ANNUAL REPORT 201920
CONSOLIDATE SCALE EXCEL TABLE OF CONTENTS
CORPORATE INFORMATION ...... 2 3
STATUTORY REPORTS ...... 6 BOARD’S REPORT ANNEXURES TO BOARD’S REPORT MANAGEMENT DISCUSSION AND ANALYSIS CORPORATE GOVERNANCE REPORT BUSINESS RESPONSIBILITY REPORT DIVIDEND DISTRIBUTION POLICY
FINANCIAL STATEMENTS ...... 68 INDEPENDENT AUDITOR’S REPORT ON STANDALONE FINANCIAL STATEMENTS STANDALONE FINANCIAL STATEMENTS INDEPENDENT AUDITOR’S REPORT ON CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS
NOTICE ...... 193
ANNUAL GENERAL MEETING MONDAY, SEPTEMBER 21, 2020 3:00 PM IST REGISTERED OFFICE Ground Floor, Mira Corporate Suites, Plot No. 1 & 2, Ishwar Nagar, Mathura Road, New Delhi – 110065 Tel: 91-11-39194000 Fax: 91-11-41010050 Email: [email protected] Website: www.tatasteeelbsl.co.in
CORPORATE OFFICE Jasmine Tower, Ground & 1st Floor, 31 Shakespeare Sarani, Kolkata – 700071 West Bengal Tel: 91-33-40859600
PLANT LOCATIONS
Tata Steel BSL Limited, Dhenkanal Tata Steel BSL Limited, Sahibabad P.O. Shibapur, Meramandali, 23, Site-IV, Sahibabad Industrial Area Distt.: Dhenkanal – 759 121 Distt.: Ghaziabad – 201 010 Odisha, INDIA Uttar Pradesh, INDIA
Tata Steel BSL Limited, Khopoli Tata Steel BSL Limited, Hosur Village – Nifan, Savroli, Kharpada Road, Plot No-104/3, SIPCOT, Industrial Complex Taluka-Khalapur, SIPCOT Phase – 1, Hosur, Near Khopoli Distt: Raigad – 410 203 Tamil Nadu – 635126, INDIA Maharashtra, INDIA
CORPORATE REGISTRAR AND TRANSFER AGENT IDENTIFICATION NUMBER RCMC Share Registry Pvt. Ltd. B -25/1, First Floor L74899DL1983PLC014942 Okhla Industrial Area Phase II New Delhi – 110 020 Tel: 91-11-2638 7320, 2638 7321 STATUTORY AUDITORS Fax: 91-11-2638 7322 M/s Walker Chandiok & Co LLP Email: [email protected] (Firm Registration No. 001076N/N500013) Website: www.rcmcdelhi.com
CAUTIONARY STATEMENT Statements in this Report describing the Company’s objectives, projections, estimates, expectations may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include economic conditions affecting demand and/or price conditions in the domestic and overseas markets in which the Company operates, changes in Government regulations, tax laws and other statutes and other incidental factors. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent developments, information or events. CORPORATE INFORMATION
BOARD OF DIRECTORS (As on August 27, 2020)
MR. T V NARENDRAN Non-executive Director and Chairman
MR. KRISHNAVA DUTT Independent Director
MS. NEERA SAGGI Independent Director
MR. SHASHI KANT MAUDGAL Independent Director
MR. SRIKUMAR MENON Independent Director
MR. KOUSHIK CHATTERJEE Non-executive Director
MR. ANAND SEN Non-executive Director
MR. RAJEEV SINGHAL Managing Director
KEY MANAGERIAL PERSONNEL
MR. RAJEEV SINGHAL Managing Director
MR. SANJIB NANDA Chief Financial Officer
MS. NISHA ANIL SETH Company Secretary & Compliance Officer PROMOTING INCLUSIVE GROWTH AROUND OUR OPERATIONS
Tata Steel BSL Limited believes in standing shoulder to shoulder with the members of the communities in which it operates. As a part of its CSR initiatives several socio-economic programmes have been implemented
by the Company around its operational locations in the eld of education, women empowerment, health services, livelihood, rural infrastructure, agriculture and sports. STATUTORY REPORTS AND FINANCIAL STATEMENTS
BOARD’S REPORT ...... 6 ANNEXURE 1 PARTICULARS OF REMUNERATION ...... 15 ANNEXURE 2 FORM AOC 2 ...... 17 ANNEXURE 3 INFORMATION ON SUBSIDIARIES OR ASSOCIATES INCLUDING JOINT VENTURES ..... 18 ANNEXURE 4 SECRETARIAL AUDIT REPORT ...... 20 ANNEXURE 5 EXTRACT OF ANNUAL RETURN ...... 23 ANNEXURE 6 PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO ...... 31
MANAGEMENT DISCUSSION AND ANALYSIS ...... 34 CORPORATE GOVERNANCE REPORT ...... 42 BUSINESS RESPONSIBILITY REPORT ...... 57 DIVIDEND DISTRIBUTION POLICY ...... 66
FINANCIAL STATEMENTS STANDALONE ...... 68 CONSOLIDATED ...... 128
NOTICE ...... 193 BOARD’S REPORT
To the Members,
Your Directors take pleasure in presenting the 37th Annual Report on the business and operations of Tata Steel BSL Limited (‘Company’), along with the summary of standalone and consolidated financial statements for the year ended March 31, 2020.
A. FINANCIAL RESULTS (` crore) Particulars Standalone Consolidated 2019-20 2018-19 2019-20 2018-19 Gross revenue from operations 18,199.14 20,891.60 18,199.14 20,891.60 Total expenditure before finance cost, depreciation (net of 15,896.30 17,093.04 15,848.97 17,094.29 expenditure transferred to capital) Operating Profit 2302.84 3,798.56 2,350.17 3,797.31 Add: Other income 106.51 132.44 70.50 132.44 Profit / (Loss) before finance cost, depreciation, exceptional items 2,409.35 3,931.00 2,420.67 3,929.76 and taxes Less: Finance costs 1,695.91 3,752.18 1,654.77 3,752.18 Profit / (Loss) before depreciation, exceptional items and taxes 713.44 178.82 765.90 177.58 Less: Depreciation 1,431.63 1,441.74 1,463.41 1,441.74 Profit / (Loss) before share of profit / (loss) of joint ventures & (718.19) (1,262.92) (697.51) (1,264.16) associates, exceptional items & tax Share of profit / (loss) of Joint Ventures & Associates - - - - Profit / (Loss) before exceptional items & tax (718.19) (1,262.92) (697.51) (1,264.16) Add / (Less): Exceptional Items (Refer note) 69.02 2,976.01 69.02 2,976.01 Profit / (Loss) before taxes (649.17) 1,713.09 (628.49) 1,711.85 Less: Tax Expense / (income) - - - - (A) Profit/(Loss) after taxes (649.17) 1,713.09 (628.49) 1,711.85 (B) Net Profit / (loss) for the period (649.17) 1,713.09 (628.49) 1,711.85 Total Profit / (Loss) for the period attributable to: Owners of the Company - - (628.49) 1,711.89 Non-controlling interests - - - (0.04) (C) Total other comprehensive income / (Loss) (7.47) 5.17 (8.63) 5.04 (D) Total comprehensive income for the period [ B + C] (656.64) 1,718.26 (637.12) 1,716.89
Notes: The exceptional items include: 1. Provision for impairment on property, plant & equipment (` crore) Provision for impairment of property, plant and equipment `(84.58) Particulars Year ended Year ended crore; previous year `(183.27) crore. March 31, 2020 March 31, 2019 2. Exceptional items recognized in previous year financial statements (i) Effects of implementation 153.60 3159.28 of resolution plan (refer Pursuant to the order dated May 15, 2018, of the National note below) Company Law Tribunal, Principal Bench, New Delhi (‘NCLT’) under the corporate insolvency resolution process of the Insolvency (ii) Provision for impairment (84.58) (183.27) and Bankruptcy Code, 2016, Bamnipal Steel Limited, a wholly in property, plant & owned subsidiary of Tata Steel Limited acquired the Company on equipment and other May 18, 2018. assets (refer note below) Pursuant to the Resolution Plan submitted by Tata Steel Limited Total 69.02 2976.01 and as approved by the NCLT vide its order dated May 15, 2018, the Company redeemed 1,82,59,885, 10% Redeemable Cumulative
6 Statutory Reports Financial Statements
Preference shares of `100 each (amounting to `2,425.57 crore) plan under exceptional items taken in last year against exceptional for a total sum of `4,700/-i.e. `100 per preference share holder. income booked in the previous year. The basic and diluted earnings per The gain arising out of the redemption was recorded as an share stood at `(5.94) for FY20. There was no change in the nature of exceptional item in the financial results for the financial year ended business during FY2019‑20. March 31, 2019. D. CAPEX AND LIQUIDITY B. IMPACT OF COVID-19 During the year, the Company has repaid `382 crore to capital creditors Members are aware of the novel coronavirus (COVID-19) outbreak (operational creditors covered under the approved resolution plan). which was declared a pandemic by the World Health Organization in Further, the Company spent `238 crore on capital projects, largely towards February 2020. The outbreak of the COVID-19 pandemic has led to an balancing facilities and essential sustenance capital projects. unprecedented health crisis and has disrupted economic activities and trade globally. As on March 31, 2020, the liquidity position of the Company was `724 crore [excluding Fixed Deposit(s) (‘FD’) under Lien of `129 crore for As the outbreak spread in India, the Company initiated measures to closely opening of Letters of Credit with Banks] as against `1,872 crore as on monitor the situation to safeguard the health, welfare and safety of all its March 31, 2019 (excluding FDs under Lien of `157 crore). employees across locations. In mid-March 2020, the Company started advising its employees to work from home wherever feasible. Policies and Further, the Company has undrawn borrowing facilities amounting to directives related to working from home and IT infrastructure support `954 crore, at the end of the reporting year to which the Company had were implemented almost on a real-time basis to enable our employees access. to shift seamlessly to this new method of working. E. DIVIDEND The Government of India had imposed a stringent nationwide lockdown The Company has incurred a net (loss) of `(649.17) crore during the with effect from March 25, 2020 which severely impacted manufacturing financial year ended March 31, 2020. The Board of Directors (‘Board’) does activities. Pursuant to the announcement of the nationwide lockdown and not recommend any dividend to the preference and equity shareholders the directives issued by the Central and the various state governments, the of the Company for the financial year ended March 31, 2020. Company suspended operations at its downstream facilities and service centres at Khopoli, Chakan and Aurangabad in Maharashtra, Sahibabad in F. TRANSFER TO RESERVES Uttar Pradesh, Manesar in Haryana and Ludhiana in Punjab. In view of the losses incurred during the year under review, no amount Though the Steel sector was exempt from the lockdown measures, has been transferred to General Reserve. However, the losses have been demand was affected as key steel consuming sectors struggled to operate carried forward to Reserves and Surplus account. due to working capital constraints, shortage of manpower and logistical issues. As a result, the steel making facilities at Angul continued to G. MANAGEMENT DISCUSSION AND ANALYSIS operate albeit significantly below capacity and with minimum number of The Management Discussion and Analysis as required in terms of the workforce. SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 The health and safety of the workforce (including contract labour) being (‘Listing Regulations’) forms part of the Annual Report. the topmost priority, the Company is focusing on running its operations H. MATERIAL DEVELOPMENTS DURING THE FINANCIAL YEAR safely and efficiently so it can continue to serve its customers. Majority of our offices continue to operate with minimal or no staff. The Company The following key events took place in the Company during FY2019-20: has put in place measures to ensure the well-being of its employees by re-enforcing the importance of social distancing, safe working practices (i) Composite Scheme of Amalgamation of Tata Steel BSL Limited across our plants and general personal hygiene. The Company is also (‘TSBSL’ or ‘Company’) and Bamnipal Steel Limited into and with focused on conserving cash and managing liquidity to face any future Tata Steel Limited disruption in business conditions. The Board of Directors at its meeting held on April 25, 2019, approved Continuous communication to spread awareness about the pandemic is a Composite Scheme for Amalgamation of TSBSL and Bamnipal Steel being ensured. The Company is also providing necessary support to all Limited, a wholly owned subsidiary of Tata Steel Limited and TSBSL’s employees affected by the pandemic. The Company will implement a holding company into and with Tata Steel Limited (‘Scheme’), phased and safe return-to-work plan as and when lockdown restrictions subject to the requisite statutory and regulatory approvals. are completely relaxed and taking into account the situation. The Company has received ‘No Observation Letters’ from both C. FINANCIAL PERFORMANCE AND STATE OF AFFAIRS BSE Limited and the National Stock Exchange of India Limited on August 26, 2019. The Company filed its first motion application During the year, the total turnover from operations was `18,199.14 crore in September 2019 with the National Company Law Tribunal, (previous year: `20,891.60 crore). The decrease in turnover was mainly due New Delhi, for necessary directions. Eventually the Company moved to an unfavorable rate and sales mix variance amounting to `2,601 crore a transfer application which was allowed by the Hon’ble NCLT, New and `433 crore respectively. Delhi to transfer the case from Principal Bench, New Delhi to NCLT Such unfavorable variance is partly offset by a favorable quantity variance Mumbai on grounds of administrative convenience as the registered amounting to `423 crore (approx). offices of both Tata Steel Limited and Bamnipal Steel Limited are located in Mumbai. During the year, the Company recorded a net loss of `(649.17) crore (previous year: Net Profit `1,713.09 crore). This is primarily due to the The Amalgamation is subject to approvals from shareholders and reduction in finance cost in FY20 and effects of the approved resolution other regulatory authorities.
7 (ii) Acquisition of Bhushan Energy Limited (now known as ‘Angul I. CREDIT RATINGS Energy Limited’) There has been no change in the credit ratings assigned to the Company’s In accordance with the applicable provisions of the Insolvency and facilities during the year. The details of the credit ratings of the Company Bankruptcy Code, 2016 the corporate insolvency resolution process are available on its website www.tatasteelbsl.co.in (‘CIRP’) of Bhushan Energy Limited (now known as ‘Angul Energy J. MATERIAL CHANGES POST CLOSURE OF FINANCIAL YEAR Limited’) (‘AEL’) was initiated by its financial creditors. The petition for initiating the CIRP against AEL was admitted by the National There are no material changes and commitments, affecting the financial Company Law Tribunal, Principal Bench, New Delhi (‘ NCLT’) on position of the Company which have occurred between the end of the January 08,2018. The NCLT vide its order dated May 30, 2019 (‘NCLT financial year to which the financial statements relate i.e., March 31, 2020 Order’), approved the Resolution Plan submitted by Tata Steel and the date of this Report. Limited for the revival of AEL. Pursuant to the NCLT Order and the K. CORPORATE SOCIAL RESPONSIBILITY (CSR) approved resolution plan, the Company (an indirect subsidiary of Tata Steel Limited) acquired AEL on June 01, 2019 (‘Acquisition’). Your Company is committed towards improving the quality of life of the Prior to the Acquisition, AEL was an Associate of the Company. communities in the areas it operates, through its various CSR initiatives.
In terms of the approved resolution plan, the Company subscribed The Company has in place a Corporate Social Responsibility and to 1,00,00,000 (One Crore) equity shares of AEL bearing face Sustainability Committee (‘CSR&S Committee’ or ‘Committee’) and a value `10/- (Rupees Ten) per share amounting to `10 crore, which Corporate Social Responsibility & Sustainability Policy (‘CSR&S Policy’). increased the Company’s stake to 99.99% of the total equity share The CSR&S Policy provides guidelines to conduct CSR activities of the capital of AEL. The existing promoters of AEL were reclassified as Company. The CSR&S Policy enables the Committee to assist the Board retail shareholders. in formulating, monitoring and reviewing the CSR&S strategy and the (iii) Application for Shifting of Registered Office amount of expenditure to be incurred on various CSR&S activities. Further, the CSR&S Policy provides for the Committee to review and recommend The members of the Company at the Extraordinary General Meeting to the Board the annual budget for CSR&S. held on March 11, 2019 had approved the shifting of the Registered Office of the Company from the National Capital Territory of Delhi The CSR & S Policy is available on the website of the Company to the State of Maharashtra. The Company has made the necessary http://tatasteelbsl.co.in/Investor%20Relations%20pdf/Policies/CSR%20 applications with the Regional Director, North, Ministry of Corporate and%20Sustainability%20Policy.pdf Affairs and other regulatory authorities for the same. Considering the performance of the Company in the previous 3 (three) (iv) Quashing of Summons and Criminal Complaint against the financial years, the Company was not mandatorily required to incur any Company and its subsidiary, Angul Energy Limited (formerly expenditure towards CSR&S activities during the FY2019-20. However, known as ‘Bhushan Energy Limited’) as a good corporate citizen, an amount of `9.20 crore was spent in FY2019-20 towards various CSR&S activities. These activities are in The Ministry of Corporate Affairs, Government of India, had ordered alignment with the focus initiatives of the Tata Group that lay emphasis an investigation into the affairs of the Company by Serious Fraud on four thrust areas – Education, Health, Livelihoods and Rural and Urban Investigation Office(‘SFIO’) through an order dated May 3, 2016. infrastructure. During the year under review there were no changes made The Company had received a summons by the Special Judge to the CSR&S policy. (Companies Act) / Additional Sessions Judge – 03, Dwarka Courts, New Delhi (‘Special Court’), to appear before the Special Court L. CORPORATE GOVERNANCE in relation to a criminal complaint (‘Complaint’) filed by the SFIO The Corporate Governance Report for FY2019-20 as stipulated under against the Company. Bhushan Energy Limited (now known as the Listing Regulations forms part of the Annual Report. We consider it ‘Angul Energy Limited’) (‘AEL’), a subsidiary of the Company, was our inherent responsibility to disclose timely and accurate information also named as an accused in relation to the Complaint and had also regarding the operations and performance, leadership and governance of received summons in relation to the Complaint to appear before the the Company. Special Court. The Complaint and summons arose from the investigation initiated The Certificate from a Practicing Company Secretary, on compliance with by the SFIO into the affairs of the Company and AEL relating to the corporate governance norms forms part of the Corporate Governance issues that had arisen prior to the acquisition of the Company Report. and AEL by Tata Steel Limited through the corporate insolvency 1. Board Meetings resolution process i.e. when the Company and AEL were controlled by ex-promoters and ex-management personnel. The Board met five (5) times during the year, the details of which are given in the Corporate Governance Report. The intervening gap The Company and AEL filed two separate writ petitions before the between the meetings was within the period as prescribed under Delhi High Court (‘High Court’) challenging the Complaint, order the Companies Act, 2013 (‘Act’) and the Listing Regulations. of cognizance and the summons issued by the Special Court against TSBSL and AEL in terms of the applicable provisions of the IBC 2. Selection of New Directors and Board Membership Criteria and other applicable legal provisions. The High Court was pleased The Nomination and Remuneration Committee (‘NRC’) works with to allow the Writ Petition(s) and set aside the Complaint, Order of the Board to identify the requisite skills and expertise of Board Cognizance and the Summons as were issued against the Company members in order to ensure a Board with diverse backgrounds and AEL.
8 Statutory Reports Financial Statements
and wide experience in business, industry, government, and ■ Structure, composition and role clarity of the Board and public service. Characteristics expected of all Directors include Committees; independence, integrity, high personal and professional ethics, ■ Effectiveness of the deliberations and process management; sound business judgement, ability to participate constructively in deliberations and willingness to exercise authority in a collective ■ Board/Committee culture and dynamics; manner. ■ Quality of relationship between Board Members and the The Company has in place a Policy on Appointment and Removal of Management; Directors (‘Policy’). ■ Degree of fulfillment of key responsibilities towards The objective of the Policy is to lay down criteria and terms and stakeholders (by way of monitoring corporate governance conditions with regards to the identification of persons who are practices, participation in the long-term strategic planning, qualified to become Directors (executive, non-executive and etc.); independent) including their qualifications, positive attributes and ■ Extent of co-ordination and cohesiveness between the Board independence as well as to lay down criteria to identify persons who and its Committees; may be appointed as the Senior Management of the Company. ■ Quality of relationship between Board Members and the The salient features of the Policy are: Management. i. It acts as a guideline for matters relating to appointment and The above criteria are broadly based on the Guidance Note on Board re-appointment of directors. Evaluation issued by the Securities and Exchange Board of India on ii. It contains guidelines for determining qualifications, positive January 5, 2017. attributes for directors, and independence of a Director. The Chairman of the Board had one-on-one meetings with the iii. It lays down the criteria for Board Membership Independent Directors and the Chairman of the Nomination and Remuneration Committee had one-on-one meeting with the iv. It sets out the approach of the Company on board diversity Executive and Non-Executive Directors. These meetings were intended to obtain Directors’ inputs on effectiveness of the Board/ v. It lays down the criteria for determining independence of a Committee processes. director, in case of appointment of an Independent Director The Board considered and discussed the inputs received from the The Policy is available on the website of the Company at http:// Directors. Further, the Independent Directors at their meeting held tatasteelbsl.co.in/Investor%20Relations%20pdf/Policies/Policy%20 on May 20, 2020 reviewed the performance of the non-Independent on%20appointment%20and%20removal%20of%20Directors.pdf Directors, the Board as a whole and Chairman of the Board after During the year under review, there has been no change to the taking into account views of the Executive Director and other Policy. Non-Executive Directors.
3. Familiarization Programme for Independent Directors 5. Remuneration Policy for the Board and Senior Management
All new Directors, including the Independent Directors (‘IDs’) In terms of the provisions of Section 178(3) of the Act, the Company inducted to the Board are provided orientation on the Company’s has in place a policy for Remuneration for Directors, Key Managerial business operations, products, organization structure as well Personnel and all other employees of the Company (‘Remuneration as the Board constitution and its procedures through various Policy’). As part of the policy, the Company strives to ensure that: programmes / presentations. a. The level and composition of remuneration is reasonable At various Board meetings during the year, presentations were and sufficient to attract, retain and motivate Directors of the made to the Board on safety, health and environment, company quality required to run the Company successfully; policies, changes in the regulatory environment applicable to the b. Relationship of remuneration to performance is clear and company, the industry, market and customers, operations and other meets appropriate performance benchmarks; and relevant matters. c. Remuneration to Directors, KMP and senior management During the year under review, no new Independent Directors involves a balance between fixed and incentive pay reflecting were inducted to the Board. Details of orientation given to short and long-term performance objectives appropriate to the Independent Directors in the areas of business, strategy, the working of the Company and its goals. governance, operations, safety, health, environment are available on the website of the Company at http://tatasteelbsl.co.in/Investor%20 The Remuneration Policy lays down parameters on which Relations%20pdf/OtherImpDocuments/Familiarisation%20 remuneration is decided and paid to the Managing Director, Programme%20for%20Independent%20Directors.pdf Executive Directors, KMPs and employees of the Company.
4. Board Evaluation The salient features of the policy are as below:
The Board has carried out an evaluation of the effectiveness of its a. It lays down the parameters on which remuneration (including functioning, that of the Committees and of individual Directors, commission and sitting fees) is to be paid to Independent pursuant to the provisions of the Act and Listing Regulations. Directors and Non-Executive Directors of the Company. Feedback from Directors was sought on various parameters b. I t lays down parameters on which remuneration (including including: fixed salary, benefits and perquisites, bonus/performance
9 linked incentives and retirement benefits) are to be paid Company effective April 30, 2019. Based on the recommendation to Managing Director, whole-time directors, KMPs and of the Nomination and Remuneration Committee, the Board of employees of the Company. Directors at its meeting held on April 25, 2019, approved the c. I t lays down the parameters for remuneration payable to appointment of Ms. Nisha Anil Seth as the Company Secretary and Director for services rendered in other capacity. Compliance Officer of the Company effective May 1, 2019. The Remuneration Policy is available on the website of the Pursuant to the provisions of Section 203 of the Act, the Key Company at http://tatasteelbsl.co.in/Investor%20Relations%20 Managerial Personnel of the Company as on the date of this Report pdf/Policies/Remuneration%20Policy%20of%20directors%20 are as under: KMPs%20&%20Employees.pdf. There has been no change in the Remuneration Policy during the year. i. Mr. Rajeev Singhal - Managing Director; 6. Particulars of Employees ii. Mr. Sanjib Nanda – Chief Financial Officer; and Disclosures pertaining to remuneration and other details as iii. Ms. Nisha Anil Seth – Company Secretary & Compliance required under Section 197(12) of the Companies Act, 2013, read Officer. with Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed The remuneration and other details of the Key Managerial Personnel to this Report as Annexure - 1. Remuneration is as per the for FY2019-20 are provided in Extract of the Annual Return which Remuneration Policy of the Company. forms part of this Report. 7. Independent Directors’ Declaration 9. Audit Committee The Company has received the necessary declarations from each The Audit Committee comprises Mr. Krishnava Dutt (Independent of its Independent Directors in accordance with Section 149(7) Director & Chairman of Audit Committee), Ms. Neera Saggi of the Act, read with Regulations 16(1)(b) and 25(8) of the Listing (Independent Director), Mr. Srikumar Menon (Independent Director) Regulations, confirming that they meet the criteria of independence and Mr. Koushik Chatterjee (Non – Executive Director). as laid out in Section 149(6) of the Act and Regulations 16(1)(b) and 25(8) of the Listing Regulations. The Audit Committee met 5 (Five) times during the year. The details In the opinion of the Board, there has been no change in the of the meetings held and attendance of Members during the year circumstances which may affect their status as Independent are given in the Corporate Governance Report. Directors of the Company and the Board is satisfied of the integrity, The Audit Committee has adopted a Charter for its functioning. expertise, and experience [including proficiency in terms of Section The Company Secretary acts as the Secretary to the Committee. 150(1) of the Act and applicable rules thereunder] of all Independent During the year under review, there were no instances when the Directors on the Board. In terms of Section 150 of the Act read recommendations of the Audit Committee were not accepted by with Rule 6 of the Companies (Appointment and Qualification of the Board. Directors) Rules, 2014, Independent Directors of the Company have undertaken requisite steps towards the inclusion of their names in The primary objective of the Audit Committee is to monitor and the data bank of Independent Directors maintained with the Indian provide effective supervision of the Management’s financial Institute of Corporate Affairs. reporting process, to ensure accurate and timely disclosures, with The Independent Directors have complied with the Code for the highest levels of transparency, integrity and quality of financial Independent Directors prescribed in Schedule IV to the Act. reporting. 8. Directors and Key Managerial Personnel 10. Internal Financial Control Systems
The shareholders at the Annual General Meeting of the Company The Board of Directors of the Company is responsible for ensuring held on September 06, 2019 approved the re-appointment of that Internal Financial Controls have been laid down in the Company Mr. T V Narendran as a Director of the Company liable to retire by and that such controls are adequate and operating effectively. The rotation. Internal Financial Controls are based on the Tata Code of Conduct, Re-appointment of Director retiring by rotation policies and procedures adopted by the Management, corporate In accordance with the provisions of the Act, Mr. Koushik Chatterjee strategies, management reviews and the risk management (DIN: 00004989) will retire at the ensuing Annual General Meeting framework. (‘AGM’) and being eligible, seeks reappointment. The Board The Company’s Internal Financial Controls are commensurate with recommends his re-appointment. the nature of its business, the size, and complexity of its operations The necessary resolutions for re-appointment of Mr. Koushik and such Internal Financial Controls with reference to the Financial Chatterjee (DIN: 00004989) form part of the Notice convening Statements are adequate and operating effectively. the ensuing AGM scheduled to be held on September 21, 2020 (‘Notice’). 11. Risk Management The profile and particulars of experience, attributes and skills that The Company has put in place a framework of enterprise risk qualify Mr. Chatterjee for Board membership are disclosed in the management (‘ERM’) to identify and mitigate the risks to the said Notice. objectives and operations of the Company.
Key Managerial Personnel A dedicated ERM team has been set up to deploy the ERM process During the year under review, Mr. O.P.Davra, Vice President Corporate across the Business Units. The ERM team is led by the Principal Affairs & Company Secretary superannuated from the services of the Executive Officer who acts as the Chief Risk Officer of the Company.
10 Statutory Reports Financial Statements
During the year under review, the Company has been continuously the Company’s website at http://tatasteelbsl.co.in/Investor%20 working on strengthening the ERM process and framework in the Relations%20pdf/Policies/Related%20Party%20Transactions%20 Company including facilitating the top-down risk assessment Policy.pdf process, deploying various analytical tools to analyze the risks, and 14. Disclosure as per the Sexual Harassment of Women at Workplace strengthening the integration with key functions. (Prevention, Prohibition and Redressal) Act, 2013 As per the applicable provisions of the Listing Regulations effective The Company has zero tolerance for sexual harassment at April 1, 2020, the top 500 companies as per market capitalization (as workplace. Post Acquisition in May 2018, the Company has adopted on March 31 of the previous financial year) are required to form a a revised policy on Prevention, Prohibition and Redressal of Sexual Risk Management Committee. Harassment at the Workplace, in line with the provisions of the Accordingly, on May 20, 2020, the Board of Directors based on the Sexual Harassment of Women at Workplace (Prevention, Prohibition recommendations of the Nomination and Remuneration Committee and Redressal) Act, 2013 and the Rules thereunder. approved the formation of the Risk Management Committee The Company has complied with the provisions relating to the (‘RMC’). The RMC comprises a judicious mix of independent, constitution of the Internal Committee as per the Sexual Harassment executive and non-executive directors and senior management. The of Women at Workplace (Prevention, Prohibition and Redressal) Act, Chairman of the RMC is an Independent Director. 2013. 12. Vigil Mechanism and Whistle Blower Policy During the year under review, the Company received 4 complaints The Company has in place a vigil mechanism that provides a formal of sexual harassment. All 4 complaints have been resolved by taking mechanism for the Directors, employees and vendors to approach appropriate actions and there is no pending complaint as on the date of this report. the Ethics Counselor/Chairman of the Audit Committee and make protective disclosures about the unethical behavior, actual or 15. Directors’ Responsibility Statement suspected fraud or violation of the Tata Code of Conduct (‘TCoC’), Based on the framework for internal financial controls established or ethics policy, thereby ensuring that the activities of the Company and maintained by the Company, work performed by the internal, are conducted in a fair and transparent manner. statutory, cost and secretarial auditors and external agencies The Vigil Mechanism comprises 3 (Three) policies viz., the Whistle including audit of internal financial controls over financial reporting Blower Policy for Directors & Employees, Whistle Blower Policy by the statutory auditors and the reviews performed by the for Vendors and Whistle Blower Reward and Recognition Policy Management and the relevant Board committees, including Audit for Employees. The Policy is available on our website at http:// Committee, the Board is of the opinion that, the Company’s internal tatasteelbsl.co.in/Investor%20Relations%20pdf/Policies/Vigil%20 financial controls were adequate and effective during FY2019-20. Mechanism%20%20Policy.pdf Accordingly, pursuant to the provisions of Section 134(3)(c) read During the year under review, the Company received 158 whistle with Section 134(5) of the Act, the Board of Directors, to the best of blower complaints of which 149 complaints have been resolved and its knowledge and ability, confirms that: action are underway for the pending 9 cases. During the year under a) in the preparation of the annual accounts for FY2019-20, the review, no person has been denied access to the Chairman of the applicable accounting standards have been followed and that Audit Committee. There has been no change in the Vigil Mechanism there were no material departures; and Whistle Blower Policy during the year. b) they have selected such accounting policies and applied them The Company has also adopted the Anti-Bribery and consistently and made judgments and estimates that are Anti-Corruption (‘ABAC’) and Anti-Money Laundering (‘AML’) reasonable and prudent so as to give a true and fair view of Policies. The key elements of the policies are risk assessment, third the state of affairs of the Company at the end of the financial party due diligence, training & awareness, and audit & reporting. year and of the loss of the Company for that period; The Gift and Hospitality Policy requires its employees to take the c) they have taken proper and sufficient care for the maintenance right decisions when they are offered gifts or hospitality while of adequate accounting records in accordance with the conducting business or official transactions on behalf of the provisions of this Act for safeguarding the assets of the Company. The Policy is in consonance with ABAC and AML policies. Company and for preventing and detecting fraud and other irregularities; 13. Related Party Transactions d) they have prepared the annual accounts on a going concern All related party transactions (‘RPT’) have been approved by the basis; Audit Committee. e) they have laid down internal financial controls to be followed The Company did not have any contracts or arrangements with by the Company and that such internal financial controls are related parties in terms of Section 188(1) of the Act. adequate and are operating effectively; Details of related party transactions entered into by the Company, f) they have devised proper systems to ensure compliance with in terms of Ind AS-24 are disclosed in notes to the standalone/ the provisions of all applicable laws and that such systems consolidated financial statements forming part of this Annual were adequate and operating effectively. Report. 16. Business Responsibility Report The particulars of material contracts or arrangements with related Pursuant to Regulation 34(2) of the Listing Regulations, the top parties entered by the Company during FY2019-20 are given in 1,000 listed companies (based on market capitalisation calculated as prescribed Form AOC - 2 (Annexure - 2). on March 31 of every financial year) is required to prepare a Business The policy on RPTs, as approved by the Board, is available on Responsibility Report (‘BRR’), describing the initiatives taken
11 by the Company from an environmental, social and governance A report on the performance and the financial position of the perspective, in the format as prescribed by SEBI. The BRR forms part subsidiaries, associates and joint venture as per Form AOC-1 is of the Annual Report for FY2019-20. attached to this report as Annexure - 3.
17. Subsidiaries, Joint Ventures and Associates 18. Auditors Tata Steel BSL Limited (‘Company’ or ‘TSBSL’) has 4 (four) Statutory Auditors subsidiaries in India and 4 (four) subsidiaries in Australia as on March 31, 2020. The Consolidated Financial Statements presented by the The members of the Company at the Annual General Meeting of the Company for the year ended March 31, 2020 include financial results Company held on September 25, 2018 approved the appointment of of all its subsidiaries. M/s Walker Chandiok & Co LLP, Chartered Accountants (Registration The Company has 1 (one) joint venture company as on No: 001076N/N500013) as the Statutory Auditor of the Company March 31, 2020. Pursuant to an order of Hon’ble Calcutta High Court for a period of five years commencing from the conclusion of the th th dated January 24, 2017, Andal East Coal Company Pvt. Ltd, a joint 35 AGM held on August 21, 2018 until the conclusion of the 40 venture of the Company is under liquidation. AGM of the Company to be held in the year 2023. During the year, Angul Energy Limited (formerly known as Bhushan The report of the Statutory Auditor forms part of the Annual Report. Energy Limited) (‘AEL’) was acquired by the Company under the The said report does not contain any qualification, reservation, corporate insolvency resolution process of the Insolvency and adverse remark or disclaimer. During the year under review, the Bankruptcy Code, 2016 on June 1, 2019 pursuant to the order of the Statutory Auditors did not report any matter under Section 143(12) National Company Law Tribunal, Principal Bench, New Delhi dated of the Act, and therefore no details are required to be disclosed under May 30, 2019 (‘Acquisition’). Section 134(3) (ca) of the Act. In terms of the provisions relating to statutory auditors forming part of the Companies Amendment Pursuant to the Acquisition, TSBSL holds 99.99% of the paid- Act, 2017, notified on May 7, 2018, ratification of appointment of up equity share capital of AEL. Prior to the Acquisition, AEL was Statutory Auditors at every AGM is no more a legal requirement. an Associate Company of TSBSL. As on March 31, 2020, AEL is a Accordingly, the Notice convening the ensuing AGM does not carry subsidiary of the Company. any resolution on ratification of appointment of Statutory Auditors. During the year TSBSL has entered into a tolling agreement with AEL for conversion of coal to power, where TSBSL will purchase coal and Cost Auditors AEL would act as a conversion agent. In terms of Section 148 of the Act, the Company is required Except AEL, all other subsidiaries and joint venture(s) of the to maintain cost records and have the audit of its cost records Company have not commenced operations and their contribution conducted by a Cost Accountant. Cost records are maintained by to the overall performance of the Company is insignificant. the Company as required under Section 148(1) of the Act. Based on During the year, the Company has identified two of its subsidiaries, the recommendation of the Audit Committee, the Board of Directors Bhushan Steel (Orissa) Limited (‘BSOL’) and Bhushan Steel Madhya of the Company at its meeting held on May 20, 2020, approved the Bharat Limited (‘BSMBL’) to provide Technical (O&M) and other appointment of M/s. Shome & Banerjee, Cost Accountants (Firm Services and Transactional services (Logistics, Facility management, Registration No.00001), as the Cost Auditor of the Company to etc.) to the TSBSL group. conduct Cost Audit for the year ending March 31, 2021.
BSOL and BSMBL were non-operating companies and the new In accordance with the provisions of Section 148(3) of the Act read managements in the interest of these companies, intended to with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the explore and deploy their resources towards activities that would remuneration payable to the cost auditors as recommended by the create greater value for BSOL, BSMBSL and the TSBSL group. Audit Committee and approved by the Board has to be ratified by Accordingly, the Memorandum of Association of BSOL and BSMBL the members of the Company. Accordingly, appropriate resolution was amended to the extent of amending the main business activity forms part of the Notice convening the AGM. M/s Shome & Banerjee for undertaking management, supply etc. of manpower resources have vast experience in the field of cost audit and have been thereby shifting from manufacturing category to service category. conducting the audit of the cost records of the Company since the The said amendments to the Memorandum and Articles of Acquisition. Association of BSOL and BSMBL was approved by the shareholders of these companies at the Extraordinary General Meetings of The Cost Audit Report of the Company for the Financial Year these companies held on February 10, 2020. The alteration of the ended March 31, 2019 was filed by the Company in XBRL mode on memorandum and articles was subsequently confirmed by the August 21, 2019. Ministry of Corporate Affairs. Secretarial Auditors As on date TSBSL has entered into agreements with BSOL and BSMBL for the supply of manpower for its various facilities in India. Section 204 of the Act inter-alia requires every listed company to annex to its Board’s report, a Secretarial Audit Report given in the The Company has 2 (two) associate companies as on March 31, 2020, prescribed form, by a Company Secretary in practice. viz. Jawahar Credit and Holdings Private Limited and Bhushan Capital and Credit Services Private Limited. These entities are connected The Board of Directors appointed M/s PI & Associates, Practicing with the members of previous management. Your Company does Company Secretaries, as the Secretarial Auditor to conduct the not have any visibility on the business and operations of these 2 Secretarial Audit of the Company for FY2019-20 and their report is (two) associate companies. annexed to this report as Annexure - 4.
12 Statutory Reports Financial Statements
The Management’s response on the observations raised by the remaining Rental Agreement, after the normalization of auditors in their report is clarified as under: the functioning of the Courts, which remains affected due to Covid-19 related protocols and other safety and 1. The related party transaction with Tata International Limited safe distancing guidelines issued from time to time since amounting to `5.95 crore was inadvertently entered into by the imposition of nationwide lock down. the Company and the same was subsequently ratified by the Audit Committee. ii. Prior to conclusion of the CIRP, the Company had entered into a lease agreement (‘Vistrat Lease 2. A separate meeting of Independent Directors for FY20 was Agreement’) with Vistrat Real Estates Pvt. Ltd (‘Vistrat’). scheduled in the last week of March 2020 and the Performance The Company terminated the Vistrat Lease Agreement Evaluation process was initiated by the Company in early on June 11, 2018 and the leased premises was vacated March 2020. However, due to the sudden outbreak of COVID-19 on September 10, 2018. The Hon’ble National Company pandemic and the lockdown imposed by the Central and State Law Tribunal, New Delhi (‘NCLT’) in it order dated Governments, the said meeting and performance evaluation February 26, 2019 has noted that the Vistrat was a related process could not be held / concluded and was deferred and party of the Company during the tenure of the erstwhile held and concluded on May 20, 2020. Further, the Ministry Management and transaction between the Company of Corporate Affairs vide its circular dated March 24, 2020 and Vistrat was deemed to be a preferential transaction. granted relaxations to corporates from adhering to strict The Company is in process of initiating appropriate legal timelines for statutory requirements of conducting at least 1 proceedings to recover amount as deemed due to the meeting of Independent Directors (IDs) during a Financial Year Company, after the normalization of the functioning pursuant to Para VII(1) of Schedule IV to the Act. of the Courts, which remains affected due to due to The Board has also appointed M/s PI & Associates as Secretarial Covid-19 related protocols and other safety and safe Auditor, to conduct the secretarial audit of the Company for distancing guidelines issued from time to time since the FY2020-21. imposition of nationwide lock down.
19. Other Disclosures iii. Prior to the conclusion of CIRP, the Company had entered into agreements for exports to certain non- Members are aware that the Company was acquired by Bamnipal resident entities which were connected to the erstwhile Steel Limited, a wholly owned subsidiary of Tata Steel Limited, on promoters (‘Non-Resident Entities’) and the Company May 18, 2018 under the corporate insolvency resolution process had also entered into arrangements for payment of (‘CIRP’) of the Insolvency and Bankruptcy Code, 2016 and a new commissions in relation to exports made to certain Board of Directors and new management was appointed (‘New third parties. Such contracts and commission related Management’). arrangements were not entered into on an arms’ length As previously reported, the New Management had initiated the basis. The Company has also not realized payments process of analyzing contracts entered into by your Company prior from the Non-Resident Entities for such exports within to the CIRP and had reserved right to seek appropriate remedies. the period prescribed under the applicable FEMA Due to the nature of the contracts, the New Management has not Regulations (‘Export Proceeds’). Accordingly, the New concluded their analysis into various issues faced by the Company Management had sent legal notices to such Non- and whilst efforts are ongoing to analyze the various contracts resident entities demanding recovery of the Export entered into by the Company prior to the conclusion of the CIRP, the Proceeds or such other amount as deemed due to the following may be noted: Company. The Company has recovered the full value of the Export Proceeds in one case and in relation to all (a) Your Company had identified contracts, terms of which appear other non-realized Export Proceeds, the Company has onerous and such contracts were entered into with entities either initiated appropriate proceedings or currently is connected with the members of previous management: in process of initiating appropriate legal proceedings. i. Prior to the conclusion of CIRP, the Company had (b) The Company was impleaded in a proceeding initiated by the entered into various lease/leave and license agreements Directorate of Enforcement (‘ED’) relating to the confirmation for residential and commercial/warehouse (‘Premises’) of a provisional attachment order (‘PAO’) of `50,00,000 purposes across India (‘Rental Agreements’). The (‘PMLA Proceeding’). The said amount of ` 50,00,000 was Company has terminated the Rental Agreements. The seized by the Central Bureau of Investigation (‘CBI’) in relation New Management had decided to terminate these to an allegation of payment of illegal gratification made Rental Agreements because it was of the view that these against the previous Managing Director of the Company even agreements were not entered into on arms-length basis though the charge sheet filed by the CBI before CBI Court and, in certain cases, the Premises leased/licensed under in the predicate offence did not name the company as an such Rental Agreements were not being used for the accused and/ or contain direct allegations against Tata Steel Company purposes. The Company has sent legal notices BSL Limited as a company, but only contained allegations to the lessors/licensors and has also initiated a legal against erstwhile Managing Director of BSL. Vide Order proceeding. The Company is also in process of initiating dated September 24, 2018, the Adjudicating Authority was appropriate legal proceedings in relation to the pleased to disallow the original complaint for confirmation of
13 the provisional attachment order against all the Defendants 24. Deposits including the Company. This has been disclosed in the Annual During the year, the Company has not accepted any public deposits Report of the Company for FY2018-19. The ED has filed an from the public in terms of the Act. Further, no amount on account appeal against the order of the Adjudicating Authority before of principal or interest on deposits from public was outstanding as the Appellate Tribunal, Prevention of Money Laundering Act on the date of the balance sheet. and notice has been issued. Your Company is contesting the appeal filed by the ED and has filed its response/reply to the 25. Secretarial Standards said appeal. The Company has in place proper systems to ensure compliance 20. Extract of Annual Return with the provisions of the applicable Secretarial Standards issued by The extract of Annual Return in Form MGT-9, as per the provisions The Institute of Company Secretaries of India and such systems are of the Act and Rules thereunder, is annexed to this Report as adequate and operating effectively. Annexure - 5 and the same is available on the website of the 26. Acknowledgements Company, the weblink of which is given below: Your Directors would like to place on record their appreciation http://tatasteelbsl.co.in/Investor%20Relations%20pdf/Forms/ for Senior Leadership Team and all the employees of the Extract%20of%20Annual%20Return%20as%20on%20March%20 Company for their efforts and contribution to the Company’s 31,%202020.pdf. performance. 21. Significant Material Orders passed by the Regulators or Courts Your Directors would also like to thank the Company’s customers, There have been no significant and material orders passed by the vendors, dealers, suppliers and investors for their continuous regulators or courts or tribunals impacting the going concern status support. and the Company’s operations. However, Members’ attention is drawn to the statement on contingent liabilities, commitments in Your Directors wish to take the opportunity to place on record the notes forming part of the Financial Statements. their sincere appreciation and gratitude to the Government of India, various State Governments particularly the States of Orissa, 22. Particulars of Loans, Guarantees or Investments Maharashtra & Uttar Pradesh, Government of Australia, Banks, Save as provided in the Notes to Accounts, the Company did not Financial Institutions, shareholders and concerned Government give any loans, directly or indirectly to any person (other than departments and agencies for their continued support. to employees) or to other body corporates, nor did it give any guarantee or provide any security in connection with a loan to any On behalf of the Board of Directors other body corporate or person during the financial year under review. The loans provided to employees are also in compliance with Section 186 of the Act. sd/- T. V. NARENDRAN 23. Conservation of Energy, Technology Absorption and Foreign Jamshedpur Chairman Exchange Earnings and Outgo May 20, 2020 DIN: 03083605 Details of the energy conservation, technology absorption and foreign exchange earnings and outgo are annexed to this Report as Annexure – 6.
14 Statutory Reports Financial Statements
ANNEXURE - 1 PARTICULARS OF REMUNERATION PART A: DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
(i) The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during FY2019-20 and ratio of the remuneration of each Director to the median remuneration of the employees of the Company for FY2019-20:
Name of Directors/Key Managerial Remuneration for % Increase in remuneration Ratio of remuneration to median Personnel ('KMP') Financial Year (₹Lakh) Remuneration of all employees^ 2019-20 2018-19 Independent Directors Mr. Krishnava Dutt 3.00 4.10 (36.6) 0.69 Mr. Shashi Kant Maudgal 2.45 4.15 (40.1) 0.56 Ms. Neera Saggi 3.25 5.70 (42.3) 0.75 Mr. Srikumar Menon 2.75 3.10 (11.29) 0.63 Non-Executive Directors# Mr. T. V. Narendran - - - - Mr. Anand Sen 0.55 - - - Mr. Koushik Chatterjee - - - - Executive Director and KMP Mr. Rajeev Singhal$ 318.12 158.12 - 73.13 Managing Director Mr. Sanjib Nanda$ 161.97 71.35 - 37.23 Chief Financial Officer Mr. O. P. Davra* 5.06 49.32 - - Company Secretary Ms. Nisha Anil Seth** 39.25 - - - Company Secretary & Compliance Officer
^ The ratio of remuneration to median remuneration is based on remuneration paid during the period April 1, 2019 to March 31, 2020.
# In line with the internal guidelines of the Company, no payment has been made towards commission/sitting fees to Non-Executive Directors of the Company who are in full time employment with any other Tata Company. Accordingly, remuneration paid to Mr. Anand Sen is only for part of the year, post his superannuation from Tata Steel Limited. Therefore the ratio of his remuneration to median remuneration is not comparable and increase in remuneration is not stated.
$ Remuneration of Mr. Rajeev Singhal and Mr. Sanjib Nanda for FY2018-19 is shown from May 18, 2018 and July 1, 2018 respectively i.e. the dates on which they were appointed in the Company. Hence the percentage increase in their remuneration is not comparable.
* Mr. O P Davra, superannuated from the services of the Company effective April 30, 2019 and hence remuneration paid is for part of the year. Accordingly, percentage increase in remuneration and ratio of his remuneration to median remuneration is not comparable.
** Ms. Nisha Anil Seth was appointed as Company Secretary and Compliance Officer effective May 1, 2019. Since her remuneration is only for part of the year, the ratio of her remuneration to median remuneration is not comparable and increase in remuneration is not stated. Notes: (i) Median remuneration of the employees of the Company for the financial year 2019-20:` 4.35 lakh (ii) Percentage increase in the median remuneration of employees in the financial year 2019-20:9.20% (iii) Number of permanent employees on the rolls of Company as on March 31, 2020: 5,660 (iv) During the year, there has been no exceptional increase in the remuneration to the KMPs. The average percentage increase in salary for other employees was 8.73%. (v) No variable component of remuneration was paid to the Directors. (vi) Remuneration is as per the Remuneration Policy of the Company.
15 sd/- man Chair DIN: 03083605 T. V. NARENDRAN V. T. Arcelor Mittal Arcelor Tata Steel Limited Limited Steel Tata Tata Steel Limited Steel Tata Tata Steel Limited Limited Steel Tata Last Employment Chief Financial Officer, Officer, Chief Financial On behalf of the Board of Directors On behalf of the Board NatSeel Singapore Pte. Ltd. Pte. NatSeel Singapore Executive-in-Charge (Tubes), Holcim Cement – Bangladesh Holcim Cement Vice President - Raw Materials, - Raw Materials, President Vice Chief IT - Projects, Tata Steel Limited Limited Steel Tata Chief IT - Projects, Chief – Pellet Plant, Tata Steel Limited Limited Steel Tata Plant, Chief – Pellet – Operation (KVHS), Tata Steel Limited Limited Steel Tata (KVHS),– Operation Chief Resident Exectuive-Bhubaneswar, Chief Resident Exectuive-Bhubaneswar, Chief Business Performance Enhancement Enhancement Chief Business Performance Chief (Marketing & Sales), Tata Steel Limited Steel Tata Chief (Marketing & Sales), Date of Date 18.05.2018 28.09.2015 18.05.2018 30.07.2011 01.09.2018 18.05.2018 18.05.2018 02.04.2019 01.07.2018 18.05.2018 of employment commencement commencement 46 56 51 60 50 57 44 47 55 56 Age Age (Years) 23 31 27 37 27 34 20 22 28 34 (Years) Experience Experience
Qualification B. Sc. (Engg) Electronics Sc. B. Industrial Sc.(Engg) & B. PGDM Production, B.E.(Mining), PGDM B.E.(Mining), B.E.(Metallurgy) (Engg) Electronics & Sc. B. Communication .(Mech), PGDM B.Tech CA, ICWA .(Elect), PGDM B.Tech CA .(Mech), PGDBM (Marketing) B.Tech 90.40 89.25 110.39 104.15 102.14 243.06 102.63 157.96 143.74 298.02 (₹Lakh) Remuneration Designation Executive Plant Head - Plant Executive Khopoli Senior Vice President Chief – Corporate Chief – Corporate Services Executive Director Executive Chief Information Officer Executive Principle Officer Chief Commercial Officer Chief Operating Chief Operating Officer Chief Financial Officer Chief Financial Managing Director yees mentioned above is a relative of any Director of the Company or Manager of the Company. of the Company Director of any is a relative above mentioned yees $ * Name ing the financial year 2019-20 or part thereof, was in receipt of remuneration, which was in excess of that drawn by the Managing Director or Whole-time or Director Manager and who or by the Director Managing drawn of that was in excess which remuneration, of receipt was in year 2019-20 or parting the financial thereof, *
as in receipt of remuneration during the financial year 2019-20, which, in the aggregate, was more than rupees one crore and two lakhs; and two and than rupees one crore was more year 2019-20, which, in the aggregate, during the financial of remuneration as in receipt
as in receipt of remuneration for any part of the financial year 2019-20, at a rate which, in the aggregate, was more than rupees eight lakh than rupees eight was more fifty thousand. which, in the aggregate, partrate at a any year 2019-20, of the financial for of remuneration as in receipt w w dur of the Company. of the equity shares percent not less than two children, himself or along with his spouse and dependent holds by
Mr. Kapil Modi Mr. Kawal Deep Sahni Mr. Mr. P.K Sinha P.K Mr. Mr. Manikanta Naik Mr. Mr. Debojyoti Roy Debojyoti Mr. Mr. Subodh Pandey Mr. Mr. Sanjib Nanda Mr. Mr. Rajeev Singhal Mr. Kumar Akshaya Mr. Saxena Mr. Vineet Vineet Saraf Mr.
M of the year. R Apar a) b) c) T None of the emplo Gr Gratuity Fund. to contribution excludes ` 5. 6. 7. 8. 9. 3. 1. 2. 10.
S. No. PART B: DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5(2) AND 5(3) OF THE COMPANIES (APPOINTMENT (APPOINTMENT THE COMPANIES 5(2) AND 5(3) OF WITH RULE 2013 READ ACT, THE COMPANIES AS REQUIRED UNDER SECTION 197(12) OF REMUNERATION TO PERTAINING B: DETAILS PART 2014 PERSONNEL) RULES, OF MANAGERIAL AND REMUNERATION 2019-20 Year during the Financial drawn of remuneration in terms of the Company employees ten Top * $ for part is shown remuneration Hence January with effect from respectively. 19, 2020 31, 2020 and March of the Company be employees to P K Sinha ceased and Mr. Saxena Kumar Akshay r. Notes: April 02, 2019. from is calculated Saraf Vineet Mr. for emuneration 1. who: is no employee, B there in Part the details given t from 2. 3. in all cases is contractual. of employment he nature 4. funds but and Superannuation Provident to contribution and the Company’s the Directors to commission monitory of perquisites, value allowances, salary, comprises oss remuneration Jamshedpur 20, 2020 May
16 Statutory Reports Financial Statements
ANNEXURE - 2 FORM NO. AOC-2 [Pursuant to clause (h) of sub-section (3) of Section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014]
The Form pertains to the disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto.
1. Details of contracts or arrangements or transactions not at arm’s length basis:
There were no contracts or arrangements or transactions entered into by the Company, which were not at arm’s length basis.
2. Details of material contracts or arrangements or transactions at arm’s length basis:
S. N. Particulars Remarks a. Name(s) of the related party T S Global Procurement Company Pte. Ltd. Singapore (‘TSGP’) b. Nature of relationship TSGP is a subsidiary of Tata Steel Limited, which is the ultimate holding company of Tata Steel BSL Limited c. Nature of contracts /arrangements /transactions Procurement of raw materials, consumables and other procurement related services. d. Duration of the contracts/arrangements/transactions FY2019-20 e. Salient terms of the contracts or arrangements or transactions Procurement of raw materials, rolls and process consumables, including the value, if any IT related procurements from TSGP & receipt of related procurement services amounting to `4,099.02 crore during FY2019-20. f. Date(s) of approval by the Board, if any The said Related Party Transaction (‘RPT’) was approved by the Audit Committee on February 11, 2019. The RPT was approved by the Members of the Company at the Extraordinary General Meeting of the Company held on March 11, 2019 by way of an ordinary resolution. g. Amount paid as advances, if any NA
Notes :
1. The transaction involves procurement of of raw materials, rolls, process consumables, IT related procurements from TSGP and receipt of related procurement service by the Company from TSGP.
2. The transactions are in the ordinary course of business and at arm’s length basis approved by the Audit Committee on February 11, 2019 and reviewed by Statutory Auditors. The above transaction was approved by the Members at the Extraordinary General Meeting of the Company held on March 11, 2019 by way of an ordinary resolution. The total transaction value approved by the Members stood at `7,500 crore.
On behalf of the Board of Directors
sd/- T. V. NARENDRAN Jamshedpur Chairman May 20, 2020 DIN: 03083605
17 (%) 99.99 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Ownership ------dividend Proposed Proposed under the corporate corporate the under (‘TSBSL’) - - (0.35) (4.48) (0.38) (0.38) (0.38) 431.00 ( ` Lakh) taxation Profit after Profit ------( ` Lakh) taxation Provision for for Provision - - (0.35) (4.48) (0.38) (0.38) (0.38) Profit Profit 431.00 before before ( ` Lakh) taxation ------( ` Lakh) 35,553.94 Turnover Turnover . Pursuant to the Acquisition, AEL became a subsidiary of TSBSL. TSBSL. AEL became a subsidiary the Acquisition, to of . Pursuant (‘Acquisition’) ------Total 70.13 (₹ Lakh) Investment* - - 0.18 0.18 578.86 101.60 funds) 2,172.11 38,592.11 shareholders’ shareholders’ Total Liabilities Total Lakh) (excluding ( ` Lakh) (excluding - - 3.04 0.22 3.04 16.60 1,206.92 ( ` Lakh) Assets Total 1,20,363.23 - - FORM AOC-1 FORM ANNEXURE 3 ANNEXURE - (2.14) (2.14) (106.38) Surplus ( ` Lakh) 80,771.10 Reserve & (26,318.47) (11,055.54) - - 5.00 5.00 5.00 Share Share 1000.01 Capital 8,900.04 ( ` Lakh) 26,946.53 None 1.00 1.00 1.00 1.00 was an associate of the Company as on March 31, 2019. On June 1, 2019 AEL was acquired by Tata Steel BSL Limited Limited BSL Steel Tata by acquired was AEL 2019 1, June On 2019. 31, March on as Company the of associate an was (‘AEL’) Rate 46.107 46.107 46.107 46.107 Exchange Exchange INR INR INR INR AUD AUD AUD AUD Currency All except Angul Energy Limited. Energy Angul except All Reporting when 01.06.2019 15.06.2007 28.07.2009 28.07.2009 28.07.2009 27.04.2010 27.04.2010 27.04.2010 acquired Date since Date Subsidiary ** #** [Pursuant to first proviso to sub-section (3) of Section 129 of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014] Rules, to sub-section(Accounts) Companies first proviso Act,read with Rule 5 of the (3) of to SectionCompanies 2013 129 of the [Pursuant Statement containing salient features of the financial statements of the Subsidiaries/Associate Companies/Joint Ventures Companies/Joint of the Subsidiaries/Associate of the financial statements features salient containing Statement #**
$ #** ies which have been liquidated or sold during the year: been liquidated ies which have ies yet to commence operations: operations: commence to ies yet $ Name of the Company change rate as on March 31, 2020 has been considered for calculation. for 31, 2020 has been considered as on March change rate Bowen Consolidated Pty Ltd. Pty Ltd. Consolidated Bowen Bowen Energy Pty Ltd. Pty Energy Ltd. Bowen Pty Coal Ltd. Bowen Bhushan Steel (Australia) Pty Ltd. Pty Ltd. (Australia) Bhushan Steel (formerly known as ‘Bhushan Energy ‘Bhushan Energy known(formerly as Limited’) Bhushan Steel (Orissa) Ltd. (Orissa) Bhushan Steel (South) Bhushan Steel Ltd. Ltd. Bharat Madhya Bhushan Steel Angul Energy Limited Angul Energy Name of subsidiar Names of subsidiar R B Angul I Closing ex insolvency resolution process of the Insolvency and Bankruptcy Code, 2016 vide order of the National Company Law Tribunal dated May 30, 2019 May dated Tribunal Law of the Insolvency Company of the National process insolvency and Bankruptcy 2016 vide order resolution Code, capital in AEL. holds 99.99 % of the equity share currently TSBSL ownership in Bowen Energy Pty. Ltd. and its step-down subsidiaries shall be the same as the shareholding existing in Bhushan Steel (Australia) Pty. Ltd. Pty. and its step-down (Australia) existing in Bhushan Steel Ltd. subsidiaries shall be the same as shareholding Pty. Energy in Bowen ownership 8. 6. 7. 2. 3. 4. 5. 1.
S. N.
# the effective Hence, Pty Energy Ltd. subsidiaries of Bowen down step are Pty Ltd. Consolidated and Bowen Pty Coal Ltd. Bowen whereas Ltd. Pty. subsidiary is the wholly owned (Australia) of Bhushan Steel Ltd. Pty. Energy owen $ Limited’) Energy ‘Bhushan known (formerly as Limited Energy * Assets. Total ncluded in ** Notes: 1. 2. 3. eporting 31, 2020. all subsidiaries March is April 1, 2019 to period for PART A - Summary of Financial Information of Subsidiary Information A - Summary Companies of Financial PART
18 Statutory Reports Financial Statements Not Not -- -- considered in considered consolidation sd/- sd/- (₹ lakh) , the accounts of Andal East , the accounts (DIN:00918431) (DIN: 02719570) -- -- Managing Director Mr. Rajeev Singhal Mr. Independent Director Mr. Shashi Kant Maudgal Kant Shashi Mr. consolidation Considered in Considered Share Share of Profit/loss for the year 2017.Therefore -- -- (₹ lakh) Net Worth Worth Net balance sheet balance attributable to to attributable shareholding as shareholding per latest audited audited per latest sd/- sd/- sd/- Director (DIN: 00004989) (DIN: 00501029) Ms. Neera Saggi Neera Ms. ## ## Company Secretary Company Ms. Nisha Anil Seth Nisha Anil Ms. Independent Director is not Mr. Koushik Chatterjee Koushik Mr. (Membership No: ACS 27019) (Membership No: ACS Reasons why Reasons why joint joint venture consolidated the associate/ the associate/ By By influence Description is significant is significant Shareholding Shareholding of how there there of how of (%) 42.58 39.65 sd/- sd/- sd/- Extent holding Director Mr. Anand Sen Anand Mr. (DIN: 00237914) (DIN: 02792753) Mr. Sanjib Nanda Mr. Mr. Krishnava Dutt Krishnava Mr. Independent Director Chief Financial Officer Chief Financial 940.31 940.31 ( ` Lakh) Amount of Amount Investment Investment For and on behalf of the Board of Directors and on behalf of the Board For No. of No. shares 86,43,742 86,43,742 held by the Company on year end on year the Company held by Shares of Associate or Joint Venture Venture or Joint of Associate Shares sd/- sd/- INR INR Chairman Currency (DIN: 00470254) (DIN: 03083605) Reporting Mr. T. V. Narendran V. T. Mr. Independent Director Mr. Srikumar Menon Mr. of the Company was admitted to winding up proceedings by the Hon’ble Calcutta High January Calcutta Court dated vide order 24, the Hon’ble by winding up proceedings to admitted was of the Company 28.07.1993 28.07.1993 (‘JV’) (‘JV’) or acquired joint venture venture joint associate and associate Date on which Date was associated associated was Latest Latest audited audited balance balance 31.03.2017 31.03.2017 sheet date oal Company Pvt. Ltd, a Joint Venture a Joint Pvt. Ltd, oal Company ssociates/JVs which have been liquidated or sold during the year: Andal East Coast Company, a JV of the Company is currently under liquidation. is currently a JV of the Company Company, or sold during Andal East Coast the year: been liquidated which have ssociates/JVs Company Name of the Bhushan Capital Bhushan Capital Services& Credit Limited Private Jawahar Credit & Credit Jawahar Holdings Private Limited The Company has written to both of these Associate Companies and to the Registrar of Companies intimating that your Company should not be identified as the promoters of these 2 (two) associate companies. As such, your As such, companies. associate of these 2 (two) as the promoters should not be identified Company your that intimating of Companies the Registrar and to Companies both of these Associate to has written Company The companies. associate visibilityof these 2 (two) on the business and operations any does not have Company A Andal East C Name Names of A Coast Company Pvt. Limited have not been considered for consolidation of accounts of the Company. of accounts consolidation for not been considered have Pvt. Limited Company Coast 1. 2.
ASSOCIATES S. N. PART B: Associates and Joint Ventures and Joint B: Associates PART ## consolidation. for has not been considered net worth companies the negative of associate net worth. Hence, should not be included in the consolidated and JVs net worth companies s per IND AS, negative of associate Notes: 1. 2. management. previous the of members connectedthe with entities are Limited, Services Credit & Bhushan Capital and Private Limited Private Holdings & Credit Jawahar operations: commence to yet Associates/JVs of 3. May 20, 2020 May
19 ANNEXURE - 4 FORM NO. MR-3 SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED MARCH 31, 2019 [Pursuant to section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To, and dealing with client; (Not applicable to the Company during the audit period) The Members, Tata Steel BSL Limited . g The Securities and Exchange Board of India (Delisting of Equity (Formerly known as 'Bhushan Steel Limited') Shares) Regulations, 2009; (Not applicable to the Company during the (L74899DL1983PLC014942) audit period) We have conducted the secretarial audit of the compliance of applicable h. The Securities and Exchange Board of India (Buy - back of Securities) statutory provisions and the adherence to good corporate practices by Regulations, 2018; (Not applicable to the Company during the audit Tata Steel BSL Limited (hereinafter called ‘the Company’). Secretarial Audit period) was conducted in a manner that provided us a reasonable basis for evaluating i. The Securities and Exchange Board of India (Listing Obligations and the corporate conducts/statutory compliances and expressing our opinion Disclosure Requirements) Regulations, 2015. thereon. (vi) We further report that with respect to the compliance of the below Based on our verification of the Company’s books, papers, minute books, forms mentioned laws, we have relied on the representations made by the and returns filed and other records maintained by the Company, the information Company and its officers for system and mechanism framed by the provided by the Company, its officers, agents and authorized representatives Company for compliances under other the following specific laws during the conduct of secretarial audit, we hereby report that in our opinion, applicable as mentioned hereunder: the Company has, during the audit period covering the financial year ended on March 31, 2020, complied with the statutory provisions listed hereunder and a. Air (Prevention and Control of Pollution) Act, 1981 and the rules and also that the Company has proper Board-processes and compliance-mechanism standards made thereunder. in place to the extent and as applicable to the Company, in the manner and . b Water (Prevention and Control of Pollution) Act, 1974 and Water subject to the reporting made hereinafter. (Prevention and Control of Pollution) Rules, 1975. We have examined the books, papers, minute books, forms and returns filed . c Environment Protection Act, 1986 and the rules, notifications issued and other records made available to us and maintained by the Company for the thereunder. financial year ended on March 31, 2020 as mentioned in Annexure A and B, . d Factories Act, 1948 and allied State Laws. according to the provisions of: . e The Mines Act, 1952 and the rules, regulations made thereunder. (i) The Companies Act, 2013 (‘the Act’) and the rules made thereunder; (ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules . f Mines and Minerals (Development & Regulation) Act, 1957 and the made thereunder; rules made thereunder. (iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed . g Coal Mines (Special Provisions) Act, 2015. thereunder; h. The Petroleum Act, 1934. (iv) Foreign Exchange Management Act, 1999 and the rules and regulations i. The Indian Boilers Act, 1923 and rules/regulations made thereunder. made thereunder to the extent of Foreign Direct Investment, Overseas . j The Indian Explosives Act, 1884 and the Static and Mobile Pressure Direct Investment and External Commercial Borrowings; Vessels (Unfired) Rules, 2016. (v) The following Regulations and Guidelines prescribed under the Securities We have also examined compliance with the applicable clauses of the following: and Exchange Board of India Act, 1992 (‘SEBI Act’): a. The Securities and Exchange Board of India (Substantial Acquisition (i) Secretarial Standards issued by The Institute of Company Secretaries of of Shares and Takeovers) Regulations, 2011; India with respect to Board and General Meetings wherein the Company is generally regular in complying with the standards. . b The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; (ii) The Listing Agreements entered into by the Company with the BSE Limited ('BSE') and National Stock Exchange of India Limited ('NSE') read . c The Securities and Exchange Board of India (Issue of Capital and with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2018; (Not applicable to the Disclosure Requirements) Regulations, 2015 (hereinafter referred to as Company during the audit period) ‘Listing Regulations’). . d The Securities and Exchange Board of India (Share Based Employees During the period under review, the Company has complied with the Benefits) Regulations, 2014; (Not applicable to the Company during provisions of the Act, Rules, Regulations, Guidelines, Standards etc. the audit period) mentioned above, except the following: . e The Securities and Exchange Board of India (Issue and Listing of 1. That the Company had generally obtained prior approval of the Debt Securities) Regulations, 2008; (Not applicable to the Company Audit Committee for entering into all related party transactions during the audit period) except for one transaction i.e. Tata International Limited amounting . f The Securities and Exchange Board of India (Registrars and Share to `5.95 crore. However, the said transaction was subsequently Transfer Agents) Regulations, 1993; regarding the Companies Act ratified by the Audit Committee.
20 Statutory Reports Financial Statements
2. That as per Regulation 25(3) of the Listing Regulations, the Company 52(5), Regulation 54(2), Regulation 57(1) of the Listing Regulations in had not conducted separate meeting of Independent Directors and respect of non-convertible debentures (‘NCDs’) issued and listed on BSE the Board at its meeting had not carried out an evaluation of its Limited (‘BSE’) during the year(s) 2008 to 2013; and under Regulation performance, its Committees and of individual Directors. 7(3), Regulation 13(3) and Regulation 40(10) read with Regulation 40(9) of the Listing Regulations during the year(s) 2016 to 2018, in respect of the The Company has informed that a separate meeting of Independent equity shares of the Company listed on NSE and BSE. Directors for FY20 was scheduled in the last week of March 2020 and the Performance Evaluation process was initiated by the Company In this regard, the Company vide its letter dated February 4, 2020 replied to in early March 2020. However, due to the outbreak of COVID-19 and the SEBI stating inter-alia that no action is warranted against the Company the lockdown and other restrictions enforced by the Central and owing to the fact that the erstwhile Company i.e. Bhushan Steel Limited State Governments, the Independent Directors meeting could not was acquired by Bamnipal Steel Limited, a wholly owned subsidiary of be held and the formal performance evaluation process (scheduled Tata Steel Limited on May 18, 2018 pursuant to the corporate insolvency for the last week of March 2020) could not be held/concluded and resolution process (‘CIRP’) under the Insolvency and Bankruptcy Code, was deferred to Q1FY21. 2016 further to which the Board of Directors of the Company was reconstituted (‘Reconstituted Board’) and a new management (‘New We further report that: Management’) was put in place. Further, the resolution plan as approved 1. The Board of Directors of the Company is duly constituted with proper by the NCLT was binding on all stakeholders and therefore, the Company balance of Executive Directors, Non-Executive Directors and Independent under New Management cannot be held responsible for any acts or Directors. The changes in the composition of the Board of Directors that omissions pertaining to the pre-CIRP period. The matter is still pending took place during the period under review were carried out in compliance before SEBI as on the date of this Report. with the provisions of the Companies Act, 2013. We further report that during the audit period the following event(s) occurred 2. Adequate notice was given to all Directors to schedule the Board during the year which have a major bearing on the Company’s affairs in Meetings, agenda and detailed notes on agenda were sent at least seven pursuance of the laws, rules, regulations, guidelines, standards etc. referred to days in advance for meetings other than those held at shorter notice, above. and a system exists for seeking and obtaining further information and 3. The Company (an indirect subsidiary of Tata Steel Limited) completed clarifications on the agenda items before the meeting and for meaningful the acquisition of a controlling stake of 99.99% in Angul Energy Limited participation at the meeting. (formerly known as 'Bhushan Energy Limited'), pursuant to the Resolution 3. Majority decision were carried through and there were no instances Plan as approved by National Company Law Tribunal vide its order dated where any director expressing any dissenting views. May 30, 2019, under the corporate insolvency resolution process of the Insolvency and Bankruptcy Code, 2016. The acquisition was completed on We further report that there are adequate systems and processes in the June 1, 2019. Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and 4. The Board of Directors on April 25, 2019 considered and approved a guidelines. composite Scheme of Amalgamation of Bamnipal Steel Limited and the Company into and with Tata Steel Limited ('Scheme') and the Scheme is We further noted that the Company has received following Show Cause under process of approval from Hon’ble National Company Law Tribunal. Notices (SCN): Under the Scheme a merger ratio of 1 equity share of `10/- each fully 1. SCN from the Securities and Exchange Board of India (SEBI) vide its letter paid-up of Tata Steel Limited for every 15 equity shares of `2/- each fully dated July 19, 2019 wherein it is alleged that the Company (referred paid-up held by the public shareholders of Tata Steel BSL Limited has been as Noticee No. 8) along with other eight (8) noticees in the year 2009, recommended. The Company has received ‘No Observations’ letters from omitted to include Noticee No. 9 (BNS Tour & Travel Private Limited) as the National Stock Exchange of India Limited and BSE Limited on August Person Acting in Concert and that there was a delay of 24 days in making 26, 2019 and has filed an application before the National Company Law public announcement of the acquisition of shares of Orissa Sponge & Tribunal, Mumbai Bench for necessary directions. The amalgamation is Steel Limited in violation of Section 12A(f) of the SEBI Act and Regulation subject to approval from shareholders and other regulatory authorities. 10 read with 14(1) of erstwhile. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 read with Regulation 35(2)(a) of the The Securities and Exchange Board of India For PI & Associates, (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. Company Secretaries In this regard, the Company in its reply letter dated October 1, 2019 responded to SEBI that the allegation made out in the SCN was already sd/- decided in a similar matter by the Ld. Securities Appellate Tribunal vide Nitesh Latwal its order dated December 28, 2010 in favour of the Company and other Partner noticees wherein SEBI was also a party and thus, the SCN is not tenable in May 20, 2020 ACS No.: 32109 C P No.: 16276 the eyes of the law. The matter is pending before SEBI as on the date of this New Delhi UDIN: A032109B000277189 report. The above report is subject to the review of the Audited Financial Statements for the 2. SCN from SEBI vide its letter dated October 18, 2019 alleging that the year ended March 31, 2020 with Auditor’s Report and reports of concurrent auditor. Company had made defaults under Regulation 51(1), Regulation 51(2) read Further, this report is to be read with our letter of even date which is annexed as with Part B of Schedule III (Clause A1, A4, A9), Regulation 52(4), Regulation ‘Annexure A and B’ and forms an integral part of this report.
21 Annexure A
Under Companies Act, 2013 1. Memorandum & Articles of Association of the Company. 2. Annual Report for the financial year ended March 31, 2020. 3. Minutes of the meetings of the Board of Directors, Audit, Nomination & Remuneration, Stakeholders Relationship and Corporate Social Responsibility Committee, along with Attendance Register held during the financial year under report. 4. Minutes of General Body Meetings held during the financial year ended March 31, 2020 under report. 5. Statutory Registers as per the Companies Act 2013. 6. Agenda papers submitted to all the Directors / Members for the Board and Committee Meetings. 7. Declarations received from the Directors of the Company pursuant to the provisions of Section 149(6) & (7), Section 164 and Section 184 of the Companies Act, 2013. 8. E-Forms filed by the Company, from time-to-time, under applicable provisions of the Companies Act, 2013 and attachments thereof during the financial year under report. 9. Various Policies framed by the Company required under the Companies Act, 2013 viz. Nomination and Remuneration Policy, Corporate Social Responsibility Policy, Board Evaluation Policy etc. 10. Documents pertaining to appointment, resignation of Directors and Key Managerial Personnel. 11. Other relevant documents as required to be maintained and published on website by the Company. 12. Show Cause Notices and other letters issued by the SEBI, Stock Exchanges or other regulators. Due to lockdown and social distancing guidelines issued by the Ministry of Home Affairs (MHA) on different dates vide orders dated March 29, 2020, April 15, 2020 and May 01, 2020 for containment of spread of COVID-19, the abovementioned documents, registers, forms, minutes, etc. have not been physically verified by us especially for the last quarter, as maintained by the Company at their offices. However, we have taken all possible steps to verify the records, as made available to us by the Company through electronic medium and has also taken confirmation from the Company, wherever required.
Annexure B
To,
The Members, Tata Steel BSL Limited (Formerly known as 'Bhushan Steel Limited')
Our Secretarial Audit Report of even date is to be read along with this letter. 1. Maintenance of secretarial records is the responsibility of the management of the Company. Our Responsibility is to express an opinion on these secretarial records based on our audit. 2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion. 3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company. 4. Wherever required, we have obtained the Compliance Certificate/Management Representation Letter about the compliance of laws, rules and regulation and happening of events etc. 5. The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards are the responsibility of the Management. Our examination was limited to the verification of procedures on test basis. 6. The Secretarial Audit Report is neither an assurance as to future viability of the Company nor of the efficacy or effectiveness with which the Management has conducted the affairs of the Company.
