AML Steel Ltd Directors Report

To

The Members,

Your Directors have pleasure in presenting the 21^st Annual Report of the Company together with the Audited accounts for the year ended 31st March 2014.

FINANCIAL REVIEW: (Rupees in Lacs)

Particulars	2013 -14	2012 -13
Total Turnover (Net)	12648.3	11244.87
Profit Before Depreciation, Interest and Tax	668.17	753.65
Depreciation	125.58	122.93
Interest	535.49	622.12
Profit Before Current Tax	7.09	8.6
Profit after Current Tax	4.9	5.94
Balance Profit B/f from earlier year	2689.13	2743.19
Appropriation	2694.03	2749.13
Transfer to General Reserve	60	60
Proposed Dividend (including Dividend Tax)	0	0
Profit C/f to Balance Sheet	2634.03	2689.13

RESERVES:

Your Board has approved the transfer of Rs. 60.00 Lakhs to the General Reserves.

DIVIDEND:

The Board of Directors of the Company has not recommended any Dividend during the Year.

MANAGEMENT DISCUSSION AND ANALYSIS

FINANCIAL PERFORMANCE

AML Steel Limited (AMLs) Net Turnover for the financial year ended March 31, 2014 increased to Rs. 126.48 crores from Rs. 112.45 crores in the previous year. The operating profit (PBDIT) of the Company has decreased to Rs. 6.68 crore from Rs. 7.54 crores in the previous year. Net Profit before tax has however has decreased to Rs. 7.09 lakhs from Rs. 8.601akhs in the previous year. The Profit of your Company for the Year 2013 -14 was affected adversely mainly due to the impact of input prices and higher overheads.

INDUSTRY STRUCTURE AND DEVELOPMENTS

The demand for steel in India is expected to rise 7 per cent in next financial year beginning April 1 as compared to sluggish projected growth of 5.5 per cent in 2013-14. The overall outlook for the steel sector is positive and the demand was likely to pick up in next financial year on the back of revival in the economic growth and the governments measures to ease infrastructure Investment Rules.

OPPORTUNITIES

The global steel industry has witnessed reasonable demand growth and steel manufacturing gradually shifted to emerging market such as China and India. By utilizing the optimum resources along with the liberalized Foreign Direct Investment policies can further help to grow the Steel Industries in India.

CHALLENGES

The adverse cost fluctuations in input raw material and its availability & costs, high interest, taxes, duties, inadequacy of funds to the expansion or modification of project Low labour productivity, fluctuations in environment, technology up gradation etc impede the development of Steel Industries in General. One of the major specific threats includes building the capability of the existing work force to meet the higher level of skill requirements, to develop the infrastructure.

OUTLOOK

During the year Our Country improved its position to 04th in the said sector. Your Company always intends to actively pursue these growth opportunities in the fast growing Iron and Steel manufacturing sector in the country. It will focus on the optimum utilization of available resources by creating a balance economy, maximum returns to the members, reaching a good impact on public by adhering to high ethics and standards.

COMPANYS PRODUCTION MILD STEEL INGOTS & TMT BARS:

During the year under consideration your company achieved a turnover of Rs. 126.48 Crores. Your Company is presently using its furnace to convert Scrap into M.S Ingots for its captive manufacturing thus reducing cost of production. Demand for TMT Bar is expected to rise as a result of various initiatives taken by government of India to boost infrastructural Industry.

RISKS AND CONCERNS

Risk and concerns given by the management are not in detail but only highlighting some of salient among them. It includes fluctuation in input prices, nonavailability of adequate financing, Frequent changes in technology, price volatility, Climate Changes, Strict regulatory frame works etc. Managing Director, Directors, Business, Plant heads and executives in charge manage risk on a daily basis through cross functional involvement and intense communication across business.

ADEQUACY OF INTERNAL CONTROL

The company has an internal audit system for assessing suitability of the internal controls, adherences to policies, procedures and taking corrective action to address any gaps. It facilitates proper recommendation for improving the business systems. These controls have been designed to provide a reasonable assurance with regard to maintaining proper accounting controls, monitoring operations, protecting assets from unauthorized use or losses, compliances with regulations and for ensuring reliability with financial reporting. The company has continued with its efforts to align processes and controls with best global practices in these areas as well.

The Audit Committee of the board actively reviews the adequacy and effectiveness of internal control systems and suggests improvements to strengthen the same.

