The Directors have pleasure in presenting the 23rd Annual Report of SARTHAK METALS LIMITED along with the Audited Financial Statements for the year ended 31st March 2018.

FINANCIAL SUMMARY/HIGHLIGHTS

Our Company’s financial performance for the year under review has been encouraging and is summarized below:

(In lakhs)

PERFORMANCE REVIEW

Iron & Steel sector has seen positive results in the past financial year after many years of poor performance. This is mainly due to two reasons, first being higher budget allocation by Central Government on infrastructure expenditure and measures to stop cheap steel imports from China. Overall it has been a good year for your company. Our revenues have increased by 12.4% and EBIDTA increased by 16.7%. Earnings per share have also increased by 20%. The growth has been steady despite many other players entering the market. We have been able to show good performance due to our client’s trust in our product and their readiness to pay a premium for the same.

DIVIDEND

In order to conserve resources for future growth and business expansion, your directors do not recommend any dividend for the Financial Year 2017-18.

RESERVES

The Company has transferred the whole amount of Profit to Reserve & Surplus Account as per attached audited Balance Sheet for the year ended on 31st March 2018

SHARE CAPITAL

The Paid-up Equity share capital of the Company as on 1st April, 2017 was Rs. 13,68,97,500 divided into 1,36,89,750 Equity Shares of Rs 10/- each. No change was made during the year. The equity share capital thus, as on 31/03/2018 was Rs. 13,68,97,500.

EXTRACT OF THE ANNUAL RETURN

The extract of the annual return in Form No. MGT - 9 is attached in Annexure A appended to the Director’s Report.

CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL

The composition of the Board is as per the Listing Regulations and provisions of the Companies Act, 2013. There was no change in the composition of the Board during the year under review.

Presently, the composition of the Board is six Directors, led by Chairman and Managing Director with two Whole- Time Director, two Non- Executive Independent Director and one Non- Executive Non- Independent Director.

In accordance with the provisions of Companies Act, 2013, Mr. Kishore Kumar Bansal, Director of the Company, retires by rotation at the ensuing Annual General Meeting and offers himself for re-appointment.

MANAGEMENT DISCUSSION AND ANALYSIS:

As required by Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 a Management Discussion & Analysis Report forms part of the Annual Report.

REPORT ON CORPORATE GOVERNANCE:

Sarthak Metals Limited is listed on SME Exchange of BSE, the requirement of Corporate Governance as notified in Regulation 15 (2) of the SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015 not applicable; therefore it is not required to maintain Corporate Governance Report.

DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received declarations from all the Independent Directors of the Company under Section 149 (7) of Companies Act, 2013 confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Regulation 16 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

PERFORMANCE EVALUATIONOF BOARD, COMMITTEES & INDIVIDUAL DIRECTOR

A formal evaluation of the performance of the Board, its Committees, the Chairman and the individual Directors was led by Nomination & Remuneration Committee, the evaluation was done using individual interviews covering amongst other vision, strategy and role clarity of the Board. Board dynamic and processes, contribution towards development of the strategy, risk management, budgetary controls, receipt of regular inputs and information, functioning, performance & structure of Board Committees, ethics & values, skill set, knowledge & expertise of Directors, leadership etc.

As part of the evaluation process the performance of non- independent Directors, the Chairman and the Board was done by the Independent Directors. The performance evaluation of the respective Committees and that of independent and non-independent Directors was done by the Board excluding the Director being evaluated. The Directors expressed satisfaction with the evaluation process.

FAMILIARISATION PROGRAMMES FOR BOARD MEMBERS:

The Board members are provided with brochures, reports and internal policies to enable them to familiarize with the Company’s procedures and practices. The Chairman and Managing Director had one to one discussions with newly appointed Directors to familiarize them with the Company’s operations. Periodic presentations are made at the Board and Board Committee Meetings, on business and performance updates of the Company, global business environment, business strategy and risks involved. Quarterly updates on relevant statutory and regulatory changes are circulated to the Directors. Site visits to various plant locations are organized for the Directors to enable them to understand the operations of the Company.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors duly met 6 (Six) times in financial year 31st March, 2018 and as per section 173 of the Companies Act the time gap between any two Meetings has not been more than one hundred and twenty days. The dates on which the Board Meetings were held are 15th April, 2017, 29th May, 2017, 23rd June, 2017, 12th September, 2017, 15th November, 2017 and 9th March, 2018.

