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Directors Report of Electrosteel Steels Ltd.

Mar 31, 2015

Dear Members,

The Directors take pleasure in presenting the Eighth Annual Report along with Audited Financial Statements for the year ended 31stMarch, 2015.

FINANCIAL SUMMARY/HIGHLIGHTS

Amount (Rs in Lakhs)

Particulars FY 2014-15 FY 2013-14

i. Gross Turnover 203287.58 57,616.92

ii. Net Turnover 183124.07 513,22.19

iii. Other Income 1560.49 692.57

iv. Total Revenue 184684.56 52,014.76

v. Earnings Before Interest, Depreciation, Taxation and Amortization (EBIDTA) 2855.09 (4,616.29)

vi. Interest 45173.13 17,731.41

vii. Depreciation 20085.09 6,764.31

viii. Profit before Taxation (PBT) (62403.13) (29,112.00)

ix. Tax including Deferred Tax 1.10 1.17

x. Profit after Taxation (PAT) (62404.23) (29,113.17)

xi. Profit brought forward from previous year - -

xii. Amount available for appropriation (62404.23) (29,113.17)

xiii. Transfer to general reserve - -

xiv. Surplus/ (Deficit) carried to Balance Sheet (62404.23) (29,113.17)

OPERATIONS

The Company's Greenfield Integrated Steel & Ductile Iron Pipe Plant with 2.51 Million Ton Per Annum (MTPA) capacity as detailed hereunder is under construction and erection:

Finished Products MTPA

Wire rods 0.60

TMT Bars 0.85

Ductile Iron Pipe 0.33

Billets 0.33

Pig Iron 0.40

Total 2.51

In addition to the already operational Blast Furnace of smaller 350 M3 capacity, Your Company has operationalised bigger Blast Furnace of 1050 M3 capacity resulting in increase in production and turnover. In addition to above, the already operational ancillary units viz Vertical Coke Oven, Rebar Mill and one unit each of Sinter & Steel Melt Shop were further buoyed by the successful trial run of Lime and Dolomite Plant, Oxygen Plant, Power Plant and balance unit of Sinter Plant. Hence, the development of ancillary modules is resulting into augmentation of integrated capabilities of the Plant and further reducing dependency for supply from outside. A part of the Plant facility has commenced production and the work for completion of the balance Project modules to make the Plant completely commissioned to its annual capacity are in progress.

Presently Your Company is selling TMT Bar, Billets, Ductile Iron Pipes and Pig Iron in the open market. With the commencement of production of the flagship product - Ductile Iron Pipe, Your Company expects better margins translating into improved performance with the increase in turnover. Your Company has also started exporting billets to various neighbouring countries like Nepal, Bangladesh, Bhutan and Sri Lanka. However, sluggishness in the global steel industry remains a matter of concern.

It is pertinent to note that the execution of balance project modules has been funded by the Corporate Debt Restructuring (CDR) Package sanctioned to the Company in September 2013. However, the sanction of CDR Package, post the referral to CDR forum, and consequent release of additional term loan under CDR Package happened with delay which resulted in further delay of operationalization of the balance project modules.

Further, the CDR Package had also approved the assessed Need Based Working Capital facility of Rs 1300 Crores. However, the financial closure of said facility took inordinate delay and ultimately the documents for the same were executed in November 2014. The release of the sanctioned working capital facility by majority of the lenders was done gradually and only subsequent to the execution of the documents in November 2014. The delay in release of working capital facilities had impacted the cash flow generation of the Company. Further, the Company is still to get the entire sanctioned need based working capital facility.

The shareholders of the Company pursuant to the requirement of the Companies Act 2013 had approved procurement of coal/coking coal from Electrosteel Castings Limited (ECL) on the terms and conditions as stated in the notice for the Annual General Meeting held on 16th September 2014. However, Supreme Court vide its order dated 24th September 2014 had de-allocated Parbatpur Coal Block allotted to ECL. Hence the agreement with ECL for procurement of coking coal stood cancelled w.e.f. 1st April 2015 due to Force Majure.

Your Company is optimistic that with the release of entire working capital facilities, it will be able to step up production levels, which will add to enhanced top line and cash flow generation.

Under the CDR Package, further funds in the form of equity/preference shares/unsecured loan etc. needs to be infused, for which Company is seeking potential investment sources.

Thus, with the operationalization of other Project modules together with the increase in release of working capital facilities and the infusion of funds, it is expected that the overall financial health of the Company would improve considerably.

EQUITY SHARE CAPITAL

In terms of CDR Package, Electrosteel Castings Limited (ECL), the Promoter Company, was required to make contribution by way of equity and/or unsecured (subordinate) loans for Rs 222.50 crores. The Board of Directors ("Board") in its meeting held on 13 th August 2014 after the approval of the shareholders on 19th March 2014 through Postal Ballot process had allotted 22.25crores equity shares of Rs 10 each fully paid up to ECL. The equity shares were later admitted for listing and trading on both the stock exchanges i.e. National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE). The equity share capital of the Company was enhanced from Rs 2,18,673.50 lakhs to Rs 2,40,923.50 lakhs.

DIVIDEND

In view of the loss, Your Directors regret their inability to declare any dividend for the year.

TRANSFER TO RESERVES

In view of losses incurred by the Company during the year, no amount has been transferred to the General Reserve. EROSION OF NETWORTH

With accumulated losses of Rs. 1,356.33 crores at the end of the financial year, resulting in erosion of over 50% of peak net worth during the immediately preceding four financial years, we regret to inform that Your Company has become a "Potential Sick Company" within the meaning of Section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA).

The Board in its meeting held on 11th May 2015 has reviewed the causes for such erosion and the reasons amongst others which adversely affected the performance of the Company were:

(a) Delay in execution of Project mainly due to change in visa policy for Chinese work force deployed, problems in aggregation of land, necessity to hire local workmen, adverse operating and financial leverage and delay in sanction and disbursement of required Project Loan which resulted in huge overrun and caused non achievement of performance and profitability and thereby losses.

(b) Delay in sanction & disbursement of "need based working capital facilities "which resulted in lower capacity utilization and lower cash flow generation.

The Board after considering the various steps implemented and/or to be undertaken for improvement of performance of the Company is confident/optimistic that the Company would be able to implement effective measures in normal course of business to revive the operations of the Company. Accordingly, the financial statements for the Financial Year 2014-15 has been prepared on a going concern basis.

The Board in its meeting held on 11th May 2015 also approved Report of even date to such erosion and causes for such erosion, for consideration of the shareholders in the Extra Ordinary General Meeting to be convened on Friday, 11th September, 2015. The said Report is enclosed as an Annexure to the Notice of the Extra Ordinary General Meeting. In terms of the requirement of SICA, the Company shall also report to Board for Industrial and Financial Reconstruction (BIFR) the fact of erosion after consideration of the Report by the shareholders in the ensuing Extra-Ordinary General Meeting.

MANAGEMENT DISCUSSIONS AND ANALYSIS

A report on Management Discussion and Analysis is enclosed as "Annexure A" and forms an integral part of this Report.

NATURE OF BUSINESS

There has been no change in the nature of the business of the Company during the year. No material changes and commitments occurred between 31st March 2015 and 11th May 2015 i.e. the date of the Directors Report, affecting the financial position of the Company.

NUMBER OF BOARD MEETINGS

During the year 6 (Six) Board Meetings were convened and held, details of which are provided in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 ("Act").

FIXED DEPOSITS

The Company has not accepted any fixed deposit during the period under review.

