Gallantt Ispat Ltd Directors Report.

GALLANTT ISPAT LIMITED

TO THE MEMBERS

Your Directors have the pleasure in presen ng the 16th Annual Report on the business and opera ons of the Company along with the Audited Financial Statements of the Company for the financial year ended March 31, 2020.

CORPORATE OVERVIEW

Gallan Ispat Limited ("Your Company" or "The Company") is a leading Iron and Steel manufacturing Company in Eastern U ar Pradesh. The Company has its Registered O ce at New Delhi and Factory at Gorakhpur, U ar Pradesh.

WORKING RESULTS

Standalone

Consolidated

2020 2019 2020 2019
Financial Results
Income from opera on 1,02,010.15 1,22,927.06 1,02,010.15 1,22,927.06
Other Opera ng Income 3,609.14 204.50 3,609.14 204.50
Finance Cost 1,166.17 967.94 1,166.17 967.94
Deprecia on (including amor za on) 2,395.23 2,589.53 2,395.23 2,589.53
Profit Before Tax 6,488.19 16,631.38 6,488.19 16,631.38
Tax Expenses (including Deferred Tax) 675.78 3,609.34 675.78 3,609.34
Profit A er Tax 5,812.42 13,022.04 5,812.42 13,022.04
Share of Profit from Associate - - 244.15 3,356.85
Profit for the Period 5,812.42 13,022.04 6,056.57 16,378.89

FINANCIAL ACCOUNTING AND ADOPTION OF IND-AS

The Financial Statements for the FY 2019-20 are prepared under Ind-AS. Pursuant to Sec on 129(3) of the Companies Act, 2013, the Consolidated Financial Statements of the Company prepared in accordance with the Sec on 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and Indian Accoun ng Standard 110 on Consolidated Financial Statements is provided in the Annual Report.

BUSINESS OPERATION AND PERFORMANCE REVIEW

During the year Revenue from Opera ons stood at

Rs. 1,02,010.15 Lacs as against Rs. 1, 22,927.06 Lacs during the last FY 18-19. The Profit before Interest, Deprecia on and Taxa on stood at Rs. 1,00,09.59 Lacs as against Rs. 1,9011.18 Lacsin the previousyear registering a shrinking of 47.14%. The Net Profit a er Tax for the year fall to Rs. 5,812.42 Lacs from Rs. 13,022.04 Lacs in theprevious year. Standalone Earnings per Share (EPS) stood at Rs. 2.06 (face value of Rs. 1/- each) and Consolidated Earnings per Share (EPS) stood at Rs. 2.14 (face value of Rs. 1/- each) for the Financial Year ended March 31, 2020. During the year Company has reported rela vely sluggish performance both in terms of profitability and turnover due to the market condi ons as it was highly bearish and unfavourable together with low selling prices with no corresponding downward adjustment in raw material prices mainly iron ore.

Produc on at a glance:

Product

2019-20

2018-19

% of Change

Produc on Sales* Produc on Sales* Produc on Sales*
Sponge Iron (M.T.) 2,69,635 2,70,181 2,62,748 2,63,665 2.62% 2.47%
M.S. Billets (M.T.) 2,79,076 2,78,945 2,88,284 2,89,785 -3.19% -3.74%
M.S. Round Bar & Miss 2,74,392 2,70,720 2,71,141 2,71,822 1.20% -0.41%
Rolled Bar (M.T.)
Wheat Products (M.T.) 44,745 44,362 52,413 53,860 -14.63% -17.63%
Power Genera on (KWH) 25,83,30,603 25,83,30,603 26,70,65,508 26,70,65,508 -3.27% -3.27%

Due to pandemic COVID 19, the en re opera ons of your company as per the Governments direc ve were suspended w.e.f. 23rd March, 2020.

There is no change in the nature of the business of the Company. Disclosure of financial statement of Associate Company M/s. Gallan Metal Limited has been provided in the prescribed format as a part of this Report.

There were no significant and material orders passed by regulators or courts or tribunals impac ng the going concern status and Companys opera ons in future. Factory had been working e ciently during the year. Safety measures and processes have been installed and improved upon at the plants and work sites. There are no material changes or commitments a ec ng the financial posi on of the Company which have occurred between the end of the financial year and the date of this Report.

Due to na onwide lockdown declared by the Government of India, manufacturing and sales opera ons were shut down in late March, 2020 and par ally resumed in the month of April and became fully opera onal from start of June, 2020 which has impacted Companys opera ons during the months of March, April and May, 2020. The Company›s Agro Businesses, being in the ‘essen al category, remained opera onal. The overall demands of the steel products have been impacted but due to easing out of restric on in lockdown demand for the products are improving.

DIVIDEND

In view of conserving resources of the Company for future plan and to strengthen its fund and liquid posi on, Directors are unable to recommend any dividend.

Securi es and Exchange Board of India (‘SEBI), vide its no fica on dated 8 July, 2016, has amended the SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015 (‘Lis ng Regula ons), introducing new Regula on 43A manda ng the top 500 listed en es, based on market Capitaliza on calculated as on 31st March of every Financial Year, to formulate a Dividend Distribu on Policy and disclose the same in their Annual Reports and on their websites (www.gallan .com).

Accordingly, the Board of the Company has adopted a Dividend Distribu on Policy, which is available on the website of the Company i.e. www.gallan .com under "Investors Corner" and the same is annexed as

ANNEXURE-I.

DISCLOSURE ON COMPLIANCE WITH SECRETARIAL STANDARDS

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

SHARE CAPITAL

As on 31st March 2020, the authorized capital of the Company was Rs. 49,88,50,000/- (Rupees Forty Nine Crores Eighty Eight Lacs Fi y Thousand only) and the paid up capital stands at Rs. 28,23,60,720/- (Rupees Twenty Eight Crores Twenty Three Lacs Sixty Thousand Seven Hundred and Twenty only) consis ng of 28,23,60,720 equity shares of Rs. 1/- (Rupee One) each. There was no change in share capital of the Company during the financial year under review. During the year under review, the company has not issued shares with di eren al vo ng rights nor has granted any stock op ons or sweat equity. As on March 31, 2020, none of the Directors of the company hold instruments conver ble into equity shares of the Company. The Company has paid Lis ng Fees for the financial year 2020-21 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 Opera ng Personnel who have been instrumental in the growth of the business over the years. Your Directors believe that the Company has the poten al to further scale up its business volumes and profitability and are in the process of iden fying new avenues of growth and e ec ve u liza on of its exis ng resources. The Infrastructure crea on con nues to be one of the major priori es of the State Governments as well as Government of India and thereby the infrastructure space is likely to see significant ac vity which augurs well for cement demand. Hence, the Board decided to enter into cement business and for this purposes it was decided to amend the Main Object Clause of the Memorandum of Associa on of the Company so as to include the cement business in "the Main Object to be pursued by the Company". Cement Business is already covered under the part B of Clause- III of Memorandum of Associa on of the Company being : "(B). MATTERS WHICH ARE NECESSARY FOR FURTHERANCE OF THE OBJECTS SPECIFIED IN CLAUSE III(A)" and Cement business should be dragged into the Main Object Clause. Further, considering the prevailing business environment, cost of produc on, economy in scale of opera on and flaws and strength of the Company together with other relevant factors, the Board of Directors has, in supersession of earlier decision taken on February 05, 2019, decided to par ally modify the ongoing expansion programme of various industrial units of the Company and to install a cement manufacturing industrial unit. The es mated Cost of expansion Projects reduced at Rs. 865 Crores.

The capacity details of the various units a er modifica on and induc on of Cement unit are as under:

Capacity (in MTs except otherwise stated
Sl. No. Product (s) Units Exis ng Capacity Expansion Total Capacity a er expansion
1 Steel Billet 3,30,000 1,98,000 5,28,000
2 Rolling Mill 3,30,000 1,98,000 5,28,000
3 Power 53 MW 25MW 78 MW
4 Sponge Iron 2,97,000 2,47,500 5,44,500
5 Pellet - 7,92,000 7,92,000
6 Cement - 3,96,000 3,96,000
7 Flour Mill 1,08,000 - 1,08,000

Total Project Cost including Margin Money for Working Capital es mated at Rs. 865 Crores.

