Directors Report of Balasore Alloys Ltd.

Mar 31, 2018

The Directors are pleased to present the 30th Annual Report and the Company''s audited accounts for the financial year ended 31st March, 2018.

FINANCIAL PERFORMANCE

The Company''s financial performance, for the year ended 31st March, 2018 is summarized below:

(Rs. In Lacs)

Particulars	Financial Year Ended
	Standalone		Consolidated
	31st March, 2018	31st March, 2017	31st March, 2018	31st March, 2017
Total Income (net of excise duty)	1,27,102.44	1,03,391.01	1,27,102.46	1,03,397.71
Profit/(Loss) Before Interest, Depreciation & Tax (PBIDT)	21,113.80	20,128.41	17,963.73	20,125.04
Finance Charges	4,615.16	3,934.22	4,616.38	3,934.22
Depreciation	3,031.47	2,708.86	3,031.47	2,708.86
Exceptional Items	2,661.81	-	2,661.81	-
Provision for Income Tax (Including for earlier years)	4,249.78	5,121.09	4,249.78	5,121.09
Share of Loss of Associate Company
Net Profit After Tax (PAT)	6,555.58	8,364.24	3,404.31	8,360.87
Other Comprehensive Income	(20.09)	(66.94)	(20.09)	(66.94)
Total Comprehensive Income For the Year	6,535.49	8,297.30	3,384.22	8,293.93
Profit brought forward from Previous Years	71,255.44	63,087.96	74,339.29	66,175.18
Profit Carried to Balance Sheet	77,375.65	71,255.44	77,308.24	74,339.29

STATE OF AFFAIRS OF YOUR COMPANY

Your Company''s performance reflects the strong improvement in the India''s business sentiment fuelled by the positive trend of international market and progressive policies of the Government.

Your Company''s total income increased by 22.93% from Rs.1,03,391.01 lacs in 2016-17 to Rs.1,27,102.44 lacs in 2017-18. PBIDT increased by 4.90% from Rs.20,128.41 lacs in 2016-17 to Rs.21,113.80 lacs in 2017-18. The Profit (PAT) for the Year decreased by 21.62% from Rs.8,364.24 lacs in 2016-17 to Rs.6,555.58 lacs in 2017-18. Total Comprehensive Income for the year decreased by 21.23% at Rs.6,535.49 Lacs as against Rs.8,297.30 Lacs in 2016-17.Consequently, the earnings per share stood at Rs.7.35 (basic) and Rs.6.70 (diluted) for 2017-18 against Rs.10.52 (basic)and Rs.9.85 (diluted)for2016-17.

DIVIDEND

Your Board needed to strike a prudent balance between rewarding shareholders and reinvesting business surplus in the business for capitalizing on emerging growth opportunities. Your Board has strategically laid more emphasis on the later considering the promising opportunities over the medium-term catalyzed by Government policies.

The Board of Directors have recommended a 15% dividend on equity shares i.e, Rs.0.75 per equity share of face value of Rs.51- each for the year ended on 31st March, 2018 subject to the approval of the Shareholders at the 30thAnnual General Meeting of the Company.

TRANSFER TO RESERVES

The Company has not transferred any amount to the General Reserve during the financial year ended on 31st March, 2018.

SHARE CAPITAL

The paid-up Equity Share Capital as on 31st March, 2018 was Rs.4,666.27 lacs. The Committee for Preferential Issue of Warrants has allotted 44,35,000 Equity Shares of Rs.51- each at a premium of ?16.50 to the Promoter Group Companies on preferential basis on 30th March, 2018 pursuant to conversion of equivalent number of Warrants as under:

SI. No.	Name of Allottees	No. of Equity Shares
1.	Global Steel Holdings Asia Pte. Limited	37,39,983
2.	Prasan Global Ventures Singapore Pte. Limited	6,95,017
	Total	44,35,000

OPERATIONS

Fiscal 2017-18 was an important milestone in your Company''s journey as we registered our highest ferro-alloy production at 1,47,324 Million Tonnes against 1,31,014 Million Tonnes in 2016-17, a 12.45% increase.

Besides, the untiring efforts of the team in successfully implementing various projects (using the TPM, Lean Six Sigma and IMS) also contributed immensely in improving productivity and optimizing operational costs.

In keeping with its commitment in saving the environment, your Company undertook a number of green initiatives:

- In-plant initiatives for reducing energy and fuel consumption.

- Sale of 1,92,734 Million Tonnes of slag which facilitated in conserving granite stone otherwise used in construction activities.

MINES

Government of Odisha was pleased to order grant of mining lease for chromite over a land of 35.60 hects in Sukinda Valley, Jajpur District for 50 years vide Government proceeding No 298 /SM dated 9th January, 2017 under Section 10A(2)(c) of the Mines and Minerals (Development and Regulations) (MMDR) Amendment Act, 2015 read with Rule 8(2) of Minerals Concession Rules (MCR), 2016 to the company and asked to furnish the performance security in form of Bank Guarantee and also to sign the Mines Development and Production Agreement (MDPA) followed by execution of the lease deed and registration thereof on or before 11th January, 2017 as required under rule 8(4) of the MCR, 2016.

For the delay in the execution of the lease under the MMDR Amendment Act, 2015 and the Rules under the MCR, 2016, the company moved to Hon''ble Orissa High Court. The Hon''ble Orissa High Court vide its Judgment dated 24th April, 2018 has directed State Government to execute and register the Lease deed within 2 months'' time from the date of the Judgment.

At the date of this report, the matter is lying with State Government for taking appropriate action pursuant to the said Judgment of Hon''ble Orissa High Court.

EXPORT

Your Company exported 1,17,373 Million Tonnes valued at Rs. 99,114.73 Lacs in 2017-18 against 109,183 Million Tonnes valued at Rs.86,298.78 Lacs during 2016-17. Exports constituted 77.98 % of your Company''s turnover in 2017-18.

BUSINESS EXCELLENCE DRIVE

During the year, in its drive to strengthen Business Excellence, your company continued its thrust on the key Business Excellence initiatives namely Malcolm Baldrige Business Excellence framework, TPM, Lean Six Sigma and Integrated Management System through extensive class room and shop-floor training and facilitation at site by the Business Excellence team in order to integrate these with the shop-floor operations. The entire system adoption of Malcolm Baldrige model was internally driven by Business Excellence (''BE'') team. To bring synergy and accelerate BE culture across the organization, it has been apprehended that the success of change management underlies in accepting and driving the BE culture at departmental level. To strengthen the BE culture, an external certification programme to develop Malcolm Baldrige internal assessors was organized and total 30 participants qualify the Malcolm Baldrige assessment programme.

The team''s efforts in implementing these global techniques yielded heartening results. Productivity and product quality improved, asset utilization improved while wastages declined. Besides, disciplined preventive maintenance facilitated in improving equipment health. During the financial year, your Company continued to have latest certification of ISO 9001:2015, ISO 14001:2015, ISO 55001:2014, achieved new certifications of ISO 27001:2013 and SA8000:2014. The Company is recertified to OHSAS 18001:2007 and IS050001:2011. Mines also achieved recertification of IS0 9001:2015, ISO 14001:2015, OHSAS 18001:2007 and continued to have certification of SA8000:2014. With this the company has successfully implemented the Integrated Management System (IMS) which integrates all business processes across the value chain in addition to integrating the process involved in Management Initiatives and all forms of ISO Management System. An external assessment of the Company based on the Malcolm Baldrige Model was held in May, 2017 to calibrate our systems and processes. We have moved one step up on the Malcolm Baldrige Ladder (from Early Development to Early Result band) and it has provided a way forward for further improvement.

In its endeavour to emerge as a global conglomerate, your Company initiated the implementation of a comprehensive Business Excellence initiative based on the globally-respected Malcolm Baldrige Quality Framework. The Company, during the year, moved forward in its journey on Malcolm Baldrige Model by creating the BAL Business Excellence Framework with the objective of building competitive advantage and sustainable business.

INDUSTRYOUTLOOK

Ferrochrome (FeCr), an alloy of chrome and iron, is a key raw material for stainless steel (SS) production. The markets for chrome ore and ferrochrome are shaped primarily by stainless steel production. All stainless steels contain chrome-indeed, it is chrome that makes steel “stainless” and to impart this property a minimum mass fraction of 10.5% chrome content is required, although in practice commercial grades of stainless steel contain at least 18% chrome.

Annual global crude stainless steel production in 2017 have an all-time high of around 48.45 Million Tonnes, which represents an annual growth of 6.2 % according to CRU. CRU forecasts a further rise in worldwide outturn of nearly 5 percent, in 2018, to a new peakof50.7 Million Tonnes.

Recently-issued official Chinese output figures were significantly higher than earlier expectations. The annual total at close to 26 Million Tonnes represents 54 percent of global crude stainless steel production. Even after accounting for a slower growth in the consumption of stainless steel, a marginal growth is expected in Chinese stainless steel production in 2018.

The world High Carbon Ferro Chrome consumption is 12.26 Million Tonnes and Asia forms the largest consumer segment of this market with Chinese consumption alone being over 7.4 Million Tonnes in 2017 according to CRU.

BUSINESS STRATEGY

Volume-driven growth''. Your Company is analyzing ways of increasing the operating capacity from about 1,60,000 Million Tonnes through capacity balancing, process optimization and marginal capital investment. This should increase the operating capacity to around 1,80,000 Million Tonnes.

The Company is continuously exploring opportunities for growth and expansion Organically and Inorganically. Organically, the company is undertaking development of its underground mining in kaliapani Chromite Mines at Sukinda, Odisha. In addition to the above growth efforts, the company is also contemplating setting up of and I or investing in some brown field and I or green field projects relating to the activities of the company.

Value-led growth: The team is working on increasing the production of value-added products namely low and medium-silicon, low-phosphorous, medium-carbon and high-chromium, among others. In addition, your Company is focused on maximizing its net realization through proper market segmentation in the domestic and international markets by selling directly to the end user.

Sustainability: Your Company owns natural resource assets of captive Chromite Ore Mines located at Sukinda Valley, Jajpur, Odisha.

The available resources for open cast mining in the Kaliapani Chromite Mines in Sukinda would continue for next few years. For sustained business operations, the management is developing underground mining in Kaliapani Chromite Mines of Sukinda.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

During the year, there was no change in the nature of business of the Company.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

SUBSIDIARIES, ASSOCIATES AND JOIN VENTURE COMPANIES:

SUBSIDIARIES

As on the date of this report, the subsidiary companies are Milton Holdings Limited, Balasore Metals Pte. Limited and BalasoreAlloys Nigeria Limited. Balasore Energy Limited, is the only associate Company. Further, the company does not have anyjoint venture.

A report on the performance and financial position of each of the subsidiaries and associate Company is included in form AOC -1 which forms part of this report.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Section 129(3) of the Companies Act, 2013, read with Regulation 34 of SEBI (LODR), Regulations, 2015 the Company has prepared a Consolidated Financial Statement of the Company and all its subsidiaries and associate companies, which is forming part of this Annual Report.

The Statement in Form AOC-1 containing the salient features of the financial statement of the Company''s subsidiaries and associates pursuant to first-proviso to sub-section (3) of Section 129 of the Companies Act, 2013 forms part of this Report as Annexure-1.

In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Company i.e. www.balasorealloys.com

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loan, guarantees provided or made any investments exceeding sixty per cent of its paid-up share capital, free reserves and securities premium account or one hundred per cent of its free reserves and securities premium account, whichever is more, as prescribed under Section 186 of the Companies Act, 2013 read with applicable rules made there under.

Details of Loans given, Guarantees provided and Investments made covered under the provisions of Section 186 of the Companies Act, 2013 are given in the note no. 3 and 4 of the Financial Statements of the Company for the year ended on 31st March, 2018.

PARTICULARS OF CONTRACTS ORARRANGEMENTS WITH RELATED PARTIES

During the financial year ended 31st March, 2018, your Company''s transactions with all the Related Parties as defined under the Companies Act, 2013 read with rules framed there under were in the ordinary course of business and at arm''s length basis. Your Company does not have a material unlisted subsidiary as stipulated under Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. During the year under review, your Company did not have any Related Party Transaction which required prior approval of the Shareholders.

All Related Party Transactions (''RPT'') are placed before the Audit Committee for its prior approval. There has been no materially Significant Related party Transaction during the year under review, having potential conflict with the interest of the Company. Hence, disclosure in Form AOC-2 is not applicable. Further, necessary disclosures required under the Indian Accounting Standard (lndAS-24) have been made in the Notes forming part of Financial Statements of this Annual Report.

PUBLIC DEPOSITS

The Company has not invited or accepted any deposits from the public as stipulated under Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

AUDITORS&AUDITORS’ REPORT

Pursuant to provision of Sections 139 and 142 and other applicable provisions, if any, of the Act and Rules made thereunder and based on the recommendations of the Audit Committee and the Board, M/s. Chaturvedi & Shah, Chartered Accountants (Firm Registration No. 101720W) are proposed to be re-appointed as the Statutory Auditors of the Company for the second term of five years, to hold office from the conclusion of 30thAGM until the conclusion of the 35thAGM of the Company on such remunerations as shall be fixed by the Board of Directors from time to time in consultation with the Auditors.

M/s Chaturvedi & Shah have given their consent to act as Auditors, if re-appointed. The Company has received a letter from them to the effect that they satisfy the criteria provided under Section 141 of the Companies Act, 2013 and that their re-appointment for the second term of five years, would be within the limits prescribed under Section 141(3)(g)of the Companies Act, 2013.

Members are requested to approve their re-appointment as the Statutory Auditors of the Company for the second term of five years, to hold office from the conclusion of 30thAGM until the conclusion of the 35thAGM of the Company.

A resolution proposing re-appointment of M/s Chaturvedi & Shah as the Statutory Auditors of the Company pursuant to Section 139 of the Companies Act, 2013, forms a part of the Notice convening the Annual General Meeting of the Company.

The Auditors'' Report to the shareholders for the year under review does not contain any qualifications or adverse remarks. The Notes on Financial Statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments.

COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost record and Audit) Rules, 2014 and based on the recommendations of the Audit Committee, the Board of Directors at its meeting held on 28th May, 2018, has approved the re-appointment of M/s. Shome & Banerjee (Firm Registration Number 000001) as the Cost Auditors of the Company for the Financial Year 2018-19 to conduct audit of the Cost Records, maintained by the Company. As required under the Companies Act, 2013, a resolution seeking approval for the remuneration payable to the Cost Auditors forms part of the Notice convening the ensuring Annual General Meeting of the Company.

The Cost Audit Report for the Financial Year ended on 31st March, 2017 was filed with Central Government in specified forms within the due date by the Cost Auditors of the Company. The Report of the Cost Auditors for the Financial Year ended on 31st March, 2018 is under finalization and will be filed with the MCA within the prescribed period.

INTERNAL AUDITORS

Pursuant to the provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of The Companies (Accounts) Rules, 2014 and based on the recommendations of the Audit Committee, the Board of Directors of the Company at its meeting held on 28th May, 2018, has approved the appointment of M/s Das & Prasad, Chartered Accountants, (Firm Registration Number 303054E) as the Internal Auditor of the Company for the financial year 2018-19 to conduct the internal audit of the Company.

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 and based on the recommendations of the Audit Committee, the Board of Directors at its meeting held on 28th May, 2018, has approved the appointment of M/s MKB & Associates, Company Secretaries, as the Secretarial Auditor of the Company for conducting the Secretarial Audit of the Company for the financial year 2018-19.

The report of M/s. MKB &Associates, Secretarial Auditor of the Company for the financial year ended on 31^st March, 2018 is annexed to this Report as Annexure -2. The Secretarial Audit Report contains the following qualifications as:

- “out of the entire shareholding of the Promoters 4,660 equity shares (0.004% of the total share capital of the Company) are not held in dematerialized form as required under Regulation 31(2) of the Listing Regulations, 2015.”

The shareholders may kindly note that 4,660 Shares of the Promoters are lying as collateral securities with Bank. The same shall be dematerialized in due course in consultation with the Bank.

- “The Company had complied with the provisions in regard to declaration and payment of dividend for the Financial Year 2016-17. However, there is delay in transfer of fund and payment of dividend to the Promoter Shareholders."

The shareholders may kindly note that, in view of ongoing proceedings by the Enforcement Directorate in the Promoter companies, the payment of Dividend to the Promoter shareholders was withheld and was paid after obtaining appropriate expert advice in the matter.

DIRECTORS & KEY MANAGERIAL PERSONNEL:

I. INDEPENDENT DIRECTORS:

(a) STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (7) OF SECTION 149 OF THE COMPANIES ACT, 2013 AND REGULATION 16 OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 -

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence as laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

(b) FAMILIARIZATION PROGRAMME UNDERTAKEN FOR INDEPENDENT DIRECTORS

The Independent Directors are familiarised 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. On appointment, the Independent Director is issued a Letter of Appointment setting out in details, the terms of appointment, duties, responsibilities and expected time commitments. Each newly appointed Independent Director is taken through a formal induction program including the presentation from the Managing Director on the Company''s manufacturing, marketing, finance and other important aspects. The Company Secretary briefs the Directors about their legal and regulatory responsibilities as a Director. The induction for Independent Directors include interactive sessions with Committee Members, Business and Functional Heads, visit to the manufacturing site, etc. On the matters of specialized nature, the Company engages outside experts/consultants for presentation and discussion with the Board members. The Details of familiarisation Programme imparted by the Company to its Independent directors is displayed at its website i.e, www.balasorealloys.com

II. NON-INDEPENDENT DIRECTORS:

(a) WOMAN DIRECTOR:

As per the provisions of Section 149(1) of the Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, the Company is required to have atleast one Woman Director on its Board. The Company complies with the aforesaid requirement as Ms. Mita Jha was appointed as Non-Executive Independent Director of the Company on 12th August, 2016. However, consequent to her appointment as Whole-time Director Designated as Executive Director - Human Resource with effect from 27th July, 2017, Ms Mita Jha ceases to be the Independent Director of the Company. Ms Mita Jha has been a Director of the Company till 24th April, 2018.

(b) APPOINTMENT OF DIRECTORS:

Based on the recommendation of Nomination and Remuneration Committee and Audit Committee, the Board of Directors of the Company in its Meeting held on 19th May, 2017 appointed Ms. Mita Jha as Whole-time Director designated as Executive Director - Human Resource to hold office for a term of 5 years w.e.f., 27th July, 2017. Further, Dr. Samuel Onyeabor Nwabuokei was appointed as Non-Executive & Non-Independent Director of the Company w.e.f. 14th June, 2017 through Circular Resolution. The Board of Directors in its Meeting held on 14th December, 2017 based on the recommendation of Nomination and Remuneration Committee and Audit Committee appointed Mr. Nikunj Pansari as Director- Finance & CFO and Mr. Dhiren Kumar Nath as Director-Operations of the Company.