SUBSIDIARIES:

A brief description of AML Steel Subsidiaries is as follows:_

Name	Products	Location
Ankit Ispat Private Limited	MSI (Mild Steel Ingot)	Kariakal
Ashok Steel Industries Private Limited	MSI (Mild Steel Ingot) & TMT Bars	Sri Lanka
AML Steel & Power Limited	Sponge Iron, Power Plant for captive consumption & Steel Melting Shop for manufacturing of Billets	Jharkhand

As required under Section 217 of the Companies Act, 1956, the Audited Statement of accounts along with the report of the Board of Directors and Auditors Report of your Companies, subsidiaries, namely, AML Steel & Power Limited, Ankit Ispat Private Limited and Ashok Steel Industries (P) Limited, Srilanka, are annexed to this report.

PUBIC DEPOSITS:

The Company has not accepted or not renewed any Public Deposits, as defined under section 58A of the companies Act,1956 during the year under review.

HUMAN RESOURCES:

The Industrial Relation with the employees of the Company continues to be cordial. Your Company takes all the necessary steps to facilitate a friendly atmosphere with in the organization by way of hiring, developing and retaining the best personnel.

DIRECTORS:

Shri Ankit Agarwal and Shri Vinay Kishore Kasat, Directors of the Company are due for retirement by rotation at this annual General Meeting who are eligible for re - appointment. Brief particulars of these Directors are given below:

i) Ankit Agarwal- is a Promoter cum Non-Executive Director of the Company. He is an engineering graduate from Anna University, Chennai. And He is a member of the management team responsible for the companys day to day operations and long term.

ii) Vinay Kishore Kasat - is a Non-Executive Independent Director of the Company. He is a graduate in commerce and having an experience in different industries. He is practicing as an industrial consultant from the year 1998. He is also involved in the social activities.

DIRECTORS RESPONSIBILITY STATEMENT:

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

(i) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 ended March 31 , 2014 and the profit of the company for that year;

(iii) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities, if any;

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

CONSOLIDATED FINANCIAL STATEMENTS:

In terms of listing agreement with the Stock Exchanges, the duly audited consolidated financial statements are placed as Annexure. These statements have been prepared on the basis of audited financial statements received from subsidiary companies as approved by their respective Boards.

PARTICULARS OF EMPLOYEES:

There were no employees of the company who were in the receipt of the remuneration as per the limits prescribed by Section 217(2A) of the Companies Act, 1956 and the rules framed there under.

DISCLOSURE OF PARTICULARS:

The information required under Section 217(l)Ie) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given as annexure forming part of this Report.

LISTING:

Your Companys shares have been listed at Madras Stock Exchange Limited, Delhi Stock Exchange Association Limited and Ahmedabad Stock Exchange Limited. It is confirmed that the Annual Listing fees upto the period from 01.04.2014 to 31.03.2015 has been paid to the aforesaid exchanges.

AUDITORS:

M/s. K.P. Jain & Co., Chartered Accountants, Chennai, the Auditors of the Company retire at the conclusion of the Annual General Meeting and being eligible, offer themselves for re-appointment.

CORPORATE GOVERNANCE

In terms of listing agreement with the Stock Exchanges, a compliance report on Corporate Governance is given as Annexure. A certificate from Auditors of the company regarding compliance of conditions of Corporate Governance is placed as Annexure. The Board has laid down a Code of Conduct for all Board Members and Senior Management of the company.

VIGIL MECHANISM:

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a vigil mechanism for directors and employees to report genuine concerns has been established.

CAUTIONERY STATEMENT

The statement in this management Discussion and analysis report describing the companys projections, estimates, expectations or predictions may be forward-looking statement within the meaning of applicable securities laws and regulations. These statements being based on certain assumptions and expectations of future events, actual results could differ materially from those expressed or implied.

APPRECIATION:

Your Directors would like to place on record our sincere appreciation and thank the entire team of AML Steel limited for their support inspite of challenging business environment. We take this opportunity to express our sincere thanks to all stake holders for their confidence and faith and to all Government, Regulatory Authorities and Banks for their valuable support.

