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Directors Report of Shah Alloys Ltd.

Mar 31, 2018

DIRECTORS'' REPORT

Dear Members,

Your Directors are pleased to present the 28th Annual Report of your company on the operations and performance along with the Audited Financial Statements for the year ended on 31st March 2018.

FINANCIAL HIGHLIGHTS

		Rs in Crores
Particulars	March 31, 2018	March 31, 2017
Total Revenues	564.16	349.88
Less: Total Expenditure	564.13	349.58
Profit / (Loss) before interest, depreciation, extraordinary item and tax	0.03	0.30
Less: Depreciation and Interest	13.77	28.07
Profit / (Loss) after depreciation and Interest but before extraordinary item and Tax.	(13.74)	(27.77)
Less: Extraordinary item	140.88	80.98
Profit after Extraordinary item but before tax	127.14	53.21
Less: Tax Expense / Deferred tax	85.04	10.14
Net Profit available for Appropriation	42.09	43.07
Balance to be carried forward	42.37	43.17

STATE OF COMPANY''S AFFAIRS / PERFORMANCE OVERVIEW

During the year under review Total revenue from Operations and from other operating income increased from Rs. 349.88 crores in the previous year to Rs 564.16 crores. Company has registered a profit of Rs. 42.09 crores in comparison to the profit of Rs. 43.07 crores during previous year.

During the year under review company entered into settlement agreement with Assets Reconstruction Company India Limited (ARCIL) and Invent Assets Securitisation & Reconstruction Pvt. Ltd (INVENT) for the dues assigned to them by various lenders. Company has been in constant touch with the lenders, banks and financial institutions for settlement of dues.

DIVIDEND

Due to high accumulated losses, your Directors have not recommended dividend for the financial year 2017-18. BUSINESS ACTIVITY

The company is engaged in manufacturing of wide range of Stainless Steel, alloy & Special steel, Carbon/Mild Steel and Armour Steel in Flat and Long products. There has been no change in the nature of business of the Company.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The company is not having holding or subsidiary company during the year and no other company has become holding / subsidiary/joint venture. However, it has one associate company as per details as under:

Sr. No.	Name of the Company	CIN/GLN	Concern	% of shares held by Company	Applicable Section
1.	S.A.L. Steel Limited	L29199GJ2003PLC043148	Associate	35.61%	2(6)

The Consolidated Financial Statements of the Company and its Associate, viz., SAL Steel Ltd., has been prepared in accordance with the relevant Accounting Standards of the Institute of Chartered Accountants of India, duly audited by the Statutory Auditors and form part of the Annual Report and are reflected in the Consolidated Accounts.

Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company''s associate in Form AOC-1 is attached to this report as Annexure- 1.

DEPOSIT

The Company has not accepted any public deposit during the year under review and no amount against the same was outstanding at the end of the year.

DETAILS OF LOANS, GUARANTEES AND INVESTMENTS U/S 186 OF THE COMPANIES ACT, 2013

During the year under review the Company has not made any inter corporate loans, investments, given any corporate guarantee to any other body corporate, subsidiary, associate or any other company.

REGULATORY STATEMENT

In conformity with provision of regulation 34(2)(c) & 53(b) of SEBI (LODR), Regulations 2015, the Cash Flow Statement for the year ended 31.03.2018 is annexed hereto. The equity shares of the Company are Listed on the BSE Ltd. and the National Stock Exchange of India Ltd. (NSE).

The Company has paid Listing fees for the year 2018-19 to above stock exchanges.

DETAILS OF DIRECTORS OR KMPs APPOINTMENT OR RESIGNATION

During the year under review there is no other change in the Composition of the Board except re-appointment of Shri G.M. Shaikh as Independent Director. However, in the current year Shri Yashpal Mehta, Chief Financial Officer resigned from the post w.e.f. 30th June, 2017 and Shri Ashok A. Sharma appointed as Chief Financial Officer w.e.f. 5th August 2017. During the current financial year Shri Vinod Kumar Shah, Head - Legal cum Company Secretary & Compliance officer of the Company resigned from the post w.e.f. 10th April, 2018. The Board appreciates the valuable services rendered by them during their tenure. MEETINGS OF THE BOARD

The Board met five times during the financial year. Details of meetings are given in the Corporate Governance Report annexed herewith and forms part of this report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declarations from each Independent Director of the Company confirming that he/she meets with the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and under Regulation 16(1)(B) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. BOARD DIVERSITY

A diverse Board enables efficient functioning through differences in perspective and skill, and also fosters differentiated thought processes at the back of varied industrial and management expertise, gender, knowledge and geographical background. The Company follows diverse Board structure.

BOARD EVALUATION

As per the provisions of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015, the formal annual evaluation was carried out for the Board''s own performance, its committee & Individual directors. The manner and detail in which evaluation was carried out is stated in the Corporate Governance Report which is annexed and forms a part of this report.

INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY:

The details in respect of internal financial control and their adequacy are included in Management Discussion and Analysis Report, which forms part of this report.

CORPORATE GOVERNANCE REPORT

The Company is committed to observe good corporate governance practices. The report on Corporate Governance for the financial year ended March 31, 2018, as per regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report. The requisite Certificate from the Practicing Company Secretary of the Company confirming compliance with the conditions of Corporate Governance is annexed to this Report.

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

As required under Section 134 (3) (m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014, particulars relating to conservation of Energy, R & D, Technology absorption and foreign Exchange earnings / outgo are separately provided in the annexure to this report as Annexure - 2.

RISK MANAGEMENT POLICY

The Company had put in place an enterprise wide risk management framework. This holistic approach provides the assurance that, to the best of its capabilities, the Company identifies, assesses and mitigates risks that could materially impact its performance in achieving the stated objectives. The Audit committee ensures that the Company is taking appropriate measures to achieve prudent balance between risk and reward in business activities. The Committee reviews strategic decisions of the Company on regular basis, reviews the Company''s portfolio of risks and considers it against the Company''s Risk Appetite.

VIGIL MECHANISM POLICY

The Company had implemented a vigil mechanism, where by employees, directors and other stakeholders can report matters such as generic grievances, corruption, misconduct, fraud, misappropriation of assets and non-compliance of code of conduct to the Company. The policy safeguards the whistleblowers to report concerns or grievances and also provides a direct access to the Chairman of the Audit Committee. During the year under review none of the personnel has been denied access to the Chairman of Audit Committee. CORPORATE SOCIAL RESPONSIBILITY

Company has earned a profit in the year under review. However, the average net profit calculated as per section 197 of the Companies Act 2013 of last three preceding years is negative, therefore, provisions related to expenditure of atleast two percent of the average net profits in CSR activities is presently not applicable to the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

In Compliance with Section 134(5) of the Companies Act, 2013, the Board of Directors to the best of their knowledge and hereby confirm the following:

a) In the preparation of the annual accounts for the financial year ended 31st March 2018, as far as possible and to the extent, if any, accounting standards mentioned by the auditors in their report as not complied with, all other applicable accounting standards have been followed along with proper explanation relating to material departure;

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

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

d) The Directors had prepared the annual accounts on a going concern basis; and

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

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.

POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The policy of the Company on Director''s appointment and remuneration, including criteria for determining qualifications, independence and other matters as provided under subsection(3) of Section 178 of the Companies Act, 2013 is available on the Company''s website at www.shahalloys.com.

DISCLOSURE UNDER SECTION 22 OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL), ACT,2013

There were no complaints pending for the redressal at the beginning of the year and no complaints received during the financial year.

PARTICULARS OF THE EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report as Annexure- 3. Further, particulars of employees remuneration, as required under section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are not applicable since there was no employee of the Company including Executive Directors was in receipt of remuneration in excess of the limits set out in the said rules.

DETAILS OF RELATED PARTIES TRANSACTIONS PURUSANT TO SECTION 188(1) OF THE COMPANIES ACT, 2013

During the financial year, all transactions entered into with the Related Parties as defined under Companies Act, 2013, were in the ordinary course of business on arm''s length basis and as such did not attract provisions of Section 188 (1) of Companies Act, 2013. Company has formulated policy on related party transactions. Particulars of related party transactions pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 is attached at Annexure - 4. Approvals from the Audit Committee are obtained even for transactions which are in ordinary course of business and repetitive in nature. Further, on quarterly basis, disclosures are made to the Audit Committee and to the Board in its meetings. Details of related party transactions are given in the notes to financial statements.

STATUTORY AUDITORS

Members at its 27th Annual General Meeting held on September 30, 2017 approved the appointment of M/s. Parikh & Majmudar, Chartered Accountants, as statutory auditors for a terms of five years as per provisions of the Companies Act, 2013.

Cost Auditors

Pursuant to the provisions of Section 148 of the Companies Act, 2013 and the Rules made there under M/s. Ashish Bhavsar & Associates, Cost Accountants were appointed for auditing cost accounting records of the Company for the year ending 31st March, 2018. Board has further appointed M/s. Ashish Bhavsar & Associates, Cost Accountants as Cost Auditors for the year ending 31st March 2019 subject to approval of remuneration in the forthcoming Annual General Meeting.

Internal Auditor

The Company has appointed an Independent firm of Chartered Accountants to act as an Internal Auditor as per suggestion of auditors and recommendation of the Audit Committee in order to strengthen the internal control system for the Company.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with rules made thereunder, the Board of Directors has appointed M/s Kamlesh Shah & Co., Practicing Company Secretaries, as Secretarial Auditor to conduct Secretarial Audit of the Company for the Financial Year 2018-19. The report submitted by the Secretarial Auditor in Form MR-3 for the financial year ended as on 31st March, 2018 is attached to this report as Annexure - 5.

BOARD''S RESPONSE ON the REMARKS MADE BY STATUTORY Auditors

The Directors submit their explanations to then various observations made by the Auditors in their report for the year 2017-18. Para nos.of Auditors'' Report and reply are us under:

Basis for Qualified Opinion - Para 1 of Standalone and Consolidated Independent Auditor''s Report

On account of maturity of foreign currency convertible Bonds (FCCB) on 22.09.2011, dues have been frozen. On 13.09.2010 the Company was declared as Sick Unit by Hon''ble BIFR u/s 3(1)(0) of SICA. It was taken a conscious decision that the principal amount be frozen on the date of maturity and no further exchange gain / loss and interest to be provided on FCCB. This Liability was frozen on the maturity.

