Directors Report of Bihar Sponge Iron Ltd.

Mar 31, 2024

Your directors take pleasure in presenting the 42nd Annual Report along with the Audited Financial Statements of the Company along with audited accounts for the Financial Year ended 31st March, 2024.

Financial Performance (Rs. Lakhs
Financial Parameters	2023-24	2022-23
Sales (Net of GST)	26,665.10	46,337.47
Other Income	2,551.57	224.94
Profit / (Loss) before Interest, Depreciation & Exceptional Items	1,167.68	1,636.47
Interest & Finance Charges	-	14.57
Depreciation	423.20	424.63
Profit/(Loss) for the year before Exceptional Items	744.48	1,197.27
Exceptional Items -Net income / (Expenditure)	-	16.28
Provision for Tax	-	-
Profit/(Loss) for the year carried to Balance Sheet	744.48	1213.55

Outlook

India is the world''s second-largest producer of crude steel. The government has taken various steps to boost the sector including the introduction of National Steel Policy 2017 and allowing 100% Foreign Direct Investment (FDI) in the steel sector under the automatic route. The Government''s

National Steel Policy 2017 aims to increase the per capita steel consumption to 160 kgs by 2030-31.

In FY 2024-25, demand for steel is expected to increase by 9-10%. Demand for steel in India will reach 221-275 million tonnes by 2033-34, driven by rising construction activities. Steel companies are looking to restart expansion projects on the back of burgeoning steel processes.

Sponge Iron is the basic raw material for Steel manufacturers, so it is growing up parallel with steel demand. According to National Steel Policy, 2017, the aim is to increase the DRI production from 37.14 million tons to 80 million tons by 2030-31. India has huge untapped potential for the growth in the sponge iron industry, as it has still one of the lowest steel consumptions per capita (74.3 Kg.). The industry''s prospects are looking bright.

Operations

The Company was constrained to shut its Plant and Operations since 9th August, 2013 on account of sudden stoppage of coal supply by Central Coalfields Limited, a Unit of Coal India Limited against long term Fuel Supply Agreement. The Coal available through online auction from various Coal Companies was of lower grades and was also available at high price, therefore, it was not economically viable for the company to operate with the costlier coal.

As reported last year, with a view to earning some revenue, the Company had entered into a Facility User Agreement dated 30.12.2020 with M/s. Vanraj Steels Private Limited, Mr. Manoj Kumar Agarwal and M/s. Parasnath Advisory Private Limited.

After complete overhauling and renovation work of the plant as well as the railway siding, the possession of the same had been handed over to M/s. Vanraj Steels Private Limited on 12th January, 2022. With the handing over of the plant, the Company has started receiving the operating income.

Now the plant is in operation, and with the restart of the plant, Company has started earning revenue and there is net profit before tax amounting to Rs. 744.48 Lacs during FY 2023-24. Management is hopeful of earning good profit in future and losses suffered in past will get wiped out in due course.

The financial statements, as such, have been prepared on a going concern basis on the strength of management''s plan of revival including restructuring of liabilities, operation of the plant through a third-party ensuring generation of revenue.

5 MW Power Plants/ Steel Plant

The Company from the existing power plant generates 5 MW of power based on 80% Dolo Char 20% Coal Fine, being produced in the manufacturing of sponge iron. Due to the high price of coal, power generation cost is very high. To control the overhead cost, the company has taken 3 MW power connection from Jharkhand State Electricity Board.

Corporate Social Responsibility

The Board of Directors of the Company in its meeting held on 26th May, 2023 had approved the dissolution of the Corporate Social Responsibility Committee pursuant to the provision of Section 135(9) of the Companies Act, 2013 (“the Act") and the functions of the said Committee shall now be discharged by the Board. The Company has a Corporate Social Responsibility (CSR) Policy in accordance with the provisions of the Act and rules made thereunder. The CSR Policy along with the CSR projects approved by the Board, the composition of the Committee and other relevant details are disclosed on the website of the Company at www.bsil.org.in.

The Annual Report on the CSR activities undertaken by the Company during the Financial Year under review, in the prescribed format, is annexed to this Report as "Annexure -F".

Dividend

In view of the losses suffered by the Company in the past, no dividend has been proposed for the financial year ended 31st March, 2024.

Share Capital

The Paid-up Equity Share Capital as on 31st March, 2024 is Rs. 9020.54 lakhs. During the year under review, the

Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.

Fixed Deposits

During the year under review, your Company has not accepted any deposits within the meaning of provisions of Chapter V - Acceptance of Deposits by Companies, of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.

Subsidiary, Associate and Joint Ventures

The Company does not have any Subsidiary, Associate or Joint Venture Company as on 31st March, 2024.

Material Changes and Commitments

There were no material changes and commitments affecting the financial position of the Company which occurred between the end of financial year and the date of report.

Directors

Changes in Directors and Key Managerial Personnel

Since last reported, the following changes have taken place in the Board of Directors and Key Managerial Personnel:

In accordance with Regulation 17 (1)(1D) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations") which requires that any director serving on the Board of Directors of a listed company as on 31st March, 2024 without the approval of the shareholders for the last 5 years or more shall be subject to the approval of the shareholders in the ensuing Annual General Meeting to be held after 31st March, 2024. The Board of Directors of the Company pursuant to the provisions of Sections 152, at its meeting held on 14th August, 2024 pursuant to the recommendations of Nomination and Remuneration Committee has approved the re-appointment of Mr. Umesh Kumar Modi (DIN: 00002757) as a Non-Executive NonIndependent Director of the Company pursuant to the Regulation 17 (1)(1D) of SEBI Listing Regulations.

In accordance with the provisions of Section 152 of the Act 2013 and Article 128 of the Articles of Association of the Company, Mrs. Kumkum Modi (DIN: 00522904) retires by rotation at ensuing Annual General Meeting and being eligible offers herself for re-appointment. Your directors recommend her re-appointment.

Mr. Shiv Shankar Agarwal, Independent Director of the Company, has completed his 1st term of 5 years as an Independent Director on 10th May, 2023. Accordingly, he has ceased to be a Director of the Company, w.e.f. 11th May, 2023.

Mr. Jagdish Chander Chawla, Independent Director of the Company, ceased to be a Director of the Company w.e.f. 16th February, 2024, due to his resignation due to other preoccupation with other professional activities.

Mr. Ajay Kumar Aggarwal was appointed as a Non-Executive Independent Director of the Company w.e.f. 1st September, 2023.

Mr. Pramod Kumar Gupta was appointed as a Non-Executive Independent Director of the Company w.e.f. 27th November,

2023.

Mr. Vijay Kumar Modi (DIN: 00004606), Mr. Anirudh Kumar Modi (DIN: 01751260) and Mrs. Asha Agarwal (DIN: 09026835), Non-Executive Independent Directors of the Company have resigned from the Board w.e.f. 27th August,

2024.

Board has appointed and recommend the regularization of Mr. Rohit Chawdhary (DIN: 10751087), Ms. Mohi Kumari (DIN: 09696682) and Mr. Adhish Sharma (DIN: 10751609) as Non-Executive Independent Directors, not liable to retire by rotation, of the Company for the first term of consecutive 5 (five) years w.e.f. 16th September 2024 till 15th September, 2029.

None of the Directors of the Company is disqualified under Section 164 (2) of the Act. Your directors have made necessary disclosures as required under various provisions of the Companies Act, 2013.

Composition of Kev Managerial Personnel

Pursuant to the relevant provisions of Section 203 of the Act, the Company has the following KMPs:

S. No.	Name	Designation
1.	Mr. Aditya Kumar Modi	Whole Time Director (Designated as Director -Operations)
2.	Mr. Sachin	Chief Financial Officer
3.	Mr. Vimal Prasad Gupta	Company Secretary & Compliance Officer

Declaration by Independent Directors

All the Independent Director(s) have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations.

Formal Evaluation of Board, Committees and Directors

Pursuant to the provisions of Section 134 of the Act and Regulation 17 of the SEBI Listing Regulations, Independent Directors at their meeting (without participation of the NonIndependent Directors and Management) have considered/

evaluated the Boards'' performance, Performance of the Chairman and other Non-Independent Directors.

