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Notes to Accounts of Facor Alloys Ltd.

Mar 31, 2015

1. Terms/rights attached to Equity Shares:

The Company has only one class of Equity Shares having a par value of Rs. 1/- per share. The Equity Shares have equal rights, preferences and restrictions which are in accordance with the provisions of law, in particular the Companies Act, 2013.

2. The lock-out declared in the Manufacturing Unit at Shreeramnagar (A.P) w.e.f. 04-02-2014 has been lifted from 26-12-2014. However, no production activity could be started as yet.

3. Disclosure pursuant to Accounting Standard - 15 ( Revised) "Employee Benefits" :

Defined Contribution Plan :

Amount of Rs. 84.63 Lacs (Previous Year Rs. 194.29 Lacs) is recognised as expense and included in "Employee Benefits Expense" in Note 23 of the Statement of Profit and Loss.

Defined Benefit Plan :

The company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favourable than the provisions of the Payment of Gratuity Act, 1972. The scheme is funded with SBI Life Insurance in form of qualifying insurance policy.

The company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of privilege leave for encashment. This is an unfunded plan.

The following tables summarises the components of net expense recongnised in the Statement of Profit and Loss and Balance Sheet for the respective plans.

4. There are no Micro, Small and Medium Enterprises, to whom the company owes dues, which are outstanding as at the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

5. Segment Information:

The Management Information System of the Company identifies and monitors Ferro Alloys as the business segment. The Company is managed organisationally as a single unit. In the opinion of the management, the Company is primarily engaged in the business of Ferro Alloys. As the basic nature of these activities are governed by the same set of risk and return, these constitute and are grouped as single segment as per Accounting Standard (AS) 17 dealing with segment reporting issued by ICAI.

6. Contingent Liabilities and Commitments

(I) Contingent Liabilities :

(a) Claims against the Company not acknowledged as debts, since disputed Rs. 944.14 lacs (Previous Year Rs. 2047.39 lacs).

(b) A standby Letter of Credit (SBLC) for a sum of 10 Million USD from Bank of India, Visakhapatnam is provided to the Bank of India, Jersey for sanctioning a loan of 10 Million USD to Facor Minerals (Netherlands) B.V., one of the overseas subsidiary of the Company. The said SBLC facility is secured by way of first charge on fixed assets of the Company by deposit of title deeds in respect of immovable properties.

(c) A corporate guarantee for a sum of 1.6 Million USD is provided to Bank of India, London as a collateral security to the Term Loan sanctioned to Cati Madencilik Ithalat Ve Ihracat A.S., a tier II subsidiary of the Company.

(d) Counter guarantees in favour of Consortium Banks in respect of their outstandings with Facor Steels Limited. Due to the nature of the liability, its financial impact is not ascertainable.

(II) Capital and other Commitments:

(a) Estimated amount of contracts on Capital Account and other commitments remaining to be executed and not provided for in accounts Rs. NIL (Previous Year Rs. NIL).

7. Related Party Disclosure:-

(I) List of related parties:-

A Name and nature of relationship with the related party where control exists:

Best Minerals Ltd. - Subsidiary Company

Facor Electric Ltd. - Subsidiary Company

FAL Power Ventures Pvt Ltd. - Subsidiary Company

Facor Minerals Pte Ltd. - Subsidiary Company

Facor Minerals (Netherlands) B.V. - Subsidiary Company

B Associate and Enterprise, over which key management personnel and their relatives exercise significant influence, with whom transactions have taken place during the year :

1 Pioneer Facor IT Infradevelopers Pvt. Limited - Associate

2 Facor Steels Limited

3 Rai Bahadur Shreeram and Company Private Limited

4 Godawaridevi Saraf & Sons

5 Saraf Bandhu Private Limited

6 GDP Infrastructure Private Limited

7 Shreeram Shipping Services Pvt. Ltd.

8 Smt. Godawaridevi Saraf Janseva Trust

9 Ferro Alloys Corporation Limited

10 Shri R.B. Shreeram Religious & Charitable Trust

11 Vidarbha Iron & Steel Corporation Limited

12 Facor Power Limited

C Key Management Personnel :

a) Directors

i) R.K. Saraf Chairman & Managing Director

ii) M.D. Saraf (upto 25-07-2014) Vice Chairman & Managing Director

iii) Ashim Saraf Joint Managing Director

iv) Anurag Saraf Joint Managing Director

v) C.N. Harman Director (Technical)

b) Executive Officers

i) M.D. Saraf (w.e.f 01-08-2014) President

ii) S.S. Sharma GM (Legal) & Co. Secretary

iii) O.P Saraswat Dy. Chief Financial Officer

8. Details of Loans given, Investments made and Guarantee given covered U/s 186(4) of the Companies Act, 2013

Loans given, Investments made and Guarantees given by the Company in respect of loans are given under the respective heads.

