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Inducto Steel Ltd.

BSE: 532001 Sector: Others
NSE: N.A. ISIN Code: INE146H01018
BSE 00:00 | 04 Oct 15.22 0
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NSE 05:30 | 01 Jan Inducto Steel Ltd
OPEN 14.50
PREVIOUS CLOSE 15.22
VOLUME 129
52-Week high 17.60
52-Week low 11.88
P/E 6.95
Mkt Cap.(Rs cr) 6
Buy Price 15.22
Buy Qty 10.00
Sell Price 15.22
Sell Qty 490.00
OPEN 14.50
CLOSE 15.22
VOLUME 129
52-Week high 17.60
52-Week low 11.88
P/E 6.95
Mkt Cap.(Rs cr) 6
Buy Price 15.22
Buy Qty 10.00
Sell Price 15.22
Sell Qty 490.00

Inducto Steel Ltd. (INDUCTOSTEEL) - Director Report

Company director report

(INCLUDES MANAGEMENT DISCUSSION AND ANALYSIS)

Dear Members

The Board of Directors are pleased to present the Company's Thirtieth (30th)Annual Report and the Company's audited financial statements (standalone and consolidated)for the financial year ended March 31 2018 ("year under review/ FY 2017-18").

Management Discussion and Analysis

To avoid repetition of information the Management Discussion and Analysis onperformance of the Company is presented below.

Global Overview:

IMF remains positive on India's growth potential and has retained its GDP forecast forthe country at 7.4% in 2018. It also estimated that the Indian economy would grow by 7.8%in 2019 making it world's fastest growing economy in 2018 and 2019.

FY 2017-18 was a landmark year due to implementation of much awaited Goods and ServicesTax ("GST"). While sector experienced limited unfavourable impact early on dueto roll out related disruptions it gradually experienced steady recovery towards the endof the year. Your Company believes that this move has created a singular trading marketacross the country creating an organised ecosystem under unified tax regime; expected tobenefit both consumers and companies in the long run.

External Environment

1. Macroeconomic Condition

During the Financial Year 2017-18 the global economy continued its broad-basedmomentum and registered a growth of 3.8% its strongest level since 2011 as more thanhalf of the world's economies registered growth. Global manufacturing activity continuedto grow on account of favourable financing conditions globally accommodative policiesrising investor confidence and increase in commodity prices. Global economy was aided byrebound in global trade investment recovery in advanced economies and continued growth inemerging Asia. Growth in advanced economies was driven by strong domestic demand andimproved labour markets while emerging markets witnessed strong consumption and trademomentum. The United States of America (‘US') witnessed a growth of 2.3% on the backof strong external demand private investment and a weaker dollar. Demand was positivelyaffected by the overhaul of the tax code in 30 years - the corporate income tax rate wasslashed to 21% from 35% and taxes for households were also lowered. Strong domestic demandis also a recurring theme in Europe and Asia. Euro area registered a growth of 2.4% whichis almost 0.6% higher than previous year. Policy stimulus and strengthening global demandhas contributed to this increase in growth. In Japan strong domestic demand aided byrecovery in consumer spending and investment helped achieve growth of 1.7%. Among theemerging and developing economies China continued to maintain its growth rate atapproximately 7% aided by policy support and recovery in trade. Growth in India was 6.7%owing to consumption led growth influenced by Government policies and investments. Growthin Middle-East and sub-Saharan Africa was impacted by geo-political/domestic conflicts.Overall improved growth in US Europe and other key regions more than offset the lowergrowth in other regions and helped sustain growth momentum.

2. Economic Outlook

According to International Monetary Fund (‘IMF') global growth is projected torise to 3.9% in 2018 and 2019 closer to the long-term growth trend of 4%. The IMFestimates that the growth of more than 1.5% in 2017 in each of the world's seven biggesteconomies—the US China Germany Japan France the UK and India— will providean impetus to the world economy to achieve more robust growth in 2018. Advanced economiesare expected to maintain their growth momentum in 2018. The US economy is projected by IMF

to grow at a faster pace (2.7%) in 2018 aided by fiscal stimulus and policies. The euroarea economic recovery has broadened across its member nations and is likely to be aidedby rise in capex and consumption. Unemployment rate has reached its lowest level since2009 and the European Central Bank (‘ECB') is expected to keep interest ratesunchanged and gradually scale back on asset purchases with an eye on economic growth.Among other key regions China's GDP growth is likely to moderate to 6.5% in 2018 as thepolicy makers continue their efforts to promote quality growth. Supply side reformsthrough capacity cuts rural revitalisation urbanisation & housing reform andcontrolled pace of credit growth are likely to determine domestic demand and potentialmovement in commodity prices. As per IMF India is expected to grow between 7.0% to 7.5%in Financial Year 2018-19 aided by rural development infrastructure investment andexpansion of manufacturing activity. Outlook for Middle-East and North Africa is graduallyimproving on the back of higher commodity prices. Structural issues though continue topose a significant risk to the global growth cycle. While the supportive economicenvironment policies and commodity prices are likely to aid growth in the short termpossible financial stress increased protectionism and rising geopolitical tensions maypose as downside risks to growth. Further restrictions by the US government on importsand other protectionist measures in Europe & other regions may disrupt global tradeand investment adversely affecting global growth and sentiment. Also high leverage levelsamong nations makes them financially vulnerable and any tighter financial conditions inUS Europe or China is likely to have adverse spill-over effect on global growth. Outcomeof the Brexit negotiations is likely to impact the pace of recovery in UK as well as theEurozone economy.

