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Electrosteel Castings Ltd.

BSE: 500128 Sector: Engineering
BSE 00:00 | 28 Feb 13.70 -0.87






NSE 00:00 | 28 Feb 13.65 -0.90






OPEN 14.05
VOLUME 27789
52-Week high 23.00
52-Week low 10.40
P/E 5.57
Mkt Cap.(Rs cr) 593
Buy Price 13.40
Buy Qty 105.00
Sell Price 14.10
Sell Qty 500.00
OPEN 14.05
CLOSE 14.57
VOLUME 27789
52-Week high 23.00
52-Week low 10.40
P/E 5.57
Mkt Cap.(Rs cr) 593
Buy Price 13.40
Buy Qty 105.00
Sell Price 14.10
Sell Qty 500.00

Electrosteel Castings Ltd. (ELECTCAST) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the Sixty Fourth Annual Report together withAudited Annual Financial Statements (including Audited Consolidated Financial Statements)of the Company for the Financial Year ended 31 March 2019.




FY 2018-19 FY 2017-18 FY 2018-19 FY 2017-18
Revenue from Operations 2390.61 2026.08 2699.44 2268.36
Earnings Before Interest Taxes Depreciation Amortisation 410.78 305.13 451.59 337.21
and Exceptional Item
Less : Finance Costs 225.40 202.32 234.65 210.28
Less : Depreciation and Amortisation expense 54.82 59.22 58.51 62.40
Profit Before Exceptional Item & Tax 130.56 43.59 158.43 64.53
Less: Exceptional Item 789.90 183.97
Profit / (Loss) Before Tax (659.34) 43.59 (25.54) 64.53
Less : Tax Expense (23.48) (3.40) (18.00) (1.08)
Profit / (Loss) After Tax (635.86) 46.99 (7.54) 65.61
Share of Profit/(Loss) in Associates and Joint Ventures 46.20 58.58
Profit / (Loss) After Tax including share of Associate and Joint (635.86) 46.99 38.66 124.19
Attributable to :
Owners of the Parent 38.17 124.03
Non-Controlling Interest 0.49 0.16
Other Comprehensive Income (net of tax) (3.32) 1.94 (3.69) (8.75)
Total Comprehensive Income (639.18) 48.93 34.97 115.44
Attributable to :
Owners of the Parent 34.48 115.28
Non-Controlling Interest 0.49 0.16
Opening balance in Retained Earnings 1087.86 1060.75 656.49 552.48
Profit / (Loss) for the period (635.86) 46.99 38.17 124.03
Re-measurement of defined benefit plans 1.22 0.10 1.22 0.10
Dividend including dividend distribution tax (14.66) (21.48) (14.66) (21.48)
Transfer to Debenture Redemption Reserve
Transfer from Debenture Redemption Reserve 62.50 62.50
Transfer to Statutory Reserve (1.28) (0.14)
Transfer to General Reserve
State capital investment subsidy 1.50 1.50
Closing Balance in Retained Earnings 501.06 1087.86 742.44 656.49


In view of absence of distributable profits your Directors are unable to recommend anydividend for the year under review.


In view of losses incurred by your Company during the year no amount has beentransferred to the General Reserve for the Financial Year ended 31 March 2019.


The Company's Revenue from Operations on standalone basis was reported at Rs.2390.61Crores during the year under review as compared to Rs.2026.08 Crores reported in theprevious year. The Export sales increased by around 71% from Rs.610.22 Crores in 2017-18to Rs.1046.82 Crores in 2018-19 due to increase in volume of sales and selling price.The Company's profit / (loss) after tax (PAT) for the Financial Year 2018-19 was reportedat Rs.(635.86) Crores as against Rs.46.99 Crores for Financial Year 2017-18. During theyear there was an exceptional loss of Rs.789.90 Crores on account of fair valuation ofinvestment in the shares of Electrosteel Steels Limited and advance and trade receivableswritten off as per approved resolution plan as confirmed by Hon'ble National Company LawAppellate Tribunal (NCLAT) by its order dated 10 August 2018.

