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Shyam Century Ferrous Ltd (INDUSTRY : Mining & Mineral products)

  • BSE Code: 539252
  • NSE Symbol: SHYAMCENT
  • ISIN Demat: INE979R01011
  • Book Value ( ₹ ) 5.03
  • Face Value ( ₹ ) 1
  • Market Cap ( ₹ Cr. ) 42.21
  • P/E (TTM): 0.00
  • EPS (TTM): 0.00
  • Div Yield (%): 0.00

MANAGEMENT DISCUSSION AND ANALYSIS

Your Directors have pleasure in presenting the Eighth Annual Report of the Company together with the Audited Balance Sheet as at March 31, 2019 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, 2019 as compared to the previous financial year are as under:-

Particulars

Consolidated

Standalone

2018-19 2017-18 2018-19 2017-18
Total Income 13,443.78 12,550.69 13,443.78 12,550.69
Profit before Depreciation, Interest and Tax 1,885.10 2,019.97 1,885.10 2,019.97
Depreciation 276.21 249.67 276.21 249.67
Interest and Finance Charges 129.51 171.62 129.51 171.62
Profit/Loss Before Tax 1,479.38 1,598.68 1,479.38 1,598.68
Tax Expenses:
-Current Tax 438.53 526.67 438.53 526.67
-Deferred Tax (7.16) 26.65 (7.16) 26.65
Profit/Loss after Tax 1,048.01 1,045.36 1,048.01 1,045.36
Share of profit of associates 619.29 552.42 - -
Net profit after taxes and share of profit of associates 1,667.30 1,597.78 - -
Other comprehensive income for the year, net of tax (5.51) 1.29 (5.22) 2.16
Total comprehensive income for the year 1,661.79 1,599.07 1,042.79 1,047.52

Previous years figures were rearranged and regrouped wherever necessary.

Ferro Alloy Business - Industry at a glance

Steel is the one of the multipurpose materials on the earth. Ferro alloy are mainly used in the production of steel. Ferro alloys are important additives in manufacturing of steel. The product mix of Ferro Alloys contains bulk Ferro Alloys viz., Ferro Manganese, Silicon Manganese, Ferro Silicon, Ferro Chrome, Charge Chrome, etc. and noble Ferro Alloys viz., Ferromolybdenum, Ferrovanadium, Ferrotungsten, Ferro- silicon magnesium, Ferro-boron and Ferro-titanium. Bulk ferro alloys is used for making stainless steel and Carbon steel while noble ferro alloys are made from rare earth minerals. Therefore, market of ferro alloys industries are dependent on the future of steel industry.

India is having various potentialities for the development of the steel industry mainly due to availability of skilled man power resources with low cost, abundant raw materials availability etc. The National Steel Policy announced in the year 2017 aims to encourage the industry to reach global benchmark. The government is setting up Steel Research and Technology Mission of India to spearhead research and development activities in the iron steel sector at an initial corpus of B200 crores.

Countrys finished steel production is anticipated to increase to 230 MT by 2030-31, the rise in demand likely to be supported by the growth of domestic market. Countrys steel industry is modern with state of arts steel mills and it has always keen for upgradation of older plants and development of energy efficiency level.

Governments 30% levy of export duty on iron ore will help supply of iron ore and budgetary thrive to develop infrastructure, housing, rail road, ports etc., will push the demand of the ferro alloy industries. National Steel Policy aims to envisage 300 MT steel making capacity and 160 kgs per capita consumption by 2030-31.

During the year under review your Company continued to focus on its fundamental strength i.e., productivity and quality. Strong emphasis were given on utilization of internal efficiencies together with an improvement in the sales mix which enabled your Company to withstand inflationary pressures on costs and profitability.

During the year under review, your company has sold 14,580 MT of Ferro Silicon as against 14,189 MT. While your Company constantly strives to increase stakeholders value, emphasis continues to be on delivering value to customers and strengthening processes while driving sustainable practices, resulting into expanding customer base.

Power Business

During the year under review, your Company generated 347 lacs KWH unit as compared to 689 lacs KWH unit which was captively consumed by the Company.

Further, M/s. Meghalaya Power Limited, an Associate Company has generated 1,701 lacs KWH units as compared to 1,901 lacs KWH units recorded in the previous year. During the Financial year 2018-19, the associate Company has posted PBT of H1,511.10 lacs and PAT of H1,269.16 lacs as against H1,054.27 lacs and H1,132.12 lacs respectively recorded in the previous financial year.

