SIXTY SECOND ANNUAL REPORT 2017-18
FERRO ALLOYS CORPORATION LIMITED CORPORATE INFORMATION
Board of Director Executive Bankers Bank of India R. K. SARAF O. P. BANKA Central Bank of India Chairman & Managing Director Director (Finance) State Bank of India Syndicate Bank Manoj Saraf Yashpal Mehta State Bank of Bikaner & Jaipur Managing Director Chief Financial Officer Solicitor Vineet Saraf P.G.Suresh Kumar Mulla & Mulla and Chief Executive Craige Blunt & Caroe Ashish Saraf (Charge Chrome Plant) Bhaishankkar Kanga and Joint Managing Director Girdharilal R. K. Singh Rohit Saraf Sr. General Manager Auditors Joint Managing Director (Mines) K.K. Mankeshwar & Co. Chartered Accountants Resolution Professional A.S. Kapre Internal Auditors K. G. Somani M/s. Das & Prasad Umesh Khaitan Chartered Accountans Umesh Khaitan Pinaki Misra Secretarial Auditors M. B. Thaker M/s. Ashish Saxena & Co. Company Secretaries Urmila Gupta Registrars & Share Transfer Agents (for both Physical & Electronic) Ritesh Chaudhry Sr. General Manager (Legal) & Beetal Financial & Computer Services Pvt. Ltd. Company Secretary Beetal House, 3rd Floor, 99 Madangir,Behind LSC, New Delhi – 110 062 Phone No.91-11-29961281-83 Fax No. 91-11-29961284 E-mail: [email protected] [email protected]
Contents: Corporate Information and Index: Notice to Members...... 3 Standlone Balance Sheet, Profit & Loss & Notes...... 52 Report to the members under section 134 to the companies Act, 2013...... 8 Consolidated Auditors’ Report to Members...... 89 Management Discussions and Analysis...... 32 Consolidated Balance Sheet, Statement of Profit & Loss & Notes...... 93 Corporate Governance Report...... 34 Principal Addresses of the Company...... 126 Auditors’ Report to Members (Standlone) ...... 47 SIXTY SECOND Annual Report NOTICE TO MEMBERS 62 2017-18
Notice is hereby given that the SIXTY SECOND ANNUAL Number: 000113), as Cost Auditor of the Company for GENERAL MEETING of the Members of the Company will be FY 2018-19 on a remuneration of Rs. 70,000/- (Rupees held at the Registered Office of the Company at D.P. Nagar, Seventy Thousand only) per annum plus applicable taxes Randia – 756135, Dist. Bhadrak, Odisha on Tuesday, the 18th and out of pocket expenses be and is hereby ratified.” day of September, 2018 at 4 p.m. to transact, with or without modification as may be permissible, the following business: Registered Office: By Order of Resolution Professional D.P. Nagar for Ferro Alloys Corporation Limited ORDINARY BUSINESS: P.O. Randia - 756135 Distt. Bhadrak, Odisha Ritesh Chaudhry 1. To receive, consider and adopt the Audited Financial Sr. General Manager (Legal) & Statement of the Company for the financial year ended Company Secretary 31st March, 2018, the Report to the members under section 134 of the Companies Act, 2013 and the Auditors’ Resolution Professional Report thereon and the audited consolidated financial Dated : 14th August, 2018 statement of the Company for the Financial Year ended Place : Noida – 201301, U.P. K.G. Somani 31st March, 2018. NOTES: 2. To appoint a Director in the place of Mr. Vineet Vithaldas Saraf (DIN:00004715), who retires from Office by rotation 1. The Explanatory Statement pursuant to Section 102 of and, being eligible, offers himself for re-appointment. the Companies Act, 2013, which sets out details relating to Item no.4 being Special Business at the meeting, is 3. To consider and, if thought fit, to pass the following annexed hereto. resolution which will be proposed as an Ordinary Resolution: 2. The Register of Members and the Share Transfer books of the Company will remain closed from Saturday, the 15th “RESOLVED THAT pursuant to provision of section 139 September, 2018 to Tuesday, the 18th September, 2018 of the Companies Act 2013 (as amended or re-enacted (both days inclusive) for annual closing. from time to time) and other applicable provisions, if any, of the Companies Act 2013 read with the Companies 3. A MEMBER ENTITLED TO ATTEND AND VOTE AT (Audit and Auditors) Rules, 2014 (including any statutory THE MEETING IS ENTITLED TO APPOINT A PROXY modification(s) or re-enactments thereof for the time / PROXIES TO ATTEND AND VOTE INSTEAD OF being in force) and the resolution passed by the members HIMSELF/HERSELF. SUCH A PROXY/ PROXIES NEED of the Company at the 61st Annual General Meeting of NOT BE A MEMBER OF THE COMPANY. A person can the Company, the appointment of M/s K.K. Mankeshwar act as proxy on behalf of members not exceeding fifty (50) & Co. Chartered Accountants, (Firm Registration No. and holding in the aggregate not more than ten percent of 106009W) as Auditors of the Company to hold office till the total share capital of the Company. The instrument of the conclusion of the 66th Annual General Meeting of Proxy in order to be effective, should be deposited at the the Company be and is hereby ratified for the remaining Registered Office of the Company, duly completed and period of their tenure, as Auditors of the Company at a signed, not less than 48 hours before the commencement remuneration plus applicable taxes and reimbursement of of the meeting. A Proxy form is sent herewith. Proxies expenses incurred by them incidental to their functions, submitted on behalf of the companies, societies etc., as may be decided by Resolution Professional and/or the must be supported by an appropriate resolution/authority, Board of Directors, as applicable, in consultation with the as applicable. said Auditors. 4. To prevent fraudulent transactions, members are advised RESOLVED FURTHER THAT the Company Secretary is to exercise due diligence and notify the Company of any hereby directed to file the relevant e-form with the Ministry change in address or demise of any member as soon as of Corporate Affairs and to take all such further actions as possible. Members are also advised not to leave their may be required in this connection.” demat account(s) dormant for long. Periodic statement of holdings should be obtained from the concerpned SPECIAL BUSINESS: Depository Participant and holdings should be verified.
4. To consider, and if thought fit, to pass with or without 5. The Securities and Exchange Board of India (SEBI) has modification(s), the following resolution as an Ordinary mandated the submission of Permanent Account Number resolution: (PAN) by every participant in securities market. Members holding shares in electronic form are, therefore, requested “RESOLVED THAT pursuant to Section 141, 148 and to submit the PAN to their Depository Participants with other applicable provisions, if any, of the Companies Act, whom they are maintaining their demat accounts. 2013, and Rule 14 and other applicable rules, if any, of The Members holding shares in physical form can submit their Companies (Audit and Auditors) Rules, 2014 (including PAN details to the Company. any statutory modification(s) or re-enactment thereof for the time being in force), and subject to the approval of 6. Details under sub-clause 3 of Regulation 36 and other Central Government as may be required, the appointment applicable regulations, if any, of the Securities and of M/s Niran & Co., Cost Accountants (Registration Exchange Board of India (Listing Obligations And
Ferro Alloys Corporation Limited 3 SIXTY SECOND Annual Report NOTICE TO MEMBERS 62 2017-18
Disclosure Requirements) Regulations, 2015 in respect shareholders’ of the Company, holding shares of the Directors seeking appointment/re-appointment either in physical form or in dematerialized form, at the Annual General Meeting, forms integral part of as on the cut-off date (record date) of Tuesday, 11th Report on Corporate Governance. The Director(s) have September, 2018 may cast their vote electronically. furnished the requisite declarations for their appointment/ The e-voting module shall be disabled by CDSL for re-appointment. voting thereafter.
7. Electronic copy of the Annual Report for 2017-18 is (ii) Shareholders who have already voted prior to the being sent to all the members whose email IDs are meeting date would not be entitled to vote at the registered with the Company/Depository Participants(s) meeting venue. for communication purposes unless any member has requested for a hard copy of the same. For members who (iii) The shareholders should log on to the e-voting have not registered their email address, physical copies website www.evotingindia.com. of the Annual Report for 2017-18 is being sent in the (iv) Click on Shareholders. permitted mode. Complete copy of the Annual Report for 2017-18 shall be provided on request to members. (v) Now Enter your User ID
8. In accordance with the Companies Act, 2013 read with the a. For CDSL: 16 digits beneficiary ID, Rules framed there under Electronic copy of the Notice of the 62nd Annual General Meeting of the Company inter b. For NSDL: 8 Character DP ID followed by 8 alia indicating the process and manner of e-voting along Digits Client ID, with Attendance Slip and Proxy Form is being sent to all the members whose email IDs are registered with the c. Members holding shares in Physical Form Company/Depository Participants(s) for communication should enter Folio Number registered with the purposes unless any member has requested for a hard Company. copy of the same. For members who have not registered (vi) Next enter the Image Verification as displayed and their email address, physical copies of the Notice of the Click on Login. 62nd Annual General Meeting of the Company inter alia indicating the process and manner of e-voting along with (vii) If you are holding shares in demat form and had Attendance Slip and Proxy Form is being sent in the logged on to www.evotingindia.com and voted on permitted mode. an earlier voting of any company, then your existing password is to be used. 9. Members may also note that the Notice of the 62nd Annual General Meeting and the Annual Report for 2017-18 (viii) If you are a first time user follow the steps given will also be available on the Company’s website www. below: facorgroup.in/investorrelations/AGMNotice2017-18 for their download. The physical copies of the aforesaid For Members holding shares in Demat Form documents will also be available at the Company’s and Physical Form Registered Office in D.P. Nagar, Randia for inspection during normal business hours on working days. Even PAN Enter your 10 digit alpha-numeric PAN issued after registering for e-communication, members are by Income Tax Department (Applicable for entitled to receive such communication in physical form, both demat shareholders as well as physical upon making a request for the same, by post free of cost. shareholders) For any communication, the shareholders may also send • Members who have not updated their PAN requests to the Company’s investor email id: investors@ with the Company/Depository Participant are facorgroup.in requested to use the first two letters of their name and the 8 digits of the sequence number 10. Voting through electronic means in the PAN field. Sequence no is printed on the address slips. In compliance with provisions of Section 108 of the • In case the sequence number is less than 8 Companies Act, 2013 and Rule 20 of the Companies digits enter the applicable number of 0’s before (Management and Administration) Rules, 2014 and also the number after the first two characters of the 44(1) of the SEBI (Listing Regulations and Disclosure name in CAPITAL letters. Eg. If your name is Requirements) Regulations, 2015, the Company is Ramesh Kumar with sequence number 1 then pleased to provide members facility to exercise their right enter RA00000001 in the PAN field. to vote at the AGM by electronic means and the business Dividend Enter the Dividend Bank Details or Date of Birth may be transacted through e-Voting Services provided by Bank (in dd/mm/yyyy format) as recorded in your demat Central Depository Services (India) Limited. Details account or in the company records in order to login. The instructions for e-voting are as under: OR Date of Birth • If both the details are not recorded with the (i) The voting period begins on Saturday, 15th (DOB) depository or company please enter the September, 2018 at 9:00 a.m. and ends on Monday, member id / folio number in the Dividend Bank details field as mentioned in instruction (v). 17th September, 2018 at 5:00 p.m. During this period 4 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report NOTICE TO MEMBERS 62 2017-18
(ix) After entering these details appropriately, click on • After receiving the login details a Compliance “SUBMIT” tab. User should be created using the admin login and password. The Compliance User would be (x) Members holding shares in physical form will then able to link the account(s) for which they wish to directly reach the Company selection screen. vote on. However, members holding shares in demat form will now reach ‘Password Creation’ menu wherein • The list of accounts linked in the login should be they are required to mandatorily enter their login mailed to [email protected] and password in the new password field. Kindly note that on approval of the accounts they would be able this password is to be also used by the demat holders to cast their vote. for voting for resolutions of any other company • A scanned copy of the Board Resolution and on which they are eligible to vote, provided that Power of Attorney (POA) which they have company opts for e-voting through CDSL platform. It issued in favour of the Custodian, if any, should is strongly recommended not to share your password be uploaded in PDF format in the system for the with any other person and take utmost care to keep scrutinizer to verify the same. your password confidential. (xxi) In case you have any queries or issues regarding (xi) For Members holding shares in physical form, e-voting, you may refer the Frequently Asked the details can be used only for e-voting on the Questions (“FAQs”) and e-voting manual available resolutions contained in this Notice. at www.evotingindia.com, under help section or write (xii) Click on the EVSN no. 180814033 for Ferro Alloys an email to [email protected]. Corporation Limited. All grievances connected with the facility for voting (xiii) On the voting page, you will see “RESOLUTION by electronic means may be addressed to Mr. DESCRIPTION” and against the same the option Rakesh Dalvi, Deputy Manager, (CDSL) Central “YES/NO” for voting. Select the option YES or NO Depository Services (India) Limited, 16th Floor, as desired. The option YES implies that you assent Phiroze Jeejeebhoy Towers, Dalal Street, Fort, to the Resolution and option NO implies that you Mumbai-400001, or send an email to helpdesk. dissent to the Resolution. [email protected] or call 18002005533. (xiv) Click on the “RESOLUTIONS FILE LINK” if you wish In case of members receiving the physical copy: to view the entire Resolution details. (A) Please follow all steps from sl. no. (i) to sl. no. (xx) (xv) After selecting the resolution you have decided to above to cast vote. vote on, click on “SUBMIT”. A confirmation box will be (B) In case you have any queries or issues regarding displayed. If you wish to confirm your vote, click on e-voting, you may refer the Frequently Asked “OK”, else to change your vote, click on “CANCEL” Questions (“FAQs”) and e-voting manual available and accordingly modify your vote. at www.evotingindia.co.in under help section or write (xvi) Once you “CONFIRM” your vote on the resolution, an email to [email protected], as you will not be allowed to modify your vote. aforesaid. (xvii) You can also take a print of the votes cast by clicking (C) The e-voting period commences on Saturday, 15th on “Click here to print” option on the Voting page. September, 2018 (9:00 am) and ends on Monday, 17th September, 2018 (5:00 pm). During this period (xviii) If a demat account holder has forgotten the login shareholders of the Company, holding shares either password then Enter the User ID and the image in physical form or in dematerialized form, as on the verification code and click on Forgot Password & cut-off date (record date) of 11th September, 2018 enter the details as prompted by the system. may cast their vote electronically. Once the vote on a (xix) Shareholders can also cast their vote using resolution is cast by the shareholder, the shareholder CDSL’s mobile app m-Voting available for shall not be allowed to change it subsequently. android based mobiles. The m-Voting app can (D) The voting rights of shareholders shall be in be downloaded from Google Play Store. Please proportion to their shares of the paid up equity share follow the instructions as prompted by the capital of the Company as on the cut-off date (record mobile app while voting on your mobile. date) of Tuesday, 11th September, 2018, as referred (xx) Note for Non – Individual Shareholders and in preceding clause. Custodians (E) Mr. Ashish Saxena & Co., Company Secretaries, • Non-Individual shareholders (i.e. other than (Membership No. 6560) has been appointed as the Individuals, HUF, NRI etc.) and Custodian are Scrutinizer to scrutinize the e-voting process in a fair required to log on to www.evotingindia.com and and transparent manner. register themselves as Corporates. (F) The Results shall be declared on or after the AGM • A scanned copy of the Registration Form of the Company. The Results declared alongwith bearing the stamp and sign of the entity should the Scrutinizer’s Report shall be placed on the be emailed to [email protected]. Company’s website www.facorgroup.in within 2 (two)
Ferro Alloys Corporation Limited 5 SIXTY SECOND Annual Report NOTICE TO MEMBERS 62 2017-18
days of passing of the resolutions at the AGM of the ANNEXURE TO THE NOTICE Company and communicated to the BSE Limited. EXPLANATORY STATEMENT IN RESPECT OF THE (G) The Scrutinizer shall within a period not exceeding SPECIAL BUSINESS PURSUANT TO SECTION 102 OF three(3) working days from the conclusion of the THE COMPANIES ACT, 2013 e-voting period unblock the votes in the presence of at least 2 (two) witnesses not in the employment of Item no.4 the Company and make a Scrutinizer’s Report of the votes cast in favour or against, if any, forthwith to the The Resolution Professional has considered and decided the Resolution Professional of the Company. appointment of M/s Niran & Co., Cost Accountant (Registration No. 000113), as Cost Auditor of the Company for the financial 8. All documents referred to in the accompanying Notice and year 2018-19 on a remuneration of Rs.70,000/- (Rupees the Explanatory Statement shall be open for inspection Seventy Thousand only) per annum plus applicable taxes and at the Registered Office of the Company on all working out of pocket expenses and applicable taxes. days during normal business hours (9.00 am to 5.00 pm) except Saturdays, Sundays and Holidays up to and In accordance with the provisions of Section 148(3) of the Act including the date of the AGM of the Company. read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified by 9. Members are also informed that the complete particulars the shareholders of the Company. It is therefore, necessary for of the venue of the Meeting including route map and the members to pass and Ordinary Resolution under section prominent land mark for easy location has been specified 148 and other applicable provisions, if any, of the Companies in this notice. Further, the same has been hosted Act, 2013 as set out at Item no.4 of the Notice. along with the Notice on website www.facorgroup.in/ investorrelations/AGMNotice2016-17 of the company. None of the Directors / Key Managerial Personnel of the Company / their relatives / Resolution Professional, is, in any 11. The investors may contact the Company Secretary for way, concerned or interested, financially or otherwise, in the queries, if any. For this purpose, they may either write resolution set out at Item No. 4 of the Notice. to him at the Corporate office address at “Facor House A45-A50, Sector-16, Noida, U.P.-201301” or e-mail their The Ordinary Resolution set out at Item No. 4 of the Notice is grievances /queries to the Company Secretary at the commended for approval by the shareholders. following e-mail address: [email protected] Registered Office: By Order of Resolution Professional 12. Unclaimed/Unpaid dividends for the financial years D.P. Nagar for Ferro Alloys Corporation Limited referred herein below are due for transfer to Investor P.O. Randia - 756135 Education & Protection Fund constituted by the Central Distt. Bhadrak, Odisha Ritesh Chaudhry Government. Members may claim their unclaimed/unpaid Sr. General Manager (Legal) & dividends by approaching the Company’s Secretarial Company Secretary Department at “Facor House” Ground Floor, Plot no. A 45-50, Sector 16, Noida – 201301, U.P. for payment Resolution Professional thereof as the same will be transferred to the “Investor Dated : 14th August, 2018 Education & Protection Fund” of the Central Government, Place : Noida – 201301, U.P. K.G. Somani as aforesaid, on the following dates, post which no claim shall lie against the Company or the Investor Education & Protection fund: . Dividend for the year 2010-11, on or after 12th October, 2018 13. Members are also informed that the complete particulars of the venue of the Meeting including route map and prominent land mark for easy location has been specified in this notice. Further, the same has been hosted along with the Notice on website www.facorgroup.in/ investorrelations/AGMnotice of the company.
Registered Office: By Order of Resolution Professional D.P. Nagar for Ferro Alloys Corporation Limited P.O. Randia - 756135 Distt. Bhadrak, Odisha Ritesh Chaudhry Sr. General Manager (Legal) & Company Secretary Resolution Professional Dated : 14th August, 2018 Place : Noida – 201301, U.P. K.G. Somani
6 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report NOTICE TO MEMBERS 62 2017-18
Ferro Alloys Corporation Limited 7 SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18
REPORT TO THE MEMBERS UNDER SECTION 134 OF THE COMPANIES ACT, 2013 We present the 62nd Annual Report of your Company and the Audited Financial Statement of the Company for the financial year ended 31st March, 2018, and the audited Consolidated Financial Statements of the Company for the Financial Year ended 31st March, 2018. FINANCIAL RESULTS Despite sluggish business phase during the year under review, the Company improved it bottom line numbers which is reflected in the financial results for the year which are, as under: (` in lacs) Particulars Standalone Consolidated For the year For the year For the year For the year ended 31st ended 31st ended 31st ended 31st March, 2018 March, 2017 March, 2018 March, 2017 Income from Operations 53908.25 61144.23 53908.25 61144.23 Profit before tax & Depreciation/Amortization 7062.70 4458.30 7051.31 4462.45 Depreciation/Amortization 575.05 663.06 575.05 663.06 Provision for taxation 939.48 1598.37 939.48 1598.37 Net Profit/(Loss) for the year 5492.29 1994.58 5480.90 1994.64 Balance carried to Balance Sheet (1420.88) (6969.05) (1426.35) (6963.13) *Previous Year Figures have been regrouped/rearranged wherever necessary as the figures are rearranged/regroup due to IndAS. During the year under review, revenue from operations Regulations, 2016 invited expression of interest from eligible decreased by 11.83% to `53,908.25lacs (previous year bidders, who submitted the bids in accordance with the norms `61,144.23 lacswhich includes Inter unit transfers of set out by the Committee of Creditors after due deliberations. `10,884.32 lacs). However, EBIDTA increased by 32.82% to However, none of the bids tendered were accepted by the `8,049.18lacs (previous year `6,060.34 lacs) and profit after Committee of Creditors and accordingly the NCLT, Kolkata tax increased by 175.36% to `5,492.29 lacs (previous year had been informed that none of the bids received had been `(1,994.58 lacs) on the back of improvement in prices . accepted by the Committee of Creditors, on 2nd April, 2018. STATE OF COMPANY’S AFFAIRS Although in terms of the provisions of Insolvency and Bankruptcy Code, 2016 the 270 days’ period for Corporate Members may recall that the Company had executed Insolvency Resolution Process got over on 2nd April, 2018, Corporate Guarantee of ` 517.90 crores, in tranches, to Rural the said NCLT, Kolkata, vide its order 2nd April, 2018 directed Electrification Corporation Limited which had sanctioned a Resolution Professional to continue with the management of Term Loan of ` 517.90 crores to Facor Power Limited, the then the affairs of the Company. Further, post 2nd April, 2018 alsothe subsidiary of the Company against the security of the assets matter has been heard subsequently as well by NCLT, Kolkata of FPL, the personal guarantee of two of its directors and the but final decision in the matter has not been taken in view Corporate Guarantee of Ferro Alloys Corporation Limited, as of the direction from Hon’ble NCLAT, New Delhi in its order aforesaid. dated 5th March, 2018 that any order passed shall be subject Members may recall that pursuant to a default in the to decision of the appeals filed before it. repayment of the instalments and interest on the loan as COMPANY OPERATIONS AFTER APPOINTMENT OF per the repayment schedule and upon an application filed RESOLUTION PROFESSIONAL by REC under section 7 of the Insolvency and Bankruptcy The performance of the Company’s Charge Chrome Division Code, 2016 with the National Company Law Tribunal, Kolkata, and Mining Division during the year under the management of Corporate Insolvency Resolution Process was initiated against Resolution Professional has been satisfactory which is best the Company w.e.f 6th July, 2017 and Mr. K.G. Somani was demonstrated, as under: appointed as Resolution Professional. Particulars FY 2017-18 FY 2016-17 As reported last year, an appeal against the order of Hon’ble (w.e.f July, NCLT, Kolkata was filed before the Hon’ble National Company 2017 to Law Appellate Tribunal, New Delhi (NCLAT, New Delhi) which March 18) was heard from time to time with the last hearing done on 5th March, 2018. The order is awaited. Ferro Chrome Production in MT 53,728 69,370 Members may note that since Hon’ble NCLAT, New Delhi had not, during the hearings conducted before it, stayed the order Sales in MT 54,249 68,449 of the Hon’ble NCLT, Kolkata, the Resolution Professional Chrome Ore had, in compliance with the provisions of the Insolvency Production in MT 1,03,381 89,499 and Bankruptcy Code, 2016 and the Corporate Insolvency
8 Ferro Alloys Corporation Limited SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18
Further, the Resolution Professional continues to manage the is expected to boost India’s steel production.* Huge scope affairs of the Company post 2nd April, 2018 in terms of the order for growth is offered by India’s comparatively low per capita dated 2nd April, 2018 of the Hon’ble NCLT, Kolkata. During steel consumption and the expected rise in consumption the quarter ended 30th June, 2018, the performance of the due to increased infrastructure construction and the thriving Company has been, as under: automobile and railways sectors. (` in lacs) Rise in infrastructure development and automotive production Sr. Particulars Quarter ended Quarter ended is driving growth in the sector. Power and cement industries No. 30th June, 2018 30th June, 2017 also aiding growth in the metals and mining sector. Demand for iron and steel is set to continue, given the strong growth 1. Revenue from 15297.17 14476.53 expectations for the residential and commercial building operations industry. India holds a fair advantage in cost of production and conversion costs in steel and alumina. It’s strategic location 2. Expenses 13617.73 12325.19 enables convenient exports to developed as well as the fast 3. EBITDA 2229.67 2312.96 developing Asian markets. The Ministry of Steel aims to 4. Tax expense 684.88 (34.86) increase the steel production capacity to 300 million tonnes by 5. Net profit 1138.90 3805.56* 2030-31 from 128.28 million tonnes in 2016- 2017 indicating new opportunities in the sector. Under the Union Budget 2018- * Includes exceptional gain of Rs.2484.01 lacs arising due to 19, the Government added a surcharge of 10 per cent on sale of fixed assets. aggregate duties of customs on imported goods to strengthen INDUSTRIAL SCENARIO the domestic industry. India is currently the world’s 3rd largest producer of crude steel Government of India’s focus on infrastructure and restarting and is expected to become the 2nd largest producer of crude road projects is aiding the boost in demand for steel. Further, steel in the world soon. The country is also the 3rd largest likely acceleration in rural economy and infrastructure is consumer of finished steel (83.5 million tonnes in 2016) in expected to lead to growth in demand for steel. The Union the world preceded by China (681.0 million tonnes in 2016) Cabinet, Government of India has approved the National Steel and the USA (91.6 million tonnes in 2016). During January- Policy (NSP) 2017, which seeks to create a globally competitive December 2017, the country’s crude steel production crossed steel industry in India. NSP 2017 targets 300 million tonnes the 100 million tonnes mark for the first time in history, reaching (MT) steel-making capacity and 160 kgs per capita steel 101.371 million tonnes (provisional; source: JPC), a growth of consumption by 2030. Metal Scrap Trade Corporation (MSTC) 6.18% over same period of 2016. Limited and the Ministry of Steel have jointly launched an e-platform called ‘MSTC Metal Mandi’ under the ‘Digital India’ Steel is the most versatile material, which has made the initiative, which will facilitate sale of finished and semi-finished progress in every aspect on this earth possible. There are steel products. The Ministry of Steel is facilitating setting up of hundreds of varieties of steel because for each application an industry driven Steel Research and Technology Mission of it has to be made with specific properties to get the most India (SRTMI) in association with the public and private sector optimum usage. Though the basic constituent of steel is iron, steel companies to spearhead research and developmental it is the proportion of other elements in it, which gives each activities in the iron and steel industry at an initial corpus of Rs type of steel, certain specific properties. These elements are 200 crore (US$ 30 million). added in liquid iron in the form of Ferro alloys to get the desired composition and properties. Thus, Ferro alloys are important India has a significant profile in mining of chrome and additives in the production of steel and Ferro Alloys industry production of ferrochrome. On the back of depressed market is vitally linked for its growth and development to that of the conditions, the production of chrome ore progressively came Steel Industry. down in keeping with the policy to conserve the resource and mining disruptions due to court interventions and environment In the backdrop of the industry’s scenario as above, your issues. In any case, India with chrome ore reserve of 70 million company’s turnover for the current financial year, 2017-18 mt has only one per cent share of global proven deposit. stands at ` 52610.47 lacs as against ` 60537.38 lacs including Around 85 per cent of world reserve of this ore is found in Inter unit transfers of ` 10884.32 lacs last year. Exports during South Africa and Zimbabwe. As a result, India is importing the year were ` 30200.87 lacs. Further, your company has growing quantities of high grade chrome ore for blending with posted a profit before tax of ` 6487.65 lacs this year as against locally mined material. ` 3795.24 lacs in the previous year, reflecting a increase of 70.95%. FUTURE STRATEGY AND GROWTH PROSPECTS The period till 1947 thus witnessed a small but viable steel industry in the country, which operated with a capacity of about India is expected to overtake Japan to become the world’s 1 million tonne and was completely in the private sector. From second largest steel producer soon, and aims to achieve 300 the fledgling one million tonne capacity status at the time of million tonnes of annual steel production by 2025-30. India independence, India has now risen to be the 3rd largest crude is expected to become the second largest steel producer in steel producer in the world and the largest producer of sponge the world by 2018, based on increased capacity addition in iron. As per official estimates, the Iron and Steel Industry anticipation of upcoming demand, and the new steel policy, contributes around 2 per cent of the Gross Domestic Product which has been approved by the Union Cabinet in May 2017, (GDP). From a negligible global presence, the Indian steel
