of minimum public shareholding.

4. I further report that the Company has complied with the provisions of the Depositories Act, 1996 and theByelaws framed thereunder by the Depositories with regard to dematerialization / rematerialisation of securitiesand reconciliation of records of dematerialized securities with all securities issued by the Company, however,the Company has not paid the Annual Custodial Fees for the Financial Year ended 31-03-2015.

5. The Company has complied with the provisions of the FEMA, 1999 and the Rules and Regulations made underthat Act to the extent applicable.- NA

6. I further report that:

a. the Company has generally complied with the requirements under the Equity Listing Agreements enteredinto with BSE Limited however few of the non-compliancesobserved by me are listed in Annexure-1, basisthe information and documents made available to me;

b. the Company has complied with the provisions of the Securities and Exchange Board of India (SubstantialAcquisition of Shares and Takeovers) Regulations, 2011 including the provisions with regard to disclosuresand maintenance of records required under the said Regulationsas per the information and documentsmade available to me;

c. the Company has complied with the provisions of the Securities and Exchange Board of India (Prohibitionof Insider Trading) Regulations, 1992 including the provisions with regard to disclosures and maintenanceof records required under the said Regulations as per the information and documents made available tome;

7. I further report that based on the information received and records maintained and confirmationby themanagement and the statutory Auditor’s Report, there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliance with applicablelaws, rules, regulations and guidelines.

Date: 15-07-2015Place: Bangalore

For Manoj Rajan& Associates

CS Manoj RajanPracticing Company Secretary

CP No. 13851


17

ANNEXURE –1TO THE SECRETARIAL AUDIT REPORT

In my opinion and to the best of my information and according to the examinations carried out by me andexplanations furnished and representations made to me by the Company, its officers and agents, I report that theCompany has, during the financial year under review, following non-compliances have come to my observationwith regard to the provisions of the Acts, the Rules made there under and the Memorandum and Articles ofAssociation of the Company:-

1) Company has not appointed woman director as per section 149 (1) of Companies Act 2013

2) Company has not appointed sufficient number of Independent Directors as per Section 149(6) of CompaniesAct 2013.

3) Audit Committee of the Company is not constituted with sufficient number of independent Directors as persection 177(2) of the Companies Act 2013

4) Share holders’ / Investors’ Grievance Committee of the Company doesn’t contain sufficient independentdirectors and Nomination & Remuneration committee are not constituted as per section 178 of the CompaniesAct 2013.

5) There is no Company Secretary in the Company and more than 6 months has elapsed since the lastappointment.

6) Company has not appointed Cost Auditor as per section 148 of the Companies act 2013 and companies (costrecords and audit) rules 2014.

7) Company not performed formal evaluation of board and also not mentioned in its Board report as persection 134(3) of the Companies Act 2013.

8) Website of the company is not up to date with latest information of the Company as mentioned below:

a) Quarterlyunaudited /auditedfinancial Results and AnnualauditedfinancialResultsof the Company are notuploaded for compliance towards Clause-41 of Listing Agreement(LA).

b) Email IDofthegrievanceredresser division/ complianceofficerexclusively for the purpose of registeringcomplaintsbyinvestorsnot hosted as per Clause-47 (f) of LA.

c) The terms and conditions of appointment of independentdirector is notdisclosedonthewebsite oftheCompany as required under Clause-49 (II) (B)(4) (b) of LA.

d) Thedetailsof familiarization programmesforIndependent directors are not hosted and has not disclosed asper Clause- 49 (II) (B)(7) (b) of LA.

e) TheCodeof Conductfor theBoardand Senior Management is not provided as per Clause-49 (II) (E)(1) & 49(VIII (D)(3) of LA.

f) The policy on dealing with Related Party Transactions is not prepared and also not hosted on its websiteand aweblink thereto is not provided in the Annual Report as per Clause-49 (VIII) (A)(2) of LA.

g) The criteria of making payments to non-executive directors is neither provided in its Annual Report nor putupon the company’s website and reference drawn thereto in the annual report as per Clause-49 (VIII)(C)(3) of listing agreement.

h) The Company has not provided in the website the Quarterly results and presentations made by thecompany to analysts as per Clause-49 (VIII) (E)(3) of listing agreement.

i) The Company has not updated details of financial information, shareholding pattern, compliance withcorporate governance, contact information of the designated officials of the company who are responsiblefor assisting and handling investor grievances as per Clause-54 of listing agreement.

9). According to the information and explanations given in auditor’s report, details in respect of statutory duesduring the period are as below:

(a) The Company has not been regular in depositing undisputed statutory dues, except TDS, Profession Tax,Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, Service Tax, Wealth Tax, CustomsDuty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it, with theappropriate authorities.

(b) There were undisputed amounts payable in respect of TDS, Profession Tax, KVAT, Provident Fund,Employees’ State Insurance, income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, ExciseDuty, Value Added Tax, Cess and other material statutory dues in arrears as at 31 March 2015 for a periodof more than six months.


18

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty; ValueAdded Tax and Cess which have not been deposited as on 31 March 2015 on account of disputes aregiven below:

To,The MembersBHUWALKA STEEL INDUSTRIES LIMITEDCIN : L27209KA1981PLC004343BHUWALKA CENTRE71,3RD CROSS, RESIDENCY ROAD,BANGALORE - 560 025

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the company. Our responsibilityis to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practice and processes which were appropriate to obtain reasonable assuranceabout the correctness of the contents of the Secretarial records. The verification was done on the test basisto ensure that correct facts are reflected in secretarial records. We believe that the processes and practices,we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of thecompany.

4. Where ever required, we have obtained the Management representation about the compliances of laws, rulesand regulations and happening of events etc. and relied on the audited financials.

5. The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards is theresponsibility of management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacyor effectiveness with which the management has conducted the affairs of the company.

For Manoj Rajan& Associates

Manoj Kumar RajanMembership No: A19865

C P No. 13851

Sl. No. Name of the statute Nature of Dues Forum where dispute is pending

1 Central Excise Act 1944 Excise Duty and Commissioner of central Excise(Appeals),Service Tax CESTAT, High Court, Supreme Court

2 Income Tax Act, 1961 Income Tax Commissioner of Income Tax (Appeals), ITAT

d) The company has already filed Form C with BIFR due to the eroded net worth.

e) In our opinion and according to the information and explanations given to us, the Company has defaultedin the repayment of dues to financial institutions, banks as mentioned in Note 23 (7)(ii).

f) In our opinion and according to the information and explanations given to us, the terms and conditions ofthe guarantees given by the Company for loans -taken by others from banks and financial institutions arenot, prima facie, prejudicial to the interests of the Company.

g) In our opinion and according to the information and explanations given to us, the term loans have beenapplied by the Company during the year for the purposes for which they were obtained, other thantemporary deployment pending application.

10. Disclosure of interests and concerns in contracts and arrangements, shareholdings and directorships inother Companies and interest in other entities by Directors is confirmed by the management as complied with;

11. As per the Management confirmation all transactions with related parties were in the ordinary course ofbusiness and arms length basis and were placed before the Audit Committee periodically.

12. Establishing a Vigil Mechanism and providing to complainants, if any, unhindered access to the Chairman ofthe Audit Committee is complied as per management confirmation.

13. The Company has appointed Internal Auditor.

Date: 15/10/2015Place: Bangalore


19

EXTRACT OF ANNUAL RETURN

As on the financial period ended on March 31, 2015[Pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies

(Management and Administration) Rules 2014]

FORM No. MGT – 9

I REGISTRATION AND OTHER DETAILS

CIN L27209KA1981PLC004343

Registration Date 18/08/1981

Name of the Company Bhuwalka Steel Industries Limited

Category/Sub-Category of the Company Company limited by shares and IndianNon Government Company

Address of the Registered office and “Bhuwalka Centre” No. 71, 3rd Cross,contact details Residency Road, Bengaluru – 560 025

Tel. : 080-42427000, Fax. : 080-25599090Email:[email protected]

Whether Listed Company Yes

Name, Address and Contact details of Integrated Enterprises (India) LimitedRegistrar and Transfer Agents No. 30, Ramana Residency, 4th Cross,

Sampige Road, Malleswaram,Bengaluru – 560 003Tel.:080 23460815 to 818

II PRINCIPAL BUSSINESS ACTIVITIES OF THE COMPANYAll the business activities contributing10%or more of the total turnover of the company shall be stated:

Name and Description Products/services NIC Code of the % to total TurnoverProduct / service of the Company

Manufacturing of Re-Rollable Steel Products 7214 100


20

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Name and address of Address CIN/GLNCompany

Benaka Sponge Iron Pvt. Ltd “Bhuwalka Centre” U27102KA2003PTC032717 Subsidiary 99.97 Section 2(87)No.71, 3rd Cross,Residency Road,Bangalore – 560 025

Nava Karnataka Steels Pvt. Ltd. “Bhuwalka Centre” U27100KA1972PTC002239 Associate NIL Section 2(6)No.71, 3rd Cross,Residency Road,Bangalore – 560 025

Bhuwalka Jewellers Ltd. “Bhuwalka Centre” U36911KA1995PLC018805 Associate NIL Section 2(6)No.71, 3rd Cross,Residency Road,Bangalore – 560 025

Shri Durga Trade Links Pvt. Ltd. “Bhuwalka Centre” U51101KA1988PTC009119 Associate NIL Section 2(6)No.71, 3rd Cross,Residency Road,Bangalore – 560 025

Bhuwalka Metal Industries “Bhuwalka Centre” U27209KA1982PTC004850 Associate NIL Section 2(6)Pvt. Ltd. No.71, 3rd Cross,

Residency Road,Bangalore – 560 025

Mahesh Sponge Iron and “Bhuwalka Centre” U27104KA2004PLC034136 Associate NIL Section 2(6)Power Ltd. No.71, 3rd Cross,

Residency Road,Bangalore – 560 025

Holding/Subsidiary/AssociateCompanies

% ofShares

Held

ApplicableSection


21

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23

iii) Change in Promoters’ Shareholding (Please specify, if there is no change)

At the beginning of the year No change during the year

Date wise Increase/Decrease in Promoters’Shareholding during the year specifying thereasons for increase/ decrease(e.g allotment/transfer/Bonus/sweat equity etc) No change during the year

At the end of the year No change during the year

Shareholding at the beginningof the year (01.04.2014)

Shareholding at the endof the year (31.03.2015)

No ofShares

No ofShares

% of total shareof the Company

% of total shareof the Company

iii) Shareholding Pattern of ten Shareholders (Other than Directors, Promoters and Holders ofGDRs and ADRs)

Surya Prakash Heda 258250 2.49 250285 2.41Sangeetha S 184945 1.78 185320 1.79Master Capital Services Ltd. 156455 1.51 3106 0.03Geeta Gupta 100000 0.96 100000 0.96Nilesh Anant Naik 67872 0.65 67872 0.65Alankit Assignments Ltd. 61090 0.59 300 0.00Savitha S 50000 0.48 50000 0.48Rajinder Singh Chadha 48000 0.46 80990 0.78Satish Kumar 40000 0.39 66111 0.64Ravi Varma S 37170 0.36 59871 0.58

Shareholding at the beginning of theyear (01.04.2014)

Shareholding at the end of the year(31.03.2015)

No of Shares % of total shareof the Company


For Each of the Top10 Shareholders

ii) Shareholding of promoters’

Suresh Kumar Bhuwalka 6058500 58.40 5524680 91.19 6058500 58.40 5524680 91.19

Ajay Kumar Bhuwalka 752600 7.25 700000 93.01 752600 7.25 700000 93.01

Indira Devi Bhuwalka 247500 2.39 – – 247500 2.39 – –

Kishan Kumar Bhuwalka 1400 0.01 – – 1400 0.01 – –

Bhuwalka Metal Industries Pvt. Ltd. 300000 2.89 – – 300000 2.89 – –

Total 7360000 70.94 6224680 84.57 7360000 70.94 6224680 84.57

No. ofShares

held

% of totalshares of

thecompany

Sharespledged/

encumbered

% ofsharesencum-bered

No. ofShares

held

% of totalshares of

thecompany

Sharespledged/

encumbered

% ofsharesencum-bered

Shareholding at the beginningof the year 01.04.2014

Shareholding at the beginningof the year 01.04.2015


24

Shareholding at the beginningof the year

Cumulative Shareholdingduring the Year



For Each of the Directorsand KMP

Suresh Kumar Bhuwalka 6058500 58.40 6058500 58.40

Ajay Kumar Bhuwalka 752600 7.25 752600 7.25

Date wise Increase/Decrease in shareholdingduring the year Specifyingthe reasons for increase/decrease (e.g. allotment /transfer / bonus / sweatequity etc):

At the end of the year

Suresh Kumar Bhuwalka 6058500 58.40

Ajay Kumar Bhuwalka 752600 7.25

Not Applicable

v) Shareholding of Directors and Key Managerial Personnel:

vi) INDEBTEDNESS:

Secured Loans Unsecured Deposits TotalExcluding Deposits Loans Indebtedness

Indebtedness at the Beginning of theFinancial Year 1474716094 499670695 NIL 1974386789

i) Principal Amount

ii) Interest due but not paid

iii) Interest accrued but not due

Total (i+ii+iii) 1474716094 499670695 NIL 1974386789

Change in Indebtedness during thefinancial year

Addition 383163124 1574770 384737894

Reduction 129831 6105214 62355045

Net Change 383033293 (-) 4530444 378502849

Indebtedness at the end of thefinancial year 1857749387 495140251 NIL 2352889638

iv) Principal Amount

v) Interest due but not paid

vi) Interest accrued but not due

Total (iv+v+vi) 1857749387 495140251 NIL 2352889638


25

Vii) REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration of MD, WTD and / or Manager

Particulars Mr. Suresh Kumar Bhuwalka Kumar Bhuwalka(Chairman & Managing Director) Mr. Ajay Managing Director Total

Gross Salary 700000.00 450000.00 1150000.00

(a) Salary as per provisions containedin section 17(1) OF THE IncomeTax Act, 1961 —- —- —-

(b) Value of perquisities underSection 17(2) of theIncome Tax, 1961 —- —- —-

(c) Profit in lieu of salary underSection 17(3) of the Income TaxAct, 1961 —- —- —-

Stock Options —- —- —-

Sweat Equity —- —- —-

Commission —- —- —-

- As % of profit —- —- —-

- Others, please specify —- —- —-

(a) Retirement Benefit —- —- —-

(b) Other Benefits (net Perquisite value)included in 1 (b) above —- —- —-

Total 700000.00 450000.00 1150000.00

B. Remuneration to other Directors

Particulars of Remuneration Name of Director(s) Total Amount

Fee for attending Board / Committee Meetings NIL NIL

Commission NIL NIL

Others, Please specify NIL NIL

Total (B)(1) NIL NIL

Other Non Executive Directors

Particulars of Remuneration Name of Director(s) Total Amount

Fee for attending Board / Committee Meetings NIL NIL

Commission NIL NIL

Others, Please specify NIL NIL

Total (B)(2) NIL NIL

Total (B0 = (B)(1) + (B)(2) NIL NIL


26

Remuneration to Key Managerial Personnel other than MD/WTD Manager

CEO Company Secretary CFO Total

Gross Salary

(a) Salary as per provisions containedin section 17(1) OF THEIncome Tax Act, 1961 NIL NIL NIL NIL

(b) Value of perquisities underSection 17(2) of the Income Tax, 1961 NIL NIL NIL NIL

(c) Profit in lieu of salary underSection 17(3) of the Income Tax Act, 1961 NIL NIL NIL NIL

Stock Options NIL NIL NIL NIL

Sweat Equity NIL NIL NIL NIL

Commission

- As % of profit NIL NIL NIL NIL

- Others, please specify NIL NIL NIL NIL

(a) Retirement Benefit NIL NIL NIL NIL

(b) Other Benefits (net Perquisite value) (c) NIL NIL NIL NIL

Total NIL NIL NIL NIL

Key Managerial PersonnelParticulars of Remuneration

Viii. Penalties / Punishments / Compounding of offences: NIL

Type Section of the Brief Details of penalaty/ Authority Appeal madeCompanies Act Description Punishment/ [RD /NCLT/ If any

Compounding COURT] (give details)Fees imposed

A. Company

Penalty — — — — —

Punishment — — — — —

Compunding — — — — —

B. Directors




Other Officers in Defaults





27

Management Discussion and AnalysisIndustry Structure & Developments:

The Company’s primary product, steel rolled product (Mainly TMT and Structural Steel), is catering to the demand ofReal Estate construction, infrastructure, power, Telecom and engineering industries. There are large no. of re-rollingmills across the country who are largely local players apart from Primary Steel Producers like Tata Steel, JSW etc.