The name and category of Directors on the Board, their attendance at the Board Meetings held during the year and also at the Annual General Meeting, the member of Directorships and Committee Memberships and Chairpersonships held by them in other companies as on 31st March, 2018 are given below.

^Represents Memberships/Chairpersonships of Audit Committee & Stakeholders’ Relationship Committee of public companies only.

"Designates as a Woman Director on Board.

As per the disclosure received, none of the Directors of your Company hold memberships/Chairmanships more than the prescribed limits across all companies in which he/she is a Director.

MEETINGS OF INDEPENDENT DIRECTORS:

The Company’s Independent Directors shall meet at least once in every financial year without the presence of Executive Directors or management personnel. Such meetings are conducted informally to enable Independent Directors to discuss matters pertaining to (i) review the performance of Non-Independent Directors and the Board as a whole, (ii) review the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors; and (iii) to assess the quality, quantity and timeliness of flow of information between the Company Management and the Board.

COMMITTEES OF THE BOARD OF DIRECTORS

In compliance with the requirement of applicable laws and as part of the best governance practice, the Board has constituted various Committees of its members. These Committees hold meetings at such frequencies as is deemed necessary by them to effectively undertake and deliver upon the responsibilities and tasks assigned to them. Minutes of the meetings of each of these Committees are tabled regularly at the Board Meetings.

Your Company currently has 4 (Four) Committees viz:

(a) AUDIT COMMITTEE

The Company has formed a qualified and Independent Audit Committee which acts as a link between the Statutory and Internal Auditors and the Board of Directors. The terms of reference of the Audit Committee cover the matters specified for Audit Committee in the SEBI Listing Regulations and Section 177 of the Companies Act, 2013.

As on 31st March, 2018, the Audit Committee comprises of the following members-

1. Mr. Chetan Kumar Chairman

2. Ms. Rama Kohli Member

3. Mr. Kishore Kumar Bansal Member

The Committee met 4 times during the year on 29th May, 2017, 23rd June, 2017 and 15th November 2017 and the attendance of Members at the Meetings.

The Company Secretary of the Company is the Secretary of the Committee.

The Chairman of the Audit Committee of the Company was present at the last Annual General Meeting of the Company held on 1st August, 2017.

(b) NOMINATION & REMUNERATION COMMITTEE

In compliance with Section 178 of the Companies Act, 2013 and SEBI Listing Regulations, a Nomination & Remuneration Committee of the Company has been constituted.

As on 31st March, 2018, the Nomination and Remuneration Committee comprises of the following members-

1. Mr. Chetan Kumar Chairman

2. Ms. Rama Kohli Member

3. Mr. Kishore Kumar Bansal Member

The Committee met 1 time during the year on 15th April, 2017 and the attendance of Members at the Meetings is as follows:

(c) STAKEHOLDERS RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee is constituted according to Section 178 of the Companies Act, 2013 and SEBI Listing Regulations. The Committee ensures cordial investor relations and overseas the mechanism for redressal of investor grievances. The Committee specifically looks into redressing shareholders and investor complaints/ grievances pertaining to share transfers, non- receipts of annual reports, non- receipt of dividend and other allied complaints.

As on 31st March, 2018, the Stakeholders Relationship Committee comprises of the following members-

1. Mr. Chetan Kumar Chairman

2. Ms. Rama Kohli Member

3. Mr. Kishore Kumar Bansal Member

During the period under review, Company has not received any complaint from shareholders. There is no outstanding complaint as on 31st March, 2018.

The Company Secretary of the Company also acts as Compliance Officer of the Company.

