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Electrosteel Castings Ltd.

BSE: 500128 Sector: Engineering
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OPEN 37.05
VOLUME 64752
52-Week high 44.20
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P/E 15.00
Mkt Cap.(Rs cr) 1,604
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Sell Price 0.00
Sell Qty 0.00
OPEN 37.05
CLOSE 38.65
VOLUME 64752
52-Week high 44.20
52-Week low 15.79
P/E 15.00
Mkt Cap.(Rs cr) 1,604
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Electrosteel Castings Ltd. (ELECTCAST) - Director Report

Company director report

Dear Members

Your Directors take pleasure in presenting the Sixty Sixth Annual Report together withAudited Annual Financial Statements (including Audited Consolidated Financial Statement)of the Company for the Financial Year ended 31 March 2021.


(Rs. in Crore)

Standalone Consolidated
Particulars FY 2020-21 FY 2019-20 FY 2020-21 FY 2019-20
Revenue from Operations 2236.12 2479.89 3470.56 2711.04
Earnings Before Interest Taxes Depreciation Amortisation and Exceptional Item 285.45 396.18 489.09 399.22
Less: Finance Costs 183.83 219.90 210.63 227.58
Less: Depreciation and Amortisation Expense 52.67 52.74 91.19 57.15
Profit Before Exceptional Item & Tax 48.95 123.54 187.27 114.49
Less: Exceptional Item - - 244.23 -
Profit / (Loss) Before Tax 48.95 123.54 (56.96) 114.49
Less: Tax Expense 5.71 24.95 40.32 28.20
Profit / (Loss) After Tax 43.24 98.59 (97.28) 86.29
Share of Profit / (Loss) in Associates and Joint Ventures - - 5.41 75.19
Profit / (Loss) After Tax including share of Associate and Joint Ventures 43.24 98.59 (91.87) 161.48
Attributable to:
Owners of the Parent - - (145.88) 161.06
Non-Controlling Interest - - 54.01 0.42
Other Comprehensive Income (Net of Tax) 25.85 (0.09) 147.33 12.60
Total Comprehensive Income 69.09 98.50 55.46 174.09
Attributable to:
Owners of the Parent - - 1.48 173.67
Non-Controlling Interest - - 53.98 0.42
Opening balance in Retained Earnings 636.49 517.07 920.51 739.59
Closing Balance in Retained Earnings 668.38 636.49 763.02 920.51


The Directors are pleased to recommend a dividend of Rs. 0.25 per Equity Share of facevalue of Re. 1 each for the Financial Year ended 31 March 2021. This dividend is subjectto the approval of the Members of the Company at their ensuing Annual General Meeting('AGM'). If approved the total outlay on account of dividend for the Financial Year2020-21 would amount to Rs. 10.82 Crore.

The Company had declared dividend of Rs. 0.30 per Equity Share of face value of Re. 1each for the Financial Year ended 31 March 2020.


Transfer of Dividend to Investor Education and Protection Fund

In terms of the provisions of Section 124 of the Companies Act 2013 (Act') readtogether with the Investor Education and Protection Fund Authority (Accounting AuditTransfer and Refund) Rules 2016 and amendments thereof ('IEPF Rules') the Company hastransferred Rs. 1179866 (Rupees Eleven Lakh Seventy Nine Thousand Eight Flundred andSixty Six Only) to the IEPF during the Financial Year 2020-21 being unpaid/unclaimeddividend amounts relating to the Financial Year 2012-13.

Pursuant to the provisions of the IEPF Rules the Company has uploaded the details ofunpaid and unclaimed amounts lying with the Company as on 31 March 2020 (as on the dateof closure of previous financial year) on the website of the Company(

Transfer of Shares to the Demat Account of Investor Education and Protection FundAuthority

In terms of the provisions of Section 124(6) of the Act read with the relevant Rulesmade thereunder 121798 Equity Shares of the Company in respect of which dividend wasunpaid or unclaimed for the Financial Year 2012-13 and onwards has been transferred tothe Demat Account of the IEPF Authority maintained with National Securities DepositoryLimited during the Financial Year 2020-21.

