ANNUAL REPORT - BSE Ltd. (Bombay Stock Exchange)€¦ · BHUWALKA STEEL INDUSTRIES LIMITED 4 NOTICE...

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

ANNUAL REPORT2012 - 2013

BHUWALKASTEEL INDUSTRIES LIMITED

2

Annual Report 2012- 2013

3

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

Shri. Ajay Kumar BhuwalkaShri. Ankit BhuwalkaShri. K.C. KondaiahSmt. Visalakshi VasanthanNominee Director - IDBI Bank Ltd.

COMPANY SECRETARY : Rachana P V

AUDITORS : M/s. ASR AssociatesChartered AccountantsBellary

BANKERS : Canara BankIDBI Bank Ltd.

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

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.


4

NOTICENotice is hereby given that the 31st Annual General Meeting of the Company will be held on Saturday, the28th December, 2013, at 12.30 P.M. at Hotel Woodlands, No. 5, Raja Ram Mohan Roy Road, Bangalore- 560 025to transact the following business.

ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Statements of Accounts of the Company for the period ended 30th

September 2013, and the Reports of the Directors’ and the Auditors’ thereon.

2. To appoint a Director in place of Shri. Suresh Kumar Bhuwalka, who retires by rotation and being eligible, offershimself for re-appointment.

3. To appoint a Director in place of Shri. K.C.Kondaiah, who retires by rotation and being eligible, offers himselffor re-appointment.

4. To re-appoint Auditors to hold office from the conclusion of this meeting until the conclusion of the next annualGeneral Meeting and to authorize the Board to fix their remuneration.

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 21st December,2013 to 28th December, 2013 (both days inclusive).

4. Queries on accounts and Operations of the company, if any, may please be sent to the company at least7 days in advance of the Meeting.

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

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

7. A 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 ofshares held in electronic form, instructions regarding change in address be furnished to members’ DepositoryParticipant only.

Registered Office: By Order of the BoardNo.71, III CrossResidency RoadBangalore - 560 025 (SURESH KUMAR BHUWALKA)Date: 21st November, 2013 Chairman and Managing Director


5

Details of Directors seeking appointment / re-appointment at 31st Annual General Meeting (In pursuance ofClause 49 of Listing Agreement)

Name of Director Shri Suresh Bhuwalka Shri. K.C.Kondaiah

Date of Birth 01.11.1950 10.07.1950

Qual i ficat ion B .C om B.com

Expert ise in specif ic More than 42 years experience as More than 43 years In Industry andindustrialist in manufacturing. is an MLC in Karnataka

List of other Nava Karnataka Steels Pvt. Ltd., Nava Karnataka Steels Pvt. Ltd.,Companies in which Benaka Sponge Iron Pvt. Ltd., Sri Durga Trade Links Pvt.Ltd.Directorship held Mahesh Sponge Iron & Power Ltd.,

Sri Durga Trade Links Pvt.Ltd.Bhuwalka Metal Industries Pvt. Ltd.,Bhuwalka Jewellers Ltd.Bhuwalka Steel Industries FZC

Chairman/ Member None Noneof the Committeesof the Board ofDirectors of otherCompanies in whichhe is a Director


6

DIRECTORS’ REPORTTO THE MEMBERS OFBHUWALKA STEEL INDUSTRIES LIMITED:

Your Directors have pleasure in presenting before youthe 31st Annual Report of the Company together withAudited Statement of Accounts for the Eighteen MonthsPeriod ended 30th September, 2013.

1. FINANCIAL RESULTS: (Rs.in Lakhs)

2012 - 13 2011 - 12(18 months) (12 months)

Total Income 85,405.18 63,996.75

Profit before Interest,Depreciation and Taxation 3,809.25 2,654.73

Less: - Interest 3,369.46 2,403.42

Less:- Depreciation/Amortization 817.42 597.68

Profit Before Tax (377.63) (346.37)Extraordinary items

Add: Profit fromExtraordinary item 501.03 0.00

Profit before tax afterExtraordinary item 123.40 (346.37)

Less:- Income Tax for theyear(including FBT andDeferred taxation) (73.60) 125.66

Less:- Income tax forearlier years – –

Profit After Tax 49.80 (220.73)Add: Balance of profitbrought forwardFrom last year 542.23 762.96

Appropriations:Proposed Dividend withDividend taxon Equity shares – –

Balance of Profit carried forward 592.03 542.23

2. OPERATIONS REVIEW:

The Company has adopted 18 Months FinancialPeriod from 1st April 2012 to 30th September, 2013due to Corporate Debt restructuring (CDR)approval process and its long implementationtenure. Total income from operations during theperiod of 18 months under review was Rs.85,405.18 lakhs as compared to Rs. 63,996.75lakhs in the previous year (12 months) signifying arise by 33.45 % in top line. During the period underreview, the Company has earned profit after tax ofRs. 49.80 Lakhs (after extra ordinary items) asagainst losses after tax of Rs. 220.73 lakshs in theprevious accounting year. Extraordinary item ofRs. 501.03 Laksh were due to profit on account of

sale of guest house property. Main reason for lowerprofitability from operations were Local Body taxand Transportation strike in Maharashtra, poormarket condition, Lower capacity utilization ofproduction capacities due to inadequate workingcapital during most of the period of reportedFY, steep rise in interest costs and highdepreciation cost.

CDR was sanctioned during November 2012 bythe Company’s Bankers Canara Bank and IDBIBank which could not be fully implemented before31st March 2013. The additional working capitalfunding from the bankers could be utilised only duringApri l 2013 to September 2013. Company isendeavoring to overcome the issues of poor demandin Infra and Real Estate by innovative marketingstrategies and also focusing in optimizing itscapacity utilization.

In order to improve financial performance andprofitability, Company is endeavoring to raise longterm funding resources through equity,concentrating in improving productivity, efforts foroptimum capacity utilization of the Wada plant andan overall cost reduction exercise. Further companyhas already received approval from CDR for sale ofits surplus assets at Hoskote, Kanchipuram andBangalore in order to improve long term fundpositions of the company. However company couldnot materialize it due to poor demand in Real estate.

Company’s products are continued to be wellaccepted by the market. Company has beenregularly participating in tenders floated by govt.undertakings and also concentrating on exportorders.

3. DIVIDEND

Your Directors express their inability to recommendany dividend in view of insufficiency of profits.

4. SUBSIDIARY COMPANY

As required under section 212 of the CompaniesAct. 1956, the audited statements of accounts alongwith the report of the Board of Directors of M/sBenaka Sponge Iron Private Limited together withthe Auditor’s report as at and for the year 31st March2013, are appended. While preparing consolidatedfinancials of the company, Financials of M/s BenakaSponge Iron Private Limited has been consolidatedas per Accounting Standard- 21 of ICAI.

5. CONSERVATION OF ENERGY:

Total energy consumption and energy consumedper unit of production as per Form ‘A’ is annexed- forming part of this Report.


7

6. TECHNOLOGY ABSORPTION :

The Company is keeping abreast of the latestdevelopments in product technology, manufacturingprocess and methods and using indigenoustechnology

7. FOREIGN EXCHANGE EARNINGS ANDOUTGOINGS:

Foreign Exchange Earnings and Expenditure aregiven under Point 8 (F) and 8 (G) of Note ‘23’forming part of the Accounts for the Period ended30th September, 2013.

8. PERSONNEL:

Industrial Relations remained cordial through outthe year.

There are no employees of the categories specifiedunder Section 217 (2A) of the Companies Act, 1956read with Companies (Particulars of Employees)Rules, 1975 as amended. Hence, this informationis not given.

9. DIRECTORS:

Sri Suresh Kumar Bhuwalka and Sri. K.C. Kondaihretire by rotation at the forthcoming Annual GeneralMeeting and being eligible, offer themselves for re-appointment.

10. AUDITORS:

The Auditors, M/s. ASR Associates, CharteredAccountants, Bellary, retire at the conclusion of theforthcoming Annual General Meeting and beingeligible offer themselves for re-appointment.

11. AUDITORS’ REPORT:The Notes on accounts referred to in the Auditors’Report are self explanatory and therefore do notcall for any further comments under section 217(3)of the Companies Act, 1956.

12. DIRECTORS’ RESPONSIBILITY STATEMENT ASPER SECTION 217 (2AA):

Your Directors hereby confirm:

a) that in the preparation of the annual accounts,the applicable accounting standards have beenfollowed and that there are no materialdepartures;

b) that the directors had selected such accountingpolicies and applied them consistently and madejudgments and estimates that are reasonableand prudent so as to give a true and fair view ofthe state of affairs of the Company at the end ofthe financial year and of the profit of thecompany for the year;

c) that the directors had taken proper and sufficientcare for the maintenance of adequateaccounting records in accordance with theprovisions of the Companies Act, 1956, tosafeguard the assets of the Company and for

preventing and detecting fraud and otherirregularities;

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

13. REPORT ON CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreementswith the Stock Exchanges, the following form partof this Annual Report:

a) Management Discussion and Analysis;

b) Report on Corporate Governance;

c) Auditors’ Certificate regarding compliance ofconditions of Corporate Governance

14. ACKNOWLEDGEMENTS:

Your Directors wish to place on record theirappreciat ion for the cont inued support,encouragement and co-operation extended by allthe stakeholders namely; Financial Institutions,Bankers, shareholders, customers and suppliers.

Your Directors also place on record theirappreciation for the contributions made by theemployees of the Company at all levels.

FOR AND ON BEHALF OF THE BOARD(SURESH KUMAR BHUWALKA)

Chairman and Managing Director

(AJAY KUMAR BHUWALKA)Director

Place : BangaloreDate : 21st November, 2013


8

Management Discussion and Analysis

Industry Structure & Developments:

The Company’s primary product, steel rolled product (Mainly TMT and Structural Steel), is catering to the demandof Real Estate construction, infrastructure, power, Telecom and engineering industries. There are large no ofre-rolling mills 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.Further to create a wide product base to cater other growing industries such as telecom and engineering,Company has already implemented modernization and expansion at its facilities at Wada. Modernization will alsohelp company in improving productivity. Further Company has received additional working capital Finance fromBankers under CDR for its Wada unit. It will help company to achieve optimal capacity utilization.

Opportunities, Threats and Concerns:

Deep economic recession coupled with global meltdown has affected all the commodities market across the globeduring last 4 years and steel was one of the worst affected commodity. There is no surge in demand in currentyear, however there is growth opportunities in Infra sector based on expected Central Government’s announcementof Infra projects. Further there are also expectations of export of company’s product. In an emerging economy likeIndia, there will be good opportunity for growth though may be lower than earlier targets and renewed emphasis oninfrastructure by the existing government may work as stimulus for the industries at large.

With the newly elected stable Government in the State, Industry in Karnataka is expecting industry supportiveatmosphere in the state. Demand in Maharasthra is Stable and slow, however expected to pick up shortly.

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.

Price volatility, low demand, Capacity utilization and higher cost of borrowing remain serious concern of theCompany. Company has already initiated necessary steps to mitigate 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:

The cost of power (including fuel) and its availability is major concern. High power tariffs and volatility in inputprices may adversely affect the profitability of the Company. However, it is not significant considering the level ofoperations of the Company and normal correlation in the price of raw material and finished goods. High volatility incommodity prices remain serious concern. Company is also exposed to financial risks like exchange fluctuationand interest rate variations. Management has already identified these risks and taking necessary steps to mitigatethe risks such as exploring the possibilities to having captive power plant to become self sufficient, linkage to coaland iron ore mines for uninterrupted production and to reduce cost of borrowing by various means.

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.


9

* Power and Fuel Comsumption for the period of 18 months from 1-April-2012 to 30-Sep-2013

FORM “A”ANNEXURE TO DIRECTOR’S REPORT

FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO

CONSERVATION OF ENERGY

A. POWER AND FUEL CONSUMPTION:

ROLLED PRODUCTS

Current PreviousYear Period

2013* 2012

1. ELECTRICITY:

a) Purchased

Units 1,10,71,085 1,00,18,507

Total Amount(Rs.) 8,06,28,114 6,59,47,063

Rate/Unit(Rs.) 7.28 6.58

b) Own Generation NIL NIL

2. FURNACE OIL:

Quantity (Ltrs) 8,49,652 18,55,654

Total Amount (Rs.) 3,24,37,564 6,38,62,422

Average Rate (Rs.) 38.18 34.42

3. COAL & OTHERS:

Quantity (Tonnage) 10,981 10,269

Total Amount (Rs.) 8,24,83,259 8,43,02,790

Average Rate (Rs.) 7,512 8,209

B. CONSUMPTION PER UNIT OF PRODUCTION:

Production (MTs) 91388 97,669

Electricity(Units) 121 103

Furnace Oil (Ltrs.) 9 19

Coal & Others (Kgs) 120 105


10

CORPORATE GOVERNANCE

1. The philosophy of the Company on corporate governance envisages the attainment of the highest level oftransparency, accountability, trusteeship, integrity and equity in all areas of its operations. Company iscommitted to good corporate governance. The fundamental objective of the Company is enhancement ofshareholder value, whilst taking into account the interest of all other stakeholders for wealth creation.

2. Board of Directors:The Board of Directors as on the date of this Report is comprised of 5 Directors of which One is Executive,Two Non Executive, One Non Executive Independent and one Nominee Director.Sri. Suresh Kumar Bhuwalka, Chairman - Executive (Managing Director)Sri. Ajay Kumar Bhuwalka - Non-ExecutiveSri. Ankit Bhuwalka - Non-ExecutiveSri. K.C. Kondaiah - Non Executive & IndependentSmt. Visalakshi Vasanthan - Nominee Director of IDBI Bank Ltd.,

3. Details of attendance at Board Meetings and last AGM and details of memberships in other Boards & BoardCommittees:The Board met 10 times during the year – on 11th May 2012, 1st August 2012, 14th August 2012, 12th

November 2012, 21st December 2012, 12th February 2013, 18th March 2013, 14th May 2013, 18th June 2013,and 13th August 2013.

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

Suresh Kumar Bhuwalka 5 Yes 7 – –Ajay Kumar Bhuwalka 10 Yes 6 – –Ankit Bhuwalka 0 No 6 – –K.C. Kondaiah 4 No 1 – –Roop Sing Chawhan 9 Yes 1 – –Visalakshi Vasanthan 4 No Nil – –

Sri. Roop Sing Chawhan Non- Executive Independent Director Resigned w.e.f 21.11.2013

4. Audit Committee : During the period upto 30th September, 2013a) Sri. Suresh Kumar Bhuwalka (Resigned w.e.f 01.08.2012) - Executiveb) Sri. Roop Sing Chawhan - Non Executive & Independentc) Sri Ajay Kumar Bhuwalka (included on 01.08.2012) - Executived) Sri. K.C. Kondaiah - Non Executive & Independent

The Committee met 7 times during the year on 11.05.2012, 01.08.2012, 14.08.2012, 12.11.2012, 12.02.2013,14.05.2013 and 13.08.2013.

Name of the Members Category Attended % of total Whetherattendedlast AGM

Sri. Suresh Kumar Bhuwalka Executive 1 14 YesSri. Roop Sing Chawhan NED & Ind 7 100 YesSri. K.C.Kondaiah Executive 3 43 NoSri. Ajay Kumar Bhuwalka NEC & Ind 5 72 Yes

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


11

5. Share holders’ / Investors’ Grievance Committee : During the period upto 30th September, 2013a) Sri Roop Sing Chawhan - Non-executive and Independentb) Sri Suresh Kumar Bhuwalka - Chairman and Managing Directorc) Sri K.C.Kondaiah - Non-executive and independent

This committee facilitates prompt and effective redressal of shareholders’ complaints and to look into theirgrievances. As on 30.09.2013, there were no complaints remaining unresolved.

6. 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 2012-13 are given in No. 2 of Note 23 -Notes to Accounts.

Sitting fee is paid to non-executive directors for attending Board Meetings, Audit committee meetings and othercommittee meetings. No other remuneration is paid to Non-executive directors.

7. Share Transfer Committee:

The Share transfer committee consisting of

1. Sri. Suresh Kumar Bhuwalka – Chairman

2. Sri. Ajay Kumar Bhuwalka

Compliance Manager – Desmond RozarioRequests for dematerialization are generally confirmed on a weekly basis.

8. 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.

9. General Body Meetings:

Location, Date and Time where last three Annual General Meetings (AGM) were held:

YEAR DATE TIME VENUE

2009 – 2010 28.09.2010 12.30 P.M. Hotel Woodlands28th AGM No.5, Rajaram Mohanroy Road

Bangalore – 560 0252010 – 2011 26.09.2011 12.30 P.M. Hotel Woodlands

29th AGM No.5, Rajaram Mohanroy RoadBangalore – 560 025

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

Bangalore – 560 025

10. 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.

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

12. 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 the company’swebsite www.bhuwalkagroup.com.


12

13. General Shareholder’s Information:Annual General Meeting : Saturday, 28th December 2013 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

ii. Annual Accounts – 2013 -2014for the period(01.10.2013 to 31.03.2014) : on or before 15.05.2014

Book Closure : 21.12.2013 to 28.12.2013

Listing on Stock Exchanges : Bangalore , Mumbai

Stock Code : The Mumbai Stock Exchange 513333: Bangalore Stock Exchange BHUWALKSTL

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

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)

April, 2012 23.30 18.20 35,624May, 2012 22.00 17.35 74,604June, 2012 23.25 19.25 44,946July, 2012 21.75 17.20 47,048August, 2012 19.15 17.10 20,851September, 2012 18.85 16.50 28,127October, 2012 18.85 16.60 55,082November, 2012 18.75 16.05 19,717December, 2012 17.50 16.25 10,281January, 2013 17.55 14.90 34,911February, 2013 16.40 13.80 7,230March, 2013 15.60 11.05 6,293April, 2013 16.00 12.75 2,087May, 2013 13.05 11.27 8,462June, 2013 13.50 11.50 694July, 2013 12.50 10.86 10,790August, 2013 — — —September, 2013 12.49 10.73 21,292

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.


