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Directors Report of Star Ferro and Cement Ltd.

Mar 31, 2016

Dear Shareholders,

The Directors have pleasure in presenting Sixth Annual Report of the Company together with the Audited Balance Sheet as at 31st March, 2016 and the Statement of Profit & Loss for the year ended on that date.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

Your Company has five subsidiaries including step-down subsidiaries namely, Cement Manufacturing Company Limited (CMCL), Star Cement Meghalaya Limited (SCML), Megha Technical & Engineers Private Limited (MTEPL), Meghalaya Power Limited (MPL) and NE Hills Hydro Limited (NHHL). CMCL along with its subsidiaries operates integrated Cement plants in the State of Meghalaya and Assam with a combined installed capacity of 2.87 MMTPA of Cement and 2.54 MMTPA of cement clinker. MPL is in the business of power generation and operates 51 MW Thermal Power Plant in the State of Meghalaya. NHHL is exploring possibilities of power generation in the North Eastern Part of India. The report on the financial position of the Company''s Subsidiaries for the year ended 31st March, 2016 in Form AOC 1 is attached and marked as Annexure – 1 to this report.

Your Company does not have any Associate or Joint Venture.

A Policy has been formulated for determining the Material Subsidiaries of the Company. The said Policy has been posted on the Company''s website at the weblink: http://www.starferrocement.co.in/admin/docs/policy-on- material-subsidiary.pdf

INDIAN ECONOMY AND GLOBAL HEADWINDS

Amidst mixed global economic landscape, India stands out as a haven of stability and an outpost of opportunity. Its macro-economy remains stable, founded on the Government''s commitment to fiscal consolidation and low inflation. Country''s economic growth has remained the highest in the world, helped by a reorientation of Government spending towards needed public infrastructure and have been accomplished in the face of global headwinds and a second successive season of poor rainfall. During the Financial Year 2015-16 India as an economy fared well as compared to most of the developing economies as also compared to developed economies. The signs of consolidation of Indian Economy which started reflecting during October-December Quarter of FY 2014- 15 were sustained and confirmed during the year under review. As against 7.2% of GDP growth during Financial Year 2014-15, Indian Economy is expected to register GDP growth rate of 7.6% during the FY 2015-16. Despite a weak monsoon for a second consecutive year, agriculture and food production both grew, although marginally, over previous year. Improvement in private consumption was witnessed largely on account of a pickup in urban consumption, while rural consumption remained subdued as a result of two consecutive weak monsoons. Government consumption growth also stayed tepid as the Central Government boosted capital expenditure and curtailed current expenditure. Increase in capital expenditure undertaken by the Central Government helped investment growth to improve further during the year under review as compared to previous Financial Year.

Inflationary pressures were largely under control mainly on account of sharp fall witnessed in the prices of oil as also on account of base rate effect and softening of food prices.

As against this, Global economic growth slowed in FY 2015-16 to its weakest pace since the year 2008-09. This was mainly led by slower growth in emerging economies. China''s real GDP growth was witnessed at 6.9% during the year 2015 which is one of the slowest in last 25 years reflecting a weaker growth in country''s industrial sector. Growth in other emerging economies also slowed in 2015 and more particularly in commodity producing countries. All major developed economies are expected to see the growth momentum picking up. Despite expectations of a more robust recovery, developed economies continue to face considerable headwinds from the legacies of the global financial crisis, including subdued employment levels, elevated private and public sector debt and financial sector fragilities.

In the backdrop of above, Indian Economy is expected to pick up further growth momentum during the ensuing Financial Year, helped by the Government''s strengthening of public sector banks'' capital and operations, private investment benefitting from corporate deleveraging, the financing of stalled projects and an uptick in bank credit.

CEMENT SCENARIO IN INDIA - OPPORTUNITIES, CHALLENGES AND OUTLOOK

Cement is major business vertical for subsidiaries of your Company. India is one of the largest producer of Cement in world and only second to China. It accounts for nearly 8% of the total global production having close to 400 Million MT per annum installed capacity. The cement industry capacity doubled in the last decade, with about 70 Million MT added in the last three years alone. Cement, being a bulk commodity, is a freight intensive industry and transporting it over long distances can prove to be uneconomical. This has resulted in cement being largely a regional play with the industry divided into five main regions viz. North, South, West, East and the Central Region. The Southern region of India has the highest installed capacity, accounting for about one-third of the country''s total installed cement capacity.

On the consumption side, India has witnessed sustained growth in cement consumption since 2001. However, consumption growth has slowed down in last 4-5 years mainly on account of a slump in housing, infrastructure and commercial sector. The gap in the pace between capacity additions and actual demand has led to an excess capacity situation in the industry, resulting in sub-optimal utilization rates.

On Per Capita consumption front, cement in India still remains substantially low at about 195 kg which is less than 50% as compared with the world average and thus underlines the tremendous scope for growth in the Indian cement industry in the long term.

Cement is a cyclical commodity with a high correlation with GDP The housing sector is the biggest demand driver of cement, accounting for about two-thirds of the total consumption. The other major consumers of cement include infrastructure, commercial construction and industrial construction.

First half of FY 2015-16 witnessed slowdown in consumption and demand growth. However, second half of the Financial Year started with up-tick in demand which further consolidated during the last quarter of the Financial Year. Housing sector is the major demand driver. The slow growth in cement sector is expected to remain a short-term phenomenon with the Government''s focus on constructing 50 million houses under ''Housing for All'' scheme by 2022. Government''s other initiatives such as 100 smart cities, AMRUT cities, affordable housing as well as initiatives undertaken towards development of ports, roads, bridges, freight corridor, etc. are likely to provide further impetus to cement demand in India. This also gets reflected with Government''s intention to unshackle the impediments in economic and infrastructural growth. The years ahead are expected to bring more cheers for Indian Cement Industry.

On the cost front power, fuel and logistic costs are the major cost drivers. Cost, quality and availability of coal are major cost driver for power as well as fuel so far as cement industry is concerned. Indian cement industry continued to face challenges on this front, both in terms of quality as well as prices. However, with all time low Baltic Dry Index (BDI), the landed cost of imported Petroleum Coke has been seen to be more cost effective for cement industry in terms of its cost as well as consistency in quality parameters. With unblocking of coal blocks and Governments intent to bring perceptible difference in power supply situation, both in terms of quantity and quality, it is expected that in years to come, the challenges currently being faced by Indian cement industry will be eased out.

In the backdrop of opportunities in Housing and Infrastructure sectors, India as an economy presents a promising future for cement industry.

EAST INDIA AND LAND OF SEVEN SISTERS – AN OPPORTUNTY FOR CEMENT INDUSTRY

East India which comprises of States of West Bengal, Bihar, Jharkhand and Orrisa as well as eastern most North Eastern Region comprising of contiguous Seven Sister States namely, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura and Himalayan State Sikkim is endowed with opportunities. North East India is 8% of land size of India where around 4% of Indian populace resides. The region offers a unique agglomeration comprising varied cultures, languages and dialects, different forms of belief and worship and diverse ways of life. Topography of North Eastern Region (NER) presents a panoramic view and an awe-inspiring landscape. Within these fascinating and fabulous environment of NER, rich potential wealth of mineral resources have been lying untapped, ready to be exploited for the benefit of the people and economy. Despite being endowed with vast natural resources in terms of forests, biological diversity, hydroelectricity and petroleum, the region has remained largely underdeveloped on account of poor infrastructure and limited connectivity, both within the region as well as with the rest of the country. The region, connected to the rest of India by a narrow stretch of land called the ''chicken''s neck'', needs infrastructure to support. Large Hydro potential that exists in NER and if exploited, has potential to export power to the power deficit Northern and Western regions of the country. This under development of the region presents a lot of opportunities for industrial and infrastructure growth within the region. Development of infrastructure such as roads, communications and electricity supply to remote hilly area will result in better quality of life. The improvement in power generation will in turn help in establishing industries by annulling the effects of high transportation costs. Owing to proximity of the region with neighboring countries such as Bangladesh and Myanmar, the region has potential of augmenting trade.

On the socio-economic front, the region stands way below in comparison with the rest of India. Underdeveloped infrastructure has been one of major bottlenecks in development of region on socio-economic front. During recent years the Government has taken several steps to overcome these infrastructural bottlenecks to induce sustainable development in the region. The strong focus on roads, airports and hydropower developments are some of the key steps in this direction.

Realizing these opportunities, subsidiary of your Company CMCL started setting up its first cement plant in the State of Meghalaya of NER with a very small capacity of 0.3 Million MT more than a decade ago and started its commercial operations during later part of the FY 2004-05. The product and brand was well accepted in the markets of North East. Looking at the potential of the market, your subsidiary Company kept on adding the capacity which has reached to the level of 2.54 Million MT per annum of Cement Clinker and around 2.87 Million MT of Cement in North East alone. With passage of time, your subsidiary has been able to spread its foot print in the entire North Eastern region in terms of its distribution network and enjoys a premium brand reputation commanding highest market share in North Eastern Region. Owing to the vast opportunities, markets of North Eastern Region continued to remain the focus market for the products of your subsidiaries.

During the year under review the region witnessed infrastructure growth story getting realized on the ground with two major highway projects dedicated to NER on 1st May, 2015. Shillong Bye-pass Highway Project and four-lane Jorabat - Barapani section of NH- 40 was opened for public on its completion. This has helped decongest the traffic in the city of Shillong from trucks and heavy vehicles coming from or moving towards North Eastern parts of Assam, Mizoram and Tripura apart from significant reduction in travel time and also ease of logistic operations for cement industry like your Company''s subsidiaries having factories in Meghalaya. Much awaited broad gauge conversion work of Silchar-Lumding railway line on a stretch of 210 Kms was completed and opened for Goods and Passenger Traffic during the year under review. Similarly, the capital town of the landlocked State of Tripura appeared on a broad-gauge railway network connecting Tripura with the rest of the country. The project consists of 79 major bridges, 340 minor bridges and 21 tunnels. The rail line brings Assam''s underdeveloped but strategically important Barak Valley as well as State of Tripura on the broad gauge map. During the year under review, the State of Arunachal Pradesh was presented with second Broad Gauge connectivity with the commissioning of Balipara - Bhalukpong gauge conversion project. Similarly, North Lakhimpur - Murkongselek sections were converted into broad- gauge during the year under review. Commissioning of newly converted North Lakhimpur - Murkongselek section marked the completion of Rangiya - Murkongselek Gauge Conversion project running all along the North Bank of Brahmaputra. There are other major railway projects which are on a fast track of completion.

All the above developments are expected to provide better connectivity for goods and passenger traffic for overall benefit of public residing in these States and presents a promising future for cement industry in North East Region as also for economy of the region.