SUBSIDIARY / ASSOCIATE /JOINT VENTURES COMPANIES

The Company does not has a subsidiary/associate /Joint venture company for the year ended 31st March 2015. INTERNAL FINANCIAL CONTROLS

The Company has in place ERP Package "SAP" which is operated on a pre-defined manual. The Company also has adopted Standard Operating Practices (SOPs) for its various areas of operations, which are in line with SAP manual. SOPs are adopted or revised, if required, to ensure that internal control system is effective and constantly assessed and strengthen. The Company has appointed Internal Auditors who monitor and evaluate the efficacy and adequacy of the internal control systems in the Company, its compliance with operating systems and accounting procedures and policies adopted by it, besides benchmarking controls with best practices in the Industry. Based on the reports of the internal auditor, process owners undertake corrective action(s) in their respective area(s) and thereby strengthening the controls. Significant audit observation(s) and corrective action(s) thereon are presented to the Audit Committee and the Board.

SIGNIFICANT AND MATERIAL ORDERS

During the year no significant and material order was passed by any regulator or court or tribunal impacting the going concern status and Company's operations in future.

ANNUAL EVALUATION OF THE BOARD

The Board on recommendation of the Nomination and Remuneration Committee, had adopted Schedule IV to the Act, as criteria for evaluating the performance of the Independent Directors and on the basis of the performance evaluation report has determined to continue their term of appointments as Independent Directors of the Company.

All the Independent Directors of the Company in its separate meeting held on 13th February 2015, without the attendance of Non-Independent Directors and members of management, on the basis of defined and agreed parameters, inter-alia, without the attendance of non-executive Directors and members of management had (i) reviewed the performance of the Non Independent Directors, the Board and Committees thereof and (ii) assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to be effective and reasonably perform their duties.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The shareholders of the Company in its previous Annual General Meeting held on 16th September 2014 had approved appointment of Mr Rajkumar Khanna as an Independent Director of the Company for a period of five years w.e.f 5th May 2014. In terms of requirement of the Act, Mr Naresh Pachisia and Mr Jinendra Kumar Jain, were also appointed in the aforesaid Annual General Meeting as Independent Directors of the Company for a period of 5 years w.e.f 1st April 2014. The Company has received from Mr Rajkumar Khanna, Mr Naresh Pachisia and Mr Jinendra Kumar Jain (i) intimation in Form DIR-8 pursuant to Section 152(2) of the Act read with Rule 14 of the Companies (Appointment & Qualifications of Directors) Rules, 2014 to the effect that they are not disqualified in accordance with Section 164(2) of the Act (ii) statement on declaration that they meet the criteria of Independence as provided in Section 149(6) of the Act and (iii) declaration that they have abide by the provisions specified in Schedule IV to the Act.

The Board in its meeting held on 21st March 2015, on the recommendation of the Nomination &Remuneration Committee and subject to approval of the shareholders in the ensuing Annual General Meeting, appointed Ms Rishu Kumari as an Additional Independent Non Executive Director not liable to retire by rotation. The Board is of opinion that her appointment is appropriate and in the best interest of the Company. The Company has received from Ms Rishu Kumari (i) consent in writing to act as Director in Form DIR-2 pursuant to Rule 8 of the Companies (Appointment & Qualifications of Directors) Rules, 2014 (ii) intimation in Form DIR-8 pursuant to Rule 14 of the Companies (Appointment & Qualifications of Directors) Rules, 2014 to the effect that she is not disqualified in accordance with Section 164(2) of the Act and (ii) statement on declaration that she meet the criteria of Independence as provided in Section 149(6) of the Act. Based on the declarations received, the Board is of opinion that Ms Rishu Kumari is a person of integrity and possesses relevant expertise and experience and is eligible and fulfills the conditions specified in the Act and Listing Agreement for such appointment and is independent of the management of the Company. The Board recommends her appointment as Independent Director of the Company.

The Company issued letter of appointment to all Independent Directors as per Scheduled IV to the Act and the terms and conditions for appointment are disclosed on the website of the Company www.electrosteelsteels.com.

The Board in its meeting held on 5th May 2014 had appointed Mr Ashutosh Agarwal as Chief Financial Officer of the Company. During the period under review, Mr Anubhav Maheshwari was appointed as Company Secretary and Compliance officer of the Company w.e.f. 5th September 2014 in place of Mr Vikash Kumar Agarwal who tendered his resignation as Company Secretary and Compliance officer of the Company w.e.f. 27th August 2014.

All the Directors have made necessary disclosures as required under various provisions of the Act and Clause 49 of the Listing Agreement.

Mr A P Verma and Mr Sunil V Diwakar, Directors shall retire at the Annual General Meeting and being eligible offers themselves for re-appointment.

The brief Resume/Profile of the Directors recommended by the Board for appointment /re-appointment is attached with Notice for the ensuing Annual General Meeting.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors hereby confirm that:

a) in the preparation of annual accounts, containing financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanations, wherever required.

b) thy have 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 2014-15 and of the loss of the Company for that period.

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safe guarding the assets of the company and for preventing and detecting any fraud and other irregularities.

d) they have prepared annual accounts on a going concern basis.

e) they have 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.

*Please refer to the Section 'Internal Financial Controls' of the Report and 'Internal Controls' in the enclosed Management Discussion & Analysis Report.

PARTICULARS OF THE EMPLOYEES

The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employees of the Company is given a separate annexure to this Report. The Reports and Accounts are being sent to members and other entitled thereto, excluding the information on employee's particulars which is available for inspection by the members at the Registered Office of the Company during business hours on any working day. If any member is interested in obtaining a copy thereof, such member may write to Company Secretary in this regard.

AUDIT COMMITTEE

The composition, terms of the reference and number of meetings of the Audit Committee during the year is covered in the enclosed Corporate Governance Report.

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

The information related to conservation of energy, technology absorption, foreign exchange earnings and outgo stipulated under Section 134 (3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules 2014 is enclosed as "Annexure B" and forms integral part of this Report.

CORPORATE GOVERNANCE

Your Company has fully complied with the requirements of Clause 49 of the Listing Agreement regarding Corporate Governance. A Report on Corporate Governance and the Auditors Certificate on compliance of conditions as stipulated therein is enclosed as "Annexure C" and forms integral part of this Report.

STATUTORY AUDITORS & AUDITORS REPORT

The Shareholders of the Company in the 7th Annual General Meeting (AGM) held on 16th September 2014 had approved appointment of M/s. B Chhawchharia & Co., Chartered Accountants as Statutory Auditors of the Company until the conclusion of the 10th AGM of the Company and authorized the Board to fix their remuneration. In terms of the requirement of the Act, their appointment is required to be ratified by the members at the ensuing AGM. Accordingly, the Notice convening the ensuing 8th AGM includes the resolution seeking such ratification by the members for the said re-appointment of the Auditors.

Pursuant to Sections 139, 141 and 142 of the Act, and relevant rules prescribed there under, the Company has received certificate from the Statutory Auditors to the effect, inter alia, that they are not disqualified for ratification of appointment under the provisions of applicable laws, the appointment is as per the terms and the limits prescribed under the Act, and no proceedings against them or any of their partners are pending with respect to matter of professional conduct.

The Auditors have also confirmed that they have subjected themselves to Peer Review, a process of Institute of Chartered Accountants of India (ICAI) for evaluating the quality of audit and attestation services and that they hold a valid certificate issued by the Peer Review Board of the ICAI.

The Auditors' Report addressed to the Members of the Company, does not contain any qualification or reservation or adverse remark or disclaimer.