The Board subsequently evaluated the performance of the Independent Directors as per the criteria laid down and has recommended their continuation on the Board of the Company. The working of its Committees (Audit, Nomination and Remuneration and Stakeholders Relationship) and Independent Directors (without participation of the Director being evaluated) were also evaluated. The criteria for performance evaluation have been detailed in the Corporate Governance Report.

Number of Board Meetings

During the year 2023-24, Four (4) Board Meetings were convened and held. Details of the same are given in the Corporate Governance Report which forms part of this report. The intervening gap between either two meetings was within the period prescribed under the Act, and the SEBI Listing Regulations.

Directors'' Responsibility Statement

Pursuant to Section 134 (5) of the Act, the Directors of your Company declare as under 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 profit 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;

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

(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.

Statement regarding opinion of the Board with regard to Integrity, Expertise and Experience of the Independent Director appointed during the year

During the Year, Mr. Ajay Kumar Aggarwal and Mr. Pramod Kumar Gupta were appointed as Non-Executive Independent Director(s) of the Company w.e.f. 1st September, 2023 and 27th November, 2023 respectively. In the opinion of Board Mr. Aggarwal and Mr. Gupta are persons with high moral values, having rich experience in the matter of Corporate Laws and good corporate governance.

Significant and Material orders passed by the Regulators or Courts or Tribunals

During the year under review, there were no significant material orders passed by the Regulators or Courts or Tribunals that could impact the going concern status of the Company and its future operations.

Auditors and Auditors Report

Statutory Auditor

M/s. K. K. Jain and Co., Chartered Accountants (FRN: 002465N), were re-appointed as the Statutory Auditors of the Company in the 40th AGM of the Company till the conclusion of 45th AGM.

M/s. K.K. Jain & Co., Chartered Accountants, (FRN: 002465N) vide their letter dated 3rd November, 2023 have resigned as Statutory Auditors of the Company with immediate effect, thereby resulting into a casual vacancy in the office of Statutory Auditors of the Company.

In order to fill the casual vacancy caused by resignation of the Auditor, the Board of Directors at its meeting held on 6th November, 2023, upon the recommendation of the Audit Committee, and pursuant to the provisions of Section 139(8) of the Companies Act, 2013, have appointed M/s. Doogar & Associates, Chartered Accountants (FRN: 000561N), as Statutory Auditors of the Company, till the conclusion of ensuing AGM in the Financial Year 2024. The approval of the shareholders was accorded via Postal Ballot Notice dated 6th November, 2023.

Auditor''s Qualification

Notes to accounts referred to in the Auditor''s Report are self-explanatory and therefore do not call for any further explanation. However, the following has not been recognized as explained below:

a. Rs. 4,352.70 Lakhs against currency fluctuation of foreign currency loan has not been recognized as the Company has filed Letters Patent Appellate Jurisdiction

(LPA) before the Divisional Bench of High Court of Jharkhand, Ranchi and it is hopeful that the decision will be in favour of the Company.

b. Rs. 215.28 Lakhs recovered by South Eastern Coal Fields Ltd as penalty on account of short lifting of coal quantity in terms of Fuel Supply Agreement as the matter has been disputed by the Company under writ petition filed before the Hon''ble High Court of Chhattisgarh. The Company is hopeful that it would get an order in its favour in the said proceedings.

c. Interest on unsecured loan taken from Promoters and other parties from 10.08.2013 to 31.03.2024 has not been taken into account as the Company will approach the lenders for the waiver of the interest on unsecured loan.

d. Interest on Soft Loan taken from the Government of Jharkhand under the Industrial Rehabilitation Scheme 2003 amounting to Rs. 7448.22 Lakhs from 10.08.2013 to 31.03.2024 has not been provided and is subject to representation for waiver.

Internal Auditors

M/s. Sarat Jain & Associates, Chartered Accountants (FRN: 014793C), Noida, conducted Internal Audit periodically and submitted their reports to Audit Committee. Their Repots have been reviewed by the Audit Committee.

Cost Auditors

The Board of Directors, on the recommendation of the Audit Committee, have appointed M/s. M.K. Singhal & Co., Cost Accountants (FRN: 00074), as the Cost Auditors to audit the cost accounting records maintained by the Company for the financial year 2024-25 at a remuneration of Rs.1,00,000/-plus taxes as applicable and reimbursement of out-of-pocket expenses. As required under the Companies Act, 2013, a resolution seeking member''s approval of the remuneration payable to the Cost Auditor forms part of the notice convening the Annual General Meeting.

Secretarial Auditor

M/s. Soniya Gupta & Associates, Company Secretaries (PCS COP No. 8136) were appointed as the Secretarial Auditor of the Company in relation to the financial year 2023-24, in terms of Section 204 of the Companies Act, 2013.

The Secretarial Audit Report for financial year 2023-24 is attached as "Annexure - A" with this report.

The observations in the secretarial audit report is selfexplanatory and therefore do not call for any further explanation.

Particulars of Loans, Guarantees or Investments under Section 186

The Company has not given any loans, guarantees or made any investments under Section 186 of Companies Act, 2013 during the financial year 2023-24.

Internal Financial Control and their Adequacy

The Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business including adherence to the Company''s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures.

Risk Management Policy

As per Section 134(3) (n) of the Companies Act, 2013, the Company has adopted a Risk Management Policy which is reviewed on a periodic basis to recognize and reduce exposure to risks wherever possible. The Company''s Risk management policies are based on the philosophy of achieving substantial growth and managing risks involved.

Nomination and Remuneration Policy

In accordance with the requirements under Section 178 of the Companies Act, 2013 and Listing Regulations, the Committee formulated a Nomination and Remuneration policy to govern the nomination/appointment, criteria for determining qualifications, positive attributes, independence of a Director and remuneration of Directors, Key Managerial Personnel, other employees and senior Management of the Company. Details of Composition of Committee are given in the Corporate Governance Report.

The aforesaid policy can be accessed on the Company''s website at www.bsil.org.in.

Vigil Mechanism/ Whistle Blower Policy

In compliance of Section 177 (9) & (10) of the Companies Act, 2013 and in terms of Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has set up a whistle blower policy which can be viewed on the Company''s website at www.bsil.org.in. In terms of the said policy, the Directors and employees are given direct access to the Chairman of the Audit Committee to report on alleged wrong doings.

Your Company hereby affirms that no Director/ employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.

Particulars of Contracts or Arrangements with Related Parties

All the Related party Transactions entered by the Company during the financial year were done in the ordinary course of business and at Arm''s Length. The Audit Committee granted omnibus approval for the said related party transactions (which are repetitive in nature) and the same was reviewed by the Audit Committee and the Board of Directors.

During the year, your Company had entered materially significant transactions i.e. transactions exceeding ten percent of the annual consolidated turnover with Related Parties and the same are within the limits approved by the Shareholders of the Company. Furthermore, suitable disclosures as are required under IND AS - 24 have been made in the Notes to the Financial Statements.

The details of these transactions, as required to be provided under section 134(3) (h) of the Companies Act, 2013 are disclosed in Form AOC-2 as "Annexure-B" and forms part of this report.

The policy on materiality to regulate transactions between the Company and its related parties, in compliance with the applicable provisions of the Act, and regulation 23 of the Listing Regulations, as amended, is uploaded and can be viewed on the Company''s website at www.bsil.org.in.

Extract of the Annual Return

The extract of the Annual Return as per the provisions of Section 92 of Companies Act, 2013 read with Rule 12 of Companies (Management and Administration) Rules, 2014 will be made available on the website of the Company at www. bsil.org.in.

Particulars of Employees and Related Disclosures

Disclosure with respect to remuneration of Directors and employees as required under section 197 (12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Board report for the year ended 31st March, 2024 are given in "Annexure-C" to this Report.

Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 of the Companies Act, 2013 read with rule (8)(3) of the Companies Account Rules, 2014 is enclosed in "Annexure-D" and forms part of this report.

Corporate Governance

A report on Corporate Governance along with an Auditors'' Certificate confirming compliance of conditions of Corporate Governance as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual report.