Simultaneous with expanding its horizon in the markets of North Eastern Region, your subsidiary which started its network expand in the markets of West Bengal and Bihar during the latter part of Financial Year 2013-14 has further consolidated its presence in these markets during the year under review. States of West Bengal and Bihar have also remained under developed as compared to rest of India and has tremendous growth opportunities in infrastructure and housing sector, two major demand drivers of cement. During the year under review the subsidiary Company has successfully driven the marketing campaign in these States to bring the recall of its brand "STAR CEMENT" at the top of people''s mind. Looking at opportunities in these markets, subsidiary Company has further augmented its capacity in form of arrangements with grinding units in the State of West Bengal.

MARKET DEVELOPMENT

Despite slowdown in cement demand in rest of the country, growth in cement demand in NER was close to country''s GDP growth rate. During the year under review, cement demand in NER has grown by more than 7% over previous Financial Year. Over a period of time, cement import to NER from outside region has also reduced considerably. During the year under review less than 15% of cement was imported in the region from outside as against more than 17% during previous Financial Year. During the year under review your subsidiary companies were able to sale 17,03,415 MT of cement in the markets of NER as against 14,98,380 MT during the FY 2014-15 and thus recording a growth of 13.7% over previous year.

Your Directors are pleased to report that markets of West Bengal and Bihar where the brand "STAR CEMENT" has been relatively a new player as compared to its positioning in the markets of North Eastern Region, has fared well during the year under review. Your subsidiary companies have been able to sale 9,26,280 MT of cement during the Financial Year 2015-16 in these markets as against 6,70,871 MT during the Financial Year 2014-15 registering a growth of 38% over previous year. To augment its capacity further in these markets, your subsidiary has made arrangements with one more grinding unit in the State of West Bengal during the year under review. With this arrangement, subsidiary has grinding arrangement of close to 1 Million MT of cement per annum. The capacity augmentation will help further in cutting down the logistic time to make the product available in these markets.

In line with its endeavor to focus trade segment of the business, your subsidiaries continued adding dealer and retail network across length and breadth of the North East Region as well as in the States of West Bengal and Bihar to make its foot prints more visible in these markets. At the close of the fiscal, your subsidiaries had dealer and retail network of more than 6000 spread across entire North East Region and 4000 in the States of West Bengal and Bihar on consolidated basis.

During the year under review your subsidiary Company CMCL has undertaken various marketing initiatives in order to make the brand "STAR CEMENT" more visible and attain top of mind recall. In the markets of North Bengal and Bihar, they launched its premium product "Star Anti-Rust Cement". Marketing Campaign called "Kismat Ki Bori" was launched in various markets of North Eastern Regions and outside the region too. During the year under review your subsidiary''s branding initiative in form of "Largest Idol of Goddess Durga" was a huge success story.

To make the brand more visible in remote areas, a block level branding campaign was undertaken. In addition, they conducted various knowledge sharing events mainly related to construction techniques in form of "Engineers'' Workshop" and "Star Tech" to impart training to engineers. Your subsidiary also conducted more than 50 "Mason Certification Programme" wherein masons were trained and their construction skills were certified jointly by your subsidiary Company and local engineering institutes. These initiatives has helped them to promote the brand "STAR CEMENT" in a more effective manner in these markets and has also resulted into creation of better informed category of masons and engineers.

POWER BUSINESS

During the year under review, the performance of Meghalaya Power Limited, a step down subsidiary of the Company was very optimistic. The power generation has increased to 1,831.14 Lacs units as compared to 1,679.23 Lacs units recorded in the previous year. During the Financial year 2015-16, the Company has posted PBT of Rs. 1,472.07 Lacs and PAT of Rs. 1,082.84 Lacs as against Rs. 1,287.39 Lacs and Rs. 544.66 Lacs respectively recorded in the previous Financial Year.

OPPORTUNITIES & THREATS, RISKS AND CONCERNS

In the backdrop of initiatives being undertaken by the Central Government in form of "Housing for All'' and "Affordable Housing" in the urban and rural housing sector and initiatives in the areas of "Amrut and Smart Cities", Development of Ports, Roads and Highways, dedicated Freight Corridors, Gauge conversion Projects undertaken by Railways, development in the area of alternative source of energy vis Hydro and Solar Power and other infrastructure projects is expected to boost Cement and Power Demand in the region where subsidiaries of your Company operates as well as in other parts of the country too.

India''s economy being too much dependent upon vagaries of monsoon, rains play an important factor which determines commodity demand growth including cement. Cement and power industry being majorly dependent upon availability of quality coal at affordable cost remains to be a concern. However, recent initiatives in the areas of unblocking of coal mines as also all-time low Baltic Dry Index (BDI) making availability of Petroleum Coke at a cheaper cost with high consistency in quality is expected to address the concern to a great extent.

Your Company having business operations through its subsidiaries only, the Company has evolved a risk management framework to identify, assess and mitigate the key risk factors of the business of its Subsidiaries impacting your Company''s performance. The Board of the Company is kept informed about the risk management of the Company.

FINANCIAL PERFORMANCE

The highlights of the financial performance of the Company for the Financial Year ended 31st March, 2016 and previous Financial Year are as under:

(Rs. in Lacs)

Particulars Consolidated Standalone

2015-16 2014-15 2015-16 2014-15

Net Sales/ Income 1,71,644.98 1,43,121.01 2,375.38 0.10

Profit Before Depreciation, Interest & Tax 39,931.24 43,584.75 2,225.93 (138.55)

Depreciation (17,149.21) (22,374.29) - -

Interest and Finance Charges (8,336.77) (8,738.47) (0.01) (0.03)

Exceptional Items (53.14) 1.83 - -

Profit Before Tax 14,392.13 12,473.82 2,225.92 (138.58)

Tax Expenses (551.06) (480.13) 44.56 -

Profit after Tax before Minority Interest 13,841.06 11,993.69 2,270.48 (138.58)

Less: Minority Interest (4,643.59) (3,650.03) - -

Net profit after Minority Interest 9,197.48 8,343.66 - -

Surplus in the Statement of Profit & Loss:

At the beginning of the year 44,838.24 37,165.12 41.61 180.20

Add: Profit for the year 9,197.48 8,343.66 2,270.48 (138.58)

-Less: Interim Dividend on Equity Shares 2,221.73 - 2,221.73 -

-Less: Tax on Interim Equity Dividend - - - -

-Less: Tax on Proposed Equity Dividend - 670.55 - -

-Less: Transfer to General Reserve - - - -

Balance at the end of the year 51,813.98 44,838.24 90.36 41.61

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2016 was Rs. 2,221.73 Lacs. During the year under review, the Company has not issued any shares with differential voting rights nor granted stock options or sweat equity shares.

EXTRACT OF ANNUAL RETURN

In terms of requirement of Section 134 (3) (a) of the Companies Act, 2013, the extract of the Annual return in form MGT-9 is annexed herewith and marked Annexure-2.

MEETINGS OF THE BOARD

During the year seven (7) Board meetings and five (5) Audit Committee meetings were convened and held. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. The details of the Board meetings and the Committee meetings are provided in the Corporate Governance Report.

MEETINGS OF INDEPENDENT DIRECTORS

During the year under review, a meeting of Independent Directors was held on 21st March, 2016 wherein the performance of the Non-Independent Directors and the Board as a whole was reviewed. The Independent Directors at their meeting also, inter-alia, assessed the quality, quantity and timeliness of flow of information between the Company management and the Board of Directors of the Company.

COMMITTEES OF THE BOARD

The composition and terms of reference of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee have been furnished in the Corporate Governance Report forming part of this Annual Report. There has been no instance where the Board has not accepted the recommendations of the Audit Committee and Nomination and Remuneration Committee.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

The Company has a Whistle Blower Policy/ Vigil Mechanism as required under Section 177 of the Companies Act, 2013 and as per Listing Obligations and Disclosures Requirements Regulations, 2015 formulated by Securities and Exchange Board of India (SEBI). The Vigil (Whistle Blower) mechanism provides a channel to the employees and Directors to report to the management, concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct or policy. The mechanism provides for adequate safeguards against victimization of employees and Directors to avail the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. The said policy may be referred to at the Company''s website at the weblink: http://www.starferrocement. co.in/admin/docs/Whistle-Blower-Policy.pdf

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to requirement of Section 134 (3) (c) read with Section 134 (5) of the Companies Act, 2013, the Directors hereby confirm and state that:

- In the preparation of Annual Accounts, the applicable Accounting Standards have been followed along with the proper explanation relating to material departures, if any.

- The Directors have selected such accounting policies and have 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 as at 31st March, 2016 and of the profit of the Company for the year under review.

- The Directors have taken 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.

- The Directors have prepared the annual accounts on going concern basis.

- The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

- The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

DECLARATION BY INDEPENDENT DIRECTORS

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. Mr. Manindra Nath Banerjee, Mr. Santanu Ray, Mr. Mangilal Jain and Mrs. Plistina Dkhar are Independent Directors on the Board of your Company. In the opinion of the Board and as confirmed by these Directors, they fulfil the conditions specified in Section 149 of the Act and the Rules made thereunder about their status as Independent Director of the Company.

FAMILIARIZATION PROGRAMME UNDERTAKEN FOR INDEPENDENT DIRECTORS

In order to enable the Independent Directors to perform their duties optimally, the Board has devised a familiarization programme for the Independent Directors to familiarize them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. They are periodically updated about the development which takes place in the Company. The Independent Directors have been issued Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and commitments etc. The familiarization program is available on the Company''s website under the weblink: http://www.starferrocement.co.in/admin/ docs/familiarisation-programme.pdf

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT EMPLOYEES

The Board has framed a Remuneration Policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Employees. The remuneration policy aims to enable the Company to attract, retain and motivate highly qualified members for the Board and at other executive levels. The remuneration policy seeks to enable the Company to provide a well-balanced and performance-related compensation package, taking into account shareholder interests, industry standards and relevant Indian corporate regulations. The details on the same are given in the Corporate Governance Report.

AUDITORS & AUDITORS'' REPORT

M/s. Kailash B. Goel & Co., Chartered Accountants (Firm Registration no. 322460E) Statutory Auditors of the Company, will retire at the conclusion of the ensuing Annual General Meeting of the Company. Being eligible, they have offered themselves for re-appointment and have confirmed that their appointment, if made, will be in accordance to the provisions of Section 141 read with Section 139 of the Companies Act, 2013 and the rules framed there under for re-appointment of auditors. The Board, on recommendation of the Audit Committee, recommends the appointment of M/s. Kailash B. Goel & Co., as Statutory Auditors of the Company for a period of 5 (five years) from the date of ensuing Annual General Meeting subject to approval of their appointment by the shareholders in the ensuing Annual General Meeting and ratification of their appointment in Annual General Meetings to be held subsequent to ensuing Annual General Meeting during the tenure of their appointment.