9. Previous Year's figures have been re-grouped wherever necessary.


Mar 31, 2014

1.1 Terms/rights attached to Equity Shares:

The Company has only one class of Equity Shares having a par value of Rs. 1/- per share. The Equity Shares have equal rights, preferences and restrictions which are in accordance with the provisions of law, in particular the Companies Act, 1956.

2. The manufacturing Unit at Shreeramnagar (A.P.) is under lock out since 04-02-2014, the accounts for the Year ended on 31-03-2014 have been prepared on the basis of the available information and records.

3. Disclosure pursuant to Accounting Standard - 15 ( Revised) "Employee Benefits" :

Defined Contribution Plan :

Amount of Rs. 194.29 Lacs (Previous Year Rs. 197.08 Lacs) is recognised as expense and included in "Employee Benefits Expense" in Note 23 of the Statement of Profit and Loss.

Defined Benefit Plan :

The company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not lessfavourable than the provisions of the Payment of Gratuity Act, 1972. The scheme is funded with SBI Life Insurance in form of qualifying insurance policy.

The company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of privilege leave for encashment. This is an unfunded plan.

The following tables summarises the components of net expense recongnised in the Statement of Profit and Loss and Balance Sheet for the respective plans.

4. Earnings in Foreign Exchange on account of Export of Goods on F.O.B. basis 9,914.02 12,179.04

5. There are no Micro, Small and Medium Enterprises, to whom the company owes dues, which are outstanding as at the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

6. Segment Information:

The Management Information System of the Company identifies and monitors Ferro Alloys as the business segment. The Company is managed organisationally as a single unit. In the opinion of the management, the Company is primarily engaged in the business of Ferro Alloys. As the basic nature of these activities are governed by the same set of risk and return, these constitute and are grouped as single segment as per Accounting Standard (AS) 17 dealing with segment reporting issued by ICAI.

7. Contingent Liabilities and Commitments

(I) Contingent Liabilities:

(a) Claims against the Company not acknowledged as debts, since disputed Rs. 2047.39 lacs (Previous Year Rs. 4198.05 lacs).

(b) A standby Letter of Credit (SBLC) for a sum of 10 Million USD from Bank of India, Visakhapatnam is provided to the Bank of India, London for sanctioning a loan of 10 Million USD to Facor Minerals (Netherlands) B.V., one of the wholly owned overseas subsidiary of the Company. The said SBLC facility is secured by way of first charge on fixed assets of the Company by deposit of title deeds in respect of immovable properties.

(c) Counter guarantees in favour of Consortium Banks in respect of their outstandings with Facor Steels Limited. Due to the nature of the liability, its financial impact is not ascertainable.

(II) Capital and other Commitments:

(a) Estimated amount of contracts on Capital Account and other commitments remaining to be executed and not provided for in accounts Rs. NIL (Previous Year Rs. NIL).

8. Related Party Disclosure:-

(I) List of related parties:-

(A) Name and nature of relationship with the related party where control exists:

Best Minerals Ltd. - Subsidiary Company

Facor Electric Ltd. - Subsidiary Company FAL Power Ventures Pvt Ltd. - Subsidiary Company Facor Minerals Pte Ltd. - Subsidiary Company Facor Minerals (Netherlands) B.V. - Subsidiary Company

(B) Enterprise, over which key management personnel and their relatives exercise significant influence, with whom transactions have taken place during the year :

