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Directors Report of Modern Steels Ltd.

Mar 31, 2015

Dear Members,

The Directors hereby present their 41st Annual Report and audited accounts of the Company for the year ended 31st March, 2015.

FINANCIAL HIGHLIGHTS Rs, in Lacs

Year Ended Year Ended 31.03.2015 31.03.2014

Gross Sales 35660 29542

Excise Duty 3904 3228

Net Sales & Income

from Operations 31756 26314

Operating Profit 1246 893

Finance Cost 2503 1984

Cash Profit / (Loss) (1257) (1091)

Depreciation & Amortization 583 467

Profit / (Loss) before Tax (1840) (1558)

Profit / (Loss) after Tax (1216) (1067)

PERFORMANCE

During the year under review, in spite of being very challenging, the Company was able to achieve Gross Sales of Rs, 356.60 Crores as compared to Rs, 295.42 Crores in the previous year. This has also improved the operating Profit of the Company for the year to Rs,12.46 Crores as against Rs, 8.93 Crores previous year. But due to high interest cost there has been higher losses in the current year against the previous year.

DIVIDEND

Due to the present difficult financial position and the loss suffered by the Company, the Directors have not recommended any dividend for the year.

PRODUCT AND MARKET DEVELOPMENT

During the year the Company successfully commissioned and stabilized Auto Component Division along with Heat Treatment section. On the heavy Ingot segment also, higher size ingots have been incorporated. This has enabled the Company to enter into market of Oil & Gas and Wind Energy Segment towards our objective to value addition. Further the Company has also successfully developed new grades in the tool and die segment. The company has tested the market and expected to ramp up the volumes in near future.

FINANCIAL ASSISTANCE

The Company is in discussions with the Lenders to find out a workable solution to the present financial difficulties of the Company.

CURRENT OPERATIONS

During the first quarter, the Company has achieved Net Sales of Rs, 70.01 Crores as compared to Rs, 75.19 Crores in the same period, in the previous year. It has incurred net loss after deferred tax of Rs, 3.81 Crores as compared to loss of Rs, 2.14 Crores in the same period, previous year. The Company has earned a good customer base in its special and alloy steel segment. The Company expects to improve volumes and Profitability in near future.

KAIZEN & TS 16949 ACCREDITATION

Your Company's manufacturing facilities continue to maintain the prestigious TS 16949 certification by DNV Netherlands, a leading international Certifications Company.

During the year, the Company continued implementation of Kaizen and 5'S' projects to come up to the expectations of major global OEMs.

SHARE CAPITAL

During the year the Company converted 11,70,000 Warrants of Rs, 100 each in 11,70,000 equity shares of face value Rs, 10 each at a price of Rs, 100 inclusive of premium of Rs, 90 per equity share (price being not less than the price calculated as per the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, to the persons from Promoters and Promoter Group, on receipt of entire consideration. The paid up capital of the Company as on 31st March, 2015 is Rs, 13.76 Crores.

FIXED DEPOSITS

The outstanding exempted deposits at the end of the year under review amount to Rs, 662.43 Lacs (Previous year Rs, 625.54 Lacs). There are no overdue deposits.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSIONS & ANALYSIS

A separate report on Corporate Governance and Management Discussions & Analysis is attached herewith and forms part of this report.

DIRECTORS

The Lead Bank SBI has nominated Mr. D.K. Gupta, retired Dy. General Manager of the Bank as its nominee on the Board of Directors of the Company vide its letter dated 11th November, 2014.

Mr. Aditya Goyal, Director of the Company resigned from the Board of Directors of the Company w.e.f. 14th November, 2014 due to his preoccupations. The Board placed on record its appreciations for the services rendered by Mr. Aditya Goyal.

Pursuant to provisions of the Companies Act, 2013 and Articles of Association of the Company, the Board appointed Mr. R.K. Sinha as Additional Director designated as Director (Operations) of the Company for a period of five years w.e.f. 28th May, 2015 at a remuneration for a period of three years subject to the approval of the shareholders in terms of the provisions of Companies Act, 2013.

Pursuant to the provisions of the Companies Act, 2013 and the Articles of Association of the Company Dr. Meena Sharma was appointed as Additional Independent Non Executive Director w.e.f. 16th July, 2015 and she shall hold Office up to the date of the ensuing Annual General Meeting. The Company has received notice in writing from member proposing Dr. Meena Sharma for appointment as Independent Director.

