Directors Report of Steelco Gujarat Ltd.

Mar 31, 2016

To

The Members,

The Directors are pleased to present the Twenty Sixth Annual Report of your Company together with the Audited Financial Statements for the year ended 31^st March, 2016.

1. FINANCIAL HIGHLIGHTS

(Rs, in Lakhs)

	Current Year	Previous Year
	Ended	Ended
	31.03.16	31.03.15
Sales / Other Income	51,053.46	57,421.51
(Net of Excise Duty)
Profit before Depreciation & Interest	2,449.31	1,256.62
(Less) : Depreciation	(254.92)	(299.14)
Profit / Loss before interest &
financial charges	2,194.39	957.48
(Less) : Interest & financial charges	(2,095.76)	(2,139.68)
Profit / (Loss) after interest &
financial charges	98.63	(1,182.20)
Add :Excess provision written back	0	868.85
Net profit / (loss) before tax	98.63	(313.35)
(Less) : Tax	0	0
Net profit / (loss) after tax	98.63	(313.35)

2. DIVIDEND

Your Directors do not recommend any dividend on the equity shares of the Company in view of carried forward losses.

3. REVIEW OF OPERATIONS & PERFORMANCE

The overall sales during FY 2015-16 stood at 104,052 MT, increased by 17.8% over FY 2014-15 (88,292 MT). However, in terms of revenue, it has decreased by 11% from Rs, 574.21 crores to Rs, 510.53 crores, due to reduction in steel prices (from USD 550 /MT to USD 390 / MT). Further, the Company achieved Cash Profit of Rs, 3.53 crores as compared to Cash Loss of Rs, 8.83 crores of FY 2014-15.

The Steel Industry has been impacted very adversely during the year and the major challenges faced on ramping up volumes to planned levels were mainly on account of the below factors:

- Cheap imports, Dumping from China and highly competitiveness from China with supply of material in other parts of the world;

- pressure in margins to sustain Global Competition due to sluggish market condition;

- Continuous and drastic reduction in HRC Prices during the year. (Which started improving after implementation of MIP from Feb’ 16);

- Discontinuance of Open Access Power;

- Currency rate fluctuations/rupee depreciation;

- Poor monsoon;

- Slowdown in Market leading to higher cost and lower realization of sales value;

- Low order book up to Q3 FY 2015-16.

However, after the initiatives taken by the Ministry of Steel for curbing of import of steel from China and FTA Countries, a safeguard & MIP were put in place and the situation started improving from last quarter of FY 2015-16. The Company was able to achieve dreamed volume of 10000 plus MT from Dec’15 onwards and have achieved Highest Ever Sales Volume since inception of the Company of approx. 15000 MT during March 2016. During Q4 of FY 2015-16, total revenue Rs, 155.72 crores (35410 MT), EBIDTA of Rs, 3.18 crores and Operation Net Profit of Rs, 0.50 crores and total Net Profit of Rs, 15.38 crores (with sale of land of Rs, 14.88 crores). Resultantly, there is an improvement in our volumes by 61% in Q4 2015-16 as compared to Q3 2015-16 with net profit from operations.

Although there are challenges going forward in FY 2016-17, the outlook of the Company is quite optimistic in view of the following:

- Implementation of MIP and the measures taken by the Government of India towards growth of domestic steel industries and especially for downstream products;

- Strategies & markets with upcoming economy;

- Started focusing in South East Asia Market (Indonesia, Vietnam, Philippines) for CRFH & Galvanized product;

- Focused Srilanka / Myanmar for Galvanized product;

- To overcome Chinese competitiveness, started supplying into the Latin American Galvanized markets (Peru, Chili, Columbia);

- Made significance presence in Ethiopian Market;

- Started focusing on Gal & CRFH domestic market, other than current CRCA market;

- With our presence started / to be started in new Export markets/areas including South East Asia Market, Latin American markets, Ethiopian markets with flexibility in the product mix with better margins, expansion in export business with better contribution is expected;

- Considering commissioning of color coated line by Oct-16 product will be initially launched in Gujarat/Kerala/Assam/ J&K markets and after successful launching & establishing it in local market, export market will be tapped;

- Healthy outlook from order point of view.

The Company has been able to keep its Net worth positive as on 31^st March 2016 with improved performance and with the sale of Land (Subject to NOC from GIDC & Lenders). We are confident that Net Worth will remain Positive in coming times, with better future prospectus and implementation of capex plan.

4. PERFORMANCE OF SUBSIDIARY COMPANY

The Company had its wholly owned subsidiary viz, Steelco Colour Coating Ltd., (‘SCCL”) (CIN U27310GJ2015PLC082627), incorporated in March 2015, which has yet not commenced its business. However, as at the end of 31^st March 2016, SCCL ceased to be subsidiary of the Company in view of further allotment of Equity Shares of '' 10 each by it to M/s. Metchem Singapore Pte. Ltd.

5. BOARD OF DIRECTORS

During the year under review, Dr. R. S. Mamak completed his tenure as Executive Vice Chairman as on 13^th August, 2015 and accordingly, w.e.f. 14^th August, 2015, he has been re-designated as Non-Executive Vice Chairman.

Smt. Ameeta Trehan had been appointed as an Additional Director of the Company w.e.f. 16^th May, 2015 to hold the office up to the 25^th Annual General Meeting and at the 25^th Annual General Meeting held on 30^th September, 2015, she was appointed as a Director (Independent Woman Director).

