MUKAND SUMI METAL PROCESSING LIMITED

1 MUKAND sumi METAL PROCESSING LIMITED CIN: U27300MH2012 PLC234000 3RD ANNUAL REPORT 2014 -2015 Board of Directors Mr. Rajesh V. Shah -- Chairman Mr. Arvind M. Kulkarni Mr. Vipul M. Mashruwala Ms. Anna Abraham -- appointed 11th February, 2015 Mr. Kenji Setogawa Mr. Shinobu Nakada -- appointed 18th October, 2014 Mr. Makoto Horie -- upto 28th May, 2015 Mr. Masaki Sasamoto -- appointed 28th May, 2015 Mr. N. C. Sharma -- appointed 15th July, 2014 Mr. R. Sankaran -- appointed 11th February, 2015 Key Managerial Personnel Mr. Arvind M. Kulkarni - Manager Mr. S. B. Jhaveri - Chief Financial Officer Mr. K. J. Mallya - Company Secretary Auditors M/s. Haribhakti & Co., LLP Chartered Accountant Registered Office: Bajaj Bhavan, 3rd Floor, Jamnalal Bajaj Marg, 226, Nariman Point, Mumbai 400 021 Tel: 022 61216666 Fax: 022 22021174 Email: Project Office: Building No. 65, Thane Belapur Road, Village Dighe, Kalwe, Thane 400 605 MUKAND sumi METAL PROCESSING LIMITED (CIN: U27300MH2012 PLC234000) 1 Directors Report 2014 -15 Dear Members, Your Directors take pleasure in presenting the Third Annual Report on the business and operations of the Company along with the audited financial statements for the financial year ended 31st March 2015.

2 1. Financial Results The financial performance of the Company, for the financial year ended March 31, 2015 is summarised below: Particulars Rs. in Million 2014 -15 2013-14 Total Income EBIDTA Profit/(Loss) Before Taxation Profit / (Loss) After Taxation Ratios: Particulars 2014 -15 2013-14 EBIDTA to SALES Earnings Per Share (Rs.) 2. Review of Operations During the financial year under review, the Company consolidated manufacturing and commercial operations. The company sold 58,398 MT of bright bars and wires valued at Rs. 4, million, an increase of 28 % over previous year (the operations of the Company started in July 2013). The Company has utilized 89 % of its total capacity. The sale consisted of 47,098 Million Tons ( MT ) of Alloy Steel and 11,263 MT of Stainless Steel ( SS ) products. During the year, the Company has exported a total of 5,576 MT of Bright Bars with FOB value of Rs.

3 Million. The sales for FY 2014 -15 fell short in SS Bright bars and Alloy Steel Wires. The sale of SS bright bars is mainly to the Seamless Pipe sector, which was severely affected due to sudden drop in Crude Oil prices. The reduction in sales volume in Alloy Steel Wires was primarily due to surge of imports of SAS Wires and Wire MUKAND sumi METAL PROCESSING LIMITED (CIN: U27300MH2012 PLC234000) 2 rods from China starting October 2014 . The sales of Alloy Steel Bright Bars was more or less as per the plans. 3. Outlook for Financial Year 2015-16 The Company has already procured a state of the art Wire Drawing Machine fitted with online Eddy Current Tester and a Combined Drawing line. These machines will widen the product range in Bright Bars and Wires, reduce manufacturing costs and also develop import substitute products, hitherto imported by the Automobile companies. The total capacity for sale of products will be enhanced from 66,000 MT to 81,000 MT per year after complete commissioning of the two new machines.

4 The Company has plans to sell 69,000 MT of wires and bright bars (55,500 MT alloy steels and 13,500 stainless steels) for the FY 16, valued at approximately Rs. 5,850 Million. 4. Joint Venture The Company is a joint venture of MUKAND LIMITED , India and Sumitomo Corporation, Japan pursuant to the Master Agreement dated October 29, 2012, executed amongst and between MUKAND LIMITED , Sumitomo Corporation, Sumitomo Corporation Asia & Oceania Pte. Ltd. (formerly known as Sumitomo Corporation Asia Pte. Ltd. ). The Company does not have any subsidiaries, associates or joint venture companies. 5. Dividend With a view to conserve resources, your Directors have thought it prudent not to recommend any dividend for the financial year under review. 6. Finance During the year under review, the company has availed working capital limit sanctioned from Kotak Mahindra Bank The total facility is Rs.