13

Distribution of Shareholdings as on 30th September, 2013.

No. Of Folios SharesShares held Number % Number %

1 – 500 4438 87.76 8124510 7.83

501 – 1000 313 6.19 2505050 2.41

1001 – 2000 170 3.36 2784870 2.68

2001 – 3000 39 0.77 1017980 0.98

3001 – 4000 33 0.65 1206580 1.16

4001 – 5000 8 0.16 370000 0.36

5001 – 10000 24 0.47 1710720 1.65

10001 & ABOVE 32 0.63 86025270 82.92

Total 5057 100.00 103744980 100.00

Pattern of Share Holding as on 30th September, 2013.

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 365616 3.52

4. Indian Public 2614508 25.20

5. Clearing Member 9372 0.09

5. NRI/Foreign Institutional Investors 19202 0.19

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


14

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 period ended on 30th September, 2013, as stipulated in Clause 49 of the Listing Agreement of the saidCompany with 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 period ended 30th September, 2013, noinvestor grievance is pending for a period exceeding one month against the Company as per the recordsmaintained by the Company.

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 : 21st November, 2013 Partner

Membership No.204646FRN No. 8877S

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 (Suresh Kumar Bhuwalka)Date : 21st November, 2013 Chairman & Managing Director.


15

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

We have audited the accompanying financial statementsof BHUWALKA STEEL INDUSTRIES LIMITED whichcomprise the Balance Sheet as at 30th Sep 2013, andthe Statement of Profit and Loss and Cash FlowStatement for the period then ended, and a summary ofsignificant accounting policies and other explanatoryinformation.

Management is responsible for the preparation of thesefinancial statements that give a true and fair view of thefinancial position, financial performance and cash flowsof the Company in accordance with the AccountingStandards referred to in sub-section (3C) of section211 of the Companies Act, 1956 (“the Act”). Thisresponsibility includes the design, implementation andmaintenance of internal control relevant to thepreparation and presentation of the financial statementsthat give a true and fair view and are free from materialmisstatement, whether due to fraud or error.

Our responsibility is to express an opinion on thesefinancial statements based on our audit. We conductedour audit in accordance with the Standards on Auditingissued by the Institute of Chartered Accountants ofIndia. Those Standards require that we comply withethical requirements and plan and perform the audit toobtain reasonable assurance about whether the financialstatements are free from material misstatement.

An audit involves performing procedures to obtain auditevidence about the amounts and disclosures in thefinancial statements. The procedures selected dependon the auditor’s judgment, including the assessment ofthe risks of material misstatement of the financialstatements, whether due to fraud or error. In makingthose risk assessments, the auditor considers internalcontrol relevant to the Company’s preparation and fairpresentation of the financial statements in order todesign audit procedures that are appropriate in thecircumstances. An audit also includes evaluating theappropriateness of accounting policies used and thereasonableness of the accounting estimates made bymanagement, as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for ouraudit opinion.

In our opinion and to the best of our information andaccording to the explanations given to us, the financialstatements give the information required by the Act inthe manner so required and give a true and fair view inconformity with the accounting principles generallyaccepted in India:

a) in the case of the Balance Sheet, of the state ofaffairs of the Company as at 30th Sep 2013;

b) in the case of the Profit and Loss Account, of theprofit/ loss for the period ended on that date; and

c) in the case of the Cash Flow Statement, of thecash flows for the period ended on that date.

1. As required by the Companies (Auditor’s Report)Order, 2003 (“the Order”) issued by the CentralGovernment of India in terms of sub-section (4A)of section 227 of the Act, we give in the Annexure astatement on the matters specified in paragraphs 4and 5 of the Order.

2. As required by section 227(3) of the Act, we reportthat:

a) we have obtained all the information andexplanations which to the best of our knowledgeand belief were necessary for the purpose ofour audit;

b) in our opinion proper books of account asrequired by law have been kept by the Companyso far as appears from our examination of thosebooks

c) the Balance Sheet, Statement of Profit and Loss,and Cash Flow Statement dealt with by thisReport are in agreement with the books ofaccount.

d) in our opinion, the Balance Sheet, Statement ofProfit and Loss, and Cash Flow Statementcomply with the Accounting Standards referredto in subsection (3C) of section 211 of theCompanies Act, 1956;

e) on the basis of written representations receivedfrom the directors as on 30th Sep 2013, andtaken on record by the Board of Directors, noneof the directors is disqualified as on 30th Sep2013, from being appointed as a director interms of clause (g) of sub-section (1) of section274 of the Companies Act, 1956.

f) Since the Central Government has not issuedany notification as to the rate at which the cessis to be paid under section 441A of theCompanies Act, 1956 nor has it issued anyRules under the said section, prescribing themanner in which such cess is to be paid, nocess is due and payable by the Company-NotApplicable


(CA A. S. Rafiq )Partner


Place: BangaloreDate : 21st November, 2013


16

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE REPORT OF EVEN DATE OF THE AUDITOR’S TOTHE MEMBERS OF BHUWALKA STEEL INDUSTRIES LIMITED, BANGALORE, ON THE ACCOUNTS FORTHE PERIOD ENDED 30TH SEPTEMBER 2013.

1. The company is maintaining proper records showing full particulars, including quantitative details and situationof fixed assets. The Company has drawn up a program of physical verification of fixed assets at reasonableintervals, which, in our opinion, is reasonable having regard to the size of the Company and the nature of itsassets. Fixed assets were physically verified by the management during the year and no material discrepancieswere noticed on such verification.

During the year company has sold house property (Inclusive of furniture and Fixtures) at Indira nagar,Bangalore of Rs 3,90,29,834/-( book Value) For Consideration of Rs. 8,22,00,000/-.

2. The management has conducted physical verification of inventory at reasonable intervals. The procedures ofphysical verification of inventory followed by the management are reasonable and adequate in relation to thesize of the Company and the nature of its business. The Company is maintaining proper records of inventoryand no material discrepancies were noticed on physical verification.

3. a) As informed to us, the Company has granted interest free unsecured loans and advances, to one company,covered in the register maintained under section 301 of the Companies Act, 1956. The maximum Amountinvolved during the year was nil lacs and year end balance was nil lacs.

b) In our opinion and as per the information and explanation given to us the terms & conditions, on whichloans have been granted, are prima facie not prejudicial to the interest of the company.

c) The loan was repayable on demand and no stipulation has been made for the repayment of loans taken bythe company covered in the register maintained under section 301 of companies Act 1956, we are unableto comment on regularity of repayment of loans and interest on loan granted by Company.

d) As informed to us, the company has taken interest free unsecured loan from directors covered in theregistered maintained under section 301 of the Companies Act, 1956 amounting to Rs. 2,757.66/- Lacsand the terms and conditions whereof is not prejudicial to the interest of the company.

e) The loan was repayable on demand and no stipulation has been made for the repayment of loans taken bythe company covered in the register maintained under section 301 of companies Act 1956, we are unableto comment on regularity of repayment of loans and interest on loan taken by Company.

4. In our opinion and according to the information and explanations given to us, there is adequate internal controlsystem commensurate with the size of the Company and the nature of its business, for the purchase ofinventory and fixed assets and for the sale of goods and services. During the course of our audit, no majorweakness has been noticed in the internal controls system.

5. Based on the audit procedures applied by us and according to the information and explanations provided bythe management, we are of the opinion that the particulars of contracts or arrangements referred to in section301 of the companies Act have been entered in the register required to be maintained under section 301. Inrespect of transactions made in pursuance of such contracts or arrangements, with parties with whomtransactions exceeding value of Rupees five lakhs have been entered into during the financial year, have beenmade at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of itsbusiness.

8. The Central Government has prescribed maintenance of cost records under section 209(1)(d) of the CompaniesAct, 1956 in respect of the manufacturing activities of the Company. We have broadly reviewed the accountsand records of the Company in this connection and are of the opinion that prima facie the prescribed accountsand records have been made and maintained. However, we have not made a detailed examination of thesame.

9. According to the records of the Company, the Company is generally regular in depositing undisputed statutorydues except Income Tax Amounting 13.35/-lacs including Provident Fund, Investor Education and ProtectionFund, Employees’ State Insurance, Income-tax, Sales-tax, Wealth Tax, Customs Duty, Excise Duty, cessand other statutory dues applicable to it with the appropriate authorities

According to the information and explanations given to us, no undisputed amounts payable in respect ofstatutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance,Income-tax, Sales-tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues,


17

applicable to it, were outstanding at the year end for a period of more than six months from the date theybecame payable.

Based on information and explanations given to us, such disputed statutory dues that have not been depositedon account of matters pending before appropriate appellate authorities are as under :-

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 Before Commissioner (Appeals) 894.45service tax CESTAT and High Court

2 Income Tax Act 1961 Income Tax Before ITAT 9.45

10. The Company has no accumulated losses at the end of the financial year and it has not incurred any cashlosses in the immediately preceding financial year.

The Company has not incurred cash losses in the current financial year.

11. As per information furnished by the management, the company has been paying due principal installments,interest dues to banks and financial institutions. However delays have been observed on due dates.

12. According to the information and explanations given to us, the Company has not granted any loans andadvances on the basis of security by way of pledge of shares, debentures and other securities.

13. The company is not a chit fund or a nidhi/mutual benefit fund/society and hence clause 4 (xiii) of Companies(Auditor’s Report) Order 2003 is not applicable to the company.

14. In our opinion, the Company is not a dealer or a trader in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the terms and conditions of the guarantee given bythe company for loans taken by others from banks or financial institutions are not prejudicial to the interest ofthe company.

16. The term loans raised by the company under as working capital term loan and funded interest term loanamounting Rs.3714.02/-lacs under CDR Scheme were applied for the purpose for which they were raised.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheetof the Company, we report that funds raised on short-term basis have not been used for long-term investment.

18. During the year, the company has not made preferential allotment of shares to parties and companiescovered in the register maintained under section 301 of the Companies Act, 1956.

19. The company has not issued debentures and therefore the question of creation of securities in respect ofdebentures does not arise.

20. The Company has not raised any money through a public issue during the year.

21. Based upon the audit procedures performed and information and explanations given by the management, wereport that no fraud on or by the Company has been noticed or reported during the course of our audit.


Place : Bangalore (CA A. S. Rafiq )Date : 21st November, 2013 Partner


s


18

BALANCE SHEET AS AT 30TH SEPTEMBER, 2013

PARTICULARS Note AS AT AS ATNo. 30.09.2013 31.03.2012

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

(a) Share capital 1 115,753,018 115,753,018(b) Reserves and surplus 2 129,073,152 124,093,489(c) Money received against share warrants 20,040,000 20,040,000

Sub-total - Shareholder’s funds 264,866,170 259,886,5072. Non-current liabilities

(a) Long-term borrowings 3 739,421,876 303,820,496(b) Deferred tax liabilities (net) 21 59,605,139 54,210,143(c) Other long-term liabilities – –(d) Long-term provisions – –

Sub-total - Non-current liabilities 799,027,015 358,030,639

3. Current liabilities

(a) Short-term borrowings 4 1,376,532,751 936,047,570(b) Trade payables 5 355,577,107 973,299,385(c) Other current liabilities 6 120,670,715 129,542,543(d) Short-term provisions 7 4,815,629 2,849,813

Sub-total - Current liabilities 1,857,596,202 2,041,739,311

TOTAL 2,921,489,387 2,659,656,457

B ASSETS

1. Non-current assets

(a) Fixed assets(i) Tangible assets 8 676,497,639 769,251,846(ii) Intangible assets – –(iii) Capital work-in-progress – –(iv) Intangible assets under development – –(v) Fixed assets held for sale – –

(b) Non-current investments 9 138,199,244 138,199,244(c) Deferred tax assets (net) – –(d) Long-term loans and advances 10 15,294,696 16,549,038(e) Other non-current assets – –

Sub-total· Non-current assets 829,991,579 924,000,128

2. Current assets(a) Inventories 11 1,295,708,436 1,007,059,988(b) Trade receivables 12 554,786,659 508,513,141(c) Cash and cash equivalents 13 50,383,512 91,623,115(d) Short-term loans and advances 14 190,619,201 128,460,085(e) Other current assets – –

Sub-total - Current assets 2,091,497,808 1,735,656,329

TOTAL 2,921,489,387 2,659,656,457

See accompanying notes forming part ofthe financial statements 23

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

(Suresh Kumar Bhuwalka) (Ajay Kumar Bhuwalka) for ASR Associates Chairman & Managing Director Director Chartered Accountants

(Rachana P V) (CA A. S. Rafiq )Place : Bangalore Company Secretary ProprietorDate : 21st November, 2013 Membership No.204646

FRN No. 8877S


19

PROFIT & LOSS ACCOUNT FOR THE PERIOD ENDED 30TH SEPTEMBER, 2013

PARTICULARS Note For the Period ended For the Year endedNo. 30.09.2013 31.03.2012

(18 Months) (12 Months)A CONTINUING OPERATIONS1. Revenue from operations (gross) 15 9,016,538,253 6,753,328,069

Less: Excise duty 489,225,049 366,308,604Revenue from operations (net) 8,527,313,204 6,387,019,465

2. Other income 16 13,204,859 12,656,029

3. Total revenue (1+2) 8,540,518,063 6,399,675,494

4. Expenses(a) Cost of materials consumed 17.a 3,222,864,639 3,219,514,791(b) Purchases of stock-in-trade 17.b 4,463,043,335 2,626,936,237(c) Changes in inventories of finished goods,

work-in-progress and stock-in-trade 17.c (9,578,534) (114,818,774)(d) Employee benefits expense 18 154,243,217 123,832,763(e) Finance costs 19 336,946,397 240,342,071(f) Depreciation and amortisation expense 8.b 81,741,780 59,768,214(g) Other expenses 20 329,020,390 278,737,248

Total expenses 8,578,281,224 6,434,312,550

5. Profit / (Loss) before exceptional andextraordinary items and tax (3 - 4) (37,763,161) (34,637,056)

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

items and tax (5 + 6) (37,763,161) (34,637,056)8. Extraordinary items 50,103,636 –9. Profit / (Loss) before tax (7 + 8) 12,340,475 (34,637,056)10. Tax expense:

(a) Current tax expense for current year – –(b) Current tax expense relating to prior years – –(c) Net current tax expense (1,965,816) –(d) Deferred tax Assets/(Liabilities) 21. a (5,394,996) 12,563,978

11. Profit / (Loss) from continuing operations (9 -10) 4,979,663 (22,073,078)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) 4,979,663 (22,073,078)

15.i. Earnings per share (of 10/- each): 22(a) Basic 0.48 (2.13)See accompanying notes formingpart of the financial statements 23



(Rachana P V) (CA A. S. Rafiq )Place : Bangalore Company Secretary ProprietorDate : 21st November, 2013 Membership No.204646

FRN No. 8877S

Rs. Rs.


20

iv) 55,07,249 Equity Shares of Rs. 10/- each fully paid-up,issued as Bonus Shares on Capitalisation of Capital redemption reserve,Securities premium, General Reserve. Out of which total 5187249 fully paid up shares were alloted as bonus shares in 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 is 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 Warant holders have not exercised the option, theWarrants have been forfeited during FY 2009-10.

