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Shyam Century Ferrous Ltd.

BSE: 539252 Sector: Metals & Mining
NSE: SHYAMCENT ISIN Code: INE979R01011
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VOLUME 2500
52-Week high 6.79
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Mkt Cap.(Rs cr) 39
Buy Price 1.77
Buy Qty 10000.00
Sell Price 2.04
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OPEN 1.77
CLOSE 1.77
VOLUME 2500
52-Week high 6.79
52-Week low 1.77
P/E
Mkt Cap.(Rs cr) 39
Buy Price 1.77
Buy Qty 10000.00
Sell Price 2.04
Sell Qty 3955.00

Shyam Century Ferrous Ltd. (SHYAMCENT) - Director Report

Company director report

MANAGEMENT DISCUSSION AND ANALYSIS

Your Directors have pleasure in presenting the Eighth Annual Report of the Companytogether 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 endedMarch 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 13443.78 12550.69 13443.78 12550.69
Profit before Depreciation Interest and Tax 1885.10 2019.97 1885.10 2019.97
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 1479.38 1598.68 1479.38 1598.68
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 1048.01 1045.36 1048.01 1045.36
Share of profit of associates 619.29 552.42 - -
Net profit after taxes and share of profit of associates 1667.30 1597.78 - -
Other comprehensive income for the year net of tax (5.51) 1.29 (5.22) 2.16
Total comprehensive income for the year 1661.79 1599.07 1042.79 1047.52

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 mainlyused in the production of steel. Ferro alloys are important additives in manufacturing ofsteel. The product mix of Ferro Alloys contains bulk Ferro Alloys viz. Ferro ManganeseSilicon Manganese Ferro Silicon Ferro Chrome Charge Chrome etc. and noble Ferro Alloysviz. Ferromolybdenum Ferrovanadium Ferrotungsten Ferro- silicon magnesium Ferro-boronand Ferro-titanium. Bulk ferro alloys is used for making stainless steel and Carbon steelwhile noble ferro alloys are made from rare earth minerals. Therefore market of ferroalloys industries are dependent on the future of steel industry.

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

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

Government's 30% levy of export duty on iron ore will help supply of iron ore andbudgetary thrive to develop infrastructure housing rail road ports etc. will push thedemand of the ferro alloy industries. National Steel Policy aims to envisage 300 MT steelmaking capacity and 160 kgs per capita consumption by 2030-31.

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

During the year under review your company has sold 14580 MT of Ferro Silicon asagainst 14189 MT. While your Company constantly strives to increase stakeholder's valueemphasis continues to be on delivering value to customers and strengthening processeswhile driving sustainable practices resulting into expanding customer base.

Power Business

During the year under review your Company generated 347 lacs KWH unit as compared to689 lacs KWH unit which was captively consumed by the Company.

Further M/s. Meghalaya Power Limited an Associate Company has generated 1701 lacsKWH units as compared to 1901 lacs KWH units recorded in the previous year. During theFinancial year 2018-19 the associate Company has posted PBT of H1511.10 lacs and PAT ofH1269.16 lacs as against H1054.27 lacs and H1132.12 lacs respectively recorded in theprevious financial year.

Opportunities & Threats Risks and Concerns

Performance of the Company depends on the continued demand of our products in the steeland stainless steel industry. Government's initiatives to liberalise industrial policyapproval of National Steel policy and policy on 'Make in India' and other infrastructuralinitiatives taken for the entire county is expected to have positive impact of the ferroalloy industry and thereby boosting demand for the company's product. Global stainlesssteel production growth is expected to average +2.6% p.a. upto 2021. The industry seemshealthy in future as it is expanding at estimated CAGR of 5.9% during 2017-2025. Themarket for worldwide ferro alloys is projected to reach a valuation of USD 188.7 bn by theend of 2025 from its worth of USD 112.8 bn in 2016.

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

Despite these threats Indian Ferro alloy industry has growth prospect due to rapidindustrialization urbanization and other infrastructural development. Various initiativesof the Government addressing their concern to help the industry and resolve the problemslikely to have positive impact on the development of the industry.

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

Performance and Operations Review

During the year under review on a full year basis although on the demand side therehas been concern on the realization side your company was able to achieve marginalimprovement. The Company has posted total revenue of H13443.78 Lacs and Profit before Taxof H1479.38 Lacs in FY 2018-19 as against H12550.69 Lacs and H1598.68 Lacs respectivelyduring the previous financial year. Your Company produced 15219 MT of Ferro Siliconduring the year under review as against 14169 MT in the Financial Year 2017-18. Netrealization has been improved marginally during the year under review as compared toprevious financial year. However due to increase in costs profits declined during theyear.

