To

SATHAVAHANA ISPAT LIMITED,

The Resolution Professional presents to the Members the 32'^J Annual Report of the Company for the year ended 3 f March, 2021, which includes the Directors' Report ("Annual Report'').

FINANCIAL RESULTS:

Your Board of Directors report the following financial results for the year 2020-21:

(Rupees in Lakhs)

The performance during the year was impacted adversely due to factors beyond the control of the Company. The performance suffered due to working capital constraints and the consequent financial stress which resulted in underutilization of capacities.

The gross revenue of Rs. 2676.09 Lacs is lower as compared to previous year's revenue of Rs. 27289.63 Lacs. The year ended with loss before tax of Rs. 32600.37 Lacs as against loss before tax of Rs. 31076.10 Lacs in the previous year. During the year, in the absence of reasonable certainty deferred tax asset on account of unabsorbed depreciation and business loss and others amounting to Rs. 13225.16 Lacs as against previous year's amount of Rs. 11843.44 Lacs has been recognized to the extent it can be realised fully against deferred tax liability. Accordingly, the tax impact is nil in both current and previous years. The year ended with net loss aftertax of Rs. 32600.37 as against net loss aftertax of Rs. 31076.10 in the year before. Accordingly, the loss per share accounted for at Rs. 64.05 as compared to loss per share of Rs. 61.05 in the previous year.

INITIATION OF CORPORATE INSOLVENCY RESOLUTION PROCESS (CIRP)

National Company Law Tribunal (NCLT) has initiated Corporate Insolvency Resolution Process (CIRP) in respect of Sathavahana Ispat Limited ("the Company") under the provisions of the Insolvency and Bankruptcy Code, 2016 ("the Code") with effect from 28"' July, 2021.

In this connection, Mr. GollaRamaKantha Rao (IP Registration No. IBBI/IPA-003/IP-N000310/2020-21/13364) has been appointed as an Interim Resolution Professional (IRP) to carry outthe activities relating to CIRP as perthe rules, regulations and guidelines prescribed by the Code.

The Committee of Creditors ('COC') in its first meeting held on 31/08/2021 appointed Mr. Bhuvan Madan (IBBI/IPA-001/IP-P01004/2017-2018/11655)as Resolution Professional (RP) pursuant to an order of the Honorable National Company Law Tribunal; Hyderabad Bench ('NCLT') dated 08'" September, 2021 to carry out the activities relating to CIRPas per the rules, regulations and guidelines prescribed by the Code.

During this period, the NCLT has prescribed moratorium period for prohibiting all of the following namely:

I. The institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority.

II. Transferring, encumbering, alienating, or disposing of by the corporate debtor any of its assets or any legal right or beneficial interesttherein.

III. Any action to foreclose recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the securitization and reconstruction of financial assets and enforcementofsecurityinterestact,2002.

IV. The recovery of any property by owner or lessor where such property is occupied by or in the possession of the corporate debtor.

As per Section 17 of the Insolvency and Bankruptcy Code from the date of appointment of the interim Resolution Professional -

a) the management affairs of the company shall vest in the resolution professional.

b) the power of the board of directors company shall stand suspended and be exercised by the Resolution Professional.

c) the officers and managers of the company shall report to the resolution professional and provide access to such documents and records of the company as maybe required by the interim resolution professional.

d) the financial institutions maintaining accounts of the company shall act on the instructions of the interim resolution professional in relating to such accounts furnish all information relating to the company available with them to the Resolution Professional.

CHANGE IN THE NATURE OF BUSINESS:

There is no change in the nature of business during the Financial Year 2020-21

DIVIDEND AND GENERAL RESERVE:

Your Company has not recommended any dividend for the year 2020-21 due to loss incurred during the year and carry forward loss from earlier years. Company cannot declare dividend until the carryforward loss is fully set off against the profits as provided in the Companies Act, 2013.

Your Company also has not proposed to transfer any amount to General Reserve in view of the carry forward loss.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 with respect to Directors' Responsibility Statement, your Directors hereby state and confirm that: ^I)

I) In the preparation of Annual Accounts for the Financial Year 2020-21 the applicable Indian Accounting Standards (Ind-As) had been followed with proper explanation relating to material departures;

ii) The Accounting Policies selected were applied consistently and the judgements and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^a March 2021 and of the Loss of the Company for the year ended on that date;

iii) Proper and sufficient care has been taken 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) The Annual Accounts have been prepared on a going concern basis;

v) Internal financial controls to be followed by the Company have been laid down and that such Internal Financial Controls are adequate and were operating effectively; and

vi) Proper systems had been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDIT COMMITTEE:

The Audit Committee is duly constituted as perthe provisions of the Act, applicable Rules framed the reunder read with the listing regulations. The primary objective of the committee is monitoring and supervising the Management's financial reporting process to ensure accurate and timely disclosures with highest levels of transparency, integrity and quality of financial reporting.

