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Directors Report of Shyam Century Ferrous Ltd.

Mar 31, 2018

DIRECTORS'' REPORT & MANAGEMENT DISCUSSION ANALYSIS

The Directors have pleasure in presenting the Seventh Annual Report of the Company together with the Audited Balance Sheet as at March 31, 2018 and the Statement of Profit & Loss for the year ended on that date.

FINANCIAL PERFORMANCE

The highlights of the financial performance of the Company for the financial year ended March 31, 2018 as compared to the previous financial year are as under:-

( Rs, in Lacs)

Consolidated

Standalone

Particulars

2017-18

2016-17 H

2017-18

2016-17

Net Sales / Income

12,501.32

9,282.94

12,501.32

9,282.94

Profit before Depreciation, Interest and Tax

1,958.66

1,141.29

1,958.66

1,141.29

Depreciation

249.67

214.69

249.67

214.69

Interest and Finance Charges

110.31

111.58

110.31

111.58

Profit/Loss Before Tax

1,598.68

815.02

1,598.68

815.02

Tax Expenses:

-Current Tax

526.67

260.35

526.67

260.35

-Deferred Tax

26.65

12.16

26.65

12.16

Profit/Loss after Tax

1,045.36

542.51

1,045.36

542.51

Share of profit of associates

552.42

615.06

-

-

Net profit after taxes and share of profit of associates

1597.78

1157.57

-

-

Other comprehensive income for the year, net of tax

1.29

(3.60)

2.16

(2.84)

Total comprehensive income for the year

1599.07

1153.97

1,047.52

539.67

DIRECTORS'' RESPONSIBILITY STATEMENT

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

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

- The Directors have selected such accounting policies and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March, 2018 and of the profit of the Company for the year under review.

- The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

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

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

- The Directors have laid down internal financial controls to be followed by the Company and that such internal

EXTRACT OF ANNUAL RETURN

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

MEETINGS OF THE BOARD

During the year, Five (5) Board Meetings and Four (4) Audit Committee meetings were convened and held. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. The details of the Board Meeting are provided in the Corporate Governance Report.

MEETINGS OF INDEPENDENT DIRECTORS

During the year under review, meeting of Independent Directors was held on 6th March, 2018 wherein the performance of the Non-Independent Directors and the Board as a whole was reviewed. The Independent Directors at their meeting also, inter alia, assessed the quality, quantity and timeliness of flow of information between the Company management and the Board of Directors of the Company.

COMMITTEES OF THE BOARD

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

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

The Company has formed a Whistle Blower Policy/ Vigil Mechanism as required under Section 177 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) 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. The said policy may be referred to at the Company''s website at the web link: http:// shyamcenturyferrous.com/wp-content/uploads/2015/04/ Whistle_Blower_Policy.pdf

Co., Cost Accountants, (Firm Registration number 000064) as Cost Auditors of the Company for the financial year ended 31st March, 2018 in the Board Meeting held on 30th May, 2017. The remuneration proposed to be paid to them for the FY2017-18, as recommended by audit committee, was ratified in the meeting of shareholders held on 11 September, 2017.

M/s. B. G. Chowdhury & Co., Cost Accountants, (Firm Registration number 000064) have expressed their willingness to be appointed as Cost Auditors of the Company for ensuing financial year. The Board, on recommendation of the audit committee has appointed M/s. B. G. Chowdhury & Co., Cost Accountants, (Firm Registration number 000064) as Cost Auditors of the Company for the FY2018-19 subject to ratification of their remuneration by shareholders in the General Meeting of the company.