For PI & Associates, Company Secretaries
sd/- Nitesh Latwal Partner May 20, 2020 ACS No.: 32109 C P No.: 16276 New Delhi UDIN: A032109B000277189
22 Statutory Reports Financial Statements
ANNEXURE - 5 FORM NO. MGT-9
EXTRACT OF ANNUAL RETURN AS ON MARCH 31, 2020 [Pursuant to Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014]
I. REGISTRATION AND OTHER DETAILS
i CIN L74899DL1983PLC014942 ii Registration Date January 7, 1983 iii Name of the Company Tata Steel BSL Limited (Formerly ‘Bhushan Steel Limited’) iv Category/Sub-Category of the Company Public listed company having share capital v Address of the Registered office and contact details Ground Floor, Mira Corporate Suites, Plot No 1 & 2, Ishwar Nagar, Mathura Road, New Delhi-110065 Tel: +91-11-39194000 Fax: +91-11-41010050 E-mail: [email protected] Website: www.tatasteelbsl.co.in vi Whether listed company Yes/No Yes vii Name, Address and Contact details of Registrar and Transfer RCMC Share Registry Pvt. Ltd. Agent, if any (Unit: Tata Steel BSL Limited) B-25/1, First Floor, Okhla Industrial Area Phase II, New Delhi - 110020. Phone: 011-26387320, 26387321 Fax : 011- 26387322 e-mail: [email protected]
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
All the business activities contributing 10% or more of the total turnover of the Company shall be stated
SN Name and Description of main products / services NIC Code of the Product/ service % to total turnover of the Company 1. Manufacture of basic iron &steel 241 100%
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES
SN Name and address of the Company Holding (%) Holding Company (Pursuant to Section 2(46) of Companies Act, 2013 1 Bamnipal Steel Limited 72.65 Tarapur Complex, Plot No. F8, MIDC, Tarapur Industrial Area, Palghar, 401 506. CIN: U27310MH2018PLC304494 Subsidiary Companies (Pursuant to Section 2(87)(ii) of Companies Act, 2013 1 Angul Energy Limited (formerly Bhushan Energy Limited) 99.99 Ground Floor, Mira Corporate Suites, Plot No. 1 & 2, Ishwar Nagar, Mathura Road, New Delhi-110 065 CIN: U40105DL2005PLC140748 2 Bhushan Steel (Orissa) Ltd. 99.98 Ground Floor, Mira Corporate Suites, Plot No. 1 & 2, Ishwar Nagar, Mathura Road, New Delhi-110 065 CIN: U93000DL2010PLC202028 3 Bhushan Steel Madhya Bharat Ltd. 99.98 Ground Floor, Mira Corporate Suites, Plot No. 1 & 2, Ishwar Nagar, Mathura Road, New Delhi-110 065 CIN: U93000DL2010PLC202026
23 SN Name and address of the Company Holding (%) 4 Bhushan Steel (South) Ltd. 100.00 Ground Floor, Mira Corporate Suites, Plot No. 1 & 2, Ishwar Nagar, Mathura Road, New Delhi 110 065 CIN: U27100DL2010PLC202027 5 Bhushan Steel Australia PTY Ltd. 90.97 Mitchell & Partners, Suite 3 Level 2, 66 Clarence Street, Sydney NSW 2000 6 Bowen Energy PTY. Ltd. 100.00 Mitchell & Partners, Suite 3 Level 2, 66 Clarence Street, Sydney NSW 2000 7 Bowen Coal PTY. Ltd. 100.00 Mitchell & Partners, Suite 3 Level 2, 66 Clarence Street, Sydney NSW 2000 8 Bowen Consolidated PTY. Ltd. 100.00 Mitchell & Partners, Suite 3 Level 2, 66 Clarence Street, Sydney NSW 2000 Associate Companies (Pursuant to Section 2(6) of Companies Act, 2013) 1 Bhushan Capital & Credit Services Private Limited# 42.58 Cabin No. 1, 1205, 89 Hemkunth Chamber, Nehru Place, New Delhi - 110 019 CIN: U74899DL1993PTC054636 2 Jawahar Credit & Holdings Private Limited# 39.65 Cabin No. 1, 1205, 89 Hemkunth Chamber, Nehru Place, New Delhi - 110 019 CIN: U74899DL1993PTC054635 3 Andal East Coal Company Pvt. Ltd.* 33.89 37, Shakespeare Sarani, 4thfloor Kolkata– 700 017. CIN: U10300WB2009PTC138558
# Entities connected with the members of previous management.
* Joint Venture Company under liquidation
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as Percentage of Total Equity)
a) Category-wise Share Holding
Category of No. of Shares held (April 1, 2019) No. of Shares held (March 31, 2020) % Change Shareholders Electronic Physical Total % of Total Electronic Physical Total % of Total Shares Shares A. Promoters (including Promoter Group) (1) Indian a) Individual/ 0 0 0 0.00 0 0 0 0.00 0.00 Hindu Undivided Family b) Central 0 0 0 0.00 0 0 0 0.00 0.00 Government c) State 0 0 0 0.00 0 0 0 0.00 0.00 Government d) Bodies 79,44,28,986 0 79,44,28,986 72.65 79,44,28,986 0 79,44,28,986 72.65 0.00 Corporate e) Financial 0 0 0 0.00 0 0 0 0.00 0.00 Institutions/Banks f) Others (Trusts) 0 0 0 0.00 0 0 0 0.00 0.00 Sub-total (A) (1) 79,44,28,986 0 79,44,28,986 72.65 79,44,28,986 0 79,44,28,986 72.65 0.00
24 Statutory Reports Financial Statements
Category of No. of Shares held (April 1, 2019) No. of Shares held (March 31, 2020) % Change Shareholders Electronic Physical Total % of Total Electronic Physical Total % of Total Shares Shares (2) Foreign a) Individuals Non- 0 0 0 0.00 0 0 0 0.00 0.00 Resident Individuals 0 0 0 0.00 0 0 0 0.00 0.00 b) Other 0 0 0 0.00 0 0 0 0.00 0.00 Individuals c) Bodies 0 0 0 0.00 0 0 0 0.00 0.00 Corporate d) Banks / Financial 0 0 0 0.00 0 0 0 0.00 0.00 Institutions e) Qualified 0 0 0 0.00 0 0 0 0.00 0.00 Foreign Investor f) Any Other 0 0 0 0.00 0 0 0 0.00 0.00 (Specify) Total 79,44,28,986 0 79,44,28,986 72.65 79,44,28,986 0 79,44,28,986 72.65 0.00 shareholding of Promoter and Promoter Group (A) = (A)(1) + (A)(2) B. Public Shareholding (1) Institutions a) Mutual Funds 0 2,500 2,500 0.00 98,74,910 0 98,74,910 0.90 0.90 b) Financial 10,56,80,307 21,21,657 10,78,01,964 9.86 9,74,98,506 1,56,141 9,76,54,647 8.93 (0.93) Institutions/ Banks c) Central 0 0 0 0.00 0 0 0 0.00 0.00 Government d) State 0 0 0 0.00 0 0 0 0.00 0.00 Government e) Venture Capital 0 0 0 0.00 0 0 0 0.00 0.00 Funds f) Insurance 1,18,06,751 0 1,18,06,751 1.08 1,07,17,096 0 1,07,17,096 0.98 (0.10) Companies g) Foreign 1,439 0 1,439 0.00 32,03,617 0 32,03,617 0.29 0.29 Institutional Investors h) Foreign Venture 0 0 0 0.00 0 0 0 0.00 0.00 Capital Investors i) Any Other 0 0 0 0.00 0 0 0 0.00 0.00 (Specify) Sub-total (B)(1) 11,74,88,497 21,24,157 11,96,12,654 10.94 12,12,94,129 1,56,141 12,14,50,270 11.11 0.17
25 Category of No. of Shares held (April 1, 2019) No. of Shares held (March 31, 2020) % Change Shareholders Electronic Physical Total % of Total Electronic Physical Total % of Total Shares Shares (2) Non-Institutions a) Bodies Corporate i) Indian 3,70,36,154 38,852 3,70,75,006 3.39 3,94,18,822 38,602 3,94,57,424 3.61 0.22 ii) Overseas 16,93,192 0 16,93,192 0.15 35,96,865 0 35,96,865 0.33 0.18 b) Individuals i) Individual 8,87,79,330 4,69,233 8,92,48,563 8.16 8,34,00,949 3,82,630 8,37,83,579 7.66 (0.50) shareholders holding nominal share capital upto `1 lakh ii) Individual 4,45,06,726 0 4,45,06,726 4.07 4,60,05,755 0 4,60,05,755 4.21 0.14 shareholders holding nominal share capital in excess of `1 lakh c) Any others: i) Non-Residents 32,32,770 52,250 32,85,020 0.30 33,22,511 46,500 33,69,011 0.31 0.01 ii) Trust 62,021 0 62,021 0.01 1,29,377 0 1,29,377 0.01 0.00 iii) IEPF Account 1,82,521 0 1,82,521 0.02 2,22,021 0 2,22,021 0.02 0.00 iv) HUF 0 0 0 0.00 0 0 0 0.00 0.00 v) Clearing 32,91,381 0 32,91,381 0.30 9,95,480 0 9,95,480 0.09 (0.21) Member vi) LLP/LLP-DR 0 0 0 0.00 0 0 0 0.00 0.00 viii) NBFCs 53,698 0 53,698 0.00 1,000 0 1,000 0.00 0.00 registered with RBI d) Qualified 0 0 0 0.00 0 0 0 0.00 0.00 Foreign Investor Sub-total (B)(2) 17,88,37,793 5,60,335 17,93,98,128 16.41 17,70,92,780 4,67,732 17,75,60,512 16.24 (0.17) Total Public 29,63,26,290 26,84,492 29,90,10,782 27.35 29,83,86,909 6,23,873 29,90,10,782 27.35 0.00 Shareholding (B) = (B)(1) + (B)(2) C. Shares held 0 0 0 0.00 0 0 0 0.00 0.00 by Custodian for GDRs & ADRs Grand Total 1,09,07,55,276 26,84,492 1,09,34,39,768 100.00 1,09,28,15,895 6,23,873 1,09,34,39,768 100.00 0.00 (A+B+C)
) b Shareholding of Promoters (including Promoter Group)
SN Shareholder’s Name Shareholding (April 1, 2019) Shareholding (March 31, 2020) % change in shareholding No. of Shares % of % of total No. of Shares % of % of total during the year total Shares Pledged/ total Shares Pledged/ Shares encumbered to Shares encumbered to total shares(*) total shares (*) 1 Bamnipal Steel Limited 79,44,28,986 72.65 0.00 79,44,28,986 72.65 0.00 0.00 Total 79,44,28,986 72.65 0.00 79,44,28,986 72.65 0.00 0.00
(*) Percentage to total shares of the company
26 Statutory Reports Financial Statements
c) Change in Promoters’ (including Promoter Group) Shareholding SN Particulars Date Shareholding Cumulative Shareholding during the year No. of shares % of total shares No. of shares % of total shares of the Company of the Company 1 Bamnipal Steel Limited
At the beginning of the year April 1, 2019 79,44,28,986 72.65 79,44,28,986 72.65 At the end of the year March 31, 2020 79,44,28,986 72.65 79,44,28,986 72.65
d) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs)
SN Name of shareholders Shareholding Cumulative Shareholding during the year No. of Shares % of total shares of No. of Shares % of total shares of the Company the Company 1 State Bank of India At the beginning of the year 2,91,28,349 2.66 2,91,28,349 2.66 Bought during the year - - 2,91,28,349 2.66 Sold during the year - - 2,91,28,349 2.66 At the end of the year 2,91,28,349 2.66 2,91,28,349 2.66 2 Neeraj Singal At the beginning of the year 1,93,27,988 1.77 1,93,27,988 1.77 Bought during the year - - 1,93,27,988 1.77 Sold during the year - - 1,93,27,988 1.77 At the end of the year 1,93,27,988 1.77 1,93,27,988 1.77 3 Bhushan Infrastructure Private Limited At the beginning of the year 1,21,01,188 1.11 1,21,01,188 1.11 Bought during the year - - 1,21,01,188 1.11 Sold during the year - - 1,21,01,188 1.11 At the end of the year 1,21,01,188 1.11 1,21,01,188 1.11 4 Life Insurance Corporation of India At the beginning of the year 1,01,03,928 0.92 1,01,03,928 0.92 Bought during the year - - 1,01,03,928 0.92 Sold during the year - - 1,01,03,928 0.92 At the end of the year 1,01,03,928 0.92 1,01,03,928 0.92 5 Principal Trustee Company Pvt Ltd A/C PRINCIP At the beginning of the year 0 0.00 0 0.00 Bought during the year 98,58,978 0.90 98,58,978 0.90 Sold during the year - - 98,58,978 0.90 At the end of the year 98,58,978 0.90 98,58,978 0.90 6 Punjab National Bank At the beginning of the year 96,93,019 0.89 96,93,019 0.89 Bought during the year - - 96,93,019 0.89 Sold during the year - - 96,93,019 0.89 At the end of the year 96,93,019 0.89 96,93,019 0.89
27 SN Name of shareholders Shareholding Cumulative Shareholding during the year No. of Shares % of total shares of No. of Shares % of total shares of the Company the Company 7 L&T Finance Limited At the beginning of the year 75,56,208 0.69 75,56,208 0.69 Bought during the year - - 75,56,208 0.69 Sold during the year - - 75,56,208 0.69 At the end of the year 75,56,208 0.69 75,56,208 0.69 8 ICICI Bank Limited At the beginning of the year 32,31,535 0.30 32,31,535 0.30 Bought during the year 57,69,969 0.53 90,01,504 0.82 Sold during the year (34,31,141) (0.31) 55,70,363 0.51 At the end of the year 55,70,363 0.51 55,70,363 0.51 9 Canara Bank-New Delhi At the beginning of the year 53,32,075 0.49 53,32,075 0.49 Bought during the year - - 53,32,075 0.49 Sold during the year - - 53,32,075 0.49 At the end of the year 53,32,075 0.49 53,32,075 0.49 10 UCO Bank At the beginning of the year 47,30,884 0.43 47,30,884 0.43 Bought during the year - - 47,30,884 0.43 Sold during the year - - 47,30,884 0.43 At the end of the year 47,30,884 0.43 47,30,884 0.43 11 Brij Bhushan Singal At the beginning of the year 47,16,930 0.43 47,16,930 0.43 Bought during the year - - 47,16,930 0.43 Sold during the year - - 47,16,930 0.43 At the end of the year 47,16,930 0.43 47,16,930 0.43 12 IDBI Bank Ltd. At the beginning of the year 48,36,578 0.44 48,36,578 0.44 Bought during the year 1,07,985 0.01 49,44,563 0.45 Sold during the year (7,62,985) (0.07) 41,81,578 0.38 At the end of the year 41,81,578 0.38 41,81,578 0.38 13 Bank of India At the beginning of the year 60,14,896 0.55 60,14,896 0.55 Bought during the year - - 60,14,896 0.55 Sold during the year 29,36,523 (0.27) 30,78,373 0.28 At the end of the year 30,78,373 0.28 30,78,373 0.28
Notes: (1) The above information is based on the weekly beneficiary position received from Depositories. (2) The % of total shares of the Company in respect of shares bought and sold during the year is calculated on the total share capital of the Company as on March 31, 2020. (3) The date wise increase or decrease in shareholding of the top ten shareholders is available on the website of the Company at www.tatasteelbsl.co.in
28 Statutory Reports Financial Statements
e) Shareholding of Directors and Key Managerial Personnel
None of the existing Directors of Key Managerial Personnel of the Company hold any equity shares in the Company.
V. INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment
(` Crore) Particulars Secured Loans Unsecured Deposits Total excluding deposits Loans Indebtedness Indebtedness at the beginning of the financial year i) Principal Amount 13,845.42 - - 13,845.42 ii) Interest due but not paid - - - - Total (i+ii) 13,845.42 - - 13,845.42 Change in Indebtedness during the financial year · Addition 437.00 3,725.01 - 4,162.01 · Reduction (1,422.98) (3,275.01) - (4,697.99) Net Change (985.98) 450.00 - (535.98) Indebtedness at the end of the financial year i) Principal Amount 12,859.45 450.00 - 13,309.45 ii) Interest due but not paid 94.08 0.22 - 94.30 Total (i+ii) 12,953.52 450.22 - 13,403.75
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole-time Directors and/or Manager
(` Lakh) SN Particulars of Remuneration Name of MD/WTD/ Manager Total Amount Mr. Rajeev Singhal 1. Gross salary (a) Salary as per provisions contained in Section 17(1) of the Income-tax Act, 1961 288.98 288.98 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 1.06 1.06 (c) Profits in lieu of salary under Section 17(3) Income tax Act, 1961 - - 2. Stock Option - - 3. Sweat Equity - - 4. Commission - - 5. Others (Retirement benefits) 28.08 28.08 Total 318.12 318.12 Ceiling as per the Companies Act, 2013 : As approved via postal ballot by the Shareholders under section 196 and 197 read with Schedule V of the Companies Act, 2013
29 . B Remuneration to other Directors (For period April 1, 2019 to March 31, 2020)
(` Lakh) SN Name Commission Sitting Fees Total Compensation 1 Mr. Anand Sen - 0.55 0.55 2 Mr. Krishnava Dutt - 3.00 3.00 3 Ms. Neera Saggi - 3.25 3.25 4 Mr. Shashi Kant Maudgal - 2.45 2.45 5 Mr. Srikumar Menon - 2.75 2.75 Total 12.00 12.00 Ceiling as per the Act: As per Section 197 of the Companies Act, 2013.
Note: In line with the internal guidelines of the Company, no payment has been made towards commission/sitting fees to Non-Executive Directors of the Company who are in full time employment with any other Tata Company. Accordingly, remuneration paid to Mr. Anand Sen is only for part of the year, post his superannuation from Tata Steel Limited.
C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD
(` Lakh) SN Particulars of Remuneration Key Managerial Personnel Company Secretary Chief Financial Company Secretary Total (Mr. Om Prakash Officer (Ms. Nisha Anil Seth) Davra) * (Mr. Sanjib Nanda) ** 1 Gross salary: (a) Salary as per provisions contained in section 17(1) 4.28 136.89 34.74 175.91 of the Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 0.78 0.80 0.41 1.99 (c) Profits in lieu of salary under section 17(3) Income - - - - Tax Act, 1961 2 Stock Option - - - - 3 Sweat Equity - - - - 4 Commission - - - - 5 Others (Retirement benefits) - 24.28 4.10 28.38 Total 5.06 161.97 39.25 206.28
* Mr. O P Davra, superannuated from the services of the Company effective April 30, 2019. Hence, remuneration shown is only for part of the year and does not include retiral benefits paid on his superannuation.
** Remuneration of Ms. Nisha Anil Seth has been taken effective May 01, 2019.
VII. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES
During the year there were no penalties/punishments/compounding of offences under the Companies Act, 2013.
For and on behalf of the Board of Directors
sd/- sd/- Rajeev Singhal Nisha Anil Seth Managing Director Company Secretary & DIN 02719570 Compliance Officer May 20, 2020 ACS 27019
30 Statutory Reports Financial Statements
ANNEXURE - 6 PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO [Pursuant to Companies (Accounts) Rules, 2014]
(A) CONSERVATION OF ENERGY The completion of Gas Fired Boiler has significantly reduced the flaring of blast furnace gases with reduction in pollution Tata Steel BSL Limited (‘TSBSL’ or ‘Company’) has embarked on a load. This resulted in reduced usage of coal in coal fired boiler radical transformation journey with Energy Conservation, Environmental for generation of power with increase in share of clean power Protection and Re-Cycling practices at its Integrated Steel Plant (‘ISP’) at generation through usage of plant gas. Angul, Odisha. 2. During FY20, the Company commissioned a Basic Oxygen During FY20, the Company adopted an integrated strategy towards Furnace (‘BOF’) Gas Holder of dry seal type having capacity of efficient Waste Management System ensuring optimal utilization of 50,000 m3. The BOF Gas Holder stores converter gas generated resources and minimal disposal of solid waste along with eventual from BOF#1 & 2 for further use as fuel in various plant units Zero Liquid Discharge. The Company has taken various initiatives to through distribution network in a continuous and uniform manage solid waste in an environmentally friendly, socially responsible manner. The commissioning of BOF Gas Holder led to a and techno-commercially viable manner. In addition, the waste water stoppage to a large extent in the flaring of BOF gas. Further, the generated in the ISP is being reused / recycled for processes internally. BOF gas (converter gas) with calorific value of 1800 Kcal/Nm3 The Company also recognizes its role and responsibility in addressing the replaced the costly Coke Oven Gas (‘COG’) partially which is global issue of climate change and is taking various initiatives to support getting used as a fuel in Reheating Furnaces. The unlocked India’s Intended Nationally Determined Contributions (‘INDC’) target COG will be used in Gas Fired Boilers to generate power. and reduce carbon intensity at its ISP at Angul. Through the various steps taken, the Company was able to significantly reduce the intensity of its 3. A Briquetting Plant was installed for conversion of BOF sludge, carbon emissions to 2.76 ton/tcs in FY20 as against 2.74 ton/tcs in FY19. Furnace Extraction System (‘FES’) dust and mill scale into briquettes which will be used as input in Steel Making Plant. The Company has imbibed a systematic management approach for The briquetting plant is ready for commissioning. This will continuous improvement in its operational performance with innovation replace Direct Reduced Iron ('DRI') with low cost briquette in processes, responsible utilisation of resources, adoption of new as a coolant in converter. This will further strengthen the technology and learning & development. These initiatives have resulted Company’s adherence to environmental norms and obligation in a significant improvement in energy and resource efficiency. for effective usage of plant waste with good realization.
During FY20, the Company's Energy Wing along with the Operations 4. The second Pulverized Coke Injection (‘PCI’) System is Team renewed its efforts to stay ahead of the curve by leveraging new being installed in BF#2 with installation of new 40 TPH ideas towards optimization of energy across the steel plant. The Company Coal Preparation Plant. This project is in the final stage of made significant efforts to reduce specific energy consumption and commissioning. The completion of the project will help to Green-House Gas (‘GHG’) emissions for every ton of steel produced at its enhance the PCI rate in BF#2 from the current average of ISP through developing and streamlining sustainable process controls in around 140 kg/thm to 165 kg/thm. various process units. 5. One of the biggest sustainability initiatives undertaken by During the year under review, Energy Conservation has been taken the Company in FY20 was the construction of Earthen Ponds up with paramount importance adhering to the Company’s long-term (Lagoons) inside the plant premises to improve the water strategy as under: quality. Further, a High-Density Poly Ethylene (‘HDPE’) Pond • Enhance Energy Efficiency of capacity 50,000 m3 for the management of surface run-off and rain water harvesting was successfully commissioned in • Reduce-Reuse-Recycle of Waste Q4 FY20.
• Combat Climate Change 6. As a part of the recycling initiative to reduce carbon emissions, The Company has taken up several key capex projects (new and there has been a significant increase in scrap charging in Basic improvement) in FY20 with the key consideration that each and every Oxygen Furnaces from 5% (FY19) to 8% (FY20). equipment in the ISP should have best-in-class environmental attributes, 7. Specific oalc consumption per ton of DRI produced from DRI benchmarking energy efficiency and meeting global emission standards Plant reduced to 0.88 ton/ton of DRI in FY20 as compared to with lowest carbon foot print. 1.21 ton/ton of DRI in FY19. This has resulted in lower usage of (i) Steps taken for energy conservation: fossil fuel in the ISP with potential reduction in GHG emission.
1. The Company commissioned a 250 TPH Gas Fired Boiler 8. The scheme for controlled operation of cooling tower fans wherein the Blast Furnace (‘BF’) Gas produced from BF#1 & corresponding to clarified water temperature has been BF#2 is used as a fuel for generation of steam which in turn is implemented in Sinter Plant#2 & 3 to optimize the energy used in turbine for generation of electricity. consumption in sinter plants.
31 9. The speed regulation strategy for 6.6 KV, 1350 KW Pushing ISP at Angul. In FY20, the Company produced approx. 120 MW Emission Control ID Fan with possibility to reduce the speed of power through Waste Heat Recovery Route. This is approx. from 800 rpm to 700 rpm during pushing and 450 rpm to 350 40% of the total power consumed at the ISP. rpm during idle condition was implemented in Coke Oven 2. A Feasibility Study for potential generation of 30 MW power by Plant#2 for optimization of energy. harnessing solar energy is under progress. 10. An automation scheme to reduce the De-Dusting fan speed (iii) Capital investment on energy conservation equipment during idle time of coke pushing was implemented in Coke Oven#1. The Company has taken adequate measures towards conservation of energy with optimization of specific energy consumption per 11. Variable Frequency Drive (‘VFD’) was installed for some ton of liquid steel produced at its Integrated Steel Plant at Angul, motors of the Utility Pump House, Oxygen Plant and other Odisha. areas to reduce energy consumption. TSBSL has initiated the installation of various energy conservation 12. The existing Normal/High Pressure Sodium Vapour (‘HPSV’) equipments through systematic phase-wise implementation with lamps are getting replaced with energy efficient LED lamps staggered investment over the years (FY16 to till date) covering the across the plant to save energy. projects described above.
13. There is a significant increase of PCI rate in the Blast Furnaces During the year under review, capital expenditure of approximately through multiple improvement initiatives with yearly average `44.58 crore was incurred towards completion of energy of 168 kg/thm in BF#1 and 140 kg/thm in BF#2. conservation projects.
14. Fuel rate in Blast Furnaces was reduced by way of improved (B) TECHNOLOGY ABSORPTION: operating practices with annual average of 522 kg/thm in (i) Efforts towards Technology Absorption BF#1 and 513 kg/thm in BF#2. BOF Gas Holder of 1,00,000 m3 capacity for storage of converter 15. Reduced coke rate in Blast Furnaces was achieved through gas with technology supplied from Motherwell Bridge, UK was process excellence with yearly average of 316 kg/thm in BF#1 commissioned in September 2019. and 326 kg/thm in BF#2. The Coke Dry Quenching (‘CDQ’)#2 plant was commissioned (ii) Steps taken for utilizing Alternate Sources of Energy in May 2018. The CDQ#2 plant has been supplied by M/s Nippon 1. An extremely important and significant initiative has been Steel Engineering, Japan and designed for dry quenching of coke taken by the Company to use alternate sources of energy at its produced from Coke Oven Plant#2 with throughput of 170 ton/hr. (ii) Details of technology imported in last three years (reckoned from beginning of the financial year)
S. No. Technological Facilities Plant Year of Year of Name of Technology/ Remarks Configuration Import Commissioning Equipment Supplier 1 BOF Gas Holder 1,00,000 m3 FY16 to FY20 Sept 2019 Motherwell Bridge Technology imported from United Kingdom 2 CDQ # 2 Coke throughput – FY16 to FY19 May 2018 Nippon Steel Imported from Japan 170 t/hr Engineering 3 Reheating Furnace # 3 330 tph FY16 to FY17 July 2017 Tenova Italimpianti Imported from Italy Final Configuration: Reheating Furnace # 1 & 2 (Yr.2010/2012) RHF # 3 (Yr. 2017)
Notes:
1. The imported technology has been fully absorbed.
2. TSBSL has set up two (2) Coke Oven Plants at its Integrated Steel Plant at Odisha. Initially, both the Coke Oven Plants had wet quenching facilities. However, as per the mandate from Ministry of Environment, Forest and Climate Change (‘MoEF&CC’), the Company replaced the wet quenching facility of Coke Oven Plant#2 with dry quenching facility by setting up CDQ#2. The CDQ#1 for conversion of wet to dry for Coke Oven Plant#1 has been ordered from Nippon Steel Engineering in Q4FY20.
32 Statutory Reports Financial Statements
(iii) Benefits derived from key projects TSBSL has successfully developed the following new steel grades in FY2019-20: (i) Achieved Specific Energy Consumption of 6.38 GCal/tcs as against 6.84 GCal/tcs in FY19. 1. API X70 grade HR Coil for GAIL Project.
(ii) Achieved Carbon Emission Intensity of 2.74 ton/tcs as against 2. API 5L X-70M PSL - 2 in size 7.28x1470 mm & 12.83x1460 mm 2.93 ton/tcs in FY19. for BPCL Project.
(iii) Recorded lowest ever Specific Water Consumption of 4.14 m3/ 3. API 5LX60M PSL - 2 in size: 6.50x1625 mm & 8.0x1620 mm for tcs and reduced fresh water intake over FY19. HP Oil Gas Limited.
(iv) The flaring of blast furnace gases has been reduced to 4 - 5% 4. API 5L Gr-BM PSL-2 grade in size 6.5x1385 mm for HP Oil Gas with commissioning of 250 TPH Gas Fired Boiler. Limited.
(v) Increase in clean power generation from 40% to 86% along 5. API 5L X-70M PSL-2 grade has been developed and initial with reduction of fuel rates in Blast Furnaces, increase in quantity of 4,400 MT has been supplied to Jindal India Ltd for scrap charging in Steel Melting Shop, reduction of specific GAIL Project. coal consumption in DRI and installation of 250 TPH Gas Fired Boiler. 6. SAE 1008 grade for Indian Steel Corporation Ltd.
(vi) Completion of some major environmental improvement 7. IS 11513 CR-2 (D05) for Tata Steel Branded Product Steelium projects enabled reduction in the Dust Load to 0.73 kg/tcs as for panel application. against 0.84 kg/tcs in FY19. 8. IS 11513 CR-2 grade (C16) for Tata Steel Branded Product (vii) The CDQ#2 facility has been stabilized. The wet quenching Steelium for automotive internal components and drawing facility of Coke Oven Plant#2 has been replaced with application. dry quenching facility by setting up the CDQ Plant. The 9. Bake Hardening Steel BH 220 for automotive application. superheated steam of around 90 tons produced from the boiler of CDQ#2 being used for generation of captive power. 10. IS 10748 Gr-6 in thickness up to 15.80 mm for Tata Structura.
(viii) There is an increase of PCI rate in the Blast Furnaces with yearly 11. IS 11513 CR-2 grade for Tata Steel branded product Steelium average of 168 kg/thm in BF#1 as against 154 kg/thm in FY19 for automotive internal components and drawing application. and 140 kg/thm in BF#2. The 2nd PCI system in BF#2 which is under commissioning will increase the PCI rate from existing 12. IS 2062 E250 grade in non-peritectic grade, HRC thickness up 140 kg/thm to 165 kg/thm. to 12.0 mm.
(ix) The scientifically designed HDPE lined pond of capacity 50,000 13. Development of Steel for hydroforming application (DIN m3 for efficient management of surface run offs from Coke 17100 St 52.3). Oven and RMHS area has been commissioned successfully. 14. HS 620 Grade (up-to 6.0 mm) for Auto Components/Caterpillar (x) The trial of Ultra Violet (‘UV’) reactor technology for total application. cyanide removal from coke oven waste water has been carried The Company is continuously engaged in various R&D initiatives for out successfully. The fabrication and installation of commercial process improvements and new product developments. There has Cyanide Removal Plant is under progress. been no significant expenditure on R & D in FY2019-20. (iv) Research and Development (‘R&D’) Initiatives (C) FOREIGN EXCHANGE EARNINGS AND OUTGO With best -in-class manufacturing capabilities, TSBSL is continuously Details of Foreign Exchange Earnings and Outgo for FY2019-20 are given focusing on designing and producing a basket of new steel products below: under its R&D initiative to cater to the changing trends, needs and demand of customers and to create a stronger foot print in domestic (₹ crore) and international market. Foreign Exchange Earnings 3,299.77 The Company is also actively involved in Industry - Institute Value of Direct Imports 4,956.98 partnerships and has initiated collaborative projects with leading Expenditure in Foreign Currency 32.60 academic and research institutes in India including IIT Mumbai & IIT Kanpur to improve the steel quality and develop new steel grades to become a reliable customer-centric brand. On behalf of the Board of Directors
(v) Development of New Products sd/- The Company is committed to innovate and introduce new products T. V. NARENDRAN through continuous improvement in process and adopting new Jamshedpur Chairman technology and manufacturing better products. May 20, 2020 DIN: 03083605
33 MANAGEMENT DISCUSSION AND ANALYSIS
BUSINESS OVERVIEW the COVID-19 outbreak, most likely path for the disease is that once it is has reached its peak, it will continue to have periodic, regional outbreaks The following discussion and analysis should be read in conjunction with Tata across the world through 2020 and 2021. Hence projections during Steel BSL Limited's ('Company' or 'TSBSL') audited standalone / consolidated this period may change over the course of the year. The International financial statements and related notes for the year ended March 31, 2020 Monetary Fund ('IMF') estimates global economy to de-grow by -3% in included in this Annual Report. 2020 (as compared to 2.9% growth in 2019), with a downward bias. Partial A. INDUSTRY STRUCTURE AND DEVELOPMENTS recovery is projected for 2021 but the level of GDP will remain below the pre-virus trend, with uncertainty about strength of the rebound. The key External Environment factors expected to impact the global economy adversely in 2020 are Global Economy & Steel Industry (a) lockdown measures taken by over 100 countries resulting in minimum economic activities to ensure social distancing measures, (b) disruptions The Global Economy grew at 2.9% in 2019, against a growth forecast in manufacturing due to changing global supply chain dynamics, of 3.5% due to weakening international trade and slowdown in (c) increasing expenditure on Health care infrastructure, (d) Glut in Oil manufacturing. In 2020, economic growth was initially projected to be supplies amid COVID-19 pandemic, resulting in fall in oil prices. marginally lower than 2019, with likely easing of US-China trade tensions and consumption led recovery in emerging and developing economies. In H2 2020, with the likely lifting of lockdown by most of the countries, However, given the fast-moving nature of the impact of COVID-19 across gradual resumption of economic activities is expected in a phased geographies, GDP forecasts of 2020 are frequently being revised, with a manner, supported by policy interventions. However, there is a likelihood common underlying view that the GDP contraction is likely to be deeper of a new normal in terms of spending patterns, consumption behaviors of than the global financial crisis. people, and commodity price volatility across the year.
According to World Steel Association (‘WSA’), global crude steel Steel demand outlook would be linked to scenarios. Under a scenario production reached 1,869.9 MnT in 2019, up by 3.4% compared to 2018, of early containment of the pandemic through effective government largely contributed by China’s crude steel production of 996.3 MnT. China’s interventions, whereby economic activities are affected throughout share in global crude steel production increased from 50.9% in 2018 to Q2-Q3 and gradual normalization expected in Q4 2020, global steel 53.3% in 2019. demand is expected to witness a de-growth of approximate -4%. There is Given the current scenario of pandemic, the global steel industry is likely a downward bias to this outlook in case a scenario of prolonged pandemic to be impacted by significant fall in manufacturing, postponement of unfurls. investments and slowdown of construction activities in next few quarters Indian Economy & Steel Industry across most of the economies. After slower than expected growth in 2019, mainly due to a deep manufacturing recession in developed economies, Various forecasts, peg FY21 growth for the Indian economy in the range a further decline in global steel demand in the second quarter of 2020 is of 1-2%, lowest since liberalization. These forecasts assume lifting of expected, with a further downside associated with the uncertainty on the lockdown by end-May and economic activity resuming by end-June. Also, duration of the disruption. sizable government stimulus (4-5% of GDP) would be provided to boost the economy. Considering the uncertainty in the shape of growth and Indian Economy & Steel Industry its drivers, a scenario based approach is being adopted while estimating The Indian economy witnessed a growth of 4.7% in Q3 FY20, due to steel demand. significant fall in manufacturing and agricultural output, while service In the base scenario (most likely), the national lockdown is expected to sector growth remained stable. Marginal improvement in consumption continue in part (Red Districts) or in full (Containment Zones) upto end of was witnessed in Q3-Q4 FY20, during the festival season and back to June 2020. At the same time, there is Government support to households, back rate cuts taken by the Reserve Bank of India ('RBI'). However, the corporates and banking system with fiscal & monetary stimuli to the tune nationwide lockdown announced in March 2020 to control spread of of ~3% of GDP. Construction and manufacturing activities resume back COVID-19, brought the economic activity to a virtual standstill, especially to normal levels by end of June, resulting in contraction of 15-20% in in the manufacturing and service sectors. Except essential services, steel demand (as assessed in May 2020 against 6-7% assessed earlier in all other business activities almost ceased. The growth rate for FY20 is March 2020). Hence, domestic steel demand is likely to be 80-85MnT in expected to be lower than the previous forecast, mostly due to a low Q3 FY21 as compared to 100MnT in FY20. growth and an extremely poor Q4 FY20. However, in a scenario of outbreak recurrences occurring sporadically With the production of 102 MnT, India recorded the second largest across the country triggering intermittent lockdown, impacting economic crude steel production in 2019 (CY) up by 1.8% over 2018 (CY). Indian activity through the year, the steel demand could be impacted by as much Steel demand for FY20 has seen a de-growth of -2.1% (excluding stock as 35% -40% with the largest steel consuming sectors - Automotive and changes). Factoring for stock changes in the system, steel demand in FY20 Construction, likely to remain in the red throughout the year. would be at the same level as of FY19.
B. OUTLOOK C. OPPORTUNITIES AND THREATS Global Economy & Steel Industry Opportunities
The lockdown is probably the worst recession post the great depression, • With high Agricultural output, least affected rural economy, the with cumulative loss, upto USD 9 Trillion, to global GDP spread over 2020 Roofing segment in rural is expected to recover fast, post lockdown and 2021. Whilst several predictions have been made on the trajectory of and consumption expected to revive in pre-monsoon season.
34 Statutory Reports Financial Statements
• Health care infrastructure spending in a post-COVID scenario is Financial Performance & State of Affairs (standalone) expected to remain high, and is expected to create new demand During the year, the Company recorded a net loss of `649 crore (previous in Pre-engineered Building (PEB) segment for isolation centres, year: Profit of` 1,713 crore). The basic and diluted earnings per share stood hospitals and Government Infrastructure Space. at `(5.94) for FY20. • Oil and Gas pipelines for city gas distribution and cross country An analysis of major items of the financial statements is given below: pipelines are witnessing strong demand with several new projects being launched due to strong government focus. The Renewable a) Net sales and other operating income Energy sector is likely to revive rapidly in the post-COVID scenario. (` crore)
• Packaging (drums and barrels) and Container segment demand to FY20 FY19 Change remain stable with continuation of growth in exports. (%) Sale of Products 17,238 19,860 (13) Threats Other Operating Income 961 1,031 (7) • Consumer durables and Appliance sectors are expected to decline Total income from operations 18,199 20,892 (13) significantly in Q1FY21 due to weak sentiments and low buying During the year, the overall turnover was lower due to poor market activities. Slow recovery is anticipated from Q2-Q3FY21 onwards conditions. Further, steel prices in domestic market have been post monsoon. significantly impacted, leading to lower realisations of lower prices • The Automotive sector is expected to decline in Q1FY21, due in the current year. Sales were also affected in March 2020 on to disruption of production and cessation of retail sales during account of the outbreak of COVID-19. lockdown. In addition, new launches are expected to be delayed ) b Raw materials consumed due to negative consumer sentiments. (` crore) D. FINANCIAL PERFORMANCE FY20 FY19 Change (%) The Company is engaged in Steel business. Brief performance of the Raw materials consumed 10,592 11,603 (9) Company is as follows: During the year, raw material consumption decreased by 9% (` crore) due to decrease in prices of various raw materials and increase in Particulars FY20 FY19 Variation efficiencies by implementing various improvement initiatives.
Turnover 18,199 20,892 (2,693) c) Employee benefits expense PBDIT 2,303 3,799 (1,496) (` crore) Interest and Financial Charges 1,696 3,752 (2,056) FY20 FY19 Change (%) Depreciation 1,432 1,442 (10) Employee benefits expense 401 363 11 Exceptional Items 69 2,976 (2,907) The employee cost increased primarily on account of yearly Profit / (Loss) After Tax (649) 1,713 (2,362) increments and the Company’s commitment to generate new employment. Further, during FY20, there was a change in the Sales & Production Volume (in MT) discount rate for computing Gratuity and Leave liability, resulting in an increase in employee benefit expenses. Production Sales 4.14 4.05 d) Depreciation and amortization expense 3.81 3.34 3.48 (` crore)
2.28 FY20 FY19 Change 2.01 4.16 4.47 (%) Depreciation and amortization 1,432 1,442 (1)
1.96 2.35 3.23 3.42 3.84 expense
FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 e) Other Expenses (` crore) • During FY20, production stood at 4.47 MnT which is 7.33% higher FY20 FY19 Change than the previous year. (%) Other Expenses 5,154 5,399 (5) • Further, there was also an increase of 2.22% in quantity sold in FY20. Total quantity sold in FY20 stood at 4.14 MnT as compared to FY19 Other expenses were lower compared to last year despite an (4.05 MnT). Post the COVID-19 outbreak and the lock down enforced increase in production due to a decrease in power and fuel expenses by the central and state governments, sales were affected from and a net recovery of bad-debts in the current year. This decrease is the third week of March 2020 due to mobility restrictions, safety of offset by an increase in consumption of stores and spares and other employees and other stakeholders. expenses in line with increase in crude steel production.
35 The details of other expenses are as below: Further, CWIP amounting to `595 crore has been capitalized during (` crore) the year. The Company has impaired certain items of property, plant FY20 FY19 Change and equipment and CWIP of `69 crore. (%) i) Investment Consumption of stores and 1,409 1,307 7.75 (` crore) spares FY20 FY19 Change Packing material consumed 78 75 3.42 (%) Power and fuel 1,500 1,977 (24.12) Investment in Subsidiary, JVs 10.15 0.15 6,666.67 Rent 11 17 (32.15) and Associates Repairs & Maintenance 172 74 130.95 Administrative Expenses 61 56 9.96 Other Investments 0.67 1.01 (33.66) Selling and Distribution 997 926 7.59 Total Investments 10.82 1.16 832.76 Other Expenses 903 863 4.68 During FY20, the Company acquired Angul Energy Limited Misc Expenses 23 106 (78.30) (formerly Bhushan Energy Limited) ('AEL') under the corporate Total Other Expenses 5,154 5,399 (4.54) insolvency resolution process. As a part of the acquisition, the a. The reduction in Power and Fuel expenses was on account Company subscribed to the equity share capital of AEL for an of the Tolling Arrangement entered into with Angul Energy amount of `10 crore. Limited (formerly Bhushan Energy Limited) and improved j) Inventories efficiencies. (` crore) b. Increase in Repairs and Maintenance expenditure was on FY20 FY19 Change account of increased proactive maintenance activities during (%) FY20 for better Mill availability and throughput. Raw Material 1,340 1,700 (21) ) f Finance Costs and Net Finance Costs Finished Goods & WIP 2,162 1,963 10 (` crore) Stores, Spares & Others 1,333 919 45 FY20 FY19 Change (%) Total Inventory 4,835 4,582 6 Finance Costs 1,760 3,823 (53.96) Value of inventories above is stated after provisions of (net of Net Finance Costs 1,696 3,752 (54.80) reversal) `9 crore (March 31, 2019: `10 crore) for write-downs to net The reduction in finance cost is on account of decrease in interest realizable value and provision for slow moving and obsolete items. rate, repayment of term loan and issuance of preference shares k) Trade Receivables (compound financial instrument) closer to end of FY19. (` crore) g) Exceptional Items FY20 FY19 Change (` crore) (%) FY20 FY19 Change Gross Debtors 797 880 (9) (%) Less: Provision for doubtful 95 183 (48) Exceptional Items 69 2,976 (98) Debts In FY20 the Company impaired certain items of property, plant Net Debtors 702 697 1 and equipment and capital work-in-progress ('CWIP') of `69 crore. There has been a decrease in excepted credit losses provided in the Exceptional items in FY19 include an exceptional gain of `3,159 FY20 as compared to FY19. However, there is no major change in the crore on account of effects of implementation of resolution plan balance of net trade receivables in FY20. and impairment charge of `183 crore against property, plant & equipment. l) Cash Flow (` crore) h) Fixed Assets (` crore) FY20 FY19 Change FY20 FY19 Change (%) (%) Net Cash Flow from Operating 1,718 5,800 (70) Activities Property, Plant and Equipment 27,936 29,154 (4) Net Cash Flow from investing 728 (1,617) 145 Capital work-in-progress 682 1,154 (41) Activities Other Intangible assets 21 0.17 Net Cash Flow from financing (2,000) (4,500) 56 During the year, depreciation on PPE amounted to `1,301crore. Activities Further Oxygen Plant which was classified as Plant and Machinery Net increase / (decrease) in 446 (317) 241 during the period ended March 2019 is recognized as Right of Use cash and cash equivalents effective April 1, 2019 amounting to `564 crore.
36 Statutory Reports Financial Statements
The cash operating profit before working capital changes and The idea pipeline was built by conducting 50+ idea generation workshops direct taxes in FY20 was `2,171 crore as compared to `3,900 crore engaging employees across all levels from departmental heads to shop during FY19. floor operators. These initiatives focused on cost reduction, throughput debottlenecking, and value creation. Key initiatives on cost that drove The cash inflow from Investing activities was `728 crore as compared value across the organization include – fuel rate reduction, power cost to a cash outflow of `1,617 crore during the FY19. The inflow during reduction, Value-in-Use driven buying of all raw material, Suppliers Days the year broadly represents sale of current investments. for best cost country sourcing of Refractories and Graphite Electrodes, Hot The net cash outflow from financing activities was` 2,000 crore as Rolled barter with other steel players for logistics cost reduction. compared to `4,500 crore during FY19. The outflow is broadly due Key initiatives on throughput include debottlenecking across upstream to repayment of borrowings and interest paid in FY20. and downstream units, operationalization of Direct Reduced Iron ('DRI') E. CHANGES IN KEY FINANCIAL RATIOS kilns, horizontally deploying standardized maintenance practices for critical equipment. Besides these, initiatives focused on value creation The details of changes in the key financial ratios as compared to previous including – diversification of end customer segments (especially non- year are stated below:- auto), creating a full potential and GTM view for strengthening export volumes, reduce order delivery time through design of HR buffer for FY20 FY19 Change downstream plants. (%) In addition, the program focused on leveraging group synergies with Tata Debtors Turnover1 (Days) 14.07 16.74 16 Steel Limited ('TSL'). to increase use of captive raw material, combined Inventory Turnover2 (Days) 94.69 75.19 (26) cargo planning (inbound and outbound), inter-plant synergies, and Interest Coverage Ratio (Times) 0.55 0.66 (17) manufacture of TSL branded products at the Company's plants at Current Ratio (Times) 1.65 1.91 (14) arm’s length. The plant achieved multiple BPDs (best-demonstrated- performance) throughout the year across both cost and throughput KPIs Debt Equity Ratio (Times) 0.99 0.93 (7) accelerating annual production from 4.1 MT in FY19 to 4.5 MT in FY20 and Net Debt Equity (Times) 0.96 0.83 (16) driving down cost by 11% over FY20. Return before exceptional item to (3.68) (6.90) 41 To sustain this momentum the program focused on capability building Net worth3 % across the organization by conducting multiple trainings across the 4 EBITDA Turnover % 12.65 18.18 (30) organization. Procurement Academy (Pro^2) was launched with 13 Net Profit before exceptional item to (3.95) (6.05) 35 trainings clocking 1400+ man hours of engagement. Besides these, Turnover5 % customized trainings focused on functional and technical skills such as A3 problem solving, MS Excel, ViU (Value in Use) modeling, TQM way of 1. Debtors Turnover Ratio – The fall is primarily on account faster thinking, etc were delivered to enable operators to be the torch bearers of collection and higher cash sales resulted from better credit change. management. The Company has also started its foray into use of digital tools to create 2. Inventory Turnover Ratio – The increase mainly on account of sustainable value. A few key highlights from digital include the Digital lower/no sales in the last 10 days of March 2020, due to COVID -19 Twin for SMS which helped debottleneck throughput, GPS tracking of all mobility restrictions. outbound trucks from gate entry to customer unloading. 3. Return before exceptional item to Net worth– The return is higher As the Be1 program enters into its third year, the focus is on sustaining the on account of higher production in FY20 and significant cost savings KPIs at the BDP levels, and achieving cost leadership. This will be enabled on account of efficiencies and improvement measures. Further, the only by engaging employees across all levels of the organization with a interest cost of the Company has reduced significantly in FY20. renewed focus on capability building to identify and groom the next wave 4. EBITDA turnover – The reduction is primarily on account of of change agents. Use of digital tools and advanced analytics will further lower demand and realizations throughout FY20 due to economic accelerate the journey. We are confident of scaling newer heights and slowdown. setting industry benchmarks as we march forth on this transformation journey. 5. Net Profit before exceptional item to Turnover – The return is G. SEGMENT WISE OR PRODUCT WISE PERFORMANCE higher on account of higher production in the FY20 and significant cost savings on account of efficiencies and improvement measures. The Company has revenue source from steel business, details of which Further, the interest cost of the Company has reduced significantly have been included in the financial performance. in FY20. Post-acquisition of the Company in May 2018, many improvement F. OPERATIONAL EXCELLENCE: BE1 PROGRAM projects have been undertaken at TSBSL. The Company produced 4.46 MTPA of crude steel in FY20, which is higher by 7.7% over FY19. Further The Be1 Program - the Company's flagship multi-dimensional excellence there are plans to sweat all the assets and reach higher levels of capacity program driving operational, commercial, financial and capability utilization. In order to maximize capacity utilization, the Company has excellence - continued in its second year at the Company. The program taken the following initiatives: which had started with 15 IMPACT centers ('IC') in FY19, was extended to 18 ICs in FY20 delivering estimated combined savings of ~`1,950 crore • Development of value added products – During FY20, the Company in FY20. This was enabled by building a robust pipeline of improvement developed new grades in Oil and Gas ('O&G') segment and adhesive initiatives which will continue to deliver value in FY21, strengthening the coated material for auto sector for brake application (as an import Company's financial position. substitute).
37 • Development of new customers & market – During FY20, the next year is on building capability to produce high end precision Company has appointed 6 new distributors across India and tubes like tubular front fork in two wheeler segment and propeller also added new customers in OEM segment to increase the shaft in commercial vehicle segment, GP tubes, enhancing the market presence and secure good Share of Business (‘SOB’) in service center capacity and increasing SOB in two wheeler, three OEM segment. wheeler and commercial vehicle segment.
• Value creation through synergy initiative with parent organization • TSBSL has been focusing on O&G segment and water pipe line - the Company's technical and quality teams are working closely projects in domestic and exports market. During FY20, the Company with TSL's technology teams on development of value added Hot commenced Pipe sales to cross country pipeline (CCP) and city gas Rolled product capability for high end segments and to increase the distribution (CGD) projects. volumes in branded products. • Branded Product Sales started from Large Dia Pipe Plant – Tata Automotive & Industrial Products & Projects Structura & Tata Pipes sold ~41 KT in FY20 as against 1 KT in FY19. • The Company increased its presence in the automotive segment by Exports broad basing its customer base and initiating commercial supplies to The Company has developed a strong relationship with long-term additional Auto OEMs. In order to deliver value to our key customers, customers and markets across the globe and has been consistently we developed steel for outer panel applications using hot rolled exporting upstream products (Hot Rolled Coils) and Downstream steel from Angul. So far one of the leading auto manufacturers products (Galvanized, Galume, Color Coated, Tubes & Pipes, Hardened & has approved 28 skin panels made from HR produced from TSBSL's Tempered steel). The Company is continuously focusing on development Angul Plant. We successfully developed value added and High of downstream export markets in Indonesia, Europe, Africa, South-East Strength steels, thereby increasing our product basket and offerings Asia and Latin America. The Company has also shown its presence in the to customers. In continuation of our aim to provide indigenous export of high end Hot Rolled Coils for structural applications in Europe product options to customers, adhesive coated material for auto and Malaysia. During FY20, in order to insulate business from domestic sector for brake shim application was successfully developed, which demand cyclicity, the Company exported appox 900 KT globally of which was so far being imported by customers. 15% comprised of downstream products to enrich the value-added mix. • Trial supplies were commenced to the Tata Motors plant at Pune H. PRODUCT DEVELOPMENT: from TSBSL's Khopoli Plant thereby providing locational advantage. Hot Rolled Product • During the year the Company supplied API X65 grade to O&G segment. The Company also received approval from one of the Oil and Gas Segment major oil companies for supply of PPGI/PPGL material for their petrol During FY20, the Company developed various grades specific to cater to pumps across India. This makes TSBSL the first approved source for the need of O&G segment, including API 5L X-70M PSL, API 5L X60M PSL the Oil Company. in certain select sizes and SAE1008 grade. • The Company's Sahibabad UNIT received approvals from a Other Segments multinational household appliance company for their refrigerator equipment requirements. The Company worked on developing of Bake Hardening Steel BH 220, IS 2062 E250 grade in non-peritectic grade, Steel for hydroforming BRP (Branded Product & Retail) application (DIN 17100 St 52.3) and HS 620 Grade for auto components. • Sales under distribution vertical grew by 31% in FY20 to 1.49 Mn Cold Rolled and Coated Product MT from 1.15 Mn MT in FY19. This was done with increased focus on downstream markets. CRCA :The Company obtained approvals for a significant number of panels from one of the major auto maker. The Company worked • During FY20 the Company appointed new distributors to increase with the customers on development of HSLA 340 in 0.70X1250 mm its reach to additional pockets which will increase its distribution for floor application. Further the Company worked with customers network across India. and other manufacturers on development of CRCA material in • During FY20 the Company developed and serviced the solar different sizes for Automotive Tubes for automotive application and segment market in the Western Region. Corten-A grade for air preheater. • Marketing & Sales processes at TSL were imbibed and embedded Colour Coated Products: Development and supply of colour along with interaction and training of people. coated products for various automakers and white goods manufacturers, introduction of 9 different colour coated product • Post product improvements and operating philosophy alignment, for export and domestic customers to be used for roofing and puff segment specific brands like Tata Steelium, Tata Shaktee and Tata panel application and material for false ceiling application and Kosh were launched. This helped us in value creation and also HVAC application. provided enhanced reach through established 2 Tier Distribution Network. We have been able to achieve overall sales of 76KT in FY20. Tubes: Development of Zinc Coated Tubes (1.2 mm thick). Tubes and Pipes Branded Products
• The Company has maintained its leadership position in Precision During FY20, The Company has added various grades to its existing Tubes business for Automotive segment with 26% SOB despite of branded products Steelium and Tata Structure. The same includes, IS de-growth by more than 15% in the two wheeler, three wheeler and 11513 CR-2 (D05), IS 11513 CR-2 grade (C16) and IS 10748 Gr-6 in thickness commercial vehicle segment. To enable growth, the emphasis for up to 15.80 mm.
38 Statutory Reports Financial Statements
The Company has also successfully produced and supplied material for 50,000 m3, efficiently manages the surface run offs from Coke Oven Tata Pravesh. Further, there has been horizontal deployment of production and Raw Material Handling Systems ('RMHS') area. However, the most of Tata Steelium, Tata Shakti and Tata Kosh from all locations of TSBSL. significant achievement was successful trial of Ultra Violet ('UV') reactor technology for total cyanide removal from coke oven waste water by our I. ENVIRONMENT Environment Research & Development team. Further, our downstream The Company is committed to build a culture of zero tolerance to unit at Sahibabad has successfully implemented rainwater harvesting environmental non-compliances. This is supported by various policy- and ground water recharge structures both inside the plant and in nearby based improvement initiatives like reduction of carbon emissions and villages by adopting ponds. When, 0.96 lakh cubic meter of rooftop specific energy consumption by increasing pulverised coal injection rain water is recharged inside the plant, 4.37 lakh cubic meter water is ('PCI') rates in blast furnaces, enhanced utilization of scrap in steel making recharged through adopted ponds in villages annually. process, clean power generation through waste heat recovery boilers in Solid Waste Management DRI plant and using waste gases in gas fired boilers. For a circular economy, reuse of wastes in integrated steel plants is very In FY20, Tata Steel BSL Limited also undertook special initiatives like important with respect to environmental and economic aspect. Efficient theme based daily management practices, solid waste management, recycling of wastes is the key factor to control pollution that arise out stoppage of use of single use plastic, water audit by CII -Triveni water of disposal of wastes. Where utilization of LD Slag in steel plants is a institute followed by water savings campaign, creation of site specific rain challenge, TSBSL has significantly increased its LD slag utilization in Sinter water harvesting structures, rapid afforestation using Miyawaki method of making & other industrial applications during FY20. Further, the Company plantation etc. has achieved 100% utilization of fly ash through cement plants, brick & Major highlights of environmental achievements of FY20 are as given paver block making and using for highway road construction. below: Recognition
Initiatives to reduce Energy Consumption & CO2 Emissions Besides the above, in FY20, the Company has received commendations TSBSL is continually improving its carbon footprint by reducing carbon for significant achievement in Environment Management from several emission and energy conservation. In FY20, TSBSL reduced its carbon Institutions of repute. Few of them are, 9th Icon SWM Excellence Award emissions to 2.74 ton/tcs from that of 2.93 t/tcs of FY19. The substantial 2019, Odisha State Energy Conservation Award, 15th CII-EHS Award Odisha improvement in carbon emission was made possible by implementation Chapter and National Energy Management Award 2019 (for the Khopoli of some major initiatives like, successful commissioning of coke dry Plant). quenching system in Coke Oven-2 & 250 TPH gas fired boiler in power plant, increase in clean power generation to 86% from 40%, reduction J. SAFETY in overall fuel rates in blast furnaces, increase in scrap charging in Steel As a Tata Group company, we are committed to ‘ZERO HARM’. With this Melting Shop and reduction of specific coal consumption in DRI etc. goal in mind, TSBSL has established a Safety System & Process. To ensure Improvement in ambient air quality in & around our Steel plants personal safety, a special drive was undertaken for ensuring 100% availability and usage of PPEs at workplace. Point & nonpoint source emissions are major contributors in steel industries for degrading ambient air quality. Post-acquisition, TSBSL has To minimize risks of working at heights, specialized vendors for placed specific emphasis on improving its source emissions. Completion deployment of standard scaffolding have been engaged. A number of of certain key environmental improvement projects enabled TSBSL's safety initiatives have been implemented like, elimination of hydra cranes; Angul plant to reduce its dust load from 0.84 kg/tcs to 0.73 kg/tcs in Contractors safety management (Contract Leaders Awareness Programme FY20. Technological improvements like Power supply of electrostatic on Safety); imparting safety training to employees; implementation of precipitator ('ESP') using High frequency transformer rectifier/Micro Positive Isolation before starting of work, calming down of road traffic pulse-based rectifier, revamping of old ESPs in DRI contributed a lot to with surveillance, awareness of road safety management & development improve stack emission quality. Further standardization of maintenance of heavy vehicles parking places introduced. These initiatives have procedures, spillage reduction in conveyor junction houses by installation improved the Behavioral and Process Safety of TSBSL. of new technology sealing using double skirt rubber and commissioning of new dust extraction system in junction houses helped to reduce fugitive Considering, the management’s commitment to safety for all stakeholders, emission significantly. Moreover, as greenery always contributes for better the organizational focus is on Risk Assessment, Ranking and Decision air quality and acts as a carbon sink, TSBSL is continuously increasing its making for elimination of hazards and minimization of risk at workplace green cover throughout all its locations across India by Miyawaki method through safety competencies & safety processes, such as of rapid afforestation. o Safety Competencies and Safety Skills to Line Managers Water Conservation o Enhancement of Work Permit System and Implementation of TSBSL’s Sustainability framework and Environment Policy subscribes Positive Isolation to water conservation philosophy which greatly relies on 5R principles o Competency development of vendor partners and establishing a of Reduce, Reuse, Recycle, Recover and Recharge. With continuous vendor evaluation system efforts to make steel making more water efficient, TSBSL has taken significant initiatives for water conservation. Reuse of water from Effluent o Elimination of Man Machine Interface through Engineering solution Treatment Plants and Sewage Treatment Plants in DRI & Sinter plants enables these to consume zero fresh water. Installation of a scientifically o Pre-Startup Safety review for all new units and Long shut down designed high density poly ethelene ('HDPE') lined pond of capacity plants
39 It is important to note that the desired safety performance of Infrastructure Pipeline ('NIP') projects / initiatives for 2019-2025 in 'ZERO HARM' can be achieved, only, with the involvement and December 2019 especially for the transportation & logistics sector commitment of all stakeholders. TSBSL has chosen IT as the key enabler covering Roads, Railways, Ports and Airports. Achievement of NIP target to take the Safety journey forward, by Introduction of ‘Ensafe’ - an online will likely bring down the transportation and logistics cost in the future. platform to monitor the overall safety progress of the organization. In FY20, TSBSL focused on ramping-up operations, optimizing cost of K. RISKS AND CONCERNS production, streamlining logistics and raw material sourcing, improving environment and safety performance parameters, enabling steady Steel consumption growth stalled in most economies in the later half of performance across key product lines to survive critical business 2018, and the 2017 recovery lost its momentum. Downside risks included times. Through better financial prudence in working capital and credit increased trade frictions and a weakening global economy. 2019 started management, we consolidated our position in FY20. off well but due to local and global issues cropping up, looked very similar to 2018 in the world’s steel markets as momentum continued to slow In accordance with the Companies Act, 2013 and the SEBI (Listing from the supercharged year of 2017.The Global finished steel market in Obligations and Disclosure Requirements) Regulations, 2015, TSBSL has 2020 is set to be weighed down by continuation of last year’s weaker implemented a Risk Management framework relevant to all functions end-consumption rates co-inciding with outbreak of COVID-19. Global across locations in FY20. This Enterprise Risk Management ('ERM') steel consumption y-o-y growth for 2020 has been revised down to 1.1% process has been designed and developed with various inputs from from initial forecasts of 1.7% while China’s steel consumption is expected practices across industries and international standards (COSO 2017 to stay flat. These downward revisions are largely due to negative impact and ISO 31000:2018) and tailored with suitable customizations to meet of COVID-19 along with weak downstream activities in construction and the requirements of Tata Steel BSL. The ERM process ensures robust risk manufacturing sectors. Meanwhile, disruption of supply chains has been identification, assessment, prioritization, developing mitigation strategies the most significant in automotive industry as many countries rely on and monitoring/reporting risk dashboards for the same. A proper imported automotive parts from China and a large number of automotive risk governance structure with an empowered cross functional team factories are located within China. Traditionally, slower growth in steel comprising, but not limited to, of risk champions and risk owners have consumption has a negative impact on steel prices and this trend will been formed to take forward implementation of ERM process holistically. continue in 2020. But there are bright spots coming in the longer term L. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY with steel demand expected to rebound in H2 2020 from strong stimulus The Board of Directors of the Company and Audit Committee are policies in China for economic recovery and GDP growth after COVID-19. responsible for ensuring that Internal Financial Controls have been laid The steel industry’s net leverage and interest coverage are likely to down in the Company and that such controls are adequate and operating deteriorate in FY20 due to compressed EBITDA margins, due to a drop in effectively. The foundation of Internal Financial Controls (‘IFC’) lies in the net realizations in the face of a demand slowdown and increase in raw Tata Code of Conduct (‘TCoC’), policies and procedures adopted by the material prices. India’s steel exports are likely to decline in the next fiscal Management, corporate strategies, annual business planning process, year due to higher domestic demand from automotive and infrastructure management reviews, management system certifications and the risk companies. The auto sector has seen one of the worst periods in the last management framework. 9 months. Better demands from auto and infra companies are expected The Company has an IFC framework, commensurate with the size, scale in FY21 on a low FY20 base and it has already been observed that and complexity of its operations. The framework has been designed to restocking had resumed since December 2019. Government’s spending provide reasonable assurance with respect to recording and providing on infrastructure will boost the demand further in later half of 2020 once reliable financial and operational information, complying with applicable COVID-19 crisis will be over. Upside movement of coking coal prices laws, safeguarding assets from unauthorized use, executing transactions accompanied with tight domestic market of iron ores, due to license expiry with proper authorization and ensuring compliance with corporate and auctions of mines, will eventually inflate the cost of production. Rising policies. steel and iron ore prices could still help India to become a net exporter. The Internal Audit team monitors and evaluates the efficacy and As per recent Eurasia group study on global risks for 2020, growing levels adequacy of internal control systems in the Company, its compliance with of geopolitical and economic crisis across the world e.g. United States operating systems, accounting procedures and policies at all locations of (US)-China, US-Iran, European Union (EU)-China, Post-Brexit, is the major the Company and its subsidiaries. Based on the report of internal audit concern. Apart from that, climate change is now beginning to constrain function, process owners undertake corrective action(s) in their respective economic growth and plays an important role on global political stage as area(s) and thereby strengthen the controls. never before. For all these reasons, 2020 looks troubling indeed. The Audit Committee reviews the reports submitted by the Internal The growth trajectory of the steel industry has its own set of challenges/ Auditors. Also, the Audit Committee has independent sessions with concerns. Presently the biggest concern is with environment which the external auditor and the Management to discuss the adequacy and is gradually taking centre stage in India. The steel industry is energy- effectiveness of internal financial controls. intensive and is the second biggest consumer of energy globally. This leads to a higher carbon footprint and also affects the environment. M. HUMAN RESOURCE DEVELOPMENT / INDUSTRIAL RELATIONS Energy-efficient methods will be the focal point for production of steel. With an employee strength of ~ 5700, the Company strives to become In spite of lowering down of policy repo rate by RBI 5 times and by 135 an ‘Employer of choice’. To achieve this goal, the Company's HR Policies basis points in 2019 alone, cost of capital in India still remains significantly and Practices are being geared up. Safety is of utmost importance and high and Indian steel makers continue to face a relative disadvantage vis- deployment of safe practices has been done with a view to develop safe à-vis their competitors from the developed world. For most Indian steel behavior as well as safe workplace. The leadership has been a role model makers managing logistics requirements in time, is really challenging and has provided all the support to develop good HR practices, so that and costly affair. However, Government of India has announced National employees are nurtured well and are positively engaged.
40 Statutory Reports Financial Statements
In order to bring about Transparency, Uniformity and Consistency, several way of working, a program titled ‘Navchetna – the Tata Way of Life’ was policies have been developed for the employees, which have been well introduced. Our continued efforts on Workers education was recognized received and have provided an empowering environment to employees. by the Department of Labour, Govt of India with the ‘Workers education Different Social security schemes have also been introduced. award 2019’.
Employee Productivity continued to be the focus area during the year To improve employee connect, there are multiple forums and medium and various initiatives were deployed to improve the same. Efforts in that are used for communication and interaction with the employees, improving diversity has shown positive result with increase in women including platforms where employees can raise their concerns for employees in the workforce. redressal.
Performance Management System ('PMS') was introduced last year to For enhancing better employee experience, our Human Resource bring fairness and transparency. More rigor has been brought into the Information System has been further strengthened and various employee- PMS process by the introduction of a Talent Review mechanism which will friendly modules were rolled out. also help to promote a performance driven culture. The industrial relation during the year was harmonious. Employees have For providing career opportunity to employees and to recognize home contributed significantly for growth of the organization. grown talent, process of Internal Job Posting has been introduced. CAUTIONARY STATEMENT In order to improve the skill gap, there is a constant focus on building the Capability of our employees and vendor partners. Numerous Functional Statements in the Management Discussion and Analysis describing the and Managerial training programs have been delivered throughout Company’s estimates and expectations may be ‘forward-looking statements’ the year for both our employees and those of our vendor partners. within the meaning of applicable securities laws and regulations. Actual results In order to ensure cultural assimilation of employees with the Tata could differ materially from those expressed or implied.
41 CORPORATE GOVERNANCE REPORT
COMPANY’S CORPORATE GOVERNANCE PHILOSOPHY Ms. Nisha Anil Seth, Company Secretary & Compliance Officer of the Company is the ‘Compliance Officer’ in terms of this Insider Trading Code. As a part of the Tata Group, your Company places strong emphasis on Corporate Governance. Your Company’s philosophy on Corporate Governance extends BOARD OF DIRECTORS across its business operations to meet the needs of all stakeholders and the The Board is at the core of our corporate governance practices and oversees communities in which it operates to create long term sustainable value. and ensures that the Management serves and protects the long-term interest of Adoption and adherence to the Tata Code of Conduct further strengthens your all our stakeholders. We believe that an active, well-informed and independent Company’s philosophy on Corporate Governance. Board is necessary to ensure the highest standards of corporate governance. The Company strives to ensure compliance with the various corporate SIZE AND COMPOSITION OF THE BOARD governance requirements under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as Our policy is to have an appropriate mix of Executive Directors (‘EDs’), amended from time to time (‘SEBI Listing Regulations’). We consider it our Non-Executive Directors (‘NEDs’) and Independent Directors (‘IDs’) to maintain inherent responsibility to protect the rights of our stakeholders and disclose the Board’s independence and separate its functions of governance and timely, adequate and accurate information regarding our financials and management. performance, as well as the leadership and governance of the Company. As on March 31, 2020, the Board comprised eight (8) directors, one (1) of whom The Company is in compliance with the requirements stipulated under is an ED, three (3) are NEDs and four (4) are IDs including a Woman Independent Regulations 17 to 27 read with Schedule V and clauses (b) to (i) of Regulation Director. The composition of the Board of Directors of the Company is in 46(2) of the SEBI Listing Regulations, as applicable, with regard to corporate conformity with Regulation 17 of the SEBI Listing Regulations read with Section governance. 149 of the Companies Act, 2013 (‘Act’). The Board periodically evaluates the need for change in its composition and size. A detailed profile of our Directors Adherence to the various policies and codes adopted by the Company from is available on our website http://tatasteelbsl.co.in/management.html time to time in conformity with regulatory requirements helps your Company None of our Directors serve as Director or IDs in more than 7 listed companies fulfill this responsibility. These policies are available on the Company’s website and none of the EDs serve as IDs on any listed company as on date. Further, at https://tatasteelbsl.co.in/downloads.html none of our IDs serve as Non-Independent Director(s) of any Company on the Board of which any of our Non-Independent Director is an ID. Pursuant to This report highlights the Company’s practices for the Financial Year 2019-20. Regulation 26 of the SEBI Listing Regulations, none of our Directors are members CODE OF CONDUCT in more than 10 committees or act as chairperson of more than 5 committees (the committees being, Audit Committee and Stakeholders’ Relationship The Company has adopted the Tata Code of Conduct (‘TCoC’) which is available Committee) across all public limited companies in which they are a Director. All on its website at http://tatasteelbsl.co.in/Investor%20Relations%20pdf/ Non-Independent, Non-Executive Directors are liable to retire by rotation. There CodeOfConduct/TATA%20Code%20of%20Conduct.pdf are no inter-se relationships between our Board Members.
The TCoC articulates the Tata Group’s values, ethics and business principles Independent Directors are NED(s) as defined under Regulation 16(1)(b) of the and provides the guidelines by which all Tata Group companies conduct their SEBI Listing Regulations read with Section 149(6) of the Act along with rules business. framed thereunder. In terms of Regulation 25(8) of the SEBI Listing Regulations, the IDs have confirmed that they are not aware of any circumstance or situation A declaration signed by the Managing Director of the Company confirming the which exists or may be reasonably anticipated that could impair or impact compliance by Board Members and senior management personnel with the their ability to discharge their duties. Based on the declarations received TCoC is also annexed with this report. from the IDs, the Board of Directors has confirmed that they meet the criteria TATA CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING & CODE of independence as mentioned under Section 149 of the Act and Regulation OF CORPORATE DISCLOSURE PRACTICES 16(1)(b) of the SEBI Listing Regulations and that they are independent of the management. Further, the IDs have in terms of Section 150 of the Act read with In accordance with the Securities and Exchange Board of India (Prohibition of Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014, Insider Trading) Regulations, 2015, as amended from time to time, the Board of confirmed that they have enrolled themselves in the Independent Directors’ Directors (‘the Board’) of the Company has adopted the revised Tata Code of Databank maintained with the Indian Institute of Corporate Affairs. Conduct for Prevention of Insider Trading and the Code of Corporate Disclosure The Company has issued formal letters of appointment to the IDs and their Practices (‘Insider Trading Code’). appointments are in compliance with Regulation 25(1) and (2) of the SEBI Listing All our Promoters (including Promoter Group), Directors, Employees of the Regulations. As required under Regulation 46 of the SEBI Listing Regulations, as Company are identified as Designated Persons, and their Immediate Relatives amended, the terms and conditions of appointment of IDs including their role, and other Connected Persons such as auditors, consultants, bankers amongst responsibility and duties are available on our website at https://tatasteelbsl. others, who could have access to the unpublished price sensitive information of co.in/Investor%20Relations%20pdf/OtherImpDocuments/Terms%20&%20 the Company, are governed under this Insider Trading Code. Conditions%20of%20appointment%20of%20ID.pdf
42 Statutory Reports Financial Statements
Table A: Composition of the Board and Directorship(s) held as on March 31, 2020:
Name of the Director No. of directorship(s) held in No. of Board Committee Directorship(s) in other listed entity other Indian Public positions held in (Category of Directorship) Companies (1) other Indian Public Companies (2) Chairperson Member Chairperson Member Non-Executive, Non-Independent Directors Mr. T. V. Narendran 3 4 0 1 a) Tata Steel Limited (Chairman) (Chief Executive Officer & Managing Director) DIN: 03083605 b) Tata Steel Long Products Limited (Formerly ‘Tata Sponge Iron Limited’) (Non-Executive, Non-Independent) c) TRF Limited (Non-Executive, Non-Independent) Mr. Koushik Chatterjee 2 3 0 3 a) Tata Steel Limited DIN: 00004989 (Executive Director & Chief Financial Officer) b) Tata Metaliks Limited (Non-Executive, Non-Independent) c) The Tinplate Company of India Limited (Non-Executive, Non-Independent) d) Tata Steel Long Products Limited (Formerly ‘Tata Sponge Iron Limited’) (Non-Executive, Non- Independent) e) TRF Limited (Non-Executive, Non- Independent) Mr. Anand Sen 1 1 1 2 Tayo Rolls Limited DIN: 00237914 (Non-Executive, Non-Independent) Independent Directors Mr. Krishnava Dutt 0 5 3 5 a) Tata Metaliks Limited DIN: 02792753 (Non-Executive, Independent) b) Balrampur Chini Mills Limited (Non-Executive, Independent) c) TRF Limited (Non-Executive, Independent) Ms. Neera Saggi 0 7 0 7 a) Swaraj Engines Limited DIN: 00501029 (Non-Executive, Independent) b) GE Power India Limited (Non-Executive, Independent) c) TRF Limited (Non-Executive, Independent) d) GE T&D India Limited (Non-Executive, Independent) e) Honeywell Automation India Limited (Non-Executive, Independent) Mr. Shashi Kant Maudgal 0 2 0 2 a) The Tinplate Company of India Limited DIN: 00918431 (Non- Executive, Independent) b) Tata Steel Long Products Limited (Formerly ‘Tata Sponge Iron Limited’) (Non- Executive, Independent) Mr. Srikumar Menon 0 1 0 1 Tata Steel Long Products Limited DIN: 00470254 (Formerly ‘Tata Sponge Iron Limited’) (Non- Executive, Independent) Executive Director Mr. Rajeev Singhal 0 5 0 0 The Tinplate Company of India Limited DIN: 02719570 (Non-Executive, Non- Independent)
43 Notes: regulatory environment applicable to the Company, the industry, market and customers, operations and other relevant matters. 1. Directorships in other Indian Public Companies (listed and unlisted) excludes Tata Steel BSL Limited and Section 8 Companies. Details of orientation given to the IDs in the areas of business, strategy, governance, operations, safety, health, environment are available on the 2. As required under Regulation 26(1)(b) of the SEBI Listing Regulations, the website of the Company at http://tatasteelbsl.co.in/Investor%20Relations%20 disclosure includes chairmanship/membership of the Audit Committee pdf/OtherImpDocuments/Familiarisation%20Programme%20for%20 and Stakeholders’ Relationship Committee in Indian Public companies Independent%20Directors.pdf (listed and unlisted) excluding Tata Steel BSL Limited. Further, membership includes position as Chairperson of committees. BOARD EVALUATION
SELECTION OF NEW DIRECTORS AND BOARD MEMBERSHIP CRITERIA The details of the Board Evaluation forms part of the Board’s Report. The Nomination and Remuneration Committee (‘NRC’) works with the Board REMUNERATION POLICY FOR BOARD AND SENIOR MANAGEMENT to determine the appropriate qualifications, positive attributes, characteristics, skills and experience required for the Board as a whole and its individual The Board has approved the Remuneration Policy for Directors, Key Managerial members with the objective of having a Board with diverse backgrounds and Personnel (‘KMP’) and all other employees of the Company. The same is experience in business, government, education and public service. The Policy available on our website at http://tatasteelbsl.co.in/Investor%20Relations%20 for Appointment and Removal of Directors is available on our website at https:// pdf/Policies/Remuneration%20Policy%20of%20directors%20KMPs%20&%20 tatasteelbsl.co.in/Investor%20Relations%20pdf/Policies/Policy%20on%20 Employees.pdf appointment%20and%20removal%20of%20Directors.pdf Details of remuneration for Directors in FY2019-20 are provided in Table C DIRECTORS QUALIFICATIONS, SKILLS, EXPERTISE, COMPETENCIES AND below. ATTRIBUTES Table C: Cash compensation paid to Directors for the year ended The Board comprises qualified members with an appropriate blend of skills, March 31, 2020 competence, functional and industry expertise and diversity of perspectives (` lakh) appropriate to the size and nature of the Company to enable them to effectively contribute at the Board and Committee meetings. Name Fixed Salary Commission/ Sitting Total Bonus Fees Compensation The below matrix summarizes the key skills, expertise, competencies and Basic Perquisite/ Total attributes as identified by the NRC for recommending appointment of Directors Allowance Fixed on the Board. Salary Non-Executive, Non-Independent Directors Table B: Director qualifications, skills, expertise, competencies and attributes: Mr. T. V. Narendran – – – – – – Mr. Anand Sen – – – – 0.55 0.55 Name of the Areas of Skills/Expertise/Competence Mr. Koushik Chatterjee – – – – – – Director Leadership Strategy Operations Technology Finance Governance Government / Regulatory Independent Directors Affairs Ms. Neera Saggi – – – – 3.25 3.25 T. V. Narendran * * * * * * * Mr. Krishnava Dutt – – – – 3.00 3.00 Krishnava Dutt * * * * * Mr. Srikumar Menon – – – – 2.75 2.75 Shashi Kant * * * * * * Maudgal Mr. Shashi Kant – – – – 2.45 2.45 Maudgal Neera Saggi * * * * Srikumar * * * * * * Executive Directors Menon Mr. Rajeev Singhal 53.96 94.96 148.91 149.10 – 298.02 Koushik * * * * * * Total 53.96 94.96 148.91 149.10 12.00 310.02 Chatterjee Anand Sen * * * * * * Notes: Rajeev Singhal * * * * * * * (1) In line with the internal guidelines of the Company, no payment is made FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS towards commission/sitting fees to the Non-Executive Directors of the Company, who are in full time employment with any other Tata Company. Independent Directors inducted to the Board are given a formal orientation on Accordingly, remuneration paid to Mr. Anand Sen is only for part of the the Company’s business operations, products, organization structure, as well year post his superannuation from Tata Steel Limited. as the Board constitution and its procedures through various programmes / presentations. The IDs are also provided with an opportunity to visit the plant (2) Mr. Rajeev Singhal is not eligible for payment of any severance fees and locations of the Company and interact with members of Senior Management. his contract may be terminated by either party giving to the other party six months’ notice in writing of such termination or the Company paying At various Board meetings held during the year, presentations were made to six months’ remuneration in lieu thereof. The compensation paid to the Board on safety, health and environment, Company policies, changes in the Mr. Rajeev Singhal does not include actuarial valuation of retirement.