COST AUDITORS & COST AUDIT REPORT

In terms of requirement of Section 148 of the Act, read with Companies (Audit and Auditors) Rules, 2014, the Board in its meeting held on 11th May 2015 on the recommendation of the Audit Committee, had approved re-appointment of M/s S. G. & Associates, Cost Accountants, Kolkata (Registration No 000138) as Cost Auditors for audit of the Cost records to be maintained by the Company for the Steel Products and Mineral Fuels (Other than Petroleum) to be produced by the Company during the Financial Year 2015-16 on a remuneration of Rs 60,000 (Sixty Thousand) plus out of pocket expenses. The appointment as Cost Auditors is till the expiry of 180 days from the closure of the financial year ending 31st March 2016 or till the submission of the Cost Audit Report for the financial year 2015-16 in the prescribed format to the Board, which ever is earlier.

As required under the Act, the remuneration payable to the Cost Auditors is required to be placed before the Members for ratification. Accordingly, a resolution seeking Members ratification for the remuneration payable to M/s S. G. & Associates, Cost Accountants is included at Item No. 6 of the Notice convening the AGM. The Company has received consent letter from M/s S. G. & Associates, Cost Accountants, for their appointment.

The Cost Auditors are expected to submit their Cost Audit Report to the Board of Directors in the prescribed form for the financial year 2014-15 within the due date of 27th September 2015.

The Cost Audit Report for the Financial year 2013-14 do not contain any qualification or reservation or adverse remark and was filed with Ministry of Corporate Affairs on 24th September 2014.

SECRETARIAL AUDITOR & SECRETARIAL AUDIT REPORT

The Board in its meeting held on 11th May 2015 on the recommendations of the Audit Committee had approved appointment of M/s K Arun & Co., Practicing Company Secretaries, as Secretarial Auditor of the Company for audit of the secretarial and related records of the Company for the financial year ending 31st March 2016. The Company has received consent letter from M/s K Arun & Co., Practicing Company Secretaries, for their appointment.

The Secretarial Audit Report of M/s K Arun & Co., Practicing Company Secretaries for the financial year ended 31st March 2015 do not contain any qualification or reservation or adverse remark or disclaimer and is enclosed as "Annexure D" and forms integral part of this Report.

EXTRACTS OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9 as required under section 92 of the Act is enclosed as "Annexure E" and forms integral part of this Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES

During the period under review, the related party transactions with Electrosteel Castings Limited, Promoter Company, is within the limits and terms and conditions approved by the shareholders of the Company in its meeting held on 16th September 2014. The policy on Related Party Transactions as approved by the Board of Directors is available on the Company's website http://www.electrosteelsteels.com/investor-relations/ pdf/rpt.pdf

The particulars of the material contract or arrangements with related party are enclosed as "Annexure F" and forms integral part of this Report.

The related party transactions are entered into based on considerations of various business exigencies such as synergy in operations, profitability, legal requirements, liquidity, resources availability etc of related parties. All related party transactions are intended to further the Company's interests.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year, the Company has not provided any loan, guarantee or made investment under provisions of Section 186 of the Act.

RISK MANAGEMENT POLICY

The Board in its meeting held on 13th November 2014 had amended the Risk Management Policy of the Company. The details of the identification of the various risk associated with the business of the Company is detailed in the enclosed Management Discussion & Analysis Report.

CORPORATE SOCIAL RESPONSIBILITY POLICY

The Board in its meeting held on 13th August 2014 on the recommendation of the Corporate Social Responsibility (CSR) Committee had approved the Corporate Social Responsibility Policy. The CSR policy is available on the website of the Company www.electrosteelsteels.com. The composition and the terms of reference of the Committee are detailed in the enclosed Corporate Governance Report.

During the year, the CSR initiatives undertaken by the Company, although not mandatory under Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules 2014, are detailed in the enclosed Management Discussion & Analysis Report.

REMUNERATION POLICY

The Board on the recommendation of the Nomination & Remuneration Committee in its meeting held on 13th November 2014 modified/amended its remuneration policy for Directors, Key Managerial Personnel and Senior Management Personnel to align with the requirement of the Act and Listing Agreement. The particulars of the remuneration policy are stated in the enclosed Corporate Governance Report.

DISCLOSURE UNDER "THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place "Internal Complaints Committee" and redressal policy in case of sexual harassment of women at workplace as envisaged under aforesaid Act. During the year, the Company has not received any complaint with respect to sexual harassment of woman at work place.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Board in its meeting held on 5th May 2014 had approved Vigil Mechanism/Whistle Blower Policy. The details of the Policy as well as establishment of vigil mechanism are provided in the Corporate Governance Report enclosed and are also available on the website of the Company i.e. www.electrosteelsteels.com.

APPRECIATION

Your Directors take this opportunity to place on record their gratitude and thank the Financial Institutions, Bankers, Government Authorities, Customers, Vendors, Shareholders and Employees for their valuable guidance, support continued assistance and cooperation to the Company. The Directors also commend the continuing commitment and dedication of the employees at all levels. The Directors also look forward to their continued support in future.

For and on behalf of the Board of Directors

Place : Kolkata R S Singh Lalit Kumar Singhi Dated : 11th May, 2015 Whole-time Director Director


Mar 31, 2014

Dear Shareholders,

The Directors take pleasure in presenting their Seventh Annual Report and the Audited Accounts of your Company for the year ended March 31, 2014.

FINANCIAL RESULTS Amount (Rs/Lakhs)

Particulars FY 2013-14 FY 2012-13

i. Gross Turnover 57,616.92 18,329.76

ii. Net Turnover 513,22.19 16,311.01

iii. Other Income 692.57 93.39

iv. Total Revenue 52,014.76 16,404.40

v. Earnings Before Interest, Depreciation, Taxation and Amortization (EBIDTA) (4,616.28) (8,422.33)

vi. Interest 17,731.41 13,441.11

vii. Depreciation 6,764.31 6136.39

viii. Profit before Taxation (PBT) (29,112.00) (27,999.83)

ix. Tax including Deferred Tax 1.17 1.42

x. Profit after Taxation (PAT) (29,113.17) (28,001.25)

xi. Profit brought forward from previous year — —

xii. Amount available for appropriation (29,113.17) (28,001.25)

xiii. Transfer to general reserve — —

xiv. Surplus/ (Deficit) carried to Balance Sheet (29,113.17) (28,001.25)

PROPOSED ISSUE OF EQUITY SHARE CAPITAL UNDER PREFERENTIAL ALLOTMENT

During the year the Board of Directors of the Company at its Meeting held on February 6, 2014 and further as approved by the shareholders by a resolution passed by Postal Ballot and as announced on 19th March, 2014, it has been decided to issue equity shares of Rs 10 each ("Equity Shares") on preferential basis to the promoter of the Company, namely, Electrosteel Castings Limited, aggregating to Rs-222.50 Crores.

The above issue is as per Corporate Debt Restructuring Package as approved by Corporate Debt Restructuring Empowered Group (CDR EG) on 26-09-13 and the Letter of Approval (LOA) was issued by CDR EG on 28-09-13. The Company has made petition before the Company Law Board for issuance of Shares at a discounted value of Rs-5 per share or such other value as may be sanctioned by the Company Law Board. The petition is pending before the Company Law Board.

DIVIDEND

You will appreciate that since the project is under implementation, there is not much earnings as of now, and hence your Directors are not recommending any dividend on the Equity Shares of the Company for the year ended 31st March 2014.

OPERATIONS

As you are aware, that your Company is setting up a 2.51 MTPA integrated Steel & Ductile Iron (DI) Pipe project, at Siyaljori village, in Bokaro District, in the state of Jharkhand, which is about 22 kms from Bokaro city, a well- developed industrial town of Jharkhand, the plant will produce;

Finished Products MTPA

Wire rods 0.60

Reinforcement bars in straight lengths 0.85

Ductile Iron Pipe 0.33

Commercial Billets 0.33

Pig Iron 0.40

Total 2.51

Your Company has operationalised Blast Furnace (BF #II) of 1050 M capacity in addition to Blast Furnace (BF #III) of 350 M3 capacity. Operations of Coke Oven and Sinter Plant are continuing. In addition to Pig Iron, production of Billets and Re-bars are persistent from Steel Melt Shop (SMS) and Rebar Mill. One unit of Captive Power Plant (CPP) of 60 MW based on Waste Heat Recovery Boiler has been commissioned during the year. This would result in the reduction of overall power cost of the plant. Pulverized Coal Injection System has also been commissioned during the reporting period. Lime Calcination Plant has also started operations thereby reducing the dependence on supply from outside. With the operationalization of BF #II, daily production of steel has increased.