During the year under review, the steel prices continued to be volatile and the prices of rolled products weremarket driven. For improving margins, Company has taken serious steps for reduction in the cost of productionand overheads. Company is concentrating to optimize its capacity utilization so as to achieve economies of scale.Company is also exploring Job work opportunities for better utilization of the capacities. Further to create a wideproduct base to cater other growing industries such as telecom and engineering, Company has already ready andmodern facilities at Wada to achieve these objects. Company is exploring means to get additional working capitalFinance by way of sale of surplus assets and also from equity investors so that company can achieve optimalcapacity utilization.

Opportunities, Threats and Concerns:

Deep economic recession coupled with global meltdown has affected all the commodities market across the globeduring last 4 to 5 years and steel was one of the worst affected commodity. There is no major surge in demand incurrent year, however there is growth opportunities in Infra sector based on expected Central Government’sannouncement of Infra projects. Further there are also expectations of export of company’s product. In anemerging economy like India, there will be good opportunity for growth though may be lower than earlier targets andrenewed emphasis on infrastructure by the newly elected central government may work as stimulus for the industriesat large. Major Job work contracts with various large vendor will also help company for utilizing its capacities.

Competition from un-organized sector is still a threat to the Company. However, renowned builders and infrastructurecompanies are keen to source their requirement from organized company like yours. Moreover, Company’sbetter-structured product portfolio will enable it to penetrate into new markets and to meet the requirements ofexisting customers.

Accumulated losses, erosion in net working Capital, Price volatility, low demand, Capacity utilization and highercost of borrowing remain serious concerns of the Company. Company has already initiated necessary steps tomitigate this risk.

Outlook:

The year ahead looks promising as there is growth envisaged in demand in various industries to whom company’sproducts are catered to. Company is catering to requirements of Housing, Power, Telecommunication andEngineering Sectors. Large integrated plant mainly focuses on flat products and long products are generally thedomains of secondary steel makers like us. A growth rate higher than the global industry average has beenenvisaged in the national steel policy. The long-term goal of the country is to become self reliant and globallycompetitive in steel sector.

Risks and concerns:

Erosion in Working capital and liquidity issues are major concerns for the company. It is impacting company’sability to produce at optimal level and generate profits. Further the cost of power (including fuel) and its availabilityis also one of the major concern. High power tariffs and volatility in input prices may adversely affect theprofitability of the Company. However, it is not significant considering the level of operations of the Company andnormal correlation in the price of raw material and finished goods. High volatility in commodity prices remainserious concern. Company is also exposed to financial risks like exchange fluctuation and interest rate variations.Management has already identified these risks and taking necessary steps to mitigate the risks by looking atalternative and cheaper source of finance and cost reduction exercise across the company.

Internal control systems and their adequacy:

The Company’s internal control systems and procedures are adequate and commensurate with the size andnature of Company’s operations. Company has sufficient procedures that form part of internal control systemwhich provide for check and balances. In current year, Company has engaged industry and finance experts tofurther strengthen its internal control and audit system for reduction of various costs and overheads.

Cautionary Statement:

This report contains forward-looking statements, which are based on certain assumptions and future events. Itcannot be guaranteed that these are accurate or realized in future. Company’s actual results may materially differfrom those projected in forward looking statements. The reader should bear this in mind. Further, Companyundertake no obligation to publicly update any forward-looking statements, whether as a result of new information,future events or otherwise.


28

CORPORATE GOVERNANCE

1. We believe in the philosophy of managing the business affairs in the most fair and transparent manner withhighest level of accountability, integrity and equity in all areas of our operation.We always seek to ensure thatwe work towards enhancing the shareholder value, whilst taking into account the interest of all other stakeholdersfor wealth creation.

2. Board of Directors:The Board of Directors as on the date of this Report is comprised of 3 Directors of which one is Executive,Two Non Executive.Sri. Suresh Kumar Bhuwalka, Chairman - Non-Executive (Chairman)Sri. Ajay Kumar Bhuwalka - ExecutiveSri. Ankit Bhuwalka - Non-ExecutiveSri. Munish Mohan (Resigned w.e.f 14.02.2015) - Nominee Director of IDBI Bank Ltd.,

Relationship between the Directors Inter-seName of the Directors RelationshipSuresh Kumar Bhuwalka Father of Mr. Ajay Kumar Bhuwalka and Ankit BhuwalkaAjay Kumar Bhuwalka Son of Mr. Suresh Kumar Bhuwalka and brother of Ankit BhuwalkaAnkit Bhuwalka Son of Mr. Suresh Kumar Bhuwalka and brother of Ajay Kumar Bhuwalka

Details of attendance at Board Meetings and last AGM and details of memberships in other Boards & BoardCommittees:The Board met 6 times during the year – on 8thMay 2014, 30th May 2014, 14th August 2014, 13th November2014, 14th February 2015 and 20th March 2015.

Name of the Directors No. of Board Whether Directorship CommitteeMeetings attended in other Boards Membership Chairmanship Attended last AGM

Suresh Kumar Bhuwalka 1 Yes 7 – 1Ajay Kumar Bhuwalka 5 Yes 6 3 –K.C Kondaiah* 1 No 1 1 –Ankit Bhuwalka 4 No 6 2 –Munish Mohan** 1 No 1 – –*Shri. K.C.Kondaiah (Resigned w.e.f 08.05.2014)** Shri. Munish Mohan - Nominee Director of IDBI Bank Ltd., (Resigned w.e.f 14.02.2015)

3. Audit Committee : 1. (As on the date of this Report)a) Sri. Suresh Kumar Bhuwalka

(Replaced From Committee on change 08.5.2014) - Executiveb) Sri Ajay Kumar Bhuwalka - Executivec) Sri. Ankit Bhuwalka (included on 08.05.2014) - Non Executived) Sri. K.C. Kondaiah (Resigned w.e.f 08.05.2014) - Non Executive & Independent

The Committee met 5 times during the year on 08.05.2014, 30.05.2044, 13.08.2014, 13.11.2014 and 14.02.2015

Name of the Members Category Attended % of total Whetherattendedlast AGM

Sri. Suresh Kumar Bhuwalka * EC 1 20 Yes Sri. Ajay Kumar Bhuwalka Executive 5 100 Yes Sri. Ankit Bhuwalka NEC 4 80 No Sri. K.C/. Kondaiah NEC &Ind 1 20 No

The Statutory and Internal Auditors were present as invitee in the meeting.The scope of reference to the committee includes: Review of audit with Statutory Auditors and Internal Audit team. Limited Review of accounts with Statutory Auditors Review of annual financial statements with Auditors and management before submission to the Board


29

4. Share holders’ / Investors’ Grievance Committee :a) Sri Ajay Kumar Bhuwalka - Non-Executive Directorb) Sri Ankit Bhuwalka - Non-Executive Directorc) Sri. Desmond Rozario - Manager ComplianceThis committee facilitates prompt and effective redressal of shareholders’ complaints and to look into theirgrievances. As on 31.03.2015, there were no complaints remaining unresolved.

5. Remuneration to Directors:The Board is yet to constitute a remuneration committee to review and propose the remuneration for Whole timeDirectors and Managing Director.

The details of remuneration of the managerial personnel for the year 2014-15 are given in Note 23(2) of Notesto Accounts.

Sitting fee is paid to Nominee Director and In-dependent Directors for attending Board Meetings, Audit committeemeetings and other committee meetings. No other remuneration is paid to Non-executive directors.

6. Share Transfer Committee:

The Share transfer committee consisting of

1. Sri. Suresh Kumar Bhuwalka – Chairman

2. Sri. Ajay Kumar Bhuwalka

3. Compliance Manager – Desmond Rozario

Requests for dematerialization are generally confirmed on a weekly basis.

7. Directors:

Particulars about Directors who are retiring and are eligible for re-appointment and for those who are proposedto be appointed have been given in the notice convening the Annual General Meeting and ExplanatoryStatement.

8. General Body Meetings:

Location, Date and Time where last three Annual General Meetings:

YEAR DATE TIME VENUE

2011 – 2012 26.09.2012 12.30 P.M. Hotel Woodlands30th AGM No.5, Rajaram Mohanroy Road

Bangalore – 560 025

2012 – 2013 28.12.2013 12.30 P.M. Hotel Woodlands31st AGM No.5, Rajaram Mohan Roy Road

Bangalore – 560 0252013 – 2014 27.09.2014 12.30 P.M. Hotel Woodlands

32nd AGM No.5, Rajaram Mohanroy RoadBangalore – 560 025

9. Code of Conduct:As per the requirement of Clause 49 of the Listing Agreement with the Stock Exchanges, the Board has laiddown a Code of Conduct (“the Code”) for all Board members and Senior Management Personnel of theCompany. The Code is posted on the website of the company. All Board Members and Senior managementpersonal have affirmed compliance with the Code of Conduct during the year 2014-15. A declaration to thiseffect signed by the Managing Director is attached to this Report.

SPECIAL RESOLUTION

Appointment of Mr. SureshKumar Bhuwalka as MD andfixing his Remuneration.

No special Resolution waspassed.

Authorisation to Report to theBoard for Industrial andFinancial Reconstruction (BIFR)as per section 23 of the SICKIndudtrial Companies (Specialprovisions) Act, 1985.


30

14. General Shareholder’s Information:Annual General Meeting : Monday, 09th November, 2015 at 12.30 pm

Woodlands HotelNo.5 Rajaram Mohanroy RoadBangalore – 560 025

Financial Calendar of Board Meetings (tentative) for approval of

i. Unaudited Results – I Qtr : on or before 14.08.2015ii Unaudited Results – II Qtr : on or before 14.11.2015iii Unaudited Results – III Qtr : on or before 14.02.2016iv Annual Accounts 2015 : on or before 30.05.2016

Book Closure : 06.11.2015 to 09.11.2015

Listing on Stock Exchanges : Mumbai (Bangalore Stock Exchange have closed down wherethe shares were listed

Stock Code : The Mumbai Stock Exchange 513333

Listing Fee : Annual Listing fees are being paid to thesaid Stock exchange as and when they fall duefor payment

10. Whistle Blower Policy:The Company has established vigil mechanism and adopted Whistle Blower Policy for Directors and foremployees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company’scode of conduct or ethics policy. The employees are encouraged to raise any of their concerns by way ofwhistle blowing and none of the employees have been denied access to the Chairman, Audit Committee. TheWhistle Blower Policy ia available on the website of the Company.

11. Insider Trading:Pursuant to the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, thecompany has adopted a code of conduct for prevention of insider trading and required disclosure practices.

12. Disclosures:Disclosure of related party transactions as per Accounting Standard 18 has been made under Note 23 of thebalance sheet, under notes forming parts of the Accounts.

13 Means of CommunicationThe quarterly results are published in the Financial Express and “Sanjevani” (Kannada). During the year, nopresentations were made to Financial Analysts / Institutional Investors.The details pursuant to clause 54 of the listing agreement with stock exchanges are available in thecompany’s website www.bhuwalkagroup.com


31

Share Price Data:There has been no active trading on Bangalore Stock Exchange and Data of Mumbai Stock Exchange isfurnished below:-

Month High (Rs.) Low (Rs.) Volume(No. of Shares)

June, 2014 12.71 9.70 63135

July, 2014 11.98 10.05 4785

August, 2014 12.50 9.71 12326

September, 2014 11.70 9.62 52332

October, 2014 11.00 9.88 3412

November, 2014 12.90 10.78 2367

December, 2014 12.86 10.22 5925

January, 2015 10.73 8.87 19739

February, 2015 9.90 8.15 11665

March, 2015 9.00 7.80 4501

April, 2015 9.70 8.51 7611

May, 2015 9.50 7.96 115131

June, 2015 9.49 7.61 9571

July, 2015 9.80 7.51 8866

Registrar & Transfer Agents :The Share Transfer work is being done by M/s. Integrated Enterprises (India) Ltd., Regd. Office, 30, RamanaResidency 4th Cross, Sampige Road, Malleswaram, Bangalore – 560 003 for both Physical and ElectronicForm till date in compliance with SEBI requirements.

Share Transfer System :

The power to approve transfer of shares had been delegated by the Board to the Share Transfer committee.Share transfers are processed within 30 days from the date of receipt.

Distribution of Shareholdings as on 31st March, 2015.

No. Of Folios SharesShares held Number % Number %

1-500 4358 87.40 8023050 7.73

501 –1000 305 6.12 2422180 2.33

1001 – 2000 179 3.59 2894510 2.79

2001 – 3000 37 0.74 966680 0.93

3001 –4000 33 0.66 1191860 1.15

4001 – 5000 13 0.26 605000 0.58

5001 – 10000 27 0.54 1909930 1.84

10001 & ABOVE 34 0.68 85731770 82.64

Total 5020 100.00 103744980 100.00


32

Pattern of Share Holding as on 31st March, 2015.

Sl.No. Category No.ofShares % of ShareHolding

1. Promoters and promoters’ group 7360000 70.94

2. Mutual Funds 500 0.00

3. Financial Institution/Banks 5300 0.06

3. Private Corporate Bodies 81197 2.79

4. Indian Public 2896990 25.94

5. Clearing Member 9739 0.09

6. NRI/Foreign Institutional Investors 20772 0.18

Total 10374498 100.00

Dematerialization of Shares :The Company has entered into necessary agreements with NSDL & CDSL for dematerialization of sharesheld by investors.

As on date, more than 90% of share capital is in electronic form.

The ISIN Number allotted to the Company is ISIN INE069C01013.

Plant Locations: Given on the first page of the Annual report

Address for correspondence:

All correspondence regarding shares should be addressed to R & T Agent or Company at:

To the Company: To the Registrar & Transfer Agent:Mr. Desmond Rozario Mr. S. Vijay GopalManager Compliance Assistant Vice PresidentBhuwalka Steel Industries Ltd. M/s. Integrated Enterprises (India) Ltd.,‘Bhuwaka Centre’ No.71, III Cross 30, Ramana Residency, 4th CrossResidency Road, Bangalore –560 025 Sampige Road, Malleswaram

Bangalore – 560 003

Non-mandatory Clauses:

The Company has not adopted any of the non-mandatory requirements as mentioned in Clause 49 of theListing Agreement.

for and on Behalf of the Board

Place: Bangalore (Ajay Kumar Bhuwalka) Date : 29th September, 2015 Director.


33

AUDITORS’ CERTIFICATETO THE MEMBERS OF BHUWALKA STEEL INDUSTRIES LIMITED

We have examined the compliance of conditions of corporate governance by Bhuwalka Steel Industries Limited,for the year ended on 31st March, 2015, as stipulated in Clause 49 of the Listing Agreement of the said Companywith stock exchange(s).

The compliance of conditions of corporate governance is the responsibility of the management. Our examinationwas limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of theconditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financialstatements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that theCompany has complied with the conditions of Corporate Governance as stipulated in the above mentioned ListingAgreement.

We state that in respect of investors’ grievances received during the year ended March 31, 2015, no investorgrievance is pending for a period exceeding one month against the Company as per the records maintained by theCompany.

We further state that such compliance is neither an assurance as to the future viability of the Company nor theefficiency or effectiveness with which the management has conducted the affairs of the Company.

for ASR AssociatesChartered Accountants

Place : Bangalore (CA A. S. Rafiq)Date : 29th September, 2015 Proprietor

Membership No.204646FRN No. 8877S


34

INDEPENDENT AUDITOR’S REPORTTo The Members ofM/S. BHUWALKA STEEL INDUSTRIES LIMITED

REPORT ON THE STANDALONE FINANCIALSTATEMENTS

We have audited the accompanying standalone financialstatements of BHUWALKA STEEL INDUSTRIESLIMITED (“the Company”), which comprise the BalanceSheet as at 31st March, 2015, the Statement of Profitand Loss, the Cash Flow Statement for the year thenended, and a summary of the significant accountingpolicies and other explanatory information.

