Home  »  Company  »  Ferro Alloys  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Ferro Alloys Corporation Ltd.

Mar 31, 2016

DIRECTORS’ REPORT TO THE MEMBERS

The Directors present the 60th Annual Report of your Company and the Audited Financial Statement of the Company for the financial year ended 31st March, 2016, and the audited consolidated financial statement of the Company for the Financial Year ended 31st March, 2016.

FINANCIAL RESULTS

With adverse business phase during Year under review, the Company''s performance has been affected significantly which is reflected in the financial results for the year which are, as under:

STATE OF COMPANY’S AFFAIRS

It needs no reiteration that the fortunes of ferro alloys industry are saddled to that of the steel industry. In the current year, steel prices have been down by about 33% and consequently the fall in gross margins of steel producers, which has been alarming. In their drive to cut costs in every possible way and survive the depressed market conditions, steelmakers are bargaining hard while buying raw materials or intermediate products, including ferroalloys.

India has a significant profile in mining of chrome and production of ferrochrome. On the back of depressed market

('' in lacs)

Particulars

Consolidated

Standalone

For the year ended 31st March, 2016

For the year ended 31st March, 2015

For the year ended 31st March, 2016

For the year ended 31st March, 2015

Income from Operations

57368.19

60,310.28

56933.35

60,270.18

Profit before tax & Depreciation/ Amortization

(3521.21)

(439.76)

(322.03)

2951.74

Depreciation/Amortization

2166.41

2178.74

467.66

495.63

Provision for taxation

(376.64)

549.50

(376.64)

549.50

Net Profit/(Loss) for the year

(5310.98)

(3168.00)

(413.05)

1906.61

Transfer to General Reserve

-

2100.00

-

2100.00

Balance carried to Balance Sheet

(12469.98)

(7159.00)

3953.94

4366.99

During the year under review, revenue from operations declined by 5.54% to Rs, 56,933.35 lacs (previous year Rs, 60,270.18 lacs). However, EBIDTA fell by 68.16% to Rs, 1,466.58 lacs (previous year Rs, 4,606.55 lacs) and profit after tax declined by 121.66% to Rs, (413.05) lacs (previous year Rs, 1,906.61 lacs) on account of difficult market conditions and decline in production.

Your Company is engaged mainly in the production of Ferro Chrome and with a dip in stainless steel production, the Company''s financials have been impacted due to weak realization. Further, rise in working capital requirement has kept the profitability and debt-servicing indicators stressed.

Shortall in chrome supply from company''s captive mines due to there being no mining operations at Company''s Kathpal mine, Boula mines compounded the problem of raw material availability. To meet out the requirement of its shortfall of Chrome ore, the Company has procured chrome ore from Orissa Mining Corporation and other mining companies also, which increased the cost of production. At the same time, sharp decline in sales realization during the year vis a vis relatively lesser reduction in raw material cost have compounded the problem further which is evident from the results for the year under review.

conditions, the production of chrome ore progressively came down from 3.3 million tonnes (mt) in 2005 to 2.8 mt in 2014 in keeping with the policy to conserve the resource and mining disruptions due to court interventions and environment issues. In any case, India with chrome ore reserve of 70 mt has only one per cent share of global proven deposit. Around 85 per cent of world reserve of this ore is found in South Africa and Zimbabwe. As a result, India is importing growing quantities of high grade chrome ore for blending with locally mined material.

In the backdrop of the industry''s scenario as above, your company''s turnover for the current financial year, 2015-16 stands at '' 56029.10lacs as against '' 59069.32lacs last year, an decrease of 5.15% over the previous year. Exports during the year were '' 22974.17 lacs. Further, your company has posted a profit/(loss) before tax of '' (789.69) lacs this year as against '' 2456.11lacs in the previous year, reflecting a decrease of 132.15%.

Although the Company''s operations have been closed at Boula mines following the order passed by the Hon''ble Supreme Court, the company is evaluating legal remedies to regain and restart the mining operations at the Boula mines. Further, the Company is in the process of finalizing a long term contract for supply of chrome ore. Although the supply contract is not for a substantial quantity, it should, nevertheless ease some strain on the chrome ore requirements of the Company.

PROSPECTS

High input costs, led by lower availability of ores and reluctant, and inadequate power supply are key risks faced by the ferro alloys industry. Non-availability of rail wagons for procuring raw materials and poor infrastructure facilities at ports are other issues that Indian ferro alloy manufacturers have to grapple with.

However, ferro chrome prices of late, have staged some recovery. Also, Stainless Steel Development Association announced that Indian stainless steel production will go up to 5.2 million tons in 2020. This is grossly up by 67.7% from 3.1 million tons expected in 2015, and according to the anticipation announced, the increasing trend will continue such as 3.6 million tons in 2016, 4.0 million tons in 2017, 4.3 million tons in 2018 and 4.7 million tons in 2019.

However, with an annual output of 1 mt, India figures prominently in the global chrome alloys industry and trade. Our stainless steel production being 3 mt, the domestic requirement of ferrochrome is about 460,000 tonnes, leaving us with an exportable surplus of half the alloy production.

Chinese Customs Tariff Commission of the State Council issued 2016 Import and Export Tariffs Schedules, which will be effective from January 1st 2016. The export tariffs on ferroalloys products have been kept the same as that implemented in 2015. Chinese ferroalloys products have lost its price advantage in the international market due to the high export tariff during the past few years, and the export volume of Chinese ferroalloys has consequently declined sharply.

Stainless demand in general, however, remains a mixed bag. Demand is very weak in the oil country, especially with oil prices remaining at only about $40-$45/barrel and not expected to get above $60/barrel next year. But on the other hand, automotive sales - especially sales of pickup trucks and sport utility vans - are at 15 year highs and shipments of major home appliances are seeing nearly 10% year on year increases.

The government on August 4, 2016 extended minimum import price on 66 steel products and is also expected to levy an antidumping on other products. With this we expect prices in the domestic market to rise. However, given the demand-supply imbalance in the market we expect prices uptick to be marginal. Consequently, operating margins are expected to improve with higher realizations and lower raw material cost.

FUTURE STRATEGY AND GROWTH

The Company is also contemplating setting up an additional 27MVA furnace at the Company''s Charge Chrome Plant. Your company, thus, remains committed to forward integration as well by way of setting up green field projects, acquisitions, joint ventures etc.

Further, the captive power plant set by your company in Facor Power Limited, the subsidiary of the Company is supplying uninterrupted power to the Company and Balasore Alloys Ltd., a Ferro Alloys producer in Orissa on group captive basis and is also trying to tie up power sale for its balance power generation.

DIVIDEND

Keeping in view the future requirement of funds in working capital and other purposes, the Directors do not recommend any dividend in the financial year ended 31st March, 2016.

FINANCE

Cash and cash equivalent as at March 31, 2016 was Rs, 244.72 lacs. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

DEPOSITS

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

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard 21 on Consolidated Financial Statements read with Accounting Standard 23 on Accounting for Investments in Associates, the audited consolidated financial statement is provided in the Annual Report for the year.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2016 was 1852.68 lacs. During the year under review, the Company has neither issued shares with differential voting rights nor granted stock options nor sweat equity.