The cost audit report for the Financial Year 2016-17 was filed with the Ministry of Corporate Affairs on 26th June, 2017

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. MKB & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith marked Annexure-2. The report is self-explanatory and do not call for any further comments.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

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

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

RELATED PARTY TRANSACTIONS

All related party transactions are entered on arm''s length basis, in the ordinary course of business and are in compliance with the applicable provisions of the Companies Act, 2013. 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. Accordingly, no transactions are being reported in Form AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. However, the details of the transactions with the Related Party are provided in financial controls are adequate and were operating effectively.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013. Mr. Santanu Ray, Mr. Mangilal Jain and Mrs. Plistina Dkhar are Independent Directors on the Board of your Company. In the opinion of the Board and as confirmed by these Directors, they fulfil the conditions specified in section 149 of the Act and the Rules made there under about their status as Independent Director of the Company.

FAMILIARIZATION PROGRAMME UNDERTAKEN FOR INDEPENDENT DIRECTORS

In order to enable the Independent Directors to perform their duties optimally, the Board has devised a familiarization programme for the Independent Directors to familiarize them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. They are periodically updated about the development which takes place in the Company. The Independent Directors have been issued Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and commitments etc. The familiarization program is available on the Company''s website under the web link: http:// shyamcenturyferrous.com/wp-content/uploads/2015/10/Familiarization_Programme_for_Independent_Directors. pdf

AUDITORS & AUDITORS'' REPORT

M/s. Kailash B. Goel & Co., Chartered Accountants (Firm Registration no. 322460E), Statutory Auditors of the Company, have been appointed by the members at the third Annual General Meeting and shall hold office for a period of 5 years from the date of such meeting held on 4th July, 2014.

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

COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its manufacturing activity is required to be audited. Your Directors have, on the recommendation of the Audit Committee, appointed M/s. B. G. Chowdhury & for quality improvement. During the year under review there was no Capital expenditure and no Revenue Expenditure in Research & Development.

(C) Foreign Exchange Earnings And Outgo

- During the period under review, there was no Foreign Exchange Earnings and Outgo.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES (CSR)

Your Company is promoting education and providing non-formal education to the rural and tribal people through One Teacher School (OTS) i.e., Ekal Vidyalaya run by the Friends of Tribal Society. The projects aims to reach the education to every doorstep of the country

The Committee is headed by Mr. Nagraj Tater, Director of your Company and consists of Members as stated below:

Name

Category

Chairman/

Members

Mr. Nagraj Tater

Non-Independent

Chairman

Mr. Aditya Vimalkumar Agarwal

Non-Independent

Member

Mr. Mangilal Jain

Independent

Member

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

The CSR Policy of the Company is available on the Company''s website under the weblink: http://shyamcenturyferrous. com/wp-content/uploads/2015/04/Corporate_Social_ Responsibility_Policy.pdf

EVALUATION OF THE BOARD''S PERFORMANCE

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

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

The Nomination and Remuneration Committee at its meeting established the criteria based on which the Board will evaluate the performance of the Directors. the Company''s financial statements in accordance with the Accounting Standards.

All Related Party Transactions are presented to the Audit Committee and the Board. Omnibus approval has been obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.

A policy on ''Related Party Transactions'' has been devised by the Company which may be referred to at the Company''s website at the web link: http://shyamcenturyferrous.com/ wp-content/uploads/2015/10/Related_Party_Policy.pdf

RESERVES

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

DIVIDEND

In order to conserve resources for future operations, your Directors do not recommend any dividend for the Financial Year 2017-18.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated in section 134 (3) (m) of the Act and rules framed there under is mentioned below:

(A) Steps taken toward Conservation of energy:

- Arrested all leakages in air circuit, water circuit and steam circuit resulted reduction in auxiliary power consumption and improved the efficiency of the plant.

- Re-insulation is carried out wherever required in Boiler and steam line which resulted reduction of thermal energy consumption.

- Turbine overhauled, condenser cleaned, improved in vacuum resulted reduction in specific steam consumption and cooling water power consumption.

(B) Steps taken toward Technical Absorption:

- Reduction of auxiliary power consumption in CT Fan 1 & 2 by replacement of conventional FRP fan blades with E-glass Epoxy FRP low weight fan blades.