44 Statutory Reports Financial Statements
(3) No commission was paid to any Director during FY2019-20. The Ministry of Corporate Affairs has vide its circular dated March 24, 2020 granted relaxations to corporates from adhering to strict timelines for statutory (4) During FY2019-20, there were no pecuniary relationships or transactions requirements of conducting at least 1 meeting of Independent Directors during of any Non-Executive Directors vis-a-vis the Company. a Financial Year pursuant to Para VII(1) of Schedule IV to the Act. (5) None of the Directors hold any shares / stock options / convertible BOARD COMMITTEES instruments of the Company as on March 31, 2020. There are five (5) Committees of the Board as on March 31, 2020. The details of BOARD MEETINGS the Committees of the Board are given below. Scheduling and selection of agenda items for Board Meetings Audit Committee All agenda papers for the Board and Committee meetings are disseminated The primary objective of the Audit Committee (‘Committee’) is to monitor electronically on a real-time basis, by uploading them on a secured online and provide an effective supervision of the Management’s financial reporting application. The Board meets at least once a quarter to review the quarterly process, to ensure accurate and timely disclosures, with the highest levels of financial results and other items on the agenda. Additional meetings are held, as transparency, integrity and quality of financial reporting. and when necessary. Committees of the Board meet before the Board Meeting, or whenever the need arises for transacting the business. The information as The Committee oversees the work carried out in the financial reporting process required under Regulation 17(7) read with Schedule II Part A of the SEBI Listing by the Management and the Company’s Internal, Cost and Statutory Auditors. Regulations is made available to the Board. The recommendations of the The Committee also assesses the adequacy and reliability of the internal Committees are placed before the Board for necessary approval and/or noting, control systems and risk management systems. The Committee further reviews as the case, may be. processes and controls including compliance with laws, TCoC and Insider Trading Code, Whistle Blower Policies and related cases thereto, functioning of During FY2019-20, five (5) Board Meetings were held on April 17, 2019, the Anti-Sexual Harassment Policy and guidelines and internal controls. April 25, 2019, July 25, 2019, October 24, 2019, and January 14, 2020. The gap between any two consecutive Board Meetings during this period did not exceed The Company Secretary acts as the Secretary to the Committee. The Internal one hundred and twenty days. The necessary quorum was present at all the Auditor reports functionally to the Committee. The Executive Director and meetings. Senior Management of the Company also attend the meetings as invitees whenever required, to address concerns raised by the Committee Members. Table D: Attendance details of Directors for the year ended March 31, 2020 are given below: The Board at its Meeting held on July 11, 2018, approved and adopted the Charter of the Audit Committee. Name of Director Category No. of meetings No. of Meetings held during the attended As on March 31, 2020, the terms of reference and role of the Committee were as tenure per Section 177(4) of the Act and Regulation 18(3) read with Part C of Schedule II of the SEBI Listing Regulations respectively. Mr. T. V. Narendran NED 5 5 (Chairperson) During FY2019-20, the Committee met five (5) times on April 17, 2019, Mr. Koushik Chatterjee NED 5 5 April 25, 2019, July 25, 2019, October 24, 2019 and January 14, 2020. The necessary quorum was present at all the meetings. All decisions at the Audit Mr. Anand Sen NED 5 5 Committee meetings were taken unanimously. Mr. Krishnava Dutt ID 5 5 Table E: The composition of the Committee and the attendance details of Ms. Neera Saggi ID 5 5 the Members for the year ended March 31, 2020 are given below: Mr. Shashi Kant Maudgal ID 5 4 Mr. Srikumar Menon ID 5 5 Names of Members Category No. of meetings No. of held during meetings Mr. Rajeev Singhal ED 5 5 tenure attended Video conferencing facilities are also used to facilitate Directors travelling Mr. Krishnava Dutt ID 5 5 abroad or at other locations to participate in the meetings. (Chairperson) All the Directors, except Ms. Neera Saggi were present at the Annual General Ms. Neera Saggi ID 5 5 Meeting (‘AGM’) of the Company held on Friday, September 6, 2019. Ms. Neera Mr. Srikumar Menon ID 5 5 Saggi was unable to participate at the AGM due to personal exigency. Mr. Koushik Chatterjee NED 5 4
MEETING OF THE INDEPENDENT DIRECTORS Mr. Krishnava Dutt, Chairperson of the Audit Committee was present at the last AGM of the Company held on Friday, September 6, 2019. Pursuant to the provisions of Section 149(8) read with Schedule IV of the Act and Regulations 25(3) & 25(4) of the SEBI Listing Regulations, a meeting Nomination and Remuneration Committee of the Independent Directors was scheduled to be held in the last week of The purpose of the Nomination and Remuneration Committee (‘Committee’) March 2020 without the presence of Non-Independent Directors and Members includes formulating criteria for determining qualifications, positive attributes, of the Management to evaluate the performance of all Directors, the Chairman independence of Directors, succession planning and recommending to the and the Board as a whole and its Committees. However, due to the outbreak Board of Directors, a policy relating to the remuneration of the Directors, Key of the COVID-19 pandemic and the subsequent lockdowns imposed by the Managerial Personnel and Employees (‘Remuneration Policy’) overseeing Central and State Governments, the meeting was rescheduled and held on the Company’s process for appointment of Senior Management and their May 20, 2020.
45 remuneration, devising criteria for performance evaluation of the Board of Table G: The composition of the Committee and the attendance details of Directors (including Independent Directors). The Remuneration Policy and the Members for the year ended March 31, 2020 are given below: the criteria for making payments to Non-Executive Directors is available on our website at http://tatasteelbsl.co.in/Investor%20Relations%20pdf/Policies/ Names of Members Category No. of meetings No. of Remuneration%20Policy%20of%20directors%20KMPs%20&%20Employees.pdf held during meetings tenure attended The Committee also discharges the Board’s responsibilities relating to Mr. T. V. Narendran NED 1 1 compensation of the Company’s Executive Directors and Senior Management. (Chairperson) The Board at its Meeting held on July 11, 2018 approved and adopted Mr. Shashi Kant ID 1 1 the Charter of the Nomination and Remuneration Committee. As on Maudgal March 31, 2020, the terms of reference and role of the Committee were as per Mr. Anand Sen NED 1 1 Section 178 of the Act and Regulation 19(4) read with part D of Schedule II of the SEBI Listing Regulations respectively. Mr. Rajeev Singhal ED 1 1
During FY2019-20, the Committee met twice on April 17, 2019 and Mr. T. V. Narendran, Chairperson of the Committee was present at the last AGM April 25, 2019. The necessary quorum was present at both the meetings. of the Company held on Friday, September 6, 2019.
Table F: The composition of the Committee and the attendance details of Stakeholders’ Relationship Committee the Members for the year ended March 31, 2020 are given below: The Stakeholders’ Relationship Committee (‘Committee’) considers and resolves the grievances of our shareholders and other security holders, Names of Members Category No. of meetings No. of including complaints relating to non-receipt of annual report, transfer and held during meetings transmission of securities, non-receipt of dividends/interests, issue of new/ tenure attended duplicate certificates, general meetings and such other grievances as may be Ms. Neera Saggi ID 2 2 raised by the security holders from time to time. (Chairperson) The Committee also reviews:
Mr. Shashi Kant ID 2 1 a) Measures taken for effective exercise of voting rights by Shareholders; Maudgal b) Service standards adopted by the Company in respect of services Mr. T. V. Narendran NED 2 2 rendered by our Registrars & Transfer Agent;
Mr. Anand Sen NED 2 2 c) Measures rendered and initiatives taken for reducing quantum of unclaimed dividends and ensuring timely receipt of dividend/annual Ms. Neera Saggi, Chairperson of the Committee, was not present at the last AGM report/notices and other information by Shareholders. of the Company held on Friday, September 6, 2019, due to personal exigency. Mr. T. V. Narendran, Chairman of the Board and Non-Executive Director was The Board at its Meeting held on July 11, 2018 approved and adopted the present at the AGM as authorised by the Chairperson of the Committee to Charter of the Stakeholders’ Relationship Committee which was revised and respond to any questions that the Members might have on the nomination and adopted on October 24, 2019. As on March 31, 2020, the terms of reference and remuneration processes of the Company. role of the Committee were as per Section 178 of the Act and Regulation 20(4) read with part D of Schedule II of the SEBI Listing Regulations respectively. Corporate Social Responsibility and Sustainability Committee During FY2019-20, one (1) Meeting of the Committee was held on The purpose of the Corporate Social Responsibility and Sustainability (‘CSR&S’) October 24, 2019. The necessary quorum was present at the meeting. Committee (‘Committee’) is to assist the Board in formulating, monitoring and reviewing the CSR strategy and policy of the Company and the amount of Table H: The composition of the Committee and the attendance details of expenditure to be incurred on CSR activities. the Members for the year ended March 31, 2020 are given below:
The Committee also assists the Management to formulate, implement and Names of Members Category No. of meetings No. of review policies, principles and practices to foster the sustainable growth of the held during meetings Company that creates value consistent with the long-term preservation and tenure attended enhancement of financial, manufactured, natural, social, human and intellectual Mr. Koushik Chatterjee NED 1 1 capital. (Chairperson) Mr. Krishnava Dutt1 ID 1 1 The Board at its Meeting held on July 11, 2018 approved and adopted the Charter of the Committee. Mr. Anand Sen NED 1 - Mr. Rajeev Singhal ED 1 1 The CSR&S Policy is available on our website at http://tatasteelbsl.co.in/ Investor%20Relations%20pdf/Policies/CSR%20and%20Sustainability%20 1. M r. Krishnava Dutt was appointed as a Member of the Stakeholders’ Policy.pdf Relationship Committee at the Board Meeting held on April 17, 2019 with immediate effect. During FY2019-20, one (1) Meeting of the Committee was held on March 13, 2020. The necessary quorum was present at the meeting. Mr. Koushik Chatterjee, Chairperson of the Committee was present at the AGM of the Company held on Friday, September 6, 2019.
46 Statutory Reports Financial Statements
In terms of Regulation 6 and Schedule V of the SEBI Listing Regulations, the Disclosures regarding the re-appointment of Directors Board has appointed Ms. Nisha Anil Seth, Company Secretary & Compliance In terms of the relevant provisions of the Act, Mr. Koushik Chatterjee Officer as the Compliance Officer of the Company, the details of whom are given (DIN: 00004989) is liable to retire by rotation at the ensuing AGM and being below: eligible, seek re-appointment.
Name of the Designation Address The Board recommends the above re-appointment for the approval of the Compliance Officer Members at the ensuing AGM. Ms. Nisha Anil Seth Company Secretary & Ground Floor, Mira Corporate The detailed profile of Mr. Chatterjee and particulars of his experience, skills Compliance officer Suites, Plot No. 1 & 2, Ishwar or attributes that qualify him for Board Membership is provided in the Notice Nagar, Mathura Road, convening the AGM. New Delhi – 110 065. Means of Communication During FY2019-20, the Company received one (1) shareholder complaint and the same was resolved to the satisfaction of the shareholder. As on Timely sharing and disclosure of consistent, comparable, relevant and reliable March 31, 2020, the Company did not have any complaint pending for resolution information on the Company’s performance is at the core of its Corporate on the online redressal portal of SEBI i.e., SCORES. The details of shareholder Governance Policy. Steps taken by the Company in this regard are given below: complaints received and redressed during FY2019-20 were as below: Financial Results
Opening Received during Resolved during Closing The Company publishes the quarterly, half-yearly and annual financial results of Balance as on the year the year Balance as on the Company in Business Standard (English and Hindi edition). The results are April 1, 2019 March 31, 2020 promptly disseminated to BSE Limited (‘BSE’) and National Stock Exchange of 0 1 1 0 India Limited (‘NSE’) (collectively referred to as ‘Stock Exchanges’) for display on their respective websites as well as uploaded on the website of the Company at Safety, Health and Environment Committee www.tatasteelbsl.co.in immediately after the Board Meetings. The statutory notices are published in ‘Business Standard’ (English and Hindi edition). The The Safety, Health and Environment Committee (‘SHE Committee’) reviews the Company also issues press releases from time to time. safety, health and sustainability policies, processes and systems, periodically and recommends measures for improvement from time to time. Annual Report
The SHE Committee oversees the environmental performance and reviews The Annual Report containing, inter-alia, Audited Annual Accounts, Consolidated Company’s safety performance on a quarterly basis. Financial Statements, Board’s Report, Management Discussion and Analysis and other regulatory reports is circulated to the Members and others entitled The Board at its meeting held on August 9, 2018 approved and adopted the thereto. The Annual Reports for previous years are also available on the website Charter of the Safety, Health and Environment Committee. of the Company at http://tatasteelbsl.co.in/financial-reporting.html
The Board at its Meeting held on July 11, 2018 approved and adopted Disclosures to Stock Exchanges the Safety Principles & Occupational Health Policy which is available on All price sensitive information and matters that are material to shareholders our website at http://tatasteelbsl.co.in/Investor%20Relations%20pdf/Policies/ are disclosed to the respective Stock Exchanges, where the securities of the Safety%20Health%20and%20Environment%20Policy.pdf Company are listed. All submissions to the Stock Exchanges are made through During FY2019-20, 3 (three) Meetings of the SHE Committee were held on their respective electronic online filing systems. The same are also available on July 25, 2019, October 24, 2019 and January 14, 2020. The necessary quorum the Company’s website at http://tatasteelbsl.co.in/corporate-announcements. was present at all the meetings. html
Table I: The composition of the SHE Committee and the attendance details Website of the Members for the year ended March 31, 2020 are given below: The Company’s website provides details on it’s leadership, management, policies, corporate governance, corporate social responsibility, investor Names of Members Category No. of meetings No. of relations, products and processes and updates and news. The section on held during meetings ‘Investor Relations’ serves to inform the Shareholders, by giving complete tenure attended financial details, stock exchange compliances and disclosures including Mr. T. V. Narendran NED 3 3 shareholding patterns and updated credit ratings amongst others, information (Chairperson) on unclaimed dividend of Shareholders, details of Registrars & Transfer Agent.
Mr. Shashi Kant ID 3 3 Share Transfer System Maudgal Pursuant to SEBI Circular Nos. D&CC/FITTC/CIR-15/2002 dated Mr. Rajeev Singhal ED 3 3 December 12, 2002 and D&CC/FITTC/CIR-18/2003 dated February 12, 2003, GENERAL INFORMATION FOR SHAREHOLDERS RCMC Share Registry Pvt. Ltd., which is already the Depository Interface of the Company for both National Securities Depository Limited (‘NSDL’) and Central Corporate Identity Number (CIN) of the Company: The CIN of the Company is Depository Services (India) Limited (‘CDSL’), has been appointed as Registrar L74899DL1983PLC014942. and Transfer Agents (‘RTA’) effective March 31, 2003 for all the work related to share registry in terms of both physical and electronic holdings.
47 During the financial year 2019-20, the Securities and Exchange Board of India SCN that there is a violation of Regulation 10 read with 14(1) of the SAST (‘SEBI’) and Ministry of Corporate Affairs (‘MCA’) has mandated that existing Regulations, 1997 read with Regulation 35(2)(a) of the SAST Regulations, members of the Company who hold securities in physical form and intend to 2011 is not tenable in the eyes of law. transfer their securities after April 1, 2019, can do so only in dematerialised The matter is currently pending before SEBI. form. In view of the same, the Members holding shares in physical form were requested to dematerialize such shares and to update their bank accounts and 2. Show Cause Notice (Reference No. SEBI/EAD-3/VSS/CM/27601/2019) email ids with their respective Depository Participant (‘DP’). dated October 18, 2019 issued by SEBI in relation to alleged violations of Regulation 51(1), Regulation 51(2) read with Part B of Share transactions in electronic form can be effected in a simpler and faster Schedule III (Clause A1, A4, A9), Regulation 52(4), Regulation 52(5), manner. After a confirmation of a sale/purchase transaction from the broker, Regulation 54(2), Regulation 57(1) of the SEBI Listing Regulations in shareholders should approach the DP with a request to debit or credit their respect of non-convertible debentures (‘NCDs’) issued and listed account for the transaction. The DP will immediately arrange to complete during the year(s) 2008 to 2013 and Regulation 7(3), Regulation 13(3) the transaction by updating the account. There is no need for a separate and Regulation 40(10) read with Regulation 40(9) of the SEBI Listing communication to the Company to register such share transfers. Regulations during the year(s) 2016 to 2018, in respect of the equity shares Shareholders should communicate with RCMC Share Registry Pvt. Ltd., the of the Company listed on BSE and NSE. Company’s RTA quoting their Folio Number or Depository Participant ID (‘DP ID’) and Client ID number, for any queries to their securities. The Company submitted its response to SEBI on February 04, 2020 stating inter-alia that no action is warranted against the Company owing to the Details of Show Cause Notices received fact that the erstwhile Company i.e. Bhushan Steel Limited was acquired by Bamnipal Steel Limited, a wholly owned subsidiary of Tata Steel During the year, the Company has received the following Show Cause Notices Limited (‘TSL’) on May 18, 2018 pursuant to the corporate insolvency from SEBI: resolution process (‘CIRP’) under the Insolvency and Bankruptcy Code, 1. Show Cause Notice Reference No. (EAD/EAD5/MC/CB/2019/18359/1- 2016 (‘IBC’) further to which the Board of Directors of the Company 9), dated July 19, 2019 (‘SCN’) issued by the Securities and Exchange was reconstituted (‘Reconstituted Board’) and a new management Board of India (‘SEBI’) in the matter of Orissa Sponge Iron & Steel Limited (‘New Management’) was put in place. Further, the resolution plan as (‘OSISL’). The SCN is in relation to alleged violations of Regulation 10 approved by the NCLT was binding on all stakeholders including SEBI read with Regulation 14(1) of the SEBI (Substantial Acquisition of Shares and therefore, the Company under New Management cannot be held & Takeovers) Regulations, 1997 (‘SAST Regulations, 1997’) read with responsible for any acts or omissions pertaining to the pre-CIRP period. Regulation 35(2)(a) of the SEBI (Substantial Acquisition of Shares & The matter is currently pending before SEBI. Takeovers) Regulations, 2011 (‘SAST Regulations, 2011’) committed during the acquisition of shareholding in OSISL. It has been alleged in Details of non-compliance the SCN that the Company along with Bhushan Energy Limited presently known as Angul Energy Limited (‘Noticee No. 1’) alongwith other notices During FY2018-19, NSE and BSE had imposed a fine of `9,53,474/- and allegedly acted in a common objective with BNS Tour and Travel Pvt. Ltd. `9,53,475.40 respectively for non-compliance with the requirement of (‘Noticee No.9’) to acquire shares of OSISL and hence as a result were Regulation 33 of the SEBI Listing Regulations. Apart from the said non- persons acting in concert (‘PAC’) in terms of Regulation 2(e) of the SAST compliance, there have been no other instances of non-compliance by the Regulations, 1997 for the purpose of acquisition of shares in OSISL during Company nor have any penalties or strictures been imposed on the Company the investigation period i.e. the period up to February 28, 2009. Further, by the Stock Exchange(s) or SEBI or any Statutory Authority, on any matter it was alleged that Noticee No. 9 was undisclosed PAC with the Company related to capital markets, during the last three years. along with the Noticees No. 1-7. It was also alleged that Bhushan Group None of the Company’s listed securities are suspended from trading. (i.e. Noticee No. 1-8) made a public announcement on February 28, 2009 without disclosing Noticee No. 9 as its PAC to the offer. Therefore, Certificates from Practicing Company Secretaries the omission to include Noticee No. 9 as a PAC and subsequent delay of 24 days in making a public announcement of the acquisition of shares As required by Regulation 34(3) and Schedule V Part E of the SEBI Listing in OSISL is in violation of Section 12A(f) of the SEBI Act and Regulation Regulations, the certificate given by Messrs. PI & Associates, (Firm Registration 10 read with Regulation 14(1) of the SAST Regulations, 1997 read with No. P2014UP035400), Practicing Company Secretaries, is annexed to this report. Regulation 35(2)(a) of the SAST Regulations, 2011. As required under Clause 10(i) of Part C under Schedule V of the SEBI Listing The Company vide its reply dated October 1, 2019 has refuted all claims in Regulations, the Company has received a certificate from Messrs. PI & Associates, the said SCN stating that the said matter was already decided in favour of (Firm Registration No. P2014UP035400), Practicing Company Secretaries, the Company by the Ld. Securities Appellate Tribunal (‘SAT’) vide its order certifying that none of our Directors have been debarred or disqualified from dated December 28, 2010 (‘Order’) in appeal bearing 65 of 2010. The being appointed or continuing as Directors of the Company by SEBI or MCA or Ld. SAT while adjudicating the said appeal filed by erstwhile Bhushan such other statutory authority. Steel Limited for similar investigation period i.e. January 29, 2009 has CEO and CFO certification given a categorical finding that the Noticee No. 9, ceased to be a part of the alleged Bhushan Group of Companies from October 06, 2008 and As required under Regulation 17(8) read with Schedule II Part B of the SEBI therefore no public announcement as stated alleged in the SCN under Listing Regulations, the Managing Director and Chief Financial Officer have reply are/were required to be given. Therefore, the allegation raised in the given appropriate certifications to the Board of Directors.
48 Statutory Reports Financial Statements
Reconciliation of Share Capital Audit Report For FY2019-20, the Company had in place, a Whistle Blower Policy (‘Policy’) establishing a Vigil Mechanism, which provides a formal mechanism to the Pursuant to the provisions of Regulation 40(9) and 61(4) of the SEBI Listing Directors and employees to report to the Management, concerns about Regulations, a Company Secretary in Practice has issued half-yearly certificates unethical behaviour, actual or suspected fraud or violation of the codes of with respect to due compliance of share and security transfer formalities by the conduct or policy of the Company. Company. The details of the Vigil Mechanism are given in the Board’s Report. The Pursuant to Regulation 76 of the Securities and Exchange Board of India Whistle Blower Policy for Directors and Employees as adopted by the (Depositories and Participants) Regulations, 2018, a Company Secretary in Board of Directors of the Company on July 11, 2018, is available on the Practice carries out a Reconciliation of Share Capital Audit to reconcile the total Company’s website at http://tatasteelbsl.co.in/Investor%20Relations%20pdf/ admitted capital with NSDL and CDSL (collectively ‘Depositories’) and the total Policies/Vigil%20Mechanism%20%20Policy.pdf issued and listed capital of the Company. The audit confirms that the total listed and paid-up capital is in agreement with the aggregate of the total number During the year under review, no person has been denied access to the of shares in dematerialised form (held with Depositories) and total number of Chairman of the Audit Committee. shares in physical form. This audit is carried out every quarter and the report Disclosures in relation to Sexual Harassment at Workplace thereon is submitted to the Stock Exchanges where the Company’s shares are listed. The quarterly Audit Report as submitted to the Stock Exchanges is The disclosures in relation to the Sexual Harassment of Women at Workplace available on the Company’s website at www.tatasteelbsl.co.in (Prevention, Prohibition and Redressal) Act, 2013 are given as under: Related Party Transactions a. Number of complaints filed during the financial year 4– All transactions entered into with related parties as defined under the Act and b. Number of complaints disposed of during the financial year –4 Regulation 23 of the SEBI Listing Regulations, each as amended, during the year c. Number of complaints pending as on end of the financial year -Nil . under review were on an arm’s length price basis and in the ordinary course Consolidated Fees paid to Statutory Auditors of business. These have been approved by the Audit Committee. The Company has not entered into any materially significant related party transaction that During the Financial Year 2019-20, the total fees for all services paid by may have potential conflict with the interests of the Company at large. The the Company to M/s Walker Chandiok LLP, (Firm Registration Number: Board of Directors have approved and adopted a Policy on Related Party 001076N/N500013), Statutory Auditors of the Company is as under: Transactions and the same is updated from time to time basis amendments Table J: Consolidated fees paid to statutory auditors: in the regulatory provisions. The Policy is available on the Company’s website at http://tatasteelbsl.co.in/Investor%20Relations%20pdf/Policies/Related%20 (` lakh) Party%20Transactions%20Policy.pdf Particulars Amount During the FY2019-20, the Company did not have any material pecuniary Services as statutory auditors 340.00 relationship or transactions with Non-Executive Directors apart from paying Taxation matters and audit 40.00 Director’s remuneration. Further, the Directors have not entered into any Other services 9.04 contracts with the Company or its subsidiaries, which will be in material conflict Out-of-pocket expenses 59.49 with the interests of the Company. Total 448.53 The Board has received disclosures from KMPs relating to material, financial and commercial transactions where they and/or their relatives have personal GENERAL BODY MEETINGS interest. Table K: Location and time for the last three Annual General Meetings Material Subsidiary Companies (AGMs): There is no material unlisted subsidiary company requiring appointment of Particulars FY2018-19 FY2017-18 FY2016-17 an Independent Director of the Company on the Board of Directors of such unlisted subsidiary company. Day, Date, Time & Venue Friday, Tuesday, Saturday, September 6, 2019 September 25, 2018 September 16, 2017 Policy for Determining Material Subsidiaries at 4:00 p.m. (IST) at at 12 noon (IST) at at 11:00 a.m. (IST) at The Company has formulated a Policy for Determining Material Subsidiaries Lakshmipat Singhania Kamani Auditorium, Airforce Auditorium, and the same is available on the Company’s website at http://tatasteelbsl.co.in/ auditorium, PHD 1 Copernicus Marg, Subroto Park, Investor%20Relations%20pdf/Policies/Material%20Subsidiaries%20Policy.pdf Chamber of Commerce New Delhi – 110 001. New Delhi - 110 010. Vigil Mechanism and Industry, PHD House, 4/2 Siri The Company has in place a Vigil Mechanism that provides a formal mechanism Institutional Area, for the Directors, employees and vendors to approach the Ethics Counselor/ August Kranti Marg, Chairman of the Audit Committee and make protective disclosures about the New Delhi – 110 016. unethical behavior, actual or suspected fraud or violation of the TCoC or ethics policy, thereby ensuring that the activities of the Company are conducted in a Special Resolutions passed N.A. Change of name N.A. fair and transparent manner. of the Company and consequent The Vigil Mechanism comprises 3 (Three) policies viz., the Whistle Blower amendments in the Policy for Directors & Employees, Whistle Blower Policy for Vendors and Whistle Memorandum and Blower Reward and Recognition Policy for Employees. The Policy is available on Articles of Association of our website at http://tatasteelbsl.co.in/Investor%20Relations%20pdf/Policies/ the Company. Vigil%20 Mechanism%20%20Policy.pdf
49 Table L: Annual General Meeting 2020 proceeds of the issue were utilized for repayment of Inter-Corporate Deposit of Bamnipal Steel Limited. As on March 31, 2020 there is no amount lying During FY2019-20, the Company did not convene any Extra-Ordinary General un-utilised with the Company. The Company affirms that there has been no Meeting nor pass any resolutions through Postal Ballot. None of the businesses deviation or variation in utilisation of proceeds of the NCRPS and OCRPS of the proposed to be transacted at the ensuing AGM require passing a Special Company. Resolution through Postal Ballot. Commodity Price Risk, Foreign Exchange Risk and Hedging Activities Day & Date Monday, September 21, 2020 Time 3:00 p.m. (IST) The Company inherently faces risks arising out of raw material price volatility Venue In view of the continuing COVID-19 pandemic, the which impacts its profitability and cash flows. However, steel prices over the Ministry of Corporate Affairs has vide its circular long term tend to track underlying raw material prices thus providing a natural dated May 5, 2020 read with circulars dated April 8, hedge to the business. Further, the Company secures its iron ore requirement 2020 and April 13, 2020 (collectively referred to as from Tata Steel Limited’s captive iron ore mines and manage raw material price ‘MCA Circulars’) permitted the holding of the Annual volatility. General Meeting (‘AGM’) through VC/OAVM, without In addition to address the short-term volatility, the Company tries to buy part of the physical presence of the Members at a common its raw materials on annual fixed price basis. venue. In compliance with the provisions of the Act, SEBI Listing Regulations and MCA Circulars, the AGM of the Further, to manage the raw material sourcing, the Company has a dedicated Company is being held through VC/OAVM. The deemed procurement team with understanding of international commodity markets venue of the AGM shall be Ground Floor, Mira Corporate including raw material required for steel industry operations. This experienced Suites, Plot No. 1 & 2, Ishwar Nagar, Mathura Road, team works closely with key raw material producers across the globe and New Delhi – 110 065. is tasked with developing a reliable and lowest cost supply chain. The team Financial Year April 1 to March 31 carries out a risk assessment of the supply chain and works consciously towards Dates of Book Tuesday, September 15, 2020 to Monday, mitigating the risk of any disruption in supply chain. It ensures there is adequate Closure September 21, 2020 (Both days inclusive) diversification in terms of vendors, geographies etc. and also carries out risk Dividend payment No dividend has been declared for the Financial Year assessment of vendors with regards reliability of supply, financial strength etc. date 2019-20 The team also has a Value in Use (‘VIU’) optimization framework in place and closely monitors and analyses price movements in grades of raw materials to Annual Listing Fees arrive at the most effective source and cost of supply. The Annual Listing Fees for the financial year 2019-20 have been paid within Exposure of the Company to commodity and commodity risk faced by the the due dates to both the Stock Exchanges i.e. BSE Limited (‘BSE’) and National Company throughout the year: Stock Exchange of India Limited (‘NSE’). Dematerialisation of shares and liquidity 1. Total exposure to commodities: `5,772.72 crore (approx.). As per the notification issued by SEBI, the Company’s Equity Shares are 2. Exposure to various commodities (based on materiality). compulsorily tradable in electronic form. The International Securities Identification Number (‘ISIN’) allotted to the Equity Shares of the Company Commodity Exposure in Exposure in % of such exposure hedged Total under the Depository System is INE824B01021. Name INR towards Quantity terms through commodity derivatives the particular towards the Domestic International 1,09,28,15,895 equity shares, representing 99.94% of the Company’s paid-up commodity particular Market Market equity share capital, have been dematerialized as on March 31, 2020. Further, (₹ crore) commodity during FY2018-19, the Securities and Exchange Board of India (‘SEBI’) and (Tonnes) OTC Exchange OTC Exchange Ministry of Corporate Affairs (‘MCA’) has mandated that existing members of Coal 5,069.97 38,06,407 NIL NIL NIL NIL NIL the Company who hold securities in physical form and intend to transfer their securities after April 1, 2019, can do so only in dematerialised form. Hence, Limestone 381.82 19,00,444 NIL NIL NIL NIL NIL trading in equity shares of the Company is permitted only in dematerialized & Dolomite form as per notification issued by SEBI. Therefore, to enable us to serve our (Fluxes) shareholders better, we have requested Members whose shares are in physical Refractories 320.93 – NIL NIL NIL NIL NIL mode to dematerialize such shares and to update their bank accounts and Materials e-mail ids with their respective DPs. Disclosures with respect to Demat Suspense Account / Unclaimed Suspense Outstanding GDRs/ADRs/Warrants or any convertible instruments, Account conversion date and likely impact on equity In accordance with the requirement of Regulation 34(3) and Part F of Schedule V As on March 31, 2020, the Company does not have any outstanding GDRs/ADRs/ to the SEBI Listing Regulations, details of equity shares in the suspense account Warrants. During FY19, the Company has issued 900,00,00,000 8.89% Optionally are as follows: Convertible Redeemable Preference Shares. Details of utilization of money raised through preferential allotment of Particulars No. of No. of Preference Shares Shareholders equity shares Aggregate Number of shareholders and 2 21 During FY19 the Company issued and allotted 1070,00,00,000 11.09% Non-Convertible Redeemable Preference shares (‘NCRPS’) and 900,00,00,000 the outstanding shares in the suspense 8.89% Optionally Convertible Redeemable Preference Shares (‘OCRPS’). The account lying as on April 1, 2019
50 Statutory Reports Financial Statements
Particulars No. of No. of Transfer of Unclaimed Dividend and Shares to Investor Education and Shareholders equity shares Protection Fund Number of shareholders who approached 0 0 Pursuant to the provisions of Section 124 and 125 of the Act, read with Investor listed entity for transfer of shares from Education Protection Fund Authority (Accounting, Audit, Transfer and Refund) suspense account during the year Rules, 2016 as amended, the dividends, unclaimed for a period of seven years Number of shareholders to whom shares 0 0 from the date of transfer to the Unpaid Dividend Account of the Company is were transferred from suspense account mandatorily required to be transferred to the Investor Education and Protection during the year Fund (‘IEPF’) established by the Central Government. Further, the shares Shareholders whose shares are transferred 1 2,22,021 pertaining to which dividend remains unclaimed / unpaid for a period of seven to the demat account of the IEPF Authority years from the date of transfer to the Unpaid Dividend Account of the Company as per Section 124 of the Act are also liable to be transferred to the IEPF. The said requirement does not Aggregate number of shareholders and 2 21 apply to shares in respect of which there is a specific order of Court, Tribunal or the outstanding shares in the suspense Statutory Authority, restraining any transfer of the shares. account lying as on March 31, 2020 The Company has sent individual communication to the concerned shareholders The voting right on the shares outstanding in the Suspense Account as on at their registered address, whose dividend remains unclaimed and whose March 31, 2020 shall remain frozen until the rightful owner(s) of such shares shares are liable to be transferred to the IEPF. Notices in this regard are also claims the shares. published in the national English and Hindi newspapers and the details of Designated e-mail id for investor services unclaimed dividends and shareholders whose shares are liable to be transferred To serve the investors better and as required under Regulation 46(2)(j) of the to the IEPF Authority, are uploaded on the Company’s website. The investors SEBI Listing Regulations, the Company has a dedicated e-mail address for were advised to claim the un-encashed dividends lying in the Unpaid Dividend investor complaints: [email protected] which is continuously monitored Accounts of the Company on or before October 26, 2019 to avoid transfer of the by the Company’s Compliance Officer. same to the IEPF. Compliance with discretionary requirements During the year under review, the Company has credited unclaimed dividend All mandatory requirements of the SEBI Listing Regulations have been amounting to `1,93,775/- (Rupees One Lakh Ninety-Three Thousand Seven complied with by the Company. The status of compliance with the discretionary Hundred and Seventy-Five Only) pertaining to 40,030 Equity Shares to the requirements, as stated under Part E of Schedule II to the SEBI Listing IEPF in respect of the unpaid / unclaimed dividend amount relating to the Regulations, is as under: dividend declared in FY2011-12. The Company transferred 40,000 Equity Shares The Board: As on date, the positions of the Chairman and the Managing Director to the IEPF. are separate. Mr. T. V. Narendran is the Non- Executive Chairman of the Board and Mr. Rajeev Singhal is the Managing Director of the Company. Upon transfer, the Shareholders will be able to claim the said equity shares only Modified opinion(s) in Audit Report: The Auditors have expressed an unmodified from the IEPF Authority by making an online application the details of which opinion in their report on the financial statements of the Company. are available at www.iepf.gov.in and sending a physical copy of the same duly signed to the Nodal Officer, at the Registered Office of the Company along with Reporting of Internal Auditor: The Internal Auditor reports to the Audit the requisite documents enumerated in the ‘Web Form IEPF- 5’. Committee and submits quarterly presentations to the Committee on their reports. No claims shall lie against the Company in respect of the dividend/shares so Maintenance of Chairman’s office: The Non-Executive Chairman has a separate transferred. The Members/Claimants can file only one consolidated claim in a office which is not maintained by the Company. financial year as per the IEPF Rules.
Table M: Distribution of shareholding of Company’s Shareholders as on March 31, 2020
The distribution of equity shareholding as on March 31, 2020 is as below:
Share Holding Total No. of Shareholders as on % to total holders as on Total No. of Shares as on % to total capital as on March 31 March 31 March 31 March 31 2020 2019 2020 2019 2020 2019 2020 2019 Upto 5,000 98,532 97,915 93.25 92.70 3,65,95,234 3,85,48,605 3.35 3.53 5,001 to 10,000 3,702 4,036 3.50 3.82 1,37,78,297 1,50,66,953 1.26 1.38 10,001 to 20,000 1,810 1,958 1.71 1.85 1,33,95,066 1,46,99,478 1.23 1.34 20,001 to 30,000 584 575 0.55 0.54 73,52,274 72,04,169 0.67 0.66 30,001 to 40,000 302 340 0.29 0.32 54,17,573 61,47,777 0.50 0.56 40,001 to 50,000 134 191 0.13 0.18 30,68,441 43,94,707 0.28 0.40 50,001 to 1,00,000 297 313 0.28 0.30 1,05,31,350 1,10,78,495 0.96 1.01 1,00,001 and Above 309 295 0.29 0.28 100,33,01,533 99,62,99,584 91.76 91.12 Total 1,05,670 1,05,623 100.00 100.00 109,34,39,768 109,34,39,768 100.00 100.00
51 The details relating to various outstanding dividends and the dates by which for any of the above mentioned electronic modes of payment of dividend and they can be claimed by the shareholders from the Company’s RTA is given in other cash benefits and update their bank details: the table below. a) In case of holdings in dematerialised form - By contacting their DP and Table N: Details of date of declaration & due date for transfer to IEPF giving suitable instructions to update the bank details in their demat account. Financial Year Dividend Per Date of Last date for Share Declaration claiming unpaid b) In case of holdings in physical form - By informing the Company’s RTA i.e., (In `) dividend RCMC Share Registry Pvt. Ltd, through a signed request letter with details such as their Folio No(s), Name and Branch of the Bank in which they wish 2012-13 0.5 September 21, 2013 October 23, 2020 to receive the dividend, the Bank Account type, Bank Account Number 2013-14 0.5 September 20, 2014 October 21, 2021 allotted by their banks after implementation of Core Banking Solutions (‘CBS’) the 9 digit MICR Code Number and the 11 digit IFSC Code. This Shareholders are requested to get in touch with the RTA for encashing the letter should be supported by a cancelled cheque bearing the name of the unclaimed dividend / interest / principal amount, if any, standing to the credit first shareholder. of their account. Table O: ISIN and Stock Code details Nomination Facility Stock Exchanges ISIN Stock Code As per the provisions of the Act, facility for making nomination is available to the Members in respect of shares held by them. Nomination forms BSE Limited (‘BSE’) 500055 (SH-13/SH-14) can be obtained from the Company’s RTA by Members holding Phiroze Jeejeebhoy Towers, shares in physical form. Dalal Street, Mumbai – 400 001, Members holding shares in electronic form may obtain Nomination forms from Maharashtra, India their respective DPs. National Stock Exchange of TATASTLBSL Members holding shares in single name are especially advised to make India Limited (‘NSE’) INE824B01021 nomination in respect of their shareholding in the Company and for cancellation Exchange Plaza, 5th Floor, and variation of nomination, if they are desirous of doing so. Plot No. C/1, G Block, Shares held in Electronic Form Bandra-Kurla Complex, Mumbai – 400 051, Shareholders holding shares in electronic form may please note that instructions Maharashtra, India regarding change of address, bank details, email ids, nomination and power of attorney should be given directly to the DP. Market Information
Shares held in Physical Form Table P: Market Price Data- High, Low (based on daily closing price) and volume (no. of shares traded) during each month in Financial Year 2019-20 Shareholders holding shares in physical form may please note that instructions of the Company’s shares, on BSE and NSE: regarding change of address, bank details, emails ids, nomination and power of attorney should be given to the Company’s RTA i.e., RCMC Share Registry Pvt. Month BSE Limited (BSE) National Stock Exchange of Limited. India Limited (NSE) Updation of bank details for remittance of dividend/cash benefits in High Low Volume High Low Volume electronic form (`) (`) (No. of equity (`) (`) (No. of equity The SEBI vide its Circular No. CIR/MRD/DP/10/2013 dated March 21, 2013 shares traded) shares traded) (‘Circular’) to all listed companies requires them to update bank details of their April, 2019 38.10 30.00 60,33,749 37.95 30.05 3,43,36,906 shareholders holding shares in demat mode and/or physical form, to enable usage of the electronic mode of remittance i.e., National Automated Clearing May, 2019 35.40 28.90 33,52,131 35.35 28.70 2,71,40,828 House (‘NACH’) and National Electronic Fund Transfer (‘NEFT’), for distributing June, 2019 31.35 27.70 13,64,539 31.40 27.70 1,69,88,792 dividends and other cash benefits to the shareholders. July, 2019 31.50 25.05 11,74,520 30.50 24.95 1,41,39,297 The Circular further states that in cases where either the bank details such as August, 2019 26.35 20.00 16,05,922 26.45 20.05 1,31,47,673 Magnetic Ink Character Recognition (‘MICR’) and Indian Financial System Code (‘IFSC’), amongst others, that are required for making electronic payment are September, 2019 27.15 20.05 13,53,621 25.35 20.15 1,22,60,335 not available or the electronic payment instructions have failed or have been October, 2019 25.00 20.30 16,06,509 25.00 20.25 1,34,08,409 rejected by the Bank, the Companies or its RTA may use physical payment instruments for making cash payments to the investors. Companies shall November, 2019 27.70 23.90 15,59,374 27.35 20.20 1,65,59,250 mandatorily print the bank account details of the investors on such payment December, 2019 30.05 24.70 12,73,463 30.10 24.60 1,75,92,899 instruments. January, 2020 32.55 27.80 21,14,991 32.55 27.85 3,23,67,645 Regulation 12 of the SEBI Listing Regulations allows the Company to pay February, 2020 30.80 23.55 12,67,230 30.85 23.60 1,88,08,741 dividend by cheque or ‘payable at par’ warrants, where payment by electronic mode is not possible. March, 2020 25.00 15.25 28,64,841 26.55 15.10 2,99,79,848
Shareholders may kindly note that payment of dividend and other cash benefits The Company’s shares are regularly traded on BSE Limited and National Stock through electronic mode has many advantages like prompt credit, elimination Exchange of India Limited, as is seen from the volume of shares indicated in the of fraudulent encashment/delay in transit and more. They are requested to opt above Table containing Market Information.
52 Statutory Reports Financial Statements
Table Q: Performance of the share price of the Company in comparison to CREDIT RATING broad-based indices like BSE and Nifty Sensex are given below: There has been no change in the credit ratings assigned to the Company’s facilities during the year. The details of the credit ratings of the Company are Month Closing Price of BSE SENSEX Closing Price of Nifty available on its website www.tatasteelbsl.co.in Equity Shares Equity Shares at BSE at NSE During FY2019-20, CARE has re-affirmed the following credit ratings: April, 2019 34.30 39,031.55 34.30 11,748.15 S N Bank Facilities Rating May, 2019 30.40 39,714.20 30.25 11,922.80 1. Long-term Bank Facilities -Term CARE AA; Stable (Double A', June, 2019 29.80 39,394.64 29.75 11,788.85 Loan Outlook: Stable) July, 2019 26.45 37,481.12 26.40 11,118.00 2. Long-term / Short-term Bank CARE AA; Stable / CARE A1+ August, 2019 21.30 37,332.79 21.30 11,023.25 Facilities - Fund based / Non-Fund (Double A; Outlook: Stable /A One based Plus) September, 2019 22.35 38,667.33 22.45 11,474.45 ADDRESS FOR CORRESPONDENCE: October, 2019 23.85 40,129.05 23.90 11,877.45
November, 2019 26.95 40,793.81 26.90 12,056.05 Registered Office: Corporate Office: Registrar and Transfer Agent: December, 2019 29.80 41,253.74 29.85 12,168.45
January, 2020 28.00 40,723.49 28.00 11,962.10 Ground Floor, Ground & First Floor RCMC Share Registry Pvt. Ltd. February, 2020 23.80 38,297.29 23.80 11,201.75 Plot No. 1 & 2, Mira Jasmine Tower, B -25/1, First Floor, Corporate Suites, 31, Shakespeare Sarani Okhla Industrial Area March, 2020 16.45 29,468.49 16.45 8,597.75 Ishwar Nagar, Kolkata- 700071 Phase II, Secretarial Audit Mathura Road, Tel: 91-33-40859600 New Delhi -110 020 New Delhi-110 065. Tel: 91-11-2638 7320, The Company’s Board of Directors appointed Messrs. PI & Associates, (Firm Tel: 91-11-3919 4000 2638 7321 Registration No. P2014UP035400) Practising Company Secretaries, to conduct Fax: 91-11-4101 0050 Fax: 91-11-2638 7322 secretarial audit of its records and documents for the Financial Year 2019-20. E-mail: Email: The secretarial audit report confirms that the Company has complied with [email protected] [email protected] all applicable provisions of the Companies Act 2013, Secretarial Standards, Website: Website: Depositories Act 2018, SEBI (Listing Obligations and Disclosure Requirements) www.tatasteelbsl.co.in www.rcmcdelhi.com Regulations, 2015, SEBI (Prohibition of Insider Trading) Regulations, 2015, each as amended and all other regulations and guidelines of SEBI as applicable to the DETAILS OF CORPORATE POLICIES/ CODES Company except as mentioned therein. The Secretarial Audit Report forms part of the Board’s Report. Particulars Web Links
Green Initiative Corporate Social http://tatasteelbsl.co.in/Investor%20Relations%20 Responsibility and pdf/Policies/CSR%20and%20Sustainability%20Policy. As a responsible corporate citizen, the Company welcomes and supports the Sustainability Policy pdf ‘Green Initiative’ undertaken by the Ministry of Corporate Affairs, Government of India, enabling electronic delivery of documents including the Annual Report, Anti Sexual http://tatasteelbsl.co.in/Investor%20Relations%20 amongst others, to shareholders at their e-mail address previously registered Harassment Policy pdf/Policies/Anti%20Sexual%20Harassment%20 with the DPs and RTAs. Policy.pdf Determination of http://tatasteelbsl.co.in/Investor%20Relations%20 Shareholders who have not registered their e-mail addresses so far, are Materiality Policy pdf/Policies/Determination%20of%20Materiality%20 requested to do the same. Those holding shares in demat form can register their Policy.pdf e-mail address with their concerned DPs. Document Retention http://tatasteelbsl.co.in/Investor%20Relations%20 Shareholders who hold shares in physical form are requested to register their Policy pdf/Policies/Document%20retention%20and%20 e-mail addresses with the RTA, by sending a letter, duly signed by the first/sole archival%20policy.pdf holder quoting details of their Folio No. Material Subsidiaries http://tatasteelbsl.co.in/Investor%20Relations%20 Plant locations Policy pdf/Policies/Material%20Subsidiaries%20Policy.pdf
Tata Steel BSL Tata Steel BSL Tata Steel BSL Tata Steel BSL Related Party http://tatasteelbsl.co.in/Investor%20Relations%20 Sahibabad Plant Khopoli Plant Angul Plant Hosur Plant Transaction Policy pdf/Policies/Related%20Party%20Transactions%20 Tata Steel BSL Limited Tata Steel BSL Limited Tata Steel BSL Limited Tata Steel BSL Limited Policy.pdf 23, Site-IV, Sahibabad Village – Nifan, Savroli, P.O. Shibapur, Plot No-104/3, SIPCOT Familiarization http://tatasteelbsl.co.in/Investor%20Relations%20 Industrial Area, Taluka- Khalapur, Meramandali, Industrial Complex programme of pdf/OtherImpDocuments/Familiarisation%20 Distt: Ghaziabad-201010 Near Khopoli, Distt.: Dhenkanal-759121 SIPCOT Phase - 1 Independent Programme%20for%20Independent%20Directors. Uttar Pradesh Distt.: Raigad-410203 Odisha Hosur-635 126 Directors pdf Maharashtra Tamil Nadu
53 Particulars Web Links Particulars Web Links The terms and https://tatasteelbsl.co.in/Investor%20Relations%20 Safety, Health and http://tatasteelbsl.co.in/Investor%20Relations%20 conditions of pdf/OtherImpDocuments/Terms%20&%20 Environment Policy pdf/Policies/Safety%20Health%20and%20 appointment Conditions%20of%20appointment%20of%20ID.pdf Environment%20Policy.pdf of Independent Tata Code of Conduct http://tatasteelbsl.co.in/Investor%20Relations%20 Directors pdf/CodeOfConduct/TATA%20Code%20of%20 Policy on http://tatasteelbsl.co.in/Investor%20Relations%20 Conduct.pdf Appointment and pdf/Policies/Policy%20on%20appointment%20 Code of Corporate http://tatasteelbsl.co.in/Investor%20Relations%20 Removal of Directors and%20removal%20of%20Directors.pdf Disclosure Practices pdf/CodeOfConduct/Revised%20Code%20of%20 Policy on http://tatasteelbsl.co.in/Investor%20Relations%20 Corporate%20Disclosure%20Practices%20.pdf Remuneration of pdf/Policies/Remuneration%20Policy%20of%20 Directors, KMPs and directors%20KMPs%20&%20Employees.pdf On behalf of the Board of Directors other employees sd/- Vigil Mechanism http://tatasteelbsl.co.in/Investor%20Relations%20 T. V. NARENDRAN Policy pdf/Policies/Vigil%20Mechanism%20%20Policy.pdf Jamshedpur Chairman May 20, 2020 DIN: 03083605
54 Statutory Reports Financial Statements
DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH THE CODE OF CONDUCT
This is to confirm that the Company has adopted the Tata Code of Conduct for its employees including the Managing Director and the Whole-time Directors. The Code is available on the Company’s website at www.tatasteelbsl.co.in. I confirm that the Company hasin respect of the financial year ended March 31, 2019, received from the Senior Management Team of the Company and the Members of the Board, a declaration of compliance with the Code of Conduct as applicable to them.
For the purpose of this declaration, Senior Management Team means the Members of the Management one level below the Managing Director as on March 31, 2020.
sd/- Kolkata Rajeev Singhal May 20, 2020 Managing Director DIN: 02719570
PRACTISING COMPANY SECRETARIES’ CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS [Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015]
To, The Members of Tata Steel BSL Limited (Formerly known as ‘Bhushan Steel Limited’) Ground Floor, Mira Corporate Suites Plot No 1 & 2, Ishwar Nagar, Mathura Road, New Delhi - 110065
We have examined the relevant registers, records, forms, returns and disclosures received from the Directors of Tata Steel BSL Limited (formerly known as ‘Bhushan Steel Limited’) having CIN: L74899DL1983PLC014942 and having its registered office at Ground Floor, Mira Corporate Suites, Plot No 1 & 2, Ishwar Nagar, Mathura Road, New Delhi - 110065 (hereinafter referred to as ‘the Company’), produced before us by the Company for the purpose of issuing this Certificate, in accordance with the Regulation 34(3) read with Schedule V Para-C sub clause 10(i) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
In our opinion and to the best of our information and according to the verifications (including Directors Identification Number (DIN) status at the portal www.mca.gov.in) as considered necessary and explanations furnished to us by the Company and the respective Directors, we hereby certify that none of the Directors on the Board of the Company as stated below for the Financial Year ended on March 31, 2020 have been debarred or disqualified from being appointed or continuing as Directors of Companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs, or any such other Statutory Authority.
S. No. Name of Director DIN Date of appointment in Company* 1. Mr. Narendran Viswanath Thachat 03083605 July 11, 2018 2. Mr. Rajeev Singhal 02719570 May 18, 2018 3. Mr. Anand Sen 00237914 May 18, 2018 4. Mr. Koushik Chatterjee 00004989 July 11, 2018 5. Mr. Krishnava Satyaki Dutt 02792753 May 18, 2018 6. Ms. Neera Saggi 00501029 June 7, 2018 7. Mr. Shashi Kant Maudgal 00918431 June 7, 2018 8. Mr. Srikumar Menon 00470254 August 9, 2018 *The date of appointment is as per the MCA Portal.
Ensuring the eligibility for the appointment / continuity of every Director on the Board is the responsibility of the management of the Company. Our responsibility is to express an opinion on these based on our verification. This certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.
For PI & Associates, Company Secretaries
sd/- Nitesh Latwal Partner New Delhi ACS No.: A32109 CP No.: 16276 May 20, 2020 UDIN: A032109B000255662
55 PRACTISING COMPANY SECRETARIES’ CERTIFICATE ON CORPORATE GOVERNANCE
To The Members Tata Steel BSL Limited (Formerly known as ‘Bhushan Steel Limited’)
1. We have examined the compliance of the conditions of Corporate Governance by Tata Steel BSL Limited (‘formerly known as ‘Bhushan Steel Limited’) (‘Company’), for the year ended on March 31, 2020, as stipulated under Regulations 17 to 27 and clauses (b) to (i) of sub-regulation 2 of Regulation 46 and para C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (‘SEBI Listing Regulations’).
2. The compliance of conditions of Corporate Governance is the responsibility of the Management of the Company. Our examination was limited to the review of procedures and implementation thereof, as adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance stipulated in SEBI Listing Regulations. It is neither an audit nor an expression of opinion on the financial statements of the Company.
3. In our opinion and to the best of our information and according to our examination of the relevant records and the explanations given to us, and the representations made by the Directors and the management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the SEBI Listing Regulations for the year ended on March 31, 2020 except the following:
a. That the Company had generally obtained prior approval of the Audit Committee for entering into all related party transactions except for one transaction i.e. Tata International Limited amounting to `5.95 crore. However, the said transaction was subsequently ratified by the Audit Committee.
. b That as per Regulation 25(3) of the Listing Regulations, the Company had not conducted separate meeting of Independent Directors and the Board at its meeting had not carried out an evaluation of its performance, its Committees and of individual Directors.
The Company has informed that a separate meeting of Independent Directors for FY20 was scheduled in the last week of March 2020 and the Performance Evaluation process was initiated by the Company in early March 2020. However, due to the outbreak of COVID-19 and the lockdown and other restrictions enforced by the Central and State Governments, the Independent Directors meeting could not be held and the formal performance evaluation process (scheduled for the last week of March 2020) could not be held/concluded and was deferred to Q1FY21.
4. We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the Management has conducted the affairs of the Company.
For PI & Associates, Company Secretaries
sd/- Nitesh Latwal Partner New Delhi ACS No.: A32109 CP No.: 16276 May 20, 2020 UDIN: A032109B000255662
56 Statutory Reports Financial Statements
BUSINESS RESPONSIBILITY REPORT [Pursant to Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015]
Tata Steel BSL Limited (‘Company’ or ‘TSBSL’) was acquired by Tata Steel 9. Total number of locations where business activity is undertaken by Limited through its wholly owned subsidiary, Bamnipal Steel Limited on the Company May 18, 2018 through the corporate insolvency resolution process under the (a) Number of International Locations (Provide details of major 5): Insolvency and Bankruptcy Code, 2016 (‘Acquisition’). Post-Acquisition, the Through its subsidiaries and associate companies, the Company Board of Directors of the Company was re-constituted and a new management operates in Australia (‘New Management’) was put in place to implement the Resolution Plan as approved by the National Company Law Tribunal, Principal Bench, New Delhi ) (b Number of National Locations: The Company’s Integrated Steel vide its order dated May 15, 2018. The New Management has made significant Plant is located in Angul, Odisha. The Company also has its other efforts to integrate the Company into the Tata Group focusing on operational manufacturing locations situated at Sahibabad (Uttar Pradesh) and excellence, health & safety, environment, financial and risk management, Khopoli (Maharashtra). The Company’s downstream facilities are governance & compliance and human resource development. The Company and located in Chakan and Aurangabad (Maharashtra) and Hosur (Tamil the New Management is committed to its stakeholders and the communities it Nadu). operates in and is working to deliver sustainable growth and create value for all Apart from this the Company has a pan-India network of marketing stakeholders. and sales offices. As a part of the Tata Group, the Company endeavours to conduct its business 10. Markets served by the Company responsibly, mindful of its social accountability, respecting applicable laws In addition to serving Indian Markets, the Company also exported to and with regard for human dignity. The Company’s long-term objective is ‘to South East Asia, SAARC, Middle East, Africa, Europe, Latin America and improve the quality of life of the communities we serve globally through long Canada in FY2019-20. term value creation for all stakeholders', which is in alignment with the Tata Group Core Purpose. SECTION B: FINANCIAL DETAILS OF THE COMPANY Through this Business Responsibility Report (‘BRR’), your Company seeks to 1. Paid up Capital: `218.69 crore as on March 31, 2020 communicate its obligations and performance to all its stakeholders. 2. Total Turnover: `18,199.14 crore as on March 31, 2020 As a responsible corporate citizen, your Company continues to actively engage 3. Total profit after taxes: Loss: During the year, the Company recorded a with all its stakeholders to drive their growth for all. net loss of `(649.17) crore. This report conforms to the Business Responsibility Reporting requirement of 4. Total Spending on Corporate Social Responsibility the Securities and Exchange Board of India (Listing Obligations and Disclosure Considering the financial performance of the Company in the preceeding Requirements) Regulations, 2015 (‘Listing Regulations’) and the National 3 (Three) financial years, the Company was not mandatorily required Voluntary Guidelines on Social, Environmental and Economic Responsibilities to incur any expenditure towards Corporate Social Responsibility & of Business (‘NVG’) released by the Ministry of Corporate Affairs ‘MCA’( ), Sustainability ('CSR&S') activities during FY2019-20. Government of India. However, as a good corporate citizen, an amount of `9.20 crore was spent SECTION A: GENERAL INFORMATION ABOUT THE COMPANY in FY2019-20 towards various CSR&S activities. These activities are in 1. Corporate Identification Number (CIN) of the Company: alignment with the focus initiatives of the Tata Group that lays emphasis L74899DL1983PLC014942 on four thrust areas – Education, Health, Livelihoods and Rural and Urban infrastructure. 2. Name of the Company: Tata Steel BSL Limited (formerly known as ‘Bhushan Steel Limited’) 5. List of activities in which expenditure in 4 above has been incurred: 3. Registered Office: Ground Floor, Mira Corporate Suites, Plot No. 1&2, The areas in which the above expenditure was incurred inter-alia included Ishwar Nagar, Mathura Road, New Delhi – 110065. Education, Health, Livelihood, Infrastructure, Environment and Sports. 4. Website: www.tatasteelbsl.co.in SECTION C: OTHER DETAILS 5. E-mail id: [email protected] 1. Does the Company have any Subsidiary Company/ Companies? The Company has 8 direct and indirect subsidiaries in India and overseas 6. Financial Year reported: From April 1, 2019 to March 31, 2020 as on March 31, 2020. 7. Sector(s) that the Company is engaged in (industrial activity code- 2. Do the Subsidiary Company/Companies participate in the BR wise) Initiatives of the parent company? If yes, then indicate the number of NIC Code Description such subsidiary company(s). 241 Manufacture of Basic Iron and Steel As on March 31, 2020 all the subsidiaries of the Company, except Angul 8. List three key products/services that the Company manufactures/ Energy Limited (‘AEL’), were yet to commence operations. provides (as in balance sheet) AEL was acquired by the Company on June 1, 2019 under the corporate a. Hot Rolled Products insolvency resolution process. The new management of AEL appointed post the acquisition is taking the necessary steps to put in place practices . b Cold Rolled & Coated Products and procedures as per Tata Group guidelines. . c Special Products – H&T, HCCR, HTSS As on March 31, 2020, the Company’s subsidiaries were not participating . d Tubes & Pipes in the BR initiatives of the Company.
57 3. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities? [Less than 30%, 30-60%, More than 60%]
The Company supports and encourages standalone/ independent activities by other entities. The percentage is less than 30%. SECTION D: BUSINESS RESPONSIBILITY INFORMATION 1. Details of Director/Directors responsible for BR a) Details of the Director/Director responsible for implementation of the BR policy/policies
SN Particulars Details 1. DIN 02719570 2. Name Mr. Rajeev Singhal 3. Designation Managing Director 4. Telephone +91-33-4085-9665 5. E-mail id [email protected] ) b Details of the BR head
SN Particulars Details 1. DIN (if applicable) 02719570 2. Name Mr. Rajeev Singhal 3. Designation Managing Director 4. Telephone Number +91-33-4085-9665 5. E-mail id [email protected] 2. Principle-wise (as per NVGs) BR Policy/policies The National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVG-SEE) released by the Ministry of Corporate Affairs has adopted nine areas of Business Responsibility. These are as follows:
P1 - Businesses should conduct and govern themselves with Ethics, Transparency and Accountability. P2 - Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle. P3 - Businesses should promote the well-being of all employees. P4 - Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized. P5 - Businesses should respect and promote human rights. P6 - Businesses should respect, protect, and make efforts to restore the environment. P7 - Businesses when engaged in influencing public and regulatory policy, should do so in a responsible manner. P8 - Businesses should support inclusive growth and equitable development. P9 - Businesses should engage with and provide value to their customers and consumers in a responsible manner. a) Details of compliance (Reply in Y/N)
SN Questions P1 P2 P3 P4 P5 P6 P7 P8 P9 1. Do you have a policy/policies for Y Y Y Y Y Y Y Y Y 2. Has the policy being formulated in consultation Y Y Y Y Y Y Y Y Y with the relevant stakeholders? 3. Does the policy conform to any national/ The spirit and intent of the Tata Code of Conduct, all applicable national and international international standards? If yes, specify? laws as well as international conventions are captured in the policies articulated by Tata Steel BSL Limited. 4. Has the policy being approved by the Board? Y Y Y Y Y Y Y Y Y If yes, has it been signed by MD/ owner/ CEO/ appropriate Board Director? 5. Does the company have a specified committee Y Y Y Y Y Y Y Y Y of the Board/ Director/ Official to oversee the implementation of the policy? 6. Indicate the link for the policy to be viewed http://tatasteelbsl.co.in/Investor%20Relations%20pdf/CodeOfConduct/TATA%20 online? Code%20of%20Conduct.pdf 7. Has the policy been formally communicated to Y Y Y Y Y Y Y Y Y all relevant internal and external stakeholders? 8. Does the company have in-house structure to Y Y Y Y Y Y Y Y Y implement the policy/ policies?
58 Statutory Reports Financial Statements
SN Questions P1 P2 P3 P4 P5 P6 P7 P8 P9 9. Does the Company have a grievance redressal Y Y Y Y Y Y Y Y Y mechanism related to the policy/ policies to address stakeholders’ grievances related to the policy/ policies? 10. Has the company carried out independent audit/ Y Y Y Y Y Y Y Y Y evaluation of the working of this policy by an internal or external agency? (Refer Note 1) Note 1: All policies applicable to the Company are evaluated internally.
Principle Applicable Policies Businesses should conduct and govern themselves with Ethics, Transparency and Tata Code of Conduct Accountability. Businesses should provide goods and services that are safe and contribute to Tata Code of Conduct sustainability throughout their life cycle. Businesses should promote the well-being of all employees. Tata Code of Conduct Businesses should respect the interests of, and be responsive towards all Tata Code of Conduct stakeholders, especially those who are disadvantaged, vulnerable and marginalized. Corporate Social Responsibility and Sustainability Policy Businesses should respect and promote human rights. Tata Code of Conduct Businesses should respect, protect, and make efforts to restore the environment. Tata Code of Conduct Climate Change Policy for Tata Group Companies Safety, Health and Environment Policy Businesses when engaged in influencing public and regulatory policy, should do so Tata Code of Conduct in a responsible manner. Businesses should support inclusive growth and equitable development. Tata Code of Conduct Businesses should engage with and provide value to their customers and consumers Tata Code of Conduct in a responsible manner. Vigil Mechanism Policy Link for Policies
Tata Code of Conduct http://tatasteelbsl.co.in/Investor%20Relations%20pdf/CodeOfConduct/TATA%20 Code%20of%20Conduct.pdf Corporate Social Responsibility and Sustainability Policy http://tatasteelbsl.co.in/Investor%20Relations%20pdf/Policies/CSR%20and%20 Sustainability%20Policy.pdf Climate Change Policy for Tata Group Companies http://tatasteelbsl.co.in/Investor%20Relations%20pdf/Policies/Climate-change-policy-of- Tata%20Companies.pdf Safety, Health and Environment Policy http://tatasteelbsl.co.in/Investor%20Relations%20pdf/Policies/Safety%20Health%20 and%20Environment%20Policy.pdf Vigil Mechanism Policy http://tatasteelbsl.co.in/Investor%20Relations%20pdf/Policies/Vigil%20Mechanism%20 %20Policy.pdf . b If answer to question at serial number 1 against any principal is ‘No’, please explain why
SN Questions P1 P2 P3 P4 P5 P6 P7 P8 P9 1. The Company has not understood the Principles. Y Y Y Y Y Y Y Y Y 2. The Company is not at a stage where it finds itself in a position to formulate and implement the policies on specified principles. 3. The Company does not have financial or manpower resources available for the task. Not Applicable 4. It is planned to be done within next 6 months. 5. It is planned to be done within the next 1 year. 6. Any other reason (please specify).
59 3. Governance related to BR 2. For each such product, provide the following details in respect a) Indicate the frequency with which the Board of Directors, of resource use (energy, water, raw material etc.) per unit of Committee of the Board or CEO to assess the BR performance product(optional): of the Company. Within 3 months, 3-6 months, annually, more (a) Reduction during sourcing/production/ distribution achieved than 1 year. since the previous year throughout the value chain? The Senior Management reviews the BR performance of the Company through its monthly review meetings. In addition, the The Company takes appropriate measures during sourcing, Board of Directors also meets at least four times in a year and any production & distribution to minimize consumption of energy, significant development in relation to BR performance is reported water and raw materials. The comparative performance data is given to the Board. in the table below: ) b Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently it Parameters FY18 FY19 FY20 is published? Energy (Gcal/tcs) 6.8 6.83 6.39 The Business Responsibility Report has been made part of the Water (m3/tcs) 5.55 4.76 4.14 Annual Report for FY2019-20 and there is no separate section on Carbon emission (ton CO /tcs) 2.99 2.93 2.76 the website 2 Dust emission (Kg/tcs) 0.97 0.94 0.84 SECTION E – PRINCIPLE-WISE PERFORMANCE Principle 1: Businesses should conduct and govern themselves with Ethics, ) b Reduction during usage by consumers (energy, water) has been Transparency and Accountability achieved since the previous year?
1. Does the policy relating to ethics, bribery and corruption cover only The Company through its Environment and Climate Change the company? Does it extend to the Group/Joint Ventures/ Suppliers/ policies and other measures and intiatives encourages and helps its Contractors/NGOs /Others? customers to minimize energy and water consumption. Yes. The Tata Code of Conduct (available on www.tatasteelbsl.co.in and www.tata.com) (‘TCoC’) serves as the ethical roadmap for all Tata 3. Does the Company have procedures in place for sustainable sourcing companies. All suppliers, partners and joint ventures are expected to (including transportation)? If yes, what percentage of your inputs adopt TCoC or a joint code of conduct incorporating all elements of the was sourced sustainably? Also, provide details thereof. TCoC The Company ensures sustainable sourcing which in turn ensures energy 2. How many stakeholder complaints have been received in the past efficiency, resource efficiency & environmental performance throughout financial year and what percentage was satisfactorily resolved by the the business supply chain. Making of sintered material by using iron ore management? If so, provide details thereof. fines with low iron content and using the same in steel making, helps in A total of 159 stakeholders complaints* were received during natural resource conservation. Similarly, use of waste scrap steel in steel FY2019-20. melting process conserves natural resource and also helps in reduction of
CO2 emissions. Stakeholders Complaint Received 159 Stakeholders Complaint Resolved 150 In FY20 two new initiatives viz., Vendor Capability Advancement Program Percentage of Stakeholders Complaint Resolved 94.33% (‘VCAP’) and Supplier Relationship Management (‘SRM’) have been initiated recently to bring in improvements in Safety, Environment, Cost, *Includes TCoC concerns and investor complaints. Customer complaints are covered Quality and Delivery, etc. under Principle 9 of the Report Principle 2: Businesses should provide goods and services that are safe and 4. Has the Company taken any steps to procure goods and services from contribute to sustainability throughout their life cycle local & small producers, including communities surrounding their place of work? If yes, what steps have been taken to improve their 1. List up to 3 of your products or services whose design has incorporated capacity and capability of local and small vendors? social or environmental concerns, risks and/or opportunities. (a) High Strength Steel Yes. Most of the service requirements of the Company such as transportation, man power intensive jobs are being carried out by High Strength Automotive Steel grades maintain the safety engaging local producers / traders and local service providers. The standards of vehicles whilst enhancing fuel efficiency because of Company’s procurement department conducts multiple supplier their light weight. The choice of High Strength Steel as a material can substantially reduce the overall impact by pushing down the engagement programmes for improving the capacity and capability of use phase emissions. Further, it has deep demand in the market strategic suppliers including local vendors and suppliers. because of its customization as per customers’ requirement. The VCAP programme has been implemented primarily for imbibing ) (b GALUME and Color Coated Sheets safety culture and enhancing the skills of local contract service providers. These are preferable to asbestos sheets for the roof top sheeting In FY20, a total of 400 contractors were trained under VCAP in different and are also used by automotive industries because of light technical areas. Additionally, the SRM programme helps in transition weight and oxidation free properties. Since it is recyclable, the from adversarial to collaborative relationship with supplier-partners on product greatly helps in conservation of natural resource through a continual basis to bring in improvements in Safety, Environment, Cost, circular economy. Quality and Delivery etc.
60 Statutory Reports Financial Statements
5. Does the Company have a mechanism to recycle products and waste? 8. What percentage of under mentioned employees were given safety & If yes what is the percentage of recycling of products and waste skill up-gradation (separately as <5%, 5-10%, >10%). Also, provide details thereof. Training in the last year. The Company has a mechanism for recycling and reuse of its waste, raw material rejects, unwanted by-products. 100% of the Fly Ash generated SN Category Safety Skill is utilized in Cement Making, Brick manufacturing and road making. The Training Upgradation Company's Metal Recovery Plant separates and segregates its metallic Training components into various sizes. Metallic fines are used in the Sinter plants. a Permanent employees 100% 53.2% Almost 5% of metal was recovered and reused from LD Slag in FY20. b Permanent women employees 100% 31% There has been a significant improvement in the recycling / utilisation of c Casual / temporary / 100% 0% waste in FY20 as compared to FY19 details of which are given hereunder: contractual employees d Employees with disabilities NA NA Parameter FY19 FY20 Fly ash Utilization(%) 100 100 Principle 4: Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, LD Slag Utilization(%) 32 46 vulnerable and marginalized Solid waste Utilization (%) - 78 1. Has the company mapped its internal and external stakeholders? Principle 3: Businesses should promote the well-being of all employees Yes. The Company has mapped its internal and external stakeholders. 1. Please indicate the Total number of employees It uses both formal and informal mechanisms to engage with various The Company has a total of 5,720 employees on roll as on March 31, 2020. stakeholders to understand their concerns and expectations. Individual departments within the organization have roles and responsibilities 2. Please indicate the Total number of employees hired on temporary/ identified and defined to engage with various stakeholders. contractual/ casual basis 2. Out of the above, has the company identified the disadvantaged, The Company has a contract workforce comprising of approx. 22,059 vulnerable & marginalized stakeholders? contract employees. Yes, by adopting the ‘Community Need Assessment’ (CNA) approach, the 3. Please indicate the Number of permanent women employees Company has identified the disadvantaged, vulnerable and marginalized stakeholders. Based on this, the ‘focused groups’ for intervention have 73 as on March 31, 2020. been identified. These focussed groups for whom special projects have 4. Please indicate the Number of permanent employees with disabilities been initiated include Women; Students of school going age; Farmers and Youths. As on March 31, 2020 the Company does not have any permanent 3. Are there any special initiatives taken by the company to engage with employees with disabilities the disadvantaged, vulnerable and marginalized stakeholders? If so, 5. Do you have an employee association that is recognized by provide details thereof. management? Tata Steel BSL Limited believes in standing shoulder to shoulder with the Yes. The Company has an employee association recognised by members of the communities in which it operates. Several socio-economic Management at its plant at Khopoli, Maharashtra programmes have been implemented by the Company to address the disadvantaged, vulnerable and marginalized. These are described as 6. What percentage of your permanent employees is members of this under: recognized employee association? ) A Tata Steel BSL, Angul Approx 1.98% of the Company’s permanent employees are part of the recognised employee association. 1. WEE (Women Empowerment & Entrepreneurship) Project - a project for the socio-economic empowerment of women 7. Please indicate the Number of complaints relating to child labour, Objectives of the project: forced labour, involuntary labour, sexual harassment in the last financial year and pending, as on the end of the financial year. a) Incubating and capacitating a formal community owned and controlled multi-purpose cooperative of SN Category No. of No. of complaints women that offers livelihood support and facilitates its complaints pending as members to avail financial services from formal financial filed during the on end of the institutions. financial year financial year b) Enhancing income of households by enabling women to 1. Child labour/forced 0 0 set up sustainable micro enterprises. labour/involuntary labour c) Reducing the vulnerabilities of poor households and 2. Sexual Harassment 4 0 building their financial resilience to deal with risks 3. Discriminatory 0 0 through establishing access to financial services. employment d) Enhancing household productivity and well-being by improving health, hygiene and sanitation.
