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Dear Members,

DIRECTORS REPORT

Your Directors are pleased to present the 20th Annual Report of your company on the operations and performance along with the Audited Financial Statements and the Auditors Report thereon, for the year ended on 31st March, 2023.

FINANCIAL HIGHLIGHTS

? in Crores

Particulars

31st March, 2023

31st March, 2022

Total Revenues 510.13 534.53
Total Expenditure 495.07 509.13
Profit before interest depreciation, extraordinary item and tax 15.06 25.40
Depreciation and Interest 9.54 9.16
Profit / (Loss) before exceptional, extraordinary item and tax 5.52 16.24
Exceptional & Extraordinary item - -
Profit / (Loss) before tax 5.52 16.24
Tax Expense / Deferred tax 1.97 4.70
Net Profit / (Loss) for the year 3.55 11.54
Total Comprehensive income 0.15 0.13
Profit / (Loss) Brought forward from last year (83.97) (95.64)
Balance Carried forward (80.27) (83.97)

STATE OF COMPANYS AFFAIRS / PERFORMANCE OVERVIEW

During the year under review Total Revenue from operation has decreased from ? 534.53 Crores to ? 510.13 Crores as compared to previous years turnover. Company has registered a net profit of ? 5.52 Crores in comparison to net profit of ? 16.24 Crores during previous year.

During the year under review, your Company has made full & final payments to ARCs in terms of the settlement with bank & financial institutions.

DIVIDEND

As the Company has other pipelined projects for growth the Directors of your Company have not recommended dividend for the financial year 2022-23.

BUSINESS ACTIVITY

The company is engaged in manufacture of Sponge Iron, Ferro Alloys and Power. Company is generating power on account of waste heat recovery system resulting economic price. Company is having its power plant of 40 MW. Power generated is used for captive consumption. There has been no change in the nature of business of the Company.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The company does not have holding or subsidiary companies during the year and no other company has become holding / subsidiary/ joint venture / associate. The Company is an Associate Company of M/s. Shah Alloys Limited as it is holding more than 20% of the Equity Share Capital in the Company as a Promoter Company.

SHARE CAPITAL

During the financial year ended on March 31, 2023 there was no change in the authorised and paid-up share capital of the Company.

DEPOSIT

The Company has not accepted any deposit during the year under review and no amount against the same was outstanding at the end of the year falling within the ambit of Section 73 of the Companies Act, 2013 (the act) and the Companies (Acceptance of Deposits) Rules, 2014.

DETAILS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

During the year under review the Company has not made any inter corporate loans, investments, given any corporate guarantee to any other body corporate, subsidiary, associate or any other company.

LISTING OF SHARES

The equity shares of the Company are listed on the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). The listing fee for the year 2023-24 has been paid to the credit of both the Stock Exchanges.

DETAILS OF DIRECTORS OR KMPS APPOINTMENT OR RESIGNATION

The Board of Directors consists of nine (09) members, of which five (05) are Independent Directors including one Women Independent Director.

Directors:

During the financial year 2022-23, there were no changes in the composition of Board. However, post 31st March, 2023, the Board of Directors of the Company, based on the approval and recommendation of members of Nomination and Remuneration Committee has appointed Shri Piyush Chandarana (DIN: 08675864), as Additional Director designated as Whole-time Director w.e.f. August 25, 2023. The Board of Directors have considered the, diverse skills, leadership capabilities, general management and Industry knowledge. Shri Piyush Chandarana has done Bachelors Degree in Commerce and on the recommendation of the Nomination and Remuneration Committee, the Board of Directors proposes the name of Shri Piyush Chandarana to the Members for his appointment as Whole-time Director of the Company by way of Ordinary Resolution at the 20th Annual General Meeting of the Company for the period of three (03) consecutive years commencing from August 25, 2023 up to August 24, 2026. Shri Piyush Chandarana shall be liable to retire by rotation.