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 repor ng by the Statutory Auditors and the reviews performed by Management and the relevant Board Commi ees, including the Audit Commi ee, the Board is of the opinion that the Companys Internal Financial Controls were adequate and e ec ve during the financial year 2019-20.

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

In the prepara on of annual accounts, the applicable accoun ng standards have been followed and there has been no material departure.

ii) The selected accoun ng policies were applied consistently and the Directors made judgments and es mates that are reasonable and prudent so as to give a true and fair view of the state of a airs of the Company as at 31st March, 2020 and of the profit of the Company for the financial year ended 31st March, 2020.

iii) Proper and su cient care has been taken for the maintenance of adequate accoun ng records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preven ng and detec ng fraud and other irregulari es.

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

v) Su cient internal financial controls have been laid down and such internal financial controls are adequateand were opera ng e ec vely, and

vi) Proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems were adequate and opera ng e ec vely.

FINANCE AND ACCOUNTS

As mandated by the Ministry of Corporate A airs, IND AS is applicable to the Company from the Financial Year commencing from April 01, 2017. The es mates and judgments rela ng 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 transac ons and reasonably present the Companys state of a airs, profits and cash flows for the year ended March 31, 2020. Financial Statement has been prepared as per applicable Ind-AS.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

There is no change in the nature of the business of the Company.

LISTING INFORMATION

The Equity Shares in the Company are in dematerialized form and is listed with Bombay Stock Exchange Limited and Na onal Stock Exchange of India Limited. The Lis ng Fee has been paid to the Stock Exchanges for the year 2020-21. The ISIN No. of the Company is INE528K01029.

CREDIT RATING

During the year under report, vide its ra ng le er bearing reference no. BWR/BLR/DEL/IRC/RK/1240/2019-20 dated June 19, 2019, the Ra ng agency M/s. Brickwork Ra ngs India Private Limited has upgraded and assigned BWR BBB+ ra ng for the Companys Fund Based Long Term facili es (long term) and BWR A2 for Non-Fund based Short Term facili es.

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 Sec on 73 of the Companies Act, 2013 and Rules made there under. Therefore, it is not required to furnish informa on in respect of outstanding deposits under non- banking, non-financial Companies (Reserve Bank) Direc ons, 1966 and Companies (Accounts) Rules, 2014.

DEBENTURES

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

AUDITORS & AUDITORS REPORT

The Board of Directors, based on the recommenda on of the Audit Commi ee, has appointed of M/s. Maro

& Associates, Chartered Accountants (Firm Registra on Number 322770E), 1209, Ansal Tower Nehru Place, New Delhi-110019 as the Statutory Auditors of the Company in place of M/s. Anoop Agarwal & Co., to hold o ce from the conclusion of the 15th AGM ll the conclusion of the 20th AGM. The said appointment was approved at the last 15th AGM. M/s. Maro & Associates, Chartered Accountants have consented to act as Auditors if appointed and have also confirmed that their appointment will be in accordance with Sec on 139 read with Sec on 141 of the Act. The notes on accounts referred to the Auditors Report are self-explanatory and therefore, do not call for any further explana on.

Necessary cer ficate has been obtained from the Auditors as per Sec on 139(1) of the Companies Act, 2013.

The notes on accounts referred to the Auditors Report are self-explanatory and therefore, do not call for any further explana on.

The Auditors Report is annexed hereto and forms part of the Annual Report. The Auditors report does not contain any qualifica ons, reserva ons or adverse remarks.

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

The informa on required under sec on 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed as ANNEXURE-II to this Directors report.

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

The Company has not issued any Sweat Equity Sharesor Equity Shares with Di eren al Rights during the financial year.

DISCLOSURE IN RESPECT OF VOTING RIGHTS NOT EXERCISED

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

COST AUDIT

The Company has submi ed the Cost Audit Report and Cost Compliance Report for the year 2018-19 duly cer fied by a Cost Accountant to the Central Government within the due date. M/s. U. Tiwari & Associates, Cost Accountants were appointed with theapproval of the Central Government to carry out the cost audit in respect of the Company for the financial year 2019-20.

In terms of the provisions of Sec on 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, as amended from me to me, the Board of Directors, based on the recommenda on of the Audit Commi ee, has appointed M/s. U. Tiwari & Associates, Cost Accountants, as Cost Auditor of the Company for conduc ng the Cost Audit for the financial year 2020-21 on a remunera on of

Rs. 50,000/- plus out of pocket expenses.

A Cer ficate from M/s. U. Tiwari & Associates, Cost Accountants, has been received to the e ect that their appointment as Cost Auditor of the Company, if made, would be in accordance with the limits specified under Sec on 141 of the Act and Rules framed thereunder.

The remunera on is subject to the ra fica on of the Members in terms of Sec on 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 conduc ng audit of the cost records for the financial year 2020-21 along with a cer ficate confirming their independence and arms length rela onship.

Company has made and maintained the cost records pursuant to the Companies (Cost Records and Audit) Rules, 2014, as prescribed by the Central Government under sub-sec on (1) of Sec on 148 of the Companies Act, 2013.

INSURANCE

All the insurable interests of your Company including inventories, buildings, plant and machinery and liabili es under legisla ve 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 Commi ee, Nomina on & Remunera on Commi ee, Stakeholders Rela onship Commi ee, Corporate Social Responsibility Commi ee and Commi ee of Directors have been disclosed under Corporate Governance Report. Board of Directors has recons tuted all the above Commi ees and the same has 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 Commi ees recommenda ons were accepted and implemented by the Board.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remunera on and other details as required under sec on 197(12) read with Companies (Appointment and Remunera on of Managerial Personnel) Rules, 2014 is annexed herewith as ANNEXURE-III to this report.

A statement comprising the names of top 10 employees in terms of remunera on drawn is given in this report as

ANNEXURE-III.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

The par culars of loans, guarantees and investments u/s 186 of the Companies Act, 2013 is annexed herewith as

ANNEXURE-IV.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT

As per SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015, a Management Discussion and Analysis report is part of the Annual Report and is annexed herewith as ANNEXURE-V.

A report on Corporate Governance together with the Auditors Cer ficate regarding the compliance of condi ons of Corporate Governance is 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) Nomina on and Remunera on Policy

The Board has, on the recommenda on of the Nomina on & Remunera on Commi ee framed a policy for selec on and appointment of Directors, Senior Management and their remunera on. The summary of Remunera on Policy of the Company prepared in accordance with the provisions of Sec on 178 of the Companies Act, 2013 read with Part D of Schedule II of the SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015 are provided in the Corporate Governance Report. The Remunera on Policy is uploaded on the website of the Company. The web link to the Remunera on Policy is as under: h ps://www.gallan .com/Investors Corner/ Gallan Ispat Limited/Nomina on and Remunera on Policy/Remunera on Criteria Non-Execu ve Director w.e.f. 01.04.2019.

(ii) Corporate Social Responsibility Policy (CSR)

The Board has, on the recommenda on of the CSR Commi ee, approved the CSR Policy. The Companys CSR Policy is available on the Companys website www. gallan .com and the same is also a ached herewith as

ANNEXURE - VI.

As a part of its ini a ve under the "Corporate Social Responsibility" (CSR) drive, the Company has undertaken projects in the area of Health, Educa on and rural development, eradica ng hunger, promo ng health care and educa on. These projects are in accordance with ScheduleVIIoftheCompaniesAct,2013andtheCompanys CSR policy. Annual Report on CSR as required under Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is also a ached herewith as ANNEXURE-VII.