INDUSTRIAL RELATIONS

Industrial relations with workers, trade unions, and with local populace remained amicable and pleasant throughout the year.

DIRECTORS

Mr. Ashishkumar Ramkisan Saraf shall retire by rotation at the ensuing 60th Annual General Meeting and, being eligible, offers himself for re-appointment in accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company.

During the year, Mr. Anurag Saraf was appointed as an Additional Director in the category of Non-Executive Director. However, his resolution for appointment as a Director liable to retire by rotation was not approved by the shareholders with requisite majority and as a result, he ceased to be the Director of the Company w.e.f 21st September, 2015. Also Mr. S. B. Mishra an Independence Director Ceased to be a Director consequent upon his death on 12th August, 2016.

Further, all Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company has formulated a code of conduct for all members of the Board and Senior Management Personnel. All concerned members/ executives have affirmed compliance with the said code.

Detail of Remuneration paid to Executive Director During the year.

(Rs, in lacs)

S.

No.

Name of Director

Total Remuneration

1

Mr. R. K. Saraf

15,16,850.32

2

Mr. Manoj Saraf

17,99,783.32

3

Mr. Ashish Saraf

17,99,996.32

4

Mr. Rohit Saraf

17,99,997.32

Detail of Remuneration paid to Non-Executive Directors during the year.

(Rs, in lacs)

S.

No.

Name of Director

Sitting Fee Paid

1

Mr. A.S. Kapre

80,000

2

Mr. M.B. Thaker

70,000

3

Mr. Pinaki Misra

20,000

4

Mr. Keshaorao Pardhi

40,000

5

Mr. Umesh Khaitan

10,000

6

Mrs. Urmila Gupta

40,000

7

Mr. S.B. Mishra

25,000

8

Mr. Vineet Saraf

50,000

9

Mr. Anurag Saraf

10,000

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

All Independent Directors (IDs) inducted into the Board are given an orientation. Chairman & Managing Director and the

Senior Management give an overview of the operations of the Company, to familiarize the new IDs with the Company''s business operations. The new IDs are given an orientation on the group structure, its operations, subsidiaries, Board constitution and procedures besides providing them with the financials of the Company for at least 3 years and the corporate brochure etc. Also, plant visits are organized for each ID for familiarizing with the Company''s operations and facilities.

BOARD EVALUATION

The Board evaluated the effectiveness of its functioning and of individual directors at its meeting held on 12th February, 2016.

The aspects covered in the evaluation included the contribution to and monitoring of corporate governance practices, participation in the long-term strategic planning and the fulfillment of Directors'' obligations and fiduciary responsibilities, including but not limited to, active participation at the Board and Committee meetings.

The Chairman had meetings with the Independent Directors and the Chairman of the Nomination and Remuneration Committee also had meetings with the Executive and Non Executive Directors. These meetings were intended to obtain Directors'' inputs on effectiveness of Board/Committee processes.

Further, the Independent Directors at their meeting, reviewed the performance of Board, Chairman of the Board and of Non- Executive Directors.

NOMINATION AND REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a Nomination and Remuneration policy for the appointment and remuneration of the Directors, Key Managerial Personnel and Senior Executives of the Company including criteria for determining qualifications, positive attributes, independence of a Director and other related matters can be accessed at www.facorgroup.in/investorrelations. Further, the Policy was reviewed by the Committee and the Board at their meeting held on 27th May, 2016.

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

Ferro Alloys Corporation Limited, (FACOR), believes in equal employment opportunity and remains committed to creating and nurturing a working environment for all employees to enable them work without fear of any prejudice, gender bias and sexual harassment. The Company does not tolerate sexual harassment at the workplace and 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 there under. During the Financial Year 2015-16, the Company has not received any complaint of sexual harassment and the Policy was reviewed by the Board and Committee at its meeting held on 27th May, 2016.

MEETINGS

During the year Four Board Meetings, Four Audit Committee Meetings, One Shareholders'' Grievances Committee, One meeting of Nomination and Remuneration Committee and One meeting of Corporate Social Responsibility Committee were convened and held, details whereof are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

SUBSIDIARIES

The Report and Accounts of the Company are prepared in consolidated form and contains results of its subsidiaries, Facor Power Limited, Facor Realty and Infrastructure Limited and Facor Energy Limited. The annual accounts of the subsidiaries shall be available on request to the members of the Company and are available for inspection at the registered office of the Company. Further, the Consolidated Financial Statements presented by the Company include the financial results of the subsidiary companies.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of the Company''s Subsidiaries'', Associates'' and Joint Ventures (in Form AOC-1) is attached to the financial statements as Annexure-F.

DIRECTORS’ RESPONSIBILITY STATEMENT

On the basis of framework of internal financial controls established and maintained by the Company, the work performed by the internal, statutory, Cost and Secretarial auditors and external agencies, the reviews performed by Management and the relevant Board Committees, the Board, with the concurrence of the Audit Committee, is of the opinion that the Company''s internal financial controls were adequate and effective as on 31 March, 2016.

Accordingly, pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors to the best of their knowledge and ability confirm:

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

(b) That we 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) That 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) That the annual accounts have been prepared on a going concern basis;

(f) That proper internal financial controls were laid down by the company and that such internal financial controls are adequate and were operating effectively.

(f) That proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

AUDIT COMMITTEE

Audit Committee of the Company comprises of Mr. A.S. Kapre, Mr. M.B. Thaker, and Mr. S.B. Mishra, all Independent Directors. The committee has been constituted in compliance with the provisions of Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI(LODR) Regulations, 2015] and assumes all responsibilities provided therein, discharging their duties diligently with transparency and accountability as their sole motivation.

AUDITORS

M/s Salve & Company, Chartered Accountants hold office upto the conclusion of the 61st Annual General Meeting subject to their appointment being ratified at every intervening Annual General Meeting of the Company till 61st Annual General Meeting of the Company. Based on the recommendation of the Audit Committee, the Board of Directors of the Company have proposed the ratification of appointment of M/s Salve & Co., Chartered Accountants, as the Auditors of the Company from the conclusion of the forthcoming 60th Annual General Meeting till the conclusion of the 61st Annual General Meeting. M/s Salve & Co., have expressed their willingness to act as Auditors of the Company, if appointed, and have further confirmed that the said appointment would be in conformity with the provisions of Section 141 of the Companies Act, 2013.

AUDITOR’S REPORT

The observations made in the Auditors'' Report are self explanatory and therefore, do not call for any further comments u/s 134(3) of the Companies Act, 2013.

COST AUDITORS

Pursuant to Section 141 & 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its activity is required to be audited. Your Directors have, on the recommendation of the Audit Committee, appointed M/s Niran & Co. to audit the cost accounts of the Company for the financial year 2016-17. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Member''s ratification for the remuneration payable to Messrs Niran & Co., Cost Auditors( Registration No. 000113) is included at Item No. 12 of the Notice convening the Annual General Meeting. M/ s Niran& Co., have expressed their willingness to act as Auditors of the Company, if appointed, and have further confirmed that the said appointment would be in conformity with the provisions of Section 141 of the Companies Act, 2013.