Ferro Alloys Corporation Limited 9 SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18 industry is now globally acknowledged for its product quality. DIRECTORS As it traversed its long history since independence, the Indian Mr.Vineetkumar Vithaldas Saraf shall retire by rotation steel industry has responded to the challenges of the highs at the ensuing 62ndAnnual General Meeting and, being and lows of business cycles. eligible, offershimself for re-appointmentin accordance with India’s crude steel output grew 5.87 per cent year-on-year the provisions of theCompanies Act, 2013 and in terms of to 101.227 million tonnes (MT) in CY 2017. Crude steel theMemorandum and Articles of Association of theCompany. production reached 93.183 million tonneduring April-February Further, all Independent Directors have given declarationsthat 2017-18. India’s finished steel exports rose 102.1 per cent to they meet the criteria of independence aslaid down under 8.24 million tonne, while imports fell by 36.6 per cent to 7.42 Section 149(6) of the CompaniesAct, 2013 and Regulation 25 million tonnein 2016-17. Exports and Imports of iron and steel of the SEBI (Listing Obligations and Disclosure Requirements) stood at 14.6 million tonneand 13.1 million tonneduring April- Regulations, 2015. The Company has formulated a code of February 2017-18, respectively. Total consumption of finished conduct for all members of the Board and Senior Management steel stood at 81.943 million tonneduring April-February 2017- Personnel. All concerned members/executives have affirmed 18. compliance with the said code. Steel industry and its associated mining and metallurgy Detail of Remuneration paid to Executive Director during sectors have seen a number of major investments and the year. developments in the recent past. According to the data released by Department of Industrial Policy and Promotion Sl. Name of Director Total (DIPP), the Indian metallurgical industries attracted Foreign No. Remuneration Direct Investments (FDI) to the tune of US$ 10.56 billion in the 1 Mr. R. K. Saraf 1,05,45,715 period April 2000–December 2017. 2 Mr. Manoj Saraf 61,75,339 DIVIDEND 3 Mr. Ashish Saraf - Keeping in view the future requirement of funds in working 4 Mr. Rohit Saraf 61,75,395 capital and other purposes, no dividend is recommended for Detail of Remuneration paid to Non-Executive st the financial year ended 31 March, 2018. Directorsduring the year. FINANCE Sl. Name of Director Sitting Fee No. Paid Cash and cash equivalent as at March 31, 2018 was ` 1428.36lacs. The Company continuesto focus on judicious 1 Mr. A.S. Kapre 25,000 management of its workingcapital. Receivables, inventories 2 Mr. M.B. Thaker 30,000 and otherworking capital parameters were kept understrict check through continuous monitoring. 3 Mr. PinakiMisra - 4 Mr. Umesh Khaitan 15,000 DEPOSITS 5 Mrs. Urmila Gupta 15,000 The Companyhas not accepted deposit from the publicfalling 6 Mr. Vineet Saraf - within the ambit of Section 73 of theCompanies Act, 2013 and The Companies(Acceptance of Deposits) Rules, 2014. FAMILIARISATION PROGRAMME FOR INDEPENDENT CONSOLIDATED FINANCIAL STATEMENTS DIRECTORS In accordance with the Companies Act, 2013 and the All Independent Directors (IDs) inducted into the Board are implementation of Indian Accounting Standards (IND-AS) given an orientation. Chairman & Managing Director and the under Companies Act, 2013 on accounting and disclosure Senior Management give an overview of the operations of requirements and as prescribed by SEBI (Listing Obligations the Company, to familiarise the new IDs with the Company’s and Disclosure Requirements), Regulations, 2015 the Audited business operations. The new IDs are given an orientation Consolidated Financial Statements is provided in the Annual on the group structure, its operations, subsidiaries, Board Report for the yearexcept the subsidiary Facor Power Limited constitution and procedures besides providing them with the whoseManagement & Control have been taken over by Rural financials of the Company for atleast 3 years and the corporate Electrification Corporation Limited w.e.f 7th November, 2017. brochure etc. Also, plant visits are organized for each ID for familiarizing with the Company’s operations and facilities. SHARE CAPITAL BOARD EVALUATION The paid up Equity Share Capital as on March 31, 2018 was In view of the initiation of the Corporate Insolvency Resolution 1852.68 lacs. During the year under review, the Company has Process against the Company w.e.f 6th July, 2017, the powers neither issued shares with differential voting rights nor granted of the Board of Directors of the Company stand suspended stock options nor sweat equity. in terms of the provisions of section 17 of the Insolvency INDUSTRIAL RELATIONS and Bankruptcy Code, 2016 and the same stood vested in the Resolution Professional. Accordingly, the exercise of Industrial relations with workers, trade unions, and with local evaluation of the Board could not be taken up during the year populace remained amicable and pleasant throughout the under review. year. 10 Ferro Alloys Corporation Limited SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18
NOMINATION AND REMUNERATION POLICY Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, The Board, on the recommendationof the Nomination & the statement containing salient features of the financial RemunerationCommittee, has framed a Nomination and statements of the Company’s Subsidiaries’, Associates’ and Remuneration policy for the appointment and remuneration Joint Ventures (in Form AOC-1) is attached to the financial of the Directors, Key Managerial Personnel and Senior statements. Executives of the Company including criteria for determining qualifications, positive attributes, independence of a Director STATEMENT UNDER SECTION 134(5) OF THE COMPANIES and other related matters which can be accessed at www. ACT, 2013 facorgroup.in/investorrelations. Further, the Policy was On the basis of framework of internal financial controls reviewed by the Committee and the Board at their meeting established and maintained by the Company, the work held on 13th May, 2017. performed by the internal, statutory, Cost and Secretarial auditors and external agencies, the reviews performed by DISCLOSURE AS PER THE SEXUAL HARASSMENT OF Management, Mr. R.K. Saraf, Chairman & Managing Director WOMEN AT WORKPLACE (PREVENTION, PROHIBITION of the Company has confirmed that the Company’s internal AND REDRESSAL) ACT, 2013 financial controls were adequate and effective as on 31 Ferro Alloys Corporation Limited, (FACOR), believes in equal March, 2018 and that as required under section 134(5) of the employment opportunity and remains committed to creating Companies Act, 2013 it is confirmed: and nurturing a working environment for all employees to (a) That in the preparation of the annual accounts, the enable them work without fear of any prejudice, gender bias applicable accounting standards had been followed along and sexual harassment. The Company does not tolerate with proper explanation relating to material departures; sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment (b) That we have selected such accounting policies and at workplace in line with the provisions of the Sexual applied them consistently and made judgments and Harassment of Women at Workplace (Prevention, Prohibition estimates that are reasonable and prudent so as to give a and Redressal) Act, 2013 and the Rules thereunder. During true and fair view of the state of affairs of the company at the Financial Year 2017-18, the policy was reviewed at the the end of the financial year and of the profit and loss of meeting of the Board of Directors of the Company held on 13th the company for that period; May, 2017. Further, during FY 2017-18, the Company has not (c) That proper and sufficient care for the maintenance of received any complaint of sexual harassment. adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the MEETINGS company and for preventing and detecting fraud and During the year under review only one meeting of the Board, other irregularities; AuditCommittee, Nomination and Remuneration Committee, (d) That the annual accounts have been prepared on a going Shareholders’ Grievance Committee and the Corporate Social concern basis; Responsibility Committee were convened and held, details (f) That proper internal financial controls were laid down by whereof are given in the CorporateGovernance Report. The the company and that such internal financial controls are intervening gap betweenthe Meetings was within the period adequate and were operating effectively. prescribedunder the Companies Act, 2013. Further, post initiation of Corporate Insolvency Resolution Process w.e.f 6th (f) That proper systems to ensure compliance with the July, 2017 and suspension of the powers of the Board in terms provisions of all applicable laws were in place and that of section 17 of the Insolvency and Bankruptcy Code, 2016, no such systems were adequate and operating effectively. meetings of the Board or Committees thereof have been held AUDIT COMMITTEE thereafter as all the powers of the board and/or its committees are being exercised by the Resolution Professional. Audit Committee of the Company comprises of Mr. A.S. Kapre, Mr. M.B. Thaker, and Mr. Umesh Khaitan, all Independent SUBSIDIARIES Directors. The committee has been constituted in compliance with the provisions of Regulation 18 of the SEBI (Listing The Report and Accounts of the Company are prepared in Obligations and Disclosure Requirements) Regulations, consolidated form and contains results of its subsidiaries Facor 2015 [SEBI(LODR) Regulations, 2015] and assumes all Realty and Infrastructure Limited and Facor Energy Limited. responsibilities provided therein, discharging their duties The annual accounts of the subsidiaries shall be available on diligently with transparency and accountability as their sole request to the members of the Company and are available for motivation. However, during the year under review, only one inspection at the registered office of the Company. Further, the meeting of the Audit Committee was held on 13th May, 2017 as Consolidated Financial Statements presented by the Company Corporate Insolvency Resolution Process was initiated against include the financial results of the subsidiary companies. the Company w.e.f 6th July, 2017 and as a result, the powers of The Consolidated Financial Statements have been prepared the Board and its committees stood suspended and vested in without the consolidation of Facor Power Limited (Subsidiary the Resolution Professional thereafter. of the Company) as Rural ElectrificationCorporation Limited AUDITORS (REC) has taken over the management and control of Facor Members of the Company, at the 61st Annual General Meeting Power Limited by issuing a letter dated 7th November, 2017 of the Company had approved appointment of M/s K.K. under section 13(4)(b) of SARFAESI Act, 2002. Mankeshwar& Co. Chartered Accountants as the Statutory Ferro Alloys Corporation Limited 11 SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18
Auditor of the company from the conclusion of 61st Annual technology absorption, foreign exchange earnings and outgo, General Meeting till the conclusion of 66th Annual General in accordance with the Companies (Disclosure of Particulars Meeting (subject to the ratification at each annual general in the Report of Board of Directors) Rules, 1988 is annexed as meeting held between the 61st Annual General Meeting Annexure ‘A’ which forms part of this Report. and 66th Annual General Meeting, at a remuneration plus applicable taxes and reimbursement of expenses incurred PARTICULARS OF EMPLOYEES by them incidental to their functions as may be decided by Disclosures pertaining to remuneration and other details as Interim Resolution Professional and/or the Board of Directors, required under Section 197(12) of the Act, read with Rule as applicable. Accordingly, ratification of appointment of the 5(1) of the Companies (Appointment and Remuneration of Auditors is being put up for consideration and approval of the Managerial Personnel) Rules, 2014 are annexed to this report. members of the Company as contained in the notice of the 62nd Annual General Meeting of the Company. In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies AUDITOR’S REPORT (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other The observations made in the Auditors’ Report are self- particulars of employees drawing remuneration in excess of explanatory and therefore, do not call for any further comments the limits set out in the said Rules forms part of the Report. u/s 134(3) of the Companies Act, 2013. However, having regard to the provisions of the first proviso COST AUDITORS to Section 136(1) of the Companies Act, 2013, the Annual Pursuant to Section 141 & 148 of the Companies Act,2013 Report excluding the aforesaid information is being sent to the read with The Companies (Cost Recordsand Audit) Members of the Company. The said information is available for Amendment Rules, 2014, the costaudit records maintained by inspection at Registered Office of the Company during working the Companyin respect of its activity is requiredto be audited. hours. Any member interested in obtaining such information may write to the Company Secretary, at the registered office The Resolution Professional has considered and decided the and the same will be furnished on request. Further the details appointment of M/s Niran& Co., Cost Accountant (Registration are also available on the Company’s website: www.facorgroup. No. 000113), as Cost Auditor of the Company for the financial in year 2018-19 on a remuneration of Rs.70,000/- (Rupees Seventy Thousand only) per annum plus applicable taxes and CORPORATE GOVERNANCE out of pocket expenses and applicable taxes. Corporate Governance in your Company is about Commitment In accordance with the provisions of Section 148(3) of the Act to values, ethical business conduct, nurturing good business read with the Companies (Audit and Auditors) Rules, 2014, the ethics and creating value for its stakeholders in line with the remuneration payable to the Cost Auditors has to be ratified principles of fairness, equity, transparency, accountability by the shareholders of the Company. It is therefore, necessary and dissemination of information. Your Company’s efforts are for the members to pass an Ordinary Resolution under section driven by the fundamental objectives of maximizing value by 148 and other applicable provisions, if any, of the Companies employing resources in opportunities that generate consistent Act, 2013 as set out at Item no.4 of the Notice. returns and position it for sustained growth. None of the Directors / Key Managerial Personnel of the In terms of Regulation 27 of the SEBI (Listing Obligations Company / their relatives / Resolution Professional, is, in any and Disclosure Requirements) Regulations, 2015, a separate way, concerned or interested, financially or otherwise, in the report on Corporate Governance, Management Discussion resolution set out at Item No. 4 of the Notice. and Analysis along with your Company’s Statutory Auditors’ Certificate dated 14th August, 2018 confirming the above Further, the report on Cost audit for Financial Year ended compliance is annexed to and forms part of the Directors’ 31stMarch, 2018 would be filed with Central Government in Report. accordance with the timelines specified under the Companies Act, 2013. HUMAN RESOURCE DEVELOPMENT The Company takes great pride in the commitment, SECRETARIAL AUDITOR competence and vigour shown by its workforce in all realms of Pursuant to the provisions of Section 204 ofthe Companies Act, business and its commitment in the trying times, in particular. 2013 and The Companies(Appointment and Remuneration The Company continues to take new initiatives to further align ofManagerial Personnel) Rules, 2014, the Company its HR policies to meet the growing needs of its business. has appointed M/s Ashish Saxena&Company, a firm of EXTRACT OF ANNUAL RETURN CompanySecretaries in Practice to undertake theSecretarial Audit of the Company for financial Year 2018-19.The Reportof The details forming part of the extract of theAnnual Return in the Secretarial Audit,for FY 2017-18, in Form MR-3 is form MGT 9 is annexed herewithas “Annexure D”. annexedto this report. SECRETARIAL AUDIT REPORT CONSERVATION OF ENERGY, TECHNOLOGY In respect of observation Secretarial Auditor in his report, the ABSORPTION, FOREIGN EXCHANGE EARNINGS AND management submits that the non-filing of some forms was by OUTGO oversight. Further, the company is taking action to complete A statement giving details of conservation of energy, the filing requirement. 12 Ferro Alloys Corporation Limited SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18
RELATED PARTY TRANSACTION DISCLOSURE IF MD/WTD IS RECEIVING REMUNERATION There have been no materially significant related party OR COMMISSION FROM SUBSIDIARY COMPANY transactions between the Company and the Directors, the As per Section 197(14) of the Act, 2013 A MD/WTD of company management, the subsidiaries or the relatives except for those can receive remuneration or commission from any holding disclosed in the financial statements. company or subsidiary company of such company. This should be disclosed by the company in Board’s Report. Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the S. Name of Director Total Remuneration justification for entering into such contract or arrangement in No. including Perquisites & Form AOC-2 does not form part of the report. Allowance / Sitting Fee PARTICULAR OF LOAN & INVESTMENT 1 Mr. Ashish Saraf, Joint 5,000 Managing Director There have been no transactions by the Company and the 2 Mr. A.S. Kapre, Independent 40,000 Directors, the management, the subsidiaries or the Resolution Director nominated on Professional except for those disclosed in the financial the Board of Facor Power statements. Limited till 7th November, RISK MANAGEMENT POLICY 2017. DISCLOSURE OF VIGIL MECHANISM IN BOARD REPORT A company is exposed to uncertainties owning to the sector in which it is operating. The Company is conscious of the The Company has adopted the Vigil Mechanism Policy for fact that any risk that could have a material impact on its the Company and the same is available on the website of the business should be included in its risk profile. Accordingly, in Company www.facorgroup.in order to contain / mitigate the risk, the Company has a Risk management policy approved by the Board. The Company’s DETAILS OF DIRECTOR AND KMP Risk Management framework is designed to identify, assess Pursuant to the provisions of section 2014 and other applicable and monitor various risks related to key business and strategic provisions, if any, of the Companies Act, 2013 and the rules objectives and lead to the formulation of a mitigation plan. framed there under, Mr. R.K. Saraf, Chairman & Managing Major risks in particular are monitored regularly at Executive Director, Mr. Yashpal Mehta, Chief Finance Officer and Mr. meetings and the Board of Directors of the Company is kept Ritesh Chaudhry, Company Secretary are Key Managerial abreast of such issues and the Policy was reviewed by the Personnel of the Company. Board at its meeting held on 13th May, 2017. Further, neither any director has been appointed nor has any CORPORATE SOCIAL RESPONSIBILITY director resigned from the Board of the Company during the year under review. Pursuant to Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY 2014, your Company approved a Policy on CSR and the Policy The Company has an Internal Control System, commensurate was parked on the website of the Company. As part of CSR with the size, scale and complexity of its operations. To initiatives, your Company during the financial year 2017-18 maintain its objectivity and independence, the Internal Auditor has amongst other activities, undertaken projects in areas of reports to the Chairman of the Audit Committee of the Board. promoting healthcare, empowerment of woman, ecological balance. These projects are in accordance with Schedule VII The Internal Auditor monitors and evaluates the efficacy of the Companies Act, 2013. The report on CSR activities is and adequacy of internal control system in the Company, its attached as Annexure to this Report compliance with operating systems, accounting procedures and policies at all locations of the Company and its DISCLOSURE WHERE COMPANY IS REQUIRED TO subsidiaries. Based on the report of internal auditor, process CONSTITUTE NOMINATION AND REMUNERATION owners undertake corrective action in their respective COMMITTEE: areas and thereby strengthen the controls. Significant audit The Company has constituted a Nomination & Remuneration observations and corrective actions thereon are presented Committee under Regulation19 of the SEBI (Listing to the Audit Committee of the Board. However, during the Obligations and Disclosure Requirements) Regulations, 2015. year under review, the Internal audit reports were reviewed Further, the Company has a Nomination & Remuneration by the Resolution Professional in view of the suspension of Policy for appointment and remuneration of DirectorsUnder the powers of the Board and its Committees pursuant to the Section 178 of the Companies Act, 2013 andRegulation 19 of provisions of section 17 of the Insolvency and Bankruptcy the SEBI (Listing Obligations and Disclosure Requirements) Code, 2016. Regulations, 2015. While terms of reference of the Committee DISCLOSURE ABOUT ESOP AND SWEAT EQUITY SHARE include appointments of Directors as per the Nomination & Remuneration Policy of the Company, no new Director was Company has not issued any share under ESOP or Sweat appointed on the Board of Company during the year under Equity Shares during the year. review.
Ferro Alloys Corporation Limited 13 SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE CAUTIONARY STATEMENT REGULATORS OR COURTS Statements in the Board’s Report and the Management As reported last year, an appeal against the order dated 6th Discussion & Analysis describing the Company’s objectives, July, 2017 of the Hon’ble NCLT, Kolkata was filed before the expectations or forecasts may be forward-looking within Hon’ble National Company Law Appellate Tribunal, New Delhi the meaning of applicable securities laws and regulations. (NCLAT, New Delhi) which was heard from time to time by the Actual results may differ materially from those expressed in said NCLAT, New Delhi with the last hearing being held on 5th the Statement. Important factors that could influence the March, 2018.The order is awaited. Company’s operations include global and domestic demand and supply conditions affecting selling prices of finished Although in terms of the provisions of Insolvency and goods, input availability and prices, changes in government Bankruptcy Code, 2016 the 270 days’ period for Corporate regulations, tax laws, economic developments within the Insolvency Resolution Process got over on 2nd April, 2018, nd country and other factors such as litigation and industrial the said NCLT, Kolkata, vide its order 2 April, 2018 directed relations. Resolution Professional to continue with the management of the affairs of the Company. Further, post 2nd April, 2018, the ACKNOWLEDGEMENTS matter has been heard subsequently as well by NCLT, Kolkata but final decision in the matter has not been taken in view The Company thanks the Central and State Governments for of the direction from Hon’ble NCLAT, New Delhi in its order their continued support and co-operation extended towards dated 5th March, 2018 that any order passed shall be subject the business as well as the company’s social functions. to decision of the appeals filed before it. The Management also thanks the shareholders, Business Associates, Financial Institutions & Banks, Customers and MATERIAL CHANGES AND COMMITMENTS AFFECTING Suppliers for the faith reposed in the Company and in them THE FINANCIAL POSITION OF THE COMPANY and expresses its sincere appreciation to the dedicated and committed team of employees and workmen without whom There are no material changes and commitments affecting reaching this far and maintaining the standard and quality of the financial position of the Company which have occurred the products for which the company is famous, would not have between the end of the financial year to which the financial been possible. The management also thanks the Resolution statements related and the date of the report. Professional and its team for the efforts put in sustaining TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR the operations of the Company during the year without any EDUCTION AND PROTECTION FUND hindrance. In terms of Section 125 of the Companies Act, 2013, unclaimed By order of Resolution Professional, or unpaid Dividends detailed, as under,are due for remittance forFerro Alloys Corporation Limited on the dates specified below to the Investor Education and Protection Fund established by the Central Government. Ritesh Chaudhry Sr. GM (Legal) & Company Secretary . Dividend for the year 2010-11, on or after 12th October, 2018 K.G. Somani Resolution Professional
Place : Noida, Dated : 14th August, 2018
14 Ferro Alloys Corporation Limited SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18
ANNEXURE ‘A’ FORM AOC - 1 Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014) Statement containing salient features of the financial statement of subsidiaries/ associate companies Part A : Subsidiaries 1 SI. No. 1 2 2 Name of subsidiary Facor Realty and Facor Energy Infrastructure Limited Limited 3 Reporting period for the subsidiary concerned, if different from the - - holding company's reporting period, 4 Reporting currency and Exchange rate as on the last date of the - GBP 92.06 relevant Financial year in the case of foreign subsidiaries. 5 Share Capital 10.00 184.12 6 Reserves & Surplus (4.30) (236.70) 7 Total Assets 5.88 0.42 8 Total Liabilites 5.88 0.42 9 Investments - - 10 Turnover - - 11 Profit before taxation (0.06) (11.33) 12 Provision for taxation - - 13 Profit after taxation (0.06) (11.33) 14 Proposed Dividend - - 15 % of shareholding 100% 100% # Financial information is based on unaudited results. Note :1. Due to loss of control and influence and curtailment of shareholder’s rights, Facor Power Limited has lost the status of Subsidiary Company of Ferro Alloys Corporation Limited, therefore, the information related to the same is not incorporated. 2. Both i.e. (1) Facor Realty and Infrastructure Ltd. ; (2) Facor Energy Ltd. have not commenced operations.
Part B : Associate Statement persuant to Section 129(3) of the Companies Act, 2013 related to Associate Company S. No. Name of Associate Boula Platinum Mining Pvt. Ltd. 1 Last Audited Balance sheet date 31.03.2018 2 Share of Associate held by the company on the year end No. 466,164 Amount of Investment in Associates (` in lacs) 4.66 Extend of Holding % 30% 3 Description of how there is significant influence There is significant influence due to holding more than 20% Equity Share Capital 4 Reason why associate is not considered - 5 Net Worth Attributable to Shareholding as per latest audited Balance Sheet 51.97 (` in lacs) 6 Profit/(Loss) for the year `( in lacs) (i) Considered in Consolidation 0 (ii) Not Considered in Consolidation 0
Ferro Alloys Corporation Limited 15 SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18
ANNEXURE ‘B’ Form No. MR-3 SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2018 Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To, The Members, Ferro Alloys Corporation Limited D P Nagar Randia, Bhadrak Orissa- 756135 We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by FERRO ALLOYS CORPORATION LIMITED [CIN - L45201OR1955PLC008400] (hereinafter called the company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon. Based on our verification of the FERRO ALLOYS CORPORATION LIMITED’s books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit and to the best of our knowledge, we hereby report that in our opinion, the company has, during the audit period covering the financial year ended on 31st March, 2018 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: We have examined the books, papers, minute books, forms and returns filed and other records maintained by FERRO ALLOYS CORPORATION LIMITED (“the Company”) for the financial year ended on 31st March, 2018 according to the provisions of: (i) The Companies Act, 2013 (the Act) and the rules made there under; (ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made there under; (iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under; (iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; (v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):- (a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (No such disclosure received by the company during the audit period) (b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992; (c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; (Not applicable to the company during the audit period) (d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999; (Not applicable to the company during the audit period) (e) The Securities and Exchange Board of India (Issue and Listng of Debt Securities) Regulations, 2015; (Not applicable to the company during the audit period) (f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client; (g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (Not applicable to the company during the audit period) (h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; (Not applicable to the company during the audit period) (vi) As informed to us the following other Laws are specifically applicable to the Company: a) The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 b) Employees’ State Insurance Act, 1948 16 Ferro Alloys Corporation Limited SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18
c) The Factories Act,1948 d) Equal Remuneration Act, 1976 e) The Payment of Wages Act, 1936 f) The Minimum Wages Act, 1948, and rules made there under We have also examined compliance with the applicable clauses of the following: (i) Secretarial Standards issued by The Institute of Company Secretaries of India. (ii) The SEBI (Listing Obligaitons and Disclosure Requirements) Regulations, 2015. During the period under review the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above subject to the following observation(s): a) The Company is yet to file Form MGT-7 for the financial year ended 31.03.2017 b) The company is yet to file Form MR1, IEPF 1 and IEPF 2, in respect of the events occurred during the audit period. We further report that: a) The company has given the corporate guarantee in respect of Term Loan obtained by M/s Facor Power Limited (hereinafter mentioned as borrower), from Rural Electrification Corporation Limited. Pursuant to a default in the repayment of the installments and interest by the borrower and upon an application filed by REC (the lender) under section 7 of the Insolvency and Bankruptcy Code, 2016 with the National Company Law Tribunal, Kolkata, Corporate Insolvency Resolution Process was initiated against the Company w.e.f 6th July, 2017 and Mr. K.G. Somani was appointed as Resolution Professional b) Pursuant to initiation of Corporate Insolvency Resolution Process, powers of the Board of Directors stand suspended wef. 6th July 2017 and management of the company had been entrusted to the Resolution Professional, Mr. K. G. Somani wef. 6th July, 2017 Post initiation of Corporate Insolvency Resolution Process w.e.f 6th July, 2017 and suspension of the powers of the Board in terms of section 17 of the Insolvency and Bankruptcy Code, 2016, no meetings of the Board or Committees thereof have been held thereafter as all the powers of the board and its committees are being exercised by the Resolution Professional The Board of Directors of the Company is, otherwise, duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. No change in the composition of the Board of Directors took place during the period under review. Adequate notice was given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, in respect of the meeting held during the audit period, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. All decisions of the board, in respect of the meeting held during the audit period, were unanimous and recorded as part of the minutes. Further, with the vesting of the power of the Board w.e.f 6th July, 2017, all management decisions have been taken by the Resolution Professional. We further report that there are systems and processes in the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. However, there is scope to improve these control and compliance systems through use of Compliance Software and tools. On the basis of information provided, we further report that during the audit period there were no instances of: a. Public/Right/Preferential issue of shares / debentures/ sweat equity b. Redemption / buy-back of securities c. Merger / amalgamation / reconstruction, etc. d. Foreign technical collaborations For Ashish Saxena & Co Company Secretaries (Ashish Saxena) Proprietor FCS – 6560 CP – 7096 Dt.: 13/08/2018 Place: Ghaziabad Note : This report is to be read with our letter of even date which is annexed as ‘ANNEXURE A’ and forms an integral part of this report. Ferro Alloys Corporation Limited 17 SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18
‘ANNEXURE A’ To, The Members FERRO ALLOYS CORPORATION LIMITED D P Nagar Randia, Bhadrak Orissa- 756135 Our report of even date is to be read along with this letter. 1. Maintenance of secretarial record is the responsibility of the management of the company. Our responsibility is to express an opinion on these secretarial records based on our audit. 2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion. 3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the company. 4. Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc. 5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis. 6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company. For Ashish Saxena & Co Company Secretaries
(Ashish Saxena) Proprietor FCS – 6560 CP – 7096 Dt.: 13/08/2018 Place: Ghaziabad
18 Ferro Alloys Corporation Limited SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18 ANNEXURE ‘C’ Additional information as required under Section 134(3)(m) read with Rule 8(3) of Companies (Accounts) Rules 2014.
A CONSERVATION OF ENERGY: a) Measures Taken Conservation of Energy is an ongoing process.Efficient electric equipments and other measures taken in recent past have b) Additional investment and proposals if any being brought down energy consumption. However, it is difficult to implemented for reduction of consumption of quantify the same and/or assess its impact on cost of production. energy c) Impact of measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods. } d) Total energy consumption and energy consumption Form ‘A’ is not applicable to Ferro Alloys Industry. per unit of production in prescribed form ‘A’.
