Aanchal Ispat Ltd Directors Report.

Dear Shareholders,

Your Directors are pleased to present the 24th Annual Report of your company on the operations and performance along with the Audited Financial Statements for the year ended on 31st March, 2019.

FINANCIAL HIGHLIGHTS

During the financial year 2018-19, the Company recorded an impressive performance by recording its highest EBITDA and Profit after tax (PAT). While EBITDA registered an increase by 39.12%, PAT improved by 110.92%. Improved productivity from our mills helped to generate more volume for sales revenue and lower manufacturing cost from more efficient operations. The Company continued to focus on important initiatives for improving safety and environmental compliance as well as improving the customer experience and operational efficiencies.

The Companys financial performance for the year ended 31st March, 2019 is summarised below:

(Rs. in lacs)
PARTICULARS 2018-2019 2017-2018
Sales and other operating Income 35,367.83 38,510.31
Earnings before Interest,Tax, Depreciation& amortization (EBITDA) 1,070.23 769.24
Finance costs 568.76 472.95
Depreciation and amortization expenses 74.93 73.42
Profit/ (loss) before tax 426.54 222.87
a) Current Tax 150.09 67.72
b) Current Tax Expense relating to Prior Years - 6.13
c) Deferred Tax (3.49) 16.30
Profit/(loss) for the period 279.94 132.72

RESULTS OF OPERATIONS AND STATE OF THE COMPANYS AFFAIRS:

The Companys revenue in FY2018-19 was at Rs. 35,367.83 Lakhs. EBIDTA stood at Rs.1,070.23 lakhs compared to Rs. 769.24 lakhs in the previous year. The Company reported post-tax profit of Rs. 279.94 Lakhs in FY2018-19 compared to a post-tax profit of Rs. 132.72 Lakhs in the previous year.

During the current financial year 2018-19, no amount has been appropriated to General Reserve.

BUSINESS ACTIVITY

The company is engaged in manufacturing of wide range of TMT Bars, MS Rounds & Angulars, besides Trading of Steel Products etc. There has been no change in the nature of business of the Company.

SHARE CAPITAL

The paid up Equity Share Capital as at March 31, 2019 stood at Rs. 20.85 cores. During the year under review, the Company has not issued shares or convertible securities or shares with differential voting rights nor has granted any stock options or sweat equity or warrants. As on March 31, 2019, none of the Directors of the Company hold instruments convertible into Equity Shares of the Company.

DIVIDEND

In order to conserve the resources for meeting future capital needs related to maintenance, regulatory, cost reduction and potential strategic projects, the Board of Directors have decided not to recommend dividend on the equity shares of the Company.

DEPOSITS

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.

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.

REGULATORY STATEMENT

In conformity with provision of regulation 34(2)(c) of SEBI (LODR), Regulations 2015, the Cash Flow Statement for the year ended 31.03.2019 is annexed hereto. The equity shares of the Company are listed on the BSE Ltd. The Company has paid listing fees for the year 2018-19 to above stock exchange

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, 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 - A. MANAGEMENTS DISCUSSION AND ANALYSIS REPORT

As per the terms of Regulation 34(2) read with Schedule V of SEBI Listing Regulations, Managements Discussion and Analysis Report for the year under review, is presented in a separate section forming part of the Annual Report.

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 arms 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 –B. 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.

DETAILS OF DIRECTORS OR KMPS APPOINTMENT OR RESIGNATION

During the year under review there are changes in the Composition of the Board. In the year under review Ms. Preetee Agarwal and Shri Sudhir Kumar Budhia, Directors resigned from the post w.e.f. 30th May, 2018 and w.e.f 14th August, 2018 respectively. The Board appreciates the valuable services rendered by them during their tenure.

Shri Vijay Srivastava was appointed as Executive Director w.e.f. 14th August, 2018 and Ms. Nilu Nigania and Ms. Babita Kaur Bagga were appointed as the Independent director, w.e.f 14th August, 2018 and 14th November, 2018 respectively.

None of the Directors are disqualified from being appointed as Directors, as specified in Section 164 of the Companies Act, 2013.

