You are here » Home » Companies » Company Overview » Sunflag Iron & Steel Company Ltd

Sunflag Iron & Steel Company Ltd.

BSE: 500404 Sector: Metals & Mining
NSE: SUNFLAG ISIN Code: INE947A01014
BSE 10:22 | 14 May 80.40 -2.05
(-2.49%)
OPEN

84.90

HIGH

84.90

LOW

78.90

NSE 10:14 | 14 May 80.25 -2.45
(-2.96%)
OPEN

83.60

HIGH

84.40

LOW

78.60

OPEN 84.90
PREVIOUS CLOSE 82.45
VOLUME 48329
52-Week high 92.75
52-Week low 26.35
P/E 13.81
Mkt Cap.(Rs cr) 1,449
Buy Price 80.15
Buy Qty 696.00
Sell Price 80.40
Sell Qty 598.00
OPEN 84.90
CLOSE 82.45
VOLUME 48329
52-Week high 92.75
52-Week low 26.35
P/E 13.81
Mkt Cap.(Rs cr) 1,449
Buy Price 80.15
Buy Qty 696.00
Sell Price 80.40
Sell Qty 598.00

Sunflag Iron & Steel Company Ltd. (SUNFLAG) - Director Report

Company director report

Your Directors take pleasure in presenting the Thirty-fourth (34th)AnnualReport along with theAudited Financial Statements of the Company for the Financial Year2019-20 ended 31st March 2020.

Indian Steel industry has been driven by availability of raw material viz. iron orecoal etc. and cost of labour. Consequently the Financial Year under review remainedvolatile during the year and could not see any sustained demand. Further your Companywith continuous development of new grades of steel and upgradation of pant and equipmentcould maintain its presence in the market particularly in automobile industry. Also duringthe Financial Year under review export of auto grade steel was not remunerative and IndianAuto and Auto Component Industry got impacted due to shifting from BS-IV to BS-VI emissionnorms by April 2020. As a result there was a decline in the sales and profit before tax.EBIDTA as a percentage to total income for the year was 10.34% as against 1 1.33% for theprevious year.

1. FINANCIAL RESULTS

The summarised financial results for the year are as follows :-

(Rs.in Lakh except EPS)

Sr. No. Particulars

For the Financial Year ended

2019-20 2018-19
1 Total Income 177065 219712
2 Total Expenditure 158749 194822
3 Gross Profit 18316 24890
4 Finance Cost 4263 3874
5 Profit before Depreciation 14053 21016
6 Depreciation 4620 3787
7 Profit before exceptional and extraordinary items and Tax 9433 17229
8 Tax Expenses and Provisions 177 6170
9 Net profit from ordinary activities after tax 9256 11059
10 Other comprehensive Income (net of taxes) # 36443 382
11 Profit After Tax 45699 11441
12 Earnings Per Share (EPS) [Basic and Diluted] in (Rs.) 5.21 6.14

# Other Comprehensive income for the year under review includes an amount of Rs.36302Lakh towards revaluation surplus net of taxes (i.e. Revaluation surplus of Rs.48512 LakhLess deferred tax of Rs.12210).

2. FINANCE

The Total Income of your Company for the Financial Year 2019-20 stood at Rs. 177065Lakh as compared to Rs. 219712 Lakh of the previous Financial Year. Your Company hasended the Financial Year 2019-20 with a profit after tax from the ordinary activities of

Rs.9256 Lakh as against the previous Financial Year's Rs.11059 Lakh. After takinginto account the brought forward profit of Rs.71600 Lakh your Company has carriedforward an amount of Rs. 79770 Lakh to the Balance Sheet.

The Company has revalued its Plant and Machinery and Building as at 31 March 2020through an independent and approved valuer and accordingly changed its accounting policyfrom cost model to fair value model. All other assets such as Land Furniture Fixtureetc. are valued at cost. The revaluation gain of 48512 Lakh has been accounted for in thegross block and credited to other equity under the head revaluation surplus. The WDV ofthese assets before such revaluation was 58468 Lakh (WDV of Plant & Machinery 45674Lakh and Building 12794 Lakh).

3. DIVIDEND

The Company is in need of more funds through internal accruals to cope up with theterms and conditions of the lending banks financing the ongoing capital projects under theexpansion programme which will enable future growth of the Company.

Due to the spread of COVID-19 pandemic and recessionary trend in the economy yourdirectors took a prudent decision to plough back the profits into the business and not torecommend any dividend for the Financial Year 2019-20.

4. SHARE CAPITAL

During the Financial Year 2019-20 ended 31 March 2020 under review there is no changein the capital structure of the Company and accordingly the issued subscribed andpaid-up share capital of the Company stood at Rs.1802194480/- divided into 180219448equity shares of face value of Rs.10/- each as on 31 March 2020.

5. MARKET SCENARIO

Growth in the steel industry largely depends on availability of raw material and fundsfor operation coupled with overall improvement in the economy. During the Financial Yearunder review the Indian steel industry could not see consistency in the demand owing tolack of raw material availability. Further with the increased level of NPAs in bankingsystem has resulted in non-availability or delay in disbursal of funds for operation tomany small and medium size auto ancillary units. This has adversely impacted yourCompany's sales and consequently end up with marginal decrease in the bottom line.

In view of outbreak of COVID-19 followed by Nationwide lock down announced byGovernment of India the manufacturing facilities and other commercial activities of theCompany were closed w.e.f. 24 March 2020. The Company has resumed its operations from 23May 2020 in a phased manner after obtaining necessary permission and has established allsafety measures maintaining high standard of hygiene for the employees.

Further based on the initial assessment by the management and considering variousinternal and external information upto the date of approval of financial results for theyear under review the company does not have any material impact in the recoverability ofcarrying amount of its loans and advances inventory trade receivables etc. FurtherReserve Bank of India granted relief to the borrowers by way of moratorium in repaymentand servicing of interest due to bank. The Company has availed such moratorium up toAugust 2020. However these evaluations are subject to impact of uncertainties thatCOVID-19 outbreak may ultimately pose on economic recovery and consequential effect onCompany's performance.

6. COMPANY'S OPERATIONS OR OVERALL WORKING PERFORMANCE

During the Financial Year 2019-20 under review the operational (production) details ofthe Company are as under : -

Production in MT and Power in Lakh kWh

Sr. No. Particulars Financial Year 2019 - 20 Financial Year 2018 - 19
1 Direct Reduction Plant (I + II) 51582 148355
2 Steel Melt Shop 308335 382597
3 Rolled products 301194 381997
4 Mini Blast Furnace (Hot Metal) / Pig Iron 304266 297763
5 Coal (Belgaon Coal Block) 270000 270000
6 Power Plant (Lakh kWh) 1745.71 1971.99

7. PROJECTS

Steel Plant:-

During the year under review the Company has received major machineries forcommissioning its Super Alloy Project. But due to COVID-19 pandemic followed by nationwide lock down the engineers from Germany at the Company's project site have been calledback by their Government. Similarly expansion at Blooming mill is also under review inconsultation with the main equipment supplier and these project activities shall berestored once the situation become normal. The Company has applied to bank for extensionof project completion date and waiting for formal approval for the same.