	For and on behalf of the Board
Place: Chennai	Ankit Agarwal	Ajay Agarwal
Date: 04.09.2014	Director	Director
	(DIN: 00065020)	(DIN: 00064366)

ANNEXUREI TO THE DIRECTORS REPORT

PARTICULARS AS PER THE COMPANIES (DISCLOSURE OF PARTICUALRS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORSS REPORT FOR THE YEAR ENDING 31ST MARCH 2014:

A. CONSERVATION OF ENERGY:

a) Energy Conversation measures taken:

Periodicals maintenance and check up of plant and plant and machinery and other motor driven equipment to keep them operational at optimum level.

b) Additional Investments and Proposals, if any, being implemented for reduction of consumption of energy.

The management of the company is continuously reviewing areas wherever further energy reduction and savings can be achieved.

c) Impact of measures at (a) and (b) for reduction of energy consumption and consequent Impact on the cost of production of goods.

The measures taken above reduce the cost of replacement.

d) Total energy consumption and energy consumption per unit of production are furnished in the prescribed TForm A enclosed.

B. Technology Absorption Efforts made in Research & Development and Technology are furnished in the prescribe ?Form B enclosed.

C. Foreign Exchange Earnings and Outgo:

1. Activities relating to exports: Initiatives taken to increase exports, developments of new export markets for products and services and export plants: NIL

2. Total Foreign Exchange used and earned

i. On Account of Travel:	NIL
ii On Account of Raw Materials:	NIL
iii Total Foreign Exchange Earned:	NIL

FORMA

FORM OF DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY

A. Power and Fuel Consumption	2013-14	2012-13
1. Electricity
(a) Purchased:
Units (KWH) in Lakhs	307.56	276.23
Total amount (Rs. In Lakhs)	1211.78	1056.20
Rate/Unit (Rs.)	3.94	3.82
(b) Own generation	Nil	Nil
2. Coal	Nil	Nil
3. Furnace Oil	Nil	Nil
4, Others/Internal Generation	Nil	Nil
B. Consumption per unit of production:
Electricity (KWH) - Per MT of M.S.Ingots	947.45	945.23
Electricity (KWH) - Per MT of T.M.T Saria	947.45	945.23

FORM B

FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION:

Research and development:
1. The specific areas in which Research and development is carried out by the company.	NIL
2. Benefits derived as a result of the above Research and Development.	NIL
3. Future plan of Action	NIL
Possibilities are explored to involve in Research and Development
4. Expenditure on Research and Development
A. Capital Expenditure:	NIL
B. Recurring Expenditure:	NIL
C. Total:	NIL
D. Total R&D Expenditure as a percentage of total turnover:	NIL

Technology Absorption, Adaptation and Innovation.

1. Efforts in brief made towards Technology Absorption, Adoption and innovation

The Company has procured the machinery manufactured by well established Manufacturers. Therefore, the company does not require and has not made any arrangement for import of technical Know-how

2. Benefits derived as a result of the above efforts. Product Improvement and Product development.

3. Information relating to the technology imported during the last 5 years:			NIL
	For and on behalf of the Board
Place: Chennai	Ankit Agarwal	Ajay Agarwal
Date: 04.09.2014	Director	Director
	(DIN: 00065020)	(DIN: 00064366)

ANNEXURE II TO THE DIRECTORS REPORT

REPORT ON CORPORATE GOVERNANCE

(As required by Clause 49 of the listing agreement of the Stock Exchanges)

Companys Philosophy on Code of Corporate Governance:

The Board of Directors of the Company has taken all the norms of Corporate Governance at AML Steel Limited in its real spirit considering and enhancing shareholders value and management accountability.

The Board of Directors of the Company fully understands the rights of the shareholders to have information on the performance of the company and considers itself as a trustee of its shareholders.

Board of Directors:

The Board consists of 6 directors with optimum combination of executive and non-executive directors. Except Managing Director all other directors are non-executive directors, including 3 independent directors. The Composition attendance at the Board meetings and last annual general meeting, outside directorship, committee memberships & chairmanship are given below:

Name & Designation	Category	Attendance		Number of other Directorships
		Board Meetings	Last AGM	Public Companies	Committee Membership	Committee Chairmanship
Mr. Ashok Agarwal	Promoter Executive	11	Yes	2	-	-
Mr. Ajay Agarwal	Promoter Non-executive	11	Yes	1	2	2
Mr. Ankit Agarwal	Promoter Non-executive	11	Yes	-	1	-
Mr. S.Kolandai Raj	Independent Non-executive	5	No	-	1	-
Mr. Vinay Kishore Kasat	Independent Non-executive	6	No	1	2	1
Mr. Inderjeet Kaushal	Independent Non-executive	5	No	-	-	-

• Directorship in Foreign Companies, Private Limited Companies and Companies covered under section 25 of the Companies Act, 1956 have not been considered.

