BURN STANDARD COMPANY LIMITED
40th ANNUAL REPORT 2015 - 2016
Contents 1
Board of Directors 2
Chairman’s Speech 3
Director’s Report 6
Auditor’s Report 46
Comments of the Comptroller and Auditor General of India 56
Ten Years’ Digest 62
Accounts 63
BOARD OF DIRECTORS (As on 01-04-2016)
SHRI DAYANIDHI MARANDI Chairman and Managing Director *
SHRI ANIRUDH KUMAR Government Director
SMT ABHILASHA JHA MISRA Government Director
SHRI SHYAMAL GHOSH Special Director, BIFR
SHRI PRAVEEN KUMAR Non-Official part-time Director
PROF. BHARATENDU NATH SRIVASTAVA Non-Official part-time Director * New Chairman and Managing Director has been appointed w.e.f 20.08.2016
Company Secretary & DM(F) Engineering Works SHRI SOURABH DATTA GUPTA HOWRAH BURNPUR Auditor PROJECT HEAD OFFICE KAY & KAY ASSOCIATES Chartered Accountants
Refractory and Ceramic Works Bankers RANIGANJ UNITED BANK OF INDIA DURGAPUR Registered Ofce : 22-B, Raja Santosh Road, ANDAL Kolkata - 700 027 GULFARBARI (Since - 16.04.2003) JABALPUR
2 - ANNUAL REPORT - 2015-2016 CHAIRMAN’S SPEECH
AT THE 40TH ANNUAL GENERAL MEETING OF THE COMPANY
Dear Shareholders,
On behalf of the Burn Standard Co Ltd Board of Directors, I have pleasure in presenting the 40th Annual Report on the affairs of the Company along with the audited accounts for the year ending 31.03.2016.
The notice of the meeting together with Directors' Report and Audited Annual accounts for the nancial year ending 31.03.2016 has already been circulated.
2. PHYSICAL AND FINANCIAL PERFORMANCE
2.1 During the year ended 31.03.2016 the Company achieved total Revenue of Rs.138.13 Crores. In previous year 2014-15 the gure was Rs.133.45 Crores. Total revenue showed an increase of 4% over last year.
2.2 The Company incurred gross loss of Rs.16.96 Crores during the year under report as against the gross loss of Rs.20.20 Crores incurred during the year 2014-15. The Net loss of the Company was Rs.28.38 Crores for the nancial year 2015-16 in comparison to a Net loss of Rs.24.66 Crores during the nancial year 2014-15.
2.3 The Company produced 319 Nos. wagons during the year against 756 Nos. wagons in the previous year. Wagons orders executed during the year totaled 147 Nos. and 172 Nos. respectively at Howrah and Burnpur Works.
2.4 The Company produced liquid metal of 5027 MT translating to 1538 bogies, 1987 couplers in the nancial year 2015-16 against 4855 MT, 1768 bogies, 1091 couplers during the nancial year 2014-15.
2.5 The Company registered downfall in nancial performance in spite of growth in physical performance. This is due to substantial reduction in price of wagons, galloping hike in costs of inputs, acute shortage of Working Capital resulting into loss of production/revenue earning on one hand and burden of payment of higher
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wages on the other, refusal of banker to enhance credit ceiling, delayed payment by SAIL & non-receipt of matched free supply steel from Rly. in 1st Qtr. are prime reasons.
3. PROSPECTIVE GROWTH
3.1 Due to drastic reduction in wagon price the Company took the challenge of repair of wagons for East Central Railways at Mughalsarai, beside the regular repair of wagons undertaken at Company's Howrah Works and Burnpur Works. During the year ended 31.03.2016 total repair of wagon jobs executed 2277 Nos., out of which Howrah Works and Burnpur Works 1439 Nos. and Mughalsarai 838 Nos.
3.2 The Company will get sufcient number of Wagon orders for rehabilitation / repair of various types of Railway Wagons to execute the order either in participating in the tender or obtaining order from Indian Railways on nomination basis.
3.3 Manufacturing of Barges has become a new venture of business which is adding feather in its core activities. The Company is exploring the idea of venturing into Monorail in Kolkata.
4. RESEARCH & DEVELOPMENT
The Company has already got approval to fabricate Steel structure bridge. The Company has also taken the initiative to arrange manufacturing of medium and small ship including house boat for fabrication.
5. ACKNOWLEDGMENT
I express my sincere thanks to the different Ministries of Government of India specially, that of Railways, Heavy Industries & Public Enterprises, Steel, Finance, various Departments of Government of India/State Governments, Braithwaite & Company and other peer PSUs for their valued support and look forward to
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continued support in future. I thank all my colleagues on the Board for their resolute support and consistent encouragement. I would also place on record my appreciation to the employees for their commitment in the progress of the Company. I also thank the Bankers, Auditors, Lenders, Suppliers and Customers for extending support to the Company throughout the year, the categories of employees and all Trade Unions of all the Units for their contribution during the year and expect that they would continue their sustained efforts for improving the performance of the Company in the coming days.
For and on behalf of the Board of Directors
Place : Kolkata ( MD. ASAD ALAM )
Dated : 24th November, 2016 CHAIRMAN & MANAGING DIRECTOR
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Gentlemen,
The Directors have the pleasure in presenting the 40th Annual Report along with the Audited Accounts for the year ended 31.03.2016.
1.0 OVERALL PERFORMANCE :
1.1 During the year ended 31.03.2016, the Company achieved Total Revenue of Rs.138.13 crores. In previous year (2014-15) the gure was Rs. 133.45 crores.
1.2 The Company incurred Gross Loss of Rs. 16.58 crores during the year under report as against the Gross Loss of Rs. 20.20 crores incurred during the previous year (2014-15).
1.3 During the year under report, the Company produced 318 wagons as against 707 wagons in the previous year (2014-15), 1716 Bogies as against 1768 Bogies in the previous year (2014-15)
2 STATE OF COMPANY AFFAIRS / OPERATING RESULTS u/s 134(3)(i) & (j):
During the year 2015-16, the Company registered Net Loss of Rs. 28.37 crores against Net Loss of Rs. 24.66 crores for the previous year 2014-15.
The salient features of Operating Results for the year 2015-16 vis-à-vis previous year 014-15 are tabulated below: ( Rs. in crores )
Since the Company is incurring loss there is no transfer to reserve.
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3 FINANCIAL & CAPITAL STRUCTURE :
The capital structure of the Company as on 31.03.2015 vis-à-vis 31.03.2016 is as follows :
4 RECENT GROWTH AND PROSPECTIVE GROWTH :
In nancial terms the turnover was up by 3.5%.The Company earned Operating Loss before depreciation, interest and Extraordinary item of Rs. -1.04 crores during the year under report as against the Operating Prot of Rs. 3.49 Crores incurred during 2014-15. Various steps have already been taken by the management, duly supported by Ministry of Railways, for turning around the nance of the company.
5 SECURED ORDER POSITION :
Our Company secured new orders for a total number of 2101 VU wagons in 2015-16 of Rs.190.87 crores against 389 VU wagons of Rs. 48.50 crores in 2014-15 and Rs.18.01 crores for Railways Bogie orders and 112.61 crores for Railway wagon repair. The order available for execution is 2583 VU wagons of Rs.308.46 crores and 62 crores for Railway components and 66.05 crores for Railways components i.e. total
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order available for execution of Rs.436.50 in 2015-16 against 389 VU wagons of Rs.48.50 crores in corresponding year 2014-15. Export: At present there is no export order.
6. RESEARCH & DEVELOPMENT :
Burn Standard stands for quality. The workforce has been motivated in such a way which can produce only the quality products. Every section of the shops and each stage of production are always under strict vigilance of the quality control supervisors. As a result, Burn Standard can produce any product within its manufacturing range conrming to global specications to the entire satisfaction of the customers.
Burn Standard is in the process of developing Light Weight Low Height 25 Ton Axle Load Bogie (LWLH 25) for Broad Gauge Wagon which is rst time in India by a wagon manufacturer.
Burn Standard is also in the process of developing BOXNS Wagon tted with 25 Ton Axle Load Bogie against prevailing 22.9 Ton Axle Load Bogie and manufacture of proto type wagon is in the advanced stage.
Development of 71-BD Draft Gear, which is an import substitute is also in the process and is likely to be developed shortly.
7.0 PERSONNEL & INDUSTRIAL RELATIONS :
7.1 During the year 2015-16, the strength of permanent employees as on 31.03.2016 was 610 as against 683 as on 31.03.2015. The reduction in manpower has been effected due to natural separation like superannuation, death etc., as also by restricting recruitment.
7.2 Pursuant to Company's policy of continuous skill development including enrichment of professional knowledge vis-à-vis strength of employee having been reduced considerably, only selected employees of different Units and Head Ofce at different levels were nominated for different Seminars / Training Programmes / Workshops organised both In-house and Out-house during the year under review.
7.3 The Company provided both statutory and non-statutory welfare facilities to the employees of different Units within its nancial limitations.
7.3 Overall industrial relation in the Company was satisfactory. 8 - ANNUAL REPORT - 2015-2016 DIRECTOR’s REPORT Contd...
8 MOU PERFORMANCE :
Based on nancial performance and achievement of other parameters laid down, your company is likely to be rated 'Fair' as per the Memorandum of Understanding (MoU), signed by the Company with the Government of India for the Financial Year 2016-17.
9 IMPLEMENTATION OF OFFICIAL LANGUAGE :
During the year 2015-16, the Company pursued the policies of Government of India on implementation of Ofcial Language. Steps were taken for ensuring compliance of the Ofcial Language Policy. A Workshop on “Noting & Drafting in implementation of Ofcial Language in Ofce” was organised on 17.03.2016 at Head Ofce in which employees participated spontaneously and effectively.
10 AUDITORS
Your Company appointed the following auditing rms for carrying out various audit functions of your Company for the nancial year 2015-16:
a) Statutory Auditor : Kay & Kay Associates b) Cost Auditor : Bandyopadhyaya Bhaumik &Co c) Internal Auditors : Sarkar Gurumurthy & Associates and George Read & Co.
d) Secretarial Auditors : Subhasis Bosu & Co.
11 REPORT OF THE STATUTORY AUDITORS AND COMMENTS OF COMPTROLLER AND AUDITOR GENERAL OF INDIA ON THE ACCOUNTS FOR 2015-16 u/s 134(3)(f)
11.1 The Comptroller and Auditor General of India appointed Kay & Kay Associates, Chartered Accountants, as the Statutory Auditors of the Company for 2015- 16.
11.2 The reports of the Statutory Auditors on the Accounts of the Company for 2015-16 are annexed to this Report. Auditors' comments in their Report are self-explanatory and have been suitably explained in the Notes on Accounts. The explanation given by the Board to the observation is enclosed here in Annexure II. (page 20)
11.3 Under section 619(4) of the Companies Act, 1956, the Comptroller and Auditor General of India have given their comments on the Accounts of the Company for the year ended 31.03.2016 which is self explanatory. The necessary explanation on the qualication of the report of the CAG, if any, shall be given separately.(page 56)
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12 SUBSIDIARY COMPANIES, JV AND ASSOCIATE U/S 134(3)(q) AND RULE 8 (1) OF COMPANY ACCOUNTS RULES : Two erstwhile Subsidiaries of the Company viz, Bharat Brakes & Valves Ltd. (BBVL) and Reyrolle Burn Ltd. (RBL) were ordered to be wound up on 17.06.2003 and 22.07.2003 respectively, by the Hon'ble High Court at Calcutta. Subsequently, as per directives of the Hon'ble High Court, the Ofcial Liquidator has taken charge of BBVL and RBL on 31.07.2003 and 24.09.2003 / 10.10.2003 respectively. Statements of Affairs of both the Companies were submitted to the Ofcial Liquidator. The Company has made a total claim of Rs. 12.93 crores against RBL on 21.12.2005 before the Ofcial Liquidator and also submitted the required documents from time to time. For RBL Limited, the Ofcial Liquidator has admitted the Company's claims, except that of investment of shares, as evident from the afdavit led by the Ofcial Liquidator. However, from the communication received from the Ofce of Ofcial Liquidator, it was clear that there is no surplus available after payment of a part of Secured Creditors from the total sale proceeds of assets of the Company. After adjudication, the claims of the Company and its erstwhile Holding Company have been distinctly identied. Now the effect of settlement of claims in the matter of BBVL has been accepted by the Ofcial Liquidator admitting as preferential claim of Rs. 2,74,00,000/- and ordinary claim of Rs. 3,80,36,000/-. The Company has received the total sum of Rs. 6,54,36,000/- on 10.07.2014 against its claim. Burn Standard Co. Ltd and Steel Authority of India Ltd. has entered into a 50:50 joint venture for manufacture of wagon components and set up a company under the name of SAIL BENGAL ALLOY CASTING PVT. LIMITED at the leasehold land in Jellingham, West Bengal. The Joint Venture Company was incorporated on 12.02.13.Pursuant to CRZ survey report from Institute of Environmental Studies and Wetland Management (IESWM), Kolkata more than 50% of the land are falling under “No Development Zone” for the category of Industry i.e. Steel Foundry for the proposed WCMF. Subsequently the existing 12 acres vacant land of BSCL adjacent to Burnpur factory has been found suitable as per letter dated 12.06.2016 of RITES Ltd. Both BSCL and SAIL Board had approved relocation of the factory site of JV company from Jellingham to Burnpur. Matter has been referred to MoR for approval. Annexure VIII (page 20)
13 RESTRUCTURING/REVIVAL OF THE COMPANY : The nancial restructuring Scheme of the Company on being accepted and forwarded by Ministry of Railways to Department of Public Enterprises was taken up by NITI Aayog on 19.07.2016 and examined. Finally, NITI Aayog directed Railway Board for submission of fresh Revival Proposal without involving any nancial support from the Govt. of India. Member Rolling Stock has communicated to NITI Aayog that it has 10 - ANNUAL REPORT - 2015-2016 DIRECTOR’s REPORT Contd...
planned to revive and sustain the Company through its own resources (Sale of Land Assets) with no infusion of Government fund.