61 Coverage: 2,000 women from 192 Self Help Groups (‘SHG’), in 27 out of 33 schools. Home visits in coordination with the spread across 12 villages coming under Dhenkanal District of School Management Committees (‘SMC’), Panchayat & village Odisha. youth are carried out for children who are irregular to school. This has helped raise the head count in February 2020 to 88% Achievements during FY20: as compared to 71% in October 2019. a) A community institution - Gruhalaxmi Bahumukhi QUEST also aims at addressing learning deficits in children by Mahila Utpadika Samabaya Samiti Ltd. a multipurpose addressing the diversified learning needs of the children both Cooperative Society was incorporated under the Orissa in-school and out-of-school and in turn building community Cooperative Societies Act, 1962. awareness and ownership leading to better transparency, b) As on March 31, 2020, 399 members were enrolled in accountability and management of schools. For this purpose, the Cooperative Society and generated Share Capital Learning Enrichment Program classes were commenced in of amount `79,800/- and Registration Fee of amount 16 centres. Since outbreak of COVID-19, social media, home `19,950/-. The total corpus of the Cooperative Society visits and small group teaching methods are being used to by March 31, 2020 was `99,750/-. ensure continuity of education. A Children’s Festival was also conducted. c) Training programs organized for its women members both in Off-Farm and Non-Farm Sectors. The outcomes Steps are being taken to strengthen SMCs through training and of the training programs are enumerated below: handholding them in the preparation and implementation of School Development Plans (‘SDP’). Towards this end, the • 02 Phenyl Units were set-up where 20 SHG SMCs were provided an orientation and exposure of the SMC members are working on daily basis. They are at Tata Steel Limited, Sukinda. The regularization of SMCs was regular suppliers to the Company’s guesthouse also intiated with the active participation of PRI and villagers. and hostel. 3. PRAYAS (Participatory Rural Approach for Youth & • Women entrepreneurship – In the 1st phase, 40 Adolescent Sensitization) Project. women mushroom growers produced 174 kgs of mushrooms. Through PRAYAS the Company seeks to empower adolescent youth to prevent them from indulging in risky behaviour and • 133 trained women tailors were developed in 05 bad practices and improve their reproductive & sexual health villages, out of which 17 women purchased their and nutrition. The strategy is to sensitize ‘Peer Educators’ who own machines. 33 women tailors, after receiving will sensitize others of the same age group. training, started their own home run shops. The trained women tailors started making face masks Currently the project covers 500 high school students across 7 in March for protection from COVID-19 and earned High Schools. an income of `300/- to `350/- per day. As a part of this initiative, sessions at 7 schools were held • By the end of March 2020, the Society made a for more than 500 students from standard IX and X wherein profit of `71,103/- they were provided a basic orientation on adolescent issues The WEE Project has gained widespread recognition and including hygiene. acceptance in the local community with the women 4. Livelihood generation through agriculture and allied members showing considerable zeal at starting micro- activities enterprises. This has also helped build support from the Community, Government Departments and Local During FY20, TSBSL implemented an initiative for livelihood Nationalized Banks generation with the purpose of building the capacity of the farmers in agriculture and allied activities thereby enabling 2. QUEST (Quality Upgradation of Education through them to generate income by optimum utilization of skills and Strategic Thrust) Project. resources. Coverage: 3,000 children of 33 schools spread across 6 Panchayats The initiative currently covers 500 farmers from the agrarian villages. These farmers were provided orientation and input The purpose of the QUEST project is to ensure 100% enrolment support for vegetable cultivation. In addition, pisciculture was and 90% regularity of children in school in the age group 6-14 implemented in 5 ponds benefitting more than 200 families. years. 5. Youth Development through Sports: Volleyball Coaching During FY20, TSBSL conducted household surveys to prepare a database to determine the number of children out of school. TSBSL is providing coaching and mentoring to youth to take 61 children were found to be out of school out of which 6 were up sports as a career and to enhance their physical fitness as a directly enrolled and a Non-Residential Bridge Course for 19 component of overall development. children who had dropped out was implemented. 7 Youth Clubs / Coaching centres covering over 200 youth have Regular campaign and community meetings are held to been set up. Disciplined and rigorous coaching on Volleyball spread general awareness about children’s education. As a part is being provided by a state level professional coach and the of the initiative, a head-count of children was implemented teams coached have started winning Block level tournaments.
62 Statutory Reports Financial Statements
B) Tata Steel BSL, Khopoli IDIA seeks to provide enhanced quality education including environment education through a School Support Program whereby 1. WEE (Women Empowerment & Entrepreneurship) Project. a baseline survey on qualitative aspects covering learning process, A project for socio-economic empowerment of women school facilities, aspirations & perspective of parents, teachers and The WEE project covers 5 villages of 2 Panchayats coming students, participation in scholastic activities was carried out. In under Khalapur Block of Raigad District, Maharashtra with a addition, parents and students were engaged through Life-Skill population of approx. 6,000 with specific focus on women in sessions, pertaining to coping with day to day challenges. the age group of 21 – 45 years. The objectives of the project Through IDIA, the Company also set up a Youth Resource Centre include: comprising 57 youths. Adolescent and youth are empowered a. Organising women into formal and functional Self help to lead community development initiatives and make informed groups (‘SHG’). choices in their personal lives and careers. Initiatives taken include online sessions on adolescent and health issues including COVID-19 For this purpose, workshops were held with the local awareness and prevention. During COVID-19 the Company has panchayats to ensure stakeholder co-operation and adopted virtual / digital means to implement the initiatives and assistance and participatory rural appraisals were spread awareness. conducted to identify issues being faced by villages. 4 SHGs were formed and the process was initiated for the Principle 5: Businesses should respect and promote human rights formation of 29 additional SHGs. 1. Does the policy of the company on human rights cover only b. Enhancing incomes of women in SHGs by setting up the company or extend to the Group/Joint Ventures/Suppliers/ micro-enterprises. 4 SHGs were training on making face Contractors/NGOs/Others? masks. The SHGs stitched 10,000 face masks which were Yes. The Tata Code of Conduct serves as the ethical roadmap for all Tata supplied to TSBSL, Khopoli generating an income of companies. All suppliers, partners and joint ventures are expected to `1.3 lakh. adopt TCoC or a joint code of conduct incorporating all elements of the c. Improving community health through clean drinking TCoC water and better maternal health. 75 Pregnant women 2. How many stakeholder complaints have been received in the past and mothers were provided with an orientation on financial year and what percent was satisfactorily resolved by the health, nutrition and importance of vaccination and also management? on precautions to be taken during COVID-19. 40 SHG members were provided training on Vermi Compost and During the year under review, the Company did not receive any complaint organic farming practices towards promoting kitchen with respect to human rights violation. garden. In addition, Community Based Organization for Principle 6: Businesses should respect, protect, and make efforts to restore health in coordination with ASHA, the local panchayat the environment and the community was initiated with focus on COVID-19 prevention awareness. 1. Does the policy related to Principle 6 cover only the company or extends to the Group/Joint Ventures/Suppliers/Contractors/NGOs/ With the outbreak of COVID-19 in March 2020, the Company others? adopted virtual / digital means to implement the initiatives. The Environmental Policy of the Company covers all manufacturing and 2. LIVE (Learning Improvement through Vibrant Education) downstream sites including both the employees and vendor partners Project of the Company. The senior management ensures implementation of The LIVE Project is focused on qualitatively enhancing Environment Policy to minimize pollution and to protect the environment. education at schools, coming within the CSR area of Khopoli 2. Does the company have strategies/ initiatives to address global through audio visual vibrant models of learning environmental issues such as climate change, global warming, etc? The project currently covers 7 Schools (including 3 high Y/N. If yes, please give hyperlink for webpage etc. schools) with 700 students and 35 classrooms In early FY20 Yes. Climate change initiatives are being adopted for specific carbon the Company installed audio visual aids in 15 classrooms. footprint reduction & environment friendly technologies, business As a result of this initiative the pass percentage in matriculation practices, in line with the Company’s vision. Various measures are being in 2020 (between 85% and 93%) in the 3 high schools taken for energy efficiency, clean technology and use of renewable improved significantly as compared to the pass percentage in energy to lower down the carbon footprint. 2019 (between 67% and 84%). Details are mentioned in point no. 5 C) Tata Steel BSL, Sahibabad 3. Does the Company identify and assess potential environmental risks? IDIA (Integrated Development through Innovative Approach) The Company continuously identifies and assesses the potential IDIA currently covers 1,000 students in the age group of 6-14 years environmental risks. The risk mitigation strategies and contingency in 2 schools in the 2 habitations of Maharajpur and Kadkad Model measures are reviewed and revised annually. The Corporate Risk in Sahibabad Industrial Area, Ghaziabad District, Uttar Pradesh. The Management team organizes multiple workshops for various functions project also covers 100 adolescents and youth in the age group throughout the year to identify and review the potential environmental 14 - 25 years. Risks. Further, the Environmental Resource Management function is also
63 taking steps to identify climate change related risks and opportunities for 2. Have you advocated/lobbied through above associations for the its Integrated Steel Plant at Angul. advancement or improvement of public good? If yes, specify the broad areas (drop box: Governance and Administration, Economic 4. Does the Company have any project related to Clean Development Reforms, Inclusive Development Policies, Energy security, Water, Mechanism? If so, provide details thereof. Also, if yes, whether any Food Security, Sustainable Business Principles, Others) environmental compliance report is filed? Yes. The Company through its parent entity, Tata Steel Limited has been The Company has registered one Clean Development Mechanism project driving various advocacy initiatives with the Government in the areas of (project reference no. is AMS-III.B-Ver 16) at its Khopoli Unit related to switching of fuel from Heavy Fuel Oil (HFO) to Liquefied Natural Gas (LNG) • Governance and Administration in the Boiler. • Economic Reforms 5. Has the Company undertaken any other initiatives on – clean • Inclusive Development Policies technology, energy efficiency, renewable energy, etc.? If yes, please give hyperlink for web page etc. • Energy Security
The Company has taken several initiatives on clean technology, energy • Sustainable Business Principles efficiency, renewable energy, etc. during the year, details of which are given below: Principle 8: Businesses should support inclusive growth and equitable development a) Successful commissioning of 250 TPH gas fired boiler and Coke Dry Quenching Plant 2 1. Does the company have specified programmes/initiatives/projects in pursuit of the policy related to Principle 8? If yes details thereof. b) Increase in share of Clean power generation from 40% (FY19) to 86% (FY20) The Company focusses on responsible business practices with community-centric interventions which are aimed towards supporting c) Reduction in overall fuel rate in Blast furnaces from 530 kg/thm inclusive growth and equitable development. Towards this end, the (FY19) to 517 kg/thm (FY20) Company has taken up several impact driven projects for the vulnerable and underprivileged sections. d) Increase in Scrap charging in BOF from 5% (FY19) to 8% (FY20) 2. Are the programmes/projects undertaken through in-house team/ e) Reduction of specific coal consumption at DRI from 1.21 ton/ton of own foundation/external NGO/government structures/any other product (FY19) to 0.88 ton/ton of product (FY20) organization? ) f Use of alternate sources of energy at the Company’s plant at Angul - Projects are implemented directly as well as through partner agencies In FY20, the Company produced approx. 120 MW of power through having relevant expertise, the details of which are given below: Waste Heat Recovery Route which is approx. 40% of the total power consumed at the plant. SN Project/ Program Location Partner Agency 6. Are the Emissions/Waste generated by the Company within the 1 WEE Project Access Development Services, permissible limits given by CPCB/SPCB for the financial year being Angul Delhi reported? 2 QUEST Tata Steel Foundation and Yes the emissions/waste generated by the Company for Financial Year ASPIRE, Delhi 2019-20 are within permissible limits given by CPCB/SPCB(s). 3 PRAYAS Directly implemented by TSBSL 7. Number of show cause/ legal notices received from CPCB/SPCB which 4 Livelihood Directly implemented by TSBSL are pending (i.e. not resolved to satisfaction) as on end of Financial Promotion through with support from the Fishery Year. Agriculture and Horticulture Departments As on March 31, 2020 there is no pending show cause or legal notice of Government of Odisha received from CPCB or SPCB, to the best of the Company’s knowledge and 5 Youth Development Directly implemented by TSBSL understanding. through Sports by deploying a full time coach Principle 7: Businesses when engaged in influencing public and regulatory 6 WEE Khopoli Tata Steel Foundation and policy, should do so in a responsible manner Watershed Organization Trust 1. Is your company a member of any trade and chamber or association? (WOTR), Pune If Yes, Name only those major ones that your business deals with: 7 LIVE Navneet-esense, Mumbai During the year under review the Company was a member of (i) 8 IDIA Sahibabad Tata Steel Foundation and ASSOCHAM (ii) Sponge Iron Manufacturers Association (iii) Confederation United Way of Delhi (UWD) of Indian Industry (CII) (iv) Engineering Export Promotion Council (EEPC) of India (v) Association of Iron and Steel technology (vi) Indian Steel Note: QUEST; WEE, Khopoli and IDIA, Sahibabad were implemented through Association. Tata Steel Foundation ('TSF') which is a CSR delivery arm of Tata Steel Ltd. The Company entered into an MoU with TSF and TSF in turn executed an MoU with the implementing partners.
64 Statutory Reports Financial Statements
3. Have you done any impact assessment of your initiative? SN Name of project/ Location Community Institution A development project needs at least three years to be subjected to program ‘Impact Assessment’. The key initiatives and achievements have been 6 WEE Khopoli SHG mentioned earlier in this Report. However, a formal impact assessment 7 LIVE No community has not been carried out. institution. Teachers are 4. What is your company’s direct contribution to community oriented who take the development projects- Amount in INR and the details of the projects class undertaken. 8 IDIA Sahibabad School Management Committee; Youth The amounts spent towards community development projects in FY20 is as under: Resource Centre Principle 9: Businesses should engage with and provide value to their SN Name of project/ program Location Amount Spent customers and consumers in a responsible manner (in ` Lakhs) 1. What percentage of customer complaints/consumer cases are 1 WEE Project 49.42 pending as on the end of financial year? 2 QUEST Angul 68.00 3 PRAYAS 0.50 Post – Acquisition the New Management has continuously worked 4 Livelihood Promotion 12.33 towards putting in place policies and practices commensurate with the size and nature of the Company’s business. through Agriculture 5 Youth Development 14.62 During the year under review, the Company also introduced an electronic through Sports Customer Complaint Management System. Steps are taken to ensure 6 WEE Khopoli 15.43 that consumer complaints received are resolved in a timely manner and 7 LIVE 20.06 to the satisfaction of the consumer. Due to the sudden outbreak of the COVID – 19 pandemic, taking into account mobility, health and safety 8 IDIA Sahibabad 31.69 measures and quarantine norms, customer complaints are being taken up 5. Have you taken steps to ensure that this community development progressively for resolution. initiative is successfully adopted by the community? Please explain. 2. Does the Company display product information on the product label, The Company has taken several steps to ensure that the initiatives over and above what is mandated as per local laws? implemented are adopted by the community. These include: Yes. The Company provides all Information mandated by law on the label. • Community Need Assessment (CNA) exercise was carried out at 3. Is there any case filed by any stakeholder against the Company Angul and Khopoli by involving the community at large, focused regarding unfair trade practices, irresponsible advertising and/or groups (women, farmers, etc.) as well as key stakeholders including anti-competitive behaviour during the last five years and pending as Panchayat members and opinion leaders and seeking their feedback on end of financial year. If so, provide details thereof. – and views. As informed, the New Management has only been in office since May 18, • The Company forms community institutions with regards to all the 2018. To the best of the knowledge of the New Management, no case has projects intiated by it. These projects are implemented in regular been filed by any stakeholder against the Company regarding unfair trade coordination with these community institutions thereby ensuring practices, irresponsible advertising and/or anti-competitive behaviour that it is the community takes ownership of the projects. The during the last five years and no such complaint is pending as on March Community institutions are: 31, 2020.
SN Name of project/ Location Community Institution 4. Did your Company carry out any consumer survey/ consumer program satisfaction trends? 1 WEE Project Self Help Groups (SHG) No such survey has been carried out in FY20. However the Company Angul and Cooperatives proposes to introduce such surveys from FY21. 2 QUEST School Management Committee 3 PRAYAS Youth & Adolescent Groups 4 Livelihood Farmers group (still in promotion through formative stages) agriculture 5 Youth development Youth Club through Sports
65 DIVIDEND DISTRIBUTION POLICY [Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015]
1. PREAMBLE • Capital expenditure requirements including need for replacement of capital assets, expansion and modernization or augmentation 1.1 The Dividend Distribution Policy (hereinafter referred to as the of capital asset including any major sustenance, improvement and “Policy”) has been developed in accordance with the applicable growth proposals. provisions of the Companies Act, 2013 and applicable SEBI regulations. • Long term growth strategy of the Company requiring it to conserve cash to execute growth plan 1.2 The Board of Directors (the “Board”) of Tata Steel BSL Limited (the “Company”) has adopted the Policy of the Company as • Funds requirement for contingencies and unforeseen events with required in terms of Regulation 43A of the SEBI (Listing Obligations financial implications and Disclosure Requirements) Regulations, 2015 (“Listing • Cost of Borrowings Regulations”). • Stipulations/ Covenants of loan agreements 1.3 Under Section 2(35) of the Companies Act, 2013, “Dividend” includes • Capital market scenarios any interim dividend. In common parlance, “dividend” means the profit of a company, which is not retained in the business and is External Factors distributed among the shareholders in proportion to the amount • Government Policies and any changes there in paid-up on the shares held by them. In case of listed companies, • Industry Outlook Macro- economic conditions and any changes Section 24 of the Companies Act, 2013 confers on SEBI, the power therein of administration of the provisions pertaining to non-payment of dividend. • Cost and availability of alternative sources of financing 2. PURPOSE, OBJECTIVES AND SCOPE • Prevailing Taxation Policy or any amendments expected thereof, with respect to dividend distribution 2.1 The Securities and Exchange Board of India (“SEBI”) vide its Gazette Notification dated July 08, 2016 has amended the Listing Regulations • Statutory requirements including those with respect to mandatory by inserting Regulation 43A in order to make it mandatory to have a transfer of a certain portion of profits to any specific reserve Dividend Distribution Policy in place by the top five hundred listed • Any other relevant factors that the Board may deem fit to consider companies based on their market capitalization calculated as on the before declaring Dividend. 31st day of March of every year. 4. CIR CUMSTANCES UNDER WHICH THE SHAREHOLDERS MAY OR MAY 2.2 As the Company is one of the top five hundred companies as on NOT EXPECT DIVIDEND March 31, 2020, the Board has laid down a broad framework for 4.1 The Board shall consider the factors provided above under Clause distribution of dividend to its shareholders and/ or retaining or 3 before determination of any dividend payout after analyzing the plough back of its profits. The Policy also sets out the circumstances prospective opportunities and threats, viability of the options of and different factors for consideration by the Board at the time of dividend payout or retention, etc. taking such decisions of distribution or of retention of profits, in the interest of providing transparency to the shareholders. 4.2 The decision of dividend payout shall, majorly be based on the aforesaid factors considering the balanced interest of the 2.3 The Policy reflects the intent of the Company to reward its shareholders and the Company. shareholders by sharing a portion of its profits after retaining sufficient funds for growth of the Company. The Company shall 5. UTILIZATION OF RETAINED EARNINGS pursue this Policy, to pay, subject to the circumstances and factors 5.1 Retained earnings shall be utilized in accordance with prevailing enlisted hereon, dividend which shall be consistent with the regulatory requirements, creating reserves for specific objectives, performance of the Company over the years. fortifying the balance sheet against contingencies, generating 3. PARAMETERS TO BE CONSIDERED WHILE DECLARING DIVIDENDS higher returns for shareholders through reinvestment of profits for future growth and expansion and any other specific purpose as The Board will consider various parameters as mentioned below before approved by the Board of Directors of the Company. arriving at a decision on declaration of dividend: 5.2 The Company shall endeavor to utilize retained earnings in a manner Financial Parameters and Internal Factors that shall be beneficial to both, the interests of the Company and its • Current year’s profit/ Inadequacy of profit stakeholders in the long run. • Accumulated reserves 5.3 The decision of utilization of the retained earnings of the Company shall inter-alia be based on the following factors: • Distributable surplus available as per the various Acts and Regulations • Long term strategic plans • The Company’s liquidity position including its working capital • Augmentation/ Increase in production capacity requirements and debt servicing obligations • Market / Product expansion plan • Return on invested capital • Modernization plan • Operating cash flow and future cash flow needs • Diversification of business
66 Statutory Reports Financial Statements
• Replacement of capital assets 8. DISCLOSURES • Balancing the Capital Structure by de-leveraging the company The Policy shall be disclosed in the Annual report and on the website of the Company i.e. at www.tatasteelbsl.co.in • Other such criteria as the Board may deem fit from time to time. 9. POLICY REVIEW AND AMENDMENTS 6. PROVISIONS IN REGARD TO VARIOUS CLASSES OF SHARES 9.1 The Policy will be reviewed periodically by the Board. The Board is authorized to change/amend this policy from time to time at its sole 6.1 The Company has one class of equity shareholders and has issued discretion and/or in pursuance of any amendments made in the preference share capital. Companies Act, 2013, SEBI and other Regulations, etc. 6.2 In case the Company issues different class of equity shares any point 9.2 Such amended Policy shall be periodically placed before the Board in time, the factors and parameters for declaration of dividend to for adoption immediately after such changes. different class of shares of the Company shall be same as covered above. 10. CONFLICT IN POLICY 6.3 The payment of dividend shall be based on the respective rights In the event of any conflict between this Policy and the provisions attached to each class of shares as per their terms of issue. contained in the Companies Act, 2013 and Listing Regulations, the Act and Listing Regulations shall prevail. 6.4 The dividends shall be paid out of the Company’s distributable profits and/or general reserves, and shall be allocated among 11. COMPLIANCE RESPONSIBILITY shareholders on a pro-rata basis according to the number of each Compliance of this Policy shall be the responsibility of the Company type and class of shares held. Secretary of the Company who shall have the power to ask for any 6.5 Dividend when declared shall be first paid to the preference information or clarifications from the management in this regard. shareholders of the Company, as per the terms and conditions of Disclaimer: their issue. a) The Policy does not constitute a commitment regarding the future 7. APPLICABILITY OF THE POLICY dividends of the Company, but only represents a general guidance The Policy shall not apply to regarding dividend policy. The statement of the Policy does not in any way restrict the right of the Board to use its discretion in the • Determination and declaring of dividend on preference shares as the recommendation of the Dividend to be distributed in the year and same will be as per the terms of issue approved by the shareholders; the Board reserves the right to depart from the policy as and when • Distribution of dividend in kind, i.e. by issue of fully or partly paid circumstances so warrant. bonus shares or other securities, subject to applicable law b) Giv en the aforementioned uncertainties, prospective or present • Distribution of cash as an alternative to payment of dividend by way investors are cautioned not to place undue reliance on any of the of buyback of equity shares. forward-looking statements in the Policy.
67 INDEPENDENT AUDITOR’S REPORT
To the Members of Tata Steel BSL Limited (Formerly known as Bhushan Basis for Opinion Steel Limited) 3. We conducted our audit in accordance with the Standards on Auditing Report on the Audit of the Standalone Financial Statements specified under section 143(10) of the Act. Our responsibilities under Opinion those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are 1. We have audited the accompanying standalone financial statements of independent of the Company in accordance with the Code of Ethics Tata Steel BSL Limited (Formerly known as Bhushan Steel Limited) (‘the issued by the Institute of Chartered Accountants of India (‘ICAI’) together Company’), which comprise the Balance Sheet as at 31 March 2020, the with the ethical requirements that are relevant to our audit of the financial Statement of Profit and Loss (including Other Comprehensive Income), statements under the provisions of the Act and the rules thereunder, and the Cash Flow Statement and the Statement of Changes in Equity for the we have fulfilled our other ethical responsibilities in accordance with year then ended, and a summary of the significant accounting policies these requirements and the Code of Ethics. We believe that the audit and other explanatory information. evidence we have obtained is sufficient and appropriate to provide a basis 2. In our opinion and to the best of our information and according to the for our opinion. explanations given to us, the aforesaid standalone financial statements Key Audit Matter give the information required by the Companies Act, 2013 (‘Act’) in the manner so required and give a true and fair view in conformity with 4. Key audit matters are those matters that, in our professional judgment, the accounting principles generally accepted in India including Indian were of most significance in our audit of the standalone financial Accounting Standards (‘Ind AS’) specified under section 133 of the Act, statements of the current period. These matters were addressed in the of the state of affairs (financial position) of the Company as at 31 March context of our audit of the financial statements as a whole, and in forming 2020, and its loss (financial performance including other comprehensive our opinion thereon, and we do not provide a separate opinion on these income), its cash flows and the changes in equity for the year ended on matters. that date.
5. We have determined the matter described below to be the key audit matter to be communicated in our report.
Key audit matter How our audit addressed the key audit matter Recoverability of amounts paid against on-going litigations We have performed the following procedures, among others, to test the recoverability of payments made by the Company in relation to litigations Refer Note 32A to the standalone financial statements. instituted against it prior to the approval of the Resolution Plan: Prior to the approval of the resolution plan (‘the Resolution Plan’) under the ● Verified the underlying documents related to litigations and other Corporate Insolvency Resolution Process of the Insolvency and Bankruptcy correspondences with the statutory authorities; Code, 2016 on 15 May 2018 as described in the aforesaid note, the Company was a party to certain litigations. Pursuant to the approval of the Resolution ● Involved direct and indirect tax specialists to review the process used Plan, it was determined that no amounts are payable in respect of those by the management to determine estimates and to test the judgments litigations as they stand extinguished. applied by management in developing the accounting estimates;
The Company had also made certain payments to the relevant authorities ● Assessed management’s estimate of recoverability, supported by in respect of those litigations which were presented as recoverable under an opinion obtained by the management from a legal expert, by “Other non-current assets” in the standalone financial statements. determining whether;
The estimates related to expected outcome of litigations and recoverability - The method of measurement used is appropriate in the of payments made in respect thereof have high degree of inherent circumstances; and uncertainty due to insufficient judicial precedents in India in respect - The assumptions used by management are reasonable in light of of disposal of litigations involving companies admitted to Corporate the measurement principles of Ind AS. Insolvency Resolution Process. Determined whether the methods for making estimates have been The application of significant judgment in the aforementioned matter ● applied consistently; required substantial involvement of senior personnel on the audit engagement including individuals with expertise in tax related matters. ● Evaluated whether the accounting principles applied by the management fairly present the amounts recoverable from relevant authorities in financial statements in accordance with the principles of Ind AS.
68 Statutory Reports Financial Statements
Information other than the Financial Statements and Auditor’s 11. As part of an audit in accordance with Standards on Auditing, we exercise Report thereon professional judgment and maintain professional skepticism throughout the audit. We also: 6. The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual ● Identify and assess the risks of material misstatement of the financial Report, but does not include the financial statements and our auditor’s statements, whether due to fraud or error, design and perform audit report thereon. The Annual Report is expected to be made available to us procedures responsive to those risks, and obtain audit evidence that after the date of this auditor’s report. is sufficient and appropriate to provide a basis for our opinion. The Our opinion on the financial statements does not cover the other risk of not detecting a material misstatement resulting from fraud information and we will not express any form of assurance conclusion is higher than for one resulting from error, as fraud may involve thereon. collusion, forgery, intentional omissions, misrepresentations, or the In connection with our audit of the financial statements, our responsibility override of internal control. is to read the other information identified above when it becomes Obtain an understanding of internal control relevant to the audit available and, in doing so, consider whether the other information is ● in order to design audit procedures that are appropriate in the materially inconsistent with the financial statements or our knowledge circumstances. Under section 143(3)(i) of the Act, we are also obtained in the audit or otherwise appears to be materially misstated. responsible for expressing our opinion on whether the ompany When we read the Annual Report, if we conclude that there is a material has adequate internal financial controls system in place and the misstatement therein, we are required to communicate the matter to operating effectiveness of such controls. those charged with governance. Responsibilities of Management and Those Charged with Governance ● Evaluate the appropriateness of accounting policies used and the for the Standalone Financial Statements reasonableness of accounting estimates and related disclosures made by management. 7. The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these ● Conclude on the appropriateness of management’s use of the standalone financial statements that give a true and fair view of the going concern basis of accounting and, based on the audit state of affairs (financial position), profit or loss (financial performance evidence obtained, whether a material uncertainty exists related including other comprehensive income), changes in equity and cash flows to events or conditions that may cast significant doubt on the of the Company in accordance with the accounting principles generally Company’s ability to continue as a going concern. If we conclude accepted in India, including the Ind AS specified under section 133 of the that a material uncertainty exists, we are required to draw attention Act. This responsibility also includes maintenance of adequate accounting in our auditor’s report to the related disclosures in the financial records in accordance with the provisions of the Act for safeguarding of statements or, if such disclosures are inadequate, to modify our the assets of the Company and for preventing and detecting frauds and opinion. Our conclusions are based on the audit evidence obtained other irregularities; selection and application of appropriate accounting up to the date of our auditor’s report. However, future events or policies; making judgments and estimates that are reasonable and conditions may cause the Company to cease to continue as a going prudent; and design, implementation and maintenance of adequate concern. internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the ● Evaluate the overall presentation, structure and content of the preparation and presentation of the financial statements that give a true financial statements, including the disclosures, and whether the and fair view and are free from material misstatement, whether due to financial statements represent the underlying transactions and fraud or error. events in a manner that achieves fair presentation. 8. In preparing the financial statements, management is responsible 12. We communicate with those charged with governance regarding, among for assessing the Company’s ability to continue as a going concern, other matters, the planned scope and timing of the audit and significant disclosing, as applicable, matters related to going concern and using the audit findings, including any significant deficiencies in internal control going concern basis of accounting unless management either intends that we identify during our audit. to liquidate the Company or to cease operations, or has no realistic alternative but to do so. 13. We also provide those charged with governance with a statement 9. Those Board of Directors are also responsible for overseeing the that we have complied with relevant ethical requirements regarding Company’s financial reporting process. independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, Auditor’s Responsibilities for the Audit of the Financial Statements and where applicable, related safeguards. 10. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, 14. From the matters communicated with those charged with governance, whether due to fraud or error, and to issue an auditor’s report that includes we determine those matters that were of most significance in the audit our opinion. Reasonable assurance is a high level of assurance, but is of the financial statements of the current period and are therefore the key not a guarantee that an audit conducted in accordance with Standards audit matters. We describe these matters in our auditor’s report unless law on Auditing will always detect a material misstatement when it exists. or regulation precludes public disclosure about the matter or when, in Misstatements can arise from fraud or error and are considered material extremely rare circumstances, we determine that a matter should not be if, individually or in the aggregate, they could reasonably be expected communicated in our report because the adverse consequences of doing to influence the economic decisions of users taken on the basis of these so would reasonably be expected to outweigh the public interest benefits financial statements. of such communication.
69 Report on Other Legal and Regulatory Requirements g) with respect to the other matters to be included in the Auditor’s Report in accordance with rule 11 of the Companies (Audit and 15. As required by section 197(16) of the Act, we report that the Company has Auditors) Rules, 2014 (as amended), in our opinion and to the best paid remuneration to its directors during the year in accordance with the of our information and according to the explanations given to us: provisions of and limits laid down under section 197 read with Schedule V to the Act. i. the Company, as detailed in note 32A to the standalone financial statements, has disclosed the impact of pending 16. As required by the Companies (Auditor’s Report) Order, 2016 (‘the Order’) litigation(s) on its financial position as at 31 March 2020; issued by the Central Government of India in terms of section 143(11) of the Act, we give in the Annexure A a statement on the matters specified in i. the Company did not have any long-term contracts including paragraphs 3 and 4 of the Order. derivative contracts for which there were any material foreseeable losses as at 31 March 2020; 17. Further to our comments in Annexure A, as required by section 143(3) of the Act, we report that: ii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund a) we have sought and obtained all the information and explanations by the Company during the year ended 31 March 2020; which to the best of our knowledge and belief were necessary for the purpose of our audit; iii. the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the ) b in our opinion, proper books of account as required by law have period from 8 November 2016 to 30 December 2016, which been kept by the Company so far as it appears from our examination are not relevant to these standalone financial statements. of those books; Hence, reporting under this clause is not applicable. c) the standalone financial statements dealt with by this report are in agreement with the books of account; For Walker Chandiok & Co LLP Chartered Accountants d) in our opinion, the aforesaid standalone financial statements Firm’s Registration No.: 001076N/N500013 comply with Ind AS specified under section 133 of the Act; e) on the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the sd/- directors is disqualified as on 31 March 2020 from being appointed Siddharth Talwar as a director in terms of section 164(2) of the Act; Partner ) f we have also audited the internal financial controls over financial Membership No.: 512752 reporting (IFCoFR) of the Company as on 31 March 2020 in UDIN: 20512752AAAABX1165 conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated Place: Faridabad 20 May 2020 as per Annexure B expressed unmodified opinion; Date: 20 May 2020
70 Statutory Reports Financial Statements
ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE TO THE MEMBERS OF TATA STEEL BSL LIMITED (FORMERLY KNOWN AS BHUSHAN STEEL LIMITED), ON THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020
Annexure A (v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance Based on the audit procedures performed for the purpose of reporting a true of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of and fair view on the financial statements of the Company and taking into clause 3(v) of the Order are not applicable. consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to (vi) We have broadly reviewed the books of account maintained by the the best of our knowledge and belief, we report that: Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of (i) (a) The Company has maintained proper records showing full the Act in respect of Company’s products/services and are of the opinion particulars, including quantitative details and situation of fixed that, prima facie, the prescribed accounts and records have been made assets. and maintained. However, we have not made a detailed examination of ) (b The Company has a regular program of physical verification of its the cost records with a view to determine whether they are accurate or fixed assets under which fixed assets are verified in a phased manner complete. over a period of three years, which, in our opinion, is reasonable (vii) (a) Undisputed statutory dues including provident fund, employees’ having regard to the size of the Company and the nature of its state insurance, income-tax, goods and services tax, duty of assets. In accordance with this program, no such verification was customs, cess and other material statutory dues, as applicable, have scheduled to be carried out during the year. generally been regularly deposited to the appropriate authorities, (c) The title deeds of all the immovable properties (which are included though there has been a slight delay in a few cases. Further, no under the head ‘Property, plant and equipment’) are held in the undisputed amounts payable in respect thereof were outstanding name of the Company except for the following properties: at the year-end for a period of more than six months from the date they became payable. ● title deeds to freehold land with gross carrying amount and net carrying amount of ` 1,265.55 lakhs and ` 1,265.55 lakhs ) (b As mentioned in note 32A to the standalone financial statements, respectively were not readily available. pursuant to the implementation of the Resolution Plan, there are no dues in respect of income-tax, goods and services tax, sales-tax, ● title deeds to building with gross carrying amount and service tax, duty of customs, duty of excise and value added tax net carrying amount of ` 245.24 lakhs and ` 158.03 lakhs that have not been deposited with the appropriate authorities on respectively were not readily available. account of any dispute.
(ii) In our opinion, the management has conducted physical verification (viii) The Company has not defaulted in repayment of loans or borrowings of inventory at reasonable intervals during the year and discrepancies to any financial institution or a bank during the year. The Company has noticed on physical verification have been properly dealt with in the no loans or borrowings payable to government and no dues payable to books of account. debenture-holders during the year.
(iii) The Company has granted unsecured loans to a Company covered in the (ix) The Company did not raise moneys by way of initial public offer or further register maintained under Section 189 of the Act; and with respect to the public offer (including debt instruments). In our opinion, the term loans same: were applied for the purpose for which the loans were obtained though (a) in our opinion the terms and conditions of grant of such loans are idle/surplus funds which were not required for immediate utilisation have not, prima facie, prejudicial to the Company’s interest. been invested in liquid investments, payable on demand.
) (b the schedule of repayment of principal and payment of interest has (x) Pursuant to the initiation of Corporate Insolvency Resolution Process and been stipulated and the principal and interest amounts are not due the requirements of Section 25(2)(j) of The Insolvency and Bankruptcy for repayment/payment currently; Code, 2016 (‘IBC’), the Resolution Professional appointed by the National Company Law Tribunal (‘NCLT’) identified certain transactions covered (c) there is no overdue amount in respect of loans granted to such under Sections 43 to 51 and 66 of the IBC. These transactions were Company. submitted with NCLT in the previous year and crystallisation of amount / future course of action will be carried out based on the judgement/order (iv) In our opinion, the Company has complied with the provisions of Sections of the NCLT. 185 and 186 of the Act in respect of investments and loans. Further, in our opinion, the Company has not entered into any transaction covered Further, based on the information and explanations provided to us, under Section 185 and Section 186 of the Act in respect of guarantees and certain former key management personnel and existing employees of security. the Company are subject matter of investigations by the Government
71 Authorities. The investigations are currently underway and the Company (xv) In our opinion, the Company has not entered into any non-cash is yet to get any orders or directions in this respect from the Government transactions with the directors or persons connected with them covered Authorities till the balance sheet date. under Section 192 of the Act.
Except these transactions, no fraud by the Company or on the Company (xvi) The Company is not required to be registered under Section 45-IA of the by its officers or employees has been noticed during the period covered Reserve Bank of India Act, 1934. by our audit. For Walker Chandiok & Co LLP (xi) Managerial remuneration has been paid and provided by the Company Chartered Accountants in accordance with the provisions of Section 197 of the Act read with Firm’s Registration No.: 001076N/N500013 Schedule V to the Act.
(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable. sd/- (xiii) In our opinion all transactions with the related parties are in compliance Siddharth Talwar with Sections 177 and 188 of Act, where applicable, and the requisite Partner details have been disclosed in the financial statements etc., as required by Membership No.: 512752 the applicable Ind AS. UDIN: 20512752AAAABX1165
(xiv) During the year, the Company has not made any preferential allotment or Place: Faridabad private placement of shares or fully or partly convertible debentures. Date: 20 May 2020
72 Statutory Reports Financial Statements
ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE TO THE MEMBERS OF TATA STEEL BSL LIMITED (FORMERLY KNOWN AS BHUSHAN STEEL LIMITED) ON THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020
Independent Auditor’s Report on the Internal Financial Controls under Meaning of Internal Financial Controls over Financial Reporting Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the 6. A Company’s IFCoFR is a process designed to provide reasonable Act’) assurance regarding the reliability of financial reporting and the 1. In conjunction with our audit of the standalone financial statements of preparation of financial statements for external purposes in accordance Tata Steel BSL Limited (formerly known as Bhushan Steel Limited) (‘the with generally accepted accounting principles. A Company’s IFCoFR Company’) as at and for the year ended 31 March 2020, we have audited include those policies and procedures that (1) pertain to the maintenance the internal financial controls over financial reporting (‘IFCoFR’) of the of records that, in reasonable detail, accurately and fairly reflect the Company as at that date. transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to Responsibilities of Management and Those Charged with Governance permit preparation of financial statements in accordance with generally for Internal Financial Controls accepted accounting principles, and that receipts and expenditures of 2. The Company’s Board of Directors is responsible for establishing and the Company are being made only in accordance with authorisations of maintaining internal financial controls based on the internal control over management and directors of the Company; and (3) provide reasonable financial reporting criteria established by the Company considering the assurance regarding prevention or timely detection of unauthorised essential components of internal control stated in the Guidance Note acquisition, use, or disposition of the Company’s assets that could have a on Audit of Internal Financial Controls over Financial Reporting (‘the material effect on the financial statements. Guidance Note’) issued by the Institute of Chartered Accountants of Inherent Limitations of Internal Financial Controls over Financial India (‘ICAI’). These responsibilities include the design, implementation Reporting and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of 7. Because of the inherent limitations of IFCoFR, including the possibility the Company’s business, including adherence to the Company’s policies, of collusion or improper management override of controls, material the safeguarding of its assets, the prevention and detection of frauds and misstatements due to error or fraud may occur and not be detected. errors, the accuracy and completeness of the accounting records, and the Also, projections of any evaluation of the IFCoFR to future periods are timely preparation of reliable financial information, as required under the subject to the risk that the IFCoFR may become inadequate because of Act. changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Auditor’s Responsibility for the Audit of the Internal Financial Controls Opinion 3. Our responsibility is to express an opinion on the Company’s IFCoFR 8. In our opinion, the Company has, in all material respects, adequate based on our audit. We conducted our audit in accordance with the internal financial controls over financial reporting and such controls were Standards on Auditing issued by the ICAI and deemed to be prescribed operating effectively as at 31 March 2020, based on the internal control under Section 143(10) of the Act, to the extent applicable to an audit of over financial reporting criteria established by the Company considering IFCoFR, and the Guidance Note issued by the ICAI. Those Standards and the essential components of internal control stated in the Guidance Note the Guidance Note require that we comply with ethical requirements and issued by the ICAI. plan and perform the audit to obtain reasonable assurance about whether adequate IFCoFR were established and maintained and if such controls For Walker Chandiok & Co LLP operated effectively in all material respects. Chartered Accountants 4. Our audit involves performing procedures to obtain audit evidence about Firm’s Registration No.: 001076N/N500013 the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design sd/- and operating effectiveness of internal control based on the assessed risk. Siddharth Talwar The procedures selected depend on the auditor’s judgement, including Partner the assessment of the risks of material misstatement of the financial Membership No.: 512752 statements, whether due to fraud or error. UDIN: 20512752AAAABX1165 5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s Place: Faridabad IFCoFR. Date: 20 May 2020
73 STANDALONE BALANCE SHEET AS AT MARCH 31, 2020 (₹ in lacs) Note As at As at March 31, 2020 March 31, 2019 ASSETS I Non-current assets (a) Property, plant and equipment 3A 2,793,557.50 2,915,441.02 (b) Right-of-use assets 3B 150,010.86 - (c) Capital work-in-progress 3C 68,171.13 115,414.24 (d) Intangible assets 4 2,080.16 17.06 (e) Investments in subsidiaries and associates 6A 1,015.00 15.00 (f) Financial assets (i) Investments 6A 66.95 100.87 (ii) Loans 6B 37,611.03 4,646.28 (iii) Other financial assets 6C 41,763.60 44,594.86 (g) Other non-current assets 8 61,250.69 80,358.73 (h) Income tax assets 9 3,771.71 3,181.98 Total non current assets 3,159,298.63 3,163,770.04 II Current assets (a) Inventories 10 483,492.54 458,188.14 (b) Financial assets (i) Investments 6A - 159,490.28 (ii) Trade receivables 11 70,238.62 69,701.21 (iii) Cash and cash equivalents 12 72,358.48 27,741.72 (iv) Other balances with banks 13 12,598.81 12,689.66 (v) Loans 6B 2,496.08 5,152.86 (vi) Derivative assets 7 5,142.54 214.07 (vii) Other financial assets 6C 11,924.01 9,465.89 (c) Other current assets 8 65,789.31 52,171.73 Total current assets 724,040.39 794,815.56 Total assets 3,883,339.02 3,958,585.60 EQUITY & LIABILITIES I Equity (a) Equity share capital 14 21,868.80 21,868.80 (b) Other equity 15 1,743,758.29 1,809,422.38 Total Equity 1,765,627.09 1,831,291.18 II Non-current liabilities (a) Financial liabilities (i) Borrowings 16A 1,653,436.55 1,697,230.74 (ii) Other financial liabilities 16C 3,620.35 5,788.97 (b) Provisions 18 7,418.23 5,679.77 (c) Deferred Income 19 189.21 227.69 Total non current liabilities 1,664,664.34 1,708,927.17 III Current liabilities (a) Financial liabilities (i) Borrowings 16A 88,700.00 - (ii) Trade payables 16B - Total outstanding dues of micro enterprises and small enterprises 16B 5,486.99 1,254.42 - Total outstanding dues of creditors other than micro enterprises and small 16B 281,484.12 307,642.43 enterprises (iii) Derivative liabilities 7 763.77 4,141.57 (iv) Other financial liabilities 16C 54,005.62 68,231.66 (b) Other current liabilities 17 22,406.23 36,803.14 (c) Provisions 18 200.86 294.03 Total current liabilities 453,047.59 418,367.25 Total equity and liabilities 3,883,339.02 3,958,585.60 The accompanying notes forming part of the financial statements 1-45 As per our report of even date attached. For and on behalf of the Board of Directors For Walker Chandiok & Co LLP sd/- sd/- sd/- Chartered accountants Mr. T. V. Narendran Mr. Krishnava Dutt Ms. Neera Saggi Firm Registration No. : 001076N/N500013 Chairman (DIN: 03083605) Independent Director (DIN: 02792753) Independent Director (DIN: 00501029)
sd/- sd/- sd/- sd/- Siddharth Talwar Mr. Shashi Kant Maudgal Mr. Srikumar Menon Mr. Anand Sen Partner Independent Director (DIN: 00918431) Independent Director (DIN: 00470254) Director (DIN: 00237914) Membership No. 512752 sd/- sd/- sd/- Mr. Koushik Chaterjee Mr. Rajeev Singhal Mr. Sanjib Nanda Director (DIN: 00004989) Managing Director (DIN: 02719570) Chief Financial Officer sd/- Nisha Anil Seth Place: Faridabad Company Secretary Date: May 20, 2020 (Membership No. 27019)
74 Statutory Reports Financial Statements
STANDALONE STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2020 (₹ in lacs) Note Year ended Year ended March 31, 2020 March 31, 2019
I Income (a) Revenue from operations 20 1,819,914.18 2,089,160.35 (b) Other income 21 10,651.49 13,244.07 Total income 1,830,565.67 2,102,404.42 II Expenses: (a) Raw materials consumed 22 1,059,204.21 1,160,305.46 (b) Purchases of finished, semi-finished and other products 23 287.56 685.44 (c) Changes in inventories of finished goods, work-in-progress and stock-in-trade 24 (25,379.95) (27,818.05) (d) Employee benefit expense 25 40,129.87 36,250.56 (e) Finance costs 26 169,591.50 375,217.88 (f) Depreciation and amortisation expense 27 143,163.44 144,173.92 (g) Other expenses 28 515,388.32 539,881.00 Total expenses 1,902,384.95 2,228,696.21 III Loss before exceptional items and tax (I-II) (71,819.28) (126,291.79) IV Exceptional items 29 6,901.84 297,600.67 V Profit/(loss) before tax (III+IV) (64,917.44) 171,308.88 VI Tax expense: (a) Current tax - - (b) Deferred tax - - Total tax expense - - VII Profit/(loss) for the year (V-VI) (64,917.44) 171,308.88 VIII Other comprehensive income (a) Items that will not be reclassified to profit or loss (i) Remeasurement gains/(losses) on post employment defined benefit plans (712.70) 523.83 (ii) Fair value changes of investments in equity shares (33.92) (6.80) (b) Income tax relating to items that will not be reclassified to profit or loss - - (c) Items that will be reclassified to profit or loss - - (d) Income tax relating to items that will be reclassified to profit or loss - - Total other comprehensive income (746.62) 517.03 IX Total comprehensive income for the year (VII+VIII) (65,664.06) 171,825.91 X Earnings per share 30 Basic (₹) (5.94) 17.45 Diluted (₹) (5.94) 1.05 The accompanying notes forming part of the financial statements 1-45 As per our report of even date attached. For and on behalf of the Board of Directors For Walker Chandiok & Co LLP sd/- sd/- sd/- Chartered accountants Mr. T. V. Narendran Mr. Krishnava Dutt Ms. Neera Saggi Firm Registration No. : 001076N/N500013 Chairman (DIN: 03083605) Independent Director (DIN: 02792753) Independent Director (DIN: 00501029) sd/- sd/- sd/- sd/- Siddharth Talwar Mr. Shashi Kant Maudgal Mr. Srikumar Menon Mr. Anand Sen Partner Independent Director (DIN: 00918431) Independent Director (DIN: 00470254) Director (DIN: 00237914) Membership No. 512752 sd/- sd/- sd/- Mr. Koushik Chaterjee Mr. Rajeev Singhal Mr. Sanjib Nanda Director (DIN: 00004989) Managing Director (DIN: 02719570) Chief Financial Officer sd/- Nisha Anil Seth Place: Faridabad Company Secretary Date: May 20, 2020 (Membership No. 27019)
75 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED MARCH 31, 2020
A. Equity Share Capital (₹ in lacs) Balance as at Changes during As at April 1, 2019 the period March 31, 2020 (Refer sub-note (a)) Equity shares of ₹ 2 each issued, subscribed and fully paid. 21,868.80 - 21,868.80
(₹ in lacs) Balance as at Changes during As at April 1, 2018 the period March 31, 2019 Equity shares of ₹ 2 each issued, subscribed and fully paid. 4,530.30 17,338.50 21,868.80 (a) For details of changes made during the period, Refer Note - 14
B. Other Equity (₹ in lacs) Capital Securities Debenture General Retained Equity Capital Equity Total redemption premium redemption reserve earnings component contribution instruments Equity reserve reserve of compound at fair value financial through other instruments comprehensive income As at April 1, 2019 693.34 72,576.10 - 564,350.09 (3,076,389.82) 1,729,582.05 2,518,550.72 59.90 1,809,422.38 Profit for the year - - - - (64,917.47) - - - (64,917.47) Other comprehensive - - - - (712.70) - - (33.92) (746.62) income As at March 31, 2020 693.34 72,576.10 - 564,350.09 (3,142,019.99) 1,729,582.05 2,518,550.72 25.98 1,743,758.29
(₹ in lacs) Capital Securities Debenture General Retained Equity Equity Equity Total redemption premium redemption reserve earnings component component instruments Equity reserve reserve of compound of compound at fair value financial financial through other instruments instruments comprehensive income As at April 1, 2018 693.34 72,576.10 36,512.50 527,837.59 (3,248,222.53) - - 66.70 (2,610,536.30) Profit for the year - - - - 171,308.88 - - - 171,308.88 Other comprehensive - - - - 523.83 - - (6.80) 517.03 income Transactions with owners - - - - - 1,729,582.05 2,518,550.72 - 4,248,132.77 in their capacity as owners Transfers within equity - - (36,512.50) 36,512.50 - - - - - As at March 31, 2019 693.34 72,576.10 - 564,350.09 (3,076,389.82) 1,729,582.05 2,518,550.72 59.90 1,809,422.38
As per our report of even date attached. For and on behalf of the Board of Directors For Walker Chandiok & Co LLP sd/- sd/- sd/- Chartered accountants Mr. T. V. Narendran Mr. Krishnava Dutt Ms. Neera Saggi Firm Registration No. : 001076N/N500013 Chairman (DIN: 03083605) Independent Director (DIN: 02792753) Independent Director (DIN: 00501029) sd/- sd/- sd/- sd/- Siddharth Talwar Mr. Shashi Kant Maudgal Mr. Srikumar Menon Mr. Anand Sen Partner Independent Director (DIN: 00918431) Independent Director (DIN: 00470254) Director (DIN: 00237914) Membership No. 512752 sd/- sd/- sd/- Mr. Koushik Chaterjee Mr. Rajeev Singhal Mr. Sanjib Nanda Director (DIN: 00004989) Managing Director (DIN: 02719570) Chief Financial Officer sd/- Nisha Anil Seth Place: Faridabad Company Secretary Date: May 20, 2020 (Membership No. 27019)
76 Statutory Reports Financial Statements
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2020
(₹ in lacs) Year ended March 31, 2020 Year ended March 31, 2019 (A) Cash Flow From Operating Activities: Profit/(loss) before taxes (64,917.47) 171,308.88 Adjustments for: Depreciation & amortisation expenses 143,163.43 144,173.88 Finance cost 169,591.49 375,217.88 Exceptional gains (6,901.84) (297,600.67) Gain on fair valuation/sale of current investments (3,781.15) (8,478.77) Unrealised (gain)/loss on outstanding forward exchange (8,306.27) 3,927.50 contracts Interest income / Dividend income (4,920.56) (2,884.47) Provision for doubtful debts / Bad debts written off (net of write (3,336.87) 7,760.49 back) Provisions (retirement benefit) 932.58 (389.42) Others (4,434.12) (3,035.52) 282,006.69 218,690.90 Operating cash flows before changes in inventories and 217,089.22 389,999.78 operating receivables and payables Adjustments for: Trade receivables 3,542.21 50,971.27 Inventories (26,202.40) (55,668.60) Loans, Other financial assets (excluding inter-corporate deposits (16,205.15) (11,620.96) and interest accrued thereon) and Other assets (excluding capital advances) Trade payables/ other financial liabilities (excluding borrowings, (5,818.09) 206,611.90 interest accrued on borrowings and capital creditors) (44,683.43) 190,293.61 Cash generated from operations 172,405.79 580,293.39 Direct taxes paid (589.74) (281.78) Net cash generated from operating activities 171,816.05 580,011.61 (B) Cash Flow From Investing Activities: Payments made for purchase of property, plant and equipment (61,991.85) (35,439.82) Proceeds from sale of property, plant and equipment 626.57 28.51 (Purchase)/sale of current investments (Net) 163,271.43 (151,011.52) Loans given (75,500.00) - Repayment of loans 42,900.00 Acquisition of interest in subsidiaries (1,000.00) Interest received 1,563.43 2,968.85 Movement in other bank balances 2,922.12 21,734.49 Dividend received 1.76 1.35 Net cash from/(used in) investing activities 72,793.46 (161,718.14)
77 CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2020
(₹ in lacs) Year ended March 31, 2020 Year ended March 31, 2019 (C) Cash Flow From Financing Activities: Proceeds from issue of Equity share capital - 15,888.50 Proceeds from issue of Preference share capital - 1,970,000.00 Proceeds from current borrowings (Net) 88,700.00 5,057,369.43 Repayment of borrowings (143,090.77) (6,252,317.76) Payment of lease liabilities (6,884.85) (4,519.58) Interest paid (138,717.13) (1,236,393.37) Unclaimed dividend - 0.02 Net cash used in financing activities (199,992.75) (449,972.76) Net (decrease)/increase in cash and cash equivalents (A+B+C) 44,616.76 (31,679.29) Opening cash and cash equivalents 27,741.72 59,421.01 Closing cash and cash equivalents (Refer note no 12) 72,358.48 27,741.72
As per our report of even date attached. For and on behalf of the Board of Directors For Walker Chandiok & Co LLP sd/- sd/- sd/- Chartered accountants Mr. T. V. Narendran Mr. Krishnava Dutt Ms. Neera Saggi Firm Registration No. : 001076N/N500013 Chairman (DIN: 03083605) Independent Director (DIN: 02792753) Independent Director (DIN: 00501029) sd/- sd/- sd/- sd/- Siddharth Talwar Mr. Shashi Kant Maudgal Mr. Srikumar Menon Mr. Anand Sen Partner Independent Director (DIN: 00918431) Independent Director (DIN: 00470254) Director (DIN: 00237914) Membership No. 512752 sd/- sd/- sd/- Mr. Koushik Chaterjee Mr. Rajeev Singhal Mr. Sanjib Nanda Director (DIN: 00004989) Managing Director (DIN: 02719570) Chief Financial Officer sd/- Nisha Anil Seth Place: Faridabad Company Secretary Date: May 20, 2020 (Membership No. 27019)
78 Statutory Reports Financial Statements
ACCOUNTING POLICIES UNDER IND AS STANDALONE FINANCIAL STATEMENTS OF TATA STEEL BSL LIMITED FOR THE YEAR ENDED MARCH 31, 2020
1. Company Information and basis of preparation ) b Property, plant and equipment TATA Steel BSL Limited (“the Company”) is a public limited Company An item of property, plant and equipment is recognised as an asset if incorporated in India with its registered office in Ground Floor, Mira it is probable that future economic benefits associated with the item Corporate Suites, Plot No. 1&2, Ishwar Nagar, Mathura Road, New Delhi- will flow to the Company and its cost can be measured reliably. This 110065, India. The Company is listed on the Bombay Stock Exchange (BSE) recognition principle is applied to costs incurred initially to acquire and the National Stock Exchange (NSE). an item of property, plant and equipment and also to costs incurred The Company is the 3rd largest secondary steel producer with an overall subsequently to add to, replace part of, or service it. All other repair steel producing capacity of 5.6 million tonne per annum. The Company and maintenance costs, including regular servicing, are recognised has presence across the entire value chain of steel manufacturing. The in the statement of profit and loss as incurred. When a replacement Company offers a broad range of steel products including a portfolio of occurs, the carrying value of the replaced part is derecognised. high value added downstream products such as hot rolled, cold rolled and Where an item of property, plant and equipment comprises major coated steel, cold rolled full hard, galvanised coils and sheets, high tensile components having different useful lives, these components are steel strips, colour coated tiles, precision tubes etc. The Company has the accounted for as separate items. unique facilities of producing cold roll and sheets up to a width of 1700 Property, plant and equipment and capital work in progress are mm and galvanised coil and steel up to a width of 1350 mm. stated at cost/, net of accumulated depreciation and accumulated Statement of compliance impairment losses. Cost includes all direct costs and expenditures incurred to bring the asset to its working condition and location for The financial statements of the Company have been prepared in its intended use. Trial run expenses (net of revenue) are capitalised. accordance with Indian Accounting Standards (Ind AS) prescribed under Borrowing costs incurred during the period of construction is section 133 of the Companies Act 2013, read with Companies (Indian capitalised as part of cost of qualifying asset. Accounting Standard) Rules, as amended time to time. The gain or loss arising on disposal of an item of property, plant and Basis of preparation equipment is determined as the difference between sale proceeds The financial statements have been prepared on a historical cost basis, and carrying value of such item, and is recognised in the statement except: of profit and loss. (a) certain assets and liabilities that are required to be carried at fair c) Depreciation and amortisation of property, plant and values by Ind AS; and equipment and intangible assets ) (b property, plant & equipment which have been fair valued at the Depreciation or amortisation is provided on a straight line basis transition date (i.e. 01April 2015) as ‘deemed cost’ upon transition to to the cost/deemed cost of property, plant and equipment and Ind AS. intangible assets, including those held under finance leases to their residual value. Depreciation on all assets commences from the dates The financial statements are presented in INR and all values are rounded the assets are available for their intended use and are spread over to the nearest Lacs (INR 00,000), except when otherwise indicated. their estimated useful economic lives or, in the case of leased assets, These are standalone financial statements (the ‘financial statements’) for over the lease period or estimated useful life whichever is less. The the year ended March 31, 2020 were approved by the Board of Directors estimated useful lives of assets and residual values are regularly and approved for issue on May 20, 2020. The Company has also prepared reviewed and, when necessary, revised. consolidated financial statements for the year ended 31 March 2020 in The estimated useful life of main category of property plant and accordance with Ind AS 110 and the same were also approved for issue by equipment and intangible assets are:- the Board of Directors on May 20, 2020. 2. Significant accounting policies Estimated useful Life (years) The significant accounting policies applied by the Company in the Buildings Upto 60 years* preparation of its financial statements are listed below. Such accounting Roads 30 years policies have been applied consistently to all the periods presented in Plant and Machinery Upto 40 years* these financial statements, unless otherwise indicated. Railway Sidings Upto 30 years* a) Current versus non-current classification Vehicles 8 to 10 years The Company presents assets and liabilities in the balance sheet Furniture, Fixtures and Office 5 to 10 years based on current/ non-current classification. An asset /liability is Equipment treated as current when it is expected to be realised/ settled, sold, Computer Software 3 years consumed within the normal operating cycle. Having regard to the * for these class of assets useful lives are different from the useful nature of business being carried out by the Company the Company lives as prescribed under Part C of Schedule II of the Companies has determined its operating cycle as twelve months. The Company Act, 2013. Based on the technical evaluation carried by a chartered classifies all other assets/liabilities as non-current. engineer and internal assessments made, the Company believes Deferred tax assets and liabilities are classified as non-current assets that useful lives mentioned above are best representative of the and liabilities respectively. period over which the Company expects to use the assets.
79 d) Borrowing Costs Spare parts including other items are carried on weighted average basis. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period g) Revenue Recognition of time to get ready for its intended use or sale are capitalised as part A customer of the Company is a party that has contracted with of the cost of the asset. All other borrowing costs are expensed in the the Company to obtain goods or services that are an output of period in which they occur. Borrowing costs consist of interest and the Company’s ordinary activities in exchange for consideration. other costs that an entity incurs in connection with the borrowing The core principle of recognizing revenue from contracts with of funds. Borrowing cost also includes exchange differences to the customers is that the Company recognizes revenue to depict the extent regarded as an adjustment to the borrowing costs. transfer of promised goods and services to customers in an amount that reflects the consideration to which the Company expects to be Eligible transaction/ ancillary costs incurred in connection with the entitled in exchange for those goods or services. arrangement of borrowings are adjusted with the proceeds of the borrowings. At contract inception, the Company assesses the goods or services promised in a contract with a customer to identify as a performance e) Impairment of non-financial assets obligation each promise to transfer to the customer either a good or The Company, at each balance sheet date, reviews carrying values service (or a bundle of goods or services) that is distinct; or a series of its property plant and equipment and assesses whether there of distinct goods or services that are substantially the same and that is an indication that an asset may be impaired. If any indication have the same pattern of transfer to the customer. exists, the recoverable amount being higher of fair value less costs The Company considers the terms of the contract and its to sell and value in use of the assets, is estimated to determine the customary business practices to determine the transaction price. impairment losses and are recognised in the statement of profit The transaction price is the amount of consideration to which and loss. Recoverable amount is determined for an individual asset, the Company expects to be entitled in exchange for transferring unless the asset does not generate cash inflows that are largely promised goods or services to a customer, excluding amounts independent of those from other assets or Groups of assets. collected on behalf of third parties (for example, indirect taxes). The consideration promised in a contract with a customer may include In assessing value in use, the estimated future cash flows are fixed amounts, variable amounts, or both. discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and If there is variable consideration, the Company includes in the the risks specific to the asset. In determining fair value less costs of transaction price some or all of that amount of estimated variable disposal, recent market transactions are taken into account. If no consideration only to the extent that it is highly probable that a such transactions can be identified, an appropriate valuation model significant reversal in the amount of cumulative revenue recognised is used. These calculations are corroborated by valuation multiples, will not occur when the uncertainty associated with the variable quoted share prices for publicly traded companies or other available consideration is subsequently resolved. fair value indicators. “In determining the transaction price, the Company adjusts the For assets an assessment is made at each balance sheet date promised amount of consideration for the effects of the time value to determine whether there is an indication that previously of money if the timing of payments agreed to by the parties to the recognised impairment losses no longer exist or have decreased. If contract (either explicitly or implicitly) provides the customer or the such indication exists, the Company estimates the asset’s or CGU’s Group with a significant benefit of financing the transfer of goods or recoverable amount. A previously recognised impairment loss is services to the customer.” reversed only if there has been a change in the assumptions used to “The transaction price is allocated by the Company to each determine the asset’s recoverable amount since the last impairment performance obligation (or distinct good or service) in an amount loss was recognised. The reversal is limited so that the carrying that depicts the amount of consideration to which it expects to be amount of the asset does not exceed its recoverable amount, nor entitled in exchange for transferring the promised goods or services exceed the carrying amount that would have been determined, net to the customer.” of depreciation, had no impairment loss been recognised for the For each performance obligation identified, the Company determines asset in prior years. Such reversal is recognised in the statement of at contract inception whether it satisfies the performance obligation profit and loss. over time or satisfies the performance obligation at a point in time. ) f Inventories If an entity does not satisfy a performance obligation over time, the performance obligation is satisfied at a point in time Items of inventories are measured at lower of cost and net realisable For each performance obligation satisfied over time, the Company value after providing for obsolescence, wherever considered recognises revenue over time by measuring the progress towards necessary. Cost is ascertained on a weighted average basis. Cost of complete satisfaction of that performance obligation. The progress inventories comprises of cost of purchase, cost of conversion and towards complete satisfaction is measured using appropriate other costs including manufacturing overheads incurred in bringing methods which include input and output methods. them to their respective present location and condition. The Company recognises as an asset the incremental costs of Net realizable value is the estimated selling price in the ordinary obtaining a contract with a customer if it expects to recover those course of business based on market price at the balance sheet costs. However, as a practical expedient, the incremental costs of date and discounted for the time value of money if material, less obtaining a contract are recognised as an expense when incurred if estimated costs of completion and estimated costs necessary to the amortisation period of the asset otherwise would have been one make the sale. year or less.
80 Statutory Reports Financial Statements
The costs to fulfil a contract are recognised as an asset if the Deferred tax liabilities are generally recognised for all the temporary costs relate directly to a contract or to an anticipated contract differences. On the contrary, deferred tax assets are recognised for that the Company can specifically identify; the costs generate or deductible temporary differences, the carry forward of unused tax enhance resources of the Company that will be used in satisfying credits (including Minimum Alternative tax (MAT) credit) and any performance obligations in the future; and the costs are expected to unused tax losses, to the extent that it is probable that taxable be recovered. profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused h) Foreign currencies tax losses can be utilised. The Company’s financial statements are presented in INR, which is The carrying amount of deferred tax assets is reviewed at each also its functional currency. balance sheet date and reduced to the extent that it is no longer Transactions and balances probable that sufficient taxable profit will be available to allow Transactions in foreign currencies are initially recorded by the all or part of the deferred tax asset to be utilised. Unrecognised Company at functional currency spot rates at the date the deferred tax assets are re-assessed at each balance sheet date and transaction first qualifies for recognition. are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rate of exchange at Deferred tax assets and liabilities are measured at the tax rates that the balance sheet date. are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been For foreign currency loans taken before 31 March 2016 for, enacted or substantively enacted at the balance sheet date. adjustments arising from exchange rate variations relating to long Deferred tax relating to items recognised outside statement of profit term monetary items attributable to the depreciable fixed assets and loss is recognised outside statement of profit and loss (either in are capitalised. For foreign currency loans taken after 31 March other comprehensive income or in equity). 2016, exchange differences arising on settlement or translation of monetary items are recognised in statement of profit or loss. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current Non-monetary items that are measured in terms of historical cost tax liabilities and the deferred taxes relate to the same taxable entity in a foreign currency are translated using the exchange rates at the and the same taxation authority. dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange j) Employee benefits rates at the date when the fair value is determined. The gain or Short-term benefits loss arising on translation of non-monetary items measured at fair The undiscounted amount of short-term employee benefits value is treated in line with the recognition of the gain or loss on the expected to be paid in exchange for the service rendered by change in fair value of the item (i.e., translation differences on items employees are recognised during the period when the employee whose fair value gain or loss is recognised in other comprehensive renders the services. income or statement of profit or loss are also recognised in other comprehensive income or statement of profit or loss, respectively). Defined contribution plans i) Income Taxes Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than Current tax the contribution payable to the provident fund. The Company Current tax assets and liabilities are measured at the amount recognizes contribution payable to the provident fund scheme as expected to be recovered from or paid to the taxation authorities. an expense, when an employee renders the related service. The tax rates and tax laws used to compute the amount are those Company’s contribution to state defined contribution plans namely that are enacted or substantively enacted in India, at the balance Employee State Insurance and Maharashtra Labour Welfare Fund sheet date. are made in accordance with the Statute, and are recognised as an Current tax relating to items recognised outside statement of expense when employees have rendered services entitling them to profit and loss is recognised outside statement of profit and loss the contribution. (either in other comprehensive income or in equity). Management Defined benefits plans periodically evaluates positions taken in the tax returns with respect The Company operates a defined benefit gratuity plan in India, which to situations in which applicable tax regulations are subject to requires contributions to be made to a separately administered interpretation and establishes provisions where appropriate. fund. Gratuity is a defined benefit obligation. Current tax assets is offset against current tax liabilities if, and only if, The cost of providing benefits under the defined benefit plan is a legally enforceable right exists to set off the recognised amounts determined using the projected unit credit method. In respect of and there is an intention either to settle on a net basis, or to realise post-retirement benefit re-measurements comprising of actuarial the asset and settle the liability simultaneously. gains and losses, the effect of the asset ceiling, excluding amounts Deferred tax included in net interest on the net defined benefit liability and the Deferred tax is provided using the balance sheet liability method on return on plan assets, are recognised immediately in the balance temporary differences between the tax bases of assets and liabilities sheet with a corresponding debit or credit to retained earnings and their carrying amounts for financial reporting purposes at the through OCI in the period in which they occur. Re-measurements balance sheet date. are not reclassified to statement of profit or loss in subsequent periods.
81 Past service cost is recognised as an expense when the plan lined, if escalation in rentals is in line with expected inflationary amendment or curtailment occurs or when any related restructuring cost. Initial direct costs incurred in negotiating and arranging an costs or termination benefits are recognised, whichever is earlier. operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental Other long term benefits income. Accumulated leave, which is expected to be utilized within the next twelve months, is treated as short-term employee benefit. Contingent rentals are recognised as revenue in the period in which The Company measures the expected cost of such absences as they are earned. the additional amount that it expects to pay as a result of the l) Provisions, contingent liabilities and contingent assets unused entitlement that has accumulated at the balance sheet date. Actuarial gains/ losses on the compensated absences are Provisions are recognised when present obligations as a result of a immediately taken to the statement of profit and loss and are not past event will probably lead to an outflow of economic resources deferred. and amounts can be estimated reliably. Timing or amount of the outflow may still be uncertain. A present obligation arises when k) Leases there is a presence of a legal or constructive commitment that has Company as a lessee resulted from past events, for example, legal disputes or onerous contracts. Provisions are not recognised for future operating losses. The Company assesses if a contract is or contains a lease at inception of the contract. A contract is, or contains, a lease if the contract Provisions are measured at the estimated expenditure required to conveys the right to control the use of an identified asset for a settle the present obligation, based on the most reliable evidence period time in exchange for consideration. available at the reporting date, including the risks and uncertainties associated with the present obligation. Provisions are discounted to The Company recognizes a right-of-use asset and a lease liability their present values, where the time value of money is material. at the commencement date, except for short-term leases of twelve months or less and leases for which the underlying asset is of low Any reimbursement that the Company can be virtually certain to value, which are expensed in the statement of operations on a collect from a third party with respect to the obligation is recognised straight-line basis over the lease term. as a separate asset. However, this asset may not exceed the amount The lease liability is initially measured at the present value of the of the related provision. lease payments that are not paid at the commencement date, All provisions are reviewed at each reporting date and adjusted to discounted using the interest rate implicit in the lease, or, if not reflect the current best estimate. readily determinable, the incremental borrowing rate specific to the country, term and currency of the contract. In those cases where the outflow of economic resources as a result of present obligations is considered improbable or remote, no Lease payments can include fixed payments, variable payments liability is recognised. that depend on an index or rate known at the commencement date, as well as any extension or purchase options, if the Company Contingent liability is disclosed for: is reasonably certain to exercise these options. The lease liability ● Possible obligations which will be confirmed only by future is subsequently measured at amortized cost using the effective events not wholly within the control of the Company or interest method and remeasured with a corresponding adjustment to the related right-of-use asset when there is a change in future ● Present obligations arising from past events where it is not lease payments in case of renegotiation, changes of an index or rate probable that an outflow of resources will be required to settle or in case of reassessments of options. the obligation or a reliable estimate of the amount of the obligation cannot be made. The right-of-use asset comprises, at inception, the initial lease liability, any initial direct costs and, when applicable, the obligations Contingent assets are not recognised. However, when inflow of to refurbish the asset, less any incentives granted by the lessors. The economic benefits is probable, related asset is disclosed. right-of-use asset is subsequently depreciated, on a straight-line m) Earnings per share basis, over the lease term, if the lease transfers the ownership of the underlying asset to the Company at the end of the lease term or, if Basic earnings per equity share is computed by dividend net the cost of the right-of-use asset reflects that the lessee will exercise profit after tax by the weighted average number of equity shares a purchase option, over the estimated useful life of the underlying outstanding during the year. Diluted earnings per equity share is asset. Right-of-use assets are also subject to testing for impairment computed by dividing adjusted net profit after tax by the aggregate if there is an indicator for impairment. Variable lease payments not of weighted average number of equity shares and dilutive potential included in the measurement of the lease liabilities are expensed equity shares during the year. to the statement of operations in the period in which the events or n) Cash and cash equivalents conditions which trigger those payments occur. In the statement of financial position right-of-use assets and lease liabilities are Cash and cash equivalent in the balance sheet comprise cash at classified respectively as part of property, plant and equipment and banks and on hand, cheques on hand and short-term deposits with short-term/long-term debt. an original maturity of three months or less, which are subject to an insignificant risk of changes in value. Company as a lessor For the purpose of the statement of cash flows, cash and cash Leases in which the Company does not transfer substantially all the equivalents consist of cash and short-term deposits, as defined risks and rewards of ownership of an asset are classified as operating above. leases. Rental income from operating lease shall not be straight-
82 Statutory Reports Financial Statements
) o Intangible assets After initial measurement, such financial assets are subsequently measured at amortised cost using the effective Intangible assets acquired separately are measured on initial interest rate (EIR) method. recognition at cost i.e. purchase cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization ii. Investments in mutual funds – Investments in mutual funds and accumulated impairment losses, if any. are measured at fair value through profit and loss (FVTPL). ) p Fair value of financial instruments iii. Investments in equity instruments of subsidiaries, joint ventures and associates - Investments in equity instruments In determining the fair value of its financial instruments, the of subsidiaries, joint ventures and associates are accounted Company uses a variety of methods and assumptions that are based for at cost in accordance with Ind AS 27 Separate Financial on market conditions and risks existing at each reporting date. The Statements. methods used to determine fair value include discounted cash flow analysis, available quoted market prices and dealer quotes. All Investments in equity instruments - Investments in equity methods of assessing fair value result in general approximation of instruments, where the Company has opted to classify such value, and such value may never actually be realized. For financial instruments at fair value through other comprehensive income assets and liabilities maturing within one year from the Balance (FVOCI) are measured at fair value through other comprehensive Sheet date and which are not carried at fair value, the carrying income. There is no recycling of the amounts from OCI to P&L, amounts approximate fair value due to the short maturity of these even on sale of investment. However, the Company may transfer instruments. the cumulative gain or loss within equity. Dividends on such investments are recognised in profit or loss unless the dividend q) Government grants clearly represents a recovery of part of the cost of the investment. Government grants are not recognised until there is reasonable Compound Financial Instrument assurance that the Company will comply with the conditions attached to them and the grants will be received. The component parts of compound instruments issued by the Company are classified separately as financial liabilities and equity Government grants are recognised in the statement of profit and in accordance with the substance of the contractual arrangements loss on a systematic basis over the periods in which the Company and the definitions of a financial liability and an equity instrument. recognises as expenses the related costs for which the grants are Conversion option that will be settled by the exchange of a fixed intended to compensate. The benefit of a government loan at below amount of cash or another financial asset for a fixed number of the market rate of interest is treated as a government grant, measured Company’s own equity instruments is an equity instrument. as the difference between proceeds received and the fair value of the loan based on the prevailing market interest rates. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar non- r) Segment reporting convertible instruments. This amount is recorded as a liability on Operating segments are reported in a manner consistent with the an amortised cost basis using the effective interest method until internal reporting done to the chief operating decision maker. The extinguished upon conversion or at the instrument’s maturity date. Company operates in a single operating segment and geographical The conversion option classified as equity is determined by segment. deducting the amount of the liability component from the fair value s) Financial instruments of the compound instrument as a whole. The conversion option classified as equity will remain in equity until the conversion option Initial recognition and measurement is exercised, in which case, the balance recognised in equity will be Financial assets and financial liabilities are recognised when the transferred to other component of equity. When the conversion Company becomes a party to the contractual provisions of the option remains unexercised at the maturity date of the convertible financial instrument and are measured initially at fair value adjusted note, the balance recognised in equity will be transferred to for transaction costs, except for those carried at fair value through retained earnings. No gain or loss is recognised in profit or loss upon profit or loss which are measured initially at fair value. Subsequent conversion or expiration of the conversion option. measurement of financial assets and financial liabilities is described Impairment of financial assets below: In accordance with Ind AS 109, the Company applies expected Non-derivative financial assets credit loss (ECL) model for measurement and recognition of Subsequent measurement impairment loss for financial assets. ECL is the weighted-average of difference between all contractual cash flows that are due to the i. Financial assets carried at amortised cost – a financial Company in accordance with the contract and all the cash flows that asset is measured at the amortised cost, if both the following the Company expects to receive, discounted at the original effective conditions are met: interest rate, with the respective risks of default occurring as the ● The asset is held within a business model whose weights. When estimating the cash flows, the Company is required objective is to hold assets for collecting contractual cash to consider: flows, and ● All contractual terms of the financial assets (including ● Contractual terms of the asset give rise on specified prepayment and extension) over the expected life of the dates to cash flows that are solely payments of assets. principal and interest (SPPI) on the principal amount ● Cash flows from the sale of collateral held or other credit outstanding. enhancements that are integral to the contractual terms.