The following financial performance and analysis details of various plants/segments isintended to convey the Management's perspective on the financial and operating performanceof the Company at the end of Financial Year 2017-18. It should be read in conjunction withthe Company's financial statements the schedules and notes thereto and other informationincluded elsewhere in the Integrated Report. The Company's financial statements have beenprepared in accordance with Indian Accounting Standards (‘Ind AS') complying with therequirements of the Companies Act 2013 and guidelines issued by the Securities andExchange Board of India (‘SEBI'). Aspects on industry structure and developmentsoutlook risks internal control systems and their adequacy and material developments inhuman resources have been covered hereinbelow.

a) Standalone Ind AS Financial Results : Review and Analysis

(Rs. in Lakhs)

Particulars For the year ended
March 31 2018 March 31 2017
Revenue from operations 2202.82 2572.24
Other Income 170.95 436.42
Total Revenue 2373.77 3008.66
Cost of raw materials consumed 2026.66 2328.53
Changes in inventories of finished goods (31.35) -
stock – in – trade work – in – process
Employee benefits expenses 72.97 56.49
Finance costs 30.45 152.03
Excise Duty 126.55 269.49
Depreciation and amortization expenses 14.76 14.42
Other expenses 94.25 102.61
Total Expenses 2334.28 2923.57
Profit / (Loss) before tax 39.48 85.09
Less: Current Tax 16.97 23.58
Less: Deferred Tax (1.59) 2.23
Profit / (Loss) after tax 24.10 59.28
Other Comprehensive Income (0.04) -
Total Comprehensive Income for the year 24.07 59.28
Earnings Per Share (Face Value of Rs. 10/- each)-
Basic- 0.60 1.48
Diluted 0.60 1.48

b) Standalone Cash Flow Analysis

(Rs. in Lakhs)

Particulars March 31 2018 March 31 2017
- Net Cash Flow from Operating Activities 3174.54 (5225.40)
- Net Cash Outflow from Investing Activities (3169.19) 5375.55
- Net Cash Outflow from Financing Activities (30.45) (153.48)
- Net Cash Inform/(Outflow) (25.09) (3.34)

Notes:

(1) Effective July 1 2017 Revenue is recorded net of GST whereas earlier the samewas recorded gross of excise duty which forms part of expenses. Hence revenue fromoperations are not comparable with the previous period corresponding figure.

(2) Includes Other Income of Rs.170.83 Lakhs (Previous Year Rs. 17.01 Lakhs) andFinance income of Rs. 0.12 Lakhs (Previous Year Rs. 419.42 Lakhs).

Revenue

Your Company reported Revenue of Rs. 2202.82 lakhs (net of inter-segment adjustment)during the year which has fallen down by 14.36% over the previous year.

Operating Profit (EBITDA)

The Operating Profit of the Company including other income and finance income is Rs.84.69 Lakhs (previous year Rs. 251.55 Lakhs). The EBITDA margin is at 3.84% and theCompany is continuously making efforts to improve the same.

Finance Cost

Finance cost during the year was Rs. 30.45 lakhs (down from Rs. 152.03 lakhs inprevious year).

Depreciation

Depreciation during the year increased to Rs. 14.76 lakhs from Rs. 14.42 lakhs inprevious year due to addition in fixed assets.

Financial Performance Review and Analysis (Consolidated)

Notes:

(1) Effective July 1 2017 Revenue is recorded net of GST whereas earlier the samewas recorded gross of excise duty which forms part of expenses. Hence revenue fromoperations are not comparable with the previous period corresponding figures.

(2) Includes Other Income of Rs.170.83 Lakhs (Previous Year Rs. 17.01 Lakhs) andFinance income of Rs. 0.12 Lakhs (Previous Year Rs. 419.42 Lakhs).

(3) Recognized Deferred tax assets on brought forward accumulated losses and theirabsorption based on reasonable certainty in coming years.

Revenue

Your Company reported consolidated Revenue of Rs. 2202.82 lakhs (net of inter-segmentadjustment) during the year which has fallen down by 14.36% over the previous year.

Operating Profit (EBITDA)

The consolidated Operating Profit of the Company including other income and financeincome is Rs. 84.69 Lakhs (previous year Rs. 251.55 Lakhs). The consolidated EBITDA marginis at 3.84% and the Company is continuously making efforts to improve the same.

Finance Cost

Consolidated Finance cost during the year was Rs. 30.45 lakhs (down from Rs. 152.03lakhs in previous year).

Depreciation

Consolidated Depreciation during the year increased to Rs. 14.76 lakhs from Rs. 14.42lakhs in previous year due to addition in fixed assets.

Industry Overview

Alang is witnessing a drastic shift especially towards green ship recycling and it isreimaging its outlook by following all the certification upgrading infrastructure safetystandards and being environmentally conscious. Ship recycling in India contributes around1 to 2% for domestic steel demand and most of dismantled ship scraps are recycled andreused.

The ship breaking industry at Alang in Gujarat witnessed a 12 per cent drop in businessduring the just-ended fiscal 2017-18 as a two-year-old ship recycling policy struggled toinfuse fresh life in to a sector that is increasingly being challenged by competition fromneighbouring Pakistan and Bangladesh.

In 2017-18 a total of 253 ships weighing over 24.33 lakh Light Displacement Tonnage(LDT) beached at the shores of Alang that houses one of the world's largest ship recyclingyard. This is 12 per cent less compared to the 259 ships and 27.75 lakhs LDT that wasbroken reveals data from the Gujarat Maritime Board (GMB) the state's nodal agency thatcontrols all shipbreaking activities at the yard in Bhavnagar district.

The business at Alang is nowhere close to the highs witnessed in 2011-12 when a record414 ships with 38.56 lakhs LDT were broken at this yard having about 170 dedicated plotsfor shipbreaking activity. In the last seven years between 2011 and 2017 the tonnage ofships broken at the yard annually has fallen by 37 per cent.

Not a single new player has entered Alang in the last two years after the newship-recycling policy took effect. Only 130 of the 154 plots at Alang are currentlyoccupied. Others are still lying empty. Secondly the demand from construction sector forrecycled steel in India is low this year. The new policy has attracted hardly any newplayers and the banks have also tightened their lending and not giving finance.

Ship-breakers feel that their counterparts in Bangladesh and Pakistan are able to paymore and the new ship-recycling policy introduced by the Gujarat government in January2016 has not been able to attract new players to the sector. The demand of the ships ismore in Bangladesh and Pakistan compared to India. The main source of steel for both ofthem is end-of-life ships. The ship-breakers in Bangladesh and Pakistan are able to payUSD 20 more for every tonne. Indian ship-breakers are able to offer about $420-430 pertonne in the international market while they offer about USD 450-460 for the same shipand so the ship owners divert their ships to the neighbouring countries.

The business dynamics of the ship-recycling industry is an interesting paradox. If theglobal shipping industry is going through a good cycle the recyclers will become jobless.If the global shipping industry is performing badly the recyclers will get good businessas more ships will be sent to scrapping yards. The current global economic tide isfavouring ship-breakers.