5 Million, consisting of Rs. 155 Million of Cash Credit limit, Rs. 50 Million of Bill Discounting, Rs. 100 Million of LC Discounting and Rs. 100 Million of LC for Capex. The facility became operational from October, 2014 . 7. Transfer to Reserves No amount was transferred to General Reserves at the end of FY 2014 -15. 8. Material Changes and Commitments There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company and the date of this report. MUKAND sumi METAL PROCESSING LIMITED (CIN: U27300MH2012 PLC234000) 3 9. Share Capital The paid up Equity Share Capital of the Company was Rs. 273,000,000/- as on 31st March 2015. There was no public issue, rights issue, bonus issue or preferential issue etc. during the year. The Company has not issued any shares with differential voting rights, sweat equity shares nor has it granted any stock options during the year.

6 10. Deposits The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act 2013 ( the Act ) read with the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the requirement for furnishing of details of deposits which are not in compliance with the Chapter V of the Act is not applicable. 11. Disclosure of Orders Passed by Regulators or Courts or Tribunal No orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Company s operations in future. 12. Particulars of Loans, Guarantees and Investments The Company has neither given any loans/guarantees to any other entities nor has made any investments during the financial year. 13. Related Party Transactions There were no related party transactions entered into by the Company during the financial year which attracted the provisions of Section 188 of the Companies Act, 2013 as all related party transactions that were entered into by the Company during the year were on an arm s length basis and were in the ordinary course of the Company's business.

7 Hence there are no transactions which are required to be disclosed in Form AOC-2. 14. Director s Responsibility Statement Pursuant to clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm that: i. in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made therefrom; ii. the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial year ended as at 31st March, 2015 and of the profit of the Company for the said period; MUKAND sumi METAL PROCESSING LIMITED (CIN: U27300MH2012 PLC234000) 4 iii. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv.

8 The directors have prepared the annual accounts on a going concern basis; v. the Company being an unlisted public company, is not required to lay down internal financial controls to be followed by the Company; and vi. the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. 15. Extract of Annual Return The extract of the Annual Return as provided under sub-section (3) of Section 92 of the Companies Act, 2013, in the prescribed Form MGT- 9 is annexed to this report as Annexure A. 16. Board of Directors & Key Managerial Personnel A. Board of Directors: As per the provisions of Sec 149 of the Companies Act, 2013 read with the Rules made thereunder, the Company is required to have at least two Directors of the total number of directors as independent directors and at least one woman director on its Board.

9 Accordingly, as on 31st March 2015, the Board of Directors of the Company consisted of nine directors, of whom two were non-executive independent and seven were non-executive and non-independent (including one woman director) as per details given in the Table below. The Company has a non-executive Chairman. Sr. No. Name of the Director Category 1 Mr. Rajesh V. Shah Chairman, Non Executive 2 Mr. Arvind M. Kulkarni Executive 3 Mr. Vipul M. Mashruwala Non Executive 4 Ms. Anna Abraham Non Executive 5 Mr. Kenji Setogawa Non Executive 6 Mr. Makoto Horie Non Executive 7 Mr. Shinobu Nakada Non Executive 8 Mr. N. C. Sharma Non Executive & Independent 9 Mr. R. Sankaran Non Executive & Independent During the year under review:- i. Mr. Prakash V. Mehta, Independent Director has ceased to be a Director with effect from 2nd April 2014 ; MUKAND sumi METAL PROCESSING LIMITED (CIN: U27300MH2012 PLC234000) 5 ii. Mr. N. C. Sharma, was appointed as an Independent Director, pursuant to Section 149 of the Companies Act, 2013, by the members at the Second Annual General Meeting held on 15th July, 2014 , to hold office for period of 5 (Five) consecutive years effective from 15th July, 2014 or upto Seventh Annual General Meeting, whichever is earlier.

10 Iii. Mr. R. Sankaran was appointed as Additional Director of the Company in the category of Independent Director, pursuant to Section 149 of the Companies Act, 2013, for a period of 5 (Five) years, at the meeting of the Board of Directors held on 11th February, 2015 subject to the shareholders approval in the ensuing Third Annual General Meeting of the Company. Mr. R. Sankaran holds office as such upto the date of the ensuing Annual General Meeting of the Company. iv. Mr. Shinobu Nakada and Ms. Anna Abraham were appointed as Additional Directors of the Company in the category Non-Executive Director at the meeting of the Board of Directors held on 11th February, 2015 subject to the shareholders approval in the ensuing Third Annual General Meeting of the Company. Mr. Shinobu Nakada and Ms. Anna Abraham hold office as such upto the date of the ensuing Annual General Meeting of the Company.