gallantt ispat ltd share price Directors report


TO THE MEMBERS

Your Directors have the pleasure in presenting the 19th Annual Report of Gallantt Ispat Limited ("the Company") along with the Audited Financial Statements for the Financial Year ended March 31, 2023.

CORPORATE OVERVIEW

The Company was incorporated in 2005 and has

thereafter transformed to being one of the leading steel manufacturing companies in India. Gallantt Ispat Limited ("Your Company" or "The Company") is a leading Iron and Steel manufacturing Company. Factories of the Company are located at Samakhyali, Kutch District of Gujarat (hereinafter referred to as "Gujarat Unit") and Sahjanwa, Gorakhpur, Uttar Pradesh (hereinafter referred to as "Gorakhpur Unit"). The Company has its Registered Office at New Delhi.

(Rs in Lakhs)

WORKING RESULTS

Particulars Stand alone
Financial Results 2023 2022
Income from operation 4,03,458.27 3,01,737.60
Other Operating Income 2,539.44 5,360.80
Finance Cost 2,722.35 2,046.35
Depreciation (including amortization) 10,025.01 9,209.26
Profit Before Tax 23,988.81 23,730.38
Tax Expenses (including Deferred Tax) 9,897.72 6,146.45
Profit After Tax 14,091.09 17,583.93
Profit for the Period 14,091.09 17,583.93

FINANCIAL ACCOUNTING AND ADOPTION OF IND AS

The Financial Statements for the FY 2022-23 are prepared under Ind-AS notified under Section 133 of the Companies Act, 2013 (hereinafter referred to as "The Act") read with the Companies (Accounts) Rules, 2014 as amended from time to time. The estimates and judgements relating to

the Financial Statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Companys state of affairs, profits and cash flows for the year ended March 31, 2023. The Notes to the Financial Statements adequately cover the Audited Statements and form an integral part of this Report.

STATE OF AFFAIRS, BUSINESS OPERATION AND PERFORMANCE REVIEW

Your Company is a steel manufacturing company. It manufactures high quality steel products to cater the needs of the customers for use in the construction and infrastructure building through the deployment of robust processes and state-of-the-art technology. The Companys high-quality products help customers to build strong constructions and gain competitive advantage.

During the FY 2022-23 Revenue from Operations stood at Rs 4,03,458.27 Lakhs as against Rs 3,01,737.60 Lakhs during the last FY 2021-22. The Profit before Interest, Depreciation and Taxation stood at Rs 36,736.17 Lakhs as

against Rs 34,985.99 Lakhs in the previous year registering a growth of 5.01 %. The Net Profit after Tax for the year stood at Rs 14,091.09 Lakhs from Rs 17,583.93 Lakhs in the previous year registering a decline 19.86%. Earnings per Share (EPS) stood at Rs 5.84 (face value of Rs 10/- each) for the Financial Year ended March 31, 2023. During the year Company has reported relatively sluggish performance in terms of profitability, however, the turnover has increased considerably. Decline in profit is due to several macroeconomic head winds, volatile market environment and operational challenges.

There is no change in the nature of business of the Company, during the year under review.

PRODUCTION AT A GLANCE

Items 2022-23 2021-22 % of Change
Production Sales* Production Sales* Production Sales*
Sponge Iron (M.T.) 6,89,565.849 6,91,138.706 4,88,999.810 4,90,310.426 41.02% 40.96%
M.S. Billets (M.T.) 6,94,206.471 6,97,377.642 6,02,726.111 6,03,459.323 15.18% 15.56%
M.S. Round Bar & Miss Rolled Bar (M.T.) 6,35,962.546 6,42,317.058 4,80,041.520 4,72,081.128 32.48% 36.06%
Power Generation (KWH) 65,20,16,430 65,20,16,430 53,27,46,256 53,27,46,256 22.39% 22.39%

* Sales include captive consumption also.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION AND CHANGE IN BUSINESS

Honorable National Company Law Tribunal, Kolkata Bench and Honorable National Company Law Tribunal, New Delhi Bench, vide their orders dated September 22, 2021 and May 20, 2022 respectively, have approved the Scheme of Amalgamation and Slump Sale providing for Slump Sale of 18 MW Power Plant of Gallantt Ispat Limited to Gallantt Metal Limited and thereafter Amalgamation of Gallantt Ispat Limited (Transferor Company No. 1 or GIL), AAR Commercial Company Limited (Transferor Company No. 2 or AAR), Hipoline Commerce Private Limited (Transferor Company No. 3 or HIPOLINE), Lexi Exports Private Limited (Transferor Company No. 4 or LEXI) and Richie Credit and Finance Private Limited (Transferor Company No. 5 or RICHIE) (together referred to as the "Transferor Companies") with Gallantt Metal Limited ("Transferee Company" or "GML") and their respective shareholders and creditors under Sections 230-232 of the Companies Act, 2013 (hereinafter referred to the "Scheme").

Post amalgamation Company has changed its name from Gallantt Metal Limited to Gallantt Ispat Limited.

Income Tax Department, Ministry of Finance has in exercise of power under Section 132 of the Income Tax Act, 1961 has carried out an Income Tax Search Operation at the Plant Office and Factory Premises of the Company together with other business offices and residential houses of Promoters and Officers of the Company. Department has seized few documents and records of the Company for further processing in the above search. Any impact with respect to search is yet to be ascertained.

The Audit Team of the Company has detected misappropriation and embezzlement of fund of the Company by few lower-level employees. These employees have misused their position in the Company for their personal interest. The matter was revealed during the course of internal checking. Total fund involvement is Rs 44.00 Lakhs (approximately). First Information Report (FIR) was registered against these employees and necessary action was taken against them. Company has proper system in place and takes sufficient care for maintenance of adequate accounting records for safeguarding the assets of the Company and detecting fraud or other irregularities. Further, robust vigil mechanism is in place to report concerns about unethical behaviour, actual or suspected fraud, or violations of Companys Code of Conduct.

Apart from the above, there have been no material change(s) and commitment (s) except elsewhere stated in this report, affecting the financial position of the

Company between the end of the financial year of the Company i.e. March 31,2023 and the date of this Report.

There were no significant and material orders passed by regulators or courts or tribunals impacting the going concern status and Companys operations in future. Factory had been working efficiently during the year. Safety measures and processes have been installed and improved upon at the plants and work sites.

There has been no change in the nature of the business of the Company during the financial year ended on March 31,2023.

DIVIDEND

The Directors wish to invest the profits back into the Company for further growth plan and to strengthen its fund and liquid position, and therefore did not recommend any dividend for the FY2022-23.

Pursuant to Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations"), the Dividend Distribution Policy duly approved by the Board is available on the website of the Company and can be accessed at Investor Corner of the website of the Company i.e. www.gallantt.com and the same is annexed as ANNEXURE-I.

FINANCIAL STATEMENTS OF SUBSIDIARIES AND ASSOCIATES

Since, there is no Associate and Subsidiary Company of the Company a statement containing the salient features of the financial statements of the subsidiaries or associate in the prescribed Form AOC-1 is not annexed to this Report.

