To

The Shareholders MSTC Limited

The Directors are pleased to present the 53rd Annual Report on the business and operation of the Company together with the Audited Accounts and the Auditor’s Report for the year ended 31st March, 2018.

A) Agency Business

This year the total volume of Agency Business stands at Rs. 36,39,015 lakh, against Rs. 32,71,682 lakh in 2016-17. Break-up for the year 2017-18 vis-a-vis 2016-17 is as follows:

B) E- Procurement

C) Trading

The performance of the Trading Division shows a total volume of business of Rs. 9,35,181 lakh, against Rs. 4,59,765 lakh in 201617. Break-up for the year 2017-18 vis-a-vis 2016-17 is as follows:

Financial Highlights of the Company

The Profit after Tax stands at Rs. 7,663 lakh in FY 2017-18 as against Rs. 6,543 lakh last year.

The Financial results of the Company for the year 2017-18 and 2016-17 are given below :-

(Rs. in lakh)

Dividend

The Board of Directors of your Company has recommended a Dividend of 74% for the financial year ended 31st March, 2018. The Dividend, if declared by the members in ensuing AGM, shall be paid to the shareholders whose names will appear in the Register of Members on the date of AGM.

During the year under review your Company has collected the bank account of majority of the shareholders. For the first time, we would directly credit the dividend to the bank account of the shareholders.

Reserves

The General Reserves of the Company stood at Rs. 46,933 lakh as on 31st March, 2017. During the year Rs. 2,683 lakh have been transferred to the General Reserve from the Profit & Loss Account. The General Reserves stand at Rs. 49,616 lakh as on 31st March 2018.

Share Capital

The authorized share capital of your Company as on 31st March, 2018 stands at Rs. 50,00,00,000, divided into 50000000 equity shares of Rs. 10 each. Your Company issued bonus shares in the ratio of 1:1 i.e. one bonus share in the ratio of one share. Consequently, the paid up share capital of the Company increased from Rs. 17,60,00,000 divided into 1,76,00,000 equity shares of Rs. 10 each to Rs. 35,20,00,000 divided into 3,52,00,000 equity shares of Rs. 10 each.

Transfer to Investor Education and Protection Fund:

Section 124 of the Companies Act, 2013 provides that any dividend that has remained unpaid / unclaimed for a period of seven years from the date of transfer to unpaid dividend account shall be transferred to the Investor Education and Protection Fund (IEPF) established by Central Government. Unclaimed dividend for the FY 2009-10 was transferred to the IEPF authority on 22nd November, 2017.

Section 124(6) of the Companies Act, 2013 read with rules made thereunder provide that all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more shall be transferred by the Company in the name of Investor Education and Protection Fund.

In compliance of the IEPF Rules, the Company sends reminder letter to all such shareholders, whose dividends have remained unpaid /unclaimed for a consecutive period of 7 years with a request to claim the dividends, failing which the shares would be transferred to the IEPF Authority on the due date.

Accordingly, all such shares in respect of which dividends had remained unclaimed for the FY 2009-10 to 2016-17 were transferred to the demat account of the IEPF authority on 30.11.17. The details of such shares are hosted on the website of the company www.mstcindia.co.in

Conservation of Energy, Technology, Absorption and Foreign Exchange Earnings and Outgo

In accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies(Accounts) Rules, 2014, the particulars relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in Annexure-I to this Report

Corporate Governance & Management Discussion and Analysis Report

Separate details on Corporate Governance and Management Discussion and Analysis Report are attached herewith as Annexure II and form part of this Board’s Report. Compliance Certificate on Corporate Governance is placed as Annexure to Board’s Report.

Extract of Annual Return

In compliance with Section 92(3) of the Act and Rule 12(1) of the Companies (Management and Administration) Rules 2014, extract of Annual Return in format MGT-9 for the financial year 2017-18 has been enclosed with this report as Annexure III in the prescribed format.

Systems

MSTC’s IT infrastructure is by far the most sophisticated and robust in the country to take up e-commerce services in a secure and transparent manner for more than 90,000 clients across the globe.

