To

The Members

Mideast Integrated Steels Limited

The Directors are pleased to present 25^th Annual Report and the Statements of Accounts for the financial year ended on March 31, 2018.

1. FINANCIAL RESULTS

The Company’s financial performance for the year ended March 31, 2018 along with previous year’s figures is given hereunder:

(Rs. in Mn)

2. FINANCIAL PERFORMANCE HIGHLIGHTS

Standalone Operations:

- Revenue from operations for the year increased by 122% to Rs. 6302.31 Million from Rs. 2835.44 achieved during previous financial year.

- EBITDA for the year increased by 83.23% to Rs. 1688.90 Million as compared to EBITDA of Rs. 1039.68 Million achieved in previous financial year.

- Profit after tax increased to Rs. 232.92 Million as compared Rs. 140.34 Million in previous financial year.

Consolidated Operations:

- Revenue from operations for the year increased by 47.41% to Rs. 0080.11 Million from Rs. 7326.54 during the previous financial year;

- EBITDA for the year increased by 52.45% to Rs. 1985.70 Million as compared to EBITDA of Rs. 1302.52 Million achieved during previous financial year.

- Due to increase in finance cost Loss after tax increased by 11.60% to Rs. (644.80) Million as compared to Loss of Rs. (577.79) Million achieved during previous financial year.

3. COMPANY’S WORKING DURING THE YEAR/ STATE OF COMPANY’S AFFAIRS

In financial year 2018, Gross Sales increased by 122% to Rs. 6302.31 Million from Rs. 2835.44 in financial year 2017. Company’s continuous focus on improving operational efficiencies helped in maintaining EBIDTA level. Growth in sales is mainly driven by restart of production and sale of pig iron. Company’s Profit after Tax increased to Rs. 232.92 Million during the period under review as compared to Rs. 140.34 Million during previous year.

4. CHANGE IN NATURE OF BUSINESS

During the year under review, there were no change in the nature of the business of the Company.

5. TRANSFER TO RESERVES

The Company has not transferred any amount to General Reserves during the Year.

6. DIVIDEND

Due to inadequate profit during the financial year ended March 31, 2018, your Directors have not recommended any dividend for the financial year ended March 31, 2018.

7. PUBLIC DEPOSITS

The Company has not accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

8. MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to regulations 34 of the Listing Regulations, Management’s Discussion and Analysis Report for the year is presented in a separate section forming part of the Annual Report.

6. SHARE CAPITAL

During the year under review, there was no change in the Company’s issued, subscribed and paid-up equity share capital. On March 31, 2018, it stood at Rs. 1378.75 Million divided into 13,78,75,000 equity shares of Rs. 10/- each. The Company has neither issued shares with differential rights as to dividend, voting or otherwise nor issued shares (including sweat equity shares) to the employees or Directors of the Company, under any Scheme. No disclosure is required under Section 67(3)(c) of Companies Act, 2013 in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said Section are not applicable

7. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts)Rules, 2014, is annexed herewith as Annexure-A

8. SUBSIDIARIES, ASSOCIATE AND JOINT VENTURE COMPANIES & CONSOLIDATED FINANCIAL STATEMENTS

During the year under review, the Company has only 1 subsidiary i.e. Maithan Ispat Limited material unlisted subsidiary. Pursuant to Section 129(3) of the Companies Act, 2013 and Accounting Standard issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the Financial Statements of its Subsidiary. Consolidated Financial Statements form part of this Annual Report. Statement containing the salient feature of the financial statement of the Company’s subsidiaries in Form AOC-1 is enclosed as Annexure-B.

In terms of provisions of Section 136 of the Companies Act, 2013, the Company shall place separate audited accounts of the Subsidiary Companies on its website at www.mescosteel.com.

9. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review, the Company entered into contracts or arrangements with related parties which were in the ordinary course of business and on arm’s length basis. All related party transactions are placed before the Audit Committee for review on a quarterly basis. The details of the related party transactions as required under Accounting Standard are set out in Notes to the standalone financial statements forming part of this Annual Report.

No transaction with the related party is material in nature except transaction which was approved by Shareholders at 24th Annual General Meeting held on September 27, 2017, in accordance with Company’s Related Party Transaction Policy and Regulation 23 of LODR Regulations.