Key Managerial Person:

During the year under review there was no change with respect to appointment or resignation of Key Managerial Persons. However, post 31st March, 2023, Shri Manish Daulani (M. No.: A53487), has resigned w.e.f. 12th August, 2023 from the post of Company Secretary & Compliance Officer (Key Managerial Person) and Shri Vinay Kumar Mishra (M. No.: F11464), was appointed w.e.f. 25th August, 2023 on the position of Company Secretary & Compliance Officer (Key Managerial Person) of the Company in terms of Section 203 of Companies Act, 2013 and regulation 6(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015.

MEETINGS OF THE BOARD AND COMMITTEES

During the year under review, total seven (07) meetings of Board of Directors were held on the following dates 28th May, 2022, 28th June, 2022, 9th August, 2022, 13th September, 2022, 11th November, 2022, 20th January, 2023 and 6th February, 2023. Details of meetings are given in the Corporate Governance Report annexed herewith as Annexure – 6 and forms part of this report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declarations from each Independent Director of the Company confirming that he/she met with the criteria of independence as laid out in sub-section (6) of Section 149 read with schedule IV of the Companies Act, 2013 and under regulation 16(1)(b) and 25(8) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015. In the opinion of the Board, the Independent Directors fulfill the criteria of independence as provided under the Act, Rules made thereunder read with applicable provisions of the Listing Regulations, and they are independent of the management and also possess requisite qualifications, experience, and expertise and hold highest standards of integrity. The report on Corporate Governance which is forming part of the Annual Report contains the disclosure regarding the skills, expertise, competence and proficiency possessed by the Directors. Further, there has been no change in the circumstances affecting their status as Independent Directors of the Company. The Board has taken on record the declarations of the Independent Directors, after undertaking due assessment of the veracity of the same.

BOARD DIVERSITY

A diverse Board enables efficient functioning through differences in perspective and skill, and also fosters differentiated thought processes at the back of varied industrial and management expertise, gender, knowledge and geographical background. The Company follows diverse Board structure.

BOARD EVALUATION

As per the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015, the formal annual evaluation was carried out for the Boards own performance, its committee & Individual directors. The manner and detail in which evaluation was carried out is stated in the Corporate Governance Report which is herewith as Annexure – 6 and forms a part of this report.

INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY

The details in respect of internal financial control and their adequacy are included in Management Discussion and Analysis Report, which forms part of this report.

CORPORATE GOVERNANCE REPORT

The Company is committed to observe good corporate governance practices. The report on Corporate Governance for the financial year ended 31st March, 2023, as per regulation 34(3) read with Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 is enclosed herewith as Annexure – 6 and forms part of this Report.

CORPORATE GOVERNANCE CERTIFIFATE

As required by Clause 10 (i) of Part C under Schedule V of the SEBI Listing Regulations, the Company has received a certificate from M/s. Kamlesh M. Shah & Co. (ACS: 8356, COP: 2072), Practicing Company Secretaries certifying that none of our Directors have been debarred or disqualified from being appointed or continuing as Directors of the Company by Securities and Exchange Board of India or Ministry of Corporate Affairs or such other statutory authority.

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

As required under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, particulars relating to conservation of Energy, R & D, Technology absorption and foreign Exchange earnings / outgo are separately provided in the annexure to this report as Annexure -1.

RISK MANAGEMENT

The Company had put in place an enterprise wide risk management framework. This holistic approach provides the assurance that, to the best of its capabilities, the Company identifies, assesses and mitigates risks that could materially impact its performance in achieving the stated objectives. The Audit committee ensures that the Company is taking appropriate measures to achieve prudent balance between risk and reward in both ongoing and new business activities. The Committee reviews strategic decisions of the Company and on regular basis, reviews the Companys portfolio of risks and considers it against the Companys Risk Appetite. The Committee also recommends changes to the Risk Management Technique and / or associated frameworks, processes and practices of the Company.

