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MANGAL STEEL ENTERPRISESLIMITED.' '

36TH ANNUAL REPORT

2016-2017

REGISTERED OFFICE:1, OLD COURT HOUSE CORNER,

KOLKATA - 700001.,'

~ ..BO"~~

SHRfB .N. GARODIA(Managing Director)

SMT. U;~HAGARODIA(Who(~(~ime Director)

., ...;.SHRI DIPCHAND AGRAWAL

SHRI BRIJ MOHAN DALMIA,.

CHIEP;:N!f"IAL OJ;FleBR

RAMESH KUMAR SHARMA

G.P. AGRAWAL& co.7~ KlRAN SI:lANKARRAYROAD

KOL;KATA- 700001.

RBGf"~1) (jj:nCE

TOBACCO HOUSE1, OLD COURT HOUSE CORNER

4th FLOOR, KOLKATA - 700 001

248, G.T .ROAD (N), SALKIA,HOWRAH-711106.

1248, G.T.R0AD(N), SALKIA,

HOWRAH-711106.

Unit 215/1 F Road, Belgachia

HOWRAH-71110S ......STATE BANK OF INDIAOVER,$~S BRANCH,1,stR.,fND ROAD,KOLq.TA-700 001

CIN # L271d9WB1981PLC033969.t··.•,· ".;r:}

. :'ll;.,\ .

Independent Auditor's ReportTo The Members of

Mangal Steel Enterprises Limited

Report on the standalone financial statements

Wehave audited the accompanying standalone financial statements of Mangal Steel Enterprises Umited ("the Company"), whichcomprise the Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year thenended, and a summary of the significant accounting policies and other explanatory information.

Management's responsibility for the standalone financial statements

The Company'sBoard of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act")with respect to the preparation of these financial statements that give a true and fair view of the financial position, financialperformance and cash flows of the Company in accordance with ~e accounting principles generally accepted in India, indudingthe Accounting Standards specified under Section 133 of the Act, .r~8,with Rule 7 of the Companies (Accounts) Rules, 2014. Thisresponsibility also includes maintenance of adequate accounting'iecords in accordance with the provisions of the Act forsafeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and applicationof appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementationand maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy andcompleteness of the accounting records, relevant to the preparation and presentation of the financial statements that give a trueand fair view and are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

Wehave taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to beincluded in the audit report under the provisions of the Act and the R~lesmade there under.

We conducted our audit in accordance with the Standards on "Auditing specified under Section 143( 10) of the Act. Thosestandards require that we comply with ethical requirements and pl.a~and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financialstatements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of materialmisstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considersinternal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of theaccounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well asevaluating the overall presentation of the financial statements.

Webelieve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on thestandalone financial statements.

Opinion

In our opinion and to the best of our information and. according to the explanations given to us, the aforesaidstandalone financial statements give the information required by the'Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31st March, 2017and its profit and its cash flows for the year ended on that date.

.,..-: ...•Independent Auditor's Report (Contd.)To The Members of


Report on the standalone financial statements (contd.)

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor's Report) Order, 2016 ("the Order") issued by the Central Government of India interms of sub-section (11) of section 143 of the Act, we give in the "Annexure A", a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. As required by Section 143 (3) of the Act, we report that:

i. We have sought and obtained all the infor~~tion and explanations which to the best of our knowledge and beliefwere necessary for the purposes of our au~t;

ii. In our opinion, proper books of account as·:fequiredby law have been kept by the Company so far as it appearsfrom our examination of those books. .

iii. The Balance Sheet, the Statement of Profit and Loss and the Cashflow Statement dealt with by this Report are inagreement with the books of account.

iv. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specifiedunder Section 133 of the Act, read with Rule7 of the Companies (Accounts) Rules, 2014.

v. On the basis of the written representations received from the directors as at 31st March, 2017 and taken onrecord by the Board of Directors, none of the directors is disqualified as at 31st March, 2017 from beingappointed as a director in terms of Section 164 (2) of the Act.

vi. With respect to the adequacy of the internal financial controls over financial reporting of the Companyand theoperating effectiveness of such controls, refer to our separate Report in "Annexure B".

vii. With respect to the other matters to be i~luded in the Auditor's Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules, 2Ql4:;in our opinion and to the best of our information and according tothe explanations given to us: ~;.~-:;~.

a. The Company has disclosed the impact 6f~ending litigations on its financial position in its financial statements-Refer Note 28.2 to the financial statemetjts.

b. The Company did not have any long-term contracts including derivatives contracts for which there were anymaterial foreseeable losses.

c. There was no amount which was required to be transferred to the investor education and protection fund by theCompany.

d. The Companyhas provided requisite disclosures in the financial statements as to holdings as well as dealings inSpecified Bank Notes during the period from 8th November, 2016 to 30th December, 2016. Based on auditprocedures and relying on the management representation, we report that the disclosures are in accordancewith books of account maintained by th~C9mpanyand as produced to us by the Management - ReferNote No.28.13 to the financial statements. <'

.......For G.P.Agrawal &. Co.

CharteredAccountantsFinn's Reqistration No. - 302082E

Placeof Signature: KolkataDate: The 29th day of May. 2017

(CA.AOnrsneK:>nYdlllsukha)Partner

Membership No. 302609

MANGAL STEEL ENTERPRISES LIMITED

Notesforining·~ of FinandalStatement..... j .•

Note No. : 1 SIGNIFICANTACCOUNTINGPOLICIES

i) Basis of Accounting

The FinancialStatements are prepared in accordancewith GenerallyAccepted Accounting Principles (GMP)

in India.

The Financial Statement of the Company is prepared on an accrual basis and under the historical cost

conversion except for certain tangible assetswhich are carried at revalued amounts.

GMP comprises applicable Accounting Standards specified under Section 133 of the Act, read with Rule 7

of the Companies (Accounts) Rules, 2014, other pronouncements of the Institute of Chartered Accountants

of India, relevant applicable provisions of the CompaniesAct, 1956, and CompaniesAct, 2013 to the extent

applicable and the applicable guidelines issued by the Securitiesand ExchangeBoard of India (SEBI).

All assets and Liabilities have been classified as current or non-current as per the company's normal

operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the

nature of products and their realization in cash and cash equivalents, the company has ascertained

operating cycles for its manufacturing busirless as less than 12 months and for its real estate businessas 9

years from the date of inception of the pr.ojectand less than 12 months as on this balance sheet date, for

the purpose of current or non-current clasSificationof assets & liabilities.

ii) Property, Plant and Equipment and Depreciation:

(a) Property, Plant and Equipment and Depreciation are stated at their original cost (net of accumulated

depreciation and impairment) adjusted by revaluation of certain assets.

Cost, net of CENVAT,includes acquisition price, import duties, other non- refundable taxes and levies,

directly attributable expenses and pre-operational expenses including finance costs, wherever

applicable for bringing the assets to its working condition for its intended use.

MANGAl STEEL ENTERPRISES LIMITED

CASH FLOWSTATEMENT FOR THE YEAR ENDED 31ST MARCH, 2017 (Contd.)

NOTE:

1. The above Cash Flow Statement has been prepared under the "Indirect Method" as set out in the Accounting Standard -3 on Cash Flow Statement specified under

Section 133 of the Ad, read with Rule 7 of the Companies (Accounts) Rules, 2014.

2. Proceeds/(repayrnent) of short term borrowings have been shown on net basis.

3. Figure in brackets represent cash outflow from respective adivities.

4. Cash & cash Equivalents do not include any amount which is not available to the Company for its use.

5. As breakup of Cash & cash equivalents is also available in Note No.16, recondliaton ofitems of Cash & cash equivalents as per Cash Flow Statement with the equivalentitems reported in the Balance Sheet is not required and hence not provided.

This is the Cash Flow Statement referred to in our report of even date.

For G.P.Agrawal & Co.Chartered AccountantsF.R.No. 302082E

(CA. Abhishek Shyamsukha)Membership No. 302609Partner

(Usha Wodia)Whole Time DirectorDIN - 00838971

~ ".__ ~N:-6arodia)Managing DiredorDIN - 00309815

7A, Kiran Shankar Ray RoadKolkata - 700 001. (Ramesh Kr.Sharma)

Chief Financial OfficerDated: The 29th day of May, 2017

MANGAl STEEL ENTERPRISES LIMITED

Notes forming part of Financ~J'Statement (Contd.)~.'';'

Note No. : 1 SIGNIFICANTACCOUNTINGPOLICIES(Contd.)

(b) Monetary Assets and Liabilities related to foreign currency transaction remaining outstanding at the

year end are translated at the year end exchange rate and the resultant difference is recognized as

gain or loss for the year. Any income or expense on account of exchange difference either on

settlement or on translation at the year end is recognised in the Statement of Profit & Loss.

(c.) Forward exchange contracts entered into for hedging purposes are accounted for separately from the

underlying transactions. The premium or discqunt on forward exchange contracts is amortised over the~.~..

period of the respective contract. Exchan~~~'differences on such contracts at the year-end/upon

termination are taken to Statement of Profit andLoss.

vi) Expenses:

All expenses are accounted for on accrual basis.

vii) RevenueRecognition:a) Sale of goods is recognised at the time of transfer of substantial risk and rewards of ownership to the

buyer for a consideration.

b) Gross turnover is net of VATand inclusive of exciseduty.

c) Export incentives are accounted for on accrual basis and include.the estimated value of export

incentives receivable under the Merchandise E~.portsfrom India Scheme.

d) The Company follows completed project method of accounting as per which revenue will be recognized

on handing over of the possession of the respective units to the buyers.

e) Dividend is accounted for when right to receive the same is established.

f) All other incomes are accounted for on accrual basis.

MANGAL STEEL 'ENTERPRISES LIMITED

Notes forming part of:FI~ancial Statement (Contd.)',' I

Note No. : 1 SIGNIFICANTACCOUNTINGPOLICIES(C~ntd.)-,:>.~';'II,~:-\

viii) InsuranceClaim

Insuranceclaim is accounted for on settlement of claims.

ix) EmployeeBenefits:

a) Short-term employee benefits are recognized as an expense at the undiscounted amount in the

Statement of Profit and Loss for the.year in which the related service is rendered.. .~

~.,','.'-=.-_"

b) Post employment and other long:;'t~~memployee benefits are recognized as an expense in the

Statement of Profit &. Loss for the y~!in which the employees have rendered services. The expense is..' .)1'.

recognized at the present value of t'hl'amount payable determined using actuarial valuations. Actuarial

gains and losses in respect of post employment and other long-term employee benefits are recognized

in the Statement of Profit and Loss.

x) Provisions,Contingent liabilities and Contingentassets:

A provision is recognised in respect of obligations where, based on the evidence available, their existence

at the Balance Sheet date is considered probable as a result of a past event, and the Companyhas a

present legal obligation that can be estimated reliably, and it is probable that an outflow of economic

benefits will be required to settle the obligation. Provisions are measured by best estimate of the outflow of". ~. t

economic benefits required to settle the $tJlgation at the BalanceSheet date.~:~~;.:

Provisions, contingent liabilities and contingent assets are reviewedat each balance sheet date.

Re-imbursement expected in respect of expenditure to settle a provision is recognised only when it is

virtually certain that the re-imbursement will be received.

A ContingentAsset is neither recognised nor disclosed in the FinancialStatements.

~:.,.'b.,~~

:f_ "j. ,(:"•


Notes forming part of Financial Statement (Contd.)


xi) Taxeson Income:

Current Income Tax is measured at the amount expected to be paid to the tax authorities in accordancewith

the Income Tax Act, 1961. Deterred Tax is reco$nised, subject to the consideration of prudence in respect

of deferred tax assets, on timing differences, being the difference between taxable income and accounting

income that originate in one period and are capable of reversal in one or more subsequent periods.

xii) Borrowing Cost:

Borrowing costs that are directly attributable to the acquisition of qualifying assets are capitalized for the

period until the asset is ready for its intended use. Other borrowing costs are recognized as an expense in

the period in which they are incurred.

xiii) Impairment of Assets:

An asset is treated as impaired when the cafryirig cost of asset exceeds its recoverable value. An

impairment loss is charged to the Statement ofProfit & Loss in the year in which an asset is identified as

impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change

in the estimate of recoverable amount.

xiv) Segment Reporting:

Segments are identified based on the dominant source and nature of risks and returns and the internal

organisation and management structure. The acc~ur)ting policies adopted for segment reporting are in line

with the accounting policies of the Company.In add,!tion,the following specific accounting policies have been..... ,

followed for segment reporting:

(a) Inter segment revenue is accounted for based on the transaction price agreed to between segments

which is primarily market led.

". ,




(b) Revenue and expenses are identified to segments on the basis of their relationship to the operating

activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not

allocable to segments on a reasonable basis, have been disclosed as "Unallocable".

xv) Earnings Per share:

Basic earnings per share is computed by dividing the profit/(Ioss) after tax (including the post tax effect of

extra ordinary items, if any) by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed by dividing the profit/(Ioss) after tax (including the post tax effect of

any extra ordinary items, if any) by the weighted average number of equity shares considered for deriving

basic earnings per share and also the weighted average number of equity shares which could be issued on

the conversion of all dilutive potential.equity shares.

xvi) Cashflow statement :

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of

transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or

payments and item of income or expenses associated with investing or financing flows. The cash flows from

operating, investing and financing activities of the Companyare segregated.

xvii) Cashand cash equivalents :

Cashand cash equivalents include cash in hand, cheques in hand, balance with banks on current accounts

and short term, highly liquid investments ~ith an original maturity of three months or less and which carry

insignificant risk of changes in value.

,.

MANGAL STEEL ENTERPRISES LIMITEDNotes Forming the Part of FinancialStatements (Contd.)

Note No : 26 (~)Other expenses :....Particulars Year Year

ended 31st ended 31st./. March,2017 March,2016

Consumptionof stores and spare parts 37,397.224 29.249.029

Powerand fuel 19)88,418 18.773,466

ProcessingCharges 35.911.319 53,385,492

Rent 119.732 140.072

RepairsTo Buildings 5,297,234 3.536.622ToMachinery 1.517,875 2,902.341ToOthers 2,726,755 9.541.864 2.675.015 9.113.978

Insurance 59.918 232,604

Ratesand taxes (excludingtaxes on income) 1.244.209 4)07,081.',

BankCharges 879.894 1,795.618:'..

Legal& Professsionalcharges 1.938,027 2,870.082..

Paymentsto auditorAs auditor for statutory audit 75,000 85.875For tax audit 20,000 22.900For other services(Limited reviews& certifications) 53,000 148,000 64.696 173.471

Travelling& Conveyance 6,416,553 3.442.360

Building ProjectExpense(Refer Note No.27A) - 23,312,432

Shipment& ExportExpenses 60,165,547 65,602.577

CarriageOutward 5,645.803 3.972.116,."