Subsidiary Companies:-

Sunflag Power Limited [CIN U 31200 UR 2003 PLC 027802]

There were no specific developments or updates for reporting and the process ofobtaining necessary approvals were continued for implementation and commencement ofoperations of Hydro Power Project of the Company at Hanol-Tuini in the State ofUttarakhand.

Khappa Coal Company Private Limited [CIN U 10100 MH 2009 PTC 191907]

In view of order of the Hon'ble Supreme Court of India dated 24 September 2014 theKhappa & Extn. Coal Block which was allocated to Khappa Coal Company Private Limitedstands de-allocated with immediate effect. The closure of the said Company solely dependsupon the outcome of final decision regarding bank guarantee and compensation from theappropriate authorities.

Sunflag Foundation [CIN U 74999 MH 2017 NPL 289961]

Sunflag Foundation a Section 8 Company (a Company not for profits) was incorporated on27 January 2017 as a Wholly-owned Subsidiary of Sunflag Iron and Steel Company Limited.The said Company was appointed as an implementing Agency to carry out the Corporate SocialResponsibility (CSR) activities as per CSR Policy of the Company within the framework ofapplicable provisions of law.

Associate / Joint Venture (JV) Companies:-

Madanpur (North) Coal Company Private Limited [CIN U 10101 CT 2007 PTC 020161] and C TMining Private Limited [CIN

U 10100 JH 2008 PTC 013329]

In view of order of the Hon'ble Supreme Court of India dated 24 September 2014 theCoal Block(s) which were allocated to Madanpur (North) Coal Company Private Limited in theState of Chhattisgarh and to C T Mining Private Limited in the state of Jharkhand standsde-allocated with immediate effect. The closure of the said Company solely depends uponthe outcome of final decision regarding bank guarantee and compensation from theappropriate authorities.

Daido D.M.S. India Private Limited [CIN U 28113 HR 2015 FTC 054839]

Daido D.M.S. India Private Limited is a Joint Venture (JV) Company of Sunflag Iron andSteel Company Limited Daido Steel Co. Ltd. Japan and Daido Die and Mold Steel SolutionsCo. Ltd. Japan. Sunflag has made an investment of INR 36000000/- (INR Three croressixty lakhs) constituting twenty percent (20% - presently 17.56%) in the capital of thesaid JV Company. The JV Company is engaged in the business of manufacturing importexport and distribution in die mold (mould) steel (tool steel and other metallicmaterials) processed products and mold parts.

Ramesh Sunwire Private Limited [CIN U 28999 MH 2016 PTC 287281]

Sunflag jointly with Stumpp Schuele & Somappa Springs Private Limited Bengaluruhas formed and incorporated a Joint Venture (JV)

Company - Ramesh Sunwire Private Limited on 31 October 2016 in the State ofMaharashtra. The main object of the JV Company is manufacturing high quality of alloysteel wire for automobile and auto component industries both in domestic and exportmarkets.

The plant commissioned on 6th May 2019 and has started its manufacturing activities.

Present Status of Coal and Minerals Mines:-

S. N. Name of Mine Area in (Ha.) Mineral Present Status
1 Belgaon Coal Mine at Village Balgoan (Deshpande) Tah.Warora Dist. Chandrapur Maharashtra 383.56 Coal Underground Coal mine having estimated reserves of 8 million tons (MT) with extractable balance of about 5.82 MT.
2 Navegaon Manganese Mine at Village Navegaon Tah. Mohadi Dist. Bhandara Maharashtra 15.90 Manganese Ore Open cast mine with reserves of about 30000 tons.
48.78 Manganese Ore Application for conversion of Prospecting Licence into Mining Lease is under process.
3 Warpani Manganese Ore Block at Village Warpani Tah. Saoner Dist. Nagpur Maharashtra 1419.65 Manganese Ore Application for conversion of Prospecting Licence into Mining Lease over an area of 460 Ha is under process.
4 Bande Iron Ore Block at Village Bande Tah. Ettapalli Dist. Gadchiroli Maharashtra 236.75 Iron Ore Application for conversion of Prospecting Licence into Mining Lease over an area of 205.75 Ha is under process.
5 Kodalibad Iron and Manganese Ore Mine at Village - Kodalibad Tah - Noamundi Dist. - Singhbhum / Jharkhand 120.00 Iron and Manganese Ore Mining Lease is yet to be executed.
6 Lohardongri Iron Ore Mines at Village Lohardongri Tah-Brahmapuri District Chandrapur (Maharashtra) 35.73 Iron Ore Declared successful bidder in auction. Letter of Intent (LOI) dated 13.09.2019 received from Government of Maharashtra.

8. NATURE OF BUSINESS ACTIVITIES AND CHANGES THEREOF

During the Financial Year 2019-20 under review the Board of Directors thoughexploring addition to existing business and commercial activities but till date there isno change in nature of business and commercial activities of the Company. As such nospecific details regarding change in nature of business activities are required to begiven or provided.

9. PUBLIC DEPOSITS

During the Financial Year 2019-20 under review the Company has neither invited noraccepted any public deposits within the meaning of Section 73 and 74 of the Companies Act2013 read with the Companies (Acceptance of Deposits) Rules 2014 (as amended). As suchno specific details prescribed in Rule 8(1) of the Companies (Accounts) Rules 2014 (asamended) have been given or provided.

10. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The changes amongst the Board of Director/s including the Executive Director/s and KeyManagerial Personnel during the period under review are as follows:-

I. CHANGES RELATED TO THE PROMOTER DIRECTOR(S) :-

There has been no change in relation to the Promoter Director(s) during the year.

II CHANGES RELATED TO THE EXECUTIVE DIRECTOR/S:-

Pursuant to the provisions of Section 152 of the Companies Act 2013 the Members ofthe Company on the recommendation of the Board of Directors and the Nomination andRemuneration Committee (NRC) of the Board at their Thirty-third (33 ) Annual the GeneralMeeting held on 27 September 2019 consented to the re-appointment of CA RambhatlaMuralidhar (DIN-00982212) Executive Director (Finance) of the Company who retired byrotation and being eligible offered himself for re-appointment.

