GANDHI SPECIAL TUBES LIMITED

Dear Members

Directors are pleased to present their Thirty Fifth Annual Report on the business andoperations of your Company along with the Audited Financial Statements for the financialyear ended on March 31 2020.

1. FINANCIAL RESULTS

The Company's financial performance for the year ended March 31 2020 is summarizedbelow:

2. RESERVES

Your Company has utilised the Retained Earnings of Rs. 6092.67 Lakhs (including BuyBack Tax of Rs. 1142.67) for the purpose of buy back of 900000 fully paid equity sharesat a price of Rs. 550/- per Equity Share during the year under report.

3. PERFORMANCE AND AFFAIRS OF THE COMPANY

During the year under review the Company recorded gross sales of Rs.8093.84 lakhs.(Previous Year Rs. 12290.68 lakhs) registering contraction of 34.15%. The Company'sprofit after tax was Rs. 2137.28 lakhs (Previous Year Rs. 3863.13 lakhs) registeringcontraction of 44.68%.

The performance of the Company has been discussed in the Management Discussion andAnalysis Report which is forming part of the Annual Report.

4 . DIVIDEND

Your Directors are pleased to recommend a dividend of 180% i.e. Rs. 9/- per equityshare out of Free reserves for the Financial Year ended March 31 2020 subject tonecessary approval by the Shareholders at the ensuing Annual General Meeting of theCompany to be held on September 22 2020. The total dividend recommended for the currentyear 2019-2020 is Rs. 1162.68 lakhs. Payment of Dividend will be made to the members whosenames appear in Register as on September 11 2020. This Dividend will be subject to IncomeTax in the hands of the Shareholders and also subject to Deduction of Tax at Source as perthe provisions of Income Tax Act 1961.

5. BUYBACK OF SHARES

During the financial year 2019-2020 the Company was successful in buying back900000 fully paid equity shares offered to the shareholders through tender offer at aprice of Rs. 550/- per Equity Share representing up to 6.51% of total number of EquityShares for an aggregate amount Rs.495000000/- (Rupees Forty Nine Crores Fifty Lakhsonly). The Buyback process was completed and the shares so bought back were extinguishedon October 24 2019. Post buyback of shares the paid up equity capital got reduced by Rs.45 Lakhs to Rs. 645.93 Lakhs.

6. IMPACT OF COVID-19 ON BUSINESS OF THE COMPANY

Government of India announced lockdown in the last week of financial year 2019-2020 inview of outbreak of Covid-19 pandemic. Hence operations of the company were closed from23rd March 2020.

The rampant spread of COVID-19 across borders and geographies has severely impactedalmost the whole world and triggered significant downside risks to the overall globaleconomic outlook. Operations were partially started with effect from 6th May 2020 withlimited workers/staff. The Company has adopted work from home policy for office/factorystaff during the lockdown period wherever feasible.

Lockdown phase 5 effective from 01st June 2020 has given additional relaxations whichhas enabled the company to further increase the production supply chain and distribution.

7. CURRENT BUSINESS STATUS

Though it is difficult to predict any demand scenario for the immediate short term weexpect the Tractor demand show good improvement on the back of several positive factorssuch as record Rabi production higher Government procurement announcement of higher MSPsleading to better realization to the farmers and outlook of a normal monsoon aidingsentiments for a good Kharif crop. The performance and outlook of the Company has beendiscussed in the Management Discussion and Analysis Report which is forming part of theAnnual Report.

8. CHANGES IN NATURE OF BUSINESS AND REVISION IN THE BOARD'S REPORT

There is no change in the nature of business of the Company during the year. There isno revision made in the Board's Report and whatever submitted herewith is the finalreport.

9. REPORT ON PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES

Your Company does not have any subsidiary associate and joint venture Company.

10. CORPORATE GOVERNANCE

Pursuant to Regulation 27(2) and Schedule V of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 Corporate Governance Report and Certificate regardingcompliance of conditions of Corporate Governance form an integral part of this report andare set out as separate Annexure to this Report. In order to obviate duplication ofinformation some of the information required under the Board's Report has been captured inthe Corporate Governance

Report.