(d) CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

In compliance with provision of the Companies Act, 2013 and SEBI Listing Regulations, a Corporate Social Responsibility Committee of the Company has been constituted.

As on 31st March, 2018, the Corporate Social Responsibility Committee comprises of the following members-

1. Mr. Chetan Kumar Chairman

2. Ms. Rama Kohli Member

3. Mr. Kishore Kumar Bansal Member

The Committee met 2 times during the year on 29th May, 2017 and 15th November, 2017 and the attendance of Members at the Meetings is as follows:

NOMINATION & REMUNERATION POLICY OF THE COMPANY:

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.

The Company’s remuneration policy is directed towards rewarding performance based on review of achievements periodically. The remuneration policy is in consonance with the existing industry practice. Extract of Remuneration Policy from Nomination and Remuneration policy is attached as Annexure-A

ANALYSIS OF REMUNERATION

The details of remuneration paid to Directors and Key Managerial Personnel is given in extract of Annual return attached with this report.

Disclosure/details pursuant to provisions of Section 197 (12) of the Companies Act 2013 read with the Companies (Appointment and Remuneration of managerial personnel) Rules, 2014 are given as follows:

The median remuneration of employees of the Company during the financial year was Rs. 1,11,091.72 p.a. Please note that only those persons who were employees as on 31st March 2018 have been considered for the calculation of the median salary. Further, no bonus payments have been considered for these calculations.

PARTICULARS OF EMPLOYEES

None of the employees of the Company is drawing remuneration, requiring disclosure of information under section 134 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014

REGULATORY ORDERS

During the year there was no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

WHISTLE BLOWER POLICY:

Pursuant to the Section 177(9) and (10) of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated Whistle Blower Policy for vigil mechanism for Directors and Employees to report the management about the unethical behavior, fraud, improper practice or violation of the Company’s Code of Conduct or complaints regarding accounting, auditing, internal controls or disclosure practices of the Company. It gives a platform to the whistle blower to report any unethical or improper practice (not necessarily violation of law) and to define processes for receiving and investigating complaints. The mechanism provides adequate safeguards against victimization of employees and directors who use such mechanism and makes provision for direct access to the Chairman of the Audit Committee in exceptional cases.

STATUTORY AUDITORS

In accordance with the provisions of Section 139 & 142 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, as amended from time to time and such other applicable provisions, M/s Begani & Begani, (FRN-010779C), Statutory Audit Firm were appointed as Auditors of the Company to hold office from the conclusion of 22nd Annual General Meeting ('AGM') till the conclusion of the 27th AGM to 2022, at such remuneration including applicable taxes, as may be mutually agreed between the Board of Directors of the Company and the Auditors.

AUDITORS' REPORT

The Board has duly reviewed the Statutory Auditor’s Report on the Accounts. The observations comments and notes of Auditor are self-explanatory and do not call for any further explanation/clarification

COST AUDITOR- NOT APPLICABLE

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of Companies Act, 2013 and the rules made thereunder, the Company has appointed M/s NILESH A. PRADHAN & CO. Practicing Company Secretary (COP. No. 3659) to undertake the Secretarial Audit of the Company for the 31st, March, 2018.

The Secretarial Audit Report for the financial year ended 31st March 2018 is included as Annexure MR-3 and forms an integral part of this report.

Responses of your Directors on the observations made by the Secretarial Auditor are as follows:-

Response to point No. 1

The Company has submitted the Annual Report to the Stock Exchange BEFORE DUE DATE i.e. as mentioned in Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Annual Report is available on BSE website, but advertently, it was uploaded before the prescribed due date. The company will take care of it next time and will file to BSE on time after Annual General Meeting.

Response to point No.2

There was 1 day delay in the Board Meeting for the quarter ended 30th September 2017, it was held on 15th November, 2017 instead of 14th November, 2017. This delay occurred inadvertently due to some miscalculation in estimating the number of days. The management ensures to take care of it in future.

Response to point No.3

The Company has transferred the Dividend declared on 1st August , 2017 for the year ended 31.03.2017 to the separate bank account as per the provisions section 123 of the Companies Act, 2013 on 8th August, 2017, since there were two holidays in between.