Opportunities & Threats, Risks and Concerns

Performance of the Company depends on the continued demand of our products in the steel and stainless steel industry. Governments initiatives to liberalise industrial policy, approval of National Steel policy and policy on Make in India and other infrastructural initiatives taken for the entire county is expected to have positive impact of the ferro alloy industry and thereby boosting demand for the companys product. Global stainless steel production growth is expected to average +2.6% p.a. upto 2021. The industry seems healthy in future as it is expanding at estimated CAGR of 5.9% during 2017-2025. The market for worldwide ferro alloys is projected to reach a valuation of USD 188.7 bn by the end of 2025 from its worth of USD 112.8 bn in 2016.

However, challenge faced by the domestic industry due to short availability of raw materials and very high power cost comparative with other countries, lack of infrastructural facilities for easy transportation of raw materials from mines to the location affects the sector. Policy of the Government and regulatory changes may also affect the domestic industry.

Despite these threats, Indian Ferro alloy industry has growth prospect due to rapid industrialization, urbanization and other infrastructural development. Various initiatives of the Government addressing their concern to help the industry and resolve the problems likely to have positive impact on the development of the industry.

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

During the year under review, on a full year basis, although on the demand side there has been concern, on the realization side, your company was able to achieve marginal improvement. The Company has posted total revenue of H13,443.78 Lacs and Profit before Tax of H1,479.38 Lacs in FY 2018-19 as against H12,550.69 Lacs and H1,598.68 Lacs respectively during the previous financial year. Your Company produced 15,219 MT of Ferro Silicon during the year under review as against 14,169 MT in the Financial Year 2017-18. Net realization has been improved marginally during the year under review as compared to previous financial year. However, due to increase in costs, profits declined during the year.

It is expected that after ongoing Lok Sabha election, infrastructural development in the country will get further motion and ferro alloy market of the country is likely to be revamped.

Share Capital

The paid up Equity Capital as on March 31, 2019 was H2,221.73 lacs. During the year under review, the Company has neither issued any shares with differential voting rights nor granted stock options or sweat equity shares.

Shares in Suspense Account

Disclosures of the shares lying in Companys Unclaimed Shares Suspense Account are given in the Report of Corporate Governance.

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.

Further, in terms of Section 134(3)(a) of the Companies Act, 2013 the Annual Return of the Company has been placed on the Companys website and can be accessed at the web link: http://shyamcenturyferrous.com/wp-content/uploads/2019/08/Annual-Return-2017-18.pdf.

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 Meetings are provided in the Corporate Governance Report.

Meetings of Independent Directors

During the year under review, meeting of Independent Directors was held on 15th March, 2019 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, Corporate Social Responsibility Committee, Stakeholders Relationship Committee and Finance 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 Companys website at the web link: http:// shyamcenturyferrous.com/wp-content/uploads/2015/04/ Whistie_Biower_Poiicy.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 shareholders interests, industry standards and relevant Indian corporate regulations. The details on the same are given in the Corporate Governance Report. The said policy may be referred to at the Companys website at the web link: http://shyamcenturyferrous.com/wp-content/ upioads/2019/04/SCFL_Remuneration-Poiicy.pdf

Code of Conduct

With intent to enhance integrity, ethics & transparency in governance of the Company your Company had adopted a Code of Conduct for Directors and Senior Management Personnel. The Code has been displayed on the Companys website www.shyamcenturyferrous.com

Compliance with the Secretarial Standard and Indian Accounting Standards

The Company has complied with the applicable Secretarial Standards as recommended by the Institute of Company Secretaries of India. The Company has also complied with all relevant Indian Accounting Standards referred to in Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standard) Rules, 2015 while prepairing the financial statements.

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, 2019 and of the profit of the Company for the year under review.

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

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

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

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

Auditors & Auditors Report

M/s. AKSD & Associates (Formerly M/s. Kailash B. Goel & Co.), Chartered Accountants, Statutory Auditors (Firm Registration no. 322460E) of the Company, will retire at the conclusion of the ensuing Annual General Meeting of the Company. Being eligible, they have offered themselves for re-appointment for a final term of two consecutive years from the date of ensuing Annual General Meeting till conclusion of tenth Annual General Meeting of the Company and have confirmed that their appointment, if made, will be in accordance to the provisions of section 141 read with section 139 of the Companies Act, 2013 and the rules framed there under for re-appointment of auditors. Members are requested to approve their re-appointment. Members are also requested to approve the Auditors Remuneration payable for the F.Y. 2019-20.