83 Trade receivables: In respect of trade receivables, the Company a new liability. The difference in the respective carrying amounts is applies the simplified approach of Ind AS 109, which requires recognised in the statement of profit or loss. measurement of loss allowance at an amount equal to lifetime Offsetting of financial instruments expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events Financial assets and financial liabilities are offset and the net over the expected life of a financial instrument. amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there Other financial assets: In respect of its other financial assets, the is an intention to settle on a net basis, to realise the assets and settle Company assesses if the credit risk on those financial assets has the liabilities simultaneously. increased significantly since initial recognition. If the credit risk has not increased significantly since initial recognition, the Company t) Accounting standards or amendments in the accounting measures the loss allowance at an amount equal to 12-month standards adopted on/from April 1, 2019: expected credit losses, else at an amount equal to the lifetime Ind AS 116, Leases: expected credit losses. On March 30, 2019, Ministry of Corporate Affairs (“MCA”) has notified When making this assessment, the Company uses the change in the Ind AS 116, Leases which has replaced Ind-AS 17 “Leases”. This the risk of a default occurring over the expected life of the financial new standard specifies how to recognize, measure, present and asset. To make that assessment, the Company compares the risk of a disclose leases. The standard provides a single lessee accounting default occurring on the financial asset as at the balance sheet date model, requiring lessees to recognize assets and liabilities for all with the risk of a default occurring on the financial asset as at the leases unless the lease term is 12 months or less or the underlying date of initial recognition and considers reasonable and supportable asset has a low value. information, that is available without undue cost or effort, that Adoption of this standard have a material impact on the standalone is indicative of significant increases in credit risk since initial financial statements of the Company. The additional required recognition. The Company assumes that the credit risk on a financial disclosures are presented in Note 5 of the financial statements. asset has not increased significantly since initial recognition if the financial asset is determined to have low credit risk at the balance On March 30, 2019, Ministry of Corporate Affairs (“MCA”) has notified sheet date. Appendix C to Ind-AS 12 Income taxes - “Uncertainty over Income Tax Treatments”. This interpretation addresses the determination De-recognition of financial assets of taxable profit (tax loss), tax bases, unused tax losses, unused A financialasset is primarily de-recognised when the contractual tax credits and tax rates when there is uncertainty over income tax rights to receive cash flows from the asset have expired or the treatments under Ind-AS 12. The Company adopted the following Company has transferred its rights to receive cash flows from the amendments which did not have any material impact on the asset. standalone financial statements of the Company.
Derivative financial instruments Further, there has been amendments in relevant paragraphs in Ind- AS 12 “Income Taxes” which clarifies that an entity shall recognize In the ordinary course of business, the Company uses derivative the income tax consequences of dividends in profit or loss, other financial instruments to reduce business risks which arise from comprehensive income or equity according to where the entity its exposure to foreign exchange. The instruments are confined originally recognised those past transactions or events in accordance principally to forward foreign exchange contracts and these with Ind-AS 109. The Company adopted the following amendments contracts do not generally extend beyond six months. which did not have any material impact on the standalone financial Derivatives are initially accounted for and measured at fair value statements of the Company. from the date the derivative contract is entered into and are Further on March 30, 2019, Ministry of Corporate Affairs (“MCA”) subsequently re-measured to their fair value at the end of each issued an amendment to Ind-AS 109 in respect of prepayment reporting period. features with negative compensation, which amends the existing requirements in Ind-AS 109 regarding termination rights in order Non-derivative financial liabilities to allow measurement at amortized cost (or, depending on the Subsequent measurement business model, at fair value through other comprehensive income) even in the case of negative compensation payments. The Company Subsequent to initial recognition, all non-derivative financial adopted the following amendments which did not have any material liabilities are measured at amortised cost using the effective interest impact on the standalone financial statements of the Company. method. Further on March 30, 2019, Ministry of Corporate Affairs (“MCA”) De-recognition of financial liabilities issued an amendment to Ind-AS 23 “Borrowing Costs” clarifies that A financial liability is de-recognised when the obligation under if any specific borrowing remains outstanding after the related asset the liability is discharged or cancelled or expires. When an existing is ready for its intended use or sale, that borrowing becomes part financial liability is replaced by another from the same lender on of the funds that an entity borrows generally when calculating the substantially different terms or the terms of an existing liability are capitalization rate on general borrowings. The Company adopted substantially modified, such an exchange or modification is treated the following amendments which did not have any material impact as the de-recognition of the original liability and the recognition of on the standalone financial statements of the Company.
84 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS - - in lacs) in Total Total (₹ 2,174.90 67,267.38 130,118.79 (10,259.38) (19,050.00) (10,760.35) (75,406.25) 2,539,881.41 5,455,322.44 2,915,441.03 5,436,423.22 2,793,557.50 2,642,865.72 - - - Office Office 774.56 261.89 776.59 830.66 538.76 (239.79) (270.33) 1,340.28 1,315.35 1,573.25 3,215.96 1,642.71 equipments equipments - - - - - 133.07 208.60 709.96 623.08 (549.05) (711.46) 1,424.21 2,134.17 Vehicles 1,008.23 1,631.31 - - - - - 221.24 431.62 fixtures 3,864.67 5,051.99 1,187.32 1,246.40 2,507.77 1,261.37 (2,839.51) (2,975.84) Furniture and Furniture (774.56) (830.66) 2,174.90 97,602.86 52,530.01 (6,631.03) (6,802.72) Plant and Plant machinery (19,050.00) (75,406.25) 1,668,303.90 3,588,619.83 1,920,315.93 1,741,626.07 3,558,110.21 1,816,484.14 ------998.56 9,568.48 8,569.92 76,081.90 85,650.38 77,080.46 85,650.38 Railway siding Railway ------Building 30,901.17 12,756.87 780,218.53 923,680.84 811,119.70 905,536.54 1,703,899.37 1,716,656.24 ------9,211.61 9,211.61 68,651.35 59,439.74 68,651.35 59,439.74 Freehold land land Freehold P
Accumulated impairment & impairment Accumulated 31, March as at depreciation 2020 Other re-classifications Deletions during the year Impairment for the year the year Impairment for Depreciation for the year the year for Depreciation Reclassified as right-of-use assets Ind to AS 116 on transition Accumulated impairment & Accumulated April 01, 2019 as at depreciation Gross carryingGross as at amount 31, 2020 March Other re-classifications Deletions during the year Deletions during the year Addition during the year during the year Addition Reclassified as right-of-use assets Ind to AS 116 on transition Net carryingNet as on amount 31, 2020 March Gross carryingGross April as at amount 01, 2019 Net carrying as on April amount 01, 2019 Particulars 3A. Equipment And Plant roperty,
85 NOTES TO FINANCIAL STATEMENTS - Total Total (2.42) (74.35) (129.55) 5,219.23 (₹ in lacs) 28,727.96 144,165.90 3,036,155.81 2,390,570.64 5,426,726.45 2,539,881.42 5,455,322.44 2,915,441.02 - - - - 78.75 Office Office 358.18 137.45 560.39 396.78 918.57 776.59 538.76 1,315.35 equipments equipments - - - 41.67 921.37 237.94 (62.32) (77.47) 709.96 1,248.60 2,169.97 Vehicles 1,424.21 2,134.17 - - - - 329.70 123.71 fixtures 3,282.42 1,889.11 1,645.86 4,928.28 3,864.67 5,051.99 1,187.32 Furniture and Furniture - (2.42) (12.03) (52.08) 3,251.37 24,389.79 Plant and Plant 111,821.03 machinery 2,011,041.01 1,553,243.53 3,564,284.54 1,668,303.90 3,588,619.83 1,920,315.93 ------996.38 9,568.48 10,564.86 75,085.52 85,650.38 76,081.90 85,650.38 Railway siding Railway - - - - - 3,776.01 Building 30,643.40 950,548.23 749,575.13 780,218.53 923,680.84 1,700,123.36 1,703,899.37 ------9,211.61 9,211.61 59,439.74 68,651.35 59,439.74 68,651.35 Freehold land land Freehold Net carryingNet as on amount 31, 2019 March Net carrying as on amount April 01, 2018 Accumulated impairment & impairment Accumulated 31, March as at depreciation 2019 Adjustment during the year during the year Adjustment Deletions during the year Impairment for the year the year Impairment for Depreciation for the year the year for Depreciation Accumulated impairment & Accumulated April 01, 2018 as at depreciation Gross carryingGross as at amount 31, 2019 March Adjustment during the year during the year Adjustment Deletions during the year Addition Addition during the year Gross carryingGross April as at amount 01, 2018 Property, Plant And Equipment (contd...) Equipment And Plant Property, Particulars
86 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
3B. Right-of-Use Assets (₹ lacs) Land Building Plant & Machinery Total
Reclassified from Property, Plant & Equipment on transition to - - 75,406.25 75,406.25 Ind AS 116*
Addition on account of transition to Ind AS 116 19,547.13 2,124.76 169.84 21,841.73
Addition during the year 937.53 509.38 83,317.55 84,764.46
Derecognition of ROU assets for leases vacated during the year - (24.07) (37.02) (61.09)
Cost as at March 31, 2020 20,484.66 2,610.07 158,856.62 181,951.35
Reclassified from Property, Plant & Equipment on transition to - - 19,050.00 19,050.00 Ind AS 116
Depreciation for the year 306.43 575.54 12,030.58 12,912.55
Derecognition of ROU assets for leases vacated during the year - (3.26) (18.80) (22.06)
Accumulated impairment & depreciation as at March 31, 306.43 572.28 31,061.78 31,940.49 2020
Net carrying value as on March 31, 2020 20,178.23 2,037.79 127,794.84 150,010.86
* Refer Note 5 3C. Capital Work-In-Progress
Capital work-in-progress (CWIP) as at March 31, 2020 comprises expenditure for the plant in the course of construction. Total amount of CWIP is ₹ 68,171.13 lacs (March 31, 2019 ₹ 115,414.24 lacs). This includes expenditure capitalised and comprises of direct material cost, labour charges and supervision charges.
₹ 6,418.64 lacs (March 31, 2019 ₹ 7,113.45 lacs) of borrowing costs has been capitalised during the year on qualifying CWIP using a annualized capitalisation rate of 9.34% (March 31, 2019: 9.81%).
Notes :
(i) Net carrying value of plant and machinery comprises of:
As at As at March 31, 2020 March 31, 2019
Asset held under finance leases *
Cost - 75,406.25
Accumulated depreciation - 19,050.00
- 56,356.25
Owned assets 1,816,484.14 1,920,315.93
1,816,484.14 1,976,672.18
*Refer Note 5 (iii)
(ii) For details of capital commitments, refer note 32.
(iii) Property, plant and equipment are pledged against borrowings, the details relating to which have been described in Note 16A pertaining to borrowings.
(iv) During the current year, the Company has impaired certain items of property, plant and equipment and capital work-in-progress in respect of assets suspended from active production or due to certain projects abandoned during the year. During the year, impairment provision was created on cold roll mill CRM extension project in CWIP amounting to ₹ 2,081.30 lacs and induction furnace in Angul plant amounting to ₹ 2,174.90 lacs. Also during the previous year, the Company had recognised an impairment loss against property, plant and equipment aggregating to ₹ 5,219.23 lacs, refer note 29.
87 NOTES TO FINANCIAL STATEMENTS
4. Intangible Assets (₹ in lacs) Software Costs Other Intangible Total Assets Cost as at April 01, 2019 75.29 978.59 1,053.88 Addition during the year 2,195.68 - 2,195.68 Deletions during the year (0.48) - (0.48) Gross carrying amount as at March 31, 2020 2,270.49 978.59 3,249.08 Accumulated amortisation as at April 01, 2019 58.23 978.59 1,036.82 Amortisation during the year 132.10 - 132.10 Accumulated amortisation as at March 31, 2020 190.33 978.59 1,168.92 Net carrying value as at April 01, 2019 17.06 - 17.06 Net carrying value as at March 31, 2020 2,080.16 - 2,080.16
(₹ in lacs) Software Costs Other Intangible Total Assets Cost as at April 01, 2018 60.86 978.59 1,039.45 Addition during the year 14.43 - 14.43 Gross carrying amount as at March 31, 2019 75.29 978.59 1,053.88 Accumulated amortisation as at April 01, 2018 50.21 978.59 1,028.80 Amortisation during the year 8.02 - 8.02 Accumulated amortisation as at March 31, 2019 58.23 978.59 1,036.82 Net carrying value as at April 01, 2018 10.65 - 10.65 Net carrying value as at March 31, 2019 17.06 - 17.06
88 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
5. Leases (i) The Company as a lessee operates certain land, buliding and plant & machineries under various lease arrangements. (ii) “On March 30, 2019, Ministry of Corporate Affairs (”MCA”) had notified the Ind AS 116, Leases which has replaced Ind-AS 17 “Leases”. Ind AS 116 ‘Leases’ eliminates the classification of leases as either finance leases or operating leases. All leases are required to be reported on an entity’s balance sheet as assets and liabilities. Leases are capitalised by recognising the present value of the lease payments and showing them either as right of use of the leased assets or together with property, plant and equipment. Rent expense is replaced by depreciation and interest expense in the statement of profit and loss. Each lease generally imposes a restriction that, unless there is a contractual right for the Company to sublet the asset to another party, the right- of-use asset can only be used by the Company. Leases are either non-cancellable or may only be cancelled by incurring a substantive termination fee. Some leases contain an option to extend the lease for a further term. The Company is prohibited from selling or pledging the underlying leased assets as security against the Company’s other debts and liabilities. For leases over office buildings and factory premises the Company must keep those properties in a good state of repair and return the properties in their original condition at the end of the lease. Further, the Company must insure items of property, plant and equipment and incur maintenance fees on such items in accordance with the lease contracts. Following the application of the modified retrospective method at the date of implementation of Ind AS 116 on April 1, 2019, whereby Right-of-Use Assets of ₹ 78,197.98 lacs (net of depreciation) were recognised which includes finance lease assets (previously classified under property plant & equipment) having carrying value amounting to ₹ 56,356.25 lacs which have been reclassified as right-of-use assets at the date of initial recognition. There was no impact on deferred tax assets and deferred tax liabilities as the corresponding deferred tax assets and deferred tax liabilities attributable to the lease liabilities and right-of-use assets relate to income taxes levied by the same taxation authority within the same legal entity and were therefore offset.” (iii) On April 1, 2019, the Company adopted Ind As 116 “Leases”, which resulted in the recognition of lease liabilities and right-of-use assets for operating lease contracts with fixed terms and future minimum lease payments as summarized in the following table: (₹ in lacs) Total Operating lease commitments as at March 31, 2019 7,570.65 Discounted using the lessee’s incremental rate of borrowing at the date of initial application 5,038.22 Finance lease obligation recognised as at March 31,2019 79,196.47 Additional lease liabilities as of April 1, 2019 from leases previously classified as operating leases in 2,986.62 accordance with Ind AS-17 Recognition exemption for leases of low-value assets (28.78) Recognition exemption for short-term leases (5,316.27) Lease liability recognised as at April 1, 2019 81,876.26 (iv) For leases that were classified as finance leases applying Ind AS 17, the carrying amount of the right-of-use asset and the lease liability at the date of initial application is equal to the carrying amount of the lease asset and lease liability immediately before that date measured applying Ind AS 17 on March 31, 2019. The carrying amount of finance lease assets and lease liabilities was ₹ 56,356.25 lacs and ₹ 79,196.47 lacs, respectively as of March 31, 2019. (v) There were no impacts on retained earnings upon implementation of Ind AS 116. (vi) Total cash outflow for leases includes: (₹ in lacs) Total Repayment of principal portion of lease liabilities 6,884.85 Interest paid on lease liabilities 17,220.71
89 NOTES TO FINANCIAL STATEMENTS
6. Financial Assets A. Investments
(₹ in lacs) As at As at March 31, 2020 March 31, 2019 (I) Non-current investments i) Investments in equity instruments of subsidiaries and associates at cost a) Investment in subsidiaries Bhushan Steel (Australia ) Pty Limited - 47,369,796 (March 31, 2019 47,369,796) equity 24,441.85 24,441.85 shares of AUD 1 each fully paid up - unquoted Less: Impairment (24,441.85) (24,441.85) - - Bhushan Steel Madhya Bharat Limited - 49,990 (March 31, 2019: 49,990) equity shares of 5.00 5.00 ₹ 10/- each fully paid up - unquoted Bhushan Steel (Orissa) Limited - 49,990 (March 31, 2019: 49,990) equity shares of ₹ 10/- 5.00 5.00 each fully paid up - unquoted Bhushan Steel (South) Limited - 50,000 (March 31, 2019: 50,000) equity shares of ₹10/- 5.00 5.00 each fully paid up - unquoted Angul Energy Limited ( Formerly known as Bhushan Energy Limited) - 10,000,065 (March 1,000.00 - 31, 2019: 65,000,000) equity shares of ₹10/- each fully paid up - unquoted Total investment in subsidiaries 1,015.00 15.00 ) b Investment in associates Jawahar Credit & Holdings Private Limited - 8,643,742 (March 31, 2019: 8,643,742) equity 940.31 940.31 shares of ₹10/- each fully paid up - unquoted (Refer sub-note (iii)) Less: Impairment (940.31) (940.31) Bhushan Capital & Credit Services Private Limited - 8,643,742(March 31, 2019: 8,643,742) 940.31 940.31 equity shares of ₹ 10/- each fully paid up - unquoted (Refer sub-note (iii)) Less: Impairment (940.31) (940.31) Total investment in associates - - Investments in subsidiaries and associates 1,015.00 15.00 ii) Other non-current investment in equity instruments at fair value through other comprehensive income Andal East Coal Company Private Limited - 330,000 (March 31, 2019: 3,30,000) equity shares of - - ₹ 10/- each fully paid up - unquoted (refer sub-note (ii) below) Tata Steel Limited - 13,500 (March 31, 2019: 13,500) equity shares of ₹10/- each fully paid up - 36.39 70.31 quoted Bhushan Buildwell Private Limited - 4,900 (March 31, 2019: 4,900 ) equity shares of ₹ 10/- each 24.74 24.74 fully paid up - unquoted Saraswat Co-operative Bank Limited - 2,500 (March 31, 2019: 2,500) equity shares of ₹ 10/- each 0.82 0.82 fully paid up - unquoted Bhushan Steel Bengal Limited - 50,000 (March 31, 2019: 50,000) equity shares of ₹ 10/- each 5.00 5.00 fully paid up - unquoted Total other investment 66.95 100.87 Quoted Investments Aggregate carrying amount and market value of quoted investments 36.39 70.31 Aggregate carrying amount of unquoted investments - In Subsidiaries 1,015.00 15.00 - In Others 30.56 30.56 Aggregate amount of impairment in value of investments 26,322.47 26,322.47
90 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
(₹ in lacs) As at As at March 31, 2020 March 31, 2019 (II) Current investments (a) Investment carried at fair value through profit or loss Investment in mutual funds - Unquoted Tata Mutual Fund - 17,679.15 Reliance Liquid Fund - 20,096.70 Aditya Birla Sunlife Liquid Fund - 21,439.92 DSP Liquidity Plan - Growth - 7,698.70 Axis Liquid Fund - Growth - 8,694.28 ICICI Prudential Liquid Fund - Growth - 10,249.52 Invesco India Liquid Fund - Growth - 13,222.97 Kotak Liquid Scheme - Growth - 5,203.75 SBI Mutual Fund - Growth - 10,107.04 UTI Liquid Cash Plan - Growth - 17,849.77 Sundaram Money Fund - Growth - 12,706.63 Baroda Pioneer Money Fund - Growth - 3,096.48 HDFC Liquid Fund - Growth - 6,341.46 L & T Liquid Fund - Growth - 5,103.91 - 159,490.28
Notes: (i) Refer note 39B for determination of fair values of current & non-current investments.
(ii) The Company held investment in equity shares of Andal East Coal Company Private Limited (AECPL) which was classified as a joint venture till January 24, 2017. The Company recognised impairment loss on such investment during the year 2017-2018 aggregating to ₹ 145.50 lacs which was disclosed under ‘exceptional items’ in statement of profit and loss. As per the order dated January 24, 2017, Calcutta high court had directed winding-up of AECPL and subsequently liquidators were appointed to carry on such liquidation process. Pursuant to this, the Company had lost joint control over AECPL and its investment was classified as FVTOCI with fair value of ₹ Nil upon initial recognition.
(iii) Tata Steel BSL Limited (TSBSL) (formerly known as Bhushan Steel Limited) was being shown as promoter of Jawahar Credit & Holdings Private Limited (“JCHPL”) and M/s Bhushan Capital & Credit Services Private Limited (”BCCSPL”). These are entities connected to the previous management of the Company. The Company has written to JCHPL, BCCSPL and the Registrar of Companies (National capital Territory of Delhi & Haryana) intimating that TSBSL should not be identified as promoter in these two companies.
. B Loans Non-Current (Unsecured, considered good unless otherwise stated) (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Security deposits 5,002.95 4,625.74 (b) Loans to employees 8.08 20.54 (c) Loans to related parties - (i) Inter corporate deposits 32,600.00 - (d) Other loans - Balances - credit impaired 523.75 523.75 Less: Allowance for expected credit losses (523.75) (523.75) - - 37,611.03 4,646.28
91 NOTES TO FINANCIAL STATEMENTS
Current (Unsecured, considered good unless otherwise stated) (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Security deposits - Unsecured, considered good 2,406.28 5,000.36 - Balances - credit impaired 6,151.94 15,151.94 Less: Allowance for expected credit losses (6,151.94) (15,151.94) 2,406.28 5,000.36 (b) Loans to employees 89.80 152.50 (c) Inter corporate deposits - Balances - credit impaired 760.00 760.00 Less: Allowance for expected credit losses (760.00) (760.00) - - 2,496.08 5,152.86 (i) Carrying amounts of current loans are a reasonable approximation of their fair values.
C. Other Financial Assets Non Current (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Recoverable for coal block (Refer sub-note (i)) - Unsecured, considered good 41,456.44 41,456.43 - Unsecured, considered doubtful 14,833.52 14,833.52 Less: Allowance for expected credit losses (14,833.52) (14,833.52) 41,456.44 41,456.43 (b) Earmarked bank balances (Refer sub-note (ii)) 307.16 3,138.43 307.16 3,138.43 41,763.60 44,594.86 (i) For details of coal block advance, refer note 32C. (ii) Non-current earmarked bank balances represent deposits and balances with bank not due for realisation within 12 months from the balance sheet date. These are primarily placed as security with government bodies and as margin money against issue of bank guarantees. Earmarked bank balances includes interest accrued but not due. Current (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Interest accrued on inter-corporate deposits 3,355.37 - (b) Others - Unsecured, considered good 8,568.64 9,465.89 - Unsecured, considered doubtful 185.98 517.00 Less: Allowance for credit losses (185.98) (517.00) 8,568.64 9,465.89 11,924.01 9,465.89 (i) Carrying amounts of other current financial assets are a reasonable approximation of their fair values.
92 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
7. Derivative Instruments (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Derivative assets Forward Contracts 5,142.54 214.07 Total derivative assets 5,142.54 214.07 (b) Derivative liabilities Forward Contracts 763.77 4,141.57 Total derivative liabilities 763.77 4,141.57
8. Other Assets Non current (Unsecured, considered good unless otherwise stated) (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Capital advances Unsecured, considered good 3,804.80 8,162.34 Unsecured, considered doubtful 3,509.57 673.00 Less: Provision for doubtful balances (3,509.57) (673.00) 3,804.80 8,162.34 (b) Balances with statutory authorities Unsecured, considered good 53,942.29 49,588.11 Unsecured, considered doubtful 32,091.12 31,651.06 Less: Provision for doubtful balances (32,091.12) (31,651.06) 53,942.29 49,588.11 (c) Advance to suppliers 3,255.70 3,255.70 (d) Prepaid lease payments for operating leases (Refer note 5) - 19,161.95 (e) Prepaid expenses 247.90 189.81 (f) Other advances - 0.82 Total (a+b+c+d+e+f) 61,250.69 80,358.73
Current (Unsecured, considered good unless otherwise stated) (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Balances with statutory authorities 39,055.89 20,019.46 (b) Advance to suppliers Unsecured, considered good 25,225.40 31,080.55 Unsecured, considered doubtful 1,640.63 - Less: Provision for doubtful advances (1,640.63) - 25,225.40 31,080.55 (c) Prepaid lease payments for operating leases (Refer note 5) - 231.37 (d) Prepaid expenses 1,436.13 737.41 (e) Other advances 71.89 102.94 Total (a+b+c+d+e) 65,789.31 52,171.73
93 NOTES TO FINANCIAL STATEMENTS
9. Income Tax Assets (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Advance tax and tax deducted at source receivable (net of tax provisions) 3,771.71 3,181.98 3,771.71 3,181.98 10. Inventories (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Raw materials 133,975.87 170,045.57 (b) Finished and semi-finished goods 216,180.84 196,304.65 (c) Stores and spares 120,143.80 84,228.80 Less : Provision (898.00) (977.15) (d) Others 14,090.03 8,586.27 483,492.54 458,188.14
Included above, goods-in-transit: (i) Raw materials 19,265.89 31,290.01 (ii) Stores and spares 8,442.40 2,739.07 27,708.29 34,029.08 (i) Value of inventories above is stated after provisions (net of reversal) ₹ 898.00 lacs (March 31, 2019: ₹ 977.15 lacs) for write-downs to net realisable value and provision for slow moving and obsolete items. 11. Trade Receivables (Unsecured) (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Trade Receivables considered good 70,238.62 71,779.82 Trade Receivables - credit impaired 9,542.63 16,266.72 79,781.25 88,046.54 Less: Allowance for expected credit losses (9,542.63) (18,345.33) 70,238.62 69,701.21 (i) For details of receivables from related parties, refer note 36. (ii) Trade receivables relate to Company’s contracts with its customers, are non-interest bearing and are generally on credit terms not exceeding 12 months. (iii) The Company recognizes lifetime expected credit losses on trade receivables using a simplified approach by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in provision matrix. (iv) Movement in allowance for credit losses of receivables is as follows: (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Balance at the beginning of the year 18,345.33 17,060.00 Charge in statement of profit & loss - 1,285.33 Release to statement of profit & loss (8,802.70) - Balance at the end of the year 9,542.63 18,345.33
94 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
(v) Ageing of trade receivables and credit risk arising there from is as below: (₹ in lacs) As at March 31, 2020 Gross carrying % of expected Allowance for Net carrying amount credit losses expected credit amount losses Amount not yet due 45,779.96 0% 89.96 45,690.00 Less than three months overdue 19,668.26 0% 82.48 19,585.78 Between three to six month overdue 1,104.40 18% 197.86 906.54 Between six month to one year overdue 527.22 27% 141.73 385.49 Greater than one year overdue 12,701.41 71% 9,030.60 3,670.81 Balance at the end of the year 79,781.25 9,542.63 70,238.62
(₹ in lacs) As at March 31, 2019 Gross carrying % of expected Allowance for Net carrying amount credit losses expected credit amount losses Amount not yet due 43,096.79 0% 62.15 43,034.64 Less than three months overdue 19,544.36 2% 354.41 19,189.95 Between three to six month overdue 3,118.76 12% 368.76 2,750.00 Between six month to one year overdue 6,720.94 75% 5,013.95 1,706.99 Greater than one year overdue 15,565.69 81% 12,546.06 3,019.63 Balance at the end of the year 88,046.54 18,345.34 69,701.21 (vi) The Company considers its maximum exposure to credit risk with respect to customers as at March 31, 2020 to be ₹ 79,781.26 lacs (March 31, 2019: ₹ 88,046.54 lacs), which after consideration of allowance for expected credit losses, is the fair value of trade receivables . The Company’s exposure to customers is diversified and no single customer contributes more than 10% of the outstanding receivables as at March 31, 2020 and March 31, 2019. (vii) There are no outstanding receivable debts due from directors or other officers of the Company.
12. Cash and Cash Equivalents (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Cash in hand 50.32 13.88 (b) Cheques in hand - 62.49 (c) Balance with banks - In current accounts 37,308.16 27,665.35 - Deposits with original maturity of less than three months 35,000.00 - 72,358.48 27,741.72 (i) The carrying amounts of cash and cash equivalents closely approximate their fair values.
95 NOTES TO FINANCIAL STATEMENTS
13. Other Balances With Banks (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Earmarked balances with banks - Unpaid dividend 9.05 9.05 - Deposit with original maturity of more than three months but less than twelve months 12,589.76 12,680.61 12,598.81 12,689.66 (i) Earmarked balances with bank represent balances held for unpaid dividends and margin money/fixed deposits against issue of bank guarantees. (ii) The carrying amounts of other balances with banks closely approximate their fair values.
14. Equity Share Capital (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Authorised: 46,500,000,000 Ordinary equity shares of ₹ 2 each (March 31, 2019: 46,500,000,000) 930,000.00 930,000.00 930,000.00 930,000.00 Issued: 1,097,530,242 Ordinary equity shares of ₹ 2 each (March 31, 2019: 1,097,530,242) 21,950.60 21,950.60 21,950.60 21,950.60 Subscribed and Paid up: 1,093,439,768 Ordinary equity shares of ₹ 2 each (March 31, 2019: 1,097,530,242) 21,868.80 21,868.80 21,868.80 21,868.80 a) Reconciliation of number of shares outstanding and the amount of share capital: (₹ in lacs) As at March 31, 2020 As at March 31, 2019 Number of shares Amount (₹ in lacs) Number of shares Amount (₹ in lacs) Shares outstanding at the beginning of the year 1,093,439,768 21,868.80 226,514,746 4,530.30 Shares issued during the year (Refer sub-note (i)) - - 866,925,022 17,338.50 Shares bought back during the year - - - - Shares outstanding at the end of the year 1,093,439,768 21,868.80 1,093,439,768 21,868.80 i) During the previous year, the Company had issued 866,925,022 shares at the face value of ₹ 2 per share by way of private placement of shares. b) Rights, preferences and restrictions attached to the equity shares The Company has only one class of issued, subscribed and paid up equity shares having a par value of ₹ 2/- per share. Each holder of equity shares is entitled to one vote per share The Company declares and pays dividend in Indian rupees. The dividend, if any, proposed by the Board of Directors is subject to approval of the Shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the share holder.”
96 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
c) Details of the shareholders holding more than 5% share in the Company
As at March 31, 2020 Number of shares % of holding held Equity shares of ₹ 2/- each fully paid up 1. Bamnipal Steel Limited 794,428,986 72.65%
As at March 31, 2019 Number of % of holding shares held Equity shares of ₹ 2/- each fully paid up 1. Bamnipal Steel Limited 794,428,986 72.65%
d) Details of shares held by the Holding Company
As at March 31, 2020 As at March 31, 2019 Number of % of holding Number of % of holding shares held shares held Equity shares of ₹ 2/- each fully paid up 1. Bamnipal Steel Limited 794,428,986 72.65% 794,428,986 72.65%
15. Other Equity
(₹ in lacs) As at As at March 31, 2020 March 31, 2019 a) Capital redemption reserve Balance as at the beginning of the period 693.34 693.34 Changes during the year - - Balance as at the end of the period 693.34 693.34
b) Securities premium Balance as at the beginning of the period 72,576.10 72,576.10 Changes during the year - - Balance as at the end of the period 72,576.10 72,576.10
c) Debenture redemption reserve Balance as at the beginning of the period - 36,512.50 Changes during the year - (36,512.50) Balance as at the end of the period - -
d) General reserve Balance as at the beginning of the period 564,350.09 527,837.59 Changes during the year - 36,512.50 Balance as at the end of the period 564,350.09 564,350.09
e) Retained earnings Balance as at the beginning of the period (3,076,389.82) (3,248,222.53) Profit/(Loss) during the year (64,917.47) 171,308.88 Remeasurement of defined employee benefit plans (712.70) 523.83 Balance as at the end of the period (3,142,019.99) (3,076,389.82)
97 NOTES TO FINANCIAL STATEMENTS
) f Equity component of compound financial instruments The compound financial intrument relate to the Optionally Convertible Redeemable Preference shares (OCRPS) and Non Convertible Redeemable Preference Shares (NCRPS) issued by the Company. A. Details of authorised, issued, subscribed and paid-up capital (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Authorised: 22,000,000 Preference shares of ₹ 100 each (March 31, 2019: 22,000,000) 22,000.00 22,000.00 12,000,000,000 Non Convertible Redeemable Preference Shares of ₹ 10 each (March 31, 2019: 1,200,000.00 1,200,000.00 12,000,000,000) 12,000,000,000 Optionally Convertible Redeemable Preference shares of ₹ 10 each (March 31, 1,200,000.00 1,200,000.00 2019: 12,000,000,000) 2,422,000.00 2,422,000.00 Issued: 10,700,000,000 Non Convertible Redeemable Preference Shares of ₹ 10 each (March 31, 2019: 1,070,000.00 1,070,000.00 10,700,000,000) 9,000,000,000 Optionally Convertible Redeemable Preference shares of ₹ 10 each (March 31, 900,000.00 900,000.00 2019: 9,000,000,000) 1,970,000.00 1,970,000.00 Subscribed and Paid up: 10,700,000,000 Non Convertible Redeemable Preference Shares of ₹ 10 each (March 31, 2019: 1,070,000.00 1,070,000.00 10,700,000,000) 9,000,000,000 Optionally Convertible Redeemable Preference shares of ₹ 10 each (March 31, 900,000.00 900,000.00 2019: 9,000,000,000) 1,970,000.00 1,970,000.00
B. Reconciliation of number of shares outstanding: Non Convertible Redeemable Preference Shares (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Shares outstanding at the beginning of the year 10,700,000,000 - Shares issued during the year (Refer sub-note (I)) - 10,700,000,000 Shares bought back during the year - - Shares outstanding at the end of the year 10,700,000,000 10,700,000,000 I. During the previous year, the Company had issued 10,700,000,000 shares at the face value of ₹ 10 per share by way of private placement of shares. Optionally Convertible Redeemable Preference shares (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Shares outstanding at the beginning of the year 9,000,000,000 - Shares issued during the year (Refer sub-note (I)) - 9,000,000,000 Shares bought back during the year - - Shares outstanding at the end of the year 9,000,000,000 9,000,000,000 I. During the previous year, the Company had issued 9,000,000,000 shares at the face value of ₹ 10 per share by way of private placement of shares.
98 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
C. Rights, preferences and restrictions attached to the preference shares The Company has issued preference shares having a par value of ₹ 10/- per share. Preference shares carry voting rights as per the provisions of Section 47(2) of the Companies Act, 2013. The Company declares and pays dividend in Indian rupees. The preference shares shall carry a preferential right vis-à-vis equity shares of the Company with respect to payment of dividend and repayment of capital. However, the holders of the preference shares shall be paid dividend on a non-cumulative basis. The preference shares shall be non-participating in the surplus funds and also in the surplus assets and profits which may remain after the entire capital has been repaid, on winding up of the Company. For terms of redemption, refer sub-note (ii) of Note 16A - Borrowings. D. Equity shares reserved for issue under option to convert Optionally Convertible Redeemable Preference shares to equity shares (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Equity shares reserved for issue under option 2,947,920,079 2,947,920,079
E. Terms of conversion attached to Optionally Convertible Redeemable Preference shares OCRPS shall be convertible into equity shares at the option of TSL within a period of 18 months from the date of allotment at ₹ 30.53 per share.
F. Details of the shareholders holding more than 5% preference shares in the Company Non Convertible Redeemable Preference Shares
As at March 31, 2020 Number of shares % of holding held Preference shares of ₹ 10/- each fully paid up 1. Tata Steel Limited 10,700,000,000 100.00%
Optionally Convertible Redeemable Preference shares
As at March 31, 2020 Number of shares % of holding held Preference shares of ₹ 10/- each fully paid up 1. Tata Steel Limited 9,000,000,000 100.00%
G. Equity component of compound financial instruments (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Balance as at the beginning of the period 1,729,582.05 - Transactions with owners in their capacity as owners - 1,729,582.05 Balance as at the end of the period 1,729,582.05 1,729,582.05
g) Capital contribution (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Balance as at the beginning of the period 2,518,550.72 - Transactions with owners in their capacity as owners - 2,518,550.72 Balance as at the end of the period 2,518,550.72 2,518,550.72
99 NOTES TO FINANCIAL STATEMENTS
h) Equity instruments at fair value through other comprehensive income (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Balance as at the beginning of the period 59.90 66.70 Other comprehensive income recognised during the period (33.92) (6.80) Balance as at the end of the period 25.98 59.90 Total other equity 1,743,758.29 1,809,422.38 i) Description of the nature of reserves existing in the Company:- Capital redemption reserve - The Companies Act, 2013 requires that when a Company purchases its own shares out of free reserves or securities premium account, a sum equal to the nominal value of the shares so purchased shall be transferred to a capital redemption reserve account and details of such transfer shall be disclosed in the balance sheet. The capital redemption reserve account may be applied by the Company, in paying up unissued shares of the Company to be issued to shareholders of the Company as fully paid bonus shares. The Company established this reserve pursuant to the redemption of preference shares issued in earlier year. Securities premium account - Securities premium account is used to record premium received on issue of shares. The account is utilised in accordance with the provisions of the Companies Act, 2013. Debenture redemption reserve - Upto the previous year the Companies Act, 2013 required that where a Company issues debentures, it shall create a debenture redemption reserve out of profits of the Company available for payment of dividend. The Company is required to maintain a Debenture Redemption Reserve of 25% of the value of debentures issued, either by a public issue or on a private placement basis. The amounts credited to the debenture redemption reserve cannot be utilised by the Company except to redeem debentures.Since, the debentures were redeemed during the previous year, hence ₹ 36,512.50 lacs appearing in the debenture redemption reserve was transferred to general reserve. General reserve - Under the erstwhile Companies Act 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to the introduction of the Companies Act, 2013, the requirement to mandatorily transfer a specified percentage of net profit to general reserve has been withdrawn. Retained earnings - Retained earnings are created from the profit/ loss of the Company, as adjusted for distributions to owners, transfers to other reserves, etc. Equity component of compound financial instruments - The Company has issued Optionally Convertible Redeemable Preference Shares (OCRPS) & Non Convertible Redeemable Preference shares (NCRPS) during the financial year ended March 31, 2019. Considering the accounting principles to be followed in line with Indian Acoounting Standards, the Company has computed the liability portion of NCRPS & OCRPS as the present value of the contractual obligations associated with the instrument. The difference between the issue amount of the OCRPS & NCRPS and the liability so computed has been treated as the ‘Equity component of compound financial instruments’ and grouped under other equity. Capital contribution - During the previous year, post implementation of the approved resolution plan dated May 15, 2018, Bamnipal Steel Limited (Holding Company), in its capacity as the promoter of the company, had waived off novated debts (reduced by the cost of novation) amounting to ₹ 2,518,550.72 lacs. The Company recognised such waiver as a capital contribution made during the previous year as an item of ‘Other equity’. Refer Note 43 for details of accounting of resolution plan. Other comprehensive income - The Company has elected to recognise changes in the fair value of certain investments in equity instruments in other comprehensive income. These changes are accumulated within FVTOCI reserve within equity. The Company transfers amount from this reserve to retained earnings when the relevant equity instruments are derecognised.
100 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
16. Financial Liabilities A. Borrowings Non - Current (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Secured (i) Term loans from banks - Indian rupees loans (Refer sub-note (i)) 1,242,244.52 1,384,542.07 (ii) Lease liabilities (Refer sub-note(iii)) 158,797.55 79,196.47 1,401,042.07 1,463,738.54 (b) Unsecured (i) Liability component of compound financial instruments (Refer sub-note(ii)) 265,911.64 239,075.38 265,911.64 239,075.38 Less: Current maturities of lease liabilities classified under ‘other financial liabilities’ 13,517.16 5,583.18 1,653,436.55 1,697,230.74
Current (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Secured (Refer sub-note(iv)) (i) Working capital facilities from banks - Indian rupees loans 39,700.00 - (ii) Cash credit / Packing credits 4,000.00 - 43,700.00 - (b) Unsecured (i) Working capital facilities from banks - Indian rupees loans 30,000.00 - (ii) Other loans 15,000.00 - 45,000.00 - 88,700.00 -
(i) Rupee Term Loans as at March 31, 2020 amounting to ₹ 1,242,244.52 lacs are secured by a charge on all of the Company’s immovable & movable properties including movable machinery, spares, tools & accessories, ranking pari passu inter-se. The term loan shall be payable across 18 half yearly installments starting from March 2022.The interest rate on such term loans is 0.55% spread over MCLR (Marginal Cost of funds based Lending Rate). The Company has made ` 143,000 lacs as prepayments, the next scheduled repayment will fall due in March 2024.
(ii) During the previous year, the Company had issued 11.09% Non-Convertible Redeemable Preference Shares (“NCRPS”) and 8.89% Optionally Convertible Redeemable Preference Shares (“OCRPS”) to Tata Steel Limited (“TSL”), on private placement basis. The NCRPS and OCRPS are redeemable at par value at maturity, i.e. 20 years from the date of allotment. The Company has an option to early redeem the NCRPS and OCRPS at 3 monthly intervals from the date of allotment. OCRPS shall be convertible into equity shares at the option of TSL within a period of 18 months from the date of allotment at ₹ 30.53 per share. The coupon payment is discretionary and accordingly these are accounted for as compound financial instruments.
(iii) As a result of the adoption of Ind AS 116 “Leases” as of April 1, 2019, the Company has recognised right–of–use assets and lease liabilities related to non–cancellable operating leases (Refer Note 5). Lease Liabilities are secured against the assets against which the lease liability is arising. Lease liabilities as at March 31, 2020 have been determined using an incremental borrowing rate ranging from 9% to 11.5%.
101 NOTES TO FINANCIAL STATEMENTS
(iv) Working capital facilities from banks as at March 31, 2020 amounting to ₹ 39,700 lacs are secured by a first pari passu charge on all of the stock of raw materials, finished goods, stock in process, consumable stores and book debts of the Company. Cash credit / Packing credit as at March 31, 2020 amounting to ₹ 4,000 lacs are secured by a first pari passu charge on all of the stock of raw materials, finished goods, stock in process, consumable stores and book debts and other current assets. (v) Reconciliation of liabilities arising from financing activities: (₹ in lacs) Term loans Liability Other Loans Lease Liability Total from banks component (including of compound current financial maturities of instruments lease liabilities) Balance as at April 01, 2019 1,384,542.07 239,075.38 - 79,196.47 1,702,813.91 Cash Flows (143,090.77) - 88,700.00 (6,884.85) (61,275.62) Non-Cash Changes 793.22 26,836.27 - 86,485.94 114,115.43 Fair Value Changes and Other Changes 793.22 26,836.27 - - 27,629.49 Impact of transition to Ind AS 116 - - - 86,485.94 86,485.94 Balance as at March 31, 2020 1,242,244.52 265,911.65 88,700.00 158,797.56 1,755,653.72
. B Trade Payables (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Total outstanding dues of micro enterprises and small enterprises (refer note 33) 5,486.99 1,254.42 (b) Total outstanding dues of creditors other than micro enterprises and small enterprises 281,484.12 307,642.43 286,971.11 308,896.85
(i) The Company considers its maximum exposure to liquidity risk with respect to vendors as at March 31, 2020 to be ₹ 286,971.11 lacs (March 31, 2019: ₹ 308,896.85 lacs), which is the fair value of trade payables. C. Other Financial Liabilities Non Current (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Deferred sales tax payable 1,802.35 4,385.37 (b) Other payables 1,818.00 1,403.60 3,620.35 5,788.97
Current (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Current maturities of lease liabilities 13,517.16 5,583.18 (b) Interest accrued on borrowings 9,430.02 - (c) Liability for capital goods 4,275.07 48,986.83 (d) Security deposits 147.74 707.27 (e) Dues to directors - 3.92 (f) Unclaimed dividend 6.85 9.04 (g) Other payables 26,628.78 12,941.42 54,005.62 68,231.66
102 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
(i) Other payables includes:
(a) Collection from customers pending remittance to bank ₹ 9,502.09 lacs (March 31, 2019: ₹ 2,682.61 lacs).
(b) Liability for employee payables ₹ 3,028.64 lacs. (March 31, 2019: ₹ 3,960.62 lacs).
(ii) Carrying amounts of other current financial liabilities are a reasonable approximation of their fair values.
17. Other Liabilities Current (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Advances received from customers 9,866.49 12,807.39 (b) Statutory Dues 12,539.74 23,995.75 22,406.23 36,803.14
(i) The advances received from customers represents contract liability balance outstanding as at the respective dates. The advance received from customers outstanding as at April 1, 2019 were fully recognised as revenue during the year ended March 31, 2020 upon satisfaction of the associated performance obligations.
18. Provisions Non Current (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Provision for employee benefits - Gratuity (Refer note 35) 4,835.75 3,416.59 - Compensated absences 2,582.48 2,263.18 7,418.23 5,679.77
Current (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Provision for employee benefits - Compensated absences 200.86 294.03 200.86 294.03
19. Deferred Income Non Current (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Deferred income 189.21 227.69 189.21 227.69
103 NOTES TO FINANCIAL STATEMENTS
20. Revenue From Operations (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019 (a) Sale of products to customers 1,723,779.36 1,986,010.95 (b) Other operating revenue Other sales to customers 74,145.99 77,551.46 Export and other incentives (Refer sub-note (i)) 21,988.83 25,597.94 1,819,914.18 2,089,160.35 (i) This includes amount recognised on account of Maharashtra Package Scheme of Incentives, 1993 amounting to ₹ 9,599.10 lacs (March 31, 2019 ₹ 14,332.48 lacs). Refer Note 44 for further details. Geographical information Geographical information, by region, of the Company’s revenue from operations, has been disclosed below and represents Tata Steel BSL’s most significant regional markets. (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019 (a) India 1,490,156.86 1,786,943.08 (b) Asia excluding India 236,761.76 177,654.52 (c) Europe 59,776.38 83,694.64 (d) Rest of world 33,219.18 40,868.11 1,819,914.18 2,089,160.35
Details of performance obligation associated with revenue recognition Satisfaction of performance obligations:- The Company’s revenue is derived from the single performance obligation to transfer primarily steel products under arrangements in which the transfer of control of the products and the fulfillment of the Company’s performance obligation occur at the same time. Revenue from the sale of goods is recognised when the Company has transferred control of the goods to the buyer and the buyer obtains the benefits from the goods, the potential cash flows and the amount of revenue (the transaction price) can be measured reliably, and it is probable that the Company will collect the consideration to which it is entitled to in exchange for the goods.. Whether the customer has obtained control over the asset depends on when the goods are made available to the carrier or the buyer takes possession of the goods, depending on the delivery terms. For the Company’s steel producing operations, generally the criteria to recognize revenue has been met when its products are delivered to its customers or to a carrier who will transport the goods to its customers, this is the point in time when the Company has completed its performance obligations. Revenue is measured at the transaction price of the consideration received or receivable, the amount the Company expects to be entitled to. Additionally, the Company identifies when goods have left its premises, not when the customer receives the goods. Therefore, the Company estimates, based on its historical experience, the amount of goods in-transit when the transfer of control occurs at the destination and defers the revenue recognition. In case of export sales, for delivery conditions whereby the Company arranges the logistics of the goods to its premises, the Company charges the freight on actual basis (actuals as levied by the transporter). In this case, the Company acts as an agent in arranging such logistics services. Hence, revenue from such services are netted off with the expenses as levied by the transporter. Payment terms The sale of goods is typically made under credit payment terms differing from customer to customer and ranges between 0-60 days. Variable considerations associated with such sales Periodically, the Company enters into volume or other rebate programs where once a certain volume or other conditions are met, it refunds the customer some portion of the amounts previously billed or paid. For such arrangements, the Company only recognizes revenue for the amounts it ultimately expects to realize from the customer. The Company estimates the variable consideration for these programs using the most likely amount method or the expected value method, whichever approach best predicts the amount of the consideration based on the terms of the contract and available information and updates its estimates in each reporting period.
104 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
21. Other Income (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019 (a) Interest income on: - Fixed deposits 757.86 2,508.09 - Others 4,160.94 375.03 (b) Net Gain / (Loss) on sale/fair valuation of investments 3,781.15 8,478.77 (c) Dividend income on long term investments 1.76 1.35 (d) Liabilities written back - 89.91 (e) Miscellaneous income 1,949.78 1,790.92 10,651.49 13,244.07
22. Raw Materials Consumed (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019 Cost of raw materials consumed 1,063,311.14 1,163,663.41 Less: Expenses transferred to CWIP (4,106.93) (3,357.95) 1,059,204.21 1,160,305.46
23. Purchases Of Finished, Semi-Finished Steel & Other Products (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019 Purchase of Finished products 287.56 685.44 287.56 685.44
24. Changes In Inventories Of Finished Goods, Work-In-Progress And Stock-In-Trade (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019 (a) Closing stock - Finished and semi-finished goods 216,180.84 196,304.65 - Others 14,090.03 8,586.27 230,270.87 204,890.92 (b) Opening stock - Finished and semi-finished goods 196,304.65 172,552.04 - Others 8,586.27 4,520.83 204,890.92 177,072.87 Net Increase [ (b) - (a) ] (25,379.95) (27,818.05)
25. Employee Benefit Expense (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019 (a) Salaries and wages 38,730.07 35,310.67 (b) Contribution to provident and other funds 1,074.85 1,013.49 (c) Staff welfare expenses 418.40 707.69 40,223.32 37,031.85 Less: Expenses transferred to CWIP (93.45) (781.29) 40,129.87 36,250.56
105 NOTES TO FINANCIAL STATEMENTS
26. Finance Costs (₹ in lacs)
Year ended Year ended March 31, 2020 March 31, 2019 (a) Interest on borrowings 154,566.16 380,969.12 (b) Interest on lease obligations 17,220.71 - (c) Other borrowing cost 4,223.27 1,362.21 176,010.14 382,331.33 Less: Expenses transferred to CWIP (6,418.64) (7,113.45) 169,591.50 375,217.88
27. Depreciation And Amortisation Expense (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019 (a) Depreciation on tangible assets 130,118.79 144,165.90 (b) Depreciation of right-of-use assets 12,912.55 - (b) Amortisation of intangible assets 132.10 8.02 143,163.44 144,173.92
28. Other Expenses (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019 (a) Consumption of stores, spares and consumables 140,872.43 130,745.05 (b) Packing material consumed 7,778.39 7,521.02 (c) Purchase of power and consumption of fuel 107,514.64 117,638.28 (d) Rent (Refer sub-note (ii)) 43,637.58 81,749.88 (e) Insurance charges 4,285.01 3,224.93 (f) Rates and taxes 1,163.63 935.31 (g) Repairs and maintenance: Building 1,168.26 718.20 Machinery 15,996.68 6,714.27 (h) Payment to auditors: Audit fees 340.00 350.00 Tax audit fee 40.00 35.00 Out-of-pocket expenses 59.49 47.57 For other services 9.04 3.06 (i) Freight and handling charges 92,555.03 89,093.63 (j) Commission, discounts and rebates 7,110.06 3,544.60 (k) Administrative expenses 6,035.52 5,567.52 (l) Contractual manpower costs 38,337.61 33,423.92 (m) Miscellaneous expenses (Refer sub-note (i)) 48,516.93 58,766.68 515,420.30 540,078.91 Less: Expenses transferred to CWIP (31.98) (197.91) 515,388.32 539,881.00
106 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
(i) Miscellaneous expenses includes :
a) Losses on account of foreign exchange fluctuation amounting to ₹ 3,440.26 lacs (March 31, 2019: ₹ 5,765.57 lacs).
b) Expected credit loss amounting to (₹ 1,052.14 lacs) (March 31, 2019: ₹ 5,954.63 lacs)
(ii) Expenses related to short-term leases and leases of assets of low value inclued in rent expenses were ₹ 181.23 lacs and ₹ 2.40 lacs, respectively, for the year ended March 31, 2020. Expenses related to variable lease payments not included in the measurement of lease liabilities were ₹ 42,507.95 lacs for the year ended March 31, 2020.
29. Exceptional Items (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019 (a) Effects of implementation of resolution plan (Refer sub-note - (i) and (iii)) 15,359.67 315,927.27 (b) Provision for impairment on property, plant and equipment and other assets (Refer sub-note - (ii) (8,457.83) (18,326.60) and (iii)) 6,901.84 297,600.67
i) Effects of implementation of resolution plan (Refer Note 43 for details of effects of resolution plan)
As per the Resolution Plan approved by the NCLT, settlement of operational creditors has been done over a period of 12 months from the Closing Date, as defined in the Resolution Plan. Further, as per the Resolution Plan, the contingent liabilities and commitments, claims and obligations, stand extinguished and accordingly no outflow of economic benefits is expected in respect thereof.
ii) Exceptional items recognised in current year financial statements
During the year, impairment provision was created on Cold Roll Mill extension project in CWIP amounting to ₹ 2,081.30 lacs and induction furnace in Angul plant amounting to ₹ 2,174.90 lacs. Also impairment provision was created on advance to suppliers and capital advances extended prior to the corporate insolvency resolution process (‘CIRP’) of the Company amounting to ₹ 1,365.42 lacs and ₹ 2,836.21 lacs.
iii) Exceptional items recognised in previous year financial statements
(A) Effects of implementation of resolution plan (Refer Note 43 for details of effects of resolution plan)
Pursuant to CIRP proceedings & implementation of resolution plan, there has been a gain of ₹ 315,927.27 lacs on account of the following:
(a) Operational creditors extinguishment - ₹ 55,212.35 lacs,
(b) Redemption of Preference shares & waiver of related interest obligation - ₹ 242,557.34 lacs
(c) Extinguishment of dues towards financial creditors on account of pledged shares invocation - ₹ 18,157.58 lacs.
(B) Provision for impairment on property, plant & equipment and other assets includes
(a) Provision for impairment of property, plant and equipment - ₹ 5,219.23 lacs
(b) Provision for impairment of certain non-current advances - ₹ 17,837.52 lacs
(c) Net reversal of provision for impairment made in earlier year - ₹ 4,730.14 lacs.
30. Earning Per Share
Basic and diluted earning per share (“EPS”) amounts are calculated by dividing the profit/(loss) for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit/ (loss) attributable to equity holders of the Company (including the potential savings/expenses that would result from the conversion of the dilutive potential ordinary share) by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
107 NOTES TO FINANCIAL STATEMENTS
The following table reflects the income and shares data used in computation of the basic and diluted earnings per share: (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019 (a) Profit/ (Loss) after tax (₹ in lacs) (64,917.44) 171,308.88 Add:- Income that would result from the conversion of the dilutive potential ordinary share (₹ in lacs) 3,035.87 38,026.38 (b) Profit/(Loss) after tax to be considered for computation of Diluted Earnings Per Share (DEPS) (61,881.57) 209,335.26 (₹ in lacs) (c) Weighted average number of equity shares - Basic (Nos.) 1,093,439,768 981,808,327 Add:- Weighted average number of equity shares that would be issued on conversion of all the 2,947,920,079 18,937,586,654 dilutive potential equity shares into equity shares (Refer sub note (i)) (d) Weighted average number of equity shares - Diluted (Nos.) 4,041,359,847 19,919,394,981 Earning Per Share Basic (₹ / share) [ (a)/(c) ] (5.94) 17.45 Diluted (₹/ share) [ (b)/(d) ] (5.94) 1.05 Face value per share (₹) 2.00 2.00 (i) Durring the current year, Earning per share is anti-dilutive hence both Basic and Diluted earning per share is equal. During the previous year, the dilution was on account of:- Potential equity shares which may be issued on account of conversion option that exists in the Optionally Convertible Redeemable Preference Shares (OCRPS). OCRPS shall be convertible into equity shares at the option of the investor (being Tata Steel Limited) within a period of 18 months from the date of allotment at ₹ 30.53 per share, and Potential equity shares which could have been issued on account of conversion option that existed in the Inter-Corporate Deposits (ICD) taken from Bamnipal Steel Limited. ICD was convertible into equity shares at the option of the investor (being Bamnipal Steel Limited) within a period of 18 months from the date of issue of ICD at face value of equity share,i.e., ₹ 2 per share. The dilution impact has been considered for previous period in which the ICD was outstanding,i.e., May 18, 2018 to March 19, 2019. 31. Tax Expenses a) Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate for year ended March 31, 2020 and March 31, 2019: (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019 Profit / (loss) before tax (64,917.44) 171,308.88 At India’s statutory income tax rate of 25.168% (March 31, 2019: 34.944%) (16,338.42) 59,862.18 (a) Incremental deferred tax assets on losses and unabsorbed depreciation not recognised 7,590.53 154,165.39 (b) Income exempt from tax/Items not deductible 7,687.28 31,180.62 (c) Deferred taxes (assets)/liabilities relating to earlier years recognised during the year - (246,042.88) (d) Others 1,060.61 834.70 - - - - (i) The Company is subject to income tax in India on the basis of its standalone financial statements. The Company can claim tax exemptions/ deduction under the specific sections of the Income Tax Act, 1961 subject to fulfilment of prescribed conditions, as may be applicable. As per the Income Tax Act, 1961, the Company is liable to pay income tax based on higher of regular income tax payable or the amount payable based on the provisions applicable for Minimum Alternate Tax (MAT). MAT paid in excess of regular income tax during a year can be carried forward for a period of fifteen years and can be offset against future tax liabilities arising from regular income tax. A new section 115BAA has been inserted in the Income Tax Act, 1961, vide Taxation Laws (Amendment) Ordinance,2019 (subsequently enacted on December 11, 2019 as The Taxation Laws (Amendment) Act, 2019) which provides domestic company with an option to pay tax at a lower rate of 22% (effective rate of 25.168%) for any previous years relevant to the assessment year beginning on or after April 01, 2020. The rate shall be applicable subject to certain conditions , including that the total income should be computed without claiming any deduction or exemptions. MAT would not be applicable to companies opting to apply the lower tax rate. New tax regime once opted, can not be reversed.
108 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
Based on above, the Company has opted to new tax regime and computed its tax liability on lower tax rate for assessment year 2020-21. The Company has not claimed certain deduction or exemption as prescribed which includes additional depreciation of ₹ 376,165 lacs claimed in earlier years. However the same has been adjusted with the net block of assets as on April 01, 2019 as per the relevant provision of section 115BAA of Income Tax Act, 1961. The statutory tax rate applicable for assessment year 2019-20 was 34.944% (including surcharge and cess). ) (b Movement of deferred tax liability from beginning to end of financial year is as follows: (₹ in lacs) As at Provided As at Provided As at April 01, 2018 during the March 31, 2019 during the March 31, 2020 year year Deferred tax liability: (a) Related to property plant & equipment 470,095.62 28,265.63 498,361.25 (174,998.90) 323,362.35 (b) Investments carried at Fair value through - 258.65 258.65 (258.65) - profit or loss Total deferred tax liability 470,095.62 28,524.28 498,619.90 (175,257.55) 323,362.35 Deferred tax assets: (a) Accumulated business loss and unabsorbed 220,820.24 217,729.29 438,549.53 (174,531.75) 264,017.78 depreciation (b) Provision for doubtful debts 5,961.44 449.15 6,410.59 (4,008.90) 2,401.69 (c) Amount deductible on payment basis 200,901.00 (195,330.10) 5,570.90 (251.33) 5,319.57 (d) Others 42,412.94 5,675.94 48,088.88 3,534.43 51,623.31 Total deferred tax assets 470,095.62 28,524.28 498,619.90 (175,257.55) 323,362.35 Deferred tax liability (net) - - - - - Recognised in profit or loss as ‘tax expenses’ - - - - - Recognised in OCI - - - - - Total - - - - - (i) Deferred tax assets have not been recognised in respect of business losses and unabsorbed depreciation aggregating to ₹ 291,932.97 lacs as at March 31, 2020 (March 31, 2019: ₹ 321,093.41 lacs), where it is not probable that sufficient taxable income will be available in the future against which such the deferred tax assets can be realised in the normal course of business of the Company. (ii) The amounts and expiry dates, if any, of unutilised tax losses and deductible temporary differences for which no deferred tax asset is recognised in the balance sheet are given below: (₹ in lacs) Year of expiry Amount Unabsorbed depreciation No expiry (1,159,937.08) (1,159,937.08)
32. Commitments And Contingencies A. Contingent liabilities As per the approved Resolution Plan, contingent liabilities (which have / are capable of being crystallized) prior to May 18, 2018 (“Effective Date”) stand extinguished. Furthermore, the Resolution Plan, among other matters, provide that except to the extent of the amount payable to the relevant Operational Creditors in accordance with the Resolution Plan, all liabilities of the Company relating in any manner to the period prior to the Effective Date, immediately, irrevocably and unconditionally stand fully and finally discharged and settled and there being no further claims whatsoever, and all the rights of the Operational Creditors and Other Creditors to invoke or enforce the same stands waived off. It is provided that any and all legal proceedings initiated before any forum by or on behalf of any Operational Creditor (including Governmental Authorities) or any Other Creditors to enforce any rights or claims against the Company also stands extinguished. Further, in terms of the Resolution Plan, no Governmental Authority has any further rights or claims against the Company, in respect of the period prior to the Effective Date and / or in respect of the amounts written off and all legal proceedings initiated before any forum by or on behalf of any Operational Creditor (including Governmental Authorities) or any Other Creditors, to enforce any rights or claims against the Company will immediately, irrevocably and unconditionally stand withdrawn, abated, settled and/or extinguished. Further, the Operational Creditors of the Company (including Governmental Authorities) and Other Creditors will have no further rights or claims against the Company (including
109 NOTES TO FINANCIAL STATEMENTS
but not limited to, in relation to any past breaches by the Company), in respect of any liability for period prior to the Effective Date, and all such claims shall immediately, irrevocably and unconditionally stand extinguished. The Company has been legally advised that while the Resolution Plan provides for extinguishment of all liabilities of the Company owed to Operational Creditors and Other Creditors as of the Insolvency Commencement Date i.e. July 26, 2017, the implementation of the Resolution Plan does not have any such similar effect over claims or receivables owed to the Company. Accordingly, the Company has concluded that any receivables due to the Company, evaluated based on merits of underlying litigations, from various governmental agencies (presented under Other Assets - Non current) continue to subsist. B. Commitments (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Estimated amount of contracts remaining to be executed on capital account and not provided 5,546.38 8,975.50 for (net of advances) 5,546.38 8,975.50
C. Other matters
(i) The Supreme Court of India vide its order dated September 24, 2014, cancelled the coal blocks allocated to various entities which includes one coal block allocated to the Company which were under development. Subsequently, the Government of India has issued the Coal Mines (Special Provision) Act 2015, which inter-alia deal with the payment of compensation to the affected parties in regard to investment in coal blocks. Receivable in respect of de-allocated coal block amounting to ₹ 56,289.95 lacs includes expenditure incurred of ₹ 14,833.52 lacs and advance given of ₹ 41,456.44 lacs. During the previous year, Company has provided for receivable in respect of expenses incurred. In the opinion of the management, the Company will receive back the payments/expenditure paid/made, including borrowing cost and other incidental expenditure relating to de-allocated coal block. The Company has filed its claim for compensation with the Government of India, Ministry of Coal. Subsequently, the Company had filed a Writ Petition bearing No 6293 of 2016 for recovery of the amount before the Hon’ble Delhi High Court in which notices were issued on July 22, 2016 to Union of India and other. The Counter Affidavit(s) were filed by Union of India in November 2016 and subsequent thereto pleadings were completed.
On May 24, 2018, the above matter came up for hearing before Delhi High Court. It was informed to the Court that vide office Memorandum dt March 20, 2018, New Patrapara Coal Block had been earmarked for allotment to Odisha Government. Union of India Counsel stated that as substantial progress is likely to be made within next 6-8 months, matter should be adjourned. The Company advocate further pointed out that an amount of ₹ 37,000 lacs has been paid to IDCO, out of which ₹ 14,000 lacs is still with IDCO. Delhi High Court had directed State Government/IDCO to file status report on land acquisition status/proceedings upto 10 days prior to next date of hearing. Matter was thereafter adjourned to September 27, 2018. Thereafter Union of India as well as state of Odisha filed their respective status report. In terms of status report, it was informed that as per updated allotment schedule, the allotment order tentatively be issued by November 14, 2018. On September 27, 2018, the Company prayed before the Court for restrain order for disbursal of money as deposited by the Company for land acquisition, however still not disbursed. Delhi High Court refused to grant such order.
On February 7, 2019, Delhi High Court directed Union of India to file specific undertaking, outlining the amounts payable to the Company and also the last date by which the amount could be disbursed.
Pursuant to letter dated November 22, 2019, Ministry of Coal ( “ MoC’) informed that all statutory license, consent approvals, permission required for undertaking of Coal mining operations in New Patrapara Coal Mine now vested to Singareni Collieries Company Ltd, pursuant to Allotment letter dated October 30, 2019.
Pursuant to letter dated February 10, 2020, MoC informed that an amount of ₹ 960.50 lacs has been sanctioned against cost of Geological Reports & Consent and asked Company to submit undertaking in the prescribed format. The Company has submitted undertaking and also informed that as a leader it has made all investment in the coal mine in terms of allocation letter.
MoC /Union of India, filed supplementary affidavit dated February 11, 2020 before Delhi High Court vide which it has informed that payment of compensation can be paid to prior allottee after the mine is successfully allotted and compensation is deposited by successful allottee, following the sequence mentioned in section 9 of Coal Mine ( Special Provisions ) Act, 2015. It has been informed that New Patrapara Coal Mine has been allocated to Singareni Collieris Company Ltd ( a state Government Undertaking) and compensation to the prior allottee will be released very shortly. The Company has contended that above affidavit is not in compliance with order dated February 7, 2019, of Delhi High Court. Now the above matter is listed for hearing on July 8, 2020.
(ii) The Company was summoned by the Special Judge (Companies Act)/ Additional Sessions Judge — 03, Dwarka Courts, New Delhi (“”Special Court””), to appear before the Special Court in relation to a criminal complaint (“”Complaint””) filed by the Serious Fraud Investigation Office (“”SFIO””) against the Company.
110 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
The Complaint and Summons arose from the investigation initiated by The Ministry of Corporate Affairs, Government of India (through the SFIO), into the affairs of the Company relating to issues which arose prior to the acquisition of these companies by Tata Steel Limited, through the Corporate Insolvency Resolution Process. The Company had filed writ petitions before the Delhi High Court (“”High Court””) challenging the Complaint, Order of Cognizance dated August 16, 2019 and the Summons issued by the Special Court against the Company.
Based on the submissions and in terms of Section 32A of the IBC (Insolvency and Bankruptcy Code), as inserted by Section 10 of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019 (subsequently enacted as an amendment to the act), the High Court was pleased to allow the Writ Petition(s) and set aside the Complaint, Order of Cognizance dated August 16, 2019 and the Summons as were issued against the Company.
In this connection, the Company on March 20, 2020 made appropriate disclosures and the said disclosures can be found on the websites of Bombay Stock Exchange, The National Stock Exchange of India and that of the Company.
33. Dues To Micro, Small And Medium Enterprises
The dues to micro, small and medium enterprises as required under the Micro, Small and Medium Enterprises Development Act, 2006 to the extent information available with the company is given below:
(₹ in lacs) As at As at March 31, 2020 March 31, 2019 a) The principal amount and the interest due thereon remaining unpaid to supplier as at the end of year - Principal amount due to micro, small and medium enterprises 5,482.75 1,648.20 - Interest due 4.24 6.93 b) The amount of interest paid by the buyer in terms of section 16 of the MSMED Act 2006 (27 of 2006) - - along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year c) The amount of interest due and payable for the period of delay in making payment (which have been - - paid but beyond the appointed day during the year) but without adding the interest specified under the MSMED Act 2006. d) The amount of interest accrued and remaining unpaid at the end of each accounting year. 6.93 6.93 e) The amount of further interest remaining due and payable even in the succeeding years, until such - - date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the MSMED Act 2006
34. Segment Reporting
The business activity of the Company falls within one operating segment viz. “Steel” and substantially sale of the product is within the country. Hence the disclosure requirement of Indian Accounting Standard 108 of “Segment Reporting” issued by the Ministry of Corporate Affairs is not considered applicable.
35. Employee Benefits
Defined Contribution Plans - General Description
Provident Fund:
During the year, the Company has recognised ₹ 873.77 lacs (2018-19: ₹ 666.61 lacs) as contribution to Employee Provident Fund in the statement of profit and loss.
Defined Benefit Plans - General Description
Gratuity:
Each employee rendering continuous service of 5 years or more is entitled to receive gratuity amount equal to 15/26 of the monthly emoluments for every completed year of service at the time of separation from the Company.
111 NOTES TO FINANCIAL STATEMENTS
The following tables summarise the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the respective plan:
a) Reconciliation of fair value of plan assets and defined benefit obligation: (₹ in lacs) Gratuity (Funded) March 31, 2019 Fair value of plan assets 2,054.86 Defined benefit obligation 5,471.45 Net asset/ (liability) as at March 31, 2019 (3,416.59) March 31, 2020 Fair value of plan assets 1,769.34 Defined benefit obligation 6,605.09 Net asset/ (liability) as at March 31, 2020 (4,835.75)
) b Changes in the present value of the defined benefit obligation are, as follows: (₹ in lacs) Gratuity (Funded) Defined benefit obligation as at April 1, 2018: 5,372.80 Current service cost 606.14 Interest expense 414.24 Benefits paid (380.57) Actuarial (gain)/ loss on obligations - OCI (541.16) Defined benefit obligation as at March 31, 2019 5,471.45 Current service cost 723.18 Interest expense 427.32 Benefits paid (694.02) Actuarial (gain)/ loss on obligations - OCI 677.16 Defined benefit obligation as at March 31, 2020 6,605.09
c) Changes in the fair value of plan assets are, as follows: (₹ in lacs) Gratuity (Funded) Fair value of plan assets as at April 1, 2018: 1,905.82 Contribution by employer 400.00 Benefits paid (380.57) Expected Return 146.94 Actuarial gain /(loss) (17.33) Fair value of plan assets as at March 31, 2019 2,054.86 Contribution by employer - Claim received but not settled (55.92) Benefits paid (354.54) Expected Return 160.48 Actuarial gain /(loss) (35.54) Fair value of plan assets as at March 31, 2020 1,769.34
112 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
(₹ in lacs) As at As at March 31, 2020 March 31, 2019 Break up of fair value of plan assets - SBI Life 635.53 741.66 - LIC 599.23 753.35 - PNB Metlife 415.03 389.92 - Trust 119.54 169.93 Total fair value of plan assets 1,769.33 2,054.86
(d) Amount recognised in Statement of Profit and Loss: (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Current service cost 723.18 606.14 Net interest expense 266.84 267.30 Amount recognised in statement of profit and loss 990.02 873.44
(e) Amount recognised in other comprehensive income: (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Actuarial (gain)/ loss on obligations Actuarial (gain)/ loss arising from change in demographic assumptions (3.30) (730.27) Actuarial (gain)/ loss arising from change in financial assumptions 504.77 (23.85) Actuarial (gain)/ loss arising from change in experience adjustment 175.69 212.96 Return on plan assets (excluding amounts included in net interest expense) 35.54 17.33 Amount recognised in other comprehensive Income for year ended 712.70 (523.84)
The principal assumptions used in determining obligations for the Company’s gratuity benefit plans are shown below: (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Discount rate (in %) 6.96% 7.81% Salary escalation (in %) 5.00% 5.00% Rate of return on plan assets (in %) 6.08% 6.80% Retirement age (in years) 60.00 60.00 Expected average remaining working lives of employees (in years)* 21.82 22.52 Expected contribution for the next annual reporting period (₹ in lacs) 1,133.69 922.40 * Mortality & Morbidity rates - 100% of IALM (2012-14)
113 NOTES TO FINANCIAL STATEMENTS
A quantitative sensitivity analysis for significant assumption as at March 31, 2020 and March 31, 2019 is as shown below: (₹ in lacs) Gratuity As at March 31, 2020 Discount rate Salary escalation Expected average remaining working lives of employees Sensitivity level + 0.5% - 0.5% + 0.5% - 0.5% - - Impact on defined benefit obligation (306.50) 332.52 337.32 (313.42) Not material Not material
(₹ in lacs) As at March 31, 2019 Discount rate Salary escalation Expected average remaining working lives of employees Sensitivity level + 0.5% - 0.5% + 0.5% - 0.5% - - Impact on defined benefit obligation (231.43) 250.39 256.09 (238.47) Not material Not material The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.
Maturity profile of defined benefit obligation (gratuity) (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Within the next twelve months (next annual reporting period) 392.09 617.96 Between two and five years 2,212.60 1,328.99 Between five and ten years 2,823.80 1,319.46 Beyond ten years 4,819.83 3,776.40 Total expected payments 10,248.32 7,042.81
36. Related Party Transactions & Balances A. Names of related parties having transactions during the year and description of relationship i) Entity having significant influence over the ultimate holding Company Tata Sons Private Limited ii) Ultimate holding Company Tata Steel Limited iii) Holding Company (“Parent Company”) Bamnipal Steel Limited iv) Subsidiary companies: Indian subsidiaries Overseas subsidiaries Bhushan Steel (Orrisa) Ltd. Bhushan Steel (Austrailia) PTY Ltd. Bhushan Steel Madhya Bharat Ltd. Step-down subsidiaries:- Bhushan Steel (South) Ltd. Bowen Energy PTY Ltd., Australia Angul Energy Limited (Formerly Bhushan Energy Limited) (w.e.f. June 01, 2019) Bowen Coal PTY Ltd. Bowen Consolidated PTY Ltd. The Company’s related parties principally consist of its ultimate holding company - (Tata Steel Limited including its subsidiaries, associates and joint ventures), subsidiaries, associates, joint ventures and entity having significant influence over the ultimate holding company (Tata Sons Private Limited).
114 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
The Company routinely enters into transactions with these related parties in the ordinary course of business at market rates and terms. The following table summarises related party transactions and balances included in the financial statements of the Company for the year ended/ as at March 31, 2020 & March 31, 2019. (₹ in lacs Transactions Year ended Ultimate Parent Subsidiary Key Other related Grand Total holding Company companies* Management parties Company Personnel (KMP) Remuneration and perks March 31, 2020 ------(Refer sub-note E) March 31, 2019 - - - 210.66 - 210.66 Directors sitting fees March 31, 2020 - - - 12.00 - 12.00 March 31, 2019 - - - 17.05 - 17.05 Allotment of Shares March 31, 2020 ------March 31, 2019 - 15,888.58 - - - 15,888.58 Issue of Preference Shares March 31, 2020 ------March 31, 2019 1,970,000.00 - - - - - Capital Contribution Received March 31, 2020 ------March 31, 2019 - 2,518,550.72 - - - 2,518,550.72 Inter Corporate Deposit Received March 31, 2020 ------March 31, 2019 - 3,597,369.42 - - - 3,597,369.42 Inter Corporate Deposit Repaid March 31, 2020 ------March 31, 2019 - 3,597,369.42 - - - 3,597,369.42 Interest paid (Refer sub-note C) March 31, 2020 ------March 31, 2019 - 231,623.50 - - - 231,623.50 Novation Loan Received March 31, 2020 ------March 31, 2019 - 10,000.00 - - - 10,000.00 Inter Corporate Deposit Given March 31, 2020 - - 74,500.00 - - 74,500.00 March 31, 2019 ------Inter Corporate Deposit Returned March 31, 2020 - - 42,900.00 - - 42,900.00 March 31, 2019 ------Interest on Inter Corporate Deposits March 31, 2020 - - 3,728.19 - - 3,728.19 Given March 31, 2019 ------Novation Loan Given March 31, 2020 - - 1,000.00 - - 1,000.00 March 31, 2019 ------Novation Loan Repaid March 31, 2020 ------March 31, 2019 - 10,000.00 - - - 10,000.00 Investments in Equity of Subsidairy March 31, 2020 - - 1,000.00 - - 1,000.00 March 31, 2019 ------Purchase of goods/ services (Refer March 31, 2020 106,575.74 - 36,255.67 - 427,178.79 570,010.20 sub-note D) March 31, 2019 39,737.37 - - - 351,844.30 391,581.67 Dividend Received March 31, 2020 ------March 31, 2019 1.35 - - - - 1.35 Sales of goods/ services March 31, 2020 1,549.17 - 2.75 - 39,516.57 41,068.48 March 31, 2019 17,710.84 - - - 6,739.83 24,450.67
115 NOTES TO FINANCIAL STATEMENTS
(₹ in lacs Transactions Year ended Ultimate Parent Subsidiary Key Other related Grand Total holding Company companies* Management parties Company Personnel (KMP) Balances Inter Corporate Deposit given and March 31, 2020 - - 37,328.19 - - 37,328.19 interest thereon March 31, 2019 ------Advance to supplier March 31, 2020 - - - - 27.30 27.30 March 31, 2019 - - - - 22.21 22.21 Payable (Refer sub-note D) March 31, 2020 20,293.56 - 6,608.60 - 136,357.91 163,260.08 March 31, 2019 7,035.27 - 1,279.42 3.92 167,797.36 176,115.96 Receivables March 31, 2020 161.47 - 1.77 - 910.80 1,074.03 March 31, 2019 102.50 - - - - 102.50 Preference shares (Refer sub-note B) March 31, 2020 1,970,000.00 - - - - 1,970,000.00 March 31, 2019 1,970,000.00 - - - - 1,970,000.00 Advance from Customer March 31, 2020 73.27 - - - - 73.27 March 31, 2019 - - - - 53.71 53.71 Dividend Receivables March 31, 2020 6.48 - - - - 6.48 March 31, 2019 6.48 - - - - 6.48 * All the transactions with Subsidiary companies are with Angul Energy Limited (formerly known as Bhushan Energy Limited). . B The Preference shares outstanding include - a) Liability component of preference shares - ₹ 265,911.64 lacs b) Equity component of preference shares - ₹ 1,729,582.05 lacs C. The interest paid excludes interest accrued on the compound financial instruments (being preference shares) amounting to ₹ 26,662.70 lacs (March 31, 2019 : ₹ 657.43 lacs) as the same represents unwinding of interest considered in statement of profit and loss during the year on account of accounting for compound financial instruments in accordance with Ind-AS 32. The same does not represent cash outflow in respect of interest expense payable to the holder of such instrument (being Tata Steel Limited). . D Purchase of goods/services from and payables to other related parties includes:- i) Purchases of goods from TS Global Procurement Pte Limited amounting to ₹ 409,902.21 lacs and ii) Amount payable to TS Global Procurement Pte Limited amounting to ₹ 131,264.73 lacs respectively. E. During the year, the Company has recognised an amount of ₹ Nil lacs (March 31, 2019 : ₹ 210.66 lacs) as remuneration to key management personnel. The details of such remuneration is as below: (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (i) Short-term employee benefits - 210.66 (ii) Post employment benefits - - (iii) Other long-term benefits - - Total expected payments - 210.66
37. Accounting Judgements, Estimates And Assumptions Use of estimates and critical accounting judgements In the preparation of financial statements, the Company makes judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods affected.