- Introduced VFD in CWP2 resulted reduction in auxiliary power consumption.

- The Company has developed a Research & Development cell for carrying out R&D Projects in the plant with specific objective of development of advanced systems

CONSOLIDATED FINANCIAL STATEMENTS

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

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

DEPOSITS

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

CHANGES IMPACTING GOING CONCERN STATUS AND COMPANY''S OPERATIONS

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

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

ADEQUACY OF INTERNAL FINANCIAL CONTROL

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

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

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

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Mr. Nagraj Tater will retire by rotation and being eligible, offers himself for re-appointment. In view of his considerable experience, your Directors recommend his re-appointment as Director of the company.

On the recommendation of the Audit Committee and Nomination and Remuneration Committee, the Board has appointed Mr. Uday Bahadur Chetri as Chief Financial Officer and Key Managerial Personnel and on the recommendation of the Nomination and Remuneration Committee, the Board has appointed Ms. Neha Agarwal as Company Secretary and Key Managerial Personnel of the Company with effect from 30 May, 2017.

The following personnel are Key Managerial Personnel of the Company:

1.

Mr. M.V.K. Nageswara Rao

Chief Executive Officer

2.

Mr. Uday Bahadur Chetri

Chief Financial Officer

3.

Ms. Neha Agarwal

Company Secretary

SUBSIDIARY, ASSOCIATE AND JOINT VENTURE

The Company does not have any subsidiary and joint venture. M/s Meghalaya Power Limited continues to remain associate company.

Meghalaya Power Limited is engaged in generation of Power. During the year under review the Company generated 1,901 Lac kwh units of power.

AUDITED FINANCIAL STATEMENTS OF THE COMPANY''S ASSOCIATE

Pursuant to sub-section (3) of section 129 of the Act, the statement containing salient features of the financial statement of associate company Meghalaya Power Limited (MPL) for the year ended March 31, 2018 is annexed in the Form AOC - 1 and marked as Annexure-4.

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

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

INTERNAL CONTROL OVER FINANCIAL REPORTING

The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES

The disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 along with a statement containing particulars of employees as required under Section 197 of Companies Act, 2013 read with Rule 5 (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith and marked Annexure- 5 and forms part of this report.

POLICY ON PREVENTION OF SEXUAL HARASSMENT

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

CORPORATE GOVERNANCE

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

ACKNOWLEDGEMENT

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

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

For and on behalf of the Board of Directors

Nagraj Tater Sajjan Bhajanka

Place: Kolkata Director Director

Date: 17 May, 2018 (DIN: 00266072) (DIN: 00246043)


Mar 31, 2016

Directors'' Report & Management Discussion Analysis

Dear Shareholders,

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

FINANCIAL PERFORMANCE

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

(Rs. in Lacs)

Consolidated

Standalone

Particulars

2015-16

2014-15

2015-16

2014-15

Net Sales / Income

11,363.42

11,591.00

11,363.42

11,591.00

Profit Before Depreciation, Interest & Tax

750.68

1,708.13

750.68

1708.13

Depreciation

(294.14)

(463.98)

(294.14)

(463.98)

Interest and Finance Charges

(297.77)

(334.62)

(297.77)

(334.62)

Exceptional Items

-

(28.23)

-

(28.23)

Profit Before Tax

158.77

881.30

158.77

881.30

Tax Expenses:

-Current Tax

(54.56)

(354.04)

(54.56)

(354.04)

-Deferred Tax

3.19

4.95

3.19

4.95

Profit after Tax

107.40

532.21

107.40

532.21

Share of profit of associates

528.38

265.77

-

-

Net profit after taxes and share of profit of

635.78

797.98

-

-

associates

During the year under review, your Company has sold 16,105 MT of Ferro Silicon as against 13,849 MT during the immediate previous year resulting an increase of 16 % in Sales volume despite stressed market condition.