Further the voting rights in respect of shares transferred to the Demat Account of theIEPF Authority shall remain frozen until the rightful owner claims the shares. Membersmay note that shares as well as unclaimed dividend transferred to the IEPF Authority canbe claimed back. Concerned shareholders are advised to visit for lodging claim for refund of shares or dividendfrom the IEPF Authority.

Further the Company has initiated necessary action for transfer of all shares inrespect of which dividend declared for the Financial Year 2013-14 and onwards has not beenpaid or claimed by the Members for 7 (seven) consecutive years or more. Members areadvised to visit the web-link


The Company proposes to retain the entire amount of profit in the Profit & LossAccount.


During the year under review the production of Ductile Iron (Dl) Pipes was 265892MT as against 309404 MT in the previous year. The production of Cast Iron (Cl) Pipes atElavur was 37413 MT as against 38206 MTin the previous year.

The Financial Year 2020-21 was one of the most challenging year in the history of ourorganisation. Despite numerous issues presented by the ongoing Global Pandemic caused bythecoronavirus ('COVID-19') the Company's people delivered strong result mainly in lastthree quarters of the Financial Year 2020-21. All the management cadres frontlineemployees and factory workers of the Company have put up a strong show to minimize impactof this global crisis.

Dl Fittings & Accessories produced 13988 MT of Dl Fittings in 2020-21 as against12667 MTin 2019-20. Overall performance like production productivity product variety& quality and despatch etc. have been improved at both Khardah and Haldia locationsof Fittings Plant. Both Domestic and Export despatch of Fittings from both Haldia andKhardah Plants have increased in spite of more than two months'lockdown on account ofCOVID-19.

As a standard practice various initiatives have been taken further for improvement inthe current Financial Year also taking care of products variety and quantity in bothdomestic & export markets.

As a continual improvement the Company is focused on improvement in production of newrange of products productivity quality energy conservation and human resource. Furtherto meet and improve upon the expectations of both international and domestic customersthe Company has continued its activities towards developmentand to add a number of productvariants to its existing product 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 other than as mentionedin the 'Operations' section of this Directors' Report.

Even while facing adverse situations the Company is taking all adequate steps tohonour all its commitments.

Further there has been no change in the nature of the Company's business but themanner in which operations and functioning had to be done had to be altered to adhere tothe COVID-19 restrictions and directions like social distancing no gathering ofpersonnel replacing physical interface with customers implementing work from homerestricted travel etc.


The Company had lost production of about two months of Dl Pipe in first quarter ofFinancial Year 2020-21 due to nationwide lockdowns and restrictions imposed by theGovernment of India.


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 material developmentsduring the Financial Year 2020-21 and is annexed as Annexure 1.


With the growth of economy India's urbanization trends have scope to significantlyaccelerate in coming years. Water and sewerage infrastructure development in Indian urbanand rural sector has been the key engine of growth acceleration for the Dl Pipe Industry.Further the country faces huge task of transporting drinking water with a limitedtreatment facility and inadequate transmission and distribution network. Rapidly growingurban centers also have limited infrastructure for waste water disposal. As a whole theIndian water and wastewater market is having a CAGR of about 10%.

To bring in improvement and greater sustainability of the water supply infrastructurethe Jal Jeevan Mission mainly aimed at rural and sub-urban water supply could meandoubling of spending on water related infrastructure creation over the coming years. Forurban water supply Central Government as well as the respective State Governments haveinitiated a number of major urban development schemes to transform the urban scenario ofthe country resulting in large investment in the Water Supply & Sewerage System. Inthis direction AMRUTYojna (Atal Mission for Rejuvenation and Urban Transformation) is amajor initiative. Under AMRUT 500 Small Cities are undergoing infrastructure revamping.

The sewerage and waste water disposal sector is also witnessing increasing fund flow tomake our cities cleaner. Considerable fund is being allocated under the 'Namami Gange'Scheme where cities on the bank of river Ganga and its tributaries will have modern WasteWater conveyance and treatment facilities to make the rivers clean. Similar schemes arecoming up in Southern and Western India.