Further, your Directors had, in accordance with the General Circular from the Ministry of Corporate Affairs appointed M/ s Niran & Co., Cost Accountants, as Cost Auditors for Financial Year ended 31st March, 2016, for which Central Government approval had been received by the Company. The report on Cost audit for Financial Year ended 31st March, 2016 would be filed with Central Government before 30th September, 2016.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Ashish Saxena & Company, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for financial Year 2016-17. The Report of the Secretarial Audit in Form MR-3 is annexed to this report, as Annexure-A.

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

A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed as Annexure ‘B'' which forms part of this Report.

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 annexed to this report.

In terms of the provisions of Section 197(12) of the Companies Act, 2013 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 employees drawing remuneration in excess of the limits set out in the said Rules forms part of the Report.

However, having regard to the provisions of the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available for inspection at Registered Office of the Company during working hours. Any member interested in obtaining such information may write to the Company Secretary, at the registered office and the same will be furnished on request. Further the details are also available on the Company''s website: www.facorgroup.in

CORPORATE GOVERNANCE

Corporate Governance in your Company is about Commitment to values, ethical business conduct, nurturing good business ethics and creating value for its stakeholders in line with the principles of fairness, equity, transparency, accountability and dissemination of information. Your Company''s efforts are driven by the fundamental objectives of maximizing value by employing resources in opportunities that generate consistent returns and position it for sustained growth.

In terms of Regulation 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate report on Corporate Governance, Management Discussion and Analysis along with your Company''s Statutory Auditors'' Certificate dated 12th August, 2016 confirming the above compliance is annexed to and forms part of the Directors'' Report.

HUMAN RESOURCE DEVELOPMENT

Your Company takes great pride in the commitment, competence and vigour shown by its workforce in all realms of business. The Company continues to take new initiatives to further align its HR policies to meet the growing needs of its business.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as “Annexure D”.

SECRETARIAL AUDIT REPORT

In respect of observation made by the Secretarial Auditor in his report, the management submits that the non-filing of MGT- 14 was by oversight. Further, The Company is filing an application for condo nation of delay to complete the filing requirement.

PARTICULAR OF LOAN & INVESTMENT

During the year, the Company has remitted GBP 10,000 (INR 9,64,800) to Facor Energy Limited, Guernsey (FEL, Guernsey). However, allotment of shares to the Company is in process by FEL, Guernsey. Other than the above, no loans, guarantees given and investments have been made during the year in accordance with section 186 of the Companies Act, 2013 are, as under. Accordingly, the information is given below:

Rules, 2014, your Company approved a Policy on CSR and the Policy was parked on the website of the Company. As part of CSR initiatives, your Company during the financial year 2015-16 has amongst other activities, undertaken projects in areas of promoting healthcare, empowerment of woman, ecological balance. These projects are in accordance with Schedule VII of the Companies Act, 2013. The report on CSR activities is attached as Annexure - E to this Report

DISCLOSURE WHERE COMPANY IS REQUIRED TO CONSTITUTE NOMINATION AND REMUNERATION COMMITTEE:

The Company have constitute a Nomination & Remuneration Committee under Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

('' in lacs)

Name of the entity

Relation

Amount

Particulars of loans, guarantees given or investments made

Purpose for which the loans, guarantees and investments are proposed to be utilized

Facor Energy Limited

Wholly Owned Subsidiary

9.65

Investment *

Business purpose

* Shares yet to be allotted by Facor Energy Limited, Guernse

RELATED PARTY TRANSACTION

There have been no materially significant related party transactions between the Company and the Directors, the management, the subsidiaries or the relatives except for those disclosed in the financial statements.

Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contract or arrangement in Form AOC-2 does not form part of the report.

RISK MANAGEMENT POLICY

A company is exposed to uncertainties owning to the sector in which it is operating. The Company is conscious of the fact that any risk that could have a material impact on its business should be included in its risk profile. Accordingly, in order to contain / mitigate the risk, the Board of Directors have approved a Risk management policy which shall be reviewed by Board and the management from time to time. The Company''s Risk Management framework is designed to identify, assess and monitor various risks related to key business and strategic objectives and lead to the formulation of a mitigation plan. Major risks in particular are monitored regularly at Executive meetings and the Board of Directors of the Company is kept abreast of such issues and the Policy was reviewed by the Board and Committee at its meeting held on 27th May, 2016.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) & Company have Nomination & Remuneration Policy for appointment and remuneration of Directors Under Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All the appointments of Directors are as per the Nomination & Remuneration Policy of the Company, which were also approved by the Committee.

DISCLOSURE IF MD/WTD IS RECEIVING REMUNERATION OR COMMISSION FROM SUBSIDIARY COMPANY

As per Section 197(14) of the Act, 2013 A MD/WTD of company can receive remuneration or commission from any holding company or subsidiary company of such company. This should be disclosed by the company in Board''s Report.

(Rs, in lacs)

S.

No.

Name of Director

Total Remuneration including Perquisites & Allowance/Sitting Fee

1

Mr. Ashish Saraf,

Joint Managing Director

5,000

2

Mr. A.S. Kapre, Independent Director nominated on the Board of Facor Power

Limited, subsidiary

40,000

DISCLOSURE OF VIGIL MECHANISM IN BOARD REPORT

The Company has adopted the Vigil Mechanism Policy for the Company in its duly held Board Meeting on 13th February, 2015 and the same is available on the website of the Company.

DETAILS OF DIRECTOR AND KMP

Pursuant to the provisions of section 2014 and other applicable provisions, if any, of the Companies Act, 2013 and the rules framed there under, Mr. R.K. Saraf, Chairman & Managing Director, Mr. O.P. Banka, Director (Finance) & Chief Finance Officer and Mr. Ritesh Chaudhry, Company Secretary have been appointed as the Key Managerial Personnel of the Company.

Further, details of directors who were appointed and/or who have resigned ceased to be Director are, as under:

S.

Name of Director

Date of Cessation

No.

1

Mr. Anurag Saraf,*

21st September,

Non-Executive Director

2015

* Represents Promoters

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

DISCLOSURE ABOUT ESOP AND SWEAT EQUITY SHARE

Company has not issued any share under ESOP or Sweat Equity Shares during the year.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations. However, members'' attention is drawn to the statement on contingent liabilities, commitments in the notes forming part of the Financial statements.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND

In terms of Section 125 of the Companies Act, 2013, unclaimed or unpaid Dividends detailed, as under, are due for remittance on the dates specified below to the Investor Education and Protection Fund established by the Central Government.

- Dividend for the year 2009-10, on or after 17th October,2017

- Dividend for the year 2010-11, on or after 12th October, 2018

CAUTIONARY STATEMENT

Statements in the Board''s Report and the Management Discussion & Analysis describing the Company''s objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company''s operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

ACKNOWLEDGEMENTS

Directors of the Company wish to thank the Central and State Governments for their continued support and co-operation extended towards the business as well as the company''s social functions. The Management also thanks the shareholders, Business Associates, Financial Institutions & Banks, Customers and Suppliers for the faith reposed in the Company and in them. The Board expresses its sincere appreciation to the dedicated and committed team of employees and workmen without whom reaching this far and maintaining the standard and quality of the products for which the company is famous, would not have been possible. We look forward to all of your continued support. Let''s grow and move ahead together.