MSTC’s IT Department is equipped with the powerful IBM Power Series 740 Servers having robust processing power and can serve thousands of concurrent hits. The servers are highly energy efficient leading to saving of power and these servers are in operation with redundancy & in high availability disaster recovery mode for providing uninterrupted services to our stakeholders like Principals, Bidders & other users.

Mumbai Disaster Recovery site is also having a similar set up as in Kolkata Data Center.

MSTC is concerned with information security issues and has left no stone unturned to achieve maximum security by installing Firewall, Intrusion Prevention System (IPS), Managed Distributed Denial of Service (MDDOS), etc.

The much needed security feature ‘Write Once Media’ which captures the Audit trails on a non-editable media, has been the hallmark of MSTC’s e-Commerce system.

SSL Encryption

SSL (Secure Sockets Layer) is the standard security technology for establishing an encrypted link between a web server and a browser. This link ensures that all data passed between the web server and browsers remain private and integral. We have implemented 256-bit SSL in our web server.

All network equipments like routers, switches are from CISCO and are totally ready for IPv6 migration. Security Appliances like Firewalls, IPS are in place to prevent unauthorized intrusion with latest signatures.

Periodical Application Security Testing is conducted by STQC, a Govt. of India Department. MSTC ensures security through periodical penetration, vulnerability & performance testing by STQC.

MSTC conducts its business through a dedicated 100 Mbps ILL and has also a standby ILL connectivity taken from a different provider. MSTC has connected its regions and branches through VPN which enabled the centralized internal applications to be used by all in a more secured manner. Moreover an UTM has been installed for protecting the users systems from outside spam and viruses.

MSTC has developed an in-house complete e-Procurement solution with e-tendering, e-reverse auction, e-reverse auction with L1 matching and many other modes. General Financial Rules, CVC guidelines, IT Act 2000 and its Amendment of 2008 have been adhered to in this e-Procurement application and the said service has been certified by STQC.

MSTC e-Commerce has been appraised to CMMI Level-3 Dev. For achieving CMMI Level 5 from existing CMMI Level 3, tendering for selection of consultant is under process.

MSTC server in Kolkata is manned round-the-clock throughout the year. The Systems dept. is well equipped with qualified professionals whose skills are continuously upgraded with training on latest technology.

MSTC’s System Department is ISO 27001:2013 certified from STQC.

MSTC e-Commerce division is also ISO 9001:2015 Quality certified.

Developments of Information Technology during 2017-18

1) STQC Certification on e-Procurement services was received which is valid till AprilRs. 18 after clearing audit conducted by STQC Kolkata that included all the testing like Functional testing, CVC and IT Act compliance Audit, Web Application Security Testing, Performance Testing, Vulnerability Assessment & Penetration Testing.

2) ISO 27001:2013 certification is in place and was recertified after clearance of recertification audit by STQC and this certificate is valid up to 12th June, 2020 and surveillance audit is carried out every year.

3) ISO 9001:2015 certification is also maintained as per standards and this certificate is valid up to 30th May, 2020.

4) MSTC Systems division is CMMI Level 3 appraised since 2013. The same was renewed this year for another three years with validity up to 27-06-2019.

5) On August 1, 2017, Hon’ble Union Minister for Consumer Affairs, Food and Public Distribution, Shri Ram Vilas Paswan and Hon’ble Union Steel Minister, Chaudhary Birender Singh, launched Rashtriya Kisan Agri Mandi (e-RaKAM), an e-platform for farmers and institutional sellers to sell agricultural produce on pan India basis.

6) Online Major & Minor Mineral Block auction for the states of Rajasthan/Chhattisgarh/UP & other States have been conducted successfully with utmost transparency and monetary gain.

7) Three stages bidding web application for Agricultural and Processed Food Products Export Development Authority (APEDA) has been developed for sale of Organic Food products online.

8) Multi currency multi stage events with global participation have been developed and successfully implemented on 18th May, 2017 which is well before the MoU Target of 30.09.2017 for NMDC.

9) Customized e-Commerce solution for IOCL Export has been developed and made live where global participation is seen in a big way.