Notes forming part of the financial statements

Particulars As at 30th Sept. 2013 As at 31st March 2012Number 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 30th Sep, 2013

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

Year ended 31 March, 2012- Number of shares 5,187,249 – 5,187,249 10,374,498- Amount Rs. 51,872,490 – 51,872,490 103,744,980

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

Class of shares / Name of As at 30th Sept. 2013 As at 31st March, 2012

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 30th Sept. 2013 As at 31st March, 2012

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


21

PARTICULARS AS AT AS AT 30th Sep. 2013 31st Mar. 2012

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

Opening balance 2,845,500 2,845,500Add: Additions during the year – –Less: Utilised / transferred during the year – –Closing balance 2,845,500 2,845,500

(b) Capital redemption reserveOpening balance – 2,800,000Add: Additions during the year – –Less: Utilised during the year for Issuing bonus shares – 2,800,000

Closing balance – –

(c) Securities premium accountOpening balance – 48,522,110Add : Premium on shares issued during the year – –Less : Utilised during the year for:

Issuing bonus shares – 48,522,110


(d) General reserveOpening balance 6,70,24,809 67,575,189Add: Transferred from surplus in Statement of Profit and Loss – –Less: Utilised / transferred during the year for:Issuing bonus shares – 550,380Others – –

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

Total 69,870,309 69,870,309

(e) Surplus / (Deficit) in Statement of Profit and LossOpening balance 54,223,180 76,296,257Add: Profit / (Loss) for the year 4,979,663 (22,073,078)Amounts transferred from:Less: Interim dividend – –Closing balance 59,202,843 54,223,180

Total 129,073,152 124,093,490

Note 3: Long-term borrowings(a) Term loans From Banks (Refer Note (i) below)

Secured 333,656,026 45,083,110Unsecured – –

(b) Term loans from othersSecured – 81,790Unsecured 130,000,000 143,718,566

(c) Loans and advances from related partiesSecured – –Unsecured 275,765,850 113,799,227

(d) Deferred Payment LiabilitiesSecured – 1,137,803Unsecured – –Total 739,421,876 303,820,496



22

(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 30th Sept. 2013 As at 31st March, 2012repayment and security

Secured Unsecured Secured Unsecured

(a) Term loans from banks:

IDBI Bank

Term loan – 30,083,110Funded Interest term loan 7,600,000Working capital term loan 84,000,000

Canara BankTerm loan – 1,50,00,000Funded Interest term loan 17,400,000working capital term loan 195,900,000

Indian Overseas BankTerm loan – –Woking capital term loan 21,000,000Funded Interest :Term loan 6,636,000Term loan WCTL 1,120,026Total-Term loans from banks 333,656,026 45,083,110

b) Term loans from other parties:

Kotak Mahindra Primus Ltd. – 81,790

Total - From Other Parties Unsecured 130,000,000 143,718,566

Total - Term loans fromother parties – 130,000,000 81,790 143,718,566

c) Loans and advances from related parties:From Directors Unsecured 275,765,850 113,799,227From Other related parties Unsecured – –Total - Loans and advancesfrom related partiesd) Deferred Payment Liabilities

Secured(Sales Tax Deferrement) – 1,137,803 –

– 275,765,850 1,137,803 113,799,227

Total 333,656,026 405,765,850 46,302,703 257,517,793

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

These loans are secured by way offirst charge (Pari passu with both thebanks) over all the Fixed assets ofthe Company except properties/assets exclusively charged to otherbanks and institutions mentionedbelow, and repayable over a periodfrom ranging 6-8 years as per sanctionletter.

Secured by exclusive charge by wayof equitable mortgage of Corporateoffice and repayable in 60 monthlyinstal lment commencing fromApril 2013

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

Statutory Liability for KanchipuramUnit of the Company


23

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


Rs. Rs.

Term loans from banks 333,656,026 45,083,110Term loans from other parties – 81,790Deferred payment liabilities – 1,137,803Other loans and advances – –


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

PARTICULARS As at 30th Sept. 2013 As at 31st March, 2012

Period of Period ofdefault default

Term loans from banks

Principal August andSeptember 2013 900,000 –

Interest August andSeptember 2013 3,269,941 –

Term loans from other parties

Principal – – From Nov. 2011 14,93,510

Interest

Deferred payment liabilities

Principal – – –

Interest – – –

Other loans and advances

Principal – – –Interest – –

Amount in Rs.

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. However, all the accounts are Performing Assets

Note 4 : Short-term borrowings


Rs. Rs.(a) Loans repayable

i) From banks (Refer Note (i) below)SecuredFor Steel Division 1,184,198,784 684,690,230

For Jewellery Division 85,126,126 111,789,201

Unsecured 7,762,001 14,985,194

1,277,086,912 811,464,625

ii) From Other Parties (Refer Note (i) below)Secured – –Unsecured 99,445,839 124,582,945Total 1,376,532,751 936,047,570


24


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

Particulars Nature of security AS AT AS AT 30th Sep. 2013 31st Mar. 2012

Rs. Rs.

Loans repayable on demandfrom banks:

CANARA BANK - OCCHypothecation of Book debts andInventories of Steel Division

904,283,083 486,966,676

IDBI BANK- OCC 279,915,701 197,723,554

Indian Overseas Bank- OCC Hypothecation of Book debts andInventories of Jewellery Division 85,126,126 111,789,201

American Express Bank Unsecured 7,762,001 14,985,194

Total - from banks 1,277,086,912 811,464,625Other loans and advances:

Factoring Facilities with SBI Assignment of Specific Receivables, 99,445,839 124,582,945Global Factors Ltd. Personal Gurantees of Directors

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


Rs. Rs.

Loans repayable on demand from banks 1,269,324,911 796,479,431

Loans repayable on demand from other parties 99,445,839 124,582,945

Loans 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 30th Sept. 2013 Period of Default Amount

Loans repayable on demand from banksPrincipal –

Interest July, August andSeptember 2013 5,338,831

August andSeptember 2013 6,765,921

September 2013 12,594,953Loans repayable on demand from other parties

Principal -Interest -

Total 24,699,705

Note: Defaults are on account of delay in servicing interest and repayment. However, all the accounts are Performing Assets


25

Note 7: Other current liabilities(a) Provision for employee benefits:

(i) Provision for bonus – –(ii) Provision for compensated absences – –(iii) Provision for gratuity (net) 2,236,793 2,236,793

2,236,793 2,236,793(b) Provision - Others:

(i) Provision for tax 2,578,836 613,020

2,578,836 613,020Total (a+b) 4,815,629 2,849,813

Trade payables:Acceptances (Letter of Credit Backed) 117,446,694 225,596,250Other than Acceptances 238,130,413 747,703,135

Total 355,577,107 973,299,385

Note 6: Other Current Liabilities

(a) Current maturities of long-term debt 32,505,832 66,074,520(b) Interest accrued but not due on borrowings 1,945,300 –(c) Interest accrued and due on borrowings 3,269,941 8,415,223(d) Unpaid dividends 1,081,742 1,081,742(e) Other payables

(i) Statutory Liabilities (Contributions to PF and ESIC,Withholding Taxes, Excise Duty, VAT, Service Tax, andProvison for excise duty on closing stock etc., 65,661,626 36,741,124

(ii) Advances from customers – –(iii) Outstanding Liabilities 16,206,275 17,229,934

Total 120,670,715 129,542,543

Note (i): Current maturities of long-term debt in Note 3 above(a) Term loans From banks

Secured 32,280,307 60,826,350Unsecured – –

From other partiesSecured – –Unsecured – 4,011,341

(b) Deferred payment liabilitiesSecured – –Unsecured 225,525 1,236,829

Total 32,505,832 66,074,520

Notes forming part of the financial statementsNote 5: Trade payables

PARTICULARS AS AT AS AT30th Sep. 2013 31st Mar. 2012

Rs. Rs.


26

No

tes

form

ing

par

t of t

he

fin

anci

al s

tate

men

ts

No

te 8

- i

i) D

epre

ciat

ion

an

d a

mo

rtis

atio

n r

elat

ing

to

co

nti

nu

ing

op

erat

ion

s:

PA

RT

ICU

LA

RS

Fo

r th

e P

erio

d E

nd

edF

or t

he y

ear

End

ed

30.

09.2

013

31.0

3.2

012

R

s. R

s.D

epre

ciat

ion

and

amor

tisat

ion

for

the

year

on

tang

ible

ass

ets

81,7

41,7

8059

,768

,214

Dep

reci

atio

n an

d am

ortis

atio

n fo

r th

e ye

aron

int

angi

ble

asse

ts–

–Le

ss:

Util

ised

fro

m r

eval

uatio

n re

serv

eD

epre

ciat

ion

and

amor

tisat

ion

rela

ting

todi

scon

tinui

ng o

pera

tions

––

Dep

reci

atio

n an

d am

ortis

atio

n re

latin

g to

con

tinui

ng o

pera

tions

81

,741

,780

5

9,76

8,21

4

NO

TE

8

I) F

IXE

D A

SS

ET

S

GROS

S B

LOCK

DEPR

ECIA

TION

BLO

CK

NET

BLO

CK

Sale

s/Ad

j./

P

ARTI

CULA

RSAs

at

Amor

tizat

ion

As a

tAs

at

For

Depr

ecia

tion

As

atAs

at

As a

t01

.04.

2012

Addi

tions

durin

g th

e ye

ar30

.09.

2013

01.0

4.20

12th

e ye

arW

ithdr

awan

30.0

9.20

1330

.09.

2013

31.0

3.20

12

LAN

D25

,695

,709

–12

,146

,827

13,5

48,8

82–

––

–13

,548

,882

25,6

95,7

09

BU

ILD

ING

S 2

26,2

58,0

67–

23,4

88,4

62 2

02,7

69,6

05 5

5,58

5,13

49,

402,

056

4,94

2,26

8 6

0,04

4,92

314

2,72

4,68

2

170,

672,

933

PLA

NT

& M

AC

HIN

ER

IES

828,

924,

786

19,

580,

386

– 8

48,5

05,1

7230

0,24

9,70

0 6

0,65

8,80

3–

360,

908,

503

487,

596,

669

528,

675,

085

ELE

CTR

ICA

L IN

STA

LLA

TIO

NS

60,9

67,6

56 4

86,1

32–

61,4

53,7

8842

,515

,770

4,

756,

131

–47

,271

,901

14,1

81,8

87 1

8,45

1,88

6

WE

IGH

ING

MA

CH

INE

S 1

,343

,398

––

1,3

43,3

98 4

66,4

23

106,

494

– 5

72,9

17

770,

481

876,

975

FU

RN

ITU

RE

& F

IXTU

RE

S 1

5,03

4,57

013

7,52

3–

15

,172

,093

8,

539,

934

938,

550

–

9,47

8,48

45,

693,

609

6,49

4,63

6

OF

FIC

E E

QU

IPM

EN

TS

19,2

17,3

73 1

,153

,230

3,3

94,5

4516

,976

,058

13,2

52,4

821,

875,

077

1,9

91,2

03 1

3,13

6,35

73,

839,

702

5,9

64,8

91

VE

HIC

LES

26,6

81,9

29–

1,15

5,92

925

,526

,000

14,

262,

199

4,00

4,66

888

2,59

4 1

7,38

4,27

2 8

,141

,728

12,

419,

730

TOTA

L1,

204,

123,

488

21,3

57,2

7140

,185

,763

1,18

5,29

4,99

643

4,87

1,64

281

,741

,780

7,81

6,06

550

8,79

7,35

7 6

76,4

97,6

39 7

69,2

51,8

46

PR

EV

IOU

S Y

EA

R1,

139,

208

,798

65,3

98,1

4748

3,45

71,

204,

123,

488

375

,586

,885

59,

768,

214

483,

457

434,

871,

642

769,

251,

846


27


Note 9 : Non-current investments

Particulars As at 30th Sept. 2013 As at 31 March, 2012

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 of Rs.100/- each 299900equity shares(As at 31 March, 2012: 299,900) 100,166,600 100,166,600 100,166,600 100,166,600

(ii) of joint venture companiesBhuwalka Steel Industries FZC Equityshares 10,350,000(As at 31 March, 2012: 10,350,000) 38,012,644 38,012,644 38,012,644 38,012,644

Total - Trade (A) 138,179,244 138,179,244 138,179,244 138,179,244

B. Other investments

Investment in government or trust 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) 138,199,244 138,199,244


28


Rs. Rs.Note 10: Long-term loans and advancesa) Security deposits

Secured, considered good – –Unsecured, considered good 15,005,163 16,259,505Doubtful 289,533 289,533Less: Provision for doubtful deposits – –

Total 15,294,696 16,549,038

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

(a) Raw materials 659,989,136 378,599,994Goods-in-transit

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

(c) Finished goods (other than those acquired for trading) 411,781,598 316,966,177Goods-in-transit

(d) Stock-in-trade (acquired for trading)Steel Division 79,808,389 157,593,741

Jewellery Division 133,204,274 133,780,928Goods-in-transit

(e) Misroll 7,917,119 8,757,465Goods-in-transit

(e) Scrap 3,007,919 11,361,683Goods-in-transit

Total 1,295,708,436 1,007,059,988

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

Secured, considered good 222,373,117 119,482,587Unsecured, considered good – –Doubtful 2,564,803 2,144,479

224,937,919 121,627,066Less: Provision for doubtful trade receivables (2,564,803) 2,144,479

222,373,117 119,482,587Other Trade receivablesSecured, considered good 332,413,542 389,030,554Unsecured, considered good – –Doubtful – –

332,413,542 389,030,554Less: Provision for doubtful trade receivables – –

332,413,542 389,030,554

Total 554,786,659 508,513,141



29


Rs. Rs.Note 13: Cash and cash equivalents

(a) Cash on hand 5,626,107 7,148,074(b) Balances with banks

(i) In current accounts 1,135,001 9,486,310(ii) In earmarked accounts

- Unpaid dividend accounts 1,081,742 1,081,742- Balances held as margin money or security against

borrowings, guarantees and other commitments 42,540,663 73,906,989

Total 50,383,512 91,623,115

Note 14: Short-term loans and advances(a) Loans and advances to related parties

Secured, considered good – 155,408Unsecured, considered goodDoubtful

Less: Provision for doubtful loans and advances – –– 155,408

(b) Loans and advances to employeesSecured, considered good 854,514 1,127,364Unsecured, considered goodDoubtfulLess: Provision for doubtful loans and advances – –

854,514 1,127,364

(c) Prepaid expenses - Unsecured, consideredgood (For e.g. Insurance premium, Annualmaintenance contracts, etc.) 410,888 1,814,894

(d) Balances with government authoritiesUnsecured, considered good(i) CENVAT credit receivable 58,488,888 63,195,257(ii) VAT credit and refund receivable 43,969,086 27,954,652(iii) Service Tax credit receivable 3,437,089 1,362,520iv) Advance Income tax/TDS 3,515,997 1,441,898v) MAT Receivables 1,580,731 –vi) Service Tax paid under protest 449,474 449,474vii) Sales tax paid under protest 4,615,065 4,313,117viii) I.T. Under Protest 1,271,900 1,271,900ix) Excise Duty Under Protest 25,454,770 14,404,770x) Others 10,372 8,568

142,793,373 114,402,156(e) Others (specify nature)

Secured, considered good – –Unsecured, considered good 46,980,751 11,380,587Doubtful – –Less: Provision for other doubtful loans and advances 420,324 420,324

46,560,427 10,960,263

Total 190,619,201 128,460,085



30

PARTICULARS For the year Ended For the year Ended 30th Sep. 2013 31st Mar. 2012

Rs. Rs.(18 Months) (12 Months)

Note 15: Revenue from operations(a) Sale of products 9,001,597,193 6,753,328,069(b) Other operating revenues 14,941,060 –

Less: 9,016,538,253 6,753,328,069(c) Excise duty 489,225,049 366,308,604

8,527,313,204 6,387,019,465 (i) Sale of products comprises

Manufactured goodsFinished Goods 3,588,659,461 3,473,717,158Misroll 33,523,754 39,112,085M.S. Scrap 68,010,834 71,977,851Jewellery 276,061,229 147,713,836Others Sales/Reciepts 682,263,853 663,391,229Total - Sale of manufactured goods 4,648,519,131 4,395,912,158Traded goodsFinished Goods 4,340,891,686 2,357,415,911Others – –

Total - Sale of traded goods 4,34,08,91,686 2,35,74,15,911

Total - Sale of products 8,989,410,817 6,753,328,069

(ii) Sale of services comprisesConversion Charges Received 12,186,376 –Others – –Total - Sale of services 12,186,376 –

(iii) Other operating revenues comprise:Transportation Charges received 14,941,060 –

Profit on sale of Import License – –

Total - Other operating revenues 14,941,060 –

Note 16: Other income(a) Interest income 7,383,830 7,245,631(b) Other non-operating income

(net of expenses directly attributableto such income) 5,821,029 5,410,398Total 13,204,859 12,656,029Interest income comprises:Interest from banks on:deposits 7,383,830 7,245,631Other interest – –Total - Interest income 7,383,830 7,245,631

(ii) Other non-operating income comprises:Profit on sale of fixed assets 148,565 184,379Miscellaneous income 5,672,464 5,226,019

Total - Other non-operating income 5,821,029 5,410,398



31



Opening stock 357,084,948 506,714,091Add: Purchases 3,503,860,150 3,069,885,648

3,860,945,098 3,576,599,739Less: Closing stock 638,080,459 357,084,948Cost of material consumed 3,222,864,639 3,219,514,791

Material consumed comprises:Raw material 3,180,989,452 3,199,681,090Store and spares 41,875,187 19,833,701

Total 3,222,864,639 3,219,514,791

Note 17.b: Purchase of traded goodsTraded goods 4,463,043,335 2,626,936,237

Total 4,463,043,335 2,626,936,237

Note 17.c: Changes in inventories of finished goods,work-in-progress and stock-in-tradeInventories at the end of the year:Finished goods 624,794,262 608,340,846Misroll 7,917,119 8,757,465M.S. Scrap 3,007,919 11,361,683Work-in-progress – –

635,719,299 628,459,994Inventories at the beginning of the year:Finished goods 608,340,846 484,961,983Misroll 8,757,465 13,028,593M.S. Scrap 11,361,683 10,088,243Work-in-progress – 1,834,927

628,459,994 509,913,746

Net (Increase) / decrease in Stock (7,259,305) (118,546,248)Increase / (decrease) of excise duty on inventory (2,319,229) 3,727,474Net (Increase) / decrease in Stock net of Excise duty (9,578,534) (114,818,774)

Note 18: Employee benefits expenseSalaries and wages 85,071,487 60,667,615Subcontracting 61,588,437 57,215,466Contributions to provident and other funds 3,820,366 3,430,047Staff welfare expenses 3,762,927 2,519,635

Total 154,243,217 123,832,763

Note 19: Finance costsInterest expense on:(i) Borrowings from Banks 212,211,994 168,536,686(ii) Trade payables – –(iii) Others

Interest on LC, Bill Discounting Chargesand on other borrowing 124,734,403 71,805,385

Total 336,946,397 240,342,071


Note 17.a: Cost of materials consumed


32



Note 20: Other expensesConsumption of packing materials – 1,409Power and fuel-factory 196,809,603 192,908,325Electricty charges 1,662,805 1,088,624Water charges 3,963,784 3,868,969Rent including lease rentals 8,156,886 3,917,600Repairs and maintenance - Buildings 1,780,827 846,090Repairs and maintenance - Machinery 4,191,731 2,206,434Repairs and maintenance - Vehicle & others 15,045,326 12,445,098Bank Charges 30,133,348 14,078,595Insurance 1,320,618 876,277Rates and taxes 4,350,591 3,077,378Communication 3,734,569 2,117,582Travelling and conveyance 9,301,758 4,319,347Printing and stationery 1,133,910 916,144Freight and forwarding 14,563,347 16,720,272Sales Expenses 8,906,221 4,296,156Sales discount – 2,365,529Legal and professional 12,624,662 6,324,371Payments to auditors 450,000 250,000Bad trade and other receivables, loans and advances written off 567,895 374,503Miscellaneous expenses 10,322,509 5,738,545

Total 329,020,390 278,737,248

Payments to the auditors comprises(net of service tax input credit, where applicable):As auditors - Statutory audit 450,000 250,000Reimbursement of expenses – –

Total 450,000 250,000



33



Rs. Rs.(18 Months) (12 Months)Note 21: Deferred Tax Liability

Deferred tax liability / (asset)

Tax effect of items constituting deferred tax liability

On difference between book balance and tax balance of fixed assets 116,305,440 113,864,072

Tax effect of items constituting deferred tax liability 116,305,440 113,864,072

Tax effect of items constituting deferred tax assets

Provision for compensated absences, gratuity andother employee benefits – –

Provision for doubtful debts / advances – –

Disallowances under Section 40(a)(i), 43B of the Income Tax Act, 1961 – –On difference between book balance and tax balance of fixed assets

Unabsorbed Depreciation carried forward (44,208,019) (45,260,591)

Brought forward business losses (12,492,281) (14,393,338)

On items included in Reserves and surplus pending amortisation intothe Statement of Profit and Loss

Others

Tax effect of items constituting deferred tax assets (56,700,301) (59,653,929)

Net deferred tax (liability) / asset 59,605,139 54,210,143

The Company has recognised deferred tax asset on unabsorbed depreciation to the extent of the correspondingdeferred tax liability on the difference between the book balance and the written down value of the fixed assetsunder Income Tax and also Company has recognised deferred tax asset on unabsorbed depreciation andbrought forward business losses based on the Management’s estimates of the future profits considering thenon-cancellable customer orders received by the Company.