Regulation 34(2) of the SEBI Listing Regulations 2015 as amended inter aliaprovides that the annual report of the top 1000 listed entities based on marketcapitalisation (calculated as on 31st March of every financial year) shall include aBusiness Responsibility Report.

Business Responsibility Report has been hosted on the Company's websitewww.gandhispecialtubes.com

12. PUBLIC DEPOSITS

Your Company has not accepted any deposits within the meaning of Section 73 and 76 ofthe Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.

(i) Directors

We are sad to inform you that Shri. Dhirajlal Shah Chairman of Audit Committee expiredon January 10 2020. Shri. Dhirajlal Shah by profession a Chartered Accountant wasassociated with the Company since its Initial Public Offering (IPO). His counselling andcontribution at the meetings of the Board and Committee were very useful and has helpedthe Company to remain on the sound footing. The Board and Audit Committee have placed onrecord their sincere and deep appreciation for the guidance and advice during his longtenure.

Shri. Bhupatrai Gandhi (DIN 00041273) Director will retire by rotation and beingeligible and not being disqualified under section 164 of the Companies Act 2013 offershimself for re-appointment.

Smt. Bhavi Koradia was re-appointed as Independent Directors for a second term of 5years at the Board Meeting held on June 29 2020 which is placed for the approval of theShareholders in the Annual General Meeting to be held on September 22 2020.

Apart from the above there is no change in the composition of the Board of Directors.

(ii) Key Managerial Personnel

During the year under review Smt. Jeegeesha Shroff resigned as Company Secretary andCompliance Officer of the Company w.e.f. February 10 2020 and Shri. Jitendra Khadye waselevated from the post of Assistant Company Secretary to Company Secretary and ComplianceOfficer of the Company w.e.f. June 29 2020.

(iii) Declaration by an Independent Director(s)

The Company has received all the necessary declaration from each Independent Directorunder Section 149(7) of the Companies Act 2013 that he/she meets the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013 and Regulation16(1)(b) and Regulation 25 of the Listing Regulations.

(iv) Annual Evaluation of the Board

In compliance with the provisions of Section 134 of the Companies Act 2013 andRegulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Board has carried out the annual performance evaluation of its own performance andthat of its Directors. A structured questionnaire was prepared after taking intoconsideration inputs received from the Directors and also as per the Guidance Notes issuedby SEBI vide its Circular No: SEBI/HO/CFD/CMD/ CIR/P/2017/004 dated January 5th 2017covering various aspects of the Board's functioning such as adequacy of the composition ofthe Board and its Committees Board culture execution and performance of specificdutiesobligations and governance.

All the independent Directors have registered themselves with the Indian Institute ofCorporate Governance (IICA) through MCA Portal. None of the Independent Directors exceptSmt. Bhavi Koradia is required to pass an online proficiency self-assessment testconducted by the Institute within a period of one year from the date of inclusion of hername in the data bank of the Institute i.e. on or before February 122021.

14. BOARD AND COMMITTEES

During the year four (4) Board Meetings were convened and held the details of whichare given in the Corporate Governance Report that forms part of this Annual Report. Theintervening gap between two meetings was less than the period prescribed under theCompanies 2013 Secretarial Standard-1 on Board Meetings and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. The details of the Audit CommitteeStakeholder Relationship Nomination and Remuneration Committee and Corporate SocialResponsibility Committee have been given in the Report on the Corporate Governance.Recommendations made by the Audit Committee have been accepted by the Board without anymodification.

15. DIRECTOR'S RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by your Directors they make the following statements under section134(5) in terms of Section 134(3)(c) of the Companies Act 2013 and hereby confirm that:-

a. in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;

b. the directors have selected such accounting policies and applied consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 31 2020 and of the profit of theCompany for the year ended on that date;

c. the directors have taken proper and sufficientcare for the with the provisions ofthis Act for safeguarding the assets of the Company and for preventing and detecting fraudand other irregularities;

d. the annual accounts have been prepared on a going concern basis;

e. the directors have laid down proper systems financial controls to be followed by theCompany and that such internal . effectively financial controls are adequate and wereoperating

f. the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

16. NOMINATION AND REMUNERATION COMMITTEE

The Board has in accordance with the provisions of sub-section (3) of Section 178 ofthe Companies Act 2013 formulated the policy setting out the criteria for determiningqualifications positive attributes independence of a Director and policy relating toremuneration for Directors Key Managerial Personnel and other employees. The text of thepolicy is available on the website of the Company www.gandhispecialtubes.com. There hasbeen no change in the policy during the year.

17. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES

The Company promotes ethical behaviour in all its business activities and has put inplace a mechanism for reporting illegal and unethical behaviour.

The Board of Directors of the Company have pursuant to the provisions of Section177(9) of the Companies Act 2013 read with Rule 7 of the Companies (Meetings of Board andits Powers) Rules 2014 framed "Vigil Mechanism Policy" for Directors andemployees of the Company to provide a mechanism which ensures adequate safeguards toemployees and Directors from any victimization on raising of concerns of any violations oflegal or regulatory requirements incorrect or misrepresentation of any financialstatements and reports etc.

18. RISK MANAGEMENT POLICY

The Company has designed Risk Management System to avoid events situations orcircumstances which may lead to negative consequences on the Company's businesses anddefine a structured approach to manage uncertainty and to make use of these in theirdecision making pertaining to its business and corporate functions. At present there is noidentifiable risk which in the opinion of the Board may threaten the existence of theCompany.

19. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

The particulars as required under the provisions of Section 134(3) (m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption foreign exchange earnings and outgo etc.are furnished in "Annexure A" which forms part of this Report.

20. INTERNAL CONTROL SYSTEMS

The details in respect of internal control system and their adequacy are included inthe Management Discussion and Analysis which is a part of this report.

21. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has an adequate system for internal financial controls which commensuratewith its size and nature of business. Detailed procedures are in place to ensure that allassets are safeguarded and protected against losses all transactions authorized recordedand appropriately reported.

As per the requirements of Section 92(3) read with Section 134(3)(a) of the Act andRules framed thereunder the extract of the annual return for FY 2019-20 in the prescribedForm No. MGT-9 being a part of this report is annexed as "Annexure B" tothis report and the same has been hosted on the website of the Company and can be viewedat www. gandhispecialtubes.com.

23. CORPORATE SOCIAL RESPONSIBILITY

In accordance with the provisions of Section 135 of Companies Act 2013 and Companies(Corporate Social Responsibility Policy) Rules 2014 the Company has formulated andposted the Corporate Social Responsibility Policy on website of the company viz;www.gandhispecialtubes.com.

The Annual Report on CSR in accordance with the Companies (Corporate SocialResponsibility Policy) Rules 2014 for the year 2019-2020 is annexed as ‘AnnexureC' to the Board's Report.

(ii) STATUTORY AUDITOR

The Statutory Auditors of your Company namely M/s. Shashikant J. Shah & Co.Chartered Accountants were appointed for a period of 5 years at the Annual General Meetingheld on July 12 2017 and will continue to hold office till the conclusion of the 37thAnnual General Meeting to be held in the year 2022. The Statutory Auditors has confirmedtheir eligibility and submitted the Certificate in writing that they are not disqualifiedto hold the office of the StatutoryAuditor. The Audit Report does not contain anyqualification reservation or adverse remark. There was no instance of fraud during theyear under review which required the Statutory Auditors to report to the Audit Committeeand / or Board under Section 143(12) of Act and Rules framed thereunder.

(ii) SECRETARIAL AUDITOR

Pursuant to provisions of section 204 of the Act and the rules framed there under theBoard has appointed M/s. Dholakia & Associates LLP Company Secretaries in Practice toundertake the Secretarial Audit of the Company for the financial year 2019-2020. TheSecretarial Audit Report in Form MR-3 is annexed herewith as "Annexure D".

The Secretarial Audit Report does not contain any qualification reservation or adverseremark.

(iii) COST AUDITOR

The Board has appointed Shri. Dakshesh Zaveri as the Cost Auditor for the year2020-2021 pursuant to the provisions of Section 148(3) of the Companies Act 2013 readwith Companies (Cost Records and Audit) Rules 2015 at a remuneration of Rs. 50000/-(Rupees Fifty Thousand only) which is subject to the ratification by members in theensuing Annual

General Meeting.