I. Ferro Alloys Corporation Limited 2. Facor Steels Limited

3. Rai Bahadur Shreeram and Company Private Limited 4. Godawaridevi Saraf & Sons

5. Saraf Bandhu Private Limited 6. GDP Infrastructure Private Limited

7. Shreeram Shipping Services Pvt. Ltd. 8. Smt. Godawaridevi Saraf Janseva Trust

9. Pioneer Facor IT Infradevelopers Pvt. Limited 10. Shri.R.B.Shreeram Religious & Charitable Trust

II. Vidharbha Iron & Steel Corporation Limited 12. Facor Power Limited

(C) Key Management Personnel :

i) R.K. Saraf Chairman & Managing Director

ii) M.D.Saraf Vice Chairman & Managing Director

iii) Ashim Saraf Joint Managing Director

iv) Anurag Saraf Joint Managing Director

v) C.N.Harman Director (Technical)

10. Previous Year''s figures have been re-grouped wherever necessary.

11. The Ministry of Corporate Affairs, Government of India, vide Circular No. 2 and 3 dated 8th February, 2011 and 21st February, 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to the fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements. The annual accounts of the subsidiary companies are available for inspection by any shareholder at the Registered office of the Company. The annual accounts of the subsidiary companies are also available for inspection at their respective registered offices.


Mar 31, 2013

1) General Information

Facor Alloys Limited ("The Company") is a Public Limited Company incorporated in India under the Companies Act, 1956. It is part of Worldwide reputed FACOR Group of Industries. The Company is listed at Bombay Stock Exchange . The Company, one of the India''s largest producers of Ferro Alloys Products produces Ferro Alloys product at its works in Andhra Pradesh and caters both domestic and international markets. The product is used in the manufacture of Steel/Stainless Steel.

2) Abridged fi nancial statement

The abridged financial statements have been prepared pursuant to Rule 7A of the Companies (Central Government''s) General Rules and Forms, 1956 as per notification F. No. 17/51/2012-CL-V, dated May 31, 2012 and are based on the annual financial statements for the year ended March 31, 2013 approved by the Board of Directors at their meeting held on May 27, 2013.

3) (Note 33 of notes to fi nancial statements)

There are no Micro, Small and Medium Enterprises, to whom the company owes dues, which are outstanding as at the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

4) (Note 34 of notes to fi nancial statements)

Segment Information :

The Management Information System of the Company identifies and monitors Ferro Alloys as the business segment. The Company is managed organisationally as a single unit. In the opinion of the management, the Company is primarily engaged in the business of Ferro Alloys. As the basic nature of these activities are governed by the same set of risk and return, these constitute and are grouped as single segment as per Accounting Standard (AS) 17 dealing with segment reporting issued by ICAI.

5) (Note 35 of notes to fi nancial statements) Contingent Liabilities and Commitments :

(I) Contingent Liabilities :

(a) Claims against the Company not acknowledged as debts, since disputed Rs. 4198.05 lacs (Previous Year Rs. 21.27 lacs).

(b) A standby Letter of Credit (SBLC) for a sum of 10 Million USD from Bank of India, Visakhapatnam is provided to the Bank of India, London for sanctioning a loan of 10 Million USD to Facor Minerals (Netherlands) B.V., one of the wholly owned overseas subsidiary of the Company. The said SBLC facility is secured by way of first charge on fixed assets of the Company by deposit of title deeds in respect of immovable properties.

(c) Counter guarantees in favour of Consortium Banks in respect of their outstandings with Facor Steels Limited. Due to the nature of the liability, its financial impact is not ascertainable.

(II) Capital and other Commitments:

(a) Estimated amount of contracts on Capital Account remaining to be executed and not provided for in accounts Rs. NIL (Previous Year Rs. NIL).

6) (Note 36 of notes to fi nancial statements) Related Party Disclosure:- I List of related parties:-

A Name and nature of relationship with the related party where control exists: Best Minerals Ltd. – Subsidiary Company Facor Electric Ltd. – Subsidiary Company FAL Power Ventures Pvt Ltd. – Subsidiary Company (formerly known as BEC Power Private Limited) Facor Minerals Pte Ltd. – Subsidiary Company Facor Minerals (Netherlands) B.V. – Subsidiary Company

7) (Note 37 of notes to financial statements)

Previous year''s figures have been re-grouped wherever necessary.