Presently your Company is selling TMT Bar, Billets and Pig Iron in the open market. Your Company is also tapering international market and exploring possibilities of export of its products. Your Company has already exported few consignments of Billets and has few export orders in hand.

Construction activities of the balance facilities are in full swing.

Capex Loan of Rs.824 Crs, as reported in the last year''s director''s report, could not be availed because sanction from one of the banks expired and took inordinate time in renewal.

Ultimately in the Joint Lenders Meeting held in May''13, it was decided by all the lenders that the Company should go for Corporate Debt Restructuring (CDR). Accordingly, flash report was filed by State Bank of India. Your Company''s CDR Package was approved by CDR EG on 26-09-13 and the Letter of Approval (LOA) was issued by CDR EG on 28- 09-13 with additional Term Loan of Rs.1307.10 Crs to complete the Project (Rs.1107.10 Crs for the Capex and Rs.200 Crs for shoring up of working capital). Rs.1107.10 Crs is assessed considering the undisbursed portion of Capex Loan of Rs.824 Crs required earlier. In addition to the additional loan, CDR EG has allowed some other benefits like:

- Reduction in rate of interest

- Longer Repayment Period

- Conversion of interest on Term Loan into Funded Interest Term Loan

CDR Package was implemented well within the stipulated time frame.

Assessment of Need Based Working Capital of Rs.1300 Crores for FY 2014-15 was also approved under the CDR Package.

The Company has started receiving disbursements of approved additional term loan from Banks for completion of balance facilities.

The Company has during the year capitalised part of the plant facility comprising of Vertical Coke Oven including CPCS, Sinter Plant (Unit-I), Steel Melting Shop and Rebar Mill. Accordingly the Pre-Operative Expenses incurred upto the date of capitalisation have been allocated to the cost of the various facilities on a proportionate basis.

LISTING

The equity shares of your Company continue to be listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE). Both these stock exchanges have nation-wide terminals and therefore, shareholders/ investors are not facing any difficulty in trading in the shares of the Company from any part of the Country. The Company had paid annual listing fees for the financial year 2014-15 to BSE & NSE and will also pay the annual custodian fees to National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

CORPORATE GOVERNANCE

Your Company has fully complied with the requirements of Clause 49 of the Listing Agreement regarding Corporate Governance. A Report on Corporate Governance Practices and the Auditors Certificate on compliance of mandatory requirements thereof is given as annexure to this report.

BUSINESS RESPONSIBILITY REPORT and CSR

Ministry of Corporate Affairs (MCA), Government of India has, in July 2011, issued National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (Guidelines). The Guidelines list out nine principles and core elements on ethics, transparency and accountability, sustainability, employee well-being, responsiveness towards stakeholders, promotion of human rights, environment protection, influencing public policy, inclusive growth and equitable development, value to customers and consumers. The Companies in India are advised to follow these Guidelines for reporting their initiatives and activities relating to corporate social responsibilities (CSR).

The Company''s vision, mission and core values enshrine these principles which are integral to the business of the Company. The Company engages in elaborate CSR initiatives, conducts business with transparency and accountability, looks after well-being and protection of the employees with a human face, is responsive to the needs of all its stakeholders and takes care of quality of the products manufactured by it, gives priority to preservation and protection of environment and prevention of pollution and believes that business is also a medium to contribute to the social development. Initiatives undertaken during the year under report in respect of corporate social responsibility, environment protection, industrial relations and human resource management etc. are mentioned in detail in the Management Discussion and Analysis Report which forms a part of this report as Annexure.

With the Commencement of Section 135 of the Companies Act, 2013 the provisions of Corporate Social Responsibility are applicable to the Company. The details of same will be covered in next year''s Director''s report.

MANAGEMENT DISCUSSIONS AND ANALYSIS

A report on Management discussion and analysis is given as annexure to this report.

FIXED DEPOSITS

The Company has not accepted any fixed deposit during the period under review.

DIRECTORS'' RESPONSIBILITY STATEMENT

Your Directors hereby confirm that:

a) in the preparation of annual accounts, containing financial statements for the year ended March 31, 2014, the applicable accounting standards have been followed along with proper explanations, wherever required.

b) the Board 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 2013-14 and of the profit or loss of the Company for that period.

c) the Board has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safe guarding the assets of the company and for preventing and detecting any fraud and other irregularities.

d) the annual accounts have been prepared on a going concern basis.

PERSONNEL

Particulars of employees as required under Section 217(2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975, as amended, forming a part of this report.

However, pursuant to Section 219(1) (b)(iv) of the Companies Act, 1956, the Annual Report is being sent to all the members of the Company, excluding the aforesaid information. Those members desirous of obtaining such particulars may write to the Company at its registered office.

"Disposal of complaint under "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013" ("The Act")

In compliance with the Act, the Company has constituted the "Internal Complaints Committee" and also framed the redressal policy in case of sexual harassment at workplace. During the year, the Company has not received any complainant with respect to sexual harassment at work place. "

INFORMATION AS PER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956

Information as per Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 related to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure - ''A'' attached hereto and forming part of this Report.

FINANCIAL STATEMENTS

Pursuant to Clause 41 of the Listing Agreement entered into with the stock exchanges, the Board of Directors has pleasure in attaching the Financial Statement prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India.

Since your Company does not have any subsidiary, preparation of the Consolidated Financial Statement is not required.

DIRECTORS

Pursuant to the provisions of 198, 269, 309 and 310 read with Schedule XIII and other applicable provisions of the Companies Act, 1956, Mr Rama Shankar Singh was appointed as the Whole Time Director of the Company by the Board at its meeting held on 6th February 2014 for a period of 3 (three) years at a remuneration and on such terms and conditions as decided by the Remuneration Committee at its meeting held on 6th February 2014. His appointment was also approved by the Shareholders of the Company by a resolution passed by Postal Ballot and as announced on 19th March, 2014. The remuneration for the aforesaid Whole time Director is subject to the approval of the Central Government which is yet to be received.

Mr. N C Bahl, Whole Time Director of the Company, have resigned from the Board of your Company with effect from 6th February 2014. The Board places on record its deep appreciation for the guidance and the invaluable services rendered by him during the tenure of his office as Whole Time Director of the Company.

Pursuant to the provisions of the Companies Act, Mr Umang Kejriwal and Mr Lalit Kumar Singhi, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment.

Pursuant to the provisions of Section 149 of the Companies Act, 2013, Mr. Jinendra Kumar Jain and Mr. Naresh Pachisia were appointed as Independent Directors of the Company w.e.f 1st April, 2014 for a term of 5 years subject to approval of Shareholders.

Pursuant to the provisions of section 161 of the Companies Act, 2013, Mr Rajkumar Khanna was appointed as the Additional Independent Director (Non-Executive) of the Company with effect from May 5, 2014 and will hold office upto the date of the next Annual General Meeting of the Company.

Pursuant to the provisions of Section 149 of the Companies Act, 2013, Mr. Rajkumar Khanna was appointed as Independent Director of the Company w.e.f 5th May, 2014 for a term of 5 years subject to approval of Shareholders.

None of the Directors of the Company are disqualified as per section 164(2) of the Companies Act, 2013. The Directors have made necessary disclosures as required under various provisions of the Act and Clause 49 of the Listing Agreement.