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

Share Capital

The paid up Equity Capital as on March 31 2019 was H2221.73 lacs. During the yearunder review the Company has neither issued any shares with differential voting rightsnor granted stock options or sweat equity shares.

Shares in Suspense Account

Disclosures of the shares lying in Company's Unclaimed Shares Suspense Account aregiven 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 extractof 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 ofthe Company has been placed on the Company's 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 wereconvened and held. The intervening gap between the Meetings was within the periodprescribed under the Companies Act 2013. The details of the Meetings are provided in theCorporate Governance Report.

Meetings of Independent Directors

During the year under review meeting of Independent Directors was held on 15th March2019 wherein the performance of the Non-Independent Directors and the Board as a whole wasreviewed. The Independent Directors at their meeting also inter alia assessed thequality quantity and timeliness of flow of information between the Company management andthe Board of Directors of the Company.

Committees of the Board

The composition and terms of reference of the Audit Committee Nomination andRemuneration Committee Corporate Social Responsibility Committee StakeholdersRelationship Committee and Finance Committee have been furnished in the CorporateGovernance Report forming part of this Annual Report. There has been no instance where theBoard has not accepted the recommendations of the Audit Committee and Nomination andRemuneration Committee.

Whistle Blower Policy/ Vigil Mechanism

The Company has formed a Whistle Blower Policy/ Vigil Mechanism as required underSection 177 of the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. A Vigil (Whistle Blower) mechanism provides a channel tothe employees and Directors to report to the management concerns about unethical behavioractual or suspected fraud or violation of the Codes of conduct or policy. The mechanismprovides for adequate safeguards against victimization of employees and Directors to availof the mechanism and also provide for direct access to the Chairman of the Audit Committeein exceptional cases. The said policy may be referred to at the Company's website at theweb link: http:// shyamcenturyferrous.com/wp-content/uploads/2015/04/Whistie_Biower_Poiicy.pdf

Policy on Appointment and Remuneration of Directors Key Managerial Personnel andSenior Management Employees

The Board has framed a Remuneration Policy for selection appointment and remunerationof Directors Key Managerial Personnel and Senior Management Employees. The remunerationpolicy aims to enable the company to attract retain and motivate highly qualified membersfor the Board and at other executive levels. The remuneration policy seeks to enable theCompany to provide a well-balanced and performance-related compensation package takinginto account shareholders' interests industry standards and relevant Indian corporateregulations. The details on the same are given in the Corporate Governance Report. Thesaid policy may be referred to at the Company's 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 theCompany your Company had adopted a Code of Conduct for Directors and Senior ManagementPersonnel. The Code has been displayed on the Company's websitewww.shyamcenturyferrous.com

Compliance with the Secretarial Standard and Indian Accounting Standards

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

Directors' Responsibility Statement

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

• In the preparation of Annual Accounts the applicable Accounting Standards havebeen followed along with the proper explanation relating to material departures if any.

• The Directors have selected such accounting policies and have applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31st March 2019and of the profit of the Company for the year under review.

• The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe 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 theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

• The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.

Auditors & Auditors' Report

M/s. AKSD & Associates (Formerly M/s. Kailash B. Goel & Co.) CharteredAccountants Statutory Auditors (Firm Registration no. 322460E) of the Company willretire at the conclusion of the ensuing Annual General Meeting of the Company. Beingeligible they have offered themselves for re-appointment for a final term of twoconsecutive years from the date of ensuing Annual General Meeting till conclusion of tenthAnnual General Meeting of the Company and have confirmed that their appointment if madewill be in accordance to the provisions of section 141 read with section 139 of theCompanies 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 toapprove the Auditors' Remuneration payable for the F.Y. 2019-20.

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

Cost Auditors

Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 the cost audit records maintained by the Companyin respect of its manufacturing activity is required to be audited. The Board of Directorsre-appointed M/s. B. G. Chowdhury & Co. Cost Accountants (Firm Registration number000064) as Cost Auditors of the Company for conducting the audit of cost records of theCompany for the Financial Year 2018-19.

The Board of Directors of the Company on the recommendation of the Audit Committeeappointed Messrs Sanjib Das & Associates Cost Accountants (Firm Registration Number100751) as the Cost Auditors of the Company for the Financial Year 2019-20 under section148 of the Companies Act 2013. Messrs Sanjib Das & Associates have confirmed thattheir appointment is within the limits of Section 141(3)(g) of the Companies Act 2013 andhave also certified that they are free from any disqualifications specified under section141(3). The Audit Committee has also received a Certificate from the Cost Auditorscertifying their independence and arm's length relationship with the Company.