Provisionfor Diminutionin value of Investment (net) - 247.452'.,.

Net loss on foreign currencytransactions and?:'.translations (Other than considered as finance cost) 90.510 1,846,749

Miscellaneousexpenses ·:~~5· 17,526,186 15.108.711. ~:

196,873,204 233,973,290

',-

,J,• I ;;:~

--- --- - - - ---

~:!~~

,:1:.'

MAN GAL STEEL ENTERPRISES LIMITEDNotes Forming the Part of Finaildal Statements (Contd.)

.:ff;Note No : 23 <;\':;: :Changesin inventories of finished goods, work.-in-proqress and stock-in-trade ':;. .,Particulars '~

Year Yearended 31st ended 31st

.. " " March,2017 March,2016

FinishedgoodsOpeningstock 37,593,923 54,608.286

Less: ClosingStock 58,944,877 (21,350,954) 37,593,923 17,014,363

Work- in-progressOpeningstock 13,185,300 90,586,701Less: ClosingStock 3,169,163 10,016,137 13,185,300 77,401,401

Flats& CarParkingSpaceOpeningstock 40,750,651Less: ClosingStock .38,690,399 2,060,252 40,750,651 (40,750,651)

..

ScrapOpeningstock -1,350,136 3,047,951Less: ClosingStock 2,720,020 (1,369,884) 1,350,136 1,697,815

(10,644,449) 55,362,928

Add/(Less) : Exciseduty and cesson stock •OpeningStock 4,327,119 6,406,251ClosingStock 6,S51,657 (2,524,538) 4,327,119 2.079,132

(8,119,911l 53,283,796

* Theamountof exciseduty and cess on stock represents differentialexciseduty and cesson openingand closingstockof finishedgoods.

(~)

Note No : 24Employeebenefits expense .;

Particulars Year Year.... ended 31st ended 31st

"" March,2017 March,2016,

Salariesandwages 15,592,470 11,674,399

Contributionto providentand other funds 1,009,405 1,407,166

Staffwelfareexpense 654,801 623,802

17,256,676 13,705,367

Note No . 25 (~)

FinancecostsParticulars Year Year

ended 31st ended 31st

- -March,2017 March,2016

Interestexpense 13,477,807 21,235,755

Otherborrowinqcosts • 1,858,412 1,447.810

15,336,219 22,683,565','.,

# Interest includeslate paymentof Statutory dues ' ' 1,290,371 55.012

MAN GAL STEEL ENTERPRISES LIMITEDNotes Forming the Part of FinancialStatements (Contd.)

Note No : 21'1.i'

" (~)Cost of materials consumedParticulars Year Year

ended 31st ended 31stMarch,2017 March,2016

Bars& RodsOpeningstock 46,488,872 123,361,693Add: Purchases 294,341,374 233,683,658Less: Closingstock (65,501,650) 275,328,596 (46,488,872) 310,556.479

ZincOpeningstock 5,247,993 2,674,898Add : Purchases 98,257,936 81,386,992Less: Closingstock (4,408,711 ) 99,097,218 (5,247,993) 78,813,897

". "

Others -.:~:.~.

Openingstock 46,002,075 38,808,316"

Add: Purchases .,'" 47,226,743 78,493,652Less: Closingstock (14,700,696) 78,528,122 (46,002,075) 71,299,893

452,953,936 460,670,269

Note No ' 22 (~)Purchasesof TradedGoodsParticulars Year Year


/MildSteelAngle,Channel 11,255,375T,M.T. ' . 69,456,583 92,956,912

!~::'~80,711,958 92,956,912

MAN GAL STEEL ENTEBPRISES LIMITEDNotes Forming part of Finan~iil1Statements (Contd.)

Note No ' 19 (~)Revenuefrom operationsParticulars Year Year

ended 31st ended 31stMarch, 2017 March, 2016

Sale 01 goods (Gross)*FinishedGoods ....

Bars / Rods 58g.$96,014 618,380,369Bolt

.":". ',1l},~33,803 43,229,308

BarbedWireFenceArm , ."5~;117,676 55,268,360Others , ~;~21,952 724,169,445 35,879,387 752,757,424

,

Saleof Flats and CarParkingSpaces 4,017,910 72,179.299

Sale01Goods- TradingGoods 81,221,668 93,637,713.'

Sale01 Scrap 33,040,910 37,974,102842,449,933 956.548,538

Other operating revenuesExport Incentives 28,412,855 25,103,795

870,862,788 981,652,333

• SalesincludeRs.30,97,356!- (Previous year 10,038,542/-) on account 01 Foreign ExchangeFluctuation.# Export Incentivesinclude Rs,69,977/- relating to previous year.

Note No' 20 (~)."

Other income .......,,Particulars T Year Year


Interest income(Gross)Fixeddeposits with banks ?,831,339 4,849,267On I.Tax Refunds 5,,189,986 287,408OnAdvances 822,458SecurityDeposits 20,039 9,863,822 14,756 5.151.431

DividendincomeLong term investments-Otherthan trade Investment 272,631 393,190

Gainon sale of Non current Investments 2,448,240

Provisionfor diminution in value of Investments written back " 1,696,698

Other non-operating income "

Rent~-~

7,200 7,200

Profit on Saleof Property, Plant and Equipment ' 179550 132,919

ClaimReceived ~,215,687Other Income 2.8,886

UnspentLiabilitiesWritten Back . 1,670 2,432,993 106,904 247,023

16,714,384 5,791,644

- -- -

MANGAL STEEL ENTERPRISES LIMITEDNotes Forming the part of Financial Statements ((ontd.)

Note No . 15 (~)

Trade receivables(Unsecured.consideredgood)Particulars As at 31st As at 31sl

March,2017 March,2016

Trade receivablesoutstandingfor a more than . ..:_

six months from due date

Other trade receivables ",.~, '" . 184,333,525 22,).151,519if':'

:~ 184,333,525 225,151,519

i

Note No' 16 (~)

(ash and bank balancesParticulars As at 31st As at 31st

March,2017 March, 2016

Cashand cashequivalents

Balanceswith banksIn current accounts . ·11,660,424 19,315,404

Cashon hand 332,976 11,993,400 538,192 19.853,596

>~

Other bankbalances: ~:_i :..,~'

Earmarkedbalances ~"J:.Unpaiddividendaccounts 2,500 2,500 48,')84 48,')84

Marginmoney',"~'.~~'.,

~,~,~'Fixeddepositswith banks ":f{

.. '1'.-. Currentportion of original maturity period morethan 12 months . 186,938

. Oriqmalmaturity period upto 12 months 1,077,450 1,077,450 311,286 498.224

13,073,350 20,400,404

Note No' 17 (~)

Short- term loans and advances "

(Unsecured,consideredgood) . ,

Particulars As at 31st As at 31st,March,2017 March,2016

Other loansand advances ,

Advanceto suppliers and others ~{ 15,591,939 9,016,800

Cenvat.Vat and other taxes/duties". ~.. 7,925,026 14,079,915

Prepaidexpenses 2,747,165 3.520,213

26,264,130 26,616,928

NoteNo' 18Other current assetsParticulars

. ,', As at 31st As at 31stMarch,2017 March,2016

Export incentivereceivable 31,518,890 17,750,282

Other receivables 51,884,529 50,389,743

Interest accruedbut not due 176,500 39,560..

83,579,919 68,179,585

-

MANGAL STEEL ENTERPRISES LIMITEDNotes Forming part of FinancialStatements ((ontd.)

(~)Note No . 11Deferred tax Assets (Net) 1:.

(Unsecured,consideredgood)~..

".":(.

Particulars Y As at 31st As at 31stMarch,2017 March,2016..

Deferred tax assets:Depreciationand amortisation 437,811 406,111

437,811 406,111

Note No . 12 (~)

Long - term loans and advances(Unsecured,consideredgood)Particulars As at 31st As at 31st


Capitaladvances 4,005,032 3,283,043

Securitydeposits 689,005 678,213

Other loansandadvancesAdvancetax 63,727,944 86,855,533Less:Provisionfor taxation 63,422,196 305,748 70,910,000 15.945.533

Other advances 850.030

4,999,785 ' 20,756,819

Note No' 13 (~)Other non-current assetsParticulars As at 31st As at 31st


Fixeddepositswith banks(Non current portion with original maturityperiod of morethan 12 months)

- AsMarginMoney 44,777,904 45.396,072

interest accruedbut not due 5,374,913 2,130.810

IncomeTaxrefundable 4,726,592 5,014,02054,879,409 52,540,902

"

Note No ' 14 (~)Inventories ?(Ai lowerof cost and net realizablevalue, unless stated otherwise)Particulars As at 31st As at 31st


Rawmatenals 84,611,057 97.738,940

Packingmatenals 721,942 466,885

Work-in-progress 3,169,163 13,185.300

Finishedgoods 58,944,877 37,593,923

Storesand spares 2,553,577 3.376,664

Stockof Fuel t77,445 100,099

Building project 38.690,399 40,750,651

FactoryScrap' 2,720.020 : .350,136

'., 191,588,480 194,562,598• Valuedat net realizablevalue "

e

MANGALS:r.t[.~NTERPRISES LIMITEDNotes Forming p~ of financial Statements [Contd.)

\j,Note No : 10 (Contd.) i~ (~)

Non-current investments '~.),Particulars

.Face Number of As at 31st I Number of As at 31st

value Shares/units March,2017 I shares I units March,2016

Bought Forward 7,448,412 4,973,503

Tata Steel Ltd, (Net of provision- NIL- Previous Year Rs.47,516/-) 10 747 286,332 747 238,816

United Spirits Ltd. (Net of Provision Rs.l0,003/- Previous Year Rs.NIL ) 10 32 69,550

Voltas Ltd, 1 293 99,147

Yes Bank Ltd" 10 500 185,329 500 185,329

In DebenturesNational Thermal Power Corporation Ltd. (Bonus) 12.50 2,500 2,500..

"In units of mutual fund ,Birla Sunlfe Frontline-Eq fund growth regular plan ~;j;i..;;~:; 10 9,265.35 1,466,334Dsp Black Rock focus 25- Regular plan growth 10 111.476,76 1,888,751

'"":.Reliance Unclaimed redemption exceed 3 years "<';'~':f~.~ 10 77.90 779

Reliance Elf Liquid bees ~', 1,000 2.35 2,354

Reliance Mutual Fund 1,000 0,02 191 -Franklin India Smaller Companies Fund-Growth 10 13,198.06 425,000 13,198 425,000

leici Prudential growth lund series 3 dividend payout 10 42,500.00 425,000 42,500 422,025

ICiciPrudential savings fund Growth 100 7,046.74 1,597,006L & T Business Cycle Fund Growth 10 145,208.89 1,638,537

IDFCCash Fund Unclaimed Dividend More Than Three Years 10 19,959.56 19,960

SBI Dynamic Bond Fund-regular Plan Growth (Net of Provision Rs.l09,869/- 1,227,471.92Previous Year Rs.109,869/- ) 10 25,283,344Sundaram Rural India Fund 10 14,625.74 500,000Motllal Oswal Multi Focussed Oppurtunilies Fund 10 300,000.00 3,000,000SBI Short Term Debt Fund Regular Plan growth 10 1,370,223.40 25,000,000

.. . (A) 69,336,026 (A) 6,244,673

(ii) Unquoted (At cost less provision for other than temporary dimunition) .:

(a) In equity shares of CompaniesFully paid up :Associate Companies:

Hindustan Enterprise Ltd. " - 10 77,520 776,200 70,010 701,101

Ansh Infraprojects Pvt. Ltd. 10 672,850 6,728,500 589,850 5,898,500

Shree Adarsh Dhatu Pvt Ltd, ';', .',',(Net of Provision Rs,94,200/- Previous Year Rs.99,367/-) ",Ii;'" 10 39,750 1,462,800 39)50 1,457,633

Subham Holdings Pvt Ltd. '. :~"(:!10 92,400 899,495 44,900 424.495~'f;~~:.

Mangal Engineering Ltd, .). 10 49,100 492.250 2,000 21,250:/

Other Companies:Shree Hanuman Cotton Mills Ltd,(Net of Provision Rs.4,9901- Previous YearRs.4 ,9901- ) 100 10 10 10 10

Shree Hanuman Foundry & Engineering Company Ltd. (Net of Provision Rs.5,725/-Previous Year Rs.5,725/- )

10 25 25 25 25

b) In Gold 340,632 340,632: ,

... (B) 10,699,912 (B) 8,843,646

(A + B) 80,035,938 I (A + B) 15,088,319

".

Aggregate amount of quoted investments

~~t~70,332,203 70,002,574

Aggregate amount of unquoted investments 10,464,195 8,613,096

Aggregate market value of quoted investments 77,898,529 73,313,989

Aggregate provision for dimunltion in value of investments 1,101,093 2,797,791

MANGAL STEEL ENTERPRISES LIMITEDNotes Forming part of Financ~ Statements (Contd.)

"

Note No' 10 (~)

Non-current investmentsParticulars Face Number of As at 31st I Number of As at 31st

value Shares/units March,20 17 I shares I units March,2016

Long termTrade investments

(i) Quoted (At cost less provision for other than temporary dimunition)(a) In equity shares of Companies

Fully paid up ;Electrosteel Steels Ltd. ;",(Net of Provision Rs.7.06.250/- Previous Year Rs.8,31.250/-) .(}O -, '. 1'25.000 543)50 125.000 418)50

Other than trade investments':~~<'..i:..

(i) Quoted (At cost less provision for other than temporary dimunition)(a) In equity shares of Companies

Fully paid up ; ~..Aditya Birla Fashion and Retail Ltd. ,1'0 1.097 1.097

'.'

Associated Cement Co. Ltd. 1.0 179 226.181 179 226,181

Axis Bank Ltd. ": 2· 865 223,435 865 223,435

Aegis Logistics Ltd. r 214 27.916

Alkem Laboratories Ltd. 2·", 21 28.411

ASian Paints Ltd '1 91 93.560 -Bioeon Ltd. S 565 220.086 565 220.086

Bharat Petroleum Corporation Ltd, 10 186 94.911'

Bosch Ltd. 10 9 201.234

Bajaj Finance Ltd. 2 91 -Bharat Forge Ltd. 2 . 117 91.490

Britannia Industries Ltd, 2 336 294.384 336' 294,384

Cadila Healtheare Ltd, 1 1.345 229,850 269 229.850

City Union Bank Ltd. >1 431 46.499

Coigtae Palmolive (India) Ltd. 1 38 33,469

Container Corporation of India Ltd. (Net of Provision Hs.1.722/- Previous Year .:.~~\Rs.NILJ- ) dO 18 22,879

'. .:~Cummins India Ltd. .. ' 61 48.735i.