DISCLOSURE ON COMPLIANCE WITH SECRETARIAL STANDARDS

Your Directors confirm that the Secretarial Standards issued by the Institute of Company Secretaries of India, have been complied with.

SHARE CAPITAL

As on March 31 2023, the Authorized Capital of the Company is Rs 2,41,30,33,000/- (Rupees Two Hundred and Forty-One Crores Thirty Lakhs and Thirty-Three Thousand only) and the paid-up capital stands at Rs 2,41,28,09,450/- (Rupees Two Hundred and Forty-One Crores Twenty-Eight Lakhs Nine Thousand and Four Hundred and Fifty only) consisting of 24,12,80,945 equity shares of Rs 10/- (Rupees Ten) each. After sanction of the Scheme of Amalgamation and Slump Sale providing for Slump Sale of 18 MW Power Plant of Gallantt Ispat Limited to Gallantt Metal Limited and thereafter Amalgamation of Gallantt Ispat Limited, AAR Commercial Company Limited, Hipoline Commerce Private Limited, Lexi Exports Private Limited and Richie

Credit and Finance Private Limited with Gallantt Metal Limited (Transferee Company) by the Honorable National Company Law Tribunal, Kolkata and New Delhi Bench on September 22, 2021 and May 20, 2022 respectively the Authorised Share Capital of the Company has increased from Rs 83,00,00,000/- (Rupees Eighty-Three Crores) to Rs 1,57,00,33,000/- (Rupees One Hundred Fifty-Seven Crores and Thirty-Three Thousand). Further, to cover up the allotment of equity shares pursuant to the Scheme of Amalgamation and Slump Sale the Authorised Capital of the Company has been increased from Rs 1,57,00,33,000/- (Rupees One Hundred Fifty-Seven Crores and Thirty-Three Thousand) to Rs 2,41,30,33,000 (Rupees Two Hundred Forty-One Crores Thirty Lacs and Thirty-Three Thousand) and the same has been approved by the shareholders of the Company at its Extra-Ordinary General Meeting held on June 04, 2022.

As on March 31, 2023 the issued, subscribed and paid-up Share Capital is Rs 241,28,09,450/- (Rupees Two Hundred Forty-One Crore Twenty-Eight Lacs Nine Thousand Four Hundred and Fifty only) divided into 24,12,80,945 Equity Shares of Rs 10/- each.

During the year under review, the company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2023, none of the Directors of the company hold instruments convertible into equity shares of the Company. The Company has paid Listing Fees for the financial year 202324 to each of the Stock Exchanges, where its equity shares are listed.

BUSINESS GROWTH, OUTLOOK AND EXPANSION

Your Company has a dedicated team of Management and Operating Personnel who have been instrumental in the growth of the business over the years. Your Directors believe that the Company has the potential to further scale up its business volumes and profitability and are in the process of identifying new avenues of growth and effective utilization of its existing resources. The infrastructure creation continues to be one of the major priorities of the State Governments as well as Government of India and thereby the infrastructure space is likely to see significant activity which augurs well for steel demand.

During the year Company was under the process of establishing a pellet plant at Gorakhpur Industrial Development Authority (GIDA), Sahjanwa, Gorakhpur - 273209, Uttar Pradesh having a capacity of 7,92,000 MT. The commercial operation of the pellet plant is proposed to start from the month of July 2023. Pellet Plant being a backward integration will reduce the raw material cost which in turn will help to improve the profitability of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Based on the framework of Internal Financial Controls and compliance systems established and maintained by the Company, the work performed by the Internal, Statutory, Cost and Secretarial Auditors including Audit of Internal Financial Controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companys Internal Financial Controls were adequate and effective during the financial year 2022-2023.

Accordingly, pursuant to Section 134(3)(c) and 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

i) In the preparation of annual accounts, the applicable accounting standards have been followed and there has been no material departure.

ii) The selected accounting policies were applied consistently and the Directors 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 March 31, 2023 and of the profit of the Company for the financial year ended March 31, 2023.

iii) Proper and sufficient care has been taken 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.

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

v) Sufficient internal financial controls have been laid down and such internal financial controls are adequate and were operating effectively, and

vi) Proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems were adequate and operating effectively.

BUSINESS RESPONSIBILITY AND SUSTAINIBILITY REPORT (BRSR)

SEBI, vide its circular dated May 10, 2021, made BRSR mandatory for the top 1,000 listed companies (by market capitalization) from financial year 2022-2023, while such disclosure is voluntary for the financial year 2021-2022.The Company has adopted the BRSR compulsorily from the financial year 2022-2023 to provide enhanced disclosures

on ESG practices and priorities of the Company. The Business Responsibility and Sustainability Report for the financial year, as stipulated under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is part of the Annual Report and is attached as ANNEXURE - II.

FINANCE AND ACCOUNTS

As mandated by the Ministry of Corporate Affairs, IND AS is applicable to the Company from the Financial Year commencing from April 01, 2017. The estimates and judgments relating to the Financial Statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Companys state of affairs, profits and cash flows for the year ended March 31,2023. Financial Statement has been prepared as per applicable Ind-AS.

LISTING INFORMATION

The equity shares of the Company are in dematerialized form and is listed with BSE Limited and National Stock Exchange of India Limited. The Listing Fee has been paid to the Stock Exchanges for the financial year 2023-24. The ISIN No. of the Company is INE297H01019.

CREDIT RATING

The Credit Rating Agency M/s. India Rating & Research Private Limited has maintained Ind A (Outlook: Stable) rating for the Companys Fund Based Long Term facilities (long term) and Ind A1 for Non-Fund based Short Term facilities.

Further, post amalgamation credit rating of erstwhile Gallantt Ispat Limited (CIN: L27109DL2005PLC350523) has been withdrawn by M/s. Brickwork Ratings India Pvt. Ltd.

CANCELLATION AND ALLOTMENT OF EQUITY SHARES

In pursuance of the Scheme as approved by the Honorable National Company Law Tribunal, Kolkata Bench and New Delhi Bench, Board of Directors of the Company has taken on record June 07, 2022 as "Record Date" of the Transferor Companies for determining the eligibility of shareholders of the Transferor Companies who were allotted Equity Shares in the Company. As per the Scheme as approved, 6,54,96,896 equity shares held by the Transferor Companies were stand cancelled and 22,54,55,517 equity shares were allotted to the shareholders of the Transferor Companies on June 10, 2022. Post cancellation and Allotment of Shares as mentioned above, the total outstanding no. of issued, subscribed and paid-up equity shares are 24,12,80,945.

PUBLIC DEPOSITS

The Company has not accepted or renewed any public deposits during the period under review. It has not accepted any deposits from the public within the meaning of the provisions of Section 73 of the Companies Act, 2013 and Rules made there under. Therefore, it is not required to furnish information in respect of outstanding deposits under non-banking, non-financial Companies (Reserve Bank) Directions, 1966 and Companies (Accounts) Rules, 2014.

DEBENTURES

During the financial year under review, the Company has not issued or allotted any Debentures and does not have any outstanding Debentures.