Mr. Krishan Kumar Goyal, Managing Director shall retire by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re-appointment.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received the necessary declaration from each Independent Director in accordance with Section 149 (7) of the Companies Act, 2013, that they meet the criteria of independence as laid out in Sub Section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

BOARD DIVERSITY AND REMUNERATION POLICY

The Company has a policy for formation of the Board to have Executive Directors and Independent Directors of diverse background to maintain the independence of the Board. As on 31st March, 2015, the Board consists of 9 members, four are Executive / Whole Time Directors, four Independent Directors and One Bank Nominee Director. We affrm that the remuneration paid to the directors is as per the terms approved by the Nomination & Remuneration Committee of the Company.

BOARD MEETINGS

During the year, five Board Meetings were convened and held, the details of which are given in the Corporate Governance Report.

DIRECTOR'S RESPONSIBILITY STATEMENT

Pursuant of requirements under Section 134(3) (c) of the Companies Act, 2013 with respect to Directors Responsibility Statement, it is hereby confirmed that:

i) in the preparation of the annual financial statements for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii) the Directors 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 as at 31st March, 2015 and of the loss of the Company for the year ended on that date;

iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the annual financial statements for the year ended 31st March, 2015, on a 'going concern' basis;

v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

RELATED PARTY TRANSACTIONS

All contracts or arrangements entered into by the Company with Related Parties have been done at arm's length and are in the ordinary course of business. Pursuant to Section 134 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of such transactions are provided in Form AOC-2 which is annexed herewith as Annexure "A" to this report. Related Party disclosures as per AS-18 have been provided in the Notes to the financial statement.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as Annexure "B".

RISK MANAGEMENT:

The Company recognizes that risk is an integral and unavoidable component of business and is committed to managing the risk in a proactive and efficient manner. The Company has formulated Risk Management Policy to identify and then manage threats / risks that could have impact on the goals and objectives of the Company.

AUDITORS

At the Annual General Meeting held on 29th September, 2014, M/s. Aaryaa & Associates, Chartered Accountants, were appointed as Statutory Auditors of the Company to hold Office till the conclusion of the Annual General Meeting to be held in the year 2019. In terms of the provisions of Section 139 of the Companies Act, 2013, the appointment of the Auditor shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. Aaryaa & Associates, Chartered Accountants, as Statutory Auditors of the Company will be placed for ratification by Shareholders. In this regard, the Company has received a Certificate from the Auditors to the effect that if their appointment is ratified, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

The Board of Directors have approved the appointment and remuneration of M/s. V. Kumar & Associates as Cost Auditors of the Company to conduct the cost audit for the year 2015-16 on the recommendations of the Audit Committee subject to the ratification of the remuneration by the shareholders.

The Board has appointed M/s. Sharma Sarin & Associates, Company Secretaries, to conduct Secretarial Audit for the financial year 2014-15, The Secretarial Audit Report in Form MR-3 for the financial year ended 31st March, 2015 is annexed herewith as Annexure "C" to this report.

AUDITOR'S REPORT

The Notes on financial statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any Qualification, reservation or adverse remark.

HUMAN RESOURCES

The Company is having motivated work force. Harmonious employee relations prevailed throughout the year. Your Directors place on record their appreciation for all employees for their hard work and dedication.

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return of the Company in Form MGT-9 is annexed herewith as Annexure "D" to this report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Particulars of Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in the Annual Report.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to the Financial Statements. During the year, such controls were tested and no reportable material weakness was observed in the design or implementation.

MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no adverse material changes or commitments occurring after 31st March, 2015, which may affect the financial position of the Company.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

APPRECIATION

The Directors would like to express their sincere appreciation of the co-operation received from the Bankers.

The Directors also wish to place on record its appreciation for the commitment displayed by all employees at all levels during the year.

The Directors also take this opportunity to express its deep gratitude for the continued co-operation and support received from its valued stakeholders.

For & on behalf of the Board

Place : Chandigarh Amarjit Goyal

Dated: 10th August, 2015 Chairman & Whole Time Director


Mar 31, 2014

The Members Modern Steels Limited Dear Members,

The Directors hereby present their 40th Annual Report and audited accounts of the Company for the year ended 31st March, 2014.

