Ashnisha Industries Ltd Directors Report.

To,

The Members,

Your Directors have pleasure in presenting their Annual Report on the business and operations of the Company and the Audited Accounts for the Financial Year ended 31st March, 2018.

1. FINANCIAL SUMMARY/HIGHLIGHTS OF PERFORMANCE OF THE COMPANY:

Financial Results

Particulars Year ended 31/03/2018 Year ended 31/03/2017
Total Revenue 11,83,45,497 54,44,842
Expenditure 11,82,28,639 55,80,334
Depreciation 1,01,594 -
Profit/(Loss) before Tax (65,82,166) (1,35,492)
Provision for Taxation - -
Income Tax - -
Deferred Tax - -
Profit/(Loss) after Tax (65,82,166) (1,35,492)

2. PERFORMANCE:

Income from trading of Steel products and dealing in shares and securities increased as compared to previous year and consequently total revenue for the year has increased. But due to rise in cost of expenses, the Company has incurred loss during the year. The Management of the Company is taking efforts for the development of the Company.

3. DIVIDEND:

Due to loss during the year, the Company is not able to declare Dividend.

4. TRANSFER TO RESERVE:

Reserves & Surplus at the end of the year stood at Rs. 9,16,40,916 /- as compared to Rs. (2,26,006) /-at the beginning of the year.

5. SHARE CAPITAL:

At present, the Company has only one class of shares - equity shares with face value of Rs.10/- each. The authorized share capital of the company is Rs. 3,07,00,000/- divided into 30,70,000 equity shares of Rs. 10/- each. The paid up share capital of the company as on March 31, 2018 was Rs. 3,01,87,640/- divided into 3018764 equity shares of Rs. 10/- each.

6. DEPOSITS:

Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

7. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE:

During the period under review, several energy conservation initiatives were adopted and were taken by the Company. There are no plans to import any kind of technology for the project and hence information regarding its absorption is not applicable. There was no research activities carried out during the year as well as no foreign exchange income or outgo during the year.

8. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There were no such material changes occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report which can affect the financial position of the Company.

The Equity Shares of the Company got listed on BSE Limited and trading of shares commenced with effect from 31st July, 2018

9. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS:

The National Company Law Tribunal (NCLT), Ahmedabad Bench had sanctioned the Scheme for Demerger of Trading and Investment Business of Lesha Industries Limited (Demerged Company) and vesting the same into Ashnisha Industries Limited (then Ashnisha Alloys Private Limited) (Resulting Company) pursuant to sections 391 to 394 of the Companies Act, 1956, vide its order dated May 29, 2017 and other relevant provisions of the Companies Act. Pursuant to the scheme, trading & investment business of the Company was transferred to Ashnisha Industries Limited (Formerly known as Ashnisha Alloys Private Limited).

In consideration the Resulting Company issued and alloted 30,18,764 new Equity Shares of Rs. 10/- each to the shareholders of the Demerged Company whose names appear in the Register of Members of the Demerged Company in the ratio of 8 (Eight) new Equity Share of the Resulting Company for every 25 (Twenty Five) Equity Shares held by the shareholders in the Demerged Company on the Record Date 18.08.2017.

No other orders have been passed by the Regulators/Court or Tribunals which can impact the going concern status and Companys operation in future.

10. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:

There are no Subsidiary/Joint Ventures/Associate Companies.

11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT BY THE COMPANY:

Details of Loans, Guarantees and Investments, if any covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.

12. MEETING OF BOARD OF DIRECTORS:

During the year under the review, 4 (Four) Board meetings were held, with gap between Meetings not exceeding the period prescribed under the Companies Act, 2013 and Rules made thereunder. Details of Board and Board committee meetings held during the year are given in the Corporate Governance Report.

The Board meeting dates are finalized in consultation with all directors and agenda papers backed up by comprehensive notes and detailed background information are circulated well in advance before the date of the meeting thereby enabling the Board to take informed decisions.