III. CHANGES RELATED TO THE KEY MANAGERIAL PERSONNEL (KMP):-

a. CA Rambhatla Muralidhar Executive Director (Finance) & CFO of the Companyexpressed his desire to discontinue from the position of Chief Financial Officer (CFO) ofthe Company.

b. Pursuant to the provisions of Section 203 of the Companies Act 2013 ("theAct") read with rule 8 of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 and other applicable provisions (including any modification or re-enactment thereof) if any of the Act and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Board of Directors vide its 174 Meeting held on 27September 2019 on the recommendation of the Nomination and Remuneration Committee (NRC)of the Board appointed Mr. S. Mahadevan Iyer General Manager (Finance) of the Company asthe Chief Financial Officer (CFO) designated Key Managerial Personnel (KMP) of theCompany w.e.f. 1 October 2019 and relieved CA R Muralidhar from the responsibility ofChief Financial Officer of the Company with effect from the close of the business hours of30 September 2019 but he shall continue as the Executive Director (Finance) designatedWhole-Time Key Managerial Personnel (KMP) of the Company.

IV. CHANGES RELATED TO THE INDEPENDENT DIRECTOR/S:-

1. Pursuant to the provisions of Regulation 17(1A) incorporated in the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 by SEBI (Listing Obligationsand Disclosure Requirements) (Amendment) Regulations 2018 - "No listed entity shallappoint a person or continue the directorship of any person as a Non-executive Directorwho has attained the age of Seventy-five (75) years unless a special resolution is passedto that effect.

Mr. S. Gajendran [DIN 00250136] Non-executive Independent Director of the Company[Date of Birth 7 July 1944] has attained the age of Seventy-five (75) years on 7 July2019 and since no such Special Resolution has been passed by the Members Mr. S.Gajendran ceased as a Non-executive Independent Director of the Company w.e.f. 7 July2019 on attaining the age of Seventy-five (75) years pursuant to aforesaid provisions.Your Board places on record its appreciation for the valuable services rendered by Mr. S.Gajendran during the tenure of his directorship.

2. The Members of the Company at their Thirty-third (33 ) Annual General Meeting heldon 27 September 2019 on the recommendation of the Board of Directors and the Nominationand Remuneration Committee (NRC) of the Board have appointed Mr. Sajiv Dhawan (DIN -00160085) as a Director [Category Non-executive Independent] to hold the office for atthe fixed first term of consecutive three (3) years i.e. from 27 September 2019 till 26September 2022.

3. The Board took note of cessation of CA Jayesh Parmar as a Non-executive IndependentDirector of the Company w.e.f. 27 September 2019 after the conclusion of 33 AnnualGeneral Meeting of the Company held on 27 September 2019 due to completion of histenure. Your Board places on record its deep appreciation for the valuable servicesrendered by CA Jayesh Parmar during his tenure as the Director of the Company.

4. The Board of Directors vide its 175 Meeting held on 12 November 2019 on therecommendation of the Nomination and Remuneration Committee (NRC) of the Board hasappointed Mr. Anand Sadashiv Kapre (DIN - 00019530) as an Additional Director [Category -Non-executive Independent] of the Company with effect from 12 November 2019 to hold theoffice till the conclusion of 34 Annual General Meeting of the Company.

5. Mr. Rooshad Russi Patel [DIN 00473945] Non-executive Independent Director of theCompany has ceased as director due to resignation w.e.f. 14 December 2019 on the groundof health and personal issues and has also confirmed that there are no other materialreasons for his resignation. Your Board places on record its appreciation for the valuableservices rendered by Mr. Rooshad Russi Patel during the tenure of his directorship.

6. The Board of Directors vide Circular Resolution (Sr. No. 01/2019-20) passed on 13March 2020 on the recommendation of the Nomination and Remuneration Committee (NRC) hasappointed CA Vinita Bahri (DIN - 03109454) as an Additional Director [Category -Non-executive Independent] of the Company with effect from 13 March 2020 to hold theoffice till the conclusion of 34 Annual General Meeting of the Company. The Company hasreceived declarations from all the Independent Directors of the Company confirming thatthey meet the criteria of independence as prescribed both under Section 149 (6) of theCompanies Act 2013 and the SEBI Listing Regulations.

V. DIRECTOR - RETIREMENT BY ROTATION:-

Pursuant to Section 152 of Companies Act 2013 read with the Companies (Appointmentand Qualification of Directors) Rules 2014 (as amended) Mr. Suhrit Ravi Bhushan Bhardwaj(DIN 02318190) Director [Category- Non-Executive & Non-Independent] of the Companyretires by rotation and being eligible offers himself for re-appointment. The Boardrecommends his re-appointment as a Director (with existing category) of the Company forthe approval of the Members at the ensuing Annual General Meeting in the interest of theCompany.

VI. PROPOSED CHANGES RELATED TO DIRECTOR/S TO BE PLACED BEFORE THE MEMBERS FOR THEIRAPPROVAL:-

1. The term of Mr. Anand Sadashiv Kapre (DIN - 00019530) as an Additional Director[Category Non-executive Independent] of the Company is expiring at the conclusion of theensuing Thirty-fourth (34 ) Annual General Meeting of the Company. The Board recommendsappointment of Mr. Anand Sadashiv Kapre (DIN - 00019530) as an Independent Director[Category Non-executive Independent] not liable to retire by rotation to hold theoffice for a fixed first term of consecutive three (3) years from the conclusion ofensuing Thirty-fourth (34 ) Annual General Meeting in the interest of the Company.

The Company has received a Notice in writing under Section 160 of the Companies Act2013 from a Member proposing the candidature of Mr. Anand Sadashiv Kapre (DIN - 00019530)for the office of a Director of the Company.

The Company has also received the self-declaration/s from Mr. Anand Sadashiv Kapre (DIN- 00019530) inter-alia to the effect that

(i) he was/is not disqualified from being appointed as a Director of the Company interms of the provisions of Section 164 of the Companies Act 2013 and has submitted hisconsent to act as a Director of the Company;

(ii) he was or is not debarred from holding the office of a Director pursuant to anyorder of the SEBI or such other authority in terms of SEBI's Circular No.LIST/COMP/14/2018-19 dated 20 June 2018 on the subject "Enforcement of SEBI Ordersregarding appointment of Directors by listed companies";

(iii) he meets the criteria of independence as provided in Section 149(6) of the Actand Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (as amended) ["Listing Regulations"]; and

(iv) he has complied with the provisions of the rule 6 (1) (b) of the Companies(Appointment and Qualification of Directors) Rules 2014 of the Companies Act 2013 byregistering his name in the Independent Director's Data Bank bearing registration no.IDDB-DI-202001-005387 having validity up to 15.01.2021 maintained by the Indian Instituteof Corporate Affairs at Manesar.