SHARE CAPITAL

The paid up Equity Capital as on March 31, 2016 was Rs. 2,221.73 Lacs. During the year, pursuant to the Scheme of Arrangement as approved by the Hon''ble Meghalaya High Court, the Board of Directors of the Company at their meeting held on 28th April, 2015, issued and allotted 22,21,72,990 Equity Shares of Rs.1/- each to every member of Star Ferro and Cement Limited (SFCL) holding fully paid up equity shares of SFCL and whose name appeared in the Register of Members of SFCL as on 24th April, 2015, the record date fixed by SFCL for this purpose. Accordingly, shares of your Company got listed in National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange (BSE) and trading started with effect from 28th July, 2015.

During the year under review, the Company has not issued shares with differential voting rights nor granted stock options or sweat equity shares.

FERRO ALLOY BUSINESS - RETROSPECT AND OUTLOOK

Ferro Alloys is an additive which is used in manufacturing of steel which consists of less than one percent of the total raw material required for steel production. Despite being very low constituent, Ferro Alloys are vital additives for steel making. The principal function of Ferro Alloy addition is that it increases the resistance of steel to corrosion and oxidation, improves its harden ability, tensile strength at high temperatures, wear and abrasion resistance and increases its other properties like creep strength etc. Ferro Alloys are generally used to impart engineering properties to steel. Ferro Alloys are vital input for producing all type of steel and are used as raw material in the production of special steels, alloy steels and stainless steels.

Production of Crude Steel, Alloy and Special Steel and Stainless Steel are major demand drivers of Ferro Alloys. Owing to demand de-growth, Financial Year 2015-16 witnessed a steep fall in commodity prices globally including prices of steel leading to immense pressure on operating margins of the steel plants worldwide including India. Besides, weak demand in major steel-producing neighboring nations such as China, Japan and South Korea have forced them to focus on exports at aggressive prices to large consumers like India, hurting the financial health of the Indian steel makers further. The current woes and challenges of the steel industry on account of cheap imports at predatory prices remain concern for Ferro Alloy Industry of the country. Apart from weak steel demand for the reasons stated above, demand for Indian Ferro Alloy Industry had also been facing dumping of Ferro Silicon from China, Malaysia and Bhutan which impacted realization during the year under review.

Despite these constraints and challenging environment, your Company continued to focus on its fundamental strength of its ability to continuously focus on productivity and quality. There was strong emphasis on internal efficiencies together with an improvement in the sales mix which enabled your Company to withstand inflationary pressures on costs and profitability. However, huge erosion of realization shows sharp decline in Profitability of the Company in this Financial Year as compared to previous year.

During the year under review, your Company has sold 16,105 MT of Ferro Silicon as against 13,849 MT during the immediate previous year resulting an increase of 16 % in Sales volume despite stressed market condition. While your Company constantly strives to increase stakeholder''s value, emphasis continues to be on delivering value to customers and strengthening processes while driving sustainable practices, resulting into expanding our customer base.

Indian Ferro Alloy Industry has been facing challenges on cost front too in form of high cost of electric power, a major cost driver, inadequate transportation facilities and technological challenges. India accounts for 10% of world''s Ferro Alloy production with installed capacity of more than 5 Million MT per annum. The industry has abundant rich Chrome Ore and Manganese deposit but has not been globally competitive despite low manpower cost mainly due to challenges faced by the Industry as mentioned above.

Indian Ferro Alloy Market is likely to experience slight contraction in short term on account of lowering of export demand. On Price and realization front, it is expected to moderate further but at a slower pace. There is stiff competition from the producers and exporters of the Ferro Alloys in India. Exports from India to China, South Africa and other countries, constituting nearly 50% of the market of the Ferro Alloys earlier, is suffering heavily for economic slowdown in China and low-cost infiltration of Ferro Alloys from Malaysia and Bhutan. However, with Government''s focus on housing and infrastructure, steel demand is likely to get a boost and thereby country''s Ferro Alloy Industry is likely to improve. Recent initiative of Central Government in the area of regulating steel imports through import duty rationalization is also likely to have positive impact on country''s steel and Ferro Alloy industry.