STATUTORY AUDITORS

The Statutory Auditor M/s. B Chhawchharia & Co., Chartered Accountants, holds office up to the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Certificate from the Auditors has been received to the effect that their re-appointment, if made, would be within the limits prescribed under the Companies Act, 2013. They are proposed to be re-appointed as the Statutory Auditors of the Company for a term of three financial years 2014-17.

The Notes to Accounts forming part of the financial statements are self- explanatory and needs no further explanation.

COST AUDITORS

Your Directors have proposed M/s S. G. & Associates, Cost Accountants, to be appointed as the Cost Auditors of the Company for the year 2014-15, subject to such approvals as may be applicable.

Necessary certificate and consent letter from the said Auditor has been obtained to the effect that their appointment, if made, would be within the limits prescribed under the Companies Act, 2013.

APPRECIATION

Your Directors take this opportunity to place on record their gratitude and thank the Financial Institutions, Bankers, Government Authorities, Customers, Vendors, Shareholders and Employees for their valuable guidance, support and continued assistance, cooperation to the Company. The Directors also commend the continuing commitment and dedication of the employees at all levels. The Directors also look forward to their continued support in future.

For and on behalf of the Board of Directors

Place : Kolkata R S Singh Lalit Kumar Singhi

Dated : May 5, 2014 Whole-time Director Director


Mar 31, 2013

Dear Shareholders,

The Directors take pleasure in presenting their Sixth Annual Report and the Audited Accounts of your Company for the year ended March 31,2013.

FINANCIAL RESULTS

Amount (Rs/Lakhs) Particulars FY 2012-13 FY 2011-12

i. Gross Turnover 18,329.76 6,714.06

ii. Net Turnover 16,311.01 6,068.75

iii. Other Income 93.39 41.81

iv. Total Revenue 16,404.40 6,110.56

v. Earnings Before Interest, Depreciation, Taxation and Amortization (EBIDTA) (8,422.33) (4,560.84)

vi. Interest 13,441.11 8,022.83

vii. Depreciation 6,136.39 2,394.55

viii. Profit before Taxation (PBT) (27,999.83) (14,978.22)

ix. Tax including Deferred Tax 1.42 3.48

x. Profit after Taxation (PAT) (28,001.25) (14,981.70)

xi. Profit brought forward from previous year

xii. Amount available for appropriation (28,001.25) (14,981.70)

xiii. Transfer to general reserve

xiv. Surplus/ (Deficit) carried to Balance Sheet (28,001.25) (14,981.70)

ISSUE OF EQUITY SHARE CAPITAL UNDER PREFERENTIAL ALLOTMENT

During the year the Board of Directors of the Company at its Meeting held on May 8,2012 and further as approved by the shareholders in its meeting held on August 7 2012, your Company had issued 15.20 crores equity shares of Rs 10 each ("Equity Shares") on preferential basis to the promoters/promoters group of the Company, namely, Electrosteel Castings Limited as prescribed under the regulations for Preferential Issues contained in Chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure) Regulations, 2009 (the "SEBI Regulations"). The said equity shares also got listed and trading permission have been granted by Bombay Stock Exchange Limited and National Stock Exchange of India Limited on September 27,2012 and September 28,2012 respectively.

DIVIDEND

You will appreciate that since the project is under implementation, there is not much earnings as of now, hence your Directors are not recommending any dividend on the Equity Shares of the Company for the year ended 31st March 2013.

OPERATIONS

As you are aware, that your Company is setting up a 2.51 MTPA integrated Steel & Ductile Iron (Dl) Pipe project, at Siyaljori village, in Bokaro District, in the state of Jharkhand, which is about 22 kms from Bokaro city, a well developed industrial town of Jharkhand, the plant will produce;

Finished Products '' MTPA

Wire rods 0.60

Reinforcement bars in straight lengths 0.85

Ductile Iron Pipe

Commercial Billets 0.33

Pig Iron 0.40

One of the Blast Furnaces (350 M3) out of the three, has commenced operation of pig iron in September, 2010. The operation of coke oven plant is continuing and sinter plant has also started operations. RebarMill is also operational. Operation of Steel Melt Shop (SMS) has also begun which has resulted into production of billet and Re-bars. The lists of un its under operations and under test are given in the Management Discussion and Analysis chapter as annexed to this report. Presently your Company is selling pig iron, and TMT bars in the open market.

Company''s plant is at its advance stage of completion and its operations are currently in a nascent stage. Due to a variety of technical reasons, the plant has undergone improvements and changes which will in turn benefit the operations of the Company in the long run.

The target completion date of the balance facilities have been extended by few months. The main reason for the delay was due to sudden decrease in availability of Chinese manpower on account of change in guidelines issued by the Central Government of India on Visa Policy, restricting the Chinese manpower with work visa. This was beyond the control of Company''s management. However, the Company made significant efforts to mitigate the effect of this Force Majeure situation with the following alternative plans;

- Appointment of local Sub-contractors underthe supervision of Chinese Contractors.

- Reducing the scope of Chinese Contractors and offloading the same to Indian Contractors.

Subsequently, the Central Government of India has allowed work permits to a specified number of Chinese manpower, since then the work at the site is going on smoothly. Your Company is confident of achieving the revised completion target in the current financial year.

In addition to the above the delay in tie-up of additional loans from the bankers delayed the implementation of various modules.

Yourcompany is pursuingfollowingtwo loan proposals:

1) Loan against Securitization of Receivables for Rs. 2,200 Crores Your Company has applied for Securitisation Loan in 1st week of September 2011 and envisaged to complete the same by March 2012. However, the Company received the full sanction from the Lenders in February 2013. Your Company had raised this loan from various banks by Securitizing future receivables from the sale of Dl Pipes and Pig Iron. A part of the proceeds from the said loan has been utilized towards payment of installments to the lenders and part towards the Project.

2) Capacity Enhancement Loan of Rs. 824 Crores - Your Company had approached to various lenders for the capacity enhancement Loan in November 2011. Your Company has received over 80% of sanctions under the said loan and has executed the Common Loan Agreement pending full tie up. The proposals for the sanction of balance loan are at an advance stage of approval with other banks and the Company is hopeful of completion of the same very soon. The proceeds from the said loan would be utilized towards completion of the balance facilities.

Your Company is hopeful that the entire production facility will be operational soon.

LISTING

The equity shares of the Company continue to be listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE). Both these stock exchanges have nation-wide terminals and therefore, shareholders/ investors are not facing any difficulty in trading in the shares of the Company from any part of the Country. The Company had paid annual listing fees for the financial year 2013-14 to BSE & NSE and also the annual custodian fees to National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

CORPORATE GOVERNANCE

Your Company has fully complied with the requirements of Clause 49 of the Listing Agreement regarding Corporate Governance. A Report on Corporate Governance Practices and the Auditors Certificate on compliance of mandatory requirements thereof is given as annexure to this report.

BUSINESS RESPONSIBILITY REPORT

Ministry of Corporate Affairs (MCA), Government of India has, injuly 2011, issued National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (Guidelines). The Guidelines list out nine principles and core elements on ethics, transparency and accountability, sustainability, employee well being, responsiveness towards stakeholders, promotion of human rights, environment protection, influencing public policy, inclusive growth and equitable development, value to customers and consumers. The Companies in India are adviced to follow these Guidelines for reporting their initiatives and activities relating to corporate social responsibilities (CSR). The Company''s vision, mission and core values enshrine these principles which are integral to the business of the Company. The Company engages in elaborate CSR initiatives, conducts business with transparency and accountability, looks after well being and protection of the employees with a human face, is responsive to the needs of all its stakeholders and takes care of quality of the products manufactured by it, gives priority to preservation and protection of environment and prevention of pollution and believes that business is also a medium to contribute to the social development. Initiatives undertaken during the year under report in respect of corporate social responsibility, environment protection, industrial relations and human resource management etc. are mentioned in detail in the Management Discussion and Analysis Report which forms a part of this report as Annexure.