(c) RESIGNATION OF DIRECTORS:

During the year under review, Mr. R K Parakh, resigned w.e.f. 30th June, 2017 from the office of Director-Finance & Chief Financial Officer (CFO) of the Company. Mr. Pramod Kumar Mittal resigned from Directorship of the Company w.e.f. 22nd August, 2017. Mr. Janarthanam Govindasamy (Director - Operations) resigned w.e.f. 6th March, 2018 and Ms. Mita Jha resigned from the office of Executive Director - HR w.e.f. 24th April, 2018. Further, Mr. Nikunj Pansari resigned from the post of Director-Finance & CFO w.e.f. 25th July, 2018. The Board placed on record its sincere appreciation for the valuable guidance and contribution made by Mr. R K Parakh, Mr. Pramod Kumar Mittal, Mr. Janarthanam Govindasamy, Ms. Mita Jha and Mr Nikunj Pansari in the deliberation of the Board during their tenure as Directors on the Board of the Company.

(d) RETIREMENT BY ROTATION:

As per the provisions of Section 152(6)(c)of the Companies Act, 2013, Mr. Samuel Onyeabor Nwabuokei (DIN: 07835812) retires by rotation and being eligible, offers himself for re-appointment. In view of his considerable experience and contribution to the Company, your Directors recommend his re-appointment.

Resume and other information in respect of the Directors seeking appointment I re-appointment as required under Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard-2 on General Meetings duly issued by ''The Institute of Company Secretaries of India'' has been given in the Notice convening the ensuing Annual General Meeting. The Board of Directors recommends the above appointment(s)/re-appointment(s).

III. KEYMANAGERIAL PERSONNEL:

As on the date of this report, Mr. Anil Sureka, Managing Director, Mr. Dhiren Kumar Nath, Director-Operations, Mr. Nikunj Pansari, Director - Finance & CFO and Mr. Trilochan Sharma, President & Company Secretary of the Company are the Key Managerial Personnel of the Company, Pursuant to Section 203(2) of the Companies Act, 2013.

MEETINGS:

MEETINGS OF BOARD OF DIRECTORS :

During the financial year ended on 31st March, 2018, Six Board Meetings were held, the detail of the meetings and the number of meetings attended by each director of the Company are separately given in the Corporate Governance Report. The intervening gap between the two Board Meetings was within the period as prescribed under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

MEETINGS OF INDEPENDENT DIRECTORS:

Pursuant to Section 149, Schedule IV of the Companies Act, 2013 and Regulation 25 of SEBI (LODR) Regulations, 2015, a separate meeting of the Independent Directors of the Company for the financial year 2017-18 was held on Tuesday, 13th February, 2018. In this meeting, the Directors evaluated the performance of Board and its Committee as a whole, Directors, Non-Executive Directors and further assessed the quality, quantity and the timeliness of flow of information between the Management and the Board.

Further, based on the Board Evaluation Report duly prepared by Dr. Asish K. Bhattacharyya, Chairman of Audit Committee and Nomination and Remuneration Committee, the Board advised the management to take corrective actions in order to access the quality, quantity and the timeliness of flow of information between the Management and the Board.

PARTICULARS OF EMPLOYEES:

Disclosures pertaining to remuneration and other details as required under section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as Annexure -3.

The particulars of employees as required under Section 197 of the CompaniesAct, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modifications or re-enactments for the time being in force) in respect of the Top 10 Employees(/''n terms of remuneration drawn) including Employees employed throughout the financial year under review and in receipt of remuneration aggregating not less than Rs. 1,02,00,000 per annum as given in Annexure - 4 hereto and forms part of this Report.

There was no employee who was employed for part of the financial year, requiring such disclosure. There was also no employee receiving remuneration during the year is in excess of that drawn by the Managing Director or Whole-time Director and holding by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the Company.

DIRECTORS’RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134(3)(c) and 134(5) of the Companies Act, 2013, with respect to Directors'' Responsibility Statement, the Directors hereby confirm that:-

(i) in the preparation of the annual accounts for the year ended 31st March, 2018, the applicable accounting standards, have been followed and there are no material departures 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 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 this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and;

(iv) the directors have prepared the annual accounts of the Company on a ''going concern'' basis.

(v) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

(vi) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

MANAGEMENT DISCUSSION AND ANALYSIS

Management''s Discussion and Analysis for the year under review, as stipulated under Regulation 34 read with Schedule V of the SEBI (LODR) Regulations, 2015, is presented in a separate section forming part of the Annual Report.

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements as set out in Regulation 17 of the SEBI (LODR) Regulations, 2015. The Report on corporate governance as stipulated in Regulation 34 read with Schedule V of the SEBI (LODR) Regulations, 2015 forms an integral part of this Annual Report.

The Certificate received from M/s. Chaturvedi & Shah, Chartered Accountants, Statutory Auditor of the Company confirming compliance with the conditions of corporate governance as stipulated in Regulation 34 read with Schedule V of the SEBI (LODR) Regulations, 2015, is attached to the Report on corporate governance. This Certificate will be forwarded to the Stock Exchanges along with theAnnual Report of the Company.

CEO/CFO CERTIFICATION

Pursuant to Regulation 17 of the SEBI (LODR) Regulations, 2015 pertaining to corporate governance norms, Mr. Anil Sureka, Managing Director of the Company and Mr. Nikunj Pansari, Director-Finance & CFO of the Company have certified inter-alia, about review of financial statements and establishing & maintaining internal control to the financial reporting for the year ended on 31st March, 2018. The said certificate forms an integral part of annual report.

PERFORMANCE EVALUATION

Pursuant to the provisions of requirements of Section 149, Schedule IV of the Companies Act, 2013 and Regulation 25 of SEBI (LODR) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance and that of its Committees and individual Directors. 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.

To determine the criteria of evaluation of the performance of the Independent Directors as required under the Regulation 19 of the SEBI (LODR) Regulations, 2015, 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 who were evaluated on the parameters such as level of engagement and contribution, independence of judgement. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Non Independent Directors was carried out by the Independent Directors.

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

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS

During the year under review, the Company has duly complied with the applicable provisions of the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India (ICSI).

COMMITTEES OF BOARD AUDIT COMMITTEE

The composition, terms of reference, details of the meeting held during the year and the number of meeting attended by each member of the Audit 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.

NOMINATION AND REMUNERATION COMMITTEE

The composition, terms of reference, details of the meeting held during the year and the number of meeting attended by each member of the Nomination and Remuneration Committee has been furnished in the Corporate Governance Report forming a part of this Annual Report.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The composition, terms of reference, details of the meeting held during the year and the number of meeting attended by each member of the Stakeholders Relationship Committee has been furnished in the Corporate Governance Report forming a part of this Annual Report.

The composition and terms of reference, details of the meeting held during the year and the number of meeting attended by each of the Corporate Social Responsibility (CSR) Committee has been furnished in the Corporate Governance Report forming a part of this Annual Report.

POLICIES AND CODES

REMUNERATION POLICY

Your company has formulated a remuneration policy for the Board Members, Key Managerial Personnel (KMPs) and Senior Management Personnel (SMPs) in terms of the provisions of section 178 of the Companies Act, 2013 read with the relevant rules there underand the SEBI (LODR) Regulations, 2015. The said policy may be referred to, at the Company''s website at the weblink:

http://www.balasoreallovs.com/upload/media/pdf/Remuneration%20Policv.pdf

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company has formed a Whistle Blower Policy / Vigil Mechanism policy as required under Section 177 of the Companies Act, 2013 and Regulation 22 of the SEBI (LODR) Regulations, 2015. A 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 Codes of conduct or policy. The mechanism provides for adequate safeguards against victimization 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. No personnel of the Company denied access to the Audit Committee. The said policy was revised w.e.f., 14^th February, 2018 and may be referred to, at the Company''s website at the weblink:

http://www.balasoreallovs.com/upload/media/code/Whistle%20Blower%20Policv%20-%20Final.pdf

RISK MANAGEMENT POLICY

In order to fulfill the objectives of Risk Management Policy and lay a strong foundation for the development of an integrated risk management frame work, the policy outlines the following guiding principles of Risk Management.

Principles of Risk Management:

1. All business decisions will be made with the prior information and acceptance of risk involved.

2. The Risk Management Policy shall provide for the enhancement and protection of business value from uncertainties and consequent losses.

3. All employees of the company shall be made aware of risks in their respective domains and their mitigation measures.

4. The risk mitigation measures adopted by the company shall be effective in the long-term and to the extent possible be embedded in the business processes of the company.

5. Risk tolerance levels will be regularly reviewed and decided upon depending on the change in company''s strategy.

6. The occurrence, progress and status of all risks will be promptly reported and appropriate actions be taken thereof.

Risk Management Policy Statement

The policy statement is as given below:

1. To ensure protection of shareholder value through the establishment of an integrated Risk Management Framework for identifying, assessing, mitigating, monitoring, evaluating and reporting of all risks.

2. To provide clear and strong basis for informed decision making at all levels of the organization.

3. To continually strive towards strengthening the Risk Management System through continuous learning and improvement.

POLICYON PREVENTION OF SEXUAL HARASSMENT

Your Company has adopted the policy against Sexual Harassment of Women at Workplace, for the purpose of preventing, prohibiting and redressing sexual harassment of female employees including permanent, temporary, on training and on contract basis at all the workplace within the company, which are based on fundamental principles of justice and fair play.

Further, an Internal Complaints Committee (ICC) has been constituted at every location where offices of the Company is situated which shall be responsible for redressal of complaints related to sexual harassment. The Company has put in place suitable processes and mechanisms to ensure issues of sexual harassment, if any, are effectively addressed. During the year under review, there were no complaints of sexual harassment received by the ICC of the Company.

Balasore Alloys has been at the forefront in extending benefits of the local communities in and around its projects. We have always believed in the sustainable development of the society. We have earned the trust of the local community over the years through our community services, on a regular basis, throughout the year.

The Company perceives corporate social responsibility as an opportunity to contribute towards uplifting the society at large, empowering individual (specially women) making them self-reliant, eradicating poverty, providing sanitation facilities & safe drinking water, promoting education, supporting economically weaker section of the society and ensuring environment sustainability.

In compliance with the provisions of Section 135 and Schedule VII of the CompaniesAct, 2013, the Corporate Social Responsibility (CSR) Committee of the Board has formulated and recommended to the Board, a CSR Policy for its approval.

This policy, which encompasses the company''s philosophy for delineating its responsibility as a corporate citizen, lays down the guidelines and mechanism for undertaking socially useful programmes for welfare & sustainable development of the community at large. The CSR Policy may be accessed on the Company''s website at link:

http://www.balasoreallovs.com/upload/media/csr-policv/CSR 25 06 2018.pdf

The Report on CSR activities or initiatives for the financial year 2017-18 as required under the Companies (Corporate Social Responsibility) Rules, 2014 has been attached as Annexure - 7 to this Report.

POLICYON MATERIALITY & DEALING WITH RELATED PARTY TRANSACTIONS

The Board at its meeting held on 20th May, 2014 had approved the policy on materiality of and dealing with Related Party Transactions. The policy regulates the transactions between the Company and its Related Parties based on the laws and regulations applicable to the Company and also lays down mechanism for identification, approval, review and reporting of such transactions.

The policy on materiality of and dealing with Related Party Transactions may be accessed on the Company''s website at link:

http://www.balasoreallovs.com/upload/media/pdf/Policv%20on%20Related%20Partv%20Transaction.pdf

POLICYON PRESERVATION ANDARCHIVING OF THE DOCUMENTS

The Company in its meeting held on 14th November, 2015 had approved the policy on preservation and archiving of the documents. The policy ensures safe-keeping of the records and safeguard of the documents from getting manhandled, while at the same time avoiding superfluous inventory of documents.

POLICYTO DETERMINE THE MATERIAL EVENTS

The Board at its meeting held on 14th November, 2015 had approved the Policy to determine the material events or information. The Policy to determine the material events or information provides the guidelines for proper, sufficient and timely disclosure of the material events or information to the Stock Exchange(s) and / or any other regulatory authorities.

POLICYFOR DETERMINING MATERIAL SUBSIDIARIES

The Board at its meeting held on 28th September, 2016 had approved the Policy for determining Material Subsidiaries. The Policy for determining Material Subsidiaries specifies the process of determination and compliances in respect of Material Subsidiaries.

The policy for determining Material Subsidiaries may be accessed on the Company''s website at link:

http://www.balasoreallovs.com/upload/media/pdf/Policv%20for%20Determination%20of%20Material%20Subsidiaries.pdf

CODE OF CONDUCT

The Company''s Code of Conduct is based on the principle that business should be conducted in a professional manner with honesty and integrity and thereby enhancing the reputation of the Company. The Code ensures lawful and ethical conduct in all affairs and dealings of the Company.

The code may be accessed on the Company''s website at link: http://www.balasoreallovs.com/upload/media/lnvestors/Code%20of%20Conduct.pdf

CODE OFINSIDERTRADING

The Company has devised a framework to avoid Insider Trading and abusive self-dealing. The Code on prevention of Insider Trading, which applies to the Board Members and all officers and employees, seeks to prohibit trading in the securities of the Company based on unpublished price sensitive information. Trading window remains closed so long unpublished price sensitive information is not made public.

The code may be accessed on the Company''s website at link:

http://www.balasoreallovs.com/upload/media/pdf/lnsider%20Tradina%20Code%20of%20Conduct.pdf

OTHER REQUIREMENTS:

EXTRACT OF THE ANNUAL RETURN

Extract of the Annual Return as on the financial year ended on 31st March, 2018 in Form MGT 9 is annexed hereto as Annexure - 5 and forms a part of this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BYTHE REGULATORS/ COURTS/ TRIBUNALS.

The Enforcement Directorate (ED) on 15th December, 2017 had passed a Provisional Attachment Order against M/s BalasoreAlloys Ltd. (BAL) for the value of ? 24489.07 Lacs on the alleged ground that Sri Pramod Kumar Mittal and Global Steel Holdings Ltd. allegedly holds 30.35% of the shares of BAL through various Indian / Foreign promoter and investment companies.

On 5th of February, 2018 the Adjudicating Authority issued a show cause to BAL as to why the aforesaid Provisional Attachment Order should not be confirmed?

The Company filed an Appeal before the Appellate Tribunal on 17th May, 2018 challenging the said Show Cause Notice dated 5th February, 2018.

The Hon''ble Appellate Tribunal after hearing the matter on merits on 23rd May, 2018 delivered an Order/Judgment inter-alia recording that BAL is an independent publicly quoted company and is not an accused and there is no complaint against BAL under the Prevention of Money Laundering Act, 2002 (PMLA) and the alleged proceedings of Provisional Attachment are contrary to the earlier Order of the Hon''ble Tribunal. It also recorded that BAL is not involved in any schedule offence under the PMLA and inter-alia duly recorded that the purported notice under Section 8(1) of the PMLA has been wrongly issued to BAL and that the Hon''ble Appellate Tribunal had fixed the Appeal for final hearing on 17th of July, 2018 and directed the Adjudicating Authority to adjourn the proceedings before it until thereafter.

The Directors would like to inform that, the company has no business relationship with GSHL and Global Steel Phillippines Inc. (GSPI) in any manner. Further, company had nothing to do with the alleged transactions between M/s State Trading Corporations (STC), GSHL & GSPI which is the basis of the cause of action of ED.

The action on the part of ED in relation to the Company is arbitrary and contrary to the well-established principle of the law as pronounced by Hon''ble Supreme Court as the Company is a separate legal entity independent from its shareholders as advised by the legal counsels and therefore, the company believe that, the above proceedings will not affect its operations of the company and would not impact it as a going concern. The purported Order of ED involving BAL is wholly without any jurisdiction, illegal and void ab-initio.

PERSONNEL

Your company is continuing the tradition of excellence in human capital management by adopting all modern tools and techniques of human management. The pragmatic and proactive approach of management has contributed in enhancing the job satisfaction of employees. Your company has analyzed the Strength and Weakness of key functions to internalize the gap and similarly Opportunities and Threats to mitigate the external forces. To fasten the action, company is moving towards Automation in Human Resource by adopting software to enable efficient and effective way of working. Your company always remains vigilant to capitalize on talent pool in order to promote performance driven work culture both within and outside the organization. Your company has adopted Balanced Score Card approach in Performance Management to be transparent and performance initiatives aligning with Organizational Vision, Mission and Objectives. The continuous dialogue sessions with the office bearers of union, prompt grievance redressal and implementation of employees'' friendly welfare scheme has been institutionalized. Acongenial productive atmosphere has been created through mutual trust and transparency between the management and the union.

AWARD AND RECOGNITION

The Company has received many recognitions for its outstanding performance/contribution to the industry and society.

Some of the awards received during the financial year 2017-18 are as mentioned below:

1. The Company was honored with the prestigious "NALCO Utkal Gaurav Madhusudan Das Quality Award" for the year 2018 in the category of "LARGE ENTERPRISE".

2. The Company has been awarded as "Brand of the Decade 2018" in manufacturing category by Herald Global - ERTC Media following a comprehensive analysis of the parameters of brand capacity conducted by BARC Asia, a renowned independent research and brand listing agency.

3. The Company was selected for“Silver”Award in “2ndAnnual EKDKN (EK KAAM DESH KE NAAM) EXCEEDAWARD 2018” under “Occupational Health & Safety” Category in Mining & Metallurgy Sector at Dehradun.

4. The Company was awarded as the "Star Performer Award for the year 2016-17" in the product group - Ferro alloys, Large Enterprise on anAII India basis from EEPCat New Delhi.

5. Odisha Metalliferous Mines Safety week celebration 2017-18:

a. First Prize Overall category.

b. First Prize in Swachhata category.

c. First Prize in FirstAid Competition.

d. Special Prize for Outstanding Performance in Safety.

e. Second Prize in Safety Quiz.

f. First Prize in Best Employee category.

g. First Prize in FirstAid briefing, FirstAid Marching, FirstAid Drill and FirstAid Management categories of Mines.

h. First Prize in Dumper Operator category of Mines.

i. Second Prize in Excavator Operator category of Mines.

PARTICULARS AS PERSECTION 134(3)(m) OF THE COMPANIES ACT,2013

Particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 are given in the Annexure - 6 hereto and forms part of this Report.

TRANSFER OF UNCLAIMED/UNPAID DIVIDEND TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to provisions of Section 124(5) of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“the Rules”) as amended from time to time, the Company is required to transfer dividends remaining unclaimed or unpaid for a period of seven years from the date of transfer to Unpaid Dividend Account along with interest accrued, if any, to the Investor Education and Protection Fund (IEPF) established by the Ministry of Corporate Affairs (MCA), Government of India within 30 days of the date on which the same falls due to be credited to the IEPF.

The company is requesting to all the concerned shareholders to claim the dividends from 2010-11 onwards, before the unclaimed or unpaid Dividend referred above are transferred to the said Fund. Due date for transfer of Unclaimed Dividend to IEPF are as follows:

Financial Year	Date of AGM	Seven years from the date of transfer to Unpaid / Unclaimed Dividend Account*	Due date of transfer of Unpaid / Unclaimed Dividend to IEPF
2010-11	29.09.2011	04.11.2018	05.11.18 to 04.12.18
2011-12	26.09.2012	02.11.2019	03.11.19 to 02.12.19
2012-13	18.09.2013	24.10.2020	25.10.20 to 24.11.20
2013-14	25.09.2014	31.10.2021	01.11.21 to 30.11.21
2014-15	29.09.2015	03.11.2022	04.11.22 to 03.12.22
2015-16	28.09.2016	02.11.2023	03.11.23 to 02.12.23
2016-17	23.09.2017	29.10.2024	30.10.24 to 29.11.24

* Note: Within seven days from the expiryof the thirty days of declaration of Dividend at the AGM the unpaid or unclaimed dividend the are transferred to Unpaid Dividend Account.