POWER BUSINESS

During the year under review, your Company generated 552.46 Lacs unit as compared to 641.17 Lacs unit which was captively consumed by the Company.

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

OPPORTUNITIES & THREATS, RISKS AND CONCERNS

Performance of the Company depends on the continued demand for our products in the steel and stainless steel industry. The Steel business is cyclical in nature, accordingly, performance and results of operations are influenced by a variety of factors relating to the steel industry like fluctuations in demand and supply of steel and steel products, both domestically and internationally, general economic conditions and changes in the international prices of steel and steel products and slowdowns in steel industry. Uncertainty of availability of raw materials and other resources such as water, uninterrupted power supply, skilled manpower etc., high cost, insufficient infrastructural facilities for rapid transportation from ore mines to plants may also affect the operations and in turn the financial condition and profitability of the Company.

Despite these threats, Indian Ferro alloy industry has tremendous growth opportunities due to very fast industrialization and urbanization in India which may lead India in emerging as the leading exporter of Ferro Alloys for the world.

With the Government''s thrust to develop infrastructure sectors and allocation of more funds, the Ferro alloy industry which fully depends on performance of steel industry, is expected to grow in future. The Government has listed few Ferro Alloys under the Focus Product Scheme which provides export benefits to the sector. It has also listed Ferro manganese slag under the restricted list of imports and imposed high customs duty on raw materials for manufacturing Ferro vanadium.

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

PERFORMANCE AND OPERATIONS REVIEW

Due to slower growth in Global steel market output, the performance of Ferro alloy remained dampened during the year under review. Despite weak economy and intense market situation, the Ferro Alloy segment posted total revenue of Rs.11,363.42 Lacs and Profit before Tax of Rs.158.77 Lacs as against Rs.11,591.00 Lacs and Rs.881.30 Lacs respectively during the previous Financial Year. During the year under review, your Company produced 15,104 MT of Ferro Silicon as against 14,835 MT during FY 2014-15. Although, net realization per ton has reduced considerably during the year under review as compared to previous Financial Year, your Company has been able to sustain these pressures by bringing efficiencies in operations.

EXTRACT OF ANNUAL RETURN

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

MEETINGS OF THE BOARD

During the year six (6) Board Meetings and four (4) Audit Committee meetings were convened and held. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. The details of the Board Meeting are provided in the Corporate Governance Report.

MEETINGS OF INDEPENDENT DIRECTORS

During the year under review, meeting of Independent Directors were held on 22nd December, 2015 and 21st March, 2016 wherein the performance of the Non Independent Directors and the Board as a whole was reviewed. The Independent Directors at their meeting also, inter-alia, assessed the quality, quantity and timeliness of flow of information between the Company management and the Board of Directors of the Company.

COMMITTEES OF THE BOARD

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

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

The Company has formed a Whistle Blower Policy/ Vigil Mechanism as required under Section 177 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) 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 Code 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. The said policy may be referred to at the Company''s website at the weblink: http:// shyamcenturyferrous.com/wp-content/uploads/2015/04/ Whistle Blower Policy.pdf

DIRECTORS'' RESPONSIBILITY STATEMENT

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

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

- The Directors have selected such accounting policies and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and of the profit & loss of the Company for the year under review.

- The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

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

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

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

DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013. Mr. Santanu Ray, Mr. Mangilal Jain and Mrs. Plistina Dkhar are Independent Directors on the Board of your Company. In the opinion of the Board and as confirmed by these Directors, they fulfill the conditions specified in Section 149 of the Act and the Rules made there under about their status as Independent Director of the Company.