Committee comprises of Chairman - Shri K. Thanu Pillai, Independent Director and two other Independent Director members -Shri Syed Anis Hussain, and Shri S.N.Rao. The Committee met 4(four) times during the year. Details of terms of reference of the Committee, number and dates of meetings held and attendance of Members dunng the year are part of the Corporate Governance Report.

The Committee met 4(four) times during the year. Details of terms of reference of the Committee, number and dates of meetings held and attendance of Members during the year are part of the Corporate Governance Report.

The Audit Committee at its meeting held on 30"¹ June 2021 has considered and approved the Audited Accounts of the Company for the financial year ended 31'¹ March 2021.

CORPORATE GOVERNANCE:

Pursuant to Listing Regulations 2015 the Company is required to comply with the Code of Corporate Governance for the financial year under review. Accordingly, the Reports on Corporate Governance and Management Discussion and Analysis together with Auditors' Report on compliance of Code of Corporate Governance are attached to this Report and forms part of the Annual Report. These Reports are to be read in conjunction with this Directors' Report.

Policy on selection and appointment of Directors, Composition and category of Directors, attendance of each Director at meetings, Number of other Directorships held byeach Director, Number of Board meetings held and dates on which held, Board meetings process, familiarisation programme of each Independent Directors, Board's evaluation process are discussed in the Report on Corporate Governance which forms part of this Report.

DECLARATION GIVEN BY INDEPENDENT DIRECTORS:

The Board of Directors confirms that based on the declarations given by all the Independent Directors in pursuance of provisions of Section 149(7) of the Companies Act 2013, all the independent Directors meet the criteria of independence as provided in Section 149(6) of the CompaniesAct2013.

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURINGTHEYEAR:

During the year Smt. G. Pushkarini, has been appointed as Company Secretary & Compliance officer of your Company w.e.f 13'" May 2020 and she has resigned her position Company secretary & Compliance officer of the Company resigned w.e.f 01"'April, 2021.

Except for the above there have been no changes in the office of directors or key managerial personnel during the year.

MEETINGS:

During the year, five meetings of Board of Directors were held as more particularly disclosed in the attached report of Corporate Governance. The intervening gap between any two meetings was within the prescribed period.

The Number and dates of meeting held by the Board and its Committees, attendance of Directors is given separately in Corporate Governance Report in terms of Section 134(3)(b) of the Companies Act, 2013.

PERFORMANCE EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration and Shareholders Grievance Committees.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

Aseparate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgments, safeguarding the interest of the Company and its minority shareholders etc.

The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process.

AUDITORS AND AUDIT REPORT:

The tenor of present Auditors M/s. Majeti & Co., Chartered Accountants, Hyderabad has been fixed for period of five years at the Annual General Meeting held on 29.09.2017 subject to ratification of appointment at every subsequent Annual General Meeting. However the Ministry of Corporate Affairs, Government of India, has vide Companies (Amendment) Act 2017 notified vide notification dated 07.05.2018 that such ratification of appointment of statutory auditors is not required at the subsequent Annual General Meetings which in other words means that appointment made initially continues to be effective until the expiry of five years from the date of their appointment. Accordingly no ratifications of appointment of statutory auditors is proposed in the ensuing Annual General Meeting.

With respect to the Independent Auditors' Report for the year ended 31^s'March 2021 which forms part of the Annual Report containing emphasis of matters and qualifications your Board of Directors state that the management replies to the same areas under: ^{1 2 3 4 5 6 7}

1. With respect to emphasis matter the explanation contained in Note No.33 to the financial statements is self-explanatory and the opinion of the Auditors is unmodified in respect ofthis matter.

2. With respect to Qualification on Trade receivables, supplier advances and capital advances as at March 31,2021 the explanation contained in Note No.36 to the financial statements is self-explanatory and does not require further explanations

3. With Respect to Statutory dues, statutory dues related to Income tax, Employee's provident fund, Employee state insurance act, Gratuity and professional tax, amounting to Rs. 11,05,80,126/- have become overdue and remain unpaid, the same is due to the cash crunch and tight working capital constraints, the management is working closely with the concerned authorities and will clear the dues based on the available cash flows.