PARTICULARS Amount in Rs.

Computation Of Deferred Tax Liability

Less: WDV as per books of Accounts as on 30.09.2013 676,497,641

WDV as per Income Tax as on 30.09.2013 318,028,107

Business Loss & Unabsorbed Depreciation as per Income Tax 174,758,209

Net temporary Difference Between IT and Books of Accounts 183,711,325

Income Tax Thereon @ 30% 55,113,397

Surcharge @ 5% 2,755,670

Education Cess @ 3% 1,736,072

Total Deferred Tax Liability as on 30/9/2013 - Provision required to be made 59,605,139

Deferred Tax Liability as on 31/03/2012 54,210,143

Deferred tax Liability to be written back from Profit and loss A/c (5,394,996)

Note 21. a: Computation of Deferred Tax Liability to be reversed


34



Note 22: Earnings per share

Earnings per share

Basic

Net profit / (loss) for the year from continuing operationsafter considering extraordinary items 4,979,663 (22,073,078)

Number of equity shares 10,374,498 10,374,498

Earnings per share from continuing operations - Basic 0.48 (2.13)


Note 23: FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30TH SEPTEMBER, 2013

01. Contingent Liabilities not provided for:-

Particulars FY 2012-13 FY 2011-12

I) Letter of Credits/ Bank Guarantees 157.59 340.96II) Corporate Guarantees given to Banks and Financial Institutions

on behalf of Group Companies(Liabilities as on 30.09.2013): 4,616.11* 3,749.86III) Other statutory liabilities disputed by the company : 903.90 980.69IV) Claims against the Company not Acknowledged as debt : 34.61 34.61

*(27.074 Million AED Converted @ 17.05 rate prevailing on 30th Sep 2013)

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

Particulars 31.03.2013 31.03.2012

Salary & Allowances 1,800,000.00 480,000Contribution to Provident Fund and Other Funds 8,580 9,360Value of Perquisites & benefits ( as per Income-Tax Rules) 225,054 594,032Total 2,033,634 1,083,392

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, 1956.

ii) General:

a) The accompanying financial statements have been prepared on the Historical Cost convention inaccordance with the provisions of Companies Act, 1956 and generally accepted accounting principlesprevailing in India.

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

c) During the year, the company has undergone financial restructure with the existing lenders under CorporateDebt Restructuring Mechanism.

iii) Valuation of Inventories:

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

Rs. in lakhs

Amount in Rs.


35

iv) Cash Flow Statement:

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

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.

During the year company has sold house property at Indira nagar, Bangalore of Rs 3,90,29,834/-( bookValue) For Consideration of Rs. 8,22,00,000/-.

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.

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.

During the year Interest is not capitalised, as asset had been put to used at the beginning of the previousfinancial year at Wada Unit 4. (Previous year Rs. Nil Lacs has been Capitalised for Wada Unit 4).

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.


36

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 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

Suresh Kumar Bhuwalka Key Management Personnel- Managing Director

Ajay Kumar Bhuwalka Key Management Personnel- Director

Ankit Bhuwalka Key Management Personnel- Director

B) Transactions carried out with related parties referred above in ordinary course of business for the 18 months period ended 30th September 2013.

Nature of Transactions Subsidiary Key Management Parties wherePersonnel Control Exists

Purchases 20.29 – 6846.70(2.31) – (13649.71)

Sales 115.23 – 44201.13(51.10) – (14997.33)

Expenses – 20.33 179.57– (10.83) (211.91)

Income Nil – –(Nil) – –

Outstanding – Debit Nil – 14.37(Nil) – (92.43)

Credit Nil 2757.66 –(Nil) (1137.99) –

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. 81.57 Lacs (Previous Year Rs. 39.17 Lacs).

xv) Accounting standard 20- Earning Per Share

Basic 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.


37

Earnings per share have been computed as under:

Particulars 30.09.2013 31.03.2012(18 Months) (12 Months)

Profit/(Loss) after Taxation after considering extra ordinary items 4,979,663 (22,073,078)

Profit /(Loss) after Taxation before considering extra ordinary items (45,123,973) (22,073,078)

Profit/(Loss) attributable to Equity Shareholders after consideringextra ordinary items 4,979,663 (22,073,078)

Profit attributable to Equity Shareholders before consideringextra ordinary items (45,784,343) (22,073,078)

Weighted average number of shares 10,374,498 10,374,498

Earnings per share (Rs.per equity share of Rs.10/- each)basic and diluted (including extra ordinary items) 0.48 (2.13)

Earnings per share (Rs.per equity share of Rs.10/- each)basic and diluted ( before extra ordinary items) (4.35) (2.13)

xvi) TAXATIONDuring the year company has made provision for tax amounting 19.66/-lacs in accordance with Income TaxAct, 1961.

The deferred tax liability 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 liability amounting to Rs.53,94,996/- (Previous year deferred taxliability Reversed for Rs. 12,563,978/-) on account of timing difference. Refer Note 21.a for computation ofdeferred tax liability.

xxvii). 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 Assets

The 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 assets

In the opinion of the management, no provision is required against contingent liabilities referred in Note ‘23’.04. Sundry debtors includes Rs. 14,37,328/-(Rs. 92,43,432 /-) due from the companies under the same

management within the meaning of sub-section (1-B) of section 370 of the Companies Act. The particularsof the same are furnished hereunder:

Sundry Debtors Current Year Previous Year

Bhuwalka Steel Industries FZC 5, 15,566 90,88,025

Bhuwalka Jewellers Ltd., Nil 1, 55,407

Balchand Suresh kumar 9, 05,986 Nil

Mahesh Sponge Iron and Power Ltd., 15,776 Nil

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


38

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

The Company has prepared the annual accounts as per revised schedule VI of Companies Act 1956. Lastyear figures have been regrouped accordingly.

08. Additional information pursuant to paragraph 3 and 4 of the Part II of Schedule VI of the Companies Act, 1956.

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* 91388** 7,226 31,69,66,177 8,013 411,781,598

RolledProducts M T (234,000) (234,000) (97,669)** (8,398) (31,46,98,196) (7,226) (31,69,66,177)

Note: - * Installed capacity is as certified by the management. ** It includes total 2,389 MT on conversion for others (PY 9,682 MT)

B. Raw Material Consumed

Particulars Current Year Previous YearMT Rs. MT Rs.

Mild steel Billets/ingots/

blooms/Slabs/Misroll etc 99,287* 3,180,989,452 104,464 319,96,81,090

* It Includes (Consumed for own Production 96773MT and received for Job Work 2514 MT)

C. Trade Purchase

Particulars Current Year Previous Year

MT Rs. MT Rs.

Mild Steel Rolled Products 95,988 423,726,577 56,680 2,49,29,04,754

Other ItemsJewellary 22,93,16,758 13,40,31,482

D. Sale of Finished Goods and Others


MT Rs. MT Rs.

Mild Steel Rolled Products 88,210 3,583,648,464 89,101 3,46,69,53,277Other Items 96,33,36,078 82,96,21,570Mild Steel- Misroll 1,107 3,35,23,754 941 2,73,59,461Mild Steel- Scrap 2,393 6,80,10,834 4,499 7,19,77,851


39

E. Consumption


MT Rs. MT Rs.

i) Raw Materialsa) Importedb) Indigenous 100 3,180,989,452 100 319,96,81,090

Total 100 3,180,989,452 100 319,96,81,090

ii) Stores & Sparesa) Imported Nil Nil Nil Nilb) Indigenous 100 41,875,187 100 198,33,701

Total 100 41,875,187 100 198,33,701

F. Earning in Foreign Currency

Export – C.I.F. value of Exports 46,00,812 91,60,538

G. Expenditure in Foreign Currency

a) Traveling expense NIL NIL

b) CIF value of Imports NIL NIL

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

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

As per Report of even date


(CA A. S. Rafiq )Place : Bangalore (Rachana P V) ProprietorDate : 20th November, 2013 Company Secretary Membership No.204646

FRN No. 8877S


40

CASH FLOW STATEMENT FOR THE PERIOD ENDED 30TH SEPTEMBER, 2013Current Year Previous Year

2012-13 2011-12(18 Months) (12 Months)

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

Net Profit / (Loss) before tax and extraordinary items 12,340,475 (34,637,056)Adjustments for:Depreciation 81,741,780 59,768,214Profit/loss from sale of Fixed Assets (50,252,202) (184,379)Profit on sale of Investment – –Rent Received – –Interest Charged to Profit & Loss A/c 336,946,397 233,096,440Provision for Doubtful Debts/Advances Written back – –Dividend Income – –Operating Cash Profit before working capital changes 380,776,450 258,043,219Adjustments for:Trade and Other Receivables (107,178,292) (119,787,092)Inventories (288,648,448) 9,485,673Trade Payables and other Liabilities (625,582,802) 210,491,380

B. CASH FLOW FROM OPERATIONS (640,633,091) 358,233,180Direct Taxes Paid/(refund) – –Sales Tax Deferrment 2,149,107 1,037,476Net Cash from Operating Activities (642,782,198) 357,195,704

C. CASH FLOW FROM INVESTING ACTIVITIES:(Increase)/decrease in Fixed Assets(Net) 61,264,628 (15,267,123)(Increase)/Decrease in Investments – –Profit on sale of Investment – –Rent Received – –Dividend Income – –Profit on Sale of Undertaking – –Long-term loans and advances – –Net cash used in Investing Activities 61,264,628 (15,267,123)

D. CASH FLOW FROM FINANCING ACTIVITIES:Increase/(Decrease) in Borrowings 877,224,364 (104,608,157)Interest Paid (336,946,397) (233,096,440)Net cash used in Financing Activities 540,277,967 (337,704,597)

Net Increase/(Decrease) in Cash and CashEquivalents (A+B+C) (41,239,603) 4,223,983

Opening Balance of Cash & Cash Equivalents 91,623,115 87,399,132Closing Balance of Cash & Cash Equivalents 50,383,512 91,623,115

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


(CA A. S. Rafiq )Place : Bangalore (Rachana P V) ProprietorDate : 21st November, 2013 Company Secretary Membership No.204646

FRN No. 8877sWe have examined the attached Cash Flow Statement of Bhuwalka Steel Industries Limited for the Period ended 30th Sep 2013. Thestatement 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. 10,81,741/- (10,81,741/-) held as balance in bank account of Unpaid Dividend which are not available for operational activities of the Company.


41

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

CIN No. L27209KA1981PLC004343 State Code 0 8

Balance Sheet Date 30 09 2013

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 9 2 1 4 8 9 Total Assets 2 9 2 1 4 8 9

SOURCES OF FUNDSPaid-up Capital 1 1 5 7 5 3 Reserves & Surplus 1 2 9 0 7 3

Secured Loans 1 6 0 2 9 8 1 Unsecured Loans 5 1 2 9 7 4

Share forfeited money 2 0 0 4 0 Deferred Tax laibility 5 9 6 0 5

APPLICATION OF FUNDS

Net Fixed Assets 6 7 6 4 9 8 Investments 1 3 8 1 9 9

Net Current Assets 1 6 2 5 7 2 9 Misc. Expenditure N I L

Accumulated Losses N I L

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

Turnover 8 5 4 0 5 1 8 Total Expenditure 8 5 2 8 1 7 8

Profit before tax 1 2 3 4 0 Profit after tax 4 9 8 0

Earning Per Share in(Rs.) 0 . 4 8 Dividend rate % N A




FRN No. 8877S


42

CONSOLIDATEDFINANCIAL STATEMENTS


43

AUDITOR’S REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

To the Board of DirectorsBhuwalka Steel Industries Limited

We have audited the attached consolidated balance sheet of M/S. BHUWALKA STEEL INDUSTRIES LIMITEDand its subsidiary company Benaka Sponge Iron Pvt. Ltd., as at 30th September, 2013, the Profit and Lossaccount and the consolidated Cash Flow statement for the period then ended. These financial statements are theresponsibility of the company’s management and have been prepared pursuant clause 32 of the Listing Agreementwith the Stock Exchanges in accordance with the group’s accounting policies as described in note to theaccompanying financial statements. Our responsibility is to express an opinion on these financial statementsbased on our audit.

The financial statement of Bhuwalka Steel Industries FZC is not considered for consolidation due to dispose ofholding shares in near future (refer Note 1 (b) of Note 23 to consolidated financial statement). We conducted ouraudit in accordance with the auditing standards generally accepted in India. These Standards require that we planand perform the audit to obtain reasonable assurance about whether the financial statements are prepared in allmaterial respects, in accordance with identified financial reporting framework and we are free of materialmisstatements. An audit includes assessing the accounting principles used and significant estimates made bymanagement, as evaluating the overall financial statements.

We report that the consolidated financial statements have been prepared by the company in accordance with therequirements of Accounting Standard (AS)21, Consolidated Financial Statements 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 30th September, 2013; and

b) The consolidated Profit and Loss account gives 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 :21st November 2013 Membership No.204646

FRN No. 8877S


44

PARTICULARS Note AS AT AS AT

No. 30th Sep. 2013 31.03.2012Rs. Rs.