FINANCIAL HIGHLIGHTS

in Lacs Year Ended Year Ended 31.03.2014 31.03.2013

Gross Sales 29542 29352

Excise Duty 3228 3216

Net Sales & Income from 26314 26136

Operations

Operating Profit 893 138

Finance Cost 1984 1677

Cash Profit /(Loss) (1091) (1539)

Depreciation & Amortisation 467 468

Profit /(Loss) before Tax (1558) (2007)

Profit /(Loss) after Tax (1067) (1372)

PERFORMANCE

During the year under review, the Company achieved Gross Sales and other operating income of Rs.295.42 Crores as compared to Rs.293.52 Crores in the previous year. The operations of the Company remained at the same level and it continued to be in loss situation, slightly better than last year.

This fiscal year continued to witness slowdown in the domestic automobile and consumer durable market. It adversely affected the demand of alloy steel sector which caters to this segment and remained under stress.

The input cost of raw materials continued to increase during the year and could not be passed onto the consumer. The high interest rates and liquidity position in the market impacted the automobile sector.

DIVIDEND

Due to the present difficult financial position and the loss suffered by the Company, the Directors have not recommended any dividend for the year.

DEBT RESTRUCTURING BY THE CDR During the year CDR has sanctioned a rehabilitation scheme on 27th April, 2013 with a cut off date as 1st September, 2012. The CDR has sanctioned fresh Corporate loan of Rs.25.50 crores in addition to creation of WCTL and FITL and reschedulement of existing term loan. The promoters were to bring in Rs.15.20 crores as their contribution. During the year the Scheme has been implemented and the major part of the promoter contribution has been inducted and correspondingly the banks have also released the term loan. The Scheme is expected to be implemented completely by the end of September, 2014.

ISSUE OF WARRANTS ON PREFERENTIAL BASIS TO PROMOTER & PROMOTER GROUP / INVESTOR

During the year your Company allotted 11,70,000 Warrants of face value Rs.10 each at a price of Rs.100 inclusive of premium of Rs.90 (price being not less than the price calculated as per the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, to the persons from Promoters and Promoter Group/ Investor to be converted into equal number of shares upon exercise of option within a period of eighteen months from the date of allotment.

The entire consideration having been received, 11,70,000 Equity Shares of Rs.10 each (at a premium of Rs.90 per share) have been allotted on 26th June, 2014.

PROJECTS

The company has undertaken to upgrade its existing facilities and added new value added production facilities with the capex of Rs.37.20 crores. The company has installed gasifier unit for production of gas for reheating furnaces in rolling mills and added heat treatment facility for alloy steel bars. The company has also added bigger ingot casting facilities in the steel melting shop to diversify process route. The company has successfully commissioned auto component division to further expand its product range. Forge shop consisting of forging presses, hammer, heat treatment facilities along with finishing and inspection facilities were added. It also installed machining & assembly lines for the manufacturing of auto steel components.

CURRENT OPERATIONS

During the first quarter, the Company has achieved Gross Sales of Rs.84.71 Crores as compared to Rs.74.58 Crores in the same period, in the previous year. It has incurred net loss after deferred tax of Rs.2.14 Crores as compared to loss of Rs.1.82 Crores in the same period, previous year.

In the current fiscal year domestic steel industry continues to remain under stress. Weak price trend coupled with slow demand growth ruled out any improvement in the operating profitability of Indian steel manufacturers

KAIZEN & TS 16949 ACCREDITATION

Your Company''s manufacturing facilities continue to maintain the prestigious TS 16949 certification by DNV Netherlands, a leading international Certification Company.

During the year, the Company continued implementation of Kaizen and 5''S'' projects to come up to the expectations of major global OEMs.

DIRECTORS

Pursuant to the provisions of Section 161(1) of the Companies Act, 2013 and the Articles of Association of the Company Prof. Priyavrat Thareja and Dr. Lalit K. Bansal were appointed as Additional Non Executive Directors designated as Independent Directors w.e.f. 26lh August, 2014 and they shall hold office up to the date of the ensuing Annual General Meeting. The Company has received notices in writing from members proposing Prof. Priyavrat Thareja and Dr. Lalit K. Bansal for appointment as Independent Directors.