2. The term of CA Vinita Bahri (DIN - 03109454) as an Additional Director [CategoryNon-executive Independent] of the Company is expiring at the conclusion of the ensuingThirty-fourth (34 ) Annual General Meeting of the Company.

The Board recommends appointment of CA Vinita Bahri (DIN - 03109454) as an IndependentDirector [Category Non-executive Independent] not liable to retire by rotation to holdthe office for a fixed first term of consecutive Five (5) years from the conclusion ofensuing Thirty-forth (34 ) Annual General Meeting in the interest of the Company.

The Company has received a Notice in writing under Section 160 of the Companies Act2013 from a Member proposing the candidature of CA Vinita Bahri (DIN - 03109454) for theoffice of a Director of the Company.

The Company has also received the self-declaration/s from CA Vinita Bahri (DIN -03109454) inter-alia to the effect that

(i) She was/is not disqualified from being appointed as a Director of the Company interms of the provisions of Section 164 of the Companies Act 2013 and has submitted herconsent to act as a Director of the Company;

(ii) She was or is not debarred from holding the office of a Director pursuant to anyorder of the SEBI or such other authority in terms of SEBI's Circular No.LIST/COMP/14/2018-19 dated 20 June 2018 on the subject "Enforcement of SEBI Ordersregarding appointment of Directors by listed companies";

(iii) She meets the criteria of independence as provided in Section 149(6) of the Actand Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (as amended) ["Listing Regulations"]; and

(iv) She has complied with the provisions of the rule 6 (1) (b) of the Companies(Appointment and Qualification of Directors) Rules 2014 of the Companies Act 2013 byregistering her name in the Independent Director's Data Bank bearing registration no.IDDB-NR-202003-020865 having validity up to 12.03.2021 maintained by the Indian Instituteof Corporate Affairs at Manesar.

3. The first term of CA Neelam Kothari Director (DIN - 06709241) (Category -Non-executive Independent) of the Company is expiring on the conclusion of the ensuingThirty-fourth (34 ) Annual General Meeting of the Company. Pursuant to Section 149 152 ofthe Companies Act 2013 ('Act') and Schedule IV to the Act read with the Companies(Appointment and Qualification of Directors) Rules 2014 (as amended) and the SEBI (LODR)Regulations the Board recommends appointment of CA Neelam Kothari (DIN - 06709241) as anIndependent Director [Category Non-executive Independent] not liable to retire byrotation to hold the office for a fixed second term of consecutive Five (5) years fromthe conclusion of ensuing Thirty-fourth (34 ) Annual General Meeting in the interest ofthe Company.

The Company has received a Notice in writing under Section 160 of the Companies Act2013 from a Member proposing the candidature of CA Neelam Kothari (DIN - 06709241) forthe office of a Director of the Company.

The Company has also received the self-declaration/s from CA Neelam Kothari (DIN -06709241) inter-alia to the effect that

(i) She was/is not disqualified from being appointed as a Director of the Company interms of the provisions of Section 164 of the Companies Act 2013 and has submitted herconsent to act as a Director of the Company;

(ii) She was or is not debarred from holding the office of a Director pursuant to anyorder of the SEBI or such other authority in terms of SEBI's Circular No.LIST/COMP/14/2018-19 dated 20 June 2018 on the subject "Enforcement of SEBI Ordersregarding appointment of Directors by listed companies";

(iii) She meets the criteria of independence as provided in Section 149(6) of the Actand Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (as amended) ["Listing Regulations"]; and

(iv) She has complied with the provisions of the rule 6 (1) (b) of the Companies(Appointment and Qualification of Directors) Rules 2014 of the Companies Act 2013 byregistering her name in the Independent Director's Data Bank bearing registration No.IDDB-DI-202006-027912 having validity up to 7 June 2021 maintained by the IndianInstitute of Corporate Affairs at Manesar.

4. Pursuant to provisions of Section 196 197 198 203 and other applicableprovisions if any of the Companies Act 2013 Schedule V to the Act read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 (includingany statutory modifications and/or re-enactment thereof for the time being in force) andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board ofDirectors vide its 179 Meeting held on 13 August 2020 on the recommendation of theNomination and Remuneration Committee (NRC) of the Board has approved and recommended thereappointment of Mr. Pranav Bhardwaj (DIN: 00054805) as the Managing Director (Category -Promoter Executive) designated Key Managerial Personnel of the Company not liable toretire by rotation for a further period of Five (5) years effective from 17 January 2021in the interest of the Company.

5. Pursuant to provisions of Section 196 197 198 203 and other applicableprovisions if any of the Companies Act 2013 Schedule V to the Act read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 (includingany statutory modifications and/or re-enactment thereof for the time being in force) andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board ofDirectors vide its 178 Meeting held on 26 June 2020 on the recommendation of theNomination and Remuneration Committee (NRC) of the Board has approved and recommended thereappointment of Mr. Surendra Kumar Gupta (DIN : 00054836) as the Deputy ManagingDirector (Category - Non-Promoter Executive) designated Key Managerial Personnel of theCompany liable to retire by rotation for a further period of three (3) years effectivefrom 30 July 2020 in the interest of the Company.

6. Pursuant to provisions of Section 196 197 198 203 and other applicableprovisions if any of the Companies Act 2013 Schedule V to the Act read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 (includingany statutory modifications and/or re-enactment thereof for the time being in force) andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board ofDirectors vide its 178 Meeting held on 26 June 2020 on the recommendation of theNomination and Remuneration Committee (NRC) of the Board has approved and recommended thereappointment of CA Rambhatla Muralidhar (DIN: 00982212) as the Executive Director(Finance) designated Key Managerial Personnel of the Company liable to retire byrotation for a further period of three (3) years effective 14 August 2020 in the interestof the Company.

7. Pursuant to provisions of Section 196 197 198 203 and other applicableprovisions if any of the Companies Act 2013 Schedule V to the Act read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 (includingany statutory modifications and/or re-enactment thereof for the time being in force) andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board ofDirectors vide its 178 Meeting held on 26 June 2020 on the recommendation of theNomination and Remuneration Committee (NRC) of the Board has approved and recommended thereappointment of Mr. Ramchandra Vasant Dalvi (DIN : 00012065) as the Executive Director(Works) designated Key Managerial Personnel of the Company liable to retire by rotationfor a further period of three (3) years effective 14 August 2020 in the interest of theCompany.

[Brief profile of all the Director/s including those seeking appointment andre-appointment is given in the Corporate Governance Report annexed to the Board Report].