The Company as one of the big players in the world Dl Pipe market continues tomaintain its dominant position in the export market against competitors. After the gradualabetment of the COVID-19 pandemic the world economy is on the revival phase and a largeportion of our production is being exported to more than 50 countries across 5 continents.The Company after entrenching itself in the discerning European and gulf markets as pipemaker of international quality is continuously expanding the business to new countrieslikeTanzania Zambia Congo Nigeria Senegal Morocco in Africa and Vietnam CambodiaMyanmar in South East Asia.The subsidiary in USA is also doing well.


The Authorised Share Capital of the Company is Rs. 500200000/- comprising of500200000 Equity Shares of Re. 1.00 each. During the year under review there has beenno change in the Authorised Share Capital of the Company.

The Issued Subscribed and Paid-up Share Capital of the Company is Rs. 432954709/-comprising of 432954709 Equity Shares of Re. 1.00 each. During the year under reviewthe Company has not issued shares with differential voting rights. It has neither issuedemployee stock options nor sweat equity shares and does not have any scheme to fund itsemployees to purchase the shares of the Company. During the year under review there hasbeen no change in the Issued Subscribed and Paid-up Share Capital of the Company. As on31 March 2021 the Company had no outstanding instruments convertible into Equity Sharesof the Company.


India Ratings and Research (Ind-Ra) has placed the Company's Long-Term Issuer Ratingof'IND A-'on Rating Watch Positive (RWP) and for short term borrowings as "INDA2+"on Rating Watch Positive (RWP). The Outlook was 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.

Members'attention is invited to Notes on Contingent Liabilities in the Notes formingpart 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/effectiveness of all transactions integrity and reliability of reporting.There is adequate MIS (Management Information System) which is reviewed periodically byfunctional heads.

The Internal Auditor of the Company monitors and evaluates the efficacy 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 owners take corrective actions in their respective areas and therebystrengthen 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'and IndianAccounting Standards (Ind AS) 28 -'Investments in Associates and Joint Ventures) notifiedunder Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended from time to time.

The Company had the following Subsidiaries and Joint Ventures as on 31 March 2021:

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 forTrading LLC Subsidiary
5. Electrosteel Europe S.A. Subsidiary
6. Electrosteel Trading S.A. Subsidiary
7. Electrosteel USA LLC Subsidiary
8. Electrosteel Brasil Ltda.Tubos e Conexoes Duteis Subsidiary
9. Electrosteel Bahrain Holding WLL Subsidiary
10. WaterFab LLC (subsidiary of Electrosteel USA LLC) Subsidiary
11. Electrosteel Bahrain Trading W.L.L (subsidiary of Electrosteel Bahrain Holding WLL) Subsidiary
12. Srikalahasthi Pipes Limited Subsidiary
13. North Dhadhu Mining Company Private Limited JointVenture
14. Domco Private Limited JointVenture

During the year under review Srikalahasthi Pipes Limited ceased to be an AssociateCompany on 17 September 2020 and became a Subsidiary from 18 September 2020.

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 2021 pursuant to the provisions of Section134(3) of the Act read with Rule 8 of the Companies (Accounts) Rules 2014 is given inAnnexure 2 to this Report. The statement containing salient features of financialstatement of subsidiaries associate companies and joint ventures for the Financial Yearended 31 March 2021 pursuant to the said Section read with Rule 5 of the said Rulesare given along with the Standalone Financial Statements.

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 Members who wish to inspect these documents can send an e-mail


The proposed Amalgamation of Srikalahashthi Pipes Limited ('SPL') with and into theCompany and their respective shareholders and creditors was approved by the Board ofDirectors of both the said companies at their respective meetings held on 5 October 2020and was subject to the necessary approvals and observations/representations of regulatoryand statutory authorities such as the Competition Commission of India ('CCI') theconcerned Stock Exchanges the Securities and Exchange Board of India ('SEBI') theconcerned Registrar of Companies the concerned Regional Directors of the Ministry ofCorporate Affairs the concerned Official Liquidator the Income Tax authorities theconcerned National Company LawTribunals ('NCLT/s') other sectoral regulators orauthorities as may be required by the NCLTs.