Deccan Chronicle Holding Ltd. (Net of Provision Rs.142,615/- Previous Year t..,·' , .'Rs.142,615/- ) .,2 1.000 2,070 1.000 2.070

Eicher Motors Ltd. 10 . 8 151,141

Emami Ltd... ..~'tl : 54 56.235

Engineers India Ltd. . ".~ 144 13.966

Godrej Industries Ltd. '.·;:1·' . 68 32,830 -GlaxoSmithkline Consumer Healthcare Ltd, (Net of Provision Rs.3.622/- PreviousYear Rs.NIU- ) ,lO 6 30,959

HCLTechnologies Ltd, 2 462 149.059 462 149,059

HDFCBank Ltd. 2 402 317.259 315 214,948

Hero MOloeroDLtd. 2 21 67,116

Hindustan Petroleum Corporation Ltd, 10 498 154,590

Housing Devlopment Finance Corporation Ltd. 2 49 61.646 -I(lCI Bank Ltd. 2 1,480 306,078 1.480 306,078

Infosys Technologies Ltd. 5 240 148,123 120 148,123

ITCLtd. 1 1.449 282.695 966 282,696

Interglobe Aviation Ltd. ·lD 71 71.212

Ipca Lab Ltd. ~: 2' 58 24.206

Kotak Mahindra Bank Ltd. S 268 207,369

Larsen 6Toubro Ltd. 766 574,383 724 512.727

L [, T Technology Services Ltd. (Net of Provision Rs.7.477/- Previous Year Rs.NIL/- ) 2 .. 53 41.478

Lupin Ltd. 2 324 264)63 324 264,763

Mahindra 6 Mahindra Ltd. 5 16Q 149,063 160 149,063

Maruti Suzuki India Ltd. 5 130 217,005 130 217.005

Motherson Suml Systems Ltd. 1 1.327 278,114 885 278,114

Max Financial Services Ltd. 2 178 67.942Page Industries Ltd. 10 7 98.840

Reliance Industries Ltd. 882 993.946(Net of Provision Rs NIL. Previous Year Rs,1 ,57,775/-) 10 882 836,171

State Bank of India 1 308 60,988

Sun Pharmaceuticals Ltd. (Net of Provision Rs,8.393/- Previous Year Rs.NIL ) 1 157 107.969

Tata Consultancy Services Ltd. (Net of Provision Rs.6.236/- Previous Year Rs.NIL) 1 31 75.364

The Jammu and kashmir Bank Ltd. 1 262 15,213Carned Forward .. 7.448.412 4.973.503

. .

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... /~.·.'Ir'MANGAL'tTEEL ENTERPRISES LIMITED

Notes Formi~al1s of Financial Statement [Contd].¥,

N t N 6 (~)o e 0: .Trade payables

Particulars As at 31st As at 31stMarch,2017 March,2016

Total outstanding dues of other than Micro and Small Enterpnses 9.662,556 31,004,548

9,662,556 31,004,548Note'TheCompanyhas not received any Memorandum (as required to be filed by the suppliers with the notified authority under theMicro and SmallEnterprises Development Act, 2006) for claiming their status as on 31st March, 2017 asMicro or Small enterprise,Consequently.the amount due to micro and small enterprises as per the requirement of section 22 of the Micro & SmallEnterprisesDevelopmentAct 2006 is Rs. Nil (Previous Year Rs.Nil). :i- •.'

Note No: 7 ,ii·;:' mOther current liabilities ~,:

Particulars ,;.~. As at 31st As at 31st..'March,2016March,2017

UnclaimeddiVidend' 2,500 48,584

Other payablesPayableto suppliers of capital goods

Total outstandrng dues of other than Mitro andSmall Enterprises 682,497 2,100

Advancereceivedagainst sale of Flat 2,124,800 1,124,800Statutory liabilities" 7,708,981 5,631,971Bank accounts temporarily overdrawn 7,560,994Others 38,748 10,555,026 38.748 14.358.612

10,557,526 14,407,196..

",. ,. There is no amount due and outstanding to be credited to Investor Educ.ation& Protection Fund.•• Includeexciseduty and cess on closing stock () :'(f,j 6,851,657 4.327,119

• ~~'", .v:

;,:-'.

Note No ' 8:<~~,

'~i...Short-term provisions

Particulars As at 31st As at 31stMarch,2017 March, 2016

Provision forProposed diVidend 495,000

Provsion forTax on proposed dividend 100.770

595,770

f' "

MANGAl STEEL ENTERPRISES LIMITEDNotes Forming part of Fina6~i~1Statements ((ontd.)

Note No' 4 (~)Long - term provisions

Particulars As at 31st As at 31stMarch,2017 March,2016

Provisionfor employeebenefitsForGratuity 407.582 22.444

407,582 22,444

..',.'.. 'iF

Note No: 5

Particulars As at 31stMarch,2017

As at 31stMarch,2016

Short - term borrowings

Other loans and advancesWorkingcapital loans

Frombanksa) lli1m_

PackingCreditPost shipmentCredit

43,711.627130,115,035 173,826,662

101.169,297123.944,275 225,113,572

173,826,662 225,113,572

Nature of securities:Securedby all current assets including stock of Rawmatenals, Finishedgoods,Workin Progress,SundryDebtors as primary security and Land and Buildingsat a.) 248,G.lRoac.Salkra, Howrah, b.) 51A. Benaras Road,Belgachia,Howrah,c.) 14-F,15~)::,16-F,18·FAND25-F.Road.Belgachla,Howrah.Condclidated.d.) office spaceat 1. Old(ourt House(orner,Kolkata, Plant and Machinery,other assets and STDRsunder•.~~ to bank as collateral s!'funty and also guaranteed by Mr B.N.Garodla,ManagingDirectorof the Companyand MangalEngineeringLtd, an associateconcern. ,<.•..

';;:."-.:

I.~. .

MANGAl STEEL ENTERPRISES LIMITEDNotes Forming parts of.Rnancial Statement ((ontd)

Note No . 3 (~)Reservesand surplusParticulars As at 31st As at 31st

. March, 2017 March, 2016">

(a) General reserveBalanceas per last account : 235,677 ,390 230,677 ,390Add:Transferfrom Statementof Profit and Loss

"'C'O' 5,000,000 240,677,390 5,000,000 235,677,390

(b) Surplus:'~~~~:.

'or

Balanceas per LastAccount r 252.468,973 226,210.430Add: Surplusas per Statementof Profit and Loss 35,294,869 31,854,313Amountavailablefor appropriation 287,763,842 258,064,743Less: Appropriations:

Proposeddividend 495,000Taxon proposeddividend 100,770Transfer to general reserve 5,000,000 5,000,000

Balanceat the end of the year 282,763,842 252.468,973

Total Reservesand surplus 523,441,232 488,146,363

Notes:i) Generalreserveis primarilycreated to complywith the requirements of Section 123(1) of the CompaniesAct, 2013. This ia a free

reserveand canbe utilised for any general purpose like for issueof bonus sha~es~paymentof dividend, buy back 01 shares etc..- "

ii) During the year ended31st March, 2016, Dividend '1.00/- per equity share.",,:~recognisedas distribution to equity shareholders.The total dividendappropriation for the year ended March 31, 2016 amounte~W ;5,95;7701- includingcorporate dividend taxof '1,00,7701-. '; ..

; !&.:':~ ';.:/

.~..

. jll!',"

MANGAL STEEL ENTERPRISES LIMITEDNotes Forming part of Financial Statements (Contd.)

Note No . 2 (~)

Share capital tParticulars

: ,;~'.:" As at 31st As at 31stMarch,2017 March,2016

Haitif shares Amount No. of shares Amount

(a) Authorised';f/t' -,"

Equitysharesof par value' 10/- each 500,000 5,000,000 500,000 5,000,000' ......

5,000,000 5,000,000.'

(b) Issued, subscribed and fully paid up

Equitysharesof par value' 10/- each 495,000 4,950,000 495,000 4,950,000

4,950,000 4,950,000

(c) The Companyhas only one class of equity shares having a par value of '10 per share, Each holder of equity shares is entitled to one vote per share. The holders of Equity Sharesare entitled to receivedividends as declared from time to time. Thedividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing AnnualGeneral Meeting. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of allpreferential amounts.Thedistribution will be in proportion to the number of equity shares'h~d by the shareholders... ,~

"

'.

"

(d) Shareholdersholdingmore than 5 % of the equity shares in the Company:

......As.at 31si March, 2017 As at 31st March, 2016

Name of shareholder No.of sharesheld % of holdine No. of shares held % of holding

AdarshGarodia 49,500 10.00 49,500 10.00Ansh ManyaBeneficiaryTrust 44,640 9.02 44,640 9.02BishwanathGarodia 47,880 9.67 47,880 9.67BishwanathGarodia,HUF 37,595 7.59 37,595 7.59MangalEngineeringLtd. 26,650 5.38 26,650 5.38UshaGarodia 46,450 9.38 46,450 9.38NehaGarodia 45,930 9.28 45,930 9.28

The Borard of Directors,in its meeting on 29th May,2017, has proposed a dividendof Rs.l.00 per equity share for the financial year ended 31st March.2017.Theproposal issubject to the approvalof the shareholders at the ensuring AnnualGeneralMeeting.and, if approved,would result in a cash outflow of approximatelyRs.5,95.nO/- includingcorporate dividendtax of Rs.l,OO,nO/- .

-

;".;:.


STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 ST MARCH, 2017(~)

Particulars Note Year YearNo. ended 31st ended 31st


I. Revenuefrom operations 19Saleof goods (Gross) 842,449,933 956,548.538Less: Exciseduty 69,054.825 53,352,663Net sale of goods 773,395.108 903.195.875

Other operating revenues 28,412,855 25.103,795801,807,963 928,299,670

II. Other income 20 16,714,384 5,791,644

III. Total revenue ( 1+11) 818,522,347 934,091,314....

IV. Expenses: ..Costof materialsconsumed 21 452.953.936 460.670.269Purchaseof TradedGoods 22 80.711.958 92.956.912ChangesIn inventonesof finished goods,work-in-progress and stock-in-trade 23 (8,119,911) 53.283,796Employeebenefits expense 24 17,256,676 13)05,367Financecosts 25 ~, " 15.336.219 22,683,565Depreciationand amortization expense 9 8,063.891 8.385,533Other expenses 26 196,873.204 233,973.289

Total expenses 763,075,973 885,658,731

V. Profit before exceptional and extra 55,446,374 48,432,583ordinary items and tax ( III-IV)

VI Exceptionalitems

VII. Profit before extraordinary items 55,446,374 48,432,583and tax ( V-VI)

VIII. Extraordinaryitems '; -IX. Profit before tax (VII-VIII) .. 55,446,374 48,432,583

X. Tax expense :Currenttax 18,700,000 18,000,000Deferredtax (31.,700) (900,819)Incometax relating to earlier years 1,483,205 20,151,505 1520,911) 16.578,270

XI. Profit for the year (IX-X) 35,294,869 31,854,313

XII. Basic & Diluted Earnings per equity share 27 71.30 64.35(FaceValue' 10/- per equity share)

Significant accounting policies 1Other disclosures 28The accompanyingnotes 1 to 28 are an integral part of thelinancial statement.

As per our report of even date attached.

For G.P.AGRAWAL& CO.CharteredAccountantsFirm's Registration Number - 302082E-(CA.Abhishek ::,hyamsukha) , JUsha Garo~ia ) ~ It. Garodia)Membership No. 302609 Wliole Time Director Managing DirectorPartner ".Oi.N.- 00838971 DIN - 00309815

7A, Kiran ShankarRoy Road -. ,Kolkata 700001 (Ramesh Kr.Sharma)


- -- - ___ -

MANGAL STEB ...'..ENTERPRISESLIMITED,_- . .;

(~)CASH FLOWSTATEMENT FORTHE YEARENDED 31ST MARCH, 2017

YEARENDED YEARENDED31st March, 2017 31st March, 2016

Rs. Rs.A. CASHFLOWFROMOPERATINGACTIVITIES: -

Net Profit before tax and extraordinary items 55,446,374 48,432,583Adjustments to reconcile Net Profit before Tax to Cash Flowprovided by Operating Activities:Depreciation and amortization expense 8,063,891 8,385,533Interest on borrowings 13,477,807 21,235,755Interest Received (3,831,339) (4,849,267)Other borrowing costs 1,858,412 1,447,810Profit on sale of non-current investments (2,448,240) -Provision for diminution in value of investments I (1,696,698) 247,452(write back) "

(Profit )/loss on sale of Property, Plant and Equipment .. (179,550) (132,919)Unspent Liabilitiesl Balances Written Back ., (1,670) ( 106,904)Sundry Balances Written Off 682,993 3,414,788Dividend Income (272,631) 15,652,975 (393,190) 29,249,058

Operating Profit before Working Capital Changes 71,099,349 77,681,640

Adjustments to reconcile Operating Profit to Cash Flowprovided by changes in Working Capital :

Increase I (decrease) in long - tenm provisions 385,138 22,444Increase I (decrease) in Trade payables (21,341,992) (57,631,261)Increase I (decrease) in Other current liabilities (3,803,586) (106,220,282)Non Cash Items Written offl written back (681,323) (3,307,886 )(Increase) I decrease in Long - term loans and advances , 117,249 (2,329,794)(Increase) / decrease in Inventories 2,974,118 123,262,902(Increase) / decrease in Trade receivables

"40,817,994 43,588,198

(Increase) / decrease in Short - term loans and advances 352,798 724,256(Increase) / decrease in Other non-current assets - 882,677(Increase) / decrease in Other current assets (15,263,394) 3,557,002 43,598,165 42,589,420

Cash Generated from Operations 74,656,351 120,271,060Direct Taxes Paid/ Refund Received (4,393,992) ( 17,334,487)

Cash Flow before Extraordinary Items 70,262,359 102,936,573Extraordinary Items -

Net Cash Generated/ Used - Operating Activities ( A) 70,262,359 102,936,573

B. CASHFLOWFROMINVESTINGACTIVITIES: -

Additions to Property, Plant and Equipment (13,431,037) (13,947.053)Sale of Property, Plant and Equipment 1,360,002 468,572Purchase of Investments (2,180,729) (53,886,526)Sale of Investments 2,448,240Fixed Deposits made with Bank (38,942) 77,693,200Interest Received on Fixed Deposits 450,296 4,849,267Dividend Received 272,631 393,190

Net Cash Generatedl Used - Investing Activities (B) (11,119,539) 15,570,651

C. CASHFLOWFROMFINANCINGACTIVITIES: - .~'.

Proceeds I (Repayment) of 'iort-term borrowings (51,286,910) (89,909,967)Other borrowing costs ( 1,858,412) (1,447,810)Interest paid (13,215,840) (21,235,755)Dividend Paid including Tax thereon - -- --_ (641,854) (316,886)