Response to point No.4

This delay occurred as there are various Bank formalities to open Bank account with the name of Unpaid Dividend Account- Sarthak Metals Limited in Bhilai (Remote Area). The management is working on it and will take care of it in future.

DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES

The Company does not have any Subsidiary Company or Joint Venture Company or Associate Company.

CORPORATE SOCIAL RESPONSIBILITY

The details of the Corporate Social Responsibility Policy framed and activities carried out thereunder are required to be disclosed in the format prescribed under Companies (Corporate Social Responsibility Policy) Rules, 2014 is given as Annexure-B.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

There are no Loans, Investments or Guarantees/Security given by the Company during the year under section 186 of the Companies Act, 2013; hence no particulars are required to be given.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All transactions entered into with the Related Parties as defined under the Companies Act, 2013 and ordinary course of business and on an arm’s length pricing basis. There were no materially significant transactions with related parties during the financial year which were in conflict with the interest of the Company.

Kindly note that the format for disclosures of transactions with related party are mentioned in Annexure AOC-2.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

Management does not perceive any material changes occurred subsequent to the close of the financial year as on 31st March, 2018 before the date of report dated 1ST August, 2018, affecting the financial position of the Company in any substantial manner.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

(A) Particulars relating to conservation of energy and technology absorption stipulated in the Companies (Accounts) Rules, 2014 are not applicable. The Company is not energy intensive. Further, the Company’s technology is indigenously developed and being constantly upgraded based on earnings of the promoters and employees.

(B) Foreign exchange earnings and Outgo:

PUBLIC DEPOSITS

Your Company has not accepted, invited and/or received any deposits from public within the meaning of section 73 & 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposit) Rules, 2014, as amended from time to time during the year under review.

ISSUE OF EQUITY SHARES WITH DIFFERENTIAL VOTING RIGHTS/SWEAT EQUITY SHARES/ EMPLOYEE STOCK OPTION SCHEME

At the beginning of the year, there were no Equity shares with differential voting rights or sweat equity shares or employee stock option scheme outstanding.

During the year, the Company has not issued any equity shares with differential voting rights or sweat equity shares or shares under employee stock option scheme. Hence, disclosures regarding the same are not required to be given.

DISCLOSURE ON COST RECORDS MAINTENANANCE

The provisions with respect to maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is not applicable to the Company.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has proper and adequate system of internal controls to ensure that all the assets are safeguarded and protected against losses from unauthorized use or disposition and that transactions are authorized, recorded and reported correctly. The Company has an effective system in place for achieving efficiency in operations, optimum and effective utilization of resources, monitoring thereof and compliance with applicable laws. The auditors have also expressed their satisfaction on the adequacy of the internal control systems incorporated by your company.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PR OHIBITION AND REDRESSAL) ACT, 2013:

The Company has in place a policy on Prevention, Prohibition and Redressal of Sexual Harassment at workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has complied with setting up of an Internal Complaints Committee (ICC) to redress complaints received regarding sexual harassment. The policy has set guidelines on the redressal and enquiry process that is to be followed by complainants and the ICC, whilst dealing with issues related to sexual harassment at the work place. All women employees (permanent, temporary, contractual and trainees) are covered under this policy. The Company has not received any complaints during the year.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(5) of the Companies Act, 2013, with respect to the Director’s Responsibilities Statement, the Directors state and hereby confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) 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 at the end of the financial year and of the profit and loss of the company for that period;

(c) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

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

(e) 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.

ACKNOWLEDGMENTS:

The Board of Directors wish to place on record its appreciation for the commitment, dedication and hard work done by the employees of the Company and the cooperation extended by Banks, Government Authorities, Customers, Shareholders and looks forward to a continued mutual support and co-operation.

FOR SARTHAK METALS LIMITED

Sd/-

(ANOOP KUMAR BANSAL)

(DIN No. 01661844)

Chairman & Managing Director

Place: Bhilai, Chhattisgarh

Date: 01.08.2018