The Revenue from Operations on consolidated basis for the year ended 31 March 2019increased by 19% from Rs.2268.36 Crores in 2017-18 to Rs.2699.44 Crores in 2018-19. Theconsolidated PAT for the year ended 31 March 2019 was Rs.38.66 Crores as against PAT ofRs.124.19 Crores for the previous Financial Year.

During the year under review the production of Ductile Iron (DI) Pipes was 303838MT as against 292714 MT in the previous year. The production of Cast Iron (CI) Pipes atElavur was 31930 MT as against 18616 MT in the previous year.

DI Fittings & Accessories produced 12085 MT of DI Fittings in 2018-19 as against9498 MT in 2017-18. Production productivity product variety & quality and despatchetc. have been improved at both Haldia and Khardah Fittings Plant. Both Domestic andExport despatch of Fittings from Haldia and Khardah Plant has enhanced. Further initiativehas been taken for improvement in the current Financial Year also.

The Company continues to provide special attention towards improvement in productionand productivity with higher energy effciency. Further to meet and improve upon theexpectations of both International and Domestic customers the Company has continued itsactivities towards development and to add a number of product variants to its existingproduct base.


There has been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of this Report.

There has been no change in the nature of business.


The Management Discussion and Analysis Report forms an integral part of this Report andgives details of the industry structure developments opportunities threats performanceand state of affairs of the Company's business internal controls and their adequacy riskmanagement systems including a section on ‘Risk Management' and other materialdevelopments during the Financial Year 2018-19 is annexed as Annexure 1 forming part ofthis Report.


Water and sewerage infrastructure development in Indian urban and rural sector has beenthe key engine of growth acceleration for the DI Pipe Industry. With the growth ofeconomy India's urbanization trends have scope to significantly accelerate in comingyears. Further the country faces immense task of transporting drinking water with alimited treatment facility and inadequate transmission and distribution network. Rapidlygrowing urban centers also have limited infrastructure for waste water disposal. As awhole the Indian water and waste water market is having a CAGR of about 10%. To improveand sustain the water availability the Central Government as well as the respective StateGovernments have initiated a number of major urban development schemes to transform theurban scenario of the country resulting in large investment in the Water Supply &Sewerage System. A major Initiative is AMRUT Yojna (Atal Mission for Rejuvenation andUrban Transformation). Under AMRUT 500 Small City is undergoing infrastructure revamping.A major part of the investment will be spent on Water Supply and Sewerage. Another 20000Crores will be spent under the ‘Namami Gange Programme' where cities on the bank ofriver Ganga and its tributaries will have modern Waste Water conveyance and treatmentfacilities to make the rivers clean. At the same time the Company continues to maintainits dominant position in the export market against competitors. The world economy is onthe revival phase and a large portion of the production is being exported. The Companyafter entrenching itself in the discerning European and gulf markets is continuouslyexpanding the business to new countries like Tanzania Zambia Congo Nigeria SenegalMorocco in Africa Vietnam Cambodia Myanmar in South East Asia.


During the year under review the Company had issued and allotted 48526861 EquityShares of face value of Re.1/- each fully paid-up at a price of Rs.28.85 per Equity Share(inclusive of a share premium of Rs.27.85 per Equity Share) on preferential basis topromoter and non-promoter for cash consideration of Rs.140 Crores approx. Pursuant to theabove allotment the Issued Subscribed and Paid-up Share Capital of the Company hasincreased to Rs.405482183/- comprising of 405482183 Equity Shares of Re.1/- each.

The Company has not issued shares with differential voting rights. It has neitherissued employee stock options nor sweat equity shares and does not have any scheme to fundits employees to purchase the shares of the Company. As on 31 March 2019 none of theDirectors of the Company hold instruments convertible into Equity Shares of the Company.

FINANCE Debentures

The Company has redeemed the following Secured Redeemable Non-Convertible Debentures(NCDs) during the Financial Year 2018-19:

Series of Debentures Amount
(Rs. in Crore)
Series IV – 11.00% 50.00
Series VI – 11.75% 125.00
Series VII – 12.00% 75.00
Total 250.00

The Company had been regular in payment of interest on its NCDs.

Credit Rating

CARE Ratings Limited (‘CARE') has reafirmed the Company's credit rating for thelong-term borrowings as "CARE BBB+" and for short-term borrowings as "CAREA2". The outlook is Stable.