10) As a follow up to the new policy called Scheme for Harnessing and Allocating Koyla (Coal) Transparently in India (SHAKTI), Coal India Limited (CIL) devised a mechanism for auction of Coal linkages to Independent Power Producers (IPPs). MSTC provided a tailor made software solution for execution of the scheme online. The exercise is expected to result in an annual generation of over 47 billion units per annum from the linkage coal and a savings in tariff of approx. Rs. 125 cr / annum for period up to 25 years. MSTC has successfully conducted the first event when 27MMT of coal was allotted to the ten winners.

11) Online Draw System at NIC Server for Oil Manufacturing Companies like IOCL, BPCL & HPCL for selection of winner in allocation of LPG Distributorship was conducted far & wide in the country.

12) DASHBOARD for Ministry of Steel was developed by Retail Software Group with the assistance of System department.

13) Customized e-Auction portal for Karnataka Forest Department has been developed & implemented.

14) Customized e-Auction portal for Aamby Valley City auction has been developed & implemented.

15) National e-bidding portal for Power Purchase Agreement (PPA) on Medium term basis on behalf of Ministry of Power has been developed & implemented.

16) The first ever e-auction of sand mining block was held in Utter Pradesh which fetched hefty revenue to the exchequer of the state as compared to the pre-auction era.

17) Customized e-procurement solution have been provided to many Buyers like REC Transmission Projects Company Ltd., Mahindra MSTC Recycling Pvt. Limited, ORISSA POWER TRANSMISSION CORPORATION LTD, Odisha Coal and Power Limited, TANGEDCO etc.

18) Regional Connectivity Scheme - Ude Desh ka Aam Naagarik (UDAN) for Ministry of Civil Aviation developed & implemented by our in-house team as per new requirement for second tranche.

19) Content Management System was implemented in our corporate site i.e. www.mstcindia.co.in as per GIGW guidelines.

20) GST Implementation as per Govt. guideline was introduced in the all business transactions.

21) Automation in Pre-Bid EMD Collection, activation & refund through online, making our e-Auction system more user friendly & transparent. The system was made operational on 27.12.2017 in all aspects.

22) MSTC unveiled the MSTC’s vision for North-East particularly in Agri-host sector in the august presence of Shri Vishnu Deo Sai, Union Minister of State for Steel.

23) MSTC opened eight new branch offices to increase outreach and for attainment of customer satisfaction.

Human Resource Development (HRD)

With the onset of the new financial year 2017-18, the Company has gone for aggressive diversification in business. Various new business verticals, namely, e-RaKAM, M3 (MSTC Metal Mandi), Retail Software, have been added to the existing catalogue. Owing to the diversification a need for development of skills of the employee was felt, therefore, various training Programmes were conducted. The company has trained a total of 75 employees on various topics through both institutional and various customized training programs on e-procurement, Operations and systems for its employees with an objective to enhance the knowledge, competencies and skill during the year.

Being in service industry, human resource has been a major thrust area in the performance of the Company. Various mOu targets pertaining to the development of the Human Resources were completed successfully within stipulated time period. Furthermore, 12(twelve) numbers of one week training programmes on various topics were conducted in the ace Institutes of India such as IIM’s and Institute of Indian Industry for better learning.

Besides this, appraisal process of all the employees, quarterly updating of their vigilance status on online portal and holding of Departmental Promotion Committee took place within specified timeline.

Also MSTC introduced an online recruitment for executives by a reputed outside agency for a transparent and efficient selection process.

Welfare of Weaker Sections

25 Management Trainees and 6 Assistant Managers were recruited during the financial year; 9, 6 and 1 persons belonged to OBC, SC and ST category respectively; of which 2(two) belong to PWD (VH). The directives in matters concerning recruitment and promotion regarding the weaker sections have been duly complied with. Other directives issued from time to time regarding reservation, relaxation, concession, etc. for the SC/ST/OBC/PWD candidates pertaining to the policies and procedures of the Government were duly observed. All Departmental Promotion Committees and Selection Committees (in case of recruitment) constituted during the year had representatives of SC/ST community. During the year, 9 SC, 5 ST and 23 OBC employees of the Company, were sponsored for training programs, both Inhouse and Institutional training programs, out of which 3 employees were PWDs and 3 belonged to Minority.

All possible cooperation and assistance was provided to the MSTC SC/ST Employees’ Council, which function primarily to safeguard the interest of the reserved section of employees of the Company.

