Dear Members

Your Directors hereby present their 48^th Annual Report and Audited Accountsof the Company for the year ended 31^st March 2022.

FINANCIAL SUMMARY

PERFORMANCE

During the year under review the company achieved net sales of Rs. 18242 Lakhs asagainst Rs. 8724 Lakhs in the previous year and resulting into net operational profitbefore exceptional items of Rs. 7613 Lakhs against the net loss of Rs. 2250 Lakhs in theprevious year.

DIVIDEND

Due to the ongoing financial constraints in the Company the Directors have notrecommended any dividend for the year under review.

BUSINESS TRANSFER AGREEMENT (BTA) / SLUMP SALE EXECUTION

Members will recall that on 15th November 2020 the Business Transfer Agreement (BTA)had been executed between M/s Arjas Steel Pvt. Ltd./ M/s Arjas Modern Steel Pvt. Ltd.(Purchaser) Modern Steels Ltd. (Seller) Promoters (Mr. Krishan Kumar Goyal and Mr.Aditya Goyal)

After the execution of the Business Transfer Agreement and Job Work Contract thecompany has given the operations of the plant to M/s Arjas Steel Pvt. Ltd. where they tookcontrol of the plant and operated till 05.01.2022.

Pursuant to the execution of BTA the Properties of the Unit (the Land & Building ofthe Plant and Staff Colony) in Mandi Gobindgarh were transferred to Arjas Modern SteelPvt. (Buyer) and the Deeds of Conveyance were duly registered with the office ofTehsildar Mandi Gobindgarh Punjab on 05th January 2022.

The Plant & Machinery of the unit and other current assets and liabilities werealso transferred to buyer under slump sale.

The slump sale was completed on 05.01.2022 and the intimation regarding the same wasgiven to Bombay Stock Exchange.

Lender

Punjab National Bank

It is informed to the Hon'ble members that Punjab National Bank vide its letter dated16.11.2021 has given its sanction letter for One Time Settlement (OTS) of the Debt of theCompany and accordingly on the due date the payment was made to the Bank. Further uponpayment the Bank on 29.12.2021 issued a No Objection Certificate cum No Dues Certificate.Accordingly all the charges have been vacated from the Ministry of Corporate Affairs.

DEPOSITS

The Company has neither accepted nor invited any deposit from the public and hencedirectives issued by Reserve Bank of India and the provisions of Chapter V (Acceptance ofdeposits by Companies) of the Companies Act 2013 and rules framed there under are notapplicable for the year under review.

TRANSFER TO RESERVES

Considering the financial position of the Company and requirements of regular funds foroperations no amount has been transferred to the General Reserves of the Company duringFinancial Year 2021-22.

SHARE CAPITAL

The paid up equity share capital is Rs. 144000000/- divided into 14400000 equityshares of Rs. 10/- each and there was no change in capital structure during the financialyear 2021-22.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSIONS & ANALYSIS

A separate report on Corporate Governance and Management Discussions & Analysis isattached herewith and forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY

Your Company does not fall within the ambit of Section 135 of the Companies Act 2013read with Companies (Corporate Social Responsibility Policy) Rules 2014.

DIRECTORS

Mr. Krishan Kumar Goyal Chairman & Managing Director (DIN: 00482035) shallretire by rotation at the ensuing Annual General Meeting and being eligible offershimself for re-appointment. In view of his considerable experience and expertiseDirectors of your Company recommends his reappointment as Director of Company.

KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 2(51) 203 of the Companies Act 2013 readwith Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 Mr.Krishan Kumar Goyal (Chairman & Managing Director) Mr. Suresh Kumar Puri *(ChiefFinancial Officer) and Ms. Deepa **(Company Secretary & Compliance Officer) are theKey Managerial Personnel of the Company.

*Mr. Divnain Singh Chowdhary ceased to be the Chief Financial Officer of Company w.e.f.01.02.2022 and Mr. Suresh Kumar Puri was appointed as the Chief Financial Officer w.e.f.25.07.2022.

**Ms. Anjali was appointed as Company Secretary & Compliance Officer of Companyfrom 05.05.2021 however she left the Company on 15.10.2021. Further so as to fill thevacancy Mr. Himanshu Kalra was appointed as Company Secretary & Compliance Officerfrom 16.10.2021 but due to some personal reasons he left the Company on 08.01.2022.Thereafter Ms. Deepa has been appointed as Company Secretary & Compliance Officerw.e.f. 14.02.2022.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received the necessary declaration from each Independent Director inaccordance with Section 149(7) of the Companies Act 2013 read with the rules madethereunder and Regulation 25 (8) of the SEBI (Listing Obligations and DisclosureRequirements) (Amendment) Regulations 2018 that they meet the criteria of independenceas laid out in Subsection (6) of Section 149 of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

The Board of your Company formed an opinion that the Independent Directors of ourCompany are maintaining highest standard of integrity and possessing expertise requisitequalifications and relevant experience for performing their role as an IndependentDirectors.