Further the companies had filed an application with the CCI for its approval to theproposed Amalgamation of SPL with and into the Company.The CCI has accorded its approvalto the said proposed Amalgamation on 27 November 2020.

Both SPL and the Company had filed respective applications with the Stock Exchangesi.e. the National Stock Exchange of India Limited ('NSE') and BSE Limited ('BSE') fortheir respective approvals to the aforesaid draft Scheme of Amalgamation under applicableregulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 ('Listing Regulations') read with applicable SEBI Circulars. The Stock Exchangeshave issued their respective Observation Letters dated 25 February 2021 to therespective applications made by SPL and the Company in accordance with the saidRegulations incorporating thereof comments by SEBI. Both the Stock Exchanges haveconveyed 'no adverse observations' and 'no-objection) respectively to the respectiveapplications filed by both the said companies.

Upon receipt of the aforesaid Observation Letters from NSE and BSE both SPL and theCompany have filed applications with the concerned NCLTs seeking directions for callingand conducting meetings of their respective creditors or class of creditors or of themembers or class of members as the case may be.

The Application filed by SPL was initially heard on 19 March 2021 by the Elon'bleNCLT Amravati Bench whereby the said Bench had reserved its Orders.Thereafter the NCLTAmaravati Bench vide its Order dated 30 April 2021 has directed that the meetings ofshareholders and creditors of SPL be held on 16 June 2021 for inter alia approving theScheme.

On Application filed by the Company the NCLT Cuttack Bench at its hearing held on 10May 2021 has directed the matter to be listed on 9 June 2021 for passing of Order.

Upon obtaining requisite approvals via requisite majority (as defined in theapplicable provisions of the Act read with applicable SEBI Circulars) of the respectivemembers (i.e. equity shareholders) and creditors (both secured and unsecured) of theCompany and SPL and upon receipt of representations if any from the aforesaidregulatory and statutory authorities the companies will make final application(s) withthe NCLT(s) for sanctioning the Scheme of Amalgamation of SPL with and into the Companyin accordance with the applicable provisions of the Companies Act 2013 and such otherlaws if any as may be applicable for the time being in force.

The concerned NCLT(s) may thereafter pass an Order sanctioning the Scheme ofAmalgamation of SPL with and into the Company with such directions as it may deemnecessary and as may be required under the law.


Your Company believes in transparent and ethical corporate governance practices.TheCompany's approach to Corporate Governance cascades across its business operations and itsstakeholders at large to create long term sustainable value.

The Company is committed in maintaining the highest standards of Corporate Governanceand adheres to the stipulations prescribed under the 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 2020-21 5 (five) Board Meetings were held the details ofwhich are given in the Corporate Governance Report forming part of this Report andannexed as Annexure 3.


The Board had based on the recommendation of Nomination and Remuneration Committee('NRC') appointed Mr. Sunil Katial (DIN: 07180348) Chief Executive Officer as anAdditional Director (Whole-time) on the Board of the Company with effect from 1 April2020. Mr. Sunil Katial had been appointed as a Whole-time Director of the Company from thesaid date for a term of 3 (three) consecutive years subject to the approval ofappointment and regularisation by the Members of the Company at the 65th AnnualGeneral Meeting ('AGM') of the Company. An affirmation had been received from Mr. Katialthat he is not debarred or disqualified from being appointed as Director ofcompanies/holding the office of director pursuant to any order of the SEBI Ministry ofCorporate Affairs or any such statutory authority. The Company had also received a noticeunder Section 160 of the Act from a Member proposing his appointment as a Whole-timeDirector of the Company. In addition Mr. Sunil Katial continued to be the Chief ExecutiveOfficer of the Company.

Mr. Ram Krishna Agarwal (DIN: 00416964) Independent Director has resigned from theBoard of the Company with effect from 8 June 2020 due to his pre-occupations withvarious professional and social commitments. Mr. Ram Krishna Agarwal has also confirmedthat there were no other material reasons other than the above for his aforesaidresignation. The Board places on record its appreciation and gratitude for the valuablecontributions made by him during his tenure as Director on the Board of the Company.