During the year India Ratings & Research Private Limited has assigned a long termIssuer Rating of "IND A-" and for short term borrowings as "IND A2+".The outlook is Stable.


During the year under review there were no significant or material order passed by theregulators or courts or tribunals impacting the going concern status and the Company'soperations in future.

However in pursuance of the Order dated 24 September 2014 issued by the Hon'bleSupreme Court of India (the Order) followed by the Ordinance promulgated by the Governmentof India Ministry of Law & Justice (legislative department) dated October 21 2014(Ordinance) for implementing the Order allotment of Parbatpur coal block (coalblock/mines) to the Company which was under advanced stage of implementation had beencancelled w.e.f. 1 April 2015. In terms of the Ordinance the Company was allowed tocontinue the operations in the said block till 31 March 2015. Accordingly the said blockhad been handed over to Bharat Coking Coal Limited as per the direction from Coal IndiaLtd. with effect from 1 April 2015 and the same has been subsequently allotted to SteelAuthority of India Limited (SAIL).

Following a petition 3led by the Company the Hon'ble High Court at Delhi haspronounced it's judgement on 9 March 2017. Accordingly based on the said judgement theCompany has claimed Rs.153176.00 Lakh towards compensation against the said coal blockacceptance whereof is awaited. Aggrieved due to delay in acceptance of claim on apetition 3led by the Company before the Hon'ble High Court the Hon'ble Court had directedthe Nominated Authority under Ministry of Coal to expedite the matter. The Hon'ble Courthad further directed the Nominated Authority to take decisions within a specific timeframe. During the year the Nominated Authority in its order has upheld its decision ofthe compensation paid earlier and the same has been contested by the Company before theHon'ble High Court and the matter is pending.

Members' attention is also invited to Notes on Contingent Liabilities in the notesforming part of the Financial Statements.


The Internal Financial Controls with reference to the Financial Statements areconsidered to be commensurate with the size scale and nature of the operations of theCompany. The system encompasses the major processes to ensure reliability of financialreporting compliance with policies procedures laws and regulations safeguarding ofassets and economical and efficient use of resources. There are Standard OperatingProcedures (SOPs) in all functional activities for which key manuals have been put inplace. The manuals are updated and validated periodically. Approval of all transactions isensured through a pre-approved Delegation of Authority (DOA) schedule which is in-builtinto the SAP system wherever required. DOA is reviewed periodically by the management andcompliance of DOA is regularly checked by the Auditors. The Company's books of accountsare maintained in SAP and transactions are executed through SAP (ERP) setups to ensurecorrectness/e3ectiveness of all transactions integrity and reliability of reporting.There is adequate MIS (Management Information System) which is reviewed periodically withfunctional heads.

The Internal Auditors of the Company monitors and evaluates the e3cacy and adequacy ofinternal control system in the Company its compliance with operating system accountingprocedures and policies at all locations of the Company. The main thrust of internal auditis to test and review controls appraisal of risks and business processes besidesbenchmarking controls with best practices in the industry. Based on the Internal AuditReports process owner takes corrective actions in their respective areas and therebystrengthens the controls. The Report is presented before the Audit Committee for review atregular intervals.


The Audited Annual Consolidated Financial Statements forming part of the Annual Reporthave been prepared in accordance with the Companies Act 2013 (‘the Act') IndianAccounting Standards (Ind AS) 110 –‘Consolidated Financial Statements' andIndian Accounting Standards (Ind AS) 28 – ‘Investments in Associates and JointVentures' notified under Section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended from time to time.

The Company had the following Subsidiaries Associate Companies and Joint Ventures ason 31 March 2019:

Name of the Company Status
1. Electrosteel Algerie SPA Subsidiary
2. Electrosteel Castings (UK) Limited Subsidiary
3. Electrosteel Castings Gulf FZE Subsidiary
4. Electrosteel Doha for Trading LLC Subsidiary
5. Electrosteel Europe S.A. Subsidiary
6. Electrosteel Trading S.A. Subsidiary
7. Electrosteel USA LLC Subsidiary
8. Electrosteel Brasil Ltda. Tubos the Conexoes Duteis Subsidiary
9. Mahadev Vyapaar Pvt Ltd Subsidiary
10. Electrosteel Bahrain Holding S.P.C. Company Subsidiary
11. WaterFab LLC (subsidiary of Electrosteel USA LLC) Subsidiary
12. Electrosteel Bahrain Trading W.L.L (subsidiary of Electrosteel Bahrain Holding S.P.C. Company) Subsidiary
13. Electrosteel Thermal Power Limited Associate Company
14. Srikalahasthi Pipes Limited Associate Company
15. North Dhadhu Mining Company Private Limited Joint Venture
16. Domco Private Limited Joint Venture

During the year under review Electrosteel Steels Limited ceased to be an AssociateCompany of the Company with effect from 6 June 2018.

A Report on the highlights of the performance of each of the Company's subsidiariesassociates and joint ventures and their contribution to the overall performance of theCompany for the Financial Year ended 31 March 2019 pursuant to the provisions of Section129(3) of the Act read with Rule 8 of the Companies (Accounts) Rules 2014 is given inAnnexure 2. The statement containing salient features of financial statement ofsubsidiaries associate companies and joint ventures for the Financial Year ended 31March 2019 pursuant to the said Section read with Rule 5 of the said Rules are givenalong with the Standalone Financial Statement.

In accordance with Section 136 of the Act the Audited Financial Statements includingthe Consolidated Financial Statements and related information of the Company and AuditedAccounts of each of its subsidiaries are available on the website of the These documents will also be available for inspection duringbusiness hours by the Members at the Registered Office of the Company.


The Board of Directors of the Company at its meeting held on 11 August 2014 hadapproved the Scheme of Amalgamation (the Scheme) of its wholly owned subsidiary MahadevVyapaar Pvt Ltd (MVPL) with the Company with effect from 1 April 2014 ("AppointedDate"). MVPL had 3led an application before the Hon'ble High Court at Calcutta whichhas sanctioned the said Scheme on 18 November 2015 and the certified copies of ordersanctioning the Scheme had been 3led by MVPL with the Registrar of Companies West Bengal.

In the meanwhile the Ministry of Corporate Affairs vide notification dated 7 December2016 enforced the Companies (Transfer of Pending Proceedings) Rules 2016 with effect from15 December 2016 whereby all proceedings under the erstwhile Companies Act 1956including proceedings relating to arbitration compromise arrangements andreconstruction other than proceedings relating to winding up on the date of coming intoforce of these rules stood transferred to the Benches of the National Company LawTribunal (NCLT) exercising respective territorial jurisdiction. With the formation ofNCLT Cuttack Bench the Hon'ble High Court at Orissa has by an order passed on 19 April2019 disposed off the same by directing transfer of the said petition to NCLT CuttackBench. The NCLT Cuttack Bench will now take up the matter.


The Company is committed in maintaining the highest standards of Corporate Governanceand adheres to the stipulations prescribed under the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (‘Listing Regulations'). A Report onCorporate Governance for the year under review along with the Certificate from theAuditors confirming compliance with the conditions of Corporate Governance is annexed asAnnexure 3 forming part of this Report.


During the Financial Year 2018-19 9 (nine) Board Meetings were held the details ofwhich are given in the Corporate Governance Report forming part of this Report and annexedas Annexure 3.


Ms. Nityangi Kejriwal Jaiswal (DIN: 07129444) Non-Executive Director resigned fromthe Board of the Company with effect from 29 January 2019. The Board places on record itsappreciation and gratitude for the valuable contributions made by her during her tenure asDirector on the Board of the Company.

Dr. Mohua Banerjee (DIN: 08350348) has been appointed as the Additional Director(Independent) on the Board of the Company with effect from 8 February 2019 for a term of 5(3ve) consecutive years subject to the approval of appointment and regularization by theMembers of the Company at the ensuing Annual General Meeting of the Company. A declarationhas been received from Dr. Banerjee that she satisfies the criteria of Independence aslaid down in Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations.The Company has also received a notice under Section 160 of the Act from a Memberproposing her appointment as an Independent Director of the Company and the same has beenincluded in the notice of the forthcoming AGM.