Empowerment of Women

MSTC is a Corporate Life Member of Forum of Women in Public Sector (WIPS) and women employees were nominated in the programs organized by WIPS. Internal Complaints Committees constituted in all the offices of MSTC have been functioning successfully. Periodical meetings and Complaint redressal, awareness programs, etc. are also duly conducted by the Committees.

During the year, 16 female employees were sponsored for training, both external and in-house, to enable them to undertake higher responsibilities in the Company.

Disclosure under section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

MSTC has in place a mechanism for prevention and redressal of sexual harassment of women employees at the workplace in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committees (ICCs) have been set up in all the offices of the Company for rendering necessary assistance to and dealing with complaints, if any, of all the women employees of the Company. All employees (permanent, outsourced, trainees etc.) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during each calendar year.

* No. of complaints received: Nil.

* No. of complaints disposed off: Nil.

Grievance Redressal Mechanism

The company has an exclusive portal integrated in to the corporate website www.mstcindia.co.in to register and monitor the grievances online. The portal provides an unique system generated code for the complainants to lodge and view the progress of the grievances registered online. Some grievances are also received at the CPGRAMS site and by post.

A Grievance Committee is constituted at Head Office and Grievance Cells have been constituted at the Regional and Branch Offices. The grievances are settled/resolved after the Competent Authority’s approval on the recommendation made by the Grievance Committee. The Grievance Committee makes recommendations after examination of the grievances and obtaining comments of the concerned department/region/ branch.

The Grievance Committee meets at periodical intervals to review the cases.

The Centralized Public Grievance Redress and Monitoring System (CPGRAMS) and Public Grievance site of the Company are monitored regularly by the Head Office. There are a Nodal officer and a Public Grievance officer in the Head Office.

Total 51 Grievances have been received during 01.4.2017 to 31.3.2018. Out of that 49 grievances have been redressed and remaining 02 are under process.

Statement of Public Grievances for the period of 01.04.2017 to 31.03.2018

Right to Information Act 2005

Provisions of RTI Act 2005 were complied with for processing the RTI applications and appeals received in all offices of MSTC. There are one Transparency Officer, one First Appellate Authority, one CPIO, one Nodal Officer in MSTC Head office and every region/branch has one PIO for effectively processing the RTI applications received at various locations of the Company.

All quarterly reports have been submitted on-line and reports have been uploaded on CIC site. During 01.04.2017 to 31.3.2018, total 106 RTI applications and 30 First Appeals have been received through online and by post also. Out of that 102 RTI Applications and 29 Appeals have been disposed of and 2 RTI applications were rejected.

Remaining 2 RTI applications and 1 appeal are under process. RTI applications/appeals can be received and disposed of through RTI web portal namely https://rtionline.gov.in. RTI Applications and Appeals are received offline and online which are processed expeditiously.

Official Language

MSTC arranged National Hindi Seminar on Bhartendu Ki Prasangikta, Aaj Ki Hindi and Bhavisya Me Hindi on 11.01.2018 at Kolkata. The seminar was inaugurated by Hon’ble Minister of Steel, Chaudhary Birendra Singh in the presence of Hon’ble Minister of Steel for State, Shri Vishnu Deo Sai and other dignitaries. In this occasion, Hon’ble Minister of Steel, Chaudhary Birendra Singh unveiled MSTC’s Hindi magazine “Sangati” along with Hon’ble Minister of Steel for State, Shri Vishnu Deo Sai and others dignitaries.

Rajbhasha Trimas was inaugurated on 14th September 2017. During this period, Hindi competitions and workshops were organized in Head office as well in regional and branch offices. Total 36 employees were awarded for winning in Hindi competitions and for passing in Hindi examinations. In this year, total 37 employees were nominated in Hindi examinations conducted by Hindi Teaching Scheme, Department of Official Language, Govt. of India.

The Chairman-cum-Managing Director attended TOLIC meeting which inspired more and more implementation of Hindi in the Company.

As per provisions of Official Language Rule, inspection of progressive use of Hindi, submission of online Timahi report, issuance of appreciation letter in Hindi to the promoted employees and Hindi versions of different documents were done.