Director retiring by Rotation

In accordance with the provisions of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Vijay Srivastava (DIN: 03618949) retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board of Directors on recommendation of Nomination & Remuneration Committee has recommended for the approval of appointment/ re-appointment of the aforesaid Directors at the ensuing Annual General Meeting. The brief details of the Directors to be appointed/re-appointed as required under Regulation 36 of the SEBI Listing Regulation are given in the Notice convening the ensuing Annual General Meeting.

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met 4 (FOUR) times during the financial year, detailed information about dates of meetings and attendance of Directors thereat is given in the Corporate Governance Report annexed to this report. The intervening gap between any two meetings was not more than one hundred twenty days as mandated under the provisions of Section 173 of the Companies Act, 2013 and Regulation 17(2) of the SEBI Listing Regulations.

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

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and other Committees. The Boards performance for the year under review was assessed on the basis of participation of directors, quality of information provided/available, quality of discussion and contribution etc. A structured questionnaire was prepared after taking into consideration inputs received from the directors, covering the aforesaid aspects of the Boards functioning. The overall performance of the Board and Committees of the Board was found satisfactory.

The overall performance of Chairman, Executive Directors and the Non-Executive Directors of the Company was found satisfactory. The review of performance was based on the criteria of performance, knowledge, analysis, quality of decision making etc. The manner and detail in which evaluation was carried out is stated in the Corporate Governance Report which forms a part of this annual report.

AUDIT COMMITTEE

The Audit Committee comprises of Ms. Nilu Nigania, Mr. Mukesh Agarwal, Mr. Manoj Goel and Ms. Babita Kaur Bagga. Ms. Nilu Nigania is the chairperson of the committee.

During the year, Ms. Preetee Agarwal and Mr. Sudhir Kumar Budhia resigned from the membership in the committee as a member at the Board meeting dated May, 30, 2018, and August, 14, 2018 respectively and Ms. Nilu Nigania & Ms. Babita Kaur Bagga were inducted as the member of the committee vide Board meeting dated 14th August, 2018 and 14th November, 2018 respectively and accordingly the Audit Committee was reconstituted.

The Committee, inter alia, reviews the Internal Control System and Reports of Internal Auditors and Compliance of various Regulations. The brief terms of reference of the Committee and the details of the Committee meetings are provided in the Corporate Governance Report. The Committee also reviews the Financial Statements before they are placed before the Board.

DIRECTORS RESPONSIBILITY STATEMENT

In compliance with the provisions of 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 2019, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(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 as at 31st March, 2019 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 the Companies Act, 2013, 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;

(e) The directors of the 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; 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.

KEY MANAGERIAL PERSONNEL

The Following director/officials of the Company have been designated as Key Managerial Personnels (KMPs) of the Company by the Board of Directors in terms of provisions of Section 203 of the Companies Act, 2013 and the Regulations: (There is no change in the KMPs during the year under review)

1. Mr . Mukesh Goel, Managing Director;

2. Mr . A.S Nageswar Rao, Chief Financial Officer;

3. Ms. Neha Sharma, Company Secretary & Compliance Officer.

DECLARATION FROM INDEPENDENT DIRECTORS

The terms & condition for appointment of Independent Directors are as per the provisions of Section 149 & Schedule IV of the Companies Act, 2013. The Company has received necessary declarations from all Independent Directors confirming that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and under Regulation 16(1)(B) of the SEBI (Listing obligations and Disclosure requirements) Regulations, 2015. And there has been no change in the circumstances which may affect their status as Independent directors during the year.

CODE OF CONDUCT

The Code of Conduct of Directors, KMP‘s and Senior executive of the Company is already in force and the same has been placed on the Companys website www.aanchalispat.com and the declaration for the affirmation with the same forms a part of this annual report.

CORPORATE GOVERNANCE

Your Company has practised sound Corporate Governance and taken necessary actions at appropriate times for enhancing and meeting stakeholders expectations while continuing to comply with mandatory provisions of Corporate Governance. Your Company has complied with the requirements of all applicable regulations read with Schedule-V of SEBI Listing regulations as issued by SEBI and amended from time to time.

A report on Corporate Governance along with certificate from M/s Raj Chandra & Associates, Chartered Accountants, regarding compliance of conditions is presented in a separate section forming part of the Annual Report.

POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

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

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The particulars of employees as required under Section 197 (12) of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, (as amended) are given in separate annexure attached hereto as Annexure-C and forms a part of this report. Further stating there were no such employees drawing remuneration in excess of the limits set out in Section 197 (12) of the Companies Act, 2013 read with Rule 5(2) & 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

AUDITORS & AUDITORS REPORT

Statutory Auditors

M/s Raj Chandra & Associates, Chartered Accountants (Firm Registration No. 326312E) were appointed as Statutory Auditors of the Company for a term of five years at the 21st Annual General Meeting held on 28th September, 2016, as per the provisions of Companies Act, 2013. They have confirmed that they are not disqualified from continuing as Auditors of the Company. The notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation, adverse remark or disclaimer.

Cost Auditor

Pursuant to the provisions of Section 148 of the Companies Act, 2013 and the Rules made there under M/s. A.S. & Associates, Cost Accountants (Firm Registration no. 000523) were appointed for auditing cost accounting records of the Company for the year ending 31st March, 2019. Board has further appointed M/s. A.S & Associates, Cost Accountants (Firm Registration no. 000523) as Cost Auditors for the year ending 31st March, 2020 subject to approval of remuneration in the forthcoming Annual General Meeting.

Internal Auditor

The Company has appointed M/s R. Modi & Co.(FRN: 327727E) 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(1) of the Companies Act, 2013, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Ms. Manisha Saraf, Company Secretary in whole time practice (Membership No. FCS-7607, Certificate of Practice No.-8207) as the Secretarial Auditor of the Company for the Financial Year 2018-2019 to conduct the Secretarial Audit. The Secretarial Audit Report for the financial year ended 31st March, 2019 has been annexed as Annexure- D and forms a part of this annual report.

The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer except some minor comments for which management is taking necessary steps to avoid the same in future.

SECRETARIAL STANDARDS

The directors state that applicable Secretarial Standards, i.e. SS-1 & SS-2, relating to ‘Meeting of the Board of Directors and ‘General Meeting respectively have been duly followed by the Company.

RISK MANAGEMENT POLICY

The risk management strategy of your Company is based on a clear understanding of various risks, and adherence to well-laid out risk policies and procedures that are benchmarked with industry best practices. The Company has developed robust systems and embraced adequate practices for identifying, measuring and mitigating various risks – business, strategic, operational, market, credit, liquidity, reputational and process risks and ensuring that they are maintained within pre-defined risk appetite levels.

ANNUAL RETURN

In terms of provisions of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management & Administration) Rules, 2014, a copy of the Annual return as prescribed under Section 92 of the Companies Act, 2013 forms a part of this report and is annexed as Annexure-E and the same can also be assessed at the website of the Company at www.aanchalispat.com

DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The Company has not developed and implemented any Corporate Social Responsibility initiatives as the provisions of section 135 of the Companies Act, 2013 along with Companies (Corporate Social Responsibility Policy) Rules, 2014 as they are not applicable.

VIGIL MECHANSIM 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.

The policy with the designation and address of the Competent Authority, Executive Chairman/Managing Director of the Company and Chairman of the Audit Committee has been communicated to the employees by uploading the same on the website of the Company.

INTERNAL FINANCIAL CONTROLS

The Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys Policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records, and the timely preparation of financial disclosures.

The Company has an Internal Control System commensurate with the size, scale and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditor. Significant audit observations and corrective action are reported to the Audit Committee.

The concerned executives monitors and evaluates the ef_cacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 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.

INSURANCE

The Company has taken appropriate insurance for all assets against foreseeable perils.

DISCLOSURE UNDER 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.

COURT/TRIBUNAL ORDERS

There were no instances of any significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.

MATERIAL CHANGES AFFECTING THE COMPANY

There are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report. There has been no change in the nature of business of the Company.

APPRECIATION

The Board of Directors thank the shareholders for their continued support and they would like to place on record their appreciation for the dedicated services rendered by the Employees at all levels. We thank our customers, vendors, dealers, investors, business associates and bankers for their continued support during the year. We place on record our appreciation of the contribution made by the employees at all levels. Our resilience to meet challenges was made possible by their hard work, solidarity, co-operation and support.

For and on Behalf of the Board of Directors
Sd/-
Place: Howrah (Mukesh Goel)
Date: 28th May, 2019 Managing Director
(DIN: 00555061)