The shipping industry is currently in rough waters. The Baltic Dry index whichmeasures freight rates for commodity bulk carriers has fallen by around 95 per cent sinceits peak in 2008. Of the top 12 shipping companies in the world 11 are posting quarter-onquarter losses. The global shipping industry may lose as much as $10 billion on revenuesof $170 billion in 2017 estimate industry experts.

It is these woes of the shipping industry that are building up hopes across theship-recycling yards of Alang. The world's largest ship-recycling yard had its dream runin 2011-12 when it broke 415 ships. Alang has a capacity of dismantling 450 ships a yearand re-rollable steel capacity of 4.5 million tonnes per annum. From then on it was asteep fall. The number of ships in 2012-13 fell to 394 and then to 298 in 2013-14. In2014-15 only 275 ships were scrapped while that number further fell to 249 ships in2015-16. Fair weather appears to have returned to Alang with 315 ships having been brokenin the previous financial year of 2016-17 according to data from the Ship RecyclingIndustries Association.

A favourable business cycle has brought cheers to nearly 40000 workers of theship-breaking industry. Moreover another about 100000 people indirectly employed byancillary industries and related activities such as steel rerolling industry and shopsselling everything in a ship from cutlery to ropes to furniture and computers - are alsohaving a good time as the tide turns for the ship-recycling industry. The proposedclean-up legislation could put Alang back in business like never before.

Industry's Initiative/ Structure and Developments

A proposed eco-friendly law may further boost the prospects of ship-breaking industryas it returns to a buoyant business cycle.

India has begun cleaning up its tarnished ship-breaking industry. Accordingly theUnion government has drafted a law to implement the Hong Kong International Convention forthe Safe and Environmentally Sound Recycling of Ships. This convention was adopted by theInternational Maritime Organization (IMO) in 2009.

A draft legislation to implement the Hong Kong Convention to make the ship-recyclingindustry safe for its workers and the environment is now undergoing pre-legislativeconsultations. The Hong Kong convention is yet to come into force as it has not beenratified by 15 countries representing 40 per cent of the world's merchant shipping bygross tonnage. Only six countries - Norway Congo France Belgium Panama and Denmark -have ratified it so far. The proposed Safe and Environmentally Sound Recycling of ShipsBill 2016 aims to give effect to the provisions of the Hong Kong Convention. The Billmakes it mandatory for ships to carry out all recycling activities in a safe manner andaccording to global practices. Any violation in this regard could attract a fine of Rs 10lakhs and a six-month imprisonment.

Since 2015 around Rs 10000-crore Indian ship-recycling industry has voluntarilystarted adopting global best practices in dismantling discarded ships. The industry hastaken up this clean-and-green initiative even before the legislation was enacted. Some 55of the 120 working yards have won the Hong Kong Convention's compliance certificates fromglobal ship classification societies. Another 15 other yards are being audited forcertification.

Alang the world's largest ship-breaking yard in south Gujarat's Bhavnagar districtwhich was set up in 1982 by Gujarat Maritime Board rapidly grew into one of the majorglobal ship-recycling hubs and has been undergoing encouraging changes in the past fewyears. The new Alang is clean and green. Most of the yards have clean and cementedplatforms. Scrapped steel computers and huge engine parts are properly stored in neat andclean temporary storage facilities. Even half-scrapped ships display red ribbon warningsigns to workers on duty. Besides almost all workers wear helmets safety jackets andboots. The situation in Alang has been improving for the better in the past two years.Meanwhile India is upgrading the ship-recycling yards in Alang through a $76-million softloan from the Japan International Cooperation Agency. The upgrade envisages concretefloors to prevent pollutants from entering the sub-soil and improvement of workers' safetyconditions and environmental safeguards.

As Alang gets its clean-up act together ship-breaking companies are betting big onbrightening business prospects. The deserted scrapping beaches are now full with ships.The ship-breaking yards are buzzing with activity as huge vessels are dismantled by scoresof workers. Back in Bhavnagar about 50 km from Alang ship-recycling companies are busyfirming up deals with scrap dealers steel re-rollers logistics suppliers and buyers ofsecond-hand electrical items furniture computer and kitchen cabinets.

Government Initiatives

Some of the other recent government initiatives in this sector are as follows:

Government of India's focus on infrastructure and restarting road projects is aidingthe boost in demand for steel. Also further likely acceleration in rural economy andinfrastructure is expected to lead to growth in demand for steel.

The Union Cabinet Government of India has approved the National Steel Policy (NSP)2017 as it seeks to create a globally competitive steel industry in India. NSP 2017targets 300 million tonnes (MT) steel-making capacity and 160 kgs per capita steelconsumption by 2030.

The Ministry of Steel is facilitating setting up of an industry driven Steel Researchand Technology Mission of India (SRTMI) in association with the public and private sectorsteel companies to spearhead research and development activities in the iron and steelindustry at an initial corpus of Rs 200 crore (US$ 30 million).

Business Overview

The company is in the business of ship breaking and investment activities.

During the financial year 2017-18 witnessed frequent fluctuation in the prices of oldship in the international market and also heavy dollar exchange rate fluctuations. Thishas adversely affected the sales turnover of the company. However the prices in Iron andsteel industry are gradually getting stabilized but foreign currency and fluctuations invalue of Indian Rupee vis--vis US Dollar remains a concerning area for the company evenin the current year. The management is exercising caution in purchase of ships forbreaking to optimize the profit margin and minimize the possibilities of losses if sohappens.

Whenever there is no immediate payment liability against old ship purchased forbreaking the surplus funds available with the Company are given as loan on short termbasis. The Company is hopeful that the Company can earn reasonable return on theseloans/investments.

Surplus funds are also invested in new avenues of earnings in the form of partnershipwith other entities like in Real Estate and Redeveloping firms. At present the Company haspartnership with M/s. Calvin Divine Enterprises with 20% share and M/s. Shree BalajiAssociates with 5% share. The management is hopeful that the Company can earn reasonablereturn on these investments.

a ) Segmental Review

During the financial year 2017-18 ship-breaking unit at Alang Ship Breaking Yard isexpected to grow substantially in coming years. Due to fluctuating and volatile prices ofold Ships Iron and Steel products coupled with fluctuations in value of Indian Rupeevis--vis US Dollar during the year the net profit margins of this segment has beenaffected. No trading activities were carried out during the year under review. Howeverthe management is of the view that in the coming years the ship breaking industry will bestable and with expected boost in the economy the requirement of iron and steel willincrease which will help the company to move towards its sustained path of growth.