Para 2 of Standalone and Consolidated Independent Auditor''s Report

On account of non-payment of principle and interest to the Banks, debts were declared NPA by the Banks. Since Company wants to settle the dues amicably with the Banks, it did not provide for interest.

Para 3 of Standalone and Consolidated Independent Auditor''s Report

It is expects that the impact of "Effective Interest Method" to the Finance Cost as per the Requirements of IND AS 109 on the financial Results will not be material enough and hence, the Management has not given effect of the same in the consolidated financial results.

Annexure A to Standalone Independent Auditors'' Report - Para viii

As per the scheme sanctioned by CDR (EG), consortium bankers were required to give working capital for the optimal utilization of production capacity. However, in the absence of non availability of funds from the lenders, the accruals were not in line with the sanctioned scheme and hence Company could not utilize optimally its production capacity. In view of this, company was not able to make payments to banks/institutions and debenture holders as per the sanctioned scheme. However, before due date of repayment, Company had approached Hon''ble BIFR for declaring it as a Sick company under Section 3(1)(0) of the SICA and was declared so before the due date, i.e., September 2011. On account of sick status of the company, payments will be made as per the scheme as may be approved by the Hon''ble BIFR.

Almost of the banks assigned the debts to various Asset Reconstruction Companies (ARCs). Company has entered into Settlement Agreements with ARCs. Company has made proposal settlement with other banks, financial institution and ARCs. Company is actively negotiating with lenders and ARCs'' for settlement of debts and expecting a settlement soon.

On account of maturity of Foreign Currency Convertible Bonds (FCCB) on 22.09.2011 dues have been frozen on maturity since company was declared Sick company by Hon''ble BIFR u/s 3(1)(o) of SICA. In view of the insufficient accruals of the Company the cash flow is not sufficient enough to pay to the FCCB holders. The company''s operations are not profitable and market conditions of steel industries are very bad. All the steel industries in India at large is facing crisis due to dumping of material from China and Company is also not an exception to that.

Para 4 of Consolidated Independent Auditor''s Report

It is expected that the loss of allowance if any as per Expected credit loss Method on the financial assets will not be material enough and hence, the Management has not given effect of the same in the consolidated financial results.

Para 5 of Consolidated Independent Auditor''s Report

Associate Company Management has paid the capital advances in earlier years and the same stands to Rs. 9,12,32,064/- which are currently shown under long term loans and advances to the suppliers for the supply of customized equipments. However, the management of Associate Company is trying to recover such advances from the suppliers.

Para 6 of Consolidated Independent Auditor''s Report

The management of Associate Company expects that the impact of "Effective Interest Method" to the Finance Cost as per the Requirements of IND AS 109 on the financial Results will not be material enough and hence, the Management has not given effect of the same in the consolidated financial results.

MATERIAL CHANGES / INFORMATION:

1. During the year under review your company has successfully entered into settlement agreement with the Assets Reconstruction Company India Limited and Invent Assets Securitisation & Reconstruction Pvt. Ltd for the dues assigned by various lenders. No other material changes have taken place after the closure of the financial year up to the date of this report which may have substantial effect on the business and financial of the Company.

2. No significant and material orders have been passed by any of the regulators or courts or tribunals impacting the going concern status and companies operations in future.

EXTRACT OF ANNUAL RETURN

An extract of the Annual Return in Form MGT-9 in compliance with Section 92 of the Companies Act 2013 read with applicable rules made there under is annexed to this report at Annexure - 6.

APPRECIATION

Your Directors place on record their sincere appreciation for the valuable support and co-operation as received from government authorities, Financial Institutions, Banks and ARCs during the year. Directors are also thankful for the support extended by Customers, Suppliers and contribution made by the employees at all level. Directors would also like to acknowledge continued patronage extended by Company''s shareholders in its entire endeavor.

	For and on behalf of the Board
	for Shah Alloys Limited
Date: 30th May 2018	Rajendra V. Shah
Place: Santej	Chairman
	(DIN: 00020904)

ANNEXURE 1

Form AOC-1

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014) Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures

Part "A": Subsidiaries

(Information in respect of each subsidiary to be presented with amounts in Crores Rs) Company does not have subsidiary company; therefore Part A is not applicable

Part "B": Associates and Joint Ventures Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures

Name of associates/Joint Ventures		S.A.L. Steel Limited
1.	Latest audited Balance Sheet Date	March 31, 2018
2.	Shares of Associate/Joint Ventures held by the company on the year end
	a) No. of Shares	30256989
	b) Amount of Investment in Associates/Joint Venture (in Cr.)	21.82
	c) Extend of Holding %	35.61
3.	Description of how there is significant influence	Based on Shareholding
4.	Reason why the associate/joint venture is not consolidated	Not Applicable
5.	Net worth attributable to shareholding as per latest audited Balance Sheet	(151.55)
6.	Profit/Loss for the year
i. Considered in Consolidation		35.89
ii. Not Considered in Consolidation		42.37

1. Names of associates or joint ventures which are yet to commence operations - None

2. Names of associates or joint ventures which have been liquidated or sold during the year - None

B. TECHNOLOGY ABSORPTION

(I) Research and Development (R & D)

	Particulars	2017-18	2016-17
1.	Specific areas in which R&D carried out by the company.	Nil	Nil
2.	Benefits derived as a result of the above R&D	Nil	Nil
3.	Future plan of action:
	a. Capital	Nil	Nil
	b. Recurring	Nil	Nil
	c. Total	Nil	Nil
	d. Total R&D expenditure as a percentage of total turnover	Nil	Nil

(II) Technology absorption, adaptation:

		Particulars	2017-18	2016-17
		Company has not carried out research, development & innovation activities.
		1. Efforts, in brief, made towards technology absorption, adaptation and innovation.	Nil	Nil
		2. Benefits derived as a result of the above efforts, e.g. product improvement, cost reduction, product development, import substitution etc.	Nil	Nil
		3. In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished:	Nil	Nil
		a. Technology imported
		b. Year of import
		c. Has technology has been fully absorbed
		d. If not fully absorbed, areas where this has not taken place, reasons therefore and future plans of action.
c.		FOREIGN EXCHANGE EARNINGS AND OUTGO(Rs. in Crores)
	Particulars		2017-18	2016-17
	1)	EARNINGS & OUTGO
	a. Foreign Exchange earnings		0.51	-
	b. Foreign Exchange outgo		37.33	47.78

2) TOTAL FOREIGN EXCHANGE USED AND EARNED
As per notes on account
	For and on behalf of the Board
	for Shah Alloys Limited
Date : 30th May 2018	Rajendra V. Shah
Place : Santej	Chairman
	(DIN: 00020904)

ANNEXURE 3 TO THE BOARD''S REPORT PARTICULARS OF THE EMPLOYEES

Information pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

I. The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year:

	Sr. No.	Name of director	Designation	Ratio of the remuneration of each director to the median remuneration of the employees of the Company for the FY 2017-18		* % increase / (decrease) in remuneration in the FY 2017-18
	a)	Shri K. S. Kamath	Jt. Managing Director		11:1	-
	b)	Shri Ashok Sharma	Whole Time Director		10.29:1	-
	c)	Shri Yashpal Mehta *	Chief Financial Officer		-	-
	d)	Shri VInod Kumar Shah	Company Secretary		12.86:1	-
II.	The percentage increase in the median remuneration of employees in the financial year:				7%
III.	The number of permanent employees on the rolls of company:				600
IV.	Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out of there are any exceptional circumstances for increase in the managerial remuneration;				During the year under review, the average annual increase was negligible
V.	Affirmation that the remuneration is as per the remuneration policy of the Company.				All remuneration of the Employees and directors are paid as per remuneration policy of the Company.

	For and on behalf of the Board
	for Shah Alloys Limited
Date : 30th May 2018	Rajendra V. Shah
Place : Santej	Chairman
	(DIN: 00020904)

`ANNEXURE 4

FORM NO. AOC -2 (Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub section (1) of section 188 of the Companies Act, 2013 including certain arms length transaction under third proviso thereto.

1 Details of contracts or arrangements or transactions not at Arm''s length basis.
	Name (s) of the related party	Nature of transaction	Duration of the transaction	Salient terms of the transaction	Justification for transactions''	Date of approval by the Board	Amount paid as advances	Date of special resolution
1.	NIL	NIL	NIL	NIL	NIL	NIL	NIL	NIL

2 Details of material contracts or arrangement or transactions at arm''s length basis
	Name (s) of the related party	Nature of relationship	Nature of transaction	Duration of the transaction	Transactions value in Rs.	Date of approval by the Board	Amount paid as advances
1	S.A.L Steel Ltd.	Associate	Purchase of Power	April 2017-March 2018	39,32,73,500	Since these RPTs are in the ordinary course of business and are at arms length basis, approval of the Board is not applicable. However, these are reported to the Audit Committee / Board at their quarterly meetings.	N.A.
			Purchase of material		1,71,68,89,797
			Sale of material		51,76,32,021

	For and on behalf of the Board
	for Shah Alloys Limited
Date : 30th May 2018	Rajendra V. Shah
Place : Santej	Chairman
	(DIN: 00020904)

ANNEXURE 5

FORM NO. MR-3 SECRETARIAL AUDIT REPORT

[Pursuant to section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]

For the Financial Year ended 31st March, 2018 To,

The Members, SHAH ALLOYS LIMITED CIN: L27100GJ1990PLC014698

I/we have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices followed by SHAH ALLOYS LIMITED (Hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/ statutory compliances and on that basis; we are expressing our opinion thereon.