116 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
Key source of estimation of uncertainty at the date of standalone financial statements, which may cause material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of impairment, useful lives of property, plant and equipment and intangible assets, valuation of deferred tax assets, provisions, contingent liabilities and fair value measurements of financial instruments as discussed below. Key source of estimation of uncertainty in respect of revenue recognition and employee benefits have been discussed in the respective policies. Significant management judgments (a) Evaluation of indicators for impairment of non-financial assets The evaluation of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets. In view of the impact of COVID-19, the Company has assessed the carrying amounts of non-financial assets. In assessing the recoverable value of such assets, the Company has considered various internal and external information and possible future uncertainties in economic conditions because of the pandemic including lockdowns and supply chain disruptions across various geographies. As per the Company’s current assessment of recoverability of these assets, no significant impact on carrying amounts of these assets is expected. (b) Provisions & contingent liabilities A provision is recognised when the Company has a present obligation as result of a past event and it is probable that the outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised in the financial statements. Contingent assets are neither recognised nor disclosed in the financial statements. (c) Valuation of deferred tax assets Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. (d) Classification of Leases The Company enters into leasing arrangements for various assets. As a lessee, the Company assesses if a contract is or contains a lease at inception of the contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period time in exchange for consideration. The Company recognizes a right-of-use asset and a lease liability at the commencement date, except for short-term leases of twelve months or less and leases for which the underlying asset is of low value, which are expensed in the statement of profit and loss on a straight-line basis over the lease term. Significant management estimates The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur. (a) Allowance for expected credit loss The allowance for expected credit loss reflects management’s estimate of losses inherent in its credit portfolio. This allowance is based on Company’s estimate of the losses to be incurred, which derives from past experience with similar receivables, current and historical past due amounts, write-offs and collections, the careful monitoring of portfolio credit quality and current and projected economic and market conditions. Should the present economic and financial situation persist or even worsen, there could be a further deterioration in the financial situation of the Company’s debtors compared to that already taken into consideration in calculating the allowances recognised in the financial statements.” ) (b Allowance for obsolete and slow-moving inventory The allowance for obsolete and slow-moving inventory reflects management’s estimate of the expected loss in value, and has been determined on the basis of past experience and historical and expected future trends. A worsening of the economic and financial situation could cause a further deterioration in conditions compared to that taken into consideration in calculating the allowances recognised in the financial statements. (c) Useful lives of property, plant and equipment and intangible assets Management reviews its estimate of the useful lives of depreciable/amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utility of certain plant and equipments. (d) Defined benefit obligations (DBO) Management’s estimate of the DBO is based on a number of critical underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.” (e) Impairment of non-financial assets Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. There is significant estimation uncertainty in determining recoverable value.
117 NOTES TO FINANCIAL STATEMENTS
38. Disclosure Of Interest In Subsidiaries, Joint Arrangements And Associates: 1) Disclosure of interest in the following Subsidiaries: (₹ in lacs) Ownership interest of Tata Steel BSL Limited (%) Country of As at As at Incorporation March 31, 2020 March 31, 2019 (i) Bhushan Steel (Orissa) Limited India 99.98% 99.98% (ii) Bhushan Steel Madhya Bharat Limited India 99.98% 99.98% (iii) Bhushan Steel (South) Limited India 100.00% 100.00% (iv) Bhushan Steel (Australia) Pty Limited Australia 100.00% 90.97% (v) Angul Energy Limited (Formerly known as Bhushan Energy Limited)* India 99.99% 47.71% * The Company has invested in equity shares of Angul Energy Limited (Formerly known as Bhushan Energy Limited) and is classified as a subsidiary Company w.e.f June 01, 2019. 2) Disclosure of interest in the following Associates: (₹ in lacs) Ownership interest of Tata Steel BSL Limited (%) Country of As at As at Incorporation March 31, 2020 March 31, 2019 (i) Jawahar Credit & Holdings Private Limited India 39.89% 39.89% (ii) Bhushan Capital & Credit Services Private Limited India 42.58% 42.58% Tata Steel BSL Limited (TSBSL) (formerly known as Bhushan Steel Limited) was being shown as promoter of Jawahar Credit & Holdings Private Limited (“JCHPL”) and M/s Bhushan Capital & Credit Services Private Limited (“BCCSPL”). These are entities connected to the previous management of the Company. The Company has written to JCHPL, BCCSPL and the Registrar of Companies (National capital Territory of Delhi & Haryana) intimating that TSBSL should not be identified as promoter in these two companies.
39. Financial Instruments A. Financial assets and liabilities The carrying amounts of financial instruments by category are as follows: (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Financial assets measured at fair value Investments measured at Fair value through other comprehensive income 66.95 100.87 Fair value through profit and loss - 159,490.28 Derivative assets 5,142.54 214.07 Financial assets measured at amortised cost Trade receivables 70,238.62 69,701.21 Loans 40,107.11 9,799.14 Cash and cash equivalents 72,358.48 27,741.72 Other bank balances 12,598.81 12,689.66 Other financial assets 53,687.62 54,060.75 Total 254,200.13 333,797.69 Financial liabilities measured at fair value Derivative liabilities 763.77 4,141.57 Financial liabilities measured at amortised cost Borrowings (including interest accrued) 1,765,083.73 1,702,813.92 Trade payables 286,971.11 308,896.85 Other financial liabilities 34,678.80 68,437.45 Total 2,087,497.41 2,084,289.79
118 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
B Fair value hierarchy The fair value of financial instruments as referred to in note (A) above has been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities [Level 1 measurements] and lowest priority to unobservable inputs [Level 3 measurements]. The categories used are as follows: Level 1: This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs, other than Level 1 inputs; and Level 3: Inputs which are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a net asset value or valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. B.1 Financial assets and liabilities measured at fair value - recurring fair value measurements (₹ in lacs) As at March 31, 2020 Level 1 Level 2 Level 3 Total Assets at fair value Investments measured at Fair value through other comprehensive income 36.39 - 30.56 66.95 Derivative assets - 5,142.54 - 5,142.54 Liabilities at fair value Derivative liabilities - 763.77 - 763.77
(₹ in lacs) As at March 31, 2019 Level 1 Level 2 Level 3 Total Assets at fair value Investments measured at Fair value through other comprehensive income 70.31 - 30.56 100.87 Fair value through profit and loss 159,490.28 - - 159,490.28 Derivative assets - 214.07 - 214.07 Liabilities at fair value Derivative liabilities - 4,141.57 - 4,141.57 a. Valuation process and technique used to determine fair value of financial assets and liabilities classified under fair value hierarchy other than Level 1:- (i) For investments held by Company as of reporting date, costs of such unquoted equity instruments has been considered as an appropriate estimate of fair value because of wide range of fair value measurements and cost represents the best estimate of fair value within that range. (ii) Derivatives are fair valued using market observable rates and published prices. b. The following table presents the changes in level 3 items for the periods ended March 31, 2020 and March 31, 2019: (₹ in lacs) Unquoted Equity shares As at April 01, 2018 30.60 Change in fair value (0.04) As at March 31, 2019 30.56 Change in fair value - As at March 31, 2020 30.56
119 NOTES TO FINANCIAL STATEMENTS
B.2 Fair value of instruments measured at amortised cost Fair value of financial instruments measured at amortised cost for which fair value is disclosed is as follows, these fair values are calculated using Level 3 inputs: (₹ in lacs) As at March 31, 2020 Carrying value Fair value Loans given 40,107.11 40,107.11 Trade receivables 70,238.62 70,238.62 Cash and Cash equivalents 72,358.48 72,358.48 Other balances with bank 12,598.81 12,598.81 Other financial assets 53,687.62 53,687.62 Borrowings 1,765,083.73 1,691,078.72 Trade payables 286,971.11 286,971.11 Other financial liabilities 34,678.80 34,678.80
(₹ in lacs) As at March 31, 2019 Carrying value Fair value Loans given 9,799.14 9,799.14 Trade receivables 69,701.21 69,701.21 Cash and Cash equivalents 27,741.72 27,741.72 Other balances with bank 12,689.66 12,689.66 Other financial assets 54,060.75 54,060.75 Borrowings 1,702,813.92 1,702,813.92 Trade payables 308,896.85 308,896.85 Other financial liabilities 68,437.45 68,437.45 For the purpose of disclosing fair values of financial instruments measured at amortised cost, the management assessed that fair values of short term financial assets and liabilities approximate their respective carrying amounts largely due to the short-term maturities of these instruments. Further, the fair value of long term financial assets and financial liabilities is included at the amount at which the instrument could be exchanged in a current transaction between the willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values: (i) Long-term fixed-rate receivables are evaluated by the Company based on parameters such as interest rates, individual credit worthiness of the customer and other market risk factors. (ii) Fair value of borrowings has been estimated by discounting expected future cash flows using a discount rate equivalent to the risk-free rate of return adjusted for credit spread considered by lenders for instruments of similar maturities. 40. Financial Risk Management Risk Management
Particulars Exposure arising from Measurement Management Credit risk Cash and cash equivalents, trade Ageing analysis Bank deposits, diversification of asset base, receivables, other balances with banks, credit limits and collateral. loans and other financial assets measured at amortised cost
Liquidity risk Borrowings and other financial liabilities Rolling cash flow Availability of committed credit lines and including trade payables forecasts borrowing facilities Market risk - foreign exchange Recognised financial assets and liabilities Cash flow forecasting Forward contract/hedging, if required not denominated in Indian rupee (INR) and derivative assets and liabilities Market risk - interest rate Long-term borrowings at variable rates Sensitivity analysis Negotiation of terms that reflect the market factors Market risk - price Investments in equity securities Sensitivity analysis Diversification of portfolio, with focus on strategic investments 4,726.31
120 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
The Company’s risk management is carried out by a central treasury department (of the Company) under policies approved by the board of directors. The board of directors provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk and investment of excess liquidity.
A Credit risk Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls. a) Credit risk management The Company assesses and manages credit risk based on internal credit rating system. Internal credit rating is performed for each class of financial instruments with different characteristics. The Company assigns the following credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets.
(i) Low credit risk (ii) Moderate credit risk (iii) High credit risk Based on business environment in which the Company operates, a default on a financial asset is considered when the counter party fails to make payments within the agreed time period as per contract. Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions.
Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or a litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognised in statement of profit and loss. The Company provides for expected credit loss based on the following:
Type of financial asset Measurement Low credit risk Cash and cash equivalents, other bank 12 month expected credit loss balances, derivative assets, loans and other financial assets Moderate credit risk Other financial assets 12 month expected credit loss High credit risk Other financial assets Life time expected credit loss (when there is significant increase in credit risk or objective evidence of impairment) or specific provision, whichever is higher In respect of trade receivables that result from contracts with customers, loss allowance is always measured at lifetime expected credit losses. Exposure to credit risk The exposure of credit risk over the financial assets of the Company except trade receivables has been summarized below*:- (₹ in lacs) As at As at March 31, 2020 March 31, 2019 I. Low credit risk on financial reporting date Loans 40,107.11 9,799.14 Cash and cash equivalents 72,358.48 27,741.72 Other bank balances 12,598.81 12,689.66 Other financial assets 53,687.62 54,060.75 Derivative Assets 5,142.54 214.07 II. High credit risk Loans 7,435.69 16,435.69 Other financial assets 15,019.49 15,350.52 Total 206,349.74 136,291.54 *These represent gross carrying values of financial assets, without deduction for expected credit losses
121 NOTES TO FINANCIAL STATEMENTS
Credit Risk Management policies Cash and cash equivalents, bank deposits and derivatives Credit risk related to cash and cash equivalents, bank deposits and derivatives is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks across the country. Trade receivables Credit risk related to trade receivables are mitigated by taking bank guarantees/letter of credit, from customers where credit risk is high. The Company closely monitors the credit-worthiness of the debtors through internal systems that are configured to define credit limits of customers, thereby, limiting the credit risk to pre-calculated amounts. The Company assesses increase in credit risk on an ongoing basis for amounts receivable that become past due and default is considered to have occurred when amounts receivable become one year past due. Other financial assets measured at amortised cost Other financial assets measured at amortized cost includes loans and advances to employees, security deposits and others. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits. b) Expected credit losses for financial assets i) Financial assets (other than trade receivables) Company provides for expected credit losses on loans and advances by assessing individual financial instruments for expectation of any credit losses. - For cash & cash equivalents and other bank balances - Since the Company deals with only high-rated banks and financial institutions, credit risk in respect of cash and cash equivalents, other bank balances and bank deposits is evaluated as very low. - For loans comprising security deposits paid - Credit risk is considered low because the Company is in possession of the underlying asset or the deposits are made to government authorities. - For other financial assets - Credit risk is evaluated based on Company’s knowledge of the credit worthiness of those parties and loss allowance is measured. Since this category includes loans and receivables of varied natures and purpose, there is no trend that the Company can draw to apply consistently to entire population. For such financial assets, the Company’s policy is to provide for 12 month expected credit losses upon initial recognition and provide for lifetime expected credit losses upon significant increase in credit risk. The reconciliation of expected credit loss recorded for all sub categories of financial assets (other than trade receivables) are disclosed below. (₹ in lacs) As at March 31, 2020 Gross carrying Expected credit Carrying amount amount losses net of impairment provision Loans 47,542.80 7,435.69 40,107.11 Other financial assets 68,707.10 15,019.49 53,687.61
(₹ in lacs) As at March 31, 2019 Gross carrying Expected credit Carrying amount amount losses net of impairment provision Loans 26,234.83 16,435.69 9,799.14 Other financial assets 69,411.27 15,350.52 54,060.75 ii) Trade receivables Refer Note 11 for details B Liquidity risk Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due.
122 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
Management monitors rolling forecasts of the Company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates. a) Financing arrangements Undrawn borrowing facilities at the end of the reporting year to which the Company had access is ₹ 95,394.69 lacs ( March 31, 2019: ₹ 55,728 lacs). b) Maturities of financial liabilities The following table shows a maturity analysis of the anticipated cash flows including interest obligations for the Company’s derivative and non- derivative financial liabilities on an undiscounted basis, which therefore differ from both carrying value and fair value: (₹ in lacs) As at March 31, 2020 Less than 1 year 1-3 year More than 3 years Total Borrowings (excluding lease obligations) 202,441.34 223,090.55 3,699,491.64 4,125,023.53 Lease obligations 34,610.12 68,981.33 181,774.16 285,365.61 Trade payables 286,971.11 - - 286,971.11 Derivative liabilities 763.77 - - 763.77 Other financial liabilities 40,488.46 - 9,207.71 49,696.17 565,274.80 292,071.88 3,890,473.51 4,747,820.19
(₹ in lacs) As at March 31, 2019 Less than 1 year 1-3 year More than 3 years Total Borrowings 148,157.65 337,648.12 4,021,273.09 4,507,078.86 Trade payables 308,896.85 - - 308,896.85 Derivative liabilities 4,141.57 - - 4,141.57 Other financial liabilities 62,648.48 - 19,309.91 81,958.39 523,844.55 337,648.12 4,040,583.00 4,902,075.67 C Market risk a) Foreign currency risk Exposures to currency exchange rates primarily arise from the business transactions carried out by the Company in other than functional currency i.e. INR. Foreign currency denominated financial assets and liabilities which expose the Company to currency risk are as follows. The amounts shown are those reported to key management personnel translated into INR at the closing exchange rate: (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Financial assets - USD 30,120.30 8,219.64 - EURO 3,219.73 409.15 - AED 960.66 33.88 34,300.69 8,662.67 Financial liabilities - USD 141,247.48 177,826.67 - EURO 1,334.95 890.65 - GBP 78.92 39.18 - JPY 88.55 15.90 - SEK 1.41 - - AUD 1,202.02 1,279.42 143,953.33 180,051.82
123 NOTES TO FINANCIAL STATEMENTS
The following table summarises the volatility in the following exchange rates during the year.
As at As at March 31, 2020 March 31, 2019 INR/USD 5.45% 6.82% INR/ EUR 7.57% 7.26% INR/ GBP 10.26% 8.82% INR/ JPY 10.65% 9.32% INR/ SEK 9.34% N.A INR/ AUD 9.48% 9.17% INR/AED 6.49% 9.17% These percentages have been determined based on the average market volatility in exchange rates during the respective years. The sensitivity analysis given in the table below is based on the Company’s foreign currency financial instruments held at each reporting date. The table illustrates the impact of sensitivity over profit/loss and equity in regards to the Company’s financial assets and financial liabilities and the movement of exchange rates of respective foreign currencies against INR, assuming ‘all other variables being constant’. Had the respective foreign currencies strengthened against the INR by the aforementioned percentage of market volatility, then this would have had the following impact on profit/(loss) and equity: (₹ in lacs) As at As at March 31, 2020 March 31, 2019 - USD (6,059.98) (11,559.48) - EURO 142.60 (34.98) - GBP (8.10) (3.46) - JPY (9.43) (1.48) - SEK (0.13) - - AUD (113.90) (117.32) - AED 62.33 3.11 Total (5,986.61) (11,713.61) If the respective functional currencies had depreciated against the INR by the aforementioned percentage of market volatility, then this would have had equal and opposite effect on the basis that all other variables remain constant. b) Interest rate risk i) Liabilities The Company’s policy is to minimise interest rate cash flow risk exposures on external financing. At March 31, 2020 and March 31, 2019, the Company is exposed to changes in interest rates through bank borrowings carrying variable interest rates. Interest rate risk exposure Below is the overall exposure of the Company to interest rate risk: (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Variable rate borrowing 1,242,244.52 1,384,542.07 Other borrowings# 522,839.21 318,271.85 Total borrowings 1,765,083.73 1,702,813.92 Amount disclosed under other current financial liabilities (Refer Note - 16C) 22,947.18 5,583.18 Amount disclosed under borrowings (Refer Note - 16A) 1,742,136.55 1,697,230.74 # Other borrowings of the Company include such borrowings which do not carry a variable interest rate and hence not exposed to the interest rate volatility.
124 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
(₹ in lacs) As at As at March 31, 2020 March 31, 2019 Interest sensitivity* Interest rates – increase by 100 basis points (March 31, 2019 100 bps) 13,279.41 13,845.42 Interest rates – decrease by 100 basis points (March 31, 2019 100 bps) (13,279.41) (13,845.42) * Holding all other variables constant ii) Assets The Company’s interest bearing financial assets consist of Inter Company deposits and fixed deposits which are carried at amortised cost and are fixed rate deposits. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates. c) Price risk The Company is not an active investor in equity markets; It continues to hold certain investments in equity for long term value accretion which are accordingly measured at fair value through other comprehensive income. The value of investments in such equity instruments as at March 31, 2020 is ₹ 66.95 lacs (2019 – ₹ 107.67 lacs). Accordingly, fair value fluctuations arising from market volatility is recognised in Other Comprehensive Income. The Company also invests in mutual fund schemes of leading fund houses. Such investments are susceptible to market price risks that arise mainly from changes in interest rate which may impact the return and value of such investments. However, given the relatively short tenure of underlying portfolio of the mutual fund schemes in which the Company has invested, such price risk is not significant. 41. Capital Management The Company’ s capital management objectives are : - to ensure the Company’s ability to continue as a going concern - to provide an adequate return to shareholders The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company. Net debt includes interest bearing borrowings less cash and cash equivalents, other bank balances (including non-current and earmarked balances) and current investments. Management assesses the Company’s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Company’s various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt. (a) Debt equity ratio (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Total debts 1,692,725.24 1,515,581.93 Total equity 1,765,627.09 1,831,291.18 Net debt to equity ratio 0.96 0.83
(b) Dividend - During the year ended March 31, 2020, no dividend has been recognised as distributions to equity shareholders (March 31, 2019: ₹ Nil)
125 NOTES TO FINANCIAL STATEMENTS
42. In compliance of Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 the required information is given as under:
As at As at March 31, 2020 March 31, 2019 I. Loans and Advances in the nature of loans: A) To Subsidiary Companies - Angul Energy Limited (formerly known as Bhushan Energy Limited) 32,600.00 - B) To Associates /Joint Venture - - C) To Firms/Companies in which directors are interested - - D) Where there is no repayment schedule or repayment beyond seven year or no interest or - - interest below section 186 of Companies Act. II. Investment by the loanee (as detailed above) in the shares of TSBSL and its subsidiaries - - Total 32,600.00 - 43. During the previous year, Corporate insolvency resolution process (“CIRP”) was initiated pursuant to a petition filed by one of its financial creditors, State Bank of India (“SBI”) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”). SBI filed the petition before the National Company Law Tribunal, Principal Bench, New Delhi (“Adjudicating Authority”) vide Company Petition No. (IB)-201 (PB)/2017 on July 03, 2017. The Adjudicating Authority admitted the said petition and the CIRP for the Company commenced on July 26, 2017. The CIRP culminated into the approval of the Resolution Plan submitted by Tata Steel Ltd (“TSL”) by the Adjudicating Authority vide its order dated May 15, 2018 (“Order”). Accordingly, keeping in view the Order dated May 15, 2018: i. On May 18, 2018 (“Effective Date”), Bamnipal Steel Limited, (wholly owned subsidiary of TSL) (“BNPL”) deposited ₹ 3,513,258 lacs, for subscription to equity shares of the Company, payment of CIRP cost and employee related dues, and payment to financial creditors in terms of the approved Resolution Plan. ii. The reconstituted board of directors in its meeting held on May 17, 2018 approved allotment of 794,428,986 fully paid equity shares of ₹ 2 each to BNPL, aggregating to ₹ 15,888.58 lacs, representing 72.65% of the equity share capital of the Company. iii. The remaining amount of ₹ 3,497,369.42 lacs was treated as Inter Corporate Deposits. . iv Out of the amount received from BNPL, ₹ 3,258 lacs were utilised towards payment of CIRP cost and employee related dues. The balance amount of ₹ 35,10,000 lacs were paid to the Financial Creditors between May 18, 2018 to May 31, 2018. . v The financial creditors invoked the pledge created in their favor by the erstwhile promoters of the Company over 67,654,810 equity shares of the Company held by them (“Pledged Shares”). The market value of Pledged Shares amounted to ₹ 18,157.58 lacs and, the same has been recorded as an exceptional item in these financial statements. Refer Note 29 for the details of exceptional items. vi. The eligible financial creditors were further allotted 72,496,036 equity shares at face value of ₹ 2 each aggregating to ₹ 1,449.92 lacs. vii. After adjusting the amounts as mentioned in para no. v and vi above, the balance due to Financial Creditors, amounting to ₹ 2,528,550.72 lacs were novated to BNPL for an aggregate consideration of ₹ 10,000 lacs. BNPL, in its capacity as the promoters of TSBSL, has waived off the debts less cost of novation, and the same has been considered as capital contribution. Refer Note 15 for details of other equity. viii. 10% Redeemable Cumulative Preference shares of ₹ 100 each amounting to ₹ 242,557.39 lacs were redeemed for a total sum of ₹ 4,700/- only. Gain arising out of redemption of such preference shares has been recorded as an exceptional item in these financial statements. Refer Note 29 for the details of exceptional items. ix. In respect of Operational Creditors, the Company has provided for liabilities based on the amount of claims admitted pursuant to CIRP. Further, the Company had proposed to pay an amount of ₹ 120,000 lacs to Operational Creditors, in the manner mentioned in the Resolution Plan, within 12 months from the closing date (May 18, 2018) i.e. on or before May 17, 2019. Accordingly, the Company has recognised a gain of ₹ 15,359.67 lacs (March 31, 2019 - ₹ 55,212.35 lacs) on account of extinguishment of such financial liabilities as an exceptional item in these financial statements. Refer Note 29 for the details of exceptional items. 44. The Company is eligible under Package Scheme of Incentives, 1993, and accordingly as per the provisions of the Scheme the Company has obtained eligibility certificate from Directorate of Industries. As per the Scheme the Company has an option to defer the payment of sales tax for a period of fourteen years upto a specified limit (twenty one years in case the specified limit is not availed in fourteen years). The said tax collected shall be paid after fourteen years in five annual equal instalments and has been recognised as deferred sales tax liability, which as at March 31, 2020 amounts to ₹ 1,802.35 lacs (March 31, 2019: ₹ 4,385.37 lacs). Post-introduction of GST, the Maharashtra government modified the scheme, whereby the Company needs to deposit the GST & claim refunds of the same. During the year, the Company has recognised ₹ 9,599.10 lacs as an income (Refer Note 20) on account of such scheme.
126 Statutory Reports Financial Statements
NOTES TO FINANCIAL STATEMENTS
45. Due to outbreak of Covid-19 globally and in India, the Company had on March 30, 2020 made a disclosure in terms of Regulation 30 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015. Further, the Company has carried out its initial assessment of the likely adverse impact on economic environment in general and financial risk because of Covid-19. The Company is in the business of manufacturing steel/steel products, which are connected with activities that are fundamental to the Indian economy. The demand for the Company’s products are expected to be lower in the short term, though the same is not likely to have a continuing impact on the business of the Company. Further, the Management believes that there may not be significantimpact of Covid-19 pandemic on the financial position and performance of the Company, in the long-term.
As per our report of even date attached. For and on behalf of the Board of Directors For Walker Chandiok & Co LLP sd/- sd/- sd/- Chartered accountants Mr. T. V. Narendran Mr. Krishnava Dutt Ms. Neera Saggi Firm Registration No. : 001076N/N500013 Chairman (DIN: 03083605) Independent Director (DIN: 02792753) Independent Director (DIN: 00501029) sd/- sd/- sd/- sd/- Siddharth Talwar Mr. Shashi Kant Maudgal Mr. Srikumar Menon Mr. Anand Sen Partner Independent Director (DIN: 00918431) Independent Director (DIN: 00470254) Director (DIN: 00237914) Membership No. 512752 sd/- sd/- sd/- Mr. Koushik Chaterjee Mr. Rajeev Singhal Mr. Sanjib Nanda Director (DIN: 00004989) Managing Director (DIN: 02719570) Chief Financial Officer sd/- Nisha Anil Seth Place: Faridabad Company Secretary Date: May 20, 2020 (Membership No. 27019)
127 INDEPENDENT AUDITOR’S REPORT
To the Members of Tata Steel BSL Limited (Formerly known as Bhushan Basis for Opinion Steel Limited) 3. We conducted our audit in accordance with the Standards on Auditing Report on the Audit of the Consolidated Financial Statements specified under section 143(10) of the Act. Our responsibilities under Opinion those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. 1. We have audited the accompanying consolidated financial statements We are independent of the Company in accordance with the Code of Ethics of Tata Steel BSL Limited (Formerly known as Bhushan Steel Limited) issued by the Institute of Chartered Accountants of India (‘ICAI’) together (‘the Holding Company’) and its subsidiaries (the Holding Company with the ethical requirements that are relevant to our audit of the financial and its subsidiaries together referred to as ‘the Group’), which comprise statements under the provisions of the Act and the rules thereunder, and the Consolidated Balance Sheet as at 31 March 2020, the Consolidated we have fulfilled our other ethical responsibilities in accordance with Statement of Profit and Loss (including Other Comprehensive Income), these requirements and the Code of Ethics. We believe that the audit the Consolidated Cash Flow Statement and the Consolidated Statement evidence we have obtained and the audit evidence obtained by the other of Changes in Equity for the year then ended, and a summary of the auditors in terms of their reports referred to in paragraph 15 of the Other significant accounting policies and other explanatory information. Matters section below, is sufficient and appropriate to provide a basis for our opinion. 2. In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the report Key Audit Matters of the other auditors on separate financial statements and on the other financial information of the subsidiary, the aforesaid consolidated 4. Key audit matters are those matters that, in our professional judgment financial statements give the information required by the Companies and based on the consideration of the report of the other auditors on Act, 2013 (‘Act’) in the manner so required and give a true and fair view separate financial statements and on the other financial information of in conformity with the accounting principles generally accepted in India the subsidiary, were of most significance in our audit of the consolidated including Indian Accounting Standards (‘Ind AS’) specified under section financial statements of the current period. These matters were addressed 133 of the Act, of the consolidated state of affairs (consolidated financial in the context of our audit of the consolidated financial statements as position) of the Group as at 31 March 2020, and its consolidated loss a whole, and in forming our opinion thereon, and we do not provide a (consolidated financial performance including other comprehensive separate opinion on these matters. income), its consolidated cash flows and the consolidated changes in equity for the year ended on that date.
5. We have determined the matters described below to be the key audit matters to be communicated in our report:
Key audit matter How our audit addressed the key audit matter Recoverability of amounts paid against on-going litigation We have performed the following procedures, among others, to test the recoverability of payments made by the Holding Company in relation to Refer Note 32A to the consolidated financial statements. litigations instituted against it prior to the approval of the BSL Resolution Prior to the approval of the resolution plan (‘the BSL Resolution Plan’) Plan: under the Corporate Insolvency Resolution Process of the Insolvency and Verified the underlying documents related to litigations and other Bankruptcy Code, 2016 on 15 May 2018, the Holding Company was a party ● correspondences with the statutory authorities; to certain litigations. Pursuant to the approval of the BSL Resolution Plan, it was determined that no amounts are payable in respect of those litigations ● Involved direct and indirect tax specialists to review the process used as they stand extinguished. by the management to determine estimates and to test the judgments applied by management in developing the accounting estimates; The Holding Company had also made certain payments to the relevant authorities in respect of those litigations which were presented as ● Assessed management’s estimate of recoverability, supported by recoverable under “Other non-current assets” in the consolidated financial an opinion obtained by the management from a legal expert, by statements. determining whether; The estimates related to expected outcome of litigations and recoverability o The method of measurement used is appropriate in the of payments made in respect thereof have high degree of inherent circumstances; and uncertainty due to insufficient judicial precedents in India in respect o The assumptions used by management are reasonable in light of of disposal of litigations involving companies admitted to Corporate the measurement principles of Ind AS. Insolvency Resolution Process. ● Determined whether the methods for making estimates have been The application of significant judgment in the aforementioned matter applied consistently; required substantial involvement of senior personnel on the audit engagement including individuals with expertise in tax related matters. ● Evaluated whether the accounting principles applied by the management fairly present the amounts recoverable from relevant authorities in financial statements in accordance with the principles of Ind AS.
128 Statutory Reports Financial Statements
Key audit matter How our audit addressed the key audit matter Acquisition of Angul Energy Limited (formerly known as Bhushan We have performed the following procedures, among others, to examine Energy Limited) whether the acquisition of Angul Energy Limited (formerly known as Bhushan Energy Limited) was appropriately accounted for and presented in Refer Note 38C to the consolidated financial statements. the financial statements: On 1 June 2019, the Holding Company acquired Angul Energy Limited ● Assessed and tested the design and operating effectiveness of the (formerly known as Bhushan Energy Limited) for a purchase consideration of Holding Company’s key controls over the accounting of business INR 75,500 lakhs, in accordance with the resolution plan (‘the BEL Resolution combination. Plan’) under the Corporate Insolvency Resolution Process of the Insolvency and Bankruptcy Code, 2016. ● Reviewed and obtained understanding of the terms of the BEL Resolution Plan to determine the assets and liabilities acquired by The acquisition has been accounted for as a business combination under the Holding Company and the value of the consideration paid by the Ind AS 103, Business Combinations and includes a number of significant Holding Company. and complex judgments in determination of the fair value of the identifiable assets acquired and liabilities assumed. ● Assessed the competence, capabilities, objectivity and independence of management’s expert; The acquisition resulted in recognition of capital reserve amounting to INR Involved auditor’s valuation specialists to evaluate the reasonableness 804 Crores, as disclosed in the aforesaid note. ● of the methodology and key assumptions used by management and Considering the materiality of the impact on the accompanying consolidated its expert for determination of fair value of the identifiable assets financial statements and aforementioned significant judgements and acquired and liabilities assumed; assumptions involved, which required substantial involvement of senior ● Performed enquiries with the management’s experts and inspected personnel including experts in valuation, this has been considered as a key relevant supporting documents to test the underlying data used in audit matter. valuation of tangible assets; ● Evaluated the appropriateness of the accounting in accordance with Ind AS 103, including computation of the capital reserve and disclosures in the financial statements and assessed the completeness and mathematical accuracy of the relevant disclosures.
Information other than the Consolidated Financial Statements and is also responsible for ensuring accuracy of records including financial Auditor’s Report thereon information considered necessary for the preparation of consolidated 6. The Holding Company’s Board of Directors is responsible for the other financial statements. Further, in terms of the provisions of the Act, the information. The other information comprises the information included respective Board of Directors/management of the companies included in the Annual Report, but does not include the consolidated financial in the Group, covered under the Act, are responsible for maintenance statements and our auditor’s report thereon. The Annual Report is of adequate accounting records in accordance with the provisions of expected to be made available to us after the date of this auditor’s report. the Act for safeguarding the assets and for preventing and detecting frauds and other irregularities; selection and application of appropriate Our opinion on the consolidated financial statements does not cover accounting policies; making judgments and estimates that are reasonable the other information and we will not express any form of assurance and prudent; and design, implementation and maintenance of adequate conclusion thereon. internal financial controls, that were operating effectively for ensuring the In connection with our audit of the consolidated financial statements, accuracy and completeness of the accounting records, relevant to the our responsibility is to read the other information identified above preparation and presentation of the financial statements that give a true when it becomes available and, in doing so, consider whether the other and fair view and are free from material misstatement, whether due to information is materially inconsistent with the consolidated financial fraud or error. These financial statements have been used for the purpose statements or our knowledge obtained in the audit or otherwise appears of preparation of the consolidated financial statements by the Directors of to be materially misstated. the Holding Company, as aforesaid. When we read the Annual Report, if we conclude that there is a material 8. In preparing the consolidated financial statements, the respective Board misstatement therein, we are required to communicate the matter to of Directors of the companies included in the Group are responsible those charged with governance. for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the Responsibilities of Management and Those Charged with Governance going concern basis of accounting unless the Board of Directors either for the Consolidated Financial Statements intends to liquidate the Group or to cease operations, or has no realistic 7. The Holding Company’s Board of Directors is responsible for the matters alternative but to do so. stated in section 134(5) of the Act with respect to the preparation of 9. Those Board of Directors are also responsible for overseeing the financial these consolidated financial statements that give a true and fair view reporting process of the companies included in the Group. of the consolidated state of affairs (consolidated financial position), Auditor’s Responsibilities for the Audit of the Consolidated Financial consolidated profit or loss (consolidated financial performance including Statements other comprehensive income), consolidated changes in equity and consolidated cash flows of the Group in accordance with the accounting 10. Our objectives are to obtain reasonable assurance about whether the principles generally accepted in India, including the Ind AS specified consolidated financial statements as a whole are free from material under section 133 of the Act. The Holding Company’s Board of Directors misstatement, whether due to fraud or error, and to issue an auditor’s
129 report that includes our opinion. Reasonable assurance is a high unless law or regulation precludes public disclosure about the matter or level of assurance, but is not a guarantee that an audit conducted in when, in extremely rare circumstances, we determine that a matter should accordance with Standards on Auditing will always detect a material not be communicated in our report because the adverse consequences of misstatement when it exists. Misstatements can arise from fraud or error doing so would reasonably be expected to outweigh the public interest and are considered material if, individually or in the aggregate, they could benefits of such communication. reasonably be expected to influence the economic decisions of users Other Matter taken on the basis of these consolidated financial statements. 11. As part of an audit in accordance with Standards on Auditing, we exercise 15. We did not audit the financial statements of one subsidiary, whose professional judgment and maintain professional skepticism throughout financial statements reflects total assets of ₹ 1,203.63 crores and net the audit. We also: assets of ₹ 817.11 crores as at 31 March 2020, total revenues of ₹ 355.54 crores and cash outflows (net) amounting to ₹ 237.26 crores for the Identify and assess the risks of material misstatement of the ● period 01 June 2019 (being the date of its acquisition by the Company) consolidated financial statements, whether due to fraud or error, to 31 March 2020, as considered in the consolidated financial statements, design and perform audit procedures responsive to those risks, whose financial statements have not been audited by us. These financial and obtain audit evidence that is sufficient and appropriate to statements have been audited by other auditors whose report has been provide a basis for our opinion. The risk of not detecting a material furnished to us by the management and our opinion on the consolidated misstatement resulting from fraud is higher than for one resulting financial statements, in so far as it relates to the amounts and disclosures from error, as fraud may involve collusion, forgery, intentional included in respect of this subsidiary, and our report in terms of sub- omissions, misrepresentations, or the override of internal control. section (3) of Section 143 of the Act, in so far as it relates to the aforesaid ● Obtain an understanding of internal control relevant to the audit subsidiary, is based solely on the report of the other auditors. in order to design audit procedures that are appropriate in the Our opinion above on the consolidated financial statements, and our circumstances. Under section 143(3)(i) of the Act, we are also report on other legal and regulatory requirements below, are not modified responsible for expressing our opinion on whether the Holding in respect of the above matter with respect to our reliance on the work Company have adequate internal financial controls system in place done by and the report of the other auditors. and the operating effectiveness of such controls. ● Evaluate the appropriateness of accounting policies used and the 16. We did not audit the financial information of seven subsidiaries, whose reasonableness of accounting estimates and related disclosures financial information reflects total assets of ₹12.30 crores and net assets made by management. of ₹ (16.23) crores as at 31 March 2020, total revenues of ₹ Nil and cash outflows (net) amounting to ₹ 0.02 crores for the year ended on that Conclude on the appropriateness of management’s use of the ● date, as considered in the consolidated financial statements.. These going concern basis of accounting and, based on the audit evidence financial statements are unaudited and have been furnished to us by the obtained, whether a material uncertainty exists related to events management and our opinion on the consolidated financial statements, or conditions that may cast significant doubt on the ability of the and matters identified and disclosed under key audit matters section Group to continue as a going concern. If we conclude that a material above and our report in terms of sub-section (3) of Section 143 of the uncertainty exists, we are required to draw attention in our auditor’s Act in so far as it relates to the aforesaid subsidiaries, are based solely on report to the related disclosures in the consolidated financial such unaudited financial information. In our opinion and according to statements or, if such disclosures are inadequate, to modify our the information and explanations given to us by the management, these opinion. Our conclusions are based on the audit evidence obtained financial information are not material to the Group. up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going Our opinion above on the consolidated financial statements, and our concern. report on other legal and regulatory requirements below, are not modified in respect of the above matter with respect to our reliance on the financial ● Evaluate the overall presentation, structure and content of the information certified by the management. consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the Report on Other Legal and Regulatory Requirements underlying transactions and events in a manner that achieves fair presentation. 17. As required by section 197(16) of the Act, based on our audit and on the consideration of the report of the other auditors, referred to in 12. We communicate with those charged with governance regarding, among paragraph 15, on separate financial statements of a subsidiary, we report other matters, the planned scope and timing of the audit and significant that the Holding Company and the subsidiary Company covered under audit findings, including any significant deficiencies in internal control the Act paid remuneration to their respective directors during the year that we identify during our audit. in accordance with the provisions of and limits laid down under section 13. We also provide those charged with governance with a statement 197 read with Schedule V to the Act. Further, as stated in paragraph 16, that we have complied with relevant ethical requirements regarding financial statements of three subsidiary companies, covered under the Act independence, and to communicate with them all relationships and other are unaudited and have been furnished to us by the management, and as matters that may reasonably be thought to bear on our independence, certified by the management, such companies have not paid or provided and where applicable, related safeguards. for any managerial remuneration during the year.
14. From the matters communicated with those charged with governance, we 18. As required by Section 143 (3) of the Act, based on our audit and on the determine those matters that were of most significance in the audit of the consideration of the report of the other auditors on separate financial consolidated financial statements of the current period and are therefore statements and other financial information of the subsidiary, we report, to the key audit matters. We describe these matters in our auditor’s report the extent applicable, that:
130 Statutory Reports Financial Statements
a) we have sought and obtained all the information and explanations i. The consolidated financial statements disclose the impact which to the best of our knowledge and belief were necessary for of pending litigations on the consolidated financial position the purpose of our audit of the aforesaid consolidated financial of the Group as detailed in Note 32A to the consolidated statements; financial statements; ) b in our opinion, proper books of account as required by law relating ii. the Holding Company and such subsidiary did not have any to preparation of the aforesaid consolidated financial statements long-term contracts including derivative contracts for which have been kept so far as it appears from our examination of those there were any material foreseeable losses as at 31 March books and the reports of the other auditors; 2020; c) the consolidated financial statements dealt with by this report are iii. there has been no delay in transferring amounts, required in agreement with the relevant books of account maintained for the to be transferred, to the Investor Education and Protection purpose of preparation of the consolidated financial statements; Fund by the Holding Company, and such subsidiary Company during the year ended 31 March 2020; d) in our opinion, the aforesaid consolidated financial statements comply with Ind AS specified under section 133 of the Act; iv. the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the e) On the basis of the written representations received from the period from 8 November 2016 to 30 December 2016, which directors of the Holding Company and taken on record by the Board are not relevant to these consolidated financial statements. of Directors of the Holding Company and the reports of the statutory Hence, reporting under this clause is not applicable. auditors of its subsidiary Company covered under the Act, none of the directors of the Holding Company and such subsidiary Company are disqualified as on 31 March 2020 from being appointed as a For Walker Chandiok & Co LLP director in terms of Section 164(2) of the Act. Chartered Accountants ) f With respect to the adequacy of the internal financial controls Firm’s Registration No.: 001076N/N500013 over financial reporting of the Holding Company and a subsidiary Company, covered under the Act, and the operating effectiveness of such controls, refer to our separate report in ‘Annexure A’; sd/- g) With respect to the other matters to be included in the Auditor’s Siddharth Talwar Report in accordance with rule 11 of the Companies (Audit and Partner Auditors) Rules, 2014 (as amended), in our opinion and to the best of Membership No.: 512752 our information and according to the explanations given to us and UDIN: 20512752AAAABX1165 based on the consideration of the report of the other auditors on separate financial statements as also the other financial information Place: Faridabad of the subsidiary: Date: 20 May 2020
131 ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE TO THE MEMBERS OF TATA STEEL BSL LIMITED (FORMERLY KNOWN AS BHUSHAN STEEL LIMITED) ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020
Annexure A of IFCoFR includes obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design Independent Auditor’s Report on the Internal Financial Controls under and operating effectiveness of internal control based on the assessed risk. Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the The procedures selected depend on the auditor’s judgement, including Act’) the assessment of the risks of material misstatement of the financial 1. In conjunction with our audit of the consolidated financial statements of statements, whether due to fraud or error. Tata Steel BSL Limited (formerly known as Bhushan Steel Limited) (‘the 5. We believe that the audit evidence we have obtained and the audit Holding Company’) and its subsidiaries (the Holding Company and its evidence obtained by the other auditors in terms of their report referred subsidiaries together referred to as ‘the Group’), as at and for the year to in the Other Matter paragraph below, is sufficient and appropriate ended 31 March 2020, we have audited the internal financial controls over to provide a basis for our audit opinion on the IFCoFR of the Holding financial reporting (‘IFCoFR’) of the Holding Company and its subsidiary Company and its subsidiary companies, as aforesaid. companies, which are companies covered under the Act, as at that date. Meaning of Internal Financial Controls over Financial Reporting Responsibilities of Management and Those Charged with Governance for Internal Financial Controls 6. A Company’s IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the 2. The respective Board of Directors of the Holding Company and its preparation of financial statements for external purposes in accordance subsidiary companies, which are companies covered under the Act, are with generally accepted accounting principles. A Company’s IFCoFR responsible for establishing and maintaining internal financial controls include those policies and procedures that (1) pertain to the maintenance based on the internal control over financial reporting criteria established of records that, in reasonable detail, accurately and fairly reflect the by the respective companies considering the essential components of transactions and dispositions of the assets of the Company; (2) provide internal control stated in the Guidance note on Audit of Internal Financial reasonable assurance that transactions are recorded as necessary to Controls over Financial Reporting (‘the Guidance Note’) issued by the permit preparation of financial statements in accordance with generally Institute of Chartered Accountants of India (‘ICAI’). These responsibilities accepted accounting principles, and that receipts and expenditures of include the design, implementation and maintenance of adequate the Company are being made only in accordance with authorisations of internal financial controls that were operating effectively for ensuring management and directors of the Company; and (3) provide reasonable the orderly and efficient conduct of its business, including adherence assurance regarding prevention or timely detection of unauthorised to the Company’s policies, the safeguarding of its assets, the prevention acquisition, use, or disposition of the Company’s assets that could have a and detection of frauds and errors, the accuracy and completeness of material effect on the financial statements. the accounting records, and the timely preparation of reliable financial information, as required under the Act. Inherent Limitations of Internal Financial Controls over Financial Reporting Auditor’s Responsibility for the Audit of the Internal Financial Controls 7. Because of the inherent limitations of IFCoFR, including the possibility of collusion or improper management override of controls, material 3. Our responsibility is to express an opinion on the IFCoFR of the Holding misstatements due to error or fraud may occur and not be detected. Company and its subsidiary companies as aforesaid, based on our audit. Also, projections of any evaluation of the IFCoFR to future periods are We conducted our audit in accordance with the Standards on Auditing subject to the risk that the IFCoFR may become inadequate because of issued by the ICAI and deemed to be prescribed under Section 143(10) of changes in conditions, or that the degree of compliance with the policies the Act, to the extent applicable to an audit of IFCoFR, and the Guidance or procedures may deteriorate. Note issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit Opinion to obtain reasonable assurance about whether adequate IFCoFR were 8. In our opinion and based on the consideration of the reports of the other established and maintained and if such controls operated effectively in all auditors on IFCoFR of a subsidiary Company, the Holding Company and material respects. such subsidiary Company, which are companies covered under the Act, 4. Our audit involves performing procedures to obtain audit evidence about have in all material respects, adequate internal financial controls over the adequacy of the IFCoFR and their operating effectiveness. Our audit financial reporting and such controls were operating effectively as at
132 Statutory Reports Financial Statements
31 March 2020, based on the internal control over financial reporting under Section 143(3)(i) of the Act in so far as it relates to such subsidiary criteria established by the respective companies considering the essential Company is based solely on the report of the auditors of such Company. components of internal control stated in the Guidance note issued by the Our opinion is not modified in respect of this matter with respect to our ICAI. reliance on the work done by and on the report of the other auditors.
Other matter For Walker Chandiok & Co LLP Chartered Accountants 9. We did not audit the IFCoFR in so far as it relates to one subsidiary Firm’s Registration No.: 001076N/N500013 Company, which is a Company covered under the Act, whose financial statements reflect total assets ₹ 1,203.63 crores and net assets of ₹ 817.11 crores as at 31 March 2020, total revenues of ₹ 355.54 crores and cash sd/- outflows (net) amounting to ₹ 237.26 crores for the period 01 June 2019 Siddharth Talwar (being the date of its acquisition by the Holding Company) to 31 March Partner 2020, as considered in the consolidated financial statements. The IFCoFR Membership No.: 512752 in so far as it relates to such subsidiary Company have been audited by UDIN: 20512752AAAABX1165 other auditors whose report has been furnished to us by the management and our report on the adequacy and operating effectiveness of the IFCoFR Place: Faridabad for the Holding Company and its subsidiary Company, as aforesaid, Date: 20 May 2020
133 CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2020 (₹ in lacs) Note As at As at March 31, 2020 March 31, 2019 ASSETS I Non-current assets (a) Property, plant and equipment 3A 2,903,487.76 2,915,441.02 (b) Right-of-use assets 3B 71,818.04 - (b) Capital work-in-progress 3C 68,171.13 115,414.24 (c) Intangible assets 4 2,080.16 17.06 (d) Investments accounted using equity method 6A - - (e) Financial assets (i) Investments 6A 137.08 100.87 (ii) Loans 6B 5,014.22 4,646.28 (iii) Other financial assets 6C 41,763.59 44,594.86 (f) Other non-current assets 8 61,263.50 80,358.71 (g) Income tax assets 9 4,256.10 3,181.98 Total non current assets 3,157,991.58 3,163,755.02 II Current assets (a) Inventories 10 483,949.88 458,188.14 (b) Financial assets (i) Investments 6A - 159,490.28 (ii) Trade receivables 11 70,238.62 69,701.21 (iii) Cash and cash equivalents 12 72,483.39 27,765.11 (iv) Other balances with banks 13 12,848.81 12,689.66 (v) Loans 6B 2,559.03 5,152.86 (vi) Derivative assets 7 5,142.54 214.07 (vii) Other financial assets 6C 9,170.70 9,465.89 (c) Other current assets 8 65,985.37 52,178.36 Total current assets 722,378.34 794,845.58 Total assets 3,880,369.92 3,958,600.60 EQUITY AND LIABILITIES I Equity (a) Equity share capital 14 21,868.80 21,868.80 (b) Other equity 15 1,826,681.11 1,810,128.78 (c) Non-controlling interests 2.21 (150.15) Total Equity 1,848,552.12 1,831,847.43 II Non-current liabilities (a) Financial liabilities (i) Borrowings 16A 1,573,257.18 1,697,230.74 (ii) Other financial liabilities 16C 3,620.35 5,788.97 (b) Provisions 18 7,630.35 5,679.77 (c) Deferred Income 19 189.21 227.69 Total non current liabilities 1,584,697.09 1,708,927.17 III Current liabilities (a) Financial liabilities (i) Borrowings 16A 89,376.64 713.77 (ii) Trade payables - Total outstanding dues of micro enterprises and small enterprises 16B 5,550.50 1,254.42 - Total outstanding dues of creditors other than micro enterprises and small 16B 277,283.19 307,664.51 enterprises (iii) Derivative liabilities 7 763.77 4,141.57 (iv) Other financial liabilities 16C 50,818.22 66,954.54 (b) Other current liabilities 17 23,121.15 36,803.16 (c) Provisions 18 207.24 294.03 Total current liabilities 447,120.71 417,826.00 Total equity and liabilities 3,880,369.92 3,958,600.60 The accompanying notes forming part of consolidated financial statements 1-45 As per our report of even date attached. For and on behalf of the Board of Directors For Walker Chandiok & Co LLP sd/- sd/- sd/- Chartered accountants Mr. T. V. Narendran Mr. Krishnava Dutt Ms. Neera Saggi Firm Registration No. : 001076N/N500013 Chairman (DIN: 03083605) Independent Director (DIN: 02792753) Independent Director (DIN: 00501029)
sd/- sd/- sd/- sd/- Siddharth Talwar Mr. Shashi Kant Maudgal Mr. Srikumar Menon Mr. Anand Sen Partner Independent Director (DIN: 00918431) Independent Director (DIN: 00470254) Director (DIN: 00237914) Membership No. 512752 sd/- sd/- sd/- Mr. Koushik Chaterjee Mr. Rajeev Singhal Mr. Sanjib Nanda Director (DIN: 00004989) Managing Director (DIN: 02719570) Chief Financial Officer
sd/- Nisha Anil Seth Place: Faridabad Company Secretary Date: May 20, 2020 (Membership No. 27019) 134 Statutory Reports Financial Statements
CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2020 (₹ in lacs) Note Year ended Year ended March 31, 2020 March 31, 2019 I Income (a) Revenue from operations 20 1,819,914.18 2,089,160.35 (b) Other income 21 7,049.53 13,244.42 Total income 1,826,963.71 2,102,404.77 II Expenses: (a) Raw materials consumed 22 1,077,532.07 1,160,305.46 (b) Purchases of finished, semi-finished and other products 23 287.56 685.44 (c) Changes in inventories of finished goods, work-in-progress and stock-in-trade 24 (25,379.95) (27,818.05) (d) Employee benefit expense 25 40,902.39 36,250.56 (e) Finance costs 26 165,476.54 375,217.88 (f) Depreciation and amortisation expense 27 146,340.68 144,173.92 (g) Other expenses 28 491,555.15 540,005.58 Total expenses 1,896,714.44 2,228,820.79 III Profit/(loss) before exceptional items and tax (I-II) (69,750.73) (126,416.02) IV Exceptional items 29 6,901.84 297,600.67 V Profit/(loss) before tax (III+IV) (62,848.89) 171,184.65 VI Tax expense: (a) Current tax - - (b) Deferred tax - - Total tax expense - - VII Profit/ (loss) for the year (V-VI) (62,848.89) 171,184.65 VIII Profit/(loss) for the year attributable to: Owners of the Company (62,848.89) 171,188.91 Non-controlling interests 0.00 (4.26) IX Other comprehensive income (a) Items that will not be reclassified to profit or loss (823.26) 517.03 (i) Remeasurement gains/(losses) on post employment defined benefit plans (732.44) 523.83 (ii) Fair value changes of investments in equity shares (90.82) (6.80) (b) Income tax relating to items that will not be reclassified to profit or loss - - (c) Items that will be reclassified to profit or loss Foreign currency translation differences (39.82) (13.14) (d) Income tax relating to items that will be reclassified to profit or loss - - Total other comprehensive income/(loss) (863.08) 503.89 X Total comprehensive income/(loss) for the year (VII+IX) (63,711.97) 171,688.54 Total Comprehensive income/(loss) for the year attributable to: Owners of the Company (63,711.98) 171,693.88 Non-controlling interests 0.01 (5.34) XI Earnings per share 30 Basic (₹) (5.75) 17.44 Diluted (₹) (5.75) 1.05 The accompanying notes forming part of the financial statements 1-45 As per our report of even date attached. For and on behalf of the Board of Directors For Walker Chandiok & Co LLP sd/- sd/- sd/- Chartered accountants Mr. T. V. Narendran Mr. Krishnava Dutt Ms. Neera Saggi Firm Registration No. : 001076N/N500013 Chairman (DIN: 03083605) Independent Director (DIN: 02792753) Independent Director (DIN: 00501029) sd/- sd/- sd/- sd/- Siddharth Talwar Mr. Shashi Kant Maudgal Mr. Srikumar Menon Mr. Anand Sen Partner Independent Director (DIN: 00918431) Independent Director (DIN: 00470254) Director (DIN: 00237914) Membership No. 512752 sd/- sd/- sd/- Mr. Koushik Chaterjee Mr. Rajeev Singhal Mr. Sanjib Nanda Director (DIN: 00004989) Managing Director (DIN: 02719570) Chief Financial Officer
sd/- Nisha Anil Seth Place: Faridabad Company Secretary Date: May 20, 2020 (Membership No. 27019) 135 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED MARCH 31, 2020
A. Equity Share Capital (₹ in lacs) Balance as at Changes during As at April 1, 2019 the period March 31, 2020 (Refer sub-note (a)) Equity shares of ₹ 2 each issued, subscribed and fully paid. 21,868.80 - 21,868.80
(₹ in lacs) Balance as at Changes during As at April 1, 2018 the period March 31, 2019 Equity shares of ₹ 2 each issued, subscribed and fully paid. 4,530.30 17,338.50 21,868.80 (a) For details of changes made during the period, Refer Note - 14
B. Other Equity (₹ in lacs) Capital Securities Debenture Capital General Retained Equity Capital Equity Foreign Non- Total redemption premium redemption reserve reserve earnings component Contribution instruments currency controlling Equity reserve reserves reserve of compound at fair value translation interests financial through other reserve instruments comprehensive income As at April 1, 2019 693.34 72,576.10 - 1,942.03 564,350.09 (3,076,414.73) 1,729,582.05 2,518,550.72 59.90 (1,210.73) (150.15) 1,809,978.62 Profit for the year - - - - - (62,849.09) - - - - 0.00 (62,849.09) Other comprehensive - - - - - (732.44) - - (90.82) (39.82) - (863.08) income Acquisition of subsidiary - - - 80,414.65 - (150.15) - - - - 152.36 80,416.87 As at March 31, 2020 693.34 72,576.10 - 82,356.68 564,350.09 (3,140,146.41) 1,729,582.05 2,518,550.72 (30.92) (1,250.55) 2.21 1,826,683.32
(₹ in lacs) Capital Securities Debenture Capital General Retained Equity Capital Equity Foreign Non- Total redemption premium redemption reserve reserve earnings component Contribution instruments currency controlling Equity reserve reserves reserve of compound at fair value translation interests financial through other reserve instruments comprehensive income As at April 1, 2018 693.34 72,576.10 36,512.50 1,942.03 527,837.59 (3,248,127.47) - - 66.70 (1,198.67) (144.81) (2,609,842.69) Profit for the year - - - - - 171,188.91 - - - - (4.26) 171,184.65 Other comprehensive - - - - - 523.83 - - (6.80) (12.06) (1.08) 503.89 income Transaction with owners in ------1,729,582.05 2,518,550.72 - - - 4,248,132.77 their capacity as owners Transfers within equity - - (36,512.50) - 36,512.50 ------As at March 31, 2019 693.34 72,576.10 - 1,942.03 564,350.09 (3,076,414.73) 1,729,582.05 2,518,550.72 59.90 (1,210.73) (150.15) 1,809,978.62
As per our report of even date attached. For and on behalf of the Board of Directors For Walker Chandiok & Co LLP sd/- sd/- sd/- Chartered accountants Mr. T. V. Narendran Mr. Krishnava Dutt Ms. Neera Saggi Firm Registration No. : 001076N/N500013 Chairman (DIN: 03083605) Independent Director (DIN: 02792753) Independent Director (DIN: 00501029) sd/- sd/- sd/- sd/- Siddharth Talwar Mr. Shashi Kant Maudgal Mr. Srikumar Menon Mr. Anand Sen Partner Independent Director (DIN: 00918431) Independent Director (DIN: 00470254) Director (DIN: 00237914) Membership No. 512752 sd/- sd/- sd/- Mr. Koushik Chaterjee Mr. Rajeev Singhal Mr. Sanjib Nanda Director (DIN: 00004989) Managing Director (DIN: 02719570) Chief Financial Officer
sd/- Nisha Anil Seth Place: Faridabad Company Secretary Date: May 20, 2020 (Membership No. 27019)
136 Statutory Reports Financial Statements
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2020
(₹ in lacs) Year ended March 31, 2020 Year ended March 31, 2019 (A) Cash Flow From Operating Activities: Profit/(loss) before taxes (62,848.91) 171,184.65 Adjustments for: Depreciation & amortisation expenses 146,340.67 144,173.88 Finance cost 165,476.53 375,217.88 Exceptional gains (6,901.84) (297,600.67) Gain on fair valuation/sale of current investments (3,781.15) (8,478.77) Unrealised (gain)/loss on outstanding forward exchange (8,306.27) 3,927.50 contracts Interest income / Dividend income (1,268.46) (2,884.82) Provision for doubtful debts / Bad debts written off (net of write (3,336.87) 7,760.49 back) Provisions (retirement benefit) 910.46 (389.42) Others (4,510.79) (3,056.80) 284,622.28 218,669.27 Operating cash flows before changes in inventories and 221,773.37 389,853.92 operating receivables and payables Adjustments for: Trade receivables 3,542.21 50,971.27 Inventories (24,197.30) (55,668.60) Loans, Other financial assets (excluding inter-corporate deposits (12,977.33) (11,538.93) and interest accrued thereon) and Other assets (excluding capital advances) Trade payables/ other financial liabilities (excluding borrowings, (761.95) 206,652.15 interest accrued on borrowings and capital creditors) (34,394.37) 190,415.89 Cash generated from operations 187,379.00 580,269.81 Direct taxes paid (760.50) (281.78) Net cash generated from operating activities 186,618.50 579,988.03
(B) Cash Flow From Investing Activities: Payments made for purchase of property, plant and equipment (62,038.87) (35,439.82) Proceeds from sale of property, plant and equipment 626.57 28.51 (Purchase)/sale of current investments (Net) 163,271.43 (151,011.52) Interest received 1,263.78 2,969.20 Acquisition of interest in subsidiaries (76,500.00) - Movement in other bank balances 2,711.73 21,744.89 Dividend received 4.68 - Net cash from/(used in) investing activities 29,339.32 (161,708.74)
137 CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2020
(₹ in lacs) Year ended March 31, 2020 Year ended March 31, 2019 (C) Cash Flow From Financing Activities: Proceeds from issue of Equity share capital - 15,888.50 Proceeds from issue of Preference share capital - 1,970,000.00 Proceeds from current borrowings (Net) 88,700.00 5,057,369.42 Repayment of borrowings (143,090.77) (6,252,329.20) Payment of lease liabilities (6,076.28) (4,519.58) Interest paid (134,602.17) (1,236,393.37) Unclaimed dividend - 0.02 Net cash used in Financing Activities (195,069.22) (449,984.21) Net (decrease)/increase in Cash and Cash Equivalents 20,888.60 (31,704.92) (A+B+C) Opening Cash and Cash Equivalents 27,765.11 59,470.03 Add:- Cash acquired during the year 23,829.68 - Closing Cash and Cash Equivalents (Refer note no 12 ) 72,483.39 27,765.11
As per our report of even date attached. For and on behalf of the Board of Directors For Walker Chandiok & Co LLP sd/- sd/- sd/- Chartered accountants Mr. T. V. Narendran Mr. Krishnava Dutt Ms. Neera Saggi Firm Registration No. : 001076N/N500013 Chairman (DIN: 03083605) Independent Director (DIN: 02792753) Independent Director (DIN: 00501029)
sd/- sd/- sd/- sd/- Siddharth Talwar Mr. Shashi Kant Maudgal Mr. Srikumar Menon Mr. Anand Sen Partner Independent Director (DIN: 00918431) Independent Director (DIN: 00470254) Director (DIN: 00237914) Membership No. 512752 sd/- sd/- sd/- Mr. Koushik Chaterjee Mr. Rajeev Singhal Mr. Sanjib Nanda Director (DIN: 00004989) Managing Director (DIN: 02719570) Chief Financial Officer
sd/- Nisha Anil Seth Place: Faridabad Company Secretary Date: May 20, 2020 (Membership No. 27019)
138 Statutory Reports Financial Statements
ACCOUNTING POLICIES UNDER IND AS CONSOLIDATED FINANCIAL STATEMENTS OF TATA STEEL BSL LIMITED FOR THE YEAR ENDED MARCH 31, 2020
1. Company Information and basis of preparation ● Exposure, or rights, to variable returns from its involvement with the investee, and TATA Steel BSL Limited (“the Company”) is a public limited Company incorporated in India with its registered office in Ground Floor, Mira ● The ability to use its power over the investee to affect its Corporate Suites, Plot No. 1&2, Ishwar Nagar, Mathura Road, New Delhi- returns. Generally, there is a presumption that a majority of 110065, India. The Company is listed on the Bombay Stock Exchange (BSE) voting rights result in control. To support this presumption and the National Stock Exchange (NSE). and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant The Company is the 3rd largest secondary steel producer with an overall facts and circumstances in assessing whether it has power steel producing capacity of 5.6 million tonne per annum. The Company over an investee, including: has presence across the entire value chain of steel manufacturing. The Company offers a broad range of steel products including a portfolio of ● The contractual arrangement with the other vote holders of high value added downstream products such as hot rolled, cold rolled and the investee coated steel, cold rolled full hard, galvanised coils and sheets, high tensile ● Rights arising from other contractual arrangements steel strips, colour coated tiles, precision tubes etc. The Company has the unique facilities of producing cold roll and sheets up to a width of 1700 ● The Group’s voting rights and potential voting rights mm and galvanised coil and steel up to a width of 1350 mm. ● The size of the Group’s holding of voting rights relative to the Statement of compliance size and dispersion of the holdings of the other voting rights holders The financial statements of the Group have been prepared in accordance with Indian Accounting Standards (Ind AS) prescribed under section 133 The Group re-assesses whether or not it controls an investee if facts of the Companies Act 2013, read with Companies (Indian Accounting and circumstances indicate that there are changes to one or more of Standard) Rules, as amended time to time. the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases Basis of preparation when the Group loses control of the subsidiary. Assets, liabilities, The financial statements have been prepared on a historical cost basis, income and expenses of a subsidiary acquired or disposed of during except: the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to (a) certain assets and liabilities that are required to be carried at fair control the subsidiary. values by Ind AS; and Consolidated financial statements are prepared using uniform ) (b property plant & equipment which have been fair valued at the accounting policies for like transactions and other events in similar transition date (i.e. 01April 2015) as ‘deemed cost’ upon transition to circumstances. If a member of the Group uses accounting policies Ind AS. other than those adopted in the consolidated financial statements The financial statements are presented in INR and all values are rounded for like transactions and events in similar circumstances, appropriate to the nearest Lacs (INR 00,000), except when otherwise indicated. adjustments are made to that Group member’s financial statements These are standalone financial statements (the ‘financial statements’) for in preparing the consolidated financial statements to ensure the year ended March 31, 2020 were approved by the Board of Directors conformity with the Group’s accounting policies. and approved for issue on May 20, 2020. The Company has also prepared The financial statements of all entities used for the purpose of consolidated financial statements for the year ended 31 March 2020 in consolidation are drawn up to same reporting date as that of the accordance with Ind AS 110 and the same were also approved for issue by parent company, i.e., year ended on March 31. When the end of the the Board of Directors on May 20, 2020. reporting period of the parent is different from that of a subsidiary, 2. Significant accounting policies the subsidiary prepares, for consolidation purposes, additional financial information as of the same date as the financial statements The significant accounting policies applied by the Company (The ‘Parent’) of the parent to enable the parent to consolidate the financial and its subsidiaries (collectively referred to as the ‘the Group’) in the information of the subsidiary, unless it is impracticable to do so. preparation of its financial statements are listed below. Such accounting policies have been applied consistently to all the periods presented in ) b Investment in associates these financial statements, unless otherwise indicated. Associates are those enterprises in which the Group has significant a) Basis of Consolidation influence, but does not have control. Investments in associates are accounted for using the equity method and are initially recognised The consolidated financial statements comprise the financial at cost, from the date significant influence commences until the statements of the Group as at March 31, 2019. Control is achieved date that significant influence ceases. Subsequent changes in the when the Group is exposed, or has rights, to variable returns from carrying value reflect the post-acquisition changes in the Group’s its involvement with the investee and has the ability to affect those share of net assets of the associate and impairment charges, if any. returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has: When the Group’s share of losses exceeds the carrying value of the associate, the carrying value is reduced to nil and recognition of ● Power over the investee (i.e. existing rights that give it the further losses is discontinued, except to the extent that the Group current ability to direct the relevant activities of the investee) has incurred obligations in respect of the associate.
139 Unrealised gains on transactions between the Group and its Where an item of property, plant and equipment comprises major associates are eliminated to the extent of the Group’s interest in components having different useful lives, these components are the associates, unrealised losses are also eliminated unless the accounted for as separate items. transaction provides evidence of an impairment of the asset Property, plant and equipment and capital work in progress are transferred and where material, the results of associates are stated at cost/, net of accumulated depreciation and accumulated modified to confirm to the Group’s accounting policies. impairment losses. Cost includes all direct costs and expenditures c) Interests in joint arrangement incurred to bring the asset to its working condition and location for its intended use. Trial run expenses (net of revenue) are capitalised. A joint arrangement is a contractual arrangement whereby the Borrowing costs incurred during the period of construction is Group and other parties undertake an economic activity where the capitalised as part of cost of qualifying asset. strategic financial and operating policy decisions relating to the activities of the joint arrangement require the unanimous consent The gain or loss arising on disposal of an item of property, plant and of the parties sharing control. equipment is determined as the difference between sale proceeds and carrying value of such item, and is recognised in the statement Where Group entity undertakes its activities under joint of profit and loss. arrangements directly, the Group’s share of jointly controlled assets and any liabilities incurred jointly with other parties are recognised f) Depreciation and amortisation of property, plant and in its financial statements and classified according to their nature. equipment and intangible assets Liabilities and expenses incurred directly in respect of interests Depreciation or amortisation is provided on a straight line basis in jointly controlled assets are accounted for on the accrual basis. to the cost/deemed cost of property, plant and equipment and Income from the sale or use of the Group’s share of the output intangible assets, including those held under finance leases to their of jointly controlled assets, and its share of joint arrangements residual value. Depreciation on all assets commences from the dates expenses, are recognised when it is probable that the economic the assets are available for their intended use and are spread over benefits associated with will flow to the Group and their amount their estimated useful economic lives or, in the case of leased assets, can be measured reliably. over the lease period or estimated useful life whichever is less. The Joint arrangements that involve the establishment of a separate estimated useful lives of assets and residual values are regularly entity in which each venturer has an interest are referred to as joint reviewed and, when necessary, revised. ventures. The Group reports its interests in joint ventures using the The estimated useful life of main category of property plant and equity method of accounting whereby an interest in joint venture is equipment and intangible assets are:- initially recorded at cost and adjusted thereafter for post-acquisition changes in the Group’s share of net assets of the joint venture. The Estimated useful consolidated statement of profit and loss reflects the Group’s share Life (years) of the results of operations of the joint venture. Buildings Upto 60 years* Unrealised gains on transactions between the Group and its joint Roads 30 years ventures are eliminated to the extent of the Group’s interest in the joint venture, unrealised losses are also eliminated unless Plant and Machinery Upto 40 years* the transaction provides evidence of an impairment of the asset Railway Sidings Upto 30 years* transferred and where material, the results of joint ventures are Vehicles 8 to 10 years modified to confirm to the Group’s accounting policies. Furniture, Fixtures and Office Equipment 5 to 10 years d) Current versus non-current classification Computer Software 3 years The Group presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset /liability is treated as * for these class of assets useful lives are different from the useful current when it is expected to be realised/ settled, sold, consumed lives as prescribed under Part C of Schedule II of the Companies within the normal operating cycle. Having regard to the nature of Act, 2013. Based on the technical evaluation carried by a chartered business being carried out by the Group the Group has determined engineer and internal assessments made, the Group believes that its operating cycle as twelve months. The Group classifies all other useful lives mentioned above are best representative of the period assets/liabilities as non-current. over which the Group expects to use the assets. Deferred tax assets and liabilities are classified as non-current assets g) Borrowing Costs and liabilities respectively. Borrowing costs directly attributable to the acquisition, construction e) Property, plant and equipment or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part An item of property, plant and equipment is recognised as an asset if of the cost of the asset. All other borrowing costs are expensed in the it is probable that future economic benefits associated with the item period in which they occur. Borrowing costs consist of interest and will flow to the Group and its cost can be measured reliably. This other costs that an entity incurs in connection with the borrowing recognition principle is applied to costs incurred initially to acquire of funds. Borrowing cost also includes exchange differences to the an item of property, plant and equipment and also to costs incurred extent regarded as an adjustment to the borrowing costs. subsequently to add to, replace part of, or service it. All other repair and maintenance costs, including regular servicing, are recognised Eligible transaction/ ancillary costs incurred in connection with the in the statement of profit and loss as incurred. When a replacement arrangement of borrowings are adjusted with the proceeds of the occurs, the carrying value of the replaced part is derecognised. borrowings.
140 Statutory Reports Financial Statements
h) Impairment of non-financial assets obligation each promise to transfer to the customer either a good or service (or a bundle of goods or services) that is distinct; or a series The Group, at each balance sheet date, reviews carrying values of of distinct goods or services that are substantially the same and that its property plant and equipment and assesses whether there is an have the same pattern of transfer to the customer. indication that an asset may be impaired. If any indication exists, the recoverable amount being higher of fair value less costs to The Group considers the terms of the contract and its customary sell and value in use of the assets, is estimated to determine the business practices to determine the transaction price. The impairment losses and are recognised in the statement of profit transaction price is the amount of consideration to which the Group and loss. Recoverable amount is determined for an individual asset, expects to be entitled in exchange for transferring promised goods unless the asset does not generate cash inflows that are largely or services to a customer, excluding amounts collected on behalf independent of those from other assets or Groups of assets. of third parties (for example, indirect taxes). The consideration promised in a contract with a customer may include fixed amounts, In assessing value in use, the estimated future cash flows are variable amounts, or both. discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and If there is variable consideration, the Group includes in the the risks specific to the asset. In determining fair value less costs of transaction price some or all of that amount of estimated variable disposal, recent market transactions are taken into account. If no consideration only to the extent that it is highly probable that a such transactions can be identified, an appropriate valuation model significant reversal in the amount of cumulative revenue recognised is used. These calculations are corroborated by valuation multiples, will not occur when the uncertainty associated with the variable quoted share prices for publicly traded companies or other available consideration is subsequently resolved. fair value indicators. “In determining the transaction price, the Group adjusts the For assets an assessment is made at each balance sheet date promised amount of consideration for the effects of the time value to determine whether there is an indication that previously of money if the timing of payments agreed to by the parties to the recognised impairment losses no longer exist or have decreased. contract (either explicitly or implicitly) provides the customer or the If such indication exists, the Group estimates the asset’s or CGU’s Group with a significant benefit of financing the transfer of goods or recoverable amount. A previously recognised impairment loss is services to the customer.” reversed only if there has been a change in the assumptions used to “The transaction price is allocated by the Group to each performance determine the asset’s recoverable amount since the last impairment obligation (or distinct good or service) in an amount that depicts loss was recognised. The reversal is limited so that the carrying the amount of consideration to which it expects to be entitled in amount of the asset does not exceed its recoverable amount, nor exchange for transferring the promised goods or services to the exceed the carrying amount that would have been determined, net customer.” of depreciation, had no impairment loss been recognised for the For each performance obligation identified, the Group determines asset in prior years. Such reversal is recognised in the statement of at contract inception whether it satisfies the performance obligation profit and loss. over time or satisfies the performance obligation at a point in time. i) Inventories If an entity does not satisfy a performance obligation over time, the Items of inventories are measured at lower of cost and net realisable performance obligation is satisfied at a point in time value after providing for obsolescence, wherever considered For each performance obligation satisfied over time, the Group necessary. Cost is ascertained on a weighted average basis. Cost of recognises revenue over time by measuring the progress towards inventories comprises of cost of purchase, cost of conversion and complete satisfaction of that performance obligation. The progress other costs including manufacturing overheads incurred in bringing towards complete satisfaction is measured using appropriate them to their respective present location and condition. methods which include input and output methods. Net realizable value is the estimated selling price in the ordinary The Group recognises as an asset the incremental costs of course of business based on market price at the balance sheet obtaining a contract with a customer if it expects to recover those date and discounted for the time value of money if material, less costs. However, as a practical expedient, the incremental costs of estimated costs of completion and estimated costs necessary to obtaining a contract are recognised as an expense when incurred if make the sale. the amortisation period of the asset otherwise would have been one Spare parts including other items are carried on weighted average year or less. basis. The costs to fulfil a contract are recognised as an asset if the costs relate directly to a contract or to an anticipated contract that the j) Revenue Recognition Group can specifically identify; the costs generate or enhance A customer of the Group is a party that has contracted with the resources of the Group that will be used in satisfying performance Group to obtain goods or services that are an output of the Group’s obligations in the future; and the costs are expected to be recovered. ordinary activities in exchange for consideration. The core principle k) Foreign currencies of recognizing revenue from contracts with customers is that the Group recognizes revenue to depict the transfer of promised The Group’s financial statements are presented in INR, which is also goods and services to customers in an amount that reflects the its functional currency. consideration to which the Group expects to be entitled in exchange Transactions and balances for those goods or services. Transactions in foreign currencies are initially recorded by the Group At contract inception, the Group assesses the goods or services at functional currency spot rates at the date the transaction first promised in a contract with a customer to identify as a performance qualifies for recognition.