11. NUMBER OF MEETINGS OF THE BOARD

During the Financial Year 2019-20 under review Six (6) meetings of the Board ofDirectors of the Company held on

(i) 21 May 2019

(ii) 12 August 2019

(iii) 27 September 2019

(iv)12 November 2019

(v) 23 December 2019 and

(vi) 13 February 2020.

12. DIRECTORS' RESPONSIBILITY STATEMENT

The Board of Directors confirms:-

I. That in the preparation of the Annual Accounts (Financial Statements) theapplicable Accounting Standards had been followed along with proper explanation relatingto material departures;

ii. That the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of theFinancial Year and of the profit of the Company for that Financial Year;

iii. That the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

iv. That the Directors had prepared the Annual Financial Statements on a going concernbasis;

v. That the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls were adequate and operating effectively;and

vi. That the Directors had devised proper system to ensure compliance with theprovisions of all applicable laws and regulations and that such systems were adequate andoperating effectively.

13. COST RECORDS

Pursuant to the amendment to the Companies (Accounts) Rules 2014 vide MCA'sNotification dated 31 July 2018 the Board of Directors do confirm that the maintenanceof cost records as specified by the Central Government under Sub-section (1) of Section148 of the Companies Act 2013 is required by the Company and accordingly such accountsand records are made and maintained by the Company for the Financial Year 2019-20.

14. BUSINESS RESPONSIBILITY REPORT

The Securities Exchange Board of India's (SEBI) Listing Regulations mandate theinclusion of the Business Responsibility Report as part of the Annual Report for the top1000 listed entities based on market capitalisation. The Business Responsibility Report(BRR) as mandated by the Securities and Exchange Board of India (SEBI) for the yearunder review is part of the Annual Report 2019-20 of the Company. The BRR maps thesustainability performance of your Company against the reporting framework suggested bySEBI. It describes the initiatives taken by your Company from an environmental social andgovernance perspective.

15. COMMITTEE(S) OF THE BOARD

The Company has constituted all the requisite Committee(s) of the Board namely AuditCommittee Nomination and Remuneration Committee Stakeholders' Relationship CommitteeCorporate Social Responsibility (CSR) Committee Share Transfer Committee Risk ManagementCommittee and Project Monitoring Committee pursuant to the provisions of the CompaniesAct 2013 read with the rules made there under and Listing Regulations. The details of itsconstitution objective or terms of reference and other related information have beenprovided in the Corporate Governance Report which forms part and parcel of the Board'sReport.

16. AUDITORS

I. STATUTORY AUDITORS AND THEIR REPORT:-

M/s. S. S. Kothari Mehta & Co. Chartered Accountants New Delhi (ICAI FirmRegistration No. 000756N Peer Review Certificate No. 008927) were appointed as theStatutory Auditors of the Company by the shareholders in the Thirty-second (32 ) AnnualGeneral Meeting (AGM) of the Company held on 25 September 2018 for a fixed second term oftwo (2) years from the conclusion of Thirty-second (32 ) Annual General Meeting until theconclusion of Thirty-fourth (34 ) Annual General Meeting of the Members of the Company tobe held for the Financial Year 2019-20. On completion of their existing tenure till theensuing AGM pursuant to the provisions of Section 139 of the Companies Act 2013 they arenot eligible for re-appointment and in their place new auditors are to be appointed. TheBoard of Directors on the recommendation of the Audit Committee has approved andrecommended for the approval of the Members at the ensuing 34 Annual General Meeting ofthe Company the appointment of M/s. N S B P & Co. Chartered Accountants New Delhi(ICAI Firm Registration No. 001075N Peer Review Certificate No. 009284) as the StatutoryAuditors in place of M/s. S. S. Kothari Mehta & Co. Chartered Accountants New Delhifor a period of 5 (Five) years to hold such office from the conclusion of ensuing AnnualGeneral Meeting till the conclusion of the Annual General Meeting to be held for theFinancial Year 2024-2025.

The appointee Statutory Auditors have furnished a Certificate of their consentqualification and eligibility for appointment including re-appointment under Section 139and 141 of the Companies Act 2013 read with the rules and regulations made there under.

The Auditors' Report submitted by M/s. S. S. Kothari Mehta & Co. CharteredAccountants New Delhi (ICAI Firm Registration No. 000756N Peer Review Certificate No.008927) the Statutory Auditors to the Members of the Company for the Financial Year2019-20 ended 31st March 2020 do not contain any qualification. The observations made bythe Statutory Auditors in their report are self-explanatory and have also been furtheramplified in the Notes to the Financial Statements and as such do not call for anyexplanations.

During the Financial Year 2019-20 under review:

a) there has been no fraud occurred noticed and/or reported by the Statutory Auditorsunder Section 143(12) of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 (as amended);

b) the observations made by the Statutory Auditors on the financial statements for theFinancial Year 2019-20 ended 31st March 2020 under review including the affairs of theCompany are self-explanatory and do not contain any qualification reservation adverseremarks or disclaimer.

As such no specific information details or explanations required to be given orprovided by the Board of Directors of the Company.

II. COST AUDITORS AND THEIR REPORT

Pursuant to Section 148 of the Companies Act 2013 the Board of Directors on therecommendation of the Audit Committee of the Company has appointed M/s. G. R. Paliwal& Company Cost Accountants Nagpur (Membership No. 7815) as the Cost Auditors of theCompany for the Financial Year 2020-21 and has also recommended their remuneration to theMembers of the Company for their ratification at the ensuing Thirty-fourth (34 ) AnnualGeneral Meeting of the Company.

The said Cost Auditors have furnished a Certificate of their eligibility forappointment including re-appointment pursuant to Section 141(3)(g) Section 148(5) of theCompanies Act 2013 read with the rules made there under Certificate for independence andarms'length relationship with the Company and have confirmed about their not beingdisqualified for such appointment including reappointment within the meaning of Section141(3) of the Companies Act 2013.

Pursuant to the applicable provisions of the Act read with the rules made there underthe Statements Annexures Proforma annexed to the Cost Audit Report in Form No. CRA-3required to be submitted by the said Cost Auditors with the Central Government in e-FormNo. CRA-4 for the Financial Year 2018-19 was filed vide SRN H-87953998 dated 09thSeptember 2019.

Moreover the Statements Annexures Proforma annexed to the Cost Audit Report in FormNo. CRA-3 to be submitted by the said Cost Auditors with the Central Government in e-FormNo. CRA-4 for the Financial Year 2019-20 do not contain any adverse remarks andqualifications is self-explanatory and do not call for any further explanation/s by theCompany.

III. SECRETARIAL AUDITORS AND THEIR REPORT

M/s. Mukesh Parakh & Associates Company Secretaries Nagpur [ICSI Membership No.FCS-4343 & Certificate of Practice No. 13693] were appointed as the SecretarialAuditors of the Company for the Financial Year 2019-20.