Non executive directors compensation and disclosures

No fees / compensation is being paid to non executive directors of the company.

Number of Board Meetings held and dates on which held

During the Year the Board of Directors of the Company met Eleven Times on 02.04.2013, 29.05.2013, 01.07.2013, 17.07.2013,14.08.2013,01.10.2013,13.11.2013,17.12.2013,02.01.2014,13.02.2014 and 12.03.2014 The maximum time gap between any two consecutive meetings did not exceed four months.

Code of Conduct

The Code of Conduct of the Company as adopted by the Board is applicable to all directors and senior management personnel of the company. The Directors and senior Management of the company have made requisite annual affirmation of the compliance with the respective Code. A declaration to this effect duly signed by Managing Director of Company, is annexed and forms a part of this Report.

Declaration as required under Clause 49 of the listing agreement is appended to this report.

Audit Committee

Composition, name of members and Chairman.

The Audit Committee consists of three non-executive Directors out of which 2 are independent Directors. During theyear the committee met four times dated 23.05.2013,10.08.2013, 08.11.2013 and 11.02.2014 and the attendance of members at the meeting was as follows:

Name of Members	Category	Designation	No. of meetings attended
Vinay Kishore Kasat	Independent Non Executive	Chairman	5
S. Kolandai Raj	Independent Non Executive	Member	5
Ankit Agarwal	Non Executive	Member	5

Terms of Reference.

The board has defined the scope of Audit committee to cover all areas provided for under section 292A of the Companies Act, 1946 and clause 49 of the Listing Agreement of the stock Exchanges.

Remuneration Committee

No remuneration / compensation are paid to any of the directors and as such the requirement of the remuneration committee is not applicable.

Shareholders / Investors Grievance Committee

The Shareholders / Investors Grievance Committee consists of two non-executive directors. The responsibility of the Shareholders / Investors Grievance Committee is to supervise the mechanism of investor grievance rederessal and to ensure cordial investors relation. The composition, name of members and chairman are as follows:

Name of Members	Category	Designation
Aj ay Agarwal	Promoter Non-executive	Chairman
Vinay Kishore Kasat	Independent Non-executive	Member

No. of Shareholders complaints received during the year ended 31st March 2014 is NIL. No. of complaints not solved to the satisfaction of the shareholders is NIL.

No. of pending complaints for the year ended 31st March 2014 is NIL. General Body Meetings

a. The details of the last three Annual General Meetings of the Company is given below:

Year	Location	Date	Time
2012-2013	Regd. Office	30/09/13	11.30 A.M
2011-2012	Regd. Office	29/09/12	11.30 A.M
2010-2011	Regd. Office	30/09/11	11.30 A.M

b. Special resolutions passed at last three Annual General Meetings:

No special resolutions were passed at the last three Annual General Meeting. There were no resolutions requiring approval through Postal Ballot.

Disclosures

• Disclosures on materially significant related party transactions i.e., transactions of the company of material nature with its Promoters, Directors, the Management, their subsidiaries or relatives that may have potential conflict with the interest of the company at large - NIL

• Details of non - compliance by the company, penalties / strictures imposed on the company by the Stock Exchanges or SEBI or any Statutory Authority on any matters related to Capital Market during the last three years: NIL

• Whistle Blower Policy: The Company encourages an open door policy where employees have access to head of Business / Functions. We affirm that no personnel have been denied access to audit committee.

• We confirm that Company had complied with all the mandatory requirement of Clause 49 of the listing Agreement.

• No remuneration / compensation is being paid to any director.

• Annual Report has a detailed section on Management Discussion and Analysis Report.

• The Company has not raised any money during the year through public issues, right issues or preferential issues.