As per the provisions of the new Companies Act, 2013 with regard to Sections 149 and 152 and to comply with the provisions of the said Sections, Shri Mitesh H. Shah, Managing Director of the company’s terms of appointment is changed to subject to retirement by rotation instead of not subject to retire by rotation by the Board of Directors.

The Independent Directors on the Board of the Company as on date are Shri J. Mehra, Shri Mahendra Lodha, Shri S. S. Ranjan & Smt. Ameeta Trehan (Woman Director) and the Company has received confirmation / declarations from the Independent Directors of the Company under Section 149(6) of the Companies Act, 2013 and applicable provisions of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

6. KEY MANAGERIAL PERSONNEL

During the year under review, the details of Key Managerial Personnel are as under:

Sr. No	Name of person	Designation
1	Dr. R. S. Mamak	Executive Vice Chairman (up to 13.08.2015)
2	Shri Mitesh H. Shah	Managing Director
3	Shri Abhishek Jajoo	Chief Financial Officer (w.e.f. 06/11/2015)
4	Shri Achal Thakkar	Company Secretary (w.e.f. 29/08/2015)
5	Shri Sunil Singhvi	Chief Financial Officer (up to 23/10/2015)
6	Shri Arvind Tambi	Company Secretary (up to 28/08/2015)

7. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and Clause 49 of the listing agreement, as may be applicable, a structured questionnaire was prepared after taking into consideration of the various aspects of the Board’s functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance. Respective member of the Board does not participate in the discussion of his / her evaluation. The Board of Directors expressed their satisfaction with the evaluation process.

8. NUMBER OF MEETINGS OF THE BOARD

The Company has complied with the provisions for holding Board Meetings and the gap between any two meetings did not exceed 120 days. Five meetings (including one adjourned meeting) of the Board of Directors of the Company were held during the year under review on 16/05/2015, 28/05/2015 (adjourned), 13/08/2015, 06/11/2015 & 05/02/2016.

9. WHISTLE BLOWER POLICY / VIGIL MECHANISM

The Company has a Whistle Blower Policy pursuant to Section 177 of the Companies Act, 2013 and the rules made there under and applicable provisions of the listing agreement and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, to report genuine concerns of Directors and Employees. The Policy has been posted on website of the Company, www.steelcogujarat.com.

10. NOMINATION AND REMUNERATION POLICY

The Policy of the Company has been framed on Directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and remuneration of Key Managerial Personnel and other employees of the Company pursuant to Sub-section (3) of Section 178 and Regulation 19 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The details of this policy have been elaborated in the Corporate Governance Report. The Policy has been posted on website of the Company, www.steelcogujarat.com.

11. CORPORATE GOVERNANCE

Your Company is compliant of all mandatory requirements pursuant to Clause 49 of Listing Agreement and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. A separate report on Corporate Governance as stipulated by Regulation 72 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, along with the required certificate from a Practicing Company Secretary regarding compliance of the conditions of Corporate Governance as stipulated by the said Regulations is given in Annexure - 3.

12. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report is given in Annexure- 4.

13. RELATED PARTY TRANSACTIONS

All transactions entered with related parties during the year under review were on arms length basis and in ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. The related party transaction entered into with the Steelco Colour Coating Limited, the then Wholly Owned Subsidiary Company, for sale of partial land of the Company, approval of the Audit Committee and Board has been obtained and shareholders’ approval is sought at the ensuing Annual General Meeting. Further, there is no material related party transaction during the year under review with the promoters, directors or key managerial personnel.

14. DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of the knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(4) (c) of the Companies Act, 2013:

i. That in preparation of the annual accounts for the year ended 31^st March, 2016, the applicable accounting standards read with requirements set out under Schedule III have been followed along with proper explanation relating to material departures, if any;

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2016 and of the loss of the Company for the year ended on that date;

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

iv. The annual accounts have been prepared on a ‘Going Concern’ basis;

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

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

15. STATUTORY AUDITORS

The present statutory auditors M/s Mukesh M. Shah & Co., Chartered Accountants, Ahmadabad, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received consent and requisite certificate from the Auditors to the effect that their reappointment, if made, would be within the prescribed limit under Section 141 of the Companies Act, 2013, confirming their eligibility for re-appointment as Auditors of the Company.

16. COST AUDITORS

Your Directors have appointed M/s A. G. Tulsian & Co., Cost Accountants, Ahmadabad, as Cost Auditors in compliance with the Companies (Cost Accounting Records) Rules, 2011. The Cost Auditors have filed the Cost Audit Report for the financial year ended 31^st March, 2015 within the due date.

Pursuant to provisions of section 148 of the Companies Act, 2013 and the Companies (Audit & Auditors) Rules, 2014, the Board on the recommendation of the Audit Committee, has approved the appointment of M/s A. G. Tulsian & Co., Cost Accountants, Ahmadabad as the Cost Auditors and remuneration payable to them, to conduct the audit of the cost records of the Company for the financial year ending 31^st March, 2017. The Company has received a letter from M/s A. G. Tulsian & Co., Cost Accountants, Ahmedabad showing their willingness to be appointed as Cost Auditors, certifying that they are not disqualified under section 148(5) read with section 141(3) of the Companies Act, 2013.