On behalf of Board of Directors,

Place : New Delhi R.K. SARAF

Dated : 12th August, 2016 Chairman & Managing

Director


Mar 31, 2014

Dear members,

The directors are delighted to present the 58th Annual Report of your Company and the Audited Statement of Accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS

The Board takes pleasure and pride to announce that despite sluggish business phase in the last Financial Year, the Company yet performed reasonably well to post positive figures for the year. The results are as under:

(Rs. in lacs)

Particulars For the For the year ended year ended 31st March, 2014 31st March, 2013

Profit before tax 4296.57 3094.59

Depreciation/Amortization 926.60 919.25

Provision for taxation 1160.28 515.47

Net Profit/(Loss) for the year 3136.29 2579.12

Transfer to General 5000.00 - Reserve

Balance carried to 4560.38 6424.09 Balance Sheet

OPERATIONS

The Indian ferro alloy industry has evolved gradually and now employs highly qualified manpower, latest equipments and technology. This evolution has led to quality produce which has strengthened its position over the years.

Reaching such position and earning recognition has not come easy for Indian ferro alloy industry given the fact that out of 12 billion tones of global reserves; about 95% of resources are geographically concentrated in Kazakhstan, South Africa, Turkey and other countries.

Notwithstanding the above, Indian chrome enjoys premium over others due to higher chrome content compared to glo- bal average and has higher Cr/ Fe ratio. Furthermore, Indian ores are also more amenable to beneficiation and upgradation than South African ores and because of the higher Cr/ Fe and higher Cr2O3, chrome alloys made from Indian ores have higher percent of chrome ore. South Africa is the largest chrome ore producer followed by Zimbabwe, Kazakhstan and India. Despite high grade of ores Indian Chrome falls short in competition owing to high input costs, escalating power tariff and unavailability of quality raw materials. Owing to the aforesaid factors Indian ferro alloys producers are operating at levels well below their installed capacity.

Your company''s turnover for the current financial year, 2013-14 stands at Rs. 63262.91 lacs as against Rs. 51787.13 lacs last year, an increase of 22.16% over the previous year. Exports during the year were Rs. 45483.70 lacs. Further, your company has posted a profit before tax of Rs. 4296.57 lacs this year as against. Rs. 3094.59 lacs in the previous year, reflecting an increase of 38.84%. DIVIDEND Keeping in view the future requirement of funds in working capital and other purposes, the Directors do not recommend any dividend in the financial year ended 31st March, 2014.

FINANCE

Your Company has not raised any deposit from public during the year.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard 21 on Consolidated Financial Statements read with Accounting Standard 23 on Accounting for Investments in Associates, the audited consolidated financial statement is provided in the Annual Report for the year.

PROSPECTS

Prospects of Ferro Alloys industry are saddled to the growth and progress of Steel Industry. With Steel Industry contributing substantially to the growth of Indian Economy, India has emerged as the 4th largest producer of crude steel in the world as against the 8th position it occupied in 2003and expects to become the 2nd largest producer of crude steel soon.

As per official estimates, the Iron and Steel Industry contributes close to 3 per cent of the Gross Domestic Product (GDP). World crude steel production stood at 1547.8 million tonnes during 2012, an increase of 1.2 per cent over 2011. During 2012, Chinese crude steel production reached 716.5 million tonnes, a growth of 3.1 per cent over 2011. Further, during FY 2012-13 India''s share in the production of High Carbon Ferro Chrome stood at 1.12 million tonnes.

China has remained the largest crude steel producer in the world, accounting for 72 per cent of Asian and 46 per cent of world crude steel production during 2012. With low per capita consumption of steel of 59 kg in India compared to the world average of estimated 200 kg there is a strong feeling that the domestic steel industry has a huge growth potential.

India, with 5-7% share of Global Ferro Alloys Industry, is amongst the ten largest producers of the material in the world. Indian Bulk ferro alloys supply constitutes of ferro chrome about 32%, ferro manganese and silico manganese about 62% and rest others. Further, Indian enjoys a natural advantage as it has the 5th largest chrome ore with 100 million tones estimated reserve and the 6th largest in Manganese ore with estimated 176 million tones reserve.

Total domestic consumption may reach 1 million metric tonnes by 2015 from about 4,50,000 tonnes, while output may rise at a slower pace of 44% to 1.3 million tones.

The Indian ferro alloy industry has, since inception, laid emphasis on research & development, backward integration in terms of setting up of captive power plants, operating mines, thereby creating large scale employment and bringing development to the local populace.

FUTURE STRATEGY AND GROWTH

With power being a major cost element in production of ferro chrome, your Company, as a measure for backward integration, is setting up a 100 MW Captive Power Plant. While phase-I (One Turbine of 50MW and One Boiler) and phase-II (2nd Turbine of 50MW and 2nd Boiler) have been completed, Commissioning of the third boiler is expected by October/ November, 2014.

Currently, the captive power plant is generating about 30-35 MW power as per the requirement of your Company.

Further, your company also remains committed to forward integration as well by way of setting up green field projects, acquisitions, joint ventures etc.

INDUSTRIAL RELATIONS

Industrial relations with workers, trade unions, and with local populace remained amicable and pleasant throughout the year.

DIRECTORS

Mr.Rohit Saraf and Mr. Ashish Saraf shall retire by rotation at the ensuing 58th Annual General Meeting and, being eligible, offer themselves for re-appointment.

The Company has formulated a code of conduct for all members of the Board and Senior Management Personnel. All concerned members/executives have affirmed compliance with the said code.

SUBSIDIARIES

The Report and Accounts of the Company are prepared in con- solidated form and contains results of its subsidiaries, Facor Power Limited, Facor Realty and Infrastructure Limited and Facor Energy Limited. The annual accounts of the subsidiaries shall be available on request to the members of the Company and are available for inspection at the registered office of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217(2AA) of Companies Act, 1956, your Directors confirm that -

i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations;

ii) 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 of the Company for that period;

iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) they have prepared the annual accounts on a going concern basis.

AUDIT COMMITTEE

Audit Committee of the Company comprises of Mr A.S. Kapre, Mr M.B. Thaker, and Mr. S.B. Mishra, all Independent Directors. The committee has been constituted in strict compliance with the provisions of Clause 49 of the Listing agreement and assumes all responsibilities provided therein, discharging their duties diligently with transparency and accountability as their sole motivation.

AUDITORS

M/s Salve & Company, Chartered Accountants hold office upto the conclusion of the ensuing 58th Annual General Meeting. Based on the recommendation of the Audit Committee, the Board of Directors of the Company have proposed the appointment of M/s Salve & Co., Chartered Accountants, as the Auditors of the Company from the conclusion of the forthcoming 58th Annual General Meeting till the conclusion of the 61st Annual General Meeting. M/s Salve & Co., have expressed their willingness to act as Auditors of the Company, if appointed, and have further confirmed that the said appointment would be in conformity with the provisions of Section 141 of the Companies Act, 2013.

You are requested to appoint Auditors for the current year and to fix their remuneration.

AUDITOR''S REPORT

The observations made in the Auditors'' Report are self explanatory and therefore, do not call for any further comments u/s 217(3) of the Companies Act, 1956.