Members are requested to consider and approve their appointment as Statutory Auditors of the Company and are also requested to empower the Board of Directors for fixation of Auditor''s Remuneration.

The notes to the accounts referred to in the Auditors'' Report are self-explanatory and therefore, do not call for any further comments.

SECRETARIAL AUDIT

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 Mr. Manoj Kumar Banthia, Practicing Company Secretary of M/s. MKB & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith marked Annexure-3. The report is self-explanatory and do not call for any further comments.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year under review, your Company has not given any loan or guarantee to any person falling under ambit of Section 186 of the Companies Act, 2013.

Details of Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

RELATED PARTY TRANSACTIONS

During the year under review, there were no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large.

A policy on ''Related Party Transactions'' has been devised which may be referred to at the Company''s website at the weblink: http://www.starferrocement.co.in/admin/docs/related-party- transaction-policy.pdf.

RESERVES

During the year under review no amount was transferred to reserves.

DIVIDEND

During the year, your Company has declared an interim dividend of Rs. 1.00 per equity share. In order to conserve resources for future operations, your Directors do not recommend any final dividend for the year ended March 31, 2016.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

As the Company does not have any direct business operations, there is nothing to report under this segment.

FOREIGN EXCHANGE EARNING AND OUT-GO

During the year under review, there was no Foreign Exchange Earning and Out-go.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES (CSR)

Your Company''s Corporate Social Responsibility (CSR) Policy is committed towards improving the quality of life of communities by working on four thrust areas - employability, education, health and environment.

Company''s Corporate Social Responsibility Committee is headed by Mr. Sajjan Bhajanka, Director of your Company and consists of members as stated below:

Sl. Name Category Chairman/ Members No.

1. Mr. Sajjan Bhajanka Non-Independent Chairman

2. Mr. Hari Prasad Agarwal Non-Independent Member

3. Mr. Mangilal Jain Independent Member

Annual Report on CSR as required to be annexed in terms of requirement of Section 135 of Companies Act, 2013 and rules framed thereunder is annexed herewith and marked Annexure-4.

The CSR Policy of the Company is available on the Company''s website under the weblink: http://www.starferrocement.co.in/ admin/docs/csr-policy.pdf

EVALUATION OF THE BOARD''S PERFORMANCE

In compliance with the Companies Act, 2013 and as per Listing Obligations and Disclosures Requirements Regulations, 2015 formulated by Securities and Exchange Board of India (SEBI), the Company has adopted a policy for evaluation of performance of the Board of Directors. The Board follows a formal mechanism for the evaluation of the performance of the Board as well as Committee.

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

The Nomination and Remuneration Committee at its meeting established the criteria based on which the Board will evaluate the performance of the Directors.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders, etc. The performance evaluation of the Non-Independent Directors and Board as a whole was also carried out by the Independent Directors.

The Directors expressed their satisfaction over the evaluation process and results thereof.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, Mr. Sanjay Agarwal will retire by rotation and being eligible offers himself for re-appointment. In view of his considerable experience, your Directors recommend his re-appointment as a Director of the Company.

The shareholders have ratified the appointment of Mr. Manindra Nath Banerjee, Mr. Santanu Ray, Mr. Mangilal Jain and Mrs. Plistina Dkhar as Independent Directors at the Annual General Meeting held on 20th September, 2014 for a period of five years.

The following personnel are the Key Managerial Personnel of the Company:

1. Mr. Sanjay Kumar Gupta - Chief Executive Officer

2. Mr. Dilip Kumar Agarwal - Chief Financial Officer

3. Mr. Debabrata Thakurta - Company Secretary

POLICY ON PREVENTION OF SEXUAL HARASSMENT

The Company values the integrity and dignity of its employees. The Company has put in place a ''Policy on Prevention of Sexual Harassment'' as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("Sexual Harassment Act"). We affirm that adequate access has been provided to any complainants who wish to register a complaint under the policy. No complaint was received during the year.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company have been prepared in accordance to requirements of Accounting Standards (AS-21), as prescribed by the Institute of Chartered Accountants of India and has been included as a part of this Annual Report.

The detailed financial statements and audit reports of each of the subsidiaries of the Company are available for inspection at the Registered Office of the Company during office hours between 11 A.M. and 1 P.M. As per the provisions of Section 136 of the Companies Act, 2013, separate audited financial statements of its subsidiaries are being placed on its website: www.starferrocement.co.in and the Company will arrange to send the financial statements of the subsidiaries upon written request from the shareholders to their registered address.

DEPOSITS

During the year under report, the Company has not accepted any deposits from public or from any of the Directors of the Company or their relatives falling under ambit of Section 73 of the Companies Act, 2013.

CHANGES IMPACTING GOING CONCERN STATUS AND COMPANY''S OPERATIONS

During the year under review, there have been no material orders passed by the Regulators/Courts impacting, materially, the going concern status or future operations of the Company.

There were no material changes and commitments affecting the financial position of the Company during the period under review.

ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Company maintains comprehensive internal control system, commensurate with the size of its operations and monitoring procedure for all the major processes to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, laws and regulations, safeguarding of assets and economical and efficient use of resources.

The Internal Audit Department of the Company periodically reviews the effectiveness and efficacy of Internal Control Systems and procedures. Audits are finalized and conducted based on internal risk assessments. Significant deviations from the standard procedures are brought to the notice of the Board periodically and corrective measures are recommended for implementation. All these steps facilitate timely detection of any irregularities, frauds and errors and early remedial measures to be undertaken so that no monetary losses are sustained. Significant audit observations, if any, and corrective actions thereon are presented to the Audit Committee of the Board.

INTERNAL CONTROL OVER FINANCIAL REPORTING

The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. During the year, such controls were tested andno reportable material weakness in the design or operations were observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

MANAGERIAL REMUNERATION

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 and Rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith and marked Annexure- 5.

PARTICULARS OF EMPLOYEES

The Company has no employee whose remuneration exceeds the limit prescribed under Section 197 of the Companies Act, 2013 read with Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

CORPORATE GOVERNANCE

The Company has complied with the corporate governance requirements as stipulated under the Listing Obligations and Disclosures Requirements Regulations, 2015 formulated by Securities and Exchange Board of India (SEBI). A separate section on corporate governance, along with a certificate from the auditors confirming the compliance, is annexed and forms part of the Annual Report. This certificate will be forwarded to the Stock Exchanges along with the Annual Report of the Company.

CHIEF EXECUTIVE OFFICER (CEO) /CHIEF FINANCIAL OFFICER (CFO) CERTIFICATION

As required under Regulation 17(8) of the Listing Obligations and Disclosures Requirements Regulations, 2015 formulated by Securities and Exchange Board of India (SEBI), the CEO/CFO certification has been submitted to the Board and a copy thereof is contained in this Annual Report.

GREEN INITIATIVES IN CORPORATE GOVERNANCE

Ministry of Corporate Affairs has permitted Companies to send copies of Annual report, Notices, etc., electronically to the email IDs of shareholders. Your Company has arranged to send the soft copies of these documents to the registered email IDs of the shareholders, wherever applicable. In case, any shareholder would like to receive physical copies of these documents, the same shall be forwarded upon receipt of written request in this respect.

HUMAN RESOURCE DEVELOPMENT & INDUSTRIAL RELATIONS

The Company has always provided a congenial atmosphere for work to all sections of society. It has provided equal opportunities of employment to all irrespective to their caste, religion, color, marital status and sex. The Company believes that human capital of the Company is its most valuable assets and its human resource policies are aligned towards this objective.

The Company focuses on enhancing organizational performance by focusing on quick grievance resolution mechanisms and maintaining cordial relations with employees and workmen across all levels. The relation amongst its employees remained harmonious and the year under review remained free from any labor unrest.

Your Directors are pleased to report that during the year under review, direct subsidiary of your Company M/s. Cement Manufacturing Company Limited (CMCL) was awarded with Certificate of Appreciation in recognition for the valuable contribution towards "Best HR Practices in Employee Engagement" held by National HRD Network (NHRDN) in Bhubaneswar on 29th January, 2016 followed by HR & Leadership Award in the area of "Excellence in Employee Engagement" by ABP News on 16th February, 2016 at Mumbai.

During the year under report, there has not been any material change in Human Resources, Industrial Relations and number of people employed.

AWARDS AND ACCOLADES

Your Directors are pleased to report that during the year under review, your Company was awarded ET Bengal Corporate Awards 2016 under category "Fastest Growing Company above Rs. 1000 Crs." on 23rd January, 2016 at Kolkata. Your power Subsidiary M/s. Meghalaya Power Limited (MPL) was awarded with First Prize in National Energy Conservation Awards, 2015 by Ministry of Power, Government of India under <100 MW Thermal Power Plants category at a ceremony held at New Delhi on 14th December, 2015.

CAUTIONARY STATEMENT

Statements in this report describing the Company''s objectives, expectations or predictions, 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, new capacity additions, availability of critical materials and their cost, changes in Government policies and tax laws, economic development of the country and other factors which are material to the business operations of the Company.

ACKNOWLEDGEMENT

Your Directors take this opportunity to express their deep sense of gratitude to the Banks, Central and State Governments and their departments and the Local Authorities, Customers, Vendors, Business partners/associates and Stock Exchanges for their continued guidance and support.

Your Directors would also like to place on record their sincere appreciation for the commitment, dedication and hard work put in by every member of the Company and recognize their contribution towards Company''s achievements. Your Directors express their gratitude to the shareholders of the Company for reposing their confidence and trust in the Management of the Company.

For and on behalf of the Board of Directors

Place: Kolkata Sajjan Bhajanka

Date: 3rd May, 2016 Chairman

(DIN: 00246043)


Mar 31, 2015

Dear Shareholders,

The Directors have pleasure in presenting the Fifth Annual Report of the Company together with the Audited Balance Sheet as at 31st March, 2015 and the Statement of Profit and Loss for the year ended on that date.

FINANCIAL PERFORMANCE

Financial Statements for the year ended on 31st March, 2015 have been drawn after considering the effect of the demerger of Ferro Alloy Division with effect from 1st April, 2014, being the appointed date and are not comparable with Financial Results for the year 2013-14.