The Secretarial Audit Report in Form No. MR-3 submitted by the said SecretarialAuditors is attached herewith as an Annex B which forms an integral part of theBoard's Report do not contain any adverse remarks and qualifications is self-explanatoryand do not call for any further explanation/s by the Company.

Further the Board of Directors of the Company at its 179 meeting held on 13 August2020 has approved the re-appointed M/s. Mukesh Parakh & Associates CompanySecretaries Nagpur [ICSI Membership No. FCS-4343 & Certificate of Practice No.13693] as the Secretarial Auditors of the Company for the Financial Year 2020-21.

IV. INTERNAL AUDITORS AND THEIR REPORT

M/s. AKMK & Associates Chartered Accountants Surat [ICAI Firm Registration No.136206W] and M/s. Nitin Alshi & Associates Chartered Accountants Nagpur [ICAI FirmRegistration No. 116875W] were appointed as the Internal Auditors and Joint InternalAuditors respectively of the Company for the Financial Year 2019-20 pursuant to theprovisions of Section 138 of the Companies Act 2013 read with Rule 13 of the Companies(Accounts) Rules 2014 and relevant SEBI Regulations including the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (as amended).

The Internal Audit finding/s and report/s submitted by the said Internal Auditor/sfrom time to time during the Financial Year 2019-20 to the Audit Committee and Board ofDirectors of the Company do not contain any adverse remarks and qualifications is/areself-explanatory and do not call for any further explanation/s by the Company.

The Board of Directors of the Company at its 177 meeting held on 13 February 2020 onthe recommendation of the Audit Committee has approved and appointed M/s. AKMK &Associates Chartered Accountants Surat [ICAI Firm Registration No. 136206W] as theInternal Auditors of the Company for the period of Three (3) Financial Year/s from theFinancial Year 2020-21 to the Financial Year 2022-23.

Further the Board of Directors of the Company at its 177th meeting held on 13thFebruary 2020 on the recommendation of the Audit Committee has approved and appointedM/s. Nitin Alshi & Associates Chartered Accountants Nagpur (ICAI Firm RegistrationNo. 116875W) as the Joint Internal Auditors of the Company for the period of Two (2)years from the Financial Year 2020-21 to the Financial Year 2021-22

17. PERSONNEL / PARTICULARS OF EMPLOYEES

The information required to be provided pursuant to the provisions of Section 197 ofthe Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 are given below:

a) The ratio of the remuneration of each Executive Director to the medianremuneration of the employees of the Company for the

Financial Year 2019-20 ended 31 March 2020:

Executive Director(s) Ratio to Median remuneration of employees
Mr. Pranav Bhardwaj - Managing Director 26.59:1
Mr. Surendra Kumar Gupta - Deputy Managing Director 18.09:1
CA Rambhatla Muralidhar - Director (Finance) 15.62:1
Mr. Ramchandra Vasant Dalvi - Executive Director (Works) 12.74:1

b) The percentage increase in remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary in the Financial Year 2019-20 ended 31 March2020:-

Directors Chief Executive Officer Chief Financial Officer and Company Secretary % increase in remuneration over previous Financial Year
Mr. Pranav Bhardwaj - Managing Director - 0.97
Mr. Surendra Kumar Gupta - Deputy Managing Director - 1.04
CA Rambhatla Muralidhar - Executive Director (Finance) & (Chief Financial Officer upto 30 September 2019) 0.00
Mr. Ramchandra Vasant Dalvi - Executive Director (Works) 0.00
CS Ashutosh Mishra - Company Secretary # NA
S. Mahadevan Iyer - Chief Financial Officer (w.e.f. 1 October 2019) (*) NA

(*) - Not comparable as he was in service as Chief Financial Officer for part of theyear.

(#) - Not comparable as he was in service for part of the previous year.

c) The percentage decrease in the median remuneration of employees in the FinancialYear 2019-20 ended 31 March 2020 : - 3%

d) The number of permanent employees on the rolls of Company as on 31 March 2020 : 1199

e) Average percentile increase already made in the salaries of employees other thanthe managerial 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: There is noincrease in the managerial remuneration for the Financial Year 2019-20 ended 31 March2020 other than commission based on net profits as per the terms of their appointment.

f) Affirmation : Remuneration paid to Director/s Key Managerial Personnel andEmployees of the Company is as per the remuneration policy of the Company.

g) Statement of Particulars of Employees as per Section 197 of the Companies Act 2013read with rule 5(2) and (3) of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended andforming part of the Boards' Report for the year ended 31 March 2020 is as below:

Sr. No. Name of the Employee Designation/ Nature of Employment Age / Qualification Experience (Years) Remuneration (Rs. in Lakh) Last Employment Date of Appointment Equity holding %
1. Mr. Pranav Bhardwaj Managing Director 46 B.Sc. (Chemistry & Business Management 21.04 497.43 Not Applicable 01-12-1998 0.89
2. Mr. S. K. Gupta Dy. Managing Director 71 PGD (DBM) B.E. (M) D. Engg. (M) 52.07 108.67 Coventry Springs 05-09-1992 -
3. CA R. Muralidhar Executive Director (Finance) 65 C.A. M.Com. 40.02 92.77 BALCO 06-10-1993 -
4. Mr. Ramchandra Dalvi Executive Director (Works) 69 B.Tech (Metallurgy) 37.08 74.84 Sanika Hospitality Own Venture 03-08-2015 -
5. Mr. Jitendra Singh Head-Marketing 55 M.Tech (MET). B.E. (MET) 31.03 69.82 Punjab Concast Steels 21-12-1998 -
6. Mr. D. D. Khonde Deputy Head Plant 45 B.Tech (Mech) PGPBA D. Engg(CHE) 24.04 61.10 PT. Gunung Garuda Indonesia 01-12-2012 -
7. Mr. S. K. Chanda Deputy Head-Marketing 51 MBA (MKT) BE. (MET) 27.07 59.67 Mukand Ltd. 04-09-2003 0.0001 (200 Shares)
8. Mr. D.S. Kalne VP (Finance & Store-Works) 64 C.A. 36.10 59.53 Orient Cordage Pvt. Ltd. 01-06-1989 -
9. Mr. Y.S. Chaturvedi GM (RM & Bright Bar) 49 D. Engg (Electrical) BSC (PCM) 29.04 53.17 JSW Steel Ltd. 10-12-2009 -
10. Mr. D.D. Chowdhury Associate Head-Project 57 D.Engg (MET) P. DIP (FT) BA.PGDMSM 34.09 44.50 Abhijeet Group 03.07-2009 -

Note:

i. Remuneration includes Salary and allowances. In the case of Mr. Pranav Bharadwaj itincludes Salary allowances and commission.

ii. None of the above employees are related to any Director or Manager except Mr.Pranav Bhardwaj who is relative of Mr. Ravi Bhushan Bhardwaj (Non- executive Chairman) andMr. Suhrit Bhardwaj (Non-executive Non Independent Director).

18. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation technology absorption foreignexchange earnings and outgo as required to be disclosed under Section 134(3)(m) of theCompanies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 are givenin the Annex - C to this report.

19. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIESACT 2013

The particulars of Loans Guarantees or investments given or made by the Company underSection 186 of the Companies Act 2013 are disclosed in the Notes to the FinancialStatements of the Company for the Financial Year 2019-20.

20. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SECTION 188 OFTHE COMPANIES

ACT 2013

a) Details of contracts or arrangements or transactions not at arm's length basis:

There are no such transactions and hence not applicable.

b) Details of contracts or arrangements or transactions at arm's length basis:

The details of contracts or arrangements or transactions in the ordinary course ofbusiness and at arm's length basis are as given below:

Pursuant to clause (h) of sub-section (3) of Section 134 of the Companies Act 2013 andRule 8(2) of the Companies (Accounts) Rules 2014 (as amended):

Name of the related party and nature of relationship Nature of contracts / arrangements / transactions Duration of contracts / arrangements / transactions Salient terms of the contracts / arrangements / transactions including the value if any Dates of approval ratification by the Board if any Consideration Amount for the FY 2019-20
Haryana Television Limited Ordinary course of Business and at Arm's length Continuing Refundable Security Deposit 28.05.2018 and ratified on 26.06.2020 Rs.2820000/- (Continuing from Previous year)
Haryana Television Limited Ordinary course of Business and at Arm's length Continuing Rent paid for Company's Godown at Faridabad 28.05.2018 and ratified on 26.06.2020 Rent Rs.5699400/- Lakh for the FY 2019-20
Ramesh Sunwire Private Limited Ordinary Course of Business and at Arm's length -- Sale of Wire Rods 26.06.2020 Rs.124501328/- in the FY 2019-20
Ramesh Sunwire Private Limited Ordinary Course of Business and at Arm's length -- Purchase of scrap of Wire Rods 26.06.2020 Rs.3185451/- in the FY 2019-20

Note :

Particulars of contracts or arrangements or transactions with related parties are notgiven in Form AOC-2 during the Financial Year 2019-20 under review as the Company has notentered into any contracts or arrangements which are material in nature or are not atarm's length.

21. LISTING OF SHARES

The Equity Shares in the capital of the Company continued to be listed with andactively traded on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE).The listing fees for the Financial Year 2020-21 ending 31st March 2021 havebeen paid to both the Stock Exchanges (BSE & NSE) within the normal stipulated time.

22. DEMATERIALISATION OF SHARES

As on 31st March 2020 there were approximately 111175197 Equity Sharesdematerialised through depositories viz. National Securities Depository Limited andCentral Depository Services (India) Limited which represents about 61.69% of the totalissued subscribed and paid-up capital of the Company.

23. ANNUAL RETURN

Pursuant to the provisions of Section 134 (3) (a) of the Companies Act 2013 theAnnual Return of the Company has been uploaded on the Company's websitewww.sunflagsteel.com and can be accessed at https://sunflagsteel.com/wp-content/uploads/2020/08/Form_MGT-7-Sunflag-Steel-2018-19.pdf.Extract of Annual Return (Form MGT-9) for the Financial Year 2019-20 too has been uploadedon the Company's website and can be accessed at https://sunflagsteel.com/investor-relations/#1597741491400-ccc68e23-d270.

24. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

The detailed information related to the dividend declared by the Company in theprevious year/s together with the amount remained unpaid or unclaimed its transfer to theInvestor Education and Protection Fund are provided in the Notes annexed to the Noticeconvening the Thirty-fourth (34th) Annual General Meeting of the Company. Toavoid repetition the Shareholders of the Company are advised to refer the said Notes fordetailed information on the subject matter.

25. TRANSFER OF SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Ministry of Corporate Affairs (MCA) has notified "Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016" (theRules) which have come into force from 7th September 2016. The said Rulesamongst other matters contain provisions for transfer of all shares in respect of whichdividend has not been claimed for seven (7) consecutive years or more in the name of'IEPF Demat Account'. Accordingly the Company has so far transferred 3169315 EquityShares constituting about 1.759% of the total issued subscribed and paid-up capital. Thevoting rights on these shares shall remain frozen till the rightful owner of such sharesclaim the Equity Shares from the IEPFAuthority. The IEPFAuthority has laid down thedetailed procedure for claiming both Dividend as well as Equity Shares by theShareholders or Investors of the Company.

26. CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance practices or requirements as set out in the ListingRegulations by the SEBI enforced through the Stock Exchange/s (BSE & NSE). TheCompany has also implemented several best Corporate Governance practices as prevalentglobally.

Your Board of Directors are pleased to report that your Company has complied with theSEBI Guidelines on Corporate Governance for the Financial Year 2019-20 ended and as of 31March 2020 relating to the Listing Regulations. Certificates from M/s. Mukesh Parakh& Associates Company Secretaries Nagpur (ICSI Membership No. FCS-4343 Certificateof Practice No. 13693) confirming compliance with conditions as stipulated under ListingRegulations and Non-disqualification of Directors are annexed to the Corporate GovernanceReport which form an integral part of the Board's Report of the Company.

27. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company's Steel plant is located at Bhandara Road Village Warthi Tahsil MohadiDistrict Bhandara in the State of Maharashtra. It is located at a distance of about 12kilometers from the Bhandara District Headquarters. The unit is surrounded by seven (7)villages in the radius of 5 KMs. The Company is having its captive Coal Mines at BelgaonVillage Aathmurdi District Chandrapur in the State of Maharashtra. The Company's CSRactivities as per its CSR Policy are strictly implemented in all the areas close to themanufacturing facilities (Steel Plant) and coal mines of the Company.

All the activities and programs covered under SISCO CSR are being monitored by the CSRCommittee and are implemented by the CSR Sub-committee through an Implementing Agency.

Sunflag Foundation (CIN-U 74999 MH 2017 NPL 289961) a Section 8 Company (A Company notfor Profits) was incorporated on 27 January 2017 as a Wholly-owned Subsidiary of SunflagIron and Steel Company Limited. The said Company has been appointed as an implementingAgency to carry out the Corporate Social Responsibility (CSR) activities as per CSR Policyof the Company within the framework of applicable provisions of law.