ISO 9001:2008 certification of Hindi department was upgraded to ISO 9001:2015. Official Language Act has been complied with. Ministry of Steel and its Hindi Salahkar Samity continuously provided their guidance about implementation of Official Language Act.

On 12.08.2017, CMD MSTC Limited was awarded by the Governor in the Prize distribution ceremony of TOLIC, Kolkata for excellent performance in Official language implementation in the Company.

Vigilance

The Vigilance setup of MSTC being headed by Chief Vigilance Officer (CVO) is committed to enhancing efficiency and transparency in the organization primarily through system improvements, preventive and proactive vigilance.

During the year 2017-18, 9 routine inspections were carried out in the Regional/Branch/Site offices on the ongoing procedure/practice of e-auction activities. In addition, 2 surprise checks were carried out. 1 Departmental Inquiry was disposed of, which resulted in punitive action against 1 official. Complaints as received from MOS/CVC as well as other sources were inquired and disposed off in time bound manner. Such examinations/investigations have resulted in initiation of various system improvement measures.

As per the directives of Central Vigilance Commission, Vigilance Awareness Week-2017 has been observed in MSTC Limited across the country w.e.f. 30.10.2017 to 04.11.2017 emphasizing the theme of “My Vision-Corruption Free India” . During the week, in order to generate awareness, educate and discuss transparency among officials/ stakeholders as well as general public to arrest the root cause & threat of corruption and to promote good governance, various activities were organized.

1. Inauguration - The Vigilance Awareness Week commenced with the administration of Integrity Pledge to the employees by CMD, MSTC while inaugurating the week on 30th October 2017.

2. Wide Publicity –

- 1000 pamphlets distributed to MSTC Employees, Visitors, Contractual Workers and customers/principals with information on whistleblower mechanism and other anti-corruption measures and they were requested to take e-pledge.

- The posters /banners specially designed for VAW-2017 has been displayed in prominent places across all offices.

- A special brochure on the theme was unveiled highlighting the tool of preventive vigilance such as Automation and Leveraging technology, being envisaged by MSTC to remove the monopoly in delivery of services and personal discretion. A total of 600 brochures were circulated to Govt. Departments, PSUs, and Ministries for wider dissemination and awareness.

- Bulk e-mail has been forwarded to the scrap and coal customers (70000 approx.) for enlisting support and commitment to take the Integrity Pledge. Also, WhatsApp and twitter account of MSTC has been extensively engaged for spreading awareness.

3. Employees Competitions - i. Slogan Competition for Employees of MSTC on the theme- “MY VISION-CORRUPTION FREE INDIA”. ii. Essay Competition for Employees of MSTC on the theme- “MY VISION-CORRUPTION FREE INDIA”. iii. Quiz Competition for Employees of MSTC on issues in Vigilance, CVC and other Anti-corruption Laws, Policies, manuals and guidelines of MSTC. iv. Elocution Competition for Employees of MSTC.

4. Competitions in Schools and Colleges - i. Elocution Competition, Creative writing competition and slogan writing competition for students of St. James’ School, Kolkata studying in Class XI to XII on topic “My Vision-Corruption free India”. ii. Elocution Competition for management students of batch 2015-17 & 2016-18 at International Management Institute, Kolkata. iii. Cartoon/Poster competition amongst the students of Govt. Sarvodaya Bal Vidyalaya, New Delhi and Sri Visvodaya Education Society, Visakhapatnam.

5. Integrity Club - Integrity Club has been constituted at St. James’ School, Entally, Kolkata with a novel initiative of ingraining the ethical values in the minds of school students.

6. Orientation Program for employees of MSTC - A one day orientation program for employees of MSTC was organized in all offices focusing on Vigilance Administration in PSUs, Conduct, Discipline & Appeal Rules of MSTC and Common Irregularities.

7. Workshops/Sensitization programs:

a. Workshop for middle level and senior level managers of MSTC HQ on Delegation of Powers, Financial Powers and Project/Contract Management.

b. Seminar on CVC theme “My Vision-Corruption Free India”, Concluding Ceremony and Prize distribution to winners of events organized during the week on 04.11.2017.