Accordingly, fresh nancial restructuring Proposal has been prepared of Rs.300 Crores (approx.) taking into account sale of land and all the pending dues as well ensuring operational strategy and on being approved in the Company's last 197th Board meeting held on 27.09.2016 the said Proposal was submitted to the Railway Board with a copy to OA(UBI) and Hon'ble BIFR Bench in compliance to Hon'ble BIFR Bench's Order dated 27.07.2016 . 14 SMALL SCALE AND ANCILLARY INDUSTRY / MSME : 18 numbers of SSI units were associated with the Howrah Unit and 16 numbers of MSME units were associated with the Burnpur Unit. Regular purchase enquiries were issued to the seancillary and SSI units. Generally, small cast iron castings, safety equipments, uniforms, cotton & jute consumables, non-ferrous castings, bolts, nuts, electrodes, fasteners and paints were procured from these SSI units. The supply performance of SSI and ancillaryunits were by and large satisfactory. Assistance was given to these units as and when required to overcome their difculties by rendering technical guidelines, by supplying of jigs & xtures, raw materials and transport facilities.
15 BOARD OF DIRECTORS u/s 134(3)(q) : During the year 2015-16,Ministry of Railways, Govt. of India has appointed one part time Govt director namely Shri Anirudh Kumar, DME (P) - I in place of Shri A. Rastogi, DME(PU), Railway Board, Ministry of Railways, Govt. Of India on the Board of Burn Standard Company Limited w.e.f. 23.02.2016.
The vacancy for the post of Woman Director was lled up by appointing Smt Abhilasha Jha Misra in place of Smt Ambika Jain,as one part time Govt director. w.e.f. 20.11.2015. During the year under review, 4 (four) meetings (26.6.2015, 9.9.2015, 30.12.2015. & 30.03.2016) of the Board of Directors were held to transact the business of the Company. The Companies Act 2013 provides for appointment of Independent Directors(ID) u/s 149(10) for a maximum 2 terms of 5 years each and shall be eligible for reappointment after passing special resolution after completion of rst term of 5 years and disclosure of such reappointment is required to be disclosed in the Directors Report. In BCSL appointment of IDs are as per order of MOR wherein a Director is appointed till he/she holds the post or order of MOR whichever is earlier.
Shri Md. Asad Alam has taken over the charge of Chairman cum Managing Director, since 20-08-2016, from Shri Dayanidhi Marandi.
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AUDIT COMMITTEE u/s 177(8): During the year under report, the Audit Committee of the Board met 4 times on 26.6.2015, 9.9.2015, 30.12.2015. & 30.03.2016 for consideration of nal Accounts, Internal Audit Reports of previous quarters, appointment of Internal Auditors and for nancial policy decisions.
16 BOARD EVALUATION U/S 134(3)(p) The Board's annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees is not applicable to Government Company.
17 DECLARATION BY AN INDEPENDENT DIRECTOR(S) U/S 134(3)(c) As required by section 134(3)(c) of Company Act 2013, a declaration u/s 149(7) by an Independent Director(s) that he/they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 is not required to be given in Director's Report, since section 149(6)(a) and section 149(6)(c) not applicable to Govt Company.
18 COMPANY'S POLICY ON APPOINTMENT AND REMUNERATION U/S 134(3)(e) READ WITH SECTION 178(3) AND 178(4) Government Company is exempted from such disclosure vide section 462 of Company Act 2013. Companies senior management's remuneration is as per laid down rules of PSU.
19 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS U/S 134(3)(g)
a) Details of Loans:
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b) Details of Investments:-
c) Details of Guarantee / Security Provided:
During the year under review, your Company has not given any loan, provided any security or guarantee which requires disclosure in terms of Section 186 of the Companies Act, 2013.
20 RELATED PARTY TRANSACTIONS U/S 134(3) (h) :
The details of transactions entered into with the Related Parties are enclosed as Annexure III, (page 20.)
21 MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY U/S 134(3) (h) :
No material changes and commitments have occurred affecting the nancial position of the Company between the end of the nancial year of the Company to which the nancial statements relate and the date of the report.
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22 RISK MANAGEMENT POLICY U/S 134(3)(n)
In terms of the requirement of the Companies Act 2013, the Company is working out comprehensive Risk Management Policy including identication therein of elements of risks which in the opinion of the Board may threaten the existence of the Company. A comprehensive risk management policy will be adopted.
Head of the Departments are responsible for implementation of the risk management system as may be applicable to their respective areas of functioning and report to the Management .
a. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS u/s 134(3)(q)
During the year under review, no signicant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations.
b. INTERNAL FINANCIAL CONTROLS u/s 134(3)(q)
The Company has in place an established internal control system designed to ensure proper recording of nancial and operational information and compliance of various internal control and other regulatory and statutory compliances. Internal Financial Control which require that the directors review the adequacy of internal controls and compliance control, nancial and operational risks, risk assessment and management systems and related party transaction, have been complied with.
The Company continues to engage Sarkar Gurumurthy & Associates for Burnpur and George Read & Co. for Kolkata and Howrah as its Internal Auditor. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efciency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors ndings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efciency in operations.
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c. DEPOSITS U/S 134(3)(q)
The Company has not taken any deposit during the year.
23 DIRECTORS RESPONSIBILITY STATEMENT u/s 134(3) ( c ) read with section 134(5):
Pursuant to the section 134(3)(c) of the Companies Act, 2013, your Directors conrm that :-
(i) in the preparation of the annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departure;
(ii) they had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the nancial year 2014-15 and of the Prot & loss Account of the Company for the said period;
(iii) they had taken proper and sufcient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the annual Accounts have been prepared on a “Going Concern Basis”.
(v) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Audit Committee was comprised of four members: Shri D. Marandi, Chairman & Managing Director and Chairman of the Committee; Shri Praveen Kumar, Non Ofcial Director, Shri Shyamal Ghosh, Special Director, BIFR and Shri B N Srivastava, Non- Ofcial Director.
24 VIGILANCE
The Vigilance Department of the Company continued to function effectively. Regular inspections were conducted from preventive vigilance point of view. Surprise checks were also conducted frequently during the year under review covering ofcers/ofcials at various levels to achieve desired results.
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As in the previous years, the Company observed ''Vigilance Awareness week'' during 26th October '2015 to 31st October 2015, where eminent speakers shared expert knowledge on preventive measures to be followed for eradication of corruption.
25 CORPORATE SOCIAL RESPONSIBILITY u/s 134(3)(o) During the year 2015-16, the Company has taken initiatives to discharge its social responsibilities in the vicinity of Burnpur and Howrah Units. The Company spent a total amount of Rs. 1,20,000/- towards donation to School and different welfare activities for the common people residing adjacent to our Works. (Annexure VII ) page 20.
26 CORPORATE GOVERNANCE In compliance with DPE Guidelines, Company has taken steps for a sound Corporate Governance system. The company followed the DPE Guidelines as per manual. For the year 2015-16, Company has complied with almost all the points covered by the DPE Guidelines, meant for a sick PSU.
Ministry of Railways has appointed– two part time Govt director on the Board of Burn Standard Company Limited .
There is no 'Related Party' transaction of Senior Managers except disbursement of their remuneration. Directors Remuneration has been mentioned in the Annual Accounts. Company has followed Indian GAAP in its accounting and also mentioned compliance with AS-17(SegmentReporting), AS- 18 (Related Party Information), AS-21 (Effect of change in Foreign Exchange rates), AS-23(Accounting for investment in Associates) and AS-27 (Joint Ventures).
27 PARTICULARS OF EMPLOYEES
During the year under report, none of the employees of the Company received remuneration exceeding the ceiling limit as prescribed under Section 197(14) of the Companies Act, 2013 read with the Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 . For the list of top 10 employees in terms of remuneration drawn, see Annexure - IX, Page 20.
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28 DISCLOSURE IN DIRECTORS REPORT ABOUT RECEIPT OF COMMISSION BY MD/WTD FROM A COMPANY AND ALSO REMUNERATION / COMMISSION FROM ANY HOLDING COMPANY OR SUBSIDIARY COMPANY U/S 197(14)
This provision is not applicable to the Government Company.
29 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTIONAND FOREIGN EXCHANGE EARNING AND OUTGO
The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134 of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, are given in the Annexure – I (page 20) to this report.
30 COST AUDIT REPORT UNDER COMPANIES (COST ACCOUNTING RECORDS) RULES, 2011
Pursuant to Order No. GSR No. 429(E) dt. 30.6.2011 read with provisions of The Companies (Cost Accounting Record) Rules, 2011 as issued by the Cost Audit branch of the Ministry of Corporate Affairs, your Company u/s 148 of Co Act 2013 has appointed M/s Bandopadhyaya Bhaumik & Co., Cost Accountants to conduct the audit of cost records of your company for the nancial year for 2015-16.
The work in this regard is under way and the report will be submitted to the Central Government within the time limit prescribed by the Ministry of Corporate Affairs.
The remuneration proposed to be paid to them requires ratication of the shareholders of the Company. In view of this, your ratication for payment of remuneration to Cost Auditors is being sought at the ensuing Annual General Meeting.
31 IMPLEMENTATION OF RTI ACT, 2005
Since inception of the act, the Company has complied with all its provisions. The Company has posted a separate section on RTI Act, 2005 on its website and made different ofcials appointed as Public Information Ofcers, CPIO and Appellate Authority. Till date all the information sought has been replied back to the respective applicants. In compliance with Government directives, the company submits quarterly Returns on the disposal of RTI cases to DPE through Ministry of Railways.
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32 SECRETARIAL AUDIT REPORT U/S 204(3)
In terms of Section 204 of the Act and Rules made thereunder, M/s. Subhasis Bosu & Co., Practicing Company Secretary have been appointed Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure IV (page 20) to this report. The report is self-explanatory and comments to that is also mentioned there.
33 VIGIL MECHANISM U/S 177(10)
In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism Policy for directors and employees, to report genuine concerns has been established and uploaded in the company's website at www.burnstandard.com
The Vigil mechanism provides a channel to the employees to report to the management concerns about unethical behavior, actual or suspected fraud or violation of the codes of conduct or policy. The mechanism provides for adequate safeguards against victimization of employees and also provide for direct access to the director nominated to play the role of Audit Committee in appropriate or exceptional cases. The Policy covers reporting of malpractices, events which have taken place or suspected to have taken place, misuse or abuse of authority, fraud or suspected fraud, manipulations, negligence causing danger to public health and safety, misappropriation of monies, assets and other matters or activity on account of which the interest of the Company is affected by whistle blowers.
34. EXTRACT OF ANNUAL RETURN u/s 134(3)(a) read with section 92(3) :
As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report at Annexure V (page 20.)
35 OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
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2013 has been notied on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee.
Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up a Committee for implementation of said policy. During the year Company has not received any complaint of harassment.
36 CHANGE IN NATURE OF BUSINESS U/S 134(3)(q)
During the year Co is exploring the idea of being a facilitator for implementing monorail for the city of Kolkata (apart from other places) and also diversied into shipping business. This is part of object clause of MOA.
37 ACKNOWLEDGEMENT
The Directors extend their sincere thanks to the various Ministries of the Government of India, particularly Ministry of Railways, Ministry / Department of Heavy Industries and Public Enterprises, Ministry of Non-Conventional Energy Sources, Ministry of Power, Ministry of Petroleum, Ministry of Company Affairs, Ministry of Finance, Ministry of Science & Technology, Department of Bio-Technology and Ministry of Steel for their excellent co-operation and assistance round the year. Thanks are also being conveyed to various Departments of the Governments of West Bengal and Tamil Nadu for their continuous co-operation and assistance in running different works of the Company. The Directors also acknowledge with gratitude and appreciation, assistance received from the Comptroller and Auditor General of India, Principal Director of Railway production Units and Metro Railway, Kolkata, Kay & Kay Associates, Chartered Accountants, Statutory Auditors and Board for Industrial and Financial Reconstruction as well as valued customers like NTPC besides different zones of Indian Railways, who have reposed immense faith and dependence on the Company's quality products. Thanks are also due to United Bank of India, who have extended valuable nancial support and assistance throughout the year to steer the operations of the Company under trying circumstances and for acting as the Operating Agency of BIFR. The Directors acknowledge the dedication and commitment of all categories of employees to the growth of the Company and all Trade Unions of all the Units for their contribution during the year and expect that they would continue their sustained efforts for improving the performance of the Company in the coming days.