25. SECRETARIAL STANDARDS

It is hereby confirmed that the Company has complied with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of India.

26. HUMAN RESOURCES

Employees are considered to be team members being one of the most critical resources inthe business which maximize the effectiveness of the Organization. Human resources buildthe enterprise and the sense of belonging would inculcate the spirit of dedication andloyalty amongst them towards strengthening the Company's Polices and Systems. The Companymaintains healthy cordial and harmonious relations with all personnel and therebyenhancing the contributory value of the Human Resources.

27. ENVIRONMENT AND SAFETY

The Company is conscious of the importance of environmentally clean and safeoperations. Due to widespread of COVID-19 pandemic company decided to adopt work from homepolicy for work related to office and in factory. The Company has adopted policy as perguidelines issued by the Government. The Company conducts operations in such a manner soas to ensure safety of all concerned compliance environmental regulations andpreservation of natural resources. There was no accident during the year.

28. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE FINANCIAL YEAR END OF THE COMPANY TO WHICHFINANCIAL RESULTS RELATES

Except as disclosed elsewhere in this report no material changes and commitments whichcould affect the Company's financial position have occurred between the end of thefinancial year of the Company and date of this report.

29. PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES

The Company has not taken any loan during the year. The details of GuaranteesInvestments and Securities as covered under the provisions of section 186 of the CompaniesAct 2013 are given in the notes No. 4 7 and 31 of the Financial Statements which formpart of the Annual Report.

30. PARTICULAR OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES

All transactions entered with Related Parties for the year under review were on arm'slength basis and in the ordinary course of business. Thus disclosure in form AOC-2 is notrequired as such Related Party Transactions are not material. However the details havebeen furnished financialstatement which should be treated as parttheNotesNo.36tothe of this Board's Report. All Related Party Transactions are placedbefore the Audit Committee as also to the Board for approval at every quarterly meeting.

The policy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the website of the Company. The web-link of the same has been provided in theCorporate Governance Report.

RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES 2014.

There were no employees except the Managing Director and Joint Managing Director of theCompany drawing remuneration of Rs.1.02 crores or more per annum or Rs.8.5 lakhs or moreper month during the year under review. Both the Managing Director and Joint ManagingDirector are related to each other and they are promoters of the Company.

Their appointment is contractual as approved by the Board and members of the Company.

The information relating to ratio of the remuneration of each director to the medianemployee's remuneration and such other prescribed details as required under Section197(12) of the Companies Act 2013 read with Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 for the year ended March 31 2020 is provided in aseparate "Annexure E" forming part of this Report. Further the reportand the accounts are being sent to the members excluding the aforesaid annexure. In termsof Section 136 of the Act the said annexure is open for inspection at the RegisteredOffice of the Company 21 days before the Annual General Meeting and up to the date of theAnnual General Meeting during the business hours on working days. Any shareholderinterested in obtaining a copy of the same may write to the Company Secretary.

32. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION & REDRESSAL) ACT 2013.

The Company has set up an Internal Complaints Committee (ICC) for providing a Redressalmechanism pertaining to sexual harassment of women employees at workplace in Mumbai and atHalol Gujrat. There was no complaint received during the year under review.

33. GENERAL DISCLOSURES

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:1. Issue of shares with differential rights.

2. Issue of sweat equity shares.

3. There is no Employees Stock Option Scheme.

4. There were no instances of non-exercising of voting rights in respect of sharespurchased directly by employees under a scheme pursuant to Section 67(3) of the Act readwith Rule 16(4) of Companies (Share Capital and Debentures) Rules

2014.

5. No orders have been passed by any Regulator or Court or Tribunal which can have animpact on the going concern status and the Company's operations in future.

6. The Company has also disclosed the impact of COVID-19 on business to Bombay StockExchange and National Stock

Exchange.

34. ACKNOWLEDGEMENT

Your Directors take this opportunity to place on record their sincere appreciation forthe excellent support provided by Bankers Government authorities all stakeholders andbusiness associates. The Board also express its sincere appreciation and support extendedby the Shareholders during the year under review and also acknowledges the dedicatedefforts put in by the employees at all levels.