Net Cash Generatedl Used - Financing Activities ( C) (67,003,016) (112,910,418)

Net Increase in Cash and Cash Equivalents (A+B+C) (7,860,195) 5,596,806Opening Cash & Cash Equivalents 19,853,595 14,256,789Closing Cash & Cash Equivalents (Refer Note No. 16) 11,993,400 19,853,595-

MANGAL STEEL ENTERPRISES LIMITEDBALANCE SHEET AS AT 31ST MARCH, 2017

(~)Particulars Note' As at 31st As at 31st

No. , " March,2017 March,2016-,

I. EQUITYAND LIABILITIES 1,'···:

(1) Shareholders' funds(a) Share capital 2 4,950,000 4,950,000(b) Reserves and surplus 3 523,441,232 528,391,232 488,146,363 493,096,363

(2) Non - current liabilities(a) Long - term provisions 4 407,582 407,582 22,444 22,444

(3) Current liabilities(a) Short - term borrowings 5 173,826,662 225,113,572(b) Trade payables

(i) Total outstanding dues of microand small enterprises 6

(ii) Total outstanding dues of creditors otherthan micro and small enterprises 6, 9,662,556 31,004,548

(c) Other current liabilities 7 10,557,526 14,407,196(d) Short - term provisions

..8 194,046,744 595,770 271,121,086

TOTAL ," 722,845,558 764,239,893.......II. ASSETS .'(1) Non - current assets

(a) Property, Plant & Equipment 9 (i) 81,392,260 79,465,457(b) Intangible assets 9 (ii) 47,538 1.060(c) Capital Work in Progress 2,213,413

83,653,211 79,466,517

(d) Non - current investments 10 80,035,938 76.158,511(e) Deferred tax Assets 11 437,811 406,111(f) Long - term loans and advances 12 4,999,785 22.887.629(g) Other non - current assets 13 54,879,409 224,006,154 50,410,092 229,328,860

(2) Current assets(a) Inventories 14

. ,"

.'191,588,480 194,562,598(b) Trade receivables 15 ..' 184,333,525 225,151,519, ,

(c) Cash and bank balances 16 13,073,350 20,400,403(d) Short - term loans and advances 17 .. 26,264,130 26,616,928(e) Other current assets 18 :: .':' 83,579,919 498,839,403 68,179,585 534.911,033

',.\,"

TOTAL 722,845,558 764,239,893

Significant accounting policies 1Other disclosures 28The accompanying notes t to 28 are an integral part of thefinancial statement.

As per our report of even date attached.

For G,P. AGRAWALfA CO.Chartered AccountantsFirm's ReQistration Number - 302082E

--(' Usha GarJlia )

.. ('I)."N. Garodia)(CA. Abhlshek snyamsUKlld) - '.Membership No. 302609 Whole TIme Director Managing Director

Partner DIN - 00838971 DIN - 00309815

7A, Kiran Shankar Roy RoadKolkata 700001 ..

(Ramesh Kr.Sharma)- -'-~;..,,,::,...--


Independent Auditor's Report (Contd.)To The Members of


"Annexure B" to the Auditor's Report (contd.)

Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, ordisposition of the Company's assets that could have a material effect':on the financial statements.

Inherent Umitations of Internal Finandal Controls Over Finandal RePorting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion orimproper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also,projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk thatthe internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degreeof compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reportingand such internal financial controls over financial reporting were op~rating effectively as at March 31, 2017, based on the internalcontrol over financial reporting criteria established by the Company considering the essential components of internal controlstated in the Guidance Note on Audit of Internal Financial Controls 6Je~Fi~ancial Reporting issued by the ICAI.

For G.P.Agrawal & Co.Chartered Accountants

Firm's Registration No. - 302082E

Place of Signature: KolkataDate: The 29th day of May, 2017

(CA.Abhishek Shyarnsukha)Partner


.;



"Annexure B" to the Independent Auditor's Report of EvenDate on the Finandal Statements of Mangal Steel Enterprises Umited

Report on the Internal Finandal Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

Wehave audited the internal financial controls over financial reporting of Mangal Steel Enterprises Limited("the Company") as ofMarch 31, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Rnandal Controls "

The Company's management is responsible for establishing, and maintaining internal financial controls based on the internalcontrol over financial reporting criteria established by t~e :Company considering the essential components of internal controlstated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India ("ICAI"). These responsibilities include'the design, implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherenceto Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy andcompleteness of the accounting records, and the timely preparation of reliable financial information, as required under theCompaniesAct, 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's ihternal financial controls over financial reporting based on our audit.Weconducted our audit in accordance with the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") and the Standards on Auditing, to the extent applicable to an audit of internal financial controls, both issued bythe ICAI.Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the auditto obtain reasonable assurance about whether adequate int~inal financial controls over financial reporting were established andmaintained and if such controls operated effectively in all m'at.~rialrespects.

,..Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls systemover financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weaknessexists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judqernent, including the assessment of the risks of material misstatement of thefinancial statements, whether due to fraud or error.

Webelieve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on theCompany's internal financial controls system over financial reporting.

Meaning of Internal Finandal Controls Over Rnandal Reporting

A company's internal financial control over financial reporting, is a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation 6f~ncial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal f~~cial control over financial reporting includes those policies andprocedures that (1) pertain to the maintenance of record's tHat, in reasonable detail, accurately and fairly reflect the transactionsand dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts andexpenditures of the Company are being made only in accordance with authorisations of management and directors of the



"Annexure An to the Auditor's Report (contd.)

(xvi) According to the information and explanations given to us, the provisions of Section 4S-IA of the Reserve Bankof India Act, 1934 are not applicable to the Company.

For G.P.Agrawal & Co.Chartered Accountants

Firm's Registration No. - 302082E'_-','.

Place of Signature: KolkataDate: The 29th day of May, 2017

(CA. Abhishek Shyamsukha)Partner




"Annexure A" to the Auditor's Report (contd.)

:,.:':\,51. Name of the Statute Nature of ~U,es Period to Amount (' ) Forum where the dispute isNo. which pending

pertain, 1 Central Excise Act, 1944 Central Excise 2004-09 7240)12 CE5TAT,Kolkatai

2 Central Excise Act, 1944 Central Excise 2005-07 289,713 Commissioner Appeal, Kolkata-I ,3 Central Excise Act, 1944 Central Excise 2009-11 456,403 CE5TAT,Kolkata I4 Central Excise Act, 1944 Central Excise ' 2011-12 8,019 CESTAT,Kolkata !

5 Central Excise Act, 1944 Central Excise 2010-11 29,664 Commissioner Appeal, Kolkata-I6 Central Excise Act, 1944 Central Excise 2011-12 331,853 Commissioner Appeal, Kolkata-I 1

Total \ .•... 8,356,364

(viii)

(ix)

(x)

(xi)

(xii)

(xiii)

The Company has not defaulted~ilfTepayment of loans or borrowings to financial institutions or banks orGovernment. The Company has not~lIed any debentures.

~. ';'.~.'.,~;~-"

The Company has not raised anY.ijjP,'oeyby way of initial public offer or further public offer (including debtinstruments) during the year, O~i:'We basis of our examination and according to the information andexplanations given to us, money .rai~d: by way of term loans have been applied for the purpose for which theloans were obtained. .

According to the information and explanations given to us, no material fraud by the Company or on theCompany by its officers or employees has been noticed or reported during the year.

According to the information and explanations give to us and based on our examination of the records of theCompany, the Company has paid/provided for managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

In our opinion, the Company is not a nidhi company. Therefore, clause (xii) of paragraph 3 of the said order arenot applicable to the Company. ,,'

.:;" ,

According to the information and ;~Plaflations given to us and based on our examination of the records of theCompany, transactions with the rdati parties are in compliance with sections 177 and 188 of the Act where

.', !t\

applicable and details of such tran~agJons have been disclosed in the financial statements as required by theapplicable accounting standards. • -:.

• '0 .. ",,' ,".(xiv) According to the information and explanations give to us and based on our examination of the records of the

Company, the Company has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year.

(xv) According to the information and explanations given to us and based on our examination of the records of theCompany, the Company has not entered into non-cash transactions with directors or persons connected withthem. Accordingly, clause (xv) of paragraph 3 of the said order is not applicable to the Company.



"AnnexureA" to the Auditor's Report

Statement referred to in paragraph 'Report on Other Legal and.8.egtjla,tory Requirements' of our report of even date to themembers of Mangal Steel Enterprises Umited on the standalone finavdal statements for the year ended 31st March, 2017.

(i) a) The Company has maintained proper records showing fuli particulars including quantitative details and situation of itsfixed assets. .

b) The fixed assets were physically verified during the year by the management in accordance with a regular programmeof verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals,According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c) According to the information and explanations given to us and on the basis of our examination of the records of theCompany,the title deeds of immovable properties are held in the name of the Company.

(ii) The inventories have been physically verified during the year by the management at reasonable intervals and nomaterial discrepancies were noticed on such physical verification.

. .(iii) The Company has not granted any loan, secured or~imsecured, to companies, firms, limited liability partnerships or

other parties covered in the register maintained undef$ection 189 of the Act. Therefore, clauses (iii) (a). (bland (c) ofparagraph 3 of the said order are not applicable toth~{ompany. .

~'~(iv) In our opinion and according to the information and:explanations given to us, there are no loans, guarantees and

securities granted in respect of which provisions of S~ction 185 and 186 of the CompaniesAct 2013 are applicable.

(v) The Companyhas not accepted any deposit within the meaning of section 73 to 76 or any other relevant provisions ofthe Act and the rules framed there under. The directives issued by the Reserve Bank of India are not applicable to theCompany.

(vi) Wehave broadly reviewed the books of account maintained by the Company in respect of products where pursuant tothe rules made by the Central Government, the maintenance of Cost records has been prescribed under section148( 1) of the Act and are of the opinion that, prima facie, the prescribed accounts and records have been made andmaintained. We,however, as not required, have notmade a detailed examination of such records.

(vii) (a) On the basis of our examination, the Company isre9~lar in depositing undisputed statutory dues including providentfund, employees' state insurance. income tax, sales tax, service tax, duty of customs, duty of excise, value added tax,, ~cess and other statutory dues, to the extent applicable, with appropriate authorities and no undisputed amountspayable in respect of the aforesaid dues were out~t~ndin9 as at 31st March, 2017 for a period of more than sixmonths from the date of becoming payable. ."

(b) The disputed statutory dues aggregating to '83,56,364/- that have been not deposited on account of matters pendingbefore appropriate authorities are as under:

'!-'- .

.;~..'.I";:'

·?i{::MANGALSTEEL ENTEffRISES LIMITED

'"C'_,::.,

Notes forming part of FinaneiaJStatement (Contd.)

Note No.: 28Other Disclosures (Contd.)

3. EmployeeBenefits:

As per Accounting Standard - 15, the disclosure of EmployeeBenefits as defined in the Accounting Standard areas follows:

a) DefinedContribution Plan:

Employee benefits in the form of Provident Fund and Employee State Insurance Scheme are considered asdefined contribution plan and the contributions are, made in accordance with the relevant statute and arerecognized as an expense when employees have rendered service entitling them to the contribution. Thecontributions to defined contributions plan, recognized as expense in the Statement of Profit & Loss are asunder:

2016-17 2015-16 !

Defined Contribution Plan Amount AmountI(Rs.) (Rs.)

Employers' Contribution to Provident Fund 398,667 310,418Employers' Contribution to Employees StateInsurance Scheme 265,048 199,271

b) Defined Benefit Plan:

Post employment and other long-term employee benefits in the form of gratuity are considered as definedbenefit obligation. The present value of obligation is determined based on actuarial valuation using projectedunit credit method as at the Balance Sheet date. The amount of defined benefits recognized in the BalanceSheet represents the present value of the obligation as adjusted for unrecognized past service cost and asreduced by the fair value of plan assets.

,_- :.,



Note No. : 28Other Disclosures (Contd.)

Any asset resulting from this calculation is·'!imited to the discounted value of any economic benefit availablein the form of refunds from the plan or regt.etion in future contribution to the plan. The amount recognized inthe Accounts in respect of Employees Ben~~'Schemes based on actuarial report is as follows:.,{>

i) Details of funded post retirement plans are as follows:

SI. Particulars Gratuity (Funded) INo. 2016-17 2015-16I. Components of Employer Expense:

1. Current Service Cost 123,307 101,0192. Past Service Cost - --

3. Interest Cost 192,119 95,4064. Expected Return on Plan Assets "

197,215 177,871\::

5. Actuarial (Gain)/ Loss .~ 428,931 1,065,6246. Expense Recognized in the Statement of Profit & Loss 547,142 1,084,178.~.:II. Change in Present Value of Defined:Jenefit Obligation:1. Present Value of Defined Benefit 08J9ation at the beginning of 2,401,491 1,192,5771

the year . i2. Interest Cost 192,119 95,406 1

I

I3. Past Service Cost - --3. Current Service Cost 123,307 101,01914 Benefits Paid (83,365) (53,135)4, Actuarial (Gain_lI Loss 428,931 1,065,6245. Present Value of Defined Benefit Obliqation at the end of the year 3,062,483 2,401,491 I

III. Change in Fair Value of Plan Assets'during the year:1. Plan Assets at the b~inning of the ,year 2,379,047 2,075,2542. Expected return on Plan Assets "'.;; ,.' 197,215 177,8713. Actual CompaflY_Contribution ...•! 162,003 179,057" ,

4 Benefits Paid '&,. (83,365) (53,135)5 Plan Assets at the end of the year t., 2,654,901 2,379,047

.. !

IV. Net Asset/(Liabi!iM. rec_Q9nizedin the Balance Sheet as at year end: I1. Present value of Defined Benefit Obliqation 3,062,483 2,401,491 I2. Fair Value on Plan Assets 2,654,901 2,379,047 !3, Funded Status [Surplus/(Deficit) J (407,582) (22,444)4, Net Asset/(Liability) recognized in Balance Sheet (407,582) (22,444) i


Notes forming parts of Financial Statement (Contd.)


B. Details of transactions with related parties as required by Accounting Standard-18 for the year ended 31stMarch 2017,

Enterprises Relative of Keywhere KMP >key Management

Particulars Associates exercises . Personnel Management Total (Rs.)(Rs.) significant

'.(Rs.) Personnel

(Rs.)influence ..:,.

Receiving of services: .T

Mr,Adarsh - -- -- 600,000 600,000Garodia (--) ( -- ) .' (--) (600,000) (600,000)

Mr. Bishwanath -- -- 1,106,446 -- 1,106,446Garodia (--) ( -- ) (1,095,005) (--) (1,095,005)Mrs,Usha Devi -- -- .500,000 -- 500,000Garodia (--) ( -- ) (420,000) (--) (420,000)

Mrs, Neha -- -- -- 360,000 360,000Garodia (--) ( -- ) (--) (360,000) (360,000)

...ri.::~r.