Based on my/our verification of the records of SHAH ALLOYS LIMITED, books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the company, its officers, agents and authorized representatives during the conduct of secretarial audit, I/We hereby report that in my/our opinion, the company has, during the audit period covering the financial year ended on 31st March 2018 complied with the statutory provisions listed hereunder and also that the company has proper Board-processes and compliances mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

I/We have examined the books, papers, minute books, forms and returns filed and record maintained by SHAH ALLOYS LIMITED (CIN: L27100GJ1990PLC014698) for the financial year ended on 31.03.2018 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made there under;

(ii) The Securities Contracts (Regulations) Act,1956 (''SCRA'') and the rules made there under;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

(iv) Foreign Exchange Management Act,1999 and the rules and regulation made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings:(NOT APPLICABLE FOR THE YEAR UNDER REVIEW)

(v) The following Regulations and guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (''SEBI Act'') :-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 2011; (COMPLIED WITH ANNUAL DISCLOSURE OF SHAREHOLDING AS PER REGULATION NO. 30 OF THE REGULATIONS)

(b) The Securities and Exchange Board of India (Prohibition of Insider Training) Regulations,1992;

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999; (NO ESOS OR ESOPS WERE ISSUED DURING THE YEAR UNDER REVIEW)

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (NOT APPLICABLE FOR THE YEAR UNDER REVIEW)

(f) The Securities and Exchange Board of India (Registrar to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client.

(g) The Securities and Exchange Board of India(Delisting of Equity Shares) Regulations, 2009; NOT APPLICABLE FOR THE YEAR

(h) The Securities and Exchange Board of India (Buyback of Securities)Regulations, 1998; (NOT APPLICABLE FOR THE YEAR UNDER REVIEW)

(vi) As stated in the Annexure - A - all the laws, rules, regulations are applicable specifically to the company.

(vii) No Other Observations regarding other major corporate events occurred during the year and various compliances made by the Company with applicable Laws, Rules, Regulations, Listing Agreements etc. I/We have also examined compliance with the applicable clauses of the following: (i) Secretarial Standards issued by The Institute of Company Secretaries of India and applicable w.e.f 1st day of July 2015 are adopted by the Company by passing requisite Board Resolutions and are complied with. (ii) The Listing Agreements entered into by the Company with BSE Limited.

During the period under review the Company has complied with the provision of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above. I/We further report that

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non -Executives Directors, Independent Directors and Woman Director.

There were no changes in the composition of the Board of Directors during the year.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance and a system exists for seeking and obtaining further information and clarification on the agenda items before the meeting and for meaningful participation at the meeting. Majority decision is carried through while the dissenting members'' views are captured and recorded as part of the minutes.

I/We further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliances with applicable laws, rules, regulations and guidelines.

I/We further report that during the audit period the company has not made any

(I) Public/ Right/Preferential issue of shares/ debentures/sweat equity, etc.

(II) Redemption/ buy-back of securities

(III) Major decisions taken by the members in pursuance to section 180 of the Companies Act, 2013

(IV) Foreign technical collaborations

	FOR KAMLESH M. SHAH & CO.,
	PRACTICING COMPANY SECRETARIES
	(Kamlesh M. Shah)
Place : Ahmedabad	PROPREITOR
Date : 30th May, 2018	ACS: 8356, COP: 2072

ANNEXURE-A

Securities Laws

1. All Price Sensitive Information was informed to the stock exchanges form time to time

2. All investors complain directly received by the RTA & Company is recorded on the same date of receipts and all are resolved within reasonable time.

Labour Laws

1. All the premises and establishments have been registered with the appropriate authorities.

2. The Company has not employed any child labour/ Bonded labour in any of its establishments.

3. Provisions with relate to compliances of PF / Gratuity Act are applicable to Company.

4. The Company is regular in filing return of PF dues.

5. The Company is making payment of Gratuity to their Employees regularly when they become due and payable except dues which are under dispute.

6. The Company has framed a policy on prevention of Sexual Harassment of Women Employee at work place and also all preventive measure has been taken by the Company. Since women employed by Company are less than 10 in number, Company had not formed any committee. However, as per provisions any aggrieved women can approach "Local Complaints Committee" formed at every District level pursuant to section 6 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Environmental Laws

1. As the company is not discharging the contaminated water at the public drains / rivers.

2. The company has been disposing the hazardous waste as per applicable rules. Taxation Laws

1. The company follows provisions of the taxation and Income Tax Act, 1961 and filing the returns with Income tax department and all other necessary departments, however, in few instances company has filed the returns with the authorities with delay payment charges / interest.

2. The company normally making payment of TDS, GST and other statutory payment with appropriate Authorities well in time except few instances with delay payment charges / interest.

	FOR KAMLESH M. SHAH & CO.,
	PRACTICING COMPANY SECRETARIES
	(Kamlesh M. Shah)
Place : Ahmedabad	PROPREITOR
Date : 30th May, 2018	ACS: 8356, COP: 2072

1) ANNEXURE 6

Form No. Mgt-9 Extract of Annual Return as on 31/03/2018 [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

REGISTRATION AND OTHER DETAILS:

1)	CIN	L27100GJ1990PLC014698
2)	Registration date	23/11/1990
3)	Name of the company	SHAH ALLOYS LIMITED
4)	Category/ sub-category of the company	Company limited by shares / Indian Non Government Company
5)	Address of the registered office and contact details:	5/1 Shreeji House, 5â¢ Floor, B/h M J Library Ashram Road, Ahmedabad-380006 Gujarat
6)	Whether listed company	YES
7)	Name, address and contact details of registrar and Transfer Agent, if any	BIGSHARE SERVICES PVT. LTD. Bharat Tin Works Building, 1st Floor, Opp. Vasant Oasis, Makwana Road, Marol, Andheri - East, Mumbai - 400059, Maharashtra. Board No.: 022 6263 8200 E-mail: [email protected] Website: www.bigshareonline.com

2) PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-

Sr. No.	Name and description of main products/ services	NIC Code of the Product / Service	% of total turnover of the Company
1	M. S. Plate, Coils, Bilets, S. S. Plate, Flat and Sheet	24103	100%

3) PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES -

Sr. No.	Name and Address of the Company	CIN / GLN	Concern	% of shares held	Applicable Section
1.	S.A.L. Steel Limited	L27100GJ1990PLC014698	Associate	35.61%	2(6)

ii) Shareholding of promoters

Category of Shareholders	Shareholding at the beginning of the year			Shareholding at the end of the year			% change in shares holding during the year
	No. of Shares	% of total shares of the Company	% of shares pledged/ encumbered to total shares	No. of Shares	% of total shares of the Company	% of shares pledged/ encumbered to total shares	% change in shares holding during the year
Rajendrabhai V. Shah	7912404	39.97	7912404	7912404	39.97	7912404	NIL
Rajendrabhai V. Shah Huf	1531960	7.74	1531960	1531960	7.74	1531960	NIL
Ragini R Shah	1146006	5.79	1146006	1146006	5.79	1146006	NIL
Prakash V Shah	47000	0.24	0	0	0	0	100
Jayesh V Shah	29936	0.15	0	28681	0.14	0	4.19
Karan R. Shah	40000	0.20	0	0	0	0	100
Ashvin V Shah	21940	0.11	0	21940	0.11	20000	NIL
Total	10729246	54.19	10590370	10640991	53.75	10610370	0.44

iii) Change In Promoter''s Shareholding (Please specify, if there is no change)

Name of promoter	Shareholding at the beginning of the year		Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment/ transfer/ bonus / sweat equity etc)				Shareholding at the end of the year
	No. of share	% of total shares of the company					No. of share	% of total shares of the company
	No. of share	% of total shares of the company	Date	Increase / Decrease	No. Of Shares	Reason	No. of share	% of total shares of the company
Rajendrabhai V. Shah	7912404	39.97	07.03.2018	Increase	92536	Transfer	7912404	39.97
			08.03.2018	Increase	11209	Transfer
			09.03.2018	Increase	1255	Transfer
			12.03.2018	Increase	40000	Inter-se Transfer
			12.03.2018	Decrease	40000	Transfer
			13.03.2018	Decrease	105000	Transfer
Rajendrabhai V. Shah -HUF	1531960	7.74	No change				1531960	7.74
Ragini R Shah	1146006	5.79	No change				1146006	5.79
Prakash V. Shah	47000	0.24	06.11.2017	Decrease	47000	Inter-se transfer	0	0
Karan R Shah	40000	0.20	12.03.2018	Decrease	40000	Inter-se transfer	0	0
Jayesh V. Shah	29936	0.15	09.03.2018	Decrease	1255	Inter-se transfer	28681	0.15
Ashvin V. Shah	21940	0.11	No change				21940	0.11
TOTAL	10729246	54.19					10640991	53.75

iv) SHAREHOLDING PATTERN OF TOP TEN SHAREHOLDERS (OTHER THAN DIRECTORS, PROMOTERS AND HOLDERS OF GDRs AND ADRs)

Sr. No.	NAME OF SHAREHOLDERS	Shareholding at the beginning of the year		Cumulative Shareholding during the year
Sr. No.		No. of Shares	% of total shares of the company	No. of Shares	% of total shares of the company
1	Gujarat NRE Coke Ltd.	969769	4.90	969769	4.90
2	Satellite Mercantiles Pvt Ltd.	901361	4.55	901361	4.55
3	Jaideep Narendra Sampat	0	0	368810	1.86
4	Anand Mohan	0	0	308800	1.56
5	Sheela Lalit Mehta	0	0	200000	1.01
6	Ambition Merchants Private Limited	359774	1.82	177021	0.89
7	Asset Reconstruction Company (India) Ltd.	0	0	145000	0.73
8	Manish Shah	0	0	122751	0.62
9	JM Financial Services Limited	3520	0	118829	0.60
10	Ramaswamy Anand	0	0	110000	0.56
	TOTAL	2234424	11.27	3422341	17.28

5) SHAREHOLDING OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Shri Rajendra V. Shah Chairman of the Company holds 7912404 equity shares in the Company in addition to 1531960 shares as Karta of HUF and no other Director or Key Managerial personnel have any shareholding in the company.

6) INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment

	Secured Loans excluding deposits	Unsecured Loans	Deposits	Total Indebtedness
Indebtedness at the beginning of the financial year
i) Principal Amount	517,53,19,370	48,82,05,000	-	566,35,24,370
ii) Interest due but not paid	183,80,25,349	23,55,83,323		207,36,08,672
iii) Interest accrued but not due

Total (i ii iii)	701,33,44,719	72,37,88,323	-	773,71,33,042
Change in Indebtedness during the financial year
i) Principal Amount	(152,45,38,024)	-	-	(152,45,38,024)
ii) Interest due but not paid	(76,94,63,023)	-	-	(76,94,63,023)
iii) Interest accrued but not due	-	-	-	-
Indebtedness at the end of the financial year
i) Principal Amount	365,07,81,346	48,82,05,000	-	413,89,86,346
ii) Interest due but not paid	106,85,62,326	23,55,83,323		130,41,45,649
iii) Interest accrued but not due

Total (i ii iii)	471,93,43,672	72,37,88,323	-	544,31,31,995

7) REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

a. Remuneration to Managing Director, Whole-time Directors and/or Manager:

SI. No.	Particulars of Remuneration	Name of MD/WTD/ Manager	Total Amount
1.	SALARY	Shri Ashok Sharma	12,00,000
		Shri K.S. Kamath	12,92,400
2.	Stock Option	NIL	-
3.	Sweat Equity	NIL	-
4.	Commission
	- as % of profit
	- others, specify...	NIL	-
5.	Others, please specify	NIL	-
	Total (A)	NIL	-
	Ceiling as per the Act	Within the Ceiling of Section II of Part II of Schedule V of the Companies Act, 2013

b. Remuneration to other Directors

Particulars of remuneration	Name of Directors					Total Amount
Independent Directors	Shri Dilip Kumar Sinha	Shri G.M. Shaikh	Shri Tejpal S. Shah	Shri Harshad M. Shah	Smt. Shefali M. Patel
Fee for attending Board / committee meeting	30,000	75,000	75,000	37,500	37,500	2,55,000
Commission	-	-	-	-	-	-
Others	-	-	-	-	-	-
Total	30,000	75,000	75,000	37,500	37,500	2,55,000

c. Remuneration to Key Managerial Personnel other than MD/Manager/WTD

SI. No.	Particulars of Remuneration	Key Managerial Personnel
SI. No.	Particulars of Remuneration	Company Secretary	CFO	Total
		Shri Vinod Kumar Shah	Shri Yashpal Mehta
1	Gross salary	15,00,000	2,43,960*
2	Stock Option	-	-	N.A.
3	Sweat Equity	-	-	N.A.
4	Commission	-	-	N.A.
	- as % of profit	-	-	N.A.
	Others specify...	-	-	N.A.
5	Others, please specify	-	-	N.A.
	Total	15,00,000	2,43,960	17,43,960

*upto 30.06.2017 d. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type	Section of the Companies Act	Brief Description	Details of Penalty / Punishment/ Compounding fees imposed	Authority [RD/NCLT / Court]	Appeal made,if any (give details)
A. COMPANY
Penalty	No	No	No	No	No
Punishment	No	No	No	No	No
Compounding	No	No	No	No	No
B. DIRECTORS
Penalty	No	No	No	No	No
Punishment	No	No	No	No	No
Compounding	No	No	No	No	No
C. Other Officers In Default
Penalty	No	No	No	No	No
Punishment	No	No	No	No	No
Compounding	No	No	No	No	No

Mar 31, 2016

Dear Members,

The Directors pleased to present the 26^th Annual Report of your company on the operations and performance along with the Audited Financial Statements for the year ended on 31^st March 2016.

FINANCIAL HIGHLIGHTS

Rs, In Crores

Particulars	March 31, 2016	March 31, 2015
Total Revenues	293.61	306.41
Total Expenditure	279.05	300.94
Profit before interest depreciation, extraordinary item and tax	14.56	5.47
Depreciation and Interest	41.30	108.85
Profit before extraordinary item and tax	(57.97)	(143.98)
Extraordinary item	(247.12)	40.38
Profit before tax	189.15	184.36
Tax Expense / Deferred tax	65.98	(49.18)
Net Profit available for Appropriation	123.17	(135.18)
Balance Carried forward	(671.09)	(794.29)

STATE OF COMPANY''S AFFAIRS / PERFORMANCE OVERVIEW

During the year under review Net Turnover of the Company has been decreased marginally from Rs, 265.82 crores to Rs, 262.37 crores as compared to previous yearRs,s turnover. Company has registered a net profit of Rs,123.17 crores in comparison to the loss of Rs, 135.18 crores during previous year. Main reason for profit during the year under review was settlement of dues with ARCs on account of reversal of interest and waiver of principal debts. Many a banks had transferred their debts to ARCs and finally dues were settled with few ARCs. Settlement of dues has been made as per directions of Hon''ble BIFR since the company had been declared as SICK company pursuant to the provisions of SICA. Company has been in constant touch with the lenders, financial institution and ARCs for settlement of dues.

DIVIDEND

Due to high accumulated loss, your Directors have not recommended dividend for the financial year 2015-16.

BUSINESS ACTIVITY

The company is engaged in manufacturing of wide range of Stainless Steel, alloy & Speicial steel, Carbon/Mild Steel and Armour Steel in Flat and Long products. There has been no change in the nature of business of the Company.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Consolidated Financial Statements of the Company and its Associates, viz., SAL Steel Ltd., prepared in accordance with the relevant Accounting Standards of the Institute of Chartered Accountants of India, duly audited by the Statutory Auditors, form a part of the Annual Report and are reflected in the Consolidated Accounts.

The company does not have holding or subsidiary companies during the year and no other company has become holding / subsidiary/ joint venture. However, it has one associate company, details are as under:

S. No.	Name of the Company	CIN/GLN	CONCERN	% of shares held by Company	Applicable Section
1.	S.A.L. Steel Limited	L27100GJ1990PLC014698	Associate	35.61%	2(6)

DEPOSIT

The Company has not accepted any public deposit during the year under review and no amount against the same was outstanding at the end of the year.

DETAILS OF LOANS, GUARANTEES AND INVESTMENTS U/S 186 OF THE COMPANIES ACT, 2013

During the year under review the Company has not made any inter corporate loans, investments, given any corporate guarantee to any other body corporate, subsidiary, associate or any other company.

REGULATORY STATEMENT

In conformity with provision of regulation 34(2)(c) & 53(b) of SEBI (LODR), Regulations 2015, the Cash Flow Statement for the year ended 31.03.2016 is annexed hereto. The equity shares of the Company are listed on the BSE Ltd. and the National Stock Exchange of India Ltd. (NSE).

The Company has paid listing fees for the year 2016-17 to above stock exchanges.

DETAILS OF DIRECTORS OR KMPs APPOINTMENT OR RESIGNATION

During the year under review Union Bank of India has withdraw nomination of Shri Harbans Lal Rawal as nominee Director on the Board of the Company. There is no other change in the Composition of the Board or KMPs during the year under review.

MEETINGS OF THE BOARD

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received the necessary declarations from each Independent Director of the Company confirming that he/she met with the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and under Regulation 16(1)(B) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

BOARD DIVERSITY

BOARD EVALUATION

INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY:

The details in respect of internal financial control and their adequacy are included in Management Discussion and Analysis Report, which forms part of this report.

CORPORATE GOVERNANCE REPORT

The Company is committed to observe good corporate governance practices. The report on Corporate Governance for the financial year ended March 31, 2016, as per regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report. The requisite Certificate from the Practicing Company Secretary of the Company confirming compliance with the conditions of Corporate Governance is annexed to this Report.

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

RISK MANAGEMENT POLICY

The Company had put in place an enterprise wide risk management framework. This holistic approach provides the assurance that, to the best of its capabilities, the Company identifies, assesses and mitigates risks that could materially impact its performance in achieving the stated objectives. The Audit committee ensures that the Company is taking appropriate measures to achieve prudent balance between risk and reward in both ongoing and new business activities. The Committee reviews strategic decisions of the Company and on regular basis, reviews the Company''s portfolio of risks and considers it against the Company''s Risk Appetite. The Committee also recommends changes to the Risk Management Technique and / or associated frameworks, processes and practices of the Company.

VIGIL MECHANISM POLICY

The Company had implemented a vigil mechanism, whereby employees, directors and other stakeholders can report matters such as generic grievances, corruption, misconduct, fraud, misappropriation of assets and non-compliance of code of conduct to the Company. The policy safeguards the whistle blowers to report concerns or grievances and also provides a direct access to the Chairman of the Audit Committee. During the year under review none of the personnel has been denied access to the Chairman of Audit Committee.

CORPORATE SOCIAL RESPONSIBILITY

Company has earned a profit in the year under review. Accordingly, Company has constituted Corporate Social Responsibility Committee as per Section 135 of Companies Act, 2013 and the rules framed there under. Since the average net profits of the Company during immediately three preceding financial years is negative, provisions related to expenditure of at least two percent of the average net profits in CSR activities is presently not applicable to the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

In Compliance with Section 134(5) of the Companies Act, 2013, the Board of Directors to the best of their knowledge and hereby confirm the following:

a) In the preparation of the annual accounts for the financial year ended 31^st March 2016, as far as possible and to the extent, if any, accounting standards mentioned by the auditors in their report as not complied with, all other applicable accounting standards have been followed along with proper explanation relating to material departure;

d) The Directors had prepared the annual accounts on a going concern basis; and

f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The policy of the Company on Director''s appointment and remuneration, including criteria for determining qualifications, independence and other matters as provided under subsection (3) of Section 178 of the Companies Act, 2013 is available on the Company''s website at www.shahalloys.com.

DISCLOSURE UNDER SECTION 22 OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL), ACT, 2013

There were no complaints pending for the redressal at the beginning of the year and no complaints received during the financial year.

PARTICULARS OF THE EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act,2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report as Annexure- 3. Particulars of employees remuneration, as required under section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are not attached with this report since there was no employee who was in receipt of remuneration in excess of aggregate of '' 60,00,000 during the year if employed throughout the financial year or '' 5 lacs per month in the aggregate if employed for part of the year.