AUDITORS & AUDITORS REPORT

M/s Maroti & Associates, Chartered Accountants (Firm Registration Number: 313132E) were appointed as Statutory Auditors in the 18th (Eighteenth) Annual General Meeting (AGM) of the Company for a period of five years, from the conclusion of 18th AGM till the conclusion of the 23rd AGM of the Company.

The Statutory Auditors had carried out audit of financial statements of the Company for the financial year ended March 31, 2023 pursuant to the provisions of the Act. The reports of Statutory Auditors form part of the Annual Report. The reports are self-explanatory and do not contain any qualifications, reservations or adverse remarks.

The Statutory Auditors have issued an unmodified opinion on the Companys Financial Statements for the financial year ended March 31,2023. Necessary certificate has been obtained from the Auditors as per Section 139(1) of the Companies Act, 2013.

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

The information required to be disclosed under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed as ANNEXURE-III to this Report.

DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES AND EQUITY SHARES WITH DIFFERENTIAL RIGHTS

The Company has not issued any Sweat Equity Shares or Equity Shares with Differential Rights during the financial year.

DISCLOSURE IN RESPECT OF VOTING RIGHTS NOT EXERCISED

No disclosure is required under Section 67 of the Companies Act, 2013 read with Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014, in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said Section are not applicable.

COST AUDIT

The Company is required to maintain cost records pursuant to the provisions of Section 148 of the Companies Act read with Companies (Cost Records and Audit) Rules, 2014, as amended from time to time. Accordingly, such accounts and records have been maintained by the Company.

The Company has submitted the Cost Audit Report for the financial year 2021-22 within the due date. For the financial year 2022-23 M/s. U. Tiwari & Associates, Cost Accountants were appointed as the Cost Auditors for conducting Cost Audit of all applicable units of the Company.

Further, pursuant to the provisions of Section 148 of the Companies Act read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the Board of Directors at its meeting held on May 29, 2023 and based on the recommendation of the Audit Committee, has appointed M/s. U. Tiwari & Associates, Cost Accountants, as Cost Auditor of the Company for conducting the Cost Audit for the financial year 202324 on a remuneration of Rs 1,00,000/- plus out of pocket expenses. A Certificate from M/s. U. Tiwari & Associates, Cost Accountants, has been received to the effect that their appointment as Cost Auditor of the Company, if made, would be in accordance with the limits specified under Section 141 of the Act and Rules framed thereunder. The remuneration is subject to the ratification of the members in terms of Section 148 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014.

The Company has received consent from M/s. U. Tiwari & Associates, Cost Accountants, to act as the Cost Auditor for conducting audit of the cost records for the financial year 2023-24 along with a certificate confirming their independence and arms length relationship.

INSURANCE

All the insurable interests of your Company including inventories, buildings, plant and machinery and liabilities under legislative enactments are adequately insured.

INTERNAL COMPLAINT REGARDING SEXUAL HARRASSMENT

There were no cases of sexual harassment of woman at work place. Also, there are no instances of child labour/ forced labour/ involuntary labour and discriminatory employment during the year.

BOARD COMMITTEES

Details of Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee, Risk Management Committee and Committee of Directors have been disclosed under Corporate Governance Report. Further, as per the amended Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR Regulations" or "LODR") Company has constituted Risk Management Committee. Details of the same have been disclosed under Corporate Governance Report.

DETAILS OF RECOMMENDATIONS OF AUDIT COMMITTEE WHICH WERE NOT ACCEPTED BY THE BOARD ALONG WITH REASONS

The same is not applicable as the Audit Committees recommendations were accepted and implemented by the Board.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under section 197(12) read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as ANNEXURE-IV to this report.

A statement comprising the names of top 10 employees in terms of remuneration drawn is given in this report as ANNEXURE-IV.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

The particulars of loans, guarantees and investments u/s 186 of the Companies Act, 2013 is annexed herewith as ANNEXURE-V.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT

As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report is part of the Annual Report and is annexed herewith as ANNEXURE-VI. A report on Corporate Governance together with the Auditors Certificate regarding the compliance of conditions of Corporate Governance is also part of the Annual Report.

MARKET AND FUTURE PROSPECTS

Please refer to Management Discussion & Analysis Report which forms part of the Annual Report.

DETAILS OF POLICIES

(i) Nomination and Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The summary of Remuneration Policy of the Company prepared in accordance with the provisions of Section 178 of the Companies Act, 2013 read with Part D of Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are provided in the Corporate Governance Report. The Remuneration Policy is uploaded on the website of the Company at www.gallantt.com

(ii) Corporate Social Responsibility Policy (CSR)

The Board has, on the recommendation of the CSR Committee, approved the CSR Policy. The Companys CSR Policy is available on the Companys website at www.gallantt.com and the same is also attached herewith as ANNEXURE - VII.

As a part of its initiative under the "Corporate Social Responsibility" (CSR) drive, the Company has undertaken projects in the area of health, education and rural development, eradicating hunger, promoting health care and education. These projects are in accordance with Schedule VII of the Companies Act, 2013 and the Companys CSR policy. Annual Report on CSR as required under Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is also attached herewith as ANNEXURE- VIII.

(iii) Risk Management Policy

Business Risk Evaluation and Management is an ongoing process within the Organization. Pursuant to Section 134(3)(n) of the Companies Act, 2013, the Board has framed a Risk Management Policy for the Company. The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the business and functions are systematically addressed through mitigating actions on a continuing basis. At present the Company has not identified any element of risk which may threaten the business (or) existence of the company.

Company has formulated a policy on Risk Management. The Policy is formulated in compliance with Regulation 17(9)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and provisions of the Companies Act, 2013, which requires the Company to lay down procedures about risk assessment and risk minimization.

The Risk Management Policy is available on the Companys website at www.gallantt.com

(iv) Whistle Blower Policy - Vigil Mechanism

Your Company has formulated a Vigil Mechanism Policy with a view to provide a mechanism for employees and directors of the Company to approach the Chairman of the Audit Committee to ensure adequate safeguards against victimisation.

This policy would help to create an environment wherein individuals feel free and secure to raise an alarm, whenever any fraudulent activity takes place or is likely to take place. It will also ensure that complainant(s) are protected from retribution, whether within or outside the organization. The Board has elected Mr. Nitesh Kumar, Company Secretary as the Whistle Officer under the Vigil Mechanism Policy.

The details of establishment of the Vigil Mechanism Policy are displayed on the website of the Company at www.gallantt.com

SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT

Mr. Anurag Fatehpuria, Practising Company Secretary, having office address at 4/B/1, Salkia School Road, Raghav River View Apartment, Howrah-711106 has been appointed as Secretarial Auditors of the Company for the financial year ended March 31,2023. The Secretarial Audit Report received from the Secretarial Auditors is annexed to this report marked as ANNEXURE-IX and forms part of this report.

ANNUAL EVALUATION OF BOARD, COMMITTEES AND INDIVIDUAL DIRECTORS

During the financial year, formal annual evaluation of the Board, its committees and individual Directors was carried out pursuant to the Board Performance Evaluation Policy of the Company.

The performance of the Board and Committees was evaluated after seeking inputs from all the Directors on the basis of the criteria such as Board/Committee constitutions, frequency of meetings, effectiveness of processes etc. The performance of individual Directors (including Independent Directors) was evaluated by the Board and Nomination & Remuneration Committee (excluding the Director being evaluated) after seeking inputs from all Directors on the basis of the criteria such as thought contribution, business insights and applied knowledge.