Rent Received: ·.r~Mangal 2,400 -- \l -- -- 2,400Engineering Ltd (2,400) ( -- )

r"I"< .(-) (--) (2,400)




I" .

Particulars Associates ~nterp!i$es Key Management Relative of Key Total (Rs.). (Rs.) where".~MP Personnel Management

exereses (Rs.) Personnel"

signifil1nt (Rs.)influence

Subham Holdings 2,400 -- - -- 2,400 IPvt Ltd. (2,400) ( -- ) (--) (--) (2,400) i

Hindustan 2,400 -- - -- 2,400Enterprise Ltd. (2,400) ( --) (--) (--) (2,400)

Guarantees (Given for the Loans obtained by the Company

Mangal 269,100;000 - -- -- 269,100,000Engineering Ltd. ( -- ) "

•~i ( -- ) ( -- ) (483,600,000)... ~,

(483,600,000)Mr. B.N. Garodia )'" 269,100,000 269,100,000-- ( -~'l~:" --

( -- ) (483,600,000) ( -- ) (483,600,000)Dividend Paid to Shareholders: ',::.~..

,.;..~

Mangal Engineering 26,650 - - -- 26,650Ltd. (-) (13,325) (--) (--) (13,325)

Subham Holdings 20,000 - -- -- 20,000Pvt. Ltd. (6,000) (--) (--) (--) (6,000)

I iShree Adarsh 4,400 - -- - 4,400Dhatu Pvt.Ltd (2,200) (-+ (--) (--) (2,200)

Mr. B.N. Garodia - .:..~;~:. 47,880 -- 47,880 I••.• J.

(--) (-~l::. (23,940) (--) (23,940),'/, i:1'.,:

Mrs. Usha Devi - "f:·i: 46,450 -- 46,450Garodia (--) (~:~:;~ (23,225) (--) (23,225)

.,:~;..Mrs. Savitri Devi -- .:" - 15,510 15,510Garodia (--) (--) (--) (7,755) (7,755)

Mr. Brijmohan -- -- 9,000 -- 9,000Dalmia (--) (--) (4,500) (--) (4,500)


Notes forming parts of Financial Statement (Contd.)

Note No.: 28Other Disclosures (Contd.) .,:~;.'Particulars Associates Enterprises ••;~XeyManagement Relative of Key Total (Rs.)

(Rs.) where KMPv. .' .f Personnel Management

exercises.~

(Rs.).' Personnelsignificant 'I·.

influence (Rs.)

Mr. Adarsh - - - 49,500 49,500Garodia (-) (--) (-- ) (24,750) (24,750)

Mrs. Neha Garodia - - - 45,930 45,930(--) (--) (-) (21,765) (21,765)

Mr. Ani! Kishore - - - 1,100 1,100Sinqhania (-) (--) .. (--) (550) (550)Mr. Raj Kishore " 7,485 7,485-- - -Singhania (--) (--) he' (-) (3}43) (3,743)b) Accounts Receivable: :/ ;.: .Subham Holdings 60,357 -

+X-- -- 60,357

Pvt. Ltd. (142,102) (--) k:'·· . (--) (--) (142,102)l'

Hindustan 40,357:,. .. 40,357- . ::".~ - --

Enterprise Ltd. (122,102) (--) . (--) . .(--) (122,102)..C) Amount outstanding against GuaranteesMangal 269,100,000 - -- -- 269,100,000Engineering Ltd ( --) ( --) ( --) (483,600,000)

(483,600,000)Mr. B.N. Garodia -- -- --

( --) ( --) 269,100,000 ( --) . 269,100,000... : (483,600,000) (483,600,000)

!!

, ~-~",.•t

C) The transactions with related parties have been enter~at amounts which are not materially different from thaton normal commercial terms. .

0) No amount has been written back / written off during the year in respect of due to / from related parties.

Note No. : 28Other Disclosures(Contd.)

MANGAL STEEL ENTERPRISESLIMITED.'i1,.'Notes forming part of.;tg!incial Statement (Contd.)

...~:..E) The amount due from related parties are good and hence no provision for doubtful debts in respect of dues

from such related parties is required,

F) Figures in brackets pertain to previous year.

.:-:'2. No borrowing cost was eligible for capitalization dul-ingthe year.

3. Segment Information::.;t:.,'

i) PrimarySegment Reporting (by BusinessSeg~~t):. -~:~~

The Company has identified two primary bl.~ess segments viz. Light Engineering goods and Real EstateDevelopment.Segments have been identified'and reported taking into account the nature of the products, thediffering risks and returns, the organizational structure and internal business reporting system.

a) Revenueand expenses have been identified to a segment on the basis of relationship to operating activitiesof the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to asegment on reasonable basis have been disclosed as "Unallocable".

b) Segment Assets and segment Liabilities represent assets and liabilities of respective segments.Investments, tax related assets/liabilities and other assets and liabilities that can not be allocated to asegment on reasonable basis have been disclosed as "Unallocable",

(In Rupees)Particulars Light EngineerihS::,: RealEstate Unallocable Total ,

goods ::~.~' DevelopmentGrossSales 838,432,~.a· 4,017,910 -- 842,449,933

(884,369,~..IJ (72,179,299 ) (956,548,538)Less Inter Segment ,f.~_ ' -- -- --0.

ISalesi

ExternalSales 838,432,023 4,017,910 -- 842,449,933 I(884,369,2391 ( 72,179,2991 (956,548,538) I

Less Excise Duty & 69,054,825 -- -- 69,054,825Cesson ExternalSales (53,352,6631 _(53,352,663)Net Sales 769,377;198 4,017,910 -- 773,395,108

(831,016,576) ( 72,179,299 ) (903,195,875 )..

Notes forming part of Financi~tStatement (Contd.)


(In Rupees)Particulars Ught Engineering Real Estate Unallocable Total I

I

Qoods Development IAdd: Other operating 28,412,855 -- -- 28,412,855revenue (25,103,795) (25,103,795)Add: Allocable Other 2,432,993 -- .. 14,281,451 16,714,384Income (247,023) (5,544,621) (5.791,644)Total Revenue 800,223,046 ~40,17,910 14,281,451 818,522,347

(856,367,394) '("'2,179,2.99 ) (5,544,621) (934,091,314)Resu~ }Segment Result 63,334,394 " t;903,578 (-) 9,791,598 55,446,374

(57,702,763) (.:1c279,410) (-)(8,990,770) (48,432,583)_Profit Before Tax 63,334,394 'J,903,578 (-) 9,791,598 55,446,374

(57,702,763) (") (279,410) (-)(8,990,770) (48,432,583) I

TaxCurrent Tax -- -- 187,00,000 187,00,000

(18,000,000) (18,000,000)Deferred Tax -- -- (-)31,700 (-)31,700

(-)(900,819) (-)(900,819)Income tax relating to -- -- 1,483,205 1,483,205earlier years (-) (520,911) (-) (520,911)Profit After Tax .... 35,294,869 35,294,869-- --.

(31,854,313) (31,854,313).:,~,

Other InformationSegment Assets 603,712,759 ' '>" 38,191,113 80,341,686 722,845,558

(631,120,994) 'j4 (,014,855) (92,104,044) (764,239,893)

Segment Liabilities 720,720,758 " 2,l24,800 -- 722,845,558(763,115,093) (1,124,800) (764,239,893)

Capital expenditure 11,217,624 -- -- 11,217,624(13,947,053) ~ (13,947,053)

Depreciation 8,063,891 -- -- 8,063,891(8,385,533) (8,385,533)

Non cash expenses -- --other than Depreciation 682,993

I682,993

(3,414,788) , " (3,414,788)

•.~ ,




ii) SecondarySegment Reporting (by Geograph~"demarcation):

a) The secondary segment is based on ge4hical demarcation, i.e India and Rest of the World.''';''.

b) Information about SecondarySegments~~~'asfollows:

(In Rupees)Particulars India Restof the World Total iSegmentRevenue 118,280,488 724,169,445 842,449,933 !

(203,791,114) (752,757,424) (956,548,538) ISegmentAssets 722,845,558 - 722,845,5581

(764',239,893) - (764,239,893)

Notes: ,a) TheCompanyhas disclosed businessseg:~~'ntas the primary segment.

l~~~?1b) Segment revenue and expense include,J~ms directly attributable to the segment and common costs,

apportioned on a reasonable basis. Thei,'"do not include investment income, interest income from Intercorporate deposits and loans given, and ~dend incomeand interest expense.

°tf*·~ii:

c) All Segment assets and liabilities are directly attributable to the segment.

Segmentassets include all operating assets used by the segment and consist principally of net fixed assets,inventories, sundry debtors, loans and advancesand operating cash and bank balances.

Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities.Segment assets and liabilities do not include investments, loans given, interest accrued and duel but notdue, share capital, reserves and surplus and loans.

d) Property, Plant and equipment used in C~any's businessor liabilities contracted have not been identifiedto any of the reportable geographical s.~ents, as the property, plant and equipment and services areused interchangeably between segmenK~c;tordingly, no disclosure relating to total segment assets andliabilities are made. .{j'f,

.'1

MANGAL STEEL ENTER.~.R.ISESLIMITED:::~;;~;-

Notes forming part of FinanciitlStatement (Contd.);_.

Note No.: 28

Other Disclosures (Contd.)

4. Derivative Instruments Outstanding:

a) Forward exchange contract, currency swaps and interest rate swaps are used to hedge its risk associated withforeign currency fluctuations and interest rate. There were no outstanding swap contracts entered into by theCompanyas on 3151 March, 2017:

b) Un-hedged Foreign Currency Exposure-

Foreign currency exposures those are not hedged by:~;derivative instrument or or otherwise:. ""':-!', .

Particulars Amount .'I USD Rs.Debtors 1,075,170 70,395,892

(988,827) (61,039,116 )Creditors 5,335 338,060

(1,164,368) ( 72,878,719)

5. Information pursuant to Accounting Standard - 27 on Rnancial Reporting of Interest in Joint Venture:

The Company entered into an agreement for developmei:jf,'of a plot of land belonging to related third parties by;';:

constructing buildings thereon. The Company is to meet t.h~:entire cost of construction and getting 65% of the total", ';:.i:;', •

sale proceeds as a consideration for construction of the bljUoingsas aforesaid. The project has been completed and.' " :....~. '. '. .'

the unsold stock of flats and car parks has been shown as"~~ilding project' under the head Inventories.

.. ,

MANGAL STEEL .ENTERPRISES LIMITED


Notes forming parts o$inancial Statement (Contd.):':~\l'~fi},.>~~.'-'!.'

6. Details of Loans given, investments made and guarantee given covered u/s 186(4) of the CompaniesAct, 2013:

A. Detailsof Loans given:The Companyhas not given any loan.

B. Details of Investments made:

The relevant details are given in Note No.1O. ,.

C. Details of Guarantee given: .t...;.

The Company has not given any guarantee. ,.t.,7. Disclosure in terms of Accounting Standard - 29 9'Q Provisions, Contingent Liabilities and Contingent Assets:

a) The Contingent Liability mentioned at 51. No.2 (i) to (iii) are dependent upon Court decision/out of court

settlement/disposal of appeal etc.

b) No Reimbursement is expected in the case of Contingent Liability shown under 51.No.2 above.

8. Value of RawMaterials Consumed:

201~-17 2015-16Particulars % of total ~nsumption % of total Consumption

Rs. .,~~~J_:}~ % Rs. %I Imported j'l>'" 4.63 45,192,546 9.8120,957,60t;:,-;,~I Indigenous 431,996,3351': 95.37 415,477,723 90.19I Total: 452,953,93EF 100.00 460,670,269 100.00

. 9. Value of Stores (including Components and Spare Parts) Consumed

2016-17 2015-16 ..Particulars % of totalCohsumption % of total Consumption

Rs. % Rs. %Indigenous 36,717,617 : 98.18 29,037,743 99.28Imported 679,607- 1.82 211,286 0,72 ,

I Total: 37,397,224 : 100.00 29,249,029 100.00...J!,"

"

1~:',.tMANGALSTEELENTER~':~ES LIMITED

"

Notes forming parts of FinancicliSiatement(Contd.)


10. C.I.FValue of Imports

Particulars 2016-17 (Rs.) 2015-16 (Rs.)RawMaterials * - 22,716,689Capital Goods 67,152 3,407,028Total: 67~152 26,123,717

. '<,

*Goods have been imported on CFRbasis.

11. Earning in Foreign Exchange

Particulars 2016-'17(Rs.) 2015-16 (Rs.)Export of Goods on F.O.B. Value 632,002,050 669,183,703

12. Expenditure in Foreign Currency

Particulars 2016-.17(Rs.) 2015-16 (Rs.)Travelling Expenses 2.:g~P,849 1,794,263Professional Fees ~":835 84,773Repairs to Plant &. Machinery 1~t9598 -

,,'i. t

! Bank Charges 4,338 -

Testing Fees 51;:;191 - iStaff Welfare 16,788 -

Interest on Import Credit - 146,512 ITotal: 3,54'1,599 2,025,548 I

13. Disclosure on holding and dealings of Specified Bank Notes during demonetization is shown in the table below:

Particulars Specified Other Total ii

Bank Notes' denominationj

.t.~" ~':.' • notesI .(..~"':'

Closing cash in hand f<j<:'as on =:

08.11.2016 702i5&. ' 194,043 896,543Permitted receipt - 280,000 280,000Permitted payments '.- . 320,764 320,764

I Amount deposited in Bank 702,500 - 702,500I Closing cash in hand as on ..".

I 30.12.2016 153,279 153,279




14. The previous year's figures have been reworked, regrouped, rearranged and reclassified wherever necessary.

Amounts and other disclosures for the pre~e~ing year are included as an integral part of the current year

financial statements and are to be read in r~t#~n to the amounts and other disclosures relating to the current~~..

year. ..r

For G.P. Agrawal& Co.Chartered AccountantsF,R,No.302082E

(CA.AbhishekShyamsukha)Membership No. 302609Partner

7A, Kiran Shankar Roy RoadKolkata 700001

Dated: The 29th day of May, 2017

For and on behalf of the Board

-ra:N. Garodia)Managing DirectorDIN-00309815

(Usha Gar~dia)WholeTime Director

DIN -00838971

(Ramesh Kr. Sharma)Chief Financial Officer

..

...",~." "

DIRECTORS' REPORTFORTHE FINANClAl YEAR 2016-2017','

ToThe Members

Your directors have pleasure in presenting their Annual Report on the business and operations of theCompany together with the Audited Statement of Accounts for the year ended 31st March, 2017.