1. Ship breaking:

As has been stated in the out-look due to fluctuations in the exchange rate of USDollar vis--vis Indian Rupee and steep decrease in prices of Iron and steel products andvolatile market conditions. During the year company has achieved sales turnover of Rs.2202.82 Lakhs as against Rs. 2572.24 Lakhs last year. During the financial year 2017-18ship-breaking unit at Alang Ship Breaking Yard has not shown a growth however the shipbreaking unit is expected to grow substantially in coming years. Due to fluctuating andvolatile prices of old ships Iron and Steel products coupled with fluctuations in valueof Indian Rupee vis--vis US Dollar during the year the sales turnover of this segmenthas been affected. Though the year under review saw fluctuation in the internationalmarket of old ships coming for breaking the management was very cautious and purchasedships at proper time and built a good level of inventories to earn better profits incoming years. Now the market has stabilized and taking into account the inventory level ofthe company as at the year end it is hoped that the turnover and the profitability willshow a an increase in the coming years.

2. Trading & Investments (HO-Mumbai):During the financial year 2017-18the company has not performed any trading activities due to fluctuating and volatileprices of old ships Iron and Steel products. The management is of the view that in thecoming years the iron and steel industry will be stable and with expected boost in theeconomy the requirement of iron and steel will increase which will help the company tomove towards its sustained path of growth.

b) Segment-wise Standalone Ind AS Financial Results

(Rs. in Lakhs)

Particulars Trading Unit Ship-Breaking Unit Total
a) Revenue from External Source 0.00 2202.82 2202.82
b) Other Income (8.42) 179.37 170.95
c) Segment Results Before Interest and Taxes (12.28) 82.21 69.9
d) Segment Assets 3865.44 275.71 4141.15
e) Segment Liabilities 32.97 11.06 44.03

a) Risk Management

The Company is exposed to the risk from the market fluctuations of foreign exchange aswell as the fluctuation in the price of iron and steel. The Company's raw material is oldship which is purchased from the international market on credit ranging up to 180 days to360 days. The Company is adopting policy of full hedging or covering the foreign exchangerequirement the Company is regularly monitoring the foreign exchange movement andsuitable remedial measures are taken as and when felt necessary.

Though the Company is employing such measures the Company is still exposed to the riskof any heavy foreign exchange fluctuation.

Likewise the Company's finished products are mainly re-rollable scrap generated fromship breaking and the price of the same is linked to the market rate for iron and steel.Any up and down in the price of the iron and steel will affect the profitability of theCompany. However taking into account the price fluctuations already affected during theyear 2017-18.

Outlook – Way Forward

India is expected to overtake Japan to become the world's second largest steel producersoon and has envisaged achieving 300 MT of annual steel production capacity by 2030.

Steel consumption is expected to grow 5.7 per cent year-on-year to 92.1 MT in 2018.

India is expected to become the second largest steel producer in the world by 2018based on increased capacity addition in anticipation of upcoming demand and the new steelpolicy that has been approved by the Union Cabinet in May 2017 is expected to boostIndia's steel production. Huge scope for growth is offered by India's comparatively lowper capita steel consumption and the expected rise in consumption due to increasedinfrastructure construction and the thriving automobile and railways sectors.

Your Company expects FY 2018-19 to be better as the after-effects of demonetisation andGST implementation seem to have subsided. As per economic surveys India continues to bethe fastest growing economies in the world and is expected to continue in FY2018-19 aswell. This is supported well by favorable factors such as policy reforms.

India is expected to experience sustained growth in short to medium term driven bygrowth in steel consuming sectors revival of rural demand increased spending oninfrastructure amongst others. Further the conducive government stance towards the steelindustry through policies focusing on ‘Make in India' and Smart City Missionreinforces India's stance as an attractive place for the steel industry. India continuesto be an attractive region for steel given its low per capita consumption of approximately65 kg (world average of 208 kg China 493 kg). This shows that there is significantheadroom for consumption growth. The Company expects to take advantage of the growthopportunity provided by the Indian economy.

Further India's iron ore reserves and competitive labour costs give steelmanufacturers based in the country a distinctive cost advantage. The Company seeks toleverage this advantageous position and strengthen its status as a low-cost andhigh-quality producer of steel. The competitive business environment the Company operatesin makes innovation imperative for success of the business.

Internal financial controls and its adequacy

Internal financial control systems of the Company are commensurate with its size andnature of its operations. These have been designed to provide reasonable assurance withregard to the orderly and efficient conduct of its business including adherence to theCompany's policies safeguarding of its assets prevention and detection of frauds anderrors accuracy and completeness of the accounting records and the timely preparation ofreliable financial information and disclosures.

Systems and procedures are periodically reviewed and these are routinely tested byStatutory as well as Internal Auditors and cover all functions and business areas. TheAudit Committee reviews adequacy and effectiveness of the Company's internal controlenvironment and monitors the implementation of audit recommendations including thoserelating to strengthening of the Company's risk management policies and systems. Duringthe year under review no material or serious observation has been received from theStatutory Auditors and the Internal Auditors of the Company on the inefficiency orinadequacy of such controls.

Human Resources

Your Company treats its "human resources" as one of its most importantassets.

We continuously invest in attraction retention and development of talent on an ongoingbasis. Our thrust is on the promotion of talent internally through job rotation and jobenlargement. We believe in harnessing its leadership and people capabilities through sharpfocus and initiatives on talent development.

We review our talent based on their performance and potential to assess their readinessfor future roles of higher scale and complexity. We believe in developing our employeesthrough multiple experiences requiring them to handle scale and complexity. We haveinstituted this through varied job rotation and project roles. We have put in placevarious recognition initiatives for our employees to reward them on their noteworthyperformance and contribution.

Our Company is committed to providing work environment that ensures every employee istreated with dignity and respect and afforded equitable treatment. The Company is alsodedicated at promoting a work environment that is conducive to the professional growth ofits employees and encourages equality of opportunity. To foster a positive workplaceenvironment free from harassment of any nature we have institutionalized the Anti SexualHarassment Framework through which we address complaints of sexual harassment at theworkplace. We follow a gender-neutral approach in handling complaints of sexual harassmentand we are compliant with the law of the land where we operate. We have also constitutedComplaints Committee to consider and address sexual harassment complaints in accordancewith Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013.

