India Steel Works Ltd Directors Report.

Dear Members,

Your Directors present their 32nd Annual Report and the Company’s Audited Accounts for the financial year ended 31st March, 2019.

1. FINANCIAL HIGHLIGHTS

The summarized financial results of the Company for the financial year 2018-19 are given hereunder:

(Rs. in Lakh)

Particulars Year ended 31.3.2019 Year ended 31.3.2018
Sales including excise duty/Income including Job work operations 53,179.42 96,729.01
Operating Profit(EBITDA) 1,880.11 3,011.09
Finance Costs 1,330.22 1,674.43
Provision for Depreciation 1,089.90 840.68
Profit /(Loss) before tax & exceptional items -540.01 495.98
Exceptional Items - -76.53
Current tax 2.04 -
Profit /(Loss) after Tax -537.98 419.45
Items not to be classified to statement of profit or Loss in subsequent years -52.69 88.70
Total comprehensive income -590.67 508.15

2. CHANGE IN THE NATURE OF BUSINESS

There was no material change in the nature of business of the Company during the year.

3. OPERATIONS

During the year under review, the gross revenue has reduced to Rs. 55,757.06 lakh as against Rs. 99,682.86 lakh in the previous year. The performance of the Company was low in last year due to inadequate supply of raw material. The Company has adopted useful life method for calculation of depreciation under IND AS which has resulted in reduction of depreciation expenses.

4. DIVIDEND

Keeping in view the need for strengthening financial soundness of the company and considering accumulated losses the Directors regret their inability to declare any dividend on Equity Shares of the Company during the year under review. However, your Directors are pleased to recommend a Final Dividend @ 0.01% on total paid up Preference share capital of the company for the financial year ended 31st March, 2019, payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date for the Financial Year 2018-19. The final dividend amounting to Rs. 75,513/- on total paid up preference shares inclusive of tax on distributed profits.

5. FINANCE:

(i) Share Capital

The paid-up Equity Share Capital as on 31st March, 2019 was Rs. 3980.81 Lakh. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.

(ii) Fixed Deposits

The Company has not accepted any deposits from the shareholders or public under applicable provisions of the Companies Act 2013 or rules made there under.

(iii) Particulars of loans, guarantees or investments

The company has not provided any loan or guarantee directly or indirectly to any person or body corporate, during the year under review. The Company also has incorporated a Wholly Owned Subsidiary namely Indinox Steels Private Limited by investing 50,000 Equity shares of Rs. 10/- each as on 16/06/2018.

6. CORPORATE SOCIAL RESPONSIBILITY:

The Company believes in development which is beneficial for the society at large and to practice the corporate values through commitment to grow in socially and environmentally responsible way while meeting the interest of our stake-holders. During the year, the Company voluntarily has undertaken CSR initiatives and contributed Rs. 6.83 lakhs for educational support to underprivileged students from poor town, remote rural and conflict afflicted communities in Khopoli town area, distribution of books & note books, scholarship to brilliant students, food and medicine help to poor in Khopoli village etc.

7. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

Pursuant to Section 177(9) of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Company has adopted a Whistle-Blower Policy, whereby employees are free to report violations of laws, rules, and regulations, or unethical conduct to the Audit Committee. The details of the Whistle Blower Policy are explained in the Corporate Governance Report and also posted on the website of the Company at www.indiasteel.in under the head ‘Investor Relations’ and the weblink is provided in the Corporate Governance Report During the year the Audit Committee has not received any reference under the policy.

8. RISK MANAGEMENT POLICY:

The Company has a risk management policy to identify, mitigate elements of risk, if any, which in the opinion of the Board may threaten the existence of the company. The Board of Directors and senior management team assess the operations and operating environment to identify potential risks and take necessary mitigation actions.