Place : Kolkata For and on behalf of the Board of Directors, ( Md Asad Alam) Date : 24th November, 2016 Chairman and Managing Director
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ANNEXURE INDEX
Annexure Content
I Conservation of energy (point no. 29) - Page-17
II Reply to auditors (point no. 11) - Page-9
III AOC 2 –
IV MR-3 secretarial audit report (point no. 32) - Page-18
V Annual return extracts in MGT 9 (point no. 34) - Page-18
VI Annual report on corporate social responsibility (point no. 25) - Page-16
Statement of particulars of employees pursuan t to the Companies VII (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2014 (point no. 27) - Page-16
Statement pursuant to section 212 (8) of the Companies Act, VIII 1956 relating to Subsidiary Company (point no. 12) - Page-10
IX (point no. 27) - Page-16
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Annexure – I
Additional information pursuant to Section 217(1)(e) of the Companies Act,1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,1988
A. CONSERVATION OF ENERGY
HOWRAH WORKS (HW)
i) Measures taken
a) To augment energy saving the following action were taken.
1) Initially, we used rectier type Plasma Cutting Machine, but now a days we switched Inverter based Plasma Cutting Machine which power factor and KVA Rating is much more better than pervious one.
2) For Lock Bolting Machine – M/s. Alcoa Pvt. Ltd. have xed the power supply line at 400 V of primary transformer, but our Company's line voltage is approx 430-440V. So we changed the input power supply connection from 400V to 440V tap line of Transformer. Hence the power factor is improved and Company get positive result regarding power consumption.
3) For Graphite Electrode (Required for melting of molten metal) previous consumption was 7.5 Kg/Ton of liquid metal. But it was now developed and present consumption is 5.5 Kg/Ton of liquid metal.
4) 50% of fresh sand was purchased in dry condition which is approximately 2500 tones in the year of 2015-16. This has generated fuel saving in sand Dryer by 20 KL amounting to Rs.10.00 lakhs in the year 2015-16.
5) Shop Floors lightings are gradually getting change to 150 W and 250 W Metal Halide Lamps from 400 Watt HPMV Lamps. Also in the process all Sodium Vapour Lamps are getting replaced by the above. Approximately 50% lighting system (newly) has been completed. This is done for the energy savings purpose.
6) Pneumatic Air Pipe Lines are being checked regularly and valves are replaced / closed to avoid leakage of Air Pressure.
i) Additional investments and proposals, if any, being implemented for reduction of consumption of energy.
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a) We have installed Liquid Oxygen Plant at our Foundry Division and invest Rs.15.00 lakhs (approx). During oxygen lancing melting time will be reduced as a result, electricity consumption will be less of suitable amount of credit on electricity bill. ii) Impact of measures (a) above, for reduction of energy consumption and consequent impact on the cost of production of goods. This can be measured only after completion of all the work regarding Energy Conservation. However, Pneumatic Pressure at the points of end-use has been increased which indicates the result of change of valves and stoppage of leakages. iii) Total energy consumption and energy consumption per Unit of production as per Form A of the Annexure (page 25). Form-A, duly led in is enclosed herewith.
BURNPUR WORKS (BW) (i) BW is consuming electrical energy at power factor level as follows:
Month Power Factor Level Rebate ( Rs )
April’15 0.96 64,356.00
May’15 0.97 38,809.00 June’15 0.97 45,088.00
July’15 0.98 52,476.00
August’15 0.97 46,352.00
September’15 0.97 48,141.00
October’15 0.97 46,211.00 November’15 0.97 44,159.00
December’15 0.97 46,396.00 January’16 0.98 51,794.00 February’16 0.97 44,841.00
March’16 0.97 47,452.00
Total Savings = Rs. 5,76,075.00
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BW is also saving electrical energy by 10% in the area of shop lighting, ofce lighting and street lightings in respect of previous utilization. (ii) BW is also continuing to save electrical energy by using of MMAW and MIG/CO2 welding machine in wagon manufacturing and repairing process . HOWRAH WORKS(HW)
STATEMENT OF ENERGY CONSUMPTION & CONSERVATION DURING 2015-16
CHARGEABLE MAXIMUM DEMAND AVG POWER MONTHS PF REBATE (Rs.) UNITS IN KWH IN KW FACTOR
Mar-16 730908 3619.2 98.6 % 191 ,790.26 Feb-16 714036 3278.4 98.47 % 185,934.97 Jan-16 741540 3499.2 98.86 % 193 ,097.02 Dec-15 912528 3643.2 98.25 % 237,622.29
Nov-15 782316 3576 97.68 % 152,786.31
Oct-15 576072 3480 98.12 % 150,470.01
Sep-15 694272 3264 97.37 % 136,007.88 Aug-15 743376 3648 97.56 % 145 ,627.36 Jul-15 693468 3379.2 98.18 % 181 ,133.84 Jun-15 685080 3408 97.78 % 134,823.74 May-15 728988 3657.6 97.05 % 143,464.84 Apr-15 792144 3345.6 96.76 % 129,911.62 TOTAL: 1,982,670.14
B) TECHNOLOGY ABSORPTION Further to Technology up-gradation which was achieved in the year 2011-12, 2012-13, 2013-14, 2014-15 and 2015-16 - the efforts were taken in the areas which are listed below with the benets obtained / targeted. a) Revamping and re-commissioning of IMF 15 T / hour capacity Moulding Line which will enable BSCL for making resin Sand Mould of various sized. This job is taken up for development of new generation high axle load bogie from 25T axle load and above. b) We are in the process of development of Prototype of BOXNS wagon and 25T Axle Load LWLH Bogie and we are expecting to get the clearance of Prototype BOXNS wagon from RDSO Kolkata very soon. We have also get clearance from RDSO/LKO & RDSO/I&L/KOL for series production of 25T Axle Load Bogie. c) We are also in the process for development WD-71-BD-15 Draft Gear for Indian Railways and expecting to achieve the same very soon.
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C) EXPENDITURE OF R & D i) Capital ii) Recurring Nil iii) Total iv) Total R&D expenditure as a percentage of total turnover..
D) TECHNOLOGY ABSORPTION, ADOPTION &INNOVATION : i) Efforts in brief made towards technology absorption, adaptation and innovation. And ii) Benets derived as a result of the above efforts e.g. product development, cost reduction, new product development, import substitution etc. a) New 5 ton capacity Electrically operated Heat Treatment Furnace has been installed and commissioned for Coupler Components. Furnace Oil consumption is totally saved. b) Furnace Lining Bricks of 4 Ton & 5 Ton Arc Melting Furnaces converted to Magnesia Carbon Bricks as against conventional Magnesite Bricks. c) Laddle Lining converted to Insulated Ceramic Board Lining in place of conventional Bricks Lining. d) Hot Patching Material for Furnace patching is introduced, results obtained complete abolition of Fuel Oil consumption for Melting purpose, which was 20 Lt/Ton of Liquid Metal. e) Reduction in Melting Power consumption from above 700 KWH/Tonne to 550 KWH/Ton of Liquid Metal. f) Reduction in Tapping Temperature by 30◦ C & thereby obtaining further power consumption reduction by about 20 KWH/Ton of Liquid Metal. iii) In case of imported technology (imported during the last 5 years reckoned from the beginning of the nancial year), the following information may be furnished…. a) No Technology was imported since last ve (5) years.
(E) FOREIGN EXCHANGE (Rs. in lakhs) 2014-152015-16 a) Total Foreign Exchange Earned -- b) Total Foreign Exchange out go -- Net Earnings/ (Outgo) -- Encl : FORM - A
Place : Kolkata Dated : 24th November, 2016
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FORM-A
STATEMENT OF ENERGY CONSUMPTION DURING 2015-16.
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Quantitative details: 2015-16
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Annexure-II
Assertion of Auditor Management Views
I . Emphasis of matters a) Note No.1.3 in which assertions Principle of going concern has been made by the company regarding adopted in preparation of Accounts. The the preparation of accounts on a company has submitted Financial going concern basis although the restructuring proposal to MOR for net worth of the company is approval which is still awaited. negative. At present the Ministry of Railways has given sufcient orders to the company for next 2 years. The work is of perennial nature and the company hopes to secure similar orders in future. So the company envisages itself as a going concern entity.
b) Schedule 2 A (Para 8.3) of the There is no ready market for the stock of Signicant Accounting Policies on materials, stores and spares of wagon the valuation of stock of materials, and foundry components. As a result stores and spares including loose compliance with the Accounting tools at cost exclusive of Cenvat Standard -2 which states that inventory element instead of 'at lower of cost shall be valued at lower of cost or or net realizable values' as per netrealizable value cannot be adhered Accounting Standard – 2 to.
c) Note No.2.2 regarding non Most of the assets including building identication of impaired assets and plant and machinery are very old and provision for the same. and are at the end of their economic life. Necessary depreciation have been provided in the books and further impairment is not perceived by the company.
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d) Note No. 2.11 in the Fixed Assets The lease deeds in respect of all schedule regarding non-disclosure leasehold land are not available with the of values in case Leasehold lands company as the lease agreements are separately. The land areas of the very old. In certain cases like Howrah said leasehold properties were not Works, Jellingham on expiry of lease supported by proper deeds. Leases long back ,the possession of leasehold have expired in case of Howrah and land in question are rested with the Pandi Mines. Lease deed in case of company followed by regular payment Raniganj and Mindnapur were of monthly rent. unavailable for audit. As such amortization/lease rent were not disclosed properly.
e) Note No. 3.1 on revaluation of land The revaluation reserve on land has assets on the basis of resolution of been made on the basis of average of the company's Board by averaging valuation by three approved valuers. the valuation done by three The valuation was done during 2009- approved valuers. We are unable to 10. Considering that period of 5 years o f f e r a n y c o m m e n t o n t h e have elapsed the current valuation is appropriateness of the procedure expected to be much on the higher side. resulting in the appreciation of the value of freehold land by Rs.43479.91 lakhs.
f) Note no. 4 on the pending conrmation of balances of sundry Debtors, Loans & Advances, Deposits, Other Current Assets and Sundry Creditors and non recognition of the above accounts
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II. Basis of qualied opinion a) Note No. 2A(2.17)(ii) regarding Necessary correspondence with the non conformation/ non provision of respective banks is being done by the bank balances amounting to company at frequent intervals. Rs.12.09 lakhs and xed deposits of Rs.1.04 lakhs b) Note No.2B(8.6) regarding non The Sheet piles at Jellingham was provision for shortage on imported attempted for disposal under the sheet piles of 965.22 MT at direction of BIFR Order . The value of Jellingham at an average purchase sheet piles based on bids received by price estimated at Rs.50.98 lakhs. the company against E – auction by MSTC in the year 2011 was Rs. 43,631.20 per tonne which is much higher than the book value per tonne. They were not disposed off as the price obtained was lower than reserve price and anticipated complications on customs duty liability if disposed in India. Since new offered price is much more than book value and total value is more than book value , no provision for storage has been made by the company.
c) Note No.2B(8.16) regarding non The company shall provide for the provision of Rs.100.00 lakhs for actual amount as determined in the year Municipal Tax of Raniganj Works. of payment. This is a old case of outstanding tax for more than 15 years. d) Note NO.2A(2.16)(i) regarding The company has led a money suit in xed deposit with United Bank of the Hon'ble Kolkata High Court for India having principal of Rs.204.29 recovery of xed deposit amounting to lakhs adjusted by the Bank against Rs 204.29 lakhs against unilateral dues of the Company.No provision adjustment of the same by United Bank has been made for the principal and of India. Hence no provision is required interest of Rs.237.42 lakhs in this at this stage. account.
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Annexure - III FORM NO. AOC -2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 Form for Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub section (1) of section 188 of the Companies Act, 2013 including certain arms length transaction under third proviso thereto. 1. Details of contracts or arrangements or transactions not at Arm's length basis.
2. Details of contracts or arrangements or transactions at Arm's length basis.
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IV Secretarial Audit Report
SECRETARIAL AUDIT REPORT (MR-3) FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2016
[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To, The Members, BURN STANDARD CO. LTD. CIN: U51909WB1976GOI030797 22B, RAJA SANTOSH ROAD, KOLKATA-700027
We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by BURN STANDARD CO. LTD. (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.