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

The cost audit report for the Financial Year 2017-18 was filed with the Ministry ofCorporate 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 hasappointed M/s. MKB & Associates a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexedherewith marked Annexure-2. The report is selfexplanatory and do not call for any furthercomments.

Particulars of Loans Guarantees or Investments

During the year under review your Company has not made any investment or providedguarantee or security in connection with a loan to any person exceeding the limitspecified in Section 186 of the Companies Act 2013.

Details of Investments covered under the provisions of Section 186 of the CompaniesAct 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 ordinarycourse of business and are in compliance with the applicable provisions of the CompaniesAct 2013. There are no materially significant related party transactions made by theCompany with Promoters Directors Key Managerial Personnel or other designated personswhich may have a potential conflict with the interest of the Company at large. In terms ofSection 134 of the Act read with Rule 8 of the Companies (Accounts) Rules 2014 theparticulars of the material contract or arrangement entered into by the Company withrelated parties as referred to in Section 188 in Form AOC-2 is attached as Annexure 3 ofthis report. However the details of the transactions with the Related Party are providedin 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 repetitivein nature. A statement of all related party transactions is presented before the AuditCommittee on a quarterly basis specifying the nature value and terms and conditions ofthe transactions.

A policy on 'Related Party Transactions' has been devised by the Company which may bereferred 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 recommendany 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 exchangeearnings and outgo as stipulated in section 134 (3) (m) of the Act and rules framed thereunder is mentioned below:

(A) Steps taken toward Conservation of Energy:

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

• Introduced new Service Air Compressor with ducting modification resultedreduction 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 whichresulted reduction in ash deposition corrosion & maximize the life span of thematerial

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

• In DM plant Degasser pump body & impeller modified by SS sheet materialresulted to minimize the chemical deposition & maximize the life span of theequipment.

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

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

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

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

• The Company has developed a Research & Development cell for carrying outR&D Projects in the plant with specific objective of development of advanced systemsfor quality improvement. During the year under review there was no Capital expenditure andno 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 andtribal people through One Teacher School (OTS) i.e. Ekal Vidyalaya run by the Friends ofTribal 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 ofMembers 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 135of Companies Act 2013 and rules framed thereunder is annexed herewith and markedAnnexure-4.

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

Evaluation of the Board's Performance

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

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

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

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

The Directors expressed their satisfaction over the evaluation process and resultsthereof.

Directors and Key Managerial Personnel

Pursuant to Regulation 17(1A) of SEBI Listing Regulations 2018 as amended no listedentity shall appoint a person or continue the directorship of any person as anon-executive Director who has attained the age of 75 years unless a special resolution ispassed in this regard. Accordingly the shareholders of the Company approved thecontinuation of Mr. Mangilal Jain who was appointed as an Independent Director of theCompany for a period of 5 years w.e.f. April 01 2015 and who is above the age of 75years for the remaining period of his existing term of directorship i.e. upto March 312020 as Independent Director of the Company by way of special resolution passed throughpostal ballot including e-voting concluded on 27th March 2019.

Mr. Santanu Ray was appointed as an Independent Director of the Company by theshareholders of the Company upto 31st March 2020. On the recommendation of the Nomination& Remuneration Committee and based on the performance evaluation the Board ofDirectors re-appointed Mr. Santanu Ray as an Independent Director for a further period of1 (one) consecutive year effective from 1st April 2020 upto 31st March 2021 subject toapproval of the shareholders of the Company by way Special Resolution at the ensuingAnnual General Meeting.

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

Mr. Santanu Ray and Mrs. Plistina Dkhar have given their consent for re-appointment andhave confirmed that they still retain their status as Independent Directors and they donot suffer from any disqualifications for re-appointment. Requisite Notices under Section160 of the Companies Act 2013 have been received from the members in respect of theirre-appointment.

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

The following personnel are Key Managerial Personnel of the Company as at end ofFinancial 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 theCompany w.e.f. close of the business hours of 30th April 2019.

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

Declaration by Independent Directors

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and the ListingRegulations. Mr. Santanu Ray Mr. Mangilal Jain and Mrs. Plistina Dkhar are IndependentDirectors on the Board of your Company. In the opinion of the Board and as confirmed bythese Directors they fulfill the conditions specified in section 149 of the Act and theRules made thereunder and the Listing Regulations about their status as IndependentDirector of the Company.