9. RELATED PARTIES CONTRACTS OR ARRANGEMENTS:

The Company has made materially significant Related Party Transactions, as approved by the non-interested shareholders at the 31st Annual General meeting of the Company. Further the said material related Party Transactions made during the year under review were on an arm’s length basis and in the ordinary course of business. Required disclosures are made in Annexure-E in Form No. AOC 2. On the recommendation of the Audit Committee, the Board of Directors has adopted a policy on Related Party Transactions, which is also uploaded on the website of the Company www.indiasteel.in under the head ‘Investor Relations’ and the weblink is provided in the Corporate Governance Report. The Policy envisages the procedure governing related party transactions required to be followed to ensure compliance with the applicable laws and regulations as well as to ensure that the Related Party Transactions are managed and disclosed in accordance with the legal and accounting requirements.

10. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant and material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

11. DIRECTORS

(i) Appointment

Mr. Sudhir Gupta (DIN: 00010853) have been re-appointed as "Managing Director" of the Company subject to approval of the shareholders of the Company for a period of 3 years w.e.f. 1st October, 2019. Mr. Deepak Kumar Gaur (DIN: 07636636) have been re-appointed as "Whole Time Director" of the Company subject to approval of the shareholders of the Company for a period of 3 years with effect from 9th November, 2019. Mr. Bimal Desai (DIN: 00872271) have been appointed as Non-executive director of the company subject to approval of the shareholders of the Company. The details of the Director are given in the Corporate Governance Report as well as in the Notice of the Annual General meeting.

In accordance with the provisions of the Companies Act, 2013 in accordance with the Articles of Association of the Company Mr. Varun Gupta retires from office by Rotation, and being eligible, offers themselves as provided in the notice are eligible for reappointment.

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 Regulations 16 (1) (B) of SEBI (LODR), 2015.

Attention of the Members is invited to the relevant items in the Notice of the Annual General Meeting seeking your approval to the aforesaid appointments.

(ii) Casual Vacancy

The Company had to bear the huge loss with the death of Mr. Ashwinkumar Gupta, Chairman of the Company as on 7th May 2019. His death came as a hard blow to the Company. The Board expresses its heart-felt grief on this irreparable loss. Mr. Anant Badjatya, Nominee Director has vacated his office as per provisions of Section 167(1) of the Companies Act 2013.

(iii) Board Evaluation

In compliance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Nomination & Remuneration Committee. The manner in which the evaluation was been carried out has been explained in the Corporate Governance Report.

(iv) Board Meetings

During the year, Six (6) Board Meetings were convened and held. The details are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

(v) Nomination & Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a Policy for selection, appointment and remuneration of Directors and Key Managerial Personnel in accordance with Section 178 of the Companies Act, 2013. More details of the same are given in the Corporate Governance Report.

(vi) Audit Committee Policy

The Board has, on the recommendation of the Audit committee, framed a policy for selection, appointment and remuneration of Statutory Auditors and internal Auditor in accordance with the Section 177 of the Companies Act, 2013. More details of the same are given in the Corporate Governance Report.

12. DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of the Section 134(3)(c) of the Companies Act, 2013:

I. That in the preparation of the annual financial statements for the year ended March 31, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

II. That such accounting policies, as mentioned in the Financial Statements as ‘Significant Accounting Policies’ have been selected and applied consistently and judgments and estimates have been made 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, 2019 and of the profit of the Company for the year ended on that date;

III. That 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. That the annual financial statements have been prepared on a going concern basis;

V. That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; VI. That proper system’s to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

13. AUDITORS

(i) Statutory Auditors & Audit Report

The Company has received a letter from M/s Laxmikant Kabra & Co., Chartered Accountants regarding their eligibility for the appointment as statutory Auditors of the Company. The said auditors were appointed effective Annual General Meeting held on 20th August, 2018 for a period of 5 years subject to ratification at every Annual general meeting. The shareholders at the ensuing annual general meeting will consider ratification of the appointment of the Statutory Auditors for financial year 2019-20.

There is no qualification, reservation or adverse remark or disclaimer made by the auditor in his report.