COST AUDITORS

Your Directors had, in accordance with the General Circular from the Ministry of Corporate Affairs appointed M/s Niran & Co., Cost Accountants, as Cost Auditors for Financial Year ended 31st March, 2014, for which Central Government approval had been received by the Company. The report on Cost audit for Financial Year ended 31st March, 2014 would be filed with Central Government before 30th September, 2014. Further, your Directors have appointed M/s Niran & Co., Cost Accountants, as Cost Auditors of the Company for Financial year ended 31st March, 2015 as well for which Central Government approval has also been received.

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

A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed as Annexure ''A'' which forms part of this Report.

PARTICULARS OF EMPLOYEES

In terms of the provisions of section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of the employees are set out in the annexure to the Directors'' Report. Having regard to the provisions of section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. Any member interested in obtaining such particulars may write to the Company Secretary of the Company.

CORPORATE GOVERNANCE

In terms of clause 49 of the Listing Agreement, a separate report on Corporate Governance, Management Discussion and Analysis along with your Company''s Statutory Auditors'' Certificate dated 26th May, 2014 confirming the above compliance is annexed to and forms part of the Directors'' Report.

HUMAN RESOURCE DEVELOPMENT

Your Company takes great pride in the commitment, competence and vigour shown by its workforce in all realms of business. The Company continues to take new initiatives to further align its HR policies to meet the growing needs of its business.

ACKNOWLEDGEMENTS

Directors of the Company wish to thank the Central and State Governments for their continued support and co-operation extended towards the business as well as the company''s social functions. The Management also thanks the shareholders, Business Associates, Financial Institutions & Banks, Customers and Suppliers for the faith reposed in the Company and in them. The Board expresses its sincere appreciation to the dedicated and committed team of employees and workmen without whom reaching this far and maintaining the stan- dard and quality of the products for which the company is famous, would not have been possible. We look forward to all of your continued support. Let''s grow and move ahead together.

On behalf of Board of Directors,

R.K. SARAF CHAIRMAN & MANAGING DIRECTOR

Place : Noida - 201 301 Dated : 26th July, 2014


Mar 31, 2013

The directors are delighted to present the 57th Annual Report of your Company and the Audited Statement of Accounts for the year ended 31st March, 2013.

FINANCIAL RESULTS

The Board takes pleasure and pride to announce that despite difficult and testing times faced in the last Financial Year, the Company performed marvellously to post positive figures for the year. The results are as under:

(Rs. in lacs)

Particulars For the year For the year ended 31st ended 31st March, 2013 March, 2012

Gross Profit/(Loss) 4013.84 767.18

Depreciation/Amortization 919.25 975.86

Provision for taxation 515.47 131.54

Net Profit/(Loss) for the year 2579.12 (340.22)

Transfer to General Reserve

Balance carried to Balance Sheet 6424.09 3844.97

OPERATIONS

The Indian ferro alloy industry has evolved over time and now fosters highly qualified manpower, latest equipments and technology. This evolution has led to quality produce which has made its position as one of the best in the world.

Making that position and earning recognition has not been an easy task for Indian ferro alloy industry as out of 12 billion tones of global reserves; about 95% of resources are geographically concentrated in Kazakhstan, South Africa, Turkey and other countries.

The edge that Indian chrome en joys over others is that it has higher chrome content compared to global average and has higher Cr/ Fe ratio of 2.4 compared to 1.7. Furthermore, Indian ores are also more amenable to beneficiation and upgradation than South African ores and because of the higher Cr/ Fe and higher Cr 2O3, chrome alloys made from Indian ores have higher percent of chrome ore. South Africa is the largest chrome ore producer followed by India and Kazakhstan.

Despite high grade of ores Indian Chrome falls short in competition owing to high input costs, escalating power tariff and unavailability of quality raw materials. Owing to the aforesaid factors Indian ferro alloys producers are operating at 50% of their installed capacity (i.e. installed capacity is 1584000 tonnes whereas production was only 792000 tonnes). The average production of the Indian ferro alloys industry during the year was 2.4 Million tonnes with peak produce of 2.89 Million Tonnes, which represented 56% capacity utilization.

Your company''s turnover for the current financial year, 2012-13 stands at Rs. 51787.13 lacs as against Rs. 47604.17 lacs last year. Exports during the year saw a slight decline against last year. Further, your company has posted a profit before tax of Rs. 3094.59 lacs this year as against loss of Rs. 208.68 lacs in the previous year.

DIVIDEND

Keeping in view the future requirement of funds in working capital and other purposes, the Directors do not recommend any dividend in the financial year ended 31st March, 2013.

FINANCE

Your Company has not raised any deposit from public during the year.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year 2012-13.

PROSPECTS

The Indian ferro alloy industry has, since inception, laid emphasis on research & development, backward integration in terms of setting up of captive power plants, operating mines, thereby creating large scale employment and bringing development to the local popuilace. The prospects of ferro alloys industry are tied up to that of steel industry and swing in the direction the latter takes. However, despite measures to achieve cost efficiency by backward integration, the same could not be achieved, especially for units which have set up captive power units. This is due to the factor that the coal allocation for thermal plants have been lax, prices of imported coal has increased with Indonesia and Philippines imposing export duty on coal. The producers are currently operating at 50% capacity to minimize their losses due to escalating costs. The global demand is predominantly met by produce of South Africa and Kazakhstan with China being the largest importer of both chrome ore and ferro chrome. Further, the Euro Zone crisis, recessionary phase continuing in the US, tsunami in Japan and contraction in global auto sector has negatively impacted steel demand. However, projections and forecast for 2013 and 2014 remain promising with global consumption pegged to increase by 2.9% to 1454 million tonne and 3.2% to 1500 million tonne in 2014 as against 1.2% growth of 2012. Apparent steel use in China is expected to grow by 3.5% in 2013 to 668.8 million tonne following a 1.9% increase in 2012. In 2014, steel demand is expected to grow by 2.5% as the Chinese government''s measures to control investment in an effort to rebalance the economy will remain in place.

On the domestic front steel demand is also expected to pick up growth is expected to be up by 5.9% to 75.8 million tone in 2013 following 2.5 % growth in 2012 as monetary easing is expected to support investment activities. In 2014, growth in steel demand is expected to further accelerate to 7.0%, owing to the reform measures aimed at narrowing the fiscal deficit, coupled with measures to improve the foreign direct investment climate.

FUTURE STRATEGY AND GROWTH

As reported earlier, your Company, as a measure for backward integration, was setting up a 100 MW Captive Power Plant. The phase-I (One Turbine of 50MW and One Boiler) of the project was successfully synchronized on 8th July 2011. The erection & commissioning activities for phase-II (2nd Turbine of 50MW and 2nd Boiler) have been completed. Commissioning of the third boiler is expected by September/October, 2013.

Once the Power plant is fully operational the Company shall benefit by continuous supply of quality power and shall also help realize a good return on its investment by selling the excess in open market.

Also, your company is also looking at forward integration by way of setting up green field projects, acquisitions, joint ventures etc.

INDUSTRIAL RELATIONS

Industrial relations with workers, trade unions, and with local populace remained amicable and pleasant throughout the year.

DIRECTORS

During the year, Mr. Harish Salve and Mr. Vineet Saraf have resigned from the Board of your Company. The Board places on record its gratitude for the services rendered by Mr. Harish Salve and Mr. Vineet Saraf during their tenure as members of the Board.