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. The Board of Directors re-appointed M/s. B. G. Chowdhury & Co., Cost Accountants, (Firm Registration number 000064) as Cost Auditors of the Company for conducting the audit of cost records of the Company for the Financial Year 2018-19.

The Board of Directors of the Company on the recommendation of the Audit Committee, appointed Messrs Sanjib Das & Associates, Cost Accountants (Firm Registration Number 100751), as the Cost Auditors of the Company for the Financial Year 2019-20 under section 148 of the Companies Act, 2013. Messrs Sanjib Das & Associates have confirmed that their appointment is within the limits of Section 141(3)(g) of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under section 141(3). The Audit Committee has also received a Certificate from the Cost Auditors certifying their independence and arms length relationship with the Company.

As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Members ratification for the remuneration payable to Messrs Sanjib Das & Associates, Cost Auditors for the Financial year 201920 is included in the Notice convening the Annual General Meeting.

The cost audit report for the Financial Year 2017-18 was filed with the Ministry of Corporate Affairs on 26.09.2018.

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 selfexplanatory and do not call for any further comments.

Particulars of Loans, Guarantees or Investments

During the year under review, your Company has not made any investment or provided guarantee or security in connection with a loan to any person exceeding the limit specified in 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 arms 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. In terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, the particulars of the material contract or arrangement entered into by the Company with related parties as referred to in Section 188 in Form AOC-2 is attached as Annexure 3 of this report. However, the details of the transactions with the Related Party are provided in the Companys 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 Companys 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 2018-19.

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:

• All Y-Chutes in boiler has been modified by changing the design & increasing the thickness of the sheet material resulted to improve the boiler efficiency.

• Introduced new Service Air Compressor with ducting modification resulted reduction in air leakage & auxiliary power consumption

• New Diesel Tank construction has done resulted to arrest the spillage of oil.

(B) Steps taken toward Technical Absorption:

• In ID Fan 1&2 delivery line MS bellow is replaced by SS sheet bellow which resulted reduction in ash deposition, corrosion & maximize the life span of the material

• In APH outlet line MS bellow is replaced by SS sheet bellow which resulted reduction in ash deposition, corrosion & maximize the life span of the material.

• In DM plant, Degasser pump body & impeller modified by SS sheet material resulted to minimize the chemical deposition & maximize the life span of the equipment.

• In Steam Turbine MOP suction line modification has done resulted to improve the turbine efficiency.

• In SAF#3 electrode, lower metal has been fitted resulted to improve the Furnace efficiency.

• SAF chimney ducting has been modified resulted improve the temperature in Furnace area.

• Centre chute has modified by new centre hood assembly in SAF#3 resulted to improve the Furnace efficiency.

• 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 there was no Capital expenditure and no Revenue Expenditure in Research & Development.

(C) Foreign Exchange Earnings And Outgo

During the period under review, Foreign Exchange

Earning was B150.77 lacs (Previous Year NIL) and Foreign

Exchange Outgo was NIL (Previous Year NIL).

Corporate Social Responsibility Initiatives (CSR)

Your Company is promoting education and providing nonformal 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 Company has also contributed towards welfare of animals.

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 Agrawal 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-4.

The CSR Policy of the Company is available on the Companys website under the weblink: httpV/shyamcenturyferrous. com/wp-content/upioads/2015/04/Corporate_SociaL Responsibility_Policy.pdf

Evaluation of the Boards 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 Boards functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

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

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

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

Directors and Key Managerial Personnel

Pursuant to Regulation 17(1A) of SEBI Listing Regulations, 2018 as amended, no listed entity shall appoint a person or continue the directorship of any person as a non-executive Director who has attained the age of 75 years unless a special resolution is passed in this regard. Accordingly, the shareholders of the Company approved the continuation of Mr. Mangilal Jain who was appointed as an Independent Director of the Company for a period of 5 years w.e.f. April 01, 2015 and who is above the age of 75 years, for the remaining period of his existing term of directorship, i.e. upto March 31, 2020 as Independent Director of the Company by way of special resolution passed through postal ballot including e-voting concluded on 27th March, 2019.