(ii) Cost Auditors

The Board has appointed Mr. Vishesh N. Patani (Membership No. 30328) cost Accountants, Mumbai under section

148 of the Companies Act, 2013 for conducting the audit of cost records of the Company for the financial year ending 31st March, 2020. Approval of the members by way of ordinary resolution ratifying the remuneration to be paid to the cost auditors is suitable included in the notice calling the Annual General Meeting of the Company.

The Cost Auditor have further confirmed that their appointment is within the limits of section 141(3)(g) of the Companies Act, 2013.

(iii) Secretarial Auditor & Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mrs. Deepika Arora (ACS 29794 & CP No. 11355) Practicing Company Secretary, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as "Annexure - A". There is no qualification, reservation or adverse remark or disclaimer made by the Secretarial auditor in her report.

(iv) Secretarial Compliance Report

Pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015 the Company has obtained annual Secretarial Compliance Report for the financial year ended 31st March, 2019. The report has been annexed herewith as "Annexure B" (v) Branch auditor:

The Company has branch outside India and may also open/acquire new branches outside India in future. It may be necessary to appoint branch auditors for carrying out the audit of the accounts of such branches, subject to approval of shareholders.

14. NTERNAL I FINANCIAL CONTROL SYSTEMS AND THEIR ADEqUACY:

Your Company’s Financial Statements are prepared on the basis of the Significant Accounting Policies that are carefully selected by Management and approved by the Audit Committee and the Board. These Accounting policies are reviewed and updated from time to time. Your Company uses ERP Systems as a business enabler and also to maintain its Books of Account. The transactional controls built into the ERP systems ensure appropriate segregation of duties, appropriate level of approval mechanisms and maintenance of supporting records.

Kindly refer to the write-up in the section Management Discussion and Analysis.

15. EXTRACT OF THE ANNUAL RETURN:

The extract of the annual return in Form No. MGT – 9 annexed as "Annexure-C" forms part of the Board’s report and the same are being hosted on the website of the Company at www.indiasteel.in at the www.indiasteel.in/pdfs/2016/ mgt-9-iswl-2018-19.pdf.

16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company has adopted the generally accepted technology for its products. Particulars regarding conservation of energy foreign exchange earnings and outgo are given in "Annexure D" as required under The Companies Act, 2013 read with The Companies (Accounts) Rules, 2014 and forms part of this report.

17. DISCLOSURE UNDER THE SExUAL HARRASSMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND

REDRESSAL) ACT, 2013:

The Company has in place an Anti-Sexual harassment Policy in line with the requirements of the Sexual harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013. An internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaints pertaining to sexual harassment were received during FY 2018-19.

18. MANAGEMENT DISCUSSION AND ANALYSIS:

A detailed analysis of your Company’s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

19. CORPORATE GOVERNANCE:

The Company has implemented the provisions of Chapter IV of SEBI (LODR), 2015 relating to the Corporate

Governance requirements. A Report on Corporate Governance, the Report of Auditors Certificates thereof is given as annexure to this report.

20. PARTICULARS OF EMPLOYEES:

During the year under review, the Company has not employed any individual whose remuneration falls within the purview of the limits prescribed under the provisions of Section 197 of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are annexed as "Annexure F".

21. NDUSTRIAL RELATIONS:

During the year under review, industrial relations at the Company’s unit continued to remain cordial and peaceful.

22. ACKNOWLEDGEMENTS:

The Directors express their appreciation for co-operation and encouragement received from all the Shareholders, Business Associates, Dealers, and Insurers, vendors, investors and bankers during the year. The Directors also place on record their appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.

Sudhir Gupta For and on behalf of the Board of Directors of
Managing Director INDIA STEEL WORKS LIMITED
DIN: 00010853 Varun Gupta
Address: 541/C, Ashok, Adenwala Road, Director
King Circle, Matunga, Mumbai 400013 DIN: 02938137
Place: Mumbai Address: 541/C, Ashok, Adenwala Road,
Date: 29/05/2019 King Circle, Matunga, Mumbai 400013