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Director's Report
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Burnpur Cement LtdIndustry : Cement - North India
BSE Code:532931
ISIN Demat:INE817H01014
Book Value(Rs):-2.52
NSE Symbol:BURNPUR
Div & Yield %:0
Market Cap (Rs Cr.):8.61
P/E(TTM):0
EPS(TTM):0
Face Value(Rs):10
  Change Company 

To the Members,

Your Directors have pleasure in presenting the 33rd Annual Report of the Company, together with the audited financial statements of the Company for the financial year ended 31st March 2019.

FINANCIAL HIGHLIGHT (STANDALONE)

Your Company's performance for the year ended 31st March, 2019 is summarized as under :

(Rs. In Lakhs)
Particulars 2018-19 2017-18
Sales (Net of Taxes) 8718.95 4205.90
Finance Cost 0.20 2.41
Depreciation 1207.37 1306.83
Profit/(Loss) before Tax (973.03) (4513.60)
Income Tax
-Current Tax - -
-Deferred Tax 294.17 (64.16)
Profit/(Loss) after Tax (1267.20) (4449.44)

TRANSFER TO RESERVE

During the year under review the Company has incurred loss of Rs. 1267.20 lakhs after tax.

DIVIDEND

The Company has incurred loss therefore your directors do not recommend any dividend for the year ended 31st March, 2019.

STATE OF COMPANY'S AFFAIRS

During the year under review, the performance of the Company has become better than previous year. The Company has restarted it production in full capacity which was suspended in last quarter of financial year 2016-17 and was remained suspended for the first quarter of financial year 2017-18 . Due to fund crisis and non availability of basic raw material your Company had suffered a huge loss of Rs. 44.94 crores last year. Apart from all these challenges, your Company got into an off take agreement with M/s Ultra tech Cement Limited around July, 2017 for a term of 3 year. The same is renewed on 13th May, 2019 for a further period of 7 year. The current capacity of Patratu Unit is 3,00,000 tons per year in comparison to last year of 240000 tons per year. Your Company strives to increase its production day by day. It has set a goal of achieving a production of 2 Million tons per year in future.

The Company has been running through a very bad phase due to substantial financial burden (secured and unsecured financial creditor of Rs. 235 Crore). The Company had set up an integrated plant in patratu, Jharkhand but due to non availability of Lime Stone the Company was forced to stop the production of Patratu Plant. Due to discontinuation of production the Company could not met its finance cost and subsequently the account became NPA. Hence, the Company has taken into the securitization process by its secured creditor i.e. State Bank of India and Central Bank of India under Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002. State Bank of India and Central Bank of India assigned their debts (around 76% of the total financial debts) to M/s UV Asset Reconstruction Company Limited an ARC (Asset Reconstruction Company). UV Asset Reconstruction Company Limited has also in process to take over the debt of other Financial Creditors i.e. United Bank of India and West Bengal Financial Corporation. Simultaneously the ARC has offered to settle our all financial debts for a sum of Rs. 133 Crore, in response to which the Company made a counter offer of Rs.100 Crore. The matter is still in negotiation stage.

CHANGE IN THE NATURE OF BUSINESS

During the year under review, there was no change in the nature of the business of the Company.

MATERIAL CHANGES AND COMMITMENTS

UV Asset Reconstruction Company Limited took over the debts owned by State Bank of India and Central Bank of India. The Company also extended its agreement with Ultra Tech Cement Limited for further period upto 10 years.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

It appeared to the Company that, under the Securitization process the operations of the Company can be restricted by the secured creditors. So the Company went to the High Court of Jharkhand. The Company Proclaimed that it is ready to give all the surplus revenue as repayment to the secured creditor after meeting the operational and other necessary expenses of the Company so that it could not affect the overall going concern of the Company. UV Asset Reconstruction Company Limited agreed to the term by adding one clause that all the payment will be made by the Company only after their approval. In order to maintain transparency and in the best interest of the stakeholders, the Company agreed to the terms of UV Asset Reconstruction Company Limited.