Management Discussion Analysis Report

In terms of Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report is annexed as "Annexure-E" and form part of this report.

Listing of Securities

The equity shares of your Company continue to be listed on BSE Ltd. and the listing fee for the Financial Year 2024-25 has been paid.

Compliance with Secretarial Standards

The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India as approved by Central Government as required under Section 118(10) of the Companies Act, 2013.

Disclosures in relation to The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act-2013

During the Financial Year 2023-24, no complaint was received from any employee and hence no complaint is outstanding as on 31st March, 2024 for redressal.

Details of application made or any proceeding pending under The Insolvency and Bankruptcy Code

During the year under review, no application is made, nor any proceeding is pending under the Insolvency and Bankruptcy Code, 2016.

Details of difference between amount of the Valuation done at the time of One Time Settlement and the Valuation done while taking Loan from the Banks or Financial Institutions along with the reasons thereof

During the year under review, no one time settlement was made by the Company with any Banks or Financial Institutions.

Acknowledgement

Your directors take this opportunity to place on record their sincere thanks to all stakeholders, various departments of Central Government, the Government of Bihar and Jharkhand, Financial Institutions and Banks for their valuable assistance. Your directors equally acknowledge the trust reposed by you in the Company. The Directors also wish to place on record their appreciation for the all-round support and co-operation received from the employees at all levels.

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Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the 33nd Annual Report of the Company along with audited accounts for the year ended 31st March, 2015.

(Rs. Lacs)

Financial Parameters 2014-15 2013-14

Sales (Net of Excise Duty) - 1909.70

Other Income 208.66 275.60

Loss before Interest,Depreciation & Exceptional Items 121.26 938.48

Interest & Finance Charges 51.93 389.43

Depreciation 446.70 342.98

Loss for the year before Exceptional Items 619.89 1670.89

Exceptional Items expenditure /(income) 116.25 103.41

Provision for Tax - -

Loss for the year carried to Balance Sheet 736.14 1774.30

OPERATIONS :

During the year under review there was no production of sponge iron due to Plant being shut from 9th August, 2013 on account of sudden stoppage of coal supply by Central Coalfields Limited, Ranchi, a Unit of Coal India Limited against our long term Fuel Supply Agreement. The reason for stoppage of coal supply was that Ministry of Coal had allocated a Captive Coal Mine - Macherkunda Coal Block in the year 2008 and as per terms & conditions the Mine was to be operative by February, 2013. The Mine could not be developed due to various reasons beyond our control i.e. depending upon the Govt.of India for clearance. The Coal Block was later cancelled on 20th November, 2012 by Ministry of Coal, Govt.of India. The Company challenged this by filing a Writ Petition No. W.P.(C) 1660 in the year 2013 in the Hon'ble Jharkhand High Court.

Further, all Coal Blocks were also cancelled by Hon'ble Supreme Court of India vide its Order dated 25th September, 2014 and our Macherkunda Coal Block was also amongst these Coal Blocks. Since the Policy about renewal of Fuel Supply Agreement (FSA) after de-allocation of Captive Coal Blocks was not clear, hence they stopped the coal supply. Later on in a Special Meeting of Standing Linkage Committee (Long Term) held on 3rd December, 2014 under the Chairmanship of Additional Secretary (Coal), Ministry of Coal decided that all EUP which were already having long term linkage should get coal from the respective Coal companies. Accordingly, we approached the Chairman-CCL, Ranchi and he advised to withdraw our Writ Petition No. W.P.(C) No.1660 of 2013. He further suggested that once the said writ petition is withdrawn, CCL would proceed in the matter for renewal of Fuel Supply Agreement. The Company has made an interlocutory application for withdrawal of the said writ petition before Hon'ble Jharkhand High Court. We hope that the matter would be resolved with the withdrawal of the said Writ Petition by the said High Court.

IRON ORE MINE:

The Company was allotted Ghatkuri Iron Ore Mine in April, 2007 in the State of Jharkhand with 406.40 hectares of land and consisting of reserves estimated at 35.65 million tons. However, the Geological Survey was conducted by Department of Geology, Ministry of Mines, Govt. of Jharkhand and report was released in February, 2012 wherein they have assessed the Ore reserve to be about 11.00 Million Tons. The Company has requested for the allocation for an additional Iron Ore Mine to compensate the difference in allocated quantity and for revised geological reserves. The draft Mining Plan prepared by MECON was submitted with Ministry of Mines on 3rd September, 2012 based on the revised reserves of 11.00 million tons.

The Indian Bureau of Mines, Ministry of Mines, Govt. of India vide its letter dated 06-02-2014 have communicated the mining plan is not approved. The Company expects a total capital investment of around Rs.45.00 Crores for the development and anticipates the commencement of production of iron ore by 2016.

COAL MINE:

As already reported the Macherkunda Coal Block allocated to the Company for captive mining of coal has been de-allocated by the Ministry of Coal, Government of India. The Government of India has filed a number of transfer petitions in the Honb'le Supreme Court for transfer of the coal block cases which were pending in various high courts. The Supreme Court has expressed its view that all coal block allocations on and after 2003 are illegal. The Supreme Court has vide its order dated 25th September, 2014 has cancelled allocation of all but 4 coal blocks allocated from 2003. The Macherkunda Coal Block was among the all cancelled coal blocks.The Company has made an application to Ministry of Coal, Govt. of India for return of Bank Guarantee of Rs. 2.81 cr. Vide its letter dated 15th October, 2014.

5 MW POWER PLANT / STEEL PLANT

The Company from the existing power plant generates 5 MW Power based on dolo char being produced in the manufacturing of sponge iron. Since the Company is not able to consume the total dolo char, the Company has entered into an agreement with G.S. Phambutor Pvt. Limited (GSP) to install a 5 MW Power Plant. Whenever the existing power plant goes under regular maintenance, the Company has to generate power from DG Set, which is highly uneconomical. During such time the Company will take the power from GSP and for the rest of the period GSP will consume the power in induction furnace to produce pencil ingot. The 5 MW power plant is at commissioning stage. Once the sponge iron plant starts its operations to said power plant will be commissioned and steps for setting up induction furnace will initiated.

DIVIDEND

In view of the loss incurred by the Company, no dividend has been proposed for the financial year ended 31st March, 2015

FIXED DEPOSITS:

During the year under review, your Company did not accept any deposits within the meaning of provisions of Chapter V - Acceptance of Deposits by Companies of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186.

The Company has not given any loans, guarantees or made any investments under Section 186 of Companies Act, 2013 during the financial year 2014-15.

INTERNAL CONTROL SYSTEM

The Company has a well placed, proper and adequate internal control system, which ensures that all assets are safeguarded and protected and that the transactions are authorised, recorded and reported correctly. The Company's internal control system comprises audit and supplemented by internal audit checks from the Internal Auditor M/s.Sarat Jain & Co. The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting of Internal Auditors to the Audit Committee of the Board.

NOMINATION AND REMUNERATION POLICY OF THE COMPANY The Board of the Company in its meeting held on 12th May, 2015 has approved and adopted the Company's Nomination and Remuneration policy. Any member interested in hard copy of the said policy may inspect the same at the Registered Office of the Company or write to the Company Secretary for a copy. The same is also disclosed in the Company's website www.bsil.org.in. Details of the Committee is provided in the corporate governance report annexed with this report.

WHISTLE BLOWER POLICY:

Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement, the Board of director of the Company in its meeting held on 6th February, 2015 has approved and adopted vigilance mechanism - Whistle Blower Policy. This Policy inter-alia provides a direct access to the Chairman of the Audit Committee. Your Company hereby affirms that no Director/ employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year. The said policy is available in the Company website, www.bsil.org. in. Any member interested in hard copy of the said policy may inspect the same at the Registered Office of the Company or write to the Company Secretary for a copy.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES.

All transactions entered by the Company with Related Parties were in the Ordinary Course of Business and at Arm's Length pricing basis. The Audit Committee granted omnibus approval for the transactions (which are repetitive in nature) and the same was reviewed by the Audit Committee and the Board of Directors.