Based on our verication of the books, papers, minute books, forms and returns led and other records maintained by the company and also the information provided by the Company, its ofcers, agents and authorized representatives during the conduct of secretarial audit, We hereby report that in our opinion, the Company has, during the audit period covering the nancial year ended on 31st March, 2016, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
We have examined the books, papers, minute books, forms and returns led and other records maintained by (“the Company”) for the nancial year ended on 31st March, 2016 according to the provisions of:
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(i) The Companies Act, 2013 (the Act) and the rules made there under;
(ii) Other laws applicable specically to the Company namely:
a) Labour Laws
b) Environmental Laws
We have examined that the company has taken care, to comply with the Secretarial Standards (SS) specied by the Institute of Company Secretaries of India namely -
(i) SS-1 : Meetings of the Board of Directors and
(ii) SS-2 : General Meetings;
As approved by the Ministry of Corporate Affairs vide letter no.1/3/2014/CL/I dated April 10, 2015, as per the requirement of the provisions of section 118(10) of the Companies Act, 2013.
The Secretarial Standards have been notied by the Institute of Company Secretaries of India in the Ofcial Gazette and has taken effect from July 1, 2015. During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above. We further report that:
The Board of Directors of the company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
Adequate notice is given to all Directors of scheduled Board Meetings, Agendas and detailed notes on agendas were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarications on the Agenda items before the meeting and for meaningful participation at the meeting. Decisions on the Board were taken unanimously.
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We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with other applicable laws, rules, regulations and guidelines.
We further report that during the audit period the Company had following event which had bearing on the Company's affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards etc.
a) The Company has undertaken JV with SAIL Bengal Alloy Castings Private Limited.
We further report that during the audit period, the Company has allotted 70,000 equity shares of Rs.1,000/- each to the President of India.
For Subhasis Bosu & Co. Company Secretaries
CS Subhasis Bosu Proprietor FCS No.:7277, C P No.:11469 Place: Kolkata
Date: 24th November, 2016
This report is to be read with our letter of even date which is annexed as' Annexure A' and forms an integral part of this report.
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'Annexure A' To, The Members BURN STANDARD CO. LTD. CIN: U51909WB1976GOI030797 22B, RAJA SANTOSH ROAD, KOLKATA-700027
Our report of even date is to be read along with this letter.
1. Maintenance of secretarial record is the responsibility of the management of the company. Our 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 verication was done on test basis to ensure that correct facts are reected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.
3. We have not veried the correctness and appropriateness of nancial records and Books of Accounts of the company.
4. Wherever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of the management. Our examination was limited to the verication of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to future viability of the Company nor of the efcacy or effectiveness with which the management has conducted the affairs of the Company.
CS Subhasis Bosu For Subhasis Bosu & Co. Company Secretaries Place: Kolkata FCS No.:7277, C P No.:11469 Date : 24th November, 2016
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Annexure V FORM NO. MGT 9 EXTRACT OF ANNUAL RETURN
As on nancial year ended on 31.03.2016
Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration) Rules, 2014.
I. REGISTRATION & OTHER DETAILS:
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)
30 203 76 % Bogie 30 204 14 %
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III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES
IV. SHARE HOLDING PATTERN (EQUITY SHARE CAPITAL BREAKUP AS PERCENTAGE OF TOTAL EQUITY) Category-wise Share Holding
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B) Shareholding of Promoter-
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C) Change in Promoters' Shareholding (please specify, if there is no change)
D) Shareholding Pattern of top ten Shareholders: (Other than Directors, Promoters and Holders of GDRs and ADRs):
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E) Shareholding of Directors and Key Managerial Personnel:
F) INDEBTEDNESS -Indebtedness of the Company including interest outstanding/accrued but not due for payment.
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XI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL- A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
B. Remuneration to other directors
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C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD
18,41,006
1,42,499
18,89,108
XII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
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Annexure VI
CSR POLICY
Since the Company is a sick Company. and as such none of the provisions of section 135(1) is applicable to the company; there is no need to form a CSR committee.
Annexure - VII
ANNEXURE - A
Statement of Particulars of employees pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2014.
See Page 45
Annexure – VIII
STATEMENT PURSUANT TO SECTION 212(8) OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY COMPANY
The company does not have a subsidiary Company.
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Annexure IX
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REVISED INDEPENDENT AUDITOR'S REPORT to the members of BURN STANDARD COMPANY LIMITED
Report on Financial Statements Further to our Audit Report dated 27th September, 2106, we report that we have audited the accompanying nancial statements of Burn Standard Company Limited (’the company’) which comprise the Balance Sheet as at March 31, 2016, the statement of Prot & Loss, the Cash Flow Statement and a summary of the signicant accounting policies and notes to the nancial statements for the year then ended.
Management's Responsibility for the Financial Statements The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these nancial statement that give a true and fair view of the nancial position, nancial performance and cash ows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specied under Section 133 of the Act, read with Rule 7 of the Companies (Account) Rules, 2014. This responsibility also includes maintenance of adequate accounting records for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal nancial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the nancial statements that give a true and fair view and are free from material mis-statement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these nancial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We have conducted our audit in accordance with the Standards on Auditing specied under Section 143(10) of the Act. Those Standards required that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free from material mis-statement. 46 - ANNUAL REPORT - 2015-2016 AUDITOR'S REPORT CONTD...
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the nancial statements. The procedures selected depend on the auditor's judgement including the assessment of the risks of material misstatement of the nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation of the nancial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal nancial control system over nancial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the nancial statements. We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our qualied audit opinion on the nancial statements.
Emphasis of Matters We draw attention to the following matters in the Notes on Accounts in Schedule 2B to the nancial statements :
(a) Note No. 1.3 in which assertions made by the company regarding the preparation of accounts on a going concern basis although the net worth of the company is negative. (b) Schedule 2A (Para 8.3) of the Signicant Accounting Policies on the valuation of stock of materials, stores and spares including loose tools at cost exclusive of Cenvat element instead of 'at lower of cost or net realizable values' as per Accounting Standard – 2. (c) Note No. 2.2 regarding non identication of impaired assets and provision for the same. (d) Note No. 2.11 in the Fixed Assets schedule regarding non-disclosure of values in case of Leasehold lands separately. The land areas of the said leasehold properties were not supported by proper deeds. Leases have expired in case of Howrah and Pandi Mines. Lease deed in case of Raniganj and Midnapur were unavailable for audit. As such amortization / lease rent were not disclosed properly. (e) Note No. 3.1 on revaluation of land assets on the basis of resolution of the company's Board by averaging the valuation done by three approved valuers. We are unable to offer any comment on the appropriateness of the procedure resulting in the appreciation of the value of freehold land by Rs. 43479.91 lakhs.
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(f) Note No. 4 on the pending conrmation of balances of Sundry Debtors, Loans & Advances, Deposits, Other Current Assets and Sundry Creditors have been taken at book value. The above matters do not form part of our qualied opinion.
Basis for Qualied Opinion
(a) Note No. 2A(2.17)(ii) regarding non conrmation / non provision of bank balances amounting to Rs. 12.09 lakhs and xed deposits of Rs. 1.04 lakhs.
(b) Note No. 2B(8.6) regarding non provision for shortage of imported sheet piles of 965.22 MT at Jellingham valued at Rs. 50.98 lakhs.
(c) Note No. 2B(8.16) regarding non provision of Rs. 100.00 lakhs for Municipal Tax of Raniganj Works.
(d) Note No. 2A(2.16)(i) regarding xed deposit with United Bank of India having principal of Rs. 204.29 lakhs being adjusted by the Bank against dues of the Company. No provision has been made for the principal and interest of Rs. 237.42 lakhs in this account.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualied Opinion as specied in paragraphs above, the nancial statements subject to our aforesaid comments in Para Nos. (a) to (d) whereby the loss for the year has been understated by Rs. 368.40 lakhs and corresponding over statement of net assets by Rs. 368.40 lakhs give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its loss and its cash ows for the year ended on that date.
Report on Other Legal and Regulatory Requirements 1. As required by the (Auditors Report) Order, 2015 issued by the Central Government in terms of Sub-Section (ii) of Section 143 of the Act we give in the Annexure a statement on the matters specied in paragraph 3 and 4 of the Order. 2. As required by Section 143(3) of the Act, we report that : (a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
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(b) Except for the effects of the matter described in the Basis for Qualied Opinion paragraph above, in our opinion proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of those books; (c) The Balance Sheet, the Statement of Prot and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account; (d) Except for the effects of the matter described in the Basis for Qualied Opinion paragraph above, in our opinion, the aforesaid nancial statements comply with the Accounting Standards specied under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. (e) On the basis of written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualied as on 31st March, 2016 from being appointed as a director in terms of Section 164(2) of the Act. (f) In our opinion the company has adequate internal nancial controls over nancial reporting of the company.
(g) With respect to the other matters to be included in the Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us. (i) The Company has not ascertained the impact of pending litigations on its nancial position in its nancial statements, (ii) The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses. (iii) There is no such amount required to be transferred to the Investor Education and Protection Fund by the Company.
For KAY & KAY ASSOCIATES Chartered Accountants (FRN : 312108E)
Place : Kolkata (SUBROTO DEY) PARTNER Dated : 24th November, 2016 Membership No. 054316
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Annexure – A - to the Independent Auditor's Report
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”). We have audited the internal nancial controls over nancial reporting of Burn Standard Co Ltd (“The Company”) as of March 31, 2016 in conjunction with our audit of the nancial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls The Company's management is responsible for establishing and maintaining internal nancial controls based on the internal control over nancial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal nancial controls that were operating effectively for ensuring the orderly and efcient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable nancial information as required under the Companies Act, 2013.
Auditor's Responsibility Our responsibility is to express an opinion on the Company's internal nancial controls over nancial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act,2013, to the extent applicable to an audit of internal nancial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal nancial controls over nancial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal nancial controls system over nancial reporting and their operating effectiveness. Our audit of internal nancial controls over nancial reporting included obtaining an understanding of internal nancial controls over nancial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedure selected depends on the auditor's judgment, including the assessment of the risks of material misstatement of the nancial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our audit opinion on the Company's internal nancial controls system over nancial reporting.
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Meaning of Internal Financial Controls over Financial Reporting A company's internal nancial control over nancial reporting is a process designed to provide reasonable assurance regarding the reliability of nancial reporting and the preparation of nancial statements for external purposes in accordance with generally accepted accounting principles. A company's internal nancial control over nancial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail accurately and fairly reect the transactions and dispositions of the assets of the company : (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of nancial statements accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorization of management and directors of the company and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, user disposition of the company's assets that could have a material effect on the nancial statements
Inherent Limitation of Internal Financial Controls over Financial Reporting Because of the inherent limitations of internal nancial controls over nancial reporting including the possibility of collusion or improper management override of controls, material mis-statements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal nancial controls over nancial reporting to future periods are subject to the risk that the internal nancial control over nancial reporting may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
Opinion In our opinion , to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal nancial controls system over nancial reporting and such internal nancial controls over nancial reporting were operating effectively as at March 31, 2016, based on the internal control over nancial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For KAY & KAY ASSOCIATES. Chartered Accountants (FRN : 312108E)
Place : Kolkata ( SUBROTO DEY ) PARTNER Dated : 24th November, 2016 Membership No. 054316
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Annexure - B to the Revised Independent Auditors Report
(This is the Annexure referred to in our Report of even date) In terms of the information and explanations given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state as under :
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of xed assets. (b) The xed assets of the Company have not been physically veried by the management at reasonable intervals. The system followed is therefore not reasonable having regard to the size of the Company and the nature of its assets. (ii) (a) The inventories have been physically veried partially by and on behalf of management under perpetual inventory system except for closed Refractory units and Jellingham fabrication yard. (b) In our opinion the system followed, records maintained for such physical verication and the frequency is not reasonable or transparent commensurate to the size and nature of the Company. (c) No material discrepancies were pointed out by the management on such verication.
(iii) As the Company has not granted any loans, secured or unsecured to companies, rms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 so clause 3(iii) of the Order is not applicable. (iv) In our opinion and according to the information and explanations given to us, it appears that there are adequate internal control procedures commensurate with the size of the company and nature of its business with regard to purchase of xed assets and inventory and for the sale of goods and services. In our opinion there is no continuing failure to correct major weaknesses in internal control system.
(v) As the Company has not accepted deposits, so the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under, were not applicable. Hence, clause 3(v) of the Order is not applicable.
(vi) The clause relating to maintenance of cost records under Sub-section (1) of section 148 of the Companies Act, 2013 has been made applicable to the company and we have been provided the cost audit report for the year ended on March 31, 2014 which was taken on record while nalizing this audit.
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(vii) (a) As per records produced before us, the company is generally regular in depositing undisputed statutory dues like Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and Statutory dues to the extent applicable to it with the appropriate authorities and there were no arrears of such dues at the year end which have remained outstanding for a period of more than six months from the date they become payable except there were some arrears of statutory dues as at the last day of the nancial year due for a period of more than six months from the date they became payable viz. Sales tax dues Rs. 801.00 lakhs, sales tax loan from Govt. of WB Rs. 410.68 lakhs and interest on above Sales Tax Loan upto 31.03.2011 Rs. 395.27 lakhs.