Further the Members of the Company at their Extra-Ordinary General Meeting held on 11August 2018 re-appointed Mr. Uddhav Kejriwal (DIN: 00066077) as the Whole-time Directorof the Company for a period of 5 (3ve) years with effect from 16 June 2018.

Mr. Shermadevi Yegnaswami Rajagopalan (DIN: 00067000) and Mr. Uddhav Kejriwal (DIN:00066077) Directors of the Company retire by rotation at the forthcoming AGM and beingeligible offer themselves for re-appointment.

The present term of appointment of Mr. Mahendra Kumar Jalan (DIN: 00311883) as theWhole-time Director is valid up to 21 January 2020. The Board has based on therecommendation of Nomination and Remuneration Committee has approved the re-appointment ofMr. Jalan as the Whole-time Director for a further term of 5 (3ve) consecutive yearswith effect from 22 January 2020 subject to the approval of the Members at the ensuing64th AGM.

In compliance with Regulation 26(4) and 36(3) of the Listing Regulations andSecretarial Standard-2 on General Meetings brief resume and other information of all theDirectors proposed to be appointed and re-appointed are given in the Notice for theforthcoming AGM.

Mr. Sunil Katial was appointed as the Chief Executive Officer of the Company witheffect from 29 January 2019. There were no other changes in Key Managerial Personnel (KMP)during the year.


Pursuant to the provisions of Section 134 of the Act the Directors state that:

a) in the preparation of annual accounts for the Financial Year ended 31 March 2019the applicable accounting standards have been followed and there were no materialdepartures requiring any explanation;

b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the Financial Year and of the loss ofthe Company for that period;

c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared annual accounts on a ‘going concern' basis;

e) they have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and are operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.


Declaration by Independent Directors

Mr. Pradip Kumar Khaitan Mr. Binod Kumar Khaitan Mr. Ram Krishna Agarwal Mr.Amrendra Prasad Verma and Dr. Mohua Banerjee Independent Directors have givendeclarations that they meet the criteria of independence as laid down in the Act and theListing Regulations.


There are 6 Board Committees as on 31 March 2019 viz. Audit Committee Nomination andRemuneration Committee Stakeholders' Relationship Committee Corporate SocialResponsibility Committee Banking and Authorisation Committee and Governance Committee.

The details of composition terms of reference and meetings held and attended by theCommittee members of Audit Committee Nomination and Remuneration Committee Stakeholders'Relationship Committee and Corporate Social Responsibility Committee are provided in theCorporate Governance Report annexed as Annexure 3.

The Banking and Authorisation Committee comprised of Mr. Binod Kumar Khaitan as theChairman with Mr. Shermadevi Yegnaswami Rajagopalan Mr. Mayank Kejriwal and Mr. UddhavKejriwal as its members as on 31 March 2019. The terms of reference for the Committeeinclude taking various decisions pertaining to the opening or closing of bank and demataccounts of the Company change in authorised signatories for operation of different bankand demat accounts subscribing/purchasing/selling/dealing in securities of Companiesother than related parties and availing broking services making loans from time to timeto subsidiary companies/Joint Ventures/Associates for its working capital requirementgiving guarantee or providing security to any bank in connection with fund based/non-fundbased facilities including loan(s) made to Subsidiary Company/Joint Venture/AssociateCompany by such bank and any other work related to day-to-day operations of the Company.

The Governance Committee comprised of Mr. Binod Kumar Khaitan as the Chairman with Mr.Mahendra Kumar Jalan and Dr. Mohua Banerjee as its members as on 31 March 2019. The termsof reference for the Committee inter-alia include formulating a governance policy andrecommending it to the Board for approval assisting the Board in its ongoing oversight ofthe quality of governance in the Company and its subsidiaries monitoring the developmentsin governance practices of the Company and its subsidiaries and report appropriately tothe Board with recommendations advising the Board or any committees of the Board of anycorporate governance issues in the Company and its subsidiaries which the Committeedetermines has a negative impact on the Company's ability to safeguard or improveshareholder value and carrying out any other function as is decided by the Board ofDirectors of the Company from time to time.