There were no materially significant transactions with Related Parties during the financial year 2014-15 which were in conflict with the interest of the Company. Suitable disclosures as required under AS-18 have been made in the Notes to the financial statements.

The Board had approved policies on Related Party Transactions. The policies have been uploaded on the Company's website: www.bsil.org.in. Any member interested in hard copy of the said policy may inspect the same at the Registered Office of the Company or write to the Company Secretary for a copy.

The particulars of contract and arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 read with clause 49 of the Listing Agreement is disclosed separately in Form No. AOC -2 as Annexure-D and forms part of this report.

EXTRACT OF THE ANNUAL RETURN

The extract of the Annual Return for 2014-15 in Form No. MGT - 9 is given separately as Annexure - E, which form part of the Board's report.

SECRETARIAL AUDIT

The Board of Directors of the Company have appointed M/s. R Singhal& Associates, Company Secretaries (PCS Registration No. 10699) as the Secretarial Auditor of the Company in relation to the financial year 2014-15, in terms of Section 204 of the Companies Act, 2013. The Secretarial Audit Report for financial year 2014-15 done is separately annexed as Annexure-F with this report and is available on the Company's website www.bsil.org.in.

The observation in secretarial audit report are self explanatory and therfore do not call for any further explanation. Further due to shutdown of the plant and suspension of operation from 09.08.2013 various dues could not be paid on due dates. Necessary steps are being taken to re-start the Company and payment of all such dues shall be made after re-start of operation of the Company.

MANAGERIAL REMUNERATION:

Disclosures required u/s 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014 relating to ratio of the remunration of each director to the median employee's remuneration and other details shall be provided on request, in accordance with the provisions of Section 136 of the Act. The relevant information could not be provided as the plant is under shut and the operations has been suspended from 09.08.2013, thereby the salary, wages and allowances of the employees is unascertained.

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, non of the employee is drawing remuneration in excess of the limits set out in the said Rules.

DIRECTORS :

A) CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL

Since the last Annual General Meeting, the following changes have taken place in the Board of Directors:

Mr. Satish Kumar Gupta,Whole Time Director designated as Director (Works) of the Company is re-appointed as Whole Time Director designated as Director (Works) w.e.f. 13-12-2014 for a period of 3 years.

In accordance with the provisions of Section 160 of the Companies Act, 2013 and Article 128 of the Articles of Association of the Company, Mrs. Kumkum Modi retires by rotation and are eligible for re-appointment.

Mr. G. W. Elsenheimer ceased to be the director of the Company under Section 167 of the Companies Act, 2013.

Mr. G. C. Jain has resigned as director of the Company w.e.f. 15th April, 2015. Mr. R. K. Agarwal, Mr. Jagan Nath Khurana, and Mr. Madan Lal the independent directors of the Company pursuant to section 149 (10) of the Companies Act, 2013 shall hold the office as directors for a term of 5 years w.e.f.12th May, 2015, 12th May, 2015 and 14th November, 2014 respectively, subject to the approval of shareholders.

Mr. B. K. Goel is appointed as Chief Financial Officer of the Company w.e.f. 6th February, 2015.

None of the directors of the Company are disqualified under Section 164 (2) of the Companies Act, 2013. Your directors have made necessary disclosures as required under various provisions of the Companies Act, 2013.

B) DECLARATION BY AN INDEPENDENT DIRECTORS

The Company has received declaration by all Independent Director(s) that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013. The declaration received from the independent directors were placed at the meeting of the Board of directors of the Company held on 12th May, 2015. Any member interested in hard copy of the said policy may inspect the same at the Registered Office of the Company or write to the Company Secretary for a copy.

C) FORMAL ANNUAL EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, Independent Directors at their meeting without the participation of the Non-independent Directors and Management, considered/ evaluated the Boards' performance, Performance of the Chairman and other Non-independent Directors

The Board subsequently evaluated its own performance, the working of its Committees (Audit, Nomination and Remuneration and Stakeholders Relationship Committee) and Independent Directors (without participation of the relevant Director).The criteria for performance evaluation have been detailed in the Corporate Governance Report which is attached as Annexure- B to this Report.

D) NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

The Board of the Company met for the four times, i.e. on 29th May, 2014, 19th September, 2014, 14th November, 2014 and 6th February, 2015 during financial year 2014-15,

E) DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act, 2013 the Directors of your Company declare as under:

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

(b) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and 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) that the directors had prepared the annual accounts on a going concern basis; and

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

Explanation-For the purposes of this clause, the term "internal financial controls" means the policies and procedures adopted by the company for ensuring the orderly and efficient 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 financial information;

(f) That 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

The composition of an Audit Committee is disclosed in the corporate governance report annexed with this report and forms part of it. Further there has not been any instance where the Board had not accepted any recommendation of the Audit Committee.

AUDITORS:

M/s. Thakur Vaidyanath Aiyar and Co., Chartered Accountants (Firm Registration No.000038N), Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received a letter from them to the effect that their re-appointment, if made would be within the prescribed limits under Section 139 of the Companies Act, 2013 and the Audit Committee of the Company has recommended their appointment as statutory Auditors for two consecutive years starting from the conclusion of 33rd AGM to the conclusion of 35th AGM of the Company.

ACCOUNTS AND AUDIT:

Notes to accounts referred to in the Auditor's Report are self-explanatory and there fore, do not call for any further explanation. However the following has not been recognized as explained below:

a. Rs. 2,32,381 thousand against currency fluctuation of foreign currency loan has not been recognized as the Company has filed Letters Patent Appellate Jurisdiction (LPA) before the Divisional Bench of High Court of Jharkhand, Ranchi and it is hopeful that the decision will be in favour of the Company.

b. Rs. 21,528 thousands recovered by South Eastern Coal Fields Ltd as penalty on account of short lifting of coal quantity in terms of Fuel Supply Agreement as the matter has been disputed by the Company under writ petition filed before the Hon'ble High Court of Chhattisgarh. It is hopeful that the Company would get the order in its favour.

c. Interest on unsecured loan taken from Promoters and other parties from 10.08.2013 to 31.03.2015 has not been taken on accounts as the Company has applied to the lenders for the waiver of the interest on unsecured loan.

d. Interest on Soft Loan taken from the Government of Jharkhand under the Industrial Rehabilitation Scheme 2003 amounting to Rs. 81,331 thousands has not been provided as the Company will make representation for waiver on re-start of the Company operation.

e. Salaries, Wages, Allowances, Contribution to PF including interest on overdue amount as well as employee benefit expenses w.e.f. 10.08.2013 to 31.03.2015 has not been provided in view of the shut down of the plant and suspension of operation from 9th August, 2013.

Further due to shut down of the plant and suspension of operation from 9th August, 2013 various dues could not be paid on due dates. Necessary steps are being taken to re-start the Company and payment of such dues shall be made after re-start of operation of the Company.

SUBSIDIARY COMPANY

Chandil Power Limited has become a subsidiary company of the Company pursuant to Section 4 (1) (a) of the Companies Act, 1956 and Section 2(87) of the Companies Act, 2013 and in accordance with the general circular No. 2/2011 dated 8 February, 2011 issued by the Ministry of Corporate Affairs, Government of India the balance sheet, profit and loss account and other documents as required to be attached with balance sheet are not attached with the balance sheet of the Company. The same will be made available to any member of the Company, who may be interested in obtaining the same. The Annual accounts and related documents of the subsidiary company will also be kept open for inspection at the registered office of the Company. Further the consolidation of accounts is not required as Chandil Power has become subsidiary by virtue of control on of composition of Board of Directors of Chandil Power Limited and the Company do not hold any shares in Chandil Power Limited.Chandil Power Limited ceased to be subsidiary of the Company w.e.f. 29th September, 2014.

CORPORATE GOVERNANCE:

A separate report on Corporate Governance is attached as Annexure B to this report. The Auditors' Certificate confirming compliance of conditions of Corporate Governance and CEO/CFO Certificate as required under Clause 41 of the Listing Agreement is included in the said Corporate Governance Report.

MANAGEMENT DISCUSSION ANALYSIS REPORT

In terms of Clause 49 of the Listing Agreement with the Stock Exchange, Management Discussion and Analysis Report is annexed as Annexure - C and form part of this report.