BOARD DIVERSITY AND REMUNERATION POLICY

In accordance with Para A of Part D and Regulation 19 of Listing Regulations the Boardhas framed Nomination & Remuneration Policy for appointment and remuneration ofDirectors Key managerial Personnel and Senior Management Employees which includes thecriteria for determining qualification positive attributes independence of a Directorand other matters provided under sub-section 3 of section 178 of the Companies Act 2013.As on 31^st March 2022 the Board consists of four directors out of which oneis Executive Director and three are Independent Directors.

The Board periodically evaluates the need for change in its composition and size.

We affirm that the remuneration paid to the Directors is as per the terms approved bythe Nomination and Remuneration Committee of the Company.

With reference to the provisions of Section 136(1) of the Companies Act 2013information required under Section 197(2) read with rule 5(1) not forms part of thisreport. Since no person is employed who draws remuneration pursuant to the provision of197(2) read with rule 5(2).

HUMAN RESOURCES

The Company is having motivated work force. Harmonious employee relations prevailedthroughout the year.

Your Directors place on record their appreciation for all employees for their hard workand dedication.

BOARD MEETINGS

During the year under review six Board Meetings were convened and held the details ofwhich are given in the Corporate Governance Report forming part of this Report.

ANNUAL EVALUATION OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS

In pursuance of Section 134 (3) (p) of the Companies Act 2013 read with rules madethereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Board of Directors carried out the performance evaluation of the Board as awhole its Committees and individual directors. Led by the Nomination & RemunerationCommittee (‘NRC') the evaluation was carried out using individual questionnairescovering composition of Board conduct as per Company values & beliefs contributiontowards development of strategy & business plan risk management receipt of regularinputs and information codes & policies for strengthening governance functioningperformance & structure of Board Committees skill set knowledge & expertise ofDirectors preparation & contribution at Board meetings leadership etc.

As part of the evaluation process the performance of Non Independent Directors theChairman and the Board was conducted by the Independent Directors. The performanceevaluation of the respective Committees and that of Independent and Non IndependentDirectors was done by the Board excluding the Director being evaluated.

RELATED PARTY TRANSACTIONS

All contracts or arrangements entered into by the Company with Related Parties havebeen done at arm's length and are in the ordinary course of business. Related Partydisclosures as per AS-18 have been provided in the Notes to the Financial Statements.Further no material related party transactions held during the financial year 2021-22.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as "ANNEXURE-A"to this report.

RISK MANAGEMENT

The Company recognises that risk is an integral and unavoidable component of businessand is committed to managing the risk in a proactive and efficient manner. The Company hasformulated Risk Management Policy to identify and then manage threats/risks that couldhave impact on the goals and objectives of the Company.

The Audit Committee of the Company periodically reviews and evaluates the adequacy ofrisk management systems keeps an eye on execution of risk management plan of the Companyand advises management on strengthening mitigating measures wherever required. The actualidentification assessment and mitigation of risks is however done by the executives ofthe Company.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

Your Company is committed to highest standards of ethical moral and legal businessconduct.

Accordingly the Board of Directors have formulated Vigil Mechanism/Whistle BlowerPolicy which provides a robust framework for dealing with genuine concerns &grievances of Employees Directors and Senior Executives.

Specifically employees can raise concerns regarding any discrimination harassmentvictimization any other unfair practice being adopted against them or any instances offraud by or against your Company. During financial year 2021-22 no complaints werereceived.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Modern Steels Limited has aligned its current systems of internal financial controlwith the requirement of Companies Act 2013.

Modern Steels Limited's internal controls are commensurate with its size and nature ofits operations. These have been designed to provide reasonable assurance with regard torecording and providing reliable financial and operational information complying withapplicable statutes safeguarding assets from unauthorized use executing transactionswith proper authorisation and ensuring compliance of corporate policies.

The management assessed the effectiveness of the Company's internal control overfinancial reporting (as defined in Regulation 17 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015) as of 31^st March 2022. Theassessment involved selfreview and external audit.

M/s Aaryaa & Associates the statutory auditors of Modern Steels Limited haveaudited the financial statements including in this annual report and has issued anattestation report on our internal control over financial reporting (as defined in Section143). The Audit Committee reviews reports submitted by the management and audit reportssubmitted by internal auditors and statutory auditors. Suggestions for improvement areconsidered and the audit committee follows up on corrective action.

Based on its evaluations (as defined in Section 177 of Companies Act 2013 andRegulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015) the Audit Committee has concluded that as of 31^st March 2022 theinternal financial controls were adequate and operating effectively.

COMMITTEES OF THE BOARD OF DIRECTORS

Your Company has the following Board Level Committees established by the Board incompliance with the requirements of the business and relevant provisions of applicablelaws and statutes:

• Audit Committee

• Nomination & Remuneration Committee

• Stakeholders Relationship Committee

The details regarding composition terms of reference number of meetings held etc. ofthe above Committees are included in the Report of Corporate Governance which forms partsof this Report. There has been no instance where the board has not accepted recommendationof Audit Committee Nomination & Remuneration Committee and Stakeholders RelationshipCommittee. Further the provisions of Companies Act mandating constitution of RiskManagement Committee are not yet applicable to the Company.