The intervening gap between the Board Meetings was within the period prescribed under the Companies Act, 2013. During the financial year 2017-18, 4 (Four) Board Meetings were held on 23/05/2017, 21/08/2017, 16/12/2017 and 08/02/2018.

13. EXTRA-ORDINARY GENERAL MEETING OF THE COMPANY HELD DURING THE YEAR 2017-18

During the year under review, Extra-Ordinary General Meeting of the Company was held on 17th June, 2017 and following resolutions were passed with the consent of the Members of the Company.

• The Authorised Share Capital of the Company was increased from Rs. 5,00,000 to Rs. 3,02,00,000.

• M/s. GMCA & Co., Chartered Accountants (Firm Registration No. 109850W) were appointed as the Statutory Auditors of the Company to fill the casual vacancy caused by the resignation of M/s. Shah Shreyas & Associates, Chartered Accountant (Firm Registration No. 130249W).

14. EXTRACTS OF ANNUAL RETURN:

An extract of Annual Return in Form MGT-9 is attached herewith as ANNEXURE-II.

15. CORPORATE SOCIAL RESPONSIBILITY (CSR):

Pursuant to provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, every company with a Net Worth of Rs. 500 Crores or more or an annual turnover of Rs. 1000 Crores or more or with a net profit of Rs. 5 Crores or more is required to constitute a CSR Committee. At present, the Company is not required to constitute a CSR Committee in this regards as none of the above referred limits have been triggered.

16. INSURANCE:

All the Properties of the Company are adequately insured.

17. RELATED PARTY TRANSACTIONS:

There are no materially significant related party transactions made by the Company which may have a potential conflict with the interest of the Company at large and thus disclosure in Form AOC-2 is not required.

18. DIRECTORATE AND KEY MANAGERIAL PERSONNEL:

The Board of Directors of your company has various executive and non-executive directors including Independent Directors who have wide and varied experience in different disciplines of corporate functioning.

In accordance with the provisions of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Shalin A. Shah (DIN: 00297447) retires by rotation at the ensuing Annual General Meeting and being eligible in terms of Section 164 of the Act offers himself for re-appointment.

The Company had, pursuant to the provisions of Regulation 17 (1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 entered into with Stock Exchanges, appointed Mrs. Daxaben M. Shah (DIN: 08054390), and Mr. Chandrakant N. Chauhan (DIN: 08057354), as an Independent Directors of the Company w.e.f 08/02/2018.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013.

As required under Section 203 of the Companies Act, 2013, the Company has appointed Ms. Dimpal J. Solanki w.e.f 08/02/2018 as Company Secretary.

19. EVALUATION OF BOARD, COMMITTEES AND DIRECTORS:

Pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015, the Board had carried out performance evaluation of its own, the Board Committees and of the Independent directors. Independent Directors at a separate meeting evaluated performance of the Non-Independent Directors, Board as a whole and of the Chairman of the Board.

The following were the Evaluation Criteria:

(a) For Independent Directors: (b) For Executive Directors:
- Knowledge and Skills - Performance as Team Leader/Member.
- Professional conduct - Evaluating Business Opportunity and analysis of Risk Reward Scenarios
- Duties, Role and functions - Key set Goals and achievements
- Professional Conduct, Integrity
- Sharing of Information with the Board

The Directors expressed their satisfaction with the evaluation process.

20. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS:

The Board has on the recommendation of the Nomination & Remuneration Committee, formulated criteria for determining Qualifications, Positive Attributes and Independence of a Director. No remuneration is paid to any of the Directors of the Company.

21. MANAGERIAL REMUNERATION:

The Company had not paid any remuneration to Executive Directors or any sitting fees to Non-Executive Directors for attending any meetings during the financial year ended 31st March, 2018.

22. COMMITTEES OF THE BOARD:

During the year, in accordance with the Companies Act, 2013, the Board constituted some of its Committees.