WHISTLE BLOWER POLICY AND VIGIL MECHANISM

The Company has put in place a Whistle Blower Policy and has implemented a Vigil Mechanism, whereby employees, directors and other stakeholders can report matters such as generic grievances, corruption, misconduct, fraud, misappropriation of assets and non- compliance of code of conduct to the Company. The policy safeguards the whistle blowers to report concerns or grievances and also provides a direct access to the Chairman of the Audit Committee. During the year under review none of the personnel has been denied access to the Chairman of Audit Committee.

CORPORATE SOCIAL RESPONSIBILITY

As per the provisions of section 135 of the Companies Act, 2013 and rules made thereunder, the amount required to be spent on CSR activities during the year under review, is ? 30,48,140/- and the Company has spent ? 30,50,000/- during the Financial Year ended March 31, 2023. The composition and other details of the CSR Committee is included in the Corporate Governance Report which form part of the Boards Report. Further the details pursuant to Annual Report on CSR activities for the Financial Year 2022-23 is separately provided in the annexure to this report as Annexure - 5.

The Board in its meeting held on 29th May, 2023 revised the existing CSR Policy of the Company to harmonize with the amendments carried out by the Ministry of Corporate Affairs in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

DIRECTORS RESPONSIBILITY STATEMENT

In Compliance with Sections 134(3)(c) and 134(5) of the Companies Act, 2013, the Board of Directors to the best of their knowledge and hereby confirm the following:

  1. In the preparation of the annual accounts for the financial year ended 31st March, 2023 as far as possible and to the extent, if any, accounting standards mentioned by the auditors in their report as not complied with, all other applicable accounting standards have been followed along with proper explanation relating to material departure;
  2. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and profit and loss account of the Company for that period;
  3. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
  4. The Directors had prepared the annual accounts on a going concern basis; and
  5. The directors in the case of a listed company had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
  6. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The policy of the Company on Directors appointment and remuneration, including criteria for determining qualifications, independence and other matters as provided under subsection (3) of Section 178 of the Companies Act, 2013 is available on the Companys website at www.salsteel.co.in

DISCLOSURE UNDER SECTION 22 OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL), ACT, 2013

In accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, a committee has been established at the offices for this purpose. There were no complaints pending for the Redressal at the beginning of the year and no complaints received during the financial year.

PARTICULARS OF THE EMPLOYEES

Information pursuant to rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as Annexure-2. Further, particulars of employees remuneration, as prescribed under section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are not attached with this report since there was no employee who was in receipt of excess remuneration as prescribed.

RELATED PARTIES TRANSACTIONS

During the financial year, all transactions entered into with the Related Parties as defined under Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015, were in the ordinary course of business and on an arms length basis and as such did not attract provisions of section 188 (1) of Companies Act, 2013. The Company has formulated policy on related party transactions. Particular of related party transactions in prescribed Form AOC-2 is attached at Annexure–3. Approvals from the Audit Committee are obtained even for transactions which are in ordinary course of business and repetitive in nature. Further, on quarterly basis, disclosures are made to the Audit Committee and to the Board. Details of related party transactions are given in the notes to financial statements.

None of the Independent Directors have any pecuniary relationship with your Company.

DISCLOSURE OF ACCOUNTING TREATMENT

The financial statements have been prepared in accordance with Indian Accounting Standards (IND AS). The Company has prepared these financial statements to comply in all material respects with the IND AS, notified under section 133 of the Companies Act, 2013 ("the Act") read together with paragraph 7 of the Companies (Accounts) Rules 2014.

AUDITORS AND AUDIT REPORTS

  1. Cost Auditors
  2. Pursuant to the provisions of Section 148 of the Companies Act, 2013 and the Rules made there under M/s. Ashish Bhavsar & Associates, Cost Accountants were appointed for auditing cost accounting records of the Company for the year ending 31st March, 2023. Board has further appointed M/s. Ashish Bhavsar & Associates, Cost Accountants as Cost Auditors for the year ending 31st March, 2024 subject to approval of remuneration by the members of the Company in the Annual General Meeting.