The Board appointed Mr. Amarjit Goyal as Chairman & Whole time Director of the Company for a period of three years w.e.f. 1st April, 2014, subject to the approval of the shareholders in terms of the provisions of Companies Act, 2013.

The Board appointed Mr. Krishan Kumar Goyal as Managing Director & CEO of the Company for a period of three years w.e.f. 1st April, 2014, subject to the approval of the shareholders in terms of the provisions of Companies Act, 2013.

Mr. Aditya Goyal, Director shall retire by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re-appointment.

The Company has received notice in writing from a member proposing Mr. D.S. Gill for appointment as an Independent Director.

Prof. Triloki Nath Kapoor and Mr. Ramesh C. Jain have expressed their desire not to seek appointment. The Board placed on record its appreciations for the services rendered by Prof. Triloki Nath Kapoor and Mr. Ramesh C. Jain during their respective tenure as Directors of the Company.

The Board appointed Mr. P. L. Talwar as Whole time Director of the Company for a period of three years w.e.f. 1st April, 2014, subject to the approval of the shareholders in terms of the provisions of Companies Act, 2013.

AUDITORS

M/s. A. Goel & Associates, Chartered Accountants, Statutory Auditors of the Company hold office until the conclusion of forthcoming Annual General Meeting. Your management puts on record its sincere appreciations for the work done by Retiring Auditor''s during their tenure.

The Board recommends the appointment of M/s. Aaryaa & Associates, Chartered Accountants, as the Statutory Auditors of the Company from the conclusion of the ensuing Annual General Meeting, in accordance with the provisions of the Companies Act, 2013. M/s. Aaryaa & Associates, Chartered Accountants, have expressed their willingness to act as Statutory Auditors of the Company, if appointed and have confirmed their eligibility. In this regard, attention of the members is invited to item no. 3 of the Notice convening the forthcoming Annual General Meeting.

The Board of Directors have approved the appointment and remuneration of M/s. V. Kumar & Associates as Cost Auditors of the Company to conduct the cost audit for the year 2014-15 on the recommendations of the Audit Committee subject to the ratification of the remuneration by the shareholders. AUDITOR''S REPORT

All the comments of the Statutory Auditors on the Annual Accounts of the Company are self-explanatory and require no further comments.

FIXED DEPOSITS

The outstanding exempted deposits at the end of the year under review amount to Rs.625.54 Lacs (Previous year Rs.441.10 Lacs). There are no overdue deposits. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSIONS & ANALYSIS

A separate report on Corporate Governance and Management Discussions & Analysis is attached herewith and forms part of this report.

HUMAN RESOURCES

The Company is having motivated work force. Harmonious employee relations prevailed throughout the year. Your Directors place on record their appreciation for all employees for their hard work and dedication.

The Statement showing particulars of employees as required under Section 217(2A) of the Companies Act, 1956 read with the Disclosure of Particulars in the Report of Board of

Directors Rules, 1988, as amended, is enclosed as Annexure ''A'' and forms part of this report.

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

Information as per Section 217 (1) (e) of Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, is given in the Annexure ''B'' forming part of the report.

DIRECTOR''S RESPONSIBILITY STATEMENT Pursuant of Section 217 (2AA) of the Companies Act, 1956 the Directors confirm that:

i) In the preparation of annual accounts for the financial year ended 31st March, 2014, the applicable accounting standards have been followed and that there were no material departures;

ii) The accounting policies selected by them have been applied consistently and they have made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of the Company as on 31st March, 2014 and loss of the Company for the year ended 31st March, 2014;

iii) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 to safeguard the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The annual accounts have been prepared on a going concern basis.

APPRECIATION

Your Directors wish to place on record their sincere thanks to the Company''s Bankers for their valuable support.

For & on behalf of the Board

Place : Chandigarh AMARJIT GOYAL Dated: 26th August, 2014 Chairman & Whole Time Director


Mar 31, 2013

To The Members Modern Steels Limited

Dear Members,

The Directors hereby present their 39th Annual Report and audited accounts of the Company for the year ended31st March, 2013.