FINANCIAL HIGHLIGHTSDuring the year under review, performance of your company as under:

(Rupees'Particulars Year ended Year ended

; 31st March 31st March". 2017 2016

Sales & Other Income 801 807 963 934 091,314Profit/CLoss) Before Taxation but after Depreciation 55446 374 48432,583Less/(Add) : Provision for TaxationCurrent Tax Expense " i'" 18700000 18 000,000Deferred Tax (31 700) (900 819)Tax relating to Earlier Year 1 483,205 520911Profit/Closs) After Taxation ....35,294,869 31,854,313Add: Balance Brought Forward from the previous year 252468/973 226 210 430Surplus Available for Appropriation 287 763,842 258 064 743AppropriationsTransfer to General Reserve 5 000,000 5 000 000Proposed Dividend - 495000Tax on Proposed Dividend - 100 770Balance Profit /(loss) Carried Forward to the 282,763,842 252,468,973next year

REVIEW OF OPERATIONS & PERFORMANCE. :.:.

The Company achieved the gross turnover of Rs. 84.:l4"crofes during the current year, as against Rs.95.65 crores during the previous year. This year the gr6s$ sales of your company has gone down by 11.92% as there was a lot of pressure on the sales as the US market;~hich is the major distributor of company'sproduction, is still sealing under recession and with fierce competition with some east Asian country likeChina, Thailand, Vietnam & Malaysia. Though the gross sales of your company for the year ended 31stMarch 2017 had slightly gone down but there was increase in company's net profit margin incomparison with last year.

Earning per share of the company has also increased since last year. Now the earning per share of thecompany is Rs. 71.30 as on 3pt March, 2017 whereas for the last year it was Rs.64.35.

Your directors feel that the global economy is still facing recession and as per the economic datapublished by the world economic organizations the recovery should start shortly. In that case ourcountries product will get a boost which will result in better export.

1

t· .

SHARE CAPITAL

The paid-up Equity Share Capital as on 31st March, 2017 is Rs. 49,50,000/-. During the year underreview, the Company has not issued any equity shares with differential rights, sweat equity sharesemployee stock options.

DIVIDEND

Your Directors are pleased to recommend a dividend of 1.00/- per Equity Share of 10/- each, i.e., 10%for the financial year 2016-17 subject to approval of the Shareholders in the Annual General meeting.Your Directors recommend the payment of Dividend @'10% (Re. 1.00 per share) subject to approvalby the shareholders in the ensuing Annual General Meeting. The dividend is free of tax in the hands ofthe recipients.

Dividend shall be paid to the shareholders whose name would appear in the Register of Members as onthe date of the Annual General Meeting within 30 days from the date of approval.

TRANSFER TO RESERVES

The Company has transferred Rs.50 lakhs to General Reserve during the FY 2016-17 (for FY 2015-16:Rs.50 lakhs).

FUTURE OUTLOOK

The steel market is very slow moving and there is a lot of pressure on the prices of raw material. Sinceyour company is engaged in export of light engineering' goods which has lot more value addition, thusthe outlook of industry in which your company is involved look to be much better as the ensuing yearshould have increased growth. ,

. :1.;:

MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments affecting the financial position of the Company occurredbetween the end of the financial year to which this financial statement relates and the date of thisreport.

DEPOSITS

The Company has neither accepted nor renewed any deposits during the year under review.

STATUTORY AUDITORS

M/s. G.P. Agarwal & Co., Chartered Accountants, hold. office till the conclusion of the ensuing 36thAnnual General Meeting of the company. But as per section 139(2) of the Companies Act 2013, they arenot eligible for re-appointment. So their resignation is souqht by company.

<Hence the name of M/s. AGRAWAL SUBODH & CO. (Firm Reg No. 319260E), Chartered Accountantshave been suggested as Statutory Auditor for 5 years for the F.Y. 17-18 to F.Y. 21-22 i.e. from ensuing36th AGM of the company till the 41st AGM of the company to be held in the year 2022.

SECRETARIAL AUDITORS

2

As required under section 204(1) of the Companies Act, 2013 the Company has obtained a secretarialaudit report.

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointmentand Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed Mis. Aditya KumarDaga, Company Secretary in Practice (C.P. No. 14266) to undertake the Secretarial Audit of theCompany. The Secretarial Audit Report for the financial year ended 31St March, 2017 is annexedherewith as "Annexure A" to this report. The Secretarial Audit Report does not contain any qualification,reservation and adverse remark.

INTERNAL AUDITOR

In line with the requirements of Section 138 of the Companies Act, 2013 and rules made there underMis. M. Kumar Jain & Co., Chartered Accountants were-appointed as the Internal Auditor to conductinternal audit of the functions and activities of the Company. The Audit Committee of the Companyperiodically reviews the Internal Audit Report and checks for any findings and follow up thereon.

AUDITOR'S REPORT

There were no qualifications, reservations or adverse remarks made by the Auditors in their report.

BOARD'S COMMENT ON THE AUDITORS' REPORT'

The observations of the Statutory Auditors, when read together with the relevant notes to theaccounts and accounting policies are self-explanatory.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return, in format MGT - 9, for the Financial Year 2016-17 is annexed herewith as"Annexure B" to this report.

DETAILS OF SIGNIFICANT AND MATERIAL ORD'E~S PASSED BY THE REGULATORS, COURTSAND TRIBUNALS . .

No significant and material order has been passed by the regulators, courts, tribunals impacting thegoing concern status and Company's operations in future.

DETAILS OF SUBSIDIARY /JOINT VENTURES/ASSOCIATE COMPANIES

The Company Doesn't Have any Subsidiary or Joint Ventures. Its Associated Companies are :(1) Ansh Infra Projects Private Ltd.(3) Subham Holdings Private Ltd.(4) Hindusthan Enterprises Ltd.(5) Mangal Engineering Limited.

" 'i

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS & OUTGO:

A) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION:

3

The particulars as required under the provisions of Section 134(3) em) of the Companies Act, 2013 inrespect of conservation of energy and technology absorption have been furnished considering thenature of activities undertaken by the company during the year under review, as follows. TheCompany is taking proper steps for conserving the en~rgy:-

Fin. Year 2016-17 Fin. Year 2015-16Rs.l,97,88,418 Rs.1,87,73,466f-

TECHNOLOGY ABSORPTION AND RESEARCH & DEVELOPMENTThe Company invests in Research and Development on an ongoing basis in order to upgrade thequality of its products and lower overall costs by way of increased productivity, reduction ofrejections, control of wastage and eliminating inefficient capacities. Production Techniques areregularly updated in order that the company's products can compete effectively in the world market.The Board, therefore, does not perceive technology obsolescence as a problem in the near future.The expenditure on Research & Development has not been accounted for separately but has beencharged to the revenue account.

ENVIRONMENT AND SAFETY

Environment and safety remained a focus area for the t;:ompany throughout this year. The Companytook reasonable initiatives to upgrade its pollution control mechanism and effluent treatment system.The Company also took adequate measures to ensure the health and safety of its workmen. TheCompany has got necessary clearance certificate from Pollution Control Board.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

Earning in Foreign Exchange

Expenditure in Foreign Currency---,-----:-::--::--::--:=----.,.-------_. __... ....

.~~_rtic:~~~_ _ _ _.___ 2016-17 (~.) ~Q!2::.t_~J~!iJ..__ JTravelli Expenses 2,950,849' 'i . ',794.263 iP·-ro-!e-s-s~io'-na-I~F_-e_-e_.-s~~~~_-_._-- -.._.-.. -._-_.-.. --I-------';'-91-89-',85'-93~85r-T. - __._-- 84,773 c__-~JIRepair!>to Plant & Machinery I

, Bank 4,338 . 1··----'---t---S...:.l.:..:,:..::19:..::1-_~~,-'''.-.-"-•.-+,,.1-.. --c-c .-.__-_==-=-_. .. ~

1-- ,._,__,. ,.....__", .._,_!_6,788; -t-_______ I

:"c,.~•..;:;{~red,;~,~;'-!t;,""·-~-----I---3-.-54-.-1.-5-9-9---t----2-:0-42-'-65,;__·~~~?_~-~~J

DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Appointment & ResignationDuring the period under review, no Director was appointed and none of the existing Directors resignedfrom the company.

Re-appointment4

In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms of theArticles of Association of the Company, Mrs. Usha Garodia retires by rotation at the forthcomingAnnual General Meeting and being eligible, offers herself for re-appointment. The proposal regardingthe re-appointment of the aforesaid director sought members approval. The Board of Directorsrecommend her re-appointment.

Key Managerial Personnel (KMP)

Shri Ramesh Kumar Sharma was appointed as the Chief Financial Officer thereby designated as theKey Managerial Personnel of the Company w. e. f 26/03/2015.

Composition of Board Of Directors

At present there are 4 Directors of the Company. Cornposttloa of the Board of Directors is as follows:

1. Mr. Biswanath Garodia (00309815) - Managing Director

Since Managing Director attains the age of 70 years on 15/02/2016 so approval of shareholderswas taken on 30/09/2016 for continuation of his employment as managing director with effectfrom August 1, 2015 to July 31, 2020.

2. Mrs. Usha Garodia (00838971) - Whole Time Director

Mrs. Usha Garodia has rich and varied experience in the Industry and has been involved in theoperations of the Company over a long period. of time, so approval of the shareholders wastaken on 30/09/2016 for continuation of her employment as Whole Time Director for a period offive years with effect from October 1, 2016 to September 30, 2021.

3. Mr. Dip Chand Agarwal (07300072) - Independent Director

Mr. Dip Chand Agarwal was appointed as the Independent Director of the Company with effectfrom 30/09/2015 for 5 years.

4. Mr. Brij Mohan Dalmia (00615993) - Independent Director

Mr. Brij Mohan Dalmia, Independent Director of the Company, attain the age of 70 years onJune 23, 2016. Hence approval of shareholders was taken on 30/09/2016 for continuation asIndependent Director for a period of five years with effect from October 1, 2016 to September30, 2021.

STATEMENT OF DECLARATION GIVEN BY INDEPENDENT DIRECTORS,.Your Company has received necessary declarations from all the Independent Directors of theCompany that they meet the criteria of independence as ·Iaid down under the Companies Act, 2013read with Schedules and rules made thereunder, and Regulation 16(b) of the SEBI (ListingObligations and Disclosure Requirements) Regulations, 2015 and the same has been placed beforethe Board and taken on record. .

Formal Appointment letter of independent directors of the Company stating the terms and conditionsof their appointment in line with the requirement of the Companies Act, 2013 and applicable clauses ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, has been issued to theindependent directors of the Company.

PERFORMANCE EVALUATION

5

Your Company understands the requirements of an effective Board Evaluation process and accordinglyduring the year under review, they have carried .out performance evaluation of Board's ownperformance, the directors individually and the evaluation of the working of its Committees pursuantto the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations, 2015. The manner in wh,ich evaluation has been carried out is explainedin the Corporate Governance Report attached as Annexure tp this report.

NUMBER OF BOARD MEETINGS

The Directors of the Company met 10 (Ten) times (02.05.2016, 14.05.2016, 12.08.2016, 12.09.2016,14.11.2016,23.12.2016, 14.02.2017, 10.03.2017,20.03.2017,30.03.2017) during the Financial Year2016 - 2017 to discuss about various matters as and when necessary.

BOARD COMMITTEES

In compliance with the requirements of Companies Act, 2013 and the SEBI (Listing Obligations andDisclosure Requirements) Regulations, 2015 your company has three board level committeescomprising of Audit Committee, Stakeholders Relationship Committee and Nomination andRemuneration Committee. The Board periodically evaluates the performance of all committees as awhole.

AUDIT COMMITTEE & OTHERS

The Board has accepted all recommendations made by the Audit Committee during the year.

Other details about the Audit Committee and other Committees of the Board are provided in the Reporton Corporate Governance forming part of this Annual Report.

PARTICULARS OF LOAN, GUARANTEES AND INVESTMENTS UNDER SECTION 186

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The particulars of contracts or arrangements with related parties have been disclosed in the financialstatements.

CORPORATE SOCIAL RESPONSIBILITY

During the year ended March 31, 2017, Company is not required to report on disclosures as per Rule 9of Companies (Corporate Social Responsibility Policy) Rules, 2014 as the same is not applicable to thecompany.However in the financial year ended on 3pt March 2017, the Net profit of the company exceeds Rs. 5Cr. So as per section 135 of the Companies Act 2013, CSR is applicable on the company. Hencecompany will spent 2% of Avg. profit of last 3 years on CSRactivities in the coming year i.e. 17-18 andwill report accordingly

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIALSTATEMENTS

The Company has in place adequate internal financial controls with reference to financial statements.During the year under review, such controls were tested and no reportable material weakness in thedesign or operation were observed. .

6

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMAN AT WORKPLACE {PREVENTION,PROHIBITION & REDRESSALl ACT, 2013

The Company is committed to provide a safe and conducive work environment to its employees. Duringthe year under review, no case of sexual harassment was reported.

RISK MANAGEMENT POLICY

The Company has developed and implemented a risk management framework which identifies majorrisks which may threaten the existence of the Company. The same has also been adopted by yourBoard and is also subject to its review from time to time. Risk mitigation process and measures havebeen also formulated and clearly spelled out in the sa.idpolicy.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule,S of The Companies (Appointmentand Remuneration of Managerial Personnel) Rules, 2014 in 'respect of employees of the Company, willbe provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sentto the Members and others entitled thereto, excluding the information on employees' particulars whichis available for inspection by the Members at the Registered Office of the Company during businesshours on working days of the Company up to the date of the ensuing Annual General Meeting.

WHISTLE BLOWER AND VIGIL MECHANISM

The Company has also adopted and formulated a formal mechanism for all directors, employees andvendors of the Company termed vigil mechanism for ¢_onductingthe affairs in a fair and transparentmanner by adopting highest standards of professlonalism, honesty, integrity and ethical behaviour. Itrequires every Director or employees to swiftly report to the management any actual or possibleviolation of the code or any event wherein he or sh¢ becomes aware of that which could affect thebusiness or reputation of the Company. The Policy safeguards the whistle blower to report concerns orgrievances and also provides direct access to the Chairman of the Audit Committee.

Your Company annually reviews any instances of fraud and mismanagement inside the affairs of theCompany. During the year 2016-17, there has been no such instances. Further, there has been nochange to the whistle blower policy during the financial year.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors' Responsibility Statement referred to in t:ilause (c) of sub-section (3) of Section 134 ofthe Companies Act, 2013, shall state that- >:::.(a) in the preparation of the annual accounts, :'the applicable accounting standards had been

followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of the loss of thecompany for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

7

1!~'.'~ -:" 4<

(e) the Company being unlisted, sub clause (e) 06- section 134(3) of the Companies Act, 2013,pertaining to laying down internal financial controls is not applicable to the Company;~.