The criteria for the performance evaluation of the Board of Directors includes aspects such as its composition and structure, and the effectiveness of its processes, information flow and functioning. The criteria for the performance evaluation of individual Directors includes aspects, such as the Directors contribution to the Board of Directors and Committee meetings, including preparation on the issues to be discussed as well as meaningful and constructive contribution and inputs during meetings. In addition, the Chairperson is evaluated on the key aspects of his role.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings etc. The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings etc.

A separate meeting of Independent Directors was also held to review the performance of Managing Director, performance of the Board as a whole and performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors.

FAMILIARISATION PROGRAMME

Your Company follows a structured orientation and familiarization programme through various reports/ codes/internal policies for all the Directors with a view to update them on the Companys policies and procedures on a regular basis.

Periodic presentations are made at the Board Meetings on business and performance, long term strategy, initiatives and risks involved.

All the board members of the Company are afforded every opportunity to familiarize themselves with the Company, its management, its operations and industry perspective on a regular basis. They are made to interact with senior management personnel and proactively provided with relevant news, views and updates on the Company and sector. All the information/documents sought by them is/are also shared with them for enabling a good understanding of the Company, its various operations and the industry. The Directors were apprised on key aspects of operations and market trend and the Companys performance and its future projects. The details of programmes for familiarisation for Independent Directors are posted on the website of the Company at www.gallantt.com

CODE OF CONDUCT

Your Company has adopted a Code of Conduct for members of the Board (incorporating duties of Independent Directors) and the Senior Management. The Code aims at ensuring consistent standards of conduct and ethical business practices across the Company. Your Company has received confirmations from all concerned regarding their adherence to the said Code.

Pursuant to Regulation 17(5) of the SEBI LODR Regulations, 2015, Mr. Mayank Agrawal, Chief Executive Officer has confirmed compliance with the Code by all members of the Board and the Senior Management.

The full text of the Code is hosted on the Companys website at www.gallantt.com

CODE OF CONDUCT FOR PROHIBITION OF INSIDER TRADING

Your Company has adopted a Code of Conduct for Prevention of Insider Trading and Code of Practices and procedures for Fair Disclosure of Unpublished Price Sensitive Information (hereinafter referred to as the"Code of Conduct" as per SEBI (Prohibition of Insider Trading) Regulations, 2015. All Directors, Designated Employees who could have access to the Unpublished Price Sensitive Information of the Company are governed by the Code. During the year under review, there has been due compliance with SEBI (Prohibition of Insider Trading) Regulations, 2015. The full text of the Code is hosted on the Companys website at www.gallantt.com

NUMBER OF MEETINGS OF BOARD AND AUDIT COMMITTEE HELD DURING THE YEAR 2022-2023

Seven (7) meetings of the Board of Directors of the Company were conducted during the financial year and also Seven (7) meetings of the Audit Committee of the Board of Directors were conducted during the financial year. The details of board/committee/shareholders meetings are provided under the Corporate Governance Report which forms part of the Annual Report.

AUDIT COMMITTEE

The Audit committee of the Company as on the date of this report is constituted of following Directors:

Names Designation Category
Mr. Ashtbhuja Prasad Srivastava Chairperson Independent
Mr. Jyotirindra Nath Dey Member Independent
Mr. Nitin Mahavir Prasad Kandoi* Member Executive

* Mr. Nitin Mahavir Prasad Kandoi, Non-Executive Director has been appointed as a Whole-time Director of the Company w.e.f. June 01, 2022. Hence, he has been categorised as an Executive Director.

Constitution of the Audit Committee is in compliance with requisite provisions of the Companies Act, 2013 and rules made thereunder, SEBI LODR Regulations, 2015 and all other applicable laws, rules and regulations.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee of the Company as on the date of this report is constituted of following Directors:

Names Designation Category
Mr. Udit Agarwal* Chairperson Independent
Mrs. Nishi Agrawal Member Independent
Mr. Jyotirindra Nath Dey Member Independent

*Mr. Udit Agarwal, Independent Director of the Company has been inducted as a Chairperson of the Stakeholders Relationship Committee w.e.f. June 10, 2022

Constitution of the Stakeholder Relationship is in compliance with requisite provisions of the Companies Act, 2013 and rules made thereunder, SEBI LODR Regulations, 2015 and all other applicable laws, rules and regulations.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee of the Company as on the date of this report is constituted of following Directors:

Names Designation Category
Mr. Jyotirindra Nath Dey Chairperson Independent
Mr. Udit Agarwal* Member Independent
Mrs. Nishi Agrawal Member Independent

*Mr. Udit Agarwal, Independent Director of the Company has been inducted as a Member of the Nomination and Remuneration Committee w.e.f. June 10, 2022

Constitution of the Nomination and Remuneration Committee is in compliance with requisite provisions of the Companies Act, 2013 and rules made thereunder, SEBI LODR Regulations, 2015 and all other applicable laws, rules and regulations.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Corporate Social Responsibility Committee of the Company as on the date of this report is constituted of following Directors:

Names Designation Category
Mr. Jyotirindra Nath Dey Chairperson Independent
Mr. Chandra Prakash Member Executive
Agrawal
Mr. Dinesh R. Agarwal Member Executive

Constitution of the Corporate Social Responsibility Committee is in compliance with requisite provisions of the Companies Act, 2013 and rules made thereunder, SEBI LODR Regulations, 2015 and all other applicable laws, rules and regulations.

RISK MANAGEMENT COMMITTEE

In compliance with the requirements of Regulation 21 of the SEBI LODR Regulations, 2015, Board of Directors of the Company, at its meeting held on June 29, 2021, has constituted the Risk Management Committee with the following Directors:

Names Designation Category
Mr. Jyotirindra Nath Dey Chairperson Independent
Mr. Nitin Mahavir Prasad Kandoi* Member Executive
Mrs. Nishi Agrawal Member Independent

* Mr. Nitin Mahavir Prasad Kandoi, Non-Executive Director has been appointed as a Whole-time Director of the Company w.e.f. June 01, 2022. Hence, he has been categorised as an Executive Director.

COMMITTEE OF DIRECTORS

At their meeting held on June 29, 2020, the Board of Directors has constituted a Committee of Directors with nomenclature of "Committee of Directors". The Committee of Directors has the following composition of members as on the date of this report and is constituted of following Directors:

Names Designation Category
Mr. Chandra Prakash Agrawal Chairperson Executive
Mr. Dinesh R. Agarwal Member Executive
Mr. Nitin Mahavir Prasad Kandoi* Member Executive

* Mr. Nitin Mahavir Prasad Kandoi, Non-Executive Director has been appointed as a Whole-time Director of the Company w.e.f. June 01, 2022. Hence, he has been categorised as an Executive Director.