17. SECRETARIAL AUDITOR

The Company has received consent and requisite certificate from M/s. Devesh Vimal & Co., Practising Company Secretaries, Vadodara, present Secretarial Auditors, to the effect that their reappointment, if made, would be within the prescribed limit, confirming their eligibility for re-appointment as Auditors of the Company Accordingly, M/s. Devesh Vimal & Co. has been re-appointed to act as Secretarial Auditors of the Company for the FY 2016-17.

18. OBSERVATION OF STATUTORY AUDITORS’ REPORT AND SECRETARIAL AUDIT REPORT

Note No. 35 relating to preparation of financial statement on Going Concern basis, in spite of accumulated losses and their impact on net worth, is self-explanatory as regards the observation made by the Statutory Auditors in their report.

In Secretarial Audit Report Observations, as regards

- observation (a) relating to order of SEBI for non-compliance / delayed compliance of Minimum Public Shareholding, please refer to clause IX, para 3 of Corporate Governance Report, which is self-explanatory.

- observation (b) relating to order of Collector and Additional Superintendent of Stamps, Gujarat State, Gandhinagar regarding recovery of deficient stamp duty, the Company is in process of making payment against the said order as per the decision of the the Board of Directors of the Company

19. POTENTIAL SICK COMPANY

The Company had become potentially sick company within the meaning of Section 23 of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), as the accumulated losses of the Company as at 31^st March, 2015 have resulted in to erosion of more than 50 % of the its peak net worth, during the immediately preceding four financial years and therefore, the Board of Directors at its meeting held on 28^th May, 2015, formed an opinion to report to the Board for Industrial and Financial Reconstruction.

Accordingly, the fact under Section 23 of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) was reported to the shareholders of the Company at the Annual General Meeting held on 30^th September, 2015 and to Board for Industrial and Financial Reconstruction in November 2015.

20. SECRETARIAL AUDIT REPORT

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the rules made there under, the Company has appointed M/s. Devesh Vimal & Co. Practicing Company Secretaries, Vadodara to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure -5 and forms an integral part of this report.

21. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9, as required under section 92 of the Companies Act, 2013 is included in this Report as Annexure - 6 and forms an integral part of this report.

22. INTERNAL FINANCIAL CONTROLS

The Company has appointed M/s. CNK & Associates LLP, Chartered Accountants, to report on adequacy and effectiveness of internal financial controls with reference to financial statements. During the year under review, such controls were tested and no reportable weakness in the design or operation was observed by them. The Statutory Auditors have opined that the Company has, in all material respects, internal financial controls over financial reporting, which is required to be strengthened further and its operative effectiveness requires improvement.

23. ENVIRONMENT & SAFETY

The Company is conscious of the importance of environmentally clean and safe operations. The Company’s policy requires conduct of operations in such a manner so as to ensure safety of all concerned compliances environmental requirement regulations and preservation of natural resources.

The Company has been awarded Gold Safety Award 2016 from Greentech Foundation, New Delhi at their Annual Award Function for outstanding achievements in Safety Management.

24. ANTI-SEXUAL HARASSMENT POLICY

As required by the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has formulated and implemented a policy on prevention of sexual harassment at workplace with a mechanism of lodging complaints. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women under Workplace (Prevention Prohibition and Redressal) Act, 2013.

25. HUMAN RESOURCES & INDUSTRIAL RELATIONS

The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business. The Company has structured induction process and management development programs to upgrade skills of managers. Objective appraisal systems based on Key Result Areas (KRAs) are in place for senior management staff. The Company is committed to nurturing, enhancing and retaining top talent through superior learning & organizational development.

26. CREDIT RATING

During the year under review, the Company has got its rating renewed by an independent credit rating agency M/s Brickwork Ratings India Pvt. Ltd. and the ratings awarded were same as earlier, i.e. BWR ‘B’ in respect of long term debts and BWR ‘A4’ in respect of Short term Debts.

27. DISCLOSURE OF PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The disclosure of particulars relating to conservation of energy and technology absorption and foreign exchange earnings and outgo as required by Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is given in Annexure - 1.

28. CORPORATE SOCIAL RESPONSIBILITY

Considering the losses and exposure, the CSR requirements are not applicable to your Company; hence, the Company has not framed Corporate Social Responsibility (CSR) Policy.

29. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197 (12) of the Act read with Rules 5(1), 5(2) and Rules 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees and the Disclosure pertaining to remuneration and other details are set out in Annexure - II to the Board’s Report.

Having regard to the provisions of the first proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

None of the employees listed in the said Annexure - II is a relative of any Director of the Company. None of the employees hold (by himself or along with his / her spouse and dependent children) more than two percent of the equity shares of the Company.

30. GENERAL DISCLOSURES

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

a) Details relating to deposits covered under Chapter V of the Act.

b) Details of remained, unpaid or unclaimed dividend at the end of year.

c) Issue of equity shares with differential right as to dividend, voting or otherwise.

d) Issue of shares (including Sweat Equity Shares) to employees of the Company under any scheme.

e) Neither the Managing Director nor the Whole Time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

f) No significant or material orders passed by the Regulators or Courts or Tribunals, which impact the going concern status and Company’s operations in future.

31. ACKNOWLEDGEMENT

Your Directors take this opportunity to express their appreciation for the co-operation and assistance received from the Government of India, Government of Gujarat, Financial Institution, the Company’s Bankers, Electricity Companies, Palej Gram Panchayat, other Government Agencies, Customers, Suppliers and Investors. Your Directors express gratitude to the investors for their confidence reposed in the Company and Co-operation, and especially to the employees for their dedicated service and support.