B) TECHNOLOGY ABSORPTION: Research & Development (R&D): a) Specific areas in which R & D carried out by the R&D in the operation of Ferro Chrome Production and company manufacturing of briquettes is again a continuous process. Studies to recover the maximum entrapped metal from the b) Benefits derived as a result of the above R&D } discharged slag are in progress. c) Future Plan of action (i) The Company is analyzing and experimenting different methods of briquetting to cut down cost of production. (ii) Slag Utilisation and Waste Management. d) Expenditure on R&D Recurring expenditure on R&D has been shown under respective heads of accounts in Profit & Loss Account. e) Technology absorption, adaptation and innovation: i) Efforts, in brief, made towards technology Not applicable since no new technology has been adopted absorption, adaptation and innovation. ii) Benefits derived as a result of the above efforts, Not applicable e.g. product improvement, cost reduction, product development, import substitution etc. iii) Information regarding technology imported No technology has been imported during the last five years. during last 5 years
C) FOREIGN EXCHANGE EARNINGS AND OUTGO: 1) Activities relating to exports, initiatives taken to To explore new avenues of exports and to understand latest increase exports, development of new export developments in the international markets, your directors markets for products and services; and export undertake foreign tours as and when required. plans 2) Total Foreign Exchange used and earned ` in lacs i) CIF value of imports 465.27 ii) Expenditure in Foreign currency 463.80 iii) Foreign exchange earned on FOB basis 27145.04
Ferro Alloys Corporation Limited 19 SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18
ANNEXURE ‘D’ Information pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (1) Ratio of the remuneration of each Director/KMP to the median remuneration of all the employees of the Company for the financial year:
Median remuneration of all the employees of the Company for the Financial Year 2017-18 Rs.4,39,945
The percentage increase in the median remuneration of employees in the Financial Year 8.13%
The number of permanent employees on the rolls of Company as on 31 March, 2018 714
Name of Director Ratio of remuneration to median Remuneration of all employees
Independent Directors
Mr. A.S. Kapre 0.06 : 1
Mr. Umesh Khaitan 0.03 : 1
Mrs. Urmila Gupta 0.03 : 1
Mr. M.B. Thaker 0.07 : 1
Executive Directors
Mr. R.K. Saraf 24.39 : 1
Mr. Manoj Saraf 14.45 : 1
Mr. Rohit Saraf 14.79 : 1
Notes: 1. The ratio of remuneration to median remuneration is based on remuneration paid during the period 1stApril, 2017 to 31stMarch, 2018. (2) Relationship between average increase in remuneration and company performance: a) The average increase in remuneration during Financial Year 2017-18 was 3.87% as compared with previous financial year. Net revenues of the Company during the financial year stood at Rs.539.08 crores as against Rs. 611.44 crores in the previous year. b) The total employee cost for the Financial Year ended 31 March, 2018 was Rs.43,46,24,591 against Rs.41,84,44,027 for the Financial Year ended 31 March, 2017. The total employee cost as a percentage of net revenues was 8.06% (last year 6.84%). (3) Comparison of the remuneration of the KMP against the performance of the Company:
Particulars Crores
Aggregate remuneration of KMP in Financial Year 2017-18 2.17
Revenue 539.08
Remuneration of KMPs (as % of revenue) 0.40
Profit before Tax (PBT) 64.88
Remuneration of KMPs (as % of PBT) 3.34
20 Ferro Alloys Corporation Limited SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18
(4) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: a) Average percentage increase in salary of the Company’s employees was 3.31%. The total managerial remuneration for the Financial Year 2017-18 was Rs.269.01 lacs as against Rs. 237.86 lacs during the previousyear. b) The percentage increase in remuneration was, as under: Mr. R.K. Saraf – Chairman & Managing Director - During the Financial Year 2017-18 was approximately 13.74% as compared to the previous financial year. Mr. Manoj Saraf – Managing Director - During the Financial Year 2017-18 was approximately 9.34% as compared to the previous financial year. Mr. RohitSaraf – Joint Managing Director - During the Financial Year 2017-18 was approximately 11.09% as compared to the previous financial year. (5) Comparison of the each remuneration of the KMP against the performance of the Company:
Particulars of Remuneration Key Managerial Personnel Mr. R.K. Saraf Mr. Yashpal Mr. Ritesh Mehta Chaudhry Remuneration in FY 17-18 (`crores) 1.07 0.43 0.26 Revenue (`crores) 539.08 539.08 539.08 Remuneration as % of Revenue 0.20 0.08 0.05 Profit before Tax (PBT) (`crores) 64.88 64.88 64.88 Remuneration as % of PBT 1.65 0.66 0.40
Ferro Alloys Corporation Limited 21 SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18 Annexure ‘E’ Form No. MGT-9 EXTRACT OF ANNUAL RETURN as on the financial year ended on 2017-18 [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]
I. REGISTRATION AND OTHER DETAILS: i) CIN: L45201OR1955PLC008400
ii) Registration Date: 27th September, 1955
iii) Name of the Company: Ferro Alloys Corporation Limited
iv) Category / Sub-Category of the Company: Public Company/Limited by Shares
v) Address of the Registered office and contact D P NAGAR, RANDIA, BHADRA details: ORISSA-756135 Phone No.-+91-6784-240320 Fax No.- +91-6784-240626 E-mail- [email protected] [email protected]
vi) Whether listed company: Yes
vii) Name, Address and Contact details of Registrar Beetal Financial & Computer Services Pvt. Ltd., and Transfer Agent Beetal House, 3rd Floor, 99, Madangir, Behind LSC, New Delhi-110062 Phone No. +91-11-29961281-83 Fax No. +91-11-29961284 E-mail: [email protected] [email protected]
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY: All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-
S. Name and Description of main products / services NIC Code of the % to total turnover of the No. Product/ service company
1. Ferro Chrome 27110 100%
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES –
S. Name And Address Of The Com- CIN/GLN Holding/ % of Applicable No. pany Subsidiary / shares Section Associate held
1 Facor Realty & Infrastructure Ltd. U45208DL2007PLC167732 Subsidiary 100 2(87)
2 Facor Energy Limited,Guernsey NA Subsidiary 100 2(87)
3 RaiBahadurShreeram& Co. Pvt. Ltd. U99999MH1953PTC021694 Associate 37.49 2(6)
4 Boula Platinum Mining Private Limited U72900DL2008PTC180106 Associate 30 2(6)
22 Ferro Alloys Corporation Limited SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) i) Category-wise Share Holding Category of Share- No. of shares held at the beginning of the year No. of Shares held at the end of the year % Change holders 01.04.2017 31.03.2018 during the Demat Physical Total % of Total Demat Physi- Total % of Total year Share cal Share A. Promoters (1) Indian a) Individual/ HUF 206,685 0 206,685 0.11 402,873 0 402,873 0.22 0.11 b) Central Govt. 0 0 0 0.00 0 0 0.00 0.00 c) State Govt. 0 0 0 0.00 0 0 0.00 0.00 d) Bodies Corp. 72,726,108 0 72,726,108 39.25 72,726,108 0 72,726,108 39.25 0.00 e) Banks/FI 0 0 0 0.00 0 0 0 0.00 0.00 f) Any Other 60,159,840 0 60,159,840 32.47 60,159,840 0 60,159,840 32.47 0.00 Sub-total (A)(1):- 133,092,633 0 133,092,633 71.84 133,288,821 0 133,288,821 71.94 0.11 (2) Foreign a) NRI’s-Individuals 196,188 0 196,188 0.11 0 0 0 0.00 -0.11 b) Others-Individuals 0 0 0 0.00 0 0 0 0.00 0.00 c) Bodies Corp. 5,639,215 0 5,639,215 3.04 5,639,215 0 5639215 3.04 0.00 d) Banks/FI 0 0 0 0.00 0 0 0 0.00 0.00 e) Any Other 0 0 0 0.00 0 0 0 0.00 0.00 Sub-total (A)(2):- 5,835,403 0 5,835,403 3.15 5,639,215 0 5639215 3.04 -0.11 Total Shareholding 138,928,036 0 138,928,036 74.99 138,928,036 0 138,928,036 74.99 0.00 of Promoters (A) =(A) (1)+(A)(2) B. Public Shareholding 1. Institutions a) Mutual Fund 1,780 0 1,780 0.00 1,780 0.00 1,780 0.00 0.00 b) Banks/FI 4,848 0 4,848 0.00 1636 0.00 1,636 0.00 0.00 c) Central Govt. 1,620 4,046 5,666 0.00 0 4,046 4,046 0 0.00 d) State Govt’s 34,020 0 34,020 0.02 34,020 0 34,020 0.02 0.00 e) Venture Capital Funds 0 0 0.00 0 0.00 0 0.00 0.00 f) Insurance Companies 1620 6,600 8,220 0.00 1620 6,600 8,220 0 0.00 g) FIIs 0 120 120 0.00 0 0.00 120 0.00 0.00 h) Foreign Venture Capi- 0 0 0 0.00 0 0 0 0.00 0.00 tal Funds i) Others (specify) 0 0 0 0.00 0 0.00 0 0.00 0.00 Sub-total (B)(1):- 43,888 10,766 54,654 0.02 39,056 10,646 49,822 0.03 0.01 2. Non-Institutions a) Bodies Corp. i) Indian 12,225,325 9,955 12,235,280 6.60 6,148,453 2,929 6,151,382 3.32 -3.28 ii) Overseas
Ferro Alloys Corporation Limited 23 SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18
Category of Share- No. of shares held at the beginning of the year No. of Shares held at the end of the year % Change holders 01.04.2017 31.03.2018 during the Demat Physical Total % of Total Demat Physi- Total % of Total year Share cal Share b) Individuals i) Individual sharehold- 25421491 645,403 26,066,894 14.07 31281002 638119 31,919,121 17.23 3.16 ers holding nominal share capital upto Rs. 1 lakh ii) Individual sharehold- 5402102 0 5402102 2.92 4927792 0 4927792 2.66 -0.26 ers holding nominal share capital in excess of Rs. 1 lakh c) Others (specify) 2537971 42883 2580854 1.39 3240805 42271 3283076 1.77 0.38 Sub-total 45,586,889 698,241 46,285,130 24.98 45,598,052 683,319 46,281,371 24.98 0.00 (B)(2):- Total Public Sharehold- 45,630,777 709,007 46,339,784 25.01 45,637,108 693,965 46,331,193 25.01 0.00 ing (B)=(B)(1)+(B)(2) C. Shares held by Cus- 0 0 0 0 0 0 0 0 0.00 todian for GDRs & ADRs Grand Total (A+B+C) 184,559,234 709,007 185,268,241 100 184,574,276 693,965 185,268,241 100 0.00 ii) Shareholding of Promoters
S. Shareholder’s Name Shareholding at the beginning of the Shareholding the end of the year % change in No. year 01.04.2017 31.03.2018 shareholding during the No. of % of total % of Shares No. of % of total % of Shares year shares Shares Pledged/ shares Shares Pledged/ of the encumbered of the encumbered Company total shares Company total shares 1 UrmiladeviNarayandas Saraf 59,43,503 3.21 0 59,43,503 3.21 0 0
2 Anurag Murlidhar Saraf 48,21,854 2.60 0 48,21,854 2.60 0 0
3 SushmadeviVinodku- 43,67,086 2.36 0 43,67,086 2.36 0 0 marSaraf
4 ManjudeviMurlidhar Saraf 39,64,131 2.14 0 39,64,131 2.14 0 0
5 MohinideviUmashankar 38,74,617 2.09 0 38,74,617 2.09 0 0 Saraf
6 VanitadeviVineetkumar Saraf 38,40,705 2.07 0 38,40,705 2.07 0 0
7 PromiladeviRamkisan Saraf 22,10,328 1.19 0 22,10,328 1.19 0 0
8 RamkisanDurgaprasad Saraf 22,10,327 1.19 0 22,10,327 1.19 0 0
9 RohitkumarNarayandas 20,93,366 1.13 0 20,93,366 1.13 0 0 Saraf
10 SunandadeviYogeshkumar 11,76,976 0.64 0 11,76,976 0.64 0 0 Saraf
11 RamadeviManojkumar Saraf 15,55,581 0.84 0 15,55,581 0.84 0 0
12 ShailajadeviAshishkumar 9,34,629 0.50 0 9,34,629 0.50 0 0 Saraf
13 AshishkumarRamkisan Saraf 9,34,629 0.50 0 9,34,629 0.50 0 0
14 ManojkumarUmashankar 9,40,493 0.51 0 9,40,493 0.51 0 0 Saraf
15 SonalAshimkumar Saraf 8,50,344 0.46 0 8,50,344 0.46 0
24 Ferro Alloys Corporation Limited SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18
S. Shareholder’s Name Shareholding at the beginning of the Shareholding the end of the year % change in No. year 01.04.2017 31.03.2018 shareholding during the No. of % of total % of Shares No. of % of total % of Shares year shares Shares Pledged/ shares Shares Pledged/ of the encumbered of the encumbered Company total shares Company total shares 16 AshimkumarRamkisan Saraf 8,50,344 0.46 0 8,50,344 0.46 0 0
17 VineetkumarVithaldas Saraf 5,14,118 0.28 0 5,14,118 0.28 0 0 18 BimladeviVithaldas Saraf 3,31,151 0.18 0 3,31,151 0.18 0 0 19 Vinodkumar Saraf 2,03,474 0.11 0 2,03,474 0.11 0 0 20 MurlidharDurgaprasad Saraf 1,90,120 0.10 0 1,90,120 0.10 0 0 21 SaritadeviSanjivkumar Saraf 76,758 0.04 0 76,758 0.04 0 0 22 PayalMurlidhar Saraf 31,280 0.02 0 31,280 0.02 0 0 23 VibhavVineetkumar Saraf 23,080 0.01 0 23,080 0.01 0 0 24 PreetideviRohitkumar Saraf 12,600 0.01 0 12,600 0.01 0 0 25 YogeshkumarUmashankar 18,900 0.01 0 18,900 0.01 0 0 Saraf 25 Aisha Ashishkumar Saraf 11,500 0.01 0 11,500 0.01 0 0 27 MadhuriManojkumar Saraf 7948 0.00 0 7948 0.00 0 0 28 SidharthVineetkumar Saraf 39,731 0.02 0 39,731 0.02 0 0 29 RaghvendraManojkumar Saraf 4,800 0.00 0 4,800 0.00 0 0 30 NarayandasDurgaprasadji 3,176 0.00 0 3,176 0.00 0 0 Saraf 31 SanjivNarayandas Saraf 1,96,188 0.11 0 1,96,188 0.11 0 0 32 MadhavhariYogeshkumar 89,618 0.05 0 89,618 0.05 0 0 Saraf 33 GautamVinodkumar Saraf 45,898 0.02 0 45,898 0.02 0 0 34 RaghuhariYogeshkumar 32,902 0.02 0 32,902 0.02 0 0 Saraf 35 M/s. GauriSanjeev Saraf 4800 0.00 0 4800 0.00 0 0 36 Amla Saraf 23,183 0.02 0 23,183 0.02 0 0 37 Gaurav Vinodkumar Saraf 5,156 0.00 0 5,156 0.00 0 0 38 SakhiSanjeevkumar Saraf 5,128 0.00 0 5,128 0.00 0 0 39 R B Shreeram& Co. Pvt. Ltd. 6,94,48,883 37.49 0 6,94,48,883 37.49 3,90,00,000 0 40 Dass Papers Pvt. Ltd. 12,00,000 0.65 0 12,00,000 0.65 0 0 41 ShreeramDurgaprasad Ores 12,00,000 0.65 0 12,00,000 0.65 10,00,000 0 Pvt. Ltd. 42 Suchitra Investments & 5,67,041 0.30 0 5,67,041 0.30 0 0 Leasing Ltd. 43 Saraf Bandhu Pvt. Ltd. 2,35,200 0.13 0 2,35,200 0.13 0 0 44 GDP Infrastructure Pvt. Ltd. 56,840 0.03 0 56,840 0.03 0 0 45 Vidarbha Iron & Steel Co. Ltd 18,144 0.01 0 18,144 0.01 0 0 46 Globalscale Investment 56,39,215 3.04 0 56,39,215 3.04 0 0 Limited 47 Manojkumar Saraf &Rohit 22,424 0.01 0 22,424 0.01 0 0 Saraf, as trustee 0of FACOR Employees Welfare Trust 48 RamkishanDurgaprasad 27,576 0.01 0 27,576 0.01 0 0 Saraf, as Trustee od FAL Employees Welfare Trust
Ferro Alloys Corporation Limited 25 SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18
S. Shareholder’s Name Shareholding at the beginning of the Shareholding the end of the year % change in No. year 01.04.2017 31.03.2018 shareholding during the No. of % of total % of Shares No. of % of total % of Shares year shares Shares Pledged/ shares Shares Pledged/ of the encumbered of the encumbered Company total shares Company total shares 49 MohinideviUmashakar Saraf 1,56,72,291 8.46 0 1,56,72,291 8.46 0 0 Jtly with ManjudeviMurlidhar Saraf, on behalf of Premier Commercial Corp. 50 VanitadeviVineetkumar Saraf 12,00,000 0.65 0 12,00,000 0.65 0 0 Jtly with SunandadeviYoges- hkumar Saraf, on behalf of Geedee Sales Services 51 MurlidharDurgaprasad Saraf 12,00,000 0.65 0 12,00,000 0.65 0 0 Jtly with Gaurav Vinod Saraf, on behalf of Deepee Sales Corporation Total 13,89,28,036 74.99 0 13,89,28,036 74.99 0 0 iii) Change in Promoters’ Shareholding (please specify, if there is no change) S. Shareholding at the Cumulative Shareholding No. beginning of the year during the year No. of % of total No. of % of total shares shares of the shares shares of the company company At the beginning of the year ------Data wise Increase/ Decrease in Promoters Share- holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): At the end of the year ------iv) Shareholding Pattern of top ten shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):
S. Name Shareholding at the Begin- Cumulative Shareholding No. ning of the year 01.04.2017 during the year 31.03.2018
No. of % of total No. of shares % of total shares shares of the shares of the company company
1 Queen Consultancy Services Pvt Ltd 14,17,623 0.77 14,17,623 0.77
2 Red Apple Financial Consultants Pvt. Ltd. - - 9,24,283 0.50
3 GN Financial Consultants Pvt. Ltd 9,16,874 0.49
4 Anil Agarwal 15,39,000 0.99 6,99,000 0.38
5 Aqua Financial Consultants Private Limited 5,79,172 0.31 10,37,727 0.56
6 SagarJalani - - 4,52,823 0.24
7 Suslil Kumar Jalani 4,20,000 0.23 4,20,000 0.23
8 Tapan Kumar Dev - - 3,86,712 0.21
9 Aroma Plantation Ltd. 2,64,988 0.14 3,64,402 0.20
10 ModexInternnation Securities Ltd. 12,84,550 0.69 3,00,000 0.16
26 Ferro Alloys Corporation Limited SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18 v) Shareholding of Directors and Key managerial Personal: S. Name of Director/KMP Shareholding at the Begin- Cumulative Shareholding No. ning of the year during the year
No. of % of total No. of shares % of total shares shares of the shares of the company company
1 Mr. R. K. Saraf 22,10,327 1.19 22,10,327 1.19
2 Mr. Manoj Saraf 9,40,493 0.51 9,40,493 0.51
3 Mr. Ashish Saraf 9,34,629 0.50 9,34,629 0.50
4 Mr. Rohit Saraf 20,93,366 1.13 20,93,366 1.13
5 Mr. A.S. Kapre 25,000 0.01 0.01 0.01
6 Mr. M.B. Thaker 5,294 0.00 5,294 0
7 Mr. Pinaki Misra 0.00 0.00 0.00 0
8 Mr. Umesh Khaitan 0 0 0 0
9 Mrs. Urmila Gupta 0 0 0 0
10 Mr. Vineet Saraf 5,14,118 0.28 5,14,118 0.28
11 Mr. Yashpal Mehat 0 0 0 0
12 Mr. Ritesh Chaudhry 0 0 0 0 vi) Indebtedness Indebtedness of the company including interest outstanding/accrued but not due for payment (` in Lacs) Secured Loans Unsecured Deposits Total Indebtedness excluding deposits Loans
Indebtedness at the beginning of the financial year i) Principal Amount 8193.94 2931.53 0 11,125.47 ii) Interest Due but not paid 1.53 14.62 0 16.15 iii) Interest Accrued but not due - 16.69 0 16.69
Total (i+ii+iii) 8195.47 2962,84 0 11,158.31
Change in Indebtedness during the financial year i. Addition - - 0 - ii. Reduction (6983.29) (24.03) 0 (7007.32)
Net Change (6983.29) (24.03) 0 (7007.32)
Indebtedness at the end of the finan- cial year i) Principal Amount 1212.18 2719.00 0 3931.18 ii) Interest Due but not paid - 203.12 0 203.12 iii) Interest Accrued but not due - 16.69 0 16.69
Total (i+ii+iii) 1212.18 2938.81 0 4150.99
Ferro Alloys Corporation Limited 27 SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18 vii) Remuneration of Directors and Key Managerial Personnel
A. Remuneration to Managing Director, Whole-time Director and/or Manager:
S. No. Particulars of Remuneration Name of MD/WTD/Manager
R.K.SARAF Manoj Ashish Saraf Rohit Total Saraf Saraf Amount
1. Gross Salary - (a) Salary as per provisions contained in 13.93 14.66 14.40 42.59 section 17(1) of Income Tax Act, 1961 (b) Value of perquisites u/s 17(2) Income 4.02 3.64 2.76 10.42 Tax Act, 1961 (c) Profits in lieu of salary under section 17(3) Income Tax Act, 1961 - - - -
2. Stock Option - - - - -
3. Sweat Equity - - - - -
4. Commission ------As % of Profit - Others, specify
5. Others, please specify - - - - -
Total (A) 17.95 17.90 17.16 17.26 53.01
Ceiling as per the Act
B. Remuneration to other directors S. Particulars of Remuneration Name of directors No. Mr. A.S. Mr. Mr. Mrs. Urmila Mr. M.B. Kapre PinakiMisra UmeshKhaitan Gupta Thaker
1. Independent Directors - Fee for attending Board, ` 25,000 - ` 15,000 ` 15,000 ` 30,000 Committee meetings - - Commission ------Others, Please specify - - - -
Total (1) ` 25,000 ` 20,000 ` 15,000 ` 15,000 ` 30,000
2. Other Non-Executive Directors - Fee for attending Board, - - - - - Committee meetings - Commission ------Others, Please specify - - - - -
Total (2) - - - - -
Total (B)=(1+2) ` 25,000 ` 20,000 ` 15,000 ` 15,000 ` 30,000
Total Managerial Remuneration
Overall Ceiling as per the Act
28 Ferro Alloys Corporation Limited SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18
S. Particulars of Remuneration Name of directors No. Mr. Vineet Saraf
1. Independent Directors - Fee for attending Board, Committee meetings - - Commission - - Others, Please specify -
Total (1) -
2. Other Non-Executive Directors - Fee for attending Board, Committee meetings - - Commission - - Others, Please specify -
Total (2) -
Total (B)=(1+2) -
Total Managerial Remuneration
Overall Ceiling as per the Act
C. Remuneration to Key Managerial Personnel Other than MD/WTD/Manager S. No. Particulars of Remuneration Key Managerial Personnel
CEO Company CFO Total Secretary
1. Gross Salary a. Salary as per provisions contained in section 17(1) of Income Tax Act, 1961 20.15 33.85 54 b. Value of perquisites u/s 17(2) Income Tax Act, 2.64 6.87 9.51 1961 c. Profits in lieu of salary under section 17(3) Income - - - Tax Act, 1961
2. Stock Option - - -
3. Sweat Equity - - -
4. Commission - As % of Profit - - - - Others, specify - - -
5. Others, please specify - - -
Total (A) 22.79 40.72 63.51 viii. Penalties/Punishment/Compounding of Offences: There have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations. However, members’ attention is drawn to the statement on contingent liabilities, commitments in the notes forming part of the Financial statements.
Ferro Alloys Corporation Limited 29 SIXTY SECOND REPORT TO THE MEMBERS UNDER SECTION 134 Annual Report OF THE COMPANIES ACT, 2013 62 2017-18
Annexure ‘F’ ANNUAL REPORT ON CSR ACTIVITIES TO BE INCLUDED INTHE BOARD’S REPORT OF FERRO ALLOYS CORPORATION LIMITED FOR FY 2017-18 Sr.No. Particulars Remarks
1 A brief outline of the Company’s CSR policy, including The Company has framed Corporate Social Responsibility overview of projects or programs proposed to be Policy and is guided by its social responsibility towards undertaken and a reference to the web-link to the CSR the society, in general and environment, in particular and policy and projects or Programmes. remains committed to its further development. The Company promotes projects that are in line with Schedule VII to the Companies Act, 2013 and: • are sustainable and create long term change, • Channelize resources & efforts towards making positive and sustainable contribution in social and economic development; and • Align CSR practices & programs to complement and support the developmental priorities at local, state and national levels. The CSR activities of the Company are focused on the four broad themes with goals to improve overall socio-economic indicators of Company’s area of operation: . Promoting healthcare, sanitation and making safe drinking water available; . Employment enhancement through training and vocational skill development; . Promoting education; and . Ensuring sustainable environment The CSR Policy has been uploaded on the Company’s website: www.facorgroup.in
2 The Composition of the CSR Committee. Mr. M.B. Thaker, Chairman Mr. R.K. Saraf, Member Mr. Manoj Saraf, Member
3 Average net profit of the Company for last three financial ` 1,893.86 lacs years
4 Prescribed CSR Expenditure (two per cent of the amount ` 37.88 lacs as in item 3 above)
5 Details of CSR spent during the financial year:
a) Total amount to be spent for the financial year; ` 39.44 lacs
b) Amount unspent, if any; Not applicable
c) Manner in which the amount spent during the financial year is detailed below
(1) (2) (3) (4) (5) (6) (7) (8)
Sl.No. CSR project or Sector in Projects or programs Amount outlay Amount spent on the Cumulative Amount activity Identified which the (1) Local area or other (budget) project projects or programs expenditure upto spent: Direct Project is (2) Specify the State or programs wise Sub-head: (1) Direct the reporting or through covered and district where (Rs.in lacs) expenditure on period implementing projects or programs projects or programs (` in lacs) agency* was undertaken (2) Overheads: (` in lacs)
a) Promoting Healthcare Keonjhar, Dhenkanal 25 25.97 25.97 Direct Healthcare and Jajpur
30 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report 62 2017-18
b) Making available Healthcare Bhadrak, Keonjhar, 5 5.06 5.06 Direct safe drinking Dhenkanal and Jajpur water
c) Promoting Promoting New Delhi 5.13 5.34 5.34 Direct Education, Education enhancing vocation skills especially among children
d) Plantation Ecological Bhadrak, Dhenkanal 1 1.09 1.09 Direct expense balance and Jajpur
e) Rural Promoting Jajpur 1.25 1.48 1.48 Direct Development Development Projects
f) Promoting Promoting Bhadrak .50 .50 .50 Direct Paralympic Sports Sports
TOTAL: 37.88 39.44 39.44 --
6. In case the company has failed to spent the two percent of the average net Not applicable profit of the last three financial years or any part thereof, the reasons for not spending the amount in its Board report.
7. A responsibility statement of the CSR Committee that the implementation and Since the power of the committee of the Board of Directors monitoring of CSR Policy, is in compliance with CSR objectives and Policy of stand suspended by the virtue of provisions of Section 17 of the company. the Insolvency and Bankruptcy Code, 2016, the Management of the Company confirms that the implementation and the monitoring of CSR Policy is in compliance with CSR objectives and Policy of the Company.