FINANCIAL HIGHLIGHTS

Rs.in Lacs

Year Ended Year Ended 31.03.2013 31.03.2012

Gross Sales 29352 37297

Excise Duty 3216 3501

Net Sales & Income 26136 33796 from Operations

Operating Profit (95) 598

Interest 1444 1584

Cash Profit/(Loss) (1539) (986)

Depreciation 468 441

Profit/(Loss) before Tax (2007) (1427)

Net Profit / (Loss) (1372) (981)

PERFORMANCE

During the year under review, the Company achieved Gross Sales of Rs. 293.52 Crores as compared to 1372.97 Crores in the previous year. The Company has reported a Net Loss of Rs. 13.72 Crores as compared to Net Loss of Rs. 9.81 Crores in the previous year.

This fiscal year also witnessed the slowdown in the domestic market and turmoil in the global market which has impacted the performance of the steel sector in the country. Further due to the continuous high rate of interest and the tight liquidity position in the market the demand in automobile sector was impacted which has direct bearing on the performance of your Company.

The cost of inputs and raw material continued to rise and because of sluggish market the said increase could not be passed on to the customer which affected the Company in terms of volumes and the margins which lead to the present difficult financial position.

DIVIDEND

Due to the present difficult financial position and the losses suffered by the Company, your Directors have not recommended any dividend for the year. DEBT RESTRUCTURING BYTHE CDR

Due to the difficult fiscal position, the Company applied to its bankers for restructuring of its loans under CDR mechanism and accordingly bankers approved and sanctioned CDR package to the Company. The Company has been sanctioned a fresh term loan of Rs. 25.50 Crores in addition to the creation of Working Capital Term Loan (WCTL) and Funded Interest Term Loan (FITL) and reschedulementof the existing term loans.

The promoters are supposed to arrange Rs. 15.20 Crores by way of unsecured loan / equity as their contribution to the said CDR package.

ISSUE OF WARRANTS ON PREFERENTIAL BASIS TO PROMOTER & PROMOTER GROUP / INVESTOR

Your Company is in the process of allotting 11,70,000 warrants @ Rs. 100/- each (at a premium of Rs. 90/- per warrant) to the promoter and promoter group / investor in terms of SEBI (Issue of Capital and Disclosure Requirement), Regulations 2009, to be converted into equal number of equity shares upon exercise of option within a period of eighteen months from the date of allotment.

PROJECTS

Your Company under the CDR has undertaken to upgrade its existing facilities and add on new facilities with an approx. capex of aroundRs. 37.20 Crores. Accordingly your Company has initiated and has started working on the said proposals. CURRENT OPERATIONS

During the first quarter, the Company has achieved Gross Sales of Rs.74.58 Crores as compared to Rs.85.43 Crores in the same period, in the previous year. It has incurred loss of X 2.46 Crores as compared to loss of Rs.6.93 Crores in the same quarter, previous year.

The current year continues to be challenging one affecting the Company''s performance. As your Company depends on import of scrap in volumes, the continuous rupee depreciation has affected the financials of your Company.

KAIZEN & TS16949 ACCREDITATION

Your Company''s manufacturing facilities continue to maintain the prestigious TS 16949 certification by DNV Netherlands, a leading international Certification Company.

During the year, the Company continued implementation of Kaizen and 5''S'' projects to come up to the expectations of major global OEMs.

DIRECTORS

Mr. Amarjit Goyal was appointed as Whole Time Director & Chairman of the Company on 29* June, 2010 for a period of three years. His present term expired on 28lh June, 2013. The Board in its meeting held on 28* May, 2013 re-appointed him for another period of three years w.e.f. 29th June, 2013, subject to the approval of the shareholders at the ensuing Annual General Meeting.

Prof. Triloki Nath Kapoor, Director shall retire by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re-appointment.

Mr. P.L. Taiwan Director shall retire by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re-appointment.

Mr. Partap K. Aggarwal, Director resigned from directorship w.e.f 10m February, 2013 due to his personal commitments. The Board placed on record its appreciations for the services rendered by Mr. Aggarwal during his tenure as Director of the Company.

AUDITORS

M/s A. Goel & Associates, Auditors of the Company, hold office until the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

Your Directors have appointed M/s. V. Kumar & Associates as Cost Auditors of the Company for the year 2013-14 to conduct the cost audit subject to the approval of the Central Government.

AUDITOR''S REPORT

All the comments of the Statutory Auditors on the Annual Accounts of the Company are self-explanatory and require no further comments.