TRANSFER OF EQUITY SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF) AUTHORITY.

Pursuant to provisions of Section 124 (6) of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“the Rules”) as amended from time to time, the shares in respect of which dividend has not been paid or claimed by the Members for seven consecutive years or more shall be transferred / credited to the Demat account of the lEPF Authority.

Members may further note that, the Company has already sent individual notices in this regard to all the concerned shareholders on 20th July, 2018 and has also advertised in the newspapers seeking action from the members who have not claimed their dividends for seven consecutive years or more.

The company is requesting again to the concerned shareholders to claim the dividends from 2010-11 onwards, before the shares referred above are transferred to the Demat account of the IEPF Authority. Due date for transfer of concerned Shares to the Demat Account of the said Authority are as follows:

Financial Year	Date of AGM	Seven years from the date of transfer to Unpaid / Unclaimed Dividend Account	Due date of transfer of shares to Demat Account of IEPF Authority
2010-11	29.09.2011	04.11.2018	05.11.18 to 04.12.18
2011-12	26.09.2012	02.11.2019	03.11.19 to 02.12.19
2012-13	18.09.2013	24.10.2020	25.10.20 to 24.11.20
2013-14	25.09.2014	31.10.2021	01.11.21 to 30.11.21
2014-15	29.09.2015	03.11.2022	04.11.22 to 03.12.22
2015-16	28.09.2016	02.11.2023	03.11.23 to 02.12.23
2016-17	23.09.2017	29.10.2024	30.10.24 to 29.11.24

Note: Within Seven days from the expiry of the thirty days of declaration of Dividend at the AGM, the shares on which dividend was not claimed/unpaid for seven consecutive years shall be transferred/credited to Demat account of the IEPF Authority.

Details of shares / shareholders in respect of which dividend has not been claimed for the seven consecutive years are provided on Company''s website. The shareholders are therefore requested to verify their records and claim their dividends of all the last seven years, if not claimed.

Underlying shares into the unpaid dividend account can be claimed anytime before they are transferred to IEPF. Further, Shareholders may also claim back the shares transferred to IEPF Authority and the unclaimed dividend including all future benefits accruing on such shares, if any, by complying the requisite formalities as stipulated in the said Rules.

CREDIT RATING

During the year under review, Credit Analysis & Research Limited (CARE) has reaffirmed the Credit Rating of CARE BBB- (Triple B Minus) for the Long term Bank Facilities and CARE A3 (AThree)for the Short term Bank Facilities of your Company. The outlook on the Long Term and Short term Rating has been changed from ''Stable'' to ''Credit Watch with Negative Implications'' on December 2017.

APPRECIATION

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain as a leading player in the industry.

Your Directors express their sincere appreciation for the continued co-operation and support extended to the Company by the Central Government, the Government of Odisha, Government Agencies, Regulatory Authorities, Stock Exchanges, Company''s Bankers, Business Associates, Shareholders and the Community at large.

For and on behalf of the Board

Anil Sureka Asish K. Bhattacharyya

Place: Kolkata Managing Director Director

Date: 28th May, 2018 DIN: 00058228 DIN: 00799039

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Mar 31, 2015

Dear Members,

The Directors are pleased to present the 27th Annual Report and the Company's audited accounts for the financial year ended 31st March, 2015.

FINANCIAL PERFORMANCE

The Company's financial performance, for the year ended 31st March, 2015 is summarized below:

(Rs. in Lacs)

Financial Year Ended

Particulars Standalone

31-03-2015 31-03-2014

Total Income 88,166.37 79,128.71

Profit/( Loss) Before Interest, 14,194.00 13,134.62 Depreciation & Tax (EBIDTA)

Finance Charges 3,415.95 3,845.60

Depreciation 2,106.38 1,884.54

Exceptional Items 4,367.31 —

Provision for Income Tax 1,380.27 2,804.19 ( Including for earlier years)

Share of Loss of Associate Company — —

Net Profit After Tax 2,924.09 4,600.29

Profit brought forward from Previous Years 22,506.20 18,472.22

Profit Carried to Balance Sheet 23,873.02 22,506.20

Particulars Consolidated

31-03-2015 31-03-2014

Total Income 88,167.54 79,128.89

Profit/( Loss) Before Interest, 14,187.43 13,124.35 Depreciation & Tax (EBIDTA)

Finance Charges 3,416.42 3,845.61

Depreciation 2,106.38 1,884.54

Exceptional Items 4,367.31 —

Provision for Income Tax 1,380.27 2,804.19 ( Including for earlier years)

Share of Loss of Associate Company 0.13 0.15

Net Profit After Tax 2,917.05 4,590.01

Profit brought forward from Previous Years 22,473.08 18,449.53

Profit Carried to Balance Sheet 23,832.71 22,473.08

Your Company's performance reflects the strong improvement in the India's business sentiment fuelled by the progressive policies of the new Government.

Your Company's total income grew by 11.42% from Rs 79,128.71 Lacs in 2013-14 to Rs 88,166.37 Lacs in 2014-15.

EBIDTA increased by 8.07% from Rs 131.35 crore in 2013-14 to Rs 141.94 crore in 2014-15. But, the Profit for the Year declined by 36.44% from Rs 4600.29 Lacs in 2013-14 to Rs 2924.09 lacs in 2014-15 due to an exceptional charge of Rs.4367.31 Lacs on account of Recompense amount payable to Lenders, to the Statement of Profit and Loss. Consequently, the earnings per share stood at Rs 4.14 (basic) and Rs 4.14 (diluted) for 2014-15 against Rs 7.16 (basic) and Rs 6.61 (diluted) for 2013-14.

DIVIDEND

Your Board needed to strike a prudent balance between rewarding shareholders and reinvesting business surplus in the business for capitalising on emerging growth opportunities. Your Board has strategically laid more emphasis on the later considering the promising opportunities over the medium-term catalyzed by Government policies.

The Board of Directors recommended a 12% dividend on equity shares (Re. 0.60 per equity share, face value of Rs. 5/- each) subject to the approval of Shareholders at the ensuing Annual General Meeting.

TRANSFER TO RESERVES

The Company proposes to transfer an amount of Rs. 73.10 Lacs to the General Reserves.

SHARE CAPITAL

The paid up Equity Share Capital as on 31st March, 2015 was Rs. 3,544.52 Lacs. The Committee for Preferential Issue of Warrants has allotted 33,00,000 (Thirty Three Lacs) Equity Shares each to Dankuni Investments Ltd. and Navoday Consultants Ltd., being Promoter Group companies on preferential basis at Rs. 5/- each at a premium of Rs. 11/- each on 16th April, 2014 pursuant to conversion of equivalent number of Warrants.

OPERATIONS

Fiscal 2014-15 was an important milestone in your Company's journey as we registered our highest ferro-alloy production at 1,11,475 MT against 1,04,550 MT in 2013-14, an increase of 6.62%.

Besides, the untiring efforts of the team in successfully implementing various projects (using the TPM, Six Sigma, Lean and BAL Q1 techniques) which also contributed immensely in optimizing operational costs and improving productivity.

The Mines performance has been improved in meeting the additional requirements of the plant for producing the higher quantity of ferro-chrome compare to last year.

In keeping with its commitment in saving the environment, your Company undertook a number of green initiatives as:

* In-plant initiatives to reduce energy and fuel consumption.

* Sale of 205702 MT of slag which facilitated in conserving granite stone otherwise used in construction activities.

EXPORT

Your Company exported 79,897 MT valued at Rs. 62,537.80 Lacs in 2014-15 against 70,675 MT valued at Rs. 54,281.58 Lacs during 2013-14. Exports constituted 73.76% of your Company's turnover in 2014-15.

MANAGEMENT INITIATIVES

During the year, your Company institutionalized all four verticals of the Business Excellence function namely TPM, Lean Management, Six Sigma and BAL Q1 Quality Management System. Extensive in-class and shop-floor training was imparted to the entire team on their organisational relevance and on their implementation.

The team's efforts in implementing these global techniques yielded heartening results. Product quality variations reduced considerably, wastages were marginalized and equipment health improved significantly leading to improved product quality and man-machine productivity. Your Company also bagged regional awards in Quality Circle competitions.

The Company is also implementing the globally-prevalent business excellence initiative based on Malcolm Baldrige Quality Framework.

In addition, your Company successfully implemented 11 modules of SAP. This is facilitating accurate and real-time data capture from across the organization facilitating faster and more informed decision-making. Your management plans to extend this platform to address Business Integration and Optimization.

FUTURE OUTLOOK

Stainless Steel sector: The stainless steel market has been dominated by China, accounting almost for half of the global market. China is the largest and fastest growing producer and consumer of stainless steel and seems to retain its leading position.

India, Taiwan, Iran, Japan, Mexico and South Korea are the other countries exhibiting strong growth in terms of stainless steel production and consumption. Global stainless steel demand over the next decade will mainly depend on these emerging economies. It is estimated that global stainless steel production will grow with an average growth rate of 5.7% in 2015 and 2016 to 44.7 million tons and 47.1 million tons, respectively. China's stainless steel production is forecasted to reach 23.5 million tons in 2015 and top the 25 million tons level in 2016.

The European Union (EU) stainless steel market is yet to be revived in 2015. However, it is expected to get stronger by 2016 due to the recent anti-dumping decision of the European Commission and consequential improving demand conditions.

Ferro chrome sector: The Global High Carbon (HC) FeCr demand illustrated robust growth of 9.5% YoY in 2014 and is expected to grow at 5% in next 5 years. The overall HC FeCr consumption expectation is 11.8 million tons for 2015 and 12.5 million tons for the year 2016. The distinguishing factor of 2015 and 2016 will be the increasing imports of HC FeCr into China & emerging markets. In 2015, overall ex-China HC FeCr production is predicted to be 7.2 million tons, an increase of 5.2% Yearly growth.

BUSINESS STRATEGY

Going forward, your Company plans to implement a volume-drive and value-led growth strategy.

Volume-driven growth: Your Company is analyzing ways of increasing the operating capacity to 1,45,000 MT through capacity balancing, process optimization and marginal capital investment.

Your Company has signed Business Transfer Agreement for acquisition of business of Sukinda Plant of Jabamayee Ferro Alloys Limited and signed Business Transfer Agreement for acquisition of business of Jajpur unit of Rohit Ferro Tech Ltd. on a slump sale basis.

Value-led growth: The team is working on increasing the production of value-added products namely low and medium-silicon, low- phosphorous, medium-carbon and high-chromium, amongst others, to maximise value-addition. In addition, your Company is focused on maximizing its net realization through proper market segmentation in the domestic and international markets by selling directly to the end user.

Besides, the Company has planned to expand its market segmentation catering to special steel manufacture sector with value added products. This will expand the Company's global footprint, particularly in Europe, USA, South America and Japan.

Sustainability: Your Company owns natural resource assets of captive Chromite Ore Mines located at Kaliapani of Sukinda Valley, Jajpur, Odisha.

The available reserves for open cast mining in the Kaliapani Chromite Mines in Sukinda is expected to continue for next six to seven years. For sustained business operations, the management is developing underground mining in same Kaliapani Chromite Mines of Sukinda. A reputed international mining consultant "SRK Consulting" has been appointed for undertaking a detailed analysis for the proposed Underground Mining Project while a reputed International Design Institute "China Coal Mine No.3 Construction Group Corporation Ltd ("CCMC")" has been also engaged for preparation of Detailed Design and Engineering for this proposed Underground Mining Project. Your company expects to commence construction activities for the proposed Underground Mining in a year time. These projects are expected to strengthen productivity and organizational sustainability over the long-term.

STATE OF COMPANY AFFAIRS

Despite the economy gaining momentum in 2014-15, the ferro alloy industry scenario in India as well as globally continued to remain subdued during the year under review.

In India, despite favourable policies having been announced by the Central Government, infrastructure development remained subdued. This resulted in the slowdown of the iron and steel sector which impacted offtake of ferro alloys.

Against the prevailing adversities, the Company grew its business and remained profitable. Your Company's grew its topline by 8.31% from Rs. 81,191.91 Lacs in 2013-14 to Rs. 87,938.46 Lacs in 2014-15. It achieved an EBIDTA of Rs. 14,194.00 Lacs, Profit after tax of Rs. 2,924.09 Lacs after an exceptional item of Rs. 4367.31 Lacs. The Basic earnings per share is Rs. 4.14 per share for the year 2014-15.

The contrarian performance was largely due to the efforts of its entire team in optimizing costs and identifying and capitalizing upon growth pockets across the globe.

As investment-inducing policies transform into on ground realities and global investment take roots in India's manufacturing sector, steel demand and consequently ferro alloy demand is expected to strengthen moving forward. The reduction in the price of crude oil and interest rates is expected to improve business profitability.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

During the year, there was no change in the nature of business of the Company.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

SUBSIDIARIES & ASSOCIATES SUBSIDIARIES

MILTON HOLDINGS LIMITED (MHL)

Milton Holdings Limited (MHL), Mauritius, a wholly-owned subsidiary, had invested through joint venture in Manganese-ore mining projects in Brazil. As at the date of Balance Sheet, the Company has an investment in shares of MHL, aggregating, in value, to USD 4.7351 million (Equivalent to Rs 2194.83 Lacs).

BALASORE METALS PTE. LIMITED

Balasore Metals Pte. Limited, Singapore, is a wholly-owned subsidiary of the Company. As at the date of Balance Sheet, the Company has an investment in share of Balasore Metals PTE. Limited aggregating, in value, to USD $ 1.00.

ASSOCIATES

Balasore Energy Limited, is an associate of the Company. As at the date of Balance Sheet, the Company has an investment in 17000 share of Balasore Energy Limited aggregating, in value, to Rs. 1,70,000.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared a Consolidated Financial Statement of the Company and all its subsidiary and associate companies, which is forming part of the Annual Report.

The statement in Form AOC-1 containing the salient features of the financial statement of the Company's subsidiaries, joint ventures and associates pursuant to first-proviso to sub-section (3) of section 129 of the Companies Act 2013 forms part of this Report as Annexure - 1.

In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Company, www.balasoreallovs.com.

Further, as per fourth proviso of the said section, audited annual accounts of each of the subsidiary companies have also been placed on the website of the Company. Shareholders interested in obtaining a copy of the audited annual accounts of the subsidiary companies may write to the Company Secretary at the Company's registered office.

The audited financial statements and audit reports of each of the subsidiaries are available for inspection at the registered as well as administrative office of the Company and that of the subsidiaries during office hours between 11.00 A.M. to 1.00 P.M.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loan, guarantees or made any investments exceeding sixty per cent of its paid-up share capital, free reserves and securities premium account or one hundred per cent of its free reserves and securities premium account, whichever is more, as prescribed in Section 186 of the Companies Act, 2013.

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the note no. 12 and 13 of the Financial Statements of the Company for the year ended 31.03.2015.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Particulars of every contract or arrangements entered into by the Company with Related Parties referred to in Section 188(1) of the Companies Act, 2013 in Form AOC-2 prescribed under the Companies (Accounts) Rules, 2014 is appended as Annexure - 2 hereto and forms part of this Report.

There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee for approval. The Audit Committee reviews all related party transactions quarterly.A statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis.

PUBLIC DEPOSITS

The Company has not invited or accepted deposits from the public covered under Section 73 of the CompaniesAct, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

AUDITORS & AUDITORS' REPORT

M/s Chaturvedi & Shah, Chartered Accountants, (Firm Registration No. 101720W), Statutory Auditors of the Company have been appointed by the members at the last Annual General Meeting and shall hold office for a period of 4 years from 1st April, 2014.

M/s Chaturvedi & Shah have given their consent to act as Auditors, if appointed. The Company has received a letter from them to the effect that they satisfy the criteria provided in Section 141 of the CompaniesAct, 2013 and that their appointment, would be within the limits prescribed under Section 141(3)(g) of the Companies Act, 2013.

Members are requested to ratify their appointment as the Statutory Auditors of the Company and to fix their remuneration for the financial year ending 31st March, 2016.

A resolution proposing appointment of M/s Chaturvedi & Shah as the Statutory Auditors of the Company pursuant to Section 139 of the CompaniesAct, 2013, forms a part of the Notice convening the Annual General Meeting.

The Auditors' Report to the shareholders for the year under review does not contain any qualifications or adverse remarks. The Notes on Financial Statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments.

COST AUDITORS

Pursuant to Section 148 of the CompaniesAct, 2013 read with the Companies (cost record and audit) Rules 2014 and based on the Audit Committee recommendations, the Board of Directors at its meeting held on May 27, 2015, has approved the re-appointment of M/s. Shome & Banerjee as the Cost Auditors of the Company for the Financial Year 2015-16 to conduct audit of the Cost Records, maintained by the company in respect of its ferro chrome / charge chrome manufacturing plant at Balgopalpur - 756 020 Dist. Balasore, Odisha.

The Cost Audit Report for the Financial Year ended March 31,2014 was filed within the due date by the Cost Auditor of the Company. The Report of the Cost Auditors for the Financial Year ended March 31,2015 is under finalization and will be filed with the MCA within the prescribed period.

INTERNAL AUDITORS

Pursuant to the provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of 'The Companies (Accounts) Rules 2014' and based on the Audit Committee recommendations, the Board of Directors of the Company at its meeting held on May 27, 2015, has approved the appointment of M/s Das & Prasad, as the Internal Auditor of the Company for the financial year 2015-16 to conduct the internal audit of the Company.

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 Board of Directors at its meeting held on May 27, 2015, has approved the appointment of M/s MKB & Associates as the Secretarial Auditor of the Company for the financial year 2015-16 to conduct the secretarial audit of the Company.

Further, the Secretarial Audit Report covering the financial year ended on 31st March, 2015 in Form No. MR - 3, given by the company secretary in practice is annexed herewith as Annexure - 3. The Report does not contain any qualification or adverse remarks.

DIRECTORS & KEY MANAGERIAL PESONNEL

I. INDEPENDENT DIRECTORS:

(a) APPOINTMENT OF INDEPENDENT DIRECTORS:

At the Annual General Meeting of the Company held on 25th September, 2014, the Members of the Company appointed Mr. Mahesh Trivedi (DIN: 00050785), Mr. Shantanu Mohapatra (DIN: 00176836), Mr. Sujit Kumar Majumdar (DIN: 00177344), Mr. Susil Kumar Pal (DIN: 00268527), Mr. Kashi Prasad Khandelwal (DIN: 00748523) and Mr. Asish Kumar Bhattacharyya (DIN: 00799039), as independent Directors under the Companies Act, 2013 for a term up to 31st March, 2019.