(Ram Kisan Saraf) (Yashpal Mehta) (Ritesh Chaudhry) Chairman & Managing Director Chief Financial Officer Sr. G.M. (Legal) & Company Secretary
Place : Noida Dated : 14th August, 2018
Ferro Alloys Corporation Limited 31 SIXTY SECOND Annual Report MANAGEMENT DISCUSSIONS AND ANALYSIS 62 2017-18
INDUSTRY STRUCTURE, DEVELOPMENT AND OTHER Production of Chrome ore at Company’s mines for FY 2017- RELATED MATTERS 18 was 1,03,381 tons vis a vis 89,499 tons for FY 2016-17 reflecting an increase by 24.81%. Ferro Alloys industry, which was established as an ancillary industry to cater to the growing needs of the domestic steel RISKS AND CONCERNS /OPPORTUNITIES AND THREATS industry has come a long way and now forms part of core sector / OUTLOOK under the Ministry of Steel and is one of the oldest industry in India. The ferro alloys industry supplies crucial intermediates Ferro alloys industry is mainly driven by demand from the to the steel industry and its growth is linked to the growth of the steel industry. The global ferro chrome industry is largely steel industry, domestically as well as globally. dependent on Chinese demand and the stainless steel cycle. China’s consumption is met through a combination of domestic The Indian ferro alloys industry is primarily driven by the growth production and substantial imports from countries including and progress of steel industry. Being a power intensive industry, South Africa, India and Zimbabwe. Other leading importers power constitutes a major portion of its cost of production. This of ferro chrome are the US, South Korea and the European is a major factor for limiting the capacity utilization of ferro alloys Union (EU) although the EU and US have witnessed a steady industry. Quality wise, chrome ore available in India edges decline in their dependence on imports for ferro chrome in the over competition due to higher Cr2O3 and higher Cr/ Fe ratio. last decade. The higher Cr/Fe and higher composition of Cr2O3 makes Indian ores more amenable to beneficiation and upgradation. The Indian ferro chrome industry is on the road to However, poor availability of good quality raw material, high consolidation. The fragmented nature of the industry which power tariff and uncertain policy framework renders the quality has been an impediment in the past is on the verge of major factor uncompetitive in the international market. change. According to figures released by the International Stainless Steel Forum (ISSF), in 2017 global crude stainless Ferro chrome, an alloy of chrome and iron having 50% to 68% steel production was at 48.08 MT. This was up by 5.79% from chrome content is primarily used in manufacturing stainless the revised figure of 45.45 MT produced in 2016. This market steel. Ferro chrome offers resistance to corrosion besides expanded at a 5.7% CAGR during 2005 – 2017. Meanwhile, strengthening and stainless steel, thus making it a unique higher growth from India and Indonesia is likely to help maintain product with multiple applications. Major chunk of world’s the demand for stainless steel at a 5% CAGR over FY17-22E. ferro chrome production is confined to China, South Africa, Kazakhstan and India.dd China, with its dominant position Ferro Alloys industry is a cyclical industry. To ensure that a in stainless steel, is also adding significant ferro chrome healthy production growth is maintained, certain exclusive production capacity and has surpassed South Africa to become stimulus/relief need to be provided by the government as the the world’s largest producer. steady growth and potential in business and development is subject to effective resolution of various bottlenecks which FINANCIAL PERFORMANCE WITH RESPECT TO the industry currently faces. While some of them relate to the OPERATIONAL PERFORMANCE larger macroeconomic framework, some of them are intrinsic (` in lacs) to the industry itself; major ones are as follows: Particulars For the year For the year • High cost of grid power has been affecting the industry’s ended 31st ended 31st competitiveness despite having the best quality ores and March, 2018 March, 2017 processes Income from Operations 53908.25 61144.23 • High cost of coal and shortage of required coal to captive EBITDA (Before 5561.31 6024.03 power unit has entailed a burden on producers exceptional items) Profit/(Loss) after tax 5548.17 2196.87 • Inadequate indigenous supply of good quality and high grade coke Cash Profit 5662.46 3859.11 • Depleting Chrome ore supply on domestic level. With During the year under review, revenue from operations OMC being the only major producer of chrome ore in the ` decreased by 11.83% to 53,908.25 lacs (previous year country, there are availability issues. ` 61,144.23 lacs which includes Inter unit transfers of ` 10,884.32 lacs). However, EBIDTA increased by 32.82% • High transportation cost due to increase in price of fuels to ` 8,049.18lacs (previous year Rs.6,060.34 lacs) and profit after tax increased by 175.36% to ` 5,492.29 lacs (previous • Inadequate and crumbling infrastructure, over burdened year ` (1,994.58 lacs) on the back of improvement in prices . roadways, railways and ports Further, the accounts have been drawn up in accordance with With electricity cost forming a major cost element in production the requirement of Ind AS. of ferro-alloys, high power tariff is the biggest concern for Production of Ferro Chrome for FY 2017-18 at 53,728 tons the ferro-alloys industry. However, the Company’s 100 MW vis a vis 69,370 tons for FY 2016-17 was down by 3.26%. Captive Power Plant enables the Company to emerge self- However, improved ferro chrome prices assisted in improved reliant in its power needs and reduce dependence on the grid profitability for FY 2016-17. electricity. 32 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report MANAGEMENT DISCUSSIONS AND ANALYSIS 62 2017-18
Although the Company, is exposed to fluctuations in foreign INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY exchange due to in import of materials and exports of finished The Company systems and procedures of internal control and products, has a risk management policy for insulating the checks in operation commensurate with the size and the nature Company from adverse foreign exchange exposure. of its business for optimum utilization of available precious With per capita steel consumption being much below the resources. The mechanism of internal control and checks global average, there is tremendous potential to grow Further, are reviewed by the management, internal and statutory the governments’ ‘Make in India’ program, will support auditors and suitable changes/ modifications, if required, are investments/ expansion plans in Roads, Railways, Automobile implemented so as to ensure that an effective scheme of Sector and Power Sector, which will fuel demand for Ferro checks and balances exists at all times. The management is Alloys in the coming years. reasonably satisfied with the existing internal control systems. MATERIAL DEVELOPMENT IN HUMAN RESOURCES / As reported previous year, the Company had executed INDUSTRIAL RELATIONS FRONT INCLUDING PEOPLE Corporate Guarantees from time to time, of an amount EMPLOYED aggregating to of ` 517.90 crores, in favour of Rural Electrification Corporation Limited (REC) which had sanctioned The Company values its employees and treats them judiciously. a Term Loan of ` 517.90 crores to Facor Power Limited (FPL), The overall industrial relations were cordial. The Company the then subsidiary of the Company against the security of the recruits judiciously through Industry contacts, newspaper assets of FPL, the personal guarantee of two of its directors advertisements and consultants. The manpower employed is and the Corporate Guarantee of the Company, as aforesaid. around 667 excluding indirect employment. CAUTIONARY STATEMENT Pursuant to a default in the repayment of instalment and interest on the loan by FPL and upon an application filed Certain statements in the Management Discussion and by REC, the Company was admitted for commencement of Analysis Report describing the Company’s objective and Corporate Insolvency Resolution Process w.e.f 6th July, 2017 predictions may be “forward-looking statements” within pursuant to order passed by the Hon’ble National Company the meaning of applicable laws and regulations. Actual Law Tribunal, Kolkta (NCLT, Kolkata) in an application filed by results may vary significantly from the forward looking REC under section 7 of the Insolvency And Bankruptcy Code, statements contained in this document due to various risks 2016 (IBC Code, 2016). and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India, volatility An appeal against the order dated 6th July, 2017 of the National in interest rates new regulations and government policies that Company Law Tribunal, Kolkata had, however, been filed with may impact the Company’s business as well as its ability to the National Company Law Appellate Tribunal, New Delhi implement the strategy. The Company doesn’t undertake to (NCLAT, New Delhi), the outcome of which is awaited. update the statements. Further, the Resolution Professional has relied on the information and details furnished by the Company’s officials and the Directors which may be subject to review.
Ferro Alloys Corporation Limited 33 SIXTY SECOND Annual Report CORPORATE GOVERNANCE REPORT 62 2017-18
1. COMPANY’S PHILOSOPHY Corporate Governance at FACOR is based on the tenets of fairness, equity, transparency, accountability and dissemination of information. Corporate Governance has been integral to FACOR’s business operations and is an ongoing journey. The Company believes that an organization’s culture and policies form the basis of good Corporate Governance practices. FACOR recognizes its social responsibility towards the shareholders and the society and embraces its Corporate Social Responsibility with a view to improving the lives of the local populace in and around its operating perimeter, in particular. Further, employees are the most valuable asset and form the FACOR family. It is the undying spirit of FACOR which banishes all difficulties and reinforces the resolve to move forward for a better future. 2. BOARD OF DIRECTORS FACOR’s Board composition echoes Board diversity. This is best demonstrated in the well balanced and Independent structure of the Company’s Board of Directors which has a fair representation of Executive, Non-Executive and Independent Directors for enhancement of organizational capabilities. None of the Directors on the Board of the Company is a member of more than 10 Committees of a Chairman of more than 5 Committees across all Companies in which they are Directors. The composition of the Board during the year and its composition as on 31st March, 2018 was as follows:-
Name of Director Category No. of No of Whether No. of Outside shares Board last Outside Committee held Meetings AGM Directorship Position attended Attended held Held Public Member Chairman Mr R.K. Saraf, Executive* 22,10,327 1 No 2 3 - Chairman & Managing Director Mr. Manoj Saraf, Executive* 9,40,493 1 Yes 1 - - Managing Director 1 Mr.Vineet Saraf, Non-Executive* 5,14,118 0 Yes 3 1 - Director 1 Mr. A.S. Kapre Non-Executive Independent 25,000 1 Yes 4 3 3 Mr. Pinaki Misra Non-Executive Independent - 0 No 2 - - Mr. Rohit Saraf, Jt. Executive* 20,93,366 1 No 2 - - Managing Director 1 Mr. Ashish Saraf, Jt. Executive* 9,34,629 0 No 4 - - Managing Director2 Mr. M.B. Thaker Non-Executive Independent 5,294 1 No 1 3 - Mr. Umesh Kumar Non-Executive Independent - 0 No 9 2 3 Khaitan Mrs. Urmila Gupta Non-Executive Independent - 0 No 4 7 1 Woman Director * Represents Promoters. 1 Nephew of Mr. R.K. Saraf, Chairman & Managing Director 2 Son of Mr. R.K. Saraf, Chairman & Managing Director BOARD MEETINGS AND PROCEDURES: The Board of FACOR is its apex decision making body for overall control and governance of the company. In line with the provisions of the Companies Act, 2013, the provisions of erstwhile Listing Agreement which was later replaced by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI(LODR) Regulations, 2015], and also with a view to ensuring better governance and effective discharge of its duties and in compliance with statutory requirement, the Board has constituted various Committees, namely the Audit Committee, the Nomination & Remuneration Committee, the Stakeholders Relationship & Transfer Committee and the Corporate Social Responsibility Committee. Although the Board holds atleast one meeting in each quarter, wherever necessitated, additional Board Meetings are also convened in the interest of business of the Company. 34 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report CORPORATE GOVERNANCE REPORT 62 2017-18
The agenda is finalized by the Chairman of the Board and the Company Secretary after consultation with the other concerned team members of the senior management and is drawn up covering all material information and circulated well in advance of the Board meeting date to to facilitate a focused discussion on the topic. The matters to be deliberated upon are generally restricted to those covered in the Agenda except for pressing exceptional circumstances which are deemed sensitive and/or were not apprehended to be so at the time of finalization. The Board is apprised of the details concerning the agenda items by way of, notes, covering areas such as Finance, Operational functions, progress reports of the Company and its subsidiaries, their operations, status on deployment of funds in subsidiaries etc, business strategies before taking on record the quarterly financial results of the Company. During 2017-18 the Board met only once in a year on 13th May, 2017 as pursuant to an application filed by REC under section 7 of the Insolvency and Bankruptcy Code, 2016 with the National Company Law Tribunal, Kolkata against your Company, Corporate Insolvency Resolution Process was initiated w.e.f 6th July, 2017 and accordingly, Mr. K.G. Somani was appointed as Resolution Professional (RP) for the Company. Accordingly, in terms of the provisions of Section 17 of the Insolvency and Bankruptcy Code, 2016 from the date of appointment of the Resolution Professional, the management of the affairs of the Corporate Debtor i.e. the Company stood vested in the RP and the powers of the Board of Directors of the Company were being exercised by the RP. Matters required to be tabled to the Board of Directors were put up for the review and the decision of the RP from time to time in accordance with the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Independent Directors Meeting Since the powers of the board of the Company stand suspended in terms of the provisions of section 17 of the Insolvency and Bankruptcy Code, 2016, no meeting of the Independent Directors was held during the year. As a consequence, the Independent Directors could not take up the performance evaluation of the Non-Independent Directors and the Board of Directors, as a whole, or evaluate the performance of the Chairman of the Board and/or discuss aspects relating to the quality, quantity and timeliness of the flow of information between the Company, the Management and the Board. Code of Conduct: The Company has adopted the Code of Conduct for Directors, Senior Management Personnel and other Executives of the Company. The Company has received confirmations from the Directors as well as Senior Management Personnel regarding compliance of the Code during the year under review. The Company has received confirmations from the Directors regarding compliance of the Code for the year under review. Further, the Code is posted on the website of the Company www. facorgroup.in 3. COMMITTEES OF THE BOARD A. Audit Committee: Composition, Meetings and Attendance: The Company has an Audit Committee comprising of three Independent Directors. The Committee is headed by Mr. A. S. Kapre. The Company Secretary acts as the Secretary of the Committee. The role of the Audit Committee and the information to be reviewed by the Audit Committee is as specified in Part C of Schedule II to SEBI (LODR) Regulations, 2015 with the Stock Exchanges read with Section 177 of the Companies Act, 2013 and the rules made there under. The composition of the Committee as on 31st March, 2018 and the attendance of the members at the meetings held are as follows:- Name of the Director Category No. of meetings held during the tenure Whether attended last Held Attended AGM Mr. A.S. Kapre, Chairman Independent 1 1 Yes Mr. M.B. Thaker, Member Independent 1 0 No Mr. Umesh Khaitan, Member Independent 1 0 No Notwithstanding the constitution of the Audit Committee, since powers of the Board of Directors and its Committees stood suspended the financial results of the Company as also the Internal Audit Reports of the Company were also placed before RP from time to time for his perusal. Similarly, other matters required to be placed in conformity the provisions of Regulation 18(3) of SEBI (LODR) Regulations, 2015, the Companies Act, 2013 and the rules framed thereunder were also placed at regular intervals. Ferro Alloys Corporation Limited 35 SIXTY SECOND Annual Report CORPORATE GOVERNANCE REPORT 62 2017-18
Only One meeting of the Committee were held during the year ended 31 March, 2018, on 13th May, 2017 due to initiation of Corporate Insolvency Resolution Process against the Company and suspension of the powers of the Board of Directors of the Company w.e.f 6th July, 2017 and the same getting vested with the RP, as aforesaid. B. Nomination & Remuneration Committee: In terms of Section 178 of the Companies Act, 2013 and Regulation 19 of SEBI(LODR) Regulations, 2015, the Board has a “Nomination and Remuneration Committee”. The composition of the Committee and the attendance details of the members are given below: Name of Directors Category No. of Meetings held No. of Meetings Whether last attended AGM attended Mr. A. S. Kapre, Chairman Independent 1 1 Yes Mr. M.B. Thaker, Member Independent 1 1 No Mrs. Urmila Gupta, Member Independent 1 1 No Comprising of all the Independent Directors, the Committee oversees the Company’s nomination process for the Directors, Senior management and specifically to identify, screen and review individuals qualified to serve as Directors and at Senior Management consistent with criteria approved as the Nomination & Remuneration Policy approved by the Board and to recommend, for approval by the Board, nominees for election at the AGM of the shareholders. The Committee also reviews the compensation of the Company’s Wholetime Directors and senior management and also coordinates and oversees the annual self-evaluation of the performance of the Board, Committees, and of Independent Directors. One meeting of the Committee was held during the year on 13th May, 2017. Post appointment of the RP upon admission of Company under Corporate Insolvency Resolution Process, no meeting of the Nomination and Remuneration Committee was held. Details of remuneration paid to Executive Directors for the year 2017-18 are as under: Name of Director Total Remuneration including Period of Agreement perquisites and allowances (in `) Mr. R.K. Saraf, CMD 1,05,45,715.00 5 years w.e.f 29th June 2015 Mr. Manoj Saraf, MD 61,75,339.00 5 years w.e.f 1stJanuary, 2016 Mr. Ashish Saraf, JMD -- 5 years w.e.f 1st August, 2014 Mr. Rohit Saraf, JMD 61,75,395.00 5 years w.ef 1st August, 2014 Total: 2,28,96,449.00 - Further, other than the payment of remuneration as per the terms of their respective engagements, which have been approved by the members of the Company from time to time, no material transactions have been made with the Non- Executive Directors vis-à-vis your Company. During the year 2017-18, they were paid sitting fee/remuneration as under:
Name of Director Sitting Fee Paid No. of Equity Shares (In `) of ` 1/- each held Mr. A.S. Kapre 25,000/-* Mr. M.B. Thaker 30,000/-* 5,294 Mr. Pinaki Misra -- -- Mr. Vineet Saraf -- 5,14,118 Mrs.Urmila Gupta 15,000/- * - Mr. Umesh Khaitan 15,000/-* - Total 85,000/- * Includes sitting fee paid for attending Committee Meetings. Note: (i) There are no stock options and severance fees. (ii) No Notice Period is specified for Director’s Resignation / Termination.
36 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report CORPORATE GOVERNANCE REPORT 62 2017-18
C. STAKEHOLDERS RELATIONSHIP & SHARE TRANSFER COMMITTEE: In terms of Section 178 of the Companies Act, 2013 and Regulation 20 of the SEBI(LODR) Regulations, 2015, the Board has in place a “Stakeholders’ Relationship Committee”. The composition of the Committee is as under:-
Name of Director Position No. of Meetings held No. of meetings attended Mr. A.S. Kapre, Chairman 1 Mr. R.K. Saraf Member 1 Mr. M.B. Thaker Member 1 1 Mr. Rohit Saraf Member 1 Mr. Manoj Saraf Member 1 The Stakeholders Relationship & Share Transfer Committee is headed by Mr. A. S. Kapre, an Independent Director. The Committee endeavors and ensures that the complaints received are settled within a reasonable time period to the satisfaction of the aggrieved investor/ shareholder. The Committee reviews and resolves the grievances of the security holders of the Company, including complaints relating to transfer and transmission of securities, non-receipt of dividends, and such other grievances as may be raised by the security holders from time to time. However, post initiation of Corporate Insolvency Resolution Process against the Company w.e.f 6th July, 2017, the investors’ complaints were placed before the RP on a quarterly basis for his information and review. One meeting of the Committee was held during the year on 13th May, 2017. Further, the Status of Investors’ complaints received and resolved during the year 2017-18 is, as under:-
Investors complaints Resolved Not solved to the satisfaction No. of pending received of Shareholders complaints 12 12 Nil Nil
D. CONSTITUTION OF CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR) In terms of Section 135 of the Companies Act, 2013, the Board has constituted a Corporate Social Responsibility (CSR) Committee to monitor the Corporate Social Responsibility Policy of the Company and the activities included in the policy. The CSR policy of the Company can be accessed at www.facorgroup.in/Investorrelations The composition of the Committee is as under:-
Name of Director Position No. of Meetings held No. of meetings attended Mr. M. B. Thaker Chairman 1 Mr. R.K. Saraf Member 1 0 Mr. Manoj Saraf Member 1 One meeting of the Committee was held during the year on 13th May, 2017. Policy for Determining Material Subsidiaries In terms of SEBI (LODR) Regulations, 2015 the Company has formulated a Policy for Determining Material Subsidiaries and the same is available on the Company’s website. The Policy can be accessed at: http://www.facorgroup.in/Investorrelations. Vigil Mechanism The Board has formulated a Vigil Mechanism system that provides a formal mechanism for all Directors, employees and vendors of the Company to approach the Chairman of the Audit Committee of the Company and make protective disclosures about the unethical behaviour, actual or suspected fraud or violation, if any, of the Company’s Code of Conduct. Under the Policy, every Director, employee or vendor of the Company has an assured access to the Chairman of the Audit Committee. Details of the Vigil Mechanism are given in the Directors’ Report. Further, the details of vigil mechanism can be accessed at www.facorgroup.in/Investorrelations. However, with the initiation of Corporate Insolvency Resolution Process against the Company w.e.f 6th July, 2017, any person can approach the RP and make protective disclosures about the unethical behaviour, actual or suspected fraud or violation, if any, of the Company’s Code of Conduct. Ferro Alloys Corporation Limited 37 SIXTY SECOND Annual Report CORPORATE GOVERNANCE REPORT 62 2017-18
4. GENERAL BODY MEETINGS The Annual General Meeting of the Company in the last three years has been held as under:-
AGM Held Venue Day, date & time Whether Resolution passed in the last AGM Special Resolution Through Postal Ballot 59th AGM D.P. Nagar, Monday, 21st September, 2015 Yes No RANDIA – 756135, Dist. Bhadrak (Odisha) 60th AGM -DO- Thursday, 28th September,2016 Yes No 61st AGM -DO- Thursday, 28th September,2017 Yes No
5. DISCLOSURES a) Related Party Transaction: During FY 2017-18, the company entered into transactions with related parties after complying with the relevant provisions of the Companies Act, 2013, the rules framed thereunder and the provisions the SEBI (LODR) Regulations, 2015. Transactions entered into with related parties were in line with the Board’s policy on transactions with related parties. Further, the Company’s policy on Related Party Transactions can be viewed on the website of the Company at www.facorgroup.in/Investorrelations. Further, during the Financial Year 2017-18, the Company did not have any material pecuniary relationship or transactions with Non-executive Directors and there have been no materially significant related party transactions between the Company and the Directors, the management, the subsidiaries or the relatives except for those disclosed in the financial statements and the Report to the members u/s 134 of the Companies Act 2013. Also, in the preparation of financial statements, the Company has followed the Accounting Standards. The significant accounting policies which are applied have been set out in the Notes to Financial Statements. The Board has received disclosures from Key Managerial Personnel relating to material, financial and commercial transactions where they and/or their relatives have personal interest. There are no materially significant related party transactions which have potential conflict with the interest of the Company at large. b) Compliance by the Company The Company has complied with the mandatory requirements under SEBI LODR Regulations, 2015 and/or under the Companies Act, 2013 and the rules framed thereunder. c) Code of Conduct: In accordance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended (the Regulations), the Company has a Code of Conduct for Prevention of Insider Trading and the Code of Conduct (the Code) to be followed by Directors, Officers and other Employees. The Code is based on the principle that Directors, Officers and Employees of a Facor owe a fiduciary duty to, among others, the shareholders of the Company to place the interest of the shareholders above their own and conduct their personal securities transactions in a manner that does not create any conflict of interest. The Code also seeks to ensure timely and adequate disclosure of Price Sensitive Information to the investor community by the Company to enable them to take informed investment decisions with regard to the Company’s securities. The code is applicable to all Directors and such designated employees who are expected to have access to unpublished price sensitive information relating to the Company as defined in the Code. Compliance required under the Code in respect to various intimations and disclosures to be made both, internally and with stipulated authorities are strictly adhered to at all times. Mr. Ritesh Chaudhry, Company Secretary, has been appointed as the Compliance Officer for monitoring adherence to the Regulations. d) Whistle Blower Policy: The Company has adopted the Whistle Blower Policy. However, no instances of fraud or other irregularities were observed during the year 2017-18 which needed to be reported to the RP as consequent to initiation of Corporate Insolvency Resolution Process the powers of the Board and/or Committees thereof stood vested in the RP. e) The Company has complied with all the mandatory recommendation of Regulation 27 SEBI (LODR) Regulations, 2015. The Company has not adopted the non-mandatory provisions of the said clause.
38 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report CORPORATE GOVERNANCE REPORT 62 2017-18
f) Disclosure of information as per SEBI (Substantial Acquisition of Shares & Takeover) Regulations, 2011: List of persons, who constitute the Group as defined under MRTP Act, 1969 is as under: I Promoters: 1. Mrs. Mohinidevi Saraf 2. Mrs. Bimladevi Saraf 3. Mr. R.K. Saraf 4. Mr. Murlidhar Saraf II Relatives of above Five Promoters as defined under Companies Act, 2013 III Group/Associate Entities:
1 Facor Alloys Limited 27 FAL Employees Welfare Trust 2 Facor Steels Limited 28 Best Minerals Ltd. 3 Rai Bahadur Shreeram & Co. Pvt. Ltd. 29 YMR Enterprise Pvt. Ltd. 4 Shreeram Durgaprasad Ores Pvt. Ltd. 30 V & G Commercial Pvt. Ltd. 5 Saraf Bandhu Pvt. Ltd. 31 ARK Mercantile Pvt. Ltd. 6 Facor Power Ltd. 32 Vanita Enterprises Pvt Ltd. 7 Facor Realty & Infrastructure Ltd. 33 NDS Minerals Pvt Ltd. 8 GDP Infrastructure Pvt. Ltd. 34 Raghavendra Sarkar Ventures Pvt. Ltd. 9 Vidharba Iron & Steel Corpn. Ltd. 35 Mezeron Enterprises Pvt. Ltd. 10 Shreeram Shipping Services Pvt. Ltd. 36 Vakrangee Press Limited 11 Suchitra Investment & Leasing Ltd. 37 Pioneer Facor IT Infradevelopers Pvt. Limited. 12 Dass Paper Private Ltd. 38 Cati Madencilik Ithalat Ve Ihracat Anonim Sirketi. 13 Geedee Sales Services 39 Asim Minerals Pvt. Ltd. 14 Godavaridevi Saraf & Sons 40 Aone Technet Private Limited 15 Facor Energy India Ltd. 41 Arka Resources Private Limited 16 Facor Electric Limited 42 Bankey Bihari Footwears Pvt. Limited 17 Facor Solar Limited 43 Bita Infosystem Private Limited 18 FAL Power Ventures Pvt. Ltd. 44 Boula Platinum Mining Private Limited 19 Facor Minerals Pte Ltd. Singapore 45 Divyajyoti Builders Private Limited 20 Deepee Sales Corporation 46 DP Infrastructure Holdings Pvt. Ltd. 21 Facor Energy Limited,Guernsey 47 Embark Infosystems Private Limited 22 Facor Minerals (Netherlands) B.V 48 GDP Holdings Private Limited 23 Facor Turkkrom Mining Netherlands B.V. 49 Premier Commercial Corporation 24 Tusta Trading Company Inc. 50 SRX Global Private Limited 25 UMT International Ltd. 51 Trusta Resources S.L. 26 Facor Employees Welfare Trust
Disclosure of interest by Resolution Professional Mr.K.G. Somani, who is the Resolution Professional appointed for the Company has disclosed his interest, as under:
As Partner i) K.G. Somani & Co., New Delhi As Director i) K.G. Somani Management Consultants (P) Ltd. New Delhi ii) KEI Limited, New Delhi iii) NTB Bowsmith Irrigation Ltd. Pune iv) K.G. Somani Insolvency Professionals Private Ltd. v) M/s Anand Rathi Wealth Services Limited
Ferro Alloys Corporation Limited 39 SIXTY SECOND Annual Report CORPORATE GOVERNANCE REPORT 62 2017-18
6. MEANS OF COMMUNICATIONS . The financial results, important announcements, declarations are communicated to each Shareholders by means of advertisements in Financial Express and Samvaad. The Company also posts the vital information such as financial results, shareholding pattern, important information, declarations etc. on its website at www.facorgroup.in which are updated at regular intervals. . The official news releases, as and when required, are being released to the Stock Exchange. Further, the same are posted at the website of the Company from time to time. 7. GENERAL SHAREHOLDERS INFORMATION
AGM, Date, Time & Venue 18th September-, 2018 at 4 p.m. at D.P. Nagar, Randia – 756135, Bhadrak (Odisha) Particulars of Director proposed to be appointed / re-appointed in the forthcoming Annual General Meeting:
Name of Date of Date of Experience in Qualifications List of Other Public Limited Chairman / Member No. of shares Director Birth Appointment specific functional Companies in which of the committee of held areas Directorship held as on Board of other Public 31-3-2017 Limited Companies on which he was a Director as on 31st March, 2018 Mr. Vineet 12.11.1958 26.07.2014 Commercial B.Com 1) Facor Energy India Ltd. Nil 514118 Saraf Operation & 2) Facor Realty And Administration Infrastructure Ltd.