8) (Note 38 of notes to financial statements)

The Ministry of Corporate Affairs, Government of India, vide Circular No. 2 and 3 dated 8th February, 2011 and 21st February, 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to the fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements. The annual accounts of the subsidiary companies are available for inspection by any shareholder at the Registered office of the Company. The annual accounts of the subsidiary companies are also available for inspection at their respective registered offices.

9) Market value of quoted investment is Rs. NIL (Previous Year Rs. NIL)


Mar 31, 2012

1.1 Terms/rights attached to Equity Shares:

The Company has only one class of Equity Shares having a par value of Rs. 1/- per share. The Equity Shares have equal rights, preferences and restrictions which are in accordance with the provisions of law, in particular the Companies Act, 1956.

1.2 During the year 2007-08 Company had reached One Time Settlement with certain Preference Shareholders for pre-mature redemption of 11,30,293 0.01% Redeemable Preference Shares of Rs. 100/- each of Face Value of Rs. 1130.29 lacs.

2. Disclosure pursuant to Accounting Standard - 15 (Revised) "Employee Benefits" :

Defined Contribution Plan :

Amount of Rs. 201.16 Lacs (Previous Year Rs. 196.93 Lacs) is recognised as expense and included in "Employee Benefits Expense" in Note 23 of the Statement of Profit and Loss.

Defined Benefit Plan :

The company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favourable than the provisions of the Payment of Gratuity Act, 1972. The scheme is funded with SBI Life Insurance in form of qualifying insurance policy.

The company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of privilege leave for encashment. This is an unfunded plan.

The following tables summarises the components of net expense recongnised in the Statement of Profit and Loss and Balance Sheet for the respective plans.

3. There are no Micro, Small and Medium Enterprises, to whom the company owes dues, which are outstanding as at the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

4. Segment Information:

The Management Information System of the Company identifies and monitors Ferro Alloys as the business segment. The Company is managed organisationally as a single unit. In the opinion of the management, the Company is primarily engaged in the business of Ferro Alloys. As the basic nature of these activities are governed by the same set of risk and return, these constitute and are grouped as single segment as per Accounting Standard (AS) 17 dealing with segment reporting issued by ICAI.

5. Contingent Liabilities and Commitments

(I) Contingent Liabilities :

(a) Claims against the Company not acknowledged as debts, since disputed Rs.21.27 lacs (Previous Year Rs. 21.27 lacs).

(b) Counter guarantees in favour of Consortium Banks in respect of their outstandings with Facor Steels Limited. Due to the nature of the liability, its financial impact is not ascertainable.

(II) Commitments:

(a) Estimated amount of contracts on Capital Account remaining to be executed and not provided for in accounts Rs. NIL (Previous Year Rs. NIL).

6. The revised Schedule VI to the Companies Act, 1956 has become effective from 01-04-2011 for preparation and presentation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Accordingly, the figures for the previous year have been reclassified, wherever necessary to conform with the current year's classification.

7. The Ministry of Corporate Affairs, Government of India, vide Circular No. 2 and 3 dated 8th February, 2011 and 21st February, 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to the fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements. The annual accounts of the subsidiary companies are available for inspection by any shareholder at the Registered office of the Company. The annual accounts of the subsidiary companies are also available for inspection at their respective registered offices.


Mar 31, 2011

1. Contingent Liabilities:

(a) Estimated amount of contracts on Capital Account remaining to be executed and not provided for in accounts is Nil (Previous Year Nil.)

(b) Claims not acknowledged as debts Rs.21.27 lacs (Previous Year Rs. 21.27 lacs).

(c) Counter guarantees in favour of Consortium Banks in respect of their outstandings with Ferro Alloys Corporation Limited and Facor Steels Limited. Due to the nature of the liability, its financial impact is not ascertainable.

2. Sundry Debtors include amount due from the company under the same management - Facor Steels Limited Rs.155.12 Lacs (Previous Year Rs.32.42 Lacs)

3. Loans and Advances Include:

a) Share Application Money pending allotment - Rs. 3750.00 lacs (previous year Rs. 2050.00 lacs)

b) Amount due from the Company under the same Management - Facor Steels Limited Rs. 20.92 lacs (Previous year Rs. 20.68 lacs)

c) Amounts paid to BEC Power Pvt Ltd.(Subsidiary company since acquired ) for expenses to be incurred Rs.1074.45 lacs (Previous Year Rs. NIL ) and to its share holders for acquistion of shares Rs.1248.76 lacs (Previous Year Rs. Nil)

4. (a) The Company has been advised that the computation of net profits for the purpose of directors' remuneration under Section 349 of the Companies Act,1956 need not be enumerated since no commission has been paid to the Directors. Fixed monthly remuneration paid to the Directors are well within the limits prescribed under Schedule XIII to the Companies Act,1956.