(b) STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB- SECTION (6) OF SECTION 149 OF THE COMPANIES ACT, 2013.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

(c) FAMILIARIZATION PROGRAMME UNDERTAKEN FOR INDEPENDENT DIRECTORS

The Independent Directors are familiarised 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. On appointment, the Independent Director is issued a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments. Each newly appointed Independent Director is taken through a formal induction program including the presentation from the Managing Director on the Company's manufacturing, marketing, finance and other important aspects. The Company Secretary briefs the Directors about their legal and regulatory responsibilities as a Director. The induction for Independent Directors include interactive sessions with Committee Members, Business and Functional Heads, visit to the manufacturing site, etc. On the matters of specialized nature, the Company engages outside experts/consultants for presentation and discussion with the Board members.

II. NON- INDEPENDENT DIRECTORS

(a) WOMAN DIRECTOR

As per the provisions of Section 149(1) of the Companies Act, 2013 and amended Clause 49 of the Listing Agreement, the Company is required to have atleast one Woman Director on its Board. The Company complies with the aforesaid requirement as Mrs. Vartika Mittal Goenka (DIN: 02451225), has been a Director of the Company since 26th May, 2011.

(b) APPOINTMENT OF DIRECTORS

The Board of Directors of the Company had appointed Mr Ansuman K. Bhanja (DIN: 07008300), as Whole-time Director of the Company designated as Director - Operations and Mr. K C Raut (DIN: 03592433) as Nominee Director of the Company w.e.f., 7th November, 2014.

(c) RETIREMENT BY ROTATION:

As per the provisions of Section 152(6)(c ) of the Companies Act, 2013, Mr. Pramod Kumar Mittal (DIN: 00772690) retires by rotation, and being eligible, offers himself for re-appointment. In view of his considerable experience and contribution to the Company, your Directors recommend his re-appointment.

III. KEY MANAGERIAL PERSONNEL

The Board of Directors at its meeting held on 20th May, 2014, pursuant to Section 203(2) of the Companies Act, 2013 noted and ratified the appointments, terms and conditions of appointments including remuneration of Mr. Anil Sureka (DIN: 00058228), Managing Director, Mr. R K Parakh (DIN: 00459699), Director-Finance & Chief Financial Officer and Mr. Trilochan Sharma, President & Company Secretary of the Company. The Board of Directors of the Company had also appointed Mr Ansuman K. Bhanja (DIN: 07008300), as Whole-time Director of the Company designated as Director - Operations w.e.f., 7th November, 2014.

MEETINGS

MEETINGS OF BOARD OF DIRECTORS

During the financial year ended 31st March, 2015, four Board Meetings were held, details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

MEETINGS OF INDEPENDENT DIRECTORS

According to the provisions of Companies Act, 2013 and Clause 49 of the Listing Agreement, a separate meeting of the Independent Directors was held on 26th March, 2015. In the meeting, the Directors reviewed the performance of Board and its Committee as a whole, Chairman of the Board, Directors, Non-Executive Directors and further assessed the quality, quantity and the timeliness of flow of information between the Management and the Board.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under section 197(12) of the Companies Act 2013,read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are attached as Annexure - 4.

The particulars of employees as required by Section 197 of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of the employees employed throughout the financial year and drawing Rs. 60 Lacs or more are given in Annexure - 5 hereto and forms part of this Report.

There was no employee who was employed for part of the financial year, requiring such disclosure. There was also no employee receiving remuneration during the year is in excess of that drawn by the Managing Director or Whole-time Director and holding by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134(3)(c) and 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, the Directors hereby confirm that:-

(i) in the preparation of the annual accounts for the year ended 31st March, 2015, the applicable accounting standards, have been followed and there are no material departures 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 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 this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the Directors have prepared the annual accounts of the Company on a 'going concern' basis; and

(v) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

(vi) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

MANAGEMENT DISCUSSION AND ANALYSIS

Management's Discussion and Analysis for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is presented in a separate section forming part of the Annual Report.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out in Clause 49 of the Listing Agreement. The Report on corporate governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

The certificate from M/s. Chaturvedi & Shah, Chartered Accountants confirming compliance with the conditions of corporate governance as stipulated under the aforesaid Clause 49, is attached to the Report on corporate governance. This Certificate will be forwarded to the Stock Exchanges along with the Annual Report of the Company.

CEO/CFO CERTIFICATION

In accordance with the provisions of the Listing Agreement pertaining to corporate governance norms, Mr. Anil Sureka, Managing Director of the Company and Mr. R K Parakh, CFO of the Company have certified inter-alia, about review of financial statements and establishing & maintaining internal control to the financial reporting for the year ended 31st March, 2015. The said certificate forms an integral part of annual report.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Code of conduct and Business ethics of the Company ("The Code") guides the conduct of affairs of your Company. The Code and Standard Operating Procedures (SOPs) stand widely communicated across the enterprise at all times and provide the foundation for Internal Financial Controls with reference to your Company's Financial Statements. Such Financial Statements are prepared on the basis of the Significant Accounting Policies that are carefully selected by management and approved by the Audit Committee and the Board. These Policies are supported by the Corporate Accounting and System Policies that apply to the entity as a whole to implement the tenets of Corporate Governance and the Significant Accounting Policies uniformly across the Company. The Accounting Policies are reviewed and updated from time to time. Your Company uses ERP Systems as a business enabler and also to maintain its Books of Account. The SOPs in tandem with transactional controls built into the ERP Systems ensure appropriate segregation of duties, tiered approval mechanisms and maintenance of supporting records. The systems, SOPs and controls are reviewed by divisional management and audited by the Internal Auditor whose findings and recommendations are reviewed by the Audit Committee and tracked till its implementation. Your Company has in place adequate internal financial controls with reference to the Financial Statements. Such controls have been tested during the year and no reportable material weakness in the design or operation was observed. Nonetheless, your Company recognises that any internal financial control framework, no matter how well designed, has inherent limitations and accordingly, regular audit and review processes ensure that proper check and balance are reinforced on an ongoing basis.

PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance and that of its Committees and individual Directors. 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.

To determine the criteria of evaluation of the performance of the Independent Directors as required under the Clause 49 of the Listing Agreement, 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, who were evaluated on the parameters such as level of engagement and contribution, independence of judgement. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors.

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

COMMITTEES OF BOARD

AUDIT COMMITTEE

The composition and terms of reference of the Audit 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.

NOMINATION AND REMUNERATION COMMITTEE

The composition and terms of reference of the Nomination and Remuneration Committee has been furnished in the Corporate Governance Report forming a part of this Annual Report.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The composition and terms of reference of the Stakeholders Relationship Committee has been furnished in the Corporate Governance Report forming a part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE

The composition and other details of Corporate Social Responsibility (CSR) Committee has been furnished in the Corporate Governance Report forming a part of this Annual Report.

POLICIES AND CODES

REMUNERATION POLICY

Your company has formulated a remuneration policy for the Board Members, Key Managerial Personnel (KMPs) and Senior Management Personnel (SMPs) in terms of the provisions of section 178 of the Companies Act, 2013 read with the relevant rules there under and listing agreement. The said policy is appended as Annexure - 9 hereto and forms part of this Report.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

The Company has formed a Whistle Blower Policy/ Vigil Mechanism policy 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 behavior, actual or suspected fraud or violation of the Codes 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://balasorealloys.com/webpage.php?title=Code of Conduct&p type= 1&parent=35&catid=59.

RISK MANAGEMENT POLICY

In order to fulfill the objectives of Risk Management Policy and lay a strong foundation for the development of an integrated risk management framework, the policy outlines the following guiding principles of Risk Management.

Principles of Risk Management:

1. All business decisions will be made with the prior information and acceptance of risk involved.

2. The Risk Management Policy shall provide for the enhancement and protection of business value from uncertainties and consequent losses.

3. All employees of the company shall be made aware of risks in their respective domains and their mitigation measures.

4. The risk mitigation measures adopted by the company shall be effective in the long-term and to the extent possible be embedded in the business processes of the company.

5. Risk tolerance levels will be regularly reviewed and decided upon depending on the change in company's strategy.

6. The occurrence, progress and status of all risks will be promptly reported and appropriate actions be taken thereof.

Risk Management Policy Statement

The policy statement is as given below:

1. To ensure protection of shareholders value through the establishment of an integrated Risk Management Framework for identifying, assessing, mitigating, monitoring, evaluating and reporting of all risks.

2. To provide clear and strong basis for informed decision making at all levels of the organization.

3. To continually strive towards strengthening the Risk Management System through continuous learning and improvement

POLICY ON PREVENTION OF SEXUAL HARASSMENT

Your Company has adopted the policy against Sexual Harassment of Women at Workplace, for the purpose of preventing, prohibiting and redressing sexual harassment of female employees including permanent, temporary, on training and on contract basis at all the workplace within the company, which are based on fundamental principles of justice and fair play.

Further, an Internal Complaints Committee (ICC) has been constituted which shall be responsible for redressal of complaints related to sexual harassment. The Company has put in place suitable processes and mechanisms to ensure issues of sexual harassment, if any, are effectively addressed. During the year, no complaints of sexual harassment were received.

CORPORATE SOCIAL RESPONSIBILITY POLICY

Your Company has been at the forefront in extending benefits to the local communities in and around its projects. We have always believed in the sustainable development of the society. We have earned the trust of the local community over the years through our community services, on a regular basis, throughout the year.

In compliance with the provisions of Section 135 and Schedule VII of the Companies Act, 2013, the Corporate Social Responsibility (CSR) Committee of the Board has formulated and recommended to the Board, a CSR Policy for its approval.

This policy, which encompasses the company's philosophy for delineating its responsibility as a corporate citizen, lays down the guidelines and mechanism for undertaking socially useful programmes for welfare & sustainable development of the community at large. The CSR Policy may be accessed on the Company's website at link: http://balasoreallovs.com/gallerv.php?title=CSR &p type=7&parent=36&photo catid=99999&catid=38.

TheAnnual Report on CSR for the financial year 2014-15 as required under the Companies (Corporate Social Responsibility) Rules, 2014 has been appended as Annexure - 8 to this Report.

POLICY ON MATERIALITY & DEALING WITH RELATED PARTY TRANSACTIONS

The Company in its meeting held on 20th May, 2014 had approved the policy on materiality of and dealing with Related Party Transactions. The policy regulates the transactions between the Company and its Related Parties based on the laws and regulations applicable to the Company and also lays down mechanism for identification, approval, review and reporting of such transactions.

The policy on materiality of and dealing with Related Party Transactions may be accessed on the Company's website at link: http://balasorealloys.com/webpage.php?title=Code of Conduct&p type=1&parent=35&catid=59.

CODE OF CONDUCT

The Company's Code of Conduct is based on the principle that business should be conducted in a professional manner with honesty and integrity and thereby enhancing the reputation of the Company. The Code ensures lawful and ethical conduct in all affairs and dealings of the Company.

CODE OF INSIDER TRADING

The Company has devised a framework to avoid Insider Trading and abusive self-dealing. The Code on prevention of Insider Trading, which applies to the Board Members and all officers and employees, seeks to prohibit trading in the securities of the Company based on unpublished price sensitive information. Trading window remains closed so long unpublished price sensitive information is not made public.

OTHER REQUIREMENTS EXTRACT OF THE ANNUAL RETURN

Extract of the Annual Return as on the financial year ended 31st March, 2015 in Form MGT - 9 is annexed hereto as Annexure - 6 and forms a part of this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNALS

There are no significant material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status of the Company and its future operations.

PERSONNEL

Your company is continuing the tradition of excellence in human capital management by adopting all modern tools and techniques of human management. The pragmatic and proactive approach of management has contributed in enhancing the job satisfaction of employees. A congenial productive atmosphere has been created through mutual trust and transparency between the management and the employees. Your company always remains vigilant to capitalize on talent pool in order to promote performance driven work culture, both within and outside the organization.

AWARD AND RECOGNITION

The Company has received many awards from various organizations in recognition of its outstanding performance and contribution to the industry and society. Some of the awards received during the financial year 2014-15 are mentioned below:

1) 20th All Odisha Quality Circle Award was conferred to Balasore Alloys Ltd. in the 20th All Odisha Quality Circle Convention organized by NALCO, Bhubaneswar.

2) The Best Pro-People Corporate House of Odisha Award was conferred to Balasore Alloys Ltd. at the function organized by Padmashree Jayanta Mohapatra International Centre.

3) Our Organization is certified with QMS, EMS and OHSAS (ISO 9001, ISO 14001 and ISO 18001) in the discipline of Quality, Environment and Occupational Health and Safety.

PARTICULARS AS PER SECTION 134 (3)(m) OF THE COMPANIES ACT, 2013.

Particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 are given in the Annexure - 7 hereto and forms part of this Report.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 124 of the Companies Act, 2013, relevant amounts which remained unpaid or unclaimed for a period of seven years shall be transferred by the Company, from time to time on due dates, to the Investor Education and Protection Fund.

Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 25th September, 2014 (date of last Annual General Meeting) on the website of Ministry of Corporate Affairs.

EXIT FROM CORPORATE DEBT RESTRUCTURING (CDR) MECHANISM

Your Company was referred to Corporate Debt Restructuring (CDR) mechanism from 1st April 2004 due to prolonged depressed domestic and international market conditions, and increase in power and fuel costs. The Company's performance improved over the years, so the Company along with its lenders commenced the exit procedures from CDR mechanism. During the year, Lenders have computed the recompense liability of Rs. 6275.72 Lacs from 1st April 2004 as approved by CDR Empowered Group (EG). Based on such approvals, provision of Rs. 4367.31 Lacs has been made towards balance recompense payable which has been shown as exceptional item. Subsequently, company has issued Non - Convertible Debentures against the recompense payable to its lenders aggregating to Rs. 4685.72 Lacs and balance amount of Rs.1590 Lacs was paid to Lenders from time to time. Further CDR EG in its meeting dated 26th March, 2015 has given direction that company stands exited from CDR.

APPRECIATION

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain as a leading player in the industry.

Your Directors express their sincere appreciation for the continued co-operation and support extended to the Company by the Central Government, the Government of Odisha, Government Agencies, Regulatory Authorities, Stock Exchanges, Company's Bankers, Business Associates, Shareholders and the Community at large.

For and on behalf of the Board

Anil Sureka M Trivedi Kolkata Managing Director Director 27th May, 2015 DIN: 00058228 DIN:00050785

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Mar 31, 2014

Dear Members,

The Directors are pleased to present the 26th Annual Report together with the Audited financial statements of your Company for the financial year ended 31st March, 2014.

FINANCIAL RESULTS

The financial performance of the Company, for 2013-2014, is summarized below:

(Rs. in Lacs) Financial year Financial year ended ended 31st March, 2014 31st March, 2013

1 Sales/Income from operations 81,191.91 71,531.58

Less: Excise Duty 2931.16 2,918.67

78,260.75 68,612.91

2 Other Income 867.96 1,664.20

3 Total Income (1 2) 79,128.71 70,277.11

4 Total expenditure 65,970.99 59,024.60

5 Profit before Interest & Finance charges and Depreciation (3-4) 13,157.72 11,252.51

6 Interest and Finance Charges 4,119.07 4,430.86

7 Depreciation / Amortisation 1,884.54 1,749.05

8 Profit before Taxes (5-6-7) 7,154.11 5,072.60

9 Provision for Taxes

– Current Tax 2,319.82 1,873.89

– Deferred Tax Charge 244.43 320.26

– Taxation of earlier years (10.43) 2,553.82 - 2,194.15

10 Profit After tax (8-9) 4,600.29 2,878.45

11 Surplus brought forward 18,472.22 15,967.37

12 Surplus Available (10 11) 23,072.51 18,845.82

13. Appropriations:

– Proposed Dividend 385.74 321.45

– Tax on Proposed Dividend 65.56 52.15

– Transfer to General Reserve 115.01 566.31 - 373.60

Surplus carried to the Balance Sheet (12-13) 22,506.20 18472.22

FINANCIAL REVIEW

Your Company''s strong business model stood the test of challenges for another year. Despite the economic slowdown, policy paralysis and inflationary pressure which dampened industry prospects, your Company strengthened its growth momentum.

Your Company''s ability in consistently delivering on customer aspiration resulted in a 13.51% growth in turnover, from Rs. 71,531.58 Lacs in 2012-13 to Rs. 81,191 .91 Lacs in 2013-14. Its painstaking efforts in streamlining costs facilitated in a 16.93% increase in EBIDTA from Rs. 11,252.51 Lacs in 2012-13 to 13,157.72 Lacs in 2013-14.

DIRECTORS'' REPORT (Contd.)

Profit after tax increased from Rs. 2,878.45 Lacs to Rs. 4,600.29 Lacs, a 59.82% growth over the previous year. The Basic earnings per share increased from Rs. 4.48 to Rs 7.16 per share during the same period.

DIVIDEND

Your Board needed to strike a prudent balance between dividend payout and reinvestment of business surplus for organisational growth. But considering robust business growth and improved profitability, the Board of Directors recommended a 12% dividend on equity shares (Re. 0.60 per equity share, face value of Rs. 5/- each) subject to the approval of Shareholders at the ensuing Annual General Meeting and necessary approval from Lenders.

OPERATIONS

Fiscal Year 2013-14 is an important milestone in the your Company''s existence as, we achieved the highest ever production of ferro alloys at 1,04,550 MT against 98,466 MT in 2012-13, an increase of 6.18% over the previous year.

This achievement was the result of the untiring efforts of the entire team in successfully implementing numerous projects (using the TPM, Six Sigma, Lean JIT and BAL Q1 techniques) which also contributed immensely in optimizing operational costs. In addition, accurate supply chain strategies and innovative customer relationship management practices facilitated in surpassing the forecasted business plan targets.

In keeping with its commitment to saving the environment, your Company undertook a number of green initiatives as :

- In-plant measures towards energy conservation, optimized power and fuel consumption

- The Company sold 1,08,489 MT of slag which facilitated in conserving granite stone otherwise used in construction activities

Going forward, your Company plans to implement a volume-drive and value-led growth strategy. On the one hand, your Company is seeking novel ways of upping its annual production capacity to about 1,45,000 MT while on the other, the team is working on increasing the production of value-added products namely low-silicon, low-phosphorous, low-carbon and high-chromium, among others, to maximise value-addition. In addition, your Company is focused on maximizing its net realization through accurate market segmentation in the domestic and international markets.

Further, Your Company is working on expanding the capacity by acquisition of plants lying idle in close proximity to its existing mines and manufacturing facility.

EXPORT

Your Company exported 70,675 MT valued at Rs. 54,329.80 Lacs during the year under review as against 61,385 MT valued at Rs. 44,769.06 Lacs during the previous year 2012-13. As a result, exports constituted 67.10% of your Company''s turnover in 2013-14.

MINES

Your Company owns large natural resource assets namely chromite ore mines located at Sukinda Valley, Jajpur, Odisha.

Your Company''s management is concerned with the reality that the available reserve for open cast mining in the Sukinda mines would exhaust in the next few years. For sustained business operations, the management is developing underground mining in Sukinda mine. A reputed international consultant has been appointed for undertaking a threadbare analysis of the underground mining project. A reputed International Design Institute has been engaged for preparation of detailed design and engineering for underground mining project.

Your Company also envisages setting up a Ferro Chrome production unit commensurate with the mine output. Your Company expects to commence construction activities for underground mining in next year.

The project is expected to strengthen business productivity and organizational sustainability over the long-term.