4. With respect to Qualification on Advance from customer contained in Note No. 38 to the financial statements is self explanatory and does not require further explanations.

5. With respect to Qualification on Non movement of inventories the explanation contained in Note No. 39 to the financial statements is self explanatory and does not require further explanations.

6. With respect to Qualification on overdue foreign currency payable to as company facing financial difficultyit's pending for long on improving company financial stability we make the payment to supplier.

7. With respect to emphasis matter the explanation contained in Note No. 41 to the financial statements is self explanatory and does not require further explanations.

The Independent Auditors' Report for the financial year ended 3T¹ March 2021 which forms part of the Annual Report do not require any further explanations from the Board.

COST AUDITORS AND COST AUDIT REPORT:

Company appointed M/s. Nageswara Rao & Co, Hyderabad, Practicing Cost Accountants (Firm's Registration Number 000332), as Cost Auditors for the financial year2020-21.

The Board of Directors based on the recommendations of the Audit Committee, has appointed M/s. Nageswara Rao & Co, Practicing Cost Accountants (Firm's Registration Number: 000332) as Cost Auditors for conducting Cost Audit of the Cost Records of the Company fortheyear2020-21.

In pursuance of the provisions of Section 148 and other applicable provisions, if any, of the Companies Act 2013, read with Companies (Audit and Auditors) Rules 2014 the remuneration payable for conducting the Cost Audit for the year ending 31"' March 2022 to M/s. Nageswara Rao& Co, Practicing Cost Accountants is being placed before the Members in the ensuing Annual General Meeting for their ratification and approval.

INTERNAL AUDITORS:

The Board of Directors based on the recommendation of the Audit Committee have appointed ASK & CO, Chartered Accountants, as internal Auditors of your Company. The Internal Auditors are submitting their reports on quarterly basis.

SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT:

M/s. D. Hanumanta Raju & Co., Practicing Company Secretaries, Hyderabad who have been appointed as Secretarial Auditor for the financial year 2020-21 have conducted the Audit of the Secretarial Records and submitted their Report in MR-3 which is annexed to this Report (Annexure-IV).

The Secretarial Audit Report forthe financial year ended 31" March 2021, contains the following observations.

1. There was no Company Secretary in the Company for more than six months as required under Section 203 of Companies Act, 2013 read with Rule 8 of Chapter XIII of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 6 (1) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015; However, the Company has appointed a Company Secretary on 13.05.2020.

Reply : The Company is undergoing severe financial stress with subdued operations. In spite of best efforts by the Company, prospective Company Secretaries have refused the Offer of the Company forthe post of CS and Compliance officer. Hence there was a delay beyond 6 Months.

2. The Company is yet to file Form IEPF-4 for statement of transfer of shares in respect of Unclaimed dividend for seven years to IEPF authority as required under Section 124 (6) of Companies Act, 2013.

Reply : The Company has already transferred the shares to IEPF Authority. However due to technical reasons the Company is unable to file e Form IEPF-4.

3. The Company has not taken prior approval of the secured creditors for payment of remuneration to key managerial personnel as required under Part II of Schedule V of the Companies Act, 2013.

Reply : The Company has missed to take the approval of the Secured Creditor by oversight. Currently the Board of Directors is suspended by virtue of the order passed by the Hon'ble NCLT under Section 9 of the IBC Code.

4. The Company has not disclosed to the Stock Exchanges about the details of default on payment of interest / instalment obligations on loans from Banks/Financial Institutions for the Quarters ended 31.03.2020 and 30.06.2020 and delayed by 7 days in disclosing to the Stock Exchanges forthe Quarter ended 30.09.2020.

Reply : The non disclosure is by oversight as there was no Company Secretary and Compliance officer during the period of default. Later on the Company has complied with disclosure upon getting knowledge of pending Compliance.

5) The Company has taken advances from customers which were outstanding for more than one year in terms of Section 73 of Companies Act, 2013 read together with Companies (Acceptance of Deposits) Rules, 2014, (Rule 2(1 )(xii)(a)), such advances arc liable to be treated as deposits and hence the company is in violation of the same and the same is also not filed in Form DPT-3.