141 Monetary assets and liabilities denominated in foreign currencies Deferred tax assets and liabilities are measured at the tax rates that are translated at the functional currency closing rate of exchange at are expected to apply in the year when the asset is realised or the the balance sheet date. liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. For foreign currency loans taken before 31 March 2016 for, adjustments arising from exchange rate variations relating to long Deferred tax relating to items recognised outside statement of profit term monetary items attributable to the depreciable fixed assets and loss is recognised outside statement of profit and loss (either in are capitalised. For foreign currency loans taken after 31 March other comprehensive income or in equity). 2016, exchange differences arising on settlement or translation of monetary items are recognised in statement of profit or loss. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current Non-monetary items that are measured in terms of historical cost tax liabilities and the deferred taxes relate to the same taxable entity in a foreign currency are translated using the exchange rates at the and the same taxation authority. dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange m) Employee benefits rates at the date when the fair value is determined. The gain or Short-term benefits loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the The undiscounted amount of short-term employee benefits change in fair value of the item (i.e., translation differences on items expected to be paid in exchange for the service rendered by whose fair value gain or loss is recognised in other comprehensive employees are recognised during the period when the employee income or statement of profit or loss are also recognised in other renders the services. comprehensive income or statement of profit or loss, respectively). Defined ontributionc plans l) Income Taxes Retirement benefit in the form of provident fund is a defined Current tax contribution scheme. The Group has no obligation, other than the Current tax assets and liabilities are measured at the amount contribution payable to the provident fund. The Group recognizes expected to be recovered from or paid to the taxation authorities. contribution payable to the provident fund scheme as an expense, The tax rates and tax laws used to compute the amount are those when an employee renders the related service. that are enacted or substantively enacted in India, at the balance sheet date. Group’s contribution to state defined contribution plans namely Employee State Insurance and Maharashtra Labour Welfare Fund Current tax relating to items recognised outside statement of are made in accordance with the Statute, and are recognised as an profit and loss is recognised outside statement of profit and loss expense when employees have rendered services entitling them to (either in other comprehensive income or in equity). Management the contribution. periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to Defined benefits plans interpretation and establishes provisions where appropriate. The Group operates a defined benefit gratuity plan in India, which Current tax assets is offset against current tax liabilities if, and only if, requires contributions to be made to a separately administered a legally enforceable right exists to set off the recognised amounts fund. Gratuity is a defined benefit obligation. and there is an intention either to settle on a net basis, or to realise the asset and settle the liability simultaneously. The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method. In respect of Deferred tax post-retirement benefit re-measurements comprising of actuarial Deferred tax is provided using the balance sheet liability method on gains and losses, the effect of the asset ceiling, excluding amounts temporary differences between the tax bases of assets and liabilities included in net interest on the net defined benefit liability and the and their carrying amounts for financial reporting purposes at the return on plan assets, are recognised immediately in the balance balance sheet date. sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Re-measurements Deferred tax liabilities are generally recognised for all the temporary are not reclassified to statement of profit or loss in subsequent differences. On the contrary, deferred tax assets are recognised for periods. deductible temporary differences, the carry forward of unused tax credits (including Minimum Alternative tax (MAT) credit) and any Past service cost is recognised as an expense when the plan unused tax losses, to the extent that it is probable that taxable amendment or curtailment occurs or when any related restructuring profit will be available against which the deductible temporary costs or termination benefits are recognised, whichever is earlier. differences, and the carry forward of unused tax credits and unused tax losses can be utilised. Other long term benefits The carrying amount of deferred tax assets is reviewed at each Accumulated leave, which is expected to be utilized within the next balance sheet date and reduced to the extent that it is no longer twelve months, is treated as short-term employee benefit. The Group probable that sufficient taxable profit will be available to allow measures the expected cost of such absences as the additional all or part of the deferred tax asset to be utilised. Unrecognised amount that it expects to pay as a result of the unused entitlement deferred tax assets are re-assessed at each balance sheet date and that has accumulated at the balance sheet date. Actuarial gains/ are recognised to the extent that it has become probable that future losses on the compensated absences are immediately taken to the taxable profits will allow the deferred tax asset to be recovered. statement of profit and loss and are not deferred.
142 Statutory Reports Financial Statements
n) Leases there is a presence of a legal or constructive commitment that has resulted from past events, for example, legal disputes or onerous Group as a lessee contracts. Provisions are not recognised for future operating losses. The Group assesses if a contract is or contains a lease at inception of Provisions are measured at the estimated expenditure required to the contract. A contract is, or contains, a lease if the contract conveys settle the present obligation, based on the most reliable evidence the right to control the use of an identified asset for a period time in available at the reporting date, including the risks and uncertainties exchange for consideration. associated with the present obligation. Provisions are discounted to The Group recognizes a right-of-use asset and a lease liability at their present values, where the time value of money is material. the commencement date, except for short-term leases of twelve months or less and leases for which the underlying asset is of low Any reimbursement that the Group can be virtually certain to collect value, which are expensed in the statement of operations on a from a third party with respect to the obligation is recognised as a straight-line basis over the lease term. separate asset. However, this asset may not exceed the amount of the related provision. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, All provisions are reviewed at each reporting date and adjusted to discounted using the interest rate implicit in the lease, or, if not reflect the current best estimate. readily determinable, the incremental borrowing rate specific to the In those cases where the outflow of economic resources as a result country, term and currency of the contract. of present obligations is considered improbable or remote, no Lease payments can include fixed payments, variable payments that liability is recognised. depend on an index or rate known at the commencement date, as Contingent liability is disclosed for: well as any extension or purchase options, if the Group is reasonably ● Possible obligations which will be confirmed only by future certain to exercise these options. The lease liability is subsequently events not wholly within the control of the Group or measured at amortized cost using the effective interest method and remeasured with a corresponding adjustment to the related ● Present obligations arising from past events where it is not right-of-use asset when there is a change in future lease payments probable that an outflow of resources will be required to settle in case of renegotiation, changes of an index or rate or in case of the obligation or a reliable estimate of the amount of the reassessments of options. obligation cannot be made. The right-of-use asset comprises, at inception, the initial lease Contingent assets are not recognised. However, when inflow of liability, any initial direct costs and, when applicable, the obligations economic benefits is probable, related asset is disclosed. to refurbish the asset, less any incentives granted by the lessors. The ) p Earnings per share right-of-use asset is subsequently depreciated, on a straight-line basis, over the lease term, if the lease transfers the ownership of the Basic earnings per equity share is computed by dividend net underlying asset to the Group at the end of the lease term or, if the profit after tax by the weighted average number of equity shares cost of the right-of-use asset reflects that the lessee will exercise a outstanding during the year. Diluted earnings per equity share is purchase option, over the estimated useful life of the underlying computed by dividing adjusted net profit after tax by the aggregate asset. Right-of-use assets are also subject to testing for impairment of weighted average number of equity shares and dilutive potential if there is an indicator for impairment. Variable lease payments not equity shares during the year. included in the measurement of the lease liabilities are expensed q) Cash and cash equivalents to the statement of operations in the period in which the events or conditions which trigger those payments occur. In the statement Cash and cash equivalent in the balance sheet comprise cash at of financial position right-of-use assets and lease liabilities are banks and on hand, cheques on hand and short-term deposits with classified respectively as part of property, plant and equipment and an original maturity of three months or less, which are subject to an short-term/long-term debt. insignificant risk of changes in value. Group as a lessor For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined Leases in which the Group does not transfer substantially all the above. risks and rewards of ownership of an asset are classified as operating leases. Rental income from operating lease shall not be straight- r) Intangible assets lined, if escalation in rentals is in line with expected inflationary Intangible assets acquired separately are measured on initial cost. Initial direct costs incurred in negotiating and arranging an recognition at cost i.e. purchase cost. Following initial recognition, operating lease are added to the carrying amount of the leased intangible assets are carried at cost less accumulated amortization asset and recognised over the lease term on the same basis as rental and accumulated impairment losses, if any. income. s) Fair value of financial instruments Contingent rentals are recognised as revenue in the period in which In determining the fair value of its financial instruments, the Group they are earned. uses a variety of methods and assumptions that are based on ) o Provisions, contingent liabilities and contingent assets market conditions and risks existing at each reporting date. The Provisions are recognised when present obligations as a result of a methods used to determine fair value include discounted cash past event will probably lead to an outflow of economic resources flow analysis, available quoted market prices and dealer quotes. All and amounts can be estimated reliably. Timing or amount of the methods of assessing fair value result in general approximation of outflow may still be uncertain. A present obligation arises when value, and such value may never actually be realized. For financial
143 assets and liabilities maturing within one year from the Balance is no recycling of the amounts from OCI to P&L, even on sale of Sheet date and which are not carried at fair value, the carrying investment. However, the Group may transfer the cumulative gain amounts approximate fair value due to the short maturity of these or loss within equity. Dividends on such investments are recognised instruments. in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. t) Government grants Compound Financial Instrument Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attached The component parts of compound instruments issued by the to them and the grants will be received. Group are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangements Government grants are recognised in the statement of profit and and the definitions of a financial liability and an equity instrument. loss on a systematic basis over the periods in which the Group Conversion option that will be settled by the exchange of a fixed recognises as expenses the related costs for which the grants are amount of cash or another financial asset for a fixed number of the intended to compensate. The benefit of a government loan at below Group’s own equity instruments is an equity instrument. market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of At the date of issue, the fair value of the liability component is the loan based on the prevailing market interest rates. estimated using the prevailing market interest rate for similar non- convertible instruments. This amount is recorded as a liability on u) Segment reporting an amortised cost basis using the effective interest method until Operating segments are reported in a manner consistent with the extinguished upon conversion or at the instrument’s maturity date. internal reporting done to the chief operating decision maker. The The conversion option classified as equity is determined by Group operates in a single operating segment and geographical deducting the amount of the liability component from the fair value segment. of the compound instrument as a whole. The conversion option v) Financial instruments classified as equity will remain in equity until the conversion option Initial recognition and measurement is exercised, in which case, the balance recognised in equity will be transferred to other component of equity. When the conversion Financial assets and financial liabilities are recognised when the option remains unexercised at the maturity date of the convertible Group becomes a party to the contractual provisions of the financial note, the balance recognised in equity will be transferred to instrument and are measured initially at fair value adjusted for retained earnings. No gain or loss is recognised in profit or loss upon transaction costs, except for those carried at fair value through conversion or expiration of the conversion option. profit or loss which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities is described Impairment of financial assets below: In accordance with Ind AS 109, the Group applies expected credit Non-derivative financial assets loss (ECL) model for measurement and recognition of impairment loss for financial assets. ECL is the weighted-average of difference Subsequent measurement between all contractual cash flows that are due to the Group in i. Financial assets carried at amortised cost – a financial accordance with the contract and all the cash flows that the Group asset is measured at the amortised cost, if both the following expects to receive, discounted at the original effective interest rate, conditions are met: with the respective risks of default occurring as the weights. When estimating the cash flows, the Group is required to consider: ● The asset is held within a business model whose objective is to hold assets for collecting contractual cash ● All contractual terms of the financial assets (including flows, and prepayment and extension) over the expected life of the assets. ● Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal ● Cash flows from the sale of collateral held or other credit and interest (SPPI) on the principal amount outstanding. enhancements that are integral to the contractual terms. After initial measurement, such financial assets are Trade receivables: In respect of trade receivables, the Group applies subsequently measured at amortised cost using the effective the simplified approach of Ind AS 109, which requires measurement interest rate (EIR) method. of loss allowance at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses ii. Investments in mutual funds – Investments in mutual funds that result from all possible default events over the expected life of are measured at fair value through profit and loss (FVTPL). a financial instrument. iii. Investments in equity instruments of subsidiaries, joint Other financial assets: In respect of its other financial assets, ventures and associates - Investments in equity instruments the Group assesses if the credit risk on those financial assets has of subsidiaries, joint ventures and associates are accounted increased significantly since initial recognition. If the credit risk for at cost in accordance with Ind AS 27 Separate Financial has not increased significantly since initial recognition, the Group Statements. measures the loss allowance at an amount equal to 12-month Investments in equity instruments - Investments in equity expected credit losses, else at an amount equal to the lifetime instruments, where the Group has opted to classify such instruments expected credit losses. at fair value through other comprehensive income (FVOCI) are When making this assessment, the Group uses the change in the risk measured at fair value through other comprehensive income. There of a default occurring over the expected life of the financial asset.
144 Statutory Reports Financial Statements
To make that assessment, the Group compares the risk of a default w) Accounting standards or amendments in the accounting occurring on the financial asset as at the balance sheet date with standards adopted on/from April 1, 2019: the risk of a default occurring on the financial asset as at the date Ind AS 116, Leases: of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that On March 30, 2019, Ministry of Corporate Affairs (“MCA”) has notified is indicative of significant increases in credit risk since initial the Ind AS 116, Leases which will replace Ind-AS 17 “Leases”. This recognition. The Group assumes that the credit risk on a financial new standard specifies how to recognize, measure, present and asset has not increased significantly since initial recognition if the disclose leases. The standard provides a single lessee accounting financial asset is determined to have low credit risk at the balance model, requiring lessees to recognize assets and liabilities for all sheet date. leases unless the lease term is 12 months or less or the underlying asset has a low value. De-recognition of financial assets Adoption of this standard have a material impact on the financial A financialasset is primarily de-recognised when the contractual statements of the Group. The additional required disclosures are rights to receive cash flows from the asset have expired or the Group presented in Note 5 of the financial statements. has transferred its rights to receive cash flows from the asset. On March 30, 2019, Ministry of Corporate Affairs (“MCA”) has notified Derivative financial instruments Appendix C to Ind-AS 12 Income taxes - “Uncertainty over Income In the ordinary course of business, the Group uses derivative financial Tax Treatments”. This interpretation addresses the determination instruments to reduce business risks which arise from its exposure of taxable profit (tax loss), tax bases, unused tax losses, unused to foreign exchange. The instruments are confined principally to tax credits and tax rates when there is uncertainty over income forward foreign exchange contracts and these contracts do not tax treatments under Ind-AS 12. The Group adopted the following generally extend beyond six months. amendments which did not have any material impact on the standalone financial statements of the Group. Derivatives are initially accounted for and measured at fair value from the date the derivative contract is entered into and are Further, there has been amendments in relevant paragraphs in Ind- subsequently re-measured to their fair value at the end of each AS 12 “Income Taxes” which clarifies that an entity shall recognize reporting period. the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity Non-derivative financial liabilities originally recognised those past transactions or events in accordance Subsequent measurement with Ind-AS 109. The Group adopted the following amendments Subsequent to initial recognition, all non-derivative financial which did not have any material impact on the financial statements liabilities are measured at amortised cost using the effective interest of the Group. method. Further on March 30, 2019, Ministry of Corporate Affairs (“MCA”) De-recognition of financial liabilities issued an amendment to Ind-AS 109 in respect of prepayment features with negative compensation, which amends the existing A financial liability is de-recognised when the obligation under requirements in Ind-AS 109 regarding termination rights in order the liability is discharged or cancelled or expires. When an existing to allow measurement at amortized cost (or, depending on the financial liability is replaced by another from the same lender on business model, at fair value through other comprehensive income) substantially different terms or the terms of an existing liability are even in the case of negative compensation payments. The Group substantially modified, such an exchange or modification is treated adopted the following amendments which did not have any as the de-recognition of the original liability and the recognition of material impact on the financial statements of the Group. a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss. Further on March 30, 2019, Ministry of Corporate Affairs (“MCA”) issued an amendment to Ind-AS 23 “Borrowing Costs” clarifies that Offsetting of financial instruments if any specific borrowing remains outstanding after the related asset Financial assets and financial liabilities are offset and the net is ready for its intended use or sale, that borrowing becomes part amount is reported in the balance sheet if there is a currently of the funds that an entity borrows generally when calculating the enforceable legal right to offset the recognised amounts and there capitalization rate on general borrowings. The Group adopted the is an intention to settle on a net basis, to realise the assets and settle following amendments which did not have any material impact on the liabilities simultaneously. the financial statements of the Group.
145 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - - in lacs) in Total Total (₹ 2,174.90 67,267.39 135,694.21 115,505.68 (10,259.38) (19,050.00) (75,406.25) (10,760.36) 2,539,881.41 5,455,322.44 2,915,441.02 2,903,487.76 5,551,928.90 2,648,441.14 - - - 0.24 Office Office 774.56 261.92 776.59 538.76 830.66 (239.79) (270.33) 1,315.35 1,642.92 3,216.20 1,573.28 1,340.28 equipments equipments - - - - - 0.96 133.14 709.96 623.97 208.60 (549.05) (711.46) 1,424.21 2,134.17 Vehicles 1,632.27 1,008.30 - - - - - 2.81 221.64 431.62 fixtures 3,864.67 5,051.99 1,187.32 1,263.77 2,510.58 1,246.80 (2,839.51) (2,975.84) Furniture and Furniture (774.56) 2,174.90 (830.66) (6,631.03) (6,802.72) Plant and Plant 52,530.01 102,853.73 106,054.99 machinery (19,050.00) (75,406.25) 1,668,303.90 3,588,619.83 1,920,315.93 1,917,288.26 3,664,165.20 1,746,876.94 ------998.56 9,568.48 8,569.92 76,081.90 85,650.38 85,650.38 77,080.46 Railway siding Railway ------9,446.68 Building 31,225.22 12,756.87 780,218.53 923,680.84 914,659.17 811,443.75 1,703,899.37 1,726,102.92 ------9,211.61 9,211.61 68,651.35 59,439.74 59,439.74 68,651.35 Freehold land land Freehold P
Other re-classifications Deletion during the year Impairment for the year the year Impairment for Depreciation for the year the year for Depreciation Reclassified as right-of-use assets Ind to AS 116 on transition Other re-classifications Reclassified as right-of-use assets Ind to AS 116 on transition carryingNet as on amount 31, 2020 March Accumulated impairment & Accumulated April 01, 2019 as at depreciation Deletion during the year Gross carryingGross April as at amount 01, 2019 Net carrying as on April amount 01, 2019 Gross carryingGross as at amount 31, 2020 March Particulars during the year Addition acquisition to related Addition & impairment Accumulated 31, March as at depreciation 2020 3A. Equipment And Plant roperty,
146 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - - Total Total (2.42) (74.35) 5,219.23 (₹ in lacs) (129.55) 28,727.96 144,165.90 2,390,570.64 5,426,726.45 3,036,155.81 2,539,881.42 5,455,322.44 2,915,441.02 - - - - - 78.75 Office Office 137.45 396.78 560.39 918.57 358.18 776.59 538.76 1,315.35 equipments equipments - - - - 41.67 237.94 921.37 (62.32) 709.95 (77.47) 1,248.60 2,169.97 Vehicles 1,424.21 2,134.17 - - - - - 329.70 123.71 fixtures 1,889.11 1,645.86 4,928.28 3,282.42 3,864.67 5,051.99 1,187.32 Furniture and Furniture - - (2.42) (12.03) (52.08) 3,251.37 24,389.79 Plant and Plant 111,821.03 machinery 2,011,041.01 1,553,243.53 3,564,284.54 1,668,303.90 3,588,619.83 1,920,315.94 ------996.38 9,568.48 10,564.86 75,085.52 85,650.38 76,081.90 85,650.38 Railway siding Railway ------3,776.01 Building 30,643.40 950,548.23 749,575.13 780,218.53 923,680.84 1,700,123.36 1,703,899.37 ------9,211.61 9,211.61 59,439.74 68,651.35 68,651.35 59,439.74 Freehold land land Freehold Net carrying as on amount April 01, 2018 Accumulated impairment & impairment Accumulated 31, March as at depreciation 2019 Other re-classifications Adjustment during the year during the year Adjustment Deletion during the year Impairment for the year the year Impairment for Deletion during the year Depreciation for the year the year for Depreciation Addition during the year Addition Accumulated impairment & Accumulated April 01, 2018 as at depreciation Gross carryingGross April as at amount 01, 2018 Gross carryingGross as at amount 31, 2019 March Net carryingNet as on amount 31, 2019 March Property, Plant And Equipment (contd...) Equipment And Plant Property, Particulars Adjustment during the year during the year Adjustment
147 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3B. Right-of-Use Assets (₹ lacs) Land Building Plant & Machinery Total Reclassified from Property, Plant & Equipment on transition to - - 75,406.25 75,406.25 Ind AS 116* Addition on account of transition to Ind AS 116 19,547.13 2,124.76 169.84 21,841.73 Addition on account of acquisition of Angul Energy Limited 2,726.54 - - 2,726.54 Addition during the year 937.54 509.38 - 1,446.92 Derecognition of ROU assets for leases vacated during the year - (24.07) (37.02) (61.09) Cost as at March 31, 2020 23,211.21 2,610.07 75,539.07 101,360.35 Reclassified from Property, Plant & Equipment on transition to - - 19,050.00 19,050.00 Ind AS 116 Depreciation for the year 342.09 575.54 9,596.74 10,514.37 Derecognition of ROU assets for leases vacated during the year - (3.26) (18.80) (22.06) Accumulated impairment & depreciation as at March 31, 342.09 572.28 28,627.94 29,542.31 2020 Net carrying value as on March 31, 2020 22,869.12 2,037.79 46,911.13 71,818.04 * Refer Note 5 3C. Capital Work-In-Progress
Capital work-in-progress (CWIP) as at March 31, 2020 comprises expenditure for the plant in the course of construction. Total amount of CWIP is ₹ 68,171.13 lacs (March 31, 2019 ₹ 115,414.24 lacs). This includes expenditure capitalised and comprises of direct material cost, labour charges and supervision charges.
₹ 6,418.64 lacs (March 31, 2020 ₹ 7,113.45 lacs) of borrowing costs has been capitalised during the year on qualifying CWIP using a annualized capitalisation rate of 9.34% (March 31, 2019: 9.81%).
Notes :
(i) Net carrying value of plant and machinery comprises of:
As at As at March 31, 2020 March 31, 2019 Asset held under finance leases * Cost - 75,406.25 Accumulated depreciation - 19,050.00 - 56,356.25 Owned assets 1,917,288.26 1,863,959.70 1,917,288.26 1,920,315.95 *Refer Note 5 (iii) (ii) For details of capital commitments, refer note 32.
(iii) Property, plant and equipment are pledged against borrowings, the details relating to which have been described in Note 16A pertaining to borrowings.
(iv) During the current year, the Group has impaired certain items of property, plant and equipment and capital work-in-progress in respect of assets suspended from active production or due to certain projects abandoned during the year.
During the year, impairment provision was created on cold roll mill extension project in CWIP amounting to ₹ 2,081.30 lacs and induction furnace in Angul plant amounting to ₹ 2,174.90 lacs. Also during the previous year, the Group had recognised an impairment loss against property, plant and equipment aggregating to ₹ 5,219.23 lacs, refer note 29.
148 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Intangible Assets (₹ in lacs) Software Costs Other Intangible Total Assets Cost as at April 01, 2019 75.29 978.59 1,053.88 Addition during the year 2,195.68 - 2,195.68 Deletions during the year (0.48) - (0.48) Gross carrying amount as at March 31, 2020 2,270.49 978.59 3,249.08 Accumulated amortisation as at April 01, 2019 58.23 978.59 1,036.82 Amortisation during the year 132.10 - 132.10 Accumulated amortisation as at March 31, 2020 190.33 978.59 1,168.92 Net carrying value as at April 01, 2019 17.06 - 17.06 Net carrying value as at March 31, 2020 2,080.16 - 2,080.16
(₹ in lacs) Software Costs Other Intangible Total Assets Cost as at April 01, 2018 60.86 978.59 1,039.45 Addition during the year 14.43 - 14.43 Gross carrying amount as at March 31, 2019 75.29 978.59 1,053.88 Accumulated amortisation as at April 01, 2018 50.21 978.59 1,028.80 Amortisation during the year 8.02 - 8.02 Accumulated amortisation as at March 31, 2019 58.23 978.59 1,036.82 Net carrying value as at April 01, 2018 10.65 - 10.65 Net carrying value as at March 31, 2019 17.06 - 17.06
149 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. Leases (i) The Group as a lessee operates certain land, buliding and plant & machineries under various lease arrangements. (ii) On March 30, 2019, Ministry of Corporate Affairs (“MCA”) has notified the Ind AS 116, Leases which has replaced Ind-AS 17 “Leases”. Ind AS 116 ‘Leases’ eliminates the classification of leases as either finance leases or operating leases. All leases are required to be reported on an entity’s balance sheet as assets and liabilities. Leases are capitalised by recognising the present value of the lease payments and showing them either as right of use of the leased assets or together with property, plant and equipment. Rent expense is replaced by depreciation and interest expense in the statement of profit and loss. Each lease generally imposes a restriction that, unless there is a contractual right for the Group to sublet the asset to another party, the right-of-use asset can only be used by the Group. Leases are either non-cancellable or may only be cancelled by incurring a substantive termination fee. Some leases contain an option to extend the lease for a further term. The Group is prohibited from selling or pledging the underlying leased assets as security against the Group’s other debts and liabilities. For leases over office buildings and factory premises the Group must keep those properties in a good state of repair and return the properties in their original condition at the end of the lease. Further, the Group must insure items of property, plant and equipment and incur maintenance fees on such items in accordance with the lease contracts. Following the application of the modified retrospective method at the date of implementation of Ind AS 116 on April 1, 2019, whereby Right of Use Assets of ₹ 78,197.98 lacs (net of depreciation) were recognised which includes finance lease assets (previously classified under property plant & equipment) having carrying value amounting to ₹ 56,356.25 lacs which have been reclassified as right to use assets at the date of initial recognition. There was no impact on deferred tax assets and deferred tax liabilities as the corresponding deferred tax assets and deferred tax liabilities attributable to the lease liabilities and right-of-use assets relate to income taxes levied by the same taxation authority within the same legal entity and were therefore offset. (iii) On April 1, 2019, the Group adopted Ind As 116 “Leases”, which resulted in the recognition of lease liabilities and right-of-use assets for operating lease contracts with fixed terms and future minimum lease payments as summarized in the following table:
(₹ in lacs) Total Operating lease commitments as at March 31, 2019 7,570.65 Discounted using the lessee’s incremental rate of borrowing at the date of initial application 5,038.22 Finance lease obligation recognised as at March 31,2019 79,196.47 Additional lease liabilities as of April 1, 2019 from leases previously classified as operating leases in 2,986.62 accordance with Ind AS-17 Recognition exemption for leases of low-value assets (28.78) Recognition exemption for short-term leases (5,316.27) Lease liability recognised as at April 1, 2019 81,876.26 (iv) For leases that were classified as finance leases applying Ind AS 17, the carrying amount of the right-of-use asset and the lease liability at the date of initial application is equal to the carrying amount of the lease asset and lease liability immediately before that date measured applying Ind AS 17 on March 31, 2019. The carrying amount of finance lease assets and lease liabilities was ₹ 56,356.25 lacs and ₹ 79,196.47 lacs, respectively as of March 31, 2019. (v) There were no impacts on retained earnings upon implementation of Ind AS 116. (vi) Total cash outflow for leases includes: (₹ in lacs) Total Repayment of principal portion of lease liabilities 6,076.28 Interest paid on lease liabilities 13,043.46
150 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. Financial Assets A. Investments (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (I) Non-current investments
i) Investments in equity instruments accounted for using equity method
(a) Investment in associates
Jawahar Credit & Holdings Private Limited - 8,643,742 (March 31, 2019: 8,643,742) 940.31 940.31 equity shares of ₹10/- each fully paid up - unquoted (Refer sub-note (iii))
Less: Share of loss (940.31) (940.31)
Bhushan Capital & Credit Services Private Limited - 8,643,742(March 31, 2019: 940.31 940.31 8,643,742) equity shares of ₹ 10/- each fully paid up - unquoted (Refer sub-note (iii))
Less: Share of loss (940.31) (940.31)
Total investment in associates - -
Total investments in equity instruments using equity method - -
(b) Other non-current investments in equity instruments at fair value through other comprehensive income
Andal East Coal Company Private Limited - 330,000 (March 31, 2019: 3,30,000) - - equity shares of ₹ 10/- each fully paid up - unquoted (Refer sub-note (ii) below)
Tata Steel Limited - 13,500 (March 31, 2019: 13,500) equity shares of ₹10/- each 36.39 70.31 fully paid up - quoted
Bhushan Buildwell Private Limited - 4,900 (March 31, 2019: 4,900 ) equity shares of 24.74 24.74 ₹ 10/- each fully paid up - unquoted
Saraswat Co-operative Bank Limited - 2,500 (March 31, 2019: 2,500) equity shares 0.82 0.82 of ₹ 10/- each fully paid up - unquoted
Bhushan Steel Bengal Limited - 50,000 (March 31, 2019: 50,000) equity shares of ₹ 5.00 5.00 10/- each fully paid up - unquoted
United Bank of India - 2,212 (March 31, 2019: 2,212) equity shares of ₹ 10 each fully 0.09 - paid up
Coal India Limited - 50,018 (March 31, 2019: 50,018) equity shares of ₹ 10 each fully 70.04 - paid up
Total other investment 137.08 100.87
Total investments (a+b) 137.08 100.87
Quoted Investments
Aggregate carrying amount and market value of quoted investments 36.39 70.31
Aggregate carrying amount of unquoted investments 100.69 30.56
151 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(₹ in lacs) As at As at March 31, 2020 March 31, 2019 (II) Current investments (a) Investment carried at fair value through profit or loss Investment in mutual funds - Unquoted Tata Mutual Fund - 17,679.15 Reliance Liquid Fund - 20,096.70 Aditya Birla Sunlife Liquid Fund - 21,439.92 DSP Liquidity Plan - Growth - 7,698.70 Axis Liquid Fund - Growth - 8,694.28 ICICI Prudential Liquid Fund - Growth - 10,249.52 Invesco India Liquid Fund - Growth - 13,222.97 Kotak Liquid Scheme - Growth - 5,203.75 SBI Mutual Fund - Growth - 10,107.04 UTI Liquid Cash Plan - Growth - 17,849.77 Sundaram Money Fund - Growth - 12,706.63 Baroda Pioneer Money Fund - Growth - 3,096.48 HDFC Liquid Fund - Growth - 6,341.46 L & T Liquid Fund - Growth - 5,103.91 - 159,490.28 Notes: (i) Refer note 39B for determination of fair values of current & non-current investments. (ii) The Group held investment in equity shares of Andal East Coal Company Private Limited (AECPL) which was classified as a joint venture till January 24, 2017. The Company recognised impairment loss on such investment during the previous year aggregating to ₹ 145.50 lacs which had been disclosed under ‘exceptional items’ in statement of profit and loss. As per the order dated January 24, 2017, Calcutta high court had directed winding-up of AECPL and subsequently liquidators were appointed to carry on such liquidation process. Pursuant to this, the Group had lost joint control over AECPL and its investment was classified as FVTOCI with fair value of ₹ Nil upon initial recognition. (iii) Tata Steel BSL Limited (TSBSL) (formerly known as Bhushan Steel Limited) was being shown as promoter of Jawahar Credit & Holdings Private Limited (“”JCHPL””) and M/s Bhushan Capital & Credit Services Private Limited (“”BCCSPL””). These are entities connected to the previous management of the Company. The Company has written to JCHPL, BCCSPL and the Registrar of Companies (National capital Territory of Delhi & Haryana) intimating that TSBSL should not be identified as promoter in these two companies. B. Loans Non-Current (Unsecured, considered good unless otherwise stated) (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Security deposits 5,006.14 4,625.74 (b) Loans to employees 8.08 20.54 (c) Other loans - Balances - credit impaired 523.75 523.75 Less: Allowance for expected credit losses (523.75) (523.75) 5,014.22 4,646.28
152 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Current (Unsecured, considered good unless otherwise stated) (₹ in lacs)
As at As at March 31, 2020 March 31, 2019 (a) Security deposits - Unsecured, considered good 2,466.28 5,000.36 - Balances - credit impaired 8,210.20 15,151.94 Less: Allowance for expected credit losses (8,210.20) (15,151.94) 2,466.28 5,000.36 (b) Loans to employees 92.75 152.50 (c) Inter corporate deposits - Balances - credit impaired 760.00 760.00 Less: Allowance for expected credit losses (760.00) (760.00) 2,559.03 5,152.86 (i) Carrying amounts of current loans are a reasonable approximation of their fair values.
C. Other Financial Assets Non Current (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Recoverable for coal block (Refer sub-note (i)) - Unsecured, considered good 41,456.43 41,456.43 - Unsecured, considered doubtful 14,833.52 14,833.52 Less: Allowance for expected credit losses (14,833.52) (14,833.52) 41,456.43 41,456.43 (b) Earmarked bank balances (Refer sub-note (ii) 307.16 3,138.43 307.16 3,138.43 41,763.59 44,594.86 (i) For details of coal block advance, refer note 32C. (ii) Non-current earmarked bank balances represent deposits and balances with bank not due for realisation within 12 months from the balance sheet date. These are primarily placed as security with government bodies and as margin money against issue of bank guarantees. Earmarked bank balances includes interest accrued but not due.
Current (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Refund receivable - Unsecured, considered good 9,170.70 9,465.89 - Unsecured, considered doubtful (185.98) 517.00 Less: Allowance for credit losses 185.98 (517.00) 9,170.70 9,465.89 9,170.70 9,465.89 (i) Carrying amounts of other current financial assets are a reasonable approximation of their fair values.
153 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. Derivative Instruments (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Derivative assets Forward Contracts 5,142.54 214.07 Total derivative assets 5,142.54 214.07 (b) Derivative liabilities Forward Contracts 763.77 4,141.57 Total derivative liabilities 763.77 4,141.57
8. Other Assets Non current (Unsecured, considered good unless otherwise stated) (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Capital advances Unsecured, considered good 3,804.80 8,162.34 Unsecured, considered doubtful 4,649.94 673.00 Less: Provision for doubtful balances (4,649.94) (673.00) 3,804.80 8,162.34 (b) Balances with statutory authorities Unsecured, considered good 53,955.10 49,588.11 Unsecured, considered doubtful 36,458.88 31,651.06 Less: Provision for doubtful balances (36,458.88) (31,651.06) 53,955.10 49,588.11 (c) Advance to suppliers 3,255.70 3,255.70 (d) Prepaid lease payments for operating leases (Refer note 5) - 19,161.94 (e) Prepaid expenses 247.90 189.81 (f) Other advances - 0.81 Total (a+b+c+d+e+f) 61,263.50 80,358.71
Current (Unsecured, considered good unless otherwise stated) (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Balances with statutory authorities 39,063.35 20,023.53 (b) Advance to suppliers Unsecured, considered good 25,277.71 31,080.54 Unsecured, considered doubtful 1,951.50 - Less: Provision for doubtful advances (1,951.50) - 25,277.71 31,080.54 (c) Prepaid lease payments for operating leases (Refer note 5) - 231.37 (d) Prepaid expenses 1,570.04 737.41 (e) Other advances 74.27 105.50 Total (a+b+c+d+e) 65,985.37 52,178.36
154 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. Income Tax Assets (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Advance tax and tax deducted at source receivable (net of tax provisions) 4,256.10 3,181.98 4,256.10 3,181.98 10. Inventories (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Raw materials 133,975.87 170,045.57 (b) Finished and semi-finished goods 216,180.84 196,304.65 (c) Stores and spares 120,601.14 83,251.65 Less : Provision (898.00) - (d) Others 14,090.03 8,586.27 483,949.88 458,188.14
Included above, goods-in-transit: (i) Raw materials 19,265.89 31,290.01 (ii) Stores and spares 8,442.40 2,739.07 27,708.29 34,029.08 (i) Value of inventories above is stated after provisions (net of reversal) ₹ 898.00 lacs (March 31, 2019: ₹ 977.15 lacs) for write-downs to net realisable value and provision for slow moving and obsolete items. 11. Trade Receivables (Unsecured) (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Trade Receivables considered good 70,238.62 79,539.82 Trade Receivables - credit impaired 9,542.63 8,506.72 79,781.25 88,046.54 Less: Allowance for expected credit losses (9,542.63) (18,345.33) 70,238.62 69,701.21 (i) For details of receivables from related parties, refer note 36. (ii) Trade receivables relate to Group’s contracts with its customers, are non-interest bearing and are generally on credit terms not exceeding 12 months.
(iii) The Group recognizes lifetime expected credit losses on trade receivables using a simplified approach by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in provision matrix.
(iv) Movement in allowance for credit losses of receivables is as follows: (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Balance at the beginning of the year 18,345.33 17,060.00 Charge in statement of profit & loss - 1,285.33 Release to statement of profit & loss (8,802.70) - Balance at the end of the year 9,542.63 18,345.33
155 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(v) Ageing of trade receivables and credit risk arising there from is as below: (₹ in lacs) As at March 31, 2020 Gross carrying % of expected Allowance for Net carrying amount credit losses expected credit amount losses Amount not yet due 45,779.96 0% 89.96 45,690.00 Less than three months overdue 19,668.26 0% 82.48 19,585.78 Between three to six month overdue 1,104.40 18% 197.86 906.54 Between six month to one year overdue 527.22 27% 141.73 385.49 Greater than one year overdue 12,701.41 71% 9,030.60 3,670.81 Balance at the end of the year 79,781.25 9,542.63 70,238.62
(₹ in lacs) As at March 31, 2019 Gross carrying % of expected Allowance for Net carrying amount credit losses expected credit amount losses Amount not yet due 43,096.79 0% 62.15 43,034.64 Less than three months overdue 19,544.36 2% 354.41 19,189.95 Between three to six month overdue 3,118.76 12% 368.76 2,750.00 Between six month to one year overdue 6,720.94 75% 5,013.95 1,706.99 Greater than one year overdue 15,565.69 81% 12,546.06 3,019.63 Balance at the end of the year 88,046.54 18,345.33 69,701.21 (vi) The Group considers its maximum exposure to credit risk with respect to customers as at March 31, 2020 to be ₹ 79,781.26 lacs (March 31, 2019: ₹ 88,046.54 lacs), which after consideration of allowance for expected credit losses, is the fair value of trade receivables . The Group’s exposure to customers is diversified and no single customer contributes more than 10% of the outstanding receivables as at March 31, 2020 and March 31, 2019. (vii) There are no outstanding receivable debts due from directors or other officers of the Company.
12. Cash and Cash Equivalents (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Cash in hand 51.21 13.99 (b) Cheques in hand - 62.49 (c) Balance with banks - In current accounts 37,672.08 27,678.07 - Deposits with original maturity of less than three months 34,760.10 10.56 72,483.39 27,765.11 (i) The carrying amounts of cash and cash equivalents closely approximate their fair values.
156 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
13. Other Balances With Banks (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Earmarked balances with banks - Unpaid dividend 9.05 9.05 - Deposit with original maturity of more than three months but less than twelve months 12,589.76 12,680.61 12,598.81 12,689.66 (i) Earmarked balances with bank represent balances held for unpaid dividends and margin money/fixed deposits against issue of bank guarantees. (ii) The carrying amounts of other balances with banks closely approximate their fair values.
14. Equity Share Capital (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Authorised: 46,500,000,000 Ordinary equity shares of ₹ 2 each (March 31, 2019: 46,500,000,000) 930,000.00 930,000.00 930,000.00 930,000.00 Issued: 1,097,530,242 Ordinary equity shares of ₹ 2 each (March 31, 2019: 1,097,530,242) 21,950.60 21,950.60 21,950.60 21,950.60 Subscribed and Paid up: 1,093,439,768 Ordinary equity shares of ₹ 2 each (March 31, 2019: 1,093,439,768 ) 21,868.80 21,868.80 21,868.80 21,868.80
a) Reconciliation of number of shares outstanding and the amount of share capital: (₹ in lacs) As at March 31, 2020 As at March 31, 2019 Number of shares Amount (₹ in lacs) Number of shares Amount (₹ in lacs) Shares outstanding at the beginning of the year 1,093,439,768 21,868.80 226,514,746 4,530.30 Shares issued during the year (Refer sub-note (i)) - - 866,925,022 17,338.50 Shares bought back during the year - - - - Shares outstanding at the end of the year 1,093,439,768 21,868.80 1,093,439,768 21,868.80 i) During the previous year, the Company had issued 866,925,022 shares at the face value of ₹ 2 per share by way of private placement of shares.
b) Rights, preferences and restrictions attached to the equity shares The Group has only one class of issued, subscribed and paid up equity shares having a par value of ₹ 2/- per share. Each holder of equity shares is entitled to one vote per share The Company declares and pays dividend in Indian rupees. The dividend, if any, proposed by the Board of Directors is subject to approval of the Shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the share holder.
157 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
c) Details of the shareholders holding more than 5% share in the Company
As at March 31, 2020 Number of shares % of holding held Equity shares of ₹ 2/- each fully paid up 1. Bamnipal Steel Limited 794,428,986 72.65%
As at March 31, 2019 Number of % of holding shares held Equity shares of ₹ 2/- each fully paid up 1. Bamnipal Steel Limited 794,428,986 72.65%
d) Details of shares held by the Holding Company
As at March 31, 2020 As at March 31, 2019 Number of % of holding Number of % of holding shares held shares held Equity shares of ₹ 2/- each fully paid up 1. Bamnipal Steel Limited 794,428,986 72.65% 794,428,986 72.65%
15. Other Equity
(₹ in lacs) As at As at March 31, 2020 March 31, 2019 a) Capital redemption reserve Balance as at the beginning of the period 693.34 693.34 Changes during the year - - Balance as at the end of the period 693.34 693.34
b) Securities premium Balance as at the beginning of the period 72,576.10 72,576.10 Changes during the year - - Balance as at the end of the period 72,576.10 72,576.10
c) Debenture redemption reserve Balance as at the beginning of the period - 36,512.50 Changes during the year - (36,512.50) Balance as at the end of the period - -
d) General reserve Balance as at the beginning of the period 1,942.03 1,942.03 Changes during the year 80,414.65 - Balance as at the end of the period 82,356.68 1,942.03
e) Retained earnings Balance as at the beginning of the period 564,350.09 527,837.59 Changes during the year - 36,512.50 Balance as at the end of the period 564,350.09 564,350.09
158 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
) f Retained earnings (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Balance as at the beginning of the period (3,076,414.73) (3,248,127.47) Profit/(Loss) during the year (62,849.08) 171,188.91 Remeasurement of defined employee benefit plans (732.44) 523.83 Acquisition of Subsidiary (150.15) Balance as at the end of the period (3,140,146.41) (3,076,414.73)
g) Equity component of compound financial instruments The compound financial intrument relate to the Optionally Convertible Redeemable Preference shares (OCRPS) and Non Convertible Redeemable Preference Shares (NCRPS) issued by the Company. A. Details of authorised, issued, subscribed and paid-up capital (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Authorised: 22,000,000 Preference shares of ₹ 100 each (March 31, 2019: 22,000,000) 22,000.00 22,000.00 12,000,000,000 Non Convertible Redeemable Preference Shares of ₹ 10 each (March 31, 2019: 1,200,000.00 1,200,000.00 12,000,000,000) 12,000,000,000 Optionally Convertible Redeemable Preference shares of ₹ 10 each (March 31, 1,200,000.00 1,200,000.00 2019: 12,000,000,000) 2,422,000.00 2,422,000.00 Issued: 10,700,000,000 Non Convertible Redeemable Preference Shares of ₹ 10 each (March 31, 2019: 1,070,000.00 1,070,000.00 10,700,000,000) 9,000,000,000 Optionally Convertible Redeemable Preference shares of ₹ 10 each (March 31, 900,000.00 900,000.00 2019: 9,000,000,000) 1,970,000.00 1,970,000.00 Subscribed and Paid up: 10,700,000,000 Non Convertible Redeemable Preference Shares of ₹ 10 each (March 31, 2019: 1,070,000.00 1,070,000.00 10,700,000,000) 9,000,000,000 Optionally Convertible Redeemable Preference shares of ₹ 10 each (March 31, 900,000.00 900,000.00 2019: 9,000,000,000) 1,970,000.00 1,970,000.00
B. Reconciliation of number of shares outstanding: Non Convertible and Redeemable Preference Shares (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Shares outstanding at the beginning of the year 10,700,000,000 - Shares issued during the year (Refer sub-note (I)) - 10,700,000,000 Shares bought back during the year - - Shares outstanding at the end of the year 10,700,000,000 10,700,000,000 I. During previous year, the Company had issued 10,700,000,000 shares at the face value of ` 10 per share by way of private placement of shares.
159 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Optionally Convertible and Redeemable Preference shares
(₹ in lacs) As at As at March 31, 2020 March 31, 2019 Shares outstanding at the beginning of the year 9,000,000,000 - Shares issued during the year (Refer sub-note (I)) - 9,000,000,000 Shares bought back during the year - - Shares outstanding at the end of the year 9,000,000,000 9,000,000,000 I. During previous year, the Company had issued 9,000,000,000 shares at the face value of ` 10 per share by way of private placement of shares. C. Rights, preferences and restrictions attached to the preference shares The Company has issued preference shares having a par value of ₹ 10/- per share. Preference shares carry voting rights as per the provisions of Section 47(2) of the Companies Act, 2013. The Company declares and pays dividend in Indian rupees. The preference shares shall carry a preferential right vis-à-vis equity shares of the Company with respect to payment of dividend and repayment of capital. However, the holders of the preference shares shall be paid dividend on a non-cumulative basis. The preference shares shall be non-participating in the surplus funds and also in the surplus assets and profits which may remain after the entire capital has been repaid, on winding up of the Company. For terms of redemption, refer sub-note (ii) of Note 16A - Borrowings. D. Equity shares reserved for issue under option to convert Optionally Convertible Redeemable Preference shares to equity shares (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Equity shares reserved for issue under option 2,947,920,079 2,947,920,079.00 E. Terms of conversion attached to Optionally Convertible Redeemable Preference shares OCRPS shall be convertible into equity shares at the option of TSL within a period of 18 months from the date of allotment at ₹ 30.53 per share. F. Details of the shareholders holding more than 5% share in the Company Non Convertible and Redeemable Preference Shares
As at March 31, 2020 Number of shares % of holding held Preference shares of ₹ 10/- each fully paid up 1. Tata Steel Limited 10,700,000,000 100.00%
Optionally Convertible Redeemable Preference shares
As at March 31, 2020 Number of shares % of holding held Preference shares of ₹ 10/- each fully paid up 1. Tata Steel Limited 9,000,000,000 100.00%
G. Equity component of compound financial instruments (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Balance as at the beginning of the period 1,729,582.05 - Transactions with owners in their capacity as owners - 1,729,582.05 Balance as at the end of the period 1,729,582.05 1,729,582.05
160 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
h) Capital contribution (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Balance as at the beginning of the period 2,518,550.72 - Transactions with owners in their capacity as owners - 2,518,550.72 Balance as at the end of the period 2,518,550.72 2,518,550.72
i) Foreign currency translation reserve (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Balance as at the beginning of the period (1,210.73) (1,198.67) Changes during the year (39.82) (12.06) Balance as at the end of the period (1,250.55) (1,210.73)
j) Equity instruments at fair value through other comprehensive income (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Balance as at the beginning of the period 59.90 66.70 Other comprehensive income recognised during the period (90.82) (6.80) Balance as at the end of the period (30.92) 59.90 Total other equity 1,826,681.11 1,810,128.79
k) Description of the nature of reserves existing in the Company:- Capital redemption reserve - The Companies Act, 2013 requires that when a Company purchases its own shares out of free reserves or securities premium account, a sum equal to the nominal value of the shares so purchased shall be transferred to a capital redemption reserve account and details of such transfer shall be disclosed in the balance sheet. The capital redemption reserve account may be applied by the Company, in paying up unissued shares of the Company to be issued to shareholders of the Company as fully paid bonus shares. The Company established this reserve pursuant to the redemption of preference shares issued in earlier year. Securities premium account - Securities premium account is used to record premium received on issue of shares. The account is utilised in accordance with the provisions of the Companies Act, 2013. Debenture redemption reserve - Upto the previous year the Companies Act, 2013 required that where a Company issues debentures, it shall create a debenture redemption reserve out of profits of the Company available for payment of dividend. The Company is required to maintain a Debenture Redemption Reserve of 25% of the value of debentures issued, either by a public issue or on a private placement basis. The amounts credited to the debenture redemption reserve cannot be utilised by the Company except to redeem debentures.Since, the debentures were redeemed during the previous year, hence ` 36,512.50 lacs appearing in the debenture redemption reserve was transferred to general reserve during the previous year. Capital reserve - Capital reserves represents the difference between value of net assets transferred to the Company in the course of business combinations and the consideration paid for such combinations. General reserve - Under the erstwhile Companies Act 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to the introduction of the Companies Act, 2013, the requirement to mandatorily transfer a specified percentage of net profit to general reserve has been withdrawn. Retained earnings - Retained earnings are created from the profit/ loss of the Company, as adjusted for distributions to owners, transfers to other reserves, etc. Equity component of compound financial instruments - The Company has issued Optionally Convertible Redeemable Preference Shares (OCRPS) & Non Convertible Redeemable Preference shares (NCRPS) during the financial year ended March 31, 2019. Considering the accounting principles to be followed in line with Indian Acoounting Standards, the Company has computed the liability portion of NCRPS & OCRPS as the present value of the contractual obligations associated with the instrument. The difference between the issue amount of the OCRPS & NCRPS and the liability so computed has been treated as the ‘Equity component of compound financial instruments’ and Grouped under other equity. Capital contribution - During the previous year, post implementation of the approved resolution plan dated May 15, 2018, Bamnipal Steel Limited (Holding Company), in its capacity as the promoter of the Company, had waived off novated debts (reduced by the cost of novation) amounting to ` 2,518,550.72 lacs. The Company recognised such waiver as a capital contribution made during the previous year as an item of ‘Other equity’. Refer Note 43 for details of accounting of resolution plan.
161 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Other comprehensive income - The Group has elected to recognise changes in the fair value of certain investments in equity instruments in other comprehensive income. These changes are accumulated within FVTOCI reserve within equity. The Company transfers amount from this reserve to retained earnings when the relevant equity instruments are derecognised. 16. Financial Liabilities A. Borrowings Non Current (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Secured (i) Term loans from banks - Indian rupees loans (Refer sub-note (i)) 1,242,244.52 1,384,542.07 (ii) Lease liabilities (Refer sub-note(iii)) 76,288.56 79,196.47 1,318,533.08 1,463,738.54 (b) Unsecured (i) Liability component of compound financial instruments (Refer sub-note(ii)) 265,911.64 239,075.38 265,911.64 239,075.38 Less: Current maturities of lease liabilities classified under ‘other financial liabilities’ 11,187.54 5,583.18 1,573,257.18 1,697,230.74
Current (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Secured (Refer sub-note(iv)) (i) Working capital facilities from banks 39,700.00 - Indian rupees loans 39,700.00 - (ii) Cash Credit / Packing Credits 4,000.00 - 43,700.00 - (b) Unsecured (i) Working capital facilities from banks 30,000.00 - Indian rupees loans 30,000.00 - (ii) Preference shares (redeemable on demand) 100.00 100.00 (iii) Inter corporate deposits 576.64 613.77 (iv) Other Loans 15,000.00 - 45,676.64 713.77 89,376.64 713.77 (i) Rupee Term Loans as at March 31, 2020 amounting to ₹ 1,242,244.52 lacs are secured by a charge on all of the Company’s immovable & movable properties including movable machinery, spares, tools & accessories, ranking pari passu inter-se. The term loan shall be payable across 18 half yearly installments starting from March 2022.The interest rate on such term loans is 0.55% spread over MCLR (Marginal Cost of fund based Lending Rate). The Company has made ` 1,430 Crores as prepayments, the next scheduled repayment will fall due in March 2024. (ii) During the previous year, the Company had issued 11.09% Non-Convertible Redeemable Preference Shares (“NCRPS”) and 8.89% Optionally Convertible Redeemable Preference Shares (“OCRPS”) to Tata Steel Limited (“TSL”), on private placement basis. The NCRPS and OCRPS are redeemable at par value at maturity, i.e. 20 years from the date of allotment. The Company has an option to early redeem the NCRPS and OCRPS at 3 monthly intervals from the date of allotment. OCRPS shall be convertible into equity shares at the option of TSL within a period of 18 months from the date of allotment at ₹ 30.53 per share. The coupon payment is discretionary and accordingly these are accounted for as compound financial instruments. (iii) As a result of the adoption of Ind AS 116 “Leases” as of April 1, 2019, the Group has recognised right–of–use assets and lease liabilities related to non–cancellable operating leases (Refer Note 5). Lease Liabilities are secured against the assets against which the lease liability is arising. Lease liabilities as at March 31, 2020 have been determined using an incremental borrowing rate ranging from 9% to 11.5%. (iv) Working capital facilities from banks as at March 31, 2020 amounting to ₹ 39,700 lacs are secured by a first pari passu charge on all of the stock of raw materials, finished goods, stock in process, consumable stores and book debts of the Company. Cash credit / Packing credit as at
162 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2020 amounting to ₹ 4,000 lacs are secured by a first pari passu charge on all of the stock of raw materials, finished goods, stock in process, consumable stores and book debts and other current assets. (v) Reconciliation of liabilities arising from financing activities: (₹ in lacs) Term loans Liability Other Loans Lease Liability Total from banks component (including of compound current financial maturities of instruments lease liabilities) Balance as at 1st April 2019 1,384,542.07 239,075.38 713.77 79,196.47 1,703,527.69 Cash Flows (143,090.77) - 88,700.00 (6,076.28) (60,467.05) Non-Cash Changes 793.22 26,836.27 (37.13) 3,168.37 30,760.73 Fair Value Changes and Other Changes 793.22 26,836.27 (37.13) 27,592.36 Impact of transition to Ind AS 116 - - - 3,168.37 3,168.37 Balance as at 31st March 2020 1,242,244.52 265,911.65 89,376.64 76,288.56 1,673,821.37
. B Trade Payables (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Total outstanding dues of micro enterprises and small enterprises (refer note 33) 5,550.50 1,254.42 (b) Total outstanding dues of creditors other than micro enterprises and small enterprises 277,283.19 307,664.51 282,833.69 308,918.93 (i) The Group considers its maximum exposure to liquidity risk with respect to vendors as at March 31, 2020 to be ₹ 282,833.69 lacs (March 31, 2019: ₹ 308,918.93 lacs), which is the fair value of trade payables.
C. Other Financial Liabilities Non Current (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Deferred sales tax payable 1,802.35 4,385.37 (b) Other payables 1,818.00 1,403.60 3,620.35 5,788.97
Current (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Current maturities of lease liabilities 11,187.54 5,583.18 (b) Interest accrued on borrowings 9,430.02 - (c) Liability for capital goods 4,275.07 48,986.83 (d) Security deposits 147.74 707.27 (e) Dues to directors - 3.92 (f) Unclaimed dividend 6.85 9.04 (g) Other payables 25,771.00 11,664.30 50,818.22 66,954.54 (i) Other payables includes: (a) Collection from customers pending remittance to bank ₹ 9,502.09 lacs (March 31, 2019: ₹ 2,682.61 lacs). (b) Liability for employee payables ₹ 3,028.64 lacs. (March 31, 2019: ₹ 3,960.62 lacs). (ii) Carrying amounts of other current financial liabilities are a reasonable approximation of their fair values.
163 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
17. Other Liabilities Current (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Advances received from customers 9,866.49 12,807.39 (b) Statutory Dues 13,254.66 23,995.77 23,121.15 36,803.16 (i) The advances received from customers represents contract liability balance outstanding as at the respective dates. The advance received from customers outstanding as at April 1, 2019 were fully recognised as revenue during the year ended March 31, 2020 upon satisfaction of the associated performance obligations.
18. Provisions Non Current (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Provision for employee benefits - Gratuity (Refer note 35) 4,967.05 3,416.59 - Compensated absences 2,663.30 2,263.18 7,630.35 5,679.77
Current (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Provision for employee benefits - Gratuity 4.16 - - Compensated absences 203.08 294.03 207.24 294.03
19. Deferred Income Non Current (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (a) Deferred income 189.21 227.69 189.21 227.69
164 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
20. Revenue From Operations (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019 (a) Sale of products to customers 1,723,779.36 1,986,010.95 (b) Other operating revenue Other sales to customers 74,145.99 77,551.46 Export and other incentives (Refer sub-note (i)) 21,988.83 25,597.94 1,819,914.18 2,089,160.35 (i) This includes amount recognised on account of Maharashtra Package Scheme of Incentives, 1993 amounting to ₹ 9,599.10 lacs (March 31, 2019 ₹ 14,332.48 lacs). Refer Note 44 for further details. Geographical information Geographical information, by region, of the Group’s revenue from operations, has been disclosed below and represents Tata Steel BSL’s most significant regional markets. (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019 (a) India 1,490,156.86 1,786,943.07 (b) Asia excluding India 236,761.76 177,654.52 (c) Europe 59,776.38 83,694.64 (d) Rest of world 33,219.18 40,868.11 1,819,914.18 2,089,160.34 Details of performance obligation associated with revenue recognition Satisfaction of performance obligations:- The Group’s revenue is derived from the single performance obligation to transfer primarily steel products under arrangements in which the transfer of control of the products and the fulfillment of the Group’s performance obligation occur at the same time. Revenue from the sale of goods is recognised when the Group has transferred control of the goods to the buyer and the buyer obtains the benefits from the goods, the potential cash flows and the amount of revenue (the transaction price) can be measured reliably, and it is probable that the Group will collect the consideration to which it is entitled to in exchange for the goods. Whether the customer has obtained control over the asset depends on when the goods are made available to the carrier or the buyer takes possession of the goods, depending on the delivery terms. For the Group’s steel producing operations, generally the criteria to recognize revenue has been met when its products are delivered to its customers or to a carrier who will transport the goods to its customers, this is the point in time when the Group has completed its performance obligations. Revenue is measured at the transaction price of the consideration received or receivable, the amount the Group expects to be entitled to. Additionally, the Group identifies when goods have left its premises, not when the customer receives the goods. Therefore, the Group estimates, based on its historical experience, the amount of goods in-transit when the transfer of control occurs at the destination and defers the revenue recognition. In case of export sales, for delivery conditions whereby the Group arranges the logistics of the goods to its premises, the Group charges the freight on actual basis (actuals as levied by the transporter). In this case, the Group acts as an agent in arranging such logistics services. Hence, revenue from such services are netted off with the expenses as levied by the transporter.” Payment terms The sale of goods is typically made under credit payment terms differing from customer to customer and ranges between 0-60 days Variable considerations associated with such sales Periodically, the Group enters into volume or other rebate programs where once a certain volume or other conditions are met, it refunds the customer some portion of the amounts previously billed or paid. For such arrangements, the Group only recognizes revenue for the amounts it ultimately expects to realize from the customer. The Group estimates the variable consideration for these programs using the most likely amount method or the expected value method, whichever approach best predicts the amount of the consideration based on the terms of the contract and available information and updates its estimates in each reporting period.
165 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
21. Other Income (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019 (a) Interest income on: - Fixed deposits 829.59 2,508.44 - Others 434.19 375.03 (b) Net Gain / (Loss) on sale/fair valuation of investments 3,781.15 8,478.77 (c) Dividend income on long term investments 4.68 1.35 (d) Liabilities written back - 89.91 (e) Miscellaneous income 1,999.92 1,790.92 7,049.53 13,244.42
22. Raw Materials Consumed (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019 (a) Cost of raw materials consumed 1,081,639.00 1,163,663.41 Less: Expenses transferred to capital CWIP (4,106.93) (3,357.95) 1,077,532.07 1,160,305.46
23. Purchases Of Finished, Semi-Finished Steel & Other Products (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019 Purchase of Finished products 287.56 685.44 287.56 685.44
24. Changes In Inventories Of Finished Goods, Work-In-Progress And Stock-In-Trade (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019 (a) Closing stock - Finished goods 216,180.84 196,304.65 - Work-in-progress - - - Others 14,090.03 8,586.27 230,270.87 204,890.92 (b) Opening stock - Finished goods 196,304.65 172,552.04 - Work-in-progress - - - Others 8,586.27 4,520.83 204,890.92 177,072.87 Net Increase [ (b) - (a) ] (25,379.95) (27,818.05)
166 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
25. Employee Benefit Expense (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019
(a) Salaries and wages 39,497.23 35,310.67
(b) Contribution to provident and other funds 1,078.97 1,013.49
(c) Staff welfare expenses 419.64 707.69
40,995.84 37,031.85
Less: Expenses transferred to capital work in progress (93.45) (781.29)
40,902.39 36,250.56
26. Finance Costs (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019
(a) Interest on borrowings 154,630.04 380,969.12
(b) Interest on lease obligations 13,043.46 -
(c) Other borrowing cost 4,221.68 1,362.21
171,895.18 382,331.33
Less: Expenses transferred to capital CWIP (6,418.64) (7,113.45)
165,476.54 375,217.88
27. Depreciation And Amortisation Expense (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019
(a) Depreciation on tangible assets 135,694.21 144,165.90
(b) Amortisation of intangible assets 132.10 8.02
(c) Depreciation of right-of-use assets 10,514.37 -
146,340.68 144,173.92
167 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
28. Other Expenses (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019 (a) Consumption of stores, spares and consumables 141,163.76 130,745.05 (b) Packing material consumed 7,778.39 7,521.02 (c) Purchase of power and consumption of fuel 110,040.61 117,638.28 (d) Rent (Refer sub-note (ii)) 13,799.23 81,749.88 (e) Insurance charges 4,446.52 3,224.92 (f) Rates and taxes 1,218.26 934.66 (g) Repairs and maintenance: Building 1,168.26 718.20 Machinery 16,531.27 6,714.27 (h) Payment to auditors: Audit fees 392.92 353.73 Tax audit fee 40.00 35.00 Out-of-pocket expenses 59.49 47.57 For other services 9.04 3.06 (i) Freight and handling charges 92,555.03 89,093.63 (j) Commission, discounts and rebates 7,110.06 3,544.60 (k) Administrative expenses 6,109.29 5,567.52 (l) Contractual manpower costs 38,337.61 33,423.92 (m) Miscellaneous expenses (Refer sub-note (i)) 50,827.39 58,888.18 491,587.13 540,203.49 Less: Expenses transferred to capital CWIP (31.98) (197.91) 491,555.15 540,005.58 (i) Miscellaneous expenses includes a) Losses on account of foreign exchange fluctuation amounting to ₹ 3,579.49 lacs (March 31, 2019: ₹ 5,765.57 lacs). b) Expected credit loss amounting to (₹ 1,052.14 lacs) (March 31, 2019: ₹ 6,029.63 lacs) (ii) Expenses related to short-term leases and leases of assets of low value inclued in rent expenses were ₹ 186.80 lacs and ₹ 2.40 lacs, respectively, for the year ended March 31, 2020. Expenses related to variable lease payments not included in the measurement of lease liabilities were ₹ 12,664.03 for the year ended March 31, 2020.
29. Exceptional Items (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019
(a) Effects of implementation of resolution plan (Refer sub-note - (i) and (iii)) 15,359.67 315,927.27
(b) Provision for impairment on property, plant and equipment and other assets (Refer sub-note - (ii) (8,457.83) (18,326.60) and (iii))
6,901.84 297,600.67
i) Effects of implementation of resolution plan (Refer Note 43 for details of effects of resolution plan) As per the Resolution Plan approved by the NCLT, settlement of operational creditors has been done over a period of 12 months from the Closing Date, as defined in the Resolution Plan. Further, as per the Resolution Plan, the contingent liabilities and commitments, claims and obligations, stand extinguished and accordingly no outflow of economic benefits is expected in respect thereof.
168 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ii) Exceptional items recognised in current year financial statements During the year, impairment provision was created on Cold Roll Mill extension project in capital work in progress amounting to ₹ 2,081.30 lacs and induction furnace in Angul plant amounting to ₹ 2,174.90 lacs. Also impairment provision was created on advance to suppliers and capital advances extended prior to the corporate insolvency resolution process (‘CIRP’) of the Company amounting to ₹ 1,365.42 lacs and ₹ 2,836.21 lacs. iii) Exceptional items recognised in previous year financial statements (A) Effects of implementation of resolution plan (Refer Note 43 for details of effects of resolution plan) Pursuant to CIRP proceedings & implementation of resolution plan, there has been a gain of ₹ 315,927.27 lacs on account of the following:- (a) Operational creditors extinguishment - ₹ 55,212.35 lacs, (b) Redemption of Preference shares & waiver of related interest obligation - ₹ 242,557.34 lacs, (c) Extinguishment of dues towards financial creditors on account of pledged shares invocation - ₹ 18,157.58 lacs. (B) Provision for impairment on property, plant & equipment and other assets includes: (a) Provision for impairment of property, plant and equipment - ₹ 5,219.23 lacs. (b) Provision for impairment of certain non-current advances - ₹ 17,837.52 lacs. (c) Net reversal of provision for impairment made in earlier year - ₹ 4,730.14 lacs.
30. Earning Per Share Basic and diluted earning per share (“EPS”) amounts are calculated by dividing the profit/(loss) for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit/ (loss) attributable to equity holders of the Company (including the potential savings/expenses that would result from the conversion of the dilutive potential ordinary share) by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares. The following table reflects the income and shares data used in computation of the basic and diluted earnings per share: (₹ in lacs) Year ended Year ended March 31, 2020 March 31, 2019 (a) Profit/ (Loss) after tax (₹ in lacs) (62,848.91) 171,188.91 (b) Add:- Income that would result from the conversion of the dilutive potential ordinary share (₹ in lacs) 3,035.87 38,026.38 (c) Profit/(Loss) after tax to be considered for computation of Diluted Earnings Per Share (DEPS) (59,813.04) 209,215.29 (₹ in lacs) (d) Weighted average number of equity shares - Basic (Nos.) 1,093,439,768 981,808,327 Add:- Weighted average number of equity shares that would be issued on conversion of all the 2,947,920,079 18,937,586,654 dilutive potential equity shares into equity shares (Refer sub note (i)) (e) Weighted average number of equity shares - Diluted (Nos.) 4,041,359,847 19,919,394,981 Earning Per Share Basic (₹ / share) [ (a)/(c) ] (5.75) 17.44 Diluted (₹/ share) [ (b)/(d) ] (5.75) 1.05 Face value per share (₹) 2.00 2.00 (i) Durring the current year, Earning per share is anti-dilutive hence both Basic and Diluted earning per share is equal. During the previous year, the dilution was on account of:- Potential equity shares which may be issued on account of conversion option that exists in the Optionally Convertible Redeemable Preference Shares (OCRPS). OCRPS shall be convertible into equity shares at the option of the investor (being Tata Steel Limited) within a period of 18 months from the date of allotment at ₹ 30.53 per share, and, Potential equity shares which could have been issued on account of conversion option that existed in the Inter-Corporate Deposits (ICD) taken from Bamnipal Steel Limited. ICD was convertible into equity shares at the option of the investor (being Bamnipal Steel Limited) within a period of 18 months from the date of issue of ICD at face value of equity share,i.e., ₹ 2 per share. The dilution impact has been considered for previous period in which the ICD was outstanding,i.e., May 18, 2018 to March 19, 2019.
169 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
31. Tax Expenses a) Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate for year ended March 31, 2020 and March 31, 2019: (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Profit / (loss) before tax (62,848.89) 171,184.65 At India’s statutory income tax rate of 25.101% (March 31, 2019: 34.944%) (15,776.26) 59,818.76 (a) Incremental deferred tax assets on losses and unabsorbed depreciation not recognised 21,705.46 154,208.80 (b) Income exempt from tax/Items not deductible (6,989.82) 31,180.62 (c) Deferred taxes (assets)/liabilities relating to earlier years recognised during the year - (246,042.88) (d) Others 1,060.62 834.70 - - - - (i) The Company is subject to income tax in India on the basis of its standalone financial statements. The Company can claim tax exemptions/ deduction under the specific sections of the Income Tax Act, 1961 subject to fulfilment of prescribed conditions, as may be applicable. As per the Income Tax Act, 1961, the Company is liable to pay income tax based on higher of regular income tax payable or the amount payable based on the provisions applicable for Minimum Alternate Tax (MAT). MAT paid in excess of regular income tax during a year can be carried forward for a period of fifteen years and can be offset against future tax liabilities arising from regular income tax. A new section 115BAA has been inserted in the Income Tax Act, 1961, vide Taxation Laws (Amendment) Ordinance, 2019 (subsequently enacted on December 11, 2019 as The Taxation Laws (Amendment) Act, 2019) which provides domestic Company with an option to pay tax at a lower rate of 22% (effective rate of 25.168%) for any previous years relevant to the assessment year beginning on or after April 01, 2020. The rate shall be applicable subject to certain conditions , including that the total income should be computed without claiming any deduction or exemptions. MAT would not be applicable to companies opting to apply the lower tax rate. New tax regime once opted, can not be reversed. Basesd on above, the Company has opted to new tax regime and computed its tax liability on lower tax rate for assessment year 2020-21. The Company has not claimed certain deduction or exemption as prescribed which includes additional depreciation of ` 3,761.65 crores claimed in earlier years. However the same has been adjusted with the net block of assets as on April 01, 2019 as per the relevant provision of section 115BAA of Income Tax Act, 1961. The statutory tax rate applicable for assessment year 2019-20 was 34.944% (including surcharge and cess). (₹ in lacs) As at Provided As at Provided As at April 01, 2018 during the March 31, 2019 during the March 31, 2020 year year Deferred tax liability: (a) Related to property plant & equipment 470,095.62 28,265.63 498,361.25 (195,355.71) 303,005.54 (b) Investments carried at Fair value through - 258.65 258.65 (258.65) 0.00 profit or loss Total deferred tax liability 470,095.62 28,524.28 498,619.90 (195,614.36) 303,005.54 Deferred tax assets: (a) Accumulated business loss and unabsorbed 220,820.24 217,729.29 438,549.53 (174,531.75) 264,017.78 depreciation (b) Provision for doubtful debts 5,961.44 449.15 6,410.59 (4,008.90) 2,401.69 (c) Amount deductible on payment basis 200,901.00 (195,330.10) 5,570.90 (251.33) 5,319.57 (d) Others 42,412.94 5,675.94 48,088.88 (16,822.38) 31,266.50 Total deferred tax assets 470,095.62 28,524.28 498,619.90 (195,614.36) 303,005.54 Deferred tax liability (net) - - - - - Recognised in profit or loss as ‘tax expenses’ - - - - - Recognised in OCI - - - - - Total - - - - -
170 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(i) Deferred tax assets have not been recognised in respect of business losses and unabsorbed depreciation aggregating to ₹ 349,781.85 lacs as at March 31, 2020 (March 31, 2019: ₹ 321,093.41 lacs), where it is not probable that sufficient taxable income will be available in the future against which such the deferred tax assets can be realised in the normal course of business of the Company. (ii) The amounts and expiry dates, if any, of unutilised tax losses and deductible temporary differences for which no deferred tax asset is recognised in the balance sheet are given below: (₹ in lacs) Year of expiry Amount Carry forwards Business Losses 2022-23 5,396.79 Carry forwards Business Losses 2027-28 16,616.80 Unabsorbed depreciation No expiry 1,303,470.90 1,325,484.49
32. Commitments And Contingencies A. Contingent liabilities As per the approved Resolution Plan, contingent liabilities (which have / are capable of being crystallized) prior to May 18, 2018 (“Effective Date”) stand extinguished. Furthermore, the Resolution Plan, among other matters, provide that except to the extent of the amount payable to the relevant Operational Creditors in accordance with the Resolution Plan, all liabilities of the Company relating in any manner to the period prior to the Effective Date, immediately, irrevocably and unconditionally stand fully and finally discharged and settled and there being no further claims whatsoever, and all the rights of the Operational Creditors and Other Creditors to invoke or enforce the same stands waived off. It is provided that any and all legal proceedings initiated before any forum by or on behalf of any Operational Creditor (including Governmental Authorities) or any Other Creditors to enforce any rights or claims against the Company also stands extinguished. Further, in terms of the Resolution Plan, no Governmental Authority has any further rights or claims against the Company, in respect of the period prior to the Effective Date and / or in respect of the amounts written off and all legal proceedings initiated before any forum by or on behalf of any Operational Creditor (including Governmental Authorities) or any Other Creditors, to enforce any rights or claims against the Company will immediately, irrevocably and unconditionally stand withdrawn, abated, settled and/or extinguished. Further, the Operational Creditors of the Company (including Governmental Authorities) and Other Creditors will have no further rights or claims against the Company (including but not limited to, in relation to any past breaches by the Company), in respect of any liability for period prior to the Effective Date, and all such claims shall immediately, irrevocably and unconditionally stand extinguished. The Company has been legally advised that while the Resolution Plan provides for extinguishment of all liabilities of the Company owed to Operational Creditors and Other Creditors as of the Insolvency Commencement Date i.e. July 26, 2017, the implementation of the Resolution Plan does not have any such similar effect over claims or receivables owed to the Company. Accordingly, the Company has concluded that any receivables due to the Company, evaluated based on merits of underlying litigations, from various governmental agencies (presented under Other Assets - Non current) continue to subsist. . B Commitments (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Estimated amount of contracts remaining to be executed on capital account and not provided for 5,546.38 8,975.50 (net of advances) 5,546.38 8,975.50
C. Other matters (i) The Supreme Court of India vide its order dated September 24, 2014, cancelled the coal blocks allocated to various entities which includes one coal block allocated to the Company which were under development. Subsequently, the Government of India has issued the Coal Mines (Special Provision) Act 2015, which inter-alia deal with the payment of compensation to the affected parties in regard to investment in coal blocks. Receivable in respect of De-allocated coal block amounting to ₹ 56,289.95 lacs includes expenditure incurred of ₹ 14,833.52 lacs and advance given of ₹ 41,456.44 lacs. During the previous year, Company has provided provision for expenses incurred. In the opinion of the management, the Company will receive back the payments/expenditure paid/made, including borrowing cost and other incidental expenditure relating to de- allocated coal block. The Company has filed its claim for compensation with the Government of India, Ministry of Coal. Subsequently, the Company had filed a Writ Petition bearing No 6293 of 2016 for recovery of the amount before the Hon’ble Delhi High Court in which notices were issued on July 22, 2016 to Union of India and other. The Counter Affidavit(s) were filed by Union of India in November 2016 and subsequent thereto pleadings were completed.
171 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On May 24, 2018, the above matter came up for hearing before Delhi High Court. It was informed to the Court that vide office Memorandum dt March 20, 2018, New Patrapara Coal Block has been earmarked for allotment to Odisha Government. Union of India Counsel stated that as substantial progress is likely to be made within next 6-8 months, matter should be adjourned. BSL Advocate further pointed out that an amount of ` 370 Crore has been paid to IDCO, out of which ` 140 crore is still with IDCO. Delhi High Court has directed State Government/IDCO to file status report on land acquisition status/proceedings upto 10 days prior to next date of hearing. Matter was thereafter adjourned to September 27, 2018. Thereafter Union of India as well as state of Odisha filed their respective status report. In terms of status report, it was informed that as per updated allotment schedule, the allotment order tentatively be issued by November 14, 2018. On September 27, 2018, BSL prayed before the Court for restrain order for disbursal of money as deposited by BSL for land acquisition, however still not disbursed. Delhi High Court refused to grant such order.
On February 7, 2019, Delhi High Court directed Union of India to file specific undertaking, outlining the amounts payable to the Company and also the last date by which the amount could be disbursed.
Pursuant to letter dated November 22, 2019, Ministry of Coal ( “ MoC’) informed that all statutory license, consent approvals, permission required for undertaking of Coal mining operations in New Patrapara Coal Mine now vested to Singareni Collieries Company Ltd, pursuant to Allotment letter dated October 30, 2019.
Pursuant to letter dated February 10, 2020, MoC informed that an amount of ` 960.50 lacs has been sanctioned against cost of GR (Geological Reports) & Consent and asked the Company to submit undertaking in the prescribed format. The Company has submitted undertaking and also informed that as a leader it has made all investment in the coal mine in terms of allocation letter.
