Ashirwad Steels & Industries Ltd

TO THE SHAREHOLDERS

Your Directors present their 24th Annual Report and the Audited Statements of Accountsof your Company together with Auditors' Report for the year ended 31 st March, 2010.

OPERATIONS & FINANCIAL PERFORMANCE :

The financial performance of your Company during the financial year ended 31.3.10 hasnot been satisfactory. The total income from operations/turnover stood at Rs.52.34 Crores(Previous year Rs.74.22 crores). During the year your Company produced 33141 M.T. ofSponge Iron (Previous year 43916 M.T.). The Company has during the year earned a netprofit of Rs.35.17 lacs as against previous year's net profit of Rs.26.14 lacs. Theoverall financial performance of the Company has been adversely affected due to highlydepressed market conditions in the secondary Steel Section in which your Company operates.The market conditions of Sponge Iron still continue to be very depressed. Your Directors,however, are continuing their best efforts to efficiently manage the affairs of theCompany.

DIVIDEND :

Your Directors do not recommend any dividend for the year under review.

STATUTORY AUDITORS :

M/s. A Pradhan & Associates, Chartered Accountants, were appointed as StatutoryAuditors of your Company in the last Annual General Meeting and they being eligible haveoffered themselves for re-appointment at the ensuing Annual General Meeting.

DIRECTORS :

Mr. Suresh Kumar Agarwal, Mr. Yudhbir Chhibbar and Mr. Dev Kumar Mishra. Directorsretire by rotation from the Board and being eligible offer themselves for re-appointment.

EXPANSION PROJECTS & CAPITAL RAISING :

Your Company has not been able to initiate any expansion project till now due tonon-receipt of necessary clearances from the Pollution Control Authorities. As soon thesame are obtained; your Directors would take a decision and initiate to set up expansionprojects depending upon the market conditions which at present are highly depressed.During the year your Company had issued and allotted 45.00.000 Equity Shares onpreferential allotment basis @ Rs.40/- per share including a premium of Rs.307- per sharefor the purpose of proposed expansion Projects.

FIXED DEPOSIT :

The Company has not during the year accepted any deposits from the Public under section58 of the Companies Act, 1956.

CORPORATE GOVERNANCE:

Corporate Governance Report along with the certificate of the Auditors confirmingcompliance of conditions of Corporate Governance as required under Clause 49 of theListing Agreement with the Stock Exchange is annexed hereto.

LISTING OF COMPANY'S SHARES & LISTING FEES :

The Company's shares are listed on Bombay Stock Exchange Limited (BSE), PhirozeJeejeebhoy Towers, 25th Floor, Dalai Street, Mumbai-400 023.

The Company has paid the listing fees for the financial year 2009-2010 to the StockExchange, Mumbai, on which Company's shares are listed. The Company has also paidcustodial fees for the year 2009-2010 to National Securities Depository Limited (NSDL) andCentral Depository Services (India) Limited (CDSL).The International SecurityIdentification Number (ISIN) allocated to the Company by NSDL and CDSL is 338C01012.

SHARE REGISTRARS & TRANSFER AGENTS :

Niche Technologies (P) Ltd., D-511, Bagree Market, 71, B.R.B.B. Road, 5th Floor,Kolkata - 700 001. Phone : (033) 2235-7270/71, 2234-3576, Fax: (033) 22156823, E-mailnichetechpl@nichetechpl

DEPOSITORY DETAILS :

1. Central Depository Services (India) Ltd., P.J.Towers (17th floor), Dalai Street,Mumbai-400023, Phone: (022) 22723333-3224, Fax : (022) 2272-2072/3199.

2. M/s. National Securities Depository Ltd., 4th floor, 'A'Wing, Trade World, KamalaMills Compound, Senapati Bapat Marg, Lower Parel, Mumbai-400 013. Phone: (022) 2499-4200Fax: (022) 24972993.

DEMATERIALISATION OF SHARES :

As per SEBI's direction, the Company has signed tripartite agreements with the aboveDepositories and Registrars and Transfer Agents in November, 2000. Dematerialisationfacility is now available. According to SEBI's guidelines trading in Demat form has beenmade compulsory for all classes of investors. Therefore, it is in the interest of all theshareholders to convert their physical holdings into electronic holdings bydematerialisation of the equity shares.

PPERSONNEL:

No employee was in receipt of Salary exceeding the limits prescribed u/s 217(2A) of theCompanies Act, 1956 and hence the Statement of particulars of employees as required underthat section is not applicable to your Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, EXPORTS AND FOREIGN EXCHANGE EARNINGSAND OUTGCINGS.

As regards the information required under Section 217(1 )(e) of the Companies Act, 1956read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules1988, your Directors give the following particulars to the extent applicable to yourCompany.

(A) CONSERVATION OF ENERGY :

The Power requirement at Company's Gas Bottling Plant is negligible as only bottling ofgases is being done. For Sponge Iron Plants, the Capacitor Panels of adequate size andnumber have been installed and are maintained to save and economise on power consumption.

(B) TECHNOLOGY ABSORPTION :

The Company is using in-house technology and expertise for its LPG Bottling Plants. Thetechnology to manufacture Sponge Iron was provided by an outside agency.The saidtechnology is fully indigenous and is now well established and has been fully absorbed bythe Company. The Company has not so far made use of any imported technology for itsproducts/plants.

( C ) FOREIGN EXCHANGE EARNINGS AND OUT-GO : Earnings : Nil (Previous Year : Nil)

Out-Go : Rs. 162256 Previous Year; 399440)

DIRECTORS' RESPONSIBILITY STATEMENT :

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 withrespect to Directors' Responsibility Statement, it is hereby confirmed :-

(i) that in the preparation of the annual accounts for the financial year ended 31 stMarch, 2010, the applicable accounting standards had been followed alongwith properexplanation relating to material departures.

(ii) that the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for the year under review.

(iii) that the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act, 1956for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.

(iv) that the Directors have prepared the accounts for the financial year ended 31stMarch, 2010 on a going concern basis.

ACKNOWLEDGEMENT :

Your Directors would like to convey their sincere appreciation for the assistance andco-operation received from the valued customers, suppliers and shareholders during theyear under review. Your Directors also wish to place on record their appreciation for thecontribution of the employees at all levels.

RESPECT TO CONSERVATION OF ENERGY

1. RESEARCH AND DEVELOPMENT:

The Company has not so far carried out any major Research & Development work. TheCompany has not incurred any expenditure on this account so far. The Company, however, hasfull fledged laboratories at its Sponge Iron Plants for testing the quality of rawmaterials and also of the finished products.

2. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION :

Since no technology has been absorbed from outside, the item is not applicable to us.The Company, however, continues the efforts for upgradation of technology in order toimprove the quality and reduce cost to the extent possible.