The highlights of the financial performance of the Company for the financial year ended 31st March, 2015 and previous financial year are as under:

(Rs.in lacs)

Particulars Consolidated Standalone

2014-15 2013-14 2014-15 2013-14

Net Sales/Income 143,121.01 1,17,587.81 0.10 15,318.86

Profit Before Depreciation, Interest and Tax 43,584.75 25,745.67 (138.55) 2848.06

Depreciation (22,374.29) (16,163.64) - (480.46)

Interest and Finance Charges (8,738.47) (8,721.20) 0.03 (399.57)

Exceptional Items 1.83 (101.21) - 9.56

Profit Before Tax 12,473.82 759.62 (138.58) 1,977.58

Tax Expenses (480.13) (270.80) - (404.35)

Profit after Tax before Minority Interest 11,993.69 488.82 (138.58) 1,573.23

Less: Minority Interest (3,650.03) (123.63) - -

Net profit after Minority Interest 8,343.66 612.44 - -

Surplus in the Statement of Profit and Loss:

At the beginning of the year 37,165.12 37,994.31 180.20 (558.86)

Add: Profit for the year 8,343.66 612.44 (138.58) 1,573.23

-Less: Interim Dividend on Equity Shares - 1,042.52 - 733.17

-Less: Tax on Interim Equity Dividend - 178.11 - -

-Less: Tax on Proposed Equity Dividend (670.55) - - -

-Less: Transfer to General Reserve - 221.00 - 101.00

Balance at the end of the year 44,838.23 37,165.12 41.61 180.20

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2015 was Rs.2,221.73 lacs. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options or sweat equity shares.

EXTRACT OF ANNUAL RETURN

In terms of requirement of Section 134(3)(a) of the Companies Act, 2013, the extract of the Annual return in form MGT-9 is annexed herewith and marked Annexure 1.

MEETINGS OF THE BOARD

During the year, six (6) Board Meetings and five (5) Audit Committee Meetings were convened and held. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. The details of the Board meeting and the Committee meeting are provided in the Corporate Governance Report.

MEETINGS OF INDEPENDENT DIRECTORS

During the year under review, a meeting of Independent Directors was held on 19th March, 2015 wherein the performance of the Non-independent Directors and the Board as a whole was reviewed. The Independent Directors at their meeting also assessed the quality, quantity and timeliness of flow of information between the Company management and the Board of Directors of the Company.

COMMITTEES OF THE BOARD

The composition and terms of reference of the Audit Committee, Nomination and Remuneration Committee and Share Transfer cum Stakeholders Relationship Committee has been furnished in the Corporate Governance Report forming a part of this Annual Report. There has been no instance where the Board has not accepted the recommendations of the Audit Committee and Nomination and Remuneration Committee.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company has formed a Whistle Blower PolicyA/igil Mechanism as required under Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. A Vigil (Whistle Blower) mechanism provides a channel to the employees and Directors to report to the management concerns about unethical behaviour, actual or suspected fraud or violation of the codes of conduct or policy. The mechanism provides for adequate safeguards against victimisation of employees and Directors to avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. The said policy may be referred to at the Company's website at the web link: http://www.starferrocement.co.in/admin/docsAA/histle- Blower-Policy.pdf.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, the Directors hereby confirm and state that:

In the preparation of Annual Accounts, the applicable Accounting Standards have been followed along with the proper explanation relating to material departures, if any;

The Directors have selected such accounting policies and have 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 as at 31st March, 2015 and of the profit of the Company for the year under review;

The Directors have taken 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;

The Directors have prepared the Annual Accounts on going concern basis;

The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively;

The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

DECLARATION BY INDEPENDENTDIRECTORS

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. Mr. Manindra Nath Banerjee, Mr. Santanu Ray, Mr. Mangilal Jain and Mrs. Plistina Dkhar are Independent Directors on the Board of your Company. In the opinion of the Board and as confirmed by these Directors, they fulfil the conditions specified in Section 149 of the Act and the Rules made thereunder about their status as Independent Directors of the Company.

FAMILIARISATION PROGRAMME UNDERTAKEN FOR INDEPENDENT DIRECTORS

In order to enable the Independent Directors to perform their duties optimally, the Board has devised a familiarisation programme for the Independent Directors to familiarise them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. They are periodically updated about the development which takes place in the Company. The Independent Directors have been issued Letters of Appointment setting out in detail, the terms of appointment, duties, responsibilities and commitments etc. The familiarisation programme is available on the Company's website under the web link: http://www. starferrocement.co. in/ad mi n/docs/Familiarisation-Programme, pdf.

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS

The Board has framed a Remuneration Policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Employees. The Remuneration Policy aims to enable the company to attract, retain and motivate highly qualified members for the Board and other executive levels. It seeks to enable the Company to provide a well-balanced and performance-related compensation package, taking into account shareholder interests, industry standards and relevant Indian corporate regulations. The details on the same are given in the Corporate Governance Report.

AUDITORS AND AUDITORS' REPORT

M/s. Kailash B. Goel and Co., Chartered Accountants, Statutory Auditors (Firm Registration no. 322460E) of the Company, will retire at the conclusion of the ensuing Annual General Meeting of the Company. Being eligible, they have offered themselves for re-appointment and have confirmed that their appointment, if made, will be in accordance with the provisions of Section 141 read with Section 139 of the Companies Act, 2013 and the rules framed thereunder for re-appointment of auditors. Members are requested to approve and ratify their appointment. Members are also requested to empower the Board of Directors for fixing the Auditor's Remuneration.

The notes to the accounts referred to in the Auditors' Report are self-explanatory and, therefore, do not call for any further comments.

SECRETARIAL AUDIT

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. Mr. Manoj Kumar Banthia, Practising Company Secretary of M/s. M K B & Associates, a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith and marked Annexure 2. The report is self-explanatory and does not call for any further comments.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year under review, your Company has not given any loan or guarantee to any person falling under the ambit of Section 186 of the Companies Act, 2013.

Details of investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

RELATED PARTY TRANSACTIONS

During the year under review, there were no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interests of the Company at large.

A policy on Related Party Transactions has been devised by the Company which may be referred to at the Company's website at the web link http://www.starferrocement.co.in/admin/docs/ Related-Party-Transaction-Policy.pdf.

RESERVES

During the year under review, no amount was transferred to reserves.

DIVIDEND

Keeping in view the tight liquidity position in the market and in order to conserve funds for working capital needs, your Directors do not recommend any dividend for the FY 2014-15.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

In view of the transfer of Ferro Alloy business of the Company, there is nothing to report under this segment.

FOREIGN EXCHANGE EARNING AND OUT-GO

During the year under review, there was no foreign exchange earning and out-go.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES (CSR)

Your Company's Corporate Social Responsibility (CSR) Policy is committed towards improving the quality of life of communities by working on four thrust areas - employability, education, health and environment.

During the year under review, the Company has constituted the Corporate Social Responsibility Committee as per the requirements of Section 135 of the Companies Act 2013. The Committee is headed by Mr. Sajjan Bhajanka, Director of your Company and consists of members as stated below:

Name Category Chairman/ Members

Mr. Sajjan Bhajanka Non-independent Chairman

Mr. Mangilal Jain Independent Member

Mr. Hari Prasad Non-independent Member Agarwal

Annual Report on CSR, as required to be annexed in terms of requirement of Section 135 of Companies Act, 2013 and rules framed thereunder, is annexed herewith and marked Annexure- 3.

The CSR Policy of the Company is available on the Company's website under the web link: http://www.starferrocement.co.in/ admin/docs/CSR-Policy.pdf.

EVALUATION OF THE BOARD'S PERFORMANCE

In compliance with the Companies Act, 2013 and Clause 49

of the Listing Agreement, the Company has adopted a policy for evaluation of performance of the Board of Directors. The Board follows a formal mechanism for the evaluation of the performance of the Board as well as Committee.

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

The Nomination and Remuneration Committee at its meeting established the criteria based on which the Board will evaluate the performance of the Directors.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders, etc. The performance evaluation of the Non-independent Directors and the Board as a whole was also carried out by the Independent Directors.

The Directors expressed their satisfaction over the evaluation process and results thereof.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, Mr. Hari Prasad Agarwal resigned as Managing Director of the Company with effect from 1st September, 2014 and is continuing as Non-Executive member of the Board. In accordance with the provisions of Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Mr. Hari Prasad Agarwal will retire by rotation and, being eligible, offers himself for re-appointment. In view of his considerable experience, your Directors recommend his re-appointment as a Director of the Company.

The shareholders have ratified the appointment of Mr. Manindra Nath Banerjee, Mr. Santanu Ray, Mr. Mangilal Jain and Mrs. Plistina Dkhar as Independent Directors at the Annual General Meeting held on 20th September, 2014 for a period of five years.

During the year under review Mr. Ravi Prakash Mundhra, Company Secretary, and Mr. Om Prakash Lohia, Chief Financial Officer, resigned from the services of the Company with effect from 9th August, 2014 and 28th August, 2014 respectively. The Board places on record their appreciation for the services and contribution made by them during their tenure.

The Board of Directors had, on the recommendation of the Nomination and Remuneration Committee, appointed Mr. Sanjay Kumar Gupta as Chief Executive Officer and Mr. Dilip Kumar Agarwal as Chief Financial Officer with effect from 20th September, 2014 and Mr. Debabrata Thakurta has been appointed as Company Secretary with effect from 13th August, 2014.

The following personnel are Key Managerial Personnel of the Company:

Name Chairman/ Members

Mr. Sanjay Kumar Gupta Chief Executive Officer

Mr. Dilip Kumar Agarwal Chief Financial Officer

Mr. Debabrata Thakurta Company Secretary

SUBSIDIARIES AND ASSOCIATES

Consequent to the Scheme of Arrangement being effective, the Company's investment in Meghalaya Power Limited has been transferred to and vested in Shyam Century Ferrous Limited.

Cement Manufacturing Company Limited (CMCL), Star Cement Meghalaya Limited (SCML), Megha Technical and Engineers Private Limited (MTEPL), Meghalaya Power Limited (MPL) and NE Hills Hydro Limited (NHHL) continued to be the subsidiaries of your Company. CMCL, along with its subsidiaries, operates integrated cement plants in the states of Meghalaya and Assam with a combined installed capacity of 2.87 MMTPA of cement and 2.54 MMTPA of clinker. MPL is in the business of power generation and operates 51 MW Power Plant in the state of Meghalaya. NHHL is exploring possibilities of power generation in the North Eastern region of India.

A Policy has been formulated for determining the Material Subsidiaries of the Company pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges. The said Policy has been posted on the Company's website at the web link http:// www. starferrocement. co. in/ad m in/docs/Pol icy-On-Materia I- Subsidairy.pdf.

POLICY ON PREVENTION OF SEXUAL HARASSMENT

The Company values the integrity and dignity of its employees. The Company has put in place a 'Policy on Prevention of Sexual Harassment' as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("Sexual Harassment Act"). We affirm that adequate access has been provided to any complainants who wish to register a complaint under the policy. No complaint was received during the year.