8. Organization website has been used to propagate the messages of CVC and encouraging citizens to take e-pledge.

9. Stakeholders Meet - 1. Grievance Redressal Camps organized with customers during the week at MSTC offices to redress their issue. 2. Customer feedback survey conducted in the camp.

10. Integrity Pact Meeting - A meeting on integrity pact was chaired by Shri Asok Kumar Sinha, Independent External Monitor (IEM), MSTC which was attended by CMD, Director (Finance), CVO and other senior officials held at the Head Office, MSTC, Kolkata on 04-11-2017.

F Preventive Vigilance/System Improvement

(a) MSTC has started procuring secondary items/materials such as office stationeries & consumables, computer peripherals through GEM portal.

(b) Purchases of items not offered through GEM portal are being procured through e-procurement portal.

(c) Techno-commercial and Price Bids are opened online and received from the bidders duly signed with digital signature certificate (DSC). Tender fee and Bid Guarantee/ EMD are being received through e-payment system.

(d) Bill Tracking System is being utilized for the purpose of display/status of pending bills of contractors on the portal.

(e) Applications for recruitment are being received online. Online examination introduced for recruitment to the entry level.

(f) Pre-bid EMD/EMD are being received online and subsequent refund of EMD to bidders of coal e-auctions/ scrap e-auctions through direct uploading of files on bank’s server.

(g) Purchase and Service Contract Manual formulated.

(h) Amendment of CDA Rules by prescribing timelines for submission of written statement of defense by the charged officer, providing requisitioned documents before the IO by the custodian(s) within one month of receipt of such requisition and also for conducting the inquiry by the IO within a period of six months from the date of receipt of appointment orders, etc.

(i) Privilege given to super admin for changing the status of the lot at post-bid stage has been reassessed.

F System improvement suggestions: System improvement suggestions were made in varied areas of organizational activities:

i. Review of Accounts Manual.

ii. Review of Risk Management Policy at intermittent intervals.

iii. Regular quantity and quality assessment by independent third party for pledged materials lying at customer’s premises.

iv. Physical verification of Bank Guarantees submitted by the contractors at random basis.

v. Improvement suggested in the operation module in varied aspects such as registration of bidders, renewal of Selling Agency Agreements, e-auction catalogue, receipt of EMD, pre-bid EMD stipulation, monitoring the validity of bids under Subject to Approval, unambiguous categorization of lots, Acceptance Letter, Delivery Order, etc.

F System Improvement Studies : Studies were taken in the following areas:

Sl. Subject of Study

1. Fixed Asset management of MSTC.

2. Examination of Audit Reports for the year 2014-15 and 2015-16.

3. CSR Policy of MSTC and monitoring of projects.

4. Promotion & Transfer Policy of MSTC.

5. Standardization of NITs, Bid Documents etc.

6. Recruitment process in MSTC.

7. Monitoring the award of contract for undue delay.

8. Payment to the contractors.

9. Rotational Transfer Policy

10. Purchase & Service Contract Manual.

Directors Responsibility Statement

As required under the provisions of Section 134(5) of the Companies Act, 2013, the Board of Directors state that:

In the preparation of the Annual Accounts the applicable Indian Accounting Standards (INDAS) have been followed along with proper explanation relating to material departures.

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 as at 31.03.2018 and of the profit of the Company for the financial year 2017-18. 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 frauds and other irregularities.

The Directors have prepared the Annual Accounts for the year ended 31st March, 2018 on a going concern basis.

The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Directors & Key Managerial Personnel

Shri B.B. Singh, Chairman-cum-Managing Director, Shri A.K. Basu, Director (Finance) and Smt. Bhanu Kumar, Director (Commercial) are whole time Directors of the Company. Shri B.B. Singh is also acting as Chairman of Ferro Scrap Nigam Limited (FSNL) and Mahindra MSTC Recycling Pvt. Ltd. (MMRPL). Shri A. K. Basu is also acting as Director of Ferro Scrap Nigam Limited (FSNL) and Mahindra MSTC Recycling Pvt. Ltd. (MMRPL).

During the year under review Shri Suraj Bhan and Shri Sunil Barthwal ceased to be the Directors of the Company. The Board places on its record their sincere gratitude for the valuable guidance and support rendered by them during their tenure.