(b) According to the information and explanations given to us, there are disputed dues of Income-Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty or Cess to the extent applicable to it are as follows :-
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(c) There is no such amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under so clause 3 (vii) of the Order is not applicable.
(viii) The Company have accumulated loss as at 31st March, 2016 to the tune of Rs. 25868.04 lakhs. The Company has incurred cash losses in the nancial year under report, and also there are cash losses in the nancial year immediately preceding such nancial year.
(ix) The Company has not defaulted in repayment of dues to a nancial institution or bank or debenture holders . Hence clause 3 (ix) is not applicable.
(x) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or nancial institutions.
(xi) Since no term loans have been raised by the Company, clause 3 (xi) of the order is not applicable.
(xii) On the basis of our examination and according to the information and explanations given to us, no fraud, on or by the Company, has been noticed or reported during the year under audit.
For KAY & KAY ASSOCIATES Chartered Accountants Firm's Registration No. 312108E
SUBROTO DEY Partner Membership No. 054316
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Annexure - C
Directions under 143(5) of Companies Act, 2013
1 If the Company has been selected for disinvestment, a complete status report in terms of valuation of Assets (including intangible assets and land) and Liabilities Not Applicable (including Committed and General Reserves) may be examined including the mode and present stage of disinvestment process.
2 Whether there are any cases of waiver / write off of debts / loans / interest etc, if yes the reason there for and the amount Not Applicable involved.
3 Whether proper records are maintained As informed to us, neither any for inventories lying with third parties & inventories are lying with third assets received as gift from Government parties nor any assets received or Other Authorities as gift from Government or Other Authorities.
4 A report on age-wise analysis of pending A detail list showing position as legal / arbitration cases including the on 31.03.2016 is enclosed in reasons of pendency and existence / Annexure effectiveness of a monitoring mechanism for expenditure on all legal cases (foreign and local) may be given
For KAY & KAY ASSOCIATES Chartered Accountants Firm Registration No 312108E
Place : Kolkata (SUBROTO DEY) Partner Date : 24th November, 2016 Membership No. 054316
ANNUAL REPORT - 2015-2016 - 55 COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA
OFFICE OF THE PRINCIPAL DIRECTOR OF AUDIT Railway Production Units and Metro Railway NKG Building (5th Floor), 14, Strand Road Kolkata - 700 001.
No. PD RPU / BSCL / 2016-17 / 1244-A Dated: 30.12.2016
To
The Chairman & Managing Director, Burn Standard Company Limited, 22-B, Raja Santosh Road, Kolkata - 700 027
Sub: Comments of the Comptroller and Auditor General of India under Section 143(6) of the Companies Act, 2013 on the accounts of Burn Standard Company Limited for the year ended 31 March 2016.
Sir, Please nd enclosed herewith the comments of the Comptroller and Auditor General of India under section 143(6) of the Companies Act, 2013 on the accounts of Burn Standard Company Limited for the year ended 31 March 2016.
Yours faithfully
(Satish Kumar Garg) Principal Director of Audit
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COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL INDIA UNDER SECTION 143 (6) (b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF BURN STANDARD COMPANY LIMITED FOR THE YEAR ENDED 31 MARCH 2016. The preparation of nancial statements of Burn Standard Company Limited (BSCL) for the year ended 31 March 2016 in accordance with the nancial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the management of the Company. The statutory auditor appointed by the Comptroller and Auditor General of India under section 139(5) or 139(7) of the Act is responsible for expressing opinion on the nancial statements under section 143 of the Act based on independent audit in accordance with the standards on auditing prescribed under section 143(10) of the Act. This is stated to have been done by them vide their audit report dated 19 August, 2016. I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under section 143(6)(a) of the Act of the nancial statements of BSCL for the year ended 31 March 2016. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of sum of the accounting records. The nancial statements of the Company have been revised by the management to give effect to some of my audit observations highlighted during supplementary audit as indicated in the Note No. 2A : 2.20 and 2B : 7 of the nancial statements. In addition, I would like to highlight the following signicant matters under section 143(6)(b) of the Act which have come to my attention and which in my view are necessary for enabling a better understanding of the nancial statements and the related audit report. Comments on Financial Position Current Assets (Note 2.14) Inventories ₹ 3839.98 lakh 1. The above includes stock of 2950.423 MT Steel Piles amounting to ₹ 231.76 lakh lying at Garden Reach bonded warehouse since 1985. The Company has lodged an FIR with Metiabruz Police Station for theft of Company’s property against the owner of the warehouse. Unless and until the stock is determined, the Company needs to make a provision for the same. Non provision of the loss of steel Piles has resulted into overstatement of Inventory and correspondingly understatement of loss for the year by an amount of ₹ 231.76 lakh. No provision has been made by the Company in the current year accounts despite being pointed out in Comments of the Comptroller and Auditor General of India under section 143(6) of the Companies Act, 2013 on the Accounts of Burn Standard Company Limited for the year ended 31 March 2015. Comments on Disclosure Expenditure Manufacturing Expenses ₹ 2573.30 lakh 2. The above includes excise duty amounting to ₹ 458.47 lakh for the year 2015-16. As per Accounting Standard 9 on ‘Revenue Recognition’ issued by ICAI, the same should have
ANNUAL REPORT - 2015-2016 - 57 COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA been shown as deduction from the income instead of expenditure under Manufacturing Expenses. This has resulted in contravention of mandatory requirement of the Accounting Standard 9. Notes to Accounts No. 2A : 2.14(i) 3. The above note stated that inventory items have been physically veried in all the operating units departmentally under perpetual inventory system covering major portion of the closing stock. However no physical verication report was made available to Audit. Thus the above note is factually incorrect.
General Comments 4. Short term loan and advances Advances Recoverable in cash or in kind for value to be received ₹ 2148.42 lakh
There have been two accounts for every supplier named as ‘Suppliers’ Payable A/c’and ‘Advance to Suppliers’ A/c. The purchase and payment transaction have been entered in either or one of the accounts, without any clear system of accounting. There have been certain unadjusted advances with corresponding liability for want of making adjustment entries. The audit was not in a position to verify the above balances. 5. The audit could not verify the following line items appearing in the Financial Statements of the Company for the year ended march, 2016 due to non production of relevant / complete records by the company. a) Current Liabilities Trade Payable (Note 2.8) : ₹ 8655.39 lakh b) Current Assets (i) Trade Receivable (Note 2.15) : ₹ 5649.24 lakh (ii) Short term Loans and Advances Provision for doubtful advances (Note 2.17) : ₹ 725.32 lakh
For and behalf of the Comptroller & Auditor General of India
Satish Kumar Garg Principal Director of Audit Place : Kolkata Railway Production Units & Metro Railway Date : 30 December 2016 Kolkata
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FINAL COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619(4) OF THE COMPANIES ACT, 1956 FOR THE YEAR 2015-16
QUERY MANAGEMENT'S REPLY
1.Comments on Financial Position Necessary provision shall be made in the Current Assets ( Note 2.14) books during FY 2016-17 Inventories Rs 3839.98 lakhs
The above includes stock of 2950.423 MT Steel Piles amounting to Rs 231.76 lakh l y i n g a t G a r d e n R e a c h b o n d e d warehouse since 1985. The Company has lodged an FIR with Metiabruz Police Station for theft of Company's property against the owner of the warehouse. Unless and until the stock is determined, the Company needs to make a provision for the same. Non provision of the loss of Steel Piles has resulted into overstatement of Inventory and correspondingly understatement of loss for the year by an amount of Rs 231.76 lakh. No provision has been made by the Company in the current year accounts despite the same was pointed out in Comments of the Comptroller and Auditor General of India under section 143(6) of the Companies Act, 2013 on the Accounts of Burn Standard Company Limited for the year ended 31 March 2015.
2. Comments on Disclosure Noted for compliance from FY 2016-17 Expenditure Manufacturing Expenses onwards Rs 2573.30 lakh The above includes excise duty amounting to Rs 458.47 lakh for the year
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QUERY MANAGEMENT'S REPLY
2015-16. As per Accounting Standard 9 on Revenue Recognition issued by ICAI, the same should have been shown as deduction from the Income instead of expenditure under Manufacturing E x p e n s e s . T h i s h a s r e s u l t e d i n contravention of mandatory requirement of the Accounting Standard -9 Company did not produce the relevant records detailing the transactions and balances of the contractors', employees' and advances against orders. Therefore, the audit is not in position to comment on the above balances.
3. Notes to Accounts No 2A:2.14 ( I ) Physical verication of Inventory has been conducted at Burnpur Works as on The above note stated that inventory 31.03.2016. However physical verication items have been physically veried in all process was partially done at Howrah the operating units departmentally under perpetual inventory system covering Works due to shortage of experienced major portion of closing stock. However no manpower at on 31.03.2016. Noted for physical verication report was made compliance from FY 2016-17 onwards. available to Audit. Thus the above note is factually incorrect.
4. General Comments The company presently has two systems Short term loans and advances of issuing Purchase Orders.High value Advances Recoverable in cash or in kind for value to be received Rs 2148.42 purchase orders are issued from Head lakh Ofce. Also the terms of payments in the Purchase Orders contains different There have been two accounts for every clauses of payment viz against proforma supplier named as “Suppliers' Payables invoice and payment on the basis of “30 A/c” and 'Advance to Suppliers' A/c”. The purchases and payment transactions days credit”. When advance payments have been entered in either or one of the are made from Head Ofce, respective accounts, without any clear system of Units, are debited. Advance to Suppliers
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QUERY MANAGEMENT'S REPLY accounting. There have been certain are booked in the Unit Accounts. This is a unadjusted advances with corresponding control account and ledger details of liability for want of making adjustment respective parties are available. Upon entries. The audit was not in a position to receipt of material GRN, is raised and verify the above balances. advance is squared up. In case of credit purchases, debit in made in Purchases A/c with corresponding credit in “ Suppliers Payable Account”. When payments are made, suppliers payable accounts are adjusted. This is a control account and ledger details of respective parties are available. So adequate checks and balances are available.
5. General Comments
The audit could not verify the following line The company maintains Control Ledgers items appearing in the Financial of Sundry Trade Receivables and Satements of the company for the year Payables/Party Ledger in respect of ended March 2016 due to non production individual parties is in agreement with of relevant / complete records by the General Ledgers at Howrah Works and company Burnpur Works a) Current Liabilities These records pertain to old balances Trade Payables ( Note 2.8) : Rs8655.39 lakh since last 10 years . As desired by audit , party wise details shall be provided during b) Current Assets FY 2016-17. Tr a d e R e c e i v a b l e ( N o t e 2 . 1 5 ) : Rs5649.24 lakh
Provision for doubtful Advances (Note 2.17) Rs725.32 lakh
ANNUAL REPORT - 2015-2016 - 61 TEN YEARS' DIGEST or Gross Margin A or EBIT (3+4) otal Expenses - Other Expenses) (T Name of the Company : Burn Standard Co Ltd (BSCL)
62 - ANNUAL REPORT - 2015-2016 FINANCIAL ACCOUNTS FOR THE YEAR 2015-16
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Burn Standard Co. Ltd. Balance Sheet as at 31st March, 2016 (Rs. in Lacs) Notes(2A) As at 31.3.2016 As at 31.3.2015 Shareholder's Fund 18463.25 17763.25 Share Capital 2.1 17611.87 36075.12 20449.50 38212.75 Reserves & Surplus 2.2 - - Share Money Pending Allotment 2.3
Non Current Liabilities Long Term Borrowings 2.4 3990.52 3990.52 Other Long Term Liabilities 2.5 1131.08 1131.08 Long Term Provisions 2.6 2777.29 7898.89 2696.29 7817.89
Current Liabilities Short Term Borrowings 2.7 4400.71 4422.44 Trade Payables 2.8 8655.39 6073.43 Other Current Liabilities 2.9 607.46 612.63 Short Term Provisions 2.10 28.23 13691.79 11.51 11120.01 TOTAL 57665.80 57150.65 Fixed Assets Tangible Assets 2.11 47115.74 47302.81 Intangible Assets 0.00 0.00 Capital Work in Progress 176.35 47292.09 19.37 47322.18
Non Current Investment 2.12 1.0 0 1.0 0 Long Term Loans and Advances 2.13 0.63 0.6 3 Other Non Current Assets - - Current Assets Inventories 2.14 3839.98 3823.89 Trade Receivables 2.15 2083.95 1741.42 Cash and Bank Balance 2.16 2190.44 2381.86 Short-Term Loans and Advances 2.17 1679.22 1699.36 Other Current Assets 2.18 578.49 10372.08 180.31 9826.84 TOTAL 57665.80 57150.65 Significant Accounting Policies 1A Notes on Financial Statement 2A - 2B Notes referred to above form an integral part of the Balance Sheet As per our Reports of even date. For Kay & Kay Associates Chartered Accountants FRN No.:312108E C.A. Subroto Dey Partner S. Dutta Gupta Membership No.054316 Md. A. Alam Company Secretary & Place : Kolkata Chairman & Managing Director Dy.Mgr.(Fin.) Date : 24th November, 2016
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Burn Standard Co Ltd Statement of Prot and Loss for the year ended 31st March 2016 (Rs. in Lacs) Notes(2A) As at 31.3.2016 As at 31.3.2015 INCOME Revenue from Operations 2.19 11969.03 12563.53 Other Income 2.20 1844.69 781.87 Total Revenue 13813.72 13345.40
EXPENDITURE : Cost of Materials Consumed 2.21 6470.62 6765.16 Changes in Stock of Finished Goods & WIP 2.22 293.27 946.82 Manufacturing Expenses 2.23 2573.30 1497.53 Consumption of Stores & Spares 2.24 817.25 720.85 Power & Fuel 1261.38 1355.96 Employee Benefits Expense 2.25 3114.90 3166.22 Operational Expenses 2.26 941.93 912.43 Finance Costs 2.27 577.52 543.14 Depreciation and Amortisation Expense 2.28 252.32 394.04
Other Expenses 2.29 348.86 127.47 Total Expenses 16651.35 16429.62
Profit/(Loss) for the Year Before Tax (2837.63) (3084.22) Exceptional Items (Dr)/Cr 2.30 - 617.85 Net Profit /(Loss) before tax (2837.63) (2466.37) Deferred Tax - Credit - - Net Profit /(Loss) after tax (2837.63) (2466.37) Profit /(Loss) brought forward from previous year (23030.41) (20564.04) Accumulated Loss (25868.04) (23030.41) Balance Carried to Balance Sheet (25868.04) (23030.41)
Earnings per Equity Share of face value of Rs 1000 each Negative ( Basic and Diluted) Significant Accounting Policies 1A Notes on Financial Statement 2A - 2B Notes referred to above form an integral part of the Statement of Profit & Loss Account As per our Reports of even date.