REPORT ON PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

Pursuant to the provisions of Section 129(3) of the Act,

a statement containing performance & salient features of the financial statements of Companys associate Companies in Form AOC-1 is required to be attached. Erstwhile Gallantt Ispat Limited was Associate of the Company which was amalgamated with the Company vide Orders of the Honorable National Company Law Tribunal, Kolkata Bench and Honourable National Company Law Tribunal, New Delhi Bench dated September 22, 2021 and May 20, 2022 respectively.

Further, in accordance with Sections 179, 186 and other applicable provisions of the Companies Act, 2013, the Company has, on May 10, 2022, acquired entire shareholding of M/s. Gallantt Metalliks Limited with an investment of Rs 18,00,000/- (Rupees Eighteen Lacs only) and thereby M/s. Gallantt Metalliks Limited became a Wholly Owned Subsidiary of the Company. However, on February 13, 2023 Gallantt Metalliks Limited got disassociated with the Company as Company has sold its entire shareholding.

Therefore, Company has prepared standalone financial statements as consolidated financial statements are not required to be prepared and Form AOC-1 is not required to prepared and attached.

COMPANIES WHICH HAVE BECOME OR CEASED TO BE COMPANYS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR

As on March 31, 2023 the Company did not have any subsidiary or joint ventures. However, on May 10, 2022 Company has acquired the entire shareholding of M/s. Gallantt Metalliks Limited by investing Rs 18,00,000/- (Rupees Eighteen Lacs only) so as to make M/s. Gallantt Metalliks Limited as a Wholly Owned Subsidiary of the Company, but the same got disassociated from the company w.e.f. February 13, 2023.

In terms of the Regulation 46(2)(h) of the SEBI LODR Regulations, 2015, the policy for determining material subsidiaries is placed on the website of the Company at www.gallantt.com under Investors Corner of Gallantt Ispat Limited.

Erstwhile Gallantt Ispat Limited (Transferor Company) was an Associate of the Company which was amalgamated with the Company vide Order dated September 22, 2021 and May 20, 2022 passed by Honorable National Company Law Tribunal, Kolkata Bench and Honorable National Company Law Tribunal, New Delhi Bench respectively. Hence, consequent upon the said amalgamation, Erstwhile Gallantt Ispat Limited (Transferor Company) ceased to exist as an Associate.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

There are no significant material orders passed by the Regulators or Courts or Tribunal which would impact the going concern status of the Company and its future operations. However, Members attention is drawn to the statement on contingent liabilities, commitments in the notes forming part of the Financial Statements.

However, as enumerated above, Erstwhile Gallantt Ispat Limited, Associate together with other Companies have been amalgamated with the Company vide orders passed by the Honorable NCLTs.

DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM

The Company has formulated a Whistle Blower Policy to establish a vigil mechanism for Directors and employees of the Company to report concerns about unethical behaviour, actual or suspected fraud or violation of the Companys code of conduct or ethics policy. The Whistle Blower Policy is available on the website of the Company.

The details of establishment of the Vigil Mechanism Policy is displayed on the website of the Company at www. gallantt.com

CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social Responsibility Committee and has framed a Corporate Social Responsibility Policy and identified Healthcare, Childrens education, as some of the key areas. The Company will continue to support social projects that are consistent with the policy.

Corporate Social Responsibility Committee of the Company is constituted of:

Mr. Jyotirindra Nath Dey, Chairman

Mr. Chandra Prakash Agrawal and

Mr. Dinesh R. Agarwal

KEY MANAGERIAL PERSONNEL

The following are the whole-time key managerial personnel of the Company:

Sr. No. Names Designation
1. Mr. Chandra Prakash Chairman and
Agrawal Managing Director
2. Mr. Dinesh R. Agarwal Whole-time Director
3. Mr. Prashant Jalan Whole-time Director
4. Mr. Sandip Kumar Agarwal Chief Financial Officer
5. Mr. Mayank Agrawal* Chief Executive Officer
6. Mr. Nitesh Kumar* Company Secretary

* Mr. Mayank Agrawal and Mr. Nitesh Kumar have been appointed as the Chief Executive Officer and Company Secretary of the Company respectively w.e.f. August 10, 2022. Pre-amalgamation Mr. Mayank Agrawal and Mr. Nitesh Kumar were the Chief Executive Officer and Company Secretary of erstwhile Gallantt Ispat Limited (L27109DL2005PLC350523) respectively.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Ind - AS on consolidated financial statements read with the SEBI LODR Regulations 2015, the Consolidated Audited Financial Statements and Consolidated Cash Flow Statement for the year ended March 31, 2023 are not required to be provided in the Annual Report as the Company has no subsidiary, associate or joint venture. Gallantt Ispat Limited (Transferor Company), erstwhile associate of the Company amalgamated with the Company and Gallantt Metalliks Limited, Wholly Owned Subsidiary of the Company also got disassociated during the year.

Pursuant to Section 136 of the Act, the financial statements of the subsidiary and Associate Companies are kept for inspection by the shareholders at the Registered Office of the Company. The Company shall provide free of cost, the copy of the financial statements of its subsidiary and associate companies to the shareholders upon their request.

ASSOCIATE COMPANY

Erstwhile Gallantt Ispat Limited was an Associate of the Company. However, Gallantt Ispat Limited has amalgamated with the Company vide orders of the Honorable NCLT, New Delhi Bench dated May 20, 2022.

SUBSIDIARY COMPANY & MATERIAL SUBSIDIARY

Company has neither subsidiary company nor material subsidiary as on March 31, 2023. However, on May 10, 2022 Company has acquired the entire shareholding of M/s. Gallantt Metalliks Limited by investing Rs 18,00,000/- (Rupees Eighteen Lakhs only) so as to make M/s. Gallantt Metalliks Limited a Wholly Owned Subsidiary of the Company, but the same got disassociated from the Company w.e.f. February 13, 2023.

The Board of Directors of the Company had adopted a Policy for determining material subsidiary company in line with the SEBI LODR Regulations, 2015. The Policy is uploaded on the Companys website at www.gallantt. com. Presently there is no material subsidiary company.

EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of section 92(3) of the Act, the details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as ANNEXURE- X.

RISK MANAGEMENT

Risk management is embedded in your Companys operating framework. Your Company believes that managing risks helps in maximizing returns. The Companys approach to addressing business risks is comprehensive and includes periodic review of such risks and a framework for mitigating controls and reporting mechanism of such risks. The risk management framework is reviewed periodically by the Board and the Audit Committee. Some of the risks that the Company is exposed to are:

Key Risk Impact to Gallantt Ispat Limited Mitigation Plan
Commodity Price Risk Risk of price fluctuation on basic raw materials like Iron Ore, Coal, Chemicals, Scraps as well as finished goods used in the process of manufacturing. The Company commands excellent business relationship with the business associates. In case of major fluctuation either upwards or downwards, the matter will be mutually discussed and compensated both ways. Also, by focusing on new value added products helps in lowering the impact of price fluctuation in finished goods.
Uncertain global economic environment - slow growth in global economy Impact on raw materials which are imported. We have internal procedure to mitigate the global adverse impact.
Interest Rate Risk Any increase in interest rate can affect the finance cost. Any increase in interest rate can affect the finance cost. Dependence on debt is very minimum and we have surplus funds cushion to settle the entire debt in case the need arises. Further, the Company has repaid the Term Loan in full.
Foreign Exchange Risk Your Company does not have export sales. However, Company imports raw materials from countries outside India. Any volatility in the currency market can impact the overall profitability. The Company commands excellent business relationship with the sellers and suppliers. In case of major fluctuation either upwards or downwards, the matter will be mutually discussed and compensated both ways.
Human Resources Risk Your Companys ability to deliver value is dependent on its ability to attract, retain and nurture talent. Attrition and non-availability of the required talent resource can affect the overall performance of the Company. By continuously benchmarking the best HR practices across the industry and carrying out necessary improvements to attract and retain the best talent. Also, recruitment is across almost all States of India which helps to mitigate this risk and we do not anticipate any major issue for the coming five years.
Key Risk Impact to Gallantt Ispat Limited Mitigation Plan
Competition Risk Your Company is always exposed to competition risk from Steel and Agro Manufacturers across the region. The increase in competition can create pressure on margins, market share etc. By giving continuous efforts to enhance the brand image of the Company, quality, Cost, timely delivery and customer service.
Compliance Risk - Increasing Regulatory Requirements Any default can attract penal provisions By regularly monitoring and reviewing the changes in regulatory framework. By monitoring of compliance through legal compliance management tools and regular internal audit and secretarial audit.
Industrial Safety, Employee Health and Safety Risk The Steel Industry is labour intensive and are exposed to accidents, health and injury risk due to machinery breakdown, human negligence etc. By development and implementation of critical safety standards across the various departments of the factory, establishing training need identification at each level of employee.
Cyber Security Risk With the growing instances of cyber attacks, data security has become a challenge. Confidential information has been enhanced by implementing best-in-class firewalls. The Company is aware about the current elevated levels of cybersecurity risks across the globe. All critical IT servers are protected with best-in-class firewalls which are monitored and updated regularly.
All access to critical IT servers, including SAP ERP, for those working remotely, are allowed through security authentication tunnel.
Necessary update patches and security policies are pushed over the internet to all computers of the Company on a daily basis, even if the user is at home or away from office. Deviations and alerts are monitored closely and corrective/preventive actions are implemented as per need.
The Risk Management Committee looks into the monitoring and reviewing of the risk management plan and such other functions, as it may deem fit and such function specifically covers cyber security.

UNPAID AND UNCLAIMED AMOUNT OF DIVIDEND AND SHARE APPLICATION MONEY

Following amount of Unpaid Dividend has not been claimed and paid till 31.03.2023

Nature of Money Relevant Financial Year Bank Account Details Amount Lying (In )
Final Dividend for 2018 2017-18 IDBI Bank Account No. 1526103000000578 74,096.00
Final Dividend for 2019 2018-19 IDBI Bank Account No. 1526103000000897 50,676.25

Members who have not so far encashed their Dividend Warrants for the financial years ended 31st March, 2018 and 2019 are requested to approach immediately the Registrars for revalidation of unclaimed Dividend Warrants. The details of unclaimed dividend are available on the Companys corporate website www.gallantt.com and also uploaded on the website of IEPF viz. www.iepf. gov.in

Since, erstwhile Gallantt Ispat Limited has now amalgamated with Gallantt Metal Limited (now name changed to Gallantt Ispat Limited) all details of unpaid and unclaimed dividend amount and compulsory transfer of Equity Shares and Dividend amount lying unclaimed for 7 consecutive years to Investor Education and Protection Fund (IEPF) shall be maintained and looked after by the Company.

Following amount of Unpaid Dividend of erstwhile Gallantt Ispat Limited which has not been claimed and paid till 31.03.2023 is as follows -

Nature of Money Relevant Financial Year Bank Account Details Amount Lying (In )
Interim Dividend for 2016* 2015-16 ICICI Bank Account No. 001105026007 2269.00
Final Dividend for 2017 2016-17 IDBI Bank Account No. 1526103000000347 12,740.50
Final Dividend for 2018 2017-18 IDBI Bank Account No. 1526103000000569 21,038.00
Interim Dividend for 201819 2018-19 IDBI Bank Account No. 1526103000000666 23,638.25

*The final unclaimed and unpaid dividend money amounting to Rs 1969.00 in respect of Interim Dividend declared in FY 2015-16 has already been transferred to IEPF Account on May 18, 2023.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

a) Transfer of Unclaimed Dividend to IEPF:

Unclaimed Dividend amount aggregating to Rs 3,180/- pertaining to the financial year ended on March 31, 2015 lying with the Company for a period of seven years were transferred during the Financial Year 2022-23, to the Investor Education and Protection Fund (IEPF) established by the Central Government.

b) Transfer of shares to IEPF:

As required under Section 124 of the Companies Act, 2013, Company has transferred 55 equity shares in respect of which dividend has not been claimed by the members for seven consecutive years or more to IEPF during the financial year 2022-23. Details of shares transferred have

been uploaded on the website of IEPF as well as the Company.

BOARD OF DIRECTORS AND SENIOR EXECUTIVE

The Board comprises of Eight Directors of which four are Independent. In terms of Section 152 of the Companies Act, 2013, Mr. Prashant Jalan (DIN: 06619739), liable to retire by rotation at the ensuing Annual General Meeting is eligible for re-election.

Mr. Ashtbhuja Prasad Srivastava (DIN: 08434115), Mrs. Nishi Agrawal (DIN: 08441260) Mr. Jyotirindra Nath Dey (DIN: 00180925) and Mr. Udit Agarwal (DIN: 07036864) are Independent Directors of the Company.

The Policy on Directors appointment and remuneration, including the criteria for determining the qualifications, positive attributes and independence of Directors forms a part of the Corporate Governance Section of the Annual Report.

Presently, Company has an optimum combination of Executive and Non-Executive (Independent) Directors on the Board of the Company.

Independent Directors are appointed for five consecutive years and are not liable to retire by rotation in terms of Sections 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014. Mr. Mayank Agrawal has been appointed as the Chief Executive Officer of the Company with effect from August 10, 2022 in accordance with provisions of the Companies Act, 2013. Mr. Sandip Kumar Agarwal is Chief Financial Officer and is inter alia looking after the core finance function of the Company. Mr. Nitesh Kumar is working in the capacity of Company Secretary and Compliance Officer.

None of the Directors of your Company is disqualified under the provisions of Section 164(2)(a) & (b) of the Companies Act, 2013 and a certificate dated May 29, 2023 received from Company Secretary in Practice certifying that none of the directors on the board of the Company have been debarred or disqualified from being appointed or continuing as directors of the Companies by SEBI/Ministry of Corporate Affairs or any such statutory authority is annexed to the Corporate Governance Report.

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 and Regulation 16 (b) of SEBI LODR Regulations, 2015. Further, Independent Director shall get themselves registered with the Independent Directors Databank as per the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019.

KEY FINANCIAL RATIOS

Key Financial Ratios for the financial year ended March 31, 2023, are provided in the Management Discussion and Analysis Report given in "Annexure - VI", which is annexed hereto and forms a part of the Boards Report.