Familiarization Programme Undertaken for Independent Directors

In order to enable the Independent Directors to perform their duties optimally theBoard has devised a familiarization programme for the Independent Directors to familiarisethem with the Company their roles rights responsibilities in the Company nature of theindustry in which the Company operates business model of the Company etc. They areperiodically updated about the development which takes place in the Company. TheIndependent Directors have been issued Letter of Appointment setting out in detail theterms of appointment duties responsibilities and commitments etc. The familiarizationprogram is available on the Company's 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 Limitedcontinues to remain associate company.

Meghalaya Power Limited is engaged in generation of Power. During the year under reviewthe Company generated 1701 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 Company's Associate

Pursuant to sub-section (3) of section 129 of the Act the statement containing salientfeatures of the financial statement of associate company Meghalaya Power Limited (MPL) forthe 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 accordanceto requirements of Indian Accounting Standards (Ind AS) as prescribed by the Institute ofChartered 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 inspectionat the Registered Office of the Company during office hours between 11 A.M. and 1 P.M. Asper the provisions of Section 136 of the Companies Act 2013 separate audited financialstatements of its associate company are being placed on its website www.shyamcenturyferrous.com and the Company will arrange to send the financial statements ofits associate company upon written request from the shareholders to their registeredaddress.

Deposits

During the year under report the Company has not accepted any deposits from public orfrom any of the Directors of the Company or their relatives falling under ambit of Section73 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 theRegulators/Courts impacting materially the going concern status or future operations ofthe Company.

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

Credit Ratings

Your Company enjoys a sound reputation for its prudent financial management and itsability to meet financial obligations. CARE Ratings has affirmed the Company's short termrating to "CARE A2+" (pronounced CARE A two plus outlook stable) and reaffirmedthe long term rating at "CARE A- Stable" (pronounced CARE Single A minusoutlook stable).

Adequacy of Internal Financial Control

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

The Internal Audit Department of the Company periodically reviews the effectiveness andefficacy of Internal Control Systems and procedures. Audits are finalized and conductedbased on internal risk assessments. Significant deviations from the standard proceduresare brought to the notice of the Board periodically and corrective measures arerecommended for implementation. All these steps facilitate timely detection of anyirregularities frauds and errors and early remedial measures to be undertaken so that nomonetary losses are sustained. Significant audit observations

if any and corrective actions thereon are presented to the Audit Committee of theBoard.

Internal Control Over Financial Reporting

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

Details of Significant Changes (i.e. Changes of 25% or more) in Key Financial Ratioand 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 requiredunder 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 statementcontaining particulars of employees as required under Section 197 of Companies Act 2013read with Rule 5 (2) and (3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed herewith and marked Annexure- 6 and forms part of thisreport.

Policy on Prevention of Sexual Harassment

The Company values the integrity and dignity of its employees. The Company has put inplace a 'Policy on Prevention of Sexual Harassment' as per the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 ("Sexual HarassmentAct") and has constituted the Committee with internal and external members. We affirmthat adequate access has been provided to any complainants who wish to register acomplaint under the policy. No complaint was received during the year.

Corporate Governance

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

Chief Executive Officer (CEO) Certification

As required under Regulation 17(8) of the Listing Obligations and DisclosuresRequirements formulated by Securities and Exchange Board of India (SEBI) the CEOcertification has been submitted to the Board and a copy thereof is contained in thisAnnual Report.

Risk Management

Risk management refers to the practice of identifying potential risks in advanceanalyzing them and taking precautionary steps to reduce the risk. The Company has evolveda risk management framework to identify assess and mitigate the key risk factors of thebusiness. The Board of the Company is kept informed about the risk management of theCompany.

Human Resource Development & Industrial Relations

The Company has always provided a congenial atmosphere for work to all sections ofsociety. It has provided equal opportunities of employment to all irrespective to theircaste religion color marital status and sex. The Company believes that human capital ofthe Company is its most valuable assets and its human resource policies are alignedtowards this objective.

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

During the year under review there has not been any material changes in humanresources industrial relations and number of people employed.

Green Initiatives In Corporate Governance

Ministry of Corporate Affairs has permitted Companies to send copies of Annual reportNotices etc. electronically to the email IDs of shareholders. Your Company has arrangedto send the soft copies of these documents to the registered email IDs of theshareholders wherever applicable. In case any shareholder would like to receive physicalcopies of these documents the same shall be forwarded upon receipt of written request inthis respect.

Cautionary Statement

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

Acknowledgement

Your Directors take this opportunity to express their deep sense of gratitude to theBanks Central and State Governments and their departments and the Local AuthoritiesCustomers Vendors Business partners/associates and Stock Exchanges for their continuedguidance and support.

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