Further the Board based on the recommendation of NRC had appointed Mr. RajkumarKhanna (DIN: 05180042) as an Additional Director (Non-Executiveand Independent) of theCompany with effect from 15 June 2020. Mr. Rajkumar Khanna had been appointed as anIndependent Director of the Company from the said date for a term of 5 (five) consecutiveyears subject to the approval of appointment and regularisation by the Members of theCompany at the 65th AGM of the Company. An affirmation had been received from Mr. Khannathat he is not debarred or disqualified from being appointed as Director ofcompanies/holding the office of director pursuant to any order of the SEBI Ministry ofCorporate Affairs or any such statutory authority. The Company had also received a noticeunder Section 160 of the Act from a Member proposing his appointment as an IndependentDirector of the Company.

The Members of the Company at the 65th AGM of the Company held on 15 September 2020have approved the appointments of Mr. Sunil Katial (DIN: 07180348) as the Chief ExecutiveOfficer and Whole-time Director of the Company with effect from 1 April 2020 for a termof 3 (three) consecutive years and of Mr. Rajkumar Khanna (DIN: 05180042) as anIndependent Director of the Company for a period of 5 (five) consecutive years witheffect from 15 June 2020.

Mr. Amrendra Prasad Verma (DIN: 00236108) was appointed as an Independent Director ofthe Company for a period of 5 (five) years with effect from 22 December 2016. Mr. Verma'sexisting term will expire on 21 December 2021. The Board based on the recommendation ofNRC and performance evaluation by it at its meeting held on 20 May 2021 has reappointedMr. Verma as an Independent Director of the Company for a second term of five consecutiveyears with effect from 22 December 2021 subject to the approval of re-appointment by theMembers of the Company at the ensuing AGM of the Company. An affirmation has been receivedfrom Mr. Verma that he is not debarred or disqualified from being appointed as Director ofcompanies/holding the office of director pursuant to any order of the SEBI Ministry ofCorporate Affairs or any such statutory authority. The Company has also received a noticeunder Section 160 of the Act from a Member proposing his appointment as an IndependentDirector of the Company and the same has been included in the Notice of the forthcomingAGM.

Mr. Shermadevi Yegnaswami Rajagopalan (DIN: 00067000) and Mr. Uddhav Kejriwal (DIN:00066077) retire by rotation at the forthcoming AGM and being eligible have offeredthemselves for re-appointment.

In compliance with Regulation 36(3) of the Listing Regulations and SecretarialStandard-2 on General Meetings brief resume and other information of all the Directorsproposed to be re-appointed are given in the Notice of the forthcoming AGM.

There were no other changes in the Board and the Key Managerial Personnel during theyear.


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 2021the 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 profitof the 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. Amrendra Prasad Verma Dr. MohuaBanerjee and Mr. Rajkumar Khanna Independent Directors have given declarations that theymeet the criteria of independence as laid down in the Act and the Listing Regulations.

Further in terms of Rule 8(5)(iiia) of the Companies (Accounts) Rules 2014 asamended the Board of Directors state that in the opinion of the Board Mr. RajkumarKhanna whose appointment as an Independent Director of the Company has been approved bythe Shareholders during the year is a person of integrity and possesses relevantexpertise and experience. Further Mr. Khanna has successfully qualified the onlineproficiency self-assessment test conducted by the Indian Institute of Corporate Affairs.


There are 7 Board Committees as on 31 March 2021 viz. Audit Committee Nominationand Remuneration Committee Stakeholders'Relationship Committee Corporate SocialResponsibility Committee Banking and Authorisation Committee Amalgamation Committee andGovernance 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 to this Report.

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 2021. 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.