The summary of the order passed by the court is "all the receipts of the Burnpur Cement Limited will be credited to an escrow account and all the payments will be paid only after approval of UV Asset Reconstruction Company Limited. The surplus funds after meeting the expenses to be used for repayment of loan of UV Asset Reconstruction Company Limited."

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Directors had laid down internal financial controls procedures to be followed by the Company which ensure compliance with various policies, practices and statutes in keeping with the organization's pace of growth and increasing complexity of operations for orderly and efficient conduct of its business. The Audit Committee of the Board, from time to time, evaluated the internal financial control of the Company.

DETAILS OF SUBSIDIARY, JOINT VENTURE OR ASSOCIATES

During the year under review, the Company has no Subsidiary, Joint Venture or Associate.

DEPOSITS

During the year under review, your Company has not accepted any deposits from the public.

STATUTORY AUDITORS

Pursuant to Section 139 of the Companies Act, 2013, at the 32nd Annual General Meeting (AGM) of the Company, M/s. K. Pandeya & Co. Chartered Accountant (FRN 000135C), was appointed as the Statutory Auditor of the Company for a term of 5 (Five) consecutive years up to the conclusion of the 37th AGM of the Company to be held in the calendar year 2023.

AUDITORS' REPORT

Auditors' Report to the Members of the Company does not contain any qualification or adverse remark. Financial Statements and the notes thereon are self-explanatory and need no further explanation.

SHARE CAPITAL

During the year under review, your Company has neither issued and allotted any fresh equity shares (including ESOP) nor has granted any stock options and sweat equity. As on 31st March, 2019, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

EXTRACT OF ANNUAL RETURN

Extract of the Annual Return as on the financial year ended March 31,2019 in Form MGT-9 as per Section 134(3)(a) of the Companies Act, 2013 read with Rule 8 of Companies Act (Accounts) Rules, 2014 and Rule 12 of Companies (Management and Administration) Rules, 2014 is annexed hereto and forms part of this report as "Annexure A" and also uploaded on the Company's Website at www.burnpurcement.com

CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The details of Energy conservation, Technology Absorption, Foreign Exchange Earnings and Outgo are as mentioned in the "Annexure B" attached with this report.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

The Management Discussions & Analysis Report forms part of this Annual Report

DIRECTORS AND KEY MANAGERIAL PERSONNEL :

a) Details of Directors retiring by rotation

During the year under review, Mr. Aman Jain is liable to retire by rotation and offer himself eligible for reappointment in accordance with the provisions of the Companies Act, 2013.

b) Appointment/ Re-appointment of Directors

Mrs. Sweety Jain, (DIN 08319473) has been appointed as an Additional Director of the Company w.e.f. January 17, 2019 and she will retire at the conclusion of the ensuing Annual General Meeting.

The first term of 5 (five) consecutive years as an Independent Director of the Company of Mr. Prem Prakash Sharma and Mr. Subrata Mookerjee shall come to an end on the conclusion of the ensuing 33rd Annual General Meeting of the Company.

On the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company at their meeting held on 17th May 2019, subject to the approval of the members of the Company at the ensuing 33rd Annual General Meeting have appointed

(i) Mrs. Sweety Jain, as an Non-executive Director (Non Independent) liable to retire by rotation, with effect from the ensuing Annual General Meeting

(ii) Mr. Prem Prakash Sharma (DIN: 00788601) as an Independent Director of the Company for a second term of 5 (five) consecutive years with effect from 30th September, 2019

(iii) Mr. Subrata Mookerjee (DIN: 01220872) as an Independent Director of the Company for a second term of 5 (five) consecutive years with effect from 30th September, 2019

c) Appointment /Resignation of Key Managerial Personnel

During the year under review and till the date of board's report, Mr. Pawan Pareek has been appointed as CFO of the Company w.e.f. April 16, 2018.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declaration from the Independent Director(s) of the Company declaring that they meet the criteria of independence both, as under sub-section (6) of Section 149 of the Companies Act, 2013 and under Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Based on the declarations, disclosures received from the Independent Directors and on evaluation of the relationships disclosed, the following Non-executive Directors are Independent Directors in terms of the Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 149(6) of the Companies Act, 2013.