    Disclosure on maintenance of Cost Records

    The Company made and maintained the Cost Records under Section 148 of the Companies Act, 2013 (18 of 2013) for the Financial Year 2022-23

  3. Internal Auditor
  4. The Company has appointed an Independent firm of Chartered Accountants to act as an Internal Auditor as per suggestion of auditors and recommendation of the Audit Committee in order to strengthen the internal control system for the Company.

  5. Secretarial Auditor
  6. Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with rules made thereunder, the Board of Directors has appointed M/s. Kamlesh Shah & Co., Practicing Company Secretaries, as Secretarial Auditor to conduct Secretarial Audit of the Company for the Financial Year 2023-24. The report submitted by the Secretarial Auditor in Form MR-3 for the financial year ended as on 31st March, 2023 is attached to this report as Annexure-4. Remarks of secretarial auditor are self-explanatory.

    Annual Secretarial Compliance Report

    Pursuant to regulation 24A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015, Secretarial Compliance Report for the financial year ended 31st March, 2023 on compliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunder, was obtained from M/s. Kamlesh Shah & Co., Practicing Company Secretaries, Secretarial Auditor.

    Certificate on Corporate Governance

    The Company is committed to observe good corporate governance practices. The report on Corporate Governance for the financial year ended 31st March, 2023, as per regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report. The requisite Certificate from the Practicing Company Secretary of the Company confirming compliance with the conditions of Corporate Governance is annexed to this report as Annexure - 7.

    Certificate of Non-Disqualification of Directors

    A certificate of Non-Disqualification of Directors for the Financial Year 2022-23, pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 issued by Practicing Company Secretary is annexed to this report as Annexure - 8.

  7. Statutory Auditors

Members have at their 19th Annual General Meeting held on September 23, 2022, approved the re-appointment of M/s. Parikh & Majmudar, Chartered Accountants, as statutory auditors of the for a terms of five years as per provisions of the Companies Act, 2013.

Statutory Auditors Report

The observations of Statutory Auditor in its reports on standalone and consolidated financials are self-explanatory and therefore do not call for any further comments.

Details in respect of frauds reported by auditors

There were no instances of fraud reported by the auditors. Further, Tthere are no Qualifications, reservations or adverse remarks contain in the Auditors Report for the year under review.

MATERIAL CHANGES / INFORMATION

  1. There have been no material changes or commitments after the closure of the financial year up to the date of this report that may have substantial effect on the business and financial of the Company.
  2. No significant and material orders have been passed by any of the regulators or courts or tribunals impacting the going concern status and companies operations in future.

ANNUAL RETURN

Annual Return in Form MGT-7 in compliance with section 92 of the Companies Act, 2013 read with applicable rules made thereunder is available at the website of the Company i.e. www.salsteel.co.in.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these matters during the year under review:

  • Details relating to deposits covered under Chapter V of the Act.
  • Issue of equity shares with differential rights as to dividend, voting or otherwise.
  • Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except Employees Stock Options Schemes referred to in this Report.
  • Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.
  • No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.
  • No fraud has been reported by the Auditors to the Audit Committee or the Board.
  • There has been no change in the nature of business of the Company.
  • There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the Financial Year 2022-23.
  • There was no instance of onetime settlement with any Bank or Financial Institution during the Financial Year 2022-23.

APPRECIATION

Your Directors place on record their sincere appreciation for the valuable support and co-operation as received from government authorities, Financial Institutions, Banks and ARCs during the year. Directors are also thankful for the support extended by Customers, Suppliers and contribution made by the employees at all level. Directors would also like to acknowledge continued patronage extended by Companys shareholders in its entire endeavor.

CAUTIONARY STATEMENT

Statement in the Boards Report and the Management Discussion and Analysis describing your Companys objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence your Companys operations include global and domestic demand and supply conditions affecting selling price of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations

For and on behalf of the Board of Directors of

SAL Steel Limited

Sd/-

Rajendra V. Shah

Date: 25th August, 2023 Chairman

Place: Santej, Gujarat DIN: 00020904

Registered Office:

5/1 Shreeji House, B/h M.J. Library,

Ashram Road, Ahmedabad - 380 006 CIN: L29199GJ2003PLC043148