During the year under review the Board of Directors at its meeting held on 5 October2020 have constituted a Committee designated as the Amalgamation Committee comprisingof Mr. Binod Kumar Khaitan as the Chairman with Mr. Uddhav Kejriwal Mr. Mahendra KumarJalan and Mr. Sunil Katial as its members. There was no change in the composition of theCommittee as on 31 March 2021. The terms of reference for the Committee inter-aliaincludes to exclusively oversee and control entire work relating to the said proposedScheme of Amalgamation and to appoint such external agencies as may be necessary for thispurpose with powers to authorise Mr. Mayank Kejriwal Joint Managing Director Mr.Mahendra Kumar Jalan Whole-time Director Mr. Sunil Katial Chief Executive Officer andWhole-time Director Mr. Ashutosh Agarwal Executive Director (Group Finance) and CFO Mr.Indranil Mitra Company Secretary and Mr. Raj Kumar Agarwal General Manager (Finance andAccounts) of the Company to sign and execute such papers including but not limited to anyapplication petition affidavit and any other document as might be necessary from time totime and file the same before various authorities in the name of and on behalf of theCompany in relation to the said proposed Scheme of Amalgamation and to settle anyquestion or difficulty which might arise and give any directions necessary for obtainingapproval of and giving effect to the Scheme of Amalgamation as and when requiredincluding taking of all necessary steps and to perform various other related acts.

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 2021. Theterms of reference for the Committee inter-alia include formulating a governance policyand recommending it to the Board for approval assisting the Board in its ongoingoversight of the quality of governance in the Company and its subsidiaries monitoring thedevelopments in governance practices of the Company and its subsidiaries and reportappropriately to the Board with recommendations advising the Board or any committees ofthe Board of any corporate governance issues in the Company and its subsidiaries whichthe Committee determines has a negative impact on the Company's ability to safeguard orimprove shareholder value and carrying out any other function as is decided by the Boardof Directors 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 of the Listing Regulations read with Part D of Schedule II thereto. ThePolicy governs the criteria for determining qualifications positive attributes andindependence of a Director and lays down the remuneration principles for Directors KeyManagerial Personnel 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.

The Nomination and Remuneration Policy is available at the Company's website and can beaccessed 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 as amended the Company has aCorporate Social Responsibility ('CSR') Committee in place. The CSR Committee hasformulated and recommended to the Board the Corporate Social Responsibility Policy of theCompany which has been approved by the Board. The Annual Report on CSRactivities/initiatives which includes the contents of the CSR Policy composition of theCommittee and other particulars as specified in Section 135 of the Act read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 as amended are disclosedin Annexure 4 to this Report.

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.


The Nomination and Remuneration Committee of the Board has formulated and laid downCriteria and Manner for Evaluation of Performance of the Board its Committees andindividual Directors pursuant to provisions of Section 178 of the Act and ListingRegulations. 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 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 2020-21 are being sent to the Members and others entitled theretoexcluding this statement. The said statement is available for inspection by the members atthe Registered Office of the Company during business hours on working days up to the dateof the ensuing Annual General Meeting. If any member is interested in obtaining a copythereof such member may write to the Company Secretary whereupon a copy would be sent.

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 theCompany.

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 yearended 31 March 2021 are given below:

1. As regards the Qualified Opinion expressed by the Auditors in their Report underpara (a) under the head 'basis for qualified opinion'and its consequential references madein para nos. 2 (d) (e) (g) and (j)(i) under the head 'Report on Other Legal andRegulatory Requirements' of their Report and para (l)(b) and (ll)(a) of the Annexure A tothe 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 for qualified opinion) attention is drawn to Note no.8A.2 of the Standalone Financial Statement which are self- explanatory;

3. With respect to the Qualified Opinion expressed by the Auditors in their Reportunder para (c) under the head 'basis for qualified opinion) attention is drawn to Note no.49 of the Standalone Financial Statement which are self- explanatory;

4. On the Auditors'observation made in para (l)(a) of the Annexure A to theAuditors'Report of even date your Directors wish to inform that all necessary steps arebeing taken 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 Dl Pipe Dl Fittings ClPipe Coke Sponge Iron Power Generating units and Ferro Alloy Product - Si. Mn for everyFinancial Year as specified by the Central Government under Section 148(1) of the Actand accordingly such accounts and records are made and maintained in the prescribedmanner. Further pursuant to Section 148 of the Act read together with the Companies(Cost Records and Audit) Rules 2014 as amended the Company is required to carry outaudit of the cost accounting records of the Company. M/s. S G & Associates (FirmRegistration Number: 000138) Cost Accountants Kolkata were appointed as the CostAuditors of the Company for Financial Year 2020-21.