Consolidated Financial Statement

As per applicable provisions of the Companies Act 2013 ("the Act") if anyread with the Rules issued thereunder and in accordance with principles and procedures asset out in the Indian Accounting Standards (Ind AS) notified under the Companies (IndianAccounting Standards) Rules 2015 the Consolidated Financial Statements of the Companyfor the financial year ended March 31 2018 have been prepared.

For all periods up to and including the year ended March 31 2017 the Company preparedits financial statements in accordance with the accounting standards notified under thesection 133 of the Companies Act 2013 read together with paragraph 7 of the Companies(Accounts) Rules 2014 (previous Indian GAAP). These financial statements are theCompany's first consolidated financial statements prepared in accordance with Ind AS basedon the permissible options and exemptions available to the Company in terms of Ind AS 101‘First time adoption of Indian Accounting standards'.

The Consolidated Financial Statements together with the Auditors' Report form part ofthis Annual Report.

Details of Subsidiary/Joint Ventures/Associate Companies

The Company has no subsidiary associate companies or joint venture companies withinthe meaning of Section 2(6) and 2(87) of the Act and thus pursuant to the provisions ofSection 129(3) of the Act the statement containing the salient features of financialstatements of the Company's subsidiaries in Form AOC-1 is not required to be attached tothe financial statements of the Company.

Secretarial Standards

The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto ‘Meetings of the Board of Directors' and ‘General Meetings' respectivelyhave been duly followed by the Company.

Dividend

Your Directors have considered it financially prudent in the long term interest of theCompany to reinvest the profits into the business of the Company to build strong reservebase meet the funds requirement and grow the business of the Company. Thus your Board ofDirectors regret their inability to recommend any dividend for the year ended March 312018.

Loans Guarantee & Investments

Loans guarantees and investments covered under Section 186 of the Companies Act 2013read with the Companies (Meetings of Board and its Powers) Rules 2014 as on March 312018if any form part of the Notes to the Standalone Financial Statements provided inthis Annual Report.

Contracts or Arrangements with Related Parties

As per the provisions of Section 188(1) of the Act read with Companies (Meetings ofBoard and its Powers) Rules 2014 and Regulation 23 of the Listing Regulations allcontracts/arrangements/transactions entered by the Company with Related Parties were inordinary course of business and at arm's length basis.

All Related Party Transactions entered into during the year under review were approvedby the Audit Committee and the Board from time to time and the same are disclosed in theFinancial Statements of your Company for theyear under review.

Further pursuant to the provisions of the Act and the SEBI Listing Regulations theBoard has on recommendation of its Audit Committee adopted a Policy on Related PartyTransactions and the said policy is available on the website of the Company i.e. www.hariyanagroup.com.

Further during the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions. There were nomaterially significant related party transactions which could have potential conflict withinterest of the Company at large.

Accordingly Form AOC-2 prescribed under the provisions of Section 134(3)(h) of the Actand Rule 8 ofthe Companies (Accounts) Rules 2014 for disclosure of details of RelatedParty Transactions which are "not at arm's length basis" and also which are"material and at arm's length basis" is not provided as an annexure to theBoard's Report.

Directors and Key Managerial Personnel (KMP)

Re-appointments

• Mr. Rajeev Reniwal is proposed to be appointed as the Managing Director of theCompany subject to approval of members of the Company to hold such office until theconclusion of the 34th Annual General Meeting of the Company

• In accordance with the provisions of the Act and the Articles of Association ofthe Company Mrs. Sweety Reniwal Director of the Company retire by rotation at theensuing Annual General Meeting and being eligible seeks re-appointment. The Board ofDirectors on the recommendation of the Nomination and Remuneration Committee hasrecommended her re-appointment at the forthcoming Annual General Meeting.

• The term of office of Mr. Yogesh Thakkar as the Independent Director willexpire on March 31 2019. The

Board of Directors on recommendation of the Nomination and Remuneration Committee hasrecommended re-appointment of Mr. Yogesh Thakkar as an Independent Director of theCompany for a second term of 5 (five) consecutive years on the expiry of his current termof office.

• The term of office of Mr. Bhushanlal Behl as the Independent Director willexpire on March 31 2019. The Board of Directors on recommendation of the Nomination andRemuneration Committee has recommended re-appointment of Mr. Bhushanlal Behl as anIndependent Director of the Company for a second term of 5 (five) consecutive years on theexpiry of his current term of office.

Resignations

• During the year under review Mr. Rakesh Reniwal resigned as the Chief FinancialOfficer (CFO) of the Company w.e.f. March 27 2018. The Board places on record its deepappreciation and gratitude for the valuable contribution and advice offered by Mr. RakeshReniwal during his tenure as CFO of the Company.

All the Independent Directors of the Company have given their respective declarationsstating that they meet the criteria of Independence as provided in Section 149(6) of theAct and Regulation 16(1)(b) of the SEBI Listing Regulations and there has been no changein the circumstances which may affect their status as an independent director during theyear. During the year the non-executive directors of the Company had no pecuniaryrelationship or transactions with the Company.

Further the list of the present Directors and KMP forms part of this Annual Reportunder the section Company details.

Performance Evaluation of the Board

In terms of the provisions of the Act the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations") and Nomination Policy of the Company NARC and the Board have approveda framework which lays down a structured approach guidelines and processes to be adoptedfor carrying out an evaluation of the performance of the Board its Committees andindividual Directors.

During the year under review the Board carried out the evaluation of its ownperformance and that of its Committees and the individual Directors.

The evaluation process focused on various aspects of the functioning of the Board andits Committees such as composition of the Board and Committees attendance of Directorsat Board and committee meetings acquaintance with business communicating inter se boardmembers effective participation domain knowledge compliance with code of conductvision and strategy experience and competencies performance of specific duties andobligations governance issues etc. The Board also carried out the evaluation of theperformance of individual directors based on criteria such as contribution of the directorat the meetings strategic perspective or inputs regarding the growth and performance ofthe Company etc.