AUDITED FINANCIAL STATEMENTS OF THE COMPANY'S SUBSIDIARIES

Pursuant to Sub-section (3) of Section 129 of the Act, the statement containing the salient features of the financial statements for the year ended March 31, 2015 for each of the Company's subsidiaries viz. Cement Manufacturing Company Limited (CMCL), Star Cement Meghalaya Limited (SCML), Megha Technical and Engineers Private Limited (MTEPL), Meghalaya Power Limited (MPL) and NE Hills Hydro Limited (NHHL) are annexed in the Form AOC - 1 and marked as Annexure-4.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company have been prepared as per Accounting Standards - AS 21, as prescribed by the Institute of Chartered Accountants of India, and has been included as a part of this Annual Report.

The detailed financial statements and audit reports of each of the subsidiaries of the Company are available for inspection at the Registered Office of the Company during office hours between 11 A.M. and 1 P.M. As per the provisions of Section 136 of the Companies Act, 2013, separate audited financial statements of its subsidiaries are being placed on its website www.starferrocement.co.in and the Company will arrange to send the financial statements of the subsidiaries upon written request from the shareholders to their registered address.

DEPOSITS

During the year under report, the Company has not accepted any deposits from public or from any of the Directors of the Company or their relatives falling under the ambit of Section 73 of the Companies Act, 2013.

CHANGES IMPACTING GOING CONCERN STATUS AND COMPANY'S OPERATIONS

During the year under review, there have been no material orders passed by the Regulators/Courts impacting materially the going concern status or future operations of the Company except the order passed by the Hon'ble Meghalaya High Court in respect of Scheme of Arrangement as mentioned in the foregoing paragraph.

ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Company maintains a comprehensive internal control system commensurate with the size of its operations and monitoring procedure for all the major processes to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, laws and regulations, safeguarding of assets and economical and efficient use of resources.

The Internal Audit Department of the Company periodically reviews the effectiveness and efficacy of Internal Control Systems and procedures. Audits are finalised and conducted based on internal risk assessments. Significant deviations from the standard procedures are brought to the notice of the Board periodically and corrective measures are recommended for implementation. All these steps facilitate timely detection of any irregularities, frauds and errors and early remedial measures to be undertaken so that no monetary losses are sustained. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

MANAGERIAL REMUNERATION

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 and Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith and marked Annexure- 5.

PARTICULARS OF EMPLOYEES

The Company has no employee whose remuneration exceeds the limit prescribed under Section 197 of the Companies Act, 2013 read with Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

CORPORATE GOVERNANCE

The Company has complied with the Corporate Governance requirements as stipulated under the Listing Agreement with the Stock Exchanges. A separate Section on Corporate Governance, along with a certificate from the auditors confirming the compliance, is annexed and forms part of the Annual Report. This certificate will be forwarded to the Stock Exchanges along with the Annual Report of the Company.

CHIEF EXECUTIVE OFFICER (CEO) /CHIEF FINANCIAL OFFICER (CFO) CERTIFICATION

As required under Clause 49 of the Listing Agreement, the CEO/ CFO certification has been submitted to the Board and a copy thereof is contained in this Annual Report.

GREEN INITIATIVES IN CORPORATE GOVERNANCE

Ministry of Corporate Affairs has permitted Companies to send copies of Annual report, Notices, etc., electronically to the email IDs of shareholders. Your Company has arranged to send the soft copies of these documents to registered email IDs of shareholders, wherever applicable. In case any shareholder would like to receive physical copies of these documents, the same shall be forwarded upon receipt of written request in this respect.

HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATIONS

The Company has always provided a congenial atmosphere for work to all Sections of society. It has provided equal opportunities of employment to all irrespective of caste, religion, colour, marital status and sex. The Company believes that the human capital of the Company is its most valuable assets and its human resource policies are aligned towards this objective.

The Company focuses on enhancing organisational performance by focusing on quick grievance resolution mechanisms and maintaining cordial relations with employees and workmen across all levels. The relation amongst its employees remained harmonious and the year under review remained free from any labour unrest.

Pursuant to the Scheme of Arrangement, the employees relating to the Ferro alloys business have been transferred to the resultant company, M/s Shyam Century Ferrous Limited.

RISK MANAGEMENT

The Company has evolved a risk management framework to identify, assess and mitigate the key risk factors of the business. The Board of the Company is kept informed about the risk management of the Company.

Key risks impacting the cement business:

Excess cement capacity in the region could dampen the growth prospects for the Company.

Mitigation: The Company's entrenched presence in the geography has created a brand loyalty among discerning customers. Besides, the speedy clearance of bottlenecked projects provides optimism for increased offtake over the coming months. The Company has successfully established the Star Cement brand in the markets of West Bengal and Bihar. Furthermore, Bangladesh provides a good business opportunity for the Company as infrastructure development continues to get the Bangladeshi government's favour. Moreover, the nation does not have its own supply of limestone and cannot produce clinker domestically - it imports about 10-15 million tonnes of clinker annually.

Inflationary headwinds could dampen business margins.

Mitigation: With the operation of new capacities reaching their optimum levels, economies-of-scale will start optimising the overall cost structure. Besides, the team is continuously striving to minimise power and logistics costs (significant expense heads) through a differentiated strategy which is expected to yield results during the current year.

ACKNOWLEDGEMENT

Your Directors take this opportunity to express their deep sense of gratitude to the banks, Central and State Governments and their departments and the local authorities, customers, vendors, business partners/associates and Stock Exchanges for their continued guidance and support.

Your Directors would also like to place on record their sincere appreciation for the commitment, dedication and hard work put in by every member of the Company, and recognise their contribution towards the Company's achievements. Your Directors express their gratitude to the shareholders of the Company for reposing their confidence and trust in the Management of the Company.

For and on behalf of the Board of Directors

SAJJAN BHAJANKA

Place: Kolkata Chairman

Date: 7th May, 2015 (DIN: 00246043)


Mar 31, 2014

Dear Shareholders,

The Directors have pleasure in presenting 4th Annual Report of the Company together with the Audited Balance Sheet as at 31st March, 2014 and the Statement of Profit & Loss for the year ended on that date.

Financial Results

Particulars Consolidated 2013-14 2012-13

Gross Income 117366.99 69534.91

Net Income 117574.06 66115.89

Profit Before Depreciation, Interest & Tax 25731.93 11993.91

Depreciation (16163.64) (5029.09)

Interest and Finance Charges (8721.20) (2852.13)

Exceptional Items (87.46) (19.29)

Profit Before Tax 759.62 4131.18

Tax Expenses (270.80) (370.95)

Profit after Tax before Minority Interest 488.82 3760.23

Less: Minority Interest (123.63) 1268.21

Net profit after Minority Interest 612.44 2492.02

Surplus in the Statement of Profit & Loss

At the beginning of the year 37994.31 (0.10)

Add: Profit for the year 612.44 2492.02 Add: Amount adjusted on acquisition of subsidiaries - 35502.39

pursuant to the Scheme of Arrangement

Less:

-Interim Dividend on Equity Shares 1042.52 -

-Tax on Interim Equity Dividend 178.11 -

-Transfer to General Reserve 221.00 -

At the end of the year 37165.12 37994.31

Standalone Particulars 2013-14 2012-13

Gross Income 14976.89 6858.57

Net Income 15318.86 6485.76

Profit Before Depreciation, Interest & Tax 2848.04 (12.90)

Depreciation (480.46) (551.63)

Interest and Finance Charges (399.57) (201.78)

Exceptional Items 9.56 0.18

Profit Before Tax 1977.57 (766.49)

Tax Expenses (404.34) 207.73

Profit after Tax before Minority Interest 1573.23 (558.76)

Less: Minority Interest - -

Net profit after Minority Interest - -

Surplus in the Statement of Profit & Loss

At the beginning of the year (558.86) (0.10)

Add: Profit for the year 1573.23 (558.76)

Add: Amount adjusted on acquisition of subsidiaries - -

pursuant to the Scheme of Arrangement

Less:

-Interim Dividend on Equity Shares 733.17 -

-Tax on Interim Equity Dividend

-Transfer to General Reserve 101.00 -

At the end of the year 180.20 (558.86)

Dividend

The Company has declared and paid an interim dividend of 33% (H0.33 per equity share of H1/- each) in the month of March, 2014. Total outgo on account of dividend for the year under review amounts to H733.17 Lacs.

To meet the operational requirements of funds, your directors do not recommend any further dividend for the year under review.

Performance and Operations Review

Ferro Alloy Business

The year 2013-14 was a difficult one in terms of operating business environment with Indian economy facing various challenges. Persistent inflationary conditions together with poor market sentiments and high interest rates pegged industrial growth. Infrastructural bottlenecks, weak rupee coupled with a tapered demand and contraction of industrial production

was observed during the year under review. Liquidity conditions have worsened due to persistent hardening of interest rates, resulting into drying of availability of funds for the Industry.

The Steel sector, one of the largest consumers of your Company''s products witnessed weak demand and dumping of Ferro Silicon from China into India. As a result, the demand for Ferro Alloys remained subdued.

Despite these constraints and challenging environment, your Company continued to focus on its fundamental strength of its ability to continuously focus on productivity and quality. There was strong emphasis on internal efficiencies together with an improvement in the sales mix which enabled your Company to withstand inflationary pressures on costs and profitability.

During the year under review, your Company achieved highest production. Your Company produced 16,164 MT of Ferro Silicon during the year under review as against 9,463 MT during the immediate preceding financial year, registering a growth of 71%.

Despite intense competitive market conditions and slowdown in industrial and economic activities, your company has been able to sale 17,331 MT of Ferro Silicon during the year under review as against 8,893 MT during the immediate previous year registering a growth of 95%. While your Company constantly strives to increase stakeholder''s value, emphasis continues to be on delivering value to customers and strengthening processes while driving sustainable practices, resulting into expanding our customer base.

Operational Performance Of Subsidiaries – Cement

The conditions prevailing for the business of subsidiaries were no different than the ones faced by your Ferro Alloy Unit. For subsidiary M/s. Cement Manufacturing Company Limited (CMCL), FY 2013-14 was first full year of operation for its recently commissioned Grinding Unit at Guwahati. Similarly, FY 2013-14 was first full year of operation for M/s. Star Cement Meghalaya Limited, subsidiary of CMCL which commenced commercial operation of its Clinkerization unit at Lumshnong (Meghalaya) during last quarter of FY 2012-13. On the one hand there was slowdown in economy, inflationary pressures were on all-time high, rupee continued to erode its value which touched upon all spheres of industrial activities and so was the cement industry in general. On the other hand, these subsidiaries had before them, challenges of optimizing operations of their newly commissioned units and also to sell their product which multiplied in terms of volume as compared to previous year under these pressing market conditions. However, these challenges were also an opportunity for your subsidiaries. During the year under review, the newly commissioned units could optimize its operations to a large extent and at the same time have also been able to sale the increased volume in the market which provided a distinct competitive edge to their advantage.