For Kay & Kay Associates Chartered Accountants FRN No.:312108E C.A. Subroto Dey Partner S. Dutta Gupta Membership No.054316 Md. A. Alam Company Secretary & Place : Kolkata Chairman & Managing Director Dy.Mgr.(Fin.) Date : 24th November, 2016
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Burn Standard Co Ltd Cash Flow Statement For The Year Ended 31.03.2016 (Rs. In lakhs) For the year ended For the year ended 31st March 2016 31st March 2015 A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit/(Loss) before taxation & Extraordinary Adj. (2837.63) (2466.37) Adjustments for : Depreciation 252.32 394.04 Extra Ordinary / Exceptional Items 0.00 (617.85) Interest Expenses 543.58 477.04 Provisions 228.20 119.20 VRS Expenses (Amortised) 0.00 1024.10 0.00 372.43 (1813.53) (2093.94) Operating Profit before working capital changes Adjustments for : Inventories (16.09) 1110.77 Sundry Debtors (342.53) 640.01 VRS Exgratia 0.00 0.00 Other Current Assets (398.18) 652.18 Loans & Advances 20.14 763.46 Current Liabilities & Provisions 2446.31 1709.65 (1340.80) 1825.62 B. Cash Flow before Extraordinary Activities Extraordinary Items & others 0.00 617.85 Tax Paid 0.00 0.00 0.00 617.85 Total (A) (103.88) 349.53 C CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets [Including (CWIP)] (222.23) (195.19) Investments 0.00 (1.00)
Total (B) (222.23) (196.19) CASH FLOW FROM FINANCING ACTIVITIES Increase / (Decrease) in Secured Loans (21.73) 315.30 Increase/(Decrease) in Unsecured Loans 0.00 200.00 Increase in Share Capital 700.00 200.00 Interest paid (543.58) (477.04) Total (C) 134.69 238.26 Net Inflow/(Outflow) (A+B+C) (191.42) 391.60 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 2381.86 1990.26 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 2190.44 2381.86 NET CASH INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (191.42) 391.60 Cash in hand and transit 3.32 4.12 Balances with Scheduled Banks In Current Account 83.09 204.53 In Short Term Deposit Account 1898.69 1967.87 In Other Fixed Deposits 205.34 2187.12 205.34 2377.74 2190.44 2381.86 Note : 1) Cash Flow Statement has been prepared under the indirect method as set out in Accounting Standard - 3. 2) Cash & Cash equivalent include Fixed Deposit with UBI of Rs.204.29 lakhs which is not available for use by the company being subjudiced.
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NOTE 1A : SIGNIFICANT ACCOUNTING POLICIES
1. ACCOUNTING CONVENTION
1.1. The nancial statements have been prepared under historical cost convention, modied by revaluation of certain xed assets as and when undertaken in accordance with the Generally Accepted Accounting Principle in India and comply with the applicable Accounting Standards and the relevant provisions of the Companies Act, 2013.
1.2. The Company generally follows Mercantile System of Accounting and recognizes signicant items of income and expenditure on Accrual Basis except as otherwise stated.
2. INCOME
2.1 Turnover against sale contracts is considered on the basis of actual dispatches against ex-works contract, on delivery to the common carrier unconditionally appropriated to the sale contract and against FOR destination contract on actual delivery/receipted challan.
2.2 Earnings against fabrication and erection activities (including those for manufactured products wherever applicable) are reckoned as per certicates of customers of matching percentage completion.
2.3 In respect of turnkey projects/long-term contracts/weight based contracts, value of work executed is determined on the basis of 97.5% of proportionate contract price including escalation up to the maximum ceiling limit with reference to matching percentage completion when a project reaches 30% completion stage making suitable provision for contingency against prot. Below the said stage, the work done are evaluated at direct cost.
2.4 Amount of escalation due as per contract, 'balance bill' and 'other claims' etc. for which invoices could not be raised due to contractual provisions etc. are accounted for as 'Sales' and shown under 'Other Current Assets'.
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2.5 Sales are inclusive of Freight and other Charges recoverable but exclusive of Excise Duty and Value added Tax.
2.6 Credit for scrap is accounted for when identied and physically veried for disposal.
2.7 All claims like Escalation, Export Incentive and Insurance etc. are accounted for to 'Sales' on ascertaining their realisability.
3. EXPENSES
3.1 Expenses for after-sales-service during the guarantee period are considered in the accounts when incurred.
3.2 Sub-contract and other direct expenses include jobs done/processed through sub-contractors, ancillaries and Sister Units.
3.3 Employees Remuneration include
a) Contribution to Provident Fund and Family Pension Fund on actual liability basis.
b) Gratuity and leave encashment benet on actuarial valuation basis.
3.4 Excise Duty is accounted for on goods cleared at the time of clearance of the goods from the factory and on nished goods in stock at the end of the year. Credit for CENVAT in respect of excisable goods is accounted for on receivable basis and adjusted against Excise Duty charges on availment basis.
3.5 Prepaid Expenses up to Rs.5000/= are charged off to Revenue.
3.6 Prototypes developed or under development including experimental orders are carried as items of Inventory until sale, transfer of scrapping at cost.
4. INCOME AND EXPENSES RELATING TO PRIOR PERIOD
4.1 Income and Expenses more than Rs.5,000/= in each case pertaining to earlier years are shown under this head.
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4.2 INTER-UNIT TRANSACTIONS
i) Inter-Unit transfers are valued at market price or prices agreed to by the Units.
ii) Transfers affected during the year are not set off and are shown as 'Consumption' and 'Sales'.
5. DEPRECIATION AND AMORTISATION
5.1 Depreciation on Fixed Assets has been provided for on Straight Line Method and in accordance with Schedule XIV of the Companies Act, 1956. However, only plant and Machinery, whose individual cost is Rs.5,000/= or less are depreciated at 100% in the year in which the asset is put to use.
5.2 Extra shift depreciation is calculated for the full year irrespective of number of days worked on double shift / triple shift.
5.3 As and when the xed assets are revalued, the difference between revalued value of xed assets and written down value is transferred to revaluation reserve. Revaluation reserve account is set off with annual depreciation, wherever applicable on that portion of the value which is written up.
6. CAPITAL EXPENDITURE
Fixed Assets are capitalized at cost exclusive of CENVAT element and inclusive of installation and related expenses. Addition of Assets against specic loan fund are capitalized exclusive of interest on the said loan up to the date of commissioning. Job done departmentally on Capital Account is taken to the credit of Prot and Loss Account. Advances paid for acquisition of Capital Assets are included in Capital Work-in-Progress.
7. INVESTMENTS
Investments are intended to be held for long term and as such carried at cost except in the case of diminution, other than temporary, in the value of investment.
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8. INVENTORY
8.1 Finished Goods: Finished Goods are valued at lower of cost (including leviable excise duty) or realizable value (including escalation).
8.2 Contract-in-progress / Work-in-Progress:
a) All products at different stages of completion (including part deliveries) are valued at cost or net realisable price, whichever is lower.
b) Prot / Loss is considered upto the stage of completion of contracts. Future loss on unexecuted portion, if any, is not provided for.
8.3 Raw Materials, Stores and Spares:
a) Stock of materials, stores and spares including loose tools are valued at cost exclusive of CENVAT element. Issues are priced at weighted average rates.
b) Stock of stores, raw materials, components and capital equipment in bonded warehouse are valued at cost plus estimated Customs Duty and other applicable charges but exclusive of interest on Customs Duty.
8.4 Non-moving stores and raw materials to the extent declared obsolete and disposed of are accounted for as 'Sundry Sales'.
8.5 Non-moving stores, raw materials and loose tools are valued at 75% of book value in respect of items not moved over 3 years, at 50% for those over 4 years and 25% for those more than 5 years.
8.6 Free Supply items received from the customers are not considered in nancial accounts.
8.7 Materials issued to other Units/other subsidiaries/sub-contractors against loan or for further processing etc. are accounted for, reconciled and disclosed separately.
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9. PROVISIONS
9.1 Sundry Debtors outstanding for more than ve years are fully provided for.
9.2 Provision against Loan, Advances and other Current Assets are made on the basis of non-relisability of the said assets.
9.3 Claims against the Company are recognized as and when established.
10. SET-OFF
10.1 Advances received from customers in respect of construction contracts are shown as a deduction from the amount of specic work-in-progress.
10.2 Advances received from customers to the extent linked are set off against corresponding debts.
10.3 Advances to suppliers are set off against corresponding liability.
11. SEGMENT REPORTING
The company has two manufacturing locations at Howrah and Burnpur and Project Division & Head Ofce at Head Ofce, Kolkata. Accordingly on geographical basis the segment reporting is made by the Company.
12. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS.
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outow of resources. Contingent Liabilities are not recognized but are disclosed in the notes on Accounts. Contingent Assets are neither recognized nor disclosed in the nancial statements.
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2A. Notes on Financial Statements for the year ended 31st March, 2016 (Rs. in Lacs) As at 31.3.2016 As at 31.3.2015
2.1 SHARE CAPITAL Authorised 1850000 (1800000) Equity Shares of Rs. 1000/- each 18 ,500.00 18 ,000.00 Issued and Subscribed 1846325 (1776325) Equity Shares of Rs. 1000/- each Fully paid up 18,463.25 17 ,763.25 18 ,463.25 17 ,763.25 (i) Of the above issued and subscribed Equity Shares 88283 Shares were issued pursuant to contract for consideration otherwise than in Cash. (ii) All the Shares were held by BBUNL till April 2011 and thereafter by Ministry of Railways, Govt. of India & its Nominees. (iii) 20000 Equity shares amounting to Rs.200.00 lakhs has been allotted to MoR on 28.03.2015. (iv) 70000 Equity shares amounting to Rs.700.00 lakhs has been allotted to MoR on 30.03.2016. 2.2 RESERVES & SURPLUS Revaluation Reserve As per last Balance Sheet 43 ,47 9.91 43 ,479.91 Profit and Loss Account
Debit balance of Profit & Loss Account ( 25,868.04) (2 5,8 68.04) (2 3,030.41) (2 3,030.41) TOTAL 17 ,61 1.87 20 ,449.50
2.3 SHARE CAPITAL PENDING ALLOTMENT Share Deposits Pending Allotment - - - - 2.4 LONG TERM BORROWINGS (Unse cured) United Bank of India (Current Account)(Refer Note no.2B.2.1) 79.84 79.84 Interest free Loan from MOR 3500.00 3500.00 Sales Tax Loan from Govt of West Bengal 410.68 410.68 TOTAL 3990.52 3990.52 2.5 OTHER LONG TERM LIABILITIES For Goods 342.47 342.47 For Expenses 358.23 358.23 For Liabilities 430.38 1131.08 430.38 1131.08 1131.08 1131.08
Attention is drawn to point no.1.4 of Note 2B, wherein the 'Other Long Term Liabilities’ pertains to closed loss making refractory units (LRUs).