MANAGEMENT’S RESPONSIBILITY FOR THESTANDALONE FINANCIALSTATEMENTS

The Company’s Board of Directors is responsible forthe matters stated in Section 134(5) of the CompaniesAct, 2013 (“the Act”) with respect to the preparation ofthese standalone financial statements that give a trueand fair view of the financial position, f inancialperformance and cash flows of the Company inaccordance with the accounting principles generallyaccepted in India, including the Accounting Standardsspecified under Section 133 of the Act, read with Rule 7of the Companies (Accounts) Rules, 2014. Thisresponsibility also includes maintenance of adequateaccounting records in accordance with the provisionsof the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and otherirregularities; selection and application of appropriateaccounting policies; making judgments and estimatesthat are reasonable and prudent; and design,implementation and maintenance of adequate internalfinancial controls, that were operating effectively forensuring the accuracy and completeness of theaccounting records, relevant to the preparation andpresentation of the financial statements that give a trueand fair view and are free from material misstatement,whether due to fraud or error.

AUDITOR’S RESPONSIBILITYOur responsibility is to express an opinion on thesestandalone financial statements based on our audit.We have taken into account the provisions of the Act,the accounting and auditing standards and matterswhich are required to be included in the audit reportunder the provisions of the Act and the Rules madethereunder. We conducted our audit in accordance withthe Standards on Auditing specified under Section143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whetherthe financial statements are free from materialmisstatement. An audit involves performing proceduresto obtain audit evidence about the amounts and the

disclosures in the financial statements. The proceduresselected depend on the auditor’s judgment, includingthe assessment of the risks of material misstatementof the financial statements, whether due to fraud orerror. In making those risk assessments, the auditorconsiders internal financial control relevant to theCompany’s preparation of the financial statements thatgive a true and fair view in order to design auditprocedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion onwhether the Company has in place an adequate internalfinancial controls system over financial reporting andthe operating effectiveness of such controls. An auditalso includes evaluating the appropriateness of theaccounting policies used and the reasonableness ofthe accounting estimates made by the Company’sDirectors, as well as evaluating the overall presentationof the financial statements. We believe that the auditevidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalonefinancial statements.

OPINION

In our opinion and to the best of our information andaccording to the explanations given to us, the aforesaidstandalone financial statements give the informationrequired by the Act in the manner so required and givea true and fair view in conformity with the accountingprinciples generally accepted in India, of the state ofaffairs of the Company as at 31 March, 2015, its Lossand its cash flows for the year ended on that date.

EMPHASIS OF MATTER

We draw attention to:

1. Note 23 Sl No.7 (i) Other disclosure in respect ofFinance cost not recognized in the books by thecompany for Rs.42,24,11,280/- in view ofrepresentation by management that they havedisputed on account of unilateral withdrawal of CDRPackage by the Banks.

Our opinion is not modified in respect of thesematters.

Report on Other Legal and RegulatoryRequirements

1. As required by the Companies (Auditor’s Report)Order, 2015 (“the Order”) issued by the CentralGovernment in terms of Section 143(11) of the Act,we give in the Annexure a statement on the mattersspecified in paragraphs 3 and 4 of the Order.

2. As required by Section 143 (3) of the Act, wereport that:


35

(a) We have sought and obtained all the informationand explanations which to the best of ourknowledge and belief were necessary for thepurposes of our audit.

(b) In our opinion, proper books of account asrequired by law have been kept by the Companyso far as it appears from our examination ofthose books.

(c) The Balance Sheet, the Statement of Profit andLoss, and the Cash Flow Statement dealt withby this Report are in agreement with the booksof account.

(d) In our opinion, the aforesaid standalone financialstatements comply with the AccountingStandards specified under Section 133 of theAct, read with Rule 7 of the Companies(Accounts) Rules, 2014.

(e) On the basis of the written representationsreceived from the directors as on 31st March,2015 taken on record by the Board of Directors,none of the directors is disqualified as on 31March, 2015 from being appointed as a directorin terms of Section 164 (2) of the Act.

(e) With respect to the other matters to be includedin the Auditor’s Report in accordance with Rule11 of the Companies (Audit and Auditors) Rules,

2014, in our opinion and to the best of ourinformation and according to the explanationsgiven to us:

a. The Company has disclosed the impact ofpending litigations on its financial position in itsfinancial statements - Refer Note 23 serialnumber 01(iii) and serial number 07 to thefinancial statements;

b. The Company did not have any long-termcontracts including derivative contracts forwhich there were any material foreseeablelosses;

c. There has been no delay in transferring amounts,required to be transferred, to the InvestorEducation and Protection Fund by theCompany.

for ASR Associates

Chartered Accountants

(CA A. S. Rafiq )

Proprietor



36

ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’section of our report of even date)

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details andsituation of fixed assets.

(b) Some of the fixed assets were physically verified during the year by the Management in accordance witha programme of verification, which in our opinion, provides for physical verification of all the fixed assetsat reasonable intervals. According to the information and explanations given to us, no material discrepancieswere noticed on such verification.

(ii) In respect of its inventories:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonableintervals. Based on information, explanation and necessary documents pertaining to inventory like ExciseInventory registers, Physical verification report conducted by management and other supporting documentsprovided to us, we report that the management has conducted physical verification of Inventory atreasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physicalverification of inventories followed by the Management were reasonable and adequate in relation to thesize of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintainedproper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms or other partiescovered in the Register maintained under Section 189 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internalcontrol system commensurate with the size of the Company and the nature of its business for the purchaseof inventory and fixed assets and for the sale of goods and services, and during the course of our audit, wehave not observed any major weakness in such internal control system.

(v) According to the information and explanations given to us, the Company has not accepted any deposit duringthe year.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies(Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribedcost records have been made and maintained. We have, however, not made a detailed examination of the costrecords with a view to determine whether they are accurate or complete.

(vii)According to the information and explanations given to us, in respect of statutory dues:

a) The Company has generally been regular in depositing undisputed statutory dues, except as mentionedin table below including Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, ServiceTax, Wealth Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory duesapplicable to it with the appropriate authorities.


37

(a) There were undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance,Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess andother material statutory dues in arrears as at 31 March 2015 for a period of more than six months.

Sl.No Particulars Amount (Rs.)

1 EPF 4138183

2 ESI 12169293 TDS a) TDS CONTRACT 1049217 b) TDS ON SALARY 368090

c) TDS ON RENT 541374 d) TDS ON PROF. & CONST. 1651896 e) TDS ON INTEREST 3194553 f) TDS ON Commission or Brokarage 15395

g) TCS ON Scrap 442434 SERVICE TAX Payable on GTA and Others 30015825 VAT 89308256 Profession Tax 358500

Total Rs. 24510787

Nature of dues Period Amount Due date Date of payment Nos. of dayspertaining to Rs. delayed

TDS Apr-13 28415 5/7/2013 Pending 693TDS May-13 58797 6/7/2013 Pending 662TDS Jun-13 89936 7/7/2013 Pending 632TDS Jul-13 86793 8/7/2013 Pending 601TDS Aug-13 60224 9/7/2013 Pending 570TDS Sep-13 71231 10/7/2013 Pending 540TDS Oct-13 72516 11/7/2013 Pending 509TDS Nov-13 144073 12/7/2013 Pending 479TDS Dec-13 1082579 1/7/2014 Pending 448TDS Jan-14 159679 2/7/2014 Pending 417TDS Feb-14 77649 3/7/2014 Pending 389TDS Mar-14 634670 4/7/2014 Pending 358TDS Apr-14 101399 5/7/2014 Pending 328TDS May-14 117374 6/7/2014 Pending 297TDS Jun-14 175676 7/7/2014 Pending 267TDS Jul-14 151057 8/7/2014 Pending 236TDS Aug-14 230919 9/7/2014 Pending 205Service Tax Mar-14 625158 4/5/2014 Pending 360Service Tax Apr-14 6251 5/5/2014 Pending 330Service Tax May-14 130049 6/5/2014 Pending 299Service Tax Jun-14 150798 7/5/2014 Pending 269Service Tax Jul-14 134817 8/5/2014 Pending 238Service Tax Aug-14 161851 9/5/2014 Pending 207EPF Sep-13 129291 10/15/2013 Pending 532EPF Oct-13 129926 11/15/2013 Pending 501EPF Nov-13 130368 12/15/2013 Pending 471EPF Dec-13 331074 1/15/2014 Pending 440


38

Nature of dues Period Amount Due date Date of payment Nos. of dayspertaining to Rs. delayed

EPF Jan-14 260505 2/15/2014 Pending 409EPF Feb-14 258877 3/15/2014 Pending 381EPF Mar-14 244953 4/15/2014 Pending 350EPF Apr-14 228728 5/15/2014 Pending 320EPF May-14 232330 6/15/2014 Pending 289EPF Jun-14 111297 7/15/2014 Pending 259EPF Jul-14 210863 8/15/2014 Pending 228EPF Aug-14 204566 9/15/2014 Pending 197ESI Oct-13 80407 11/20/2013 Pending 496ESI Nov-13 82339 12/20/2013 Pending 466ESI Dec-13 75253 1/20/2014 Pending 435ESI Jan-14 78675 2/20/2014 Pending 404ESI Feb-14 81000 3/20/2014 Pending 376ESI Mar-14 80000 4/20/2014 Pending 345ESI Apr-14 80530 5/20/2014 Pending 315ESI May-14 82117 6/20/2014 Pending 284ESI Jun-14 83118 7/20/2014 Pending 254ESI Jul-14 84036 8/20/2014 Pending 223ESI Aug-14 84036 9/20/2014 Pending 192Profession Tax Mar-14 120475 4/20/2014 Pending 345Profession Tax Apr-14 23425 5/20/2014 Pending 315Profession Tax May-14 22400 6/20/2014 Pending 284Profession Tax Jun-14 20300 7/20/2014 Pending 254Profession Tax Jul-14 18575 8/20/2014 Pending 223Profession Tax Aug-14 17575 9/20/2014 Pending 192 KVAT Mar-14 148551 5/20/2014 Pending 315

Total Rs. 8287501

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, ValueAdded Tax and Cess which have not been deposited as on 31 March 2015 on account of disputes aregiven below :-

Sr. No. Name of the Statute Nature of Dues Forum where dispute Amountis pending (Rs.in lakhs)

1 Central Excise Act, 1944 Excise Duty and Commissioner ofservice tax Central Excise (Appeals)

CESTAT, High Court,Supreme Court 885.12

2 Income Tax Act, 1961 Income Tax Commissioner ofIncome Tax (Appeals), ITAT 116.70


39

(d) The Company has been regular in transferring amounts to the Investor Education and Protection Fund inaccordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made thereunderwithin time.

(viii) The Company have accumulated losses at the end of the financial year is Rs 1004.29Lakhs and theCompany has incurred cash losses of Rs 76.69Lakhs during the financial year covered by our audit andin the immediately preceding financial year for Rs. 2221.26Lacs.

Due to losses the Net Worth of the company has eroded by more than 50% (without giving effect to theobservation in Note 23 (7)(i)). The company has already filed Form C with BIFR.

(ix) In our opinion and according to the information and explanations given to us, the Company has defaulted inthe repayment of dues to financial institutions, banks as mentioned in Note 23 (7)(ii).

(x) In our opinion and according to the information and explanations given to us, the terms and conditions of theguarantees given by the Company for loans taken by others from banks and financial institutions are not,prima facie, prejudicial to the interests of the Company.

(xi) In our opinion and according to the information and explanations given to us, the term loans have beenapplied by the Company during the year for the purposes for which they were obtained, other than temporarydeployment pending application.

(xii) To the best of our knowledge and according to the information and explanations given to us, no fraud by theCompany and no material fraud on the Company has been noticed or reported during the year.


Place : Bangalore (CA A. S. Rafiq )Date : 11th July, 2015 Proprietor



40

BALANCE SHEET AS AT 31ST MARCH, 2015

PARTICULARS Note AS AT AS ATNo. 31.03.2015 31.03.2014

Rs. Rs.A EQUITY AND LIABILITIES1. Shareholders’ funds

(a) Share capital 1 11,57,53,018 11,57,53,018(b) Reserves and surplus 2 (3,05,59,437) (6,38,57,345)(c) Money received against share warrants 2,00,40,000 2,00,40,000

Sub-total - Shareholder’s funds 10,52,33,581 7,19,35,673

2 Non-current liabilities(a) Long-term borrowings 3 77,37,00,923 71,75,44,196(b) Deferred tax liabilities (net) 21 – –(c) Other long-term liabilities – –(d) Long-term provisions – –

Sub-total - Non-current liabilities 77,37,00,923 71,75,44,196

3 Current liabilities(a) Short-term borrowings 4 1,57,91,88,716 1,20,64,33,874(b) Trade payables 5 28,68,30,936 61,91,75,259(c) Other current liabilities 6 10,21,63,967 22,41,45,600(d) Short-term provisions 7 48,15,629 48,15,629

Sub-total - Current liabilities 1,97,29,99,247 2,05,45,70,362

TOTAL 2,85,19,33,751 2,84,40,50,231

B ASSETS

1 Non-current assets(a) Fixed assets

(i) Tangible assets 8 59,36,67,319 64,41,44,734(ii) Intangible assets(iii) Capital work-in-progress 22,16,953 22,16,953(iv) Intangible assets under development(v) Fixed assets held for sale

(b) Non-current investments 9 10,01,86,600 13,81,99,244(c) Deferred tax assets 21 9,31,72,740(d) Long-term loans and advances 10 1,32,69,097 1,52,94,697(e) Other non-current assets

Sub-total· Non-current assets 80,25,12,708 79,98,55,628

2 Current assets(a) Inventories 11 69,48,45,679 99,02,88,736(b) Trade receivables 12 1,15,12,12,636 78,22,83,456(c) Cash and cash equivalents 13 2,36,16,374 8,81,52,220(d) Short-term loans and advances 14 17,97,46,355 18,34,70,191(e) Other current assets – –

Sub-total - Current assets 2,04,94,21,043 2,04,41,94,603

TOTAL 2,85,19,33,751 2,84,40,50,231See accompanying notes forming part of thefinancial statements 23

In terms of our report attachedFor and on behalf of the Board As per Report of even date

(Ajay Kumar Bhuwalka) (Ankit Bhuwalka)) for ASR AssociatesManaging Director Director Chartered Accountants

(CA A. S. Rafiq )Place : Bangalore ProprietorDate : 11th July, 2015 Membership No.204646

FRN No. 8877S


41

PROFIT & LOSS ACCOUNT FOR THE PERIOD ENDED 31ST MARCH, 2015

PARTICULARS Note For the Period ended For the Period endedNo. 31.03.2015 31.03.2014

(12 Months) (6 Months)A CONTINUING OPERATIONS

1 Revenue from operations (gross) 15 4,01,33,92,564 1,73,23,17,500Less: Excise duty 8,82,23,556 5,05,33,262Revenue from operations (net) 3,92,51,69,008 1,68,17,84,238

2 Other income 16 33,60,324 20,96,1053 Total revenue (1+2) 3,92,85,29,332 1,68,38,80,3424 Expenses

(a) Cost of materials consumed 17.a 73,03,74,529 42,98,74,149(b) Purchases of stock-in-trade 17.b 2,97,20,72,033 1,30,36,09,209(c) Changes in inventories of finished goods,

work-in-progress and stock-in-trade 17.c 18,85,42,060 (3,04,25,535)(d) Employee benefits expense 18 5,30,52,625 3,71,95,806(e) Finance costs 19 5,60,585 11,51,56,073(f) Depreciation and amortisation expense 8.a 5,22,05,004 3,04,09,434(g) Other expenses 20 12,27,95,435 5,05,96,840

Total expenses 4,11,96,02,271 1,93,64,15,9785 Profit / (Loss) before exceptional and

extraordinary items and tax (3 - 4) (19,10,72,939) (25,25,35,636)6 Exceptional items – –7 Profit / (Loss) before extraordinary

items and tax (5 + 6) (19,10,72,939) (25,25,35,636)8 Extraordinary items 13,11,98,107 –9 Profit / (Loss) before tax (7 + 8) (5,98,74,832) (25,25,35,636)10 Tax expense:

(a) Current tax expense for current year – –(b) Current tax expense relating to prior years – –(c) Net current tax expense – –(d) Deferred tax Assets/(Liabilities) 21 9,31,72,740 5,96,05,139

11 Profit / (Loss) from continuingoperations (9 -10) 3,32,97,908 (19,29,30,497)

B DISCONTINUING OPERATIONS12.i Profit / (Loss) from discontinuing operations

(before tax) – –12.ii Gain / (Loss) on disposal of assets / settlement of

liabilities attributable to the discontinuing operations – –12.iii Add / (Less): Tax expense of discontinuing

operations – –13 Profit / (Loss) from discontinuing operations

(12.i + 12.ii + 12.iii) – –14 Profit / (Loss) for the year (11 + 13) 3,32,97,908 (19,29,30,497)15.i Earnings per share (of 10/- each): 22

(a) Basic 3.21 (18.60)See accompanying notes forming part of thefinancial statements 23




FRN No. 8877S

Rs. Rs.