1. Mr. Prem Prakash Sharma

2. Mr. Subrata Mookerjee

BOARD EVALUATION

Pursuant to Section 134(3)(p), Schedule IV (VIII) of the Companies Act, 2013 and Regulation 17(10) and 19(4) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), the performance evaluation of Directors, Board and Committee was done at three levels by the Independent Directors at a separate meeting, Nomination and Remuneration Committee and the Board. Firstly, the Board of Directors has carried out an annual evaluation of performance of independent directors, its own, the Committees and individual directors based on the evaluation marking by the Directors. Secondly, the independent directors of the Company at their meeting held on 30th March, 2019, carried out the evaluation of performance of the non-independent directors, the Board and the Chairman of the Company as per the prescribed criteria adopted by the Board. Lastly, the Nomination and Remuneration Committee of the Company carried out evaluations as appropriate and whenever required as per the prescribed criteria adopted by the Board. The performance was evaluated by the Board on the basis of the criteria such as the composition of Board and Committee and structure, effectiveness of Board and committee processes, information and functioning. The performance was considered satisfactory.

FAMILIARIZATION PROGRAMME FOR BOARD MEMBERS

The Company is required to conduct the Familiarization Programme for Independent Directors (IDs) in terms of Regulation 25(7) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to familiarize them about the Company, their roles, rights, responsibilities in the Company and various updates and notifications under Companies Act, 2013, Listing Regulations, 2015, Reserve Bank of India Guidelines and other statutes applicable to the Company.

The details of such Familiarization Programme for Directors may be viewed at the website of the Company at www. burnpurcement.com

NUMBER OF BOARD MEETINGS

During the financial year 2018-19, the Board of Directors had Seven (7) meetings. These were held on 16th April, 2018, 28th May, 2018, 27th July, 2018, 13th August, 2018, 14th November, 2018, 17th January, 2019 and 30th March, 2019. The details in relation to attendance at the meetings are disclosed in the Corporate Governance section which forms a part of this report.

COMMITTEES OF THE BOARD

During the financial year ended March 31,2019 the Company has three committees as mentioned below :

1. Audit Committee

2. Stakeholders Relationship Committee

3. Nomination and Remuneration Committee

AUDIT COMMITTEE

The Composition, terms of reference and other details of the Committee forms part of the Corporate Governance Report as annexed hereto. All the recommendations made by the Audit Committee during the year were accepted by the Board.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Composition, terms of reference and other details of the Committee forms part of the Corporate Governance Report, forming part of this Annual Report.

NOMINATION AND REMUNERATION COMMITTEE

The Composition, terms of reference and other details of the Committee forms part of the Corporate Governance Report, forming part of this Annual Report. The Nomination and Remuneration Policy is annexed with the Annual report and also posted on the website of the Company at www.burnpurcement.com

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Board of Directors of the Company has established a Vigil Mechanism for Directors and employees and adopted the Whistle Blower Policy in terms of Section 177 of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to report concerns about unethical behavior, wrongful conduct and violation of Company's Code of conduct or ethics policy. The details of which have been given in the Corporate Governance Report annexed to this Report and also posted on the website of the Company at www. burnpurcement.com

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS OUTSTANDING DURING THE FINANCIAL YEAR

Particulars of the Loans/guarantee/advances/ and Investments outstanding during the financial year are fully disclosed in the Note no. 6 attached to the annual accounts which are attached with this report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review, the Company has not entered into contracts or arrangements or transactions with the related parties in accordance with the provisions of Section 188 of the Companies Act, 2013 and rules thereof.

Accordingly, no transactions are reported in Form AOC-2 in terms of Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts), Rules 2014.