A EQUITY AND LIABILITIES

1. Shareholders’ funds(a) Share capital 1 115,753,018 115,753,018(b) Reserves and surplus 2 170,200,945 164,935,901(c) Money received against share warrants 20,040,000 20,040,000

Sub-total - Shareholder’s funds 305,993,963 300,728,919Minority Shareholder Interest 28,255 28,160

2. Non-current liabilities(a) Long-term borrowings 3 778,841,819 374,601,369(b) Deferred tax liabilities (net) 85,255,790 79,485,265(c) Other long-term liabilities – –(d) Long-term provisions – –

Sub-total - Non-current liabilities 864,097,609 454,086,634

3. Current liabilities(a) Short-term borrowings 4 1,591,361,619 1,155,111,684(b) Trade payables 5 410,254,504 1,024,770,485(c) Other current liabilities 6 145,616,316 159,168,404(d) Short-term provisions 7 4,929,994 6,720,739

Sub-total - Current liabilities 2,152,162,433 2,345,771,312Total 3,322,282,260 3,100,615,025

B. ASSETS1. Non-current assets

(a) Fixed assets(i) Tangible assets 8 866,909,283 975,485,432(ii) Intangible assets – –(iii) Capital work-in-progress 1,030,006 1,030,006(iv) Intangible assets under development – –(v) Fixed assets held for sale – –

(b) Non-current investments 9 38,049,987 38,049,987(c) Deferred tax assets (net) – –(d) Long-term loans and advances 10 15,294,697 16,549,038(e) Other non-current assets 10A 28,800 77,760

Sub-total· Non-current assets 921,312,772 1,031,192,224Goodwill on Consolidation 12,852,613 12,852,613

2. Current assets(a) Current investments 16 – –(b) Inventories 11 1,533,024,093 1,214,453,151(c) Trade receivables 12 599,277,783 575,759,524(d) Cash and cash equivalents 13 54,544,209 97,778,149(e) Short-term loans and advances 14 201,270,790 168,579,365(f) Other current assets – –

Sub-total - Current assets 2,388,116,875 2,056,570,188Total 3,322,282,260 3,100,615,025

See accompanying notes forming part of the financial statements 22In terms of our report attached

For and on behalf of the Board As per Report of even date(Suresh Kumar Bhuwalka) (Ajay Kumar Bhuwalka) for ASR Associates Chairman & Managing Director Director Chartered Accountants


FRN No. 8877S

BHUWALKA STEEL INDUSTRIES LIMITEDCONSOLIDATED BALANCE SHEET AS AT 30TH SEPTEMBER, 2013


45

BHUWALKA STEEL INDUSTRIES LIMITEDCONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE PERIOD ENDED30TH SEPTEMBER, 2013

PARTICULARS Note For the Period ended For the Year endedNo. 30th Sep. 2013 31.03.2012

A CONTINUING OPERATIONS1. Revenue from operations (gross) 15 9,423,941,524 7,009,122,579

Less: Excise duty 15 513,684,372 389,523,684Revenue from operations (net) 8,910,257,153 6,619,598,895

2. Other income 16 14,237,456 13,095,7403. Total revenue (1+2) 8,924,494,609 6,632,694,6354. Expenses

(a) Cost of materials consumed 17.a 3,345,645,275 3,365,234,691(b) Purchases of stock-in-trade 17.b 4,605,211,606 2,631,170,522(c) Changes in inventories of finished goods,

work-in-progress and stock-in-trade 17.c 7,046,614 (99,392,838)(d) Employee benefits expense 18 176,428,147 147,015,312(e) Finance costs 19 376,935,036 282,559,400(f) Depreciation and amortisation expense 8.b 96,990,377 75,072,427(g) Other expenses 20 353,116,938 321,574,512Total expenses 8,961,373,994 6,723,234,026

5. Profit / (Loss) before exceptional andextraordinary items and tax (3 - 4) (36,879,385) (90,539,391)

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

items and tax (5 + 6) (36,879,385) (90,539,391)8. Extraordinary items 50,103,636 –9. Profit / (Loss) before tax (7 + 8) 13,224,251 (90,539,391)10. Tax expense:

(a) Current tax expense for current year (1,965,816) –(b) Current tax expense relating to prior years (222,772) –(c) Net current tax expense – (5,195,027)(d) Deferred tax (Assets)/Liabilities (5,770,525) 12,607,158

11. Profit / (Loss) from continuing operations (9 +10) 5,265,138 (83,127,260)

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

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

settlement of liabilities attributable to thediscontinuing 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) 5,265,138 (83,127,260)15.i. Earnings per share (of 10/- each): 21(a) Basic 0.51 (8.01)See accompanying notes forming part of the financial statements 22




FRN No. 8877S

Rs. Rs.


46

Notes forming part of the financial statementsNote 1: Share Capital

Particulars As at 30.09.2013 As at 31.03.2012Number 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 12,008,038Total 115,753,018 115,753,018

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

v) 21,75,000 Equity Shares of Rs.10/- each alloted otherwise than on payment of cash to the Shareholders of erstwhile M/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 the beginning and at the end of thereporting period:

Particulars Opening Fresh Bonus Shares ClosingBalance issue Issuance Balance

Equity shares with voting rightsPeriod ended 30th September, 2013

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

Year ended 31 March, 2011- Number of shares 5,187,249 – 5,187,249 10,374,498

- Amount Rs. 51,872,490 – 51,872,490 103,744,980


Class of shares / Name of As at 30 Sep. 2013 As at 31 March, 2012shareholder 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 30 Sep, 2013 As at 31 March, 2012

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


47

PARTICULARS AS AT AS AT 30th Sep 2013 31st Mar 2012

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 – 2,800,000Add: Additions during the year –Less: Utilised during the year for Issuing bonus shares – 2,800,000


(c) Securities premium accountOpening balance – 48,522,110Add : Premium on shares issued during the yearLess : Utilised during the year for:Issuing bonus shares – 48,522,110


(d) General reserveOpening balance 67,024,809 67,575,189Add: Transferred from surplus in Statement of Profit and LossLess: Utilised / transferred during the year for:Issuing bonus shares – 550,380Others

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

(d) 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

(d) Surplus / (Deficit) in Statement of Profit and LossOpening balance 51,475,585 134,582,493Add: Profit / (Loss) for the year 5,265,138 (83,127,259)Amounts transferred from:Less: Minority Shareholder Interest 95 20,351Less: Interim dividend – –Closing balance 56,740,628 51,475,585

Total 170,200,945 164,935,901



48



Rs. Rs.Note 3: Long-term borrowings

(a) Term loans From BanksSecured 373,075,969 104,213,025Unsecured – –

(b) Term loans from othersSecured – 81,790Unsecured 130,000,000 155,369,524

(c) Loans and advances from related partiesSecuredUnsecured 275,765,850 113,799,227

(d) Deferred Payment LiabilitiesSecured – 1,137,803Unsecured – –

Total 778,841,819 374,601,369

Note 4: Short-term borrowingsLoans Repayable

i) From BanksSecured 1,442,368,104 970,238,798Unsecured 7,762,001 14,985,194

Total 1,450,130,105 985,223,992

ii) From Other PartiesSecuredUnsecured 141,231,514 169,887,692

141,231,514 169,887,692

Total 1,591,361,619 1,155,111,684

Note 5: Trade payables

Trade payables:Acceptances (Letter of Credit Backed) 117,446,694 225,596,250Other than Acceptances 292,807,810 799,174,235

Total 410,254,504 1,024,770,485

Note 6 Other Current Liabilities(a) Current maturities of long-term debt 52,215,804 68,231,836(b) Interest accrued but not due on borrowings 1,945,300 –(c) Interest accrued and due on borrowings 3,269,941 11,775,116(d) Unpaid dividends 1,081,742 1,081,742(e) Other payables

(i) Statutory remittances (Contributions to PF and ESIC,Withholding Taxes, Excise Duty, VAT, Service Tax, etc.) 66,796,849 41,933,150

(ii) Advances from customers 2,263,948 18,916,626(iii) Outstanding Liabilities 18,042,733 17,229,934

Total 145,616,316 159,168,404


49



Rs. Rs.Note 7: Short Term Provision

(a) Provision for employee benefits:(i) Provision for bonus – 729,855(ii) Provision for compensated absences – –(iii) Provision for gratuity (net) 2,351,158 2,351,158

2,351,158 3,081,013

(b) Provision - Others: – 3,026,706Provision for tax 2,578,836 613,020

2,578,836 3,639,726

Total 4,929,994 6,720,739


50

GR

OSS

B

LOC

KAc

cum

ulat

ed d

epre

ciat

ion

and

impa

irmen

t N

ET B

LOCK

Disp

osal

sBa

lanc

eBa

lanc

eDe

prec

iatio

nEl

imin

ated

Bala

nce

Bala

nce

Bala

nce

PAR

TICU

LARS

As a

tAs

at

As a

tAm

ortis

atio

non

disp

osal

of

As

atAs

at

As a

t01

.04.

2012

Addi

tions

30.0

9.20

1301

.04.

2012

expe

nce f

oras

sets

30.0

9.20

1330

.09.

2013

31.0

3.20

12th

e ye

ar

(a)

Land

-F

reeh

old

72,2

16,7

09–

12,7

20,1

7159

,496

,538

––

––

59,4

96,5

3872

,216

,709

(b) B

uild

ings

246

,008

,396

–23

,488

,462

222,

519,

934

60,0

53,6

5710

,061

,717

4,94

2,26

865

,173

,106

157

,346

,827

185,

954,

739

(c)

Pla

nt a

nd E

quip

men

t 1

,018

,652

,474

19,

580,

386

–1,

038,

232,

860

387,

312,

602

70,6

76,4

25–

457,

989,

027

580,

243,

833

631,

339,

872

(d)

Fur

nitu

re a

nd F

ixtu

res

16,3

76,5

29

137,

523

–16

,514

,052

8,9

44,4

951,

023,

496

–9,

967,

991

6

,546

,061

7,4

32,0

34

(e)

Veh

icle

s50

,052

,941

– 1

,155

,929

48,8

97,0

1226

,322

,124

6,6

47,9

29 8

82,5

9432

,087

,458

16,8

09,5

5423

,730

,817

(f)

Offi

ce e

quip

men

t20

,317

,789

1,1

53,2

303,

394,

545

18

,076

,474

13,

580,

117

1,9

27,3

47 1

,991

,203

13,

516,

262

4,5

60,2

12

6,73

7,67

2

(g) W

eigh

ing

Mac

hine

s 1

,343

,398

––

1,34

3,39

8 4

66,4

23 1

06,4

94–

572,

917

77

0,48

1

876,

975

(h)

Ele

ctric

Ins

talla

tion

60,9

67,6

5748

6,13

2–

61,4

53,7

8942

,515

,770

4,7

56,1

31–

47,2

71,9

0114

,181

,888

18,4

51,8

87

(I)

Pol

lutio

n E

quip

men

t33

,917

,372

––

33,9

17,3

725,

172,

646

1,79

0,83

7–

6,96

3,48

326

,953

,889

28,7

44,7

26

(J) O

ffice

Equ

ipm

ent C

ompu

ters

907

,846

––

907,

846

9

07,8

45–

–90

7,84

5 1

1

Tota

l1,

520,

761,

111

21,

357,

271

40,

759,

107

1,50

1,35

9,27

5 5

45,2

75,6

80

96,9

90,3

77

7,81

6,06

5

634,

449,

992

86

6,90

9,28

397

5,48

5,43

2

Pre

vio

us

year

1,45

5,89

0,47

665

,398

,147

527,

512

1,52

0,76

1,11

147

0,69

6,75

575

,072

,427

493

,503

545

,275

,679

975

,485

,432

NO

TE

8

I) F

IXE

D A

SS

ET

S

No

te 8

- ii)

Dep

reci

atio

n a

nd

am

ort

isat

ion

rel

atin

g to

co

nti

nu

ing

op

erat

ion

s:

Par

ticu

lars

Fo

r th

e ye

ar e

nd

edF

or t

he y

ear

ende

d31

Mar

ch, 2

012

31 M

arch

, 20

11

Dep

reci

atio

n an

d am

ortis

atio

n fo

r th

e ye

ar o

n

tang

ible

ass

ets

as p

er N

ote

12 A

96,9

90,3

7775

,072

,427

Dep

reci

atio

n an

d am

ortis

atio

n fo

r th

eye

ar o

n in

tang

ible

ass

ets

as p

er N

ote

12 B

Less

: U

tilis

ed f

rom

rev

alua

tion

rese

rve

Dep

reci

atio

n an

d am

ortis

atio

n re

latin

g to

disc

ontin

uing

ope

ratio

ns (

Ref

er N

ote

30.1

1)D

epre

ciat

ion

and

amor

tisat

ion

rela

ting

toco

ntin

uing

ope

ratio

ns96

,990

,377

75,0

72,4

27


51


Particulars As at 30th Sep. 2013 As at 31st March, 2012



A. Trade

(i) Investment in equity instruments(give details separatelyfully / partly paid up instruments)

(ii) of joint venture companies(Lootah BhuwalkaLootah Bhuwalka Steel Industries FZC Equityshares 10,350,000(As at 31 March, 2012: 10,350,000)

38,012,644 38,012,644 38,012,644 38,012,644

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

B. Other investmentsa) Investment in government or trust 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) 38,049,987 38,049,987



52


Rs. Rs.Note 10: Long-term loans and advancesa) Secured, considered good – –

Unsecured, considered good 15,005,164 16,259,505Doubtful 289,533 289,533Less: Provision for doubtful deposits – –

Total 15,294,697 16,549,038

Note 10A: Long-term loans and advancesa) Deferred Revenue Expenditure 28,800 77,760

(to the extent of written-off or adjusted)

Total 28,800 77,760

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

(a) Raw materials 808,572,800 480,712,333Goods-in-transit

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

(c) Finished goods (other than those acquired for trading) 493,839,591 415,649,319Goods-in-transit

(d) Stock-in-trade (acquired for trading)Steel Division 79,808,389 157,593,741

Jewellery Division 133,204,274 133,780,928

Goods-in-transit

(d) Misroll 7,917,119 8,757,465Goods-in-transit

(e) Scrap 3,007,919 11,361,683Goods-in-transit

(f) Stores And Spares 6,674,000 6,597,682

Total 1,533,024,093 1,214,453,151

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

Secured, considered good 273,911,330 120,878,598Unsecured, considered good – –Doubtful 2,564,803 2,144,479

276,476,133 123,023,077Less: Provision for doubtful trade receivables 2,564,803 2,144,479

273,911,330 120,878,598Other Trade receivablesSecured, considered good 282,413,542 389,030,554Unsecured, considered good 42,952,911 65,850,372Doubtful 325,366,453 454,880,926Less: Provision for doubtful trade receivables – –

325,366,453 454,880,926

Total 599,277,783 575,759,524



53


Rs. Rs.

Note 13: Cash and cash equivalents(a) Cash on hand 6,987,272 10,624,938

(b) Balances with banks(i) In current accounts 1,169,424 9,535,807(ii) In earmarked accounts

- Unpaid dividend accounts 1,081,742 1,081,742- Balances held as margin money or

security against borrowings,guarantees and other commitments 45,305,772 76,535,662

Total 54,544,209 97,778,149

Note 14: Short-term loans and advances(a) Secured, considered good – 155,408

Unsecured, considered good – –Doubtful – –Less: Provision for doubtful loans and advances – –

– 155,408

(b) Loans and advances to employeesSecured, considered good 972,684 1,238,542Unsecured, considered good – –Doubtful – –Less: Provision for doubtful loans and advances – –

972,684 1,238,542

(c) Prepaid expenses - Unsecured, consideredgood (For e.g. Insurance premium, Annualmaintenance contracts, etc.) 410,888 1,814,894

(d) Balances with government authoritiesUnsecured, considered good(i) CENVAT credit receivable 59,307,719 64,089,844(ii) VAT credit receivable 45,758,034 28,865,297(iii) Service Tax credit receivable 3,438,511 3,226,106iv) Advance Income tax/TDS 10,301,097 6,814,661v) Service Tax paid under protest 449,474 449,474vi) Sales tax paid under protest 4,615,065 4,313,117vii) I.T. Under Protest 1,271,900 1,271,900viii) Excise Duty Under Protest 25,454,770 14,404,770ix) Others 10,372 8,568

150,606,943 123,443,737

(e) Others (specify nature)Secured, considered good – –Unsecured, considered good 49,700,599 42,347,107Doubtful – –Less: Provision for other doubtful loans and advances 420,324 420,324

49,280,275 41,926,784

Total 201,270,790 168,579,365



54

PARTICULARS For the Period Ended For the year Ended 30.09.2013 31.03.2012

Rs. Rs.

Note 15: Revenue from operations(a) Sale of products 9,409,000,464 7,009,122,579(b) Other operating revenues 14,941,060 –

Less: 9,423,941,524 7,009,122,579(c) Excise duty 513,684,372 389,523,684

8,910,257,153 6,619,598,895 (i) Sale of products comprises

Manufactured goodsFinished Goods 3,840,044,088 3,725,268,809Misroll 33,523,754 39,112,085M.S. Scrap 68,010,834 71,977,851Jewellery 276,061,229 147,713,836Others Sales/Reciepts 682,263,853 663,391,229Total - Sale of manufactured goods 4,899,903,757 4,647,463,810Traded goods

Finished Goods 4,496,910,331 187,812,215Others – –

Total - Sale of traded goods 4,496,910,331 187,812,215Total - Sale of products 9,396,814,088 6,469,953,247

(ii) Sale of services comprisesConversion Charges Received 12,186,376 –Others – –

Total - Sale of services 12,186,376 – (iii) Other operating revenues comprise:

Transportation Charges 14,941,060 – Sundry Balance written back – –

Total - Other operating revenues 14,941,060 –

Note 16: Other income(a) Interest income 7,823,675 7,454,673(b) Other non-operating income

(net of expenses directly attributable to such income) 6,413,781 5,781,037

Total 14,237,456 13,095,740(i) Interest income comprises:

Interest from banks on:deposits 7,823,675 7,454,673Other interest – –Total - Interest income 7,823,675 7,454,673

(ii) Other non-operating income comprises:Profit on sale of fixed assets 1,48,565 1,84,379Miscellaneous income 62,65,216 54,56,688


(iii) Details of Prior period items (net)Prior period income – –Prior period expenses – –

Total – –



55


Rs. Rs.Note 17.a: Cost of materials consumedOpening stock 465,794,969 605,909,823

Add: Purchases 3,673,188,429 3,246,634,8834,138,983,398 3,852,544,706

Less: Closing stock 793,338,123 487,310,015 Cost of material consumed 3,345,645,275 3,365,234,691

Material consumed comprises:

Raw material 3,286,363,825 3,334,045,986Store and spares 59,281,450 40,763,989

Total 3,345,645,275 3,374,809,975

Note 17.b: Purchase of traded goodsTraded goods 4,605,211,606 2,631,170,522

Total 4,605,211,606 2,631,170,522

Note 17.c:Changes in inventories of finished goods,work-in-progress and stock-in-tradeInventories at the end of the year:Finished goods 684,497,276 633,848,839Misroll 8,757,465 13,028,593M.S. Scrap 3,007,919 11,361,683Work-in-progress 22,354,979 73,175,149