Share holding of Non Executive Director:

Details of Shareholding of non executive directors in the Company as on 31st March 2014:

Name of the Director	No of shares held (face value of Rs 10/- each)
Mr. Ajay Agarwal	9000
Mr. Ankit Agarwal	1,90,000
Mr. Vinay Kishore Kasat	NIL
Mr. S.Kolandai Rai	NIL
Mr. Inderjeet Koushal	NIL

Means of Communication

The quarterly / half-yearly results are generally published by the company in

(i) News Today (English)

(ii) Maalai Sudar (Tamil)

Any website where displayed - No

Whether it is also published in official newspapers - No

Presentations made to institutional investors or to analysts - No

Whether management discussion & analysis form part of the Annual Report - Yes

General Shareholder information:

General Shareholder information:

Annual General Meeting	: Twenty First
Day	: Tuesday 30.09.2014
Time	: 11.00 A.M.
Venue	: Registered Office
	B-73, SIPCOT Industrial Complex
	Gummidipoondi - 601201.

Financial Calendar

The financial year cover the period from 1st April to 31st March. Financial Reporting for 2013 - 14.

Quarter	Period	Particulars of Results
First	April - June	14th August 2013
Second	July - September	13th November 2013
Third	October - December	13th February 2014
Fourth	January - March	29th May 2014

Date of Book Closure:

The Books Closure is fixed between the 26.09.2014 to 30.09.2014 (both days inclusive).

Dividend payment date:

The Board of Directors of the Company has not recommended dividend for the financial year 2013 - 14.

Listing on Stock Exchanges:

The Companys shares are listed at Madras Stock Exchange Limited, Delhi Stock Exchange Limited and Ahmedabad Stock Exchange Limited. Listing fees for the year 2013-14 has been paid.

Stock Code: ISIN Number for NSDL & CDSL is INE577F01018

Registrar and Share Transfer Agents:

The registrar and share transfer agents of the company is M/ s. Cameo Corporate Services Limited, Subramanian Building, No.l, Club House Road, Chennai - 600002. (Phone No.044-28460390 Fax: 28460129).

Share Transfer System:

All transfers received are processed and approved by the Share Transfer Committee which normally meets once a month or more depending on the volume of transfers.

Distribution of Shareholdings:

The Distribution of Shareholdings as on 31st March 2014.

Shareholdings of nominal value	No. of Shareholders	% to Total	Share Amount	% to Total
Upto Rs.5000	1034	63.47	2789230	3.72
5001-10000	340	20.87	2792730	3.72
10001-20000	118	7.24	1726750	2.3
20001-30000	45	2.76	1157240	1.54
30001-40000	17	1.04	611580	0.82
40001-50000	15	0.92	686420	0.92
50001-100000	24	1.47	1699230	2.26
100001- and above	36	2.21	63536820	84.72
Total	1629	100	75000000	100
Physical Mode	493	30.26	466050	6.21
Electronic Mode	1136	69.73	7033950	93.78

Shareholding Pattern as on 31^st March 2014

Category	No. of Shareholders	No. of Shares	% of Holding
Promoters	9	2233450	29.78
NRI	3	1600	0.02
Resident	1573	1814009	24.19
Corporate Bodies	44	3450941	46
Clearing Members	0	0	0
Total	1629	7500000	100

Outstanding GDR/ADR/Warrants or Convertible Instruments, Conversion date and like impact on equity:

The company has not issued any ADR /GDR.

Plant Location:

Steel Plant: Eripakkam Village, Netapakkam, Commune, Pondicherry - 605106. PVC Plant: B-73, SIPCOT Industrial Complex, Gummudipoondi - 601201.

Sponge Iron Plant: Vill.-Masleva, P.O.- Kolabira, Dist- Saraikela Kharsawan, Jharkhand - 833220 Address for correspondence:

Shareholders correspondence should be addressed to: The Company Secretary

AML STEEL LIMITED

AML TOWERS, 9, Gopalapuram, 6th Street, Chennai - 600 086 Phone: 044 - 39710000 Fax: 044-39710012

Shareholders holding shares in Electronic Mode should address all their correspondences to their respective Depository Participants.

Green Initiative

Your Company welcomes and supports the green initiative taken by Ministry of Corporate Affairs. The Company provides the facility to all of its shareholders the right to receive the Annual Return by their email id. Previously registered with the Company or Share Transfer Agents. Shareholders those who have not registered the same are requested to register their email address.

Declaration

As provided under clause 49 of the listing Agreement with stock exchanges, this is to confirm that all members of the Board and Senior Management, have affirmed compliance affirmation with code of conduct in respect of Financial Year 2013 -14.

	For and on behalf of the Board
Place: Chennai	Ajay Agarwal
Dated: 04.09.2014	Director
	(DIN: 00064366)