MANAGEMENT DISCUSSIONS AND ANALYSIS

A report on Management discussion and analysis is given as annexure to this report.

FIXED DEPOSITS

The Company has not accepted any fixed deposit during the period under review.

DIRECTORS'' RESPONSIBILITY STATEMENT

Your Directors hereby confirm that:

a) in the preparation of annual accounts, containing financial statements for the year ended March 31, 2013, the applicable accounting standards have been followed along with proper explanations, wherever required.

b) the Board 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 for that period.

c) the Board has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the Companies Act, 1956 for safe guarding the assets of the company and for preventing and detecting any fraud and other irregularities.

d) the annual accounts have been prepared on a going concern basis.

PERSONNEL

Particulars of employees as required under Section 217(2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975, as amended, forming a part of this report.

However, pursuant to Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report is being sent to all the members of the Company, excluding the aforesaid information. Those members desirous of obtaining such particulars may write to the Company at its registered office.

INFORMATION AS PER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956

Information as per Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 related to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure - ''A'' attached hereto and forming part of this Report.

FINANCIAL STATEMENTS

Pursuant to Clause 41 of the Listing Agreement entered into with the stock exchanges, the Board of Directors has pleasure in attaching the Financial Statement prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India.

Since your Company does not have any subsidiary, preparation of the Consolidated Financial Statement is not required.

DIRECTORS

Pursuant to the provisions of section 260 of the Companies Act, 1956 and the Articles of Association of the Company, Mr Jinendra Kumar Jain was appointed as the Additional Independent Director (Non Executive) of the Company with effect from May 6,2013 and will hold office upto the date of the next Annual General Meeting of the Company.

Mr Amrendra Prasad Verma, was appointed as the Nominee Director of the Company on behalf of the Lenders, with effect from May 6,2013.

Pursuant to the provisions of 198, 269 and 309 read with Schedule XIII and other applicable provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr Nigam Chander Bahl was re-appointed as the Wholetime Director of the Company by the Board in its meeting held on 8 May 2012 for a period of 3 (three) years at a remuneration and on such terms and conditions as decided by the Remuneration Committee in its meeting held on 8 May 2012. His re-appointment was also approved by the Shareholders of the Company in their Meeting held on 7 August, 2012. The remuneration for the aforesaid Wholetime Director is subject to approval of the Central Government which is yet to be received and till then he is being paid on the basis of the earlier approval as received from Central Government, Ministry of Corporate Affairs vide their letter dated 6 May 2010.

Mr. Binod Kumar Khaitan, Non- Executive Independent Chairman of the Company, have resigned from the Board of your Company with effect from May 6, 2013. The Board places on record its deep appreciation for the guidance and the invaluable services rendered by him during the tenure of his office as Director of the Company.

Pursuant to the provisions of Section 255 & 256 and other applicable provisions, if any, of the Companies Act, 1956, Mr Umang Kejriwal and Mr Lalit Kumar Singhi, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment.

None of the Directors of the Company are disqualified as per section 274(1)(g) of the Companies Act, 1956. The Directors have made necessary disclosures as required under various provisions of the Act and Clause 49 of the Listing Agreement.

STATUTORY AUDITORS

The Statutory Auditor M/s. B Chhawchharia & Co., Chartered Accountants, holds office upto the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Certificate from the Auditors has been received to the effect that their re-appointment, if made, would be within the limits prescribed under section 224(1 B) of the Companies Act, 1956. They are proposed to be re-appointed as the Statutory Auditors of the Company for the financial year 2013-14.

The Notes to Accounts forming part of the financial statements are self explanatory and needs no further explanation.

COST AUDITORS

Consequent upon the notification of the Product or Activity Group classification published vide S.O. 1747(E) dated 7th August, 2012 and in suppression of the earlier Orders issued vide even number dated 2nd May 2011, 3rd May 2011, 30th June 2011 and 24th January 2012, the Ministry of Corporate Affairs, Cost Audit Branch, Government of India issued the order no. F No. 52/26/CAB-2010 dated November 6, 2012, your Directors have proposed M/s S. G. & Associates, Cost Accountants, to be appointed as the Cost Auditors of the Company for the year 2013-14, subject to such approvals as may be applicable.

Necessary certificate and consent letter from the said Auditor has been obtained to the effect that their appointment, if made, would be within the limits prescribed under section 224(1 B) of the Companies Act, 1956.

SECRETARIAL AUDIT/COMPLIANCE REPORT

The Secretarial Compliance Certificate confirms that the Company had complied with all the applicable provisions of the Companies Act, 1956, Listing Agreements with the Stock Exchanges, Securities Contract (Regulation) Act, 1956, and all the other Regulations of SEBI as applicable to the Company, including the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (as amended) and the SEBI (Prohibition of Insider Trading) Regulations, 1992.

APPRECIATION

Your Directors take this opportunity to place on record their gratitude and thank the Financial Institutions, Bankers, Government Authorities, Customers, Vendors, Shareholders and Employees for their valuable guidance, support and continued assistance, cooperation to the Company. The Directors also commend the continuing commitment and dedication of the employees at all levels. The Directors also look forward to their continued support in future.

For and on behalf of the Board of Directors

Place: Kolkata N C Bhal Lalit Kumar Singhi

Dated : May 6,2013 Director Director


Mar 31, 2012

The Directors take pleasure in presenting their Fifth Annual Report and the Audited Accounts of your Company for the year ended March 31, 2012.

FINANCIAL RESULTS Amount (Rs/Lakhs)

Particulars FY 2011-12 FY 2010-11

i. Gross Turnover 6,424.12 814.81

ii. Net Turnover 6,068.76 743.19

iii. Other Income 41.81 22.00

iv. Total Revenue 6,110.57 765.19

v. Earnings Before Interest, Depreciation, Taxation and Amortization (EBIDTA) (4,560.84) (351.25)

vi. Interest 8,022.83 157.78

vii. Depreciation 2,394.55 104.32

viii. Profit before Taxation (PBT) (14,978.22) (613.35)

ix. Tax including Deferred Tax 3.48 -

x. Profit after Taxation (PAT) (14,981.70) (613.35)

xi. Profit brought forward from previous year - -

xii. Amount available for appropriation (14,981.70) (613.35)

xiii. Transfer to general reserve - -

xiv. Surplus/ (Deficit) carried to Balance Sheet (14,981.70) (613.35)

OPERATIONS

As you are aware, that your Company is setting up a 2.2 MTPA integrated steel & Ductile Iron (DI) Pipe project, at Siyaljori village, in Bokaro District, in the state of Jharkhand, which is about 22 kms from Bokaro city, a well developed industrial town of Jharkhand.

During the project implementation process, some modifications were suggested by the technical experts to meet the technical superiority and efficiency improvement of the plant. Hence, for better balancing of the product with optimized product mix and better value addition, your Company is contemplating to enhance the plant capacity from 2.2 MTPA to 2.51 MTPA. The enhanced capacity of the plant is based on Blast Furnace (BF) - Basic Oxygen Furnace (BOF) - Billet Caster & Hot Rolling Route.

The enhanced capacity of the plant will produce;

Finished Products MTPA

Wire rods 0.60

Reinforcement bars in straight lengths 0.85

Ductile Iron Pipe 0.33

Commercial Billets 0.33

Pig Iron 0.40

One of the Blast Furnaces (350 M3) out of the three, has commenced operation of pig iron in September, 2010. The Company has taken shut down of the above Blast Furnace for synchronization with other facilities and the same was restarted subsequently. Currently, the said furnace is giving sales to your Company. Your Company has also started production of Ductile Iron Pipes from its plant.