Financial Year ending 31st March, 2018 Date of Book Closure 15th September, 2018 to 18th September, 2018 (Both days inclusive) Dividend Payment Date Not applicable
CIN NO. L45201OR1955PLC008400 Listing Details:
Name of Stock Exchange Stock Code ISIN No. Bombay Stock Exchange Limited 500141 INE912A01026
Market Price Data:
Month Bombay Stock Exchange BSE Sensex (`) High Low High Low April, 2017 13.48 10.06 30184.22 29241.48 May, 2017 12.87 9.12 31255.28 29804.12 June, 2017 11.37 8.60 31522.87 30680.66 July, 2017 9.70 7.00 32672.66 31017.11 August, 2017 14.90 8.41 32686.48 31128.02 September, 2017 25.19 13.30 32524.11 31081.83 October, 2017 23.85 16.20 33340.17 31440.48 November, 2017 15.45 10.70 33865.95 32683.59 December, 2017 17.85 11.80 34137.97 32565.16 January, 2018 13.59 9.20 36443.98 33703.37 February, 2018 9.93 7.86 36256.83 33482.81 March, 2018 13.48 10.06 34278.63 32483.84
40 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report CORPORATE GOVERNANCE REPORT 62 2017-18
Registrar & Transfer Agents : Beetal Financial & Computer Services (P) Ltd. Beetal House, 3rd Floor, 99, Madangir, (RTA) Behind LSC, NEW DELHI – 110 062 Share Transfer System : Transfer of shares in physical form are normally processed within a period of 10 days from the date of lodgment subject to the documents being valid and complete in all respects. Distribution of Shareholding as on 31st March: No. of equity shares 2017 – 2018 2016 – 2017 held No. of No. of % of issued No. of No. of % of issued shareholders shares held equity share shareholders shares held equity share capital capital Up to 500 45570 16257364 8.78 43616 13446184 7.26 501 to 1000 659 5045278 2.72 514 3912988 2.11 1001 to 2000 313 4614836 2.49 264 3850090 2.08 2001 to 3000 138 3426760 1.85 110 2781282 1.50 3001 to 4000 62 2195964 1.19 51 1821363 0.98 4001 to 5000 41 1882569 1.01 42 1918012 1.04 5001 to 100000 66 4621746 2.49 52 3753297 2.02 100001 to above 70 147223724 79.47 70 153785025 83.01 Total 46919 185268241 100.00 44719 185268241 100.00 Dematerialization of shares and liquidity as on 31st March: No. of equity shares held 2017-18 2016-17 No. of No. of shares No. of No. of shares shareholders held shareholders held Physical Mode 26,542 184561844 21182 714260 Electronic Mode 20,335 7006397 23537 184553981 Total: 46,877 185268241 44719 185268241 Plant Locations: Charge Chrome Plant Mining Complex D.P. Nagar LaxmiBhawan P.O. – Randia – 756 135 Kuans, Bhadrak – 756 100 Dist. Bhadrak (Odisha) Dist. Bhadrak (Odisha) Tel.No. : +91-6784-240320 Tel.No. : +91-6784-250311/250598/251312 Fax.No.: +91-6784-240626 Fax No.: +91-6784-251782 E-mail:[email protected]; [email protected] E-mail : [email protected]
Address for Correspondence: For matters relating to Company’s Shares For other matters Beetal Financial & Computer Services (P) Ltd. Corporate Office: Beetal House, 3rd Floor, Ferro Alloys Corporation Ltd. 99, Madangir, LSC, FACOR HOUSE, Plot No. A-45 to A-50 New Delhi – 110 062 Ground Floor, Sector 16, NOIDA – 201 301 Tel No.: +91-11-29961281-33 Tel.No. : +91-120- 4171000 Fax No.:+91-11-29961284 Fax No.: +91-120-4256700 E-mail : [email protected] E-mail : [email protected]
Address of Resolution Professional Registered Office: K. G. Somani & Co. D.P. Nagar, Randia – 756 135 Chartered Accountants Dist. Bhadrak (Odisha) 3/15, Asaf Ali road, 4th Floor, New Delhi-110002 Tel.No.: +91-6784-240320 / 272 Tel No.: 01123252225 Fax.No.: +91-6784-240626 E-mail : [email protected] E-mail: [email protected] ; [email protected] Ferro Alloys Corporation Limited 41 SIXTY SECOND Annual Report CORPORATE GOVERNANCE REPORT 62 2017-18
Useful Information for Shareholders
a) Unclaimed shares:
Pursuant to section 124 and other applicable provisions, if any, of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 all unclaimed/unpaid dividend remaining unclaimed/unpaid for a period of 7 years from the date they become due for payment, have been transferred to IEPF established by the Central Government. Further, as per the rules, the shares of the Company in respect of which dividend entitlements have remained unclaimed or unpaid for seven consecutive years or more, are required to be transferred to Investor Education and Protection Fund (IEPF) of the Government of India. Accordingly, the Company has transferred 4,45,292 shares to the IEPF authority as per the Rules. The details of shares transferred are provided in the website of the Company. Shareholders may note that the shares/dividend transferred to IEPF can be claimed by making an application to the Authority in Form IEPF 5 (to be filed online) at the following link http://iepf.gov.in/IEPFA/ refund.html. Members who have not yet encashed their dividend warrants for the financial years 2010-11 are requested to correspond with the Company to make their claims.
b) Registration of Email Addresses:
Members are requested to register/ update their email addresses to:
a) The Registrars and Share Transfer Agents, M/s. Beetal Financial & Computer Services (P) Ltd., New Delhi-110 062 in respect of shares in physical & form; and
b) Their Depository Participants in respect of shares in electronic form so that upon registration of the email address, the Company could send notices and other documents, in electronic form, to such shareholders.
c) Dematerialization of Shares:
Amendment to Regulation 40 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 vide Gazette notification dated 8th June, 2018 has mandated that transfer of securities would be carried out in dematerialized form only w.e.f 5th December, 2018. Accordingly, members are advised to convert their physical holding to demat / electronic form through any of the registered Depository Participants (DPs) to avoid such hardship.
d) Registration of National Electronic Clearing Services (NECS) / Electronic Clearing Services (ECS) mandate:
NECS/ECS facility ensures timely remittance of dividend without possible loss / delay in postal transit. Shareholders/ Members holding shares in electronic form may register their NECS/ECS details with the respective DPs and Shareholders / Members holding shares in physical form may register their NECS/ECS details with the Registrars and Share Transfer Agents, to receive dividends, if declared, via the NECS / ECS mode.
e) Updation of Address / Bank Details:
To receive all communications/corporate actions promptly, shareholders holding shares in dematerialized form are requested to please update their address / bank details with the respective DPs and in case of physical shares, the updated details have to be intimated to the Registrar & Share Transfer Agents.
f) Consolidation of multiple folios (in respect of physical shareholding):
Members are requested to consolidate their shareholdings under multiple folios to eliminate the receipt of multiple communications and this would ensure that future correspondence / corporate benefits could then be sent to the consolidated folio.
g) Compliances of mandatory requirements and adoption of the non-mandatory requirements
The Company has complied with all the mandatory requirements and the following non-mandatory requirement:
The statutory financial statements of the Company are unqualified.
h) Non-Compliance of Any Requirement Of Corporate Governance Report
None
i) The Disclosures Of The Compliance With Corporate Governance Requirements Specified In Regulation 17 To 27 And Clauses (B) To (I) Of Sub-Regulation (2) Of Regulation 46 Of Listing Regulations
42 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report CORPORATE GOVERNANCE REPORT 62 2017-18
I. Disclosure on website in terms of Listing Regulations Item Compliance status (Yes/No/NA) Details of business Yes Terms and conditions of appointment of independent directors Yes Composition of various committees of Board of Directors Yes Code of conduct of Board of Directors and senior management personnel Yes Details of establishment of vigil mechanism/ Whistle Blower Policy Yes Criteria of making payments to non-executive directors Yes Policy on dealing with related party transactions Yes Policy for determining ‘material’ subsidiaries Yes Details of familiarization programmes imparted to independent directors NA [due to initiation of Corporate Insolvency Resolution Process against the Company under Insolvency and Bankruptcy Code, 2016] Contact information of the designated officials of the listed entity who are Yes responsible for assisting and handling investor grievances email address for grievance redressal and other relevant details Yes Financial results Yes Shareholding pattern Yes Details of agreements entered into with the media companies and/or their NA associates New name and the old name of the listed entity NA
II. Annual Affirmations Particulars Regulation Compliance Status Number (Yes/No/NA) Independent director(s) have been 16(1)(b) & 25(6) Yes appointed in terms of specified criteria of ‘inde- pendence’ and/or ‘eligibility’ Board composition 17(1) Yes [Powers of the Board, however, stand sus- pended w.e.f 6th July, 2017 under section 17 of Insolvency and Bankruptcy Code, 2016 due to initiation of Corporate Insolvency Resolution Process against the Company]. Meeting of Board of directors 17(2) Only one meeting of the Board was held during the year as powers of the Board were suspended under section 17 of the Insolven- cy and Bankruptcy Code, 2016 upon initia- tion of Corporate Insolvency Resolution Pro- cess against the Company and appointment of Resolution Professional. Review of Compliance Reports 17(3) Yes Plans for orderly succession for ap- 17(4) Yes pointments Code of Conduct 17(5) Yes
Ferro Alloys Corporation Limited 43 SIXTY SECOND Annual Report CORPORATE GOVERNANCE REPORT 62 2017-18
Fees/compensation 17(6) Yes Minimum Information 17(7) Yes Compliance Certificate 17(8) Yes Risk Assessment & Management 17(9) Yes Performance Evaluation of Indepen- 17(10) Not undertaken during the year under review dent Directors consequent upon suspension of the powers of the Board of Directors of the Compa- ny under section 17 of the Insolvency and Bankruptcy Code, 2016 and appointment of Resolution Professional Composition of Audit Committee 18(1) Yes. However, powers of the Audit Committee of the Board of Directors of the Company stand suspended under section 17 of the Insolven- cy and Bankruptcy Code, 2016 upon initia- tion of Corporate Insolvency Resolution Pro- cess against the Company and appointment of Resolution Professional. Meeting of Audit Committee 18(2) Only one meeting of the Committee was held during the year consequent upon sus- pension of the powers of the Board of Direc- tors and its Committees under section 17 of the Insolvency and Bankruptcy Code, 2016 upon initiation of Corporate Insolvency Res- olution Process against the Company and appointment of Resolution Professional. Composition of Nomination & Remu- 19(1) & (2) Yes neration Committee However, powers of the Committee of the Board of Directors of the Company stand suspended under section 17 of the Insolven- cy and Bankruptcy Code, 2016 upon initia- tion of Corporate Insolvency Resolution Pro- cess against the Company and appointment of Resolution Professional. Composition of Stakeholder Rela- 20(1) & (2) - Do - tionship Committee Composition and role of Risk Man- 21(1),(2),(3),(4) NA agement Committee Vigil Mechanism 22 Yes Policy for Related Party Transaction 23(1),(5),(6),(7) & (8) Yes Prior or Omnibus approval of Audit 23(2), (3) Yes Committee for all related party trans- actions Approval for material related party 23(4) Yes transactions Composition of Board of Directors of 24(1) Till 6th November, 2017, one of the Indepen- unlisted material Subsidiary dent Directors of the Company was on the Board of the Facor Power Limited (FPL), the material subsidiary of the Company. However, w.e.f 7th November, 2017, the management control of FPL was taken over by its lenders under SARFAESI Act, 2002 and the then existing Board of FPL was dissolved and new Directors nominated by REC were placed on the Board of FPL w.e.f 7th November, 2017.
44 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report CORPORATE GOVERNANCE REPORT 62 2017-18
Other Corporate Governance re- 24(2),(3),(4),(5) & (6) Yes quirements with respect to subsidiary of listed entity Maximum Directorship & Tenure 25(1) & (2) Yes Meeting of independent directors 25(3) & (4) Not held during the year consequent upon suspension of the powers of the Board of Di- rectors of the Company under section 17 of the Insolvency and Bankruptcy Code, 2016 upon initiation of Corporate Insolvency Res- olution Process against the Company and appointment of Resolution Professsional. Familiarization of independent direc- 25(7) - Do - tors Memberships in Committees 26(1) Yes Affirmation with compliance to code 26(3) Yes of conduct from members of Board of Directors and Senior management personnel Disclosure of Shareholding by Non- 26(4) Yes Executive Directors Policy with respect to Obligations of 26(2) & 26(5) Yes directors and senior management Other Corporate Governance re- 27 Yes quirements
DECLARATION ON COMPLIANCE OF THE COMPANY’S CODE OF CONDUCT
As provided under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board Members and the Senior Management Personnel have confirmed Compliance with the Code of Conduct for the year ended 31st March, 2017.
Place: Noida, U.P. R. K. Saraf Date : 14th August, 2017 Chairman & Managing Director
Ferro Alloys Corporation Limited 45 SIXTY SECOND Annual Report CORPORATE GOVERNANCE REPORT 62 2017-18
AUDITORS’ CERTIFICATE To the Members of Ferro Alloys Corporation Limited
We have examined the compliance of conditions of corporate governance by Ferro Alloys Corporation Limited (“the Company”) for the year ended on 31 March 2018, as stipulated in Regulations 17 to 27, clauses (b) to (i) of Regulation 46 (2) and paragraphs C, D and E of Schedule V to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’).
The preparation of the Corporate Governance Report is the responsibility of the Management of the Company including the preparation and maintenance of all relevant supporting records and documents. The Management along with the Board of Directors are also responsible for ensuring that the Company complies with the conditions of Corporate Governance as stipulated in the Listing Regulations.
Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of corporate governance. It is neither an audit nor an expression of an opinion on the financial statements of the Company.
We have examined the relevant records of the Company in accordance with the Generally Accepted Auditing Standards in India, to the extent relevant, and as per the Guidance Note on Certification of Corporate Governance issued by the Institute of Chartered Accountants of India.
In our opinion and to the best of our information and according to our examination of the relevant records and the explanations given to us, we certify that the Company has complied with the conditions of corporate governance as stipulated in the above mentioned Listing Regulations.
We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency of effectiveness with which the management has conducted the affairs of the Company.
Restriction on use
This certificate is issued solely for the purpose of complying with the aforesaid Listing Regulations and may not be suitable for any other purpose.
Abhay Upadhye Partner Membership No. 049354 For & on behalf of K.K. Mankeshwar& Co Chartered Accountants FRN No. 106009W
Noida, dated the 14th August, 2018
46 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report INDEPENDENT AUDITOR’S REPORT 62 2017-18
TO THE MEMBERS OF FERRO ALLOYS CORPORATION LIMITED Report on the Standalone Financial Statements We have audited the accompanying standalone financial statements of FERRO ALLOYS CORPORATION LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended and a summary of the significant accounting policies and other explanatory information. Management’s Responsibility for the Standalone Financial Statements The Company’s Management is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these standalone financial statements based on our audit. In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone financial statements. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, including the Ind AS, of the state of affairs of the Company as at March 31, 2018, and its profit, total comprehensive income, the changes in equity and its cash flows for the year ended on that date. Emphasis of Matter a. As per Note 39(A)(b) to the Financial Statements, that the Corporate Guarantee extended by the Company along with Facor Alloys Limited to the bankers (consortium) of Facor Steels Limited for Rs. 142.40 Crores has been invoked to the extent of Rs. 33.82 Crores. The Company has not made any provision for the invoked amount, as the same is being contested. b. As per Note 39(A)(c) to the Financial Statements, the Corporate Guarantee given by the company for its subsidiary Facor Power Limited to Rural Electrification Corporation Limited (REC) has been invoked amounting to Rs. 510.98 Crores and interest thereon as on 31st March, 2018 for which, the Company is contesting. c. As per Note 39(A)(a) of the Financial Statements, the Revisional Authority, DDM has issued a demand notices for Rs. 200.56 Crores (with respect to Ostapal mine toward compensation for excess mining during the period from 2000-01 to 2006-07) and Rs.0.55 crores (being the price towards compensation u/s 21(5) of MMDR Act, 1957 for production without/ in excess of the environmental clearance for the period from 2000-01 to 2010-11) in respect of Kathpal Mine. The revisional authority, Ministry of Mines New Delhi vide order dtd 10.05.2018 has ordered stay of the aforesaid demands till the next date of hearing.
Ferro Alloys Corporation Limited 47 SIXTY SECOND Annual Report INDEPENDENT AUDITOR’S REPORT & ANNEXURE 62 2017-18 d. As per Note 39(A)(a) of the Financial Statements, a demand of Rs. 63.27 Crores (including penalty of Rs. 31.63 Crores) has been raised by Commissioner, GST & Central Excise, Bhubaneswar vide its order dated 31st October, 2017, levying service tax in respect of Corporate Guarantee issued by the Company to Financial Institutions/Banks for the Loans/facilities sanctioned in favour of its subsidiary. The same is not provided for as the Company is contesting the same. e. As per Note 39(A)(a) of the financial Statements, a demand of Rs. 28.38 Crores has been raised by The Commissioner, GST & Central Excise, Bhubaneshwar vide its order dated 15.05.2018 related to availment and transfer of Service Tax for the period from April, 2013 to June, 2017, which liability, the Company is contesting. Our opinion is not modified in respect of the above matters Report on Other Legal and Regulatory Requirements 1. As required by Section 143(3) of the Act, based on our audit we report that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account. d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act. e) On the basis of the written representations received from the directors as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as a director in terms of Section 164 (2) of the Act. f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting. g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us: i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements. ii. There are no material foreseeable losses, on long-term contracts including derivative contracts. iii. There have been no delays in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company; 2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order.
Abhay Upadhye Partner Membership No. 049354 For and on behalf of
K.K. MANKESHWAR & CO. Place : Noida Chartered Accountants Date : 29th May, 2018 FRN: 106009W
ANNEXURE ‘A’ TO THE INDEPENDENT AUDITOR’S REPORT (Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of our report to the Members of FERRO ALLOYS CORPORATION LIMITED of even date) We report that, i. In respect of the Company’s fixed assets: (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
48 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report INDEPENDENT AUDITOR’S REPORT & ANNEXURE 62 2017-18
(b) The Company has a regular programme of physical verification of fixed assets. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the company and the nature of its asset. (c) The title deeds of immovable properties are held in the name of the Company. ii. Physical verification of Inventory has been conducted at reasonable intervals by the Management. No material discrepancies were noticed. iii. According to the information and explanations given to us, the Company has not granted any unsecured loans to bodies corporate, covered in the register maintained under section 189 of the Companies Act, 2013. iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable. v. The Company has not accepted deposits during the year and does not have any unclaimed deposits as at March 31, 2018 and therefore, the provisions of the clause 3 (v) of the Order are not applicable to the Company. vi. The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013 for the business activities carried out by the Company and we are of the opinion that prima facie such accounts and records have been made and maintained. vii. According to the information and explanations given to us, in respect of statutory dues: (a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Service Tax, Goods and Service Tax, Value Added Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities. (b) There were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Service Tax, Value Added Tax, Goods and Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues in arrears as at March 31, 2018 for a period of more than six months from the date they became payable. (c) Details of dues of Income Tax, Sales Tax, Service Tax, Excise Duty and Value Added Tax which have not been deposited as at March 31, 2018 on account of dispute are given below:
Nature of ` in Lakhs Forums where the dispute is pending Period dues (Net of Payment) 10.16 Deputy Commissioner of Customs, Paradip; 1990-91, 2000-01; 137.84 Asst. Commissioner of Central Excise, Customs & Service tax, Balasore; 1981-82, 1982-83, 1985-86, 1988-89, 1989-90, 1990-91, 1996-97, 1997-98, 1999-00, 2000-01, 2001-02; Custom Duty 64.96 Commissioner of Customs(Appeals), Kolkata 1983-84 61.18 Hon’ble High Court, Odisha; 1995-96, 1997-98; 8.15 Joint Secretary(Review), CBEC, New Delhi; 1994-95; 75.87 Assistant Commissioner Of Central Excise, Customs & Service Tax , Balasore; 2013-14 & 2014-15; 6089.72 Commissioner Of Central Excise, Customs & Service Tax , Bhubneshwar; 2009-10,2010-11, 2011-12, 2013-14,2014-15; 3513.47 Commissioner, GST & Central Excise, Bhubneshwar. 2015-16,2013 to 2018.
Central 2.20 Assistant Commissioner Of Central Excise Customs & Service Tax Balasore; 1981 Excise & 22.88 Assistant Commissioner Of Central Excise, Customs & Service Tax Appelate Tribunal, West 2001-02, 2002-03; Service tax Zonal Bench, Mumbai; 1190.47 Customs Excise & Service Tax Appellate Tribunal, Kolkata; 2007-08, 2008-09; 79.88 Commissioner (Appeals) Central Excise Customs & Service tax Bhubneshwar; 2005-06, 2007-08, 2008-09, 2009-10; 85.11 Joint Commissioner Central Excise Customs & Service tax, Bhubneshwar 2011-12, 2012-13, 2013-14. 25.08 Addl. Commissioner Of Sales Tax, Central Zone, Cuttack 1980-81, 1981-82, 2005-06, 2006-07, 2000-01, 2003-04; 10.69 Sales tax tribunal, Cuttack; 2005-06,2006-07, 2007-08; Sales Tax 9.49 Addl. Commissioner, Cuttack; 1999-00, 2005-06, 525.36 Joint Commissioner Commercial Taxes, Balasore. 2006-07, 2007-08, 2016-17. viii. The Company has not defaulted in repayment of loan or borrowing to financial institutions, banks, government or dues to debenture holders.
Ferro Alloys Corporation Limited 49 SIXTY SECOND Annual Report INDEPENDENT AUDITOR’S REPORT & ANNEXURE 62 2017-18 ix. The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans during the year and hence reporting under clause 3 (ix) of the Order is not applicable to the Company. x. To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company or no material fraud on the Company by its officers or employees has been noticed or reported during the year. xi. In our opinion and according to the information and explanations given to us, the Company has paid/provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act. xii. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of the Order is not applicable to the Company. xiii. In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards. xiv. During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly paid convertible debentures and hence reporting under clause 3 (xiv) of the Order is not applicable to the Company. xv. In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its Directors or persons connected to its directors and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company. xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Abhay Upadhye Partner Membership No. 049354 For and on behalf of
K.K. MANKESHWAR & CO. Place : Noida Chartered Accountants Date : 29th May, 2018 FRN: 106009W
ANNEXURE “B” TO THE INDEPENDENT AUDITOR’S REPORT (Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report to the Members of FERRO ALLOYS CORPORATION LIMITED of even date) Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) We have audited the internal financial controls over financial reporting of FERRO ALLOYS CORPORATION LIMITED (“the Company”) as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date. Management’s Responsibility for Internal Financial Controls The Management of the Company is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly 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, as required under the Companies Act, 2013. Auditor’s Responsibility Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
50 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report INDEPENDENT AUDITOR’S REPORT & ANNEXURE 62 2017-18
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting. Meaning of Internal Financial Controls over Financial Reporting A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Abhay Upadhye Partner Membership No. 049354 For and on behalf of
K.K. MANKESHWAR & CO. Place : Noida Chartered Accountants Date : 29th May, 2018 FRN: 106009W
Ferro Alloys Corporation Limited 51 SIXTY SECOND Annual Report BALANCE SHEET AS AT 31ST MARCH, 2018 62 2017-18
STANDALONE ACCOUNTS (` in Lacs) Particulars Notes As at As at As at 31 March 2018 31 March 2017 01 April 2016 ASSETS Non-current assets Total Property, Plant and Equipment 3 16,446.79 18,080.62 18,746.30 Capital Work-in-Progress 4 700.06 957.75 965.99 Assets held for Sale 15.14 29.97 - Intangible Assets 5 1,249.64 1,339.01 654.24 Investments in Subsidiaries and Associates 6 10.36 10.42 10.56 Financial Assets - Investments 7 18.25 22.10 6.30 Other Financial Assets 8 912.26 866.09 863.15 Other Non-Current Assets 9 1,070.08 644.36 321.30 Total Non-Current Assets 20,422.58 21,950.32 21,567.84 Current Assets Inventories 10 7,366.92 7,774.01 6,859.57 Financial Assets - (i) Trade Receivables 11 850.86 5,585.22 1,452.65 (ii) Cash and Cash Equivalents 12 1,428.36 501.46 290.70 (iii) Other Bank Balances 13 2.34 4.42 4.42 (iv) Other Financial Assets 14 51.04 59.88 80.31 Other Current Assets 15 3,023.89 2,590.03 3,138.89 Current Tax Assets (Net) 82.92 - Total Current Assets 12,806.33 16,515.02 11,826.54 Total Assets 33,228.91 38,465.34 33,394.38 EQUITY AND LIABILITIES Equity Equity Share Capital 16 1,852.68 1,852.68 1,852.68 Other Equity 17 18,236.83 12,744.54 10,744.29 Total Equity 20,089.51 14,597.22 12,596.97 Liabilities Non-Current Liabilities Financial Liabilities (i) Borrowings 18 1,619.01 1,831.55 2,750.83 Deferred Tax Liabilities (Net) 19 334.87 820.93 (65.55) Provisions 20 299.06 302.83 272.23 Other Non-Current Liabilities 21 218.65 218.65 218.65 Total Non-Current Liabilities 2,471.59 3,173.96 3,176.16 Current Liabilities Financial Liabilities (i) Borrowings 22 2,312.18 9,211.71 5,876.25 (ii) Trade Payables 23 4,234.11 7,560.37 7,316.04 (iii) Other Financial Liabilities 24 1,060.63 1,069.54 1,389.63 Other Current Liabilities 25 2,165.26 1,524.51 1,687.79 Provisions 26 895.63 1,243.72 1,334.87 Current Tax Liabilities (Net) 27 - 84.31 16.67 Total Current Liabilities 10,667.81 20,694.16 17,621.25 Total Liabilities 13,139.40 23,868.12 20,797.41 Total Equity and Liabilities 33,228.91 38,465.34 33,394.38 Notes on Financial Statements 1 to 51 The notes referred to above from an integral part of the Balance sheet. As per our report of even date. By Order of the Resolution Professional Abhay Upadhye Yashpal Mehta Manoj Saraf Partner Chief Financial Officer Managing Director (Membership No. 049354) (DIN: 00234570) For K.K. Mankeshwar & Co. Chartered Accountants (Firm’s Regn. No. 106009W) Ritesh Chaudhry Rohit Saraf Place: NOIDA Sr. General Manager (Legal) & Joint Managing Director Date: 29.05.2018 Company Secretary (DIN: 00003994) 52 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2018 62 2017-18
STANDALONE ACCOUNTS (` in Lacs) Particulars Notes For the Year Ended For the Year Ended 31 March 2018 31 March 2017 Revenue Revenue from Operations 28 54,542.70 64,026.48 Other Income 29 571.10 529.96
Total Income 55,113.80 64,556.44 Expenses Cost of Materials Consumed 30 18,184.89 25,024.54 Change in Inventory of Finished Goods and Stock in Progress 31 (907.90) 352.26 Excise Duty Expenses 634.45 2,882.24 Employee Benefits Expense 32 4,346.25 4,184.44 Finance Costs 33 986.48 1,602.04 Depreciation and Amortization Expense 34 575.05 663.06 Other Expenses 35 27,294.80 26,088.93 Total Expenses 51,114.02 60,797.51 Profit/ (Loss) Before Exceptional Items and Tax 3,999.78 3,758.93 Exceptional Items Profit/(Loss) on Fixed Asset Sold/Discarded (Net) 2,487.87 36.31 Profit/ (Loss) Before Tax 6,487.65 3,795.24 Tax Expense: 36 Current tax 1,403.27 692.88 Tax for earlier years (3.03) (93.69) Deferred tax (460.76) 999.18 Profit/ (loss) for the period (A) 5,548.17 2,196.87 Other Comprehensive Income Items that will not be reclassified to Profit or Loss Remeasurement of defined benefit plans (73.14) (334.28) Fair Value of Investment (8.05) 16.30 Income Tax on items that will not be reclassified to Profit and loss 25.31 115.69 Total Other Comprehensive income for the period (B) (55.88) (202.29) Total Comprehensive Income for the period (A + B) 5,492.29 1,994.58 Earnings per equity share 37 Basic 2.99 1.19 Diluted 2.99 1.19 Notes on Financial Statements 1 to 51
The accompanying notes are an integral part of these financial statements. As per our report of even date. By Order of the Resolution Professional
Abhay Upadhye Yashpal Mehta Manoj Saraf Partner Chief Financial Officer Managing Director (Membership No. 049354) (DIN: 00234570) For K.K. Mankeshwar & Co. Chartered Accountants (Firm’s Regn. No. 106009W) Ritesh Chaudhry Rohit Saraf Place: NOIDA Sr. General Manager (Legal) & Joint Managing Director Date: 29.05.2018 Company Secretary (DIN: 00003994)
Ferro Alloys Corporation Limited 53 SIXTY SECOND Annual Report 62 2017-18
Total - - in Lacs) ` (106.50) 1,768.86 5,548.17 ( 1,768.86 5,441.67 12,513.15 23,593.17 10,744.29 12,513.15 17,954.82 (12,848.88) OCI - - - - - (98.45) (98.45) (449.97) (449.97) (449.97) (449.97) (548.42) of defined STANDALONE ACCOUNTS STANDALONE benefit plans Remeasurement Rohit Saraf Fair Manoj Saraf 8.25 (DIN: 00003994) 16.30 16.30 (8.05) (DIN: 00234570) - - - - 16.30 16.30 (8.05) Managing Director Value of Value Joint Managing Director Investment
5.66 5.66
- - - Equity 276.65 By Order of the Resolution Professional - 270.99 270.99 276.65 276.65 in Lacs) 1,852.68 ` 1,852.68 Portion of ( Borrowings - Reserves & Surplus As at 31 March 2017 - - No. of Shares - earnings 2,196.87 5,548.17 Retained 3,953.94 2,196.87 5,548.17 (6,969.06) (9,165.93) (6,969.06) (1,420.89) 185,268,241 (13,119.87) 185,268,241 ------General Reserve in Lacs) 1,852.68 ` 1,852.68 19,200.00
( 19,200.00 19,200.00 19,200.00 19,200.00 Yashpal Mehta Yashpal Ritesh Chaudhry As at 31 March 2018 Company Secretary ------439.23 Chief Financial Officer 439.23 439.23 439.23 439.23 - MARCH, 2018 Account Premium ST Securities General Manager (Legal) & Sr. 185,268,241 No. of Shares 185,268,241
(a) Equity share capital Balance at the beginning of year Changes in equity share capital during the year Balance at the end of reporting period (b) Other equity Balance at 1 April 2016 Balance at 1 Adjustments AS Impacts due to Ind Restated balance at the beginning of reporting period Profit for the year 2016-17 Other comprehensive income/ (loss) for the year comprehensive income for the year Total Balance at 31 March 2017 Changes in accounting policy / prior period errors Restated balance at the beginning of reporting period Profit for the year 2017-18 Other comprehensive income for the year comprehensive income for the year Total Balance at 31 March 2018 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 FOR THE OF CHANGES IN EQUITY STATEMENT As per our report of even date. Abhay Upadhye Partner (Membership No. 049354) For K.K. Mankeshwar & Co. Chartered Accountants Regn. No. 106009W) (Firm’s Place: NOIDA Date: 29.05.2018 54 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2018 62 2017-18
STANDALONE ACCOUNTS (` in Lacs) S. Particulars For the year ended For the year ended No. 31 March 2018 31 March 2017 A Cash flows from operating activities Net Profit/ (Loss) after Prior Period Items and before Tax 6,487.65 3,795.24 Adjustments For: a) Interest Income (80.06) (72.94) b) Depreciation 632.42 720.42 c) Interest Expense 986.48 1,602.04 Operating Cash Profit before Working Capital Changes 8,026.49 6,044.76 Movement in Working Capital:- a) Increase/(Decrease) in Trade Payables (3,326.26) 244.33 b) Increase/(Decrease) in Other Current Liabilities 640.75 (163.27) c) Increase/(Decrease) in Other Current Financial Liabilities (113.70) (307.21) d) Increase/(Decrease) in Other Non Current Liabilities - - e) (Increase)/Decrease in Other Non Current Financial Assets (46.17) (2.94) f) (Increase)/Decrease in Provisions (425.00) (394.83) g) (Increase)/Decrease in Other Non Current Assets (425.72) (323.06) h) (Increase)/Decrease in Other Current Financial Assets 1.94 19.69 i) (Increase)/Decrease in Inventories 407.09 (914.44) j) (Increase)/Decrease in Trade Receivables 4,734.36 (4,132.57) k) (Increase)/Decrease in Other Current Assets (433.86) 548.86 Cash Generated From/ (used in) operations 9,039.92 619.32 Less: Income Tax Paid (net of refunds) (1,567.47) (531.55) Net Cash Generated From/ (used in) Operating Activities before Extraordinary item 7,472.45 87.77 Outflow for extraordinary item (2,487.87) (36.31) Net Cash Generated From/ (used in) Operating Activities(A) 4,984.58 51.46 B Cash Flow from Investing Activities: (Purchase) of property, plant and equipment and capital work in progress (763.13) (913.66) Net proceeds of property, plant and equipment and capital work in progress 4,614.30 188.72 Interest received 89.04 73.68 Net movement in Investments (4.13) 0.64 Net Cash Generated from/ (Used in) Investing Activities (B) 3,936.08 (650.62) C. Cash Flow from Financing Activities: Net proceeds/(Repayment) of Long Term Borrowings (7,194.25) 2,424.84 Interest Expense Paid (799.51) (1,614.92) Issue of Shares - - Net Cash generated from/ (used in) Financing Activities (C) (7,993.76) 809.92 Net Increase/(Decrease) in Cash and Cash Equivalents ( A+B+C) 926.90 210.76 Cash and cash equivalents at the beginning of the year 501.46 290.70 Cash and Cash Equivalents at the end of the year 1,428.36 501.46 Reconciliation between the opening and closing balances in balance sheet for liabilities arising from financing activities Particulars Short Term Borrowings Long Term Borrowings Opening Balance as on 1 April 2017 9,211.71 1,864.00 Financing Cash Flows (6,899.53) (295.00) Non Cash Changes Interest Accrued 111.38 75.58 Fair Value Changes - 82.47 Closing Balance as on 31 March 2018 2,423.56 1,727.05