(iii) Risk Management Policy

Business Risk Evalua on and Management is an ongoing process within the Organiza on. Pursuant to Sec on 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 iden fy, assess, monitor and mi gate various risks to key business objec ves. Major risks iden fied by the business and func ons are systema cally addressed through mi ga ng ac ons on a con nuing basis. At present the company has not iden fied 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 Regula on 17(9)(b) of SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015 ("the Lis ng Regula ons") and provisions of the Companies Act, 2013 ("the Act"), which requires the Company to lay down procedures about risk assessment and risk minimiza on.

The web link to the Risk Management Policy is as under: h ps://www.gallan .com/InvestorsCorner/ Gallan Ispat Limited/ Risk Management Policy w.e.f. 01.04.2019.

(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 Commi ee to ensure adequate safeguards against vic misa on.

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

The details of establishment of the Vigil MechanismPolicy are displayed on the website of the Company www. gallan .com under the link: h ps://www.gallan .com/ Investors Corner/ Gallan Ispat Limited/ Whistle Blower Policy w.e.f. 01.04.2019.

SECRETARIAL AUDITORS

Mr. Anurag Fatehpuria, Prac sing Company Secretary, having o ce address at 23/1, Sita Nath Bose Lane, Salkia Howrah Pin-711101 has been appointed as Secretarial Auditors of the Company for the FY ended 31.03.2020. The Secretarial Audit Report received from the Secretarial Auditors is annexed to this report marked as ANNEXURE-VIII and forms part of this report.

ANNUAL EVALUATION OF BOARD, COMMITTEES ANDINDIVIDUAL DIRECTORS

During the financial year, formal annual evalua on of the Board, its commi ees and individual Directors was carried out pursuant to the Board Performance Evalua on Policy of the Company.

The performance of the Board and commi ees was evaluated a er seeking inputs from all the Directors on the basis of the criteria such as Board/ commi ee cons tu ons, frequency of mee ngs, e ec veness of processes etc. The performance of individual Directors (including Independent Directors) was evaluated bythe Board and Nomina on & Remunera on commi ee (excluding the Director being evaluated) a er seeking inputs from all Directors on the basis of the criteria such as thought contribu on, business insights and applied knowledge.

The criteria for the performance evalua on of the Board of Directors includes aspects such as its composi on and structure, and the e ec veness of its processes, informa on flow and func oning. The criteria for the performance evalua on of individual Directors includes aspects, such as the Directors contribu on to the Board of Directors and Commi ee mee ngs, including prepara on on the issues to be discussed as well as meaningful and construc ve contribu on and inputs during mee ngs. In addi on, the Chairperson is evaluated on the key aspects of his role.

The performance of the commi ees was evaluated by the board a er seeking inputs from the commi ee members on the basis of criteria such as the composi on of commi ees, e ec veness of commi ee mee ngs etc. The Board and the Nomina on and Remunera on Commi ee reviewed the performance of individual directors on the basis of criteria such as the contribu on of the individual director to the board and commi ee mee ngs like preparedness on the issues to be discussed, meaningful and construc ve contribu on and inputs in mee ngs etc.

A separate mee ng 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 Execu ve Directors and Non-Execu ve Directors.

FAMILIARISATION PROGRAMME

Your Company follows a structured orienta on and familiariza on 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 presenta ons are made at the Board Mee ngs on business and performance, long term strategy, ini a ves and risks involved.

All the Board members of the Company are a orded every opportunity to familiarize themselves with the Company, its management, its opera ons and industry perspec ve on a regular basis. They are made to interact with senior management personnel and proac vely provided with relevant news, views and updates on the Company and sector. All the informa on/documents sought by them is/are also shared with them for enabling a good understanding of the Company, its various opera ons and the industry. The Directors were apprised on key aspects of opera ons and market trend and the Companys performance and its future projects. The details of programmes for familiarisa on for Independent Directors are posted on the website of the Company at www.gallan .com under the Investors Corner of Gallan Ispat Limited under the link: h ps://www.gallan .com/ Investors Corner/ Gallan Ispat Limited/Famaliariza on Programme Imparted.

CODE OF CONDUCT

Your Company has adopted a Code of Conduct for members of the Board (incorpora ng du es of Independent Directors) and the Senior Management. The Code aims at ensuring consistent standards of conduct and ethical business prac ces across the Company. Your Company has received confirma ons from all concerned regarding their adherence to the said Code.

Pursuant to Regula on 17(5) of the Securi es & Exchange Board of India (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015, Mr. C.P. Agrawal, Chairman & Managing Director and Mr. Mayank Agrawal, Chief Execu ve O cer 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 www.gallan .com under the Investors Corner of Gallan Ispat Limited under the link: h ps://www. gallan .com/Investors Corner/ Gallan Ispat Limited/ Code of Conduct of BOD-w.e.f. 01.04.2019.

CODE OF CONDUCT FOR PROHIBITION OF INSIDER TRADING

Your Company has adopted a Code of Conduct for Preven on of Insider Trading and Code of Prac ces and procedures for Fair Disclosure of Unpublished Price Sensi ve Informa on (hereina er referred to as the "Code of Conduct" as per Securi es and Exchange Board of India (SEBI) (Prohibi on of Insider Trading) Regula ons, 2015. All Directors, Designated Employees who could have access to the Unpublished Price Sensi ve Informa on of the Company are governed by the Code. During the year under review, there has been due compliance with SEBI (Prohibi on of Insider Trading) Regula ons, 2015. The full text of the Code is hosted on the Companys website www.gallan .com under the Investors Corner of Gallan Ispat Limited under the link: h ps://www.gallan .com/

Investors Corner/ Gallan Ispat Limited/ Code of Conduct of Insider Trading-w.e.f. 01.04.2019.

NUMBER OF MEETINGS OF BOARD AND AUDIT COMMITTEE HELD DURING THE YEAR 2019-2020

Five (5) mee ngs of the Board of Directors of the Company were conducted during the financial year and also Five (5) mee ngs of the Audit Commi ee of the Board of Directors were conducted during the financial year. The details of board/commi ee/shareholders mee ngs are provided under the Corporate Governance Report which forms part of the Annual Report.

AUDIT COMMITTEE

The Audit commi ee of the Company as on the date of this report is cons tuted of following Directors:

Names Designa on Category
Mrs. Smita Modi Chairperson Independent
Mrs. Sangeeta Upadhyay Member Independent
Mr. Prem Prakash Agrawal Member Execu ve

Cons tu on of the Audit Commi ee is in compliance with requisite provisions of the Companies Act, 2013 and rules made thereunder, SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015 and all other applicable laws, rules and regula ons.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Stakeholders Rela onship Commi ee of the Company as on the date of this report is cons tuted of following Directors:

Names Designa on Category
Mrs. Sangeeta Upadhyay Chairperson Independent
Mrs. Smita Modi Member Independent
Mr. Prem Prakash Agrawal Member Execu ve

Cons tu on of the Stakeholder Rela onship is in compliance with requisite provisions of the Companies Act, 2013 and rules made thereunder, SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015 and all other applicable laws, rules and regula ons.

NOMINATION AND REMUNERATION COMMITTEE

The Nomina on and Remunera on Commi ee of the Company as on the date of this report is cons tuted of following Directors:

Names Designa on Category
Mrs. Sangeeta Upadhyay Chairperson Independent
Mrs. Smita Modi Member Independent
Mr. Ashtbhuja Prasad Member Independent
Srivastava

Cons tu on of the Nomina on and Remunera on Commi ee is in compliance with requisite provisions of the Companies Act, 2013 and rules made thereunder, SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015 and all other applicable laws, rules and regula ons.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Corporate Social Responsibility Commi ee of the Company as on the date of this report is cons tuted of following Directors:

Names Designa on Category
Mr. Prem Prakash Agrawal Chairperson Execu ve
Mr. Chandra Prakash Member Execu ve
Agrawal
Mrs. Smita Modi Member Independent

Cons tu on of the Nomina on and Remunera on Commi ee is in compliance with requisite provisions of the Companies Act, 2013 and rules made thereunder, SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015 and all other applicable laws, rules and regula ons.