Outcome of the Evaluation

Board:

The Board carried out an annual performance evaluation of the Board CommitteesIndividual Directors and the Chairman alongwith assessing the quality quantity andtimeliness of flow of information between the Company Management and the Board that isnecessary for the Board to effectively and reasonably perform their duties. Theperformance evaluation of the Board is carried out taking into account the variousparameters like composition of Board process of appointment to the Board commonunderstanding amongst Directors of their role and responsibilities timelines and contentof Board papers strategic directions advice and decision making etc. The Board alsonotes the actions undertaken pursuant to the outcome of previous evaluation exercises.

The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the independent director being evaluated.

The Chairman of the respective Committees shared the report on evaluation with therespective Committee members. The performance of each Committee was evaluated by theBoard based on report on evaluation received from respective Committees.

The report on performance evaluation of the Individual Directors was reviewed by theChairman of the Board and feedback was given to Directors.

Committees of the Board:

The Committee's self-assessment is carried out based on degree of fulfillment of keyresponsibilities adequacy of Committee composition effectiveness of meetings Committeedynamics and quality of relationship of the Committee with the Board and the Management.

The Independent Director(s) also evaluated the performance of Non-IndependentDirectors the Chairman of the Board and the Board as a whole at the meeting ofIndependent Director(s) held on March 31 2018. The outcome and feedback from Directorswas discussed at the respective meetings of Board Committees of Board and meetings ofIndependent Directors.

The overall performance evaluation exercise was completed to the satisfaction of theBoard. The Board of Directors deliberated on the outcome and necessary steps will be takengoing forward.

The details of the evaluation process are set out in the Corporate Governance Reportwhich forms a part of this Annual Report.

Number of meetings of the Board

During the year 10 (ten) Board meetings were held. The details of the composition ofthe Board and its Committees and of the meetings held and attendance of the Directors atsuch meetings are provided in the Corporate Governance Report.

Committees of the Board

A. AUDIT COMMITTEE:

The composition of the Audit Committee is in alignment with provisions of Section 177of the Companies Act 2013 read with the Rules issued thereunder and Regulation 18 of theListing Regulations.

All the recommendations made by the Audit Committee were accepted by the Board ofDirectors of the Company.The details pertaining to Audit Committee and its composition areincluded in the Corporate Governance Report which forms part of this report.

B. NOMINATION AND REMUNERATION COMMITTEE (‘NARC'):

Your Company has a duly constituted NARC with its composition quorum powers roleand scope in line with the applicable provisions of the Act and SEBI Listing Regulations.The detailed information with respect to the NARC is disclosed in the Corporate GovernanceReport forming part of this Annual Report.

Nomination Policy and Remuneration Policy/ Philosophy

The Board has on recommendation of the NARC adopted a Nomination Policy whichenumerates your Company's policy on appointment of Directors and Key Managerial Personnel("KMP") including criteria for determining qualifications positive attributesindependence of a director and other matters provided under Section 178(3) of the Act.

The Nomination Policy is enacted mainly to deal with the following matters fallingwithin the scope of the NARC: • to institute processes which enable theidentification of individuals who are qualified to become Directors and who may beappointed as KMP and/or in senior management and recommend to the

Board of Directors their appointment and removal from time to time;

• to devise a policy on Board Diversity;

• to review and implement the succession and development plans for ManagingDirector Executive Directors and Senior Managers;

• to formulate the criteria for determining qualifications positive attributesand independence of Directors; and

• to establish evaluation criteria of Board its Committees and each Director.

Further the Board has on recommendation of the NARC also adopted a policy entailingRemuneration Philosophy which covers the Directors KMP and employees included in SeniorManagement of the Company.

While formulating this policy the NARC has considered the factors laid down underSection 178(4) of the Act which are as under:

• the level and composition of remuneration is reasonable and sufficient toattract retain and motivate directors of the quality required to run the companysuccessfully; • relationship of remuneration to performance is clear and meetsappropriate performance benchmarks; and • remuneration to directors key managerialpersonnel and senior management involves a balance between fixed and incentive payreflecting short and long-term performance objectives appropriate to the working of thecompany and its goals.

Both the aforesaid policies are available on the website of the Company i.e.www.hariyanagroup.com.

C. STAKEHOLDERS' RELATIONSHIP & SHARE TRANSFER COMMITTEE:

The details pertaining to composition of the Committee is included in the CorporateGovernance Report which forms part of this report.

D. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE ("CSR COMMITTEE"):

In terms of the provisions of Section 135 of the Act read with the Companies (CorporateSocial Responsibility Policy) Rules 2014 your Company has a duly constituted CSRCommittee comprising the following members:

Sr. No. Name of Member Designation
1 Mr. Yogesh Thakkar Chairman
2 Mr. Bhushanlal Behl Member
3 Ms. Sweety Reniwal Member

Policy on Corporate Social Responsibility ("CSR")

The Board has with a vision "to actively contribute to the social and economicdevelopment of the communities in which your Company operates and in doing so build abetter sustainable way of life for the weaker sectionsof society and raise the country'shuman development index" adopted a CSR Policy and the same is availableon thewebsite of the Company i.e. www.hariyanagroup.com.

The CSR Policy of the Company also mentions the process to be implemented with respectto the identificationof projects and philosophy of the Company alongwith key endeavoursand goals i.e.

• Education - to spark the desire for learning and knowledge;

• Health care - to render quality health care facilities to people living in thevillages and elsewhere;

• Sustainable Livelihood - to provide livelihood in a locally appropriate andenvironmentally sustainable manner;

• Infrastructure Development - to set up essential services that form thefoundation of sustainable development; and

• Social Cause - to bring about the Social Change we advocate and support.

Corporate Social Responsibility (CSR) initiatives taken during the year

In terms of section 135 and Schedule VII of the Act the Corporate SocialResponsibility Committee (CSR Committee) has formulated and recommended to the Board aCorporate Social Responsibility Policy (CSR Policy) indicating the activities to beundertaken by the Company which has been approved by the Board.

The CSR Policy may be accessed on the Company's website i.e.www.hariyanagroup.com.

During the year under review Corporate Social Responsibility is not applicable to thecompany

Extract of Annual Return

The extract of the Annual Return of the Company as on March 31 2018 in Form MGT - 9 inaccordance with Section 134(3)(a) Section 92 (3) of the Companies Act 2013 read withCompanies(Management and Administration) Rules 2014 is appended as Annexure-I tothe Board's Report.