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i)
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NOTE 2.11 : FIXED ASSETS & CAPITAL WORK IN PROGRESS
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2A. Notes on Financial Statements for the year ended 31st March , 2016 (Rs. in Lacs) As at 31.3.2016 As at 31.3.2015 2.12 NON CURRENT INVESTMENTS
(A) IN GOVERNMENT SECURITIES (Quoted) 3% Loan 1946-86 Nominal Value Rs. 0.06 lakh) 0.04 0.04 5.5% Loan 1992 Nominal Value Rs. 0.05 lakh) 0.05 0.05 5.5% Loan 1992 Nominal Value Rs. 0.03 lakh) 0.03 0.12 0.03 0.12
(B) INVESTMENT IN SHARES Subsidiary Company (Unquoted) Bharat Brakes and Valves Ltd. 81348 Ordinary Shares of Rs. 1000 each 398.73 398.73
Reyrolle Burn Ltd. 216970 Ordinary Shares of Rs. 100 each 192.22 192.22 includes 91970 Shares pending allotment 590.95 590.95 Less: Written off ( as per note stated below) 590.95 0.00 590.95 0.00
Trade Investment (Unquoted) The Indian Standard Wagon Co. Ltd. 41500 Ordinary Shares of Rs. 10 each 2.94 2.94
The Vaughan Burn Cranes Co. Ltd. 3000 Ordinary Shares of Rs. 10 each 0.30 0.30
Wagon India Ltd. 1500 Equity Shares of Rs. 100 each 1.50 4.74 1.50 4.74
Other than Trade Investment (Unquoted) The South Indian Export Co. Pvt. Ltd. 6500 Ordinary Shares of Rs. 10 each 0.65 0.65
Chiranadu Small Scale Indus. Service Co-ope.Society Ltd. 10 Shares of Rs. 100 each 0.01 0.66 0.01 0.66
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2A. Notes on Financial Statements for the year ended 31st March , 2016 (Rs. in Lacs) As at 31.3.2016 As at 31.3.2015 (C) INVESTMENT IN DEBENTURES Bharat Brakes and Valves Ltd. 121455(Pre. Year 121455) 'O' rate Dentures of Rs. 1000 each pending allotment 1214.55 1214.55 Reyrolle Burn Ltd. 21555(Pre. Year 21555) 'O' rate Dentures of Rs. 1000 each pending allotment 215.55 215.55 1430.10 1430.10 Less: Written off ( as per note stated below) 1430.10 0.00 1430.10 0.00 Less: Provision for fall in market value / 5.52 5.52 unrealizable investment 5.52 5.52 0.00 0.00 (D) INVESTMENT IN SAIL-BENGAL ALLOY 1.00 1.00 CASTINGS PVT LTD [10000 equity shares @ Rs.10/- each] 1.00 1.00
(i) Bharat Brakes & Valves Ltd (BBVL)
ii) RBL Ltd
iii) SBACPL
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2A. Notes on Financial Statements for the year ended 31st March , 2016 (Rs. in Lacs) As at 31.3.2016 As at 31.3.2015 2.13 LONG TERM LOANS AND ADVANCES Advance and Loans to subsidiaries Loans - 339.25 Less: Recovered - 0.00 339.25 0.00
Advances 0.0 1 15.65 Less: Written off (0 .00 ) 0.01 15.64 0.01 Balances with Customs/Port Trust 0.62 0.62 TOTAL 0.63 0.63 2.14 INVENTORIES Raw Materials 2 54 3.82 21 01.39 Less: Project Inventory ( 38 7.35 ) 2,156.47 (387 .35) 1,714.04 Finished Goods 411.93 647.46 Work -in-Progress - 1,126.83 1,184.57
Project Inventory (Sheet Piles atJelligham) 15 5.5 9 155.59 Consumable Stores and Spare parts 80 3.5 1 837.62 Project Inventory (Sheet Piles at Garden Reach) 23 1.7 6 231.76 4,8 86 . 0 9 4,771.04 Less: Provision for non-moving/obselete/Unusuable items 1,046.11 947.15 TOTAL 3,839.98 3,823.89 (i)Inventory items have been physically verified in all Operating Units departmentally under Perpetual Inventory System covering major portion of the Closing Stock. Discrepancies as detected were not material in nature and have been adjusted. (ii) Ref. Note 1A-8 Accounting Policy for basis of valuation of inventories. (iii)Provision for inventories of Rs.1046.11 lakhs includes Rs.259.06 lakhs against consumable stores & spare parts and balance of Rs.722.51 lakhs is for Raw materials and Rs.64.53 lakhs for Finished goods. iv) Work-in-Progress includes inventories with LRU's amounting to Rs.209.01 lakhs. 2.15 TRADE RECEIVABLES ( Unsecured ) Debts due over six months Considered Good 1813.61 1729.53 Considered Doubtful 3565.29 5378.89 3205.23 4934.76 Other Debts Considered Good 270.35 11.90 5649.24 4946.66 Less: Provision for Doubtful Debts 3565.29 3205.23 TOTAL 2083.95 1741.43 2.16 CASH AND CASH EQUIVALENTS Cash in hand and transit 3.32 4.12 Balances with Schedule Banks In Current Accounts 83.09 204.53 In Short-Term Deposit Account with Bank 1,898.69 1967.87 Fixed deposits with Banks 205.34 2,187.12 205.34 2377.74 TOTAL 2,190.44 2,381.86 (i)Cash & Bank Balances include Fixed Deposit with United Bank of India, Calcutta Main Branch having principal amount of Rs.204.29 Lakhs. The said Fixed Deposit was unilaterally adjusted by the bank against their alleged pre-nationalization dues. After obtaining approval of Committee on Disputes (COD), the Company filed a money suit on 21.1.2011 in the Hon’ble Kolkata High Court against United Bank of India for recovery of the same along with accrued interest. (ii) Unconfirmed Bank Balances amounted to Rs.12.09 lakhs and fixed deposits Rs.1.04 lakhs. (iii)On the basis of BIFR directive Rs.107.71 lakhs has been pledged with UBI-Royal Exchange Branch under lien against sale value of a piece of land at Salem unit to be used for future rehabilitation included under short term deposit account with bank.
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2A. Notes on Financial Statements for the year ended 31st March , 2016 (Rs. in Lacs) As at 31.3.2016 As at 31.3.2015
Miscellaneous Income of Rs.1710.22 Lakhs for the F Y 2015-16 includes savings in steel amounting to Rs.1461.31 Lakhs.
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2A. Notes on Financial Statements for the year ended 31st March , 2016 (Rs. in Lacs)
2015-16 2 0 14 - 1 5 2.22 CHANGES IN INVENTORIES OF FINISHED GOODS WORK-IN-PROGRESS - (Increase)/Decrease Finished Goods : Opening Stock 647.46 1,754.47 - - Less:Closing Stock (411.93) 235.53 (647.46) 1,107.01 Work in Progress
Opening Stock 1 , 1 84 .5 7 1,024.38 Less:Closing Stock (1,126.83) 57.74 (1,184.57) (160.19) TOTAL 293.2 7 946.82 2.23 MANUFACTURING EXPENSES: Fabrication charges to Sub-contractors 810.45 969.28 Transportation and Service Charges to Sub-contractors 851.63 265.34 Design and Drawing Charges 1.95 0.30 Freight Inward 32.75 38.85 Processing Charges 418.05 232.31 Excise Duty 458.47 (8.55) TOTAL 2573.30 14 97.53 2.24 CONSUMPTION OF STORES, SPARE PARTS AND LOOSE TOOLS Opening Stock 837.62 807.44 Add : Purchases 783.14 1,620.76 751.03 1,558.47
Less: Closing Stock 803.51 837.62 817.25 720.85 2.25 EMPLOYEE BENEFITS EXPENSE Salaries and Wages 2114.29 2120.47 Leave Encashment 130.13 132.82 Gratuity 350.63 381.11 Bonus 45.56 0.00 Contribution to PF & FPF 191.68 191.23 Deposit Linked Insurance 4.06 5.01 Contribution to ESI 2.95 2.92 Other Employee Benefits 275.60 332.66 TOTAL 3114.90 3166.22 As per AS-15 (Revised) information are furnished in Note 2B 2.26 OPERATIONAL & ADMN. EXP. Repairs & Maintenance : Building 7.44 23.66 Plant & Machinery 67.18 58.68 Others 33.27 107.89 22.64 104.98 Administrative Expenses Rent 90.36 90.19 Rates & Taxes 137.35 69.65 Insurance 4.27 8.54 Note 2.26 contd…
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2A. Notes on Financial Statements for the year ended 31st March , 2016 (Rs. in Lacs) 2015-16 2 0 14 - 1 5 Printing and Stationary 10.07 11.31 Advertisement and Publicity 7.36 4.64 Payment to Statutory Auditors Payment to Auditors Statutory Audit Fees 1.08 1.08 Other Services & Out of Pocket Expenses 0.40 1.48 0.66 1.74 Payment to Auditors Internal Audit Fee 3.38 4.30 Travelling Expenses Directors 20.53 15.02 Others 9.62 30.15 12.80 27.82 Postage and Telegram 12.00 12.71 Motor Vehicle Expenses 15.38 14.52 Subscription and Donation 0.33 0.00 Training and Seminar Fees 1.39 0.20 Director's Fees 0.61 0.58 Hiring Charges 40.33 41.45 Freight Outward 32.91 8.36 Legal Expenses 6.93 15.98 Ship Building Expenses 0.26 0.00 Liquidated Damages 13.82 13.75 Filing Fees 0.69 0.25 Consultation & Retainership Fees 157.77 125.34 Security Service Charges 171.93 148.55 Entertainment Expenses 1.17 10.84 Tendering Charges 0.62 0.65 Board Meeting Expenses 0.55 0.78 Others 92.93 439.48 195.30 495.46 941.93 912.43
2.27 FINANCE COSTS Bank Interest (Cash Credit) 364.98 333.67 Other Interest 178.60 143.37 Bank Charges 33.94 66.10 TOTAL 577.52 543.14
2.28 DEPRECIATION AND AMORTISATION EXPENSE Depreciation (Note No. 2.11) 252.32 394.04 Amortisation of VRS Expenses 0.00 0.00 TOTAL 252.32 394.04
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2A. Notes on Financial Statements for the year ended 31st March , 2016 (Rs. in Lacs) 2015-16 2 0 14 - 1 5 2.29 OTHER EXPENSES :(Debit)/Credit Provisions: Inventories & Expenses 100.87 10.55 Doubtful Debts 360.06 27.58
Doubtful Claims( other current assets) (258.58) 29.79
Doubtful Advance 25.85 51.28
228.20 119.20 Prior Period Adjustments ( Credit ) [ A ] Sales,Raw materials,Employees' remuneration,Mfg. Exp. Etc (14.45) (216.11) Prior Period Adjustments -Debit [ B ] (14.45) (216.11) Manufcturing expenses and other direct cost 135.11 224.38 - - Power and Fuel [ C ] 135.11 224.38 EXCEPTIONAL ITEMS : (Dr.) / Cr. [A+B+C] 34 8.8 6 127.4 7 2.30 VRS liability no longer required written back - 33 5.8 8 Receipt from Official Liquidator on BBVL A/C - 28 1.9 7 Note : - 617.85 (i) VRS Grant pertainig to 2002-03 already paid to employees booked wrongly as liability has been written back Rs.335.88 lakhs and (ii)Amount received from Official Liquidator of BBVL after adjustment of loans and advances Rs.281.97 lakhs.Both have been treated as exceptional items. NOTE 2.31: SEGMENT REPORTING [ Geographical Segments ] (Rs.in Lacs) Engineering Units Consolidated Howrah Burnpur HO/Project Total A Primary Segment Information : 1 Revenue - External Sales 7446.79 3673.81 848.43 11969.03 - Internal Segment sales - - - - Total Revenue 7446.79 3673.81 848.43 11969.03 2 Segment Results - Profit/(Loss) before Interest, Taxation, other income (913.69) (860.24) (1063.70) (2837.63) - Interest (Finance Expenses) (29.58) (30.44) (517.50) (577.52) - Other revenue (Interest on Loans & Deposits, Income from current & long term investmen ts , Profit/ Loss o n sale of Investment etc. 969.75 624.23 250.71 1844.69 - Profit/(Loss) before Exceptional Items (913.69) (860.24) (1063.70) (2837.63) - - - - Extra ordinary Items 3 Profit/(Loss) after taxation (913.69- ) (860-.24) (1063.7- 0) (2837.6- 3) 4 Segment Assets 8435.16 11969.47 37261.17 57665.80 Revaluation of Land Assets - - - - 5 -Segment Liabilities 5100.94 4876.88 11612.86 21590.68
6 Capital Expenditures 49.28 18.39 1.46 69.13 7 Segment Depreciation 1 53.7 2 61.60 37.00 252.32 B Secondary Segment Information With in India Outside India Total Revenue Segment Revenue 13813.72 - 13813.72
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NOTE 2B: NOTES ON ACCOUNTS
1. Implementation of BIFR order dated 16.4.1999 - Case no. 508/94
1.1 The Company became a sick company within the meaning of clause 'O' of sub section(1) of Section-3 of the Sick Industrial Companies (Special Provision) Act 1985 for which reference was made to the Board for Industrial and Financial Reconstruction (BIFR) under Section 15(1) of that Act in November 1994. BIFR sanctioned a Rehabilitation Scheme on 16.4.1999 based on operation of units at Howrah, Burnpur and Salem and Central Project Division of the Company. During the latest hearing, BIFR directed Company, OA and the MoR to revisit the Modied Draft Rehabilitation Scheme (MDRS) and le fully up-dated draft MDRS.