COMMITTEE OF DIRECTORS

At their mee ng held on June 29, 2020, the Board of Directors has cons tuted a Commi ee of Directors with nomenclature of "Commi ee of Directors". The Commi ee of Directors has the following composi on of members as on the date of this report and is cons tuted of following Directors:

Names Designa on Category
Mr. Chandra Prakash Chairperson Execu ve
Agrawal
Mr. Prem Prakash Agrawal Member Execu ve
Mr. Ni n Mahavir Prasad Member Execu ve
Kandoi

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

Pursuant to the provisions of Sec on 129(3) of the Act, a statement containing performance & salient features of the financial statements of Companys associate Companies in Form AOC-1 is a ached as ANNEXURE-IX. The Company has no Subsidiary Company. Gallan Metal Limited is an ‘Associate of the Company.

The accounts of the Associate Company are audited and cer fied by their respec ve Statutory Auditors for consolida on.

In accordance with Sec on 136 of the Act, the financial statements of the Associate Companies are available for inspec on by the members at the Registered O ce of the Company during business hours on all days except Saturdays, Sundays and public holidays upto the date of the AGM. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered O ce of the Company. The financial statements including the CFS, and all other documents required to be a ached to this report have been uploaded on the website of the Company at www. gallan .com

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

The Company did not have any subsidiaries, joint ventures and associate companies, which have ceased during the year.

In terms of the Regula on 46(2)(h) of the SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015, the policy for determining material subsidiaries is placed on the website of the Company at www.gallan . com under Investors Corner of Gallan Ispat Limited.

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 opera ons. However, Members a en on is drawn to the statement on con ngent liabili es, commitments in the notes forming part of the Financial Statements.

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 viola on 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 www.gallan . com under the link: h ps://www.gallan .com/Investors Corner/ Gallan Ispat Limited/ Whistle Blower Policy-w.e.f. 01.04.2019.

CORPORATE SOCIAL RESPONSIBILITY

The Company has cons tuted a Corporate Social

Responsibility Commi ee and has framed a Corporate Social Responsibility Policy and iden fied Healthcare, Childrens educa on, as some of the key areas. The Company will con nue to support social projects that are consistent with the policy.

Corporate Social Responsibility Commi ee of the Company is cons tuted of: Mr. Prem Prakash Agrawal, Chairman, Mr. Chandra Prakash Agrawal and Mrs. Smita Modi

KEY MANAGERIAL PERSONNEL

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

SI. No. Name Designa on
1 Mr. Chandra Prakash Agrawal Chairman and Managing Director
2 Mr. Prem Prakash Agrawal Whole- me Director
3 Mr. Santosh Kumar Agrawal Whole- me Director
4 Mr. Ni n Mahavir Prasad Kandoi Whole- me Director
5 Mr. Mayank Agrawal Chief Execu ve O cer
6 Mr. Amit Jalan Chief Financial O cer
7 Mr. Nitesh Kumar Company Secretary

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Ind - AS on Consolidated Financial Statements read with the SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons 2015, the Consolidated Audited Financial Statements and Consolidated Cash Flow Statement for the year ended March 31, 2020 are provided in the Annual Report.

A statement containing the salient feature of the financial statements of each of the subsidiary and Associate Company in the prescribed Form AOC-1 is annexed

ANNEXURE-IX.

Pursuant to Sec on 136 of the Act, the financial statements of the subsidiary and Associate Companies are kept for inspec on by the shareholders at the Registered O ce 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. The statements are also available on the website of the Company www.gallan .com

COVID 19 STEPS TAKEN BY THE COMPNAY

Your company stands by the society and community in mes of despair. Apart from the above, the company has distributed wheat and other food items at the Gorakhpur and adjacent and nearby areas especially at villages nearby its plant. The company has also supplied face masks and sani zers to thesevillages.

The company strictly follows all precau ons and guidelines prescribed by the Government par cularly towards adhering to safety measures in respect of its employees.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report for the financial year, as s pulated under Regula on 34 of the SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015 is part of the Annual Report and is a ached as

ANNEXURE - X.

EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of sec on 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-XI.

RISK MANAGEMENT

Risk management is embedded in your Companys opera ng 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 mi ga ng controls and repor ng mechanism of such risks. The risk management framework is reviewed periodically by the Board and the Audit Commi ee. Some of the risks that the Company is exposed to are:

Key Risk Impact to Gallan Ispat Limited Mi ga on Plans
Commodity Price Risk Risk of price Fluctua on on basic materials like Iron Ore, Coal, Chemicals, rela onship with the business associates.Scraps as well as finished goods used in In case of major fluctua on either the process of manufacturing. raw The Company commands excellent business upwards or downwards, the ma er will be mutually discussed and compensated both ways. Also by focusing on new value added products helps in lowering the impact of price fluctua on in finished goods.
Uncertain global economic environment – slow growth in global economy Impact on raw materials which are imported We have internal procedure to mi gate the global adverse impact.
Interest Rate Risk Any increase in interest rate can a ect the finance cost Any increase in interest rate can a ect the finance cost. Dependence on debt is very minimumand we have surplus funds cushion to se le the en re debt in case the need arises. Further, the Company has repaid the Term Loan infull.
Foreign Exchange Risk Your company does not have export sales. However, import raw materials from country outside India. Any vola lity in the currency market can impact the overall profitability. The Company commands excellent business rela onship with the sellers and suppliers. In case of major fluctua on either upwards or downwards, the ma er will be mutually discussed and compensated both ways.
Human Resources Risk Your Companys ability to deliver value is dependent on its ability to a ract, retain and nurture talent. A ri on and non- availability of the required talent resource can a ect the overall performance of the Company. By con nuously benchmarking of the best HR prac ces across the industry and carrying out necessary improvements to a ract and retain the best talent. Also recruitment is across almost all states of India which helps to mi gate this risk and we do not an cipate any major issue for the coming five years.
Compe on Risk Your company is always exposed to compe on Risk from Steel and Ago Manufacturers across the region. The increase in compe on can create pressure on margins, market share etc. By con nuous e orts to enhance the brand image of the Company, quality, Cost, mely delivery and customer service.
Compliance Risk – Increasing regulatory requirements Any default can a ract penal provisions By regularly monitoring and review of 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 and Agro industry is labour intensive and are exposed to accidents, health and injury risk due to machinery breakdown, human negligence etc. By development and implementa on ofcri cal safety standards across the various departments of the factory, establishing training need iden fica on at each level of employee.

UNPAID AND UNCLAIMED AMOUNT OF DIVIDEND AND SHARE APPLICATION MONEY

Following amount of Unpaid Dividend has not been claimed and paid ll 31.03.2020:

Nature of Money Relevant Financial Year Bank Account Details Amount lying (In Rs.)
Final Dividend for 2013 2012-13 IDBI Bank Account No. 17,723.50
0135103000007344
Final Dividend for 2014 2013-14 IDBI Bank Account No. 3,282.50
0135103000007900
Final Dividend for 2015 2014-15 IDBI Bank Account No. 3,427.00
0135103000008587
Interim Dividend 2016 2015-16 ICICI Bank Account No. 3,929.00
001105026007
Final Dividend for 2017 2016-17 IDBI Bank Account No. 12,765.50
1526103000000347
Final Dividend for 2018 2017-18 IDBI Bank Account No. 21,063.00
1526103000000569
Final Dividend for 2018-19 2018-19 IDBI Bank Account No. 23,761.75
(Interim Dividend) 1526103000000666

Unclaimed and unpaid amount of Dividend for the Financial Year 2011-12 to the tune of Rs. 6,138 were transferred to the Investors Educa on and Protec on Fund. Members who have not so far encashed their Divided Warrants for the financial years ended 31st March 2013, 2014, 2015, 2016 (Interim), 2017, 2018 and 2019 (Interim) are requested to approach immediately the Registrars for revalida on of unclaimed Dividend Warrants. The details of unclaimed dividend are available on the Companys corporate website www.gallan .com and also uploaded on the website of IEPF viz. www.iepf.gov.in