MANAGEMENT INITIATIVES

During the year, your Company has institutionalized all four verticals of the Business Excellence functions namely TPM, Lean Management, Six Sigma and BAL Q1 Quality Management System. Extensive in-class and shop-floor training was imparted to the entire team on the relevance and processes of all the aforementioned tools.

The team''s efforts in implementing these quality management techniques have yielded heartening results. Product quality variations have reduced considerably, wastages have been marginalized and equipment health has improved significantly leading to improved product quality and man-machine productivity. Your Company has also bagged national and regional awards in Quality Circle competitions.

In addition, your Company successfully implemented 11 modules of SAP. This is resulting into accurate and real-time data capture facilitating faster and more accurate decision making. Your management plans to extend this platform to address Business Integration and Optimization.

FUTURE OUTLOOK

2013 proved to be a year of expansion for the chrome industry, after the low performance of 2012 for both chrome ore and ferro chrome. Global ferro chrome output reached a record high last year at 10.8 Million Tonne, in tandem with the global stainless steel production which also touched a new high. Ferro chrome output volume expanded sharply in China, which confirmed its position of the world''s largest ferro chrome producer. South Africa also increased its ferro chrome production.

Despite the increase in production volumes, the profitability of the Ferro chrome industry did not improve due to several impediments namely rising costs, infrastructural constraints and over-capacity.

Going forward, with developed economies namely the US and Europe expected to report a healthy economic growth numbers, the demand for stainless steel and consequently ferro chrome is expected to improve.

But the growing ferro-chrome demand is unlikely to translate into superior realizations in the short-term, due to planned capacity expansions in China, Finland, Kazakhstan, Oman and South Africa, resulting in a potential over-supply. Over the longer-term, the ferro-chrome market is forecast to move into balance.

ALLOTMENT OF SHARES PURSUANT TO CONVERSION OF WARRANTS

The Committee for Preferential Issue of Warrants has allotted 33,00,000 (Thirty Three Lakhs) Equity Shares each to Dankuni Investment Ltd. and Navoday Consultants Ltd., being Promoter Group companies on preferential basis at Rs. 5/- each at a premium of Rs. 11/- each on 16th April, 2014 pursuant to conversion of equivalent number of Warrants.

AWARD AND RECOGNITION

Your Company has received many awards from various organizations in recognition of its outstanding performance and contribution to the industry and society. Some of the awards received for Mines and Balasore Plant during the financial year 2013-14 are mentioned below:

1) All India Odisha Quality Circle Convention Prizes from NALCO: TPM Circle competition – two awards of Good Performer TPM Circle competition – one award of Runner Up

2) Our Chromite Ore Mines secured the following Awards in Odisha Metalliferous Mines Safety Week Celebration 2013-14 under the aegis of Director of Mines Safety (DGMS), Bhubaneswar Region in January 2014.

Best Award on implementation of 10th Conference on Safety in Mines guidelines - First Prize.

Best Award on Electrical Installations in Mines - 2nd Prize

Best Drill Operator - 3rd Prize

3) Our Chromite Mines has bagged two Nos. of prizes during Mining Environment and Mineral Conservation week, 2013-14, celebrated under aegis of Indian Bureau of Mines, Bhubaneswar Region.

2nd Prize in Installation and use of mechanical beneficiation

2nd prize in Noise and vibration study

CORPORATE DEBT RESTRUCTURING

Your Company is currently under CDR mechanism. Your management has showcased the Company''s continued superior financial performance against the projections made under the CDR scheme, to its Lenders for an early exit from CDR mechanism.

BOARD OF DIRECTORS

The Companies Act, 2013 ("the Act") provides for appointment of Independent Directors. Section 149 of the Act (effective from April 1, 2014) provides that Independent Directors shall not hold office for more than two consecutive terms of upto five years each, provided that the Director is re-appointed by passing a special resolution on completion of his first term. Independent Directors are no longer liable to retire by rotation. Further, as per explanation provided under Section 149 of the Act, any term of an Independent Director on the date of commencement of this Section, i.e., April 1, 2014 shall not be counted as a term.

The Board of Directors of the Company has decided to adopt the provisions with respect to appointment and tenure of Independent Directors which is consistent with the Act and the revised Listing Agreement.

Accordingly, Mr. Mahesh Trivedi, Mr. Shantanu Mohapatra, Mr. Sujit Kumar Majumdar, Mr. Susil Kumar Pal, Mr. Kashi Prasad Khandelwal and Mr. Asish Kumar Bhattacharyya, the existing Independent Directors are proposed to be appointed as Independent Directors of the Company by the shareholders of the Company at the Annual General Meeting of the Company for a term upto 31st March, 2019 and whose offices shall not, henceforth, be liable to retire by rotation.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Act and under Clause 49 of the Listing Agreement with the Stock Exchanges.

In accordance with the provisions of the Act and Article 149 of the Articles of Association of the Company, Ms. Vartika Mittal, Director, retire by rotation at the ensuing Annual General Meeting and being eligible offer herself for reappointment.

The Board recommends the appointment of above directors with a view to avail their valuable advices and wise counsel. Brief resume of the Directors seeking appointment, reappointment, nature of their expertise in specific functional areas and names of companies in which they hold directorships and memberships/chairmanships of Board Committees, as stipulated under Clause 49 of the Listing Agreement, are provided as annexure to the Notice calling the Annual General Meeting forming part of this Annual Report.

SUBSIDIARY COMPANY

MILTON HOLDINGS LIMITED (MHL)

Milton Holdings Limited (MHL), Mauritius, a wholly-owned subsidiary, had invested through joint venture in Manganese-ore mining projects in Brazil. As at the date of Balance Sheet, the Company has an investment in shares of MHL, aggregating in value to USD 4.7351 million (Equivalent to Rs 2194.83. Lacs).

BALASORE METALS PTE. LIMITED

Balasore Metals Pte. Limited, Singapore, a wholly-owned subsidiary of the Company. As at the date of Balance Sheet, the Company has an investment in share of Balasore Metals PTE. Limited aggregating, in value, to USD $ 1.00.

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Annual Reports for the financial year 2013-14 of the aforesaid subsidiaries will be made available to the shareholders of the Company upon receipt of written requests from them. The Annual Reports for the financial year 2013-14 of the aforesaid subsidiary companies will also be kept open for inspection by the shareholders at the Registered Office of your Company and of the subsidiaries concerned between 10.30 a.m. to 1.30 p.m. on any working day.

In compliance with the requirements of the MCA Circular, a Statement showing relevant details for the year ended March 31, 2014 of the subsidiaries have been included in the Consolidated Financial Statements of the Company which forms part of this Annual Report.

Statement pursuant to Section 212(3) of the Companies Act, 1956 relating to MHL & Balasore Metals PTE. Ltd as at 31st March, 2014 is also annexed to this Report.

CONSOLIDATED FINANCIAL STATEMENT

The Consolidated Financial Statements of the Company and its subsidiary, prepared and presented in accordance with Accounting Standard (AS) 21, are attached to and form part of the Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

i. In the preparation of the annual accounts for the financial year ended 31st March, 2014, the applicable accounting standards have been followed and there have been no material departures;

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 at the end of the financial year and of the Profit of the Company for that year;

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; and

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

AUDITORS

The Company''s Auditors M/s Chaturvedi & Shah, Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting and have expressed their willingness to be reappointed.

Pursuant to provision of Sections 139 and 142 and other applicable provisions, if any, of the Act and Rules made thereunder, M/s. Chaturvedi & Shah, Chartered Accountants (Firm Registration No. 101720W) are proposed to be appointed as the Statutory Auditors of the Company, to hold office from the conclusion of this Annual General Meeting until the conclusion of the thirtieth Annual General Meeting of the Company.

The Company has obtained a letter from the Auditors to the effect that reappointment, if made, shall be in accordance with the provision of Section 139 and also satisfies the criteria provided in Section 141 of the Act.

AUDITORS'' REPORT

In relation to the matters dealt with by the Auditors in their Audit Report, we have to state that:

1. North Eastern Electricity Supply Company of Orissa Limited (NESCO) has revoked the waiver of dues granted under a settlement in an earlier year and disputed on take or pay benefit claimed earlier. The Company has paid and, on conservation basis, provided Rs 3,400 lacs towards such claims upto 31st March, 2014. The matter is pending with Honorable High Court of Orissa & Appellate Tribunal respectively. The company is actively pursuing the matter legally and hence no further liability has been accounted for in this financial result.

2. The computation of recompense amount for the period from 1st April, 2007 to present date is being computed by the Consortium bankers and they are in process to crystallize the same. On finalization of the recompense amount, necessary action will be taken.

3. The Company has taken necessary steps to regularize the matter in regard to use of short term funds to the extent of Rs. 11,643.04 Lacs for long term investment as referred to in the point no. 17 of Annexure to the Auditors'' Report. It was necessitated to meet certain long term requirements and future growth of the Company.

FIXED DEPOSITS

During the year, your Company has not accepted any Deposits under Section 58A and Section 58AA of the Companies Act, 1956, read with Companies (Acceptance of Deposits) Rules, 1975.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the listing agreement with Stock Exchanges, the Management Discussion and Analysis and Corporate Governance Report together with the Certificate from the Auditors of the Company confirming compliance of the conditions of Corporate Governance form a part of the Annual Report.

Your Company has taken adequate steps for strict compliance with the Corporate Governance guidelines, as amended from time to time.

CODE OF CONDUCT

The Code of Conduct for the Directors and Senior Management Personnel has been made applicable to all the Directors whether executive or non-executive including all Senior Management Personnel of the Company. The Board members and Senior Management Personnel of the Company have affirmed compliance with the Code of Conduct during the year and no violation of the same was reported. The Code of Conduct is also posted on the Company''s web-site.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under clause 49 of the Listing Agreement with Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

CEO AND CFO CERTIFICATION

In accordance with the provisions of the Listing Agreement pertaining to corporate governance norms, Mr. Anil Sureka, Managing Director of the Company and Mr. R K Parakh, CFO of the Company have certified inter-alia, about review of financial statements and establishing & maintaining internal control to the financial reporting for the year ended 31st March, 2014. The said certificate forms an integral part of annual report.

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

The statement of particulars pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is annexed hereto and forms part of the report.

PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956 AND RULES FRAMED THEREUNDER

The statement of particulars pursuant to Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, is annexed hereto and forms part of the report.

COST AUDITORS

Pursuant to the Cost Audit Order dated January 24, 2012 issued by the Ministry of Corporate Affairs (MCA), and based on the Audit Committee recommendations, the Board of Directors at its meeting held on May 20, 2014, has approved the re-appointment of M/s. Shome & Banerjee as the Cost Auditors of the Company for the Financial Year 2014-15 to conduct audit of the Cost Records, maintained by the company in respect of its ferro chrome / charge chrome manufacturing plant at Balgopalpur - 756 020 Dist. Balasore, Odisha.

The Cost Audit Report for the Financial Year ended March 31, 2013 was filed on 27th September, 2013 i.e. within the due date by the Cost Auditor of the Company. The Report of the Cost Auditors for the Financial Year ended March 31, 2014 is under finalization and will be filed with the MCA within the prescribed period.

INTERNAL AUDITORS

Pursuant to the provisions of Section 138 of the Act read with Rule 13 of ''The Companies (Accounts) Rules 2014'' and based on the Audit Committee recommendations, the Board of Directors of the Company at its meeting held on May 20, 2014, has approved the appointment of M/s Das & Prasad, as the Internal Auditor of the Company for the financial year 2014-15 to conduct the internal audit of the Company.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Act the Board of Directors at its meeting held on May 20, 2014, has approved the appointment of M/s MKB & Associates as the Secretarial Auditor of the Company for the financial year 2014-15 to conduct the secretarial audit of the Company.

CORPORATE SOCIAL RESPONSIBILTY

Pursuant to section 135 of the Act and Companies (Corporate Social Responsibility Policy) Rules 2014, Board have constituted the Corporate Social Responsibility (CSR) Committee comprising Mr. M Trivedi as the Chairman and Prof. S K Majumdar, Mr. K P Khandelwal, Mr. Anil Sureka and Mr. R K Parakh as other members.

The Board in its meeting held on 20th May, 2014 has approved the CSR Policy as formulated and recommended by the CSR Committee pursuant to the requirements of the Act and rules made there under.

VIGIL MECHANISM / WHISTLE BLOWER POLICY OF THE COMPANY

Pursuant to Section 177 of the Act and revised Clause 49 of the Listing Agreement the Board of Directors at its meeting held on May 20, 2014, has approved and adopted Vigil Mechanism / Whistle Blower Policy for the directors and employees to report to the management, instances of unethical behaviour, actual or suspected fraud or violation of the company''s code of conduct.

INITIATIVE TO PREVENT SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Sexual harassment of women at the workplace continues to plague corporate India. Considering the need of the society, the Government of India, has enacted, The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to provide protection against sexual harassment of women at workplace. This Act came into force with effect from 9th December, 2013. The enacted act prescribes a range of measures to be compulsorily adopted by employers for creating a sexual harassment free workplace environment.

Your Company has adopted the policy against Sexual Harassment of Women at Workplace, for the purpose of preventing, prohibiting and redressing sexual harassment of female employees including permanent, temporary, on training and on contract basis at all the workplace within the company, which are based on fundamental principles of justice and fair play.

Further, an Internal Complaints Committee (ICC) has been constituted which shall be responsible for redressal of complaints related to sexual harassment. The Company has put in place suitable processes and mechanisms to ensure issues of sexual harassment, if any, are effectively addressed. During the year, no complaints of sexual harassment were received.

REMUNERATION POLICY FOR THE MEMBERS OF THE BOARD AND EXECUTIVE MANAGEMENT

The Board of the Directors of the Company in its meeting held on 20th May, 2014, has adopted a policy for remuneration of the Board Members, Key Managerial Personnel (KMPs) & Senior Management Personnel (SMPs) in adherence with the provisions of revised clause 49 of the listing agreement, Section 178 of the Act and Rules made there under.

PERSONNEL

Your company is continuing the tradition of excellence in human capital management by adopting all modern tools and techniques of human management. The pragmatic and proactive approach of management has contributed in enhancing the job satisfaction of employees. The cordial industrial relations continue to remain the core strength of the company. The signing of long term settlement with the recognized union for three years in peaceful atmosphere is another milestone in the journey of maintaining cordial industrial relations. It will remain in force till 31st December, 2015. The continuous dialogue sessions with the office bearers of union, prompt grievance redressal and implementation of employees'' friendly welfare scheme has been institutionalized. A congenial productive atmosphere has been created through mutual trust and transparency between the management and the union. Your company always remains vigilant to capitalize on talent pool in order to promote performance driven work culture, both within and outside the organization.

ACKNOWLEDGEMENT

Your Directors express their sincere appreciation for the continued co-operation and support extended to the Company by the Central Government, the Government of Odisha, Government Agencies, Company''s Bankers, Business Associates, Shareholders and the Community at large. Your Directors also express their warm appreciation to all employees for their diligence and contribution.

For and on behalf of the Board

Anil Sureka M Trivedi Kolkata Managing Director Director 20th May, 2014 DIN: 00058228 DIN:00050785

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Mar 31, 2013

Dear Members,

The Directors have pleasure in presenting the 25th Report of your Company along with the standalone and consolidated Audited Accounts for the financial year ended 31st March, 2013.

FINANCIAL RESULTS

The financial performance of the Company, for 2012-2013, is summarised below:

(Rs. in Lacs) Financial year Financial year ended ended 31st March, 2013 31st March, 2012

1 Sales/Income from operations 71,531.58 62,765.13

Less: Excise Duty 2,918.67 3,695.03

68,612.91 59,070.10

2. Other Income 1,664.20 705.58

3. Total Income (1 2) 70,277.11 59,775.68

4. Total expenditure 59,024.62 48,575.26

5. Profit before Interest & Finance charges and Depreciation (3-4) 11,252.49 11,200.42

6. Interest and Finance Charges 4,430.84 4,653.37

7. Depreciation / Amortisation 1,749.05 1,657.98

8. Profit before Taxes (5-6-7) 5,072.60 4,889.07

9. Provision for Taxes

– Current Tax 1,873.89 1,386.50

– Prior Year Tax 320.26 295.73

– Deferred Tax Charge/(Credit) 2,194.15 1,696.01

10. Profit after Tax (8-9) 2,878.45 3,193.06

11. Surplus brought forward 15,967.37 13,147.91

12. Surplus available (10 11) 18,845.82 16,340.97

13. Appropriations:

– Proposed Dividend 321.45 321.45

– Tax on Proposed Dividend 52.15 373.60 52.15 373.60

Surplus carried to the Balance Sheet (12-13) 18,472.22 15,967.37

TRANSFER TO RESERVE

Reserves and surplus of the Company stood at INR 28,242.54 Lacs (excluding revaluation reserve of INR 60,810.83 Lacs) at the end of the current financial year as against INR 25,737.69 Lacs (excluding revaluation reserve of INR 65,679.24 Lacs) at the end of the previous year.

FINANCIAL REVIEW

The Company has achieved highest ever production of 97,728 MT in the Financial Year 2012-13, with an increase of 4% over the previous year.

During the Financial Year 2012-13, our Company achieved a turnover of INR 71,531.38 Lacs compared to INR 62,765.13 Lacs in the Financial Year 2011-12. The Earnings before interest, depreciation and taxes stood at INR 11,252.49 Lacs as against INR 11,200.42 Lacs during the previous financial year showing a growth of 1%. Profit before taxes increased by 4% to INR 5,072.60 Lacs as against INR 4,889.07 Lacs during the corresponding previous year. The Net Profit after taxes stood at INR 2,878.45 Lacs as against INR 3,193.06 Lacs in previous fiscal. Basic earning per share of our Company has stood to INR 4.48 as against INR 4.97 during the corresponding previous year.

DIVIDEND

Your directors have recommended a 10% Dividend successively for the third year for the financial year ended 31.03.2013 subject to the approval of Shareholders at the ensuing Annual General Meeting and necessary approval from Lenders. Under the Income Tax Act, 1961, the receipt of Dividend is tax free in the hands of the shareholders.

OPERATIONS

For the year ended 31st March, 2013 the production stood at 98466.22 MT as against 93,996 MT in the previous year 2011-12. There by achieving a growth of about 4.75 % than the previous year. Your company exported 61,355 MT valued at Rs. 44787.15 Lacs during the year under review as against 33,191 MT valued at Rs. 23,095.14 Lacs during the previous year 2011-12. Your company is putting all its efforts to maximize the Net Sales Realisation by optimizing the domestic and export sales mix. Further your company is focusing on optimum capacity utilization which is a critical factor for achieving sustained profitability and we have been achieving continuously even during adverse situation.

Sustainability will continue to be our core strength. Promoting safe working condition, planned production schedule, strategic cost reduction across supply chain and very clean and green working condition will continue to be our motto for achieving sustainability in our operations.

The continued practice of modern management initiatives such as TPM, Six Sigma, Lean JIT and SCM practices has immensely contributed in optimizing the cost and improving the productivity of your organization. Apart from that, plant''s Equipment and Furnace up gradation is being done in areas like Tap hole drilling Machine, Electrode Automation level, Furnace Lining etc, with the help of Tenova Pyromet, South Africa.