Vigil Mechanism

The Company has adopted Whistle Blower Policy and established a Vigil Mechanism incompliance with provisions of the Act and the Listing Regulations for the Directors andemployees to report genuine concerns and grievances and leak/suspected leak of UnpublishedPrice Sensitive Information. This mechanism provides adequate safeguards againstvictimisation of employees and Directors and also provides for direct access to theChairperson of the Audit Committee. The Company oversees the vigil mechanism through theAudit Committee of the Company. The said Policy is available at the Company's website andcan be accessed at

Nomination and Remuneration Policy

The Board has adopted a Nomination and Remuneration Policy recommended by Nominationand Remuneration Committee in terms of the provisions of Section 178 of the Act andRegulation 19 read with Part D of Schedule II to the Listing Regulations. The Policygoverns the criteria for determining qualifications positive attributes and independenceof a Director and lays down the remuneration principles for Directors Key ManagerialPersonnel and other employees.

The Policy aims to enable the Company to attract retain and motivate highly qualifiedmembers for the Board Key Managerial Personnel (KMP) and other employees. It enables theCompany to provide a well-balanced and performance-related compensation package takinginto account shareholder interests industry standards and relevant Indian corporateregulations. The policy ensures that the interests of Board members KMP & employeesare aligned with the business strategy and risk tolerance objectives values andlong-term interests of the Company and will be consistent with the"pay-for-performance" principle and the remuneration to directors KMP andemployees involve a balance between fixed and incentive pay reflecting short and long-termperformance objectives appropriate to the working of the Company and its goals. The policylays down the procedure for the selection and appointment of Board Members and KMP andalso the appointment of executives other than Board Members compensation structure forExecutive Directors Non-Executive Directors KMP and other employees.

During the year under review the Board of Directors amended the Nomination andRemuneration Policy of the Company to bring it in line with the recent amendments toSection 178 of the Act and Regulation 19 read with Part D of Schedule II to the ListingRegulations. The Nomination and Remuneration Policy is available at the Company's websiteand can be accessed at

Corporate Social Responsibility Policy

In accordance with the requirements of Section 135 of the Act read with the Companies(Corporate Social Responsibility Policy) Rules 2014 the Company has a Corporate SocialResponsibility (CSR) Committee in place. The CSR Committee has developed and implementedthe Corporate Social Responsibility Policy. A Report on CSR activities/initiatives whichincludes the contents of the CSR Policy composition of the Committee and otherparticulars as specified in Section 135 of the Act read with Rule 8 of the Companies(Corporate Social Responsibility Policy) Rules 2014 are disclosed in Annexure 4 to thisReport.

Policy on Board Diversity and Succession Planning for the Board of Directors and SeniorManagement

A Policy on Board Diversity and Succession Planning for the Board of Directors andSenior Management as devised by the Nomination and Remuneration Committee is in place toensure adequate diversity in the Board of Directors of the Company and for orderlysuccession for appointments on the Board of Directors and Senior Management. During theyear under review the Board of Directors amended the said Policy to bring it in line withthe recent amendments to the Listing Regulations.


The Nomination and Remuneration Committee of the Board has formulated and laid downCriteria and Manner for Evaluation of Performance specifying the criteria for performanceevaluation of the Board its Committees and individual Directors and manner forperformance evaluation pursuant to provisions of Section 178 of the Act and ListingRegulations and as per requirements of Section 134 of the Act the manner in which formalannual evaluation has been made is disclosed below –

A. The Board evaluated on the roles functions and duties performed by the IndependentDirectors (IDs) of the Company. Each ID was evaluated by all other Directors but not bythe Director being evaluated. The Board also reviewed the manner in which IDs followguidelines of professional conduct as specified in Schedule IV to the Act. The adherenceto Section 149 of the Act the aforesaid Schedule IV the Listing Regulations and otherapplicable provisions of law by the IDs were also reviewed by the Board.

B. Performance review of all the Non Independent Directors of the Company was made onthe basis of the activities undertaken by them expectations of Board level ofparticipation roles played by them leadership qualities and their overall performanceand contribution in the development and growth of the business and operations of theCompany.

C. The Board evaluated the performance of its Committees on the basis of the processesand procedures followed by them for discharging their functions & duties as per theirrespective terms of references and as assigned by the Board and laws applicable theirindependence from the Board and on the effectiveness of the suggestions andrecommendations made by them to the Board. The Board observed the size structure andexpertise of the Committees to be appropriate and in compliance with the Act and theListing Regulations.