717,777,292 727,143,136Inventories at the beginning of the year:Finished goods 633,848,839 503,227,664Misroll 8,757,465 13,028,593M.S. Scrap 11,361,683 10,088,243Work-in-progress 73,175,149 97,678,324

727,143,136 624,022,824

Net (Increase) / decrease in Stock 9,365,844 (103,120,312)Increase / (decrease) of excise duty on inventory (2,319,229) 3,727,474

Net (Increase) / decrease in Stock net of Excise duty 7,046,614 (99,392,838)

Note 18: Employee benefits expenseSalaries and wages 106,366,458 83,139,848Subcontracting 61,588,437 57,215,466Contributions to provident and other funds 4,211,994 3,768,049Staff welfare expenses 4,261,258 2,891,949

Total 176,428,147 147,015,312

Note 19: Finance costsInterest expense on:

(i) Borrowings 252,200,633 210,754,015(ii) Trade payables – –(iii) Others 124,734,403 71,805,385

Interest on LC, Bill Discounting Chargesand on other borrowingTotal 376,935,036 282,559,400



56


Rs. Rs.Note 20: Other expensesConsumption of packing materials – 1,409Power and fuel 207,995,883 224,193,821Electricity Charges 1,662,805 1,088,624Water Charges 3,963,784 3,868,969Rent including lease rentals 8,156,886 3,917,600Repairs and maintenance - Buildings 1,840,437 910,405Repairs and maintenance - Machinery 5,910,550 4,526,352Repairs and maintenance - Vehicle 17,011,180 13,817,308Bank Charges 31,855,960 15,026,238Insurance 1,754,341 1,486,004Rates and taxes 5,002,972 3,874,255Communication 3,734,569 2,117,582Travelling and conveyance 9,631,038 4,640,703Printing and stationery 1,227,491 976,414Freight and forwarding 14,563,347 16,720,272Sales commission 8,906,221 4,296,156Sales discount – 2,365,529Legal and professional 13,561,009 7,596,584Payments to auditors 600,000 400,000Bad trade and other receivables,loans and advances written off 567,895 374,503Loss on fixed assets sold / scrapped / written off – 17,009Miscellaneous expenses 10,843,181 6,288,949Carriage Outward 682,835 180,908Guest House Exp 654,863 692,187Selling Expenses Others 561,414 304,703Security Charges 2,353,184 1,881,690Postage and Courier 26,133 1,698Deffered Revenue Expenses Written Off 48,960 8,640

Total 353,116,938 321,574,512

(i) Payments to the auditors comprises(net of service tax input credit, where applicable):As auditors - Statutory audit 6,00,000 4,00,000Reimbursement of expenses – –Total 6,00,000 4,00,000

(ii) Details of Prior period items (net)Prior period expenses (give details)Prior period income (give details)

TotalNote 21: Earnings per shareEarnings per shareBasicNet profit / (loss) for the year from continuing operationsafter considering extraordinary items 5,265,138 (83,127,260)Number of equity shares 10,374,498 10,374,498Earnings per share from continuing operations - Basic 0.51 (8.01)



57

Note 22 to the Consolidated Financial Statements for 18 months period ended30th September, 2013.

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 99.97% of the equity is held by the Company.

The Company has set up a Joint Venture unit Bhuwalka Steel Industries FZC at Free Zone in HamriyahFree Zone, Sharjah (UAE), for taking up business in ferrous and non-ferrous metal. Company has alsoset up a steel rolling mill in UAE recently. The Share holding pattern was held on Balance Sheet date is asunder:-

Name of shareholders’ No. of shares Value (AED) %

1. Shree Ganesh International FZE 10,800 10,800,000 51%

2. M/s Bhuwalka Steel Industries LTD. (Indian Company) 10,350 10,350,000 49%

Total 21,150 21,150,000 100%

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 holding share in joint venture intended to be disposed in near future, hence as per AS27 the company has not applied the method of proportionate consolidation and figure related to theprevious year restated accordingly 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 period endedcompanies share 30th September, 2013and country holdingof incorporation

Assets Liabilities Income Expenditure Contingentliabilities

Bhuwalka 49% 2,75,40,853 2,75,40,853 4,36,05,283 4,29,02,204 15,70,013Steel IndustriesFZC Sharjah UAE(Audited Figures)

(49%) (3,17,82,462) (3,17,82,462) (4,15,69,250) (4,10,70,743) (9,41,452)

(Amount in AED)


58

Note: Figures in brackets relate to the previous year.

1. Contingent Liabilities not provided for


I) Letter of Credits/ Bank Guarantees 157.59 386.85

II) Corporate Guarantees given to Banks and FinancialInstitutions on behalf of Group Companies(Liabilities as on 31.03.2012): 4616.11* 3749.86

III) Other statutory liabilities disputed by the company : 903.90 980.69

IV) Claims against the Company not Acknowledged as debt : 34.61 34.61

*(27.074 Million AED Converted @ 17.05 rate prevailing on 30th Sep 2013)

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 and AS 27, ‘Financial Reporting of Interest in Joint Venture’“issued by the Institute of Chartered Accountants of India.

b) Consolidated financial statements have been prepared using uniform accounting policies, in accordancewith the generally accepted accounting policies.

c) These are set out in the “Significant Accounting Policies and Notes on Accounts” of the Company and itssubsidiaries.

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 Jointly Controlled Entity

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- Managing Director

Sri Ajay Bhuwalka Key Management Personnel- Director

Sri Ankit Bhuwalka Key Management Personnel- Director

(Amount Rs. in Lacs)


59

B) Transactions carried out with related parties referred above in ordinary course of business for the 18 monthsperiod ended 30th September 2013.

( Rs. in Lakhs)

Nature of Transactions Subsidiary Key Parties whereManagement Control

Personnel Exists

Purchases 20.29 6846.70

(2.31) — (13649.71)

Sales 115.23 — 44201.13

(51.10) — (14997.33)

Expenses — 20.33 179.57

(—) (10.83) (211.91)

Income NIL — —

(NIL) — (—)

Outstanding – Debit NIL — 14.37

(NIL) — (92.43)

— Credit Nil 2757.66

(Nil) (1137.99)

Note: - Figures in bracket pertain to PY 2012-13.


For and on behalf of the Board As per Report of even date(Suresh Kumar Bhuwalka) (Ajay Kumar Bhuwalka) for ASR Associates Chairman & Managing Director Director Chartered Accountants


FRN No. 8877S


60

CASH FLOW STATEMENT FOR THE PERIOD ENDED 30TH SEPTEMBER 2013 2012-13 2011-12

Rs. Rs.CASH FLOW FROM OPERATING ACTIVITIESNet Profit / (Loss) before tax and extraordinary items 13,224,251 (90,539,391)Adjustments for:Depreciation 96,990,378 75,072,427Deffered revenue expenditure 48,960 8,640

Profit/loss from sale of Fixed Assets (50,252,202) (167,370)Profit on sale of Investment – –Rent Received – –Interest Charged to Profit & Loss A/c 376,935,036 275,313,769Provision for Doubtful Debts/Advances Written back – –Dividend Income – –

Operating Cash Profit before working capitalchanges 436,946,423 259,688,075Adjustments for:

Trade and Other Receivables (54,955,340) (11,639,577)Inventories (318,570,942) 15,397,321Trade Payables and other Liabilities (642,464,284) 143,746,032

CASH FLOW FROM OPERATIONS (579,044,144) 407,191,851Direct Taxes Paid/(refund) 222,772 5,195,027Sales Tax Deferrment 2,149,107 1,037,476

Net Cash from Operating Activities (581,416,023) 400,959,348

CASH FLOW FROM INVESTING ACTIVITIES:(Increase)/decrease in Fixed Assets(Net) 61,837,972 (15,250,122)(Increase)/Decrease in Investments – –Profit on sale of Investment – –Rent Received – –Dividend Income – –Profit on Sale of Undertaking – –

Net cash used in Investing Activities 61,837,972 (15,250,122)

CASH FLOW FROM FINANCING ACTIVITIES:Increase/(Decrease) in Borrowings 853,279,146 (105,055,468)Interest Paid (376,935,036) (275,313,769)

Net cash used in Financing Activities 476,344,110 (380,369,237)


Opening Balance of Cash & Cash Equivalents 97,778,149 92,438,160

Closing Balance of Cash & Cash Equivalents 54,544,209 97,778,149

Note : Balance of cash and cash equivalents include Rs. 10,81,741/- (10,81,741/-) held as balance in bank accountof 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 30th September, 2013. 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.

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


(CA A. S. Rafiq )Place : Bangalore (Rachana P V) ProprietorDate : 21st November 2013 Company Secretary Membership No.204646

FRN No. 8877S


61

1. Name of the Subsidiary Benaka Sponge Iron Private Limited

2. Financial Year ended 31st March, 2013

3. Extent of interest of theHolding Company in thecapital of the Subsidiary as on the above datea)No. of sharesb) 2,99,900 nos of Rs. 100/- each

Extent of holding 99.97%

4. Net aggregate amount of Profit of the Subsidiaryso far as it concerns the members of the Holding Company

a) Not dealt within the Holding Company’s Accounts:

i) For the Financial year ended 31.03.2013 Rs. 285,389/-

ii) For the previous financial years of the subsidiary Since it became Holding Company’s subsidiary Rs. 1,162,760/-

b) Dealt within the Holding Company’s Accounts:

i) For the Financial year ended 31.03.2013 Nil

ii) For the previous financial years of the Nil subsidiary since it became the Holding Company’s Subsidiary

STATEMENT PURSUANT TO SECTION 212(3) OF THE COMPANIES ACTS, 1956

(Suresh Kumar Bhuwalka) (Ajay Kumar Bhuwalka)Chairman & Managing Director Director

Place : BangaloreDate : 21st November 2013

BENAKA SPONGEIRON PRIVATE LIMITED

62

BENAKA SPONGE IRON PRIVATE LIMITED

A SUBSIDIARY COMPANY

BOARD OF DIRECTORS : Shri. Suresh Kumar BhuwalkaShri. Ajay Kumar BhuwalkaShri. Ankit BhuwalkaShri. Roop Sing Chawhan

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

FACTORY : 138A/1, 138A/2Tumti Road,Belagal Village,Bellary.

AUDITORS : M/s.ASR AssociatesChartered Accountants

PRINCIPAL BANKERS : IDBI Bank Ltd.Bangalore.


63

DIRECTORS’ REPORTTO THE MEMBERS OFBENAKA SPONGE IRON PRIVATE LIMITED:Your Directors have pleasure in presenting before you the 10th Annual Report of the Company together with Audited Statement ofAccounts for the year ended 31st March 2013.

1. FINANCIAL RESULTS:

Are as per enclosed Balance sheet and Profit and Loss Account

2. OPERATIONS:Total income from operations during the year under review was Rs.3975.28 lakhs as compared to Rs.2383.60 lakhs in theprevious year. The Company has earned a profit of Rs. 2.85 lacs compared to loss of Rs.610.54 lakhs in the previous year.

3. CONSERVATION OF ENERGY:Total energy consumption and energy consumed per unit of production as per Form ‘A’ is given in Annexure A to this Report.

4. TECHNOLOGY ABSORPTION:The Company is keeping abreast of the latest developments in product technology, manufacturing process and methods andusing indigenous technology.

5. FOREIGN EXCHANGE EARNINGS AND OUTGOINGS: NIL

6. PERSONNEL:Industrial Relations remained cordial through out the year.There were no employees of the categories specified under Section 217 (2A) of the Companies Act, 956 read with Companies(Particulars of Employees) Rules, 1975. as amended upto date.

7. DIRECTORS :Sri. Ajay Kumar Bhuwalka, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible,offers himself for re-appointment.

8. SECRETARIAL COMPLIANCE REPORT:Company is not required to employ a whole time Company Secretary in terms of Section 383-A(1) of the Companies Act, 1956.Since the Company have a paid up share capital exceeding Rs.10.00 lacs a certificate from company secretary in whole-timepractice, in prescribed form as to the compliance with all the provisions of the Companies Act, 1956 have been obtained.

9. AUDITORS:The retiring Auditors M/s. ASR Associates, Chartered Accountants, Bellary retire at the conclusion of the forthcoming AnnualGeneral Meeting and being eligible offer themselves for re-appointment.

10. AUDITORS’ REPORT:The Notes on accounts referred to in the Auditors’ Report are self explanatory and therefore do not call for any further commentsunder section 217(3) of the Companies Act,1956.

11. DIRECTORS’ RESPONSIBILITY STATEMENT AS PER SECTION 217(2AA):Your Directors hereby confirm:a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are

no material departures;b) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates

that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the company for the year;

c) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordancewith the provisions of the Companies Act, 1956, to safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

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

12. ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation for the continued support, encouragement and co-operation extendedby all the stakeholders namely: Bankers, shareholders, customers and suppliers.

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

For and on behalf of Board(Suresh Kumar Bhuwalka)

DirectorPlace : BangaloreDate : 1st August, 2013


64

FORM “A”ANNEXURE TO DIRECTOR’S REPORT

FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO

CONSERVATION OF ENERGY

A. POWER AND FUEL CONSUMPTION:

SPONGE IRON PRODUCTION

Current PreviousYear Period2013 2012

1. ELECTRICITY:

A) PURCHASED

Units 1,722,890 1,580,140Total Amount(Rs) 10,877,878 9,746,760Rate/Unit (Rs) 6.31 6.17

B) OWN GENERATION

Units Generated Through Diesel Generator 264,905 191,101Units per liter of Diesel Oil 0.32 0.32Cost / Units 16.07 13.54

2 COAL Consuption

Quantity( Tonnage) 21,111 27,266Total Amount(Rs) 79,942,829 119,199,724Rate/Unit(Rs) 3,787 4,372

B CONSUMPTION PER UNIT OF PRODUCTIONProduction ( MTs) 13,435 14,631Electricity( units) 128 121Coal & Others (MT) 1.57 1.86


65

AUDITORS’ REPORTTo,The Members,M/s. Benaka Sponge Iron Pvt. Ltd.1. We have audited the attached Balance Sheet of M/s Benaka Sponge Iron Pvt., Ltd., as at 31st March 2013 and the Profit & Loss Account

for the period ended as on that date, annexed there to. These financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our Audit in accordance with auditing standards generally accepted in India. Those standards require that we planand perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significant estimates made by management, as well asevaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) order 2003 issued by the Central Government of India in terms of Sub-Section(4A) of Section 227 of the Companies Act 1956, we enclose in the Annexure a statement on the matters specified in paragraph4 & 5 of the said order.Further to our comments in the Annexure referred above, we report that:

1. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for thepurpose of our Audit.

2. In our opinion, proper books of accounts as required by law have been kept by the Company so far as appear from ourexamination of those books.

3. The Balance Sheet, Profit & Loss Account dealt with by this report are in agreement with the books of accounts,4. In our opinion, the Balance Sheet, Profit & Loss Account dealt with by this report comply with the Accounting Standards referred

to in sub section 3 (C ) of section 211 of the Companies Act 1956.5. On the basis of written representations received from the directors, as on 31st March 2013 and taken on record by the Board of

Directors, we report that none of the Directors are disqualified as on 31st March 2013 from being appointed as a Directors in termsof clause (g) of sub section 274 of the Companies Act 1956.

6. In our opinion and to the best of our information and according to the explanations given to us, the accounts read with the notesin Schedule give the information required by the Companies Act 1956 (as amended) in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India:a. In the case of Balance Sheet, of the state of affairs of the Company as at 31st March 2013 andb. In the case of Profit and Loss Account, of the profit for the period ended on that date

for ASR ASSOCIATES Chartered Accountants

(CA. A.S. RAFIQ)Proprietor

M.No. 204646FRN No. : 008877S

THE ANNEXURE REFERRED TO IN PARAGRAPH-3 OF OUR REPORT TO THE MEMBERS OF M/S BENAKA SPONGEIRON PVT LTD, BANGALORE FOR THE PERIOD ENDED 31 ST MARCH 2013.WE REPORT THAT:I FIXED ASSETS:

a) The Company has maintained proper records showing full particulars and situation of Fixed Assets.b) The Company has carried out physical verification of Fixed Assets during the period. No material discrepancies were

noticed on such verification.c) During the period, the Company has not disposed off any Fixed Assets.

I I a) The inventory has been physically verified during the period by the management. In our opinion, the frequency ofverification is reasonable.

b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relationto the size of the company and the nature of the business.

c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physicalstocks and the book records were not material.

III The Company has neither granted nor taken any loans, secured or unsecured to/ from companies, firms or other partiesregister maintained under section 301 of the Act.

IV In our opinion and according to the information and explanations given to us, there are adequate internal control procedurescommensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assetsand with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correctmajor weakness in internal controls.

Place: BangaloreDate : 1st August, 2013


66

V According to the information and explanations given to us, we are of the opinion that there are no transactions that need to beentered into the register maintained under section 301 of the Companies Act 1956.

VI The Company has not accepted any deposits from the public.VII In our opinion, the company has an internal audit system commensurate with the size and nature of its business.VIII We have broadly reviewed the books of accounts relating to materials, labour and other items of cost maintained by the Company

pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of theCompanies Act 1956 and we are of the opinion that prima facie the prescribed accounts and records have been maintained.

IX According to the information and explanations given to us, there are no dues as at the last day of financial period of more than6 months in respect of Sales Tax, Income Tax, Excise Duty, Cess, which are disputed, and a forum where the disputeis pending.