Corporate Governance

A separate section on Corporate Governance forming part of the Board's Report and aCertificate from the Company's Auditors is included in the Annual Report as Annexure-IIto the Board's Report.

Auditors and Auditors' Report

Statutory Auditors

M/s. P. D. Goplani & Associates Chartered Accountants Bhavnagar having ICAI FirmRegistration No. 118023W were appointed as Auditors of the Company at the Annual GeneralMeeting held on September 30 2017 for a term of 5 (five) consecutive yearsi.e. to holdoffice from the conclusion of 29th Annual General Meeting until the conclusion of 34thAnnual General Meeting of the Company to be held in the financial year 2022 subject totheir ratification at every AGM. Accordingly business with respect to the same forms partof the Notice of the ensuing 30th AGM of the Company.

Further the Statutory Auditors have confirmed that they are not disqualified to act asAuditors and are eligible to hold office as Auditors of your Company for financial year2018-19.

The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation adverse remark or disclaimer. Also no frauds interms of the provisions of Section 143(12) of the Act have been reported by the StatutoryAuditors in their report for the year under review.

Secretarial Auditors

The Board had appointed M/s. Dilip Bharadiya & Associates Practicing CompanySecretaries to conduct Secretarial Audit for the FY 2017-18. The Secretarial Audit Reportfor the financial year ended March 31 2018 is annexed herewith marked as Annexure-IIIto this Report.

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

Further pursuant to provisions of Section 204 of the Act and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014; the Board of theCompany at its meeting held on May 30 2018 has reappointed M/s. Dilip Bharadiya &Associates Practicing Company Secretaries (Certificate of Practice No. 7956) toundertake the Secretarial Audit of the Company for the financial year 2018-19.

Joint Auditors

Pursuant to provisions of Section 139 of the Act and the Companies (Audit and Auditors)Rules 2014 and on recommendation of the Audit Committee the Board proposed andrecommended to Shareholders for the appointment of M/s. Lahoti Navneet & Co CharteredAccountants Mumbai (ICAI Firm Registration No. 116870W) as Joint Statutory Auditors ofthe Company for a period of 4 years i.e. to hold office from the conclusion of this AnnualGeneral Meeting until the conclusion of the 34th Annual General Meeting of the Company

Further the Joint Statutory Auditors have confirmed that they are not disqualified toact as Auditors and are eligible to hold office as Auditors of your Company for financialyear 2018-19.

Directors' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability state that:

(i) in the preparation of the annual accounts for the financial year ended March 312018 the applicable accounting standards and Schedule III of the Companies Act 2013 havebeen followed and there are no material departures from the same;

(ii) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Companyas at March 31 2018 and of the profit andloss of the Company for the financial year ended March 31 2018;

(iii) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(iv) the annual accounts have been prepared on a going concern basis;

(v) proper internal financial controls laid down by the Directors were followed by theCompany and that such internal financial controls are adequate and operating effectively;

(vi) proper systems to ensure compliance with the provisions of all applicable lawswere in place and that such systems are adequate and operating effectively.

Conservation of energy technology absorption foreign exchange earnings and outgo

The Company makes all efforts towards conservation of energy protection of environmentand ensuring safety.

The particulars as required under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 with respect to conservation ofenergy technology absorption and foreign exchange earnings and outgo is as follows:

A. Health Safety and Environment:

The Company aims to provide a safe and healthy workplace to our employees visitors andcontract workers and achieve high standards of environment protection. We are certified tothe following:

Certificate No./ Standard Description/Compliance/Requirement
ISO 9001:2015 The Quality Management System of the Inducto Steels Limited has been audited and has been found to be in accordance with the requirements of ISO 9001:2015
Quality Management System
ISO 14001:2015 Environmental Management System The Environmental Management System of the Inducto Steels Limited has been audited and has been found to be in accordance with the requirements of ISO 14001:2015
OHSAS 18001:2007 The Occupational Health and Safety Management System of the
Occupational Health and Safety Management System Inducto Steels Limited has been audited and has been found to be in accordance with the requirements of OHSAS 18001:2007

B. Conservation of energy:

(i) `the steps taken or impact on conservation of energy

(ii) the steps taken by the Company for utilising alternate sources of energy;

In light of the global challenges concerning energy security the Company considersenergy management as one of the key components of its responsible business strategy. TheCompany recognized the importance of energy conservation in decreasing the deleteriouseffects of global warming and climate change. The Company has implemented variousinitiatives for the conservation of energy and all efforts are made to minimize energycosts. Company is engaged in Ship Breaking trading in metal scrap coals graphiteelectrodes and other industrial inouts. No significant power consumption is required inship breaking industry as major portion in production process consist of non mechanicalprocesses. However industrial gases are used in ship dismantling activities and theCompany has taken various measures to control the consumption of fuel and energy.

(iii) the capital investment on energy conservation equipments;

The Company is taking adequate steps to conserve energy though no such capitalinvestment has been made.

C. Technology absorption:

The Company continues to adopt and use the latest technologies to improve theproductivity and quality of its services and products. The Company's operations do notrequire significant absorption of technology. There has been no import of technology in FY2017-18.

D. Foreign exchange earnings and Outgo:

(Rs. in lakhs)

Particulars Current Year Previous Year
INR USD EUR INR USD EUR
Foreign Exchange Earnings - - - - - -
Foreign Exchange Outgo 0 0 0 1165.25 17.21 0

Vigil Mechanism

The Whistleblower Policy has been approved and adopted by Board of Directors of theCompany in compliance with the provisions of Section 177 (10) of the Companies Act 2013and Regulation 22 of the Listing Regulations which provides a formal mechanism to theemployees business associates and stakeholdersof the Company to inter-alia report anyinstances of financial irregularities breach of code of conduct abuse of authoritydisclosure of financial/ price sensitive information unethical / unfair actionsconcerning Company vendors/ suppliers malafide manipulation of company data/recordsactual or suspected fraud or discrimination to the Company's Code of Conduct in ananonymous manner.

The policy of vigil mechanism is available on the Company's website i.e. www.hariyanagroup.com.