As required under Regulation 46 (2) (g) of LODR, the Related Party Transaction Policy and Company’s Material Subsidiary Policy is disclosed in the Company’s website i.e. www.mescosteel.com

The details of the related party transactions as required under Section 134(3)(h) r/w Rule 8 (2) of the Companies (Accounts) Rules, 2014 and under Regulation 34(3),Para A of Schedule V of SEBI(LODR) Regulations, 2015 is as per Form AOC 2 is enclosed as Annexure - C.

10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Details of Loans, Guarantees and Investments covered under the provision of the Section 186 of the Companies Act,2013 are given in the notes of Financial Statements.

11. PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided as Annexure D to this report.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits setout in the said rules forms part of this Annual Report and is attached as Annexure-D.

12. DIRECTORS OR KEY MANAGERIAL PERSONNEL

During the year under review, the shareholder of the Company in their AGM held on September 27, 2017 has reappointed Smt. Rita Singh as Chairperson and Managing Director of the Company for a period of 5 years with effect from August 1, 2017, Mrs. Natasha Sinha has been reappointed as Whole-time Director for a period of 5 years with effect from April 1, 2017, Mr. Priyabrata Patnaik has been appointed as whole time director with effect from August 1, 2017 for a period of 5 years and Mr. Hanumantha Rao Ravipati has been re-appointed as Whole Time Director for a period of 3 years with effect from September 30, 2017.

During the year under review Mr. Priyabrata Patnaik (DIN:01709955) resigned as whole time director of the Company with effect from afternoon of February 28, 2018 and Mr. Hanumantha Rao Ravipati (DIN:00044028), Whole Time Director resigned with effect from the close of business hours of March 31, 2018. The Board of Directors records their appreciation for the services rendered by both Mr. Priyabrata Patnaik and Mr. Hanumantha Rao Ravipati.

In accordance with the provisions of the Companies Act,2013 and Articles of Association of the Company, Mrs. Natasha Sinha, Whole time director retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for reappointment.

Pursuant to Rule 8 (5) (iii) of Companies (Accounts) Rules, 2014 it is reported that, there have been no changes in the Directors or Key Managerial Personnel during the year. However Mr. Sharanappa Neelappa Kambalii has been appointed as Chief Executive Officer of the Company with effect from June 9, 2018

Further the Board of Directors vide circulation appointed Mr. Sharanappa Neelappa Kambalii as Non-Executive Additional Director with effect from July19, 2018. He being eligible offers herself for reappointment at the ensuing Annual General Meeting.

13. DECLARATION OF INDEPENDENCE

The Company has received necessary declaration from each Independent Director under section 149(7) of the Companies Act, 2013 that they meet the criteria of independence laid down in section 149(6) of the Companies Act, 2013 and Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

14. PERFORMANCE EVALUATION

During the year, the evaluation of the annual performance of individual directors including the Chairman of the Company and Independent Directors, Board and Committees of the Board was carried out under the provisions of the Act and relevant Rules and the Corporate Governance requirements as prescribed under Regulation 17 of Listing Regulations, 2015 and the circular issued by SEBI with respect to Guidance Note on Board Evaluation from time to time.

In a separate meeting of Independent Directors,performance of Non Independent Directors and performance of the Board as a whole was evaluated. Further, they also evaluated the performance of the Chairman of the Company,taking into account the views of the Executive Directors and Non-executive Directors.

15. NUMBER OF MEETINGS OF THE BOARD

During the financial year 2017-18, the Board of Directors of the Company, met 4 times i.e. on May 27, 2017, August 8, 2017, November 14, 2017 and February 14, 2018. The gap between two consecutive meetings did not exceed one hundred twenty days. Further, a separate Meeting of the Independent Directors of the Company was also held on February 14, 2018.

16. AUDIT COMMITTEE

The Audit Committee Comprises of Five Independent Directors and a Whole Time Director as Members. 4 (Four) meetings were held during the financial year under review. All the recommendations made by the Audit Committee have been accepted and implemented by the Board of Directors. More details on the committee are given in the Corporate Governance Report.

17. STAKEHOLDERS RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee Comprises of 2 Independent Directors and a Whole Time Director as Members. 4 (Four) meetings were held during the financial year under review. More details on the committee are given in the Corporate Governance Report.

18. NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee Comprises of 3 Independent Directors as Members. Nomeeting were held during the financial year under review. More details on the committee are given in the Corporate Governance Report.

19. NOMINATION AND REMUNERATION POLICY

Company’s Policy on Directors Appointment and Remuneration including criteria for determining qualification, positive attributes, independence of directors and other matters provided under section 178(3) of the Companies Act, 2013 there has been no change in the Policy since the last Financial Year. Given below is the link on the website of company where in complete policy is placed http://www.mescosteel.com/admin/investor/Nomination%20 and%20 Remuneration%20 Policy.pdf

20. RISK MANAGEMENT POLICY

The Board of Directors has constituted a Risk Management Committee which is entrusted with the responsibility of overseeing various strategic, operational and financial risks that the Organisation faces, along with the adequacy of mitigation plans to address such risks. There is an overarching Risk Management Policy in place that was reviewed and approved by the Board.

21. WHISTLE BLOWER POLICY AND VIGIL MECHANISM

Your Company recognizes the value of transparency and accountability in its administrative and management practices. The Company promotes the ethical behavior in all its business activities. The Company has adopted the Whistle blower Policy and Vigil Mechanism in view to provide a mechanism for the directors and employees of the Company to approach Audit Committee of the Company to report existing/ probable violations of laws, rules, regulations or unethical conduct.The Whistle Blower Policy has been posted on the website of the Company (www.mescosteel.com)

22. DISCLOSURE AS PER THE SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has adopted a policy on prevention,prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. During the financial year ended March 31, 2018 no complaint pertaining to sexual harassment was received by the Company. Further company confirms that the company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

22. AUDITORS

a. Statutory Auditors

M/s. Todarwal & Todarwal LLP has tendered their resignation to discontinue as the Statutory Auditor of the Company for the further remaining terms of their period i.e. from April 1, 2018 tills March 31, 2022 due to change in constitution of their firm.

Hence, in order to fill up the casual vacancy the Company has appointed M/s. Arun Todarwal & Associates LLP in the Board Meeting held on August 13, 2018. The office of /s. Arun Todarwal & Associates., Chartered Accountants, are to be confirmed by the members in the ensuing Annual General Meeting, Further, their appointment shall be for the remaining period tenure of 4 (Four) years, subject to the approval of members in the ensuing Annual General Meeting. There are no qualifications or reservation made by the Auditors in their Report. The observations of Statutory Auditors in their reports on standalone and consolidated financials are self-explanatory and therefore do not call for any further comments.

b. Cost Auditor

The Board of Directors on the recommendation of the Audit Committee has appointed M/s. S.S. Sonthalia & Company (Firm Regn. No. 00167), Cost Accountants for auditing the cost records of the Company for the Financial Year 2018-19.

In terms of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules 2014,appropriate resolution seeking your ratification of the remuneration of M/s M/s. Sonthalia & Company, (Firm Regn. No. 00167), Cost Accountants, as Cost Auditors, is included in the Notice convening the 37th AGM of the Company.

c. Secretarial Auditor

During the year under review, Mr. Robinderpal Singh Batth, Practicing Company Secretary (Certificate of Practice No.3836), who was appointed as the Secretarial Auditor of the Company has issued the audit report in respect of the secretarial audit of the Company for the financial year ended March 31, 2018. The Secretarial Audit Report is annexed as Annexure-E to this Report. Given Below is the management reply on the observations made by the Secretarial Auditor in their Report.

Observation:

In terms of Securities and Exchange Board of India Circular No. Cir/ISD/3/2011, the 100% Promoter’s holding is to be in dematerialized form. Promoter holding is not in 100% Demat form.

Management’s Reply:

Company is in receipt of declaration from promoters that the shares which are not in demat form are pending adjudication of dispute before judicial/ quasi-judicial authorities and same would be dematted once the dispute is resolved/settled”

d. Internal Auditors

Pursuant to the provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of The Companies (Accounts) Rules 2014 and based on the Audit Committee recommendations, the Board of Directors of the Company have appointed of M/s. SRB & Co., Chartered Accountants, as the Internal Auditor of the Company for the financial year 2017-18.