32. CAUTIONARY STATEMENT

Statement in the Board’s Report and Management Discussion and Analysis describing the Company’s objectives, projections, estimates, expectations or predictions may be ‘Forward Looking Statements’ within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied. Important factors that may make difference to the Company’s operations include raw material availability and its prices, cyclic demand and the pricing in the Company’s principal markets, changes in government policies, regulations, tax regimes, economic developments within India and countries in which the Company conducts business.

For and on behalf of the Board of Directors

Place : Mumbai Jatinder Mehra Mitesh H. Shah

Date :20^th May, 2016 Director Managing Director

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Mar 31, 2014

Dear members,

The Directors have pleasure in presenting the Twenty Fourth Annual Report of your Company together with the Audited Statements of Accounts for the year ended 31st March 2014.

1. FINANCIAL HIGHLIGHTS

(Rs. in Lacs) Current Year Previous Year Ended 31.03.14 Ended 31.03.13

Sales / Other Income (Net of Excise Duty) 52962.19 54474.56 Profit before Depreciation & Interest 2036.78 2511.36 Depreciation 444.72 473.00 Profit / (Loss) before Interest & Financial Charges 1592.06 2038.36 Interest & Financial Charges 1963.76 2021.33 Profit / (Loss) after Interest & Financial Charges (371.70) 17.03 Excess Provision written back - - Net Profit / (Loss) before Tax (371.70) 17.03 Tax - - Net Profit / (Loss) after Tax (371.70) 17.03

2. DIVIDEND

Your Directors do not recommend any dividend on the equity shares of the Company in view of carried forward losses.

3. REVIEW OF OPERATIONS

During the year under review, the Company has made a net loss of Rs. 372 Lakhs on turnover of 82,176 MT Valuing Rs. 52,962 Lakhs against a net profit of Rs. 17 Lakhs on turnover of 88,901 MT valuing Rs. 54,475 Lakhs in the previous year. The Company has made a Cash Profit of Rs. 73 Lakhs for the year ended 31st March 2014 as against a Cash profit of Rs. 490 Lakhs in the previous year. This can be mainly attributed to lower capacity utilization by 8% in terms of quantity and 3% in terms of Value due to erratic supply of H.R. Steel coils from its main supplier and non compatibility of material arranged from alternate sources.

4. CORPORATE DEBT RESTRUCTURING

The Corporate Debt Restructuring (CDR) Cell vide Letter of Approval No. BY. CDR (ATR) No. 322/2012-13 dated 27-06-2012 had approved restructuring of debts and the same has been implemented except scheme of Capex, which are being reviewed. The scheme shall continue till March 2021.

5. ALLOTMENT OF PREFERENCE SHARES

During the year, your Company has allotted 7% 3486200 Cumulative Redeemable Preference Shares of Rs. 10/- each to the promoters, M/s Spica Investments Limited towards their contribution under CDR Scheme.

6. BOARD OF DIRECTORS

During the year under review, Shri R. P. Chandaria, founder director of the company, passed away on 13th October 2013. Your Board of Directors at its meeting held on 15th November, 2013 placed on record its appreciation for invaluable contributions made by him as a member of the Board.

During the year under review, the Company has appointed Shri S. S. Ranjan as an independent director, Mr. Jiban Goswami as Nominee director as required under approved CDR Scheme and Mr. Vimal Chandaria, promoter director as Additional Director in view of sad demise of Mr. R. P. Chandaria.

Mr. N. M. Mohnot, Managing Director of your Company has been relieved from his services on 14th August, 2014 and Dr. R. S. Mamak, Non Executive Vice Chairman has been appointed as Executive Vice Chairman from 14th August, 2014.

Your directors Mr. M. Lodha, Mr. J. Mehra & Mr. S. S. Ranjan, fulfils the condition for their appointment as specified in the Act and the listing agreement. Hence, the Board recommends appointment of aforesaid existing Directors as Independent Directors in terms of Section 149 and 152 of the Companies Act, 2013.

7. AUDITORS

M/s. Mukesh M. Shah & Co., Chartered Accountants, Ahmedabad, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. The Company has received a written certificate from the Auditors to the effect that their re-appointment, if made, would be within the prescribed limit under section 141 of the Companies Act, 2013.

8. AUDITORS OBSERVATION

Note No. 35 relating to preparation of financial statements on Going Concern Basis, in spite of substantial erosion of net worth, is self explanatory as regards the observation made by the auditors in their report.

9. COST AUDITORS

Your Directors have appointed M/s. A. G. Tulsian & Co., Cost Accountants, Ahmedabad, as Cost Auditors in compliance with the Companies (Cost Accounting Records) Rules, 2011. The Cost Auditors has filed the cost audit reports for the financial year ended on March 31, 2013 on August 16, 2013 within the due date .

10. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, the Directors confirm: -

i. That in the preparation of the annual accounts, applicable Accounting Standards have been followed along with proper explanations relating to material departures;

ii. That 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 year and of the profit of the Company for the year under review;

iii. That the Directors 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 preventing and detecting fraud and other irregularities;

iv. That the Directors have prepared annual accounts on a going concern basis.

11. PARTICULARS OF EMPLOYEES

The particulars of employees as required under section 217 (2A) of the Companies Act, 1956. read with the Companies (Particulars of Employees) Rules, 1975 are set out below:

Notes:

(1) Remuneration includes Salary, Allowances, and Contribution to retiral benefits and monetary value of perquisites at cost to the company.