AUDIT COMMITTEE:

The Company constituted its Audit Committee comprising of following Directors:

Sr. No. Name & DIN of the Director Status Category
1 Mr. Chandrakant N. Chauhan Chairman Non-Executive Independent Director
2 Mrs. Daxaben M. Shah Member Non- Executive Independent Director
3 Mr. Shalin A. Shah Member Non-Executive Director

Attendance of each member of the Audit Committee:

Committee Members Meetings held Meetings attended
Mr. Chandrakant N. Chauhan 2 2
Mrs. Daxaben M. Shah 2 2
Mr. Shalin A. Shah 2 2

NOMINATION AND REMUNERATION COMMITTEE:

The Company is having a Nomination and Remuneration Committee comprising of following Directors:

Sr. No. Name & DIN of the Director Status Category
1 Mrs. Daxaben M. Shah Chairman Non- Executive Independent Director
2 Mr. Shalin A. Shah Member Non- Executive Director
3 Mr. Chandrakant N. Chauhan Member Non- Executive Independent Director

Attendance of each member of the Nomination and Remuneration Committee:

Committee Members Meetings held Meetings attended
Mrs. Daxaben M. Shah 1 1
Mr. Shalin A. Shah 1 1
Mr. Chandrakant N. Chauhan 1 1

STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Company is having a Stakeholders Relationship Committee comprising of following Directors:

Sr. No. Name & DIN of the Director Status Category
1 Mrs. Daxaben M. Shah Chairman Non- Executive Independent Director
2 Mr. Ashok C. Shah Member Non- Executive Director
3 Mr. Chandrakant N. Chauhan Member Non- Executive Independent Director

Attendance of each member of the Stakeholders Relationship and Share Transfer Committee:

Committee Members Meetings held Meetings attended
Mrs. Daxaben M. Shah 1 1
Mr. Ashok C. Shah 1 1
Mr. Chandrakant N. Chauhan 1 1

23. AUDITORS:

A. Statutory Auditors

In terms of the provisions of Section 139 of the Companies Act, 2013 read with provisions of the Companies (Audit and Auditors) Rules, 2014 as amended, M/s. GMCA & Co., Chartered Accountants, Ahmedabad (Firm Registration No.109850W) was appointed as Statutory Auditors of the Company for a consecutive period of 5 (Five) years from the conclusion of Annual General Meeting in the year 2017 till the conclusion of the Annual General Meeting to be held in the year 2022.

The Members may note that consequent to the changes made in the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 by the Ministry of Corporate Affairs (MCA) vide notification dated May 7, 2018, the proviso to Section 139(1) of the Companies Act, 2013 read with explanation to sub-rule 7 of Rule 3 of the Companies (Audit and Auditors) Rules, 2014, the requirement of ratification of appointment of Auditors by the Members at every AGM has been done away with. Therefore, the Company is not seeking any ratification of appointment of M/s. GMCA & Co., Chartered Accountants as the Auditors of the Company, by the Members at the ensuing AGM.

The Company has received a certificate from M/s. GMCA & Co., Chartered Accountants, confirming their eligibility to continue as Auditors of the Company in terms of the provisions of Section 141 of the Companies Act, 2013 and the Rules framed thereunder.

The Report given by the M/s. GMCA & Co., Auditors on the financial statements for March 2018 of the Company is part of the Annual Report. The notes to the accounts referred to in the Auditors Report are self-explanatory and therefore do not call for any further comments.

There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

B. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Patel & Associates, Practicing Company Secretaries, Ahmedabad to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is selfexplanatory and therefore do not call for any further comments and annexed herewith as Annexure IV.

There is no qualification, reservation or adverse remark in the report.

C. Internal Auditors:

The Board of Directors has appointed M/s. Naimish K. Shah & Co., Chartered Accountant (FRN 106828W) as Internal Auditors of the Company for the F. Y. 2017-18.