X. The Company does not have any accumulated losses and has not incurred cash losses in the current financial year and in theimmediately preceding financial year.

XI In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment ofdues to financial institutions and banks.

XII According to the information and explanation given to us, the Company has not granted loans and advances on the basis ofsecurity by way of pledge of shares, debentures and other securities.

XIII In our opinion, the company is not a chit fund or a nidhi mutual benefit funds/ society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.

XIV In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly,the provisions of clause 4 (xiv) of the Companies (Auditor’s Report) order, 2003 are not applicable to the company.

XV The Company has not given any guarantee for loans taken by others.XVI Based on the information and explanations given to us by the management the term loans have been applied for the purpose

for which they were obtained.XVII On the basis of our overall examination of the Cash Flow Statements, the funds raised on short-term basis have not been used

for long term investment.XVIII During the year under Audit, the Company has not made any preferential allotment of shares to parties or companies covered

in the register maintained under section 301 of the Companies Act, 1956.XIX According to the information and explanations given to us, during the period the company has not issued any debentures.XX The Company has not raised any money by way of Public Issue during the year.XXI Based upon the audit procedures performed and on the basis of information and explanations provided by the management,

we report that no fraud, on or by the Company has been noticed or reported during the year.

for ASR ASSOCIATES Chartered Accountants

(CA. A.S. RAFIQ)Proprietor

M.No. 204646FRN : 008877S

Place: BangaloreDate : 1st August 2013


67

BALANCE SHEET AS AT 31ST MARCH, 2013(Amount in Indian Rupees)

PARTICULARS Note AS AT AS ATNo. 31.03.2013 31.03.2012

Rs. Rs.

EQUITY AND LIABILITIES

1. Shareholders’ funds(a) Share capital 1 3,00,00,000 3,00,00,000(b) Reserves and surplus 2 9,84,70,033 9,81,84,558

(c) Money received against share warrantsSub-total - Shareholder’s funds 12,84,70,033 12,81,84,558

2. Share application money pending allotment3. Non-current liabilities

(a) Long-term borrowings 3 3,94,19,943 5,91,29,915(b) Deferred tax liabilities (net) 21 2,56,50,651 2,52,75,122(c) Other long-term liabilities(d) Long-term provisions

Sub-total - Non-current liabilities 6,50,70,594 8,44,05,0374. Current liabilities

(a) Short-term borrowings 4 21,48,28,868 21,90,64,114(b) Trade payables 5 5,46,77,396 6,31,22,058(c) Other current liabilities 6 2,49,45,601 3,26,52,567(d) Short-term provisions 7 1,14,365 8,44,220

Sub-total - Current liabilities 29,45,66,230 31,56,82,959Total 48,81,06,857 52,82,72,554

B ASSETS1. Non-current assets

(a) Fixed assets(i) Tangible assets 8 19,04,11,644 20,62,33,585(ii) Intangible assets – –(iii) Capital work-in-progress 10,30,006 10,30,006(iv) Intangible assets under development – –(v) Fixed assets held for sale – –

(b) Non-current investments 9 17,343 17,343(c) Deferred tax assets (net) – –(d) Long-term loans and advances – –(e) Other non-current assets 10 28,800 77,760

Sub-total· Non-current assets 19,14,87,793 20,73,58,6942. Current assets

(a) Current investments – –(b) Inventories 11 23,73,15,657 20,73,93,163(c) Trade receivables 12 4,44,91,124 6,72,46,383(d) Cash and cash equivalents 13 41,60,697 61,55,034(e) Short-term loans and advances 14 1,06,51,586 4,01,19,279(f) Other current assets

Sub-total - Current assets 29,66,19,064 32,09,13,859Total 48,81,06,857 52,82,72,553

See accompanying notes forming partof the financial statements 23


(Suresh Kumar Bhuwalka) (Ajay Kumar Bhuwalka) for ASR Associates Director Director Chartered Accountants

(CA A. S. Rafiq )Place : Bangalore ProprietorDate : 1st August, 2013 Membership No.204646

FRN No. 8877S


68

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2013

PARTICULARS Note For the Year ended For the Year ended

No. 31.03.2013 31.03.2012

A CONTINUING OPERATIONS

1. Revenue from operations (gross) 15 42,09,54,906 26,11,35,509Less: Excise duty 2,44,59,323 2,32,15,080Revenue from operations (net) 39,64,95,583 23,79,20,429

2. Other income 16 10,32,598 4,39,7113. Total revenue (1+2) 39,75,28,181 23,83,60,1404. Expenses

(a) Cost of materials consumed 17.a 12,27,80,636 17,25,75,946(b) Purchases of stock-in-trade 17.b 15,57,19,906 42,34,285(c) Changes in inventories of finished goods,

work-in-progress and stock-in-trade 17.c 1,66,25,149 1,54,25,936(d) Employee benefits expense 18 2,21,84,930 2,31,82,549(e) Finance costs 19 3,99,88,639 4,22,17,329(f) Depreciation and amortisation expense 8.b 1,52,48,597 1,53,04,213(g) Other expenses 20 2,40,96,548 2,13,22,216Total expenses 39,66,44,405 29,42,62,475

5. Profit / (Loss) before exceptional andextraordinary items and tax (3 - 4) 8,83,776 (5,,59,02,335)

6. Exceptional items – –

7. Profit / (Loss) before extraordinary itemsand tax (5 + 6) 8,83,776 (55902335)

8. Extraordinary items – –9. Profit / (Loss) before tax (7 + 8) 8,83,776 (55902335)10. Tax expense:

(a) Current tax expense for current year – –(b) Current tax expense relating to prior years (2,22,772) (5195027)(c) Net current tax expense – –(d) Deferred tax (Assets)/Liabilities 21. a (3,75,529) 43180

11. Profit / (Loss) from continuing operations (9 +10) 2,85,475 (61054182)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) 2,85,475 (6,10,54,182)15.i. Earnings per share (of 10/- each): 22 0.95 (203.51)

(a) BasicSee accompanying notes formingpart of the financial statements 23




FRN No. 8877S

Rs. Rs.


69

SCHEDULES ANNEXED TO & FORMING PART OF AUDITED ACCOUNTS AS AT 31st MARCH, 2013

Particulars As at 31 March, 2013 As at 31 March, 2012 Number of Amount Rs. Number of Amount Rs.

shares sharesNote - 1 SHARE CAPITAL(a) Authorised

Equity shares of Rs. 100/- each with voting rights 350,000 35,000,000 350,000 35,000,000

(b) IssuedEquity shares of Rs. 100/- each with voting rights 300,000 30,000,000 300,000 30,000,000

(c) Subscribed and fully paid upEquity shares of Rs. 100/- each with voting rights 300,000 30,000,000 300,000 30,000,000

Total 300,000 30,000,000 300,000 30,000,000Notes:(i) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period:

Particulars Opening Balance Fresh issue Bonus Shares Closing BalanceIssuance

Equity shares with voting rightsYear ended 31 March, 2013

– Number of shares 300,000 – – 300,000– Amount Rs. 30,000,000 – – 30,000,000

Year ended 31 March, 2012– Number of shares 300,000 – – 300,000– Amount Rs. 30,000,000 – – 30,000,000


Class of shares / Name of shareholder As at 31 March, 2013 As at 31 March, 2012Number of % holding in that Number of % holding in that

shares held class of shares shares held class of shares

Equity shares with voting rights 299,900 100 299,900 100Bhuwalka Steel Industries Limited

Note 2: Reserves and surplusParticulars As at As at

March, 2013 March, 2012(a) Revaluation Reserve

Opening balance 43,590,007 43,590,007Add: Additions during the year – –Less: Utilised / transferred during the yearClosing balance 43,590,007 43,590,007

(b) General reserveOpening balance 3,000,000 3,000,000Add: Transferred from surplus in Statement of Profit and Loss – –Less: Utilised / transferred during the year for: – –

Issuing bonus shares – –Others – –

Closing Balance 3,000,000 3,000,000

c) Surplus / (Deficit) in Statement of Profit and LossOpening balance 5,15,94,551 11,26,48,733

Add: Profit / (Loss) for the year 2,85,475 (6,10,54,182)

Amounts transferred from:Less: Interim dividend –Closing balance 5,18,80,026 5,15,94,551

Total (a+b+c) 9,84,70,033 9,81,84,558


70


Particulars As at As atMarch, 2013 March, 2012

Note 3: Long-term borrowings(a) Term loans From Banks

Secured 3,94,19,943 5,91,29,915Unsecured

Total 3,94,19,943 5,91,29,915


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

i) From banksSecured 17,30,43,193 17,37,59,367Unsecured – –

17,30,43,193 17,37,59,367ii) From Other Parties

Secured – –Unsecured 4,17,85,675 4,53,04,747

4,17,85,675 4,53,04,747(b) Loans and advances from related parties

Secured – –Unsecured – –

21,48,28,868 21,90,64,114

(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 31 March, 2013 As at 31 March, 2012repayment and security

Secured Unsecured Secured Unsecured

Term loans from banks:

IDBI Bank These loans are secured by way 1,72,19,943 2,58,29,915 (This Loan is restructed and of Company's Fixed Assetsrepayment is rescheduled)

IDBI Bank(This Loan is restructed and These Loans are secured by 2,22,00,000 3,33,00,000repayment is rescheduled) Hypothiecation of by products and

specific charge of third partycolletral.

Total - Term loans from banks 3,94,19,943 5,91,29,915

Total 3,94,19,943 5,91,29,915


71

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

Particulars Nature of security As at 31 March, As at 31 March,2013 2012

Loans repayable on demandfrom banks:IDBI BANK- OCC (Secured by hypothecation of inventories 17,30,43,193 17,37,59,367

and book debts and pari passusecond chargeon the immovable assets of the company

Total - from banks 17,30,43,193 17,37,59,367

Loans repayable on demandfrom Other parties: – –

Total - from other parties – –

(ii) Details of short-term borrowings guaranteed by some of the directors or others:Loans repayable on demand from banks 17,30,43,193 17,37,59,367Loans repayable on demand from other parties – –Loans and advances from related parties – –Deposits – –

Total 17,30,43,193 17,37,59,367

Note 5: Trade payablesTrade payables:

Acceptances – –Other than Acceptances 5,46,77,396 6,31,22,058

Total 5,46,77,396 6,31,22,058

Note 6: Other Current Liabilities(a) Current maturities of long-term debt 1,97,09,972 21,57,316(b) Interest accrued but not due on borrowings(c) Interest accrued and due on borrowings – 33,59,893(d) Unpaid dividends(e) Other payables –

i) Statutory remittances (Contributions to PF and ESIC, Withholding Taxes,Excise Duty, VAT, Service Tax, etc.) 11,35,223 51,92,026

(ii) Advances from customers 22,63,948 1,89,16,626(iii) Outstanding Liabilities 18,36,458 30,26,706Total 2,49,45,601 3,26,52,567

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

(a) Term loans From banks

Secured 1,97,09,972 17,10,008Unsecured

From other parties -Secured – 4,47,308Unsecured

(b) Deferred payment liabilitiesSecured – –Unsecured – –

Total 1,97,09,972 21,57,316

Note 7: Short Term Provisions

(a) Provision for employee benefits:(i) Provision for bonus – 7,29,855

(ii) Provision for compensated absences – –

(iii) Provision for gratuity (net) 1,14,365 1,14,365

(b) Provision - Others: – –

(i) Provision for tax – –

Total 1,14,365 8,44,220


72

No

tes

form

ing

par

t of t

he

fin

anci

al s

tate

men

ts

GR

OSS

BL

OC

KAc

cum

ulat

ed d

epre

ciat

ion

and

impa

irmen

t

NE

T B

LOCK

Bala

nce

Bala

nce

From

01-0

4-201

2De

prec

iatio

nBa

lanc

eBa

lanc

eBa

lanc

e

P

ARTI

CULA

RSAs

at

Addi

tions

/As

at

As a

tto

with

dra

wn A

s at

As a

tAs

at

01.0

4.20

12Re

valu

atio

n31

.03.

2013

01.0

4.20

1231

-03-

2013

31.0

3.20

1331

.03.

2013

31.0

3.20

12

1La

nd4,

65,2

1,00

0–

5,73

,344

4,59

,47,

656

––

4,59

,47,

656

4,65

,21,

000

2B

uild

ing

1,97

,50,

330

––

1,97

,50,

330

44,6

8,52

36,

59,6

6151

,28,

184

1,46

,22,

146

1,52

,81,

807

3P

lant

& M

achi

nery

18,9

7,27

,688

––

18,9

7,27

,688

8,70

,62,

901

1,00

,17,

622

9,70

,80,

523

9,26

,47,

165

10,2

6,64

,787

4P

ollu

tions

Equ

ipm

ent

3,39

,17,

372

––

3,39

,17,

372

51,7

2,64

617

,90,

837

69,6

3,48

32,

69,5

3,88

92,

87,4

4,72

6

5.

Veh

icle

s2,

33,7

1,01

2–

–2,

33,7

1,01

21,

20,5

9,92

526

,43,

261

1,47

,03,

186

86,6

7,82

61,

13,1

1,08

7

6F

urni

ture

’s &

Fix

ture

s13

,41,

959

––

13,4

1,95

94,

04,5

6184

,946

–4,

89,5

078,

52,4

529,

37,3

98

7O

ffice

Equ

ipm

ent’s

9,07

,846

––

9,07

,846

9,07

,845

–9,

07,8

451

1-C

ompu

ters

8O

ffice

Equ

ipm

ent’s

11,0

0,41

6–

–11

,00,

416

3,27

,636

52,2

703,

79,9

067,

20,5

107,

72,7

80

TOTA

L31

,66,

37,6

23–

5,73

,344

31,6

0,64

,279

11,0

4,04

,038

1,52

,48,

597

–12

,56,

52,6

3519

,04,

11,6

4420

,62,

33,5

85

Pre

viou

s Y

ear

31,6

6,81

,678

–44

,055

31,6

6,37

,623

9,51

,09,

870

1,53

,04,

213

10,0

4611

,04,

04,0

3720

,62,

33,5

8522

,15,

71,8

08

NO

TE

8

I) F

IXE

D A

SS

ET

S

No

te 8

- ii)

Dep

reci

atio

n a

nd

am

ort

isat

ion

rel

atin

g to

co

nti

nu

ing

op

erat

ion

s:

Par

ticu

lars

Fo

r th

e ye

ar e

nd

edF

or t

he y

ear

ende

d31

Mar

ch, 2

013

31 M

arch

, 20

12

Dep

reci

atio

n an

d am

ortis

atio

n fo

r th

e ye

ar o

n ta

ngib

le a

sset

s as

per

Not

e 12

A1,

52,4

8,59

71,

53,0

4,21

3

Dep

reci

atio

n an

d am

ortis

atio

n re

latin

g to

con

tinui

ng o

pera

tions

1,52

,48,

597

1,53

,04,

213

Sale

/Adj

/Am

ortiz

atio

ndu

ring

the

year


73



Particulars As at 31 March, 2013 As at 31 March, 2012



A. Trade

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

i) of subsidiaries – – – – – –

(ii) of joint venture companies – – – – – –

Total - Trade (A) – – – – – –

B.Other investments

(i) government securities – 17,343 – – 17,343 –

(ii) trust securities – – – – – –

Total - Trade (B) 17,343 17,343

Total ( A+ B) 17,343 17,343


Note 10 : Other non-current assets

(a) Deferred Revenue Expenditure 28,800 77,760(To the extent not written-off or adjusted)

Total 28,800 77,760


74

Note 11: Inventories(Inventories have been valued at lower of cost and net realisable value)(a) Raw materials 14,85,83,664 10,21,12,339

Goods-in-transit(b) Finished goods (other than those acquired for trading) 8,20,57,993 9,86,83,142

Goods-in-transit(c) Stores and Spares 66,74,000 65,97,682

Goods-in-transitTotal 23,73,15,657 20,73,93,163

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

Secured, considered goodUnsecured, considered good Doubtful 15,38,213 13,96,011

15,38,213 13,96,011Less: Provision for doubtful trade receivablesOther Trade receivablesSecured, considered goodUnsecured, considered good Doubtful 4,29,52,911 6,58,50,372Less: Provision for doubtful trade receivables

Total 4,44,91,124 6,72,46,383

Note 13 : Cash and cash equivalents

(a) Cash on hand 13,61,165 34,76,863(b) Balances with banks

(i) In current accounts 34,423 49,497(ii) In earmarked accounts

- Unpaid dividend accounts- Balances held as margin money or security against borrowings,

guarantees and other commitments 27,65,109 26,28,674

Total 41,60,697 61,55,034

Note 14: Short-term loans and advances(a) Loans and advances to related parties

Secured, considered good – –Unsecured, considered good – –Doubtful – –Less: Provision for doubtful loans and advances – –

(b) Loans and advances to employeesSecured, considered goodUnsecured, considered good 1,18,170 1,11,178Doubtful

Less: Provision for doubtful loans and advances – –(c) Prepaid expenses - Unsecured, considered good (For e.g. Insurance premium, Annual

maintenance contracts, etc.) – –(d) Balances with government authorities

Unsecured, considered good(i) CENVAT credit receivable 8,18,831 8,94,587(ii) VAT credit receivable 17,88,948 9,10,645(iii) Service Tax credit receivable 1,422 18,63,586iv) Advance Income tax/TDS 52,04,369 53,72,763ix) Others – –

Total 78,13,570 90,41,581

(e) Others (specify nature)Secured, considered good – –Unsecured, considered good 2719846 3,09,66,520Doubtful – –