DETAILS OF RELATED PARTIES TRANSACTIONS PURUSANT TO SECTION 188(1) OF THE COMPANIES ACT, 2013

During the financial year, all transactions entered into with the Related Parties as defined under Companies Act, 2013, were in the ordinary course of business and on an arm''s length basis and as such did not attract provisions of Section 188 (1) of Companies Act, 2013. The Company has formulated policy on related party transactions. Particulars of related party transactions in prescribed Form AOC-2 is attached at Annexure - 4. Approvals from the Audit Committee are obtained even for transactions which are in ordinary course of business and repetitive in nature. Further, on quarterly basis, disclosures are made to the Audit Committee and to the Board. Details of related party transactions are given in the notes to financial statements.

STATUTORY AUDITORS

Members at its 25^th Annual General Meeting held on September 24, 2015 approved the appointment of M/s. Talati & Talati, Chartered Accountants, as statutory auditors for the period as per provisions of the Act, subject to ratification in every Annual General Meeting. Company has received letter of consent and confirmation under section 141(1) the Companies Act 2013 for their appointment hence, the Board has now proposed to ratify the appointment of Statutory Auditors from conclusion of 26^th Annual General Meeting to next Annual General Meeting to be held in 2017. Necessary Resolution for their appointment as the Statutory Auditors and fixing their remuneration is proposed to be passed at the Annual General Meeting.

Cost Auditors

Internal Auditor

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with rules made The Board of Directors has appointed M/s Kamlesh Shah & Co., Practicing Company Secretaries, as Secretarial Auditor to conduct the Secretarial Audit of the Company for the Financial Year 2015-16. The report submitted by the Secretarial Auditor in Form MR-3 is attached to this report as Annexure - 5. The remark of secretarial auditor is self explanatory in nature.

BOARD''S RESPONSE ON THE REMARKS MADE BY STATUTORY AUDITORS

The Directors submit their explanations to then various observations made by the Auditors in their report for the year 2015-16. Para nos. of Auditors'' Report and reply are us under:

Basis for Qualified Opinion - Para 1 of Standalone and Consolidated Independent Auditor''s Report

Dues on account of maturity of foreign currency convertible Bonds (FCCB) on 22.09.2011 have been frozen on maturity due to sick company declared by Hon''ble BIFR u/s 3(1)(0) of SICA and accordingly exchange rate fluctuation has not been considered thereafter. Payment of FCCB shall be considered as per the scheme that may be considered by Hon''ble BIFR.

Annexure A to Independent Auditors'' Report - Para 7 (i)

Payment of Statutory dues were marginally delayed on account of slow recovery / collection. However, the same has been paid.

Annexure A to Independent Auditors'' Report - Para 8

Most of the banks assigned the debts to various Asset Reconstruction Companies (ARCs). Company has entered into Settlement Agreements with INVENT in connection with dues of Union Bank of India and State Bank of India. Company has made proposal settlement with other banks, financial institution and ARCs. Company is actively negotiating with these ARCs'' for settlement of debts and expecting a settlement soon. Since the matter is pending before Hon''ble BIFR and settlement proposals are under consideration.

Dues on account of maturity of Foreign Currency Convertible Bonds (FCCB) on 22.09.2011 have been frozen on maturity and accordingly exchange rate fluctuations has not been considered thereafter. Payment of FCCB shall be considered as per the scheme that may be considered by Hon''ble BIFR, matter is pending before Hon''ble BIFR, matter will be decided as per directions of the Hon''ble BIFR.

MATERIAL CHANGES / INFORMATION:

1. No material changes have taken place after the closure of the financial year up to the date of this report which may have substantial effect on the business and financial of the Company.

2. No significant and material orders have been passed by any of the regulators or courts or tribunals impacting the going concern status and companies operations in future.

EXTRACT OF ANNUAL RETURN

An extract of the Annual Return in Form MGT-9 in compliance with Section 92 of the Companies Act 2013 read with applicable rules made there under is annexed to this report at Annexure - 6.

APPRECIATION

For and on behalf of the Board

Rajendra V. Shah

Date : 30^th May 2016 Chairman

Place : Santej (DIN: 00020904)

Mar 31, 2015

Dear Members,

The Directors present 25th Annual Report on the operations and performance together with the Audited Financial Statements for the year ended on 31st March 2015.

FINANCIAL HIGHLIGHTS Rs. In Crores

Particulars Current Year Previous Year 31.03.15 31.03.14

Total Turnover and other Receipts 306.41 472.75

Gross Profit/Loss(Before deducting any of the following) (35.13) (63.17)

A. Interest and Financial charges 69.47 93.47

B. Depreciation, Amortisation and Impairment 39.38 29.93

C. Tax Liability

I. Current Tax 0.00 0.00

II. Deferred Tax (49.18) (57.98)

III. Prior year Tax adjustment 0.00 0.00

Extra ordinary items 40.38 0.00

Net profit available for appropriation (135.18) (128.59)

Provision for Investment Allowance Reserve Nil Nil Net Profit.

A. Add: Brought forward from last year's balance (658.04) (529.45)

B. Less: Transferred to: General Reserve Nil Nil

Transfer to Debenture Redemption Reserve Nil Nil

Transitional effect of depreciation (1.07) 0.00

Dividend: Dividend has not been recommended by the Board N.A N.A

Balance Carried forward (794.29) (658.04)

OPERATIONAL OVERVIEW

During the year under review Net Turnover of the Company has been decreased from Rs. 472.75 Crores to Rs. 306.41 Crores as compared to previous year's turnover poor demand of product. There was net loss of Rs. 35.13 Crores in comparison to the loss of Rs. 63.17 Crores in the previous year.

DIVIDEND

Due to loss, your Directors have not recommended dividend for the financial year 2014-15.

PERFORMANCE

As you are aware that Company has been declared Sick Unit under the provisions of Sick Industrial Company (Special Provisions) Act, 1985, it has become difficult for the company to arrange the funds. As such due to paucity of working capital, company's working is declining. Company is in constant touch with the lenders for an amicable settlement with the lenders through Hon'ble BIFR.

BUSINESS ACTIVITY

The company is engaged in manufacturing of wide range of Stainless Steel, Alloy & Special steel, Carbon/ Mild Steel and Armour Steel in Flat and Long products. Company has been successful in developing protection Armour Steel which is mainly required for defense purpose. Company has been registered with Defense Research and Development Organization as approved vendor and it is expected that good business will be available to the company. To reduce the cost of power, company has been making efforts to purchase power through Open Access which would be cheaper than the present cost of power. There was no change in the business activities during the year.

DETAILS OF THE ASSOCIATES/ JOINT VENTURE / SUBSIDIARIES COMAPANIES

The company does not have holding or subsidiary companies during the year and no other company has become holding / subsidiary/ joint venture. However, it has two associates companies, details are as under:

S. No. Name of the Company CIN/GLN CONCERN % of shares held by Company Applicable Section

1. S.A.L. Steel Limited L27100GJ1990 PLC014698 ASSOCIATE 35.61% 2(6)

FIXED DEPOSIT

The Company has not accepted any public deposit during the year under review and no amount against the same was outstanding at the end of the year.

REGULATORY STATEMENT

In conformity with provision of Clause 32 in the Listing Agreement (s), the Cash Flow Statement for the year ended 31.03.2015 is annexed hereto. The equity shares of the Company are listed on the BSE Ltd. and the National Stock Exchange of India Ltd. (NSE).

The Company has paid listing fees for the year 2015-16 to above stock exchanges.

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

As required under Section 134 (3) (m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014, particulars relating to conservation of Energy, R & D, Technology absorption and foreign Exchange earnings / outgo are separately provided in the annexure to this report

DETAILS OF RELATED PARTIES TRANSACTIONS PURUSANT TO SECTION 188(1) OF THE COMPANIES ACT, 2013

The Company is not entering into related parties transactions for sale/purchase of goods or services at preferential prices. However, all the transactions in the nature of sales/purchase of goods or services are made on arms length basis. The same were reported to the Board at every meeting and Board took a note of the same and approved. Other details for inter corporate financial transactions or remuneration and other benefits paid to directors, their relatives, key managerial personnel etc. are given in the notes to the accounts vide note no 31 as per requirements of AS 18.

The Company has formulated various other policies like Risk Management Policy, Evaluation of Board Performance Policy, CSR Policy etc. etc. All such policies were documented and adopted by the Board in its meeting held on 14.02.2015.

Full details of Risk Management Policy are given in the Corporate Governance Report under the head Whistle Blower Policy.

As the Company is loss making one, the provisions related to CSR is presently not applicable to the Company.

Regarding Performance Review of each of the member of the Board and also the performance of the various Committees and the Board, the Company has adopted the Model Code of Conduct for Independent Directors, Key Managerial Personnel as prescribed in Schedule IV to the Companies Act, 2013 and also as prescribed in the SEBI (Insider Trading) Regulations. The Company strictly follows the procedure to obtain necessary timely declarations from each of the directors and key managerial personnel from time to time.

DETAILS OF LOANS, GUARANTEES AND INVESTMENTS U/S 186 OF THE COMPANIES ACT, 2013

During the year under review the Company has not made any inter corporate loans, investments, given any corporate guarantee to any other body corporate, subsidiary, associate or any other company.

CORPORATE GOVERNANCE

The Board of Directors supports to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity. The Report on corporate governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under the aforesaid Clause 49, is attached to the Report on corporate governance.

BOARD OF DIRECTORS

Details about the Board of Directors Meetings are attached to the Report on Corporate Governance. Further, Shri Rajendra V Shah, will be the Director retiring by rotation and being eligible offers himself for re-appointment at the ensuing Annual General Meeting.

Shri Kandodi Srinivas Kamath, Joint Managing Director and Shri Ashok A Sharma, Whole Time Director has been re-appointed for a period of five years with effect from 01.11.2015 and 01.05.2015 respectively by the Board subject to approval of shareholders and other authority, if any. A resolution seeking approval of the members for re-appointment of Shri Kandodi Srinivas Kamath as Joint Managing Director and Shri Ashok A Sharma as Whole Time Director is being proposed at this Annual General Meeting.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

DECLARATION BY INDEPENDENT DIRECTORS: (Pursuant to Provisions of section 149(6) OF the Companies Act 2013)

All the Independent Directors of the Company do hereby declare that:

(1) All the Independent Directors of the Company are neither Managing Director, nor a Whole Time Director nor a Manager or a Nominee Director.