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND a) Transfer of Unclaimed Dividend to IEPF:

As required under Sec on 124 of the Act, the Unclaimed Dividend amount aggrega ng to Rs. 17,723.50/- pertaining to the financial year ended on 31st March, 2013 lying with the Company for a period of seven years were transferred during the Financial Year 2019-20, to the Investor Educa on and Protec on Fund established by the Central Government.

b) Transfer of shares to IEPF:

As required under Sec on 124 of the Companies Act, 2013, 970 Equity Shares, in respect of which dividend has not been claimed by the members for seven consecu ve years or more have been transferred by the Company to the Investor Educa on and Protec on Fund Authority (IEPF) during the financial year 2019-20. 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 of Directors comprises of Eight Directors of which four are Independent. In terms Sec on 152 of the Companies Act, 2013, Mr. Santosh Kumar Agrawal (DIN: 01045228), liable to re re by rota on at the ensuing Annual General Mee ng is eligible for re-elec on.

Mr. Ashtbhuja Prasad Srivastava (DIN: 08434115), Mrs. Sangeeta Upadhyay (DIN: 06920195), Mrs. Smita Modi (DIN: 01141396) and Mr. Dindayal Jalan (DIN: 00006882) are Independent Directors of the Company.Presently, Company has op mum combina on of Execu ve, Non-

Execu ve and Independent Directors on the Board of the Company.

Independent Directors are appointed for five consecu ve years and are not liable to re re by rota on in terms of Sec ons 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualifica on of Directors) Rules, 2014. Mr. Mayank Agrawal is a Chief Execu ve O cer of the Company as per the provisions of the Companies Act, 2013. Mr. Amit Jalan is Chief Financial O cer and is inter alia looking a er the core finance func on of the Company. Mr. Nitesh Kumar is working in the capacity of Company Secretary and Compliance O cer.

None of the Directors of your Company is disqualified under the provisions of Sec on 164(2)(a) & (b) of the Companies Act, 2013 and a cer ficate dated June 29, 2020 received from Company Secretary in Prac ce cer fying that none of the directors on the board of the company have been debarred or disqualified from being appointed or con nuing as directors of the Companies by SEBI/Ministry of Corporate A airs or any such statutory authority is annexed to the Corporate Governance Report. All Independent Directors have given declara ons that they meet the criteria of independence as laid down under Sec on 149(6) of the Companies Act, 2013 and Regula on 16 (b) of SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015. Further, Independent Director shall get themselves registered with the Independent Directors Databank as per the Companies (Appointment and Qualifica on of Directors) Fi h Amendment Rules, 2019.

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

At their mee ng held on March 30, 2019, Mr. Chandra Prakash Agrawal (e ec ve from April 01, 2019), Mr. Santosh Kumar Agrawal (e ec ve from July 10, 2019), Mr. Prem Prakash Agrawal (e ec ve from April 01, 2019) and Mr. Ni n Mahavir Prasad Kandoi (e ec ve from October 10, 2019), all being execu ve Directors have been re-appointed for a period of five years and their reappointment was approved by the shareholders of the Company.

TRANSFER TO RESERVES

Your Directors propose to transfer an amount of

Rs. 37,139.09 Lacs standing in retained earnings including an amount of Rs. 5,824.46 Lacs as net earnings for the period and it is to be transferred to the General Reserve.

RELATED PARTY TRANSACTIONS

The details of Related Party Transac ons during the Financial Year ending 31.03.2020, being arms length transac ons have been reported in the financial statements and forms part of this report. The Audit Commi ee 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.gallan .com under the Investors Corner of Gallan Ispat Limited.

All transac ons entered with Related Par es for the year under review were on arms length basis and in the ordinary course of business and that the provisions of Sec on 188 of the Companies Act, 2013 and the Rules made thereunder are not a racted. Thus, disclosure in form AOC-2 in terms of Sec on 134 of the Companies Act, 2013 is not required. Further, there are no material related party transac ons during the year under review with the Promoters, Directors or Key Managerial Personnel. The Company has developed a framework through Standard Opera ng Procedures for the purpose of iden fica on and monitoring of such Related Party Transac ons. All Related Party Transac ons are placed before the Audit Commi ee as also to the Board for approval. Omnibus approval was obtained on a yearly basis for transac ons which are of repe ve nature. Transac ons entered into pursuant to omnibus approval are audited by the Audit Commi ee and a statement giving details of all Related Party Transac ons are placed before the Audit Commi ee and the Board for review and approval on a quarterly basis.

The policy on Related Party Transac ons as approved by the Board of Directors has been uploaded on the website of the Company viz. www.gallan .com. None of the Directors has any pecuniary rela onship or transac ons vis--vis the Company.

PERSONNEL, INDUSTRIAL RELATIONS AND MARKETING

The Companys HR philosophy is to establish and build a high performing organiza on, where each individual is mo vated to perform to the fullest capacity: to contribute to developing and achieving individual excellence and departmental objec ves and con nuously improve performance to realize the full poten al of our personnel. Industrial rela ons have remained harmonious throughout the year.

DECLARATION OF INDEPENDENCE

Your Company has received declara ons 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 Securi es & Exchange Board of India (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015.

AWARD AND RECOGNITIONS

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

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 U.P.

• Promoter of Gallan Group Mr. C.P. Agrawal & family has been listed on Indias Super Rich List at 188th posi on in 2014 by the Business World Magazine.

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

Shri Yogi Adityanath Maharaj Ji, C.M. of U.P., honoured the company for ‘Entrepreneur of the region during Gorakhpur Mahotsav 2018.

The top challengers Award 2018: awarded by the Construc on World Magazine, a world famous magazine.

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

Ranked at 6th posi on among the top 10 mid-size rebar producers in India by Steel 360 magazine in August, 2018 edi on.

During the year:

• Listed "200 BEST UNDER A BILLION COMPANIES" in Forbes Asia Magazine, July/August 2019 edi on.

• Group Chairman, Shri Chandra Prakash Agrawal was felicitated with momento for his significant and imperishable contribu ons to the Industrial development in the State, by Shri Yogi Adityanath Maharaj Ji, C.M. of U.P on the eve of U.P. Diwas Mahotsav, in January, 2020.

MATERIAL CHANGES AND COMMITMENTS

There have been no material changes and commitments a ec ng the financial posi on of the Company since the close of financial year i.e. since 31st March, 2020 ll 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, a er approval of the Scheme of Amalgama on as above all the assets and liabili es of the Transferor Companies shall be transferred to the Company. Significant and material orders passed by the regulators / courts / tribunals impac ng the going concern status and the Companys opera ons in future.

As such there is no significant and material order by the regulator/court/tribunals impac ng the going concern status and the Companys opera on in future.

GENERAL a) Your Company has not issued equity shares with di eren al rights as to dividend, vo ng or otherwise; and b) Your Company does not have any ESOP scheme for its employees/Directors.

CHANGE IN SHARE CAPITAL

There are no changes in the Share Capital during the year.

INTERNAL FINANCIAL CONTROLS

The Company has an adequate system of internal controls in place. It has documented policies and procedures covering all financial and opera ng func ons. These controls have been designed to provide a reasonable assurance with regard to maintaining of proper accoun ng controls for ensuring reliability of financial repor ng, monitoring of opera ons, and protec ng assets from unauthorized use or losses, compliances with regula ons. The Company has con nued its e orts to align all its processes and controls with global best prac ces.

The framework on Internal Financial Controls over Financial Repor ng has been reviewed by the internal and external auditors. The Companys internal financial controls were opera ng e ec vely based on the internal control criteria established by the Company considering the essen al components of internal control stated in the guidance note on audit of internal control over financial repor ng issued by the Ins tute of Chartered Accountants of India.