1.2 Govt. of India vide its letter No.8 (12)2009-PE III dated 6thAug2010 approved transfer of administrative control of the Company (other than Refractory unit at Salem) to Ministry of Railway (MoR), which was effected on and from 15.9.2010 and that of the Refractory Unit at Salem to Steel Authority of India Ltd under Ministry of Steel (MoS), was made effective on and from 16th Dec2011. Further based on receipt of sanctions for nancial restructuring from GOI for conversion of Government loans into equity with corresponding reduction of equity & accumulated losses and waiver of normal and penal interests have already been incorporated in the Accounts of 2010-11.
1.3 The accounts have been prepared on a “Going Concern Basis” based on the various measures undertaken by the GOI and the company for continuation of its business.
1.4 Other Long Term liabilities ( Sch -2.5 ) of Note 2A amounting to Rs 1131.08 lakhs pertains Loss Making Refractory Units namely Raniganj Works, Gulfabari Works , Jabalpur Works and Niwar Works which are closed since 31.12.2000.
2. No Provision has been made in respect of:
2.1 Interest on credit balance of Rs.79.84 Lakhs (United Bank of India Current Account) pertains to pre-nationalization period for which provision in the accounts was not necessary as per terms of relevant Nationalization Act.
2.2 Details of impairment of Assets in closed & other units are in the process of identication and the loss if any will be assessed and provided for.
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3. Fixed Assets:
3.1 Revaluation of Land Assets:
The Board in its meeting held on 19th Feb 2007 & 15th Dec 2010 approved valuation of Company's land assets. Three approved valuer were appointed and based on the average of the three valuations done by the valuer during the month of Dec 2009, the revaluation was given effect during the year 2010-11. The appreciation on account of revaluation of land assets amounting to Rs. 43479.91 lakhs has been credited to the Revaluation Reserve.
3.2. Stock of imported Sheet Piles worth Rs.387.35 Lakhs was being carried on as CWIP till FY 2010-11. The stock lying at Jelligham Site was 1980.78 MT valued at Rs. 155.59 lakhs and Garden Reach bonded warehouse was 2950.423 MT valued at Rs. 231.76 lakhs. The stocks have been regrouped under inventories.
4. Current Assets and Current Liabilities:
Pending conrmation from the parties, the balances in Sundry Debtors, Loans & Advances, In operative Bank Balances, Deposits & Other Current Assets and Sundry Creditors have been taken at book balance. In the opinion of the Management, Current Assets, Loans and Advances are realizable in the ordinary course of business at least equal to the amount at which they are stated save and except for Loans & Advances lying outstanding for more than 10 years for which no details are available. Necessary provision has been made in the books.
5. Arrears of 1992 Pay Revision:
Salary revision agreement of the ofcer of the company expired on 31.12.91. Administrative approval vide no. 3(17)/99 PF III dated 19.04.2000 has been issued by Dept. of Heavy Industry, Govt. of India, advising implementation of pay revision for ofcers from 1.1.2000 in accordance with the DPE Guideline dated 19.07.1995 on prospective basis with stipulation for payment of arrears on adequate internal generation of resource by the company. The Hon'ble Calcutta High Court opined in the judgment dt. 27.03.2003 that if any Revival / Joint Venture scheme is proposed, then the matter with regard to the pay revision of the petitioners is required to be considered while sanctioning any such new scheme. Further DHI vide its letter dt. 06.08.2010 intimated that the resources for meeting the arrears of 1992 pay revision must have to be internally generated and must come from improved performance in productivity. Hence, the management is of the opinion that no provision for the pay revision estimated at Rs. 1934.00 lakhs is required at this stage.
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6. Remuneration to Whole time Directors:
6.1 Remuneration paid (in Rs.) to Whole-time Directors (including Managing Director) during the year:
Salary & Name Designat ion Period Perquisites Allowance
Chairman & D. Marandi April 15 to March 16 18,41,006.10 1,64,716.00 Managing Director
A.M. Singh Director( Engg) April 15 to March 16 17,46,609.00 1,42,499.00
In addition Whole time Directors are allowed to use Co.'s car for private use up to 1000 KM. per month on payment of Rs. 2000/- PM.
6.2 Balance due from Directors and Secretary as on 31st March, 2016 - Rs. Nil (Previous Year - Nil).
7. Joint Venture Burn Standard Co. Ltd and Steel Authority of India Ltd. has entered into a 50:50 joint venture for manufacture of wagon components and set up a company under the name of SAIL BENGAL ALLOY CASTING PVT. LIMITED at the leasehold land in Jellingham, West Bengal vide JV agreement dated 25.05.2012. The Joint Venture Company was incorporated on 12.02.13. Fund amounting to Rs.7.00 Crores from MoR has been received by BSCL during FY 2015-16. Pending payment of fund to the JV Company and issuance of Share Certicate by the JV Company no accounting effects of investments is made in the books of BSCL.
However expenses paid by BSCL towards pre-incorporation and pre-operative expenses amounted to Rs. 46.34 Lakhs is shown under the head Advances in Schedule - 2.17 8. Contingent Liabilities not provided for in respect of : 8.1 Estimated amount of contracts remaining to be executed on Capital Account and not provided for – Rs535.17 Lakhs (Previous Year - Rs. 535.17 Lakhs). 8.2 Bank Guarantee outstanding – Rs. 536.19 Lakhs (Previous Year - Rs. 51.52 Lakhs).
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8.3 Letter of Credit outstanding - Rs. 55.55 Lakhs( Previous Year - Rs. 11.12 Lakhs).
8.4 Cases related to Excise Duty Claims including penalty for Rs 5383.09Lakhs(PreviousYear-Rs.5383.09 Lakhs) i.e. For BW-Rs.1345.09 Lakhs ( Previous Year -Rs. 1345.09 Lakhs), for HW-Rs.3938.00 Lakhs ( Previous Year- Rs.3938.00 Lakhs) & CPD Rs 100.00 Lakhs( Previous Year –Rs.100.00 Lakhs) are pending before different Appellate Authorities.
8.5 Sales Tax demand for Rs. 1592.28 Lakhs (Previous Year - Rs. 761.58 Lakhs) which have been contested and is pending with Appellate Authority.
8.6 Inventory includes 2946MT of BSCL sheet piles lying at Jellingham Fabrication Yard valued at Rs 155.59 lakh . However physical verication of inventory assessed the quantity of stock at 1980.78 MT. Hence there is a shortage of 965.22 MT. The proportionate value of the shortage works out to Rs 50.98 lakhs. No provision for such shortage has been made in the accounts.
8.7 Legal Suits against Company pending before different authorities – amount not ascertainable.
8.8 Claims against Company being disputed by the management have not been acknowledged as debt-amount unascertainable.
8.9 Arrear salary for Pay revision w.e.f. 1.1.1992 estimated at Rs 1934.00 Lakhs up to 31-12-1999 on implementation of pay revision of ofcers are payable on company's improved operational performance and company having adequate internal cash generation to meet this liability.
8.10 Customs Duty Payable for Sheet Piles in case of domestic sales amounting to Rs. 301.69Lacs (Previous Year - Rs.301.69 Lakhs.)
8.11 Demand of Property Tax amounting to Rs.147.58 Lakhs subsequently enhanced to Rs. 220.74 Lakhs in the year 2004-05 by the Municipal Corporation, Jabalpur (M. P.) against which Writ Petitions are pending before the Hon'ble Jabalpur High Court.
8.12 Proceedings initiated by Kolkata Port Trust before Ld Estate Ofcer for outstanding towards disputed rent and interest for leasehold land at Howrah Works and Jellingham demanded by Kolkata Port Trust under the Provisions of the Public Premises Eviction of Unauthorized Occupants Act, 1971 is pending.
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Initially, the rent was decided based on the lease agreement entered into between Kolkata Port Trust and Burn Standard Co Ltd. However, Kolkata Port Trust is demanding Schedule Rates with interest. Application for waiver of total interest amounting to Rs. 144.76 lakhs in respect of Jellinghum have been made to the concerned authorities and not provided for. 8.13 Payment of wage settlement of NW, JW and RW group of workers, matter subjudicated before the Hon'ble High Court – amount not ascertainable. 8.14 Arrear rent for custom bonded warehouse at Garden Reach amounting to Rs. 290.00 lakhs since 16th Jan. 1990 being disputed before the Hon'ble High Court, Kolkata in respect of imported Sheet Piles. 8.15 Abnormal enhancement of Municipal Tax, and interest and penalty for Head Ofce there on mentioning Rs. 196.24 lakhs is disputed by the company and not provided for. 8.16 Municipal Tax liability of Raniganj Works amounting to Rs 100.00 lakhs has not been provided for. 9. As per AS-18, the information on Related Party is given:- i) Key Management Personnel- 1. Sri D. Marandi –Chairman &Managing Director. 2. Sri A.M. Singh - Director (Engineering)
ii) Transaction with Related Parties- Remuneration paid to Directors - Refer note no 6.1 above.
10. Turnover is disclosed net of Excise Duty in accordance with ASI 14 on “Disclosure of Revenue from sale transactions” issued by the ICAI.
11. As per AS-15 (Revised) following information are furnished below:-
a) Disclosure of Employer expense for the year ended 31st March 2016
As on 31.03.16 As on 31.03.15. A. Components of employer Expenses Gratuity Leave Benets Gratuity Leave Benets 1. Current Service cost (Including risk premium for fully insured benets) 68.69 19.81 69.59 19.81 2. Interest cost 175.37 32.58 182.43 32.35 3. Expected Return on Plan Assets 0.00 0.00 0.00 0.00 4.Curtailment Cost /(Credit) 0.00 0.00 0.00 0.00 5. Settlement Cost/(Credit) 0.00 0.00 0.00 0.00
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6. Past Service cost 0.00 0.00 0.00 0.00 7. Actuarial Losses / (Gains) (185.58) (29.86) 47.98 17.18 8.Total Employer expenses recognized in P&L 58.48 22.53 300.00 69.34
B. Change in Dened Benet Obligation
1. DBO at beginning of the period 2248.36 417.70 2105.69 370.56 2. Service Cost 68.69 19.81 69.59 19.81 3. Interest Cost 175.37 32.58 182.43 32.35 4.Curtailment Cost /(Credit) 0.00 0.00 0.00 0.00 5. Settlement Cost / (Credit) 0.00 0.00 0.00 0.00 6. Plan Amendments 0.00 0.00 0.00 0.00 7. Acquisitions 0.00 0.00 0.00 0.00 8. Actuarial Losses / (Gains) (185.58) (29.86) 47.98 17.18 9. Benets Payments 0.00 0.00 (157.33) (22.20) 10. DBO at end of the period 2306.84 440.23 2248.36 417.70
C. Change in Fair Value of Assets
1. Fair Value of Plan Assets at beginning of the period 0.00 0.00 0.00 0.00 2. Acquisition adjustment 0.00 0.00 0.00 0.00 3. Expected return on Plan Assets 0.00 0.00 0.00 0.00 4. Actual company contribution 0.00 0.00 157.33 22.20 5. Actuarial Losses / (Gains) 0.00 0.00 0.00 0.00 6. Benet Payments 0.00 0.00 (157.33) (22.20) 7. Fair Value of Plan Assets at end of the period 0.00 0.00 0.00 0.00
D. Actuarial Assumption:- The Principal Actuarial assumptions as at 1st April 2015 and 31st March 2016 are as follows:-
01/Apr/15 31/Mar/16 Discount Rate 7.80% 7.50% Expected Return on Assets N/A N/A Salary Escalation 5.00% 5.00% Indian Indian
ANNUAL REPORT - 2015-2016 - 87 ACCOUNTS - 2015-16 CONTD...
Assured Assured Lives Lives Mortality Mortality (2006-08) (2006-08) (modied) (modied) Ult. Ult. Mortality Rate 01/Apr/15 31/Mar/16 Ages from 20-25 0.50% 0.50% Ages from 25-30 0.30% 0.30% Ages from 30-35 0.20% 0.20% Ages from 35-50 0.10% 0.10% Ages from 50-55 0.20% 0.20% Ages from 55-60 0.30% 0.30%
12. Deferred Tax has not been calculated due to continuous loss in the company.
13.Figures for previous year have been re-arranged and regrouped, wherever found necessary.
For Kay & Kay Associates Chartered Accountants Firm Regn No: - 312108E
C.A. Subroto Dey Md. Asad Alam S. Datta Gupta Partner Chairman & Managing Director Company Secretary Membership No 054316 & Dy. Mgr. (Fin)
Place : Kolkata
Date : 24th November, 2016
88 - ANNUAL REPORT - 2015-2016