As per our report of even date. By Order of the Resolution Professional
Abhay Upadhye Yashpal Mehta Manoj Saraf Partner Chief Financial Officer Managing Director (Membership No. 049354) (DIN: 00234570) For K.K. Mankeshwar & Co. Chartered Accountants (Firm’s Regn. No. 106009W) Ritesh Chaudhry Rohit Saraf Place: NOIDA Sr. General Manager (Legal) & Joint Managing Director Date: 29.05.2018 Company Secretary (DIN: 00003994)
Ferro Alloys Corporation Limited 55 SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
1. Reporting Entity Ferro Alloys Corporation Limited referred to as “FACOR” or “the Company” is domiciled in India. The Company’s registered office is at Randia, Odisha. The Company is listed at Bombay Stock Exchange. At one point of time FACOR was one of the India’s largest producers and exporters of Ferro Alloys, an essential ingredient for manufacture of Steel and Stainless Steel. FACOR is also engaged in Chrome Ore exploration, mining and beneficiation in the state of Odisha. FACOR was incorporated in 1955. 2. Significant Accounting Policies a) Basis of preparation These financial statements have been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard (‘Ind AS’), prescribed under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder; and other accounting principles generally accepted in India. The financial statement up to year ended 31 March, 2017 were prepared in accordance with Generally Accepted Accounting Principles (GAAP) in India and complied with the applicable accounting standards prescribed in the Companies (Accounting Standards) Rules, 2014 issued by the Central Government and as per relevant provisions of the Companies Act, 2013 read together with Paragraph 7 of The Companies (Accounts) Rules, 2014. The financial statements for the year ended 31 March, 2018 are the first financial statements of the Company are prepared under Ind AS. An explanation of how the transition to Ind AS has affected the reported financial position, financial performance and cash flows of the Company is provided in notes to accounts. b) Basis of measurement The financial statements have been prepared on a historical cost basis except the following items, which are measured on alternative basis on each reporting date: - Property, plant and equipment at fair value; - Certain financial assets (including derivative instruments) that is measured at fair value - Defined benefit liability/(assets): fair value of plan assets less present value of defined benefit obligation The standalone financial statements have been prepared on the following basis: Equity accounting Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the Company’s share of the post-acquisition profits or losses of the investee in profit and loss, and the Company’s share of other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates and joint ventures are recognised as a reduction in the carrying amount of the investment. When the Company’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, unless it has incurred obligations or made payments on behalf of the other entity. The carrying amount of equity accounted investments are tested for impairment in accordance with the policy. c) Functional and presentation currency These financial statements are presented in Indian Rupee (‘INR’), which is the Company’s functional currency. All amounts have been rounded to the nearest rupees, unless otherwise indicated. d) Use of judgements and estimates In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the company’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively. A. Judgements Information about the judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the financial statements have been given below: - Leases:Whether an arrangement contains a lease - Classification of leases into finance and operating lease
56 Ferro Alloys Corporation Limited SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
- Classification of financial assets: assessment of business model within which the assets the assets are held and assessment of whether the contractual terms of the financial asset are solely payments of principal and interest on the principal amount outstanding. B. Assumptions and estimation uncertainties Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the financial statements for the year ended 31March 2018 is included below: - Impairment test: key assumptions underlying recoverable amounts, including the recoverability of development costs; - Useful life of property, plant & equipment - Recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources e) Property, plant and equipment: Recognition and measurement Items of property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment loss if any. The cost of assets comprises of purchase price and directly attributable cost of bringing the assets to working condition for its intended use including borrowing cost and incidental expenditure during construction incurred upto the date when the assets are ready to use. Capital work in progress includes cost of assets at sites, construction expenditure and interest on the funds deployed. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as a separate items (major components) of property, plant and equipment. Any gain on disposal of property, plant and equipment is recognised in Profit and loss account. Subsequent Measurement Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the company. Depreciation The charge in respect of depreciation on tangible assets acquired prior to 01.04.2014 is provided on different fixed assets on the basis of ‘straight line method’ and ‘written down value method’ over the useful life of assets after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life as evaluated by external valuers and further reviewed by the technical Management based on historical experience. Hence, the useful lives for these assets is different from the useful lives as prescribed under Part C of Schedule II of the Companies Act,2013 However, the useful life of the assets acquired on or after 1st April, 2014, is in accordance with the useful lives as prescribed for those assets in Part C of Schedule II of the Companies Act, 2013. Cost of leasehold land is amortized over the lease period. Depreciation methods, useful lives and residual values are reviewed at each financial year end and changes, if any, are accounted for prospectively. f) Intangible assets Intangible Assets are stated at cost less accumulated amortization and impairment loss, if any.Intangible assets are amortized on straight line method basis over the estimated useful life. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the company. g) Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial instruments also include derivative contracts such as foreign exchange forward contracts, cross currency interest rate swaps, interest rate swaps and currency options; and embedded derivatives in the host contract. Financial Assets Initial recognition and measurement All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Ferro Alloys Corporation Limited 57 SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
Classifications The company classifies its financial assets as subsequently measured at either amortized cost or fair value through comprehensive income or fair value through profit and loss account depending on the company’s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. Business model assessment The company makes an assessment of the objective of a business model in which an asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. Assessment whether contractual cash flows are solely payments of principal and interest For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as profit margin. In assessing whether the contractual cash flows are solely payments of principal and interest, the company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. Debt instruments at amortised cost A financial asset is measured at amortised cost only if both of the following conditions are met: - it is held within a business model whose objective is to hold assets in order to collect contractual cash flows. - the contractual terms of the financial asset represent contractual cash flows that are solely payments of principal and interest. After initial measurement, such financial assets are subsequently measured at amortised cost using the EIR method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. Debt instrument at fair value through Other Comprehensive Income (FVOCI) Debt instruments with contractual cash flow characteristics that are solely payments of principal and interest and held in a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets are classified to be measured at FVOCI. Debt instrument at fair value through profit and loss (FVTPL) Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVOCI, is classified as at FVTPL. In addition, the company may elect to classify a debt instrument, which otherwise meets amortized cost or FVOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’). Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss. On initial recognition an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in fair value in OCI. This election is made on an investment-by-investment basis. All other Financial Instruments are classified as measured at FVTPL. Derecognition of financial assets A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the company’s balance sheet) when: - The rights to receive cash flows from the asset have expired, or - The company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the company has transferred substantially all the risks and rewards of the asset, or (b) the company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset When the company has transferred its rights to receive cash flows from an asset or has entered into a pass- through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When 58 Ferro Alloys Corporation Limited SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the company continues to recognize the transferred asset to the extent of the company’s continuing involvement. In that case, the company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the company has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the company could be required to repay. On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognised) and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in OCI is recognised in profit or loss. Impairment of financial assets The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk. With regard to trade receivable, the Company applies the simplified approach as permitted by Ind AS 109, Financial Instruments, which requires expected lifetime losses to be recognised from the initial recognition of the trade receivables. Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, amortised cost, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of amortised cost, net of directly attributable transaction costs. Subsequent measurement The measurement of financial liabilities depends on their classification, as described below: Financial Liabilities measured at amortised cost After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss. Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognised in the profit or loss. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ loss are not subsequently transferred to P&L. However, the group may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss. Derecognition of financial liabilities The company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. Modifications of financial assets and financial liabilities Financial assets If the terms of a financial asset are modified, the company evaluates whether the cash flows of the modified
Ferro Alloys Corporation Limited 59 SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
asset are substantially different. If the cash flows are substantially different, then the contractual rights to cash flows from the original financial asset are deemed to have expired. In this case, the original financial asset is derecognised and a new financial asset is recognised at fair value. If the cash flows of the modified asset carried at amortised cost are not substantially different, then the modification does not result in derecognition of the financial asset. In this case, the company recalculates the gross carrying amount of the financial asset and recognises the amount arising from adjusting the gross carrying amount as a modification gain or loss in profit or loss. If such a modification is carried out because of financial difficulties of the borrower, then the gain or loss is presented together with impairment losses. In other cases, it is presented as interest income. Financial liabilities The company derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss. h) Inventories Raw material, stores and spares, work in progress and finished goods are valued at lower of cost or net realizable value i) Revenue Recognition (a) Sale of goods Revenue is recognised when the significant risk and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Export benefits are recognised as per schemes specified in Foreign Trade Policy, as amended from time to time on accrual basis. (b) Interest income is recognized using the Effective Interest Rate (‘EIR’) method. The EIR is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial instrument or a shorter period, where appropriate to the net carrying amount of the financial asset. The EIR is computed basis the expected cash flows by considering all the contractual terms of the financial instrument. The calculation includes all fees, transaction costs, and all other premiums or discounts paid or received between parties to the contract that are an integral part of the effective interest rate. (c) Dividend income is recognised, when the right to receive the dividend is established. j) Foreign currency transactions (a) Foreign currency transactions are recorded at the exchange rate prevailing on the date of the transaction. (b) Monetary items denominated in foreign currencies (such as cash, receivables, payables etc.) outstandingat the year end, are translated at exchange rates applicable on year end date. (c) Non-monetary items denominated in foreign currency, (such as fixed assets) are valued at the exchangerate prevailing on the date of transaction and carried at cost. (d) Any gains or losses arising due to exchange differences arising on translation or settlement are accountedfor in the Statement of Profit and Loss. k) Employee benefits i. Short term employee benefits Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. ii. Defined contribution plans Obligations for contributions to defined contribution plans are expensed as the related service is provided. The company has following defined contribution plans: a) Provident Fund b) Superannuation Fund
60 Ferro Alloys Corporation Limited SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
iii. Defined benefit plans The company has only one Defined benefit plan - Gratuity. The company net obligation in respect of defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the company, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements. Re-measurement of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in Other Comprehensive Income. Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability (asset), to the net defined liability (asset) at the start of the financial year after taking into account any changes as a result of contribution and benefit payments during the year. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in profit or loss. The company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs. iv. Other long-term employee benefits The Company’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Re-measurements are recognised in profit or loss in the period in which they arise. The company has following long term employment benefit plans: a) Leave encashment Leave encashment is payable to eligible employees at the time of retirement. The liability for leave encashment is provided based on actuarial valuation as at the Balance Sheet date, based on Projected Unit Credit Method, carried out by an independent actuary. l) Borrowing Cost General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. Other borrowing costs are expensed in the period in which they are incurred. m) Income tax Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to items recognised directly in equity or in Other Comprehensive Income i. Current tax Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax assets and liabilities are offset only if, the Company: a) Has a legally enforceable right to set off the recognised amounts; and b) Intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. ii. Deferred tax Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit nor loss. Ferro Alloys Corporation Limited 61 SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves. Unrecognized deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset only if: a) The entity has a legally enforceable right to set off current tax assets against current tax liabilities; and b) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity. n) Impairment of non-financial assets At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication on impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment loss in respect of assets other than goodwill is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. o) Provisions Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre- tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as finance cost.. p) Segment Reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The board of directors of Ferro alloys corporation Limited has been identified as being the chief operating decision maker by the Management of the company. Refer note … for segment information presented. q) Cash and cash equivalents Cash and cash equivalents comprise cash at bank and on hand and short-term money market deposits with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
62 Ferro Alloys Corporation Limited SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
4.33 4.33 2017 2016 As at As at 17.39 1 April 111.14 111.14 211.43 211.43 259.68 223.09 238.32 101.43 163.99 256.52 265.32 in Lacs) 3,911.60 3,911.60 2,340.31 3,549.32 2,497.53 7,275.26 ` 31 March 11,200.15 11,200.15 ( 18,080.62
Net Block Net Block 4.33 4.33 2018 2017 As at As at 95.20 256.12 204.58 218.39 150.29 259.68 223.09 238.32 101.43 163.99 9,249.21 3,016.58 3,252.09 2,340.31 3,549.32 31 March 31 March 11,200.15 11,200.15 16,446.79 18,080.62
7.12 3.56 2018 2017 As at - - - - As at 42.25 83.31 28.31 87.64 23.74 43.00 14.53 47.68 230.19 650.54 128.70 344.50 605.71 1,129.36 31 March 31 March - 19.40 19.40 - - Deductions Deductions Adjustments/ Adjustments/ - Year Year Year 3.56 3.56 - - - 18.51 13.78 39.96 40.31 23.74 43.00 14.53 47.68 120.89 306.04 543.05 128.70 344.50 605.71 For the For the Depreciation Depreciation
------Impact Impact of Ind AS of Ind AS Transition Adjustment
3.56 2017 2016 As at - - As at 23.74 14.53 47.68 43.00 - 1 April 128.70 344.50 605.71 31 March
4.33 4.33 2018 2017 As at As at 115.96 115.96 211.67 263.24 246.83 123.51 237.93 301.70 263.24 246.83 281.32 9,249.21 3,246.77 3,902.63 2,469.01 3,893.82 31 March 31 March 11,200.15 11,200.15 17,576.15 18,686.33 0.06 7.19 9.69 5.51 0.49 0.04 ------39.87 89.62 180.00 152.41 1,950.94 2,131.00 Deletions Deletions 8.81 7.55 5.31 0.28 ------11.35 11.35 20.44 26.26 10.99 43.00 21.51 92.44 957.76 1,020.82 Additions Additions Gross Block Gross Block
------28.84 Impact 245.85 Impact 8,647.43 8,922.12 of Ind AS of Ind AS Transition Transition Transition
4.33 4.33 2017 2016 As at As at 17.39 1 April 111.14 111.14 115.96 115.96 211.67 211.43 211.43 263.24 246.83 281.32 256.52 265.32 3,911.60 3,911.60 2,469.01 3,893.82 2,548.92 2,497.53 9,824.18 31 March 11,200.15 11,200.15 18,686.33 Particulars Particulars Tangible Assets Tangible Freehold Land Leasehold Land Buildings Road and Drains Plant and Machinery Office Equipments Furniture & Fixtures Railway Sidings Vehicles Total Assets Tangible Freehold Land Leasehold Land Buildings Road and Drains Plant and Machinery Office Equipments Furniture & Fixtures Railway Sidings Vehicles Total 3. Property, Plant and Equipment 3. Property, Ferro Alloys Corporation Limited 63 SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
2017 2016 As at As at - - 1 April in Lacs) 1,339.01 1,339.01 ` 31 March (
Net Block Net Block 2018 2017 As at As at 1,249.64 1,249.64 1,339.01 1,339.01 31 March 31 March
2017 2018 2017 As at As at As at 114.71 114.71 114.71 114.71 957.75 957.75 204.08 204.08 31 March 31 March 31 March 8.24 8.24 - - - Deletions Deductions Deductions Adjustments/ Adjustments/ Year Year - 89.37 89.37 114.71 114.71 114.71 114.71 For the For the Additions Depreciation Depreciation
- - Impact Impact Impact of Ind AS of Ind AS of Ind AS Transition Transition Transition
2016 2017 2016 As at As at As at - - 1 April 1 April 114.71 114.71 114.71 114.71 965.99 965.99 31 March
2018 2018 2017 As at As at As at 700.06 700.06 1,453.73 1,453.73 1,453.73 1,453.73 31 March 31 March 31 March - - 257.69 257.69 Deletions Deletions Deletions - - - 799.49 799.49 Additions Additions Additions Gross Block Gross Block
- Impact Impact Impact 654.24 654.24 of Ind AS of Ind AS of Ind AS Transition Transition Transition
2017 2017 2016 As at As at As at - 1 April 957.75 957.75 1,453.73 1,453.73 31 March 31 March
Particulars Particulars Capital Work in Capital Work Progress Total Intangible Assets Mining Rights Total Intangible Assets Mining Rights Total 4. Capital Work-in-Progress 5. Intangible Assets 5. Intangible 64 Ferro Alloys Corporation Limited SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS (` in Lacs) As at As at As at 31 March 2018 31 March 2017 1 April 2016 6 Investment in Subsidiary and Associates Investment Measured at Cost - In Equity Shares of Subsidiary Companies - Unquoted, fully paid up 19,80,59,930 (Previous Year 19,80,59,930) Facor Power Limited 20,614.20 20,614.20 20,614.20 of ` 10/- each Less: Provision for Impairment (20,614.20) (20,614.20) (20,614.20) - - - 1,00,000 (Previous Year 1,00,000) Facor Realty & Infrastructure Ltd. of ` 10/- each 10.00 10.00 10.00 Less: Provision for Impairment (4.30) (4.24) (4.10) 5.70 5.76 5.90 2,00,001 (Previous Year 2,00,001) Facor Energy Ltd.of GBP 1 each 182.04 182.04 182.04 Less: Provision for Impairment (182.04) (182.04) (182.04) - - - - In Pref. Shares of Subsidiary Companies - Unquoted, fully paid up 11,00,000 (Previous Year : 11,00,000) Facor Power Ltd. of ` 100/- each 1,100.00 1,100.00 1,100.00 Less: Provision for Impairment (1,100.00) (1,100.00) (1,100.00) - - - - In Equity Shares of Associate Company - Quoted, fully paid up 4,66,164 (Previous Year: 4,66,164) Boula Platinum Mining Pvt. Ltd. 4.66 4.66 4.66 of ` 1/- each 10.36 10.42 10.56 Aggregate book value of quoted investments Aggregate book value of un-quoted investments - - - 10.36 10.42 10.56 7 Investment Others Investment Measured at fair Value through OCI - Investments in Equity Shares of Other Companies - Quoted, fully paid-up 5,00,000 (Previous Year: 5,00,000) Facor Alloys Limited of ` 1/- each 12.25 20.30 4.00 Investment Measured at fair Value through OCI - Investments in Mutual Funds - Quoted SBI Premier Liquid Fund units - 154.197 units 4.20 - - Investment Measured at amortised cost -Government Securities - Unquoted 5 years National Savings Certificates 0.20 0.20 0.20 6 years National Savings Certificates 1.55 1.55 2.05 7 years National Savings Certificates 0.05 0.05 0.05 18.25 22.10 6.30 Aggregate book value of quoted investments 16.45 20.30 4.00 Aggregate book value of un-quoted investments 1.80 1.80 2.30 8 Other Financial Assets Unsecured, considered good - Government authorities - - Security deposits 328.81 863.77 863.15 Fixed Deposits (Maturity more than 12 months) 583.45 2.32 - 912.26 866.09 863.15
Ferro Alloys Corporation Limited 65 SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS (` in Lacs) As at As at As at 31 March 2018 31 March 2017 1 April 2016 9 Other Non-Current Assets Unsecured, considered good 1,070.08 644.36 321.30 Capital Advances 10 Inventories (At cost or NRV Whichever is lower) Raw materials 4,663.70 4,515.79 3,237.88 Stock-in-Process 15.13 165.10 139.58 Finished Products 2,177.50 2,648.33 3,026.11 Stores and spares (Including in Transit) 457.94 394.53 412.20 Loose Tools 52.65 50.26 43.80 7,366.92 7,774.01 6,859.57 11 Trade Receivables Unsecured and considered good -from related parties - - - -from others 850.86 5,585.22 1,452.65 Unsecured and considered doubtful -from related parties Less: Allowances for doubtful receivables 850.86 5,585.22 1,452.65 12 Cash and Cash Equivalents Balance with banks: - In current account 99.85 313.17 225.27 - In Cash Credit Account 1,011.54 - - Cash on hand 7.47 20.38 19.25 Margin Money With Banks for Original maturity of Less than three - - months Cheques In Hand 0.38 0.20 Others: - - Fixed Deposits Accounts 309.12 167.91 45.98 1,428.36 501.46 290.70 13 Other Bank Balances In earmarked accounts - Unclaimed dividend account 2.34 4.42 4.42 2.34 4.42 4.42 14 Other Financial Assets Loans and advances to related parties 37.16 37.020 40.14 less: Allowance for Credit Loss (37.02) (37.020) (20.45) Interest accrued on term deposits 50.90 59.880 60.62 51.04 59.88 80.31 15 Other Current Assets Advances to vendors 963.79 624.77 558.43 Advances to employees 0.95 1.94 3.96 Taxes and duties recoverable 1,598.31 1,869.60 2,169.77 Royalty Deposits 385.36 3.41 294.48 Prepaid Expenses 73.55 88.38 110.32 Claims Recoverable 1.93 1.93 1.93 3,023.89 2,590.03 3,138.89 Current Tax Assets (Net) Advance Tax (Net of Provision for Tax ) 82.92 - - 82.92 - -
66 Ferro Alloys Corporation Limited SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS (` in Lacs) As at As at As at 31 March 2018 31 March 2017 1 April 2016 16 Share Capital Authorised: 22,00,00,000 (31 March 2017 - 22,00,00,000) equity shares of ` 1/- each 2,200.00 2,200.00 2,200.00 8,00,000 (31 March 2017 - 8,00,000) preference shares of ` 100/- each 800.00 800.00 800.00 Issued, subscribed & fully paid up: 18,52,68,241 (31 March 2017 - 18,52,68,241) equity shares of ` 1/- each 1,852.68 1,852.68 1,852.68 1,852.68 1,852.68 1,852.68 a. Terms and rights attached to equity shares The Company has only one class of equity shares having a par value of ` 1/- per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. b In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by shareholders. c. Reconciliation of number of shares outstanding at the beginning and end of the year : Number of Shares Amount Outstanding at the 1 April 2016 185,268,241 1,852.68 Equity Shares issued during the year in - - Outstanding at the 31 March 2017 185,268,241 1,852.68 Equity Shares issued during the year in - - Outstanding at the 31 March 2018 185,268,241 1,852.68 d. Shareholders holding more than 5% shares in the company Name of Shareholders As at 31 March 2018 As at 31 March 2017 As at 31 March 2016 No. of Percentage No. of Percentage No. of Percentage Shares Shares Shares R.B.Shreeram & Co. Pvt. Ltd. 65,452,441 35.33% 69,448,883 37.49% 69,448,883 37.49% Premier Commercial Corporation 15,672,291 8.46% 15,672,291 8.46% 15,672,291 8.46% 17 Other equity As at As at As at 31 March 2018 31 March 2017 1 April 2016 a Capital Reserves Balance at the beginning of the year 439.23 439.23 439.23 Addition during the year - - Balance at the end of the year 439.23 439.23 439.23 b General Reserve Balance at the beginning of the year 19,200.00 19,200.00 19,200.00 Add: Transfer from surplus balance in the statement of Profit & Loss - - - Balance at the end of the year 19,200.00 19,200.00 19,200.00 c Retained Earnings Balance at the beginning of the year (6,969.05) (9,165.92) 3,953.94 Ind AS transition Adjustment (13,119.87) Add: Profit for the year after taxation as per statement of Profit and Loss 5,548.17 2,196.87 (1,420.88) (6,969.05) (9,165.93) d Other Comprehensive Income Remeaurement of Actuarial Gain/(Loss) Balance at the beginning of the year (218.59) - - Addition during the year (47.83) (218.59) - Balance at the end of the year (266.42) (218.59) -
Ferro Alloys Corporation Limited 67 SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS (` in Lacs) 17 Other equity As at As at As at 31 March 2018 31 March 2017 1 April 2016 Impact of Fair Valuation of Investment Balance at the beginning of the year 16.30 - - Ind AS transition Adjustment Addition during the year (8.05) 16.30 - Balance at the end of the year 8.25 16.30 e Equity Portion of Loan Component Balance at the beginning of the year 276.65 270.99 - Ind AS transition Adjustment 270.99 Addition during the year - 5.66 - Balance at the end of the year 276.65 276.65 270.99 Total Equity (a+b+c+d+e) 18,236.83 12,744.54 10,744.29 Nature and purpose of other reserves General reserve The general reserve is used from time to time to transfer profits from retained earnings for appropriation purpose. Remeasurement of defined benefit plans Remeasurements of defined benefit plans represents the following as per Ind AS 19, Employee Benefits: (a) actuarial gains and losses. (b) the return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset); and (c) any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability (asset). 18 Borrowings Secured - From Banks (Ref. note 18.1) - - 82.17 Unsecured (Ref. note 18.2) - From related parties 1,033.65 1,263.58 1,379.48 - Others 585.36 567.97 1,289.18 1,619.01 1,831.55 2,750.83 18.1 Secured by hypothecation of Metal Recovery Plant and second pari-passu charge on other fixed assets of the company and guaranteed by two directors. 18.2 Terms of repayment : Payable in equal quarterly instalments. Terms of repayment : Payable after 31st March, 2020 19 Deferred Tax Liabilities / (Assets) (Net) Deferred Tax Liability: Difference between Book and Income Tax depreciation 976.78 996.41 760.28 Others 56.19 86.51 95.08 Deferred Tax Assets: Mat Credit Entitlement 416.24 - - Disallowance u/s 43B of the Income Tax Act, 1961 to be allowed on 281.86 261.99 265.32 payment basis Unabsorbed Depreciation and Unabsorbed Business Loss - - 655.59 Net Deferred Tax Liabilities / (Assets) 334.87 820.93 (65.55) Reconciliation of Deferred Tax Assets/(Liabilities) Particulars As at As at 31 March 2018 31 March 2017 Opening Balance as on 1st April 820.93 (65.55) Deferred tax income/ (expense) during the period recognised in Profit & Loss (460.76) 999.18 Deferred tax income/ (expense) during the period recognised in Other Equity - 2.99 Deferred tax income/ (expense) during the period recognised in OCI (25.31) (115.69) Closing Balance 334.86 820.93 68 Ferro Alloys Corporation Limited SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS (` in Lacs) As at As at As at 31 March 2018 31 March 2017 1 April 2016 20 Provisions Provision for employee benefits - Compensated Absences 299.06 302.83 272.23 299.06 302.83 272.23 21 Other Non- Current Liabilities Advances from Associate 218.65 218.65 218.65 218.65 218.65 218.65 22 Borrowings From Banks (Secured) - (Refer note no. 22.1) 1,212.18 8,111.71 4,776.25 From Others (Unsecured) - (Refer note no. 22.2) 1,100.00 1,100.00 1,100.00 2,312.18 9,211.71 5,876.25 22.1 Secured by hypothecation of stock of raw material, finished products, book debts and other receivables and by way of second charge on fixed assets of the company by deposite of title deeds in respect of immovable properties and guaranteed by two directors. 22.2 Secured by way of equitable mortgage of the property by the promoters and also the personal guarantee of two promoters. 23 Trade Payable Micro Small and Medium Enterprises 0.03 0.03 4.29 Others 4,234.08 7,560.34 7,311.75 4,234.11 7,560.37 7,316.04 There were no over dues during the year, for which disclosure requirements under Micro, Small and Medium Enterprises Development Act, 2006 are applicable 24 Other Financial Liabilities Current maturities of long-term debt - from banks - from Banks - 82.18 582.24 Interest accrued but not due on borrowings 69.89 18.21 16.95 Interest accrued but not due on borrowings (ICD) 38.53 14.62 - Interest accrued and due on borrowings 111.38 - 28.76 Unpaid dividend 2.34 4.42 4.42 Security Deposits 216.09 247.59 204.57 Other payables for: - Managerial Remuneration 406.87 187.09 364.09 - Royalty - 335.12 - - Related Party 23.37 - - - Employee Benefits Payable 192.16 180.31 188.60 1,060.63 1,069.54 1,389.63 25 Other Current Liabilities Statutory dues 145.07 141.18 382.97 Advance from customers 467.70 942.65 548.87 Other payables 1,552.49 440.68 755.95 2,165.26 1,524.51 1,687.79 26 Provisions Provision for employee benefits - Gratuity 120.72 285.61 0.20 - Incentive 22.45 25.36 27.41 - Compensated Absences 140.58 126.46 139.92 Others 611.88 806.29 1,167.34 895.63 1,243.72 1,334.87 27 Current Tax Liabilities Provision for Income Tax (Net of advance tax ) - 84.31 16.67 - 84.31 16.67
Ferro Alloys Corporation Limited 69 SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS (` in Lacs) Year ended Year ended 31 March 2018 31 March 2017 28 Revenue from Operations Sale of goods 53,244.92 63,419.63 Other Operating Revenues 1,297.78 606.85 54,542.70 64,026.48 29 Other Income Interest income from financial assets measured at amortised cost - on bank deposits 16.37 11.30 - Others 63.69 61.64 Realised/Unrealised gain on Investment 4.20 - Excess provision/ liability written back 238.32 297.41 Foreign exchange fluctuations (net) 109.90 112.16 Miscellaneous Receipts 138.62 47.45 571.10 529.96 30 Cost of Materials Consumed Opening Stock of Raw Material 6,044.49 3,219.09 Add: Purchases 16,804.10 26,321.24 Less: Closing Stock of Raw Material 4,663.70 4,515.79 18,184.89 25,024.54 31 Changes in Inventories of Finished Goods and Work in Process Decrease / (Increase) in Stock : (a) Closing Stock -Finished goods 2,177.50 2,648.33 -Work in Progress 15.13 165.10 2,192.63 2,813.43 (b) Less : Opening Stock -Finished goods 1,119.63 3,026.11 -Work in Progress 165.10 139.58 1,284.73 3,165.69 Decrease/(Increase) in inventories (907.90) 352.26 32 Employee Benefits Expense Salaries and wages 3,185.26 3,090.60 Contribution to provident and other funds 264.23 253.89 Staff Gratuity and Superannuation 105.02 109.41 Staff welfare expenses 522.73 492.68 Director’s Remuneration 269.01 237.86 4,346.25 4,184.44 33 Finance Cost Interest on loans 600.75 286.08 On Bill Discounting (12.67) 28.20 Other borrowing costs 397.48 1,284.36 Bank Charges on bill discounting 0.92 3.40 986.48 1,602.04 34 Depreciation and Amortisation Expense Depreciation on tangible assets 485.68 548.35 Amortisation on intangible assets 89.37 114.71 575.05 663.06 Depreciation is excluding ` 57.36 lacs (Previous year ` 57.36 lacs) considered under cost of material consumed.