LISTING IN STOCK EXCHANGE:

The equity shares of the Company continues to be listed in the Bombay Stock Exchange and listing fee for the Financial Year 2015-16 has been paid.

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

Information pursuant to Section 134 of the Companies Act, 2013 and rules made there under, a statement giving the required information relating to energy conservation, technology absorption, foreign exchange earnings and outgo is annexed hereto as Annexure-A and form part of this report.

ACKNOWLEDGEMENT:

Your Directors take this opportunity to place on record their sincere thanks to all stakeholders, various departments of Central Government, the Government of Bihar and Jharkhand, Financial Institutions and Banks for their valuable assistance. Your Directors equally acknowledge the trust reposed by you in the Company. The Directors also wish to place on record their appreciation for the all round support and co-operation received from the employees at all levels.

For & on behalf of the Board

Place: New Delhi S.K. Gupta B.D. Garg Date: 12.05.2015 Director-works Director DIN: 03537417 DIN 00002792

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Mar 31, 2014

To the Members,

The Directors have pleasure in presenting the 32nd Annual Report of the Company along with audited accounts for the year ended 31st March, 2014.

(Rs. Lacs) Financial Parameters 2013-14 2012-13

Sales (Net of Excise Duty) 1909.70 12054.16

Other Income 275.60 146

Profit / (Loss) before Interest, Depreciation & Exceptional Items (938.48) (1759.86)

Interest & Finance Charges 389.43 977.56

Depreciation 342.98 346.27

Profit/(Loss) for the year before Exceptional Items (1670.89) (3083.69)

Exceptional ltems-income/(expenditure) (103.41) 476.12

Provision for Tax - -

Profit / (Loss) for the year carried to Balance Sheet (1774.30) 2607.57



OPERATIONS

During the year under review production of sponge iron was 9634 MT as against 60,873 M.T. in the previous year. The Company could not achieve full production due to sudden closure as a result of non supply of coal from Central Coalfields Limited, as the Company was getting the supply of coal from CCL under a Fuel Supply Agreement. Ministry of Coal, Government of India vide its letter No. 38011 / 2 / 2007 - CA - 1 dated 5th August 2008, has allocated Macherkunda Coal Block to the Company in the area of Central Coalfields Limited for captive mining of coal. However, due to events beyond the control of the company, the Central Government cancelled the allocation of Coal Block by its letter dated 20"'' November, 2012. The company has since challenged the de-allocation of Coal Block by filing a Writ Petition being W.P.(C) No.7331 of 2012 before the Hon''ble Jharkhand High Court in which an interim order was passed on 12*1 December 2012. The interim order continues to operate in this matter.

The allocation and subsequent de-allocation of coal block has adversely affected the existing coal linkage of the company due to confusion arising out of Tapering Linkage Policy dated 261" February, 2010 issued by the Ministry of Coal (MoC). The company''s stand is that it is entitled to receive coal as per their existing Coal Linkage. Disputes arose between the company, Ministry of Coal and CCL on the interpretation of the Policy which resulted in another Writ Petition before the Hon''ble Jharkhand High Court being W.P.(C) No.1660 of 2013. Pursuant to an Order dated 261" June, 2014 passed by Hon''ble High Court in the aforesaid Writ Petition, the company has filed an application for execution of a fresh Fuel Supply Agreement (FSA) on which CCL is to take an informed decision which has not yet happened.

Thereafter, the company has also filed an Application before the Hon''ble High Court being I.A No.6999 of 2013 praying for urgent directions upon CCL to supply coal and also execute a fresh FSA. The said application is still pending. Owing to the aforesaid reasons, the company was forced to shut down the Plant and operations have been suspended since 91" August, 2013 due to lack of supply of coal.

Vide Office Memorandum a "Inter-Ministerial Committee" constituted by Government of India, Ministry of Coal, New Delhi has recommended supply of coal on priority basis to End-Use Plants which are having long term linkage and their existing linkage was converted into Tapering Linkage consequently upon allocation of Coal Block. .

Ministry of Steel, Govt.of India, New Delhi has informed that issues related with our Company has been noted by the Ministry and would be included for discussion with Chief Secretary, Jharkhand during the forthcoming meeting scheduled in the near future.

They have also informed that a Project Monitoring Group (PMG) under the Cabinet Secretariat is functioning for taking up such issues for resolution and advised us to upload our issues at the web portal of PMG. As per their advise, we have uploaded our issue at PMG web portal.

We hope CCL, Ranchi will restore our Fuel Supply Agreement and will start supplying coal against our linkage very soon. As and when the Company starts getting coal supplies from CCL, Ranchi the Plant will start its operation.

IRON ORE MINE ;

The Company was allotted Ghatkuri Iron Ore Mine in April, 2007 in the State of Jharkhand with 406.40 hectares of land and consisting of reserves estimated at 35.65 million tons. However, the Geological Survey was conducted by Department of Geology, Ministry of Mines, Govt, of Jharkhand and report was released in February, 2012 wherein they have assessed the iron ore reserve to be about 11.00 Million Tons. The Company has requested for the allocation for an additional Iron ore mine to compensate the difference in allocated quantity and for revised geological reserves. The draft Mining Plan prepared by MECON is already submitted with Ministry of Mines on 3rd September, 2012 based on the revised reserves of 11.00 million tons. The Company expects a total capital investment of around Rs.45.00 Crores for the development and anticipates the commencement of production of iron ore by 2016.

COALMINE

Ministry of Coal, Government of India vide its letter No. 38011 / 2 / 2007 - CA -1 dated 5th August 2008, has allocated Macherkunda Coal Block to the Company for captive mining of coal to meet its coal requirement. The allocation of the aforesaid coal block was subject to certain conditions together with milestones that were required to be achieved by the Company as fixed by the Ministry of Coal. However, notwithstanding all bonafide effort by the Company and due to inter departmental issues within the Government which were beyond the power and control of the Company, there was a delay in achieving the milestones. Thereafter the Central Government, without affording any opportunity of hearing to the Company, proceeded to accept the recommendations purported to have been made by the Inter Ministerial Group (IMG) and consequently vide an order dated 20th November 2012, communicated its decision to de-allocate the Macherkunda Coal Block.

Upon the de-allocation of the Macherkunda coal block, the Company had filed a Writ Petition before the Jharkhand High Court, being W.P. (C) No. 7331 of 2012 challenging the decision of the Ministry of Coal to de-allocate the coal block. The Hon''ble Jharkhand High Court, by an order dated 12th December 2012 has been pleased to pass the following interim order:"Until further order, no coercive steps shall be taken against the Petitioners pursuant to the impugned order".

5 MW POWER PLANT / STEEL PLANT

The Company from the existing power plant generates 5 MW Power based on dolo char being produced in the manufacturing of sponge iron. Since the Company is not able to consume the total dolo char, the Company has entered into an agreement with G.S. Phambutor Pvt. Limited (GSP) to install a 5 MW Power Plant. Whenever the existing power plant goes under regular maintenance, the Company has to generate power from DG Set, which is highly uneconomical. During such time the Company will take the power from GSP and for the rest of the period GSP will consume the power in induction furnace to produce pencil ingot. It is expected that the 5 MW power plant and induction furnace will be commissioned by June, 2014.

FIXED DEPOSITS:

The Company has neither invited nor accepted any deposits from the public within the meaning of Section 58 A of the Companies Act, 1956 during the year under review.

BOARD OF DIRECTORS:

Since the last Annual General Meeting, the following changes have taken place in the Board of Directors:

Mr. U.K. Modi seized to be the Managing Director of the Company w.e.f. 28m February, 2014 and shall continue to be the Chairman of the Company.

Mr. B. K. Thakur was appointed as additional Director and then Whole-time Director of the Company designated as Director- Finance, w.e.f. 20,n December, 2013 has resigned w.e.f. 20-12-2013.

Mr. K. K. Jain has resigned as director of the Company w.e.f. 28''" May, 2013. Mr. Satish Kumar Gupta was appointed as additional director and was later appointed as Whole Time Director designated as Executive Director (Works) of the Company w.e.f. 13-12-2013.