24. INTERNAL FINANCIAL CONTROL SYSTEM AND COMPLIANCE FRAMEWORK:

The Company has an Internal Financial Control System, commensurate with size, scale and complexity of its operations. The internal financial controls are adequate and are operating effectively so as to ensure orderly and efficient conduct of business operations. The Company has appointed M/s. Naimish K. Shah & Co., Chartered Accountant (FRN 106828W) as an Internal Auditors of the Company. The Audit Committee in consultation with the internal auditors formulates the scope, functioning, periodicity and methodology for conducting the internal audit. The internal auditors carry out audit, covering inter alia, monitoring and evaluating the efficiency & adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations and submit their periodical internal audit reports to the Audit Committee. Based on the internal audit report and review by the Audit committee, process owners undertake necessary actions in their respective areas. The internal auditors have expressed that the internal control system in the Company is robust and effective. The Board has also put in place requisite legal compliance framework to ensure compliance of all the applicable laws and that such systems are adequate and operating effectively.

25. RISK MANAGEMENT:

The Company has implemented an integrated risk management approach through which it reviews and assesses significant risks on a regular basis to help ensure that there is a robust system of risk controls and mitigation in place. Senior management periodically reviews this risk management framework to keep updated and address emerging challenges. Major risks identified for the Company by the management are Compliances of various applicable Laws, Regulatory changes, Manufacturing & Supply, Litigation and Technological Changes. The management is however, of the view that none of the above risks may threaten the existence of the Company as robust risk mitigation mechanism is put in place to ensure that there is nil or minimum impact on the Company in case any of these risks materialize.

26. VIGIL MECHANISM AND WHISTLE BLOWER POLICY:

In accordance with Section 177 of the Companies Act, 2013 and Regulation 22 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has constituted a Whistle Blower Policy/ Vigil Mechanism to establish a vigil mechanism for the directors and employees to report genuine concerns in such manner as may be prescribed and to report to the management instances of unethical behaviour, actual or suspected fraud or violation of the Companys code of conduct.

27. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (Act) and Rules made thereunder, your Company has assigned the responsibilities to Audit Committee. During the year, no complaint with allegations of sexual harassment was filed with the Company.

28. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Report on Management Discussion and Analysis Report as required under SEBI Listing Regulations is included in this Report. Certain statements in the said report may be forward looking. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of the future performance and outlook.

29. PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Companys shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code.

30. DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with Section 134(5) of the Companies Act, 2013 and to the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors state that-

i. In the preparation of the annual accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

ii. The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year 31st March, 2018 and of the profit and loss of the company for that period;

iii. The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 and Rules made thereunder for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv. The directors had prepared the annual accounts on a going concern basis;

v. The directors 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

vi. 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.

31. CORPORATE GOVERNANCE:

The compliance with the corporate governance provisions as specified in regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 and Para C, D and E of Schedule V shall not apply for the financial year 2017-18 to the listed entity as the paid up equity share capital does not exceed rupees ten crore and the net worth does not exceed rupees twenty five crore, as on the last day of the previous financial year i.e. on 31st March, 2018. Therefore, at present, the Company is not required to comply with Corporate Governance regulations as the above referred limits have not been triggered.

32. CORPORATE GOVERNANCE CERTIFICATE - NON APPLICABILITY:

The Certificate of the non applicability of submission of Report on Corporate Governance as stipulated in Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended to the report on Corporate Governance, herewith attached as Annexure V.

33. GENERAL SHAREHOLDER INFORMATION:

General Shareholder Information is given in Report on Corporate Governance forming part of the Annual Report.

34. ACKNOWLEDGEMENT:

Your Directors take this opportunity to express their gratitude for the unstinted commitment, dedication, hard work and significant contribution made by employees at all levels in ensuring sustained growth of the Company. Your Directors also sincerely thank to all the stakeholders, customers, vendors, bankers, business associates, government, other statutory bodies and look forward to their continued assistance, co-operation and support.

Place: Ahmedabad

For and on behalf of the Board

Date: August 13, 2018 SD/- SD/-
Ashok Shah Shalin Shah
Director Director
DIN: 02467830 DIN:00297447