Mr. S. Sridhar was appointed as a Director on the Board of the Company w.e.f 28th July, 2012 as a director in casual vacancy caused by the resignation of Mr. Harish Salve.

Further, during the year Mr. Vinod Saraf was appointed as an Additional Director w.e.f 19th January, 2013 and the Joint Managing Director of the Company subject to approval of the members of the Company.

Mr. Arye Berest, Mr. M.B. Thaker, Mr. A.S. Kapre and Mr. N.L. Ajwalia shall retire by rotation at the ensuing 57th Annual General Meeting and, being eligible, offer themselves for re-appointment.

The Company has formulated a code of conduct for all members of the Board and Senior Management Personnel. All concerned members/ executives have affirmed compliance with the said code.

SUBSIDIARIES

The Report and Accounts of the Company are prepared in consolidated form and contains results of its subsidiaries, Facor Power Limited, Facor Realty and Infrastructure Limited and Facor Energy Limited. The annual accounts of the subsidiaries shall be available on request to the members of the Company and are available for inspection at the registered office of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217(2AA) of Companies Act, 1956, your Directors confirm that -

i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations;

ii) 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 of the Company for that period;

iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) they have prepared the annual accounts on a going concern basis.

AUDIT COMMITTEE

Audit Committee of the Company comprises of Mr A.S. Kapre, Mr M.B. Thaker, and Mr. S.B. Mishra, all Independent Directors. The committee has been constituted in strict compliance with the provisions of Clause 49 of the Listing agreement and assumes all responsibilities provided therein, discharging their duties diligently with transparency and accountability as their sole motivation.

AUDITORS

M/s Salve & Company, Chartered Accountants hold office upto the conclusion of the ensuing 57th Annual General Meeting. The Company has received a requisite Certificate pursuant to Section 224 (1B) of the Companies Act 1956 regarding their eligibility for reappointment as Auditors of the Company. You are requested to appoint Auditors for the current year and to fix their remuneration.

AUDITOR''S REPORT

The observations made in the Auditors'' Report are self explanatory and therefore, do not call for any further comments u/s 217(3) of the Companies Act, 1956.

COST AUDITORS

Your Directors had, in accordance with the General Circular from the Ministry of Corporate Affairs appointed M/s Niran & Co., Cost Accountants, as Cost Auditors for Financial Year ended 31st March, 2013, for which Central Government approval had been received by the Company. The report on Cost audit for Financial Year ended 31st March 2012 was filed on 28th December, 2012 and in respect of Financial Year ended 31st March, 2013 would be filed with Central Government before 30th September, 2013. Further your Directors have appointed M/s Niran & Co., Cost Accountants, as Cost Auditors of the Company for Financial year ended 31st March, 2014 as well subject to the approval of the Central Government.

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

A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed as Annexure ''A'' which forms part of this Report.

PARTICULARS OF EMPLOYEES

During the year under review there were no employees receiving remu- neration of or in excess of Rs. 60,00,000/- per annum or Rs.5,00,000/- per month requiring disclosure as per the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

CORPORATE GOVERNANCE

In terms of clause 49 of the Listing Agreement, a separate report on Corporate Governance, Management Discussion and Analysis along with your Company''s Statutory Auditors'' Certificate dated 27th May,

2013 confirming the above compliance is annexed to and forms part of the Directors'' Report.

HUMAN RESOURCE DEVELOPMENT

Your Company takes great pride in the commitment,competence and vigour shown by its workforce in all realms of business. The Company continues to take new initiatives to further align its HR policies to meet the growing needs of its business.

ACKNOWLEDGEMENTS

Directors of the Company wish to thank the Central and State Governments for their continued support and co-operation extended towards the business as well as the company''s social functions The

Management also thanks the shareholders, Business Associates, Financial Institutions & Banks, Customers and Suppliers for the faith reposed in the Company and in them. The Board expresses its sincere appreciation to the dedicated and committed team of employees and workmen without whom reaching this far and maintaining the standard and quality of the products for which the company is famous, would not have been possible. We look forward to all of your continued support. Let''s grow and move ahead together.

On behalf of Board of Directors,

Place : New Delhi R.K. SARAF

Dated : 27th May, 2013 Chairman & Managing Director


Mar 31, 2012

The Directors have pleasure in presenting the 56th Annual Report of your Company and the Audited Statement of Accounts for the year ended 31st March, 2012.

FINANCIAL RESULTS

(Rs. in lacs)

Particulars For the year For the year ended 31st ended 31st March, 2012 March, 2011

Gross Profit/(Loss) 767.18 6867.18

Depreciation/Amortization 975.86 997.84

Provision for taxation 131.54 2125.02

Net Profit/(Loss) for the year (340.22) 3744.32

Transfer to General Reserve - 2000.00

Balance carried to Balance Sheet 3844.97 4185.19

OPERATIONS

Ferro alloys industry is a part of core sector, which supplies crucial intermediaries to the steel industry. Its growth is primarily related to the growth of steel industry domestically as well as globally. Steel Industry is marking a century since stainless steels were first created, patented and produced. During the 100 years, stainless steel has grown to be an integral part of our modern word. World's crude stainless steel production in 2011 was 32.1 million tonnes, up by 3.3% from 2010. Production in China of crude stainless steel in 2011 was 12.5 million tones, up by 11.9% from 2010. The production of crude stainless steel in 2012 is expected to reach 34 million tonnes. The biggest growth will again be in China, followed by India. The international steel industry is growing at a rapid pace resulting in robust demand for various Ferro Alloys like Ferro Chrome, Ferro Manganese, Ferro Silicon, Silico Manganese and noble Ferro Alloys. Indian Ferro Alloys industry has also grown during the year 2011-12. Also, the world crude steel production reached 1,527 million tonnes (M.T.) reflecting an increase of 6.8% over 2010 and was a record for global crude steel production. Annual production for Asia was 988.2 million MT for 2011, an increase of 7.9% compared to 2010. In India the end users of steel are primarily infrastructure projects, construction of dams, malls railway stations, utensils, auto industry, defence sector etc. The major part of consumption is in infrastructure and auto industry.

Power cost continue to plague the ferro alloys industry, and forms almost 40% of the cost of production. Ever increasing price is affecting revenue and as such has rendered Indian ferro alloys product non competitive in the international market. Due to lack of proper coal allocation and high cost of coal the captive power plant setup also suffers from high cost of production which is passed on to the ferro alloys produce. Your Company, however, is a fully integrated producer owning chrome ore mines and access to captive power through its subsidiary viz. Facor Power Limited.

Your company's turnover for the current financial year, 2011-12 stands at Rs.47604.17 lacs as against Rs.48786.54 lacs last year. Exports during the year saw a slight decline against last year. Further, your company has posted a loss of Rs.208.68 lacs this year as against profit of Rs.5869.34 lacs in the previous year.

DIVIDEND

Keeping in view the future requirements of funds in working capital and other purposes, the Directors do not recommend any dividend in the financial year ended 31st March, 2012.

FINANCE

Your Company has not raised any deposit from public during the year.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements the audited Consolidated Financial Statements are provided in the Annual Report.