5. The assets and liabilities as well as turnover etc., of Best Minerals Limited, a 100% subsidiary of the Company, being insignificant, Consolidated Financial Statements as required by the directives of the Securities and Exchange Board of India and AS-21 issued by ICAI have not been prepared and attached with this annual report. However, as required under section 212 of the Companies Act,1956 the audited financial statements of the subsidiary, for the year ended 31st March 2011, are annexed.

6. There are no Micro,Small and Medium Enterprises,to whom the company owes dues, which are outstanding as at the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the company. This has been relied upon by the auditors.

7. Amounts remitted during the year in foreign currencies on account of dividends.

8. Segment Information:

The Management Information System of the Company identifies and monitors Ferro Alloys as the business segment. The company is managed organisationally as a single unit. In the opinion of the management, the company is primarily engaged in the business of Ferro Alloys. As the basic nature of these activities are governed by the same set of risk and return, these constitute and are grouped as single segment as per Accounting Standard AS-17 dealing with segment reporting issued by ICAI.

9. Previous Year's figures have been re-grouped wherever necessary.

10. Related Party Disclosure:-

I List of related parties:-

A Name and nature of relationship of the related party where control exists :-

Best Minerals Ltd. - 100% Subsidiary Company

B Enterprise, over which Key management personnel and their relatives exercise significant influence, with whom transactions have taken place during the year:

1 Ferro Alloys Corporation Limited

2 Facor Steels Limited

3 Rai Bahadur Shreeram & Co. Pvt. Ltd.

4 Godavari Devi Saraf & Sons.

5 Saraf Bandhu Pvt. Ltd.

6 GDP Infrastructure Pvt. Ltd.

7 Shreeram Shipping Services Pvt. Ltd.

8 Smt. Godavari Devi Saraf Janseva Trust

9 Shri Durgaprasad Saraf Charitable Trust

C Key Management Personnel :

1 R.K.Saraf Chairman & Managing Director

2 M.D.Saraf Vice Chairman

3 Yogesh Saraf Joint Managing Director

4 Ashim Saraf Joint Managing Director

5 C.N.Harman Director (Technical)


Mar 31, 2010

1 Contingent Liabilities:

(a) Estimated amount of contracts on Capital Account remaining to be executed and not provided for in accounts is Nil (Previous Year NIL).

(b) Claims not acknowledged as debts Rs. NIL (Previous Year Rs. NIL).

(c) Counter guarantees in favour of Consortium Banks in respect of their outstandings with Ferro Alloys Corporation Limited and Facor Steels Limited. Due to the nature of the liability, its financial impact is not ascertainable.

2 (a) The Company has been advised that the computation of net profits for the purpose of directors remuneration under Section 349 of the Companies Act,1956 need not be enumerated since no commission has been paid to the Directors. Fixed monthly remuneration paid to the Directors are well within the limits prescribed under Schedule XIII to the Companies Act,1956.

3 The assets and liabilities as well as turnover etc., of Best Minerals Limited, a 100% subsidiary of the Company, being insignificant, Consolidated Financial Statements as required by the directives of the Securities and Exchange Board of India and AS-21 issued by ICAI have not been prepared and attached with this annual report. However, as required under section 212 of the Companies Act,1956 the audited financial statements of the subsidiary, for the year ended 31st March 2010, are annexed.

4 Segment Information:

The Management Information System of the Company identifies and monitors Ferro Alloys as the business segment. The company is managed organisationally as a single unit. In the opinion of the management, the company is primarily engaged in the business of Ferro Alloys. As the basic nature of these activities are governed by the same set of risk and return, these constitute and are grouped as single segment as per Accounting Standard AS-17 dealing with segment reporting issued by ICAI.

5 Previous Years figures have been re-grouped wherever necessary.

 
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