Reply: These advances are from parties whose address and contact details are not traceable. Moreover the amounts also pertain to those vendors with whom the Company has sought one time settlement due to non-performance of service / defect in goods supplied.

TRANSFER OF UNCLAIMED DIVIDEND AMOUNTS TO IEPF:

Pursuant to the provisions of Section 205A (5) of the Companies Act, 1956 and / or Section 124(5) of the Companies Act 2013, previously declared dividends, which remained unclaimed for a period of seven years, have been transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government pursuant to Section 205C of the Companies Act, 1956 and / or Section 125 of the Companies Act, 2013.

DIRECTORS, EMPLOYEES AND THEIR REMUNERATION:

The particulars of employees required to be furnished pursuant to Section 197(12) of the Companies Act 2013 read with sub rule (2) to Rule 5 to the Companies (Appointment & Remuneration) Rules, 2014, as amended, are not required to be provided as there were no employees drawing remuneration more than the stipulated limits. Details of Remuneration Policy and payment of remuneration to all Directors / Key Managerial Personnel / other managerial employees is given in the Report on Corporate Governance under the head Nomination and Remuneration Committee which forms part of this Report. Managing Director and other Whole Time Directors have not received any remuneration or commission from holding or subsidiary companies as the Company do not have such companies. In the opinion of the Board the level and composition of remuneration to Directors, Key Managerial Personnel and other managerial employees is reasonable and sufficient to attract, retain and motivate the people who could run the Company efficiently.

The Board affirms that the remuneration paid is in accordance with Remuneration Policy of the Company. The copy of Nomination and Remuneration policy is also posted in the investors section of the company's website www.sathavahana.com. The relationship between performance and remuneration is clear and meets appropriate benchmarks and that the remuneration criteria succinctly balances between fixed and variable pay wherever set reflecting short and long term performance objectives appropriate to the working of the Company and its goals. Disclosures required to be made pursuant to Rule 5 to the Companies (Appointment & Remuneration) Rules, 2014 are attached to this report (Annexure-ll).

DEMATERIALISATION OF EQUITY SHARES:

The Agreements entered into by the Company with the two Depositories viz., National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for dematerialisation of Shares are in force and the Company's Shares are in dematerialised mode under ISIN No. INE176C01016. The Securities and Exchange of India (SEBI) in its circular dated 20.04.2018 has stated that the equity shares have to compulsorily convert into dematerialization before S'¹ December 2018 the same was further extended to 1" April 2019. and thereafter dematerialized equity shares are only eligible for transfers with the exception of transmissions. In view of the significant benefits that accrue on dematerialisation of securities, Members may avail the facility.

LISTING OF SHARES ON STOCK EXCHANGES:

The Equity Shares of the Company are listed on BSE Ltd (formerly The Bombay Stock Exchange Limited) Scrip Code:526093 and The National Stock Exchange of India Limited (NSE) Scrip Code: SATHAISPAT.

The listing fee to above Stock Exchanges has not paid in financial year 2021-22.

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

Information on conservation of energy, technology absorption, foreign exchange earnings and out go required to be disclosed under Section 134 of the Companies Act 2013 read with Companies (Accounts) Rules 2014, is given in the Annexure forming part of this Report (Annexure-I).

DEPOSITS:

Your Company has not accepted any fixed deposits nor does the Company have any outstanding deposits under section 73 of the Act, read with the Companies (Acceptance of Deposits) Rules, 2014 as on the date of Balance Sheet.

DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY FOR THE COMPANY INCLUDING IDENTIFICATION THEREIN OF ELEMENTS OF RISK, IF ANY. WHICH IN THE OPINION OF THE BOARD MAY THREATEN THE EXISTENCE OF THE COMPANY:

The Board engaged it self with the task of Risk Management by preparing, implementing and monitoring the risk management plan of the Company. The Board apart from ensuring the effectiveness of risk management covering internal financial risks and controls also reviews the same on regular basis. Major risks identified are monitored on a regular basis bythe Board.

INTERNAL FINANCIAL CONTROL AND SYSTEMS AND THEIR ADEQUACY:

The Company has put in place Internal Financial Controls that will ensure the policies and procedures of the Company are followed regularly so that the business of the Company is conducted in orderly and efficient manner. The Internal Financial Controls are applied inter alia to test various aspects in the conduct of business including adherence to Company's policies, safeguarding Company's assets, prevention and detection offrauds and errors or irregularities, the accuracy and completeness of the accounting records and timely preparation of reliable financial information and the financial statements. In the opinion of the Board such Internal Financial Controls are adequate and were operating effectively. During the year such Internal Financial Controls have been tested and no reportable weaknesses in the design and operations were observed. With respect to the Independent Auditors' Report for the year ended 31" March 2021 which forms part of the Annual Report containing qualification on the Internal Financial Controls your Board of Directors state that the management replies to the same are contained in Note No.36 to the financial statements which is self explanatory.