MoC /Union of India, filed supplementary affidavit dated February 11, 2020 before Delhi High Court vide which it has informed that payment of compensation can be paid to prior allottee after the mine is successfully allotted and compensation is deposited by successful allottee, following the sequence mentioned in section 9 of Coal Mine ( Special Provisions ) Act, 2015. It has been informed that New Patrapara Coal Mine has been allocated to Singareni Collieris Company Ltd ( a state Government Undertaking) and compensation to the prior allottee will be released very shortly. The Company has contended that above affidavit is not in compliance with order dated February 7, 2019, of Delhi High Court. Now the above matter is listed for hearing on July 8, 2020.
(ii) The Company was summoned by the Special Judge (Companies Act)/ Additional Sessions Judge — 03, Dwarka Courts, New Delhi (”Special Court”), to appear before the Special Court in relation to a criminal complaint (”Complaint”) filed by the Serious Fraud Investigation Office (”SFIO”) against the Company.
Further, Bhushan Energy Limited (now known as Angul Energy Limited), a subsidiary of the Company, was also named as an accused in relation to the Complaint and had also received Summons in relation to the Complaint to appear before the Special Court. The Complaint and Summons arose from the investigation initiated by the Ministry of Corporate Affairs, Government of India (through the SFIO), into the affairs of TSBSL and AEL relating to issues which arose prior to the acquisition of these companies by Tata Steel Limited, through the Corporate Insolvency Resolution Process.
The Company and AEL had filed writ petitions before the Delhi High Court (”High Court”) challenging the Complaint, Order of Cognizance dated August 16, 2019 and the Summons issued by the Special Court against TSBSL and AEL.
Based on the submissions and in terms of Section 32A of the IBC (Insolvency and Bankruptcy Code), as inserted by Section 10 of the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019 (subsequently enacted as an amendment to the act), the High Court was pleased to allow the Writ Petition(s) and set aside the Complaint, Order of Cognizance dated August 16, 2019 and the Summons as were issued against TSBSL and AEL.
In this connection, the Company on March 20, 2020 made appropriate disclosures and the said disclosures can be found on the websites of Bombay Stock Exchange, The National Stock Exchange of India and that of the Company.
172 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
33. Dues To Micro, Small And Medium Enterprises The dues to micro, small and medium enterprises as required under the Micro, Small and Medium Enterprises Development Act, 2006 to the extent information available with the Company is given below: (₹ in lacs)
As at As at March 31, 2020 March 31, 2019 a) The principal amount and the interest due thereon remaining unpaid to supplier as at the end of year - Principal amount due to micro, small and medium enterprises 5,546.26 1,648.20 - Interest due 4.24 6.93 b) The amount of interest paid by the buyer in terms of section 16 of the MSMED Act 2006 (27 of 2006) - - along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year c) The amount of interest due and payable for the period of delay in making payment (which have been - - paid but beyond the appointed day during the year) but without adding the interest specified under the MSMED Act 2006. d) The amount of interest accrued and remaining unpaid at the end of each accounting year. 4.24 6.93 e) The amount of further interest remaining due and payable even in the succeeding years, until such - - date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the MSMED Act 2006
34. Segment Reporting The business activity of the Group falls within one operating segment viz. “Steel” and substantially sale of the product is within the country. Hence the disclosure requirement of Indian Accounting Standard 108 of “Segment Reporting” issued by the Ministry of Corporate Affairs is not considered applicable. 35. Employee Benefits Defined Contribution Plans - General Description Provident Fund: During the year, the Company has recognised ₹ 882.36 Lacs (2018-19: ₹ 666.61 Lacs) as contribution to Employee Provident Fund in the statement of profit and loss. Defined Benefit Plans - General Description Gratuity: Each employee rendering continuous service of 5 years or more is entitled to receive gratuity amount equal to 15/26 of the monthly emoluments for every completed year of service at the time of separation from the Company. The following tables summarise the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the respective plan: a) Reconciliation of fair value of plan assets and defined benefit obligation: (₹ in lacs)
Gratuity (Funded) March 31, 2019 Fair value of plan assets 2,054.86 Defined benefit obligation 5,471.45 Net asset/ (liability) as at March 31, 2019 (3,416.59) March 31, 2020 Fair value of plan assets 1,769.34 Defined benefit obligation 6,740.55 Net asset/ (liability) as at March 31, 2020 (4,971.21)
173 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
) b Changes in the present value of the defined benefit obligation are, as follows: (₹ in lacs) Gratuity (Funded) Defined benefit obligation as at April 1, 2018: 5,372.80 Current service cost 606.14 Interest expense 414.24 Benefits paid (380.57) Actuarial (gain)/ loss on obligations - OCI (541.16) Defined benefit obligation as at March 31, 2019 5,471.45 Opening defined benefit obligation of subsidiaries acquired during the year 125.98 Current service cost 738.06 Interest expense 435.21 Benefits paid (727.04) Actuarial (gain)/ loss on obligations - OCI 696.90 Defined benefit obligation as at March 31, 2020 6,740.56
c) Changes in the fair value of plan assets are, as follows: (₹ in lacs) Gratuity (Funded) Fair value of plan assets as at April 1, 2018: 1,905.82 Contribution by employer 400.00 Benefits paid (380.57) Return on plan assets 129.61 Fair value of plan assets as at March 31, 2019 2,054.86 Claim received but not settled (55.92) Benefits paid (354.54) Return on plan assets 124.94 Fair value of plan assets as at March 31, 2020 1,769.34 (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Break up of fair value of plan assets - SBI Life 635.54 741.66 - LIC 599.23 753.35 - PNB Metlife 415.03 389.92 - Trust 119.54 169.93 Total fair value of plan assets 1,769.34 2,054.86
174 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(d) Amount recognised in Statement of Profit and Loss: (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Current service cost 738.06 606.14 Net interest expense 274.72 267.30 Amount recognised in statement of profit and loss 1,012.78 873.44
(e) Amount recognised in other comprehensive income: (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Actuarial (gain)/ loss on obligations Actuarial (gain)/ loss arising from change in demographic assumptions - (730.27) Actuarial (gain)/ loss arising from change in financial assumptions 7.47 (23.85) Actuarial (gain)/ loss arising from change in experience adjustment 8.97 212.96 Return on plan assets (excluding amounts included in net interest expense) 504.77 17.33 Amount recognised in other comprehensive Income for year ended 521.21 (523.83)
The principal assumptions used in determining obligations for the Company’s gratuity benefit plans are shown below: (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Discount rate (in %) 6.96% 7.81% Salary escalation (in %) 5.00% 5.00% Rate of return on plan assets (in %) 6.08% 6.80% Retirement age (in years) 60.00 60.00 Expected average remaining working lives of employees (in years)* 21.82 22.52 Expected contribution for the next annual reporting period (₹ in Lacs) 1,161.91 922.40 * Mortality & Morbidity rates - 100% of IALM (2012-14)
A quantitative sensitivity analysis for significant assumption as at March 31, 2020 and March 31, 2019 is as shown below: (₹ in lacs) Gratuity As at March 31, 2020 Discount rate Salary escalation Expected average remaining working lives of employees Sensitivity level + 0.5% - 0.5% + 0.5% - 0.5% - - Impact on defined benefit obligation (314.54) 341.30 346.23 (321.64) Not material Not material
(₹ in lacs) As at March 31, 2019 Discount rate Salary escalation Expected average remaining working lives of employees Sensitivity level + 0.5% - 0.5% + 0.5% - 0.5% - - Impact on defined benefit obligation (231.43) 250.39 256.09 (238.47) Not material Not material
The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.
175 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Maturity profile of defined benefit obligation (gratuity)
As at As at March 31, 2020 March 31, 2019 Within the next twelve months (next annual reporting period) 396.25 617.96 Between two and five years 2,230.91 1,328.99 Between five and ten years 2,936.80 1,319.46 Beyond ten years 4,819.83 3,776.40 Total expected payments 10,383.79 7,042.81
36. Related Party Transactions & Balances A. Names of related parties having transactions during the year and description of relationship i) Entity having significant influence over the ultimate Holding Company Tata Sons Private Limited ii) Ultimate holding Company Tata Steel Limited iii) Holding Company (“Parent Company”) Bamnipal Steel Limited The Company’s related parties principally consist of its ultimate holding company - (Tata Steel Limited including its subsidiaries, associates and joint ventures), subsidiaries, associates, joint ventures and entity having significant influence over the ultimate holding company (Tata Sons Private Limited). The Company routinely enters into transactions with these related parties in the ordinary course of business at market rates and terms. The following table summarises related party transactions and balances included in the financial statements of the Company for the year ended as at March 31, 2020 & March 31, 2019. (₹ in lacs)
Transactions Year ended Ultimate Holding Parent Company Key Other related Grand Total Company Management parties Personnel (KMP)
Remuneration and perks (refer March 31, 2020 - - - - - sub-note E)
March 31, 2019 - - 210.66 - 210.66
Directors sitting fees March 31, 2020 - - 12.00 - 12.00
March 31, 2019 - - 17.05 - 17.05
Allotment of shares March 31, 2020 - - - - -
March 31, 2019 - 15,888.58 - - 15,888.58
Issue of preference shares March 31, 2020 - - - - -
March 31, 2019 1,970,000.00 - - - 1,970,000.00
Capital contribution received March 31, 2020 - - - - -
March 31, 2019 - 2,518,550.72 - - 2,518,550.72
Inter corporate Deposit received March 31, 2020 - - - - -
March 31, 2019 - 3,597,369.42 - - 3,597,369.42
Inter Corporate Deposit repaid March 31, 2020 - - - - -
March 31, 2019 - 3,597,369.42 - - 3,597,369.42
Interest paid (refer sub-note C) March 31, 2020 - - - - -
March 31, 2019 - 231,623.50 - - 231,623.50
176 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(₹ in lacs)
Transactions Year ended Ultimate Holding Parent Company Key Other related Grand Total Company Management parties Personnel (KMP) Novation Loan received March 31, 2020 - - - - - March 31, 2019 - 10,000.00 - - 10,000.00 Novation Loan repaid March 31, 2020 - - - - - March 31, 2019 - 10,000.00 - - 10,000.00 Purchase of goods/ services (refer March 31, 2020 106,581.09 - - 427,178.79 533,759.88 sub-note D) March 31, 2019 39,737.37 - - 351,844.30 391,581.67 Dividend received March 31, 2020 - - - - - March 31, 2019 1.35 - - - 1.35 Sales of goods/ services March 31, 2020 1,549.17 - - 39,516.57 41,065.73 March 31, 2019 17,710.84 - - 6,739.83 24,450.67 Balances Advance to supplier March 31, 2020 - - - 27.30 27.30 March 31, 2019 - - - 22.21 22.21 Payable (refer sub-note D) March 31, 2020 20,293.56 - - 136,357.91 156,651.48 March 31, 2019 7,035.27 - 3.92 167,797.36 174,836.55 Receivables March 31, 2020 161.47 - - 910.80 1,072.26 March 31, 2019 102.50 - - - 102.50 Preference shares (refer sub-note B) March 31, 2020 1,970,000.00 - - - 1,970,000.00 March 31, 2019 1,970,000.00 - - - 1,970,000.00 Advance from customer March 31, 2020 73.27 - - - 73.27 March 31, 2019 - - - 53.71 53.71 Dividend receivables March 31, 2020 6.48 - - - 6.48 March 31, 2019 6.48 - - - 6.48
. B The Preference shares outstanding include - a) Liability component of preference shares - ₹ 265,911.64 lacs b) Equity component of preference shares - ₹ 1,729,582.05 lacs C. The interest paid excludes interest accrued on the compound financial instruments (being preference shares) amounting to ₹ 26,662.70 lacs (March 31, 2019 : ₹ 657.43 lacs) as the same represents unwinding of interest considered in statement of profit and loss during the year on account of accounting for compound financial instruments in accordance with Ind-AS 32. The same does not represent cash outflow in respect of interest expense payable to the holder of such instrument (being Tata Steel Limited). D. Purchase of goods/services from and payables to other related parties includes:- i) Purchases of goods from TS Global Procurement Pte Limited amounting to ₹ 409,902.21 lacs and ii) Amount payable to TS Global Procurement Pte Limited amounting to ₹ 131,264.73 lacs respectively. E. During the year, the Company has recognised an amount of ₹ Nil lacs (March 31, 2019 : ₹ 210.66 lacs) as remuneration to key management personnel. The details of such remuneration is as below: (₹ in lacs) As at As at March 31, 2020 March 31, 2019 (i) Short-term employee benefits - 210.66 (ii) Post employment benefits - - (iii) Other long-term benefits - - Total expected payments - 210.66
177 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
37. Accounting Judgements, Estimates And Assumptions
Use of estimates and critical accounting judgements
In the preparation of financial statements, the Group makes judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods affected.
Key source of estimation of uncertainty at the date of standalone financial statements, which may cause material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of impairment, useful lives of property, plant and equipment and intangible assets, valuation of deferred tax assets, provisions, contingent liabilities and fair value measurements of financial instruments as discussed below. Key source of estimation of uncertainty in respect of revenue recognition and employee benefits have been discussed in the respective policies.
Significant management judgements
(a) Evaluation of indicators for impairment of non-financial assets
The evaluation of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets. In view of the impact of COVID-19, the Group has assessed the carrying amounts of non-financial assets. In assessing the recoverable value of such assets, the Group has considered various internal and external information and possible future uncertainties in economic conditions because of the pandemic including lockdowns and supply chain disruptions across various geographies. As per the Group’s current assessment of recoverability of these assets, no significant impact on carrying amounts of these assets is expected.
(b) Provisions & contingent liabilities
A provision is recognised when the Group has a present obligation as result of a past event and it is probable that the outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised in the financial statements. Contingent assets are neither recognised nor disclosed in the financial statements.
(c) Valuation of deferred tax assets
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
(d) Classification of Leases
The Group enters into leasing arrangements for various assets. As a lessee, the Group assesses if a contract is or contains a lease at inception of the contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period time in exchange for consideration. The Group recognizes a right-of-use asset and a lease liability at the commencement date, except for short-term leases of twelve months or less and leases for which the underlying asset is of low value, which are expensed in the statement of profit and loss on a straight-line basis over the lease term.
Significant management estimates
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur.
(a) Allowance for expected credit loss
The allowance for expected credit loss reflects management’s estimate of losses inherent in its credit portfolio. This allowance is based on Group’s estimate of the losses to be incurred, which derives from past experience with similar receivables, current and historical past due amounts, write- offs and collections, the careful monitoring of portfolio credit quality and current and projected economic and market conditions. Should the present economic and financial situation persist or even worsen, there could be a further deterioration in the financial situation of the Company’s debtors compared to that already taken into consideration in calculating the allowances recognised in the financial statements.
(b) Allowance for obsolete and slow-moving inventory
The allowance for obsolete and slow-moving inventory reflects management’s estimate of the expected loss in value, and has been determined on the basis of past experience and historical and expected future trends. A worsening of the economic and financial situation could cause a further deterioration in conditions compared to that taken into consideration in calculating the allowances recognised in the financial statements.
178 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(c) Useful lives of property, plant and equipment and intangible assets
Management reviews its estimate of the useful lives of depreciable/amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utility of certain plant and equipments.
(d) Defined benefit obligations (DBO) Management’s estimate of the DBO is based on a number of critical underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.
(e) Impairment of non-financial assets Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. There is significant estimation uncertainty in determining recoverable value. 38A. Disclosure Of Interest In Subsidiaries, Joint Arrangements And Associates: 1) Disclosure of interest in the following Subsidiaries: (₹ in lacs) Ownership interest of Tata Steel BSL Limited (%)
Country of As at As at Incorporation March 31, 2020 March 31, 2019
(i) Bhushan Steel (Orissa) Limited India 99.98% 99.98%
(ii) Bhushan Steel Madhya Bharat Limited India 99.98% 99.98%
(iii) Bhushan Steel (South) Limited India 100.00% 100.00%
(iv) Bhushan Steel (Australia) Pty Limited Australia 100.00% 90.97%
(v) Angul Energy Limited (Formerly known as Bhushan Energy Limited)* India 99.99% 47.71%
* The Company has invested in equity shares of Angul Energy Limited (Formerly known as Bhushan Energy Limited) and is classified as a subsidiary Company w.e.f June 01, 2019. 2) Disclosure of interest in the following Associates: (₹ in lacs) Ownership interest of Tata Steel BSL Limited (%)
Country of As at As at Incorporation March 31, 2020 March 31, 2019
(i) Jawahar Credit & Holdings Private Limited India 39.89% 39.89%
(ii) Bhushan Capital & Credit Services Private Limited India 42.58% 42.58%
Tata Steel BSL Limited (TSBSL) (formerly known as Bhushan Steel Limited) was being shown as promoter of Jawahar Credit & Holdings Private Limited (”JCHPL”) and M/s Bhushan Capital & Credit Services Private Limited (”BCCSPL”). These are entities connected to the previous management of the Company. The Company has written to JCHPL, BCCSPL and the Registrar of Companies (National capital Territory of Delhi & Haryana) intimating that TSBSL should not be identified as promoter in these two companies.
179 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
38B. Information Required By Schedule III Of The Companies Act 2013, with respect to Consolidated Financial Statements Statement of net assets and profit or loss attributable to owners and minority interest for the year ended March 31, 2020
Net Assets Share in Profit/(loss) Share in other comprehensive Share in total comprehensive income income
Name of the entity in the group Proportionate Proportionate Proportionate Proportionate Proportionate Proportionate Proportionate Proportionate share share share share share share share share
(₹ in lacs) (%) (₹ in lacs) (%) (₹ in lacs) (%) (₹ in lacs) (%)
Holding Company 1,765,627.09 95.51% -64,917.44 103% -746.62 87% (65,664) 103%
Subsidiaries
Indian
Bhushan Steel (South) Limited (101.38) -0.01% (0.38) 0% - 0% (0) 0%
Bhushan Steel (Orissa) Limited 2.86 0.00% (0.38) 0% - 0% (0) 0%
Bhushan Steel Madhya Bharat 2.86 0.00% (0.38) 0% - 0% (0) 0% Limited
Angul Energy Limited 81,771.11 4.42% 431.00 -1% (77) 9% 354 -1%
Foreign
Bhushan Steel (Australia) Pty Limited 628.06 0.03% (0.35) 0% (40.45) 5% (41) 0%
Bowen Energy Pty Limited (2,155.50) -0.12% (4.48) 0% 138.76 -16% 134 0%
Bowen Coal Pty Limited
Bowen Consolidated Pty Limited
Joint Ventures
Associates
Bhushan Capital & Credit Services - - - - Private Limited
Jawahar Credit & Holdings Private - - - - Limited
Andal East Coal Company Private - - - - Limited
Non-controlling interest- Angul 2.22 0.00% 0.00 Energy Limited
Non-controlling interest-Bhushan - - - - 0% Steel (Australia) Pty Limited
Non-controlling interest-Bowen - - - - 0% Energy Pty Limited
Adjustment due to consolidation 2,774.81 0.15% 1,644 -3% (138) 16% 1,505 -2%
Total 1,848,552.12 1.00 (62,848.89) 1.00 (863.08) 1.00 (63,711.97) 1.00
180 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Statement of net assets and profit or loss attributable to owners and minority interest for the year ended March 31, 2019
Net Assets Share in Profit/(loss) Share in other comprehensive Share in total comprehensive income income Name of the entity in the Group Proportionate Proportionate Proportionate Proportionate Proportionate Proportionate Proportionate Proportionate share share share share share share share share (₹ in lacs) (%) (₹ in lacs) (%) (₹ in lacs) (%) (₹ in lacs) (%) Holding Company 1,831,291.18 99.97% 171,308.88 100% 517.03 103% 171,825.91 100% Subsidiaries Indian Bhushan Steel (South) Limited (101.00) -0.01% -75.58 0% - 0% (75.58) 0% Bhushan Steel (Orissa) Limited 3.23 0.00% -0.56 0% - 0% (0.56) 0% Bhushan Steel Madhya Bharat 3.23 0.00% -0.56 0% - 0% (0.56) 0% Limited Foreign Bhushan Steel (Australia) Pty 668.86 0.04% -22.29 0% -50.79 -10% (73.08) 0% Limited Bowen Energy Pty Limited (2,289.78) -0.12% -20.98 0% 82.57 16% 61.59 0% Bowen Coal Pty Limited Bowen Consolidated Pty Limited Joint Ventures Associates Bhushan Capital & Credit Services - - - - Private Limited Jawahar Credit & Holdings Private - - - - Limited Andal East Coal Company Private - - - - Limited Non-controlling interest-Bhushan 56.53 0.00% -2.18 0% (5) -1% (7.10) 0% Steel (Australia) Pty Limited Non-controlling interest-Bowen (206.68) -0.01% -2.08 0% 4 1% 1.76 0% Energy Pty Limited Adjustment due to consolidation 2,421.84 0.13% 0% (44) -9% (43.84) 0% Total 1,831,847.43 1.00 171,184.65 1.00 503.89 1.00 171,688.54 1.00
38C. Acquisition of Subsidiary Angul Energy Limited (AEL) (Formerly known as Bhushan Energy Limited), located at Angul, Odisha with 465 MW thermal power plant. AEL’s facilities are designed for captive use of Tata Steel BSL Limited, with this intent the Company had submitted the resolution plan for the acquisition of AEL under Corporate Insolvency Resolution Process. On June 01, 2019, AEL was acquired by the Company pursuant to a Corporate Insolvency Resolution Process implemented under the Insolvency and Bankruptcy Code 2016. The impact of the Resolution Plan was given effect to on the resolution date. Fair value of identifiable assets acquired and liabilities assumed as on the date of acquisition is as below: (₹ lacs) Fair value as on acquisition date Non Current Assets Property, Plant and Equipment 115,505.68 Right-of-use assets 2,708.57 Non-current investments 127.03 Loans 7.74 Other financial assets 31.71 Other non-current assets 12.81 Income Tax asset 313.63 118,707.16
181 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(₹ lacs) Fair value as on acquisition date Current Assets Inventories 2,462.44 Trade receivables 10,557.00 Cash and cash equivalents 23,829.68 Other balances with banks 7.91 Loans 132.99 Other current assets 3,944.77 40,934.78 Total Assets (A) 159,641.94 Non Current Liabilities Long term borrowings 75,500.00 Other financial liabilities - Long term provisions 200.28 75,700.28 Current Liabilities Short term borrowings - Trade payables 1,316.13 Other financial liabilities 667.50 Short term provisions 20.61 Other current liabilities 520.96 2,525.20 Total Liabilities (B) 78,225.49 Fair value of identified Net Assets (C=A-B) 81,416.45 Consideration Paid 1,000.00 Non Controlling Interests (Proportionate share of (C)) 2.21 Consideration Paid including non controlling interests (D) 1,002.21 Capital Reserve (C-D) 80,414.23 (i) Pursuant to the Resolution Plan, the Holding Company subscribed to 99.99% of the equity share capital of AEL for an aggregate amount of ` 10 crores and provided additional funds aggregating to ` 755 crores by way of Inter-Corporate Deposits. (ii) From the date of acquisition, Angul Energy Limited (Formerly Bhushan Energy Limited ) contributed ` 35,553.94 lacs to revenue from operations and a profit of ` 431 lacs to the consolidated loss before tax on a pre-consolidation adjustments basis. Had these business combination been effected at April 1, 2019, the revenue of the Group from continuing operations would have been higher by ` 12824.38 lacs and loss from continuing operations would have been lower by ` 4,087.18 lacs on a pre-consolidation adjustments basis.
182 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
39. Financial Instruments A. Financial assets and liabilities The carrying amounts of financial instruments by category are as follows: (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Financial assets measured at fair value Investments measured at Fair value through other comprehensive income 137.08 100.87 Fair value through profit and loss - 159,490.28 Derivative assets 5,142.54 214.07 Financial assets measured at amortised cost Trade receivables 70,238.62 69,701.21 Loans 7,573.24 9,799.14 Cash and cash equivalents 72,483.39 27,765.11 Other bank balances 12,848.81 12,689.66 Other financial assets 50,934.29 54,060.75 Total 219,357.97 333,821.09 Financial liabilities measured at fair value Derivative liabilities 763.77 4,141.57 Financial liabilities measured at amortised cost Borrowings (including interest accrued) 1,683,251.38 1,703,527.70 Trade payables 282,833.69 308,918.93 Other financial liabilities 33,821.01 67,160.32 Total 2,000,669.85 2,083,748.52 B Fair value hierarchy The fair value of financial instruments as referred to in note (A) above has been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities [Level 1 measurements] and lowest priority to unobservable inputs [Level 3 measurements]. The categories used are as follows: Level 1: This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs, other than Level 1 inputs; and Level 3: Inputs which are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a net asset value or valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
183 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
B.1 Financial assets and liabilities measured at fair value - recurring fair value measurements (₹ in lacs) As at March 31, 2020 Level 1 Level 2 Level 3 Total Assets at fair value Investments measured at Fair value through other comprehensive income 36.39 - 100.68 137.08 Derivative assets - 5,142.54 - 5,142.54 Liabilities at fair value Derivative liabilities - 763.77 - 763.77
(₹ in lacs) As at March 31, 2019 Level 1 Level 2 Level 3 Total Assets at fair value Investments measured at Fair value through other comprehensive income 70.31 - 30.56 100.87 Fair value through profit and loss 159,490.28 - - 159,490.28 Derivative assets - 214.07 - 214.07 Liabilities at fair value Derivative liabilities - 4,141.57 - 4,141.57 a. Valuation process and technique used to determine fair value of financial assets and liabilities classified under fair value hierarchy other than Level 1:- (i) For investments held by Company as of reporting date, costs of such unquoted equity instruments has been considered as an appropriate estimate of fair value because of wide range of fair value measurements and cost represents the best estimate of fair value within that range. (ii) Derivatives are fair valued using market observable rates and published prices. b. The following table presents the changes in level 3 items for the periods ended March 31, 2020 and March 31, 2019: (₹ in lacs) Unquoted Equity shares As at April 01, 2018 30.60 Change in fair value (0.04) As at March 31, 2019 30.56 Change in fair value - As at March 31, 2020 30.56 B.2 Fair value of instruments measured at amortised cost Fair value of financial instruments measured at amortised cost for which fair value is disclosed is as follows, these fair values are calculated using Level 3 inputs: (₹ in lacs) As at March 31, 2020 Carrying value Fair value Loans given 7,573.24 7,573.24 Trade receivables 70,238.62 70,238.62 Cash and Cash equivalents 72,483.39 72,483.39 Other balances with bank 12,848.81 12,848.81 Other financial assets 50,934.29 50,934.29 Borrowings 1,683,251.38 1,609,246.37 Trade payables 282,833.69 282,833.69 Other financial liabilities 33,821.01 33,821.01
184 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(₹ in lacs) As at March 31, 2019 Carrying value Fair value
Loans given 9,799.14 9,799.14
Trade receivables 69,701.21 69,701.21
Cash and Cash equivalents 27,765.11 27,765.11
Other balances with bank 12,689.66 12,689.66
Other financial assets 54,060.75 54,060.75
Borrowings 1,703,527.70 1,703,527.70
Trade payables 308,918.93 308,918.93
Other financial liabilities 67,160.32 67,160.32
For the purpose of disclosing fair values of financial instruments measured at amortised cost, the management assessed that fair values of short term financial assets and liabilities approximate their respective carrying amounts largely due to the short-term maturities of these instruments. Further, the fair value of long term financial assets and financial liabilities is included at the amount at which the instrument could be exchanged in a current transaction between the willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:
(i) Long-term fixed-rate receivables are evaluated by the Group based on parameters such as interest rates, individual credit worthiness of the customer and other market risk factors.
(ii) Fair value of borrowings has been estimated by discounting expected future cash flows using a discount rate equivalent to the risk-free rate of return adjusted for credit spread considered by lenders for instruments of similar maturities which is categorised as level 2 in the fair value hierarchy.
40. Financial Risk Management Risk Management The Group’s activities expose it to market risk, liquidity risk and credit risk. The Group’s Board of Directors have the overall responsibility for the establishment and oversight of the Group’s risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.
Particulars Exposure arising from Measurement Measurement
Credit risk Cash and cash equivalents, trade Ageing analysis Bank deposits, diversification of asset base, receivables, other balances with credit limits and collateral. banks, loans and other financial assets measured at amortised cost
Liquidity risk Borrowings and other financial liabilities Rolling cash flow Availability of committed credit lines and including trade payables forecasts borrowing facilities
Market risk - foreign Recognised financial assets and Cash flow forecasting Forward contract/hedging, if required exchange liabilities not denominated in Indian - rupee (INR) and derivative assets and liabilities
Market risk - interest rate Long-term borrowings at variable Sensitivity analysis Negotiation of terms that reflect the market rates factors
Market risk - price Investments in equity securities Sensitivity analysis Diversification of portfolio, with focus on strategic investments
The Group’s risk management is carried out by a central treasury department (of the Group) under policies approved by the board of directors. The board of directors provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk and investment of excess liquidity.
185 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A Credit risk Credit risk is the risk that a counterparty fails to discharge its obligation to the Group. The Group continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls. a) Credit risk management The Group assesses and manages credit risk based on internal credit rating system. Internal credit rating is performed for each class of financial instruments with different characteristics. The Group assigns the following credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets. (i) Low credit risk (ii) Moderate credit risk (iii) High credit risk Based on business environment in which the Group operates, a default on a financial asset is considered when the counter party fails to make payments within the agreed time period as per contract. Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions. Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or a litigation decided against the Group. The Group continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognised in statement of profit and loss. The Group provides for expected credit loss based on the following:
Type of financial asset Measurement Low credit risk Cash and cash equivalents, other bank 12 month expected credit loss balances, derivative assets, loans and other financial assets Moderate credit risk Other financial assets 12 month expected credit loss High credit risk Other financial assets Life time expected credit loss (when there is significant increase in credit risk or objective evidence of impairment) or specific provision, whichever is higher In respect of Trade receivables that results from contracts with customers, loss allowance is always measured at lifetime expected credit losses. Exposure to credit risk The exposure of credit risk over the financial assets of the Group except trade receivables has been summarized below*:- (₹ in lacs) As at As at March 31, 2020 March 31, 2019 I. Low credit risk Loans 7,573.24 9,799.14 Cash and cash equivalents 72,483.39 27,765.11 Other bank balances 12,848.81 12,689.66 Other financial assets 50,934.29 54,060.75 Derivative Assets 5,142.54 214.07 II. High credit risk Loans 9,493.95 16,435.69 Other financial assets 14,647.54 15,350.52 Total 173,123.76 136,314.94 *These represent gross carrying values of financial assets, without deduction for expected credit losses Credit Risk Management policies Cash and cash equivalents, bank deposits and derivatives Credit risk related to cash and cash equivalents, bank deposits and derivatives is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks across the country.
186 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Trade receivables Credit risk related to trade receivables are mitigated by taking bank guarantees/letter of credit, from customers where credit risk is high. The Group closely monitors the credit-worthiness of the debtors through internal systems that are configured to define credit limits of customers, thereby, limiting the credit risk to pre-calculated amounts. The Group assesses increase in credit risk on an ongoing basis for amounts receivable that become past due and default is considered to have occurred when amounts receivable become one year past due.
Other financial assets measured at amortised cost Other financial assets measured at amortized cost includes loans and advances to employees, security deposits and others. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits. ) b Expected credit losses for financial assets i) Financial assets (other than trade receivables) Group provides for expected credit losses on loans and advances by assessing individual financial instruments for expectation of any credit losses. - For cash & cash equivalents and other bank balances - Since the Group deals with only high-rated banks and financial institutions, credit risk in respect of cash and cash equivalents, other bank balances and bank deposits is evaluated as very low. - For loans comprising security deposits paid - Credit risk is considered low because the Group is in possession of the underlying asset or the deposits are made to government authorities. - For other financial assets - Credit risk is evaluated based on Group’s knowledge of the credit worthiness of those parties and loss allowance is measured. Since this category includes loans and receivables of varied natures and purpose, there is no trend that the Group can draw to apply consistently to entire population. For such financial assets, the Group’s policy is to provide for 12 month expected credit losses upon initial recognition and provide for lifetime expected credit losses upon significant increase in credit risk. The reconciliation of expected credit loss recorded for all sub categories of financial assets (other than trade receivables) are disclosed below:
(₹ in lacs) As at March 31, 2020 Gross carrying Expected credit Carrying amount amount losses net of impairment provision Loans 17,067.19 9,493.95 7,573.24 Other financial assets 65,581.84 14,647.54 50,934.29
(₹ in lacs) As at March 31, 2019 Gross carrying Expected credit Carrying amount amount losses net of impairment provision Loans 26,234.83 16,435.69 9,799.14 Other financial assets 69,411.27 15,350.52 54,060.75 B Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due. Management monitors rolling forecasts of the Group’s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Group takes into account the liquidity of the market in which the entity operates. a) Financing arrangements Undrawn borrowing facilities at the end of the reporting year to which the Group had access is ₹ 95,394.69 lacs ( March 31, 2019: ₹ 55,728 lacs).
187 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
b) Maturities of financial liabilities The following table shows a maturity analysis of the anticipated cash flows including interest obligations for the Company’s derivative and non- derivative financial liabilities on an undiscounted basis, which therefore differ from both carrying value and fair value: (₹ in lacs) As at March 31, 2020 Less than 1 year 1-3 year More than 3 years Total Borrowings (excluding lease obligations) 203,117.98 223,090.55 3,699,491.64 4,125,700.17 Lease obligations 22,911.94 45,584.97 46,611.80 115,108.71 Trade payables 282,833.69 - - 282,833.69 Derivative liabilities 763.77 - - 763.77 Other financial liabilities 39,630.68 - 9,207.71 48,838.39 549,258.06 268,675.52 3,755,311.15 4,573,244.73
(₹ in lacs) As at March 31, 2019 Less than 1 year 1-3 year More than 3 years Total Borrowings 148,871.42 337,648.12 4,021,273.09 4,359,634.99 Trade payables 308,918.93 - - 308,918.93 Derivative liabilities 4,141.57 - - 4,141.57 Other financial liabilities 61,371.35 - 19,309.91 80,681.26 523,303.27 337,648.12 4,040,583.00 4,753,376.75
C Market risk a) Foreign currency risk Exposures to currency exchange rates primarily arise from the business transactions carried out by the Group in other than functional currency i.e. INR. Foreign currency denominated financial assets and liabilities which expose the Group to currency risk are as follows. The amounts shown are those reported to key management personnel translated into INR at the closing exchange rate: (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Financial assets - USD 30,120.30 8,219.64 - EURO 3,219.73 409.15 - AED 960.66 33.88 34,300.69 8,662.67 Financial liabilities - USD 141,251.86 177,826.67 - EURO 1,334.95 890.65 - GBP 78.92 39.18 - SEK 1.41 - - JYP 88.55 15.90 142,755.69 178,772.40 The following table summarises the volatility in the following exchange rates during the year.
188 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As at As at March 31, 2020 March 31, 2019 INR/USD 5.45% 6.82% INR/ EUR 7.57% 7.26% INR/ GBP 10.26% 8.82% INR/ JPY 10.65% 9.32% INR/ SEK 9.34% N.A INR/ AUD 9.48% 9.17% INR/AED 6.49% 9.17% These percentages have been determined based on the average market volatility in exchange rates during the respective years. The sensitivity analysis given in the table below is based on the Group’s foreign currency financial instruments held at each reporting date. The table illustrates the impact of sensitivity over profit/loss and equity in regards to the Group’s financial assets and financial liabilities and the movement of exchange rates of respective foreign currencies against INR, assuming ‘all other variables being constant’. Had the respective foreign currencies had strengthened against the INR by the aforementioned percentage of market volatility, then this would have had the following impact on profit/(loss) and equity: (₹ in lacs) As at As at March 31, 2020 March 31, 2019 - USD (6,060.22) (11,559.48) - EURO 142.60 (34.98) - GBP (8.10) (3.46) - JPY (9.43) (1.48) - SEK (0.13) - - AED 62.33 3.11 Total (5,872.95) (11,596.29) If the respective functional currencies had depreciated against the INR by the aforementioned percentage of market volatility, then this would have had equal and opposite effect on the basis that all other variables remain constant. ) b Interest rate risk i) Liabilities The Group’s policy is to minimise interest rate cash flow risk exposures on external financing. At March 31, 2020 and March 31, 2019, the Group is exposed to changes in interest rates through bank borrowings carrying variable interest rates. Interest rate risk exposure Below is the overall exposure of the Group to interest rate risk: (₹ in lacs) As at As at March 31, 2020 March 31, 2019 Variable rate borrowing 1,242,244.52 1,384,542.07 Fixed rate borrowing 441,006.86 318,985.63 Total borrowings 1,683,251.38 1,703,527.70 Amount disclosed under other current financial liabilities (Refer Note - 16C) 20,617.56 5,583.18 Amount disclosed under borrowings (Refer Note - 16A) 1,662,633.82 1,697,944.51
189 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(₹ in lacs) As at As at March 31, 2020 March 31, 2019
Interest sensitivity*
Interest rates – increase by 100 basis points (March 31, 2019 100 bps) 13,279.41 13,845.42
Interest rates – decrease by 100 basis points (March 31, 2019 100 bps) (13,279.41) (13,845.42)
* Holding all other variables constant
ii) Assets The Group’s interest bearing financial assets consist of Inter Company deposits and fixed deposits which are carried at amortised cost and are fixed rate deposits. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
c) Price risk
The Group is not an active investor in equity markets; It continues to hold certain investments in equity for long term value accretion which are accordingly measured at fair value through other comprehensive income. The value of investments in such equity instruments as at March 31, 2020 is ` 137.09 lacs (2019 – ` 100.87 lacs). Accordingly, fair value fluctuations arising from market volatility is recognised in Other Comprehensive Income.. The Group’s exposure to such investments is not significant.
The Group also invests in mutual fund schemes of leading fund houses. Such investments are susceptible to market price risks that arise mainly from changes in interest rate which may impact the return and value of such investments. However, given the relatively short tenure of underlying portfolio of the mutual fund schemes in which the Group has invested, such price risk is not significant.
41. Capital Management
The Company’ s capital management objectives are :
- to ensure the Company’s ability to continue as a going concern
- to provide an adequate return to shareholders
The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company. Net debt includes interest bearing borrowings less cash and cash equivalents, other bank balances (including non-current and earmarked balances) and current investments.
Management assesses the Company’s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Company’s various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.
(a) Debt equity ratio (₹ in lacs) As at As at March 31, 2020 March 31, 2019
Total debts 1,610,767.99 1,516,272.31
Total equity 1,848,552.12 1,831,847.43
Net debt to equity ratio 0.87 0.83
(b) Dividend - During the year ended March 31,2020, no dividend has been recognised as distributions to equity shareholders (March 31, 2019: ₹ Nil)
190 Statutory Reports Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
42. In compliance of Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 the required information is given as under: (₹ in lacs) As at As at March 31, 2020 March 31, 2019 I. Loans and Advances in the nature of loans: A) To Subsidiary Companies - Angul Energy Limited (formerly known as Bhushan Energy Limited) 32,600.00 - B) To Associates /Joint Venture - - C) To Firms/Companies in which directors are interested - - D) Where there is no repayment schedule or repayment beyond seven year or no interest or - - interest below section 186 of Companies Act. II. Investment by the loanee (as detailed above) in the shares of TSBSL and its subsidiaries - - Total 32,600.00 -
43 During the previous year, Corporate insolvency resolution process (“CIRP”) was initiated pursuant to a petition filed by one of its financial creditors, State Bank of India (“SBI”) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”). SBI filed the petition before the National Company Law Tribunal, Principal Bench, New Delhi (“Adjudicating Authority”) vide Company Petition No. (IB)-201 (PB)/2017 on July 03, 2017. The Adjudicating Authority admitted the said petition and the CIRP for the Company commenced on July 26, 2017. The CIRP culminated into the approval of the Resolution Plan submitted by Tata Steel Ltd (“TSL”) by the Adjudicating Authority vide its order dated May 15, 2018 (“Order”).
Accordingly, keeping in view the Order dated May 15, 2018: i. On May 18, 2018 (“Effective Date”), Bamnipal Steel Limited, (wholly owned subsidiary of TSL) (“BNPL”) deposited ₹ 3,513,258 lacs, for subscription to equity shares of the Company, payment of CIRP cost and employee related dues, and payment to financial creditors in terms of the approved Resolution Plan. ii. The reconstituted board of directors in its meeting held on May 17, 2018 approved allotment of 794,428,986 fully paid equity shares of ₹ 2 each to BNPL, aggregating to ₹ 15,888.58 lacs, representing 72.65% of the equity share capital of the Company. iii. The remaining amount of ₹ 3,497,369.42 lacs was treated as Inter Corporate Deposits. . iv Out of the amount received from BNPL, ₹ 3,258 lacs were utilised towards payment of CIRP cost and employee related dues. The balance amount of ₹ 3,510,000 lacs were paid to the Financial Creditors between May 18, 2018 to May 31, 2018. . v The financial creditors invoked the pledge created in their favor by the erstwhile promoters of the Company over 67,654,810 equity shares of the Company held by them (“Pledged Shares”). The market value of Pledged Shares amounted to ₹ 18,157.58 lacs and, the same has been recorded as an exceptional item in these financial statements. Refer Note 29 for the details of exceptional items. vi. The eligible financial creditors were further allotted 72,496,036 equity shares at face value of ₹ 2 each aggregating to ₹ 1,449.92 lacs. vii. After adjusting the amounts as mentioned in para no. v and vi above, the balance due to Financial Creditors, amounting to ₹ 2,528,550.72 lacs were novated to BNPL for an aggregate consideration of ₹ 10,000 lacs. BNPL, in its capacity as the promoters of TSBSL, has waived off the debts less cost of novation, and the same has been considered as capital contribution. Refer Note 15 for details of other equity. viii. 10% Redeemable Cumulative Preference shares of ₹ 100 each amounting to ₹ 242,557.39 lacs were redeemed for a total sum of ₹ 4,700/- only. Gain arising out of redemption of such preference shares has been recorded as an exceptional item in these financial statements. Refer Note 29 for the details of exceptional items. ix. In respect of Operational Creditors, the Company has provided for liabilities based on the amount of claims admitted pursuant to CIRP. Further, the Company had proposed to pay an amount of ₹ 120,000 lacs to Operational Creditors, in the manner mentioned in the Resolution Plan, within 12 months from the closing date (May 18, 2018) i.e. on or before May 17, 2019. Accordingly, the Company has recognised a gain of ₹ 15,359.67 lacs (March 31, 2019 - ₹ 55,212.35 lacs) on account of extinguishment of such financial liabilities as an exceptional item in these financial statements. Refer Note 29 for the details of exceptional items. 44 The Company is eligible under Package Scheme of Incentives, 1993, and accordingly as per the provisions of the Scheme the Company has obtained eligibility certificate from Directorate of Industries. As per the Scheme the Company has an option to defer the payment of sales tax for a period of fourteen years upto a specified limit (twenty one years in case the specified limit is not availed in fourteen years). The said tax collected shall be paid after fourteen years in five annual equal instalments and has been recognised as deferred sales tax liability, which as at March 31, 2020 amounts to ₹ 1,802.35 lacs (March 31, 2019: ₹ 4,385.37 lacs). Post-introduction of GST, the Maharashtra government modified the scheme, whereby the Company needs to deposit the GST & claim refunds of the same. During the year, the Company has recognised ₹ 9,599.10 lacs as an income (Refer Note 20) on account of such scheme.
191 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
45 Due to outbreak of Covid-19 globally and in India, the Company had on March 30, 2020 made a disclosure in terms of Regulation 30 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015. Further, the Group has carried out its initial assessment of the likely adverse impact on economic environment in general and financial risk because of Covid-19. The Group is in the business of manufacturing steel/steel products, which are connected with activities that are fundamental to the Indian economy. The demand for the Group’s products are expected to be lower in the short term, though the same is not likely to have a continuing impact on the business of the Group. Further, the Management believes that there may not be significant impact of Covid-19 pandemic on the financial position and performance of the Group, in the long-term.
As per our report of even date attached. For and on behalf of the Board of Directors For Walker Chandiok & Co LLP sd/- sd/- sd/- Chartered accountants Mr. T. V. Narendran Mr. Krishnava Dutt Ms. Neera Saggi Firm Registration No. : 001076N/N500013 Chairman (DIN: 03083605) Independent Director (DIN: 02792753) Independent Director (DIN: 00501029)
sd/- sd/- sd/- sd/- Siddharth Talwar Mr. Shashi Kant Maudgal Mr. Srikumar Menon Mr. Anand Sen Partner Independent Director (DIN: 00918431) Independent Director (DIN: 00470254) Director (DIN: 00237914) Membership No. 512752 sd/- sd/- sd/- Mr. Koushik Chaterjee Mr. Rajeev Singhal Mr. Sanjib Nanda Director (DIN: 00004989) Managing Director (DIN: 02719570) Chief Financial Officer
sd/- Nisha Anil Seth Place: Faridabad Company Secretary Date: May 20, 2020 (Membership No. 27019)
192 Tata Steel BSL Limited (Formerly known as Bhushan Steel Limited) Regd. Office: Ground Floor, Mira Corporate Suites, Plot No. 1&2, Ishwar Nagar, Mathura Road, New Delhi - 110065 Corporate Identification No. (CIN) : L74899DL1983PLC014942 Tel: +91-11-3919 4000; Fax: +91-11-4101 0050; E-mail: [email protected]; Website: www.tatasteelbsl.co.in
NOTICE
NOTICE IS HEREBY GIVEN THAT THE 37TH ANNUAL GENERAL 2. In view of the global outbreak of the COVID-19 pandemic, the Ministry of MEETING OF THE MEMBERS OF TATA STEEL BSL LIMITED (FORMERLY Corporate Affairs (‘MCA’) has vide its General Circular No. 20/2020 dated KNOWN AS ‘BHUSHAN STEEL LIMITED’) WILL BE HELD ON MONDAY, May 5, 2020 in relation to ‘Clarification on holding of Annual General SEPTEMBER 21, 2020 AT 3:00 P.M. (IST) THROUGH VIDEO CONFERENCING Meeting through video conferencing or other audio visual means read with (‘VC’) / OTHER AUDIO-VISUAL MEANS (‘OAVM’), TO TRANSACT THE General Circular No. 14/2020 dated April 8, 2020 and the General Circular FOLLOWING BUSINESS: No. 17/2020 dated April 13, 2020 in relation to ‘Clarification on passing of ordinary and special resolutions by companies under the Companies Act, ORDINARY BUSINESS: 2013 and the rules made thereunder on account of the threat posed by Item No. 1 – Adoption of Audited Standalone Financial Statements COVID-19’ (collectively referred to as ‘MCA Circulars’) and the Securities and Exchange Board of India (‘SEBI’) vide its circular dated May 12, 2020 To receive, consider and adopt the Audited Standalone Financial Statements of in relation to ‘Additional relaxation in relation to compliance with certain the Company for the Financial Year ended March 31, 2020 together with the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Reports of the Board of Directors and the Auditors thereon. Regulations, 2015 – COVID-19 pandemic’ (‘SEBI Circular’) permitted the holding of the Annual General Meeting through VC or OAVM, without the Item No. 2 – Adoption of Audited Consolidated Financial Statements physical presence of the Members at a common venue. In compliance To receive, consider and adopt the Audited Consolidated Financial Statements with the provisions of the Act, SEBI Listing Regulations, MCA Circulars th of the Company for the Financial Year ended March 31, 2020 together with the and SEBI Circular, the 37 AGM of the Company is being held through VC/ Report of the Auditors thereon. OAVM on Monday, September 21, 2020 at 3:00 p.m. (IST). The deemed venue for the 37th AGM will be at the registered office of the Company i.e., Item No. 3 – Re-appointment of a Director Ground Floor, Mira Corporate Suites, Plot No. 1&2, Ishwar Nagar, Mathura Road, New Delhi – 110 065. To appoint a Director in the place of Mr. Koushik Chatterjee (DIN:00004989), who retires by rotation in terms of Section 152(6) of the Companies Act, 2013 3. PURSUANT TO PROVISIONS OF THE ACT, A MEMBER ENTITLED TO and, being eligible, seeks re-appointment. ATTEND AND VOTE AT THE AGM IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE AT THE MEETING ON HIS/HER BEHALF AND THE SPECIAL BUSINESS: PROXY NEED NOT BE A MEMBER OF THE COMPANY. SINCE THIS AGM IS Item No. 4 - Ratification of remuneration of the Cost Auditors BEING HELD PURSUANT TO THE MCA CIRCULARS AND SEBI CIRCULAR THROUGH VC/OAVM, THE REQUIREMENT OF PHYSICAL ATTENDANCE To consider and, if thought fit, to pass the following resolution as an Ordinary OF MEMBERS HAS BEEN DISPENSED WITH. ACCORDINGLY, IN Resolution: TERMS OF THE MCA CIRCULARS AND SEBI CIRCULAR, THE FACILITY FOR APPOINTMENT OF PROXIES BY THE MEMBERS WILL NOT BE “RESOLVED THAT pursuant to the provisions of Section 148(3) and other AVAILABLE FOR THIS AGM AND HENCE THE PROXY FORM, ROUTE applicable provisions, if any, of the Companies Act, 2013 read with the Companies MAP AND ATTENDANCE SLIP ARE NOT ANNEXED TO THIS NOTICE. (Audit and Auditors) Rules, 2014, (including any statutory modification or re- enactment thereof for the time being in force), the Company hereby ratifies 4. The Members can join the AGM in the VC/OAVM mode 30 minutes the remuneration of `7 lakh plus applicable taxes and reimbursement of out- before and 15 minutes after the scheduled time of the commencement of-pocket expenses payable to Messrs. Shome & Banerjee, Cost Accountants of the Meeting by following the procedure mentioned in the Notice. The (Firm Registration Number: 000001), who have been appointed by the Board of Members will be able to view the proceedings on the website of National Directors on the recommendation of the Audit Committee, as the Cost Auditors Securities Depository Limited (‘NSDL’) at www.evoting.nsdl.com. The of the Company, to conduct the audit of the cost records maintained by the facility of participation at the AGM through VC/OAVM will be made Company, for the Financial Year ending March 31, 2021.” available to at least 1,000 Members on a first come first served basis as per NOTES: the MCA Circulars.
1. The Statement, pursuant to Section 102 of the Companies Act, 2013, 5. Institutional Investors, who are Members of the Company, are encouraged th as amended (‘Act’) with respect to Item No. 4 forms part of this Notice. to attend the 37 AGM through VC/OAVM mode and vote electronically. Additional information, pursuant to Regulations 26(4) and 36(3) of Pursuant to the provisions of the Act, the Institutional/Corporate the Securities and Exchange Board of India (Listing Obligations and Shareholders (i.e. other than individuals / HUF, NRI, etc.) are required to Disclosure Requirements) Regulations, 2015 (‘SEBI Listing Regulations’) send a scanned copy (PDF/JPG Format) of its Board or governing body and Secretarial Standard on General Meetings issued by The Institute of Resolution/Authorization etc., authorizing its representative to attend Company Secretaries of India, in respect of Director retiring by rotation the AGM through VC/OAVM on its behalf and to vote through remote seeking re-appointment at this Annual General Meeting (‘Meeting’ or e-voting. The said Resolution/Authorization shall be sent to the Scrutinizer ‘AGM’) is furnished as an annexure to this Notice. at [email protected] with a copy marked to [email protected].
193 6. The attendance of the Members attending the AGM through VC/OAVM 14. As per Regulation 40 of the SEBI Listing Regulations, as amended, will be counted for the purpose of reckoning the quorum under Section securities of listed companies can be transferred only in dematerialised 103 of the Act. form with effect from April 1, 2019, except in case of request received 7. In case of joint holders, the Member whose name appears as the first for transmission or transposition of securities. In view of this and to holder in the order of the names as per the Register of Members of the eliminate all risks associated with physical shares and for ease of portfolio Company will be entitled to vote at the Meeting. management, Members holding shares in physical form are requested to consider converting their holdings to dematerialised form. Members 8. In line with the MCA Circular dated May 5, 2020 and SEBI Circular dated may contact the Company’s RTA, RCMC Share Registry Private Limited at May 12, 2020, the Notice of the AGM along with the Annual Report [email protected] for assistance in this regard. and Annual Accounts 2019-20 is being sent only through electronic mode (i.e., through e-mail) to those Members whose e-mail addresses 15. To prevent fraudulent transactions, Members are advised to exercise due are registered with the Company / Registrar and Transfer Agent / diligence and notify the Company of any change in address or demise of Depositories. The Notice convening the 37th AGM has been uploaded on any Member as soon as possible. Members are also advised to not leave the website of the Company at www.tatasteelbsl.co.in and may also be their demat account(s) dormant for long. Periodic statement of holdings accessed from the relevant section of the websites of the Stock Exchanges should be obtained from the concerned DP and holdings should be i.e. BSE Limited and the National Stock Exchange of India Limited at verified from time to time. www.bseindia.com and www.nseindia.com respectively. The Notice is also 16. The Register of Directors and Key Managerial Personnel and their available on the website of NSDL at www.evoting.nsdl.com. shareholding and Register of Contracts or Arrangements in which 9. Book Closure the Directors are interested, shall be available for on-line inspection by the Members of the Company, without payment of fees upto The Register of Members and Share Transfer Books of the Company and including the date of AGM. Members desirous of inspecting the will be closed from Tuesday, September 15, 2020 to Monday, same may send their requests at [email protected] from their September 21, 2020 (both days inclusive) for the purpose of the AGM. registered e-mail addresses mentioning their names and folio numbers / 10. Nomination Facility: As per the provisions of Section 72 of the Act, the DP ID and Client ID. facility for making nomination is available to the Members in respect of the shares held by them. Members who have not yet registered PROCESS FOR REGISTERING E-MAIL ADDRESS: their nomination are requested to register the same by submitting i. One time registration of e-mail address with RTA for receiving the Form No. SH-13. If a Member desires to cancel the earlier nomination Annual Report and Annual Accounts 2019-20 and casting votes and record a fresh nomination, may submit the same in Form SH-14. electronically: The Company has made special arrangements with its The said forms can be downloaded from the Company’s website at RTA for registration of e-mail address of those Members (holding shares www.tatasteelbsl.co.in Nomination forms can be obtained from the either in electronic or physical form) who wish to receive this Annual Company’s Registrars and Transfer Agent (‘RTA’) by Members holding Report and Annual Accounts for FY 2019-20 and cast votes electronically. shares in physical form. Members holding shares in electronic form Eligible Members whose e-mail addresses are not registered with the may obtain Nomination forms from their respective Depository Company/ RTA/ DPs are required to provide the same to RTA on or before Participants (‘DPs’). Members are requested to submit the said form 5.00 p.m. (IST) on Monday, September 14, 2020. to their DP in case the shares are held in electronic and to the RTA at Process to be followed for one time registration of e-mail address is [email protected] in case the shares are held in physical as follows: form, quoting their folio no(s). Members holding shares in single name are especially advised to make nomination in respect of their shareholding in I. For Members who hold shares in Electronic form: the Company and for cancellation and variation of nomination, if they are a) Visit the link: https://www.rcmcdelhi.com/updates/?cid=tsbl desirous of doing so. b) Enter the DP ID & Client ID, PAN details and Captcha Code. 11. Consolidation of Physical Share Certificates: Members holding shares c) System will verify the Client ID and PAN Details. in physical form, in identical order of names, in more than one folio are requested to send to the Company or RTA, the details of such folios d) On successful verification, the system will allow you to enter together with the share certificates for consolidating their holdings in one your e-mail address and mobile number. folio. A consolidated share certificate will be issued to such Members after e) Enter your e-mail address and mobile number. making requisite changes. f) The system will then confirm the e-mail address for the limited 12. The attention of Members is particularly drawn to the Corporate purpose of service of this AGM Notice and Annual Report and Governance Report in respect of unclaimed and unpaid dividends and Annual Accounts for FY 2019-20. transfer of dividends/shares to the Investor Education & Protection II. For Members who hold shares in Physical form: Fund. a) Visit the link: https://www.rcmcdelhi.com/updates/?cid=tsbl 13. In compliance with the aforesaid MCA Circulars and SEBI Circular, Notice of the AGM along with the Annual Report and Annual Accounts 2019-20 b) Enter the physical Folio Number, PAN details and Captcha is being sent only through electronic mode (i.e., through e-mail) to those Code. Members whose email addresses are registered with the Company/RTA/ c) In the event the PAN details are not available on record, Depositories. Members may note that the Notice and Annual Report and Member to enter one of the share certificate number Annual Accounts 2019-20 will also be available on the Company’s website d) System will verify the Folio Number and PAN details or the www.tatasteelbsl.co.in, relevant section of the websites of the Stock share certificate number. Exchanges i.e. BSE Limited and National Stock Exchange of India Limited at www.bseindia.com and www.nseindia.com respectively, and on the e) On successful verification, system will allow you to enter your website of NSDL at www.evoting.nsdl.com. e-mail address and mobile number.
194 f) Enter your e-mail address and mobile number. Monday, September 14, 2020, may obtain the User ID and Password by sending a request at [email protected]. g) If PAN details are not available, the system will prompt the Member to upload a self-attested copy of the PAN card. 3. The remote e-voting period commences on Thursday, September 17, 2020 at 9.00 a.m. (IST) and ends on Sunday, h) The system will then confirm the e-mail address for the September 20, 2020 at 5.00 p.m. (IST). The remote e-voting purpose of service of this AGM Notice and Annual Report and module shall be disabled by NSDL for voting thereafter. Once the Annual Accounts for FY 2019-20. vote on a resolution is cast by the Member, the Member shall not After successful submission of the e-mail address, NSDL will be allowed to change it subsequently. The voting rights of the e-mail a copy of this AGM Notice and Annual Report and Members shall be in proportion to their share of the paid-up equity Annual Accounts for FY 2019-20 along with the e-voting user share capital of the Company as on the Cut-Off Date i.e.Monday, ID and password. In case of any queries, Members may write to September 14, 2020. [email protected] or [email protected]. 4. Members will be provided with the facility for voting through ii. Registration of e-mail address permanently with Company/ electronic voting system during the VC/OAVM proceedings at the DP: Members are requested to register their e-mail address with AGM and Members participating at the AGM, who have not already their concerned DPs, in respect of electronic holding and with the cast their vote on the resolution(s) by remote e-voting, will be Company’s RTA, in respect of physical holding, by writing to them at eligible to exercise their right to vote on such resolution(s) upon [email protected]. Further, those Members who have announcement by the Chairman. Members who have cast their vote already registered their e-mail addresses are requested to keep their on resolution(s) by remote e-voting prior to the AGM will also be e-mail addresses validated/updated with their DPs/RTA to enable servicing eligible to participate at the AGM through VC/OAVM but shall not be of notices/documents/ Annual Reports and other communications entitled to cast their vote on such resolution(s) again. electronically to their e-mail address in future. 5. The remote e-voting module on the day of the AGM shall be disabled iii. Alternatively, Members may also send an e-mail request to by NSDL for voting 15 minutes after the conclusion of the Meeting. [email protected] along with the following documents for procuring INSTRUCTIONS FOR MEMBERS FOR ATTENDING THE AGM THROUGH VC/ user id and password and registration of e-mail addresses for remote OAVM AND REMOTE E-VOTING (BEFORE AND DURING THE AGM) ARE AS e-voting for the resolutions set out in this Notice: UNDER: ● In case shares are held in physical form, please provide Folio No., 1. The Members will be provided with a facility to attend the AGM through Name of Shareholder, scanned copy of the share certificate (front VC/OAVM through the NSDL e-voting system and they may access the and back), self-attested scanned copy of PAN card, and self-attested same at www.evoting.nsdl.com under the Shareholders/Members login scanned copy of Aadhaar Card. by using the remote e-voting credentials, where the EVEN of the Company ● In case shares are held in demat form, please provide DP ID-Client i.e. 113601 will be displayed. On clicking this link, the Members will be ID (8 digit DP ID + 8 digit Client ID or 16 digit Beneficiary ID), Name, able to attend and participate in the proceedings of the AGM. Please client master or copy of Consolidated Account statement, self- note that the Members who do not have the User ID and Password for attested scanned copy of PAN card, and self-attested scanned copy e-voting or have forgotten the User ID/Password may retrieve the same of Aadhaar Card. by following the remote e-voting instructions mentioned below to avoid last minute rush. Further, Members may also use the OTP-based login for INSTRUCTIONS FOR REMOTE E-VOTING AND JOINING THE AGM ARE AS logging into the e-voting system of NSDL. FOLLOWS: 2. Members may join the Meeting through Laptops, Smartphones, Tablets A. PROCESS AND MANNER FOR VOTING THROUGH ELECTRONIC MEANS: and iPads for better experience. Further, Members will be required to use 1. Pursuant to the provisions of Section 108 of the Act read with Rule internet with a good speed to avoid any disturbance during the Meeting. 20 of the Companies (Management and Administration) Rules, 2014 Members will need the latest version of Chrome, Safari, Internet Explorer (as amended) and Regulation 44 of the SEBI Listing Regulations (as 11, MS Edge or Firefox. Please note that participants connecting from amended) and the MCA Circulars, the Company is providing the Mobile Devices or Tablets or through Laptops connecting via mobile facility of remote e-voting to its Members in respect of the business hotspot may experience Audio/Video loss due to fluctuation in their to be transacted at the AGM. For this purpose, the Company has respective network. It is therefore recommended to use stable Wi-Fi or entered into an agreement with NSDL for facilitating voting through LAN connection to mitigate any glitches. electronic means, as the authorized agency. The facility of casting votes by a Member using remote e-voting system as well as remote 3. Members are encouraged to submit their questions in advance with e-voting during the AGM will be provided by NSDL. respect to the Accounts or the business to be transacted at the AGM. These queries may be submitted from their registered e-mail address, 2. Members of the Company holding shares either in physical mentioning their name, DP ID and Client ID/Folio Number and mobile form or in electronic form as on the cut-off date of Monday, number, to reach the Company’s e-mail address at [email protected] September 14, 2020 (‘Cut-off Date’) may cast their vote by before 3.00 p.m. (IST) on Monday, September 14, 2020. remote e-voting. A person who is not a Member as on the Cut-off Date should treat this Notice for information purposes only. 4. Members who would like to express their views or ask questions A person whose name is recorded in the Register of Members or in during the AGM may pre-register themselves as a speaker by sending the Register of Beneficial Owners maintained by the depositories their request from their registered e-mail address mentioning their as on the Cut-Off Date only shall be entitled to avail the facility name, DP ID and Client ID/folio number, PAN, mobile number at of remote e-voting before the AGM as well as remote e-voting [email protected] between Monday, September 14, 2020 during the AGM. Any person who acquires shares of the Company (9:00 a.m. IST) through Wednesday, September 16, 2020 (5:00 p.m. IST). and becomes a Member of the Company after the dispatch Those Members who have registered themselves as a speaker will of the Notice and holding shares as on the Cut-Off Date i.e. only be allowed to express their views/ask questions during the
195 AGM. The Company reserves the right to restrict the number of speakers c) How to retrieve your ‘initial password’? depending on the availability of time for the AGM. (i) If your e-mail ID is registered in your demat account or with 5. Members who need assistance before or during the AGM, can contact the Company, your ‘initial password’ is communicated to you NSDL on [email protected] /1800-222-990 or contact Mr. Amit Vishal, on your e-mail ID. Open the e-mail sent to you by NSDL and Senior Manager – NSDL at [email protected]/ +91 - 22 -24994360 open the attachment i.e. a .pdf file. The password to open the or Ms. Pallavi Mhatre, Manager - NSDL at [email protected]/ .pdf file is your 8 digit client ID for NSDL account, last 8 digits +91 - 22- 24994545. of client ID for CDSL account or folio number for shares held in physical form. The .pdf file contains your ‘User ID’ and your THE INSTRUCTIONS FOR REMOTE E-VOTING BEFORE/DURING THE AGM ‘initial password’. The instructions for remote e-voting before the AGM are as under: (ii) If your e-mail ID is not registered, please follow steps The way to vote electronically on NSDL e-Voting system consists of ‘Two Steps’ mentioned in process for those shareholders whose e-mail ids which are mentioned below: are not registered. vi. If you are unable to retrieve or have not received the “initial password” or Step 1: Log-in to NSDL e-Voting system at www.evoting.nsdl.com have forgotten your password: How to Log-in to NSDL e-voting website? a) Click on “Forgot User Details/Password?” (If you are holding shares in i. Visit the e-Voting website of NSDL. Open web browser by typing the your demat account with NSDL or CDSL) option available on www. following URL: https://www.evoting.nsdl.com/ either on a Personal evoting.nsdl.com Computer or on a Mobile. ) b Click on ‘Physical User Reset Password?” (If you are holding shares in ii. Once the home page of e-voting system is launched, click on the icon physical mode) option available on www.evoting.nsdl.com. ‘Login’ which is available under ‘Shareholder’ section. c) If you are still unable to get the password by aforesaid two options, you can send a request at [email protected] mentioning your iii. A new screen will open. You will have to enter your User ID, your Password demat account number/folio number, your PAN, your name and and a Verification Code as shown on the screen. your registered address. Alternatively, if you are registered for NSDL eservices i.e. IDEAS, you can d) Members can also use the OTP (One Time Password) based login for log-in at https://eservices.nsdl.com/ with your existing IDEAS login. Once casting the votes on the e-voting system of NSDL. you log-in to NSDL eservices after using your log-in credentials, click on vii. After entering your password, tick on Agree to ‘Terms and Conditions’ by e-voting and you can proceed to Step 2 i.e. Cast your vote electronically. selecting on the check box. iv. Your User ID details are given below : viii. Now, you will have to click on ‘Login’ button.
Manner of holding shares Your User ID is : ix. After you click on the ‘Login’ button, Home page of e-voting will open. i.e. Demat (NSDL or Step 2: Cast your vote electronically on NSDL e-voting system CDSL) or Physical How to cast your vote electronically on NSDL e-voting system? a) For Members who 8 Character DP ID followed by 8 Digit Client i. After successful login at Step 1, you will be able to see the Home page of hold shares in demat ID e-voting. Click on e-voting. Then, click on Active Voting Cycles. account with NSDL. ii. After clicking on Active Voting Cycles, you will be able to see all the For example if your DP ID is IN300*** and companies ‘EVEN’ in which you are holding shares and whose voting cycle Client ID is 12****** then your user ID is is in active status. IN300***12******. iii. Select ‘EVEN’ of the Company for which you wish to cast your vote. The b) For Members who 16 Digit Beneficiary ID EVEN No. for Tata Steel BSL Limited is 113601. hold shares in demat account with CDSL. For example if your Beneficiary ID is iv. Now you are ready for e-voting as the Voting page opens. 12************** then your user ID is v. Cast your vote by selecting appropriate options i.e. assent or dissent, 12**************. verify/modify the number of shares for which you wish to cast your vote c) For Members holding EVEN Number followed by Folio Number and click on ‘Submit’ and also ‘Confirm’ when prompted. shares in Physical registered with the Company. vi. Upon confirmation, the message ‘Vote cast successfully’ will be displayed. Form. vii. You can also take the printout of the votes cast by you by clicking on the For example if folio number is 001*** print option on the confirmation page. and EVEN is 113601 then user ID is viii. Once you confirm your vote on the resolution, you will not be allowed to 113601001*** modify your vote. v. Your password details are given below: The instructions for e-voting during the AGM are as under: a) If you are already registered for e-voting, then you can use your i. The procedure for remote e-voting during the AGM is same as the existing password to login and cast your vote. instructions mentioned above for remote e-voting, since the Meeting is being held through VC/OAVM. ) b If you are using NSDL e-voting system for the first time, you will need to retrieve the ‘initial password’ which was communicated to you. ii. Only those Members/Shareholders, who will be present in the AGM Once you retrieve your ‘initial password’, you need to enter the ‘initial through VC/OAVM facility and have not cast their vote on the Resolutions password’ and the system will force you to change your password. through remote e-voting and are otherwise not barred from doing so,
196 shall be eligible to vote on such resolution(s) through e-voting system favor or against, if any, to the Chairman or a person authorized by him in during the AGM. writing, who shall countersign the same.
General Guidelines for Shareholders: iii. The results declared along with Scrutinizer’s Report, will be placed on the i. It is strongly recommended not to share your password with any other website of the Company www.tatasteelbsl.co.in and on the website of person and take utmost care to keep your password confidential. Login to NSDL www.evoting.nsdl.com immediately after the result is declared by the e-voting website will be disabled upon five unsuccessful attempts to Chairman or any other person authorized by the Chairman and the same key-in the correct password. In such an event, you will need to go through shall be communicated to BSE Limited and National Stock Exchange of the ‘Forgot User Details/Password?’ or ‘Physical User Reset Password?’ India Limited, where the shares of the Company are listed. option available on www.evoting.nsdl.com to reset the password. ii. In case of any queries/grievances pertaining to remote e-voting (before the AGM and during the AGM), you may refer to the Frequently By order of the Board of Directors Asked Questions (‘FAQs’) for Shareholders and e-voting user manual for Shareholders available in the download section of www.evoting. Sd/- nsdl.com or call on toll free no.: 1800-222-990 or send a request at Nisha Anil Seth [email protected] or contact Mr. Amit Vishal or Ms. Pallavi Mhatre or Company Secretary & Mr. Pratik Bhatt from NSDL at the designated e-mail IDs: [email protected] Compliance Officer or [email protected] or [email protected] or at telephone nos.: ACS: 27019 +91 22 2499 4360/4545/4738. Other Instructions: New Delhi August 27, 2020 i. The Board of Directors has appointed Mr. P. N. Parikh (Membership No. FCS 327) or failing him Ms. Jigyasa Ved (Membership No. FCS 6488) Registered Office: or failing her Mr. Mitesh Dhabliwala (Membership No. FCS 8331) of Ground Floor, Mira Corporate Suites, M/s. Parikh & Associates, Practising Company Secretaries, as the Scrutinizer Plot No. 1 & 2, Ishwar Nagar, Mathura Road, to scrutinize the remote e-voting process before and during the AGM in a New Delhi – 110 065. fair and transparent manner. Tel: +91-11-3919 4000 ii. The Scrutinizer shall, immediately after the conclusion of voting at the Fax: +91-11-4101 0050 AGM, unblock and count the votes cast during the AGM, and votes cast CIN: L74899DL1983PLC014942 through remote e-voting and make, not later than 48 hours of conclusion Website: www.tatasteelbsl.co.in of the AGM, a consolidated Scrutinizer’s report of the total votes cast in Email: [email protected]
STATEMENT PURSUANT TO SECTION 102(1) OF THE COMPANIES ACT, 2013, AS AMENDED (‘ACT’) The following Statement sets out all material facts relating to Item No. 4 None of the Directors and Key Managerial Personnel of the Company or their mentioned in the accompanying Notice. respective relatives is concerned or interested in the Resolution mentioned at Item No. 4 of the Notice. Item No. 4 The Board recommends the Resolution set forth in Item No. 4 for the approval The Company is required under Section 148 of the Act read with the Companies of the Members. (Cost Records and Audit) Rules, 2014, as amended from time to time, to have the audit of its cost records for products covered under the Companies (Cost By order of the Board of Directors Records and Audit) Rules, 2014 conducted by a Cost Accountant in Practice. Based on the documents available and the discussions held at the meeting of Sd/- the of the Audit Committee, it considered and recommended the appointment Nisha Anil Seth and remuneration of the Cost Auditor to the Board of Directors (the ‘Board’). Company Secretary & The Board has, on the recommendation of the Audit Committee, approved the Compliance Officer appointment and remuneration of Messrs Shome & Banerjee, Cost Accountants ACS: 27019 (Firm Registration Number - 000001) as the Cost Auditor of the Company for the Financial Year 2020-21. New Delhi In accordance with the provisions of Section 148(3) of the Act read with Rule 14 August 27, 2020 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors as recommended by the Audit Committee and approved by Registered Office: the Board of Directors has to be ratified by the Members of the Company. The Ground Floor, Mira Corporate Suites, Board of Directors has fixed the remuneration payable to the Cost Auditors for Plot No. 1 & 2, Ishwar Nagar, Mathura Road, Financial Year 2020-21 at ₹7 lakh plus applicable taxes and reimbursement of New Delhi – 110 065. out of pocket expenses, to cover the cost audit of Tubes and Steel Products of Tel: +91-11-3919 4000 the Company. Accordingly, the consent of the Members is sought for passing an Fax: +91-11-4101 0050 Ordinary Resolution as set out at Item No. 4 of the Notice for ratification of the CIN: L74899DL1983PLC014942 remuneration payable to the Cost Auditor of the Company for the Financial Year Website: www.tatasteelbsl.co.in ending March 31, 2021. Email: [email protected]
197 Annexure to the Notice
Details of Director seeking re-appointment in the forthcoming Annual General Meeting [Pursuant to Regulations 26(4) and 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard on General Meetings]
Profile of Mr. Koushik Chatterjee By virtue of his background and experience, Mr. Chatterjee has an extraordinarily broad and deep knowledge of the steel and mining industry. His experiences Mr. Koushik Chatterjee, born in 1968 will enable him to provide the Board with valuable insights on a broad range of (DIN: 00004989) was appointed as a Member of business, social and governance issues that are relevant to the Company. the Board effective July 11, 2018. His re-appointment will strengthen the Board’s knowledge, capability, Mr. Chatterjee is the Executive Director and Chief experience and execution of the Company’s strategy. Financial Officer of Tata Steel Limited (‘TSL’), the promoter and holding company of the Company. Board Meeting Attendance and Remuneration Details regarding the attendance at the Board Meeting and remuneration Mr. Chatterjee has been a member of the Primary paid to Mr. Koushik Chatterjee are provided in the Board’s Report and in the Market Advisory Committee of the SEBI and was Corporate Governance Report. member of the task force set up by SEBI that drafted the Takeover Code. He was also the member of the Global Preparers Shareholding in the Company Forum, the advisory body to the International Accounting Standards Board, Mr. Koushik Chatterjee does not hold any Equity Shares of the Company. London. He is currently a member of the International Integrated Reporting Directorships in other public limited companies (excluding foreign Council UK, the Working Group on Group Insolvency set up by the Insolvency companies, private companies and Section 8 companies) and Bankruptcy Board of India, the Global Task Force on Climate Related Financial Disclosures set up by the Financial Stability Board, Basel Switzerland; the Directorships Advisory Council to CII-ITC Centre of Excellence for Sustainable Development; Tata Steel Limited and the British Academy project on Future of the Corporation. He is also a Tata Steel Long Products Limited (formerly ‘Tata Sponge Iron Limited’) frequent speaker in various conferences in India and abroad and has been The Tinplate Company of India Limited recognised as one of India’s best CFOs by several organisations like Business Today Magazine, CNBC, Asiamoney and Chartered Institute of Management Tata Metaliks Limited Accountants, UK. In March 2019, he was awarded the CFO Lifetime Achievement TRF Limited Award by the Financial Express. Chairman/Member of Committees in other public limited companies Mr. Koushik Chatterjee is an Honors Graduate in Commerce from Calcutta (Committees include the statutory committees) University and a Fellow of the Institute of Chartered Accountants of India. Tata Steel Limited Corporate Social Responsibility Committee (Member) Particulars of experience, attributes or skills that qualify the candidate for Risk Management Committee (Member) Board membership Stakeholders’ Relationship Committee (Member) Mr. Koushik Chatterjee has valuable experience in managing the issues faced Tata Steel Long Products Limited by large and complex corporations by virtue of his tenure at Tata Sons Private Audit Committee (Member) Limited and Tata Steel Limited. Nomination & Remuneration Committee (Member) Risk Management Committee (Member) Mr. Chatterjee brings to the Board extensive experience in the areas of controllership, financial stewardship, business responsibility (including The Tinplate Company of India Limited restructuring and turnaround of large organisations), business development Nomination & Remuneration Committee (Member) (mergers, acquisitions and divestments), strategy and execution of large Tata Metaliks Limited and complex financing, strategic communication, risk management, crisis Nomination & Remuneration Committee (Member) leadership, public affairs, legal, compliance and governance. TRF Limited Mr. Chatterjee’s experience demonstrates his leadership capability, general Audit Committee (Member) business acumen and knowledge of complex financial and operational issues Corporate Social Responsibility Committee (Member) that large corporations face.
198 Tata Steel BSL Limited (Formerly known as Bhushan Steel Limited) Ground Floor, Mira Corporate Suites, Plot No 1 & 2, Ishwar Nagar, Mathura Road, New Delhi - 110065 www.tatasteelbsl.co.in