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Notes to Accounts of Ferro Alloys Corporation Ltd.

Mar 31, 2015

(Rs. in lacs) As at As at 31s1 March, 2015 31st March, 2014

1. SHARE CAPITAL

Authorised Share Capital:

220,000,000 (Previous Year - 220,000,000) Equity Shares of Rs. 1/- each 2200.00 2200.00

800,000 (Previous Year - 800,000) 0.01% Redeemable Preference 800.00 800.00

Shares of Rs. 100/- each

TOTAL 3000.00 3000.00

Issued, Subscribed and Paid up:

185,268,241 (Previous Year - 185,268,241) Equity Shares of Rs. 1/- each 1852.68 1852.68

fully paid up TOTAL 1852.68 1852.68

2.1 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

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 summaries the components of net expense recongnised in the Statement of Profit and Loss and Balance Sheet for the respective plans.

3. Corporate Scocial Responsibility Expenditure during the year amounts to Rs. 53.13 Lacs which has been debited under different heads of accounts in the Statement of Profit and Loss.

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. Contingent Liabilities and Commitments

(I) Contingent Liabilities :

(a) Claims against the Company not acknowledged as debts, since disputed Rs. 6,027.52 lacs (Previous Year Rs. 4,848.54 lacs). Amounts paid under protest Rs. 379.61 lacs (Previous Year Rs. 352.83 lacs) have been debited to Advance Account.

(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) Capital and other Commitments :

(a) Estimated amount of contracts on Capital Account remaining to be executed and not provided for in accounts Rs. 599.91 Lacs (Previous Year Rs. 848.49 lacs).

6. a) The Company has given corporate guarantee to Rural Electrification Corporation Ltd. (REC) in connection with granting a facility of Term Loan of Rs. 51,790 Lacs (Previous Year Rs. 46,704 Lacs) to Facor Power Ltd. (FPL). The Company has also pledged 19,80,60,000 shares (Previous Year 15,10,74,299 shares) with REC out of 19,80,60,000 shares (Previous Year 17,81,00,000 shares) held in FPL besides giving an undertaking to provide interest free unsecured subordinated loan or subscribe for equity / preference shares to FPL in case of cost overrun at any stage of the project.

b) The Company has given corporate guarantee to Central Bank of India of Rs. 4,200 Lacs (Previous Year Rs. 4,200 Lacs) for providing Working Capital Facilities to FPL.

7. 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.

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


Mar 31, 2014

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

Defined Contribution Plan :

Amount of Rs. 245.23 (Previous Year Rs. 246.31) is recognised as expense and included in "Employee Benefits Expenses" in Note 25 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 summaries the components of net expense recongnised in the Statement of Profit and Loss and Balance Sheet for the respective plans.

2. 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.

3. Contingent Liabilities and Commitments

(I) Contingent Liabilities :

(a) Claims against the Company not acknowledged as debts, since disputed Rs. 4,848.54 lacs (Previous Year Rs. 3,933.25 lacs). Amounts paid under protest Rs. 352.83 lacs (Previous Year Rs. 282.83 lacs) have been debited to Advance Account.

(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) Capital and other Commitments :

(a) Estimated amount of contracts on Capital Account remaining to be executed and not provided for in accounts Rs. 848.49 Lacs (Previous Year Rs. 243.51 lacs).

4. (a) The Company has given corporate guarantee to Rural Electrification Corporation Ltd. (REC) in connection with granting a facility of

Term Loan of Rs. 46,704 Lacs (Previous Year Rs. 39,768 Lacs) to Facor Power Ltd. (FPL). The Company has also pledged 15,10,74,299 shares (Previous Year 8,68,24,299 shares) with REC out of 17,81,00,000 shares (Previous Year 15,31,24,369 shares) held in FPL besides giving an undertaking to provide interest free unsecured subordinated loan or subscribe for equity / preference shares to FPL in case of cost overrun at any stage of the project.

b) The Company has given corporate guarantee to Central Bank of India of Rs. 4,200 Lacs (Previous Year Rs. 4,200 Lacs) for providing Working Capital Facilities to FPL.

5. Related Party Disclosure:-

I. List of related parties:-

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

Facor Power Limited - Subsidiary Company.

Facor Realty and Infrastructure Limited - Subsidiary Company.