FIXED DEPOSITS

The outstanding deposits at the end of the year under review amount to Rs. 441.10 Lacs (Previous year Rs. 261.44 Lacs). There are no overdue deposits.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSIONS & ANALYSIS

A separate report on Corporate Governance and Management Discussions & Analysis is attached herewith and forms part of this report

HUMAN RESOURCES

The Company is having motivated work force. Harmonious employee relations prevailed throughout the year. Your Directors place on record their appreciation of all employees for their hard work and dedication.

The Statement showing particulars of employees as required under Section 217(2A) of the Companies Act, 1956 read with the Disclosure of Particulars in the Report of Board of Directors Rules, 1988, as amended, is enclosed as Annexure ''A'' and forms part of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNING ANDOUTGO

Information as per Section 217 (1) (e) of Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, is given in the Annexure ''B'' forming part of the report.

DIRECTOR''S RESPONSIBILITY STATEMENT

Pursuant of Section 217 (2AA) of the Companies Act, 1956 the Directors confirm that:

i) In the preparation of annual accounts for the financial year ended 31" March, 2013, the applicable accounting standards have been followed and that there were no material departures;

ii) The accounting policies selected by them have been applied consistently and they have made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of the Company as on 31st March, 2013 and loss of the Company for the year ended 31" March, 2013;

iii) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 to safeguard the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The annual accounts have been prepared on a going concern basis.

APPRECIATION

Your Directors wish to place on record their sincere thanks to the Company''s Bankers for their valuable support.

For & on behalf of the Board

Place: Chandigarh AMARJIT GOYAL

Dated: 14* August, 2013 Chairman & Whole Time Director


Mar 31, 2011

Dear Members,

Your Directors hereby present their 37th Annual Report and audited accounts of the Company for the year ended 31st March, 2011.

FINANCIAL HIGHLIGHTS

Rs in Lacs

Year Ended Year Ended 31.03.2011 31.03.2010

Gross Sales 38223 31415

Excise Duty 3568 2453

Net Sales & Income from Operations 34655 28962

Operating Profit 2939 2434

Interest 1237 1031

Cash Profit 1702 1403

Depreciation 476 454

Profit before Tax (PBT) 1226 949

Net Profit 823 615

PERFORMANCE

During the year under review, the Company achieved gross Sales of Rs 382.23 Crores as compared to Rs314.15 Crores in the previous year. The Company has achieved a net profit of Rs 8.23 Crores as compared to net profit of Rs 6.15 Crores in the previous year.

In the year under review, the domestic demand continue to be strong for special alloy steels for the Automobile and Engineering Industry. The rolled product sales volume increased from 68,495 MT in the year 2009-10 to 73,482 MT in the year 2010-11.

The raw material prices and cost of power increased during the year. The Company was able to partially pass on the increase to consumers and hence the margins remained under pressure.

Your Company has been continuously taking initiatives for last few years to enter the value added market segment, by getting the approval from OEMs for two wheeler and car industry. This initiative has been further consolidated by getting approvals from many auto majors in this sector. The performance of the Company will improve in the times ahead from these initiatives.

DIVIDEND

In view of the funds required for the projects, the Directors have decided to skip the dividend this year.

PROJECTS

Your Company has undertaken a project for modernization of its various production facilities in SMS and Rolling Mills to cater to the requirements of the OEMs.

CURRENT OPERATIONS

The growth in the automotive sector is expected to continue to be good, hence the Company expects good operating results in the current year.

ISSUE OF 6,28,359 EQUITY SHARES UPON CONVERSION OF WARRANTS TO PROMOTERS

In April 2010, the Promoter & Promoter group were allotted 14,00,000 warrants on preferential basis convertible into equity shares at a price of Rs 33 per share share (price being not less than the SEBI price) to be converted within a period of 18 months from the date of BSEs approval and allotment. Accordingly on 28th March, 2011, upon exercise of option the Promoter and Promoter group were allotted 6,28,359 equity shares upon receipt of the full consideration amount.

KAIZEN &TS 16949 ACCREDITATION

Your Companys manufacturing facilities and systems were successfully audited in accordance with the latest version of ISO/TS-16949: 2009- 3rd edition by DNV, Netherland.