During the year under review, on consolidated basis, Clinker production was at 13,78,616 MT as against 835,576 MT during the FY 2012-13, registering a growth of 65%. On the cement side, your subsidiaries produced 16,64,037 MT of cement on consolidated basis as against 10,67,465 MT during FY 2012-13, registering a growth of 56%. Cement dispatch on consolidated basis was 16,53,279 MT during the year under review as against 10,69,489 MT during FY 2012-13, registering a growth of 55% over previous year. Similarly, sale of cement grew from 10,65,097 MT on consolidated basis during the year 2012-13 to 16,31,048 MT during FY 2013-14, registering a growth of 53%. Both of the newly commissioned units have been able to achieve close to two-third of their installed capacity in first full year of operation itself.

Marketing Performance of Subsidiaries

On the marketing side, subsidiaries of your company have been able to capitalize on potential of markets of North Eastern Region (NER). Despite flat demand growth in the markets of North East, these subsidiaries have been able to grow their sales volume by 37% in the region and have been able to sale 14,16,426 MT of cement on consolidated basis in the markets of NER during the year under review as against 10,32,839 MT during the last financial year. Their market share further improved from 18% during last financial year to 23% during the year under review. This was achieved by concentrating on more focused approach to expand reach in rural and semi-urban markets of NER. This was further supported by increased brand visibility and focused campaigning of brand "STAR CEMENT" in remotest areas of the region. Your Subsidiary''s Brand "STAR CEMENT" continues to enjoy leadership position in the region.

Apart from intensifying their effort in NER market, the product of your subsidiaries has been successfully placed in the markets of West Bengal and Bihar too under the brand "STAR CEMENT". Keeping in view the short time frame since launch of their product in these markets, the efforts put in the markets of West Bengal & Bihar have started bearing fruits for your subsidiaries. Your subsidiaries have been able to clock a sales volume of 2,14,622 MT of Cement in a very short span of time in these markets during the year under review as compared to 32,258 MT during the immediate preceding financial year which accounts for more than five times growth during the year under review over previous year.

While in NER, the dealer and retail network has been under expansion during the year under review to further consolidate feet in the region; your subsidiaries have started appointing dealer and retailers in the markets of West Bengal & Bihar too. A dedicated team has already been placed for these new and upcoming market areas to strengthen their retail network. A huge marketing and visibility campaign has been put in place to have a better brand visibility and top of mind recall amongst the users of cement in all these markets.

With sustained marketing efforts on continued basis, your subsidiaries expect to put a much better performance during the ensuing year. In addition, your subsidiaries are also exploring possibility of placing their product in the markets of neighboring countries viz. Nepal, Bhutan and Bangladesh. M/s. Star Cement Meghalaya Limited, a subsidiary of CMCL is already exporting clinker to these neighboring countries. Your subsidiaries are further exploring avenues to export cement too in these markets.

Financial Performance

In the backdrop of a weak economy and a challenging market situation, your Company''s Gross sales on standalone basis stood at H14,235.54 lacs as against H6858.18 lacs for last year, recording a growth of 108% and Profit before Tax (excluding exceptional items) for the year on standalone basis stood at H1977.57 lacs, as against loss of H766.49 lacs last year. Net profit after tax on a standalone basis for the year under review stood at H1573.23 lacs as against loss of H588.76 lacs last year. Your Company''s Gross sales on a consolidated basis stood at H1,17,130.26 lacs for the year under review as against H69,378.85 lacs recorded last year, registering a growth of 69%. During the year under review, Profit before Tax on a consolidated basis for the year stood at H759.62 lacs as against H4131.18 lacs recorded last year. This was mainly on account of higher interest charge and depreciation during the year under review. The net profit after minority interest for the year under review stood at H612.44 lacs as against H2492.02 lacs recorded last year.

Change of Registered Office of the Company

During the year under review, the Company has filed a petition under Section 17 of the Companies Act, 1956 with the Regional Director, Eastern Region, Ministry of Company Affairs, seeking approval for Change of Registered Office of the Company from the State of West Bengal to the State of Meghalaya. The Company has received the approval from the Regional Director on 10th April, 2014. The Company has filed the certified true copy of the order on 19th April, 2014 with the Registrar of Companies, West Bengal, which shall be considered as the effective date of the Change in Registered office. With effect from 19th April, 2014, the registered office of your company stands shifted to Vill: Lumshnong, P.O. Khaliehriat, District: East Jaintia Hills, Meghalaya – 793210.

Internal Control Systems and their Adequecy

The Company maintains comprehensive internal control system commensurate with the size of its operations and monitoring procedure for all the major processes to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, laws and regulations, safeguarding of assets and economical and efficient use of resources.

The Internal Audit Department of the Company periodically reviews the effectiveness and efficacy of Internal Control Systems and procedures. Audits are finalized and conducted based on internal risk assessments. Significant deviations from the standard procedures are brought to the notice of the Board periodically and corrective measures are recommended for implementation. All these steps facilitate timely detection of any irregularities and early remedial measures to be undertaken so that no monetary losses are sustained.

Subsidiaries and Associates

During the year under report, Cement Manufacturing Company Limited and its subsidiaries, viz. Star Cement Meghalaya Limited (SCML), Meghalaya Power Limited (MPL), Megha Technical & Engineers Private Limited (MTEPL) and NE Hills Hydro Limited (NHHL) continued to be the subsidiaries of your Company. CMCL along with its subsidiaries operates integrated Cement plants in the State of Meghalaya and Assam with a combined installed capacity of cement 2.86 MnTPA and 2.54 MnTPA of clinker.

MPL is in the business of power generation and operates 51 MW Power Plant in the State of Meghalaya. NHHL is exploring possibilities of power generation in the North Eastern Part of India.

Deposits

During the year under report, the Company has not accepted any deposits from public or from any of the Directors of the Company or their relatives as per the requirement of Section 58A or 58AA of the Companies Act, 1956.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company have been prepared as per Accounting Standards- AS 21, as prescribed by the Institute of Chartered Accountants of India and has been included as a part of this Annual Report.

The Ministry of Corporate Affairs, Government of India has granted general exemption under section 212(8) of the Companies Act, 1956 from the requirement to attach detailed financial statements of each subsidiary. In compliance with the exemption granted, we have presented summary of financial statement for each subsidiary of the Company in this Report. A statement of holding company''s interest in subsidiaries is also furnished separately.

The detailed financial statements and audit reports of each of the subsidiaries of the Company are available for inspection at the registered office of the Company during office hours between 11 A.M. and 1 P.M. The Company will arrange to send the financial statements of the subsidiaries upon written request from a shareholder to the registered address of the said shareholder. Further the reports and accounts of the subsidiary companies will also be available on the Company''s website, www.starferrocement.com.

Future Outlook

Ferro Alloy Industry mainly caters to the needs of the steel industry. Ferro alloys are used as additives and de-oxidizing agents in steel manufacture. The Indian Ferro Alloy Industry has a capacity of 5.15 million tonnes. It accounts for nearly 10% of the world''s Ferro alloy production and is amongst the 10 largest producers of the material in the world. In the midst of raw material availability being a key factor for Ferro alloy industry growth, production is concentrated in a few pockets. India, South Africa, China and CIS countries represent a large source of Ferro alloys. India''s Ferro alloy supply constitutes of Ferro Chrome (about 32%), Ferro Manganese and Silicon Manganese (about 62%) and rest others. At present, though there is surplus capacity in the country, severe power cuts is hampering production.

Ferro Alloy producers across the globe in last couple of years were one of the worst hit in history with drastic collapse in demand and vertical fall in prices of finished products. After a couple of difficult years, well-coordinated efforts at the global level and various stimulus packages (policy, fiscal and monetary) have helped to put the world economy back on track.

Strong growth in steel and stainless steel is expected in the near future with strong demands in infrastructure industry. On the back of these expectations, it is expected that the excess capacity will stand absorbed and further growth is anticipated in Ferro alloys Industry in the years to come to match the growth of Steel Industry. In view of potential growth of housing and infrastructure, the overall demand for Ferro alloy is expected to remain buoyant.

Directors

In accordance with the Articles of Association of the Company and provisions of Companies Act, 2013, Mr. Sajjan Bhajana will retire by rotation and being eligible offers himself for re-appointment. In view of his considerable experience, your Directors recommend his re-appointment as a director of the Company.

The Particulars of the Directors seeking re-appointment as per the requirement of Clause 49 of the Listing agreement are provided in the Notice to this Report.

Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors state as follows:- (i) in the preparation of the annual accounts of the Company for the year ended 31st March, 2014, the applicable accounting standards have been followed and that no material departures are made from the same;

(ii) the Directors 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 as at the end of the financial year and of the profit/loss of the Company for that period;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the Directors have prepared the annual accounts for the financial year ended 31st March, 2014 on a going concern basis;

Management Discussion and Analysis

In terms of Clause 49 of the Listing Agreement, the Management Discussion and Analysis on Company''s performance and industry trends is set out separately in this Annual Report.

Corporate Governance

The Company has complied with the corporate governance requirements as stipulated under the listing agreement with the stock exchanges. A separate section on corporate governance, along with a certificate from the auditors confirming the compliance, is annexed and forms part of the Annual Report. This certificate will be forwarded to the stock exchanges along with the Annual Report of the Company.

CEO/CFO Certification

As required under Clause 49 of the Listing Agreement, the CEO/ CFO certification has been submitted to the Board and a copy thereof is contained elsewhere in this Annual Report.

Auditors & Auditors'' Report

M/s. Kailash B. Goel & Co., Chartered Accountants, Statutory Auditors of the Company, will retire at the conclusion of the ensuing Annual General Meeting of the Company. Being eligible, they have offered themselves for re-appointment and have confirmed that their appointment, if made, will be in

accordance to the provisions of Section 141 read with Section 139 of the Companies Act, 2013. In terms of requirement of Section 177 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, the audit committee of the Company in their meeting dated 28th of May, 2014 have recommended their re-appointment as statutory auditors for the year 2014-15 to Board of Directors. Members are requested to approve and ratify their appointment. Members are also requested to empower the Board of Directors for fixation of Auditor''s Remuneration.

The notes to the accounts referred to in the Auditors'' Report are self-explanatory and, therefore, do not call for any further comments.