Facor Energy Limited - 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. Facor Alloys Limited 2. Facor Steels Limited

3. Rai Bahadur Shreeram and Company Private Limited. 4. Shri Durgaprasad Saraf Charitable Trust

5. Shreeram Shipping Services Pvt. Ltd. 6. Shreeram Durgaprasad Ores Pvt. Ltd.

7. Smt. Godavari Devi Saraf Janseva Trust 8. Saraf Enterprises (Pvt.) Ltd.

9. Saraf Bandhu Pvt. Ltd.

C. Key Management Personnel :

i) R.K. Saraf Chairman & Managing Director

ii) Manoj Saraf Managing Director

iii) Vinod Saraf Joint Managing Director

iv) Rohit Saraf Joint Managing Director

v) Ashish Saraf Joint Managing Director

D. Relative of a Key Management Personnel : i) Mrs. Priti Saraf

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

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, 2013

1) General Information

Ferro Alloys Corporation Limited (FACOR) was incorporated in 1955. The Company is listed at Bombay Stock Exchange. It is one of the India''s largest producers and exporters of Ferro Alloys, an essential ingredient for manufacture of Steel and Stainless Steel. FACOR is also engaged in Chrome Ore exploration, mining and beneficiation in the state of Odisha. Chrome Ore is one of the main raw material for producing Charge Chrome / High Carbon Ferro Chrome. Facor is having about 84% stake in Facor Power Ltd. which is engaged in the generation of power.

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 30 of notes to fi nancial statements)

Disclosure pursuant to Accounting Standard - 15 ( Revised) "Employee Benefi ts" :

Defi ned Contribution Plan :

Amount of Rs. 246.31 (Previous Year Rs. 255.40) is recognised as expense and included in "Employee Benefits Expenses" in Note 25 of the Statement of Profit and Loss.

Defi ned Benefi t 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 summaries the components of net expense recongnised in the Statement of Profit and Loss and Balance Sheet for the respective plans

4. (Note 37 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.

5. (Note 38 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. 3,933.25 lacs (Previous Year Rs. 3,870.71 lacs). Amounts paid under protest Rs. 282.83 lacs (Previous Year Rs. 270.63 lacs) have been debited to Advance Account.

(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) Capital and other Commitments :

(a) Estimated amount of contracts on Capital Account remaining to be executed and not provided for in accounts Rs. 243.51 Lacs (Previous Year Rs. 76.12 lacs).

6. (Note 39 of notes to fi nancial statements)

a) The Company has given corporate guarantee to Rural Electrification Corporation Ltd. (REC) in connection with granting a facility of Term Loan of Rs. 39,768 Lacs (Previous Year Rs. 39,768 Lacs) to Facor Power Ltd. (FPL). The Company has also pledged 8,68,24,299 shares (Previous Year 4,88,24,299 shares) with REC out of 15,31,24,369 shares (Previous Year 13,60,74,369 shares) held in FPL besides giving an undertaking to provide interest free unsecured subordinated loan or subscribe for equity / preference shares to FPL in case of cost overrun at any stage of the project.

b) The Company has given corporate guarantee to Central Bank of India of Rs. 4,200 Lacs (Previous Year Rs. 4,200 Lacs) and to State Bank of Mysore of Rs. 300 Lacs (Previous Year Rs. 300 Lacs) for providing Working Capital Facilities to FPL.

7. (Note 41 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: Facor Power Limited - Subsidiary Company. Facor Realty And Infrastructure Limited - Subsidiary Company. Facor Energy Limited - 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 Facor Alloys Limited 2 Facor Steels Limited

3 Rai Bahadur Shreeram And Company Private Limited 4 Shri Durgaprasad Saraf Charitable Trust

5 Shreeram Shipping Services Pvt. Ltd. 6 Shreeram Durgaprasad Ores Pvt. Ltd.

7 Smt. Godavari Devi Saraf Janseva Trust 8 Saraf Enterprises Pvt. Ltd.

9 Saraf Bandhu Pvt. Ltd. C Key Management Personnel :

i) R.K. Saraf Chairman & Managing Director

ii) Manoj Saraf Managing Director

iii) Vineet Saraf (up to 31/01/2013) Joint Managing Director

iv) Vinod Saraf (w.e.f. 01/02/2013) Joint Managing Director

v) Rohit Saraf Joint Managing Director

vi) Ashish Saraf Joint Managing Director

D Relative of a Key Management Personnel : i) Mrs. Priti Saraf

8. (Note 42 of notes to financial statements)

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

9. (Note 43 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 20 11 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.

10. Market value of quoted investment is Rs. 10.55 Lacs (Previous Year Rs. 28.65 Lacs)


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 226,058 0.01% Redeemable Preference Shares of Rs. 100/- each of Face Value of Rs. 226.06 lacs.