I. Conservation of Energy

1. Energy conservation measures taken :

(i) Optimum utilisation of Furnace.

(ii) Lighting inside the Plant & in compound areas has been changed to LED

2. Additional investments and proposals if any being implemented for reduction ofconsumption of energy:

The Company has installed a Roof Top Solar Plant with a capacity of 0.675 MW at itsfactory situated in Halol Gujarat.

3. Impact of the measures at (1) and (2) above for reduction of energy consumption andconsequent impact on cost of production of goods: Above measures have resulted insubstantial energy saving.

A. POWER AND FUEL CONSUMPTION

B. CONSUMPTION PER UNIT OF PRODUCTION

* Indicates combined consumption of Welded / Seamless Tubes and Nuts. ** Indicates onlyGSPC GAS consumption and Liquid Nitrogen.

(1) SPECIFIC AREAS IN WHICH R & D WAS CARRIED OUT BY THE COMPANY

The Company is undertaking regular developmental activities to strengthen itsoperations through innovation to improve productivity and quality.

(2) BENEFITS DERIVED AS A RESULT OF THE ABOVE R & D

The Company is achieving efficiency in production and improvement in quality ofproduct.

(3) FURTHER PLAN OF ACTION

At present there are no specific areas in which the Company has undertaken Research& Development.

(4) CAPITAL EXPENDITURE ON R & D

The Company has not made separate allocation in the accounts but the expenditure(other than capital expenditure) is shown under respective heads of expenditure in theProfit & LossAccount.

B. TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION

The Company is taking steps on a continuous basis to improve product and processtechnology in an effort to provide equality products to the consumers.

III. Foreign Exchange Earnings and Outgo

Total foreign exchange earnings and outgo is as follows:

As on the financial year ended March 31 2020

[Pursuant to Section 92(3) of the Companies Act 2013 and Rule 12(1) of the Companies(Management and Administration) Rules 2014]

I. REGISTRATION AND OTHER DETAILS

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10 % or more of the total turnover of theCompany shall be stated:-

III. PARTICULARS OF HOLDING SUBSIDIARY AND ASSOCIATE COMPANIES

Not applicable as there is no subsidiary and associate company.

(i) Category wise shareholding

Note: 900000 Equity Shares were bought back under the Buyback activity on October182019 and the same were extinguished on October 242019

(ii) Shareholding of Promoters

Note: 900000 Equity Shares were bought back under the Buyback activity on October18 2019 and the same were extinguished on October 24 2019.

(iii) Change in Promoters' Shareholding

During the year under review Shri. Manhar G. Gandhi part of Promoter grouptransferred 50000 equity shares to Shri. Rahul J. Gandhi also a part of thePromoter group vide inter- se transfer as a Gift.

The Promoters participated in the Buyback activity undertaken by the Company which wasapproved by the Board at its meeting held on May 28 2019 and by members through SpecialResolution passed on July 31 2019. A total of 642914 Equity Shares belonging to thePromoter and the Promoter Group were accepted under the Buyback programme.

(iv) Shareholding Pattern of top ten Shareholders (other than Directors Promoters andHolders of GDRs and ADRs)

Note: 900000 Equity Shares were bought back under the Buyback activity on October18 2019 and the same were extinguished on October 24 2019.

(v) Shareholding of Directors and Key Managerial Personnel:

1. *Shri. Manhar G. Gandhi 12.04.2019 Transfer via Gift 50000 Equity Shares toShri. Rahul J. Gandhi

2. **Shri. Kavas N. Warden 15.11.2019 Purchase 621 Equity Shares.

Note: 900000 Equity Shares were bought back under the Buyback activity on October 182019 and the same were extinguished on October 24 2019.

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due forpayment:

The Company has not borrowed any amount from the Bank or financial institution.

A. Remuneration to Managing Director / Whole Time Director and/or Manager;

B. Remuneration to other Directors:

C. Remuneration to key managerial personnel other than MD/Manager/WTD

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES (Under the Companies Act):

There were no instances of any penalties/punishments/compounding of offences for theyear ended March 31 2020

ANNUAL REPORT ON CSR ACTIVITIES