Various Kaizen projects were taken up during the year for improving processes, systems and 5 S activities

DIRECTORS

Mr. Ramesh C. Jain has been appointed as Additional Director by the Board of Directors in its meeting held on 14th February, 2011 and as such he holds office till the conclusion of the forthcoming Annual General Meeting. A notice under Section 257 of the Companies Act, 1956 has been received from a shareholder proposing the name of Mr. Ramesh C. Jain as Director, liable to retire by rotation.

Mr. Krishan Kumar Goyal was appointed as Managing Director & CEO on 1st May, 2006 for a period of five years. His present term expired on 30th April, 2011. The Board in its meeting held on 12th May, 2011 re-appointed him for another period of five years w.e.f. 1st May, 2011, subject to the approval of the shareholders.

Mr. Aditya Goyal was appointed as Whole Time Director of the Company on 25th August, 2008 for a period of three years. His present term shall expire on 24th August, 2011. The Board in its meeting held on 12th May, 2011 re-

appointed him for another period of three years w.e.f. 25th August, 2011, subject to the approval of the shareholders.

Mr. P.L. Talwar was appointed as Director (Operations) on 27th September, 2008 for a period of three years. His present term shall expire on 26th September, 2011. The Board in its meeting held on 12th May, 2011 re-appointed him for another period of three years w.e.f. 27th September, 2011, subject to the approval of the shareholders.

Prof. Triloki Nath Kapoor, Director shall retire by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re-appointment. Mr. Partap K. Aggarwal, Director shall retire by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re-appointment.

AUDITORS

M/s. A. Goel & Associates, Auditors of the Company, hold office until the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

Your Directors have appointed M/s. V. Kumar & Associates as Cost Auditors of the Company for the year 2011-12 to conduct the cost audit subject to the approval of the Central Government.

AUDITORS REPORT

All the comments of the Statutory Auditors on the Annual Accounts of the Company are self- explanatory and require no further comments.

FIXED DEPOSITS

The outstanding deposits at the end of the year under review amount to Rs 260.15 Lacs (Previous year Rs 258.13 Lacs). There are no overdue deposits.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSIONS & ANALYSIS

A separate report on Corporate Governance and Management Discussions & Analysis is attached herewith and forms part of this report.

HUMAN RESOURCES

Harmonious employee relations prevailed throughout the year. Your Directors place on record their appreciation of all employees for their hard work and dedication.

There were no employees employed throughout the financial year or part of the financial year drawing remuneration as prescribed under Section 217(2A) of the Companies Act, 1956 read with the Disclosure of Particulars in the Report of Board of Directors Rules, 1988, as amended.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNING ANDOUTGO

Information as per Section 217 (1) (e) of Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, is given in the Annexure A forming part of the report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant of Section 217 (2AA) of the Companies Act, 1956 the Directors confirm that:

i) In the preparation of annual accounts for the financial year ended 31th March, 2011, the applicable accounting standards have been followed and that there were no material departures;

ii) The accounting policies selected by them have been applied consistently, and they have made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of the Company as on 31st March, 2011 and profit of the Company for the year ended 31st march, 2011;

iii) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 to safeguard the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The annual accounts have been prepared on a going concern basis..

APPRECIATION

Your Directors wish to place on record their sincere thanks to the Companys Bankers for their valuable support.

For & on behalf of the Board

AMARJIT GOYAL Chairman & Whole Time Director

Place : Chandigarh Dated : 12th May, 2011


Mar 31, 2010

The Directors hereby present their 36th Annual Report and audited accounts of the Company for the year ended 31st March, 2010.

FINANCIAL HIGHLIGHTS

Rs. in Lacs

Year Ended Year Ended 31.03.2010 31.03.2009

Gross Sales & other Receipts 31415 31398

Excise Duty 2453 3625

Net Sales & Income from Operations 28962 27773

Operating Profit 2434 883

Interest 1031 1093

Cash Profit/Loss 1403 (210)

Depreciation 454 431

Profit before Tax (PBT) 949 (641)

Net Profit/Loss 615 (472)

PERFORMANCE

During the year under review, the Company achieved gross sales and other receipts of Rs. 314.15 Crores as compared to Rs. 313.98 Crores in the previous year. The Company has achieved a net profit of ^ 6.15 Crores as compared to net loss of Rs. 4.72 Crores in the previous year.