The Company's plant is at its advance stage of completion and its operations are currently in a nascent stage. Due to a variety of technical reasons, the plant has undergone improvements and changes, which will in turn benefit the operations of the Company in the long run.

The target completion date of the balance facilities have been extended by few months. The main reason for the delay was due to sudden decrease in availability of Chinese manpower, due to guidelines issued by the Central Government of India on Visa Policy restricting the Chinese manpower with work visa. This was beyond the control of Company's management. However, the Company made significant efforts to mitigate the effect of this Force Majeure situation with the following alternative plans;

- Appointment of local Sub-contractors under the supervision of Chinese Contractors.

- Reducing the scope of Chinese Contractors and offloading the same to Indian Contractors.

Subsequently, the Central Government of India has allowed work permits to a specified number of Chinese manpower, since then the work at the site is going on smoothly. Your Company is confident in achieving the revised completion target in the current financial year.

The project cost for the earlier 2.2 MTPA plant was Rs 7,262 crores and the revised project cost for the 2.51 MTPA plant is estimated at Rs 9,562 crores. The revised cost of the project has been verified by Lenders Independent Engineer and vetted by Mecon Limited. The estimated additional capital expenditure required for capacity enhancement would be around Rs 1,236 crores and for infrastructural/other facilities & efficiency improvement Rs 1,064 crores. The above additional cost of Rs 1,236 crores is proposed to be funded in the debt to equity ratio of 2:1. Out of the above debt requirement of Rs 824 crores, our Lead Banker, State Bank of India has sanctioned Rs.250 crores with a provision of interim disbursement of 40% of the sanctioned amount. Proposal with other banks is at an advance stage and we are hopeful to complete the same very soon.

Your Company had also proposed to raise Rupee Term Loan of around Rs 2,200 crores by securitizing the future receivables from the sale of Di pipe and Pig iron with various banks. For securitisation of the above, your Company has entered into an Off-take agreement with Stemcor India Private Limited and Electrosteel Castings Limited for off- taking DI Pipes and Pig Iron for a period of 12 years. Out of the above requirement, State Bank of India has sanctioned Rs. 600 crores and also disbursed 40% of the sanctioned amount as interim disbursement pending full tie-up. The proposal with other banks is at an advance stage and we are hopeful to complete it very soon. A part of the proceeds from the securitization of future receivables will be utilised in meeting expenditure towards other capital expenditures/implementing systems, ensuring efficiency improvement and redundancies improvement in Feeder sections like Sinter Plant, Pellet Plant, Coke Oven, Control Systems, Material Handling & other allied facilities.

DIVIDEND

You will appreciate that since the project is under implementation and only one Blast Furnace had commenced operation, there is no much earnings as of now, hence your Directors are not recommending any dividend on Equity Shares for the year ended 31st March 2012.

CORPORATE GOVERNANCE

Your Company has fully complied with the requirements of Clause 49 of the Listing Agreement regarding Corporate Governance.

A Report on Corporate Governance Practices and the Auditors Certificate on compliance of mandatory requirements thereof is given as annexure to this report.

MANAGEMENT DISCUSSIONS AND ANALYSIS

A report on Management discussion and analysis is given as annexure to this report.

FIXED DEPOSITS

The Company has not accepted any fixed deposit during the period under review.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors hereby confirm that:

a) in the preparation of annual accounts, containing financial statements for the year ended March 31, 2012, the applicable accounting standards have been followed along with proper explanations, wherever required.

b) the Board 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 for that period.

c) the Board has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the Companies Act, 1956 for safe guarding the assets of the company and for preventing and detecting any fraud and other irregularities.

d) the annual accounts have been prepared on a going concern basis.

PERSONNEL

Particulars of employees as required under Section 21 7(2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975, as amended, forming a part of this report.

However, pursuant to Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report is being sent to all the members of the Company, excluding the aforesaid information. Those members desirous of obtaining such particulars may write to the Company at its registered office.

INFORMATION AS PER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956

Information as per Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 related to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure - 'A' attached hereto and forming part of this Report.

FINANCIAL STATEMENTS

Pursuant to Clause 41 of the Listing Agreement entered into with the stock exchanges, the Board of Directors has pleasure in attaching the Financial Statement prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India.

Since your Company does not have any subsidiary, preparation of the Consolidated Financial Statement is not required.

DIRECTORS

Pursuant to the provisions of section 260 of the Companies Act, 1956 and the Articles of Association of the Company, Mr Lalit Kumar Singhi was appointed as the Additional Independent Director (Non Executive) of the Company with effect from February 6, 2012 and will hold office upto the date of the next Annual General Meeting of the Company.

Mr. Sanjoy Tekriwal, Non- Executive Independent Director of the Company, have resigned from the Board of your Company with effect from February 6, 2012. The Board places on record its deep appreciation for the guidance and the invaluable services rendered by him during the tenure of his office as Director of the Company.

Mr Naresh Pachisia and Mr Nigam Chander Bahl, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment.

None of the Directors of the Company are disqualified as per section 274(1)(g) of the Companies Act, 1956. The Directors have made necessary disclosures as required under various provisions of the Act and Clause 49 of the Listing Agreement.

STATUTORY AUDITORS

The Statutory Auditor M/s. B Chhawchharia & Co., Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. Certificate from the Auditors has been obtained to the effect that their re-appointment, if made, would be within the limits prescribed under section 224(1 B) of the Companies Act, 1956.

The Notes to Accounts forming part of the financial statements are self explanatory and needs no further explanation. There are no qualifications or adverse remarks in the Auditors' Report which require any clarification/ explanation.

COST AUDITORS

Pursuant to the notification of the Companies (Cost Accounting Records) Rules, 2011 published vide GSR 429(E) dated June 3, 2011, and in reference to the order FNo. 52/26/CAB-2010 dated June 30, 2011 issued by Ministry of Corporate Affairs, Cost Audit Branch, Government of India, your Directors in their meeting held on July 27, 2011, have proposed M/s S. G. & Associates, Cost Accountants, to be appointed as the Cost Auditors of the Company for the year 2011-12, subject to such approvals as may be applicable.

Necessary certificate and consent letter from the said Auditor has been obtained to the effect that their appointment, if made, would be within the limits prescribed under section 224(1 B) of the Companies Act, 1956.

SECRETARIAL AUDIT / COMPLIANCE REPORT

The Secretarial Compliance Certificate confirms that the Company had complied with all the applicable provisions of the Companies Act, 1956, Listing Agreements with the Stock Exchanges, Securities Contract (Regulation) Act, 1956, and all the other Regulations of SEBI as applicable to the Company, including the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (as amended) and the SEBI (Prohibition of Insider Trading) Regulations, 1992.

APPRECIATION

Your Directors take this opportunity to thank the Financial Institutions, Bankers, Government Authorities, Customers, Vendors, Shareholders and Employees for their continued assistance, cooperation and support to the Company.

For and on behalf of the Board of Directors

Place : Kolkata Binod Khaitan N C Bhal

Dated : May 8, 2012 Chairman Wholetime Director


Mar 31, 2011

The Directors take pleasure in presenting their Fourth Annual Report and the Audited Accounts of your Company for the year ended March 31,2011.