D. The Board evaluated its own performance on the basis of its composition having theright mix of knowledge skills and expertise required to drive organizational performanceand conduct of its affairs effectively monitoring of Company's performance along with theability to understand and deal with factors having a significant bearing developingsuitable strategies and business plans at appropriate time and monitoring itseffectiveness implementation of policies and procedures for proper functioning of theCompany frequency of its meetings efforts made by the Board Members to keep themselvesupdated with the latest developments in areas.

The evaluation of performance of Board it's Committees and of individual Directors wasfound to be satisfactory.

Meeting of Independent Directors: The Independent Directors of the Company held aseparate meeting without the attendance of Non-Independent Directors and members of themanagement for evaluation of the performance of Non-Independent Directors the Board as awhole and Chairman of the Company and for consideration of such other matters as requiredunder the provisions of the Act and the Listing Regulations.


The statement pertaining to particulars of employees including their remuneration asrequired to be reported under the provisions of Section 197(12) of the Act read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 [including any statutory modification(s) or re-enactment(s)thereof for the time being in force] (the Rules) are provided in Annexure 5A to thisReport. However as per the provisions of Section 136 of the Act the Reports and Accountsfor the Financial Year 2018-19 are being sent to the Members and others entitled theretoexcluding this statement. This statement is available for inspection by the Members at theRegistered Office of the Company during business hours on working days of the Company. Ifany Member is interested in obtaining a copy thereof such Member may write to the CompanySecretary in this regard.

The disclosures pertaining to the remuneration of Directors KMP and employees asrequired under Section 197(12) of the Act read with Rule 5(1) of the Rules are providedin Annexure 5B to this Report.


M/s. Singhi & Co. Chartered Accountants (Firm Registration Number 302049E) wereappointed as the Statutory Auditors of the Company to hold office from the conclusion ofthe 62nd Annual General Meeting (AGM) till the conclusion of the 67th AGM of the Company.

The para wise responses of the management to the opinion/remarks/observations made inthe Independent Auditors' Report on the financial statements of the Company for the yearending 31 March 2019 are given below:

1. As regards the Qualified Opinion expressed by the Auditors in their Report underpara (a) under the head ‘basis of qualified opinion' and its consequential referencesmade in para nos. 2 (d) (e) (g) and (j)(i) under the head ‘Report on Other Legaland Regulatory Requirements' of their Report and para (I)(b) and (II)(a) of the Annexure Ato the Auditors' Report of even date attention is drawn to Note no. 47 of the StandaloneFinancial Statement which are self-explanatory;

2. With respect to the Qualified Opinion expressed by the Auditors in their Reportunder para (b) under the head ‘basis of qualified opinion' attention is drawn toNote no. 7A.2 of the Standalone Financial Statement which are self-explanatory;

3. On the Auditors' observation made in para (I)(a) of the Annexure A to the Auditors'Report of even date your Directors wish to inform that all necessary steps are beingtaken to regularise the maintenance of proper records for furniture and fixtures.

During the year under review the Auditors had not reported any matter under Section143(12) of the Act therefore no detail is required to be disclosed under Section134(3)(ca) of the Act.


The Company is required to maintain cost records for Pig Iron DI Pipe DI Fittings CIPipe Coke Sponge Iron & Power Generating units for every Financial Year asspecified by the Central Government under Section 148(1) of the Act and accordingly suchaccounts and records are made and maintained in the prescribed manner. Further pursuantto Section 148 of the Act read together with the Companies (Cost Records and Audit) Rules2014 as amended from time to time the Company is required to carry out audit of the costaccounting records of the Company.

The Cost Audit Report and a Compliance Report for the Financial Year 2017-18 were 3ledon 24 August 2018.

M/s. S G & Associates (Firm Registration Number 000138) Cost Accountants Kolkatahas been re-appointed as Cost Auditors for Financial Year 2019-20 for all the applicableunits and products of the Company. The remuneration proposed to be paid to them for theFinancial Year 2019-20 requires rati3cation of the shareholders of the Company. In view ofthis the rati3cation for payment of remuneration to the Cost Auditors is being sought atthe ensuing AGM.