Cost Auditors

Your Company had appointed M/s B. G. Chowdhury & Co., Cost Accountants of 4A, 11/47A, Panditya Road, Kolkata – 700029, having Firm Registration number 000064 and Membership Number 13497, as Cost Auditor for audit of cost records maintained in respect of Ferro Alloy business of the Company for the financial year ended 31st March, 2014. The due date of filing the Cost Audit Reports is 27th September, 2014.

Corporate Social Responsibility

Your Company''s CSR policy is committed towards improving the quality of life of communities by working on four thrust areas - employability, education, health and environment. Your Company strives to focus upon its social responsibility towards the growth of the regions where the plant of your Company is situated. It also supports several health initiatives and educational services in the area where the Company has its operations.

Green Inititatives in Corporate Governance

Ministry of Corporate Affairs has permitted Companies to send copies of Annual report, Notices, etc., electronically to the email IDs of shareholders. Your Company has arranged to send the soft copies of these documents to the registered email IDs of the shareholders, wherever applicable. In case, any shareholder would like to receive physical copies of these documents, the same shall be forwarded upon receipt of written request in this respect.

Human Resource Development & Industrial Relations

The Company has always provided a congenial atmosphere for work to all sections of society. It has provided equal opportunities of employment to all without regard to their caste, religion, colour, marital status and sex. The Company believes that human capital of the Company is its most valuable assets and its human resource policies are aligned towards this objective of the Company.

The Company focuses on enhancing organizational performance by focusing on quick grievance resolution mechanisms and maintaining cordial relations with employees and workmen across all levels. The relation amongst its employees remained harmonious and the year under review remained free from any labor unrest.

Particulars as per Section 217(2A) of the Companies Act, 1956 Particulars of Employees

The Company has no employee whose salary exceeds the limit prescribed under section 217(2A) of the Companies Act, 1956. Hence, information required to be given under the said section read with Companies (Particular of Employees) Rules, 1975 as amended has not been provided in this report.

Information as to Conservation of Energy

Your Company has taken conscious efforts towards conservation of energy at all the plants and offices of the Company. Detailed Information on conservation of energy is set out in a separate statement, annexed to and forming part of this report.

Information as to Technology Absorption

You Company has always been first to adopt new technologies which provide superior quality of finished products. The Company has automated its operations and has embraced information technology in its operations.

Foreign Exchange Earnings and Outgo

During the year under review, the foreign exchange outgo was H0.99 Lacs. There were no earnings recorded in foreign currency during the year under review.

Acknowledgement

Your Directors take this opportunity to express their deep sense of gratitude to the banks, Central and State governments and their departments and the local authorities, customers, vendors, business partners/associates and stock exchanges for their continued guidance and support.

Your Directors would also like to place on record their sincere appreciation for the commitment, dedication and hard work put in by every member of the Company and dedicates the credit for the Company''s achievements to them. Last but not least, your directors express their gratitude to the shareholders of the Company for reposing their confidence and faith in the Management of the Company.

For and behalf of the Board of Director

Place: Kolkata Sajjan Bhajanka Date: 28th May, 2014 Chairman


Mar 31, 2013

Dear shareholder

The Directors have great pleasure in presenting the 3rd Annual Report together with the audited Balance Sheet as at 31st March, 2013 and Statement of Profit & Loss for the year ended on that date.

FINANCIAL RESULTS

(Rs.in Lacs)

Particulars CONSOLIDATED STANDALONE 2012-13 2011-12 2012-13 2011-12

Gross Income 69,545.15 0.20 6,858.57 0.20 Net Income 66,126.13 0.20 6,485.76 0.20

Profit Before Depreciation, Interest & Tax 12,001.49 (0.03) (13.08) (0.03)

Depreciation 5,029.09 551.63

Interest & Finance Charges 2,858.86 201.78

Exceptional Items (1164)

Profit Before Tax 4,131.18 (0.03) (766.49) (0.03)

Tax Expenses 37095 (207.73)

Profit after Tax before Minority Interest 3,760.23 (0.03) (558.76) (0.03)

Less: Minority Interest 1,268.21

Net Profit after Minority Interest 2,492.02 (0.03) (558.76) (0.03)

Surplus in Statement of Profit and Loss

At the beginning of the year (0.10) (0.07) (0.10) (0.07)

Add : Amount adjusted on acquisition of subsidiaries pursuant to the Scheme of Arrangement 35,502.39

Add: Profit for the year 2,492.02 (0.03) (558.76) (0.03)

At the end of the year 37,994.31 (0.10) (558.86)

SCHEME OF ARRANGEMENT

Pursuant to the Scheme of Arrangement (''the Scheme'') approved by the Hon''ble High Court of Calcutta, all the assets and liabilities of the Ferro Alloys and Cement division of Century Plyboards (India) Ltd. (CPIL) (i.e. business and interest of CPIL in manufacture of ferro alloys and cement including captive power plants attached thereto) have been transferred and vested in Star Ferro and Cement Limited (Resulting Company) at their respective book values on going concern basis from 1st April, 2012 being the appointed date. As per the Scheme, the appointed date as approved by the Hon''ble Court is 1st April, 2012 and effective date is 28th June, 2013 being the date on which the certified copies of the order sanctioning the said scheme was filed with the Registrar of Companies, West Bengal, in accordance with the Companies Act, 1956. Though the Scheme has become effective after the balance sheet date, it is operative from the appointed date 1st April, 2012 and accordingly effect of the same has been given in the accounts for the financial year 2012-13.

The figures for current year are not comparable with figures of previous year due to effect of the Scheme in current year figures.

ALLOTMENT OF SHARES

In accordance with the scheme, the Board of Directors of the Company at their meeting held on 22nd July, 2013, has issued and allotted 22,21,72,990 Equity Shares ofRs. 1/- each to every member of Century Plyboards (India) Ltd. (CPIL) holding fully paid up equity shares of CPIL and whose name appeared in the Register of Members of CPIL as on 19th July, 2013, the Record date fixed by CPIL for this purpose. These shares were allotted in the ratio of 1:1, i.e. one fully paid-up Equity Share ofRs. 1/- each in the Company for every one Equity Share of Rs. 1/- each held in CPIL.

PERFORMANCE AND OPERATIONS REVIEW

The performance of the Ferro alloy unit remained subdued during the first three quarters of the financial year under review mainly due to global market scenario but there has been increase in demand of Ferro alloys during the last quarter along with significant improvement in the overall performance.

During the year under review the Ferro al loy division has completed its capacity expansion from 18MVA Furnaces to 27 MVA Furnaces. However, due to poor demand and power shortage, the unit has been able to utilize only 59% of its enhanced capacity. The production quantity during the year under review was 9462.834 MT only, yet the team needs to be appreciated for achieving this level of production in-spite of unprecedented power crisis due to unavailability of coal to run the captive power plant.

The first quarter of the year under review was also partly under the influence of lingering after-effects of Global Meltdown experienced during previous years. But gradually, with the depletion of stock piles across the world due to shutdown of Ferro alloy facilities, the demand of Ferro Alloys has slowly picked up.

The Consolidated clinker production of the Company''s subsidiaries was 8,35,576 MT registering a growth of 16.90% over the previous year. The Consolidated cement production, on the hand was 10,67,465 MT as against 11,03,800 MT during last financial year, a drop of little over 3% compared to the previous year. Consol idated sales of cement was 10,65,097 MT of Cement as against 11,06,422 MT during the previous year, depicting a marginal drop of approximately 4%. Consolidated Gross Income during the year wasRs. 69,545.15 Lacs while Net Profit after minority interest was Rs. 2492.02 Lacs.

DIVIDEND

In view of the loss incurred, the Board of Directors did not recommend any dividend for the year.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company maintains appropriate systems of internal control, including monitoring procedures, to ensure that all assets are safeguarded against loss from unauthorised use or disposition. Company policies, guidelines and procedures are in place to ensure that all transactions are authorised, recorded and reported correctly as well as provide for adequate checks and balances.

The internal audit department reviews the effectiveness and efficiency of these systems and procedures. Audits are finalised and conducted based on internal risk assessment. Significant deviations are brought to the notice of the Board periodically and corrective measures are recommended for implementation. All these steps facilitate timely detection of any irregularities and early remedial measures with no monetary loss.

SUBSIDIARIES & ASSOCIATES

Consequent to the Scheme of Arrangement becoming effective, the pre-demerger share capital of the company has been cancelled and as such the company is no more a subsidiary of Century Plyboards (India) Ltd. Further, Cement Manufacturing Company Ltd (CMCL) and its subsidiaries Meghalaya Power Ltd. (MPL), Megha Technical & Engineers Pvt. Ltd (MTEPL), Star Cement Meghalaya Ltd. (SCML) and NE Hills Hydro Ltd. (NHHL) have now become subsidiaries of Star Ferro and Cement Ltd. with effect from appointed date 1st April, 2012.

CMCL along with its subsidiary MTEPL operates integrated Cement plant at Meghalaya with aggregate annual installed capacity of 1.20 MTPA. During last quarter of FY 2012-13, the new 1.60 MTPA cement grinding unit of CMCL at Guwahati, Assam and 1.75 MTPA Clinkerisation unit of SCML at Meghalaya have also commenced their commercial operation and their operations. During the FY 2012-13, MPL has completed its second phase of 51 MW power project. NHHL is exploring possibilities of power generation in the North-east.

CONSOLIDATED FINANCIAL STATEMENTS

The Ministry of Corporate Affairs, Government of India, has granted a general exemption under section 212(8) of the Companies Act, 1956 from the requirement to attach detailed financial statements of each subsidiary. In compliance with the exemption granted, we have presented summary financial information for each subsidiary in this Report. A statement of holding company''s interest in subsidiaries is also furnished separately.

The detailed financial statements and audit reports of each of the subsidiaries are available for inspection at the registered office of the company during office hours between 11 am to 1 pm and upon written request from a shareholder, your company will arrange to send the financial statements of subsidiary companies to the said shareholder. Further, the report and accounts of the subsidiary companies will also be available on the Company''s website, www.starferrocement.com.

The Consolidated Financial Statements of the Company prepared as per Accounting Standards-AS 21, consolidating the Company''s accounts with its subsidiaries, has also been included as part of this Annual Report.

FUTURE OUTLOOK

The Indian Ferro Alloy industry has a capacity of 5.15 million tonnes. It is accounting for nearly 10% of the world''s Ferro alloy production and is among the 10 largest producers of the material in the world. In the midst of raw material availability being a key factor for Ferro alloy industry growth, production is concentrated in a few pockets. India, South Africa, China and the CIS countries represent a large source for Ferro alloys. India''s Ferro alloy supply constitutes of Ferro chrome about 32%, Ferro Manganese and Silicon Manganese about 62% and rest others.