Less: Provision for other doubtful loans and advances – –

Total (a+b+c+d+e) 1,06,51,586 4,01,19,279


Particulars As at 31 March As at 31 March2013 2012


75

Note 15: Revenue from operationsParticulars For the year ended 31 For the year ended

March, 2013 31 March, 2012

(a) Sale of products 42,09,54,906 26,11,35,509(b) Other operating revenues – –

Less: 42,09,54,906 26,11,35,509

(c) Excise duty 2,44,59,323 2,32,15,080

Revenue from Operation (net) 396,495,583 237,920,429

(i) Sale of products comprisesManufactured goodsFinished Goods 26,49,36,261 23,79,20,429Others Sales/Reciepts – –Total - Sale of manufactured goods 26,49,36,261 23,79,20,429Traded goodsFinished Goods 15,60,18,645 –Others – –Total - Sale of traded goods 15,60,18,645 –

Total - Sale of products 42,09,54,906 23,79,20,429

Note 16: Other incomeInterest income 4,39,845 2,09,042Other non-operating income(net of expenses directly attributable to such income) 5,92,753 2,30,669

Total 10,32,598 4,39,711Interest income comprises: –Interest from banks on: 4,39,845 2,09,042depositsOther interest

Total - Interest income 4,39,845 2,09,042Other non-operating income comprises:Profit on sale of fixed assetsMiscellaneous income 5,92,753 2,30,669


Note 17.a: Cost of materials consumedOpening stock 10,87,10,021 9,91,95,732Add: Purchases 16,93,28,279 18,20,90,235Less: Closing stock 15,52,57,664 10,87,10,021Cost of material consumed 12,27,80,636 17,25,75,946Material consumed comprises:Raw material 10,53,74,373 15,58,79,943Store and spares 1,74,06,263 2,09,30,288

Total 12,27,80,636 17,68,10,231

Note 17.b: Purchase of traded goodsTraded goods 15,57,19,906 42,34,285

Total 15,57,19,906 42,34,285

Note 17.c: Changes in inventories of finished goods, work-in-progress and stock-in-tradeInventories at the end of the year:Finished goods 5,97,03,014 2,55,07,993Work-in-progress 2,23,54,979 7,31,75,149

8,20,57,993 9,86,83,142

Inventories at the beginning of the year:Finished goods 2,55,07,993 1,82,65,681Work-in-progress 7,31,75,149 9,58,43,397

9,86,83,142 11,41,09,078

Net (increase) / decrease 1,66,25,149 1,54,25,936

Note 18: Employee benefits expenseSalaries and wages 2,12,94,971 2,24,72,233Contributions to provident and other funds 3,91,628 3,38,002Staff welfare expenses 4,98,331 3,72,314

Total 2,21,84,930 2,31,82,549



76

Note 19 Finance costsInterest expense on:(i) Borrowings 3,99,88,639 4,22,17,329(ii) Trade payables(iii) Others

– Interest on LC, Bill Discounting Chargesand on other borrowingTotal 3,99,88,639 4,22,17,329

Note 20: Other expensesCarriage outwards 6,82,835 1,80,908Power and fuel 1,11,86,280 97,70,450Repairs and maintenance - Buildings 59,610 64,315Repairs and maintenance - Machinery 17,18,819 23,19,918Repairs and maintenance - Vehicle 19,65,854 13,72,210Bank Charges 17,22,612 9,47,643Insurance 4,33,723 6,09,727Rates and taxes 6,52,381 7,96,877Guest house expenses 6,54,863 6,92,187Travelling and conveyance 3,29,280 3,21,356Printing and stationery 93,581 60,270Telephone,Postage & Courier 26,133 1,698Selling Expenses 5,61,414 3,04,703Legal and professional 9,36,347 12,72,213Payments to auditors 1,50,000 1,50,000Security Charges 23,53,184 18,81,690Loss on fixed assets sold / scrapped / written off – 17009Deferred Revnue Expenses Written-off 48,960 8,640Miscellaneous expenses 5,20,672 5,50,402

Total 2,40,96,548 2,13,22,216

(i) Payments to the auditors comprises (net of service tax input credit, where applicable):

As auditors - statutory audit 1,965,854 150,000

Total 1,965,854 150,000

(ii) Details of Prior period items (net) – –Prior period expenses (give details) – –Prior period income (give details) – –

Total 1,965,854 150,000

Note 21: Deferred Tax Liability

Particulars As at31 March, 2013

Deferred tax liability / (asset)

Tax effect of items constituting deferred tax liability 2,56,50,651On difference between book balance and tax balance of fixed assets

Tax effect of items constituting deferred tax liability


Provision for doubtful debts / advances

Disallowances under Section 40(a)(i), 43B of the Income Tax Act, 1961Unabsorbed Depreciation carried forward

Brought forward business losses

On items included in Reserves and surplus pending amortisation into theStatement of Profit and Loss

Others


Net deferred tax liability / (asset)

Notes forming part of the financial statementsParticulars For the year ended 31 For the year ended

March, 2013 31 March, 2012


77

Note 21.a: Computation of Deferred Tax Liability to be reversed

Computation Of Deferred Tax Liability

Less:

WDV as per books of Accounts as on 31.03.2013 19,04,11,644

WDV as per Income Tax as on 31.03.2013 10,73,99,830

Business Loss & Unabsorbed Depreciation as per Income Tax

Net temporary Difference Between IT and Books of Accounts 8,30,11,814

Income Tax Thereon @ 30% 2,49,03,544

Surcharge @ 5% –

Education Cess @ 3% 7,47,106

Total Deferred Tax Liability as on 31/3/2013 - Provision required

to be made 2,56,50,651

Deferred Tax Liability as on 31/03/2012 2,52,75,122

Deferred tax Liability to be provided for the year 3,75,529

Note 22: Earnings per share

Earnings per share

Earnings per share

Basic

Net profit / (loss) for the year from continuing operations afterconsidering extraordinary items 2,85,475 (6,10,54,182)

Number of equity shares 3,00,000 3,00,000

Earnings per share from continuing operations - Basic 0.95 (203.51)



78

Note 23: FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2013:-

01. Contingent Liabilities not provided for:- Rs. In Lakhs


I) Letter of Credits/ Bank Guarantees 0 49.90

II) Corporate Guarantees given to Banks and FinancialInstitutions on behalf of Group Companies (Liabilities as on 31.03.2012): 0 0

III) Other statutory liabilities disputed by the company: 0 0

IV) Claims against the Company not Acknowledged as debt : 0 0

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

Particulars 31.03.2013 31.03.2012Salary & Allowances NiL 9,34,000Contribution to Provident Fund and Other Funds NiL NilValue of Perquisites & benefits ( as per Income-Tax Rules) NiL NiL

Total NiL 9,34,000

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 ofimportant accounting policies, which have been consistently followed, are set out below. The Financial Statements havealso been prepared in accordance with relevant presentational requirement of the Companies Act, 1956.

ii) General:a) The accompanying financial statements have been prepared on the Historical Cost convention in accordance with the

provisions of Companies Act, 1956 and generally accepted accounting principles prevailing in India.b) The Accounts have been prepared on accrual basis and in accordance with the going concern concept.

iii) Valuation of Inventories:Raw materials, Finished goods, Work-in-progress and Stores & Spares are valued at lower of cost or net realisablevalue , in accordance with Accounting Standard 2 – valuation of inventories. The cost formula used for this purpose isFirst in First out (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 Flow Statements.

v) Depreciation :Depreciation has been provided on straight line method as per the rates prescribed in Schedule XIV to the CompaniesAct, 1956 on all the assets of the company. Depreciation on the additions made during the year has been providedproportionately for the period of use.

vi) Revenue Recognition:The company recognises sale of goods as they are dispatched to customers and any significant uncertainty as to itsultimate realisation or collection does not exist. Sales comprise amounts invoiced for goods sold inclusive of excise dutybut net of sales tax, returns and trade discounts.

vii) Fixed AssetsFixed Assets are stated at their historical cost of acquisition or construction less accumulated depreciation except land.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 assetsand liabilities outstanding at the year end denominated in Foreign Currency is translated at the year-end closing rates.Gains and/losses resulting from the settlement of such transactions and from the translation of monetary assets andliabilities are recognized in the profit and loss account. Exchange differences attributable to the acquisition of the fixedassets, 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 the lower of costand fair value. Non current investments are stated at cost. A provision for diminution is made to recognise a decline, otherthan temporary, in the value of non current investments.

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 Schemes in line with

respective statutes and regulations in force on accrual basis and charged to Profit and Loss Account 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, impact of the same on P&Lis not ascertained.


79

xi) Borrowing cost:Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of thecost of such assets in accordance with Accounting Standard 16 on Borrowing Costs. A qualifying asset is one thatnecessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

xii) Segment InformationIn terms of Accounting Standard 17, the Company has only one reportable segment viz. sponge Iron. Hence businesssegment reporting is not applicable.

xiii) Related Party DisclosureRelated party disclosures have been made in accordance with the accounting Standards on related party Disclosure (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

Bhuwalka Steel Industries Ltd. Holding Company

Suresh Kumar Bhuwalka Key Management Personnel

Ajay Kumar Bhuwalka Key Management Personnel

Ankit Bhuwalka Key Management Personnel

B) Transactions carried out with related parties referred above in ordinary course of businessDuring FY 2013-12:-

(Rs. in Lakhs)

Nature of Transactions Holding Key Management Personnel

Purchases 115.23 –

(51.10) –

Sales 20.29 –

NIL

Expenses – –

Income – –

Outstanding – Debit NIL –

Credit NIL –

xiv) Accounting Standard 19- LeasesAccounting Standard 19 is applicable only in the case of lease transactions entered into on or after 1st April; 2001. TheCompany has land on lease which has been registered in name of the company

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

xvi) TAXATIONProvision for current tax is nil during the year. The deferred tax liability is recognised, subject to the consideration ofprudence, on timing differences, being the difference between taxable incomes and accounting income that originate inone accounting period 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.

The company has reversed deferred tax liability amounting to Rs. 375,529/-

xvii). Accounting Standard 26- Intangible Assets“Accounting Standard 26 – Intangible assets” requires an enterprise to recognize an intangible asset if future economicbenefits are expected to arise from it. It also requires that such an asset should be stated after providing depreciation/ amortization over the useful life of the asset. Presently, the reporting enterprise does 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 is required 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 Para 2 of Schedule ‘18’.

04. Additional information pursuant to paragraph 3 and 4 of the Part II of Schedule VI of the Companies Act, 1956.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

Sponge M T N.A 60000* 13435 1558 25,507,933 3519 597,03,014

Iron (60000) 14631 (1155) (182,65,681) (1558) (255,07,933)


80

B. Raw Material Consumed

Particulars 31.03.2013 31.03.2012

MT Rs. MT Rs.

A) Iron ore/pellets/coal 42,266 105,374,373 64,401.60 15,58,79,943

C. Trade Purchase

Particulars 31.03.2013 31.03.2012

MT Rs. MT Rs.

Sponge iron NIL NIL Nil NilOther Items 3,766 15,57,19,906 90 42,34,285

D. Sale of Finished Goods and Others

Particulars 31.03.2013 31.03.2012

MT Rs. MT Rs.

Sponge iron 11473 26,49,36,261 14474 22,18,27,421Traded goods - MS Steel 3776 15,60,18,645 90 4,242,858Other Items – 118,50,150

E. Consumption

Particulars 31.03.2013 31.03.2012

MT Rs. MT Rs.

a) Imported Nil Nilb) Indigenous 100 105,374,373 100 15,58,79,943

Total 100 105,374,373 100 15,58,79,943ii) Stores & Spares

a) Imported Nil Nil Nil Nilb) Indigenous 100 1,74,06,263 100 2,09,30,288

Total 100 1,74,06,263 100 2,09,30,288

*As certified by managementF. Earning in Foreign Currency - NIL

G. Expenditure in Foreign Currency - NIL


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

IIn terms of our report attached

For and on behalf of the Board As per Report of even date(Suresh Kumar Bhuwalka) (Ajay Kumar Bhuwalka) for ASR Associates

Director Director Chartered Accountants(CA A. S. Rafiq )

Place : Bangalore ProprietorDate : 1st August, 2013 Membership No.204646

FRN No. 8877S


81

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2013

2012-13 2011-12 Rs. Rs.

CASH FLOW FROM OPERATING ACTIVITIES:

Net Profit before tax and extraordinary items 8,83,776 (5,59,02,335)

Adjustments for:

Deferred Revenue Expenses written off/adjusted 48,960 8,640

Depreciation 1,52,48,597 1,53,04,213

Profit on sale of Investment – –Rent Received – –Interest expense 3,99,88,639 4,22,17,329

Loss on Sale of Fixed Assets – 17,009

provision 51,95,027

Provision for Doubtful Debts/Advances Written back –Dividend Income –Operating Cash Profit before working capital changes 6,13,64,999 16,44,856

Adjustments for:

Trade Receivables and short term advances 5,22,22,952 10,81,47,515

Inventories (2,99,22,494) 59,11,648

Trade Payables and other Liabilities (1,68,81,483) (6,67,45,348)

CASH FLOW FROM OPERATIONS 6,67,83,975 4,89,58,671

Direct Taxes Paid/(refund) (54,17,799) (51,95,027)

Net Cash from Operating Activities 6,13,66,176 4,37,63,644

CASH FLOW FROM INVESTING ACTIVITIES:

Increase/Decrease in Fixed Assets(Net) 5,73,344 17,001

(Increase)/Decrease in Investments –Net cash used in Investing Activities 5,73,344 17,001

CASH FLOW FROM FINANCING ACTIVITIES:Increase/(Decrease) in Borrowings (2,39,45,218) (4,47,308)

Increase/(Decrease) in Unsecured Loans

Preference Dividend & Tax on Dividend Paid – –Interest paid (3,99,88,639) (4,22,17,329)

Net cash from Financing Activities (6,39,33,857) (4,26,64,637)


Opening Balance of Cash & Cash Equivalents 61,55,034 50,39,028

Closing Balance of Cash & Cash Equivalents 41,60,697 61,55,034




FRN No. 8877S


82

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

CIN No. L2710KA2003PTC032717 State Code 0 8

Balance Sheet Date 31 03 2013

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 4 8 8 1 0 7 Total Assets 4 8 8 1 0 7

SOURCES OF FUNDSPaid-up Capital 3 0 0 0 0 Reserves & Surplus 9 8 4 7 0

Secured Loans 2 1 2 4 6 3 Unsecured Loans 4 1 7 8 6

Share forfeited money N I L Deferred Tax laibility 2 5 6 5 1

APPLICATION OF FUNDS

Net Fixed Assets 1 9 1 4 4 2 Investments 1 7

Net Current Assets 2 1 6 8 8 2 Misc. Expenditure 2 8

Accumulated Losses N I L

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

Turnover 3 9 7 5 2 8 Total Expenditure 3 9 6 6 4 4

Profit before tax 8 8 4 Profit after tax 2 8 5

Earning Per Share in(Rs.) 0 . 9 5 Dividend rate % N A

V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY(As per monetary terms)Item Code No.(ITC Code) 72031000Product Description Sponge Iron




FRN No. 8877S


83

BHUWALKA STEEL INDUSTRIES LIMITEDRegistered Office: No.71, III Cross, Residency Road, Bangalore: 560 025

PROXY FORM

D.P ID No. Client ID No.

Regd. Folio No.

I/We of being a Member

Members of BHUWALKA STEEL INDUSTRIES LIMITED, hereby appoint of

or failing him/her of as my/our proxy to vote for me/us

on my/our behalf at the 31st ANNUAL GENERAL MEETING of the Company to be held on Saturday, the28 th December, 2013, at 12.30 P.M. at Hotel Woodlands, No. 5, Raja Ram Mohan Roy Road,Bangalore- 560 025. and at any adjournment(s) thereof.

Signed this ___________ day of _____________ 2013.

Signature ______________________

Note : This form, in order to be effective, should be duly stamped, completed and signed and must be depositedat the Registered Office of the Company, not less than 48 hours before the meeting.

BHUWALKA STEEL INDUSTRIES LIMITEDRegistered Office No. 71, III Cross, Residency Road, Bangalore - 560 025

ATTENDANCE SLIP

31st ANNUAL GENERAL MEETING - 28TH DECEMBER, 2013

D.P ID No. Client ID No.

Regd. Folio No. No. of Shares held

I Certify that I am a registered shareholder/proxy for the registered shareholder of the Company. I hereby record

my presence at the 31st ANNUAL GENERAL MEETING of the Company to be held on Saturday, the 28th December,

2013, at 12.30 P.M. at Hotel Woodlands, No. 5, Raja Ram Mohan Roy Road, Bangalore- 560 025.

Member’s/Proxy’s name in Signature of Member/ProxyBLOCK Letters

Note: Please fill in this attendence slip and hand it over at the ENTRANCE OF THE MEETING HALL. MEMBERS ARE REQUESTED TO BRING THEIR COPIES OF THE ANNUAL REPORT TO THE MEETING

Affix

Revenue

Stamp


84

BOOK - POST

If Undelivered Please Return to:

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

To,

Date post:	01-May-2020
Category:	Documents
Upload:	others
View:	16 times
Download:	0 times

ANNUAL REPORT - BSE Ltd. (Bombay Stock Exchange)€¦ · BHUWALKA STEEL INDUSTRIES LIMITED 4 NOTICE...

Documents