(f) the directors had devised proper systems to' ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS

Your Directors would like to express their sincere appreciation for the assistance and cooperationreceived from the financial institutions, banks, Government authorities, customers, vendors andmembers during the year under review. Your Directors also wish to place on record their deep sense ofappreciation for the committed services by the Company's executives, staff and workers.

Place: KolkataDate: 29th May, 2017

For and on behalf of the Board of Directors

Chairman

.: ..

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8

ANNEXURE TO DIRECTORS' REPORT

Report of the Directors on Corporate Governance:

Corporate governance is the system of rules, practtcesjand processes by which a company isdirected and controlled. Corporate governance essentially involves balancing the interests of acompany's many stakeholders, such as shareholders, management, customers, suppliers, financiers,government and the community. Since corporate governance also provides the framework for attaininga company's objectives, it encompasses practically every sphere of management, from action plansand internal controls to performance measurement and corporate disclosure.

In accordance with Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements),2015 read with disclosure requirements relating to the Corporate Governance Report contained inSchedule V of the SEBI (Listing Obligations and Disclosure Requirements), 2015, the details ofcompliance by the Company with the norms on Corporate Governance are as under:

1. Philosophy on code of governance ~.:..i;'.~.

The Company believes in and supports the principles-and practices of good Corporate Governance.Your Company is following the philosophy of good Coi'porate Governance by focusing on transparency,accountability, professionalism and corporate social 'responsibility for enhancing shareholder values.Your board believes that the Corporate Governance, is a 'continuous process as such Company willcontinue its efforts towards raising the standards in Corporate Governance by reviewing its proceduresand systems to keep pace with the changing economic environment.

The Company also believes that employees of the Company subscribe to the corporate values andapply them in their conduct by following corporate governance practices.

2. Board of Directors(i) Composition.The composition of the Board is compliant in terms of SEBI Regulation. The Board comprised of 4Directors including 2 Non- Executive Independent Directors and one Executive Women Director andone Executive Director and out of that one is designated as Whole-time Director and one is designatedas Managing Director as on 3pt March, 2017. :.-,:

All independent directors possess the requisite qualific~tions and are experienced in their own fields.Directors, other than Independent directors are liabl~ Jp retire by rotation. None of the directors aremembers of more than ten committees or chairman af more than five committees in public limitedcompanies, in which they are directors. Necessary' di,sclosures have been obtained from all thedirectors regarding their directorships/committee memberships and have been taken on record by theBoard.

9

Composition, Category, Directorships, Committee Positions (including this company) held bythe Directors as on 31St March, 2017.

Name Category #No. of Committee* PositionsDirectorship asin PublicLimited

CompaniesChairman Member

.(:

Sri. Bishwanath Garodia Chairman cum Managing ,'1.x~2 1 1Director ,~, .".,./,~.",

Smt. Usha Devi Garodia Whole Time Director )'?-<J - 1

Sri. Brijmohan Dalmia Non- Executive 1 1 2Independent Director

Sri. Dip Chand Agarwal Non- Executive 1 1 2Independent Director

• all the Committee positions held in Audit, Nomination & Remuneration and ShareholdersGrievance Committee in Indian Public Limited Companies are considered.

# Excluding private limited companies, foreign companies, companies under Section 8 of theCompanies Act, 2013 and alternate directorships.

Except Sri. Bishwanath Garodia and Smt. Usha Garoctia.1no director of the Company is related to anyother director on the Board of the Company. :~..

(ii) Board Meeting:The Board of Directors of the Company met 10 (Ten) times (02.05.2016, 14.05.2016, 12.08.2016,12.09.2016,14.11.2016,23.12.2016, 14.02.2017, 10.03.2017,20.03.2017,30.03.2017) during theyear 16-17.The gap between any two meetings did not exceed four months.

(iii) Attendance of Directors:

10

Atte~dance of Directors at the Board Meetings held during 2016-2017 and at the last Annual GeneralMeeting.

Name of Directors Meetings attended out Whether Attendedof 10 Board Meetings last AGM held onheld during (2016-2017) 30th September, 2016.

Sri. Bishwanath Garodia 10 Yes

Smt. Usha Devi Garodia 10 Yes

Sri. Brijmohan Dalmia 10 Yes

Sri. Dip Chand Agarwal 10 Yes

Familiarisation Programme

In terms of Regulation 25(7) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations, 2015, the Company is required to conduct familiarization programmes for IndependentDirectors to familiarise them with their roles, rights> responsibilities in the Company, nature of theindustry in which the Company operates, business model of the Company, etc.

Code of Conduct

In terms of SEBI (LODR) Regulation 2015, there exists a Code of Conduct, laid down by the Board, forall the Board Members and Senior Management Personnel of the Company. The Board Members andSenior Management Personnel have affirmed compliance with this Code in terms of LODR. Adeclaration to this effect for the financial year 2016-2017 from the WTD of the Company is available atthe company.

Prevention of Insider Trading

With a view to regulate trading in securities by the directors and designated persons, the Company hasadopted a Code of Conduct for Prohibition of Insider Trading. All the Directors on the Board, employeesat senior management level at all locations and othen.persons who could be privy to unpublished pricesensitive information of the Company are governed bytJ:lis Code.

3. Audit Committee

The Company has constituted an Audit Committee in compliance with Section 177 of the Companies Act, 2013and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements), 2015 which is entrusted withthe responsibility to supervise the Company's internal controls and financial reporting process.

Terms of Reference:

The brief description of the terms of reference of the Audit Committee in line with the Companies Act, 2013 andSEBI (Listing Obligations and Disclosure Requirements), 2015 are as follows:

·r_'

* Oversight of the company's financial reporting process and the disclosure of its financial information toensure that the financial statement is correct, sufficient and credible;

* Recommendation for appointment, remuneration and terms of appointment of the auditors of the company;

11

* Approval of payment to statutory auditors for any other services rendered by the statutory auditors;

Reviewing, with the management, the annual financial statements and auditor's report thereon beforesubmission to the board for approval with particular reference to:

a) matters required to be included in the directors' resp6ri'sibility statement to be included in the Board'sReport in terms of Clause (c) of sub-section (3) of Sectiom)34 of the Companies Act, 2013;

b) changes if any, in accounting policies and practices and reasons for the samec) major accounting entries involving estimates based on the exercise of judgement by management;d) significant adjustments made in the financial statements arlsinq out of audit findings;e) compliance with listing and other legal requirements relating to financial statements;f) disclosure of any related party transaction;g) modified opinion(s) in the draft audit report;

*

* Reviewing, with the management, the quarterly financial statements before submission to the board forapproval;

* Reviewing, with the management, the statement of uses / application of funds raised through an issue(public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other thanthose stated in the offer document / prospectus / notice and the report submitted by the monitoring agencymonitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendationsto the Board to take up steps in this matter; ,i;

* Review and monitor the auditor's independence and perfe.rmance and effectiveness of audit process;

* Approval or any subsequent modification of transactior:-t~opf the company with related parties;

* Scrutiny of inter-corporate loans and investments;

* Valuation of undertakings or assets of the company, wherever it is necessary;

* Evaluation of internal financial controls and risk management systems;

* Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internalcontrol systems;

* Reviewing the adequacy of internal audit function, if .anv, including the structure of the internal auditdepartment, staffing and seniority of the official headi~g.the department, reporting structure coverage andfrequency of internal audit; .:

:<

* Discussion with internal auditors of any significant findings and follow up there on;

* Reviewing the findings of any internal investigations by the internal auditors into matters where there issuspected fraud or irregularity or a failure of internal control systems of a material nature and reporting thematter to the board;

* Discussion with statutory auditors before the audit commences, about the nature and scope of audit as wellas post-audit discussion to ascertain any area of concer:nf

12': .:~~r.·\.:

* To look into the reasons for substantial defaults in ~.the payment to the depositors, debenture holders,shareholders (in case of non-payment of declared dividends) and creditors;

* To review the functioning of the whistle blower mechanism;

* Approval of appointment of chief financial officer (i.e., the whole-time Finance Director or any other personheading the finance function or discharging that function) after assessing the qualifications, experience andbackground, etc. of the candidate;

* Carrying out any other functions as mentioned in the terms of reference of the Audit Committee.

In addition, the Audit Committee also mandatorily reviews the following:/\:

* Management discussion and analysis of financial condltlonand results of operation;Statement of significant related party transactions (as defined by the audit committee), submitted by themanagement;Management letters/letters of internal control weaknesses issued by the Statutory Auditors;Internal Audit Reports relating to internal control weaknesses; andThe appointment, removal and terms of remuneration of the chief internal auditor shall be subject to reviewby the audit committee.

*

***

* Statement of deviations:

a) Quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted tothe stock exchange(s) in terms of Regulation 32(1)

b) Annual statement of funds utilized for purposes other than those stated in the offerdocument/prospectus/notice in terms of Regulation 32(7).

The Audit Committee have authority to investigate any acti~jty within its terms of reference, seek informationfrom any employee, obtain outside legal or professional advice and secure attendance of outsiders with relevantexpertise, if it considers necessary. /

Composition and Meetings of the Committee:

The Audit Committee of the Company comprises with Sri Bishwanath Garodia as Chairman, Sri. DipChand Agarwal and Sri. Brij Mohan Dalmia as Members.

Attendance of Members at the Meetings of the Au4it Committee held during 2016-2017.Ii· .

,:f -c

Six meetings were held during the period on 14th MclY,2016; 12th August, 2016, 12th September,2016; 14th November, 2016, 14th February, 2017 and 20th March 2017.

Members Me~ting Attended

Sri. Bishwanath Garodia 6

Sri. Brijmohan Dalmia 6

13

I Sri. Dip Chand Agarwal 6

The Chairman and other member of the Audit Commit~e was present at the previous Annual GeneralMeeting of the company held on 30th September, 201'6..'

4. Nomination & Remuneration Committee:

Pursuant to Section 178 of the Companies Act, 2013 and Regulation 19 of SEBI (LODR) Regulation2015, the Board has renamed the existing 'Remuneration Committee' as 'Nomination & RemunerationCommittee' for identifying the persons who are qualified to become directors and who may beappointed in senior management cadre, in accordance with the criteria laid down, recommend to theBoard their appointments and removal and shall carry out evaluation of every director's performance.

The Nomination and Remuneration Committee has framed the criteria for determining qualifications,positive attributes and independence of a director and recommended to the Board policy relating to theremuneration for the directors, key managerial personnel and other employees.

Terms of Reference

The terms of reference of the Nomination & Remuneration Committee cover all the areas mentionedunder Regulation 19 of SEBI (LODR) Regulation 2015 'and Section 178 of the Companies Act, 2013.The broad terms of reference of the Committee includes:

- To formulate the criteria for appointment of directorsI senior management including determining theirqualifications, positive attributes and other key elements to ensure independence of directors.

- To recommend to the Board, their appointments including re-appointment and removal

- To devise a policy on Board diversity

- To Identify persons, who are qualified to become directors/for appointment in senior managementcadre

- To formulate criteria for evaluation of independent directors and Board and to carry out evaluation ofevery director's performance.

- To recommend to the Board a policy, relating to the remuneration for the directors, key managerialpersonnel and other employees.

- To recommend the remuneration package of the executiye directors at the time of initial appointment

- To determine the increments in the remuneration of executive directors

- To devise annual incentive package of the executive directors

- To decide the minimum remuneration of executive directors in the event of inadequacy of profits.

- To deal any other items under the terms of reference, as may be required by the Committee toexercise pursuant to any law or changes thereof.

Composition & Meetings

The Committee comprises three members out of which, two are non-executive independent Directorsand one is executive director. Sri Brijmohan Dalmia is Chairman and Sri. Dip Chand Agarwal and Smt.Usha Devi Garodia are Members.

14

Attendance of Members at the Meetings of the Nomination & Remuneration Committee heldduring 2016-2017.

Six meetings were held during the period on 14thMay, 2016; 12thAugust, 2016, 12thSeptember,2016; 14thNovember, 2016, 14thFebruary, 2017 and zo= March 2017.

Members Meeting Attended

Sri. BrijmohanDalmia 6

Sri. DipChandAgarwal 6

Smt. UshaDevi Garodia 6

Criteria for Performance Evaluation

Section 178 read with Section VII (3 a & b) & Section'VIII of Schedule IV of the Companies Act, 2013lays down specific requirements on perforrnance , evaluation of Board/ Chairperson/IndependentDirectors. As per Regulation 19 of SEBI (LODR) Regulation 2015, the Nomination and RemunerationCommittee has to lay down the criteria for the above. The Committee had discussed in detail about thecriteria to be adopted and process/format to be followed for evaluation of performance ofBoard/Committees and Directors. Based on the same, the evaluation process was completed for theyear.

Performance Evaluation

Pursuant to the Companies Act, 2013 and SEBI (LODR) Regulation 2015, the Board has carried out theannual performance evaluation of its own performance, the Directors individually as well as theevaluation of the working of its Audit Committee, ~9mination and Remuneration Committee, andStakeholders Relationship Committee. A structured. questionnaire was prepared after taking intoconsideration inputs received from the Directors, covering various aspects of the Board's functioningsuch as adequacy of the composition of the Board and its Committees, execution and performance ofspecific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors, includingChairman of the Board, who were evaluated on parameters such as level of engagement andcontribution, independence of judgment and safe guarding the interest of the Company. Theperformance evaluation of the Independent Directors was carried out by the entire Board. Theperformance evaluation of the Chairman and the Non Independent Directors was carried out by theIndependent Directors. The Directors expressed their satisfaction with the evaluation process.

Remuneration Policy .{.,t:

The Policy on Board Diversity and Nomination andCRemuneration Policy as recommended by theNomination & Remuneration Committee have been.vapproved by the Board of Directors. The saidpolicies are annexed to the Board's Report and are also available on the Company's website

Non- Executive Directors do not draw any remuneration and do not have any material pecuniaryrelationship/ transactions with the Company in their personal capacity at large. Executive Directorswere paid as a part of their remuneration.

Details of Remuneration an sitting ees pal to tree ors :Nameof Director Category Total Salarypaid during

April, 2016 to March,2017

Sri. BishwanathGarodia ManagingDirector Rs. 1,106,446/-

d ' f D' t

15

Smt. UshaDeviGarodia WholeTime ~;rector Rs.5,00,000/-.r,;,..

Sri. RameshKumarSharma ChiefFinanGialOfficer Rs.4,26,818/-...,Sri. DipChandAgarwal NonExeqltive -

Independent

Sri. BrijmohanDalmia NonExecutive -Independent

5. Stakeholders' Relationship Committee (formerly Share Transfer Cum Investors'Grievance Committee)

The Board of Directors of the Company has constituted a Stakeholders Relationship Committee of theBoard in terms of the requirements of Section 178 ,of the Companies Act, 2013 and Rules framedthereunder read with Regulation 20 of the Listing Regij'lations. Stakeholders' Relationship Committeeensures quick redressal of the complaints of sharetr&fders, debenture holders and other securityholders.