Ferro Alloy Industry mainly caters to the needs of steel industry. Ferro alloys are used as additives and deoxidizing agents in steel manufacture. At present, though there is surplus capacity in the country, severe power cuts is hampering the production.

Ferro Alloy producers across the globe in last couple of years was also one of the worst hit in history, with drastic collapse in demand

and vertical fall in prices of finished products. After a couple of difficult years, well-coordinated efforts at the global level and various stimulus packages (policy, fiscal and monetary) have helped to put the world economy back on track.

Strong growth in steel and stainless steel is expected in the near future with strong demands in infrastructure industry. And it is expected that the excess capacity will be absorbed and further growth is anticipated in Ferro alloys Industry in the years to come to match the growth of Steel Industry. In view of potential growth of housing and infrastructure, the overall demand for Ferro alloy is expected to remain buoyant.

FUTURE PLANS OF EXPANSION

To meet the requirement of coal for its captive power plant, the Company has started mining operations in the State of Nagaland and the operation is expected to yield results in the coming years. In order to further reduce the power costs, the Company is exploring the prospects of hydel power project in the State of Mizoram.

Further, steps have also been taken for iron ore mining at Chanderdigha in Assam to meet the mill scale requirement for production of Ferro Silicon.

DIRECTORS

Sri Manindra Nath Banerjee, Sri Mangi Lai Jain and Sri Santanu Ray were appointed as Additional Directors of the Company on 12th April, 2013 by the Board of Directors of the Company to hold office till the ensuing Annual General Meeting. The Company has received notices under section 257 of the Companies Act, 1956 proposing their candidature to the office of Directors of the Company. In view of considerable experience of Sri Banerjee, Sr, Jain and Sri Ray, your Directors recommend their appointment.

In accordance with Articles of Association of the Company, Sr, Sajjan Bhajanka and Sri Sanjay Agarwal retire by rotation, and being eligible, offer themselves for re-appointment. In view of their considerable experience, your Directors recommend their re-appointment.

DIRECTORS''RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, the Directors hereby confirm that :-

(i) in the preparation of the annual accounts for the year ended March 31, 2013, the applicable Accounting Standards have been followed and that no material departures are made from the same;

(ii) the Directors 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 as atthe end of the financial year and of the loss of the company for that period;

(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors had prepared the annual accounts for the financial year ended March 31, 2013, on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis on Company''s performance and industry trends with respect to the company is attached separately to this Annual Report.

CORPORATE GOVERNANCE

The Company is committed to good corporate governance. A detailed report on your company''s Corporate Governance practices is provided separately in this Annual Report.

AUDITORS & AUDITORS''REPORT

M/s. Kailash B. Goel & Co., Chartered Accountants, Statutory Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting of the Company. They have offered themselves for reappointment as Statutory Auditors and have confirmed that their appointment, if made, will be within the limits prescribed under Section 224(lB)ofthe Companies Act, 1956. Your Directors recommend their appointment for the ensuing year.

COST AUDITORS

Your Company had appointed M/s. B. G. Chowdhury & Co., Cost Accountant, of 4A, 11/47A, Panditia Road, Kolkata- 700029, having Firm registration number 000064 and ICWA Membership No. 13497, as Cost Auditor for audit of cost records maintained in respect of ferro alloy business for the financial year ended 31st March, 2013. The due date for filing the Cost Audit Reports is 27th September, 2013.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR philosophy of the Company is embedded in its commitment to all stakeholders, consumers, employees, the environment and the society. Your Company believes that it is this commitment which will deliver competitive, profitable and sustainable growth. The Company contributes a part of its income to social, charitable and cultural organizations. It reaches out with the objective of improving the quality of life of the economically deprived people in the places where the Company has a presence.

GREEN INITIATIVES IN CORPORATE GOVERNANCE

Ministry of Corporate Affairs has recently permitted companies to send electronic copies of Annual Report, notices etc., to the e-mail IDs of shareholders. You Company has accordingly arranged to send the soft copies of these documents to the e-mail IDs of shareholders wherever applicable. Incase any shareholder would like to receive physical copies of these documents, the same shall be forwarded upon receipt of written request.

HUMAN RESOURCE DEVELOPMENT & INDUSTRIAL RELATIONS

The human resource philosophy and strategy of your Company has been designed to attract and retain the best talent on offer. Employees are your Company''s most valuable assets and your Company''s processes are designed to empower employees and support creative approaches in order to create enduring value. Your Company''s human resource management systems and processes aim to enhance organisational performances. The Company focuses on quick grievance resolution mechanisms and maintains absolute harmony with its work force and as such it has not faced any labour trouble since inception.

PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956.

Particulars of Employees

No employee was in receipt of remuneration, requiring disclosure under section 217(2A) of the Companies Act, 1956 read with the Companies(ParticularsofEmployee)Rules,1975.

Information as to conservation of energy

The Company has always been conscious of the need of conservation of energy. Adequate energy conservation steps are being taken in all plants and offices of the Company. Additional information on conservation of energy is set out in a separate statement, attached to and forming part of this Report.

Information as to technology absorption

There is no specific area in which research and development is carried out by the Company, but the Company constantly carries out research for improvement of its products. The technologies used by the Company are indigenous. Constant efforts are made towards absorption, adaptation and innovation of technologies used, for improvement/development of products of the company.

Foreign Exchange earnings and outgo

There were no foreign exchange earnings and outgo during the year.

PUBLIC DEPOSITS

The Company has not invited or accepted deposits from the public covered under Section 58Aofthe Companies Act, 1956.

APPRECIATION

The Directors commend the contribution made by employees to the continued satisfactory business performance during the year. Their dedication and competence has ensured that the Company continues to be a significant and leading player in the industry.

Your Directors take this opportunity to thank the customers, shareholders, vendors, business partners/associates, bankers, financial institutions, regulatory and government authorities and stock exchanges for their consistent support and encouragement to the Company.

For and on behalf of the Board ofDirectors

Place : Kolkata Sajjan Bhajanka

Date :22nd July, 2013 Chairman


Mar 31, 2012

Dear Members

The Director have Pleasentinh the Annual Report and the Audit Account of the Company for year ended 31st March,2012

FINANCIAL RESULTS

Year ended Year ended 31.03.2012 31.03.2011

Total Income 20432

Total Expendeing 23349 70409

Provision tor Taxation (including Deferred Tax) 29.132 (70.49)

Your directors are hopeful that the performance of the Company will improve in the coming year.

FUTURE OUTLOOK

The general business conditions affecting business are expected to remain stable and company Is expected to perform well * ^

DIVIDEND

With a view to create long term pool of resources, no dividend is recommended for the year.

DEPOSITS

Your Company has not accepted any Deposit within the meaning of Section 58A of the Companies Act, 1956 and the Rur framed thereunder.

AUDITORS AND AUDITORS'' REPORT

Auditors'' Report contains no remark requiring explanation.

M/s Kailash B. Goel g Co, Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of few ensuing Annua; General Meeting and being eligible have offered themselves for re-appointment The Company has received a certificate from them to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224 (1B) of the Companies Act, 1956. Accordingly the Board recommends their re- appointment.

DIRECTORS

In accordance with Articles of Association of the Company, Sri Sanjay Agarwal retires by rotation, and being eligible offers himself for re-appointment. In view of his considerable experience, your Directors recommend his re-

PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT.1956

Particulars of Employees

The Company did not have any employee during the financial year, hence disclosure under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1973 is not applicable

Conservation of Energy & Technology Absorption:

The company has no activity relating to conservation of energy or technology absorption, details of which are required to be furnished in this report as per the provision of Section 217(1)(e) of the Companies Act, 1956

Foreign Exchange Earning & Outgo

Therewere no foreign exchange earning and outgo during the year.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to sub-section (2AA)of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

1 In the Preparation of the Annua! Accounts for the year ended 31st March, 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures.

2 The Directors had adopted such accounting policies and applied them consistently and made judgements and estimates in a reasonable and prudent manner so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended on 31 st March, 2012 and of the profit of the Company for that year.

3 The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other

4 The Annual accounts for the year ended 31 st March, 2012 have been prepared on a going concern basis.

ACKNOWLEDGEMENT

Your Directors take this opportunity to appreciate contributions made by the Company''s bankers, shareholders and business associates for their respective services and patronage.

For and on Behalf of the Board 6 Lyons Range,

Kolkata - 700 001

Date: 20th April, 2012 (Sajjan Bhajanka) (Sanflay Agarwal)

Director Director


Mar 31, 2011

Dear Members

The Directors have pleasure in presenting the 1st Annual Report and the Audited Accounts of the Company for the year ended 31st March 2011.

FINANCIAL RESULTS

Your company has not commenced operations during the year under review.

REVIEW OF OPERATIONS & FUTURE OUTLOOK

Your directors are hopeful that the operations of the company would commence in the coming year.

DIVIDEND

Since the operations of the company has not yet commenced, there has been no profit and consequently no dividend has been recommended.

DEPOSITS

Your Company has not accepted any Deposit within the meaning of Section 58A of the Companies Act, 1956 and the Rules framed thereunder.

AUDITORS AND AUDITORS'' REPORT

Auditors'' Report contains no remark requiring explanation.

M/s. Kailash B. Goel & Co., Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment. The Company has received a certificate from them to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224 (1B) of the Companies Act, 1956. Accordingly the Board recommends their re- appointment.

DIRECTORS

In accordance with Articles of Association of the Company, Sri Sajjan Bhajanka retires by rotation, and being eligible, offers himself for re-appointment. In view of his considerable experience, your Directors recommend his re- appointment.

PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT.1956

PARTICULARS OF EMPLOYEES

The Company did not have any employee during the financial year, hence disclosure under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1973 is not applicable

CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION:

The company has no activity relating to conservation of energy or technology absorption, details of which are required to be furnished in this report as per the provision of Section 217(1)(e) of the Companies Act, 1956

FOREIGN EXCHANGE EARNING & OUTGO

There were no foreign exchange earning and outgo during the year.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to sub-section (2AA)of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

1 In the Preparation of the Annual Accounts for the year ended 31st March 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures.

2 The Directors had adopted such accounting policies and applied them consistently and made judgements and estimates in a reasonable and prudent manner so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended on 31st March 2011 and of the profit of the Company for that year.

3 The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4 The Annual accounts for the year ended 31st March 2011 have been prepared on a going concern basis.

ACKNOWLEDGEMENT

Your Directors take this opportunity to appreciate contributions made by the Company''s, bankers, shareholders and business associates for their respective services and patronage.

For and on Behalf of the Boarad

6, LYONS RANGE

KOLKATA-700 001 (Sajjan Bhajanka) (Sama Agarwal)

Director Director

 
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