EXPORT

Export of Ferro Chrome constitutes to 63.78 % of the turnover of the Company. The Company exported 61,385 MT valued at Rs 44,787.15 Lacs during year ended 31st March, 2013. Under review as against 33,191 MT valued at Rs 23,095.14 Lacs in the last year.

FUTURE OUTLOOK

At present, the Ferro alloy industry is facing problems due to high input prices - Manganese and Chrome Ores, Coal, Coke and Energy tariff; on the other hand it is not getting required prices from the steel producers. This has slowed down the production of Ferro alloys. Ferro alloys being intermediate products, their fortunes are linked to the state of well being of the steel industry. India is expected to show strong growth in steel use in the coming years due to its strong economy, massive infrastructure needs and expansion of industrial production. India is expected to be one of the highest steel consuming nations in the next decade.

Projections for current year GDP growth, despite downscaling, are optimistic enough if one looks at growth trends /conditions in leading global markets. More importantly for India is the fact that vast rural market remains insulated to quite an extent against global upheavals. General macro-economic policies and the focused approach to reforms are also critical for steel. The 12th Plan in fact, is expected to see the commissioning of the major expansion projects currently being implemented and which is expected to elevate crude steel making capacity to over 140 MT. At the same time, there exist many factors which carry the potential of raising the per capita steel consumption in the country.

It is optimistic aspects like these that are reflected in the projections on Ferro alloy industry during the 12th Plan period as well as evident in the projections made in the Report of the Working Group on Steel for the 12th Plan which indicates that based on the demand forecasts of steel, the total demand (domestic export) of manganese alloys has been placed at 3.025 million tons during 2016-17, the terminal year of the 12th Plan. The corresponding value for Ferro chrome has been placed at 1.726 million tones. The Plan document also envisages that production of manganese and chrome Ferro alloys is likely to keep pace with rising demand during the 12th Plan and that the current capacity in different segments is expected to be adequate in meeting total demand domestic and export, both.

Moreover, the rapid developments in the industry, economy, policy and last but not the least, global market, since the release of the National Steel Policy 2005 has prompted a review the provisions of the said Policy keeping in mind the strong industry growth in recent past on one hand and the significant capacity expansion projects announced over the last few years, on the other.

With this steel scenario globally and domestically, the Ferro alloy industry estimates that the consumption of Ferro alloys will increase domestically in the coming years. The Indian Ferro alloy industry is geared up to meet both the domestic requirement of steel industry and maintain a high growth in exports.

PROJECTS

The Sukinda captive mine is presently being operated through open cast system. The Company has planned to develop it with the capacity of 0.6 mtpa through underground method of mining. The development work on underground mining project has started. The Company will also built-up Ferro Chrome production capacity commensurate with the mine capacity.

ALLOTMENT OF CONVERTIBLE WARRANTS

The Committee for Preferential Issue of Warrants has allotted 33,00,000 (Thirty Three Lakhs) Convertible Warrants each to Dankuni Investment Ltd. and Navoday Consultants Ltd., being Promoter Group Companies on preferential basis of Rs. 5/- each at a premium of Rs. 11/- each on 19th October, 2012. These Warrants shall become due for conversion on or before 18.04.2014 i.e. within 18 months from the date of allotment.

MINES

The Company is having Chromite ore mines located at Sukinda Valley, Jajpur, Odisha, Manganese Ore mines located at Balaghat District, Madhya Pradesh and at Joda, Keonjhar District, Odisha.

The Chromite mines in Sukinda Valley (ISO 9001 certified) is being worked in a systematic manner with due regard to safety and environment. Our Company has bagged several prizes during this year in the Bhubaneswar Region Safety week / Mines Environment Mineral Conservation week like Overall performance, Storage, transportation & use of explosive, First Aid & OHS activities, General Working, Publicity & Propaganda, Maintenance of HEMM & Workshop, Recording & Analysis of Near Miss incidence giving testimony to our work culture. The reserve available for open cast mining is expected to exhaust in the next four years and therefore underground mining projects has been planned. The assignment of proving reserves at depth is in progress and the work of detail project report has been awarded to International reputed consultant. Underground mining project has already commenced and we expect the construction activities from January, 2014.

AWARD AND RECOGNITION

The Company has received many awards from various organizations in recognition of its contribution to the industry & society and for its outstanding performance. Some of the awards received for Mines during the financial year 2012-13 are mentioned below:

Safety Week Prizes from DGMS:

1. First aid competition 2nd prize

2. Safety and training 2nd prize

3. Publicity and propaganda 1st prize

4. Recording & analysis of near miss incidents 2nd prize

5. Overall performance 2nd prize

6. Welfare amenities 2nd prize

7. Safety quiz competition 1st prize

8. Best captain in first aid competition 1st prize

9. Stretcher drill 3rd prize

10. Best team first aid 2nd prize MEMC WEEK 2011-12 (received in the year 2012-13)

Indian Bureau of Mines (IBM) awarded 2nd prize to BAL for noise, vibration survey & other scientific studies.

CORPORATE DEBT RESTRUCTURING

As the members are aware, the Company is under CDR mechanism. With its continued improvement and better financial performance compared to the projections made under the CDR, your Company has taken up the matter with its Lenders for exit from CDR mechanism.

MANAGEMENT INITIATIVES

Since about last more than ten years, your company has been practicing management initiatives like “Six Sigma and TPM”. From this year we have further strengthened these initiatives through additional recruitments with adequate certification in respective fields. We have also spared full time batches from business operations. Relevant training is being given to these candidates.

From this year we have also launched “Lean Management” as new initiative across the organization. We have also initiated for deployment of “Q1Ford Quality Management System” covering entire business stream.

The objective of all these initiatives is to transform our organization to a real world class. The implementation of SAP has already been completed. With minor teething problems, we are fast progressing toward its stabilization.

BOARD OF DIRECTORS

The Board of Directors accepted with deep regret the resignation of Mr B N Panda from the post of Director-Operations of the Company w.e.f. 6th April, 2013. Further, the Board of Directors in its meeting held on 30.05.2013 noted that, consequent upon retirement of Mr. S. M. Ali, Nominee Director of State Bank of India (SBI) from bank service on superannuation; SBI has taken a conscious decision for cessation of his directorship w.e.f. 22.05.2013 from the Board of the Company.

In accordance with the provisions of the Companies Act, 1956 and Article 149 of the Articles of Association of the Company Mr. Pramod Kumar Mittal and Prof. S K Majumdar, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

Brief resume of the Directors seeking appointment, reappointment, nature of their expertise in specific functional areas and names of companies in which they hold directorships and memberships/chairmanships of Board Committees, as stipulated under Clause 49 of the Listing Agreement, are provided as annexure to the Notice calling the Annual General Meeting forming part of this Annual Report.

SUBSIDIARY COMPANY

MILTON HOLDINGS LIMITED (MHL)

Milton Holdings Limited (MHL), Mauritius, a wholly-owned subsidiary, had invested through joint-venture in Manganese-ore mining projects in Brazil. As at the date of Balance Sheet, the Company has an investment in shares of MHL aggregating, in value, to USD 4.7351 million (Equivalent to Rs 2194.83. Lacs).

BALASORE METALS PTE. LIMITED

Balasore Metals Pte. Limited Singapore, a wholly-owned subsidiary of the Company. As at the date of Balance Sheet, the Company has an investment in share of Balasore Metals PTE. Limited aggregating, in value, to USD $ 1.00.

Statement pursuant to Section 212 of the Companies Act, 1956 relating to MHL & Balasore Metals PTE. Ltd as at 31st March, 2013 is also annexed to this Report.

CONSOLIDATED FINANCIAL STATEMENT

The Consolidated Financial Statements of the Company and its subsidiary, prepared and presented in accordance with Accounting Standard (AS) 21, are attached to and form part of the Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

i. In the preparation of the annual accounts for the financial year ended 31st March, 2013, the applicable accounting standards have been followed and there have been no material departures;

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 at the end of the financial year and of the Profit of the Company for that year;

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; and

iv. The Directors have prepared the annual accounts for the financial year ended 31st March, 2013 on a going concern basis.

AUDITORS

The Company''s Auditors M/s S. R. Batliboi & Co. LLP, Chartered Accountants resigned from the position of Statutory Auditors of the Company with effect from 17th April 2013. The resignation was considered and accepted by Board of Directors on 23rd April 2013.

In the Extra Ordinary General Meeting held on 20th May, 2013, M/s Chaturvedi & Shah, Chartered Accountants has been appointed as the Statutory Auditors of the Company to fill the casual vacancy caused by the resignation of M/s S. R. Batliboi & Co. LLP, Chartered Accountants, to hold office upto the conclusion of the forthcoming Annual General Meeting at a remuneration as may be determined by the Board of Directors.

The Company has obtained a letter from the Auditors to the effect that reappointment, if made, will be within the limits specified in section 224(1B) of the Companies Act, 1956.

AUDITORS'' REPORT

In relation to the matters dealt with by the Auditors in their Audit Report, we have to state that:

1. North Eastern Electricity Supply Company of Orissa Limited (NESCO) has revoked the waiver of dues granted under a settlement in an earlier year and disputed on take or pay benefit claimed during the year. The Company has paid and, on conservation basis, provided Rs 3,400 lacs towards such claims upto 31st March, 2013. The matter is pending with Honorable High Court of Orissa & Appellate Tribunal respectively. The company is actively pursuing the matter legally and hence no further liability has been accounted for in this financial result.

2. As regard to loans of INR 500.00 Lacs and interest receivable of INR 366.98 Lacs, negotiations are going on with the parties. Management is hopeful to receive the amount in full.

3. The computation of recompense amount for the period from 1st April, 2007 to till date is being computed by the Consortium bankers and they are in process to crystallize the same. On finalization of the recompense amount, necessary action will be taken.

4. The Company has taken necessary steps to regularize the matter in regard to use of short term funds to the extent of INR 10,659.46 Lacs for long term investment as referred to in the point no. 17 of Annexure to the Auditors'' Report. It was necessitated to meet certain long term requirements and future growth of the Company.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the listing agreement with Stock Exchanges, the Management Discussion and Analysis and Corporate Governance Report together with the Certificate from the Auditors of the Company confirming compliance of the conditions of Corporate Governance form a part of the Annual Report.

Your Company has taken adequate steps for strict compliance with the Corporate Governance guidelines, as amended from time to time.

CODE OF CONDUCT

The Code of Conduct for the Directors and Senior Management Executives has been made applicable to all the Directors whether executive or non-executive including all Senior Management Executives of the Company. The Board members and Senior Management Executives of the Company have affirmed compliance with the Code of Conduct during the year and no violation of the same was reported. The Code of Conduct is also posted on the Company''s web-site.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under clause 49 of the Listing Agreement with Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

CEO AND CFO CERTIFICATION

In accordance with the provisions of the Listing Agreement pertaining to corporate governance norms, Mr. Anil Sureka, Managing Director of the Company and Mr. R K Parakh, CFO of the Company have certified inter-alia, about review of financial statements and establishing & maintaining internal control to the financial reporting for the year ended 31st March, 2013. The said certificate forms an integral part of annual report.

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

The statement of particulars pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is annexed hereto and forms part of the report.

PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956 AND RULES FRAMED THEREUNDER

The statement of particulars pursuant to Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, is annexed hereto and forms part of the report.

COST AUDITORS

Pursuant to the Cost Audit Order dated January 24, 2012 issued by the Ministry of Corporate Affairs (MCA), the Board of Directors has appointed M/s. Shome & Banerjee, Cost Accountants, as Cost Auditors of the company to conduct audit of the Cost Records, maintained by the company as prescribed under section 209(1)(d) of the companies act 1956 in respect of its ferro chrome / charge chrome manufacturing plant at Balgopalpur - 756 020 Dist. Balasore, Odisha, for the Financial Year ended March 31, 2013. The appointment has been approved by the Central Government.

The Report of the Cost Auditors for the Financial Year ended March 31, 2013 is under finalization and will be filed with the MCA within the prescribed period.

Based on the Audit Committee recommendations, the Board of Directors at its meeting held on May 30, 2013, has approved the re- appointment of M/s. Shome & Banerjee as the Cost Auditors of the Company for the Financial Year 2013-14, for the products falling under Central Excise Chapter Heading 72 maintained by the Company. The appointment is subject to approval of the Central Government.

PERSONNEL

In continuation of the last year challenges your company shows pragmatic, proactive and holistic approach towards their employees to enhance the satisfaction level of each and every employee. Human relations and cordial industrial Relations continued to remain the core strengths of your company last year. The company is in process to finalise a long term settlement for 3 years for unionized workers of your company in a peaceful and cordial atmosphere. Right to freedom of association and collective bargaining has been established through joint consultation with office bearers of the Unions, grievance handling mechanism etc. A congenial atmosphere has been created through an environment of mutual trust and transparency between the Management and Union bodies. Efforts are made to implement the best practices like leveraging and upgrading framework for competitive advantage, development of talent pipeline to match Company''s growth ambition, creation of young leaders and creating of performance driven culture. Your Company also encourage work life balance for employees.

ACKNOWLEDGEMENT

Your Directors express their sincere appreciation for the continued co-operation and support extended to the Company by the Central Government, the Government of Odisha, Government Agencies, Company''s Bankers, Business Associates, Shareholders and Community at large. Your Directors also express their warm appreciation to all employees for their diligence and contribution.

For and on behalf of the Board

Kolkata Anil Sureka M Trivedi

30th May, 2013 Managing Director Director

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Mar 31, 2012

The Directors have pleasure in presenting the 24th Report of your Company along with the standalone and consolidated Audited Accounts for the financial year ended 31st March, 2012.

FINANCIAL RESULTS

The financial performance of the Company, for 2011 -2012, is summarized below:

(Rs. in Lacs)

Financial year Financial year ended ended 31st March, 2012 31st March, 2011

1. Sales/Income from operations 62645.72 66936.19

Less: Excise Duty 3695.03 3035.46

58950.69 63900.73

2. Other Income 901.00 863.14

3. Total Income (1 2) 59851.69 64763.87

4. Total expenditure 48575.26 54101.47

5. Profit before Interest & Finance charges and Depreciation (3-4) 11276.43 10662.40

6. Interest and Finance Charges 4729.38 5038.16

7. Depreciation / Amortisation 1657.98 1545.68

8. Profit before Taxes (5-6-7) 4889.07 4078.56

9. Provision for Taxes

- Current Tax 1386.50 1093.69

- Prior Year Tax 13.78 (16.93)

- Deferred Tax Charge/ (Credit) 295.73 1696.01 313.26 1390.02

10. Profit after Tax (8-9) 3193.06 2688.54

11. Surplus brought forward 13147.91 10834.21

12. Surplus available (10 11) 16340.97 13522.75

13. Appropriations:

- Proposed Dividend 321.45 321.45 - Tax on Proposed Dividend 52.15 373.60 53.39 374.84

Surplus carried to the Balance Sheet (12-13) 15967.37 13147.91

TRANSFER TO RESERVE

Reserves and surplus of the Company stood at Rs. 25,737.69 Lacs (excluding revaluation reserve of Rs. 65,679.24 Lacs) at the end of the current financial year as against Rs. 22,978.88 Lacs (excluding revaluation reserve of Rs. 71,019.59 Lacs) at the end of the previous year.

FINANCIAL REVIEW

The Company has achieved highest ever production of 93,996 MT in the Financial Year 2011-12, achieving a 3.18% increase in production with a Net Profit of Rs. 3,193.06 Lacs.

During the Financial Year 2011-12, your Company achieved a turnover of Rs 62,645.72 Lacs compared to Rs 54,883.34 Lacs in the Financial Year 2010-11 (excluding Trading Turnover of Rs 12,052.85 Lacs). The gross earnings before interest, depreciation and taxes stood at Rs 11,276.43 Lacs as against Rs 10,662.40 Lacs during the previous financial year registering a growth of 6%. Profit before taxes increased by 20% to Rs 4,889.07 Lacs as against Rs 4,078.56 Lacs during the corresponding previous year. The Net Profit after taxes stood at Rs 3,193.06 Lacs as against Rs 2,688.54 Lacs in previous fiscal registering a growth of 19%. Basic earning per share of your Company has registered a growth of 19% to Rs 4.97 as against Rs 4.18 during the corresponding previous year.

DIVIDEND

Your directors are keen to apprise that they have recommended a 10% Dividend successively for the second year for the financial year ended 31.03.2012 subject to the approval of Shareholders at the ensuing Annual General Meeting and necessary approval from Lenders. Under the Income Tax Act, 1961, the receipt of Dividend is tax free in the hands of the shareholders.

OPERATIONS

For the year ended 31 March 2012, the production stood at 93,996 MT as against 90,544 MT in the previous year 2010-11, thereby achieving a growth of about 3.18% than the previous year. Your Company exported 33,191 MT valued Rs 23,095.14 Lacs during the year under review as against 34,996 MT valued at Rs 22,244.93 Lacs during the previous year 2010-11.Your Company is putting all its effort to maximize the Net Sales Realization (NSR) by optimizing the domestic and export sales mix. Further your Company is focusing on optimum capacity utilization which is a critical factor for achieving sustained profitability and we have been achieving continuously even during adverse situation.

Sustainability will continue to be our core strength. Promoting safe working conditions, planned production schedule, strategic cost reduction across the supply chain and a very clean and green working condition will continue to be our motto for achieving sustainability in our Operations.

The continued practice of modern management initiatives such as TPM, Six Sigma and SCM practices has immensely contributed in optimizing the cost and improving the productivity of your organization.

Your Company is working on expanding the capacity by acquisition of plants lying idle in close proximity to the Company's mines and plant. Matching to the growth in production volume, mining projects including underground mining for lumpy ore is being taken up with the latest technology. This effort will not only improve the productivity and profitability of the organization but also bring the organization into a significant position in the industry.

EXPORT

Export of Ferro Chrome constitutes to 39.18% of the turnover of the company. The company exported 33,191 MT valued at Rs 23,095.14 Lacs during the year ended 31st March, 2012. Under review as against 34996 MT valued at Rs 22,244.93 Lacs in the last year.

FUTURE OUTLOOK

The temporary cutbacks in South African ferrochrome production, prompted by nationwide shortages of power, have brought focus to consumers. The announcements by all the major South African producers surprised many.

The ferrochrome market is forecast to experience a deficit of 2,88,000 MT in 2012 reflecting the impact of recent production cuts in South Africa, which in turn have been caused by local power shortages.

A downwardly revised economic outlook is likely to impact stainless steel demand for the foreseeable future. Nevertheless, next year should still mark the start of an unprecedented period of stainless demand growth. Industrial production is forecast to rise by close to 5% per year during the next four years, which in turn should support very high rises in stainless demand. The greatest growth will be seen in 300 series, which typically require the highest proportion of Ferro Chrome.

Prospects for 2013 suggest the global ferrochrome market will remain very close to balance. 2013-14 will be the years of highest growth in global stainless production; these will be driven by China and other emerging economies. Though demand and supply are likely to be in balance in 2013, the low level of stocks will continue to support prices at high levels.

The likelihood of the market experiencing even higher prices in 2013 is substantial. Industry stocks are likely to have been pared back to extremely low levels by the end of this year and will persist at these levels until end-2013 at a minimum.