GREEN INITIATIVES

As a responsible corporate citizen, the Company supports the Green Initiative undertaken by the Ministry of Corporate Affairs, Government of India, enabling electronic delivery of documents including the Annual Report etc. to shareholders at their e-mail addressess previously registered with the DPs and RTAs.

To support the Green Initiative, Members who have not registered their email addresses are requested to register the same with the Companys Registrar and Share Transfer Agent/Depositories for receiving all communications, including Annual Report, Notices, Circulars, etc., from the Company electronically. Pursuant to the MCA Circulars and SEBI Circulars, notice of the 19th AGM and the Annual Report of the Company for the financial year ended March 31, 2023 including therein the Audited Financial

Statements for the year 2022-2023, the aforementioned documents are being sent only by email to the Members.

KEY MANAGERIAL PERSONNEL (KMP) WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR

During the financial year 2022-23, Mr. Arnab Banerji resigned from the post of Company Secretary and Compliance Officer on August 10, 2022 of the Company and Mr. Nitesh Kumar was appointed as Company Secretary and Compliance Officer of the Company w.e.f. August 10, 2022. Mr. Mayank Agrawal has been appointed as the Chief Executive Officer of the Company w.e.f. August 10, 2022. Furthermore, Mr. Nitin Mahavir Prasad Kandoi, Non-Executive Director of the Company has been appointed as a Whole-time Director of the Company w.e.f. June 01, 2022.

TRANSFER TO RESERVES

Your Directors has not transferred any amount standing in retained earnings to the General Reserve.

RELATED PARTY TRANSACTIONS

The details of Related Party Transactions during the Financial Year ending March 31, 2023, being arms length transactions have been reported in the financial statements and forms part of this report. The Audit Committee and the Board of Directors of the Company have formulated the Policy on dealing with RPTs and a Policy on materiality of RPTs which is uploaded on the website of the Company and can be accessed through the website of the Company www.gallantt.com under the Investors Corner of Gallantt Ispat Limited.

All transactions entered with Related Parties for the year under review were on arms length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 and the Rules made thereunder are not attracted. Thus, disclosure in form AOC-2 in terms of Section 134 of the Companies Act, 2013 is not required. Further, there are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. The Company has developed a framework through Standard Operating Procedures for the purpose of identification and monitoring of such Related Party Transactions.

All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. Omnibus approval was obtained on a yearly basis for transactions which are of repetitive nature. Transactions entered into pursuant to omnibus approval are audited by the Audit Committee and a statement giving details of all Related Party Transactions are placed before the Audit Committee and the Board for review and approval on a quarterly basis.

The policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company viz. www.gallantt.com. None of the Directors has any pecuniary relationship or transactions vis-a-vis the Company.

PERSONNEL, INDUSTRIAL RELATIONS AND MARKETING

The Companys HR philosophy is to establish and build a high performing organization, where each individual is motivated to perform to the fullest capacity: to contribute to developing and achieving individual excellence and departmental objectives and continuously improve performance to realize the full potential of our personnel. Industrial relations have remained harmonious throughout the year.

DECLARATION OF INDEPENDENCE

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

AWARD AND RECOGNITIONS

During the year and during previous years Company/ Management has received following awards, accolades and reconciliation:

During previous years:

• Udyami Samman 2011: Awarded by Zee Media House and was presented by Shri Prakash Jaiswal, Honble Coal Minister, Government of India.

• Udyami Samman 2013: Awarded by Sahara Samay Media House and was presented by Shri Akhilesh Yadav, Honble Chief Minister of Uttar Pradesh.

• Promoter of Gallantt Group Mr. Chandra Prakash Agrawal & family has been listed on Indias Super Rich List at 188th position in 2014 by the Business World Magazine.

• Gems of Purvanchal: Jagran Coffee Table Book has given a place to our promoter Shri. C.P. Agrawal by stating "MAKING A MARK WITH BUSINESS IN STEEL".

• Shri Yogi Adityanath Maharaj Ji, Honble Chief Minister of Uttar Pradesh, honoured the company for Entrepreneur of the region during Gorakhpur Mahotsav 2018.

• The top challengers Award 2018: awarded by the Construction World Magazine, a world-famous magazine.

• The Gallantt Men: Steel 360, a renowned magazine of steel industry felicitated the group and its promoters in its cover story May, 2018.

• Ranked at 6th position among the top 10 mid-size rebar producers in India by Steel 360 magazine in August, 2018 edition.

• Listed "200 BEST UNDER A BILLION COMPANIES"

in Forbes Asia Magazine, July/August 2019 edition.

• Our Chairman and Managing Director, Shri Chandra Prakash Agrawal ji was felicitated with memento for his significant and imperishable contributions to the Industrial development in the State, by Shri Yogi Adityanath Maharaj ji, Honble Chief Minister of Uttar Pradesh, on the eve of U.P. Diwas Mahotsav, in January, 2020.

• Industry outlook Magazine recognised Gallantt under "TOP 10TMT IRON & STEEL MANUFACTURES 2021".

During the year:

• North India Best Employer Brand: Awarded by Employer Branding Institute.

MATERIAL CHANGES AND COMMITMENTS

There have been no material changes and commitments affecting the financial position of the Company since the close of financial year i.e. since March 31, 2023 till the date of this Report. Further, it is hereby confirmed that there has been no change in the nature of business of the Company. However, after approval of the Scheme of Amalgamation as above all the assets and liabilities of the Transferor Companies are to be transferred to the Company.

Significant and material orders passed by the regulators / courts / tribunals impacting the going concern status and the Companys operations in future.

As such there is no significant and material order by the regulator/court/tribunals impacting the going concern status and the Companys operation in future.

GENERAL

a) Your Company has not issued equity shares with differential rights as to dividend, voting or otherwise; and

b) Your Company does not have any ESOP scheme for its employees/Directors.

INTERNAL FINANCIAL CONTROLS

The Company has an adequate system of internal controls in place. It has documented policies and procedures covering all financial and operating functions. These controls have been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls for ensuring reliability of financial reporting, monitoring of operations, and protecting assets from unauthorized use or losses, compliances with regulations.

The Company has continued its efforts to align all its processes and controls with global best practices.

The framework on Internal Financial Controls over Financial Reporting has been reviewed by the internal and external auditors. The Companys internal financial controls were operating effectively based on the internal control criteria established by the Company considering the essential components of internal control stated in the guidance note on audit of internal control over financial reporting issued by the Institute of Chartered Accountants of India.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of internal control systems and suggests improvements wherever needed to strengthen the same. The Audit Committee evaluated the internal financial controls based on the following criteria:

1. Systems have been laid to ensure that all transactions are executed in accordance with managements general and specific authorisation. There are well-laid manuals for such general or specific authorisation.

2. Systems and procedures exist to ensure that all transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements, and to maintain accountability for aspects and the timely preparation of reliable financial information.

3. Access to assets is permitted only in accordance with managements general and specific authorisation. No assets of the Company are allowed to be used for personal purposes, except in accordance with terms of employment or except as specifically permitted.

4. The existing assets of the Company are verified / checked at reasonable intervals and appropriate action is taken with respect to any differences, if any.

5. Proper systems are in place for prevention and detection of frauds and errors and for ensuring adherence to the Companys policies.

