Key Regulatory Issue

The specific alleged non-compliance highlighted in the notice was the failure to disclose Related Party Transactions (RPTs) on a consolidated basis for the half-year ended March 31, 2021, as required under Regulation 23(9) of the SEBI LODR Regulations. The notice was issued pursuant to SEBI Master Circular No. HO/CFD/PoD2/CIR/P/2023/120 dated July 11, 2023, as amended, including an amendment dated January 30, 2026.

Company's Response and Contention

The company respectfully submitted that the information pertaining to RPTs for the period in question was, in fact, disclosed. It was included in the Annual Report for the financial year ended March 31, 2021, which was filed with the stock exchange under Regulation 34(1) of the SEBI LODR. This filing was completed on September 6, 2021, at 12:15:22 PM, with an acknowledgement number of 3153276. The company directed attention to Page 70 of that Annual Report for the RPT details.

Proactive Compliance Measure

Without prejudice to its above submission, and to ensure full compliance, the company proceeded to resubmit the disclosure of Related Party Transactions on a consolidated basis for the half-year ended March 31, 2021. This disclosure was provided in the format prescribed under Regulation 23(9) of the SEBI LODR, read with the applicable accounting standards (IND AS 24).

Financial Data: Related Party Transactions (Half-Year Ended March 31, 2021)

The annexed disclosure provides a breakdown of transactions with related parties (amounts in ₹ Lakhs):

Enterprises controlled by key management personnel & their relatives:

  • Purchase of Goods: ₹5,377.80 Lakhs (FY 2020-21)
  • Sale of Goods: ₹46,268.40 Lakhs (FY 2020-21)
  • Expense of service received: ₹2.01 Lakhs (FY 2020-21)
  • Income from service rendered: ₹11.20 Lakhs (FY 2020-21)

Key Management Personnel:

  • Expense of service received: ₹39.21 Lakhs (FY 2020-21)
  • Remuneration paid: ₹30.25 Lakhs (FY 2020-21)

Close Members (relatives of Key Management Personnel):

  • Remuneration paid: ₹58.50 Lakhs (FY 2020-21)
  • Training & Development: ₹76.66 Lakhs (FY 2020-21)

The company stated that all transactions with related parties were conducted at arm's length and in the ordinary course of business.

List of Related Parties

Key Managerial Personnel: Kamlesh Kumar Rathi (Managing Director), Satinder Singh (Company Secretary from 21/01/2021), Amit Mangla (Company Secretary till 21/05/2020).

Close relatives of Key Managerial Personnel: Pushpa Rathi, Vanshika Rathi, Parnika Rathi, Devanshi Rathi, Manvi Rathi.

Enterprises controlled by them: Rathi Special Steels Ltd, Bhiwadi iron Pvt Ltd, Khushkhera Steels Pvt Ltd, Balaji Steel Enterprises.

Future Action

The company stated its intention to make a separate application or representation to the stock exchange seeking a waiver of the fines levied, setting out the relevant facts and grounds for consideration.