The Audit commi ee of the Board of Directors ac vely reviews the adequacy and e ec veness of internal control systems and suggests improvements wherever needed to strengthen the same. The Audit Commi ee evaluated the internal financial controls based on the following criteria:

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

2. Systems and procedures exist to ensure that all transac ons are recorded as necessary to permit prepara on of financial statements in conformity with generally accepted accoun ng principles or any other criteria applicable to such statements, and to maintain accountability for aspects and the mely prepara on of reliable financial informa on.

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

4. The exis ng assets of the Company are verified / checked at reasonable intervals and appropriate ac on is taken with respect to any di erences, if any.

5. Proper systems are in place for preven on and detec on of frauds and errors and for ensuring adherence to the Companys policies.

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

E ec ve steps are taken by the Management to enable con nuous monitoring of lead control indicators and ac on taken towards correc ng iden fied gaps. Respec ve func ons have been trained and equipped to enable con nuous monitoring of excep ons by themselves to reduce surprises and enable correc ve ac on on mely and regular basis.

Your Company has a robust financial closure self-cer fica on mechanism wherein the line managers cer fy adherence to various accoun ng policies, accoun ng hygiene and accuracy of provisions and other es mates.

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 Lis ng Regula ons 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 Commi ee or the Board of Directors under sub-sec on (12) of sec on 143 of the Companies Act, 2013 during the financial year.

ENVIRONMENT AND SAFETY

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

TRANSFER OF SHARES COMPULSORILY IN DEMAT MODE

As per amended Regula on 40(1) of the SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015 amended vide SEBI No fica on No. SEBI/LADNRO/ GN/2018/24 dated June 2018, e ec ve from December 5, 2018; securi es of the listed companies can be transferred (except in case of transmission or transposi on) only in the dematerialized form.

In case any of the Shareholders have any queries or need any assistance in this regard, please contact;

GALLANTT ISPAT LIMITED Registrar & ShareTransfer Agent
Regd.O ce Address: Niche Technologies Pvt. Ltd.
"GALLANTT HOUSE", 7th Floor, Room, No. 7A & 7B,
I-7,Jangpura Extension, 3A, AucklandRd, Elgin,
New Delhi – 110014 Kolkata, West Bengal – 700017
Telefax: 011-41645392 Tel.: (033) 2280 6616 /17 / 18
Email-Id:nitesh@gallan .com Email id:
Website:www.gallan .com nichetechpl@nichetechpl.com
Website: www.nichetechpl.com

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

Procedure for Nomina on and Appointment of Directors:

The Nomina on and Remunera on Commi ee (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 poten al candidates for appointment of Directors and meets them prior to making recommenda ons of their nomina on to the Board. Specific requirements for the posi on, including expert knowledge expected, are communicated to the appointee.

On the recommenda on of the NRC, the Board has adopted and framed a Remunera on Policy for the Directors, Key Managerial Personnel and other employees pursuant to the provisions of the Act and the Lis ng Regula ons. The remunera on determined for Execu ve/Independent Directors is subject to the recommenda on of the Nomina on and Remunera on Commi ee and approval of the Board of Directors. The Non-Execu ve Independent Directors and Non-Execu ve Non-Independent Directors are compensated by way of si ng fees for a ending mee ngs of the Board and its Commi ees. The Execu ve Directors are not paid si ng fees; the Non-Execu ve Directors are en tled to si ng fees for a ending the Board/Commi ee Mee ngs.

It is a rmed that the remunera on paid to Directors, Key Managerial Personnel and all other employees is in accordance with the Remunera on Policy of the Company. The Companys Policy on Directors Appointment and Remunera onandotherma ersprovidedinSec on178(3) of the Act and Regula on 19 of the Lis ng Regula ons have been disclosed in the Corporate Governance Report, which forms part of the Annual Report.

EMPLOYEES WELFARE

The Company con nues to focus on welfare and improving thequalityoflivesofitsemployeesbyprovidingeduca onal assistance to their children, employee wellness sessions, periodic occupa onal health checks, spiritual peace by yoga classes, crche and child care facili es, transport facili es to employees at subsidized rate or at no charge.

AMALGAMATION OF COMPANIES

At their mee ng held on January 18, 2020, Board of Directors of the Company has approved the Scheme of Amalgama on and Slump Sale providing for the Amalgama on of Gallan 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 Gallan Metal Limited ("Transferee Company" or "GML") and for the Slump Sale of 18 MW Power Plant Undertakings of Gallan Ispat Limited to the Transferee Company and their respec ve shareholders and Creditors ("Scheme") under Sec on 230 to 232 andother applicable provisions of the Companies Act, 2013.

In accordance with the Regula on 37 of the Securi es and Exchange Board of India (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015 (hereina er referred to as the "LODR") Company has filed the dra Scheme of Amalgama on and Slump Sale with the BSE Limited (formerly Bombay Stock Exchange Limited) and the Na onal Stock Exchange of India Limited (hereina er together referred to as the "Stock Exchanges") for obtaining an ‘observa on le er or a ‘no-objec on le er, before filing such scheme. Further, Transferor Company No. 2 and the Transferee Companyhave also filed this applica on with the Stock Exchanges under Regula on 37 of LODR.

Brief details of the Scheme are as under:

1. GIL, AAR, HIPOLINE, LEXI and RICHIE all are TRANSFEROR COMPANIES and GML is TRANSFEREE COMPANY.

2. The Transferee Company is a listed Company. GIL and AAR are also Listed Companies.

3. Upon the Scheme becoming e ec ve in lieu of the amalgama on no considera on will be due to the Transferor Companies and in considera on of the amalgama on of the Transferor Companies with the Transferee Company pursuant to the Scheme including the consequen al ex nguishment of the shareholding in Transferor Companies, the Transferee Company shall without further applica on, issue and allot as given below equity shares in the Transferee Company to the equity shareholders of the Transferor Companies whose names appear in the Register of Members of the Transferor Companies on the Record Date:

• 13 (Thirteen) equity shares of the nominal value of Rs. 10/- fully paid up in the Transferee Company for every 14 (Fourteen) equity shares of Rs. 1/- each fully paid up held by such member in GIL.

• 5 (Five) equity shares of the nominal value of

Rs. 10/- fully paid up in the Transferee Company for every 1 (One) equity share of Rs. 10/- each fully paid up held by such member in AAR.

• 9 (Nine) equity shares of the nominal value of

Rs. 10/- fully paid up in the Transferee Company for every 2 (Two) equity shares of Rs. 10/- each fully paid up held by such member in HIPOLINE.

• 84 (Eighty-Four) equity shares of the nominal value of Rs. 10/- fully paid up in the Transferee Company for every 1 (One) equity share of

Rs. 10/- each fully paid up held by such member in LEXI.

• 101 (One Hundred One) equity shares of the nominal value of Rs. 10/- fully paid up in the Transferee Company for every 2 (Two) equity shares of Rs. 10/- each fully paid up held by such member in RICHIE.

4. Transferor Companies GIL and AAR and Transferee Company GML are under the Jurisdic on of the Registrar of Companies, Delhi and Haryana and Transferor Companies, HIPOLINE, LEXI and RICHIE are under the jurisdic on of the Registrar of Companies, West Bengal.

5. Pursuant to the Scheme 18 MW Power Plant Undertakings of GIL will be sold and transferred to the Transferee Company through Slump Sale at a considera on of Rs. 35 Crores payable in cash.

6. "Appointed Date of Slump Sale" means the open of business hours on 1st April 2019

7. "Appointed Date" means the open of business hours on 1st April 2019 a er the comple on of the slump sale.