In accordance with the provisions of 160 of the Companies Act, 2013 and Article 128 of the Articles of Association of the Company, Mrs. Kumkum Modi, Mr. Jayesh Modi retires by rotation and are eligible for re-appointment. Mr. G. C. Jain, Mr. B. D. Garg, Mr. J. C. Chawla, Dr. Shyam Vyas and Mr. G. W. Elsenheimer the independent directors of the Company shall pursuant to section 149 (10) of the Companies Act, 2013 hold the office as directors for a term of 5 years w.e.f.29* May, 2014.

None of the directors of the Company are disqualified under Section 164 (2) of the Companies Act, 2013. Your directors have made necessary disclosures as required under various provisions of the Companies Act, 2013.

AUDITORS:

i. M/s. Thakur, VaidyanathAiyar and Co., Chartered Accountants (Firm Registration No.000038N), Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received a letter from them to the effect that their re-appointment, if made would be within the prescribed limits under Section 139 of the Company Act, 2013 and the Audit Committee of the Company has recommended their appointment as statutory Auditors of the Company.

ii. M/s M.K. Singhal& Co., Cost Accountants has been appointed by the Board of 8lh February, 2014 and Directors of the Company on the recommendation of the Audit Committee, as Cost Auditors of the Company for the Financial Year 2013-14. The Company has received a letter from them to the effect that their appointment, if made would be within the prescribed limits under Section 139 of the Company Act, 2013. The Certificate of independence and arms length relationship with the Company and are not disqualified for such appointment within the meaning of Section141/148 of the Companies Act, 2013 has been received.

ACCOUNTS AND AUDIT REPORT:

The Notes to Accounts referred to in the Auditors'' Report are self explanatory and, therefore, do not call for any further comments. However the following has nbt been recognized as explained below:

— Rs. 2754.09 lacs against currency rate fluctuation of Foreign Currency Loan has not been recognized as the same is pending before Court and the Company is hopeful that the decision will be in favour of the Company.

— Penalty of Rs. 215.28 lacs recovered by South Eastern Coalfields Ltd. for short lifting of coal, has not been recognized as the same is pending before Court and the Company is hopeful that the decision will be in favour of the Company.

— Rs. 171.79 forfeited by CCL as additional price under tapering linkage policy has not recognized, as the 40 % increase in price of coal was illegal and the Company has made representation before the Ministry of Coal for release of forfeited amount.

Interest on unsecured loan amounting to Rs. 6863.90 lacs has not been taken recognized as the Company had applied to the unsecured lenders for the waiver of the interest.

Interest on soft loan amounting to Rs. 305.26 lacs has not been provided as the Company will apply for waiver of interest on soft loan when the Company re-start operation.

The salary and wages from lO" August, 2013 has not been provided in view of shutdown of plant and suspension of operation from 10lh August, 2013.

Further due to low production as a result of non-availability of coal from CCL against linkage resulting to shut down of the plant & suspension of the operation from 9"1 August, 2013, the various dues could not be paid on due dates. Necessary steps for the payment of such dues along with interest for the delayed period are being taken.

SUBSIDIARY COMPANY

Chandil Power Limited has become a subsidiary company of the Company pursuant to Section 4 (1) (a) of the Companies Act, 1956 and Section 2(87) of the Companies Act, 2013 and in accordance with the general circular No. 2/2011 dated 8''" February, 2011 issued by the Ministry of Corporate Affairs, Government of India the balance sheet, profit and loss account and other documents as required to be attached with balance sheet are not attached with the balance sheet of the Company. The same will be made available to any member of the Company, who may be interested in obtaining the same. The Annual accounts and related documents of the subsidiary company will also be kept open for inspection at the registered office of the Company. Further the consolidation of accounts is not required as Chandil Power has become subsidiary by virtue of control on of composition of Board of Directors of Chandil Power Limited and the Company do not hold any shares in Chandil Power Limited.

MANAGEMENT DISCUSSION ANALYSIS REPORT

In terms of Clause 49 of the Listing Agreement with the Stock Exchange, Management Discussion and Analysis Report is annexed and form part of this report.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217 (2AA) of the Companies Act, 1956 and Section 134 of the Companies Act, 2013 the Directors of your Company declare as under:

(i) That in the preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures.

(ii) That the Company has 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 Profit or Loss of the Company for that period.

(iii) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) That the annual accounts have been prepared on a going concern basis. DIVIDEND In view of the loss incurred by the Company, no dividend has been proposed for the financial year ended 31"1 March, 2014.

CORPORATE GOVERNANCE:

A separate report on Corporate Governance is attached as Annexure to the Annual Report. The Auditors'' Certificate confirming compliance of conditions of Corporate Governance is included in the said Corporate Governance Report.

LISTING IN STOCK EXCHANGE:

The equity shares of the Company continues to be listed in the Bombay Stock Exchange and listing fee for the Financial Year 2014-15 has been paid. PARTICULARS OF EMPLOYEES:

None of the employee of the Company fall under the purview of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and Section 134 of the Companies Act, 2013 and Rules made there under.

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

Information pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, (as amended) and Section 134 of the Companies Act, 2013 and rules made there under, a statement giving the required information relating to energy conservation, technology absorption, foreign exchange earnings and outgo is annexed hereto as Annexure-A and form part of this report.

ACKNOWLEDGEMENT:

Your Directors take this opportunity to place on record their sincere thanks to all stakeholders, various departments of Central Government, the Government of Bihar and Jharkhand, Financial Institutions and Banks for their valuable assistance. Your Directors equally acknowledge the trust reposed by you in the Company. The Directors also wish to place on record their appreciation for the all round support and co-operation received from the employees at all levels.

For & on behalf of the Board

Place : New Delhi Umesh K. Modi Dated : 29-05-2014 (Chairman)

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Mar 31, 2013

To the Members,

The Directors have pleasure in presenting the 31s1 Annual Report of the Company along with audited accounts for the year ended 31st March, 2013.

(Rs. in Lacs) Financial Parameters 2012-13 2011-12

Sales (Net of Excise Duty) 12,054.16 17,146.42

Other Income 146.00 85.78

Profit / (Loss) before Interest, Depreciation & Exceptional Items (1,759.86) (710.85)

Interest & Finance Charges 977.56 1,011.68

Depreciation 346.27 347.98

Profit/(Loss) for the year before

Exceptional Items (3,083.69) (2,070.51)

Exceptional ltems- income/(expenditure) 476.12 (0.08)

Provision for Tax

Profit / (Loss) for the year carried to Balance Sheet (2,607.57) (2,070.59)

OPERATIONS

During the year under review production of sponge iron was 60,873 M.T. as against 83,495 M.T. in the previous year. The Company could not achieve full production due to unprecedented tow availability of iron ore, coal and working capital shortage.

IRON ORE:

Iron ore is one of the major raw material for the production of sponge iron and due to fast growth of small sponge iron plants in Odisha and Jharkhand, there has been an acute shortage of iron ore in the market.

Further Govt, of Odisha introduced online registration under the guidance of Indian

Beureo of Mines, which almost stopped the mining activities in the State of Odisha.

Moreover Sponge Iron manufacturers were asked to submit details of yearly Iron

re procurement data, along with the production compilation of the data for verification, which took long time. Thereafter hindrance in supply of iron ore again appeared due to demand of forest clearance from mines owner by Odisha Govt. As a result 60% of the mines were closed for the want of enviromenlal clearance.

COAL:

Ministry of Coal, Government of India has allocated Macherkunda Coal Block to the

Company for captive mining of coal to meet its coal requirement. The allocation of the aforesaid coal block was subject to certain conditions together with milestones that were required to be achieved by the Company as fixed by the Ministry of Coal.

One of the condition to the allocation of said coal mine was the Coal Tapering Linkage Policy issued by the Ministry of Coal (MoC), vide Notification being No. 23011/39/2008-CPD dated 26* February 2010 by virtue of which the Company''s existing linkage of coal would be tapered on and from 5ln February 2013 (being the normative date of production from the coal mine allocated) in the forthcoming 4 years by 25 % in each year and an additional price of 40% over the notified basic

price of coal would be charged.