A report on the internal financial controls under clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 issued by M/s. Maroti & Associates, Chartered Accountants, Statutory Auditors of the Company is attached with their Independent Auditors Report and the same is self-explanatory.

Effective steps are taken by the Management to enable continuous monitoring of lead control indicators and action taken towards correcting identified gaps. Respective functions have been trained and equipped to enable continuous monitoring of exceptions by themselves to reduce surprises and enable corrective action on timely and regular basis.

Your Company has a robust financial closure selfcertification mechanism wherein the line managers certify adherence to various accounting policies, accounting hygiene and accuracy of provisions and other estimates.

PARTICULARS OF LOANS/ADVANCES/INVESTMENTS AS REQUIRED UNDER SCHEDULE V OF THE LISTING REGULATIONS

The details of related party disclosures with respect to loans/advances/investments at the year end and maximum outstanding amount thereof during the year as required under Part A of Schedule V of the Listing Regulations have been provided in the notes to the Financial Statements of the Company.

FRAUD REPORTING

There have been no frauds reported by the Auditors of the Company to the Audit Committee or the Board of Directors under sub-section (12) of section 143 of the Companies Act, 2013 during the financial year. However, Audit Team of the Company has reported a misappropriation of Rs 44.00 Lakhs (approx.) as described hereinabove.

ENVIRONMENT AND SAFETY

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

TRANSFER OF SHARES COMPULSORILY IN DEMAT MODE

As per amended Regulation 40(1) of the SEBI LODR Regulations, 2015 amended vide SEBI Notification No. SEBI/LADNRO/GN/2018/24 dated June 2018, effective from December 5, 2018; securities of the listed companies can be transferred (except in case of transmission or transposition) only in the dematerialized form.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

Procedure for Nomination and Appointment of Directors:

The Nomination and Remuneration Committee (NRC) has been mandated to oversee and develop competency requirements for the Board based on the industry requirements and business strategy of the Company. The NRC reviews and evaluates the resumes of potential candidates for appointment of Directors and meets them prior to making recommendations of their nomination to the Board. Specific requirements for the position, including expert knowledge expected, are communicated to the appointee.

On the recommendation of the NRC, the Board has adopted and framed a Remuneration Policy for the Directors, Key Managerial Personnel and other employees pursuant to the provisions of the Act and the Listing Regulations. The remuneration determined for Executive/ Independent Directors is subject to the recommendation of the Nomination and Remuneration Committee and approval of the Board of Directors. The Non-Executive Independent Directors are compensated by way of sitting fees for attending meetings of the Board and its Committees. The Executive Directors are not paid sitting fees.

It is affirmed that the remuneration paid to Directors, Key Managerial Personnel and all other employees is in accordance with the Remuneration Policy of the Company. The Companys Policy on Directors Appointment and Remuneration and other matters provided in Section 178(3) of the Act and Regulation 19 of the Listing Regulations have been disclosed in the Corporate Governance Report, which forms part of the

Annual Report.

EMPLOYEES WELFARE

The Company continues to focus on welfare and improving the quality of lives of its employees by providing educational assistance to their children, employee wellness sessions, periodic occupational health checks, spiritual peace by yoga classes, creche and child care facilities, transport facilities to employees at subsidized rate or at no charge.

AMALGAMATION OF COMPANIES

Vide the orders of the National Company Law Tribunal, Kolkata Bench and National Company Law Tribunal, New Delhi Bench dated September 22, 2021 and May 20, 2022 respectively, the Scheme of Amalgamation and Slump Sale got approved which was providing for the Amalgamation of Gallantt Ispat Limited (Transferor Company No. 1 or GIL), AAR Commercial Company Limited (Transferor Company No. 2 or AAR), Hipoline Commerce Private Limited (Transferor Company No. 3 or HIPOLINE), Lexi Exports Private Limited (Transferor Company No. 4 or LEXI) and Richie Credit and Finance Private Limited (Transferor Company No. 5 or RICHIE) (together referred to as the "Transferor Companies") with Gallantt Metal Limited ("Transferee Company" or "GML") and for the Slump Sale of 18 MW Power Plant Undertakings of Gallantt Ispat Limited to the Transferee Company and their respective shareholders and Creditors (Scheme") under Section 230 to 232 and other applicable provisions of the Companies Act, 2013.

On receipt of the Orders as above and pursuant to the Scheme 6,54,96,896 equity shares held by Transferor Companies with Gallantt Metal Limited (Now known as Gallantt Ispat Limited) (Transferee Company) stands cancelled. Further, the Board of Directors of the Company have allotted 22,54,55,517 (Twenty-Two Crores Fifty-Four Lakhs Fifty-Five Thousand Five Hundred and Seventeen) fully paid-up equity shares of face value of Rs 10/- each of the Company to the eligible shareholders of the Transferor Companies as per the Record Date fixed on June 7, 2022. Further, the newly allotted shares are got listed with the Stock Exchanges viz. BSE Limited, National Stock Exchange of India Limited.

OTHER DISCLOSURES

• The Managing Director of the Company has not received any remuneration or commission from any of the subsidiary companies;

• None of the Auditors of the Company have reported any fraud as specified under the second provision of Section 143 (12) of the Companies Act, 2013 (including any statutory modification(s) or reenactment (s) thereof for the time being in force);

• The Company does not have any scheme or provision of money for the purchase of its own shares by employees/ Directors or by trustees for the benefit of employees/ Directors; and

• The Company has not issued equity shares with differential rights as to dividend, voting or otherwise.

• In the preparation of financial statements, no treatment different from that prescribed in an Accounting Standard has been followed.

• No proceedings are pending against the Company under the Insolvency and Bankruptcy Code, 2016.

• The Company serviced all the debts & financial commitments as and when they became due and no settlements were entered into with the bankers.

BOARD EVALUATION

The Company has devised a formal process for annual evaluation of performance of the Board, its Committees and Individual Directors ("Performance Evaluation") which include criteria for performance evaluation of nonexecutive directors and executive directors as laid down by the Nomination and Remuneration Committee and the Board of Directors of the Company. It covers the areas relevant to the functioning as Independent Directors or other directors, member of the Board or Committee of the Board. The Independent Directors carried out annual performance evaluation of the Chairman and Executive Directors. The Board carried out annual performance evaluation of its own performance. The performance of each Committee was evaluated by the Board, based on report on evaluation received from respective Committees. A consolidated report was shared with the Chairman of the Board for his review and giving feedback to each Director.

ACKNOWLEDGEMENT

Your Directors take this opportunity to thank the Ministry of Steel, the various State Governments, Central Government for their support and guidance.Your Directors also thank Ministry of Corporate Affairs, SEBI, BSE Limited, National Stock Exchange of India Limited, Depositories, Regulators, Financial Institutions and Banks, Credit Rating Agencies, Stakeholders, Suppliers, Contractors, Vendors and business associates for their continuous support. The Company also looks forward to their support in future. Also, your Directors convey their appreciation to the employees at all levels for their enormous personal efforts as well as collective contribution to the Companys growth.

On behalf of the Board
Place: Gorakhpur C. P. Agrawal
Date: May 29, 2023 Chairman