FAMILIARIZATION PROGRAMME UNDERTAKEN FOR INDEPENDENT DIRECTORS

In order to enable the Independent Directors to perform their duties optimally, the Board has devised a familiarization programme for the Independent Directors to familiarize them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. They are periodically updated about the development which takes place in the Company. The Independent Directors have been issued Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and commitments etc. The familiarization program is available on the Company''s website under the weblink: http://shvamcenturvferrous. com/wp-content/uploads/201 5/1 0/Familiarization Programme for Independent Directors.pdf

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

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

AUDITORS & AUDITORS'' REPORT

M/s. Kailash B. Goel & Co., Chartered Accountants (Firm Registration Number 322460E), Statutory Auditors of the Company, have been appointed by the members at the third Annual General Meeting and shall hold office for a period of 5 years from the date of such meeting held on 4th July, 2014. The Board, in terms of Section 139 of the Act, on recommendation of the Audit Committee, has recommended for the ratification of the appointment of Statutory Auditors from the conclusion of the ensuing Annual General Meeting till the conclusion of the Sixth Annual General Meeting.

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

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

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Manoj Kumar Banthia, Practicing Company Secretary of M/s. MKB & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith and marked Annexure-2. The report is 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 Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its manufacturing activity is required to be audited. Your Directors have, on the recommendation of the Audit Committee, appointed M/s. B. G. Chowdhury & Co., Cost Accountants, (Firm Registration Number 000064) as Cost Auditors of the Company for the Financial Year ended 31st March, 2016 in the Board Meeting held on 10th August, 2015. The remuneration proposed to be paid to them for the Financial Year 2015-16, as recommended by Audit Committee, was ratified in the meeting of shareholders held on 25th September, 2015.

M/s. B. G. Chowdhury & Co., Cost Accountants, (Firm Registration number 000064) have expressed their willingness to be appointed as Cost Auditors of the Company for ensuing Financial Year. The Board, on recommendation of the Audit Committee has appointed M/s. B. G. Chowdhury & Co., Cost Accountants, (Firm Registration number 000064) as Cost Auditors of the Company for the Financial Year 2016-17 subject to ratification of their remuneration by shareholders in the General Meeting of the Company.

The Cost Audit report for the Financial Year 2014-15 was filed with the Ministry of Corporate Affairs on 22nd September, 2015.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

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

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

RELATED PARTY TRANSACTIONS

All Related Party Transactions are entered on arm''s length basis, in the ordinary course of business and are in compliance with the applicable provisions of the Companies Act, 2013. 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. Accordingly, no transactions are being reported in Form AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. However, the details of the transactions with the Related Party are provided in the Company''s financial statements in accordance with the Accounting Standards.

All Related Party Transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.

A policy on ''Related Party Transactions'' has been devised by the Company which may be referred to at the Company''s website at the weblink: http://shyamcenturyferrous.com/ wp-content/uploads/2015/10/Related_Party_Policy.pdf

RESERVES

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

DIVIDEND

In order to conserve resources for future operations, your Directors do not recommend any dividend for the Financial Year 2015-16.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated in Section 134 (3) (m) of the Act and rules framed there under is mentioned below:

(A) Steps taken toward Conservation of Energy:

- Provision of Bed coil protection to minimize bed coil leakage resulted into lowering down stoppages and better plant availability together with enhanced bed coil life.

- Measures undertaken in Air and Water System of Power Plant resulted into reduction in Auxiliary Power Consumption.

- Improvement in quality of raw materials resulted into reduction in specific power consumption in Ferro Silicon production.

- Less Stroking of Charged Material in furnace resulted into reduction in diesel consumption.

(B) Steps taken toward Technical Absorption:

- Conversion of Operation of VFD in CT Fan Motor from local mode to remote mode resulted into reduction in power consumption in operation of CT Fan Motor.

- Controlling main steam temperature by boiler operation resulted into reduction in power consumption in operation of Boiler Feed Pump motor.