Accordingly Sunflag Foundation is implementing all the CSR activities budget andaccounts for the same the manner in which the CSR amount has been spent or to be spentetc. and in turn furnishes its report to the Company on regular basis. As required thedetails pertaining to the Corporate Social Responsibility (CSR) activities together withdetails of expenditure is enclosed herewith as an Annex A which forms an integralpart of the Board's Report of the Company.

28. CODES OF CONDUCT OF BUSINESS PRINCIPLES & ETHICS AND PREVENTION OF INSIDERTRADING AND OTHER CODES / POLICIES

The Board of Directors are pleased to report that your Company has complied with the:-

i) Code of Conduct of Business Principles and Conduct;

ii) Code of Prevention of Insider Trading in Sunflag Securities by the designatedpersons [Insider] (as amended from time to time);

iii) Code for Vigil Mechanism - Whistle Blower Policy ;

iv) Code for Independent Directors;

v) Corporate Social Responsibility (CSR) Policy;

vi) Risk Management Policy which includes identification of elements of risk if anywhich in the opinion of the Board of Directors may threaten the existence of the Company;

vii) Policy on Document Preservations (Regulation 9 of the SEBI (LODR) Regulations2015);

viii) Policy for determining of ‘material' Subsidiary (Regulation 16 of the SEBI(LODR) Regulations 2015);

ix) Policy on materiality of related party transaction/s and on dealing with relatedparty transaction/s (Regulation 23 of the SEBI

(LODR) Regulations 2015);

x) Policy for determination of materiality based on specified criteria andaccordingly grant authorisation for determination of materiality of events (Regulation 30of the SEBI (LODR) Regulations 2015); and

xi) Nomination and Remuneration Policy.

The aforesaid code(s) and policy(ies) are available on the Company's Website www.sunflagsteel.com.

29. MATERIAL DEVELOPMENT IN HUMAN RESOURCES

HUMAN RESOURCES

An improvement in employee productivity is the key focus area for the Company wherebyachieving benchmark performance in this area year on year is a major goal for theCompany led by its Human Resource Department.

The emphasis on the people of the organisation stems from the belief that humanresource is the key factor to achieve success in any business. Sunflag Steel has alwaysbeen a front runner in its human resource practices with many pioneering policies in thearea of human resources. Our human resource practices are based on the values of SunflagSteel with emphasis on respect dignity unity and fostering a culture of togetherness.

Employees' competencies and skills were enhanced by imparting them internal andexternal training. Various measures were taken to improve motivation level of eachemployees. As a result many improvements were seen where initiatives were undertaken tobring about a change in culture and mind set of the workforce of the Company.

PRVEVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

Sunflag Iron and Steel Company Limited ("the Company") has in place anAnti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 and InternalComplaints Committee (ICC) has been set up to redress complaints received regarding sexualharassment.

All employees (permanent contractual temporary trainees etc.) are covered underthis Policy. Pursuant to the amendment to the st

Companies (Accounts) Rules 2014 vide MCA's Notification dated 31 July 2018 the Boardof Directors do confirm that the Company has complied with provisions relating to theconstitution of Internal Complaints Committee under the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 [14 of 2013].

The Certificate by the Deputy Managing Director of the Company to that effect isenclosed herewith as an Annex - D and forms an integral part of the Board's Reportof the Company.

HEALTH AND SAFETY

Health and safety remains the Company's highest priority and Sunflag Steel aspires tobe the steel industry benchmark in health & safety. The Health & Safety of theworkforce is of utmost importance and hence the need was felt for the same to percolatefrom the top leadership in the form of learning and experience-sharing.

Several initiatives were undertaken during the Financial Year to improve health &safety standards of the Company. Steps were taken to improve competency and capability forhazard identification and risk management. Further departmental safety co-ordinator/s areat place for monitoring & training on safety related matters at shop-floor. The SafetyCommittee and Apex Committee are available for periodical review on health safety &environment of all department/s of the Company. As a part of regular assignment trainingprograms on safety are being organised for New Joinee as well as for regular employeesand contract labour/s and as a part of this mock-drills are conducted for practicalexposure to meet emergency need on quarterly basis. The Hand book on safety awareness aredistributed to all employees of the Company as well as it is displayed at Notice Board/sat the Works and Offices of the Company.

To ensure safety at work site On-Line Safety Training is provided through"KIOSK" to concerned workers mainly for safe working at height safety whileFork Lift operation safe material handling with Hydra cranes and to Truck drivers.

After successful completion of safety training safety pass is being issued to themwhich is valid for 6 months.

30. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place adequate internal control systems and procedures commensuratewith the size and nature of business. These procedures are designed to ensure:-

a) that all assets and resources are used efficiently and are adequately protected;

b) that all the internal policies and statutory guidelines are complied with; and

c) the accuracy and timing of financial reports and management information ismaintained.

31. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY

There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the Financial Year of the Companyunder review to which the financial statements relate and the date of this Board's Report.As such no specific details are required to be given or provided.

32. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS

IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

During the Financial Year 2019-20 no significant and material order is passed by anyof the Regulators or Courts or Tribunals impacting the going concern status and theCompany's operations in future. As such no specific details are required to be given orprovided.

33. COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors confirms that the Company has duly complied with the applicableSecretarial Standards namely Secretarial Standard-1 ('SS-1') on Meetings of the Board ofDirectors Secretarial Standard-2 ('SS-2') on General Meetings and Secretarial Standard-3('SS-3') on Dividend during the Financial Year 2019-20.

34. OTHER DISCLOSURES

The details regarding Board and its Committee Meeting/s Evaluation of Boardperformance Self-Declaration by the Independent Director/s Remuneration policy forDirector/s and KMP's Induction training and familiarisation programmes for theDirector/s including Independent Director/s and such other related information has beenprovided under the Corporate Governance Report which forms an integral part of theBoard's Report of the Company.

35. ENCLOSURES a) Annex A : Annual Report on Corporate Social Responsibility (CSR)activities together with expenditure details; b) Annex B : Secretarial Audit Report inForm No. MR-3; c) Annex C : Report on Energy Conservation Technology Absorption andForeign Exchange Earnings and Outgo; d) Annex D : Certificate on Prevention of SexualHarassment of Women at the Workplace and its Prohibition and Redressal.

36. ACKNOWLEDGEMENT

The Board of Directors acknowledge with thanks co-operation and assistance received bythe Company from the Shareholders Consortium and other Banks or Lenders Central StateGovernment and Local Authorities and other external agencies involved in the overallbusiness operations of the Company.

The Board of Directors also record its appreciation for the dedication of all theemployees of the Company and their support and commitments to ensure that the Companycontinues to grow.

.