The Policy on Related Party Transaction as approved by the Board has been posted on the website of the Company at www.burnpurcement.com

CORPORATE SOCIAL RESPONSIBILITY

As the Company is suffering loss, the CSR is not applicable on your Company.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the details are annexed as "Annexure C" to the Annual Report.

Further, in accordance with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, there are no employees in the Company drawing remuneration in excess of the limits set out in the said rules.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company has appointed Mr. Rajesh Ghorawat, Practising Company Secretary, to conduct the Secretarial Audit for the financial year 2018-19. The Secretarial Audit Report for the Financial Year 2018-19 is appended as Annexure ‘D' which is self-explanatory. The said Report does not contain any qualification, reservation or adverse remark.

CORPORATE GOVERNANCE

The Company is committed to maintaining the premier standards of Corporate Governance and adhering to the Corporate Governance requirements as set out by Securities and Exchange Board of India. The Report on Corporate Governance as stipulated under Regulation 34(3) read with Schedule V of the Listing Regulations, 2015 forms part of the Annual Report.

The Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance also forms part of this Annual Report.

Further, declaration by Mr. Ashok Gutgutia, Managing Director stating that the members of the Board of Directors and Senior Management Personnel have affirmed compliance with the Code of Conduct of the board of Directors and Senior Management are annexed with this Report.

MD & CFO CERTIFICATION

Certificate from Mr. Ashok Gutgutia, Managing Director and Mr. Pawan Pareek, Chief Financial Officer, pursuant to Regulation 17(8) read with Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the year under review forms part of this Annual Report.

RISK MANAGEMENT

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks that may impact key business objectives of your Company.

Your Company has adopted the Risk Management Policy in order to ensure that all the current and future material risk exposures of the Company are identified, assessed, quantified, appropriately mitigated and managed, to establish a framework for the Company's risk management process and to ensure its wide implementation, to ensure systematic and uniform assessment of risks to enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices and to assure business growth with financial stability.

Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at Audit Committee and the same is even referred to the Board of Directors of the Company, if any.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of the provisions on the Directors' Responsibility Statement referred in Section 134 (5) of the Companies Act, 2013, your Director's confirm that—

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

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

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(f) 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.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

The Company is committed to provide safe and conducive work environment to its employees and has formulated "Policy for Prevention of Sexual Harassment" to prohibit, prevent or deter any acts of sexual harassment at workplace and to provide the procedure for the redressal of complaints pertaining to sexual harassment, thereby providing a safe and healthy work environment. During the year under review, no case of sexual harassment was reported.

FRAUD REPORTING

There have been no frauds reported by the auditors of the Company under sub-section (12) of section 143 of the Companies Act, 2013 and to Central Government as per Companies Amendment Act, 2015.

COST AUDITORS

As per the provision of Section 148 of the Companies Act, 2013 the Company's cost records for the year ended March, 2019 are being audited/ reviewed by Cost Auditor M/s Som Das & Associates. The Cost Audit Report for the year ended 31st March, 2019 was filled in accordance with Cost Audit (Report) Rule 2001 within the stipulated time. For the Financial Year 2019-20 the Board of Directors of the Company has re-appointed M/s Som Das & Associate, cost auditor to audit the cost records of the Company as per the recommendation of the Audit Committee. The remuneration of the of the cost auditor shall be ratified by the shareholders of the Company in the ensuing Annual General Meeting.

APPRECIATION

Your Directors express their deep sense of gratitude to the Financial Institutions, Banks, Government Authorities, dealers, suppliers, business associates and Company's valued customers and the esteemed Shareholders for the faith they continue to repose in the Company and look forward to their continued support in future.

The Directors also warmly thank all the employee of the Company for their contribution to Company's performance and progress.

For and on behalf of the Board
Place : Kolkata ASHOK GUTGUTIA AMAN JAIN
Date : 17.05.2019 Vice-Chairman and Managing Director Director

   

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