(2) Aforesaid Director does not hold by himself or along with his spouse and dependent children, or through any company, any share of the company.

(3) Aforesaid Director''s services are of contractual nature.

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

Information pursuant to Section 217(1 )(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given in Annexure ‘A'', forming part of this report.

13. CORPORATE GOVERNANCE

Your Company is compliant of all mandatory requirements pursuant to Clause 49 of Listing Agreement. A separate report on Corporate Governance compliance and a Management Discussion and Analysis Report as stipulated by the clause 49 of the Listing Agreement forms part of the Annual Report along with the required certificate from the Practicing Company Secretary regarding compliance of the conditions of Corporate Governance as stipulated by the revised clause 49 of the Listing Agreement. The detailed Operational Performance of the Company has been comprehensively discussed in the Management Discussion and Analysis Report, which forms part of Directors'' Report.

14. DAMAGES DUE TO FLOOD

During the year, operations at your Palej works were affected for 10 days due to flood in September 2013. Since your company was fully insured with insurers, there was no adverse effect because of flood including loss of profits. The surveyors have assessed the losses of material damage and loss of profits and these have been considered into accounts. The claim amount is been received by the Company.

15. MINIMUM PUBLIC SHAREHOLDING

The company had received notice from SEBI for non compliance of the requirement of clause 40A regarding minimum public shareholding. In terms of CDR requirement, the promoters'' shareholding was fully pledged with the consortium members of the bank hence it could be de-pledged in April 2014. Subsequent to that the promoters have fully liquidated the excess Equity Shares by way of sale under OFS Scheme on 30th June, 2014 and 6th August, 2014, as per the prescribed SEBI guidelines.

16. ACKNOWLEDGEMENT

Your directors take this opportunity to express their appreciation for the co-operation and assistance received from the Government of India, Government of Gujarat, Financial Institutions, the Company''s Bankers, Electricity Companies, Palej Gram-Panchayat, other Government Agencies, Customers, Suppliers and Investors. Your Directors express gratitude to the investors for their confidence reposed in the Company and co-operation, and especially to the employees for their dedicated service and support.

For and behalf of the Board of Directors

Place : Mumbai Dr. R.S. Mamak Date : 14th August 2014 Executive Vice Chairman

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Mar 31, 2013

To The Members,

The Directors have pleasure in presenting the Twenty Third Annual Report of your Company together with the Audited Statements of Accounts for the year ended 31st March 2013.

1. FINANCIAL HIGHLIGHTS

(Rs.in Lacs)

Current Year Previous Year Ended 31.03.13 Ended 31.03.12

Sales / Other Income (Net of Excise Duty) 54,474.76 47,121.33

Profit before Depreciation & Interest 2,511.36 736.16

Depreciation 473.00 1,242.98

Profit / (Loss) before Interest & Financial Charges 2,038.36 (506.82)

Interest & Financial Charges 2,021.33 2,363.77

Profit / (Loss) after Interest & Financial Charges 17.03 (2,870.59) Excess Provision written back

Net Profit / (Loss) before Tax 17.03 (2,870.59) Tax

Net Profit / (Loss) after Tax 17.03 (2,870.59)



2. DIVIDEND

Your Directors do not recommend any dividend on the equity shares of the Company in view of carried forward losses.

3. REVIEW OF OPERATIONS

During the year under review, the Company has made a net profit of" 17 Lacs on turnover of 88,901 MT Valuing " 54,475 Lacs against a net loss of" 2,871 Lacs on turnover of 77,114 MT valuing " 47,121 Lacs in the previous year. The Company has made Cash Profit of" 490 Lacs for the year ended 31st March 2013 as against a Cash loss of" 1,628 Lacs in the previous year. This can be mainly attributed to improved capacity utilization, selection of appropriate product mix and cost efficiency during the year as follows:-

(i) Selection of appropriate product mix resulted into better sales realization per MT.

(ii) The Company has improved its turnover by 15% resulting into efficient utilization of equipments and reduction in costs.

(iii) Financial Costs during the year of operations have reduced by " 343 Lacs due to the CDR implementation.

(iv) Forex losses reduced by " 175 Lacs to a bare minimum of" 2 Lacs during the year under review.

(v) Power cost has reduced by" 283 Lacs in view of purchase of power through Open Access by entering into an agreement with Indian Energy Exchange. (vi) Depreciation reduced by " 770 Lacs mainly on account of the Rolling Mills and other ancillary equipments fully depreciated during the year under review.

4. CORPORATE DEBT RESTRUCTURING

The Corporate Debt Restructuring (CDR) Cell vide Letter of Approval No. BY. CDR(ATR) No. 322/2012-13 dated 27-06-2012 has approved restructuring of debts. The sanctioned scheme has reduced the interest burden from the cut-off date i.e. 30-11-2011. The scheme shall continue till March 2021.

5. PREFERENCE SHARES APPLICATION MONEY

During the year, your Company has received promoters ''contribution of " 348.64 Lacs as per condition of CDR Scheme. The Company would proceed for allotment of Non Convertible Redeemable Preference Shares to the Promoters M/s Spica Investments Limited after obtaining requisite approvals including approval under the ECB from the Reserve Bank of India.

6. BOARD OF DIRECTORS

During the year under review Shri P. G. R. Prasad passed away on 16-11-2012. Your Board of Directors at its meeting held on 15-12-2012 placed on record its appreciation for invaluable contributions made by him as a member of the Audit Committee, Remuneration Committee and Shareholders/ Investors ''Grievance Committee.