Mr. Santanu Ray was appointed as an Independent Director of the Company by the shareholders of the Company upto 31st March, 2020. On the recommendation of the Nomination & Remuneration Committee and based on the performance evaluation, the Board of Directors re-appointed Mr. Santanu Ray as an Independent Director for a further period of 1 (one) consecutive year effective from 1st April, 2020 upto 31st March, 2021 subject to approval of the shareholders of the Company by way Special Resolution at the ensuing Annual General Meeting.

Mrs. Plistina Dkhar was appointed as an Independent Director of the Company by the shareholders of the Company upto 31st March, 2020. On the recommendation of the Nomination & Remuneration Committee and based on the performance evaluation, the Board of Directors reappointed Mrs. Plistina Dkhar as an Independent Director for a further period of 5 (five) consecutive years effective from 1st April, 2020 upto 31st March, 2025 subject to approval of the shareholders of the Company by way Special Resolution at the ensuing Annual General Meeting.

Mr. Santanu Ray and Mrs. Plistina Dkhar have given their consent for re-appointment and have confirmed that they still retain their status as Independent Directors and they do not suffer from any disqualifications for re-appointment. Requisite Notices under Section 160 of the Companies Act, 2013 have been received from the members in respect of their re-appointment.

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.

The following personnel are Key Managerial Personnel of the Company as at end of Financial year:

Sl. No. Name Category
1 Mr. M.V.K. Nageswara Rao Chief Executive Officer
2 Mr. Uday Bahadur Chetri * Chief Financial Officer
3 Ms. Neha Agarwal Company Secretary

* Mr. Uday Bahadur Chetri, Chief Financial Officer resigned from the services of the Company w.e.f. close of the business hours of 30th April, 2019.

Your Board records its appreciation for valuable services rendered by Mr. Chetri during his association with the Company.

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 and the Listing Regulations. 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 thereunder and the Listing Regulations 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 familiarise them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. They are periodically updated about the development which takes place in the Company. The Independent Directors have been issued Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and commitments etc. The familiarization program is available on the Companys website under the weblink: http:// shyamcenturyferrous.com/wp-content/uploads/2015/10/ Familiarization_Programme_for_Independent_Directors.pdf

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 1,701 Lacs KWH units of power.

Changes in Nature of Business, if any

There has not been any change in the nature of business.

Audited Financial Statements of the Companys 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, 2019 is annexed in the Form AOC - 1 and marked as Annexure-5.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company have been prepared in accordance to requirements of Indian Accounting Standards (Ind AS), 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.

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 Companys 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.

Credit Ratings

Your Company enjoys a sound reputation for its prudent financial management and its ability to meet financial obligations. CARE Ratings, has affirmed the Companys short term rating to "CARE A2+" (pronounced CARE A two plus, outlook stable) and reaffirmed the long term rating at "CARE A-, Stable" (pronounced CARE Single A minus, outlook stable).

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.

Details of Significant Changes (i.e., Changes of 25% or more) in Key Financial Ratio and Change in Return on Networth Alongwith Detailed Explanations

Key Financial Ratios FY 2018-19 FY 2017-18 % change Explanation for significant changes
Debtors Turnover ratio 4.37 4.14 5.71 NA
Inventory Turnover ratio 5.00 3.47 43.91 Inventory has been increased due to the fall in prices and demand of ferro silicon in the last quarter of the year
Interest Coverage ratio 12.42 10.32 20.43 NA
Current ratio 5.18 2.05 152.87 Due to the decrease in Debtor cycle there was a drastic decrease in utilization of Cash Credit limit and other Current Liabilities.
Debt Equity ratio 0.017 0.025 (33.02) Debt was reduced due to its repayment and net worth increased on account of profit earned during the year.
Operating Profit Margin (%) 0.11 0.13 (14.49) NA
Net Profit Margin (%) 7.86 8.42 (6.68) NA
Return on Net Worth 0.09 0.10 (8.82) Due to the increase in the prices of coal and other Raw materials

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- 6 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") and has constituted the Committee with internal and external members. 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.

Chief Executive Officer (CEO) 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 certification has been submitted to the Board and a copy thereof is contained in this Annual Report.

Risk Management

Risk management refers to the practice of identifying potential risks in advance, analyzing them and taking precautionary steps to reduce the risk. 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.

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 changes in human resources, industrial relations and number of people employed.

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.

Cautionary Statement

Statements in this report describing the Companys 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 Companys 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 Companys 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 Aditya Vimalkumar Agrawal
Director Director
(DIN: 00266072) (DIN: 03330313)
Place: Kolkata
Date: 7th May, 2019