(2) All the Independent Directors in the opinion of the Board are persons of integrity and possesses relevant expertise and experience.

(3) Who are or were not a Promoter of the Company or its Holding or subsidiary or associate company.

(4) Who are or were not related to promoters or directors in the company, its holding, subsidiary or associate company.

(5) Who has or had no pecuniary relationship with the company, its holding, subsidiary or associate company or their promoters or directors, during the two immediately preceding financial years or during the current financial year.

(6) None of whose relatives has or had pecuniary relationship or transaction with the company, its holding, subsidiary, or associate company, or their promoters, or directors, amounting to two per cent or more of its gross turnover or total income or fifty lacs rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year,

(7) Who neither himself, nor any of his relatives,

(a) Holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of three financial years immediately preceding the financial year in which Ihe is proposed to be appointed.

(b) Is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial years in which he is proposed to be appointed of

(i) A firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company; OR

(ii) Any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to ten per cent, or more of the gross turnover of such firm;

(iii) Holds together with his relatives two per cent, or more of the total voting power of the company; OR

(iv) Is a Chief Executive or director, by whatever name called, or any non-profit organization that receives twenty five per cent or more of its receipts from the Company, any of its promoters, directors or its holding, subsidiary or associate company or that holds two per cent or more of the total voting power of the company; OR

(v) Who possesses such other qualifications as may be prescribed.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of section 134 Clause (C) of Sub-Section (3) of the Companies Act, 2013, in relation to financial statements for the year 2014- 15, the Board of Directors state:

a) In the preparation of the annual accounts for the financial year ended 31st March 2015, as far as possible and to the extent, if any, accounting standards mentioned by the auditors in their report as not complied with, all other applicable accounting standards have been followed along with proper explanation relating to material departure;

b) 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 at the end of the financial year and profit and loss account of the Company for that period;

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

d) The Directors have prepared the annual accounts on a going concern basis; and

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

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

DECLARATION BY BOARD AS PER REQUIREMENT OF SECTION 178 (1)

In compliance with Section 178 (1) as also in compliance with Clause 49 of the Listing Agreement, the Board of Directors do hereby declare that:

a. The Company has proper constitution of the Board of Directors including independent directors in proportion as per requirement of clause 49 of the Listing Agreement. However, the Company is still in process for appointing a suitable person as woman director as required under Section 149 of the Companies Act, 2013.

b. The Company has constituted Nomination and Remuneration Committee, Stakeholders Relationship Committee, Audit Committee as per requirements of the Clause 49 of the Listing Agreement and provisions of the Companies Act 2013.

c. The Company has the policy for selection and appointment of independent directors who are persons of reputation in the society, have adequate educational qualification, sufficient business experience and have integrity & loyalty towards their duties.

d. The Company pays managerial remuneration to its Managing/Whole Time Directors based upon their qualification, experience and past remuneration received by them from their previous employers and company's financial position.

e. The Independent Directors are paid sitting fee for attending sitting fees for attending Board and other committee meetings as decided by the Board from time to time. This sitting fee is decided considering the financial position of the company.

f. The Company is not paying any commission on net profits to any directors.

g. During the year the Board has met 4 times during the year. The details of presence of every director at each meeting of the Board including the meetings of the Committees, if any, are given in the reports of the Corporate Governance.

INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY:

The details in respect of internal financial control and their adequacy are included in Management Discussion and Analysis Report, which forms part of this report.

SYSTEM OF PERFORMANCE EVALUATION OF THE BOARD, INDEPENDENT DIRECTORS AND COMMITTEES AND INDIVISULA DIRECTORS

1. The Board makes evaluation of the effectiveness and efficiency of every individual directors, committee of directors, independent directors and board as a whole.

2. For these purpose the Board makes evaluation twice in a year on a half yearly basis.

3. The performance of individual directors are evaluated by the entire Board, excluding the Director being evaluated on the basis of presence of every directors at a meeting, effective participation in discussion of each of the business of agenda for the meetings, feedback receives from every directors on draft of the minutes and follow up for action taken reports from first line management.

4. Effectiveness and performance of various committees are evaluated on the basis of the scope of work assign to each of the committees the action taken by the committees are reviews and evaluated on the basis of minutes and agenda papers for each of the committee meetings.

5. The performance of independent directors are evaluated on the basis of their participation at the meetings and post meeting follow up and communication from each of such independent directors.

DISCLOUSER AS PER COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014.

Company has Shri Ashok Sharma as Whole Time Director, Shri Srinivas Devidas Kamath as Joint Managing Director, Shri Yashpal Mehta as CFO and Shri Vinod Kumar Shah, FCS as Company Secretary. Total managerial remuneration paid to each of them during the current year and previous year are as under:

I. The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year:

Sr. Name of director Designation Remuneration Remuneration No. paid in paid in current year previous year

1 Shri Ashok Sharma Whole Time Director 12,00,000 12,00,000

2 Shri Kandodi Srinivas Joint Managing Director 12,92,400 12,92,400 Kamat

3 Shri Yashpal Mehta CFO 9,75,840 9,75,840

4 Shri Vinod Kumar Shah Company Secretary 10,20,000 10,20,000

Name of director Total cost of Percentage remuneration remuneration of of the director to total employees cost of remuneration

Shri Ashok Sharma 14,68,15,029 0.82%

Shri Kandodi Srinivas Kamat 14,68,15,029 0.88%

Shri Yashpal Mehta 146815029 0.66%

Shri Vinod Kumar Shah 146815029 0.69%

II. The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any in the financial year:

There was no increase in remuneration during the year 2014-2015.

III. The percentage increase in the median remuneration of employees in the financial year:

During the year the total remuneration of employees is Rs. 14,68,15,029 as against Rs. 20,10,00,891 in the previous year constituting a net decrease of Rs. 5,41,85,862 constituting 26.95%. This decrease in remuneration of employees was due to reduction in business activities.

IV. The number of permanent employees on the rolls of company: There were 515 permanent employees on the rolls of company.

V. The explanation on the relationship between average increase in remuneration and company performance; NOT APPLICABLE

VI. Comparison of the remuneration of the Key managerial personnel against the performance of the company :

The KMP i.e. whole time Directors, Company Secretary CFO are being paid total Remuneration of Rs. 44.88 Lacs per annum.

VII. Variations in the market capitalization of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies, and in case of unlisted companies, the variations in the net worth of the company as at the close of the current financial year and previous financial year;

Closing Market Price of shares of Company as on 31/03/2014 : Rs. 4.00 /- Closing Market Price of shares of Company as on 31/03/2015 : Rs. 5.40/- Earning Per share for the financial year ended on 31/03/2014 : Rs. (64.95)/- Earning per share for the financial year ended on 31/03/2015 : Rs. (47.87)/- Regarding other information like Variations in the market capitalization of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies is not given herewith since Company had made IPO more than 5 Years before and there was no substantial variation in the market price of shares of the company. Company's EPS is negative and hence PE Ratio is not given.

VIII. Comparison of the each remuneration of the key managerial personnel against the performance of the company;

As the company is paying minimum managerial remuneration to its managerial personnel and the Company is the loss making one the comparison of remuneration of each of the KMP with performance of the company is not comparable.

Since WTDs are being paid minimum remuneration and other KMPs are getting remuneration as per prevailing industry norms, it is not possible to compare remuneration with the performance of the company.

IX. The key parameters for any variable component of remuneration availed by the directors; NOT APPLICABLE.

X. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year;

9 (Nine) employees is receiving remuneration in excess than the remuneration of Director or Key Managerial Personnel.

XI. Affirmation that the remuneration is as per the remuneration policy of the Company.

All remuneration of the Employees and directors are paid as per remuneration policy of the Company.

PARTICULARS OF THE EMPLOYEES

Particulars of the employees as required under provisions of Section 197 (12) of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time, are not attached with this report since there was no employee who was in receipt of remuneration in excess of Rs.5,00,000 per month during the year or Rs. 60 Lacs per annum in the aggregate if employed part of the year.

AUDITORS

Statutory Auditors

M/s. Talati & Talati, Chartered Accountants, an Auditors firm are statutory auditors of the company since 2008-09. As per Rule 6(3) of the Companies (Audit and Auditors) Rules 2014, they are eligible to continue as the statutory auditors of the company for financial years 2015-16, 2016-17, and 2017-18. Accordingly Statutory Auditors of the company have given their letter of consent and confirmation under section 141(1) the Companies Act 2013 for their appointment as Statutory Auditors of the Company up to the financial year 2017- 18 hence, the Board has now proposed to appoint the Statutory Auditors for a period of up to 2017-18. Necessary Resolution for their appointment as the Statutory Auditors and fixing their remuneration is proposed to be passed at the Annual General Meeting.

Cost Auditors

M/s. Ashish Bhavsar & Associates, Cost Accountants have been appointed for auditing cost accounting records of the Company for the year ending 31st March, 2015. Pursuant to the provisions of Section 148 of the Companies Act, 2013 and the Rules made there under.

Internal Auditor

The Company has appointed an Independent firm of Chartered Accountants to act as an Internal Auditor as per suggestion of auditors and recommendation of the audit Committee in order to strengthen the internal control system for the Company.

Secretarial Auditor

The Company has appointed M/s. KAMLESH SHAH & SHAH CO. as the secretarial auditor for the financial year 2014-15. They have given their report in the prescribed form MR-3 which is annexed to this report as an ANNEXURE.

Observations of the Secretarial Auditor

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non- Executives Directors and Independent Directors except the woman director. The Company is in process of finding of suitable Woman Director.