Company has appointed BSE Limited as designated Stock Exchange for co-ordina ng with the SEBI in respect of the said Scheme and ma ers connected therewith.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of Companies Act, 2013 (hereina er referred to as "the Act"), Regula on 33 of the Securi es and Exchange Board of India (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015 (hereina er referred to as "Lis ng Regula ons") and applicable Accoun ng Standards, the Audited Consolidated Financial Statements of the Company for the financial year 2019-20, together with the AuditorsReport form part of this Annual Report.

OTHER DISCLOSURES

• The Managing Director & CEO of the Company has not received any remunera on or commission from any of the subsidiary companies;

• None of the Auditors of the Company have reported any fraud as specified under the second proviso of Sec on 143 (12) of the Companies Act, 2013 (including any statutory modifica on(s) or re-enactment(s) thereof for the me 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 di eren al rights as to dividend, vo ng or otherwise.

• In the prepara on of financial statements, no treatment di erent from that prescribed in an Accoun ng Standard has been followed.

ACKNOWLEDGEMENT

Your Directors wish to convey their apprecia on to all of the Companys employees for their contribu on towards the Companys performance. Your Directors would also like to thank the shareholders, employee unions, customers, dealers, suppliers, bankers, Governments and all other business associates for their con nuous support to the Company and their confidence in its management on behalf of the Board.

On behalf of the Board

C. P. Agrawal

Chairman

Date: June 29, 2020 Place: Gorakhpur

Dividend Distribu on Policy

1. Statutory Mandate

The Board of Directors (The ‘Board) of Gallan Ispat Limited ("the Company") has adopted the following Policy for Distribu on of Dividend to the Shareholders of the Company.

2. Background

The Steel industry is a capital-intensive industry. Most units of the owned by the Company entails substan al capital outlays.

A large propor on of the financing of the Companyis through equity capital. With a low level of borrowing in propor on to equity capital, the outlay on dividend forms a substan al part of the cost of capital. It is the Companys endeavour to maintain and pay dividend keeping market expecta ons in mind. The dividend paid as a propor on of earnings has been maintained accordingly.

The prevailing Governmental and geopoli cal environment directly impacts profit in the steel industry. Infrastructural development, both domes c and foreign, depends on factors that are beyond the control of the Company. In the past, the need to meet the general investors expecta ons of return on equity during the years of instability has resulted in a rela vely reasonable payout ra o.

3. Policy

This Policy for Distribu on of Dividend to Shareholders of the Company is framed in terms of Regula on 43 of the Securi es and Exchange Board of India (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015 (hereina er referred to as the "Lis ng Regula ons").

4. Dividend

The Board will finalise the dividend to be declared by the Company based on the above stated background while also considering the following: Dividend will be declared once a year based onthe profits as per the Audited Financial Statements for the year. The Board may declare an interim dividend a er sa sfying themselves about the distributable profit. Normally, the Dividend will be declared out of the current years profit of the Company, subject to the following: i) Companys need of Capital Expenditures/ Investment; ii) Cash Flow posi on.

Given that profits can be vola le, the Board to the extent feasible, in the quantum of Dividend paid to Shareholders. Should the current yearsprofit be inadequate, the Board may, a er considering the Carried Forward Balance in the Profit & Loss Account of the Company, declare dividend or declare dividend out of Reserves, as is permi ed under the law.

As such, the Company may declare theDividend out of: i) Current years profit – a) a er providing for deprecia on in accordance with Sub-sec on (2) of Sec on 123 of the Companies Act, 2013 ("Act") and b) a er transfer of such percentage of its profits for that Financial Year to reserves as may be required under the law and as the Board of Directors may deem fit; OR ii) Carried Forward Balance in the Profit & Loss Account; OR iii) Free Reserve as may be permi ed under law; OR iv) A combina on of (i), (ii) and (iii) above.

5. Factors to be considered for declara on ofDividend i) Capital Expenditure /Investment requirement of the Company for: a) New projects; b) Ongoing projects including expansion, renova on or modernisa on etc. c) Acquisi on of major fixed assets including land and buildings; d) Acquisi on of any business en ty etc. ii) Payment of any major liability; iii) Any other requirements for fund conserva on; iv) Agreement with lending ins tu ons.

6. Revision in the Policy

The Board of Directors will review the policy from me to me or when changes may be required.

7. General

All the words and expressions used in this Policy,unless defined hereina er, shall have the meaning respec vely assigned to them under the Lis ng Regula ons and in the absence of its defini on or explana on therein, as per the Companies Act, 2013 and the Rules, No fica ons and Circulars made/ issued thereunder, as amended from me to me.

A. CONSERVATION OF ENERGY

(a) Energy Conserva on Measures Taken

Steps taken for conserva on of energy:

Your Company is con nually taking necessary steps to absorb and adopt the latest technologies. These ini a ves enable the facili es to become more e cient and produc ve as the company expands, thereby helps in energy conserva on. All machinery and equipment are con nuously serviced, updated and overhauled in order to maintain them in good condi on. This resulted in consump on of lesser energy consump on. Energy Conserva on con nues to receive increased emphasis at all the units of the Company. Your Companys technical team monitors closely and vigorously various plants and equipments and suggests adop on of new and latest technology etc. and discuss to iden fy areas of improvement.

In addi on to the exis ng Energy Conserva on measures, the Engineering and Produc on departments in each manufacturing unit work closely towards improving the e ciency of genera on and also in the reduc on in energy consump on. Addi onally, constant e orts in con nuing all previous conserva on measures and increasing awareness of energy management amongst employees have con nued which should enable further savings to transpire going forward.

The measures taken in all the Companys manufacturing units can be briefly enumerated as below:

• Addi onal investments and proposals, if any, being implemented for reduc on of consump on of energy - Nil

• In respect of measures at (a) and (b) above for reduc on of energy consump on and consequent impact on the cost of produc on of goods- This has resulted in cost savings for the Company.

• Total energy consump on and energy consump on per unit of produc on as per Form "A" of the Annexure in respect of industries specified in the Schedule thereto:

FORM –A

Disclosure of Par culars with respect to conserva on of energy

A. Power & Fuel Consump on 2019-20 2018-19
1. Electricity
(a) Purchased
Total Unit in Lacs KWH 180.04 130.90
Amount Rs. in Lacs 1,876.88 1,176.52
Rate Per Unit (Rs.) 10.42 8.99
(b) Own Genera on
Total Units in Lacs KWH 2,583.31 2,670.66
Amount Rs. In Lacs 16,661.54 19,961.21
Rate per Unit (Rs.) 6.45 7.47
2. Coal
Quan ty - M.T. 3,61,091.08 3,40,512.23
Total Cost - Rs. in Lacs 25,678.23 27,566.19
Average rate - Rs. per M.T. 7,111.29 8,095.51
B. Consump on per unit of produc on
1. Electricity (Unit/M.T.)
- Agro 97.25 84.01
- Sponge Iron 63.91 61.34
- SMS (Furnace and Concast) 769.90 777.20
- Rolling Mills 125.74 112.52
2. Coal
- Power Plant (per 1000 KWH) 428.44 404.03
- Rolling Mills (Kg/M.T.) 17.50 18.90
- Sponge Iron (Kg/M.T.) 910.90 865.79

FORM –B

Disclosure of Par culars with respect to technology absorp on

RESEARCH & DEVELOPMENT (R & D)

Specific areas in which R & D carried out by the Company

No Research & Development work has been carried out by the Company.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1) E orts, in brief, made towards technology absorp on, adapta on etc.

• Absorbing and adap ng latest technology in maintenance system.

• Technical Interac on with expert.

• Con nuous e orts are being made towards improvements in exis ng produc on process.

2) Benefits derived as a result of the above e orts

• Improvement in quality of products.

• Cost reduc on

• Improvement in the exis ng process and produc vity.

• Knowledge of updated technology.