In the longer term, ferrochrome prices are forecast to drop back. South African power shortages are limiting the ability of the local industry to expand but presenting others, notably the Chinese, with a chance to fill the supply gap. By 2014, the world ferrochrome market should have moved back into surplus as Chinese supply hits 3.6 MT and expansions elsewhere lift global production.

PROJECTS

Though, the power supply during the year under review remained stable, there has been steep hike in power tariff, Power, therefore, continues to remain a major area of concern and impediment in the growth of the Company.

As already informed in earlier years, your Company had acquired land, coal linkage and other requisite statutory clearances for setting up the Captive Power Plant. However, the project being very capital intensive, efforts are on to explore the strategic partner for securing financial tie-up for the projects.

The capacity addition project i.e. new Ferro Chrome Furnace projects of 16.5 MVA and acquisitions of idle furnaces in close proximity to plant and mines are also under active consideration.

MINES

The Company is having Chromite ore mines located at Sukinda Valley, Jajpur, Odisha, Manganese Ore mines located at Balaghat District, Madhya Pradesh and at Joda, Keonjhar District, Odisha.

The Chromite mines in Sukinda Valley (ISO 9001 certified) is being worked in a systematic manner with due regard to safety and environment. Our Company has bagged several prizes during this year in the Bhubaneswar Region Safety week / Mines Environment Mineral Conservation week like Overall performance, Storage, transportation & use of explosive, First-Aid & OHS activities, General Working, Publicity & Propaganda, Maintenance of HEMM & Workshop, Recording & Analysis of Near Miss incidence Giving testimony to our work culture. The reserve available for open cast mining is expected to exhaust in the next four years and therefore underground mining projects has been planned. The assignment of proving reserves at depth is in progress and the work of detail project report has been awarded to International reputed consultant. We expect that the underground mining project shall start from April, 2013. The ISO 9001:2008 has been successfully renewed for another three years up to April-2014.

AWARD AND RECOGNITION

The Company has received many awards from various organizations in recognition of its contribution to the industry & society and for its outstanding performance. Some of the awards during the financial year 2011-12 are mentioned below:

a. "GREENTECH ENVIRONMENT SILVER AWARD" in METAL & MINING SECTOR from Green Tech Foundation, New Delhi for outstanding achievement in Environment Management.

b. "IMEA GOLD AWARD" by FROST & SULLIVAN in METAL CATEGORY for manufacturing excellence.

c. "NALCO QC CONVENTION RUNNERS UP AWARD" in TPM Circle by National Aluminium Company Limited.

d. "SPECIAL ACHIEVEMENT AWARD" (Twenty Three Numbers) for Greenery Development by Rotary Club.

CORPORATE DEBT RESTRUCTURING

As the members are aware, the Company is under CDR mechanism. With its continued improvement and better financial performance compared to the projections made under the CDR package and keeping in view of its ongoing need based projects, your Company has taken up the matter with its Lenders to come out of CDR. This will enable the company to tie-up funding of the projects at a competitive terms.

MANAGEMENT INITIATIVES

Your Company continues to practice various strategic management initiative such as Six Sigma, Total Productive Maintenance (TPM), Performance management System (PMS) , Supply Chain Management (SCM) and in the process of implementing "SAP" with a view to continually improving the productivity and to maximize the automation of business process. Continuous training and re-training are being conducted to update all employees on the modern initiatives. To augment the process, your Company has taken up an integrated approach of various initiatives with focus on Business Excellence. 100% involvement of employees across the organization and structured review mechanism put in place at the apex level has made these initiatives contributing towards growth of the organization.

BOARD OF DIRECTORS

The Board of Directors accepted with deep regret the resignation of Mr V V Jamnis from the post of Director of the Company w.e.f. 30th July, 2011, Mr R K Jena, Managing Director and Mr C R Pradhan, Director-Operations of the Company w.e.f. 11th November, 2011.

The Board of Directors of the Company had appointed Mr B N Panda, Director-Operations, Mr R K Parakh, Director-Finance of the Company w.e.f., 17th November, 2011 and Mr Anil Sureka as Managing Director of the Company w.e.f., 17th April, 2012.

In accordance with the provisions of the Companies Act, 1956 and Article 149 of the Articles of Association of the Company, Mr M Trivedi and Mr S Mohapatra, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

Brief resume of the Directors seeking appointment, reappointment, nature of their expertise in specific functional areas and names of companies in which they hold directorships and memberships/chairmanships of Board Committees, as stipulated under Clause 49 of the Listing Agreement, are provided as annexure to the Notice calling the Annual General Meeting forming part of this Annual Report.

SUBSIDIARY COMPANY MILTON HOLDING LIMITED (MHL)

Milton Holdings Limited (MHL), Mauritius, a wholly-owned subsidiary, shall implement, through joint-venture, proposed Manganese- ore mining projects in Brazil. As at the date of Balance Sheet, the Company has investment in shares of MHL aggregating, in value, to USD 4.7351 million (Equivalent to Rs 2194.83. Lacs).

BALASORE METALS PTE. LIMITED

The Company was incorporated during the period under review to set up an offshore entity at Singapore for the purpose of international trade in steel, iron ore, coal mining and export trade or to entail any other business that may accrue out of the opportunities in the commodity space.

Balasore Metals Pte. Limited, Singapore, a wholly-owned subsidiary of the Company. As at the date of Balance Sheet, the Company has investment in shares of Balasore Metals Pte. Limited aggregating, in value, to uSd 1.00.

Statement pursuant to Section 212 of the Companies Act, 1956 relating to MHL & Balasore Metals Pte. Limited as at 31st March, 2012 is also annexed to this Report.

CONSOLIDATED FINANCIAL STATEMENT

The Consolidated Financial Statements of the Company and its subsidiary, prepared and presented in accordance with Accounting Standard (AS) 21, are attached to and form part of the Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

(i) In the preparation of the annual accounts for the financial year ended 31st March, 2012, the applicable accounting standards have been followed and there have been no material departures;

(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 at the end of the financial year and of the Profit of the Company for that year;

(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; and

(iv) The Directors have prepared the annual accounts for the financial year ended 31st March, 2012 on a going concern basis.

AUDITORS

The Company's Auditors M/s S R Batliboi & Co, Chartered Accountants, retires at the conclusion of the ensuing Annual General Meeting and have expressed their willingness to be reappointed.

The Company has obtained a letter from the Auditors to the effect that reappointment, if made, will be within the limits specified in section 224(1 B) of the Companies Act, 1956.

AUDITORS' REPORT

In relation to the matters dealt with by the Auditors in their Audit Report, we have to state that:

1. The Company strongly refuted the decision of NESCO citing various correspondences, regulations in the true spirit of the settlement scheme and requested NESCO to withdraw the amount so levied in the monthly bill. The Company is under discussion with NESCO and has also referred the matter to Hon'ble High Court of Orissa. However, pending outcome of the court case, Management is unable to cite the impact on the financial statements.

2. As regard to loans of Rs 962.00 Lacs and interest receivable of Rs 543.13 Lacs, negotiations are going on with the parties. Management is hopeful to receive the amount in full.

3. The computation of recompense amount for the period from 1st April, 2007 to till date has been submitted to the Consortium bankers and they are in process to crystallize the same. On communication of the recompense amount, provision would be taken subject to settlement terms.

4. The Company has been regular in making payment of its statutory dues except as pointed out by the Auditors against point no. ix (a) referred to in the Annexure to the Auditors Report.

5. The Company has taken necessary steps to regularize the matter in regard to use of short term funds to the extent of Rs 8,495.16 Lacs for long term investment as referred to in the point no. xvii of Annexure to the Auditors' Report. It was necessitated to meet certain long term requirements and future growth of the Company.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the listing agreement with Stock Exchanges, the Management Discussion and Analysis and Corporate Governance Report together with the Certificate from the Auditors of the Company confirming compliance of the conditions of Corporate Governance form a part of the Annual Report.

Your Company has taken adequate steps for strict compliance with the Corporate Governance guidelines, as amended from time to time.

CODEOFCONDUCT

The Code of Conduct for the Directors and Senior Management Executives has been made applicable to all the Directors whether executive or non-executive including all Senior Management Executives of the Company. The Board members and Senior Management Executives of the Company have affirmed compliance with the Code of Conduct during the year and no violation of the same was reported. The Code of Conduct is also posted on the Company's web-site.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under clause 49 of the Listing Agreement with Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

CEO AND CFO CERTIFICATION

In accordance with the provisions of the Listing Agreement pertaining to corporate governance norms, Mr. Anil Sureka, Managing Director of the Company and Mr. R K Parakh, CFO of the Company have certified inter-alia, about review of financial statements and establishing & maintaining internal control to the financial reporting for the year ended 31st March, 2012. The said certificate forms an integral part of annual report.

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

The statement of particulars pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is annexed hereto and forms part of the report.

PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956 AND RULES FRAMEDTHEREUNDER

The statement of particulars pursuant to Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, is annexed hereto and forms part of the report.

PERSONNEL

Despite the fact that your Company during the period under review went through different challenges, continued to further strengthen the relationship of mutual trust and transparency with its employees which helped in meeting all challenges. The second half of the year was difficult as there were a large exodus of senior executives but the Management and employees of our Company worked hand in hand during the crisis and came out with flying colours.

Skill and knowledge up gradation has remained as one of the focus areas of the Company so that a vibrant workforce is developed to meet the present and future requirements. Special focus was given in areas like nurturing future leaders, role clarity, empowerment, team work to facilitate a performance driven culture. As the Company looks to expand its business, it aims to develop a cohesive workforce through leadership, management, talent management and transparent performance management system. The individual goals have been synchronized with organizational goals and the young and energetic team of our Company is marching ahead in its quest for excellence. The human resource policy of the Company focuses on equal opportunity and fair treatment for all and there is a focus on attraction and retention of best talents.

The Board records its appreciation for the support of employees at all levels and looking forward to their total involvement in the growth process of the Company.

ACKNOWLEDGEMENT

Your Directors express their sincere appreciation for the continued co-operation and support extended to the Company by the Central Government, the Government of Odisha, Government Agencies, Company's Bankers, Business Associates, Shareholders and Community at large. Your Directors also express their warm appreciation to all employees for their diligence and contribution.

For and on behalf of the Board

Kolkata Anil Sureka M Trivedi

28th May, 2012 Managing Director Director

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Mar 31, 2011

Dear Members

The Directors have pleasure in presenting the 23rd Report of your Company along with the Audited Accounts for the financial year ended 31st March, 2011. The Report also includes the consolidated financial statements and the Management's Discussion in accordance with the guidelines on Corporate Governance.

FINANCIAL RESULTS

The financial performance of the Company, for 2010-2011, is summarised below:

(Rs. in Lacs)

Financial year Financial year

ended ended

31st March, 2011 31st March, 2010

1. Sales/Income from operations 66901.65 43261.75

Less: Excise Duty 3035.46 1743.19

63866.19 41518.56

2. Other Income 863.14 2935.67

3. Total Income (1 2) 64729.33 44454.23

4. Total expenditure 54028.26 37056.77

5. Profit before Interest & Finance charges and Depreciation (3-4) 10701.07 7397.46

6. Interest and Finance Charges 5038.16 4221.37

7. Depreciation/Amortisation 1545.68 1404.55

8. Profit before Prior Period Items & Taxes (5-6-7) 4117.23 1771.54

9. Prior Period Items (Net) 38.44 (313.24)

10. Profit before Taxes (8-9) 4078.79 2084.78

11. Provision for Taxes

– Current Tax 1093.92 1039.43

– Prior Year Tax written back (16.93) (21.02)

– Deferred Tax Charge/(Credit) 313.26 1390.25 (188.54) 829.87

12. Profit after Taxes (10-11) 2688.54 1254.91

13. Profit brought forward from the Previous Year 10834.21 9579.30

14. Profit available for Appropriation (12 13) 13522.75 10834.21

15. Appropriations:

– Proposed Dividend 321.45 –

– Tax on Dividend 53.39 374.84 – –

Surplus carried to the Balance Sheet (14-15) 13147.91 10834.21

TRANSFER TO RESERVE

Reserves and surplus of the Company stood at Rs.22978.88 lacs (excluding revaluation reserve of Rs.71019.59 lacs) at the end of the current financial year as against Rs.20928.23 lacs (excluding revaluation reserve of Rs.76337.69 lacs) at the end of the previous year.

FINANCIAL REVIEW

The Company recorded a robust performance in the Financial Year 2010-11, achieving a 54% increase in turnover with a Net Profit of Rs. 2688.54 Lacs.

During the Financial Year 2010-11, your Company achieved a turnover of Rs. 63866.19 Lacs compared to Rs. 41518.56 Lacs in the Financial Year 2009-10. The gross earnings before interest, depreciation and taxes stood at Rs. 10701.07 Lacs as against Rs.7397.46 lacs during the previous financial year, registering a growth of 45%. Profit before taxes increased by 96% to Rs. 4078.79 Lacs as against Rs. 2084.78 Lacs during the corresponding previous year. The Net Profit after taxes stood at Rs. 2688.54 Lacs as against Rs. 1254.91 Lacs in previous fiscal registering a growth of 114%. Basic earning per share of your Company has registered a growth of 114% to Rs.4.18 as against Rs.1.95 during the corresponding previous year.

DIVIDEND

After a long hiatus of 14 years, your directors are happy to mention that they have recommended a 10% Dividend for the financial year ended 31.03.2011 subject to the approval of Shareholders at the ensuing Annual General Meeting and necessary approval from Lenders under CDR mechanism. Under the Income Tax Act, 1961, the receipt of Dividend is tax free in the hands of the shareholders.

OPERATIONS

The production during the year under review was 90,544 MT as against 83,936 MT in the previous year 2009-10.

Recuperating from the economic crisis and difficult market conditions that prevailed in 2009, global demand for stainless steel increased in 2010 driven mainly by consumer-led industries and demand from Asia. The world output of crude stainless steel in the calendar year of 2010 came up to more than 32 Millions Tonnes, having had a substantial increase of 23% compared with that in the preceding year of 2009, when stainless steel industry had suffered from a serious depression, and shown a brilliant revival.

The pick-up in overall demand of Ferrochrome was also clearly evident as the rising chrome ore prices and tight Ferro-chrome supply continued to steer the market upwards. However, the ferrochrome market is entering a period of seasonal weakness, with output and prices both soft at present, although the longer-term prospects are better. Further, credit tightening in China has prompted stainless steel and ferrochrome producers to reduce inventories in stainless steel and ferrochrome, while the uncertainty about the sustainability of the global economic recovery has inhibited buying. Balancing this weakness is the strong outlook for this year and next year, with CRU forecasting record stainless steel production for 2011 and again for 2012.

However, substantial increase in Power Tariff by about 25% during the year under review has severely impacted the margins and is a matter of concern for future.

EXPORT

Export of Ferro Chrome constitutes to 43% of the turnover (excluding trading) of the Company. The Company exported 34,996 MT valued at Rs. 22,244.93 lacs during the year ended 31st March, 2011 under review as against 42,497 MT valued at Rs. 20,608.87 lacs in the previous year.

FUTURE OUTLOOK

Though the year 2011 started on a promising note, sentiment has subsequently deteriorated reflecting almost unprecedented levels of uncertainty surrounding the global economic outlook. Global ferrochrome consumption while will continue to grow in 2011 and 2012, it shall be at a much slower pace than was experienced in 2010. To compound the problem, ferrochrome production need to be curbed because the stocks are to be kept in check in view of the decelerating Stainless Steel production.

Buying activity should again resume in October, following destocking in the stainless industry in April-June Quarter and the holiday slowdown in July and August. The combination of cuts to ferrochrome production and improved demand later in the year should leave the market in better shape for securing price increases. Longer term, the extent to which China aims to move towards self sufficiency in ferrochrome production will be a key factor influencing market dynamics.

The Indian Economy is expected to grow at an accelerated growth of 8.5% to 9.0%. Steel production is expected to be 132 Million Tonnes by 2016-2017. Present Indian Stainless Steel production is over 2 Million Tonnes and expected to grow 10% every year. The growth in Stainless Steel production in the country augurs well for the Ferrochrome industry and your Company shall endeavour to expand its market share in the given scenario.

Indian Ferro Alloy Producers have to tackle the high utility power tariff in India, for which your company has already initiated their captive power plant project to counter and mitigate the burden of increasing Power cost.

PROJECTS

Though, the power supply during the year under review remained stable, there has been steep hike in the tariff by about 25%. Power, therefore, continues to remain a major area of concern and impediment in the growth of the company.

As already informed in the previous year, your company had acquired land, coal linkage and requisite statutory clearances for setting up the Captive Power Plant. However, the project being very capital intensive, efforts were made to bring in joint venture partners for the Project. In this regard, your company is in advanced stage of negotiations with a Joint Venture Partner for setting up a Power Plant through a Special Purpose Vehicle (SPV).

The capacity addition project i.e. New Ferro Chrome Furnace project of 16.5 MVA is also under revival. We are in the process of having a financial tie-up with one of our major customers.

MINES

The Company is having Chromite ore mines located at Sukinda Valley, Jajpur, Odisha, Manganese Ore mines located at Balaghat District, Madhya Pradesh and at Joda, Keonjhar District, Odisha and attempts are on to acquire a new manganese ore mine lease in Chindwara District, Madhya Pradesh.

The Chromite mines in Sukinda Valley (ISO 9001 certified) is being worked in a systematic manner with due regard to safety and environment. The ISO 9001:2008 has been successfully renewed for another three years up to April-2014. Our mine has bagged several prizes during this year as detailed under:

- Seven Prizes during the Mines Safety Week Celebration of Bhubaneswar Region for the year 2010-11.

- The Mine also bagged 6 No of Prizes at the Annual Safety Week Function in Dec 10 organized by DGMS, Bhubaneswar, Odisha.

- 1st Prize from Indian Bureau of Mines, Bhubaneswar for Waste Dump Management during MEMC week Celebration in Feb-11.

AWARD AND RECOGNITION

The Company has been conferred awards by various organizations in recognition of its contribution to the industry and society. Some of the awards during the financial year 2010-11 are mentioned below:

- "Think Odisha Leadership Award" from Times of India for commendable work in Education Support System.

- "Grow Green Award" for outstanding efforts of the company towards environmental protection.

- "Special Achievement Award" (Twenty One Numbers) for greenery development from Rotary Club.

- "EEPC Award" for outstanding Export Performance from Eastern Region in Large Enterprise Category by Engineering Export Promotion Council (EEPC), Eastern India.

- "NALCO QC Convention Award" for Best Performance in TPM Circle (Workman Category). Runners-Up Award was also received by the Company.

- Award for "Best Practices in Industrial Relation" by Confederation of Indian Industries, Odisha.

CORPORATE DEBT RESTRUCTURING

As the members are aware, the Company is under CDR mechanism. With its continued improvement and better financial performance compared to the projections made under the CDR package and keeping in view of its ongoing need based projects, your Company has taken up the matter with its Lenders to come out of CDR. This will enable the company to tie-up funding of the projects at a competitive terms.

MANAGEMENT INITIATIVES

Your Company continues to practice various strategic management initiatives such as Six Sigma, Total Productive Maintenance (TPM), Performance Management System (PMS) and Supply Chain Management (SCM) with a view to continually improving the productivity. To augment the process, your Company has taken up an integrated approach of various Initiatives with focus on Business Excellence. 100% involvement of employees across the organization and structured review mechanism put in place at the apex level has made these initiatives contributing towards growth of the organization.