EXPLAINATION TO THE Auditors' REMARKS

The Directors submit their explanations to then various observations made by the Auditors in their report for the year 2014-15. Para nos. of Auditors' Report and reply are us under:

Basis for Qualified Opinion Â Para 1

Since last many years the company does not have internal accruals from the operations and as a result, management do not anticipate execution of its ongoing project of Cold Rolling Mill (CRM) Plant. Fund of Rs. 18,31,84,363/- is blocked in the said ongoing projects. Since the capital project is not anticipate to complete in future, we have charged back expense of pre-operative expense, trial run expense and borrowing cost elements for Rs. 5,72,84,008/- to the statement of profit and loss during the current year which was earlier capitalized and carried in Capital work In Progress of our ongoing projects. For the remaining balance carried as Capital Work in Progress, the company has not carried out any Techno-economic assessment during the year ended 31st March 2015 for the valuations of such Capital Projects and hence identification of impairment loss and provision thereof, if any, has not been made. Considering the emphasis of the matter, company agreed to appoint an approved valuer to access the impairment of the assets. We are expecting a report from the valuer and decision will be taken with regard to impairment, if any, on such assets.

Basis for Qualified Opinion Â Para 2

Dues on account of maturity of Foreign Currency Convertible Bonds (FCCB) on 22.09.2011 have been frozen on maturity and accordingly exchange rate fluctuation has not been considered thereafter. Payment of FCCB shall be considered as per the scheme that may be considered by Hon'ble BIFR.

Annexure to the Independent Auditors' Report Â Para vii a Payments of Statutory dues were marginally delayed on account of slow recovery/collection. However, the same has been paid.

Annexure to the Independent Auditors' Report Â Para ix

As per the scheme sanctioned by CDR (EG) consortium bankers were required to give working capital for the optimal utilization of production capacity. However, in the absence of non availability of funds from the lenders, the accruals were not in line with the sanctioned scheme and hence Company could not utilize optimally its production capacity. In view of this, Company was not able to make payments to banks/institutions and debenture holders as per the sanctioned scheme. However, before due date of repayment, Company had approached Hon'ble BIFR for declaring it as a Sick company under Section 3(1)(o) of the SICA and was declared so before the due date, i.e., June 2011. On account of sick company status, payments were not made as per CDR. Company has submitted the proposal for One Time Settlement (OTS) of debts to all the lenders and also revised the proposals based on discussions with high level committee meetings of the lenders. However, despite of the repeated attempts by the company or/and order of the Hon'ble BIFR, Lenders have declined revised proposal and most of the banks assigned the debts to various Asset Reconstruction Companies (ARCs). Your company is actively negotiating with these ARCs' for one time settlement of debts and expecting a settlement in the coming hears.

MATERIAL CHANGES / INFORMATION:

1. No material changes have taken place after the closure of the financial year up to the date of this report which may have substantial effect on the business and financial of the Company. However, in the year current financial year most of the lenders have assigned the debts to various Asset Reconstruction Companies (ARCs)

2. No significant and material orders have been passed by any of the regulators or courts or tribunals impacting the going concern status and companies operations in future.

APPRECIATION

Your Directors place on record their sincere appreciation for the valuable support and co-operation as received from government authorities, Financial Institutions and Banks during the year. The Directors are also thankful for the support extended by Customers, Suppliers and contribution made by the employees at all level. The Directors would also like to acknowledge continued patronage extended by Company's shareholders in its entire endeavor.

For and on behalf of the Board

Rajendra V. Shah

Date :22nd May 2015 (DIN: 00020904)

Place:Santej Chairman

Mar 31, 2013

Dear Members,

The Directors present 23rd Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2013.

FINANCIAL HIGHLIGHTS Rs. In Crores

PARTICULARS Current Year Previous Year 31.03.13 31.03.12

Total Turnover and other Receipts 656.94 833.30

Gross Profit/Loss (Before deducting any of the following) (45.92) (115.88)

A. Interest and Financial charges 92.36 92.22

B. Depreciation, Amortisation and Impairment 30.64 31.74

C. Tax Liability

I. Current Tax 0.00 0.00

II. Deferred Tax (68.30) (78.52)

III. Prior year Tax adjustment 0.00 0.05

Net Profit available for appropriation (100.62) (161.38) Provision for Investment Allowance Reserve Nil Nil Net Profit.

A. Add: Brought forward from last year''s balance (428.78) (267.40)

B. Less: Transferred to: General Reserve Nil Nil

Transfer to Debenture Redemption Reserve Nil Nil

Balance Carried forward (529.40) (428.78)

PERFORMANCE

Due to the financial crisis manufacturing capacity was underutilized. As you are aware that Company has been declared Sick Unit under the provisions of Sick Industrial Company (Special Provisions) Act, 1985, it has become difficult for the company to arrange the funds. Board expects that once DRS is passed or otherwise dues are settled with the lenders, Company would be in a position to give better results.

CORPORATE GOVERNANCE

The Board of Directors supports the broad principles of corporate governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity.

Your company has been practicing the principles of good corporate governance over the years.

DIRECTORS

Shri Ashok Sharma, Shri Tejpal Shah and Shri Dilip Kumar Sinha will be the Directors retiring by rotation and being eligible offer themselves for re-appointment at the ensuing Annual General Meeting.

PARTICULARS OF THE EMPLOYEES

Particulars of the employees as required under the provisions of section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended are not attached with this report since there was no employee who was in receipt of remuneration in excess of limits prescribed under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particular of Employees), Rules 1975.

CONSERVATION OF ENERGY, R & D TECHNOLOGY ETC

As required under section 217(1)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 the particulars relating to conservation of Energy, R & D, Technology absorption and foreign Exchange earnings / outgo are annexed.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors confirm:

a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

b) that they 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 and of the profits of the company for that period;

c) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for prevailing the detecting fraud and other irregularities;

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

AUDITORS

M/s. Talati & Talati, Chartered Accountants, Statutory Auditors of the Company, retires at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. Your Directors recommend their re-appointment. Your directors had appointed M/s. Ashish S. Bhavsar & Co. as Cost Auditor, for auditing cost accounting records of the Company for financial year 2012-13. The Report of 2011-12 has been submitted to the Central Government within stipulated time and report of 2012-13 will be submitted to the Central Government on or before the due date. Board in its meeting held on 28th May, 2013 have decided to appoint M/s. Ashish Bhavsar & Associates, Cost Accountants for auditing cost accounting records of the Company for the financial year 2013-14 and an application for seeking said appointment will be made to the Central Government by the Company. The Company has received a letter to the effect that their appointment would be within the prescribed limits under Section 224(1-B) of the Companies Act, 1956.

EXPLANATION TO THE AUDITORS'' REMARKS

The Directors submit their explanations to the qualifications made by the Auditors in their report for the year 2012-13. The Para nos. of Auditors'' Report and reply are as under:

Under the heading ''Opinion''

Dues on account of maturity of Foreign Currency Convertible Bonds (FCCB) on 22.09.2011 have been frozen on maturity and accordingly exchange rate fluctuation has not been considered thereafter. Payment of FCCB shall be considered as per the scheme that may be considered by Hon''ble BIFR.

Para - ix (a)

Payments of Statutory dues were marginally delayed on account of slow recovery/collection. However, the same have been paid.

Para xi

As per the scheme sanctioned by CDR (EG) consortium bankers were required to give working capital for the optimal utilization of production capacity. However, in the absence of non availability of funds from the members, the accruals were not in line with the sanctioned scheme and hence Company could not utilize optimally its production capacity. In view of this, Company was not able to make payments to banks/institutions and debenture holders as per the sanctioned scheme. However, before due date of repayment, Company had approached Hon''ble BIFR for declaring it as a Sick company and was declared so before the due date, i.e., June 2011. On account of sick status, payments were not made as per CDR, Company is negotiating with lenders for settlement of dues through Hon''ble BIFR. Once lenders'' dues are settled, company would be able to manage funds and optimize production capacity.

FIXED DEPOSIT

The Company has not accepted any deposits during the year.

REGULATORY STATEMENT

Pursuant to provision of clause 32 of Listing Agreement(s) the Cash Flow Statement for the year ended 31.03.2013 is annexed hereto.

The equity shares of your company are listed on the following stock exchanges and the listing fees have been paid by the company for the year 2013-2014.

X Bombay Stock Exchange Ltd. National Stock Exchange of India Ltd"

P. J. Tower, Dalal Street, Mumbai - 400 001. "Exchange Plaza"

Bandra Kurla Complex, C-1, Block-G, Bandra (East), Mumbai - 400 051.

ACKNOWLEDGMENT

Your Directors wish to place on record their appreciation for the valuable support and co-operation received from government authorities, Financial Institutions, and Banks during the year. Your Directors are also thankful for the support extended by Customers, Suppliers ad contribution may by the employees at all level. The Directors would also like to acknowledge continued patronage extended by Company''s shareholders in its entire endeavor.

For, SHAH ALLOYS LIMITED

Sd/-

Date: 28th May 2013 Rajendra V Shah

Place: Santej CHAIRMAN

Mar 31, 2012

The Directors present 22nd Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2012.

FINANCIAL HIGHLIGHTS:

(Rs. in Crores)

Particulars 2011-12 2010-11

Turnover 830.11 824.51

Less: Excise duty 72.30 72.79

Net Turnover 757.81 751.72

Other Income 3.19 2.67

Gross Revenue 761.00 754.39

Less: Cost of Sales 876.88 819.02

Profit/(Loss) before depreciation, Interest & Tax (115.88) (64.63)

Less: Depreciation & Amortisation 31.74 32.28

Less: Interest and Financial Expenses 92.22 87.19

Profit/(Loss)before Taxes (239.84) (184.10)

Less: Tax Expense (Income) (78.46) (54.42)

Net Profit/(Loss) after Tax (161.38) (129.68)

Add: Balance brought forward from previous year (267.40) (137.71)

Carried forward Losses (428.78) (267.40)

PERFORMANCE

Members are aware that due to the status of Sick industry, Company has been facing financial crunch and as such manufacturing capacity was very much underutilized. However, due to all round efforts Company could maintain turnover near to the figures of last year. Total Income for the year ended 31st March, 2012 amounted to Rs. 761 Crores as against Rs. 754.39 Crores for the year ended 31st March, 2011. Apart from the financial crisis, operations of the company are still influenced due to higher raw material prices, escalating fuel prices, higher inflationary conditions, lower margin realization and competition. Introduction of some good product mix and greater attention on the high value premium products have helped the Company to realize better margin in some areas.