Particulars of Employees

A) The information required under Section 197(12) of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014:

a. Ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the Financial Year 2017-18; and

b. Percentage increase in remuneration of each Director Chief Executive Officer ChiefFinancial Officer Company Secretary if any for the Financial Year 2017-18:

Sr. No. Name Designation Remuneration for the Financial Year 2017-18 Percentage Increase/ (Decrease) in remu- neration in the Financial Year 2017-18 (%) Ratio of Remuneration of each Director to Median Remuneration of Employees
1. Ms. Arpita Doshi Company Secretary 3.50 lakhs Nil -

c. Percentage increase in the median remuneration of employees in the financial year:

There is no increase in the remuneration of employees in the financial year and hencethe information cannot be furnished.

d. Number of permanent employees on the rolls of Company: 4

e. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:

Save and except the payment of remuneration to Company Secretary with no percentageincrease in remuneration in the financial year no remuneration is being paid to anyDirector or KMP of the Company. Hence the information pertaining to percentage increasein remuneration cannot be provided.

f. Affirmation that the remuneration is as per the remuneration policy of the Company:

It is hereby affirmed that the remuneration paid to:

• Directors KMP and members of Senior Management is as per RemunerationPhilosophy/Policy of the Company; and

• other employees of the Company is as per the Human Resource Philosophy of theCompany.

B) The information required under Section 197(12) of the Act read with Rules 5(2) and5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014:

Having regard to the provisions of Section 136(1) of the Act the Annual Reportexcluding the aforesaid information is being sent to the members of the Company. The saidinformation is available for inspection on all working days during business hours at theRegistered Office of the Company 21 days before the AGM and upto the date of the ensuingAGM. Any member interested in obtaining such information may write to the CompanySecretary and the same will be furnished on request.

Familiarization Programme

The Company conducts Familiarization Programme for the Independent Directors to enablethem to be familiarized with the Company its management and its operations to gain aclear understanding of their roles rights and responsibilities for enabling theircontribution to the Company. They are provided a platform to interact with multiple levelsof management and are provided with all the documents required and/or sought by them tohave a good understanding of Company's operations businesses and the industry as a whole.Further when a new Director is inducted on the Board they are provided with necessarydocuments/ brochures reports internal policies strategy and such other operationalinformation to enable them to familiarise with the Company's procedures and practices.Site visits to various plant locations are organised for the Independent Directors toenable them to understand and acquaint with the operations of the Company.

Periodic presentations are made at the Board and Committee meetings on business andperformance updates of the Company global business environment business strategy andrisks involved. Detailed presentations on the Company's business segments are made at theseparate meetings of the Independent Directors from time to time.

The details of such familiarization programmes for Independent Directors are put up onthe Company's website and can be accessed at www.hariyanagroup.com.

Sexual harassment of women at workplace

Your Company is committed towards providing a work environment that is professional andmature free from animosity and one that reinforces our value of ‘integrity' thatincludes respect for the individual. The Company is committed to providing a safe andconducive work environment to all of its employees and associates. In line with theprovisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 your Company has adopted a Policy on Prevention of Sexual Harassmentat Workplace. This policy is applicable to all employees irrespective of their level andit also includes ‘Third Party Harassment' cases i.e. where sexual harassment iscommitted by any person who is not an employee of the Company. The said policy isavailable on the website of the Company i.e. www.hariyanagroup.com. InternalComplaints Committees have also been set up to redress complaints received regardingsexual harassment.

The Company has not received any complaint of sexual harassment during the financialyear 2017-18.

Other Disclosures

In terms of the applicable provisions of the Act and SEBI Listing Regulations yourCompany additionally discloses that during the year under review:

• there was no change in the nature of business of your Company;

• your Company has not accepted any fixed deposits from the public falling underSection 73 of the Act read with the Companies (Acceptance of Deposits) Rules 2014. Thusas on March 31 2018 there were no deposits which were unpaid or unclaimed and due forrepayment hence there has been no default in repayment of deposits or payment ofinterest thereon;

• your Company has not issued any shares with differential voting rights;

• your Company has not issued any Sweat Equity Shares; and

• no significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status operations of your Company in future.

It is further disclosed that:

• There is no plan to revise the Financial Statements or Directors' Report inrespect of any previous financial year.

• No Material changes and commitments have occurred between the end of theFinancial Year of the Company to which the Financial Statements relate and the date of thereport affecting the financial position of the Company.

• Your Company does not engage in Commodity hedging activities.

Corporate Governance

Your Company is committed to follow the best practices of Corporate Governance and theBoard is responsible to ensure the same from time to time.

Your Company has duly complied with the Corporate Governance requirements as set outunder Chapter IV of the SEBI Listing Regulations from time to time and the StatutoryAuditors of the Company vide their certificate dated May 30 2018 have confirmed thatthe Company is and has been compliant with the conditions stipulated in the Chapter IV ofthe SEBI Listing Regulations. The said certificate is annexed as Annexure-IV tothis Report. Further a separate report on Corporate Governance forms part of this AnnualReport.

Cautionary Statement

Statements in the Board's Report and the Management Discussion and Analysis describingthe Company's objectives projections estimates expectations or predictions may be"forward looking statements" within the meaning of applicable securities lawsand regulations. Actual results could differ materially from those expressed or implied.Important factors that could make a difference to your Company's operations include globaland Indian demand supply conditions finished goods prices feed stock availability andprices cyclical demand and pricing in your Company's principal markets changes inGovernment regulations tax regimes economic developments within India and the countrieswithin which your Company conducts business and other factors such as litigation and yourCompany is not obliged to publicly amend modify or revise any forward looking statementson the basis of any subsequent development information or events or otherwise. The"Management's Discussion and Analysis" does not constitute a prospectusoffering circular or offering memorandum or an offer to acquire any shares and should notbe considered as a recommendation that any investor should subscribe for or purchase anyof the Company's securities.

Acknowledgement

The Board of Directors would like to express their sincere gratitude for the assistanceand co-operation received from the financial institutions banks Government authoritiescustomers vendors and members during the year under review.

The Board of Directors also wish to place on record its deep sense of appreciation forthe committed services by the Company's executives staff and workers at all levels. Ourconsistent growth was made possible by their hard work solidarity co-operation andsupport.

For and on behalf of the Board of Directors For Inducto Steels Limited

Sd/- Sd/-
Rajeev Reniwal Sweety Reniwal
Managing Director Director
(DIN: 00034264) (DIN: 00041853)
Date: May 30 2018
Place: Mumbai