SUBSIDIARIES

In terms of the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. However, the financial information of the subsidiary companies is disclosed in the Annual Report in compliance with the said circular. The company will make available the Annual Accounts of the subsidiary companies and related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the Company will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies as well. Further, the Consolidated Financial Statements presented by the Company include the financial results of the subsidiary companies.

PROSPECTS

As highlighted above, prospects of ferro alloys industry is dependent on the growth of steel industry. Infrastructure and auto industry are the major consumers, consequently, developing countries are major customers of all type of steel for their growth. Prospect for ferro alloys industry seems bright and is expected that demand of steel shall be doubled by 2015. As per world steel forecast, steel demand in India should grow by 6.9% in 2012 and the growth should accelerate to 9.4% in 2013. Further, the low per capita consumption of stainless steel in India which was 2.1 kg as compared to 7.5 kg in China and the world average of 4 Kg all in the 2011-12 fiscal year, constitutes a huge opportunity for growth in this sector. Indian Stainless Steel consumption will grow at a compounded annual growth rate of 9.7% reaching 3.4 million tonnes per annum by 2015, outstripping global consumption growth of 6% to 34.12 million tonnes which is a welcome sign for the ferro alloys industry as consumption of ferro alloys will increase.

Further, there are indications that there may be power shortage in South Africa, which may directly affect the production of ferro alloys to some extent. This factor may help Indian Ferro Alloys industry to utilize its idle capacity to take seize the opportunity of meeting the shortfall by South Africa. However, full utilization of capacity may happen provided raw materials are readily available and the power cost is made internationally comparable with peers like South Africa and CIS countries.

South Africa is exporting large quantities of Chrome Ore to China and making China highly competitive to South African Ferro Chrome production. Therefore, Government of South Africa is seriously planning to impose export duty on Chrome Ore thereby the landed cost of Chrome ore in China will be exorbitant resulting in higher cost of production of Ferro Chrome. Hence, there are good prospects of export of Indian High Carbon Ferro Chrome to China.

FUTURE STRATEGY AND GROWTH

As reported earlier, your Company, as a measure for backward integration, was setting up a 100 MW Captive Power Plant. The phase-I (One Turbine of 50MW and One Boiler) of the project was successfully synchronized on 8th July 2011 and the same was under testing till 30th September 2011. The erection & commissioning activities for phase-II (2nd Turbine of 50MW and 2nd Boiler) of the Project are in full swing and expected to be synchronized by July/August, 2012.Commissioning of 3rd boiler is expected by June/July, 2013.

Once the Power plant is fully operational the Company shall benefit by continuous supply of quality power and shall also help realize a good return on its investment by selling the excess in open market.

Further, measures are being taken to increase the capacity of production to 115000 MT p.a. from present 65000 MT p.a. New Furnace with high quality yield are being considered for capacity enhancement. This is in line with our focus on upgradation of technology for sustained growth and better utilization of resources.

Also, your company is also looking at forward integration by way of setting up green field projects, acquisitions, joint ventures etc.

INDUSTRIAL RELATIONS

Apart from the lockout carried out by the Company on its plant located at Randia, from 29.06.11 to 10.07.11 industrial relations with the labour union were peaceful and satisfactory. The lockout was called due to unlawful activities by the labour union which resulted in non conducive and potentially unsafe work environment.

DIRECTORS

Mr. S.B. Mishra, Mr. M.D. Saraf, Mr. Rohit Saraf and Mr. Ashish Saraf shall retire by rotation at the ensuing 56th Annual General Meeting and, being eligible, offer themselves for re-appointment.

The Company has formulated a code of conduct for all members of the Board and Senior Management Personnel. All concerned members/ executives have affirmed compliance with the said code.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217(2AA) of Companies Act, 1956, your Directors confirm that -

i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations;

ii) 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 of the Company for that period;

iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) they have prepared the annual accounts on a going concern basis.

AUDIT COMMITTEE

Audit Committee of the Company comprises of Mr A.S. Kapre, Mr M.B. Thaker, and Mr. S.B. Mishra, all Independent Directors. The committee has been constituted in strict compliance with the provisions of Clause 49 of the Listing agreement and assumes all responsibilities provided therein, discharging their duties diligently with transparency and accountability as their sole motivation.

AUDITORS

M/s Salve & Company, Chartered Accountants hold office upto the conclusion of the ensuing 56th Annual General Meeting. The Company has received a requisite Certificate pursuant to Section 224 (1B) of the Companies Act 1956 regarding their eligibility for reappointment as Auditors of the Company. You are requested to appoint Auditors for the current year and to fix their remuneration.

COST AUDITORS

Your Directors had, in accordance with the General Circular from the Ministry of Corporate Affairs appointed M/s Niran & Co., Cost Accountants, as Cost Auditors for Financial Year ended 31st March, 2012, for which Central Government approval had been received by the Company. The report on Cost audit for Financial Year ended 31st March, 2012 would be filed with Central Government before 30th September, 2012. Further, your Directors have appointed M/s Niran & Co., Cost Accountants, as Cost Auditors of the Company for Financial year ended 31st March, 2013 as well for which Central Government approval has also been received.

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

A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed as Annexure 'A' which forms part of this Report.

PARTICULARS OF EMPLOYEES

During the year under review there were no employees receiving remu- neration of or in excess of Rs.60,00,000/- per annum or Rs.5,00,000/- per month requiring disclosure as per the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

CORPORATE GOVERNANCE

In terms of clause 49 of the Listing Agreement, a separate report on Corporate Governance, Management Discussion and Analysis along with your Company's Statutory Auditors' Certificate dated 28th July, 2012 confirming the above compliance is annexed to and forms part of the Directors' Report.

ACKNOWLEDGEMENTS

Directors of the Company wish to thank the Central and State Governments for their continued support and co-operation extended towards the business as well as the company's social functions. The Management also thanks the shareholders, Business Associates, Financial Institutions & Banks, Customers and Suppliers for the faith reposed in the Company and in them. The Board expresses its sincere appreciation to the dedicated and committed team of employees and workmen without whom reaching this far and maintaining the standard and quality of the products for which the company is famous, would not have been possible. We look forward to all of your continued support. Let us grow and move ahead together.

On behalf of Board of Directors,

Place : New Delhi R.K. SARAF

Dated : 28th July, 2012 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2011

TO THE MEMBERS

The Directors are delighted to present the 55thAnnual Report of your Company and the Audited Statement of Accounts for the year ended 31st March, 2011.

FINANCIAL RESULTS

Rs. in lacs

Particulars For the year For the year

ended 31st ended 31st March, 2011 March, 2010

Gross Profit/(Loss) 6870.18 3373.27

Depreciation/Amortization 997.84 1024.03

Provision for taxation 2128.02 947.36

Net Profit/(Loss) for the year after tax 3744.32 1401.88

Transfer to General Reserve 2000.00 2000.00

Balance carried to Balance Sheet 4185.19 2979.18



OPERATIONS

2010-11 witnessed both natural and economic disasters which could not keep any company across the globe insulated thus affecting operations in some way or the other. Your company was also affected due to the above.

However, with GDP estimated to have grown at 8.6% in 2010-11 in real terms, the economy has shown remarkable rescillence and so has your company.