Smt. Bhanu Kumar, was appointed as Director (Commercial) w.e.f 10.10.2017.

Dr. Promodita Sathish, Economic Advisor, Ministry of Steel and Smt. Ruchika Chaudhry Govil, Joint Secretary, Ministry of Steel, Govt. of India were appointed as Government Nominee Director w.e.f. 15.06.2017 and 11.10.2017 respectively.

Shri G. R. Aloria, Ex Chief Secretary, State Govt. of Gujarat, Dr. T. V. Muralivallabhan, retired academician were appointed as Independent Directors on the Board of the Company w.e.f 06.09.2017.

Dr. R. S. Yeli, retired academician and Smt. Pravati Parida, advocate and social activist were also appointed as Independent Directors on the Board of the Company w.e.f. 09.03.2018.

The Company has received the necessary declaration from all the Independent Directors confirming that they meet the criteria prescribed for Independent Directors under the applicable provisions of the Companies Act, 2013 and rules made thereunder.

MSTC being a Government Company, the appointment and evaluation of directors are done by Administrative Ministry.

A brief profile of the Directors proposed to be appointed at the ensuing AGM is provided in the Corporate Governance report section.

The details of the Key Managerial Personnel of the Company as on the date of this report are as follows;

Related Party Transactions

All Related Party Transactions that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business. Hence, the provision of section 188 in the Companies Act, 2013, as amended are not attracted. Thus disclosures in Form AOC-2 are not required. Further there are no related party transactions with the directors and KMP or other designated persons, which may have a potential conflict with the interest of the Company.

All Related Party Transactions are placed before the Audit Committee for approval.

Corporate Social Responsibility

The Company is seriously committed to social upliftment. In line with the Companies Act, 2013 and also DPE guidelines, the Company has a CSR Committee which functions as per the Govt. guidelines and the Company CSR policy. The CSR Policy of the Company has been approved by the Board and is hosted on the website of the Company.

Annual Report on Corporate Social Responsibility as required under Rule 8 Companies (Corporate Social Responsibility Policy) Rules, 2014 is placed as Annexure IV.

Secretarial Audit

In compliance with Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Shri Saumayo Jyoti Seal, practicing Company Secretary has been appointed as the Secretarial Auditor for the year 2017-18. The Report of the Secretarial Auditor as prescribed is enclosed as Annexure V to this report.

Auditors

Pursuant to Section 139 of the Companies Act, 2013, the Comptroller and Auditor General of India, has appointed M/s. D. K. Chhajer & Co, Chartered Accountants, as Statutory Auditors of the Company for the year 2017-18. The report of the Auditors is attached to the Annual Accounts of the Company. Management replies on the comments/ observations of the Auditors are placed at Annexure VI to the Board’s Report.

Comments by the Comptroller and Auditor General of India (CAG)

The comments of the CAG on the Annual Accounts of the Company in terms of Section 143(6)(b) of the Companies Act, 2013, shall be deemed as part of the Board’s Report.

Number of Meetings of the Board

The Board met five times during the FY 2017-18. The details of the number of the meetings of the Board of Directors held during the year 2017-18 form a part of the Corporate Governance Report.

Disqualification of Directors

Pursuant to Section 164(2) of the Act and Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014, all the Directors have intimated that, they stand free from any disqualification from being a Director.

Notice of Interest by the Directors

Pursuant to Section 184(1) of the Act and Rule 9(1) of the Companies (Meetings of Board and its Powers) Rules, 2014, all the Directors have given Notice of Interest by the Director.

Committees of the Board

MSTC has constituted four committees of the Board viz., Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility (CSR) Committee and Share Transfer Committee.

Audit Committee

The Audit Committee comprises of Shri G. R. Aloria, Independent Director, as Chairman, Dr. T. V. Muralivallabhan, Independent Director and Dr. Promodita Sathish, Govt. nominee Director as members.

Nomination and Remuneration Committee

Pursuant to Section 178 of the Companies Act, 2013, read with Rule 6 of the Companies (Meeting of Board and its Powers) Rules, 2014, the Company is supposed to have a Nomination and Remuneration Committee. Being a Govt. of India Company, the nomination/appointment of Director is made by the Govt. of India. The Nomination and Remuneration Committee constitutes of Shri G. R. Aloria, Independent Director, as Chairman, Dr. T. V. Muralivallabhan, Independent Director and Dr. Promodita Sathish, Govt. nominee Director as members.