In terms of Section 204 of the Act and Rules framed thereunder M/s. S. M. Gupta &Co. Practicing Company Secretaries were appointed to conduct the Secretarial Audit ofthe Company for the Financial Year 2018-19. The report of the Secretarial Auditor isannexed as Annexure 6 to this Report. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.

The Board has also re-appointed M/s. S. M. Gupta & Co. Practicing CompanySecretaries as Secretarial Auditor to conduct Secretarial Audit of the Company forFinancial Year 2019-20.


In terms of the provisions of Section 138 of the Act M/s. Ernst & Young LLP wereappointed as the Internal Auditor of the Company for the Financial Year 2018-19. The AuditCommittee in consultation with the Internal Auditors formulates the scope functioningperiodicity and methodology for conducting the Internal Audit. The Audit Committeeinter-alia reviews Internal Audit Reports.

The Board has re-appointed M/s. Ernst & Young LLP as the Internal Auditor for theFinancial Year 2019-20 under the provisions of Section 138 of the Act.


During the Financial Year 2018-19 the Company has not accepted any deposit within themeaning of Sections 73 and 76 of the Act read together with the Companies (Acceptance ofDeposits) Rules 2014.


The particulars of loans guarantees and investments covered under the provisions ofSection 186 of the Act are given in Note no. 55.3 to the Standalone Financial Statementsof the Company.


Pursuant to Section 92(3) of the Act and Rule 12(1) of the Companies (Management andAdministration) Rules 2014 an extract of Annual Return as on the Financial Year ended 31March 2019 in Form MGT 9 is annexed as Annexure 7 to this Report.

The extract of the Annual Return of the Company can also be accessed on the website ofthe Company at


The Company has in place a Policy in line with requirements of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition & Redressal) Act 2013. An InternalComplaints Committees is in place to redress complaints received regarding sexualharassment. The Company has not received any complaint of sexual harassment during theFinancial Year 2018-19.


The Company has entered into contracts/arrangements with the related parties during theFinancial Year 2018-19 which were in the ordinary course of business and on arm's lengthbasis. Thus provisions of Section 188(1) of the Act are not applicable and the disclosurein Form AOC-2 is not required. However your attention is drawn to the Related Partydisclosure in Note no. 55 of the Standalone Financial Statements.

The Board has approved a policy for Related Party Transactions which has been hosted onthe website of the Company. The web-link for the same is Related Party Transactions wherever necessary are carried out by the Company as perthis Policy.

There were no materially significant related party transactions entered into by theCompany during the year which may have a potential conflict with the interest of theCompany at large. There were no pecuniary relationship or transactions entered into by anyIndependent Director with the Company during the year under review.


The Company has a well-established Risk Management Policy to identify and evaluatebusiness risks. This framework seeks to create transparency minimise adverse effect onthe business objectives and enhance Company's competitive advantage. The key businessrisks identified by the Company are economic risk competitor risk industry riskenvironment risk operational risk foreign exchange risk etc. and it has propermitigation process for the same. The Audit Committee reviews this policy periodically. Astatement indicating development and implementation of Risk Management Policy for theCompany including identification of elements of risk if any is provided as a part ofManagement Discussions & Analysis Report at Annexure 1 which forms a part of thisReport.


The prescribed particulars of Conservation of Energy Technology Absorption and ForeignExchange Earnings & Outgo required to be disclosed under Section 134 of the Act readwith Rule 8 of the Companies (Accounts) Rules 2014 is annexed as Annexure 8 and forms apart of this Report.


The Company is in compliance with the Secretarial Standards issued by the Institute ofCompany Secretaries of India on Meetings of the Board of Directors (SS-1) and GeneralMeetings (SS-2).


Your Directors record their sincere appreciation for the assistance and co-operationreceived from the banks financial institutions government authorities and otherbusiness associates and stakeholders. Your Directors also wish to place on record theirdeep sense of appreciation for the committed services by the Company's executives sta3and workers.

For and on behalf of the Board of Directors

Umang Kejriwal Mahendra Kumar Jalan
Managing Director Whole-time Director
DIN: 00065173 DIN: 00311883

Place: Kolkata

Date: 15 May 2019