As per Section 256 of the Companies Act, 1956, Dr. R. S. Mamak resigned from the office of Executive Vice Chairman w.e.f. 01-02-2013. However, at the request of the Board, he continues to be Non Executive Director as well as Non Executive Vice Chairman. Dr. R. S. Mamak and Mr. Rashmi Chandaria, Directors of the Company are liable to retire by rotation and being eligible offer themselves for re-appointment.

Your Directors appointed Mr. S.S. Ranjan as an additional director on 22nd May, 2013 pursuant to section 260 of the Companies Act, 1956 read with clause 43 of the Articles of Association to hold office upto the ensuing Annual General Meeting. The Company has received requisite notice pursuant to section 257 of the Companies Act, 1956 proposing his candidature for appointment as a retiring director at the ensuing Annual General Meeting.

7. AUDITORS

M/s. Mukesh M. Shah & Co., Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. The Company has received a written certificate from the Auditors to the effect that their re-appointment, if made, would be within the prescribed limit under section 224 (1B) of the Companies Act, 1956.

8. AUDITORS OBSERVATION

Note No. 34 relating to preparation of financial statements on Going Concern basis, inspite of substantial eroson of net worth is self explanatory as regards the observation made by the auditors in paragraph No. 5 of their report.

9. COST AUDITORS

Your Directors have appointed M/s. A. G. Tulsian & Co., Cost Accountants, as Cost Auditors in compliance with the Companies (Cost Accounting Records) Rules, 2011.

10. DIRECTORS ''RESPONSIBILITY STATEMENT

Pursuant to the requirements of section 217(2AA) of the Companies Act, 1956, with respect to Directors''Responsibility Statement, the Directors confirm: -

i. That in the preparation of the annual accounts, applicable Accounting Standards have been followed along with proper explanations relating to material departures;

ii. That 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 year and of the profit of the Company for the year under review;

iii. That the Directors 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 preventing and detecting fraud and other irregularities;

iv. That the Directors have prepared annual accounts on a going concern basis.

11. PARTICULARS OF EMPLOYEES

The particulars of employees as required under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are set out below:

Notes:

(1) Remuneration includes Salary, Allowances and Contribution to retiral benefits and monetary value of perquisites at cost to the Company.

(2) Aforesaid Director does not hold by himself or along with his spouse and dependent children, or through any company, any share of the Company.

(3) Aforesaid Directors'' services are of contractual nature.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given in Annexure A‘ ,'' forming part of this report.

13. CORPORATE GOVERNANCE

Your Company is compliant of all mandatory requirements pursuant to Clause 49 of Listing Agreement. A separate report on Corporate Governance compliance and Management Discussion and Analysis Report as stipulated by the Clause 49 of the Listing Agreement forms part of the Annual Report along with the required certificate from the Practicing Company Secretary regarding compliance of the conditions of Corporate Governance as stipulated by the revised Clause 49 of the Listing Agreement. The detailed Operational Performance of the Company has been comprehensively discussed in the Management Discussion and Analysis Report, which forms part of Directors''Report.

14. ACKNOWLEDGEMENT

In consonance with established maxim that the Company is only as good as its people, your Company has put together a team of highly qualified and experienced professionals.

The success achieved by your Company and the progress made by it are due to the co-operation, efforts and commitment of all concerned with its affairs, including the Government of India, Government of Gujarat, Financial Institutions, Companys'' Bankers, Electricity Companies, Palej Gram-Panchayat, other Government Agencies, Customers, Suppliers and Investors. Your Directors express gratitude to the investors for their confidence reposed in the Company and co-operation, and especially to the employees for their dedicated service and support.

For and behalf of the Board of Directors

Place : Mumbai Dr. R.S. Mamak

Date : 22nd May, 2013 Vice Chairman

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Mar 31, 2011

The Members,

The Directors have pleasure in presenting the Twenty- First Annual Report of your Company together with the Audited Statements of Accounts for the year ended 31st March 2011.

1. FINANCIAL HIGHLIGHTS

(Rs. in Lacs)

Current Previous Year Year Ended Ended 31.03.11 31.03.10

Sales/Other Income (Net of Excise Duty) 53800.88 47527.81

Profit before Depreciation, Interest & Financial Charges 3676.47 3668.86

Depreciation 1233.39 1174.66

Profit before Interest & Financial Charges 2443.08 2494.20

Interests Financial Charges 2110.73 1910.93

Profit after Interest & Financial Charges 332.35 583.27

Excess Provision written back - -

Net Profit / (Loss) before Tax 332.35 583.27

Tax 80.00 99.57

Net Profit / (Loss) after Tax 252.35 483.70

2. DIVIDEND

Your Directors do not recommend any dividend on the equity shares of the Company in view of carried forward losses.

3. REVIEW OF OPERATIONS

Your Company continues to maintain the improved level of turnover and profitability achieved during last year. Current year has also ended with a cash profit of Rs. 1566 Lacs and net profit of Rs. 332 Lacs and turnover of 94932 MT Valuing Rs. 53801 Lacs against turnover of 96045 MT Valuing Rs. 47528 Lacs, Cash profit of Rs. 1758 Lacs and Net Profit of ? 583 Lacs of previous year. At the year end 1951 MT of material was at sea -port due to delay in arrival of designated vessels, which adversely affected the turnover by Rs. 994 Lacs & profit by ? 69 Lacs including incentive on export.