FOREIGN EXCHANGE EARNINGS AND OUTGO

1. Ac vi es rela ng to export, ini a ve taken to increase exports, development of new export markets for products and export plans – Nil

2. Total foreign exchange used and earned

2019-2020 2018-2019
(Rs. in Lacs) (Rs. in Lacs)
Raw Materials 4,178.56 17,033.09
Stores, Chemical and Packaging Materials 57.91 70.21
Capital Goods 168.51 79.06
Earning in foreign currency - -

MANAGERIAL REMUNERATION

Disclosures pertaining to remunera on and other details as required under Sec on 197(12) of the Companies Act,2013 read with Rule 5(1) of the Companies (Appointment and

Remunera on of Managerial Personnel) Rules, 2014 are as under:

(a) ra o of the remunera on of each director to the median remunera on of the employees of the Company for the financial year;

Name Designa on Ra o to median remunera on of Employees
Chandra Prakash Agrawal Chairman & Managing Director 27.69 : 1
Prem Prakash Agrawal Whole- me Director 27.69 : 1
Santosh Kumar Agrawal Director (Sales & Marke ng) 27.69 : 1
Ni n Mahavir Prasad Kandoi Director (Plant-Opera on) 27.69 : 1
Dindayal Jalan Independent Director N.A. *
Smita Modi Independent Director N.A. *
Ashtbhuja Prasad Srivastava Independent Director N.A. *
Sangeeta Upadhyay Independent Director N.A. *
Jyo rindra Nath Dey# Independent Director N.A. *
Sanchit Dubey# Independent Director N.A. *
Piyush Kankrania# Independent Director N.A. *
Sangeeta Upadhyay Independent Director N.A. *

* Except si ng fees, no remunera on is paid to the Non-Execu ve Independent Director.

# Resigned from the Board of Directors.

(b) Percentage increase in remunera on of each director, Chief Financial O cer, Chief Execu ve O cer, Company Secretary or Manager, if any, in the financial year;

Name Designa on % increase
Chandra Prakash Agrawal Chairman & Managing Director 50.00%
Prem Prakash Agrawal Whole- me Director 50.00%
Santosh Kumar Agrawal Director (Sales & Marke ng) 50.00%
Ni n Mahavir Prasad Kandoi Director (Plant-Opera on) 50.00%
Dindayal Jalan Independent Director N.A. *
Smita Modi Independent Director N.A. *
Ashtbhuja Prasad Srivastava Independent Director N.A. *
Sangeeta Upadhyay Independent Director N.A. *
Sangeeta Upadhyay Independent Director N.A. *
Mayank Agrawal Chief Execu ve O cer 20.00%
Amit Jalan Chief Financial O cer 10.99%
Nitesh Kumar Company Secretary 6.67%

(c) percentage increase in the median remunera on of employees in the financial year: 2.13%

(d) number of permanent employees on the rolls of company: 1,453

(e) explana on on the rela onship between average increase in remunera on and company performance: The profit before tax for the financial year ended March 31, 2020 decreased by 60.99% and the profit a er tax for the financial year ended March 31, 2020 decreased by 55.36%, whereas the increase in median remunera on is 2.13%.

(f) comparison of the remunera on of the Key Managerial Personnel against the performance of the company;

The total remunera on of KMP increased by 38.36%, whereas the profit before tax decreased by 60.99% and the profit a er tax decreased by 55.36%.

(g) average percen le increase already made in the salaries of employees other than the managerial personnel in the last- financial year and its comparison with the percen le increase in the managerial remunera on and jus fica on thereof and point out if there are any excep onal circumstances for increase in the managerial remunera on: 3.45% (non-Managerial personnel) and 10.06% (Managerial Personnel);

(h) comparison of remunera on of each of the Key Managerial Personnel against the performance of the company;

Name Designa on % increase Comparison
Chandra Prakash Agrawal Chairman & Managing Director 50% The profit before tax for the financial year ended March
Prem Prakash Agrawal Santosh Kumar Agrawal Whole- me Director Director (Sales & Marke ng) 50% 50% 31, 2020 decreased by 60.99% and the profita er tax for the financialyear ended March 31,
Ni n Mahavir Prasad Kandoi Director (Plant-Opera on) 50% 2020 decreased by 55.36%.
Mayank Agrawal Chief Execu ve O cer 50%
Amit Jalan Chief Financial O cer 50%
Nitesh Kumar Company Secretary 50%

(i) the key parameters for any variable component of remunera on availed by the directors; Companys financial results, the performance of the business unit, individual performance, skills and competence, fulfilment of various improvement targets or the a ainment of certain financial objec ves.

(j) the ra o of the remunera on of the highest paid director to that of the employees who are not directors but receive remunera on in excess of the highest paid director during the year; NIL

(k) We hereby a rm that the remunera on paid to the managerial and non-managerial personnel is as per the Remunera on Policy of the Company approved at the board mee ng dated 30.05.2014.

The Remunera on policy of the Company comprising the appointment and remunera on of the Directors, Key Managerial Personnel and Senior Execu ves of the Company including criteria for determining qualifica ons, posi ve a ributes, independence of a Director and other related ma ers has been provided in the Report.

Details of Top 10 Employees 2019-2020

Sr. Employee Name Father Name D.O.B Age Educa onal Qualifica on Date of Joining Salary Last Employment Desgina on Deptarment Rela on with Directors Experince
1 UMESH RAI CHANDU RAI 10/10/1973 46 10TH 10/05/2017 13,92,177 BHARAT STEEL, FOREMAN ROLLING MILL No 23
MUZAFFARNAGAR
2 AMIT KUMAR GAURI 18/05/1985 34 B.TECH 23/11/2017 14,14,328 ELECTROTHERM INDIA GENRAL SPONGE IRON No 13
NANDA LTD ,GUJRAT MANAGER
SHANKAR NANDA PROCESS
3 SANDEEP RAVINDRA NATH 15/04/1973 46 DIP. (MECH.) 03/09/2018 14,25,543 GALWALIYA ISPAT LTD., MARKETING OUT STATION No 21
KUMAR SRIVASTAVA KASHIPUR &SALES
SRIVASTAVA GENERAL
MANAGER
4 ANUP KUMAR SHANTI NIDHI 03/01/1965 54 B. TECH. 16/01/2019 16,47,176 RASHMI METALLICS, PRESIDENT - PROJECTS No 32
BEHERA BEHERA KHARAGPUR PROJECT
5 ASHUTOSH SRI SANTOSH 04/04/1978 41 01/05/2009 18,00,000 GOVIND MILL LTD SN.EXECUTIVE SPONGE IRON Son of 10
AGRAWAL KUMAR MIS Director
AGRAWAL
6 MAYANK SRI C.P.AGRAWAL 20/07/1984 35 BBA 01/05/2009 18,00,000 GOVIND MILL LTD CEO ADMIN Son of CMD 10
AGRAWAL
7 RAJESH KUMAR LATE CHAMBAIL 24/05/1959 60 DIP. (MECH.) 10/09/2018 18,06,927 SMC POWER G M SPONGE IRON No 33
MINHAS SINGH MINHAS GENERATION LTD., MECHANICAL
JHARSUGUDA
8 NITESH KUMAR Arjun Ram 04/07/1978 41 Company 11/08/2008 19,20,000 GREENPLY INDUSTRIES COMPANY OUT STATION No 16
Secretary, B. LTD SECRETARY &
Com (H) COMPLIANCE
OFFICER
9 PARASHURAM RAMJI SHUKLA 03/05/1960 59 B.SC 03/09/2018 19,74,338 ANJANI STEEL GENRAL STEEL MELT No 35
SHUKLA RAIGARH MANAGER SHOP
FURNACE
10 RAMARAO BALASAHEB 02/10/1971 48 AMIE- 31/03/2018 21,77,808 KSK ENERGY,WARDHA GENRAL POWER PLANT No 24
BALASAHEB KULKURANI MECH,BOE MANAGER

LOANS, INVESTMENT & GUARANTEE U/s 186 of the Companies Act, 2013

Rs. in Lacs
Sl. No. Par culars Loans Investments Guarantee
1 Loan to Gallan Metal Limited 500.00 NIL NIL