BOARD OF DIRECTORS

The Board of Directors accepted with deep regret the resignation of Mr R N Pandey from the Directorship of the Company w.e.f. 17th May, 2011and place on record, its sincere appreciation for the valuable contribution made by him during his tenure to the Company.

The Board of Directors of the Company had appointed Mr V V Jamnis as an additional Director w.e.f. 29th July, 2010 and Ms Vartika Mittal as an additional Director w.e.f. 26th May, 2011.

In accordance with the provisions of the Companies Act, 1956 and Article 149 of the Articles of Association of the Company Mr S K Pal and Dr A K Bhattacharyya, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible to offer themselves for reappointment.

SUBSIDIARY COMPANY

Milton Holdings Limited (MHL), Mauritius, a wholly-owned subsidiary, shall implement, through joint-venture, proposed Manganese- ore mining projects in Brazil. As at the date of Balance Sheet, the Company has investment in shares of MHL aggregating, in value, to USD 4.36 million (Equivalent to Rs.1994.25 lacs).

The Directors' Report of MHL, the wholly-owned subsidiary, and its audited Statement of Accounts alongwith Auditors' Report thereon for the year ended 31st March, 2011 form part of this Report. Statement pursuant to Section 212 of the Companies Act, 1956 relating to MHL as at 31st March, 2011 is also annexed to this Report.

CONSOLIDATED FINANCIAL STATEMENT

The Consolidated Financial Statements of the Company and its subsidiary, prepared and presented in accordance with Accounting Standard (AS) 21, are attached to and form part of the Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

i. In the preparation of the annual accounts for the financial year ended 31st March, 2011, the applicable accounting standards have been followed and there have been no material departures;

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 at the end of the financial year and of the Profit of the Company for that year;

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; and

iv. The Directors have prepared the annual accounts for the financial year ended 31st March, 2011 on a going concern basis.

AUDITORS

The Company's Auditors M/s S R Batliboi & Co, Chartered Accountants, retires at the conclusion of the ensuing Annual General Meeting and have expressed their willingness to be reappointed.

The Company has obtained a letter from the Auditors to the effect that reappointment, if made, will be within the limits specified in section 224(1B) of the Companies Act, 1956.

AUDITORS' REPORT

In relation to the matters dealt with by the Auditors in their Audit Report, we have to state that:

1. As regard to loans of Rs. 962.00 lacs and interest receivable of Rs. 585.79 lacs (including Rs. 42.66 lacs in respect of loans where no principal amount is outstanding), negotiations are going on with the parties. Management is hopeful to receive the amount in full.

2. Necessary follow up is being made on regular basis for recovery of the balance amount of advances of Rs.500 lacs and expect to recover full amount during current financial year.

3. The Company strongly refuted the decision of NESCO citing various correspondences, regulations in the true spirit of the settlement scheme and requested NESCO to withdraw the amount so levied in the monthly bill. The proposal is under process/negotiation with the Authorities of NESCO.

4. The Company has been regular in making payment of its statutory dues except as pointed out by the Auditors against point no. ix (a) referred to in the Annexure to the Auditors Report.

5. The Company has taken necessary steps to regularise the matter in regard to use of short term funds to the extent of Rs.3039.44 lacs for long term investment as referred to in the point no. xvii of Annexure to the Auditors' Report. It was necessitated to meet certain long term requirements and future growth of the Company.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the listing agreement with Stock Exchanges, the Management Discussion and Analysis and Corporate Governance Report together with the Certificate from the Auditors of the Company confirming compliance of the conditions of Corporate Governance form a part of the Annual Report.

CODE OF CONDUCT

The Code of Conduct for the Directors and Senior Management Executives has been made applicable to all the Directors whether executive or non-executive including all Senior Management Executives of the Company. The Board members and Senior Management Executives of the Company have affirmed compliance with the Code of Conduct during the year and no violation of the same was reported. The Code of Conduct is also posted on the Company's web-site.

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

The statement of particulars pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is annexed hereto and forms part of the report.

PERSONNEL

Your company during the period under review continued to take proactive measures to maintain harmonious Industrial relations and develop an environment of transparency and mutual trust. A performance oriented work culture has been developed in the organization and the motivated workforce has helped in overcoming the different challenges faced by the company.

The company has taken steps for constantly upgrading the knowledge and skill level of employees which shall help to meet the present and future organizational requirements and also lead to self development of the employees.

As the company looks to expand its business, it aims to develop a cohesive work force with well defined roles and responsibilities having belongingness for the company. The human resource policy of the company focuses on equal opportunity and fair treatment for all and there is a focus on attraction and retention of best talent.

The Board records its appreciation for the support of employees at all levels and looks forward to their continued support and involvement for all round development and growth of the Company.

ACKNOWLEDGEMENT

Your Directors express their sincere appreciation for the continued co-operation and support extended to the Company by the Central Government, the Government of Odisha, Government Agencies, Company's Bankers, Business Associates, Shareholders and Community at large. Your Directors also express their warm appreciation to all employees for their diligence and contribution.

For and on behalf of the Board

R K Jena M Trivedi

Managing Director Director

Kolkata

26th May, 2011

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Mar 31, 2010

The Directors submits their 22nd Report on the business and operations of the Company together with Audited Accounts for the financial year ended 31st March, 2010.

FINANCIAL RESULTS

(Rs. in Lacs)

Financial year Financial year ended ended 31st March, 31st March, 2010 2009

1. Sales/Income from operations 43261.75 65689.46

Less: Excise Duty 1743.19 1816.03

41518.56 63873.43

2. Other Income 2935.67 1123.62

3. Total Income (1+2) 44454.23 64997.05

4. Total Expenditure 37056.77 58283.89

5. Profit before Interest & Finance charges and Depreciation (3-4) 7397.46 6713.16

6. Interest & Finance Charges 4221.37 4457.79

7. Depreciation / Amortisation 1404.55 1185.39

8. Profit before Prior Period Items & Taxes (5-6-7) 1771.54 1069.98

9. Prior Period Items (Net) (313.24) 361.83

10. Profit before Taxes (8-9) 2084.78 708.15

11. Provision for Taxes

- Current Tax 1039.43 99.97

- Prior Year Tax expense written back (21.02) -

- Deferred Tax Charge/(Credit) (188.54) 829.87 514.59 614.56

12. Profit after Taxes (10-11) 1254.91 93.59

13. Balance brought forward from previous year 9579.30 9485.71

Amount carried to next year (12 + 13) 10834.21 9579.30



TRANSFER TO RESERVE

Reserve and surplus of the Company stood at Rs. 97265.92 lacs ended on 31st March, 2010 as against Rs. 20806.03 lacs at the end of the previous year ended on 31st March, 2009. The increase is on account of Profits earned and Revaluation Reserve of Rs. 76337.69 lacs created during the financial year under review.

FINANCIAL REVIEW

The Company notched up an impressive performance in the financial year under review. Despite the pace and speed of recovery in the performance of the Company remaining subdued for the first half of the financial year under review, the growth momentum coupled with improvement in the price of the Ferro Alloy product has taken place in the second half of the financial year under review.

The Company earned a net profit of Rs. 1254.91 lacs during the financial year ended on 31st March, 2010 as against Rs. 93.59 lacs during the previous financial year ended on 31st March, 2009, reflecting a growth of 1240.84%. The profit before tax (PBT) for the financial year ended 31st March, 2010 registered a growth of 194.40% to Rs. 2084.78 lacs as against Rs. 708.15 lacs for the corresponding previous year. Basic earning per share of your Company has registered a growth of 1200% to Rs. 1.95 as against Rs. 0.15 during the corresponding previous year. The gross turnover of the company has been adversely affected during the financial year under review due to the lower sales realization on account of the impact of worldwide recession prevailed during the part of the financial year.

DIVIDEND

In order to maintain a better liquidity position and conserve existing resources of the company, the Directors, therefore, do not recommend any dividend for the financial year under review.

OPERATIONS

The production during the year under review was 83,936 MT as against 88846 MT in the previous year 2008-09. During the year under review, the State of Orissa faced unprecedented shortage of power as the hydel power plants in Orissa did not have enough water due to insufficient rain. The rationing of power to industries by the States Electricity Regulatory Authority affected our production during the first quarter of the year.

The first quarter of the year under review was also partly under the influence of lingering after-effects of Global Meltdown experienced during previous year. But gradually, with the depletion of stock piles across the world due to unprecedented shutdowns of Ferro chrome facilities across the industries, the demand of Ferro chrome slowly picked up. Your Companys strategic and proactive measures in the direction of maintaining minimum stock, optimization of raw material consumption norms vis-à-vis operational cost, continued focus on both domestic and export markets, etc has resulted in achievement of sustained full scale operations.

EXPORT

Export of Ferro Chrome constitutes upto 50% of the total turnover of the Company. The Company exported 42497 MT valued at Rs.20608.87 lacs during the year ended 31st March, 2010 under review as against 68726 MT valued at Rs.49474.53 lacs in the previous year.

Your Companys thrust on exports will continue as our strategy is to make our product globally competitive, coupled with maintaining impressive growth in future. To ensure consistent quality, your Company is fully equipped with latest testing equipments and process automation. Your Company is relentlessly striving for continuous improvements in Quality specs coupled with customer focused initiatives so as to satisfactorily cater to the requirements of different OEMs and niche markets and strengthen the product and delivery system. Notwithstanding the stiff competition in the international market, the Company has been successfully making value added exports to quality conscious countries in Europe, Asia and Latin America. Global competiveness, international quality of our products and superior logistical capabilities has enabled the Company to also establish its presence in 31 countries across the globe. Accredited with ISO 9001:2008 & 14001:2004 quality certifications and awarded with EEPCs Easter Region Awards for last 18 consecutive years for impressive export performance, your Company will continue its ceaseless effort to improve further in the field of Ferro alloys, with global outlook to respond to the demand in the years to come.

FUTURE OUTLOOK

The ferrochrome market is very attractive because of its high growth expectations and the rising demand especially in China. Ferrochrome production is a very energy-intensive process and the long-term price of ferrochrome is driven by difficulties in electricity availability in South Africa, the main producing country with 40% of the global market. The constrained situation of electricity in South Africa is expected to continue for several years and the electricity price in South Africa is expected to double in the coming few years compared to the level in 2009.

Limited growth in ferrochrome production - mainly reflecting power shortages in South Africa - coupled with solid growth in demand is expected to push the market back into deficit and stocks will once again move onto a downward path. Such conditions should allow spot and contract prices to surge upwards again.

PROJECTS

In the previous year, your Directors had taken a decision to set up a Captive Power Plant on utmost priority. The power scenario in the State of Orissa during the year under review has further emphasized the need for setting up the Power Plant at the earliest. Orissa had witnessed the worst power scenario during the year under review and the Authorities were compelled to resort to power rationing. The industry in general and your Company was also hit by the power restriction. Since power constitutes about 45% of the Variable Cost of your Companys product, your company has directed all its effort towards the setting up of the Captive Power Plant. Substantial progress like acquisition of land, obtaining of Statutory Clearances, Coal Linkage has already been achieved.

With the economy back on recovery track and demand for the Companys product gradually picking up, your Company has also revived the capacity addition project i.e. New Ferro Chrome Furnace project of 16.5MVA.

The Company is in process of finalising the financial arrangements for its on-going projects and has already approached the lenders for their No Objection Certificate (NOC) pursuant to the terms and conditions of CDR package, which is awaited.

FORFEITURE OF ZERO COUPON CONVERTIBLE WARRANTS

The Committee for Preferential Issue of Warrant had allotted 65,00,000 (Sixty Five Lakh) Zero Coupon Convertible Warrants (ZCCW) of Rs. 5/- each at a premium of Rs. 65/- each to the Promoters on 15th March, 2008 on preferential basis. These ZCCW became due for conversion on or before 15.09.2009 i.e. within 18 months from the date of allotment. The conversion option was not exercised by the Promoters within the due date. Accordingly, the up-front money of Rs.4.90 Crores received from the allottee Companies stand forfeited in terms of the relevant SEBI Guidelines / Regulations and the Committee noted the same at its meeting held on 15.09.2009.

MINES

The Company is having Chromite ore mines located at Sukinda Valley, Jajpur, Orissa, Manganese mines located at Balaghat District, Madhya Pradesh and at Joda, Keonjhar District, Orissa and attempt is being made to acquire a new manganese lease(s) in Chindwara District, Madhya Pradesh.

The Chromite mines in Sukinda Valley (ISO 9001 certified) is being worked in a systematic manner with due regard to safety and environment. Our mine has bagged several prizes during this year in the Zonal Mines Safety Week / Environment Week celebrations conducted by Directorate General of Mines Safety like General Working, Waste Management, Maintenance of HEMM and workshop, Survey, Planning, Statutory Records and Return, Overall Performance etc. giving testimony to our work culture.

AWARD AND RECOGNITION

The Company has been awarded by various organisations and statutory bodies in recognition of its contribution to the industry and society.

The Company has received the following awards / recognition during the financial year 2009-10:

* "EEPC Gold Trophy Award” for being top Exporter of Ferro Alloys from Eastern region by Engineering Export Promotion Council.

* "Rajiv Gandhi National Quality Award” by BIS (Bureau of Indian Standards) for best Quality.

* "IMEA Platinum Award” by Frost & Sullivan in Metal Category for Manufacturing Excellence.

* "Special Achievement Award” (Thirteen Numbers) for greenery development by Rotary Club.

* "NALCO QC Convention Runners Up Award” in TPM Circle (Workman Category) by National Aluminium Company Limited.

* "NALCO QC Convention Award” (Two Numbers) in TPM Circle (Workman Category) by National Aluminium Company Limited for good performance.

CORPORATE DEBT RESTRUCTURING

In view of the Companys better financial performance compared to the projections made under the CDR package, the Board of Directors have recommended to explore the possibilities to exit from the CDR mechanism, which will enable the Company to raise finance by exploring various options by approaching Financial Institutions, Private Equity Investors domestically and internationally at competitive cost for its upcoming expansion and modernization plan.

MANAGEMENT INITIATIVES

Various strategic management initiatives that your Company continues to practice such as Six Sigma, Total Productive Maintenance (TPM), Performance Management System (PMS) and Supply Chain Management (SCM) with a view to continually improve. To augment the process, your Company has taken up an integrated approach of various Initiatives with focus on Business Excellence.

During the year, your Company has received the prestigious award like “Rajiv Gandhi National Quality Award” by (BIS) Bureau of Indian Standards.

100% involvement of employees and structure review mechanism put in place at the apex level has made these initiatives contributing towards growth of the organization.

BOARD OF DIRECTORS

The Board of Directors of the Company had appointed Mr S M Ali as Nominee Director of State Bank of India w.e.f. 30th October, 2009.

In accordance with the provisions of the Companies Act, 1956 and Article 149 of the Articles of Association of the Company, Mr P Mittal, Mr S K Majumdar and Mr K P Khandelwal, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

SUBSIDIARY COMPANY

Milton Holdings Limited (MHL), Mauritius, a wholly-owned subsidiary, shall implement, through joint-venture, proposed Manganese- ore mining projects in Brazil. As at the date of Balance Sheet, the Company has investment in shares of MHL aggregating, in value, to USD 4.36 million (Equivalent to Rs.1994.25 lacs).

The Directors Report of MHL, the wholly-owned subsidiary, and its audited Statement of Accounts along with Auditors Report thereon for the year ended 3lst March, 2010 form part of this Report. Statement pursuant to Section 212 of the Companies Act, 1956 relating to MHL as at 31st March, 2010 is also annexed to this Report.

CONSOLIDATED FINANCIAL STATEMENT

The Consolidated Financial Statements of the Company and its subsidiary, prepared and presented in accordance with Accounting Standard (AS) 21, are attached to and form part of the Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed that:

(i) In the preparation of the annual accounts for the financial year ended 31st March, 2010, the applicable accounting standards have been followed and there have been no material departures;

(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 at the end of the financial year and of the Profit of the Company for that year;

(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; and

(iv) The Directors have prepared the annual accounts for the financial year ended 31st March, 2010 on a going concern basis.

The above statement has been taken note of by the Audit Committee at its meeting held on 25th May, 2010.

AUDITORS

The Companys Auditors M/s S R Batliboi & Co, Chartered Accountants, retires at the conclusion of the ensuing Annual General Meeting and have expressed their willingness to be reappointed.

The Company has obtained a letter from the Auditors to the effect that reappointment, if made, will be within the limits specified in section 224(1B) of the Companies Act, 1956.

AUDITORS REPORT

In relation to the matters dealt with by the Auditors in their Audit Report, we have to state that:

(a) The Company has recovered / adjusted an amount of Rs.235 lacs during the reported financial year and balance amount of Rs.500.00 lacs is expected to be recovered / adjusted in the current financial year.

(b) The Company has been regular in making payment of its statutory dues except as pointed out by the Auditors against Point no IX (a) referred to in the Annexure to the Auditors Report.

(c) As regard use of short-term funds to the extent of Rs.5069.37 lacs for long-term investment in fixed assets & investments and repayment of long term loans, the same was necessitated owing to certain immediate and compelling long term business requirements of the company. Steps are being taken to regularize the same at the earliest.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the listing agreement with Stock Exchanges, the Management Discussion and Analysis and Corporate Governance Report together with the Certificate from the Auditors of the Company confirming compliance of the conditions of Corporate Governance form a part of the Annual Report.

CODE OF CONDUCT

The Code of Conduct for the Directors and Senior Management Executives has been made applicable to all the Directors whether executive or non-executive including all Senior Management Executives of the Company. The Board members and Senior Management Executives of the Company have affirmed compliance with the Code of Conduct during the year and no violation of the same was reported. The Code of Conduct is also posted on the Companys web-site.

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

The statement of particulars pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is annexed hereto and forms part of the report.

PERSONNEL

Your company during the period under review further strengthened the relationship of mutual trust and transparency with its employees which helped in meeting all challenges and coming out with flying colours. The other organizations in the periphery of your company have been plagued with various Industrial Relations issues but the proactive approach adopted by your company has helped in creating a highly productive environment without loss of a single man day on IR issues.

Knowledge and Skill up-gradation of employees remains a key focus area of the company so that a vibrant workforce is developed to meet the present and future requirements. The company nurtures its human capital with great care which helps in retaining and attracting best talent in the Industry. A conducive work-environment has been created due to role clarity, empowerment, team work and performance driven culture prevailing in your company. The Organizational and individual goals have been aligned and the team marches ahead in its quest for excellence.

The Board records its appreciation for the support of employees at all levels and looks forward to their continued support and involvement in the growth process of the Company.

Information in terms of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, is annexed to this report.

ACKNOWLEDGEMENT

Your Directors express their sincere appreciation for the continued co-operation and support extended to the Company by the Central Government, the Government of Orissa, Government Agencies, Companys Bankers, Business Associates, Shareholders and Community at large. Your Directors also express their warm appreciation to all employees for their diligence and contribution.

For and on behalf of the Board

Kolkata R K Jena M Trivedi

25th May, 2010 Managing Director Director