42

iv) 55,07,249 Equity Shares of Rs. 10/- each fully paid-up,issued as Bonus Shares on Capitalisation of Capital redemptionreserve, Securities premium, General Reserve. Out of which total 5187249 fully paid up shares were alloted as bonus sharesin FY 2011-12.

v) 21,75,000 Equity Shares of Rs.10/- each alloted otherwise than on payment of cash to the Shareholders of erstwhileM/s.Tikmani Steel Co. Ltd & M/s. A.A. Alloys Ltd.as per the Scheme of Amalgamation approved by the Karnataka High Court.

vi) Company has alloted 2,000,000 warrants during March 2008 with an option to acquire 1 equity share at the option of warrantholder at a price of Rs. 100.20 per equity share by way of preferential issue as per SEBI Guidelines. The warrant-holders havepaid 10% of the total issue price before the allotment in terms of SEBI Guidelines which ls liable to be forfeited if option to applyfor equity shares is not exercised on or before due date. The option attached with Warrants may be exercised within a periodof 18 months from the date of allotment, i.e., 11th March, 2008, Since Wanant holders have not exercised the option, theWarrants have been forfeited during FY 2009-10.

Notes forming part of the financial statements

Particulars As at 31st March 2015 As at 31st March 2014Number Amounts in Rs. Number Amounts in Rs.

of shares of shares(a) Authorised

Equity shares of Rs. 10/- eachwith voting rights 15,000,000 150,000,000 15,000,000 150,000,000Equity shares of Rs. 10/- eachUnclassified Shares 5,000,000 50,000,000 5,000,000 50,000,000Preference shares of Rs. 100/- each 500,000 50,000,000 500,000 50,000,000

250,000,000 250,000,000(b) Issued

Equity shares of Rs. 10 eachwith voting rights 10,374,498 103,744,980 10,374,498 103,744,980

(c) Subscribed and fully paid upEquity shares of Rs. 10 eachwith voting rights 10,374,498 103,744,980 10,374,498 103,744,980

(d) Forfeited Shares 12,008,038 12,008,038

Total 115,753,018 115,753,018

Notes: (i) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of thereporting period:

Particulars Opening Fresh Bonus Shares ClosingBalance issue Issuance Balance

Equity shares with voting rightsYear ended 31st March, 2015

- Number of shares 10,374,498 – – 10,374,498- Amount Rs. 103,744,980 – – 103,744,980

Year ended 31st March, 2014- Number of shares 10,374,498 – – 10,374,498- Amount Rs. 103,744,980 – – 103,744,980

(ii) Details of shares held by each shareholder holding more than 5% shares:

Class of shares / Name of As at 31st March 2015 As at 31st March 2014

shareholder Number of % holding in Number of % holding inshares held that class shares held that class

Shares SharesEquity shares with voting rightsSuresh Kumar Bhuwalka 6,058,500 58.40 6,058,500 58.40Ajay Kumar Bhuwalka 752,600 7.25 752,600 7.25

(iii) Details of forfeited shares

Class of shares As at 31st March 2015 As at 31st March 2014

Number of Amount Number of Amountshares Originally shares Originally

paid up paid up

Equity shares with voting rights 12,008,038 12,008,038

Note 1: Share Capital


43

PARTICULARS AS AT AS AT 31st March 2015 31st March 2014

Rs. Rs.Note 2 : Reserves and surplus(a) Capital Reserve

Opening balance 28,45,500 28,45,500Add: Additions during the yearLess: Utilised / transferred during the yearClosing balance 28,45,500 28,45,500

(b) Capital redemption reserveOpening balance – –Add: Additions during the year – –Less: Utilised during the year for Issuing bonus shares – –Closing balance – -

(c) Securities premium accountOpening balance – –Add : Premium on shares issued during the yearLess : Utilised during the year for:Issuing bonus shares – –Closing balance – –

(d) General reserveOpening balance 6,70,24,809 6,70,24,809Add: Transferred from surplus in Statement of Profit and LossLess: Utilised / transferred during the year for:Issuing bonus shares – –OthersClosing Balance 6,70,24,809 6,70,24,809Total 6,98,70,309 6,98,70,309

(e) Surplus / (Deficit) in Statement of Profit and LossOpening balance (13,37,27,654) 5,92,02,843Add: Profit / (Loss) for the year 3,32,97,908 (19,29,30,497)Amounts transferred from:Less: Interim dividend – –

Closing balance (10,04,29,746) 13,37,27,654

Total (3,05,59,437) (6,38,57,345)

Note 3: Long-term borrowings

(a) Term loans From Banks (Refer Note (i) below)Secured 36,63,60,303 31,17,78,346Unsecured – –

(b) Term loans from others (Refer Note (i) below)Secured – –Unsecured 13,00,00,000 13,00,00,000

(c) Loans and advances from related parties(Refer Note (i) below)SecuredUnsecured 27,73,40,620 27,57,65,850

(d) Deferred Payment Liabilities (Refer Note (i) below)Secured – –Unsecured – –

Total 77,37,00,923 71,75,44,196



44

(i) Details of terms of repayment for the other long-term borrowings and security provided in respect of the secured other long-term borrowings:

Particulars Terms of As at 31st March 2015 As at 31st March 2014repayment and security

Secured Unsecured Secured Unsecured

(a) Term loans from banks:

IDBI Bank – –Term loan

Funded Interest term loan 88,92,339 66,00,000

Working capital term loan 9,01,76,288 7,96,00,000

Canara Bank

Term loan – –Funded Interest term loan 1,99,91,426 1,52,00,000

Working capital term loan 21,02,78,204 18,55,00,000

Indian Overseas Bank

Indian Overseas Bankterm loan – –

Indian Overseas BankWoking capital term loan 2,72,64,811 1,80,00,000

IOB Funded InterestTerm loan CC 79,92,209 56,88,000

IOB Funded InterestTerm loan WCTL 17,65,026 11,90,346

Total - Term loansfrom banks 36,63,60,303 31,17,78,346

Notes forming part of the financial statementsNote 3: Long-term borrowings (Contd.)

These loans are secured by wayof first charge (Pari passu with boththe banks) over all the Fixed assetsof the company except properties/assets exclusively charged to otherbanks and institutions mentionedbelow, and repayable over a periodfrom ranging 6-8 years as persanction letter.However, thesanction has been withdrawn andthe company has maderepresentation to re-instate thesanction terms.

These loans are secured by wayof first charge (Pari passu with boththe banks) over all the Fixed assetsof the company except properties/assets exclusively charged to otherbanks and institutions mentionedbelow, and repayable over a periodfrom ranging 6-8 years as persanction letter.However, thesanction has been withdrawn andthe company has maderepresentation to re-instate thesanction terms.

Secured by exclusive charge by wayof equitable mortgage of Corporateoffice, and repayable in 60 monthlyinstallment commencing from April2013.However, the sanction hasbeen withdrwan and the companyhas made representation to re-instate the sanction terms.


45

Term loans fromother parties:

Kotak Mahindra Primus Ltd. – – – –

Total - From Other Parties Unsecured 13,00,00,000 13,00,00,000

Total - Term loansfrom other parties – 13,00,00,000 – 13,00,00,000

c) Loans and advances fromrelated parties:

From Directors 27,73,40,620 27,57,65,850

From Other related parties Unsecured – –

Total - Loans and advances Unsecuredfrom related parties – 27,73,40,620 – 27,57,65,850

Total 36,63,60,303 40,73,40,620 31,17,78,346 40,57,65,850

Secured by an exclusive charge byway of hypothecation of Vehiclespurchased out of this loan.


46

(ii) Details of long-term borrowings guaranteed by some of the directors or others:


Rs. Rs.

Term loans from banks 36,63,60,303 31,17,78,346Term loans from other parties – –Deferred payment liabilities – –Other loans and advances – –


(iii) The Company has defaulted in repayment of loans and interest in respect of the following:

PARTICULARS As at 31st March 2015 As at 31st March 2014

Period of default Period of default

Term loans from banksPrincipal December 2013 to December 2013 to

March-2015 March-2014

Interest December 2013 December 2013to March-2015 to March-2014

Term loans from other parties

Principal -

Interest

Deferred payment liabilitiesPrincipalInterestOther loans and advancesPrincipalInterest

–

Amount in Rs.

Note : Term Loan from Banks represents the working capital term loan and funded interest term loan granted by the banks as per CDRScheme and Master Restructuring Agreement (MRA) entered by the Company with consortium of banks led by Canara Bank.Defaults are on account of delay in servicing interest and repayment.The Banks have withdrawn the CDR scheme.The Accounts of IDBI, Canara Bank and IOB has been classified as NPA.

Note 4 : Short-term borrowings


Rs. Rs.(a) Loans repayable

i) From banks (Refer Note (i) below)SecuredFor Steel Division 1,39,63,12,282 1,01,74,52,226For Jewellery Division 9,50,76,802 9,50,76,802Unsecured 71,62,001 71,62,001

1,49,85,51,086 1,11,96,91,030ii) From Other Parties (Refer Note (i) below)

SecuredUnsecured 8,06,37,630 8,67,42,844

8,06,37,630 8,67,42,844

Total 1,57,91,88,716 1,20,64,33,874


47


(i) Details of security for the secured short-term borrowings:

Particulars Nature of security AS AT AS AT 31st March 2015 31st March 2014

Rs. Rs.

Loans repayable on demandfrom banks:

CANARA BANK - OCC Hypothecation of Book debts andInventories of Steel Division 96,88,24,183 65,44,04,791

IDBI BANK- OCC 42,74,88,099 36,30,47,435

Indian Overseas Bank- OCC Hypothecation of Book debts andInventories of Jewellery Division 9,50,76,802 9,50,76,802

American Express Bank Unsecured 71,62,001 71,62,001

loans and advances:

Factoring Facilities with Assignment of Specific Receivables,SBI Global Factors Ltd. Personal Gurantees of Directors 8,06,37,630 8,67,42,844

(ii) Details of short-term borrowings guaranteed by some of the directors or others:


Rs. Rs.

Loans repayable on demand from banks 1,49,13,89,085 1,11,25,29,029Loans repayable on demand from other parties 8,06,37,630 8,67,42,844Loans and advances from related parties – –Deposits – –

(iii) The Company has defaulted in repayment of loans and interest in respect of the following:

PARTICULARS AS AT 31st March 2015 Period of Default Amount

Loans repayable on demand from banks

Principal Dec 2013 Dec 2013

Interest to to

LC Devolvement March 2015 March 2014

Others

Loans repayable on demand from other parties

Principal –

Interest –

Note : Defaults are on account of delay in servicing interest and LC devolment and other payments. IDBI, Canara Bank and IOBhas classified as NPA.


48

Note 7: Short Term Provisions(a) Provision for employee benefits:

(i) Provision for bonus – –(ii) Provision for compensated absences – –(iii) Provision for gratuity (net) 22,36,793 22,36,793

22,36,793 22,36,793(b) Provision - Others:

(i) Provision for tax 25,78,836 25,78,83625,78,836 25,78,836

Total 48,15,629 48,15,629

Trade payables:Acceptances2 (Letter of Credit Backed) – 41,53,10,121Other than Acceptances 28,68,30,936 20,38,65,138

Total 28,68,30,936 61,91,75,259

Note 6: Other Current Liabilities

(a) Current maturities of long-term debt – 5,05,00,646(b) Interest accrued but not due on borrowings – 57,54,159(c) Interest accrued and due on borrowings – 24,58,171(d) Unpaid dividends 3,34,854 8,15,075(e) Other payables

(i) Statutory Liabilities (Contributions to PF and ESIC,Withholding Taxes, Excise Duty, VAT, Service Tax,and Provison for excise duty on closing stock) 8,19,49,760 6,72,69,346

(ii) Advances from customers – –(iii) Outstanding Liabilities & Other Liabilities 1,98,79,353 9,73,48,204

Total 10,21,63,967 22,41,45,600

Note (i): Current maturities of long-term debt in Note 3 above

(a) Term loans From banksSecured – 5,04,08,720Unsecured – –

From other partiesSecured – –Unsecured – –

(b) Deferred payment liabilitiesSecured – –Unsecured – 91,926

Total – 5,05,00,646

Notes forming part of the financial statementsNote 5: Trade payables

PARTICULARS AS AT AS AT31st March 2015 31st March 2014

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FURN

ITUR

E &

FIXT

URES

1,51

,72,

093

––

1,51

,72,

093

97,9

1,81

65,

22,0

62–

1,03

,13,

878

48,5

8,21

553

,80,

277

OFFI

CE E

QUIP

MEN

TS

1,7

0,23

,931

38,1

89-

1,70

,62,

120

1,36

,29,

886

3,67

,891

–1,

39,9

7,77

730

,64,

343

33,9

4,04

6

VEHI

CLES

2,55

,26,

000

––

2,55

,26,

000

1,86

,48,

760

21,6

4,28

7–

2,08

,13,

047

47,1

2,95

368

,77,

240

TOTA

L 1,

18,33

,51,52

6 19

,49,74

22,2

2,154

1,18,5

0,79,1

1453

,92,06

,791

5,24,2

7,158

2,22,1

5459

,14,11

,795

59

,36,

67,3

19

6

4,41

,44,

734

PREV

IOUS

YEA

R1,

18,5

2,94

,996

47,8

7119

,91,

341

1,1

8,33

,51,

526

50,

87,9

7,35

73,

04,0

9,43

4–

53,9

2,06

,791

64,4

1,44

,734


50


Note 9 : Non-current investments

Particulars As at 31st March 2015 As at 31st March 2014

Quoted Unquoted Total Quoted Unquoted Total

Investments (At cost):

A. Trade

(a) Investment in equity instruments(give details separately for fully /partly paid up instruments)

(i) of subsidiariesBenaka Sponge Iron Pvt. Ltd. Equity ofRs.100/- Each 299900 equity shares(As at 30th Sept. 2013: 299,900) 10,01,66,600 10,01,66,600 10,01,66,600 10,01,66,600

(ii) of joint venture companiesBhuwalka Steel Industries FZCEquity shares 10,350,000(As at 30th Sept. 2013: 10,350,000) – – 3,80,12,644 3,80,12,644

Total - Trade (A) 10,01,66,600 10,01,66,600 13,81,79,244 13,81,79,244

B. Other investments

(a) Investment in government ortrust securities

(i) government securities 20,000 20,000 20,000 20,000

(ii) trust securities

Total - Trade (B) 20,000 20,000 20,000 20,000

Total ( A+ B) 10,01,86,600 13,81,99,244


51


Rs. Rs.Note 10: Long-term loans and advances

(a) Security depositsSecured, considered good – –Unsecured, considered good 1,29,79,564 1,50,05,164Doubtful 2,89,533 2,89,533