Small scale industrial undertakings to whom Rs. 0.47 lac (Previous Year Rs. 1.81 lacs) are due for a period exceeding 30 days have been identified based on the information available with the Company and are as follows : Indo Compressed Tools Pvt. Ltd., Rock Drill (India) Pvt. Ltd. and Odisha Air Products Pvt. Ltd.

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

Defined Contribution Plan :

Amount of Rs. 255.40 lacs (Previous Year Rs. 233.02 lacs) is recognised as expense and included in "Employee Benefits Expense" in Note 25 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 summaries the components of net expense recognised in the Profit and Loss account 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 Contingent Liabilities and Commitments

(I) Contingent Liabilities :

(a) Claims against the Company not acknowledged as debts, since disputed Rs. 3,870.71 lacs (Previous Year Rs. 4,311.32 lacs). Amounts paid under protest Rs. 270.63 lacs (Previous Year Rs. 230.92 lacs) have been debited to Advance Account.

(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. 76.12 Lacs (Previous Year Rs. 605.69 lacs).

5 a) The Company has given corporate guarantee to Rural Electrification Corporation Ltd. (REC) in connection with granting a facility of

Term Loan of Rs. 39,768 Lacs (Previous Year Rs. 39,768 Lacs) to Facor Power Ltd. (FPL). The Company has also pledged 4,88,24,299 shares (Previous Year 4,88,24,299 shares) with REC out of 13,60,74,369 shares (Previous Year 6,48,24,369 shares) held in FPL besides giving an undertaking to provide interest free unsecured subordinated loan or subscribe for equity / preference shares to FPL in case of cost overrun at any stage of the project.

b) The Company has given corporate guarantee to Central Bank of India for granting a short term loan of Rs. NIL (Previous Year Rs. 12,500 Lacs) and to State Bank of Mysore for granting bank guarantee limit of Rs. 300 Lacs (Previous Year Rs. 300 Lacs) to FPL.

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, 2010

1 Contingent Liabilities:

(a) Estimated amount of contracts on Capital Account remaining to be executed and not provided for in accounts Rs. 690.07 lacs (Previous Year Rs. 757.54 lacs).

(b) Claims not acknowledged as debts, since disputed Rs. 4,676.34 lacs (Previous Year Rs. 3,254.25 lacs). Amounts already paid under protest Rs. 981.76 lacs (Previous Year Rs. 981.76 lacs) have been debited to Advance Account.

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

2 (Refer Note 7 of Schedule K of Annual Accounts)

a) The Company has given a corporate guarantee to Rural Electrification Corporation Ltd. (REC) in connection with granting a facility of term loan of Rs. 140 crores to Facor Power Ltd (FPL). The Company has also pledged with REC its entire shareholding in FPL besides giving an undertaking to provide interest free unsecured subordinated loan to FPL in case of cost overrun at any stage of the project

b) The Company has given guarantee to State Bank of Mysore for granting bank guarantee limit of. Rs. 3 crores to FPL

3 (Refer Note 8 of Schedule K of Annual Accounts)

Amounts due from the companies under the same Management :- i) Facor Alloys Ltd. Rs. 333,09 lacs (Previous Year Rs. 66.00 lacs) ii) Facor Steels Ltd. Rs. 45.54 lacs (Previous Year Rs. 68.31 lacs) iii) Facor Power Ltd. Rs. 298.98 lacs (Previous Year Rs. 469.36 lacs)

4 (Refer Note 14 of Schedule T of Annual Accounts)

In view of no manufacturing / trading activities having been commenced by Facor Realty and Infrastructure Ltd., the subsidiary company, Consolidated Financial Statements required by directives of 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 u/s. 212 of the Companies Act, 1956, the audited Financial Statements of the subsidiary company for the year ended 31st March, 2010 are annexed.

5 (Refer Note 26 of Schedule K of Annual Accounts)

Related Party Disclosure:- I List of related parties:-

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

Facor Realty and Infrastructure Ltd., - 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 Facor Alloy Limited 2 Facor Steels Limited

3 Facor Power Limited 4 Rai Bahadur Shreerarn & Co. Pvt. Ltd.

5 Shri Durgaprasad Saraf Charitable Trust 6 Shreerarn Shipping Services Pvt. Ltd.

7 S. D. Ores Pvt. Ltd. 8 Smt. Godavari Devi Saraf Janseva Trust

C Key Management Personnel:

i) R.K. Saraf Chairman & Managing Director

ii) Manoj Saraf Managing Director

iii) Vineet Saraf Joint Managing Director

iv) Rohit Saraf Joint Managing Director

v) Ashish Saraf Joint Managing Director

Compiled from the Audited Accounts of the Company referred to in our Report dated 24th July, 2010













 
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