The Company had linkages with Central Coalfields Limited (CCL) for supply 1,21,500 MT of B/C grade coal and 1,30,500 MT of E/F grade coal per annum. CCL has stopped supplying the linkage coal to the Company from 5,h February, 2013 on the basis of said Coal Linkage policy. Since the allocated Macharkunda coal block has been de-allocated by Ministry of Coal vide their letter dated 20th November, 2012 the tapering policy do not apply to the Company. The Company has challenged the aforesaid action of the MoC, Coal India Limited and CCL by filing a writ petition before the Hon''ble Jharkhand High Court. In the last hearing held on 141h May, 2013 the Hon''ble Court granted one last opportunity and directed the Union of India to file its counter affidavit, failing which the officer concerned will have to appear before the Court to answer as to why the counter affidavit is not being filed in spite of directions. The Court has also directed CCL to file its response.

Further, the MoC has also constituted a Committee under the Chairmanship of Additional Secretary of Coal, to look into the matter, we are hopeful that the issue would be resolved soon.

Further during the period under review insufficient coal rakes were supplied by CCL due to non availability of rakes caused as a reason of priority being given to Power Sector.

IRON ORE MINE ;

The Company was allotted Ghatkuri Iron Ore Mine in April, 2007 in the State of Jharkhand with 406.40 hectares of land and consisting of reserves estimated at 35.65 million tons. However, the Geological Survey was conducted by Department of Geology, Ministry of Mines, Govt, of Jharkhand and report was released in February, 2012 wherein they have assessed the iron ore reserve to be about 11.00

Million Tons.

The Company has requested for the allocation for an additional Iron ore mine to compensate the difference in allocated quantity and for revised geological reserves.

The draft Mining Plan prepared by MECON is already submitted with Ministry of Mines on 3rd September, 2012 based on the revised reserves of 11.00 million tons.

The Company expects a total capital investment of around Rs.45.00 Crores for the development and anticipates the commencement of production of iron ore by 2015. COAL MINE

Ministry of Coal, Government of India vide its letter No. 38011 / 2 / 2007 - CA - 1 dated 5lh August 2008, has allocated Macherkunda Coal Block to the Company for captive mining of coal to meet its coal requirement. The allocation of the aforesaid coal block was subject to certain conditions together with milestones that were required to be achieved by the Company as fixed by the Ministry of Coal. However, notwithstanding all bonafide effort by the Company and due to inter departmental issues within the Government which were beyond the power and control of the Company, there was a delay in achieving the milestones. Thereafter the Central Government, without affording any opportunity of hearing to the Company, proceeded to accept the recommendations purported to have been made by the Inter Ministerial Group (IMG) and consequently vide an order dated 20,h November 2012, communicated its decision to de-allocate the Macherkunda Coal Block. Upon the de-allocation of the Macherkunda coal block, the Company had filed a Writ Petition before the Jharkhand High Court, being W.P. (C) No. 7331 of 2012 challenging the decision of the Ministry of Coal to de-allocate the coal block. The Hon''ble Jharkhand High Court, by an order dated 12lh December 2012 has been pleased to pass the following interim order:"Until further order, no coercive steps shall be taken against the Petitioners pursuant to the impugned order". 20 MW POWER PLANT:

Your Company has entered into an Agreement with Chandil Power Ltd.(CPL) for the sale of hot gases being generated by the Company during production of sponge iron, which at present is a waste and being discharged into the air. The sale price of hot gas will be based on its calorific value. The hot gases will be used by CPL for generating power in its proposed 20MW WHRSG based Power Plant. The Company will get additional revenue from the sale of hot gases and will also get benefit of carbon credit.

CPL has applied for various Govt, approvals necessary for putting up the Plant. The Company has also applied to Govt, of Jharkhand for their permission to sub- lease 22.36 acres of land to Chandil Power Ltd. required for the Power Plant as the same has to set up in the vicinity of BSIL for smooth flow of hot gases. The necessary permission is under consideration of Govt, of Jharkhand. Further, the term loan sanctioned by Indian Renewable Energy Development Agency Limited ("IREDA") to Chandil Power Ltd. on 30th September 2010 for setting up of the 20 MW Power Plant has now been sought to be closed on the basis that NOC for the sub-lease of the land has not been submitted by the Company till date. Chandil Power Limited shall apply for fresh loan to IREDA after the Company receives the permission from Government of Jharkhand to sub-lease the land. 5 MW POWER PLANT/STEEL PLANT

The Company from the existing power plant generates 5 MW Power based on dolo char being produced in the manufacturing of sponge iron. Since the Company is not able to consume the total dolo char, the Company has entered into an agreement with G.S. Phambutor Pvt. Limited (GSP) to install a 5 MW Power Plant. Whenever the existing power plant goes under regular maintenance, the Company has to generate power from DG Set, which is highly uneconomical. During such time the Company will take the power from GSP and for the rest of the period GSP will consume the power in induction furnace to produce pencil ingot. It is expected that the 5 MW power plant and induction furnace will be commissioned by June, 2013. FIXED DEPOSITS:

The Company has neither invited nor accepted any deposits from the public within the meaning of Section 58A of the Companies Act, 1956, during the year under review.

BOARD OF DIRECTORS:

Since the last Annual General Meeting, the following changes have taken place in the Board of Directors:

Mr. B. K. Thakur was appointed as additional Director and then Whole-tme Director of the Company designated as Director- Finance, w.e.f. 20,h December, 2013. Mr. B.K. Luthra resigned as Director of the Company with effect from 23,d August, 2012.

Mr. K.K. Jain has resigned as director of the Company w.e.f. 28th May, 2013. Bihar State Industrial Development Corporation (BSIDC) had withdrawn the nomination of Mr. Dipak Kumar Singh and has nominated Mr. Sudhir Kumar vide their letter dated No. 133/G dated 15th April, 2013.

In accordance with the provisions of section 257 of the Companies Act, 1956 and Article 128 of the Articles of Association of the Company, Mrs. Kum Kum Modi, Mr. B. D. Garg and Mr, G C. Jain retires by rotation and are eligible for re-appointment. None of the directors of the Company are disqualified under Section 274 (1) (g) of the Companies Act, 1956. Your directors have made necessary disclosures as required under various provisions of the Companies Act, 1956. AUDITORS:

i. M/s. Thakur, Vaidyanath Aiyar and Co., Chartered Accountants (Firm Registration NO.000038N), Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received a letter from them to the effect that their re-appointment, if made would be within the prescribed limits under Section 224 (1B) of the Company Act, 1956.

ii. M/s M.K. Singhal & Co., Cost Accountants has been appointed by the Board of Directors of the Company on the recommendation of the Audit Committee, as Cost Auditors of the Company for the Financial Year 2012-13. The Company has received a letter from them to the effect that their appointment, if made would be within the prescribed limits under Section 224 (1B) of the Company Act, 1956. The Certificate of independence and arms length relationship with the Company and are not disqualified for such appointment within the meaning of Section 226/233-B (5) of the Companies Act, 1956 has been received. ACCOUNTS AND AUDIT REPORT:

The Notes to Accounts referred to in the Auditors'' Report are self explanatory and, therefore, do not call for any further comments. However, in respect of delays/ non-payment of part of statutory dues the Board of Directors wish to explain as under:

Due to low production as a result of non-availability of coal from CCL, the said dues could not be paid on due dates. Necessary steps for the payment of such dues along with interest for the delayed period are being taken. SUBSIDIARY COMPANY

Chandil Power Limited has become a subsidiary company of the Company pursuant to Section 4 (1) (a) of the Companies Act, 1956. In accordance with the general circular No. 2/2011 dated 8m February, 2011 issued by the Ministry of Corporate Affairs, Government of India the balance sheet, profit and loss account and other documents as required to be attached with balance sheet are not attached with the balance sheet of the Company. The same will be made available to any member of the Company, who may be interested in obtaining the same. The Annual accounts and related documents of the subsidiary company will also be kept open for inspection at the registered office of the Company. Further the consolidation of accounts is not required as Chandil Power has become subsidiary by virtue of control on of composition of Board of Directors of Chandil Power Limited and the Company do not hold any shares in Chandil Power Limited. MANAGEMENT DISCUSSION ANALYSIS REPORT