Less: Provision for doubtful deposits – –Total 1,32,69,097 1,52,94,697

Note 11: Inventories(Inventories have been valued at lower of cost and net realisable value)

(a) Raw materials 21,72,59,431 32,41,60,428

Goods-in-transit

(b) Work-in-progressGoods-in-transit

(c) Finished goods(other than those acquired for trading) 36,97,12,169 40,48,02,812Goods-in-transit

(d) Stock-in-trade (acquired for trading)Steel Division 9,12,14,691 13,98,57,890Jewellery Division 25,00,875 11,12,71,032Goods-in-transit

(e) Misroll 90,28,254 78,29,981Goods-in-transit

(e) Scrap 51,30,258 23,66,593Goods-in-transit

Total 69,48,45,679 99,02,88,736

Note 12: Trade receivablesTrade receivables outstanding for a period exceeding six months fromthe date they were due for payment

Secured, considered good 68,16,49,484 70,77,24,563Unsecured, considered goodDoubtful 25,64,803 25,64,803

68,42,14,287 71,02,89,366Less: Provision for doubtful trade receivables -25,64,803 -25,64,803

68,16,49,484 70,77,24,563Other Trade receivablesSecured, considered good 46,95,63,152 7,45,58,893Unsecured, considered goodDoubtful 46,95,63,152 7,45,58,893Less: Provision for doubtful trade receivables - -

46,95,63,152 7,45,58,893Total 1,15,12,12,636 78,22,83,456



52


Rs. Rs.Note 13: Cash and cash equivalents

(a) Cash on hand 10,85,389 53,01,360(b) Balances with banks

(i) In current accounts 86,32,155 3,38,28,185(ii) In earmarked accounts

- Unpaid dividend accounts 3,34,854 8,15,075- Balances held as margin money or security against borrowings, guarantees and other commitments 1,35,63,976 4,82,07,601

Total 2,36,16,374 8,81,52,221

Note 14: Short-term loans and advances

(a) Loans and advances to related partiesSecured, considered good – –Unsecured, considered goodDoubtful – –Less: Provision for doubtful loans and advances – –

– –

(b) Loans and advances to employeesSecured, considered good 7,37,698 6,63,514Unsecured, considered good – –Doubtful – –Less: Provision for doubtful loans and advances – –

7,37,698 6,63,514(c) Prepaid expenses - Unsecured, considered good

(For e.g. Insurance premium, Annual maintenancecontracts, etc.) 4,48,892 4,35,676

(d) Balances with government authoritiesUnsecured, considered good(i) CENVAT credit receivable 5,30,20,408 5,84,91,637(ii) VAT credit and refund receivable 3,48,27,339 3,56,76,430(iii) Service Tax credit receivable 42,01,576 49,57,593(iv) Advance Income tax/TDS 55,09,714 39,19,068(v) MAT Receivables 15,80,731 15,80,731(v) Service Tax paid under protest 4,49,474 4,49,474(vi) Sales tax paid under protest 46,15,065 46,15,065(vii) I.T. Under Protest – 12,71,900(viii) Excise Duty Under Protest 2,54,54,770 2,54,54,770(ix) Others 8,568 10,368

12,96,67,646 13,64,27,037

(e) Others (specify nature)Secured, considered good – –Unsecured, considered good 4,93,12,444 4,63,64,294Doubtful

Less: Provision for other doubtful loans and advances 4,20,324 4,20,3244,88,92,120 4,59,43,970

Total 17,97,46,355 18,34,70,191



53

PARTICULARS For the For the Year Ended period Ended

31st March 2015 31st March 2014 Rs. Rs.

(12 Months) (6 Months)Note 15: Revenue from operations(a) Sale of products 4,01,24,22,349 1,72,91,11,871(b) Other operating revenues 9,70,215 32,05,629

Less: 4,01,33,92,564 1,73,23,17,500(c) Excise duty 8,82,23,556 5,05,33,262

3,92,51,69,008 1,68,17,84,238

(i) Sale of products comprisesManufactured goodsFinished Goods 71,08,97,003 25,07,58,497Misroll 72,39,085 33,79,754M.S. Scrap 1,24,21,220 96,82,660Jewellery 10,82,17,795 5,88,09,810Others Sales/Reciepts 5,16,91,444 19,96,16,149

Total - Sale of manufactured goods 89,04,66,547 52,22,46,870

Traded goodsFinished Goods 3,12,19,55,802 1,20,68,65,001Others

Total - Sale of traded goods 3,12,19,55,802 1,20,68,65,001

Total - Sale of products 4,01,24,22,349 1,72,91,11,871

(ii) Sale of services comprisesConversion Charges Received – –Others – –

Total - Sale of services – –

(iii) Other operating revenues comprise:Transportation Charges received 9,70,215 32,05,629Profit on sale of Import License – –

Total - Other operating revenues 9,70,215 32,05,629

Note 16: Other income

(a) Interest income 28,21,261 20,80,967

(b) Other non-operating income(net of expenses directly attributable to such income) 5,39,063 15,137

Total 33,60,324 20,96,105

Interest income comprises:Interest from banks on:deposits 28,21,261 20,80,967Other interest – –Total - Interest income 28,21,261 20,80,967

(ii) Other non-operating income comprises:Profit on sale of fixed assets – –Miscellaneous income 5,39,063 15,137

Total - Other non-operating income 5,39,063 15,137



54

Notes forming part of the financial statementsNote 17.a: Cost of materials consumedPARTICULARS For the Year Ended For the period Ended

31st March 2015 31st March 2014 Rs. Rs.

(12 Months) (6 Months)

Opening stock 30,22,51,750 63,80,80,459Add: Purchases 62,35,45,453 9,40,45,441

92,57,97,203 73,21,25,899Less: Closing stock 19,54,22,673 30,22,51,750

Cost of material consumed 73,03,74,529 42,98,74,149

Material consumed comprises:Raw material 72,12,23,707 42,66,47,348Store and spares 91,50,822 32,26,802

Total 73,03,74,529 42,98,74,149

Note 17.b Purchase of traded goodsTraded goods 2,97,20,72,033 1,30,36,09,209

Total 2,97,20,72,033 1,30,36,09,209

Note 17.c Changes in inventories of finished goods,work-in-progress and stock-in-trade

Inventories at the end of the year:Finished goods 46,34,27,735 65,59,31,734Misroll 90,28,254 78,29,981M.S. Scrap 51,30,258 23,66,593Work-in-progress – –

47,75,86,248 66,61,28,308

Inventories at the beginning of the year:Finished goods 65,59,31,734 62,47,94,262Misroll 78,29,981 79,17,119M.S. Scrap 23,66,593 30,07,919Work-in-progress – –

66,61,28,308 63,57,19,299

Net (Increase) / decrease in Stock 18,85,42,060 (3,04,09,009)Increase / (decrease) of excise duty on inventory – (16,526)Net (Increase) / decrease in Stock net of Excise duty 18,85,42,060 (3,04,25,535)

Note 18: Employee benefits expenseSalaries and wages 3,73,91,647 2,39,66,790Subcontracting 1,17,48,619 1,11,57,156Contributions to provident and other funds 13,49,838 8,33,030Staff welfare expenses 25,62,521 12,38,830

Total 5,30,52,625 3,71,95,806

Note 19: Finance costsInterest expense on:(i) Borrowings from Banks (3,54,564) 7,91,52,762(ii) Trade payables – –(iii) Others 9,15,149 3,60,03,311

- Interest on LC, Bill Discounting Charges and on other borrowing

Total 5,60,585 11,51,56,073


55

PARTICULARS For the Year ended For the period ended 31st March 2015 31st March 2014

Rs. Rs.(12 Months) (6 Months)

Note 20: Other expensesPower and fuel-factory 6,81,43,029 2,07,10,830Electricty charges 10,67,909 6,01,822Water charges 7,56,822 4,76,907Rent including lease rentals 57,44,600 28,11,900Repairs and maintenance - Buildings 9,50,113 48,956Repairs and maintenance - Machinery 2,02,551 3,33,359Repairs and maintenance - Vehicle & others 52,17,424 25,99,950Bank Charges 31,45,978 63,76,826Insurance 4,19,637 2,36,004Rates and taxes 9,22,328 2,27,634Communication 23,15,414 13,39,177Travelling and conveyance 1,02,79,174 42,77,073Printing and stationery 4,96,375 2,65,624Freight and forwarding 9,58,343 3,64,795Sales Expenses 35,51,175 7,47,631Legal and professional 1,28,34,017 68,66,606Payments to auditors 4,00,000 2,00,000Bad trade and other receivables, loans and advances written off 5,179 346Miscellaneous expenses 53,85,366 20,89,818Loss on fixed assets sold / scrapped / written off – 21,582

Total 12,27,95,435 5,05,96,840

Payments to the auditors comprises(i) Payments to the auditors comprises

(net of service tax input credit, where applicable):

As auditors - Statutory audit 4,00,000 2,00,000

Reimbursement of expenses – –

Total 4,00,000 2,00,000



56

PARTICULARS For the year ended For the period ended 31st March 2015 31st March 2014

Rs. Rs.(12 Months) (6 Months

Note 22: Earnings per share

Earnings per share

Basic

Net profit / (loss) for the year from continuingoperations after considering extraordinary items 3,32,97,908 (19,29,30,497)

Number of equity shares 1,03,74,498 1,03,74,498

Earnings per share from continuing operations - Basic 3.21 (18.60)


PARTICULARS AS AT 31st March 2015

Rs.Note 21: Computation of Deferred Tax Liability

Computation Of Deferred Tax Liability(Asset)

Less:

WDV as per books of Accounts as on 31.03.2015 59,36,67,319

WDV as per Income Tax as on 31.03.2015 29,12,97,159

Business Loss & Unabsorbed Depreciation as per Income Tax 60,39,00,063

Net temporary Difference Between IT and Books of Accounts (30,15,29,903)

Income Tax Thereon @ 30% (9,04,58,971)

Surcharge @ 5% –Education Cess @ 3% (27,13,769)

Total Deferred Tax Liability(Asset) as on 31/03/2015 -Provision required to be made (9,31,72,740)

Deferred Tax Liability (Asset)as on 31/03/2014 –Deferred tax Liability(Asset) as on 31.03.2015 (9,31,72,740)

Deferred tax Asset Reversed From Profit and loss A/c (9,31,72,740)


57


Note 23: FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2015

01. Contingent Liabilities not provided for:-

Particulars FY 2014-15 FY 2013-14

I) Letter of Credits/ Bank Guarantees Nil 129.86II) Corporate Guarantees given to Banks and Financial

Institutions on behalf of Group Companies (Liabilities as on31.03.2015): 4602.58* 4339.96

III) Other statutory liabilities disputed by the company : 1001.82 918.81IV) Claims against the Company not Acknowledged as debt : 34.61 34.61

*(27.074 Million AED Converted @ 17.00 rate prevailing on 31st March 2015)

02. Managerial Remuneration paid or payable to Whole time directors including Managing Director during the Year:-

Particulars 31.03.2015 31.03.2014(12 Months) (6 Months)

Salary & Allowances 11,50,000 6,00,000Contribution to Provident Fund and Other Funds Nil NilValue of Perquisites & benefits ( as per Income-Tax Rules) Nil Nil

Total 11,50,000 6,00,000

03. STATEMENT ON SIGNIFICANT ACCOUNTING POLICIES:-

i) Principal Accounting Policies

The Financial statements have been prepared in accordance with applicable Accounting Standards in India.A summary of important accounting policies, which have been consistently followed, are set out below. TheFinancial Statements have also been prepared in accordance with relevant presentational requirement of theCompanies Act, 2013

ii) General:

a) The accompanying financial statements have been prepared on the Historical cost convention in accordancewith the provisions of Companies Act, 2013 and generally accepted accounting principles prevailing inIndia.

b) The Accounts have been prepared on accrual basis and in accordance with the going concern concept.

c) The company has prepared twelve months financials for the financial year 2014-15 period from 01st April2014 to 31st March 2015. In previous financial year 2013-14 the company was prepared six monthsfinancials from 1st October 2013 to 31st March 2014.

Rs. in lakhs


58

iii) Valuation of Inventories:

Raw materials, Finished goods, Work-in-progress and Stores & Spares are valued at lower of cost ornet realisable value except Missrolls and M.S. Scrap which are valued at net realisable value, in accordancewith Accounting Standard 2 – valuation of inventories. The cost formula used for this purpose is First in Firstout (FIFO) method and includes direct cost incurred in bringing the items of inventory to their present locationand condition.

iv) Cash Flow Statement:

The cash flow statement is prepared by the indirect method set out in Accounting Standard 3 on Cash FlowStatements.

v) Depreciation :

Depreciation has been provided on straight line method as per the rates prescribed in Schedule XIV to theCompanies Act, 1956 on all the assets of the company. Depreciation on the additions made during the yearhas been provided proportionately for the period of use.

vi) Revenue Recognition:

The company recognises sale of goods as they are dispatched to customers and any significant uncertaintyas to its ultimate realisation or collection does not exist. Sales comprise amounts invoiced for goods soldinclusive of excise duty but net of sales tax, returns and trade discounts.

vii) Fixed Assets:

Fixed Assets are stated at their historical cost of acquisition or construction less accumulated depreciation.Cost includes all cost incurred to bring the asset to their present location and condition.

viii)Foreign Currency Transactions:

Foreign currency transactions are accounted for at the exchange rates prevailing at the transaction date.Monetary assets and liabilities outstanding at the year end denominated in Foreign Currency is translated atthe year-end closing rates. Gains and/losses resulting from the settlement of such transactions and from thetranslation of monetary assets and liabilities are recognized in the profit and loss account. Exchange differencesattributable to the acquisition of the fixed assets, if any, are adjusted to the cost of the respective assets.

ix) Investments:

Investments are classified into current and non current investments. Current investments are stated at thelower of cost and fair value. Non current investments are stated at cost. A provision for diminution is made torecognise a decline, other than temporary, in the value of non current investments.

During the financial year 2014-15 the company has disinvested its total investments in joint venture companyBhuwalka Steel Industries FZC, UAE.

x) Employee benefits:

In accordance with Accounting Standard 15 (Revised) – “Employee Benefits”, the Company has:-

1. Accounted short term employee’s benefits on accrual basis:

2. Accounted contribution to Employees’ benefits contribution plan like Provident Fund and Pension Schemesin line with respective statutes and regulations in force on accrual basis and charged to Profit and LossAccount of the year.

3. Accounted for gratuity, bonus and leave encashment on cash basis instead of accrual basis as per AS 15.As no quantification of provision liability has been done by company from approval actuary/valuer, impactof the same on P&L is not ascertained.

xi) Borrowing cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized aspart of the cost of such assets in accordance with Accounting Standard 16 on Borrowing Costs. A qualifyingasset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowingcosts are charged to revenue.

xii) Segment Information

In terms of Accounting Standard 17, the Company has only one reportable segment viz. Steel. In case ofgeographical segment, although the company’s assets are multi-located, the same are not exposed to risksand returns which are materially different from one another. Further, all of them operate in the same economicenvironment and subject to similar profitability margins. Hence geographical segment reporting is not applicable.


59

xiii) Related Party Disclosure

Related party disclosures have been made in accordance with the accounting Standards on related partyDisclosure (AS 18) issued by The Institute of Chartered Accountants of India.