RELATED PARTY TRANSACTIONS:

In Compliance with the provision of the Act and the Listing Regulations, each Related party transaction is placed before the Audit Committee for prior approval/noting.

There are no material related party transactions entered into by the Company falling within the meaning of Section 188(1) of the Companies Act 2013. Other related party transactions, contracts or arrangements entered into by the Company are in the ordinary course of business and at arm's length price. The details of these contracts or arrangements or transactions as required to be disclosed in terms of Section 134(3)(h)are provided in Form AOC-2 which forms part of this Report (Annexure-lll) and accompanying Financial Statements.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

The Company has not granted loans, guarantees or made investments in or to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act 2013. The Company has not extended any loans to the employees for purchase of its shares. Other investments made bythe Company are given in the accompanying Financial Statements which are in the ordinary course of business.

CORPORATE SOCIAL RESPONSIBILITY:

The details with respect to Corporate Social Responsibility of the Company as required to be disclosed in terms of provisions of Section 135 read with Section 134(3) (o) and Rule 9 of Companies (Accounts) Rules 2014 are given in the Report on Corporate Governance attached to and forming part of this Report. During the year the Company, in terms of provisions of sub section 5 to Section 135 of the Companies Act 2013, is not required to ear mark any fund for Corporate Social Responsibility activities in view of the losses.

VIGIL MECHANISM/WHISTLE BLOWER POLICY:

Your Company has well-defined Vigil Mechanism policy in place to provide a formal mechanism for all Directors, employees, business associates and vendors of the Company to approach Chairman of the Audit Committee.

During the year under review, none of the Directors/employees/ business associates / vendors was denied access to Chairman of Audit Committee

REPORTING OF FRAUD:

The auditors of the Company have not reported any fraud as specified under section 143(12) of the Act.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Your Company has zero tolerance towards sexual harassment at the workplace. It has well defined policy incompliance with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. An internal Committee is in place to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees, etc.) are covered under this Policy. The Company has not received any compliant of sexual harassment during the F.Y. 2020-2021.

MATERIAL CHANGES ANDCOMMITMENTS:

In terms of Section 17 of the Code, on commencement of the Corporate Insolvency Resolution Process (CIRP), the powers of the Board of Directors of Sathavahana Ispat Limited stands suspended and the same are being exercised by Mr. Bhuvan Madan. The management of the affairs of Sathavahana Ispat Limited has been vested with Mr. Bhuvan Madan.

Except for the above mentioned, there are no other material changes and commitments affecting the financial position of the company occurred between the end of financial year of the company to which the financial statements relate and the date of the report.

ORDERS PASSED BY THE REGULATORS, COURTS OR TRIBUNALS:

The application filed by the M/s. Thirumala Logistics against the company under Sec. 9 of The Insolvency Bankruptcy Code 2016, has been approved by the Honorable National Company Law Tribunal, Hyderabad Bench ('NCLT') dated 28^lh July, 2021. The Committee of Creditors meeting was conducted and a Resolution Professional was appointed.

Consequent to an order of the Honourable National Company Law Tribunal, Hyderabad Bench ('NCLT') dated 28"¹ July, 2021, the Company is currently under Corporate Insolvency Resolution Process ('CIRP') as per the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC)and as per Section 17of the Code, the powers of the Board of Directors of Sathavahana Ispat Limited (Corporate Debtor) stands suspended and such powers shall be vested with Mr. Bhuvan Madan, Resolution Professional.

Further there are no other significant material orders passed by the Regulators which would impact the going concern status of the Company and its future operations.

THE NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR:

Your Company does not have any Subsidiaries or Associates or Joint ventures.

ACKNOWLEDGMENTS:

Your Company take this opportunity to express their grateful thanks to Canara Bank, State Bank of India (formerly State Bank of Hyderabad), Union Bank of India, Shareholders, Central and State Governments and valued suppliers and customers for their co-operation and support. The Company also places on record its appreciation of the valuable services rendered by the employees at all levels of the Company.

For Sathavahana Ispat Limited