AUDITORS Statutory Auditors

M/s. Aaryaa & Associates Chartered Accountants (Registration No. 015935N) wereappointed as Statutory Auditors of the Company at 45th Annual General Meeting for a periodof three years till the conclusion of the 48th Annual General Meeting to be held in theyear 2022 at a remuneration mutually agreed between the Board of Directors of the Companyand the Statutory Auditors whose tenure is going to expire at this ensuing Annual GeneralMeeting.

The Board of Directors pursuant to Section 139 and 142 and other applicable provisionsof Companies Act 2013 if any and the rules framed thereunder and subject to approval ofShareholders approved appointment of M/s. APT& Co. LLP Chartered Accountants asStatutory Auditors of Company for a period of two (2) years to hold office from thisensuing Annual General Meeting till the conclusion of the Annual General Meeting to beheld in the year 2024 at a remuneration mutually agreed between the Board of Directors ofthe Company and the Statutory Auditors.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with rulesmade thereunder the Board of Directors had appointed M/s. Sanger & AssociatesCompany Secretaries as Secretarial Auditor of the Company for the financial year 2021-22for conducting the Secretarial Audit as required under the provisions of Companies Act2013.

Further M/s. Sanger & Associates Company Secretaries being eligible forre-appointment expressed his willingness to act as Secretarial Auditor of Company forFinancial Year 2022-23 the Board of Directors on recommendation of Audit Committeeapproved the re-appointment of M/s. Sanger & Associates as Secretarial Auditors of theCompany for Financial Year 2022-23.

AUDITOR'S REPORT Statutory Auditors' Report

The Statutory Auditors of the Company M/s. Aaryaa & Associates CharteredAccountants has submitted the Auditor's Report on standalone financial statements for theperiod ended March 31 2022 which do not contain any qualification reservation or adverseremark or disclaimer. The notes to the accounts referred to in the auditors' report areself-explanatory and therefore do not call for any further comments. The Auditors havealso not reported any matter under section 143(12) of the Companies Act 2013. SecretarialAuditors' Report

The Secretarial Auditor M/s. Sanger & Associates Company Secretaries has submittedthe Secretarial Audit Report for the Financial Year 2021-22 in Form No. MR-3 and formingpart of this Directors Report annexed as "ANNEXURE-B".

Secretarial Auditors' Qualification in Secretarial Audit Report

The Company has generally complied with the provisions of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 except noncompliance with Regulation 33 andRegulation 23 (9) wherein the filings to the Stock Exchange was not filed within thestipulated time.

Management's Reply:

There was delay in filing to stock exchange because due to the tedious procedure ofcompleting Slump Sale of the Assets of the Company and the 2nd wave of COVID 19 Pandemicthe finalization of the accounts got delayed and the company was unable to file thequarterly results with in stipulated time limit. Further all the fines levied by the BSEfor the Non-Compliances of the Regulation 33 have been deposited by the Company. Apartfrom that the Company has complied with all the applicable provisions of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

EXTRACT OF ANNUAL RETURN

In compliance with Section 92(3) Section 134(3)

(a) and Rule 12 of the Companies (Management and Administration) Rules 2014 theextract of the annual return in Form No. MGT-9 is available on the website of Companywww.modernsteels.com and also annexed as "ANNEXURE-C" forming part ofthis report and also available on the website of the Company at www.modernsteels.com.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The details of Loans Guarantees and Investments covered under Section 186 of theCompanies Act 2013 for Financial Year 2021-22 forms part of the notes to the financialstatements provided in the Annual Report.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no adverse material changes or commitments occurring after 31^stMarch 2022 till the date of this report which may affect the financial position of theCompany.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.

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

Your Company has in place a policy on Prevention of Sexual Harassment at workplace.This policy is in line with the requirements of The Sexual Harassment of Women at theWorkplace (Prevention Prohibition & Redressal) Act 2013. All employees are coveredunder this Policy.

As per the said Policy an Internal Complaints Committee is also in place to redresscomplaints received regarding sexual harassment. No complaints were received duringfinancial year 2021-22.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company is compliant with the applicable Secretarial Standards (SS) viz. SS-1 &SS-2 on Meetings of the Board of Directors and General Meetings respectively.

DIRECTOR'S RESPONSIBILITY STATEMENT

Pursuant to requirements under Section 134(3)(c) of the Companies Act 2013 withrespect to Directors Responsibility Statement it is hereby confirmed that:

i) in the preparation of the annual accounts for the year ended 31^st March2022 the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;

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 Company as at 31^st March 2022 and ofthe loss of the Company for the year ended on that date;

iii) the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

iv) the Directors have prepared the annual accounts for the year ended 31^stMarch 2022 on a ‘going concern' basis;

v) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;

vi) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

APPRECIATION

The Directors also wish to place on record its appreciation for the commitmentdisplayed by all employees at all levels during the year.

The Directors also take this opportunity to express its deep gratitude for thecontinued co-operation and support received from its valued stakeholders.