A) Following are the name of related parties with whom the transactions were carried out by the company:

Name of the Related Parties Relationship

Benaka Sponge Iron Private Limited Subsidiary CompanyBhuwalka Steel Industries FZC Parties where Control ExistsBalchand Suresh Kumar Parties where Control ExistsBhuwalka Jewellers Limited Parties where Control ExistsBhuwalka Metal Industries Private Limited Parties where Control ExistsShri Durga Trade Links Private Limited Parties where Control ExistsNava Karnataka Steels Private Limited Parties where Control ExistsMahesh Sponge Iron and Power Limited Parties where Control ExistsSuresh Kumar Bhuwalka Key Management Personnel- DirectorAjay Kumar Bhuwalka Key Management Personnel- Managing DirectorAnkit Bhuwalka Key Management Personnel- Director

B) Transactions carried out with related parties referred above in ordinary course of business for the 12months period ended 31St March 2015

(Rs. in Lakhs)

Nature of Transactions Subsidiary Key Management Parties wherePersonnel Control Exists

Purchases 22.39 – 5939.52(Nil) – (3131.78)

Sales NIL – 21080.25(Nil) – (11135.73)

Expenses – 11.50 NIL– (6.00) (Nil)

Income NIL – (–)NIL – –

Outstanding – DebitCredit Nil – 459.48Nil| – (25.37)

Nil 2773.40 646.47(Nil) (2757.66) (–)

xiv) Accounting Standard 19- LeasesAccounting Standard 19 is applicable only in the case of lease transactions entered into on or after 1st April;2001.The Company has taken office & residential properties for its employees under cancelable operatinglease agreement after 1st April, 2001. The company intends to renew the agreements in the normal courseof its business. These properties cannot be subleased to any other person.

Total lease rentals recognized in the Profit & Loss Account for the year with respect to the above isRs. 57.45 Lacs (Previous half year Rs. 28.12Lacs).

xv) Accounting standard 20- Earning Per ShareBasic earnings per share has been calculated by dividing profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The basicearnings per share and diluted earnings per share are the same as there is no change in capital structurein the company.


60

Earnings per share have been computed as under:

Particulars 31.03.2015 31.03.2014(12 Months) (6 Months)

Profit/(Loss) after Taxation after considering extra ordinary items 3,32,97,908 (19,29,30,497)

Profit /(Loss) after Taxation before considering extra ordinary items (9,79,00,199) (19,29,30,497)

Profit/(Loss) attributable to Equity Shareholders after consideringextra ordinary items 3,32,97,908 (19,29,30,497)

Profit attributable to Equity Shareholders before consideringextra ordinary items (9,79,00,199) (19,29,30,497)

Weighted average number of shares 10374498 10374498

Earnings per share (Rs.per equity share of Rs.10/- each)basic and diluted ( including extra ordinary items) 3.21 (18.60)

Earnings per share (Rs.per equity share of Rs.10/- each)basic and diluted ( before extra ordinary items) (9.44) (18.60)

xvi) TAXATION

During the year company has not made provision for tax in accordance with Income Tax Act, 1961.

The deferred tax Asset is recognised, subject to the consideration of prudence, on timing differences,being the difference between taxable incomes and accounting income that originate in one accountingperiod and are capable of reversal in one or more subsequent periods. The deferred tax is accounted for,using the tax rates and laws that have been substantively enacted as of the balance sheet date.

Deferred tax assets are recognized on unabsorbed depreciation and carry forward of losses as there isvirtual certainty that such deferred tax asset can be realized against future taxable profits.

The Company has provided deferred tax asset amounting to Rs.9,31,72,740/-(Previous year deferred taxliability has reversed for Rs. 5,96,05,139/-) on account of timing difference. Refer Note 21 for computationof deferred tax liability.

xvii). Accounting Standard 26- Intangible Assets“Accounting Standard 26 – Intangible assets” requires an enterprise to recognize an intangible asset iffuture economic benefits are expected to arise from it. It also requires that such an asset should be statedafter providing depreciation / amortization over the useful life of the asset. Presently, the reporting enterprisedoes not own any intangible assets.

xviii) Accounting Standard 28- Impairment of AssetsThe Company has identified that there is no material impairment of assets and as such no provision isrequired as per AS-28 issued by the ICAI.

xix) Accounting standard 29- Contingent Liabilities & Contingent assetsIn the opinion of the management, no provision is required against contingent liabilities referred in Note ‘23’.

04. Sundry debtors includes Rs. 4,59,48,121/-(Rs.25,36,636/-) due from the companies under the samemanagement. The particulars of the same are furnished hereunder:

Sundry Debtors Current Year Previous Year

1. Shri Durga Trade Links PrivateLimited 4,21,23,093 Nil

2. Bhuwalka Steel Industries FZE 26,21,918 16,11,812

3. Balchand Suresh kumar 11,35,991 9,05,986

4. Mahesh Sponge Iron and Power Limited 67,119 18,838

05. Sale of raw material has been regrouped under Sales and Other Operational Income in Current Financial yearas well as for previous year.


61

06. Sundry Creditors under Current Liabilities in Note ‘5’ include Rs. Nil (Rs.Nil) due to Small Scale undertakings.This amount has been determined to the extent such parties have been identified from available information.

07. Other Disclosures

i) The financial statements of the company have been prepared in accordance with Generally AcceptedAccounting Principles in India to comply with the Accounting Standard specified under section 133 of theCompanies Act 2013. The financial statement have been prepared on accrual basis under the historicalcost convention except in case of Finance Cost including Exorbitant charges/penal charges/ penal interestto the extent of Rs. 42,24,11,280/- including accrued interest is disputed on account of unilateral withdrawalof CDR Package by the Banks.

Further the company has approached Debt Recovery Tribunal for resolving above dispute by filingapplication on 18.02.2015 Respondents Canara Bank and IDBI Bank And on 16.02.2015 RespondentIndian Overseas Bank. The matter is still pending on 31.03.2015

ii) The Banks have served Notice under section 13(2) of the SARFAESI Act by Canara Bank on 02.12.2014IDBI Bank on 21.11.2014 And IOB on 10.05.2014. In view of this company filed an application before DebtRecovery Tribunal on 18.02.2015 Respondent Canara Bank and IDBI Bank And on 16.02.2015 RespondentIndian Overseas Bank to resolve the said issue. The matter is still pending on 31.03.2015. The companyhas defaulted in repayment of Due of Rs.220.75Crores to the Banks mentioned above. The matter is stillpending on 31.03.2015

08. Additional information

A. Production, opening Stock and Closing Stock of Finished Goods

Particulars Unit Licensed Installed Actual Opening Stock Closing StockCapacity Capacity Production Quantity Amount Quantity Amount

Mild Steel 234,000 234,000* 16,932 7,864 40,48,02,811 7573 36,97,12,169RolledProducts M T (234,000) (234,000) (6,359) (8,013) (41,17,81,598) (7,864) (40,48,02,811)

Note: - * Installed capacity is as certified by the management. ** It includes total NIL MT on conversion for others (PY NIL MT)

B. Trade Purchase

Particulars Current Year Previous Year

MT Rs. MT Rs.

Mild Steel Rolled Products 71,194 2,95,21,49,935 29,202 1,26,94,96,385Other Items-Jewellery 1,99,22,098 3,41,12,824

C. Sale of Finished Goods and Others


MT Rs. MT Rs

Mild Steel Rolled Products 17,220 70,00,01,070 6,508 25,02,85,816Other Items 17,08,05,172 25,88,98,640

Mild Steel- Misroll 246 72,39,085 115 33,79,754

Mild Steel- Scrap 347 1,24,21,220 149 96,82,660


62

D. Consumption


MT Rs. MT Rs.

i) Raw Materialsa) Importedb) Indigenous 100 72,12,23,707 100 42,66,47,349

c) Total 100 72,12,23,707 100 42,66,47,349

ii) Stores & Sparesa) Importedb) Indigenous 100 91,50,822 100 32,26,801

c) Total 100 91,50,822 100 32,26,801

E. Earning in Foreign Currency


Export – C.I.F. value of Exports 6,71,435 4,35,598

F. Expenditure in Foreign Currency


a) Traveling expense NIL NIL

b) CIF value of Imports NIL NIL

09. Balance of Sundry Debtors, Sundry Creditors and Bank Balances are subject to confirmation by therespective parties.

10. The previous year’s figures are regrouped/re-arranged wherever found necessary

NOTE: PREVIOUS YEAR’S FIGURES ARE SHOWN IN THE BRACKETS

For and on behalf of the Board As per Report of even date



FRN No. 8877S


63

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2015Current Year Previous Year

2014-15 2013-14(12 Months) (6 Months)

Rs. Rs.A. CASH FLOW FROM OPERATING ACTIVITIES:

Net Profit / (Loss) before tax and extraordinary items (19,10,72,939) (25,25,35,636)Adjustments for:Depreciation 5,22,05,004 3,04,09,434Profit/loss from sale of Fixed AssetsProfit on sale of Investment – –Rent Received – –Interest Charged to Profit & Loss A/c 5,60,585 11,51,56,073Provision for Doubtful Debts/Advances Written back – –Dividend Income – –

Operating Cash Profit before working capitalchanges (13,83,07,351) (10,69,70,129)Adjustments for:Trade and Other Receivables (36,52,05,343) (22,03,47,788)Inventories 29,54,43,057 30,54,19,700Trade Payables and other Liabilities (45,43,25,956) 36,80,84,340

B. CASH FLOW FROM OPERATIONS (66,23,95,593) 34,61,86,124 Direct Taxes Paid/(refund) – –

Sales Tax Deferrment – 21,49,107

Net Cash from Operating Activities (66,23,95,593) 34,40,37,017CASH FLOW FROM INVESTING ACTIVITIES:(Increase)/decrease in Fixed Assets(Net) (17,27,588) (2,73,483)(Increase)/Decrease in Investments 3,80,12,644 –Profit on sale of Investment 13,11,98,107 –Rent Received – –Dividend Income – –Profit on Sale of Undertaking – –Long-term loans and advances 20,25,601 –

Net cash used in Investing Activities 16,95,08,764 (2,73,483)CASH FLOW FROM FINANCING ACTIVITIES:Increase/(Decrease) in Borrowings 42,89,11,569 (19,08,38,754)Interest Paid (5,60,585) (11,51,56,073)

Net cash used in Financing Activities 42,83,50,983 (30,59,94,827)

Net Increase/(Decrease) in Cash and Cash

Equivalents (A+B+C) (6,45,35,8460 3,77,68,707

Opening Balance of Cash & Cash Equivalents 8,81,52,220 5,03,83,512Closing Balance of Cash & Cash Equivalents 2,36,16,374 8,81,52,220


(Ajay Kumar Bhuwalka) (Anik Bhuwalka)) for ASR AssociatesManaging Director Director Chartered Accountants


FRN No. 8877S

We have examined the attached Cash Flow Statement of Bhuwalka Steel Industries Limited for the Period ended 31st March 2015.The statement has been prepared by the Company in accordance with the requirements of Clause 32 of listing agreement with thecorresponding Profit & Loss account and Balance Sheet of the Company covered by our report

Note : Balance of cash and cash equivalents include Rs.3,34,854 /- (8,15,075/-) held as balance in bank account of Unpaid Dividend which are not available for operational activities of the Company.


64

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEI. REGISTRATION DETAILS

CIN No. L27209KA1981PLC004343 State Code 0 8

Balance Sheet Date 31 03 2015

Date Month Year

II. CAPITAL RAISED DURING THE YEAR (Amount in Rs. Thousand)

Public Issue N I L Rights Issue N I L

Bonus Issue N I L Private Placement N I L

III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs. Thousand)

Total Liabilities 2 8 5 1 9 Total Assets 2 8 5 1 9

SOURCES OF FUNDSPaid-up Capital 1 1 5 8 Reserves & Surplus - 3 0 6

Secured Loans 1 8 5 7 7 Unsecured Loans 4 9 5 1

Share forfeited money 2 0 0 Deferred Tax laibility(Asset) 9 3 2

APPLICATION OF FUNDS

Net Fixed Assets 5 9 3 7 Investments 1 0 0 1 . 8 7

Net Current Assets 1 6 5 5 6 Misc. Expenditure N I L

Accumulated Losses N I L

IV.PERFORMANCE OF COMPANY (Amount in Rs.Thousand)

Turnover 3 9 2 8 5 Total Expenditure 4 1 1 9 6

Profit before tax - 5 9 9 Profit after tax 3 3 3

Earning Per Share in(Rs.) 3 . 2 1 Dividend rate % N A

V. GENERIC NAMES OF THREE PRICIPLE PRODUCTS/ SERVICES OF COMPANY(As per monetary terms)

Item Code: (ITC Code) 7214 7216Product Description Bars Angles, Shapes and Sections




FRN No. 8877S


65

CONSOLIDATEDFINANCIAL STATEMENTS


66

AUDITOR’S REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

ToThe Board of DirectorsBHUWALKA STEEL INDUSTRIES LIMITED

We have audited the attached Consolidated balance sheet of M/s. BHUWALKA STEEL INDUSTRIES LIMITED andits subsidiary company M/s Benaka Sponge Iron Private Limited as at 31st March 2015 and the Consolidated Profitand Loss account and Consolidated Cash flow statement for the period then ended. These financial statementsare the responsibility of the company’s management and have been prepared pursuant clause 32 of the ListingAgreement with the stock exchanges in accordance with the groups accounting policies as described in accordancewith the group’s accounting policies as described in note to the accompanying financial statements. Our responsibilityis to express an opinion on these financial statements based on our audit.

We report that the consolidated financial statements have been prepared by the company in accordance with therequirements of Accounting Standards (AS) 21, Consolidated Financial Statement and on the basis of the individualfinancial statements of the company and its subsidiary included in the aforesaid consolidation.On the basis of information and explanations given to us and on consideration of the separate audit reports onindividual audited financial statements of the company and its aforesaid subsidiary, we are of the opinion that;

a) The Consolidated Balance Sheet gives a true and fair view of the consolidated state of affairs of thecompany and its subsidiary at 31st March 2015; and

b) The Consolidated Profit and Loss account give a true and fair view of the consolidated results of thecompany and its subsidiary for the period then ended.

c) In the case of the consolidated cash flow statement, of the cash flows of the company and itssubsidiary for the period ended on that date.


(CA A. S. Rafiq )Place : Bangalore PartnerDate : 14th August 2015 Membership No.204646

FRN No. 8877S


67

PARTICULARS Note AS AT AS AT

No. 31st March 2015 31st March 2014Rs. Rs.