22. CORPORATE SOCIAL RESPONSIBILITY

The CSR Committee consists of three directors including two Independent Director. The CSR Committee has formulated a CSR policy of the Company for undertaking the activities as specified in Schedule VII of the Companies Act, 2013. The Said policy has been approved and adopted by the Board of directors of the Company, the contents of which have been displayed on the Company’s website. (Weblink: www.mescosteel.com).The Annual Report on CSR activities initiated and undertaken by the Company during the year under review is annexed herewith as an Annexure-F

23. ANNUAL RETURN

Given is the weblink www.mescosteel.com/admin/investor/2017-18.pdf where annual return referred to in sub-section (3) of section 92 has been placed.

24. CORPORATE GOVERNANCE

Report on Corporate Governance and Certificate of Practicing Company Secretary regarding compliance of the conditions of Corporate Governance as stipulated in Part Cof Schedule V of the SEBI (LODR) Regulations, 2015 are enclosed as part of this report.

25. INTERNAL FINANCIAL CONTROLS

Details of internal financial control and its adequacy in compliance with the provisions of Rule 8 (5)(viii) of Companies (Accounts) Rules, 2014 are included in the Management Discussion and Analysis Report, which forms part of this Report.

26. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were no material changes and commitments affecting the financial position of the Company between the end ofthe financial year of the Company to which the financial statements relate and the date of the report and the date of this Report except to the extent disclosed below.

- During the year under review the Hon’ble Supreme Court vide judgment dated August 2, 2017 in Common Cause vs Union of India & Ors., Writ Petition No. 114 of 2014 upheld the calculation made by Central Empowered Committee (“CEC”) and had directed all the mine lease holders to pay the entire amount by December 31, 2017, failing which the mining operations of the mine lease holders will be closed by the State of Odisha. As per this judgment our Company had come under the violation of production in excess of environmental clearances and as per the CEC calculations had to pay approximately Rs. 925 Crores.

- Our Company’s equity shares got listed with Bombay Stock Exchange Limited (BSE) vide BSE trading approval dated October 16, 2017 and trading on shares started with effect from October 18, 2017.

- Mining operations of Mideast Integrated Steels Limited (herein after referred to “MISL”) mines situated at Roida-I has been closed from December 31, 2017 till the time company makes the payment of the compensation as passed in the order dated August 2, 2017 passed by the Hon’ble Supreme Court in Common Cause Vs Union of India & Ors., Writ Petition No. 114 of 2014 due to non payment of aforesaid compensation amount.

- During the year under review, company has infused Rs. 225.00 Million by acquiring 2,25,00,000 equity shares having face value of Rs. 10 each.

26. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE

There are no significant and material orders passed by the regulators or courts or tribunals which impact the going concern status and Company’s operations in future except to the extent disclosed regarding Supreme Court judgment dated August 2, 2017 in Common Cause vs Union of India & Ors., Writ Petition No. 114 of 2014 as detailed above

27. GENERAL DISCLOSURE

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

a) Issue of equity shares with differential rights as to dividend, voting or otherwise.

b) Issue of shares (including sweat equity shares) to employees of the Company under any Scheme or ESOS.

c) We further confirm that maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is required by the Company and accordingly such accounts and records are made and maintained.

28. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134(3)(c) and 134(5) of the Companies Act, 2013, with respect to Directors’ Responsibility Statement, your Directors confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed with no material departures;

b. they 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/loss of the Company for the same period;

c. they 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;

d. they have prepared the annual accounts on a going concern basis;

e. they have laid down internal financial controls in the Company that are adequate and are operating effectively; and

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that these are adequate and are operating effectively.

29. COMPLIANCES WITH SECRETARIAL STANDARDS

During the year, the Company is in compliance of both erstwhile and revised Secretarial Standard -1(Meetings of the Board of Directors), Secretarial Standard-2 (General Meetings) effective from 1st October, 2017.

28. ACKNOWLEDGEMENTS

The Board expresses its sincere gratitude to the shareholders, bankers/lenders, Investors, vendors, State and Central Government authorities and the valued customers for their continued support. The Board also wholeheartedly acknowledges and appreciates the dedicated efforts and commitment of all employees of the Company.

By order of the Board

For and on behalf of Mideast Integrated Steels Limited

Rita Singh

New Delhi Chairperson Cum Managing Director

August 13, 2018 DIN: 00082263