70 Ferro Alloys Corporation Limited SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS (` in Lacs) Year ended Year ended 31 March 2018 31 March 2017 35 Other Expenses Mining Handling & Other Production expenses 4,059.71 2,693.40 Power and fuel 14,482.11 13,471.27 Repairs and maintenance: - Buildings 417.43 952.92 - Plant and machinery 1,387.41 2,094.67 Freight, Shipment & Sales Expenses 1,336.39 1,553.26 Stores & Spares 186.85 221.74 Work Expenses 2,038.39 1,954.04 Transportation expenses 21.69 35.41 Rent 197.13 209.60 Insurance 25.48 25.87 Rates and Taxes 80.18 103.59 Provision for Doubtful advances - 16.56 Commission and Brokerage on Sales 267.61 285.97 Payment to auditors 11.80 10.24 Directors’ sitting fees 0.86 2.46 Royalty 2,742.90 2,416.98 Miscellaneous Expenses 38.86 40.95 Total 27,294.80 26,088.93 35.1 Payment to Auditor as: Statutory Auditor Audit Fees 4.75 4.75 Tax Audit Fees 0.15 0.15 Certification and Consultation Fees 0.05 0.28 Reimbursement of Expenses 5.17 2.07 10.12 7.25 Cost Auditor Cost Audit Fees 0.70 0.70 Management Services 0.60 0.60 Certification and Consultation Fees - 0.24 Reimbursement of Expenses 0.38 1.45 1.68 2.99 Total 11.80 10.24 35.2 Corporate Social Responsibility (a) CSR amount required to be spent as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof by the Company during the year is ` 37.88 lacs (Previous Year ` 43.84 lacs). (b) Expenditure related to Corporate Social Responsibilities incurred is ` 39.44 lacs (Previous Year ` 44.54 Lacs). 36 Income Tax 36.1 Income Tax Expenses Particulars Current Tax Expenses Current year 1,403.27 692.88 Adjustment for previous Year (3.03) (93.69) 1,400.24 599.19 Deferred Tax Expenses Change in recognised temporary differences (460.76) 999.18 (460.76) 999.18 Total Tax Expenses 939.48 1,598.37
Ferro Alloys Corporation Limited 71 SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS (` in Lacs) Year ended Year ended 31 March 2018 31 March 2017 36.2 Reconciliation of effective tax rate Profit/(loss) before tax 6,487.65 3,795.24 Applicable tax rate 34.61% 34.61% Computed Tax Expenses 2,245.25 1,313.46 Tax Effect of: Mat Credit recognised (629.73) 507.42 Adjustment of earlier year tax (93.69) Difference of tax rate and indexation on sale of land (655.67) - Tax Allowance of Goodwill (146.31) Others tax adjustment (20.38) 11.71 Tax Expenses recognised in profit and loss 939.47 1,592.59 Effective Tax Rate 14.48% 41.96% 37 Earning per Share Profit/ (loss) for the period 5,548.17 2,196.87 Weighted average number of equity shares of ` 1/- each 1,852.68 1,852.68 EPS - Basic and Diluted 2.99 1.19 38 The information related to Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of of information available with the Company. 39 Contingent liabilities, contingent assets and commitments A. Contingent Liabilities a. Claims against the Company not acknowledged as debts, since disputed ` 32,389.47 lacs (Previous Year ` 6,314.03 lacs). Amounts paid under protest ` 525.83 lacs (Previous Year ` 304.79 lacs) have been debited to Advance Account. b. The claim under Corporate guarantee for ` 142.40 Crores given by the Company for Facor Steels Limited with Facor Alloys Limited has been invoked to the extent of ` 33.82 Crores which liability, the Company is contesting. c. The Company has given corporate guarantee to Rural Electrification Corporation Ltd. (REC) in connection with granting a facility of Term Loan of ` 51,790 Lacs (Previous Year ` 51,790 Lacs) to Facor Power Ltd. (FPL). The Company has also pledged 19,80,59,930 shares (Previous Year 19,80,59,930 shares) with REC out of 19,80,59,930 shares (Previous Year 19,80,59,930 shares) held in FPL besides giving an undertaking to provide interest free unsecured subordinates loan or subscribe for equity / preference shares to FPL in case of cost overrun at any stage of the project. The Corporate Guarantee given by Ferro Alloys Corporation Limited in respect of REC has been invoked amounting to ` 510.98 cores and interest thereon. REC has initiated proceedings under Insolvency and Bankruptcy Code 2016, by filing an application u/s 7 of the Insolvency and Bankruptcy Code 2016 with the National Company Law Tribunal, Kolkata (NCLT, Kolkata). Corporate Insolvency Resolution process has commenced against FACOR pursuant to an order dated 6th July, 2017 of the said NCLT, Kolkata and Mr. K.G. Somani was appointed as Resolution Professional of FACOR. The Committee of Creditors of FACOR, at their last meeting held on 1st April, 2018 rejected the resolutions plans tabled before it and the Resolution Professional accordingly, submitted his report to NCLT, Kolkata on 2nd April, 2018. The Promoter Group, however, aggrieved by the order dated 6th July, 2017 of NCLT, Kolkata, had filed an appeal before the National Company Law Appellate Tribunal, New Delhi (NCLAT, New Delhi) which, after hearing the matter has, on 5th March, 2018 reserved the judgment, which is awaited. d. The Company has given corporate guarantee to Central Bank of India of ` 3,000 Lacs (Previous Year ` 3,000 Lacs) for providing Working Capital Facilities to FPL. B. Capital and Other Commitments a. Estimated amount of contracts on Capital Account remaining to be executed and not provided for in accounts ` 3,107.38 Lacs (Previous Year ` 2,599.43 lacs). C. Contingent Assets The company has no contingent asset as on ,31 March 2018, 31 March 2017 & 1 April 2016. 40 Segment information Segment information is presented in respect of the company’s key operating segments. The operating segments are based on the company’s management and internal reporting structure. Operating Segments The Management Information System of the Company identifies and monitors Ferro Alloys as the business segment. The Company is managed organisationally as a single unit. In the opinion of the management, the Company is primarily engaged in the business of Ferro Alloys. As the basic nature of these activities are governed by the same set of risk and return, these constitute and are grouped as a single segment. Accordingly, there is only one Reportable Segment for the Company which is “Ferro Alloys”, hence no specific disclosures have been made. 72 Ferro Alloys Corporation Limited SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS Entity wise disclosures A. Information about products and services During the year, the Group primarily operates in one product line, therefore product wise revenue disclosure is not applicable. B. Information about Geographical Areas The Group derives revenue from following major geographical areas: (` in Lacs) Area For the year ended For the year ended 31 March 2018 31 March 2017 Outside India 30,200.87 30,666.75 Domestic 23,044.05 33752.88 All the non-current assets of the Group other than financial instruments, deferred tax assets, post-employment benefit assets are located in India. C. Information about Major Customers (from External Customers) The Company derives revenues from the following customers where each contributes to 10 per cent or more of an entity’s revenues: (` in Lacs) External Customers For the year ended For the year ended 31 March 2018 31 March 2017 Posco 13,878.49 16,061.14 Globus 8 Alloys 8,148.47 6,151.83 Rimjhim Ispat Limited 7,229.76 6,645.50
41 In Pursuance of the decision dated 2nd August 2017 by the Honourable Supreme Court of India and subsequent demand notice related to Katasahi Mines from DDM, an amount of ` 1041.48 Lacs has been provided under the head Mining, Handling & Other Production. The company has also provided for interest at the applicable rate for the period from 31st December 2017 and onwards. 42 During the Current Financial Year the Company has incurred an amount of ` 279.55 lacs towards Resolution Process Cost which has been debited under different heads of accounts in the Statement of Profit and Loss the details are as under:
S. Particulars (` in Lacs) No. a) Resolution Professional Fees 214.63 b) Concurrent Auditors Fees 6.75 c) Other Professional Charges 36.05 d) Advertisement Expenses 9.06 e) Travelling and Other Expenses 13.06 Total 279.55
43 Royalty paid for the months of February,2018 and March,2018 has been calculated on the basis of latest IBM price published for the month of January’2018. However, the variation in Royalty Rates for the months of February, 2018 and March, 2018 will be adjusted subsequently in the next financial year after pronouncements of royalty rates by IBM. 44 The company, in the beginning of the financial year started installing an additional 27 MVA furnace at its existing location so as to meet twin objective of enhancing the production capacity of Ferro Chrome as well as to increase the generation capacity of the power plant of its subsidiary Facor Power limited (FPL). The company has put the expansion project on hold post initiation of Corporate Insolvency Resolution Process (CIRP) and appointment of Interim Resolution Professional vide order dated 6th July, 2017 of Kolkata bench of National Company Law Tribunal. The total expenditure incurred on expansion project is of ` 677.36 lacs and given a capital advances of ` 531.86 lacs till date.
Ferro Alloys Corporation Limited 73 SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS 45 Position of working and non-working mines. S. No. Name of Mines Lease started on Lease terminating on Status 1 Kathpal mine w.e.f 07.10.1972 Lease period valid upto 31.03.2030 as per Presently, a non-Working mine. section 8A (5) of MMDR Act 2015. The issue Application for revival of mine filed on of Execution of Lease deed is pending before 24.01.2018 Decision pending. Steel & Mines Dept. Government of Odisha. 2 Ostapal mine w.e.f 13.08.1985 50 years w.e.f 13.08.1985 Working mine. 3 Kalarangiatta w.e.f 18.04.2008 30 years w.e.f 18.04.2008 Working mine. mine (as per lease deed) 50 year w.e.f 18.04.2008 (as per MMDR Act, 2015) 4 Katasahi mine w.e.f 01.08.1998 20 years w.e.f 01.08.1998 Non-working mine as mine declared (as per Lease Deed) lapsed w.e.f. 30.10.2011 vide 50 years w.e.f 01.08.1998 proceeding no 7730/SM, BBSR (as per MMDR Act, 2015) dtd.17.08.2015 issued of Steel & Mines dept., Govt. of Odisha. 5 Boula mines w.e.f 06.08.1972 Mining Officer , Keonjhar vide letter No. Non-working mine as mining operations 1601/Mines, dtd. 15.12.2016 has intimated stopped as per Supreme Court order that the expiry of the Boula Chromite Mines 12th January, 2016. of M/s. FACOR Limited can be considered to have reached its finality with effect from 07.10.2016 46 Pursuant to Guidelines issued in January 2018 by Indian Bureau of Mines, Company is in the process of ascertaining the mine closure espenses in respect of its captive mines, which are not presently acertainable. 47 Related Party Disclosure:- I. List of Related Parties:- A. Name and nature of relationship with the related party where control exists: 1 Facor Power Limited - Subsidiary Company. * 2 Facor Realty and Infrastructure Limited - Subsidiary Company. 3 Facor Energy Limited - Subsidiary Company. * Facor Power Limited (FPL), subsidiary of the Company, defaulted in repayment of term loan to REC. REC invoked the provisions of SARAFAESI and have taken physical possession w.e.f. 7th November, 2017 of the Assets and Book of Accounts. Due to loss of control and influence and curtailment of shareholders rights, FPL has lost the status of Subsidiary Company of Ferro Alloys Corporations. B Enterprise, over which key management personnel and their relatives exercise significant influence, with whom transactions have taken place during the year : 1 Boula Platinum Mining Pvt. Ltd. - Associate 2 Facor Alloys Limited 3 Rai Bahadur Shreeram and Company Private Limited. 4 Shri Durgaprasad Saraf Charitable Trust 5 Shreeram Shipping Services Pvt. Ltd. 6 Shreeram Durgaprasad Ores Pvt. Ltd. 7 Saraf Enterprises (Pvt.) Ltd. 8 Saraf Bandhu Pvt. Ltd. 9 GDP Infrastructure Private Limited C. Key Management Personnel i) R.K. Saraf Chairman & Managing Director ii) Manoj Saraf Managing Director iii) Ashish Saraf Joint Managing Director iv) Rohit Saraf Joint Managing Director D. Relatives of a Key Management Personnel : i) Mrs. Priti Rohit Saraf ii) Mr. Vinod Saraf
74 Ferro Alloys Corporation Limited SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS
II. Transactions with Related Parties during the year ended 31-03-2018 in the ordinary course of business. (` in Lacs) Particulars With Subsidiary With Enterprise With Key Companies where Significant Management influence exists Personnel & Relatives 2017-18 2016-17 2017-18 2016-17 2017-18 2016-17 i) Sale of Goods - - - 417.95 - - ii) Sale of Assets - - - 2.00 - - iii) Purchase of Goods 13,877.23 12,421.14 - - - - iv) Rent paid - - 100.23 104.22 23.55 23.14 v) Interest paid /accrued and not paid - - 165.44 196.17 - - vi) Electricity Charges Paid - - 11.38 8.46 - - vii) Maintenance Charges Paid - - 7.65 7.02 - - viii) Short Term Loans & Advances given - 16.56 - (19.68) - - ix) Clearing & forwarding and other - - 17.04 17.94 - - service charges x) Legal & Professional Charges Paid - - 36.50 23.20 - - xi) Long Term Borrowings - - (295.00) (150.00) - - xii) Other Current Liabilities - - 69.34 (1.40) - - xiii) Key Management Personnel and their - - - - 299.43 267.88 Relative’s Remuneration xiv) Sitting Fees - - - - 0.85 2.45 xv) Balances outstanding at the year end ------a) Short Term Loans & Advances ------b) Trade Payable 945.67 1,608.86 - - - - c) Long Term Borrowings - - 1,033.65 1,263.57 - - d) Other Long Term Borrowings - - 218.65 218.65 - - e) Other Current Liabilities - - 56.21 10.09 - - f) Key Management Personnel and - - - - 407.88 188.05 their Relative’s Remuneration (` in Lacs) S. No. Particulars Relationship 2017-18 2016-17 1 Sale Of Goods Facor Alloys Limited Others - 417.95 Total - 417.95 2 Sale Of Assets Facor Alloys Limited Others - 2.00 Total - 2.00 3 Purchase Of Goods Facor Power Limited Subsidiary 13,877.23 12,421.14 Total 13,877.23 12,421.14 4 Rent Paid Facor Alloys Limited Others 79.80 79.80 GDP Infrastructure Private Limited Others 3.00 3.00 Saraf Enterprises (Pvt.) Ltd. Others 14.91 18.90 Saraf Bandhu Private Limited Others 1.80 1.80 Shri Durgaprasad Saraf Charitable Trust Others 0.72 0.72 Sub-Total 100.23 104.22 Mrs. Priti Rohit Saraf Relative of Key 23.55 23.14 Management Personnel Total 123.78 127.36 Ferro Alloys Corporation Limited 75 SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS (` in Lacs) S. No. Particulars Relationship 2017-18 2016-17 5 Interest Paid/accrued and not paid Shreeram Durgaprasad Ores Pvt. Ltd. Others 28.69 36.25 Rai Bahadur Shreeram and Company Pvt. Ltd. Others 136.75 159.92 Total 165.44 196.17 6 Electricity Charges Paid Facor Alloys Limited Others 11.38 8.46 Total 11.38 8.46 7 Maintenance Charges Paid Facor Alloys Limited Others 7.65 7.02 Total 7.65 7.02 8 Short Term Loans & Advances GIVEN Facor Power Limited Subsidiary - - Facor Energy Limited Subsidiary - 16.56 Sub-Total - 16.56 Facor Steels Limited Others - Boula Platinum Mining Pvt. Ltd. Associate - (19.68) Sub-Total - (19.68) Total - (3.12) 9 Clearing & Forwarding And Other Service Charges Shreeram Shipping Services Pvt. Ltd. Others 17.04 17.94 Total 17.04 17.94 10 LEGAL & PROFESSIONAL CHARGES PAID Khaitan & Khaitan Co. Others 36.50 23.20 Total 36.50 23.20 11 LONG TERM BORROWINGS (Inter Corporate Deposit) Rai Bahadur Shreeram and Company Others - (150.00) Private Limited Shreeram Durgaprasad Ores Pvt. Ltd. Others (295.00) - Total (295.00) (150.00) 12 OTHER CURRENT LIABLITIES Shreeram Durgaprasad Ores Pvt. Ltd. Others (2.33) 0.08 Facor Alloys Limited 23.23 - Rai Bahadur Shreeram and Company Others 48.44 (1.48) Private Limited Total 69.34 (1.40) 13 KEY MANAGEMENT PERSONNEL AND THEIR RELATIVES’ REMUNERATION Shri R.K. Saraf Key Management 19.78 19.85 Personnel Shri Manoj Saraf Key Management 19.83 20.93 Personnel Shri Rohit Saraf Key Management 21.33 21.35 Personnel Shri Vinod Saraf Relative of Key 19.72 19.56 Management Personnel Commission Directors 218.77 186.19 Total 299.43 267.88
76 Ferro Alloys Corporation Limited SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS (` in Lacs)
S. No. Particulars Relationship 2017-18 2016-17 14 SITTING FEES Mr. A.S. Kapre Non Executive Directors 0.25 0.70 Mr. Vineet Saraf Non Executive Directors - 0.40 Mr. M.B. Thakkar Non Executive Directors 0.30 0.75 Mr. Umesh Khaitan Non Executive Directors 0.15 0.20 Mr. Pinaki Misra Non Executive Directors - 0.10 Mrs. Urmila Gupta Non Executive Directors 0.15 0.30 Total 0.85 2.45 15 BALANCES OUTSTANDING AT THE YEAR END (A) Short Term Loans & Advances Subsidiary Facor Energy Limited 37.02 37.02 Less: Provision for doubtful advances (37.02) (37.02) Sub-Total - -
(B) Trade Payables Facor Power Limited Subsidiary 945.67 1,608.86 Total 945.67 1,608.86
(C) Long Term Borrowings Rai Bahadur Shreeram and Company Others 1,033.65 990.71 Private Limited Shreeram Durgaprasad Ores Pvt. Ltd. Others - 272.86 Total 1,033.65 1,263.57 (D) Other Long Term Borrowings Boula Platinum Mining Pvt. Ltd. Associate 218.65 218.65 Total 218.65 218.65 (E) Other Current Liabilities Rai Bahadur Shreeram and Company Pvt. Others 56.21 7.76 Ltd. Shreeram Durgaprasad Ores Pvt. Ltd. Others - 2.33 Total 56.21 10.09 (F) Key Management Personnel and their Relatives’ Remuneration Shri R.K. Saraf Key Management 0.43 0.15 Personnel Shri Manoj Saraf Key Management 0.76 0.76 Personnel Shri Vinod Saraf Relative of Key 1.01 0.95 Management Personnel Shri Rohit Saraf Key Management 0.72 - Personnel Commission Payable Directors 404.96 186.19 Total 407.88 188.05
Ferro Alloys Corporation Limited 77 SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS 48 Employee Benefits The Company Contributes To The Following Post-Employment Defined Benefit Plans In India Defined Contribution Plans: Amount of ` 290.13 lacs (Previous Year ` 277.21 lacs) is recognised as expenses and included in “Employee Benefits Expense” in Note 32 of the Statement of Profit and Loss. Defined Benefit Plan : “The company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favourable than the provisions of the Payment of Gratuity Act, 1972. The scheme is funded with SBI Life Insurance in form of qualifying insurance policy. The company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of privilege leave for encashment. This is unfunded plan.” The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at 31 March 2018. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method. Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity plan and the amounts recognised in the Company’s financial statements as at balance sheet date: (` in Lacs) 31 March 2018 31 March 2017 31 March 2016 (a) Net Defined Benefit Liability Liability for Gratuity 120.71 285.61 0.00 Liability for PL Encashment 439.64 429.29 412.15 Total Employee Benefit Liability 560.36 714.90 412.15 Non-Current 299.07 302.84 272.23 Current 261.29 412.06 139.92 (` in Lacs) (i) (a) Reconciliation of Opening and Closing balances of the present value of the Defined Benefit Obligation Particulars Gratuity PL Encashment 2017-18 2016-17 2017-18 2016-17 Present value of Defined Benefit Obligation at the beginning 2,044.91 1,889.05 429.29 412.15 of the year Interest Cost 144.57 146.21 30.35 31.90 Current Service Cost 79.10 86.09 34.97 36.33 Actuarial Losses/(Gains) (1.05) 233.62 98.58 67.11 Benefits Paid (389.38) (310.06) (153.55) (118.20) Present value of Defined Benefit Obligation at the close of 1,878.15 2,044.91 439.64 429.29 the year (` in Lacs) (b) Changes in the Fair Value of Plan Assets and reconciliation thereof Particulars Gratuity PL Encashment 2017-18 2016-17 2017-18 2016-17 Fair Value of Plan Assets at the beginning of the year 1,759.30 1,916.90 - - Add : Expected Return on Plan Assets 124.38237 153.35 - - Add/(Less) : Actuarial Gains/(Losses) 24.39 -33.62 - - Add : Contributions 238.7511 32.73 - - Less : Benefits Paid (389.38) (310.06) - - Fair Value of Plan Assets at the close of the year 1,757.44 1,759.30 - -
78 Ferro Alloys Corporation Limited SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS (` in Lacs)
(c) Amount Recognised in The Balance Sheet Particulars Gratuity PL Encashment 2017-18 2016-17 2015-16 2017-18 2016-17 2015-16 Present Value of Defined Benefit Obligation 1,878.15 2,044.91 1,889.05 439.64 429.29 412.15 Less : Fair Value of Plan Assets 1,757.44 1,759.30 1,916.90 - - - Present Value of unfunded obligation 120.71 285.61 (27.85) 439.64 429.29 412.15
(d) Amount Recognised in the Statement of Profit and Loss are as Follows : ( ` in Lacs) Particulars Gratuity PL Encashment 2017-18 2016-17 2017-18 2016-17 In Income Statement Current Service Cost 79.10 86.09 34.97 36.33 Interest Cost/(Income) 20.19 (7.14) 30.35 31.90 99.29 78.95 65.32 68.23 In Other Comprehensive Income Net actuarial loss/(gain) (25.44) 267.24 98.58 67.11 (25.44) 267.24 98.58 67.11
(e) Investment Details: Funds Managed by Insurer (investment with insurer) 100% 100% (f) Actuarial Assumptions as at the Balance Sheet date Particulars 2017-18 2016-17 2015-16 Discount Rate 7.60% 7.07% 8.00% Salary Escalation Rate 5.00% 5.00% 5.00% Expected rate of return on plan assets 7.07% 8.00% 8.00% The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary. The Expected Rate of Return on Plan Assets is determined considering several applicable factors, mainly the composition of Plan Assets held, assessed risks, historical results of return on Plan Assets and the Company’s policy for Plan Assets Management. The expected contributions for Defined Benefit Plan for the next financial year will be in line with FY 2017-18
(g) Sensitivity Analysis: Significant Actuarial Assumptions for the determination of the defined benefit obligation are discount rate ,expected salary increase and employee turnover. The sensitivity analysis below, have been determined based on reasonably possible changes of the assumptions occurring at end of the reporting period , while holding all other assumptions constant. The result of Sensitivity analysis is given below.
Particulars As at 31 March 2018 As at 31 March 2017 Increase Decrease Increase Decrease Change in discounting rate (delta effect of +/- 0.5%) 0.17 3.33 0.18 3.62 Change in rate of salary increase (delta effect of +/- 0.5%) 2.75 (1.20) 2.99 (1.31)
Ferro Alloys Corporation Limited 79 SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS (` in Lacs) 49 Financial Instruments – Fair Values and Risk Management I. Fair Value Measurements A. Financial instruments by category* As at 31 March 2018 As at 31 March 2017 As at 1 April 2016 FVOCI Amortised FVOCI Amortised FVOCI Amortised Cost Cost Cost Financial assets Non-current investments 12.25 6.00 20.30 1.80 4.00 2.30 Other non-current financial assets - 912.26 - 866.09 - 863.15 Trade receivables - 850.86 - 5,585.22 - 1,452.65 Cash and cash equivalents - 1,428.36 - 501.46 - 290.70 Bank balances other than above - 2.34 - 4.42 - 4.42 Other current financial assets - 51.04 - 59.88 - 80.31 12.25 3,250.86 20.30 7,018.87 4.00 2,693.53 *Exclude financial instruments measured at cost Financial liabilities Borrowings - 3,931.19 - 11,043.26 - 8,627.08 Trade payables - 4,234.11 - 7,560.37 - 7,316.04 Other financial liabilities - 1,060.63 - 1,069.54 - 1,389.63 - 9,225.93 - 19,673.17 - 17,332.75 B. Fair Value Hierarchy “This section explains the judgements and estimates made in determining the fair values of the financial instruments that are: (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.” Financial assets and liabilities measured at fair value - recurring fair value measurements (` In Lacs) As at 31 March 2018 Level 1 Level 2 Level 3 Total Financial Assets Financial Investments at FVOCI Investments Equity Shares 12.25 - - 12.25 Total Financial Assets 12.25 - - 12.25 Financial assets and liabilities which are measured at amortised cost for which fair values are disclosed As at 31 March 2018 Level 1 Level 2 Level 3 Total Financial assets Non-Current Investments - - 6.00 6.00 Other Non-Current Financial Assets - - 912.26 912.26 Trade Receivables - - 850.86 850.86 Cash and Cash Equivalents - - 1,428.36 1,428.36 Bank Balances other than above - - 2.34 2.34 Other Current Financial Assets - - 51.04 51.04 Total Financial Assets - - 3,250.86 3,250.86 Financial Liabilities Borrowings - - 3,931.19 3,931.19 Trade Payables - - 4,234.11 4,234.11 Other Financial Liabilities - - 1,060.63 1,060.63 Total Financial Liabilities - - 9,225.93 9,225.93
80 Ferro Alloys Corporation Limited SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS (` in Lacs) Financial Assets and Liabilities measured at fair value - recurring fair value measurements As at 31 March 2017 Level 1 Level 2 Level 3 Total Financial Assets Financial Investments at FVOCI Investments Equity Shares 20.30 - - 20.30 Total Financial Assets 20.30 - - 20.30
Financial assets and liabilities which are measured at amortised cost for which fair values are disclosed As at 31 March 2017 Level 1 Level 2 Level 3 Total Financial assets Non-Current Investments - - 1.80 1.80 Other Non-Current Financial Assets - - 866.09 866.09 Trade Receivables - - 5,585.22 5,585.22 Cash and Cash Equivalents - - 501.46 501.46 Bank Balances other than above - - 4.42 4.42 Other Current Financial Assets - - 59.88 59.88 Total Financial Assets - - 7,018.87 7,018.87 Financial Liabilities Borrowings - - 11,043.26 11,043.26 Trade Payables - - 7,560.37 7,560.37 Other Financial Liabilities - - 1,069.54 1,069.54 Total Financial Liabilities - - 19,673.17 19,673.17
Financial Assets and Liabilities measured at fair value - recurring fair value measurements As at 1 April 2016 Level 1 Level 2 Level 3 Total Financial Assets Financial Investments at FVOCI Investments Equity Shares 4.00 - - 4.00 Total Financial Assets 4.00 - - 4.00
Assets and Liabilities which are measured at amortised cost for which fair values are disclosed As at 1 April 2016 Level 1 Level 2 Level 3 Total Financial Assets Non-Current Investments - - 2.30 2.30 Other Non-Current Financial Assets - - 863.15 863.15 Trade Receivables - - 1,452.65 1,452.65 Cash and Cash Equivalents - - 290.70 290.70 Bank Balances other than above - - 4.42 4.42 Other Current Financial Assets - - 80.31 80.31 Total Financial Assets - - 2,693.53 2,693.53 Financial Liabilities Borrowings - - 8,627.08 8,627.08 Trade Payables - - 7,316.04 7,316.04 Other Financial Liabilities - - 1,389.63 1,389.63 Total Financial Liabilities - - 17,332.75 17,332.75
Ferro Alloys Corporation Limited 81 SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS (` in Lacs) Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV. Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities. There are no transfers between level 1 and level 2 during the year C. Fair value of financial assets and liabilities measured at amortised cost (` in Lacs) As at 31 March 2018 As at 31 March 2017 As at 1st April 2016 Carrying Fair Value Carrying Fair Value Carrying Fair Value Amount Amount Amount Financial Assets Non-Current Investments 6.00 6.00 1.80 1.80 2.30 2.30 Other Non-Current Financial Assets 912.26 912.26 866.09 866.09 863.15 863.15 Trade Receivables 850.86 850.86 5,585.22 5,585.22 1,452.65 1,452.65 Cash and Cash Equivalents 1,428.36 1,428.36 501.46 501.46 290.70 290.70 Bank Balances other than above 2.34 2.34 4.42 4.42 4.42 4.42 Other Current Financial Assets 51.04 51.04 59.88 59.88 80.31 80.31 3,250.86 3,250.86 7,018.87 7,018.87 2,693.53 2,693.53 Financial Liabilities Borrowings 3,931.19 3,931.19 11,043.26 11,043.26 8,627.08 8,627.08 Trade Payables 4,234.11 4,234.11 7,560.37 7,560.37 7,316.04 7,316.04 Other Financial Liabilities 1,060.63 1,060.63 1,069.54 1,069.54 1,389.63 1,389.63 9,225.93 9,225.93 19,673.17 19,673.17 17,332.75 17,332.75 II. Financial Ri1sk Management The Company has exposure to the following risks arising from financial instruments: - credit risk; - liquidity risk; and - market risk” Risk Management Framework A company is exposed to uncertainties owning to the sector in which it is operating. The Company is conscious of the fact that any risk that could have a material impact on its business should be included in its risk profile. Accordingly, in order to contain / mitigate the risk, the Board of Directors have approved a Risk management policy which shall be reviewed by Board and the management from time to time. The Company’s Risk Management framework is designed to identify, assess and monitor various risks related to key business and strategic objectives and lead to the formulation of a mitigation plan. Major risks in particular are monitored regularly at Executive meetings and the Board of Directors of the Company is kept abreast of such issues and the Policy was reviewed by the Board and Committee at its meeting. The Company’s Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee. i. Credit Risk Credit risk is the risk of financial loss to company if a customer or counterparty to the financial instrument fails to meet its financial obligations, and arises principally from the company’s receivables from customers.