A EQUITY AND LIABILITIES1 Shareholders’ funds

(a) Share capital 1 115,753,018 115,753,018(b) Reserves and surplus 2 (152,864,478) (58,198,404)(c) Money received against share warrants 20,040,000 20,040,000

Sub-total - Shareholder’s funds (17,071,460) 77,594,615Minority Shareholder Interest – –

2 Non-current liabilities(a) Long-term borrowings 3 810,808,702 737,254,159(b) Other long-term liabilities – –(c) Long-term provisions – –

– –Sub-total - Non-current liabilities 810,808,702 737,254,159

3 Current liabilities(a) Short-term borrowings 4 1,794,068,561 1,390,678,251(b) Trade payables 5 543,137,311 899,644,991(c) Other current liabilities 6 152,749,126 257,070,594(d) Short-term provisions 7 4,929,994 4,929,994

Sub-total - Current liabilities 2,494,884,992 2,552,323,830TOTAL 3,288,622,234 3,367,172,604

B ASSETS1 Non-current assets

(a) Fixed assets(i) Tangible assets 8 753,621,212 819,355,702(ii) Intangible assets – –(iii) Capital work-in-progress 3,246,959 3,246,959(iv) Intangible assets under development – –(v) Fixed assets held for sale – –

(b) Non-current investments 9 37,343 38,049,987(c) Deferred tax assets (net) 106,307,193(d) Long-term loans and advances 10 13,269,097 15,294,697(e) Other non-current assets 10A – –

Sub-total· Non-current assets 876,481,803 875,947,345Goodwill on Consolidation 12,852,613 12,852,613

2 Current assets(a) Current investments 16 – –(b) Inventories 11 995,428,606 1,267,330,305(c) Trade receivables 12 1,182,380,966 926,318,588(d) Cash and cash equivalents 13 25,948,838 90,531,988(e) Short-term loans and advances 14 195,529,408 194,191,765(f) Other current assets – –

Sub-total - Current assets 2,399,287,818 2,478,372,646TOTAL 3,288,622,234 3,367,172,604

See accompanying notes forming part of the financial statements 23

BHUWALKA STEEL INDUSTRIES LIMITEDCONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2015


(Ajay Kumar Bhuwalka) (Ankit Bhuwalka) for ASR AssociatesManaging Director Director Chartered Accountants

(CA A. S. Rafiq )Place : Bangalore ProprietorDate : 14th Aug, 2015 Membership No.204646

FRN No. 8877S


68

BHUWALKA STEEL INDUSTRIES LIMITEDCONSOLIDATED PROFIT & LOSS ACCOUNT FOR THEYEAR ENDED31ST MARCH, 2015

PARTICULARS Note For the Year ended For the Period endedNo. 31st March 2015 31st March 2014

A CONTINUING OPERATIONS1 Revenue from operations (gross) 15 4,298,863,845 2,152,716,323

Less: Excise duty 15 116,540,659 60,510,209Revenue from operations (net) 4,182,323,186 2,092,206,114

2 Other income 16 5,321,045 2,422,9733 Total revenue (1+2) 4,187,644,231 2,094,629,0874 Expenses

(a) Cost of materials consumed 17.a 982,929,928 580,531,552(b) Purchases of stock-in-trade 17.b 2,996,097,528 1,617,573,598(c) Changes in inventories of finished goods,

work-in-progress and stock-in-trade 17.c 219,774,663 (103,140,025)(d) Employee benefits expense 18 70,257,983 57,705,598(e) Finance costs 19 43,506,019 152,988,540(f) Depreciation and amortisation expense 8.b 67,462,078 45,660,211(g) Other expenses 20 139,787,405 76,993,005

Total expenses 4,519,815,605 2,428,312,480

5 Profit / (Loss) before exceptional andextraordinary items and tax (3 - 4) (332,171,374) (333,683,393)

6 Exceptional items – –7 Profit / (Loss) before extraordinary items

and tax (5 + 6) (332,171,374) (333,683,393)

8 Extraordinary items 131,198,107 –

9 Profit / (Loss) before tax (7 + 8) (200,973,267) (333,683,393)

10 Tax expense:(a) Current tax expense for current year – –(b) Current tax expense relating to prior years – –(c) Net current tax expense – –(d) Deferred tax (Assets)/Liabilities 106,307,193 85,255,790

11 Profit / (Loss) from continuing operations (9 +10) (94,666,074) (248,427,603)

B DISCONTINUING OPERATIONS12.i Profit / (Loss) from discontinuing operations (before tax) – –12.ii Gain / (Loss) on disposal of assets / settlement of

liabilities attributable to the discontinuing operations – –12.iiiAdd / (Less): Tax expense of discontinuing operations – –13 Profit / (Loss) from discontinuing operations

(12.i + 12.ii + 12.iii) – –14 Profit / (Loss) for the year (11 + 13) (94,666,074) (248,427,603)15.i Earnings per share (of 10/- each): 22

(a) Basic (9.12) (23.95)See accompanying notes forming part of the financial statements23

Rs. Rs.



(CA A. S. Rafiq )Place : Bangalore ProprietorDate : 14th Aug, 2015 Membership No.204646

FRN No. 8877S


69

Notes forming part of the financial statementsNote 1: Share Capital

Particulars As at 31st March 2015 As at 31st March 2014Number Amounts in Rs. Number Amounts in Rs.

of shares of shares(a) Authorised

Equity shares of Rs. 10/- eachwith voting rights 1,50,00,000 1,50,00,000 1,50,00,000 1,50,00,000Equity shares of Rs. 10/- eachUnclassified Shares 50,00,000 5,00,000,000 50,00,000 5,00,000,000Preference shares of Rs. 100/- each 5,00,000 5,00,000,000 5,00,000 5,00,000,000

25,00,00,000 250,000,000(b) Issued

Equity shares of Rs. 10 eachwith voting rights 1,03,74,498 10,37,44,980 1,03,74,498 10,37,44,980

(c) Subscribed and fully paid upEquity shares of Rs. 10 eachwith voting rights 1,03,74,498 10,37,44,980 1,03,74,498 10,37,44,980

(d) Forfeited Shares 1,20,08,038 1,20,08,038Total 11,57,53,018 11,57,53,018

iv) iv) 55,07,249 Equity Shares of Rs. 10/- each fully paid-up,issued as Bonus Shares on Capitalisation of Capital redemptionreserve, Securities premium, General Reserve. Out of which total 5187249 fully paid up shares were alloted as bonus sharesin FY 2011-12.

v) 21,75,000 Equity Shares of Rs.10/- each alloted otherwise than on payment of cash to the Shareholders of erstwhileM/s. Tikmani Steel Co. Ltd & M/s. A.A. Alloys Ltd.as per the Scheme of Amalgamation approved by the Karnataka High Court.

vi) Company has alloted 2,000,000 warrants during March 2008 with an option to acquire 1 equity share at the option of warrantholder at a price of Rs. 100.20 per equity share by way of preferential issue as per SEBI Guidelines. The warrant-holders havepaid 10% of the total issue price before the allotment in terms of SEBI Guidelines which ls liable to be forfeited if option to applyfor equity shares is not exercised on or before due date. The option attached with Warrants may be exercised within a periodof 18 months from the date of allotment, i.e., 11th March, 2008, Since Wanant holders have not exercised the option, theWarrants have been forfeited during FY 2009-10.

Notes: (i) Reconciliation of the number of shares and amount outstanding at.

Particulars Opening Fresh Bonus Shares ClosingBalance issue Issuance Balance

Equity shares with voting rightsYear ended 31st March, 2015

- Number of shares 10,374,498 – – 10,374,498- Amount Rs. 103,744,980 – – 103,744,980

Period ended 31st March, 2014- Number of shares 10,374,498 – – 10,374,498- Amount Rs. 103,744,980 – – 103,744,980

(ii) Details of shares held by each shareholder holding more than 5% shares:

Class of shares / Name of As at 31 March, 2015 As at 31st March 2014shareholder Number of % holding Number of % holding

shares held in that shares held in thatclass Shares class Shares

Equity shares with voting rightsSuresh Kumar Bhuwalka 6,058,500 58.40 6,058,500 58.40

Ajay Kumar Bhuwalka 752,600 7.25 752,600 7.25

(iii) Details of forfeited shares

Class of shares As at 31 March, 2015 As at 31st March 2014

Number of % holding Number of % holdingshares held in that shares held in that

class Shares class Shares

Equity shares with voting rights 12,008,038 12,008,038


70

PARTICULARS AS AT AS AT 31st Mar 2015 31st Mar 2014

Rs. Rs.Note 2 : Reserves and surplus

(a) Capital ReserveOpening balance 2,845,500 2,845,500Add: Additions during the year – –Closing balance 2,845,500 2,845,500

(b) Capital redemption reserveOpening balance – –Add: Additions during the year –Less: Utilised during the year for Issuing bonus shares – –

Closing balance – –

(c) Securities premium accountOpening balance – –Add : Premium on shares issued during the yearLess : Utilised during the year for:Issuing bonus shares – –Closing balance – –

(d) General reserveOpening balance 67,024,809 67,575,189Add: Transferred from surplus in Statement of Profit and Loss – –Less: Utilised / transferred during the year for:Others – –

Closing Balance 67,024,809 67,024,809

(e) Revaluation reserveOpening balance 43,590,007 43,590,007Add: Transferred from surplus in Statement of Profit and Loss – –Less: Utilised / transferred during the year for:Issuing bonus shares – –Others – –Closing Balance 43,590,007 43,590,007

(f) Surplus / (Deficit) in Statement of Profit and LossOpening balance (171,658,720) 56,740,628Add: Profit / (Loss) for the year (94,666,074) (248,427,603)Amounts transferred from:Less: Minority Shareholder Interest – (20,028,255)Less: Interim dividend – –Closing balance (266,324,794) (171,658,720)

Total (152,864,478) (58,198,404)



71



Rs. Rs.Note 3: Long-term borrowings

(a) Term loans From BanksSecured 403,468,082 331,488,309Unsecured – –

(b) Term loans from othersSecured – –Unsecured 130,000,000 130,000,000

(c) Loans and advances from related partiesSecured – –Unsecured 277,340,620 275,765,850

(d) Deferred Payment LiabilitiesSecured – –Unsecured – –

Total 810,808,702 737,254,159

Note 4: Short-term borrowings(a) Loans repayable

i) From banksSecured 1,706,268,930 1,287,529,029Unsecured 7,162,001 7,162,001

1,713,430,931 1,294,691,030ii) From Other Parties

SecuredUnsecured 80,637,630 95,987,221

80,637,630 95,987,221

Total 1,794,068,561 1,390,678,251

Note 5: Trade payables

Trade payables:Acceptances (Letter of Credit Backed) – 415,310,121Other than Acceptances 543,137,311 484,334,870

Total 543,137,311 899,644,991

Note 6 Other Current Liabilities

(a) Current maturities of long-term debt – 70,210,622

(b) Interest accrued but not due on borrowings 3,601,371 8,186,997

(c) Interest accrued and due on borrowings – 3,103,127

(d) Unpaid dividends 334,854 815,075

(e) Other payables

i) Statutory remittances (Contributions to PF and ESIC,Withholding Taxes, Excise Duty, VAT, Service Tax, etc.) 86,699,686 71,950,708

(ii) Advances from customers 37,062,686 3,551,756

(iii) Outstanding Liabilities 25,050,529 99,252,310

Total 152,749,126 257,070,594


72



Rs. Rs.Note 7: Short Term Provision

(a) Provision for employee benefits:(i) Provision for bonus – –(ii) Provision for compensated absences – –(iii) Provision for gratuity (net) 2,351,158 2,351,158

2,351,158 2,351,158

(b) Provision - Others: – –(i) Provision for tax 2,578,836 2,578,836

2,578,836 2,578,836

Total 4,929,994 4,929,994


73

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74

Note 9 : Non-current investments

Particulars As at 31st March 2015 As at 31st March 2014

Quoted Unquoted Tota Unquoted TotalInvestments (At cost):

A. Trade(i) Investment in equity instruments

(give details separately for fully /partly paid up instruments) – – – –

(ii) of joint venture companies(Lootah Bhuwalka Bhuwalka Steel

Industries FZC Equityshares 10,350,000(As at 31 March, 2015: 10,350,000) – – 38,012,644 38,012,644

Total - Trade (A) – – 38,012,644 38,012,644

B. Other investmentsInvestment in government ortrust securities(i) government securities 37,343 37,343 37,343 37,343

(ii) trust securities – – – –

Total - Trade (B) 37,343 37,343 37,343 37,343

Total ( A+ B) – 37,343 3,80,49,987



75


Rs. Rs.Note 10: Long-term loans and advances(a) Security deposits

Secured, considered goodUnsecured, considered good 1,29,79,564 1,50,05,164Doubtful 2,89,533 2,89,533

Less: Provision for doubtful deposits – –

Total 1,32,69,097 1,52,94,697

Note 10A: Long-term loans and advancesa) Deferred Revenue Expenditure – –

(to the extent of written-off or adjusted)

Total – –

Note 11: Inventories(Inventories have been valued at lower of cost and net realisable value)

(a) Raw materials 38,77,66,592 43,93,74,250Goods-in-transit 9,04,142 -

(b) Work-in-progressGoods-in-transit

(c) Finished goods (other than those acquired for trading) 49,32,52,049 55,74,56,295Goods-in-transit

(d) Stock-in-trade (acquired for trading)Steel Division 9,12,14,691 14,19,76,890

Jewellery Division 25,00,875 11,12,71,033

Goods-in-transit

(e) Misroll 90,28,254 78,29,981Goods-in-transit

(f) Scrap 51,30,258 23,66,593Goods-in-transit

(g) Stores And Spares 56,31,744 70,55,264

Total 99,54,28,606 1,26,73,30,305

Note 12 Trade receivablesTrade receivables outstanding for a period exceeding six months fromthe date they were due for payment

Secured, considered good 70,07,33,397 80,34,97,597Unsecured, considered goodDoubtful 25,64,803 25,64,803

70,32,98,200 80,60,62,400Less: Provision for doubtful trade receivables 25,64,803 25,64,803

70,07,33,397 80,34,97,597Other Trade receivables

Secured, considered good 48,16,47,569 12,28,20,991Unsecured, considered goodDoubtful 48,16,47,569 12,28,20,991Less: Provision for doubtful trade receivables – –

48,16,47,569 12,28,20,991

Total 1,18,23,80,966 92,63,18,588



76


Rs. Rs.

Note 13: Cash and cash equivalents(a) Cash on hand 11,35,229 57,37,409(b) Balances with banks

(i) In current accounts 95,25,515 3,43,82,640(ii) In earmarked accounts

- Unpaid dividend accounts 3,34,854 8,15,075- Balances held as margin money or security against

borrowings, guarantees and other commitments 1,49,53,241 4,95,96,865

Total 2,59,48,838 9,05,31,988

Note 14: Short-term loans and advances(a) Loans and advances to related parties

Secured, considered good – –Unsecured, considered goodDoubtful – –

Less: Provision for doubtful loans and advances – – – –

(b) Loans and advances to employeesSecured, considered good 8,52,831 8,14,647Unsecured, considered goodDoubtful – –Less: Provision for doubtful loans and advances – –

8,52,831 8,14,647

(c) Prepaid expenses - Unsecured, considered good(For e.g. Insurance premium, Annual maintenance contracts, etc.) 4,59,304 4,35,676

(d) Balances with government authoritiesUnsecured, considered good(i) CENVAT credit receivable 5,30,41,097 5,87,28,659(ii) VAT credit receivable 3,71,15,405 3,67,50,264(iii) Service Tax credit receivable 42,59,127 72,00,146(iv) Advance Income tax/TDS 1,08,66,472 91,26,527(v) Mat Receivables 15,80,731 15,80,731(vi) Service Tax paid under protest 4,49,474 4,49,474(vii) Sales tax paid under protest 46,15,065 46,15,065(viii) I.T. Under Protest – 12,71,900ix) Excise Duty Under Protest 2,54,54,770 2,54,54,770x) Others 15,07,507 10,368

13,88,89,649 14,51,87,905

(e) Others (specify nature)Secured, considered good – –Unsecured, considered good 5,57,47,948 4,81,73,860Doubtful – –

Less: Provision for other doubtful loans and advances 4,20,324 4,20,324

5,53,27,624 4,77,53,537

Total 19,55,29,408 19,41,91,765



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PARTICULARS For the Year Ended For the Period Ended 31st Mar 2015 31st Mar 2014

Rs. Rs.