- Arresting air leakages in boiler ducting, APH & Primary airline resulted into reduction in power consumption in ID Fan, FD Fan & PA Fan.

- The Company has developed a Research & Development cell for carrying out R&D Projects in the plant with specific objective of development of advanced systems for quality improvement. During the year under review, your Company incurred Capital expenditure of Rs.7.73 Lacs and there was no Revenue Expenditure in Research & Development.

(C) Foreign Exchange Earnings And Outgo

During the period under review, there was no Foreign Exchange Earning and Outgo.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES (CSR)

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

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

Sl.

No.

Name

Category

Chairman/

Members

1.

Mr. Nagraj Tater

Non-Independent

Chairman

2.

Mr. Aditya

Vimalkumar Agrawal

Non-Independent

Member

3.

Mr. Mangilal Jain

Independent

Member

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

The CSR Policy of the Company is available on the Company''s website under the weblink: http://shvamcenturvferrous. com/wp-content/uploads/201 5/04/Corporate_Social_ Responsibilitv_Policv.pdf

EVALUATION OF THE BOARD''S PERFORMANCE

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

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

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

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

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL

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

During the year under review, Ms. Hasti Doshi, Chief Financial Officer (CFO) resigned from the services of the Company on 10th August, 2015. The Board places on record their appreciation for the services and contributions made by Ms. Doshi during her tenure.

The Board of Directors had, on the recommendation of the Nomination and Remuneration Committee and the Audit Committee, appointed Mr. Debasis Mukhopadhyay as Chief Financial Officer (CFO) with effect from 11th August, 2015.

The following personnel are Key Managerial Personnel of the Company:

1. Mr. M.V.K. Nageswara Rao - Chief Executive Officer

2. Mr. Debasis Mukhopadhyay - Chief Financial Officer

3. Ms. Rachna Pareek - Company Secretary

SUBSIDIARY, ASSOCIATE AND JOINT VENTURE

The Company does not have any subsidiary and joint venture. M/s. Meghalaya Power Limited is an Associate Company.

AUDITED FINANCIAL STATEMENTS OF THE COMPANY''S ASSOCIATE

Pursuant to sub-section (3) of Section 129 of the Act, the statement containing salient features of the financial statement of Associate Company Meghalaya Power Limited (MPL) for the year ended March 31, 2016 is annexed in the Form AOC - 1 and marked as Annexure-4.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company have been prepared in accordance to requirements of Accounting Standards (AS-23), as prescribed by the Institute of Chartered Accountants of India and has been included as a part of this Annual Report.

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

POLICY ON PREVENTION OF SEXUAL HARASSMENT

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

DEPOSITS

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

CHANGES IMPACTING GOING CONCERN STATUS AND COMPANY''S OPERATIONS

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

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

ADEQUACY OF INTERNAL FINANCIAL CONTROL

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

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

INTERNAL CONTROL OVER FINANCIAL REPORTING

The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

MANAGERIAL REMUNERATION

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

PARTICULARS OF EMPLOYEES

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

CORPORATE GOVERNANCE

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

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

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

GREEN INITIATIVES IN CORPORATE GOVERNANCE

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

HUMAN RESOURCE DEVELOPMENT & INDUSTRIAL RELATIONS

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

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

During the year under review, there has not been any material change in human resources, industrial relations and number of people employed.

CAUTIONARY STATEMENT

Statements in this report describing the Company''s objectives, expectations or predictions, may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company''s operations include: global and domestic demand and supply conditions affecting selling prices, new capacity additions, availability of critical materials and their cost, changes in government policies and tax laws, economic development of the country and other factors which are material to the business operations of the Company.

ACKNOWLEDGEMENT

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

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

For and on behalf of the Board of Directors

Place: Kolkata Nagraj Tater Sajjan Bhajanka

Date: 3rd May, 2016 Director Director

DIN: 00266072 DIN: 00246043

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