The Cost Audit Report and a Compliance Report for the Financial Year 2019-20 were filedon 9 September 2020.

M/s. S G & Associates Cost Accountants Kolkata has been re-appointed as CostAuditors for Financial Year 2021-22 for all the applicable units and products of theCompany. The remuneration proposed to be paid to them for the Financial Year 2021-22requires ratification of the shareholders of the Company. In view of this theratification for payment of remuneration to the Cost Auditors is being sought at theensuing AGM.


In terms of Section 204 of the Act and Rules framed thereunder M/s. K. Arun & Co.Company Secretaries were appointed to conduct the Secretarial Audit of the Company forthe Financial Year 2020-21. The report of the Secretarial Auditor is annexed as Annexure 6to this Report. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.


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 2020-21. The AuditCommittee in consultation with the Internal Auditor formulates the scope functioningperiodicity and methodology for conducting the Internal Audit. The Audit Committeeinter-alia reviews the Internal Audit Reports.

The Board has re-appointed M/s. Ernst & Young LLP as the Internal Auditor of theCompany for the Financial Year 2021-22 under the provisions of Section 138 of the Act.


During the Financial Year 2020-21 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. 54.3 to the Standalone Financial Statementsof the Company.


Pursuant to Section 92(3) read with Section 134(3)(a) of the Act a copy of theAnnual Return of the Company as on the Financial Year ended 31 March 2020 in Form No.MGT-7 can be accessed on the website of the Company at ualReturn-MGT-7-31March2020.pdf.

Further pursuant to Section 92(3) of the Act the Annual Return of the Company as onthe Financial Year ended 31 March 2021 will be duly uploaded on the website of theCompany at upon filing of the same with the Registrar of Companiesunder Section 92(4) of the Act.


The Business Responsibility Report as per Regulation 34 of the Listing Regulationsdetailing the various initiatives taken by the Company on the environmental social andgovernance front is annexed as Annexure 7 to this Report.

Mr. Mahendra Kumar Jalan Whole-time Director of the Company has been authorized bythe Board of Directors of the Company to oversee the implementation of the BusinessResponsibility Policy. Mr. Ashutosh Agarwal Executive Director (Group Finance) and CFOis designated as the Business Responsibility Head.


The Company has in place a Policy in line with requirements of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition & Redressal) Act 2013. In compliance withthe provisions of the said Act an Internal Complaints Committee is in place to redresscomplaints received regarding sexual harassment. The Company has not received anycomplaint of sexual harassment during the Financial Year 2020-21.


The Company has entered into contracts/arrangements with the related parties during theFinancial Year 2020-21 which were in the ordinary course of business and on arm's lengthbasis. Thus provisions of Section 188(1) of the Act were not applicable on the Companyand the disclosure in Form AOC-2 is not required. However your attention is drawn to theRelated Party disclosure in Note no. 54 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 The RelatedParty Transactions wherever necessary are carried out by the Company as per this 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 business risksidentified by the Company are economic risk competitor risk industry risk environmentrisk operational risk foreign exchange risk etc. and it has proper mitigation processfor the same. The Audit Committee reviews this policy and evaluates the risk managementsystems of the Company periodically. A statement indicating development andimplementation of Risk Management Policy for the Company including identification ofelements of risk if any is provided as a part of Management Discussions & AnalysisReport at Annexure 1 which forms a part of this Report.


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).


During the year under the review:

i) There was no application made or any proceeding pending under the Insolvency andBankruptcy Code 2016 involving the Company; and

ii) The Company had not entered into anyone-time settlement with any Bank or anyFinancial Institution. ACKNOWLEDGEMENT

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 staffand workers especially during the unprecedented COVID-19 pandemic environment.

For and on behalf of the Board of Directors
Pradip Kumar Khaitan
Place: Kolkata Chairman
Date: 20 May 2021 DIN: 00004821