In terms of Clause 49 of the Listing Agreement with the Stock Exchange, Management Discussion and Analysis Report is annexed and form part of this report. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors of your Company declare as under:

(i) That in the preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures. (ii) That the Company has 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 Profit or Loss of the Company for that period. (iii) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. (iv) That the annual accounts have been prepared on a going concern basis. CORPORATE GOVERNANCE:

A separate report on Corporate Governance is attached as Annexure to the Annual Report. The Auditors'' Certificate confirming compliance of conditions of Corporate Governance is included in the said Corporate Governance Report. PARTICULARS OF EMPLOYEES:

None of the employee of the Company fall under the purview of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

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

Information pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, (as amended) a statement giving the required information relating to energy conservation, technology absorption, foreign exchange earnings and outgo is annexed hereto as Annexure-A and form part of this report. ACKNOWLEDGEMENT:

Your Directors take this opportunity to place on record their sincere thanks to all stakeholders, various departments of Central Government, the Government of Bihar and Jharkhand, Financial Institutions and Banks for their valuable assistance. Your Directors equally acknowledge the trust reposed by you in the Company. The Directors also wish to place on record their appreciation for the all round support and co-operation received from the employees at all levels. i

For & on behalf of thaVBoard Place New Delhi Urnqsh

Dated: 28-05-2013 (Chairman & Managing''Director)

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Mar 31, 2010

The Directors have pleasure in presenting the 28lh Annual Report of the Company along with audited accounts for the year ended 31st March, 2010. FINANCIAL RESULTS : Rs. In lacs

2009-10 2008-09

Sales (Net of Excise Duty) 1,79,94.89 2,14,03.28

Other Income 1,95.99 1,20.34

Profit / (Loss) before Interest,

Depreciation & IncomeTax 3,95.37 1,88.85

Interest & Finance Charges 5,93.61 6,63.65

Depreciation 5,75.65 6,51.06

Profit/(Loss) for the year before

Extra Oridinary Items &

Provision for Tax (7,73.89) (11,25.87)

Provision for Tax

- Fringe Benefit Tax (Net) 1.02 18.17

- Wealth Tax 0.33 0.64

Profit / (Loss) for the year

carried to Balance Sheet (7,75.24) (11,44.68)

OPERATIONS :

During the year under review, production was 1,41,265 MT of sponge iron as against 1,36,372 MT of sponge iron in the previous year. The Company could not achieve higher production due to political instability in the state of Jharkhand, frequent bandh" called by MCC/ Naxals, unprecedented low availability of iron ore and insufficient supply of coal racks by Central Coal Field Limited.

The Company has been allotted iron ore mine of 406.40 hectors, at Ghatkuri Forest Reserve, Dist. Singhbhum, Jnarkhand. The drilling job in the said mine started on 27* February, 2009. The same has been completed and report is under preparation and expected to be completed by 3rd week of August, 2010. The Mining Plan/EMP/EMI and Forest Clearance Plan will be prepared and will be submitted to the respective ministries.

The Company has also been allotted for captive use a coal block in the Macherkunda Coal Block, in the state of Jharkhand. The Company has obtained the Geological Report from Central Mine Planning & Design Institute Limited (CMPDIL), a unit of Govt, of India, for developing of Mine Plan and Environmental Plan. The Company has applied to Govt, of Jharkhand for mining lease of the aforesaid coal block. The application is still pending before the District Mining Officer, Latehar. The Company has awarded the contract for developing Mining Plan, EMP/EMI and Project Report to CMPDIL and expect the reports by January/February 2011.

Once the said iron ore & coal mines become operational, the Company will be in a position to meet internally its total requirement of iron ore and coal. This will result in substantial savings in cost of raw-materials, optimizing overheads with capacity operation and will contribute to the profitability of the Company.

Your Company has entered into an agreement with Chandil Power Limited, for the sale of hot gases generated by it during production of sponge iron, which at present is a waste and is being discharged into air. The sale price of hot gases will be based on its calorific value. The hot gases will be used by Chandil Power Limited for generating power, in its proposed 20 MW WHRSG Based Power Plant.

Chandil Power Ltd. has entered into an agreement with Tata Power Limited for the sale

of power. It has applied for various Government approvals necessary for putting up the

plant Arrangement of funds is at final stage of approval.

At present the Company is passing through a difficult phase but the future of the

Company is encouraging, once the iron ore mine, coal mine and power plant

becomes operational. Not only your Company will turn profitable, it will take future

expansion of capacity to 1 million tones.

FIXED DEPOSITS:

The Company has neither invited nor accepted deposits from the public within the

meaning of Section 58A of the Companies Act, 1956, during the year under review.

BOARD OF DIRECTORS:

Since the last Annual General Meeting, the following changes have taken place in the Board of Directors:

Mr. Jayesh Modi was appointed as an Additional Director of the Company with effect from 18th June, 2010.

Mr. B.K. Luthra was appointed as an Additional Director of the Company w.e.f. 18th June, 2010.He was also appointed as the Whole Time Director, designated as Executive Director (Works) of the Company with effect from that date for a period of one year, subject to your approval.

Notices in writing alongwith requisite deposits under Section 257 of the Compainies Act 1956, have been received from the members of the Company proposing Mr. Jayesh Modi and Mr. B. K. Luthra as candidates for the office of Directors.

Mr. Vijay Kumar Modi alternate Director to Dr. W. Janke ceased to hold office on 26* February, 2010, on arrival of Dr. W. Janke to attend the meeting of Board of Directors. Mr. Vijay Kumar Modi has again been appointed as an Alternate Director to Dr. W. Janke with effect from 18th June, 2010. LIC has withdrawn nomination of Mr. Meghander Kumar from 27th January, 2010. The Board places on record its deep sense of appreciation for the wise counsel, valuable guidance and Co-operation extended by Mr. Maghendar Kumar during his tenure of the Directorship. In accordance with the provisions of Section 256 of the Companies Act, 1956 and Article 128 of the Articles of Association of the Company, Mr. K. K. Jain and Dr. W. Janke retire by rotation and are eligible for re-appointment.

AUDITORS:

M/s. Thakur, Vaidyanath Aiyar and Co., Chartered Accountants (Firm Registration No.000038N), Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received a letter from them to the effect that their re-appointment, if made would be within the prescribed limits under Section 224 (1B) of the Company Act, 1956.

ACCOUNTS AND AUDIT REPORT:

The Notes to Accounts referred to in the Auditors Report are self explanatory and, therefore, do not call for any further comments. However, in respect of delays in payment of Statutory Dues and Secured Loans (principle installments and interest) the Board of Directors wish to explain as under- Due to increase in raw material prices and non availability of working capital facility from Banks, the said dues could not be paid on due dates. However, all the said dues have been paid to respective accounts of Government & Secured Creditors along with the interest for the delayed period at the contractual rates.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors of your Company declare as under:

(i) That in the preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures.

(ii) That the Company has 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 financial year and of the Profit or Loss of the Company for that period.

(iii) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) That the annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE:

A separate report on Corporate Governance is attached as Annexure to the Annual Report. The Auditors Certificate confirming compliance of conditions of Corporate Governance is included in the said Corporate Governance Report. PARTICULARS OF EMPLOYEES

The particulars of employees required under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are annexed to this report as Annexure - A and form part of this report.

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

Information pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, (as amended) a statement giving the required information relating to energy conservation, technology absorption, foreign exchange earnings and outgo is annexed hereto as Annexure-B and form part of this report.

ACKNOWLEDGEMENT:

Your Directors take this opportunity to place on record their sincere thanks to all stakeholders, various departments of Central Government, the Government of Bihar and Jharkhand, Financial Institutions and Banks for their valuable assistance. Your Directors equally acknowledge the trust reposed by you in the Company. The Directors also wish to place on record their appreciation for the all round support and co-operation received from the employees at all levels.

For & on behalf of the Board

Place: New Delhi Umesh Kumar Modi

Date : 13th August, 2010 (Chairman & Managing Director)