FINANCIAL RESULTS Amount

(Rs/Lakhs)

Particulars FY 2010-11

i. Gross Turnover 814.81

ii. Net Turnover 738.72

iii. Other Income 26.47

iv. Total Revenue 765.19

v. Earnings Before Interest, Depreciation, Taxation and Amortisation (EBIDTA) (352.67)

vi. Interest 156.36

vii. Depreciation 104.32

viii. Profit before Taxation (PBT) (613.35)

ix. Tax including Deferred Tax --

x. Profit after Taxation (PAT) (613.35)

xi. Profit brought forward from previous year --

xii. Amount available for appropriation (613.35)

xiii. Transfer to general reserve --

xiv. Total --

xv. Surplus/(Deficit) carried to Balance Sheet (613.35)

* Since this is the first year of operation, the corresponding figures for the year 2009-10 are not given.

OPERATIONS

As you are aware, the Company is setting up a 2.2 MTPA integrated steel & Dl Pipe project, at Siyaljori village, in Bokaro District, in the state of Jharkhand, which is about 22 kms from Bokaro city, a well developed industrial town of Jharkhand.

The plant is based on Blast Furnace (BF) - Basic Oxygen Furnace (BOF) - Billet Caster & Hot Rolling Route and will produce 1.2 MTPA of long steel products, comprising 0.5 MTPA of wire rods and 0,7 MTPA of reinforcement bars in straight lengths. The plant will have a 0.33 MTPA Dl pipe production facilities in the same complex. The plant will also have production facilities for 0.27 MTPA of Commercial Billets and 0.40 MTPA of Pig Iron.

The Company had engaged reputed international companies for the supply of equipments and construction of the Project. Significant milestones like land acquisition, land leveling, basic engineering, detailed engineering, placement of orders for equipments and major civil constructions have already been achieved. The Company has put in place an excellent project team comprising of professionals from respective areas with an extensive project management and execution skills. To ensure continued & uninterrupted supply of major raw materials, long term agreements for the supply of iron ore and coking coal have been entered into with Electrosteel Castings Limited.

We are pleased to inform that, one of the Blast Furnaces (350 M3) out of the three, has commenced operation of pig iron in September, 2010. The Company has taken shut down of the above Blast Furnace for synchronization with other facilities and the same has been restarted in March 2011.

The target completion date of the balance facilities have been extended by few months. The main reason for the delay is sudden decrease in availability of Chinese manpower, due to guidelines issued by the Central Government of India on Visa Policy restricting the Chinese manpower with work visa. This was beyond the control of Companys management. However, the Company made significant efforts to mitigate the effect of this Force Majeure situation with the following alternative plans;

- Appointment of local Sub-contractors under the supervision of Chinese Contractors.

- Reducing the scope of Chinese Contractors and offloading the same to Indian Contractors

Subsequently, the Central Government of India has allowed work permits to a specified number of Chinese manpower, since then the work at the site is going on in full swing. Your Company is confident in achieving the revised completion target in the current financial year.

INITIAL PUBLIC OFFER (IPO)

Your Company had raised funds by issuing equity in the month of September 2010 through the Initial Public Offer (IPO) of 25,93.44 lacs equity shares (including Green Shoe Option "GSO" of 3,38.27 lacs equity shares) of Rs. 10/- each at a premium of Rs 1 /- per share aggregating to Rs 28,527.80 lacs.

Your Company had received appx 94,000 applications in total from all categories of investors, which was subscribed by appx 8.23 times of the total issue size. Your Company has completed all the necessary formalities of IPO.

Your Directors take immense pleasure to announce that the Company got listed for trading in the equity shares of the Company from 8th October, 2010 with the Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE).

Out of the net funds of Rs 24,828.78 lacs received through IPO, a sum of approx. Rs 23,001.89 lacs is being utilized for the Project after netting of IPO related expenses of Rs 1,826.89 lacs.

The net gain of Rs 5,077,536/- on account of equity shares purchased from the market for the purpose of stabilization of post-listing price of the equity shares of the Company, was remitted by the stabilising agent to the investor protection fund maintained by BSE in compliance with the Securities and Exchange Board of India (Issue of capital and disclosure requirements) Regulations 2009,

DIVIDEND

You will appreciate that since the project is under implementation and only one Blast Furnace had commenced operation, there is not much earnings as of now, hence your Directors are not recommending any dividend on Equity Shares for the year ended 31 st March 2011.

CORPORATE GOVERNANCE

Your Company has fully complied with the requirements of Clause 49 of the Listing Agreement regarding Corporate Governance.

A Report on Corporate Governance Practices and the Auditors Certificate on compliance of mandatory requirements thereof is given as annexure to this report.

MANAGEMENT DISCUSSIONS AND ANALYSIS

A report on Management discussion and analysis is given as annexure to this report.

FIXED DEPOSITS

The Company has not accepted any fixed deposit during the period under review. DIRECTORS RESPONSIBILITY STATEMENT Your Directors hereby confirm that:

a) in the preparation of annual accounts, containing financial statements for the year ended March 31, 2011, the applicable accounting standards have been followed along with proper explanations, wherever required.

b) the board 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 for that period.

c) the Board has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the Companies Act, 1956 for safe guarding the assets of the company and for preventing and detecting any fraud and other irregularities.

d) the annual accounts have been prepared on a going concern basis.

PERSONNEL

Particulars of employees as required under Section 217(2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975, as amended is forming a part of this report.

However, pursuant to Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report is being sent to ail the members of the Company, excluding the aforesaid information. Those members desirous of obtaining such particulars may write to the Company at its registered office.

INFORMATION AS PER SECTION 217(1 )(e) OF THE COMPANIES ACT, 1956

Information as per Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 related to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure A attached hereto and forming part of this Report.

FINANCIAL STATEMENTS -

Pursuant to Clause 41 of the Listing Agreement entered into with the stock exchanges, the Board of Directors has pleasure in attaching the Financial Statement prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India.

Since your Company does not have any subsidiary, preparation of the Consolidated Financial Statement is not required.

DIRECTORS

Pursuant to the provisions of section 260 of the Companies Act, 1956 and the Articles of Association of the Company, Mr Binod Khaitan was appointed as the Additional Independent Director (Non Executive) cum Chairman of the Company with effect from April 22, 2011 and will hold office upto the date of the next Annual General Meeting of the Company.

Mr. Vilas Vishnu Jamnis, Wholetime Director and Mr Anil Kumar Sinha, Director and Chairman of the Company, have resigned from the Board of your Company with effect from 10th August, 2010 and 15th November, 2010 respectively. The Board places on record its deep appreciation for the guidance and the invaluable services rendered by them during the tenure of their office as Directors of the Company.

Mr Umang Kejriwal and Mr Sanjoy Tekriwal, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment.

None of the Directors of the Company are disqualified as per section 274(1 )(g) of the Companies Act, 1956. The Directors have made necessary disclosures as required under various provisions of the Act and Clause 49 of the Listing Agreement.

AUDITORS

The Statutory Auditor M/s. B Chhawchharia & Co., Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. Certificate from the Auditors has been obtained to the effect that their re-appointment, if made, would be within the limits prescribed undersection 224(1 B) of the CompaniesAct, 1956.

The Notes to Accounts forming part of the financial statements are self explanatory and needs no further explanation. There are no qualifications or adverse remarks in the Auditors Report which require any clarification/ explanation.

SECRETARIAL AUDIT/ COMPLIANCE REPORT

The Secretarial Compliance Certificate confirms that the Company had complied with ail the applicable provisions of the Companies Act, 1956, Listing Agreements with the Stock Exchanges, Securities Contract (Regulation) Act, 1956, and all the other Regulations of SEBI as applicable to the Company, including the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and the SEBI (Prohibition of Insider Trading) Regulations, 1992.

APPRECIATION

Your Directors take this opportunity to thank the Financial Institutions, Bankers, Government Authorities, Customers, Vendors, Shareholders and Employees for their continued assistance, cooperation and support to the Company.

For and on behalf of the Board of Directors

Place: Kolkata N C Bahl Sanjoy Tekriwal

Dated: April 22,2011 Director Director