Terms of Reference:

* To review and note all matters relating to the registration of transfer and transmission of sharesand debentures, transposition of shares, sub-division of shares, issue of duplicate share certificatesor allotment letters and certificates for debentures in lieu of those lost/misplaced;

* To look into the redressal of shareholders' and investors' complaints relating to the transfer ofshares, non-receipt of Annual Report/notices, dividends, etc;

* To oversee the performance of the Registrar & Share Transfer Agents;

* To review dematerialisation and rematerialisation of~~heshares of the Company, if applicable;

.:~-/

* To comply with all such directions of SEBI, Stock Exchanqes, Ministry of Corporate Affairs & otherregulatory bodies w.r.t. shareholders'/investors' rights and market regulations, from time to time.

Composition & Meetings

The Committee comprises three members out of which two are non-executive independent Directorsand one is executive Director viz., Sri. Dip Chand Agarwal as Chairman and Sri Brijmohan Dalmia andSri Biswanath Garodia as Members. .

Attendance of Members at the Meetings of the St~~eholders' Relationship Committee heldduring 2016-2017. ':'._'

Six meetings were held during the period on 14th ~~y,2016; 12th August, 2016, izv September,2016; 14thNovember, 2016, 14thFebruary, 2017 and 20thMarch 2017.

I Members Meeting Attended

16

Sri. Dip Chand Agarwal 6

Sri Brijmohan Dalmia 6

Sri. Biswanath Garodia 6

6. Compliance Certificate

Compliance Certificate for Corporate Governance of ttl~:(Company is given as Annexure to this report.

7. Meeting of Independent Directors

The Independent Directors of the Company had met during the year on 14th November, 2015 to reviewthe performance of non- Independent Directors and the Board as a whole, review the performance ofthe Chairperson of the Company and had assessed the quality, quantity and timeliness of flow ofinformation between the company management and the Board.

\..

17

8. General Body Meetings.

The last 3 Annual General Meetings of the Company were held at the Registered Office on the followingdates:

Dates Time ';:. Venue Special Resolution/s.....

. ,,'J.',

...·r..

30th September, 2016 11.30 a.m. 1, Old Court House YesCorner, 4th Floor,Kolkata - 700001

;.

30th September, 2015 11.30 a.m. 1, Old Court House NoCorner, 4th Floor,Kolkata - 700001

23rd September, 2014 11.30 a.m. 1, Old Court House NoCorner, 4th Floor,Kolkata - 700001

There were no special resolutions passed by the Company through Postal Ballot during the year andno resolution is proposed to be conducted by means of Postal Ballot at present because Postalballot is not applicable to the company since numbers of shareholders in the company are less than200. ~

Resume and other information regarding the djr~Ctors seeking appointment/ reappointment, ifapplicable, as required by SEBI (LODR) Regulation 4015 has been given in the Notice convening theensuing Annual General Meeting and in the Statement pursuant to Section 102 of the Act.

9. Vigil Mechanism / Whistle Blower PolicyThe Company has adopted the whistle blower mechanism, a mandatory requirement of the ListingAgreement and the Companies Act, 2013 with the objective to provide employees, customers andvendors, an avenue to raise concerns, in line with the Company's commitment to the highest possiblestandards of ethical, moral and legal conduct of business, its commitment to open communication andto provide necessary safeguards for protection of employees from reprisals or victimization of whistleblowing in good faith. The Audit Committee reviews periodically the functioning of whistle blowermechanism. The policy also lays down the process to be followed for dealing with complaints and inexceptional cases, also provides for direct appeal to the Chairman of the Audit Committee. The detailof establishment of such mechanism is disclosed by the Company on its website and in the Board'sReport. It is hereby affirmed that no person has been denied access to the Audit Committee.

18: ..'~ ..

10. Disclosures:Related Party TransactionsAll transactions entered into with the Related Parties as defined under the Companies Act, 2013 andSEBI (LODR) Regulation 2015 during the financial year were in the ordinary course of business and onan arm's length pricing basis. There were no materially significant related party transactions withDirectors/ promoters/ management, which had potential conflict with the interests of the Company atlarge. .

Statutory Compliances and StricturesThe Company has complied with the requirements qf the Stock Exchanges / SEBI and statutoryauthorities on all matters related to capital rnarkets'[durinq the last three years. No strictures orpenalties have been imposed on the Company by Stoc;ldexchanges.

The Company has complied with the mandatory requi~ements of the Code of Corporate Governance asstipulated in SEBI (LODR) Regulation 2015. The Company has submitted the compliance reports in theprescribed format to the stock exchanges for every quarter during the year ended 31st March, 2017.The certificate of compliance with the conditions of corporate governance as stipulated in clause 49 ofthe Listing Agreement forms part of the Annual Report .. '

Disclosure of Accounting TreatmentThe Financial Statements for the year ended 31st March, 2017 have been prepared under the historicalcost convention on a going concern basis and in compliance with the relevant accounting standardsand provisions as specified under the Companies Act, 2013.

Disclosures on Risk ManagementIn accordance with SEBI (LODR) Regulation 2015, the, Board of Directors is responsible for framing,implementing and monitoring the risk management plS!~.sof the Company. The Board of Directors haslaid down procedures for assessment and rnlnirnisatioji of risk which is being reviewed and updatedperiodically. The Company has a defined Risk ManagE!fl)entPolicy and the same has been approved bythe Board of Directors of the Company. .; ,

CEO/CFO CertificationA certificate from the CEOand the CFOof the Company in terms of SEBI (LODR) Regulation 2015 forthe year ended 3pt March, 2017 was placed before the Board at its meeting held on 29thMay, 2017.

All mandatory requirements under SEBI (LODR) Regulation 2015 (as amended from time to time) havebeen appropriately complied with and the non-mandatory requirements are dealt with at the end ofthis Report.

',-\'"e --~"·:1··~:,,'. ~_\'

19

Distribution of Shareholdinq: '-'::-'\'.~,.,'The Shareholding distribution of equity shares of face"Y~lue of Rs. 10/- each as at 3pt March, 2017 isgiven below: ~:L, ,

,,; , .:'~:';.'~.::

No. of Equity Shareholders ShareholdingShares held -,

from to Nos. 0/0 Nos. 0/0

001-500 9 14.75% 2800 0.57%

501-1000 9 14.75% 7050 1.42%

1000-5000 30 49.18% 74610 15.07%

5000 & Above 15 23.80% 410540 82.93%

Shares in Transit - - - -Total 63 100% ,~: 495000 100%

Sh h Id hare 0 ing pattern as on 3P Marc 2017 :,.

Category No. of equity shares held 0/0 of shareholdingA. Promoter's holding

1. Promoters

Indian Promoter 367890 74.321%Foreign Promoter Nil 0.00

Sub - Total

B. Non Promoter Holding

2. Institutional Investors

Mutual Funds and UTI Nil '. 0.00i

Banks, Financial Institution, Nil 0.00Insurance Companies ).

"FilS Nil ~. 0.00, .

Sub Total

3. Others'.

Body Corporate 21850 4.414%Indian Public 127 110 21.265%

NRl/OCBs Nil 0.00Any other-Clearing Nil 0.00Members

Sub Total

Grand Total 495000 100.00%

20;,~"... ,

11. Other Disclosures

Status of Adoption of the Non-Mandatory Requirements

1. Audit QualificationsIt is always been the Company's endeavour to present unqualified financial statements.There is no audit qualification in the Company's Financial Statements for the year ended onMarch 31, 2017.

10. Means of Communication.

a)

b)

c)

d)

Half yearly report sent to each household-of shareholders: Noj'

Website, where displayed . ,c~:~:.:.: www.steelmangal.com.,\

Whether it also displays official news releases: No. '~'-. .

The Presentation made to institutional in\kestors or to the analyst: NoI :;.

e) The Management and Discussion AnaIYS'iS"':Reportis annexed with this report.~ .

The Company will be sending soft copies of the Annual Report for the financial year 2016-17 tothose shareholders whose email IDs are registered with the Depository Participants (DPs) and /or with the Company's Registrar and Share Transfer Agent, unless they have opted for aphysical copy, to support the "Green Initiative"

Annual General Meeting Date & Time : Saturday, 23rd September,2017

: At 11.30 a.m.

Venue : 1, Old Court House Corner

.~.: . Kolkata- 700 001',).

....-:..Financial Year 1st '~pril, 2016 to 31st March, 2017

'.:~~.'~./.. .

. .Book Closure Date Hit~..September, 2017 to 23rd September, 2017

.... (both days inclusive)'.

'. 'c'

Listing on Stock ExchangeThe Calcutta Stock Exchange Ltd., (CSE)

Stock Code23097

Listing FeesPaid to the exchan_g_esfor the_y_ear2017-18

Stock Price: There were no tradin_g_found in CSE.

Registrar & Share Transfer Agents Mis. ABS Consultants Pvt. Ltd.

Share Transfer System The) transfers of Physical Shares, which arecomplete in all respects, are taken up forapp:t9vaI and the transferred securities aredisP~!tched to the transferee within thestipq.lated time.

( ,.~-~

XI) Dematerialization ofShares as on 31St March, 2017.

All shares of the Company held in physical formas on 3pt March, 2017 and necessary steps to

21

be taken to demateria lized the shares of theCompany.

XII) Outstanding GDRs /ADRs /Warrants or any Convertible NILi,:instruments, conversion dates. ','.,

.,

';'<!;'., ':'~/',,' ',_·,·'··.··1

Registered office 1, Qfd Court House Corner, Kolkata - 700001' .

Kolkata 29th May, 2017. On behalf of the Board

B .N. Garodia, Managing Director

Declaration

The Board Members and Senior Management Per,'sonnei have given declaration relating tothe Code of Conduct for the Year 2016-17 as perttie SEBI (LODR) Regulation 2015 .

. . '

On behalf of the Board

For Mangal Steel Enerprises Limited

Kolkata 29th May, 2017.B. N. Garodia,

Managing Director

For Mangal Steel Enerprises Limited

U. D. Garodia,Whole Time Director

22

CFO Certification

I/We have reviewed financial statements and the Cash Flow statement for the Financial year 2016-17and that the best of our knowledge and belief, I/we stai,e that

i. These statements do not contain any materially. untrue statement or omit any material fact orcontain statements that might be misleading';

ii. These statements together present a true and fair view of the Company's affairs and complywith existing accounting standards, applicable laws and regulations.

There are to the best of my/our knowledge and belief; no transactions entered into by the Companyduring the financial year that are fraudulent, illegal or violative of the Company's code of conduct.

I/We accept responsibility for establishing and maintaining internal controls and that we haveevaluated the effectiveness of the internal control systems of the Company and we have disclosed tothe Auditors and the Audit Committee, deficiencies in the design or operation of internal controls, ifany, of which I/we am/are aware and the steps I/we have taken or propose to take to rectify thesedeficiencies.

I/We have indicated to the Auditors and the Audit Committee:..,

1. Significant changes in the internal control during'the year;2. Significant changes in the accounting policies during the year, if any, and that the same have

been disclosed in the notes to the financial statements; and3. Instances of significant fraud and the involvement therein, if any of the management or an

employee having a significant role in the Company's internal control systems.

Place: KolkataDate: 29th May, 2017 Ramesh Kumar Sharma

(Chief Financial Officer)

23

liS Aditya Kumar DagaPractising Company Secretary

E-4/S Saltee Spacio,l Mall RoadNagerBazar, Kolkata - 700 080E-mail: [email protected]: +91 9830811101

,Form NO::MGT-8

[Pursuant to section 92(2) of the Cornpanles Act, 2013 and rule 11(2) of Companies(Management and Acfmir..istration) Rules, 2014]

.~ ."',

I have examined the registers, records and books and papers of MIs. Mangal SteelEnterprises Limited as required to be maintained under the Companies Act, 2013 (theAct) and the rules made there under for the financial year ended on 31st day of March, 2017.In my opinion and to the best of my information and according to the examinations carried outby me and explanations furnished to me by the company, its officers and agents, I certify that:

A. The Annual Return states the facts as at the close of the aforesaid financial yearcorrectly and adequately.

B. During the aforesaid financial year the Company has complied with provisions of the Act& Rules made there under in respect of :

1. its status under the Act;

2. maintenance of registers/records &. making entries therein within the timeprescribed there for;

.,3. filing of forms and returns as stated in the annual return, with the Registrar ofCompanies, Regional Director, Central Government, the Tribunal , Court or otherauthorities within/beyond the prescribed time;

4. calling/ convening/ holding meetings of Board of Directors or its committees, if any,and the meetings of the members of the company on due dates as stated in theannual return in respect of which meetings, proper notices were given and theproceedings including the circular resolutions and resolutions passed by postal ballot, ifany, have been properly recorded in the Minute Book/registers maintained for thepurpose and the same have been signed;

7. contracts/arrangements with related 'partie~ as specified in section 188 of the Act:

5. closure of Register of Members I Securrty holders, as the case may be..

6. advanceslloans to its directors and/or persons or firms or companies referred insection 185 of the Act;

8. issue or allotment or transfer or transmission or buy back of securitiesl redemption ofpreference shares or debentures/ alteration or reduction of share capital! conversion ofshares/ securities and issue of security certificates in all instances;

9. keeping in abeyance the rights to dividend, rights shares and bonus shares pendingregistration of transfer of shares in compliance with the provisions of the Act;

Continuation Sheet

.',

10. declaration/ payment of dividend; transfer of unpaid/ unclaimed dividend/otheramounts as applicable to the Investor Education and Protection Fund in accordancewith section 125 of the Act;

11. signing of audited finanCial statement as per the provisions of section 134 of the Actand report of directors is as per sub - sec~ions(3), (4) and (5) thereof;

12. constitution/ appointmenU re-appointments/ retirement! filling up casual vacancies/disclosures of the Directors, Key Managerial Personnel and the remuneration paid tothem; ,

;.\

13. appointment! reappointment! filling up casual vacancies of auditors as per theprovisions of section 139 of the Act; ..

.~

14. approvals required to be taken from the Central Government, Tribunal, RegionalDirector, Registrar, Court or such other authorities under the various provisions of theAct;

15. acceptance/ renewal! repayment of deposits;

16. borrowings from its directors, members, public financial institutions, banks andothers and creation /modification /satisfaction of charges in that respect, whereverapplicable;

17. loans and investments or guarantees given or providing of securities to otherbodies corporate or persons falling und/ilIi:t-heprovisions of section 186 of the Act;

18. alteration of the provisions of the Memorandum and/ or Articles of Association ofthe Company;

Date:06.10.2017Place: Kolkata

~- -,Iv~ajfya Kumar Dag~

Practicing Company SecretaryC.P No. : 14266

Membership No. : A37778

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