Note 15: Revenue from operations(a) Sale of products 4,29,78,93,630 2,14,95,10,694(b) Other operating revenues 9,70,215 32,05,629

Less: 4,29,88,63,845 2,15,27,16,323(c) Excise duty 11,65,40,659 6,05,10,209

4,18,23,23,186 2,09,22,06,114

(i) Sale of products comprisesManufactured goodsFinished Goods 97,03,07,848 35,13,35,309Misroll 72,39,085 33,79,754M.S. Scrap 1,24,21,220 96,82,660Jewellery 10,82,17,795 5,88,09,810Others Sales/Reciepts 5,16,91,444 19,96,16,149

Total - Sale of manufactured goods 1,14,98,77,392 62,28,23,682

Traded goodsFinished Goods 3,14,80,16,238 1,52,66,87,012Others

Total - Sale of traded goods 3,14,80,16,238 1,52,66,87,012

Total - Sale of products 4,29,78,93,630 2,14,95,10,694

(ii) Sale of services comprisesConversion Charges Received – –Others – –Total - Sale of services – –

(iii) Other operating revenues comprise:Transportation Charges 9,70,215 32,05,629Sundry Balance written back – –

Total - Other operating revenues 9,70,215 32,05,629

Note 16: Other income(a) Interest income 41,53,083 22,97,811(b) Other non-operating income (net of expenses

directly attributable to such income) 11,67,962 1,25,162

Total 53,21,045 24,22,973

Interest income comprises:Interest from banks on:deposits 28,67,561 22,97,811Other interest 12,85,522 -

Total - Interest income 41,53,083 22,97,811

(ii) Other non-operating income comprises:Profit on sale of fixed assets – –Miscellaneous income 11,67,962 1,07,383

Total - Other non-operating income 11,67,962 1,07,383

(iii) Details of Prior period items (net)Prior period income – –Prior period expenses – –Total – –



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Rs. Rs.Note 17.a: Cost of materials consumedOpening stock 42,45,20,836 79,33,38,123

Add: Purchases 92,99,70,671 21,17,14,266

1,35,44,91,507 1,00,50,52,388Less: Closing stock 37,15,61,578 42,45,20,836Cost of material consumed 98,29,29,928 58,05,31,552Material consumed comprises:Raw material 96,60,30,829 56,12,90,647Store and spares 1,68,99,099 1,92,40,905

Total 98,29,29,928 58,05,31,552

Note 17.b: Purchase of traded goodsTraded goods 2,99,60,97,528 1,61,75,73,598

Total 2,99,60,97,528 1,61,75,73,598

Note 17.c:Changes in inventories of finished goods,work-in-progress and stock-in-tradeInventories at the end of the year:Finished goods 56,60,66,130 79,31,66,367Misroll 90,28,254 78,29,981M.S. Scrap 51,30,258 23,66,593Work-in-progress 2,09,01,485 1,75,37,850

60,11,26,128 82,09,00,791

Inventories at the beginning of the year:Finished goods 79,10,47,367 68,44,97,276Misroll 78,29,981 79,17,119M.S. Scrap 23,66,593 30,07,919Work-in-progress 1,96,56,850 2,23,54,979

82,09,00,791 71,77,77,292

Net (Increase) / decrease in Stock 21,97,74,663 -10,31,23,499Increase / (decrease) of excise duty on inventory 0 -16,526

Net (Increase) / decrease in Stock net of Excise duty 21,97,74,663 -10,31,40,025

Note 18: Employee benefits expenseSalaries and wages 5,40,21,941 4,37,38,296Subcontracting 1,17,48,619 1,11,57,156Contributions to provident and other funds 17,53,783 12,55,464Staff welfare expenses 27,33,640 15,54,682

Total 7,02,57,983 5,77,05,598

Note 19: Finance costsInterest expense on:(i) Borrowings 4,25,90,870 11,69,85,229(ii) Trade payables(iii) Others 9,15,149 3,60,03,311

- Interest on LC, Bill Discounting Chargesand on other borrowing

Total 4,35,06,019 15,29,88,540



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Rs. Rs.Note 20: Other expensesPower and fuel 7,85,96,662 3,35,80,921Electricity Charges 10,67,909 6,01,822Water Charges 7,56,822 4,76,907Rent including lease rentals 57,44,600 28,11,900Repairs and maintenance - Buildings 9,50,113 1,33,645Repairs and maintenance - Machinery 5,41,222 18,31,061Repairs and maintenance - Vehicle 56,27,388 40,12,913Bank Charges 31,99,414 66,49,507Insurance 6,26,676 5,15,412Rates and taxes 16,60,170 8,02,664Communication 23,38,997 13,39,177Travelling and conveyance 1,06,06,932 46,79,722Printing and stationery 5,47,026 3,42,472Freight and forwarding 9,58,343 3,64,795Sales Expense 39,01,045 7,54,283Legal and professional 1,31,72,264 79,40,470Payments to auditors 5,50,000 3,50,000Bad trade and other receivables, loans and advances written off 5,179 346Loss on fixed assets sold / scrapped / written off - 21,582Miscellaneous expenses 60,77,951 26,25,958Carriage Outward 33,376 4,10,167Guest House Exp 5,34,947 5,92,497Security Charges 22,90,368 22,17,652Postage and Courier - 6,406Deffered Revenue Expenses Written Off - 28,800Crop Compensation Farmers - 39,01,926

Total 13,97,87,405 7,69,93,005

(i) Payments to the auditors comprises(net of service tax input credit, where applicable):As auditors - Statutory audit 5,50,000 6,00,000Reimbursement of expenses

Total 5,50,000 6,00,000

(ii) Details of Prior period items (net)Prior period expenses (give details)Prior period income (give details)

Total

Note 21: Earnings per shareEarnings per shareBasicNet profit / (loss) for the year from continuing operationsafter considering extraordinary items (9,46,66,074) (24,84,27,603)Number of equity shares 1,03,74,498 1,03,74,498Earnings per share from continuing operations - Basic (9.12) (23.95)



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Note 23 to the Consolidated Financial Statements for the year ended 31st March, 2015.

1. a) The Company and description of business.

Bhuwalka Steel Industries Limited was incorporated in 1981 and started commercial production in 1983.The Company has 3 manufacturing units situated at Wada, (Maharasthara), Hoskote (Karanataka) andKanchipuram (Tamilnadu) for manufacture of Rolled Products including Angles, Structural, Flats etc. fordomestic and export market out of which operations in one of the unit at Kanchipuram (T.N.) weresuspended.

The Company has a subsidiary at Bellary, namely, Benaka Sponge Iron Pvt. Ltd., having sponge ironcapacity of 200 TPD where 59.97% of the equity is held by the Company.

b) Consolidation.

The accompanying financial statements include the financial statement of Benaka Sponge Iron Pvt. Ltd.subsidiary of Bhuwalka Steel Industries Limited, The consolidated financial statements are prepared inaccordance with the principles and procedures required for the preparation and presentation of consolidatedfinancial statements as laid down under AS 21, issued by the Institute of Chartered Accountants of India(ICAI). The financial statements of the Company and its subsidiaries are consolidated on a line by linebasis by adding together like items of assets, liabilities, income and expenses. Any excess of the cost tothe parent company of its investment in a subsidiary and the parent company’s portion of equity of thatentity at the date, at which such investment is made, is described as capital Reserve or goodwill andrecognized separately. All significant inter-company transactions, related unrealised profits / losses, andbalances between the entities included in the consolidated financial statements have been eliminated.

Further, Company is sold share in joint venture during the current year. hence as per AS 27 the companyhas not applied the method of proportionate consolidation and figure related to the previous year restatedaccordingly in financial statement.

Disclosure requirement as per AS 27 for joint venture with Bhuwalka Steel Industries FZC is as under:-

Name of % of Amount of interest based on accounts for the Year endedcompanies share 31st March, 2015and country holdingof incorporation

Assets Liabilities Income Expenditure Contingentliabilities

Current Year Nil Nil Nil Nil Nil Nil

Previous Year 49% (2,75,40,853) (2,75,40,853) (4,36,05,283) (4,29,02,204) (15,70,013)

(Amount in AED)

Note: Figures in brackets relate to the previous year

Bhuwalka Steel IndustriesFZC Sharjah UAE(Audited Figures)


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2. Contingent Liabilities not provided for

Particulars FY 2014-15 FY 2013-14

I) Letter of Credits/ Bank Guarantees Nil 129.86

II) Corporate Guarantees given to Banks and Financial Institutions onbehalf of Group Companies(Liabilities as on 31.03.2015): 4602.58* 4339.96*

III) Other statutory liabilities disputed by the company : 1062.31 918.81

IV) Claims against the Company not Acknowledged as debt : 34.61 34.61

*(27.074 Million AED Converted @ 17.00 rate prevailing on 31st March 2015)

3. STATEMENT ON SIGNIFICANT ACCOUNTING POLICIES: a) The consolidated financial statements have been prepared in accordance with the Accounting Standard

21 on “Consolidated Financial Statements “issued by the Institute of Chartered Accountants of India.b) Consolidated financial statements have been prepared using uniform accounting policies, in

accordance with the generally accepted accounting policies.c) These are set out in the “Significant Accounting Policies and Notes on Accounts” of the Company and

its subsidiaries.4. Profit and Loss Account

Profit & Loss on sale of raw material and excess/shortage on physical verification, if any, remain adjusted inthe respective consumption accounts. Profit & Loss A/c has been consolidated on line to line basis forSubsidiary.

5. Related Party Disclosure

Related party disclosures have been made in accordance with the accounting Standards on related partyDisclosure (AS 18) issued by The Institute of Chartered Accountants of India.

A) Following are the name of related parties with whom the transactions were carried out by the company:

Name of the Related Parties Relationship

Benaka Sponge Iron Pvt Ltd. Subsidiary Company

Bhuwalka Steel Industries FZC Parties where Control Exists

Balchand Suresh Kumar Parties where Control Exists

Bhuwalka Jewellers Ltd. Parties where Control Exists

Bhuwalka Metal Industries Pvt. Ltd. Parties where Control Exists

Shri Durga Trade Links Private Limited Parties where Control Exists

Nava Karnataka Steels Private Ltd. Parties where Control Exists

Mahesh Sponge Iron and Power Ltd Parties where Control Exists

Sri Suresh Kumar Bhuwalka Key Management Personnel- Director

Sri Ajay Bhuwalka Key Management Personnel- Managing Director

Sri Ankit Bhuwalka Key Management Personnel- Director

(Amount Rs. in Lacs)


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B) Transactions carried out with related parties referred above in ordinary course of business for the year ended31st March 2015.

( Rs. in Lakhs)

Nature of Transactions Subsidiary Key Parties whereManagement Control

Personnel Exists

Purchases 22.39 5939.52

(Nil) — (3131.78)

Sales Nil — 21080.25

(Nil) — (11135.73)

Expenses — 11.50 Nil

(—) (6.00) (Nil)

Income Nil — —

Nil — (—)

Outstanding – Debit Nil — 459.48

Nil — (25.37)

— Credit Nil 2773.40 646.47(Nil) (2757.66) (—)

Note: - Figures in bracket pertain to PY 2013-14.

6. The previous year’s figures are regrouped/re-arranged wherever found necessary.

NOTE : PREVIOUS YEAR’S FIGURES ARE SHOWN IN THE BRACKETS


(Ajay Kumar Bhuwalka) (Ankit Kumar Bhuwalka) for ASR AssociatesManaging Director Director Chartered Accountants

(CA A. S. Rafiq )Place : Bangalore ProprietorDate : 14th August 2015 Membership No.204646

FRN No. 8877S


83

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2015 2014-15 2013-14

Rs. Rs.CASH FLOW FROM OPERATING ACTIVITIES:Net Profit / (Loss) before tax and extraordinary items (33,21,71,374) (33,36,83,393)Adjustments for:

Depreciation 6,74,62,077 4,56,60,212Deffered revenue expenditure – 28,800

Profit/loss from sale of Fixed Assets – –Profit on sale of Investment – –Rent Received – –Interest Charged to Profit & Loss A/c 4,35,06,019 15,29,88,540Provision for Doubtful Debts/Advances Written back – 2,22,772Dividend Income – –

Operating Cash Profit before working capital changes (22,12,03,278) (13,47,83,070)Adjustments for:

Trade and Other Receivables (25,74,00,021) (31,99,61,783)Inventories 27,19,01,699 26,56,93,788Trade Payables and other Liabilities (46,08,29,148) 56,86,37,050

CASH FLOW FROM OPERATIONS (66,75,30,748) 37,95,85,985Direct Taxes Paid/(refund) – 2,22,772Sales Tax Deferrment – 21,49,107

Net Cash from Operating Activities (66,75,30,748) 37,72,14,106CASH FLOW FROM INVESTING ACTIVITIES:

(Increase)/decrease in Fixed Assets(Net) (17,27,588) (3,23,583) (Increase)/Decrease in Investments 3,80,12,644 –

Profit on sale of Investment 13,11,98,107 –Rent Received – –Dividend Income – –Profit on Sale of Undertaking – –Long-term loans and advances 20,25,601

Net cash used in Investing Activities 16,95,08,764 (3,23,583)CASH FLOW FROM FINANCING ACTIVITIES:Increase/(Decrease) in Borrowings 47,69,44,853 (20,79,14,204)Interest Paid (4,35,06,019) (15,29,88,540)Increase In Share Capital – 2,00,00,000

Net cash used in Financing Activities 43,34,38,833 (34,09,02,744)

Net Increase/(Decrease) in Cash and Cash

Equivalents (A+B+C) (6,45,83,150) 3,59,87,779

Opening Balance of Cash & Cash Equivalents 9,05,31,988 5,45,44,209

Closing Balance of Cash & Cash Equivalents 2,59,48,838 9,05,31,988

Note : Balance of cash and cash equivalents include Rs. 3,34,854/- (8,15,075/-) held as balance in bankaccount of Unpaid Dividend which are not available for operational activities of the Company.

We have examined the attached Consolidated Cash Flow Statement of Bhuwalka Steel Industries Limited for theyear ended 31st March, 2015. The statement has been prepared by the Company in accordance with therequirements of Clause 32 of listing agreement with the corresponding Profit & Loss account and Balance Sheetof the Company covered by our report.



(CA A. S. Rafiq )Place : Bangalore ProprietorDate : 14th August 2015 Membership No.204646

FRN No. 8877S


84

Form AOC-1(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)

Statement containing salient features of the financial statement of subsidiaries/associatecompanies/joint ventures

Part “A”: Subsidiaries

(Information in respect of each subsidiary to be presented with amounts in Rs.)

Sl. No. Particulars Details1. Name of the subsidiary Benaka Sponge Iron Pvt Ltd2. Reporting period for the subsidiary concerned, if

different from the holding company’s reporting period 2014-15

3. Reporting currency and Exchange rate as on the lastdate of the relevant Financial year in the case offoreignsubsidiaries INR

4. Share capital 50000000

5. Reserves & surplus (84991055)

6. Total assets 524002468

7. Total Liabilities 524002468

8. Investments 17343

9. Turnover 259114899

10. Profit before taxation (141098435)

11. Provision for taxation/Deferred Tax Assets 13134453

12. Profit after taxation 127963982

13. Proposed Dividend -

14 % of shareholding -

Notes: The following information shall be furnished at the end of the statement:1. Names of subsidiaries which are yet to commence operations2. Names of subsidiaries which have been liquidated or sold during the year.

Part “B”: Associates and Joint VenturesStatement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companiesand Joint Ventures

Name of associates/Joint Ventures Nil1. Latest audited Balance Sheet Date

2. Shares of Associate/Joint Ventures held by the company on the year endNo.Amount of Investment in Associates/Joint VentureExtend of Holding%

3. Description of how there is significant influence4. Reason why the associate/joint venture is not consolidated5. Net worth attributable to shareholding as per latest audited Balance Sheet6. Profit/Loss for the yeari. Considered in Consolidationii. Not Considered in Consolidation

1. Names of associates or joint ventures which are yet to commence operations.2. Names of associates or joint ventures which have been liquidated or sold during the year.Note: This Form is to be certified in the same manner in which the Balance Sheet is to be certified.


85

Aff ixRevenue

Stamp

Form No. MGT-11Proxy form

[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management andAdministration) Rules, 2014]

CIN: L27209KA1981PLC004343Name of the Company: Bhuwalka Steel Industries Limited

REGISTERED OFFICE : “Bhuwalka Center” , No.71, 3rd Cross, Residency Road, Bengaluru - 560 025

Name of the member (s) :

Registered address :

E-mail Id:

Folio No/ Client Id :DP ID :

I/We, being the member (s) of ……….....................…. shares of the above named company, hereby appoint

1. Name : …………….............................................................................................................................……

Address :……………............................................................................................................................……

E-mail Id :…………….............................................................................................................................……

Signature :……..........................................................................................................………. , or failing him

2. Name : ……………...........................................................................................................................……

Address :……………...........................................................................................................................……

E-mail Id :……………...........................................................................................................................……

Signature :……..........................................................................................................………. , or failing himas my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the Thirty Third Annual GeneralMeeting of the Company, to be held on Monday, the 9th November, 2015 at 12.00 Noon at Woodlands Hotel, No.5, Rajaram Mohan Roy Road, Bengaluru-560 025 and at any adjournment(s) thereof in respect of such resolutionsas are indicated below:

ORDINARY BUSINESS

1. Adoption of Financial Statements for the year ended March 31, 2015.

2. Re-Appointment of Mr. Suresh Kumar Bhuwalka.

3. Appointment of Statutory Auditors of the Company.

SPECIAL BUSINESS

4. Appointment of Mr. Ajay Kumar Bhuwalka as Managing Director

Date:

Signature of shareholder

Signature of Proxy holder(s)

Note: This form of proxy in order to be effective should be duly completed and deposited atthe Registered Office of the Company, not less than 48 hours before the commencement ofthe Meeting.


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b

annual report - bseindia.com as managing director of the company including salary, ......

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