Corporate Social Responsibility (CSR) Committee

In compliance of Section 135(1) of the Act, read with Rule 5 of the Companies (CSR Policy) Rules 2014, the Company had constituted the CSR Committee of the Board with Dr. T. V. Muralivallabhan, Independent Director as Chairman, Shri A. K. Basu, Director (Finance) and Dr. Promodita Sathish, Govt. nominee Director as members.

Share Transfer Committee

Constitution of the Stakeholder’s Relationship Committee as provided under Section 178(5) of the Act, do not apply to the Company as the number of shareholders are below one thousand. However, the Share Transfer Committee is in place with Shri A. K. Basu, Director (Finance) and Smt. Bhanu Kumar, Director (Commercial) as members.

Details of the above Committees are provided under corporate governance section forming part of the Board’s Report.

Subsidiary Company and Joint Venture Ferro Scrap Nigam Limited

Ferro Scrap Nigam Limited is the 100% Subsidiary of the Company. The Operational result of two years is given below:

The detailed information relating to the subsidiary Company in form AOC-1 in compliance of Section 129(3) of the Companies Act, read with Rule 5 of Companies (Accounts) Rules forms part of Annual Report.

Mahindra MSTC Recycling Pvt. Ltd

MSTC had entered into JVA with Mahindra Intertrade Limited and formed a Joint Venture Company “Mahindra MSTC Recycling Pvt. Ltd.”.

Consolidated Financial Results

In accordance with the provisions of the Companies Act, 2013 and the Accounting Standards issued by the Institute of Chartered Accountants of India, your Corporation has prepared the Consolidated Financial Statement for the group, including its subsidiary and joint venture and attached with your Companies report.

Material Changes and Commitments, if any, affecting the Financial Position of the Company

There are no material changes and commitments affecting the financial position of the Company that have occurred between the close of the financial year ended 31st March 2018 and the date of Board’s Report.

Details of Significant and material order passed by the Regulators, Courts and Tribunals

No significant and material orders has been passed by the Regulators, Courts and Tribunals impacting the going concern status and the Company’s operation in future.

Particulars of Loans, Guarantees or Investments

Details of loan, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 and Rules made thereunder are given in the notes to the financial statements.

Public Deposits

Your company has not accepted any deposits under the Companies Act, 2013 during the financial year ended 31st March, 2018.

Compliance of DPE Guidelines and Policies

The guidelines and policies issued by the Department of Public Enterprise from time to time are duly complied with by the Company.

Compliance with Secretarial Standards

Your Corporation complies with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

Internal Financial Controls

Your Corporation has put in place adequate internal financial controls for ensuring the efficient conduct of its business in adherence with laid-down policies; the safeguarding of its assets; the prevention and detection of frauds and errors; the accuracy and completeness of the accounting records; and the timely preparation of reliable financial information, which is commensurate with the operations of the Corporation.

M/s. M.C. Bhandari & Co., Chartered Accountants was the Internal Auditor of the Company for the year and their reports are put up to the management at regular intervals and summarized statement of important issues are placed before the Audit Committee.

Acknowledgement

The Board of Directors wish to place on record their gratitude to the Hon’ble Union Minister for Steel, Hon’ble State Minister for Steel, Secretary (Steel), Additional Secretary and FA (Steel), and other officials of the Ministry of Steel, Defence Ministry, Coal Ministry, Mining Ministry, Civil & Aviation, Petroleum, Natural Gas Ministry and various other Central Government Ministries, all State Governments, various Central and State Public Sector Undertakings, private companies, the bankers, our principals and others for their valuable assistance and guidance extended to the Company during the year. The Directors express their gratitude to all stake holders, customers and suppliers for the trust and confidence reposed by them on your Company year after year. Your Directors also place on record the appreciation of the sincere efforts made by the employees which has resulted in excellent performance of the Company.

For & on behalf of the Board of Directors

(B.B. Singh)

Chairman-cum-Managing Director