During the year, Company commissioned its narrow rolling mills complex, which is getting stabilized after initial teething troubles and hence, full benefit of the same would be available from the year 2011 -2012 onward. Facilities are planned to be utilized for production of special steel i.e High carbon and medium carbon, which would help to further improve the bottom line and turnover.

Your Company's thrust to develop special steel of high quality and value continued during the year which resulted into its emergence as a reliable source for its overseas customer to supply enamel grade steel.

The overall performance of your Company is satisfactory, keeping in view the delay in release of working capital by its bankers during last year and high volatility in the prices of its main raw material i.e. H.R. Coils.

4. REVALUATION OF ASSETS

During the year the company has revalued its assets, based on revaluation report as on 31.03.2011 by M/s Mott MacDonald Pvt. Ltd., India. Net value of Plant & machinery and Land & Building has increased by Rs. 9280.18 Lacs. Furniture & Fixtures, computers etc. were not revalued keeping in view their short life and nature of assets. Accordingly revaluation reserve has been created for Rs. 9280.18 Lacs

5. NON CONVERTABIUTY OF PREFERENCE SHARES INTO EQUITY SHARES

Your Company had issued 3,28,20,000 12.5% Cumulative Redeemable Preference Shares of Rs. 10/- each valuing Rs. 32,82,00,000/ - on private placement basis to SPICA Investments Ltd., promoter of the Company, on 29th September, 2008, with an option to convert into equity shares. SEBI vide its letter No. CFB/DCR/TODMS/4536/2011 dated 7th February, 2011 has not confirmed the conversion of Preference Shares into equity shares and hence M/s SPICA Investments Limited would continue to hold them as preference shares.

6. BOARD OF DIRECTORS

During the year Company lost its founder Director and member Shri Shripal Sheth due to his sad and sudden demise on 26.12.2010. Your Board of Directors at their meeting held on 10.02.2011 took on record appreciation for invaluable contributions made by him in the growth of the Company and his services and guidance to the Company as a Chairman of the Audit Committee, Remuneration Committee and Shareholder's/ Investor's Grievance Committee.

As per Section 256 of the Companies Act, 1956 and Articles of Association of the Company, Mr. Rashmi Chandaria and Mr. " Mahendra Lodha, Directors of the Company are liable to retire by rotation and being eligible, offer themselves for re-appointment.

Your Directors at their meeting held on 30th May, 2011, have appointed Mr. Krishna Kumar M. Joshi as Additional Director as well as Managing Director w.e.f. 20th June, 2011. The Company has received requisite notice pursuant to Section 257 of the Companies Act, 1956 proposing his candidature as non retiring director.

7. AUDITORS

M/s. Mukesh M. Shah & Co., Chartered Accountants, Statutory Auditors of the company, hold office until the conclusion of the ensuing Annual General Meeting. The company received a written certificate from the Auditors to the effect that their re-appointment, if made, would be within the prescribed limit under section 224 (1B) of the Companies Act, 1956.

8. AUDITORS' REPORT

Notes to the accounts as referred in Auditors' Report are self explanatory and therefore, do not call for any further comments or explanations.

9. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, the Directors confirm: -

a. That in the preparation of the accounts for the financial year ended 31st March, 2011, the applicable Accounting Standards have been followed and that there are no material departures;

b. That 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 of the profits of the Company for that period;

c. That the Directors 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 preventing and detecting fraud and other irregularities;

d. That the Directors have prepared the accounts for the financial year ended 31st March, 2011 on a 'going concern' basis.

10. PARTICULARS OF EMPLOYEES

There was no employee drawing remuneration of X 60.00 Lacs p.a. or Rs. 5.00 Lacs p.m. or more for any part of the year and hence no particulars have been furnished as specified under section 217 (2A) of the Companies Act 1956, read with the Companies (Particulars of Employees) Rules, 1975.

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

The Statement pursuant to Section 217(1 )(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the statement Annexed (Annexure" A") hereto forming part of the report.

12. CORPORATE GOVERNANCE

Your Company has complied with the requirement of Clause 49 of the Listing Agreement with the Stock Exchanges. A detailed report on the Corporate Governance practices, the Auditors' Certificate on compliance of mandatory requirements thereof and Management Discussion and Analysis are given as an annexure to this report. The operational performance of the Company has been comprehensively discussed in the Management Discussion and Analysis Report, which forms part of Directors' Report.

13. APPRECIATION AND ACKNOWLEDGEMENT

Your Directors take this opportunity to express their appreciation for the co-operation and assistance received from the Government of India, Government of Gujarat, Financial Institutions, the Company's Bankers, Electricity Companies, Palej Gram Panchayat, other Government Agencies, Customers, Suppliers and Investors. Your Directors express their gratitude to the Investors' / Shareholders' during the year under review. The Directors also wish to place on record their appreciation of the devoted and dedicated services rendered by all employees of the Company.

For and behalf of the Board of Directors

Dr. R.S. Mamak Executive Vice-Chairman

Place Mumbai Date 30th May, 2011

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Mar 31, 2010

The Directors have pleasure in presenting the Twentieth Annual Report of your company together with the Audited Statements of Accounts for the year ended 316t March 2010.