REFERENCE TO BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION (BIFR) UNDER SICA:

Members are aware that Company has gone to Hon'ble Board for Industrial and Financial Reconstruction (BIFR) under the Section 15 of Sick Industrial Company (Special Provisions) Act, 1985. Company has been registered as Sick Company vide order of Hon'ble BIFR dated 31st August 2010. Union Bank of India (UBI) has been appointed as Operating Agency (OA). On the directions of the consortium lenders, M/s MECON Ltd., a Public Sector Undertaking had been appointed to carry out Techno Economic Viability (TEV) Study. The study report has been received and submitted to the Operating Agency as well as to other lenders. Your Company is following the matter with the OA for Draft Rehabilitation Scheme.

FOREIGN CURRENCY CONVERTIBLE BONDS (FCCB)

During the year 2006, Company had issued 100 zero coupon unsecured Foreign Currency Convertible Bonds (FCCB) of US $ 100,000 each aggregating to US$ 10 million to international investors and raised funds to part finance its expansion and modernisation programme and for such other purpose as permitted under relevant laws and regulations. The Bonds, at the sole option of Bondholder, were convertible into equity share of Rs. 10/- each at a premium of Rs. 165/- per share during any time on or after 20th September 2006 and ending on 8th September 2011, unless previously redeemed, repurchased and cancelled. The Bonds which were not redeemed, repurchased and cancelled or converted were redeemable on 22nd September 2011 in cash at 148.255% of the principal amount of the Bonds.

Since the Bondholders did not exercise the option for conversion of Bonds into equity shares upto 8th September, the same became liable for redemption on 22nd September. Due to inadequacy of funds and ongoing sick status of the Company, Company could not repay the aforesaid bonds on its due date i.e. 22nd September 2011. As such, the aforesaid Bonds of US$ 10 million remains outstanding as at the end of financial year ended on 31st March 2012. The amount due shall be covered in the draft rehabilitation scheme.

CORPORATE GOVERNANCE

The Board of Directors supports the broad principles of corporate governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity.

Your company has been practicing the principles of good corporate governance over the years.

DIRECTORS

Shri Kandodi S Kamath, Shri G M Shaikh and Shri Harshad M Shah will be the Directors retiring by rotation and being eligible offer themselves for re-appointment at the ensuing Annual General Meeting.

During the year under review Shri Mahendra P Desai has resigned from the post of Director - Works w.e.f. 08.12.2011. Further Shri Arkhita Khandual was nominated by IDBI Bank in place of Shri M B Kaul.

PARTICULARS OF THE EMPLOYEES

Particulars of the employees as required under the provisions of section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended are not attached with this report since there was no employee who was in receipt of remuneration in excess of limits prescribed under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particular of Employees), Rules 1975

CONSERVATION OF ENERGY, R & D TECHNOLOGY ETC.

As required under section 217(1)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 the particulars relating to conservation of Energy, R & D, Technology absorption and foreign Exchange earnings/outgo are annexed.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors confirm:

a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

b) that they 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 and of the profits of the company for that period;

c) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for prevailing the detecting fraud and other irregularities;

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

AUDITORS

M/s. Talati & Talati, Chartered Accountants, Statutory Auditors of the Company, retires at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. Your Directors recommend their re-appointment.

Pursuant to Central Government's Order dated 3rd May 2011 Ref No. 52/26/CAB-2010, mandating appointment of Cost Auditor, your directors have reappointed M/s Ashish S. Bhavsar & Co. as Cost Auditor, for auditing cost accounting records of the Company for financial year 2012-13.

EXPLANATION TO THE AUDITORS' REMARKS

The Directors submit their explanations to the qualifications made by the Auditors in their report for the year 2011-12. The Para nos. of Auditors' Report and reply are as under:

Para 4 (d)

Dues on account of maturity of Foreign Currency Convertible Bonds (FCCB) on 22.09.2011 have been frozen on maturity and accordingly exchange rate fluctuation has not been considered thereafter. Payment of FCCB shall be considered as per the scheme that may be considered by Hon'ble BIFR.

Para ix (a)

Payments of Statutory dues were marginally delayed on account of slow recovery/collection. However, the same have been paid.

Para xi

As per the scheme sanctioned by CDR (EG) consortium bankers were required to give working capital for the optimal utilization of production capacity. However, in the absence of non availability of funds from the members, the accruals were not in line with the sanctioned scheme and hence Company could not utilize optimally its production capacity. In view of this, Company was not able to make payments to banks/institutions and debenture holders as per the sanctioned scheme. However, before due date of repayment, Company had approached Hon'ble BIFR for declaring it as a Sick company and was declared so before the due date, i.e., June 2011. On account of sick status, payments were not made as per CDR and shall be considered based on the Rehabilitation scheme that may be considered and approved by the Hon'ble BIFR. Similarly payment to FCCB holders shall be considered as per Rehabilitation scheme that may be sanctioned.

Besides, other qualification, the notes to the Accounts are self explanatory and give suitable explanation to qualifications in Auditors' Report.

FIXED DEPOSIT

The Company has not accepted any deposits during the year.

REGULATORY STATEMENT

In conformity with amended provision of clause 32 in the Listing Agreement(s) the Cash Flow Statement for the year ended 31.03.2012 is annexed hereto.

The equity shares of your company are listed on the following stock exchanges and the listing fees are paid by the company for the year 2012-2013.

- Bombay Stock Exchange Ltd.

- National Stock Exchange of India Ltd

P. J. Tower, Dalal Street, Mumbai - 400001. "Exchange Plaza" Bandra Kurla Complex, C-1, Block-G, Bandra (East), Mumbai - 400 051.

ACKNOWLEDGMENT:

Your Directors place on record their sincere appreciation for the valuable support and co-operation as received from government authorities, Financial Institutions and Banks during the year. The Directors are also thankful for the support extended by Customers, Suppliers and contribution made by the employees at all level. The Directors would also like to acknowledge continued patronage extended by Company's shareholders in its entire endeavor.

For SHAH ALLOYS LIMITED

Sd/-

Rajendra V. Shah CHAIRMAN

Date : 30th June 2012 Place : Santej

Mar 31, 2010

The Directors present the 20th Annual Report together with the Audited statement of Accounts for the year ended on 31st March, 2010.

Financial Results:

(Rs. in Crore)

Particulars: 31.03.2010 31.03.2009 Rs. Rs.

1 Turnover 835.76 847.53

2 Profit/Loss before Dep. Int. & Taxes 26.05 (66.42)

3 Profit/Loss before Tax (80.72) (176.35)

4 Net profit after Tax (60.32) (123.60)

OPERATIONAL REVIEW

The company has performed low in the year 2009-10 by posting a turnover of Rs 835.76 Crore. During the year, the company has been sanctioned rework CDR Package and banks have partially realized the working capital limits in the end of the first half. Coupled with low demand in domestic and international market has resulted in to low capacity utilsation. Moreover enhanced furnace oil prices had further dented the bottom line of the company. However, company has stabilized its product range in domestic market with the invention of new value added products.

It can be seen for the profit and loss account and balance sheet for the year ended 31/03/10 the accumulated losses have been exceed the Companys net worth, therefore the company becomes Sick Industrial Company within the meaning of Sick Industrial Company (Special Provision) Act. Hence it is necessary to make a reference a Board for Industrial and Financial Reconstruction under the section 15 of Sick Industrial Company (Special Provision )Act.

CORPORATE GOVERNANCE

The Board of Directors supports the broad principles of corporate governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity.

Your company has been practicing the principles of good corporate governance over the years.

DIRECTORS

Shri Harshad M. Shah, ShriTejpal S. Shah &Shri G. M. Shaikh retires by rotation and being eligible offer themselves for re-appointment at the ensuing Annual General Meeting.

Shri B.S. Rawat ceased to be Jt. Managing Director and Director due to his resignation from the Board of the Company w.e.f 31.08.2009.The Board places on record his appreciation for the services ren- dered by him as Jt. Managing Director during his association with the Company.

Shri Bhupendra Jha was appointed as a Jt. Managing Director of the Company w.e.f 12.10.2009.

PARTICULARS OF THE EMPLOYEES

Particulars of the employees as required under the provisions of section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended are not attached with this report since there was no employee who was in receipt of remuneration in excess of limits prescribed under the provisions of Section 217(2A) of the Companies Act, 1956 read with the

Companies (Particular of Employees), Rules 1975 CONSERVATION OF ENERGY, R & D TECHNOLOGY ETC.

As required under section 217(l)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 the particulars relating to conservation of Energy, R&D, Technology absorption and foreign Exchange earnings / outgo are annexed.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors confirm:

a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

b) that they 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 and of the profits of the company for that period;

c) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for prevailing the detecting fraud and other irregularities;

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

M/s. Talati &Talati, Chartered Accountants, Statutory Auditors of the Company, retires at the conclu- sion of the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. Your Directors recommend their re-appointment.

FIXED DEPOSIT

The Company has not accepted the deposits during the year. REGULATORY STATEMENT

In conformity with amended provision of clause 32 in the Listing Agreement(s) the Cash Flow State- ment for the year ended 31.03.2010 is annexed hereto.

The equity shares of your company are listed on the following stock exchanges and the listing fees are paid by the company for the year 2010-2011.

- Bombay Stock Exchange Ltd.P. J. Tower,Dalal Street,Mumbai - 400 001.

- National Stock Exchange of India Ltd"Exchange Plaza"Bandra Kurla Complex, C-l, Block- G,Bandra (East), Mumbai - 400 051.

ACKNOWLEDGMENT

Your Directors wish to place on record their appreciation for the valuable co-operation and support received from the customers and suppliers, various financial Institutions, Banks, Central and State Government bodies, Auditors and Legal Advisors which have made possible the excellent results achieved by your company and to all the persons who reposed faith and trust in us. We would also like to express thanks to our shareholders and stakeholders for their confidence and understanding.

Last but not the least, we wish to place on record our appreciation of the sincere services rendered by the employees and our colleagues at all levels, who have put in their best efforts. We look forward to their continued support in future.

For and on behalf of the Board Date: 15th April, 2010.

Place: Ahmedabad Rajendra V. Shah

Chairman

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