In the backdrop of the global recession during the fiscal 2008-2009, the year under review started on a difficult note. The first half of the year did not show significant improvement in operations. But in the second half, with the revival of domestic demand, specially from the Automobile & Engineering Industry, the company could show better performance. The Rolled products sales volume increased from 53,108 MT in the year 2008-09 to 68,495 MT in the year 2009-10.

During the year your company has taken initiative to explore the new market segments. It has worked towards getting approval from OEMs for Two Wheelers & Car Segments. This initiative will help in the better performance of the company in the times ahead.

PROJECTS

The company has strengthened its Quality Control in line with the requirements of OEMs. The company has commissioned the state-of-the-art Automatic Ultrasonic Testing Machine.

CURRENT OPERATIONS

Your directors are pleased to report that the current year started on a strong note with an all round demand in automotive and engineering industry. With the present scenario and the encouraging forecasts from the Industry & Government, it is expected that the Industry will do fairly well in the time ahead. This augurs well for your Company.

During the first quarter, the Company has achieved Net Sales of Rs. 86.44 Crores as compared to Rs. 68.50 Crores in the same period, previous year. It has earned profit before tax of Rs. 3.90 Crores as compared to Rs. 1.68 Crores in the same quarter, previous year.

ISSUE OF WARRANTS TO PROMOTERS

In April 2010, the Promoter & Promoter group were allotted 14,00,000 warrant on preferential basis (subject to BSE approval) convertible into equity shares at a price of Rs. 33 per share (price being not less than the SEBI price) to be converted within a period of 18 months from the date of BSEs approval and allotment.

KAIZEN&TS 16949 ACCREDITATION

During the year the company continued implementation of Kaizen project and conducted a number of workshops. Your Companys manufacturing facilities continue to maintain TS 16949 Certification by DNV Netherlands, a leading international Certification Company.

DIRECTORS

Mr. Amarjit Goyal, Chairman & Mg. Director of the companys tenure has ended on 28.06.2010. The Board of Directors has appointed him as Whole Time Director for a period of three years with effect from 29.06.2010 subject to approval of shareholders at the ensuing Annual General Meeting.

Mr. Goyal will continue to remain the Chairman of the Board.

Mr. Beant Singhs term will end by the ensuing Annual General Meeting and he is not seeking re-appointment. The directors place on record their sincere appreciation for the valuable contributions made by Mr. Beant Singh during his long association with the Company.

Mr. D.S. Gill, Director shall retire by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re-appointment.

AUDITORS

M/s A. Goel & Associates, Auditors of the Company, hold office until the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

Your Directors have appointed M/s V, Kumar & Associates as Cost Auditors of the Company for the year 2010-11 to conduct the cost audit subject to the approval of the Central Government.

AUDITORS REPORT

All the comments of the Statutory Auditors on the Annual Accounts of the Company are self- explanatory and require no further comments.

FIXED DEPOSITS

The outstanding deposits at the end of the year under review amount to Rs. 258.13 Lacs (Previous year Rs. 238.38Lacs). There are no overdue deposits.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSIONS & ANALYSIS

A separate report on Corporate Governance and Management Discussions & Analysis is attached herewith and forms part of this report.

HUMAN RESOURCES

Harmonious employee relations prevailed throughout the year. Your Directors place on record their appreciation of all employees for their hard work and dedication.

The statement showing particulars of employees as required under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, is enclosed as Annexure A and forms part of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNING AND OUTGO

information as per Section 217 (1) (e) of Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, is given in the Annexure B forming part of the report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant of Section 217 (2AA) of the Companies Act, 1956 the Directors confirm that:

i) In the preparation of annual accounts for the financial year ended 31st March 2010, the applicable accounting standards have been followed and that there were no material departures,

ii) The accounting policies selected by them have been applied consistently, and they have made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of the Company as on 31st March 2010 and profit of the Company for the year ended 31st March 2010;

iii) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 to safeguard the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The annual accounts have been prepared on a going concern basis.

APPRECIATION

Your Directors wish to place on record their sincere thanks to the Companys Bankers for their valuable support.

For & on behalf of the Board

Place : Chandigarh AMARJIT GOYAL

Dated: 30th August, 2010 Chairman & Whole Time Director