During the year 2010-11 operations at the Charge chrome plant and mines showed improved performance. The production of Charge Chrome/Ferro Chrome and chrome ores was higher as compared to that of the previous year. Over the years, the company has also reduced the tonnage under conversion contract with Tata Steel.

Ferro alloy products are used in the production of steel as de-oxidant and alloying agents and the Ferro alloys industry acts an intermediate industry to the Iron & Steel industry. Being an intermediate product its demand and prices move in sync with that of steel.

Power cost forms almost 40% of the cost of production and ever increasing price is affecting revenue and as such has rendered Indian ferro alloys product non competitive in the international market. To tide over this problem your company is in the process of establishing a captive power plant with total capacity of 10 0 MW first phase comprising of 45 MW has now been synchronized and awaits commissioning. Post commissioning your company shall be self reliant for power.

The overall turnover of the Company increased from Rs. 348.58 crores in 2009-2010 to Rs. 487.87 crores in 2010-2011 recording an increase of 39.96%. Exports were also higher at Rs. 282.31 crores as compared to Rs. 208.35 crores in the previous year registering a growth of 35.50%. Profit before tax too surged to Rs. 58.72 crores as compared to Rs..23.49 crores in the previous year recording an increase of 149.98%.

DIVIDEND

Your Directors have, in their meeting held on 1st August, 2011 proposed dividend at the rate of Rs. 0.25 (25%) per share of Rs. 1 each for the financial year ended 31st March, 2011 which shall be paid on or before 11th October, 2011 once approved by the members of the Company at the 55th Annual General Meeting of the Company.

FINANCE

Your Company has not raised any deposit from public during the year.

PROSPECTS

The ferro alloys industry forms part of the core sector under the Ministry of Steel and is engaged in supplying crucial intermediate products to the Steel industry. Consequent to dip in global stainless steel production during the preceding year coupled with cut down in Chinese steel production the demand as well as price of ferro alloys was reduced by 25%. Also, the credit squeeze policy of the Chinese Government has aggravated the situation and the demand for ferro alloys products has reduced during the last two quarters. There is overcapacity of Stainless steel as demand for stainless steel is around 5-6 Million tons against the production capacity of 8-9 Million tons. European markets also do not seem very encouraging with Greece and Spain opting for debt restructuring. Also, the Turkish producers have become aggressive in the chrome ore market and have resulted lower chrome ore prices.

On the domestic front ferro alloys industry has capacity of 4.04 million tons and is working at capacity utilization of 65%. However, Ferro alloys producers are now looking towards the domestic market for sustenance with mega steel projects been approved for installation for various capacities which now are poised to be commissioned at the earliest. Per capita consumption of steel is very low in India as against the global standards and that of developed countries which provides strong growth opportunity. With India on growth path, steel industry shall remain in the focus as it forms the core sector for development, in the light of which the prospects of ferro alloys industry for the coming years are expected to remain good.

Further, the steps taken by the Government of India to boost the sentiments of the manufacturing industry in general and iron & steel industry, in particular,by imposing export duty on chrome ore to ensure availability of this important raw material for production of High Carbon Ferro Chrome provides an indication for the growth of indian ferro alloys industry.

FUTURE STRATEGY AND GROWTH

The first phase covering 45 MW of the 100 MW captive thermal power plant set up by Facor Power Limited has completed the synchronization process and awaits commissioning is likely to go onstream by end of August, 2011 and the second phase by November / December, 2011.

With power deficit in the country your company sees opportunity in the power sector and is on look out for various opportunities in both conventional and renewable sources with varying capacities.

Also, your company is also looking at forward and backward integration. While forward integration is being planned by way of setting up green field projects, acquisitions, joint ventures etc., backward integration is being planned for setting up power projects to contain the power cost, acquisition of chromite mines, enhancement of existing capacities etc.

Further, your company also remains focused on upgradation of technology for a sustained growth.

INDUSTRIAL RELATIONS

Apart from a brief lockout by the Company on its plant located at Randia, from 29.06.11 to 10.07.11 industrial relations with the labour union were peaceful and satisfactory. The lockout was called due to unlawful activities by the labour union which resulted in non conducive and potentially unsafe work environment. The matter was subsequently settled amicably.

DIRECTORS

Mr. M.B. Thaker, Mr. A.S. Kapre, Mr. Vineet Saraf and Mr. N.L. Ajwalia shall retire by rotation at the ensuing 55th Annual General Meeting and, being eligible, offer themselves for re-appointment.

The Company has formulated a code of conduct for all members of the Board and Senior Management Personnel. All concerned members/ executives have affirmed compliance with the said code.

SUBSIDIARIES

The Report and Accounts of and Facor Realty And Infrastructure Limited, subsidiary of your Company, are annexed along with statement pursuant to section 212 of the Companies Act, 1956.

DIRECTORS REPOSIBILITY STATEMENT

Pursuant to the provisions of Section 217(2AA) of Companies Act, 1956, your Directors confirm that -

i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations;

ii) 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 of the Company for that period;

iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) they have prepared the annual accounts on a going concern basis.

AUDIT COMMITTEE

Audit Committee of the Company comprises of Mr A.S. Kapre, Mr M.B. Thaker, Mr Umesh Khaitan and Mr. S.B. Mishra, all Independent Directors . The committee has been constituted in strict compliance with the provisions of Clause 49 of the Listing agreement and assume all responsibilities provided therein, discharging their duties diligently with transparency and accountability as their sole motivation.

AUDITORS

M/s Salve & Company, Chartered Accountants hold office upto the conclusion of the ensuing 55thAnnual General Meeting. The Company has received a requisite Certificate pursuant to Section 224 (1B) of the Companies Act 1956 regarding their eligibility for reappointment as Auditors of the Company. You are requested to appoint Auditors for the current year and to fix their remuneration.

AUDITOR'S REPORT

The observations made in the Auditors' Report are self explanatory and therefore, do not call for any further comments u/s 217(3) of the Companies Act, 1956.

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

A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed as Annexure 'A' which forms part of this Report.

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of the Report. However, as per the provision of section 219(1)(b)(iv) of the said Act, the Report and Accounts are being sent to all shareholders of the Company excluding the statement of particulars of employees u/s 217(2A) of the said Act. Any shareholder desirous of obtaining a copy of the statement may write to the Company Secretary of the Company.

CORPORATE GOVERNANCE

In terms of clause 49 of the Listing Agreement, a separate report on Corporate Governance, Management Discussion and Analysis along with your Company's Statutory Auditors' Certificate dated 1st August, 2011 confirming the above compliance is annexed to and forms part of the Directors' Report.

ACKNOWLEDGEMENTS

Directors of the Company wish to thank the Central and State Governments for their continued support and co-operation extended towards the business as well as the company's social functions. TheManagement thanksthe shareholders, Business Associates, Financial Institutions & Banks, Customers and Suppliers for the faith reposed in the Company and in them. The Board also expresses its sincere appreciation to the dedicated and committed team of employees and workmen without whom reaching this far and maintaining the standard and quality of the products for which the company is famous, would not have been possible and look forward to continued support.

On behalf of Board of Directors,

Place : New Delhi R.K. SARAF

Dated : 1st August, 2011 CHAIRMAN & MANAGING DIRECTOR

Find IFSC