1. FINANCIAL HIGHLIGHTS

(Rs. in Crores)

Current Year Previous Year Ended 31.03.10 Ended 31.03.09

Sales/Other Income (Net of Excise Duty) 475.28 428.85

Profit before Depreciation, Interests Financial Charges 36.69 27.61

Depreciation 11.75 11.77

Profit before Interest & Financial Charges 24.94 15.84

Interest & Financial Charges 19.11 23.82

Profit after Interest & Financial Charges 5.83 (7.98) Excess Provision written back

Net Profit / (Loss) before Tax 5.83 (7.98)

Tax 1.00 0.10

Net Profit / (Loss) after Tax 4.83 (8.08)

2. DIVIDEND

Your Directors do not recommend any dividend on the equity shares of the company in view of carried forward losses.

3. REVIEW OF OPERATIONS

During the year under review the company has exhibited turnaround with net profit of Rs. 583 Lacs on turnover of 96045 MT valuing Rs. 47528 Lacs against net loss of Rs. 798 Lacs on turnover of 77614 MT valuing Rs. 42885 Lacs in the previous year. Cash profit for the year ended 31 st March 2010 has also improved to Rs. 1758 Lacs as against Rs. 378 Lacs in the previous year, an increase of 365%. This is primarily attributed to higher capacity utilization during the year due to easing of :-

(i) Working Capital - The release of Term Loan of Rs. 20 Crores and fund based limit of Rs. 10 Crores by Companys bankers coupled with promoters contribution of Rs. 10 Crore during year 2008-2009 has improved the availability of working capital for operation of the company.

(ii) Raw Material - Availability of raw material used to be a major constraint in the past as domestic manufactures were not able to meet its requirement in time at competitive prices. To over come the same, company imported 18505 M.T. of H.R Steel coils during the year to meet part of its requirement.

4. OPTING FOR CONVERSION OF PREFERENCE SHARES INTO EQUITY SHARES BY THE PROMOTER

The company had issued 3,28,20,000 12.5% Cumulative Redeemable Preference Shares of Rs. 10 /- each valuing Rs. 32,82,00,000/- to SPICA Investment Ltd., Promoter of the company on 29th September, 2008, with an option to convert into equity shares mainly to finance the enhanced working capital requirement for the company and in compliance with direction of Consortium of Bankers to augment the financial resources to meet Long Term Working Capital and capital expenditure requirement of the company. SPICA Investment Ltd. has opted for conversion of the aforesaid preference shares into equity subject to the requisite formalities and approvals from the relevant authorities as they are already holding 78.26% equity of the company; the approvals are still awaited.

5. BOARD OF DIRECTORS

Your Directors appointed Mr. P. G. R. Prasad as an Additional Director (Independent Director) at their meeting held on 23rd February, 2010, pursuant to the provision of Section 260 of the Companies Act, 1956 and Clause no. 43 of the Articles of Association of the Company, to hold office upto ensuing Annual General Meeting. The company has received a notice in writing from the member of the company pursuant to Section 257 of the Companies Act, 1956 proposing candidature of Mr. P.G. R. Prasad as retiring Director at ensuring Annual General Meeting.

As per Section 256 of the Companies Act, 1956 and Articles of Association of the Company, Mr. R. P. Chandaria and Mr. J. Mehra, Directors of the company are liable to retire by rotation and being eligible offer themselves for re-appointment.

6. AUDITORS

M/s. Mukesh M. Shah & Co., Chartered Accountants, Statutory Auditors of the company, hold office until the conclusion of the ensuring Annual General Meeting. The company received a written certificate from the Auditors to the effect that their re-appointment, if made, would be within the prescribed limit under section 224 (1B) of the Companies Act, 1956.

7. AUDITORS REPORT

Notes to the accounts as referred in Auditors Report are self explanatory and therefore, do not call for any further comments or explanations.

8. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 217(2AA) of The Companies Act, 1956, with respect to Directors Responsibility Statement, the Directors confirm: -

i. That in the preparation of the annual accounts, applicable Accounting Standards have been followed along with proper explanations relating to material departures;

ii. That 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 year and of the profit of the company for the year under review;

iii. That the Directors 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 preventing and detecting fraud and other irregularities;

iv. That the Directors have prepared annual accounts on a going concern basis.

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

Information pursuant to Section 217(1 )(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given in Annexure A, forming part of this report.

11. CORPORATE GOVERNANCE

The company is compliant of all mandatory requirements pursuant to Clause 49 of Listing Agreement. A separate report on Corporate Governance compliance and a Management Discussion and Analysis Report as stipulated by the Clause 49 of the Listing Agreement forms part of the Annual Report along with the required certificate from the Practicing company Secretary regarding compliance of the conditions of Corporate Governance as stipulated by the revised Clause 49 of the Listing Agreement.

The detailed operational performance of the company has been comprehensively discussed in the Management Discussion and Analysis Report, which forms part of Directors Report.

12. ACKNOWLEDGEMENT

In consonance with established maxim that the company is only as good as its people, your company has put together a team of highly qualified and experienced professionals.

The success achieved by your company and the progress made by it are due to the co-operation, efforts and commitment of all concerned with its affairs, including the Government of India, Government of Gujarat, Financial Institutions, the Companys Bankers, Electricity Companies, Palej Gram-Panchayat, other Government Agencies, Customers, Suppliers and Investors. Your Directors express gratitude to the investors for their confidence reposed in the company and co-operation, and especially to the employees for their dedicated service and support.

For and behalf of the Board of Directors

Place : Ahmedabad Dr. R.S. Mamak

Date : 09th August, 2010 Executive Vice-Chairman