82 Ferro Alloys Corporation Limited SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, cash and cash equivalents, other balances with banks and other financial assets. None of the financial instruments of the Company result in material concentration of credit risk other than trade receivable. The company maintains its Cash and cash equivalents and Bank Deposits with banks having good reputation, good past track record and high quality credit rating and also reviews their credit rating on a timely basis. The gross carrying amount of trade receivables is ` 807.55 Lacs (31 March 2017 ` 5,585.22 Lacs.) During the period, the Company has made no write-offs of trade receivables. The Company management also pursue all options for recovery of dues wherever necessary based on its internal assessment. A default on a financial asset is when counterparty fails to make payments within 365 days when they fall due. Loans and advances are related to balances recoverable from related parties. Provision is created in books of accounts on case to case basis depending upon the possibility/probability of recovery of the amount due to financial position of related parties. The gross carrying amount of loan and advances to related parties is ` 37.15 Lacs (31 March 2017 amounted to ` 37.02 lacs) (` 40.13 lacs as on 1 April 2016). Reconciliation of loss allowance provision – Loan and Advances to Related Parties (` In Lacs) 31 March 2018 31 March 2017 31 March 2016 Opening balance 37.02 20.45 - Changes in loss allowance calculated at life time expected 16.57 20.45 credit losses Closing balance 37.02 37.02 20.45 ii. Liquidity Risk Liquidity risk refers to risk of financial distress or extra ordinary high financing cost arising due to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and require financing. The Company’s objective is to maintain at all times optimum levels of liquidity to meet its cash and collateral requirements. Processes and policies related to such risk are overseen by senior management and management monitors the Company’s net liquidity position through rolling forecast on the basis of expected cash flows. (a) Financing Arrangements The group currently do not have access to the any undrawn borrowing facilities as on 31 March 2018. (b) Maturities of Financial Liabilities (` In Lacs) The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and excluding contractual interest payments and exclude the impact of netting agreements. Carrying Contractual cash flows Amounts Total Upto 1 Between 1 Between 2 More than 5 31 March 2018 year and 2 years and 5 years year Non-derivative financial liabilities Borrowings 3,931.19 3,931.19 2,312.18 - 1,619.01 - Trade payables 4,234.11 4,234.11 4,234.11 - - - Other financial liabilities 1,060.63 1,060.63 1,060.63 - - - Total non-derivative liabilities 9,225.93 9,225.93 7,606.92 - 1,619.01 - Carrying Contractual cash flows Amounts Total Upto 1 Between 1 Between 2 More than 5 31 March 2017 year and 2 years and 5 years year Non-derivative financial liabilities Borrowings 11,043.26 11,043.26 9,293.89 - 1,749.37 - Trade payables 7,560.37 7,560.37 7,560.37 - - - Other financial liabilities 1,069.54 1,069.54 1,069.54 - - - Total non-derivative liabilities 19,673.17 19,673.17 17,923.80 - 1,749.37 - Carrying Contractual cash flows Amounts Total Upto 1 Between 1 Between 2 More than 5 1 April 2016 year and 2 years and 5 years year Non-derivative financial liabilities Borrowings 8,627.08 8,627.08 6,458.49 - 2,168.59 - Trade payables 7,316.04 7,316.04 7,316.04 - - - Other financial liabilities 1,389.63 1,389.63 1,389.63 - - - Total non-derivative liabilities 17,332.75 17,332.75 15,164.16 - 2,168.59 -
Ferro Alloys Corporation Limited 83 SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS iii. Market risk Market risk is the risk that changes in market prices, foreign exchange rates and interest rates – will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. a) Equity Price risk Commodity Price Risk is the risk that future cash flow of the Company will fluctuate on account of changes in market price of the material produced and sold by the company. The Company is exposed to the movement in price of key raw materials in domestic and international markets. The Company has in place policies to manage exposure to fluctuations in the prices of the materials. The Company enters into contracts for procurement of materials and most of the transactions are short term fixed price contracts. b) Currency Risk Foreign currency risk is the risk that fair value of future cash flow of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities. The Company has foreign currency trade payables and receivables and is therefore, exposed to a foreign exchange risk. Foreign currency risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Company’s functional currency (INR). The risk is managed through a forecast of highly probable foreign currency cash flows. Exposure to currency risk The summary quantitative data about the Group’s exposure to currency risk as reported to the management of the Group is as follows: (Figures In Lacs)
As at 31 March 2018 As at 31 March 2017 As at 1 April 2016 USD JPY USD JPY USD JPY Financial Asset Trade Receivables 111.25 - 1,938.39 - 549.90 - Net exposure to foreign currency risk(assets) 111.25 - 1,938.39 - 549.90 -
Trade Payables (58.08) 182.21 318.43 288.80 - Net statement of financial position exposure (58.08) - 182.21 318.43 288.80 - Sensitivity analysis A reasonably possible strengthening (weakening) of the INR against all other currencies at 31 March would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.
Profit or loss, net of tax Equity, net of tax Strengthening Weakening Strengthening Weakening 31 March 2018 5% movement USD 5.54 (5.54) 5.54 (5.54) JPY 1.90 (1.90) 1.90 (1.90) 31 March 2017 5% movement USD 57.42 (57.42) 57.42 (57.42) JPY (10.41) 10.41 (10.41) 10.41 31 March 2016 5% movement USD 8.54 (8.54) 8.54 (8.54)
84 Ferro Alloys Corporation Limited SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS c) Interest Rate Risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost. Since the interest rates on loans obtained are fixed, the company does not have any interest rate risk. The Company’s exposure to interest rate risk in minimal and hence no sensitivity analysis is presented. 50 Capital Management For the purpose of the Company’s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity share holders of the Company. The primary objective of the Company’s capital management is to safeguard continuity, maintain healthy capital ratios in order to support its business and maximise shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The funding requirement is met through equity, internal accruals, long term borrowings and short term borrowings. In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. 51 First Time Adoption of Ind AS As stated in note 2, these are the Company’s first standalone financial statements prepared in accordance with Ind AS The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS statement of financial position at 1 April 2016 (the Company’s date of transition). In preparing its opening Ind AS statement of financial position, the Company has adjusted amounts reported previously in financial statements prepared in accordance with Indian GAAP (previous GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and the notes that accompany the tables. Exemptions and exceptions availed Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS. A. Ind AS optional exemptions (i) Deemed cost of Property, plant and equipment: The Company has elected to measure items of Property, Plant & Equipment (PPE) at the date of transition to Ind AS at their fair value. The Company has used the fair value of PPE, which is considered as deemed cost on transition. Fair valuations are assessed as on 1 April, 2016. (ii) Investments in Subsidiary: Ind AS 101 permits a first-time adopter to choose the previous GAAP carrying amount at the entity’s date of transition to Ind AS to measure the investment in the subsidiary as the deemed cost. Accordingly, the Group has opted to measure its investment in subsidiary at deemed cost, i.e. previous GAAP carrying amount. Ind AS mandatory exceptions B. (i) Estimates An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for Impairment of financial assets based on expected credit loss model in accordance with Ind AS at the date of transition as these were not required under previous GAAP. (ii) Classification and measurement of financial assets Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS. C. Reconciliations between previous GAAP Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.
Ferro Alloys Corporation Limited 85 SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS Reconciliation of Equity (` In Lacs) Particulars As at 1 April 2016 As at 31 March 2017 Previous Adjustments Ind AS Previous Adjustments Ind AS GAAP* GAAP* Assets Non-Current Assets Property, Plant and Equipment 9,824.18 8,922.12 18,746.30 9,163.59 8,917.03 18,080.62 Capital Work-in-Progress 965.99 - 965.99 957.75 (0.00) 957.75 Asset Held for Sale - - - 29.97 0.00 29.97 Intangible Assets - 654.24 654.24 - 1,339.01 1,339.01 Investments in Subsidiary and Associates 21,910.91 (21,900.35) 10.56 21,910.91 (21,900.49) 10.42 Non-Current Financial Assets - - (I) Investments 7.30 (1.00) 6.30 6.80 15.30 22.10 (Ii) Other Non-Current Financial Assets 863.15 (0.00) 863.15 863.76 2.33 866.09 Other Non-Current Assets 321.30 (0.00) 321.30 644.37 (0.01) 644.36
Current Assets - - Inventories 6,888.40 (28.83) 6,859.57 7,774.01 (0.00) 7,774.01 Financial Assets - - (i) Trade Receivables 1,452.65 0.00 1,452.65 5,585.22 (0.00) 5,585.22 (ii) Cash and Cash Equivalents 290.70 (0.00) 290.70 503.79 (2.33) 501.46 (iii) Bank Balances other than (ii) above 4.42 0.00 4.42 4.42 0.00 4.42 (iv) Other Current Financial Assets 100.76 (20.45) 80.31 96.90 (37.02) 59.88 Other Current Assets 3,793.15 (654.26) 3,138.89 3,977.11 (1,387.08) 2,590.03 Total Assets 46,422.90 (13,028.52) 33,394.38 51,518.59 (13,053.25) 38,465.34 Equity and Liabilities Equity Equity Share Capital 1,852.68 (0.00) 1,852.68 1,852.68 (0.00) 1,852.68 Other Equity 23,593.18 (12,848.89) 10,744.29 25,609.99 (12,865.45) 12,744.54
Non-Current Liabilities Financial Liabilities (I) Borrowings 3,024.95 (274.12) 2,750.83 2,057.72 (226.17) 1,831.55 Deferred Tax Liabilities (Net) (160.63) 95.08 (65.55) 734.42 86.51 820.93 Long Term Provisions 1,439.58 (1,167.35) 272.23 1,108.99 (806.16) 302.83 Other Non-Current Liabilities 218.65 - 218.65 218.65 - 218.65
Current Liabilities Financial Liabilities (I) Borrowings 4,776.25 1,100.00 5,876.25 8,111.70 1,100.01 9,211.71 (Ii) Trade Payables 7,316.04 0.00 7,316.04 7,560.38 (0.01) 7,560.37 (Iii) Other Financial Liabilities 1,390.23 (0.60) 1,389.63 1,066.20 3.34 1,069.54 Other Current Liabilities 2,815.38 (1,127.59) 1,687.79 2,675.99 (1,151.48) 1,524.51 Short-Term Provisions 156.59 1,178.28 1,334.87 437.56 806.16 1,243.72 Current Tax Liabilities (Net) - 16.67 16.67 84.31 0.00 84.31
Total Equity and Liabilities 46,422.90 (13,028.52) 33,394.38 51,518.59 (13,053.25) 38,465.34 *The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.
86 Ferro Alloys Corporation Limited SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
STANDALONE ACCOUNTS Reconciliation of Equity (` In Lacs) Particulars 31 March 2017 1 April 2016 Total equity (shareholder’s funds) as per previous GAAP 27,462.68 25,445.86 Adjustments: Impact on account of fair valuation of fixed assets - 8,893.28 Impact on account of impairment of Investment in Subsidiary and Associates (0.14) (21,900.35) Impact of interest charged as per EIR Method (57.16) 3.73 Impact of interest charged as per EIR Method in Equity component 5.66 270.99 Depreciation and Amortisation (5.09) - Impact on account of fair valuation of investment through OCI 16.30 (1.00) Impact on account of provision of loans and advances (16.56) (20.45) Tax effects of adjustments 11.56 (95.07) Other Adjustment 28.84 - Total adjustments (16.59) (12,848.88) Net impact brought forward from Opening balance sheet (12,848.88) - Total equity as per Ind AS 14,597.21 12,596.98 Reconciliation of total comprehensive income for the year ended 31 March 2017 (` In Lacs) Particulars Amount Profit after tax under India GAAP 2,016.817 Adjustments Impact on account of fair valuation Fixed Assets (3.56) Impact of Provision for doubtful advances (16.56) Impact on account of impairment of Investment in Subsidiary and Associates (0.14) Impact on account of capitalisation of Spares 27.32 Impact of reclassification of remeasurement of employee benefit expenses 334.28 Impact of interest charged as per EIR Method (57.16) Tax effects of adjustments (104.12) Total adjustments 180.05 Profit after tax as per Ind AS 2,196.87 Other Comprehensive Income Fair Valuation of Investment 16.30 Impact of reclassification of remeasurement of employee benefit expenses(net of tax) (218.59) Total Comprehensive income for the year 1,994.58 D. Notes to First-Time Adoption: 1 Property, Plant and Equipment The Company has elected to measure items of Property, Plant & Equipment (PPE) at the date of transition to Ind AS at their fair value. The Company has used the fair value of PPE, which is considered as deemed cost on transi- tion. Fair valuations are assessed as on 1 April, 2016 and the same had an impact of ` 8,893 Lacs in accordance with stipulations of Ind AS 101 with the resultant impact being accounted for in the reserves and depreciation for the year ended 31 March 2017 increased by ` 3.56 lacs on leasehold land. 2 Investment in Subsidiary and Associates The company had opted to carry its investment in subsidiary and associates at cost in accordance with Ind AS 27. Further, the company had carried out the impairment testing of investment value (at cost) in accordance with the Ind AS 36. The impairment testing has resulted in impairment of investment by Rs. 21,900.35 lacs with resultant impact being accounted for in the reserves on the transition date. 3 Other Investments (other than Subsidiary and Associates) Under previous GAAP, the Company used to carry the investments in equity instruments of companies(other than subsidiary and associates) at cost. Under Ind AS, the Company elected to fair value the same through the other comprehensive income. As a result, the Company recorded downward fair valuation of ` 1 Lacs as on the transi- tion date and upward fair valuation ` 16.30 lacs during FY 2016-17.
Ferro Alloys Corporation Limited 87 SIXTY SECOND NOTES ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR 62 Annual Report ENDED 31ST MARCH, 2018 2017-18
4 Inventory As per Ind AS 16, spares meeting the definition of Property, Plant and Equipment have been capitalised on the date such spares were ready for their intended use. As a result, inventories as on 1 April 2016 decreased by ` 28.84 Lacs, Property Plant and Equipment as on 1 April 2016 increased by ` 28.84 Lacs and depreciation for the year ended 31 March 2017 increased by ` 1.52 lacs and other expenses decreased by ` 28.84 lacs during 2016-17 being booked as consumption under IGAAP. 5 Borrowings Under previous GAAP, the Company has followed the policy of charging the transaction costs to the income statement or capitalized to Property, Plant and Equipment as and when incurred. Under Ind AS, transaction costs are amortized as an adjustment of interest expense over the term of the related loan using effective interest rate method. The above resulted in reduction in borrowings as at 1 April 2016 by ` 0.68 lacs with corresponding reduction in reserves. Further, the financial liability (borrowings) needs to be measured at amortised cost using EIR and for the computation of EIR market rate of interest needs to be considered. The company had obtained certain loans which were at below market interest rate and application of EIR method had resulted in decrease of borrowings by ` 274.72 lacs with corresponding increase in reserves (including other equity). The above adjustment had decreased profit by ` 57.16 lacs during FY 2016-17. 6 Impairment of Financial Assets - Loans and Advances As per Ind AS 109, the company is required to apply expected credit loss model for recognising the allowance for doubtful debts. As a result, the allowance for doubtful debts has been booked by ` 20.45 Lacs with corresponding decrease in reserves as at 1 April 2016. 7 Remeasurements of Post-Employment Benefit Obligations Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year (net of tax) ended 31 March 2017 increased by ` 267.23 lacs (` 174.75 lacs). There is no impact on the total equity as at 31 March 2017. 8 Deferred Tax Deferred tax have been recognised on the adjustments made on transition to Ind AS. 9 Excise Duty Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty as the excise duty is collected by the company as a principal unlike other indirect taxes. The excise duty paid is presented on the face of the statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended 31 March 2017 by ` 2,882.24 Lacs. There is no impact on the total equity and profit. 10 Retained earnings Retained earnings as at 1 April 2016 has been adjusted consequent to the above Ind AS transition adjustments.
As per our report of even date. By Order of the Resolution Professional
Abhay Upadhye Yashpal Mehta Manoj Saraf Partner Chief Financial Officer Managing Director (Membership No. 049354) (DIN: 00234570) For K.K. Mankeshwar & Co. Chartered Accountants (Firm’s Regn. No. 106009W) Ritesh Chaudhry Rohit Saraf Place: NOIDA Sr. General Manager (Legal) & Joint Managing Director Date: 29.05.2018 Company Secretary (DIN: 00003994)
88 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report INDEPENDENT AUDITOR’S REPORT 62 2017-18
TO THE MEMBERS OF FERRO ALLOYS CORPORATION LIMITED
Report on the Consolidated Financial Statements
We have audited the accompanying Consolidated financial statements of FERRO ALLOYS CORPORATION LIMITED (hereinafter referred to as “the Holding Company”) and its subsidiaries (the Holding company and its subsidiaries together referred to as ‘‘the Group’’)and its associate comprising of the Consolidated Balance Sheet as at March 31, 2018, and the Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash Flows for the year then ended and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as ‘‘the consolidated financial statements’’
Management’s Responsibility for the Consolidated Financial Statements
The Holding Company’s Management is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these Consolidated financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the directors of the Holding company, as aforesaid.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the consolidated financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their report referred to in sub-paragraph (a) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, including Ind AS, of the state of affairs of the Group as at March 31, 2018, and its consolidated profit, total comprehensive income, the changes in equity and cash flows for the year ended on that date.
Emphasis of Matter
The particular Consolidated Financial Statements have been prepared without the consolidation of Facor Power Limited (Subsidiary) as REC has takenover the books of accounts of FPL in terms of the section 13(4)(b) and 15 of SARFAESI Act; also, due to loss of control and influence and curtailment of shareholder’s rights, FPL has lost the status of Subsidiary company of Ferro Alloys Corporation Limited (FACOR).
Also,
Ferro Alloys Corporation Limited 89 SIXTY SECOND Annual Report INDEPENDENT AUDITOR’S REPORT 62 2017-18 a. As per Note 39(A)(b) to the Financial Statements, that the Corporate Guarantee extended by the Company along with Facor Alloys Limited to the bankers (consortium) of Facor Steels Limited for Rs. 142.40 Crores has been invoked to the extent of Rs. 33.82 Crores. The Company has not made any provision for the invoked amount, as the same is being contested. b. As per Note 39(A)(c) to the Financial Statements, the Corporate Guarantee given by the company for its subsidiary Facor Power Limited to Rural Electrification Corporation Limited (REC) has been invoked amounting to Rs. 510.98 Crores and interest thereon as on 31st March, 2018 for which, the Company is contesting. c. As per Note 39(A)(a) of the Financial Statements, the Revisional Authority, DDM has issued a demand notices for Rs. 200.56 Crores (with respect to Ostapal mine toward compensation for excess mining during the period from 2000-01 to 2006-07) and Rs.0.55 crores (being the price towards compensation u/s 21(5) of MMDR Act, 1957 for production without/ in excess of the environmental clearance for the period from 2000-01 to 2010-11) in respect of Kathpal Mine. The revisional authority, Ministry of Mines New Delhi vide order dtd 10.05.2018 has ordered stay of the aforesaid demands till the next date of hearing. d. As per Note 39(A)(a) of the Financial Statements, a demand of Rs. 63.27 Crores (including penalty of Rs. 31.63 Crores) has been raised by Commissioner, GST & Central Excise, Bhubaneswar vide its order dated 31st October, 2017, levying service tax in respect of Corporate Guarantee issued by the Company to Financial Institutions/Banks for the Loans/facilities sanctioned in favour of its subsidiary. The same is not provided for as the Company is contesting the same. e. As per Note 39(A)(a) of the financial Statements, a demand of Rs. 28.38 Crores has been raised by The Commissioner, GST & Central Excise, Bhubaneshwar vide its order dated 15.05.2018 related to availment and transfer of Service Tax for the period from April, 2013 to June, 2017, which liability, the Company is contesting.
Our opinion is not modified in respect of the above matters
Other Matters
The Consolidated Ind AS financial statements include the financial statement of one Indian subsidiary which have been audited by other Auditor. In respect of this subsidiary, financial statement have been furnished to us by the management and our opinion on the statement in so far as it related to this subsidiary is based on report of auditor of that subsidiary, whose financial statement reflect total assets of Rs. 5.88 lakhs as on 31st March 2018, total revenues of Rs.NIL and net cash outflow of Rs. Nil for the year ended as considered in the consolidated Ind AS financial statements.
Also, One Foreign subsidiary company, whose financial statement reflect total assets of Rs. 0.41 lakhs as at 31st March,2018, total revenues of Rs. Nil and net cash flows of Rs. Nil for the year ended on that date, as considered in the consolidated Ind AS financial statements. This Financial statement is unaudited and have been furnished to us by the management. The consolidated financial statements also include the Group’s share of net loss of Rs. Nil for the year ended 31st March, 2018, as considered in the consolidated financial statements, in respect of one associate, whose financial statements have not been audited by us. These financial statements have been audited by other auditors whose reports have been furnished to us by the Management. Our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiary and associate, and our report in terms of sub-sections (3) and (11) of Section 143 of the Act, insofar as it relates to the aforesaid subsidiary and associate, is based solely on such unaudited financial statements and the report of the other auditors respectively.
Our opinion on the consolidated financial statements, and our report on Other Legal and regulatory requirements below, is not modified in respect of the above and the financial statements certified by the management.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.
b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept by the Company so far as it appears from our examination of those books and reports of other auditors.
c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including Other Comprehensive Income, Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash Flow dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of the consolidated financial statements.
d) In our opinion, the aforesaid Consolidated financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.
90 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report INDEPENDENT AUDITOR’S REPORT & ANNEXURE 62 2017-18
e) On the basis of the written representations received from the directors as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”.
g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The consolidated financial statements disclose the impact of pending litigations on its financial position of the Group in its associate in its Financial Statements.
ii There are no material foreseeable losses, on long-term contracts including derivative contracts.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Group. ABHAY UPADHYE Partner (Membership No. 049354) For and on behalf of
K.K. MANKESHWAR & CO. Place : Noida Chartered Accountants Date : 29th May, 2018 (Firm’s Registration No. 106009W)
ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
We have audited the internal financial controls over financial reporting of FERRO ALLOYS CORPORATION LIMITED (“the holding Company”) as of March 31, 2018 in conjunction with our audit of the consolidated financial statements of the Company.
Management’s Responsibility for Internal Financial Controls
The Management of the Holding Company, its subsidiary companies is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly 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, as required under the Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.
Ferro Alloys Corporation Limited 91 SIXTY SECOND Annual Report INDEPENDENT AUDITOR’S REPORT & ANNEXURE 62 2017-18
Meaning of Internal Financial Controls over Financial Reporting
A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Holding Company, its subsidiaries have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
ABHAY UPADHYE Partner (Membership No. 049354) For and on behalf of
K.K. MANKESHWAR & CO. Place : Noida Chartered Accountants Date : 29th May, 2018 (Firm’s Registration No. 106009W)
92 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2018 62 2017-18
CONSOLIDATED ACCOUNTS (` in Lacs) Particulars Notes As at As at As at 31 March 2018 31 March 2017 01 April 2016 ASSETS Non-Current Assets Property, Plant and Equipment 3 16,446.79 18,080.62 18,746.30 Capital Work-in-Progress 4 700.06 957.75 965.99 Assets held for Sale 15.14 29.97 - Intangible Assets 5 1,249.64 1,339.01 654.24 Investments in Subsidiary and Associates 6 2.01 2.01 2.10 Financial Assets Investments 7 18.25 22.10 6.30 Other Financial Assets 8 912.26 866.09 863.15 Other Non-Current Assets 9 1,070.08 644.36 321.30 Total Non-Current Assets 20,414.23 21,941.91 21,559.38 Current Assets Inventories 10 7,366.92 7,774.01 6,859.57 Financial Assets (i) Trade Receivables 11 850.86 5,585.22 1,452.65 (ii) Cash and Cash Equivalents 12 1,434.65 507.71 296.73 (iii) Other Bank Balances 13 2.34 4.42 4.42 (iv) Other Financial Assets 14 51.04 59.88 80.31 Other Current Assets 15 3,023.89 2,590.03 3,138.89 Current Tax Assets (Net) 16 82.92 - - Total Current Assets 12,812.62 16,521.27 11,832.57 Total Assets 33,226.85 38,463.18 33,391.95 EQUITY AND LIABILITIES Equity Equity Share Capital 17 1,852.68 1,852.68 1,852.68 Other Equity 18 18,219.73 12,739.83 10,736.35 Non Controlling Interest - - - Total Equity 20,072.41 14,592.51 12,589.03 Liabilities Non-Current liabilities Financial Liabilities (i) Borrowings 19 1,619.01 1,831.55 2,750.83 Deferred Tax Liabilities (Net) 20 334.87 820.93 (65.55) Provisions 21 299.06 302.83 272.23 Other Non-Current Liabilities 22 218.65 218.65 218.65 Total Non-Current liabilities 2,471.59 3,173.96 3,176.16 Current liabilities Financial liabilities (i) Borrowings 23 2,312.18 9,211.71 5,876.25 (ii) Trade payables 24 4,234.11 7,560.37 7,316.04 (iii) Other Financial Liabilities 25 1,060.63 1,069.54 1,389.63 Other Current Liabilities 26 2,180.30 1,527.06 1,693.30 Provisions 27 895.63 1,243.72 1,334.87 Current Tax Liabilities (Net) 28 - 84.31 16.67 Total Current liabilities 10,682.85 20,696.71 17,626.76 Total liabilities 13,154.44 23,870.67 20,802.92 Total Equity and Liabilities 33,226.85 38,463.18 33,391.95 Notes on Financial Statements 1 to 52
As per our report of even date. By Order of the Resolution Professional
Abhay Upadhye Yashpal Mehta Manoj Saraf Partner Chief Financial Officer Managing Director (Membership No. 049354) (DIN: 00234570) For K.K. Mankeshwar & Co. Chartered Accountants (Firm’s Regn. No. 106009W) Ritesh Chaudhry Rohit Saraf Place: NOIDA Sr. General Manager (Legal) & Joint Managing Director Date: 29.05.2018 Company Secretary (DIN: 00003994)
Ferro Alloys Corporation Limited 93 SIXTY SECOND CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE Annual Report YEAR ENDED 31ST MARCH, 2018 62 2017-18
CONSOLIDATED ACCOUNTS (` in Lacs) Particulars Notes Year Ended Year Ended 31 March 2018 31 March 2017 Revenue Revenue from Operations 29 54,542.70 64,026.48 Other Income 30 571.10 529.96 Total Income 55,113.80 64,556.44 Expenses Cost of Materials Consumed 31 18,184.89 25,024.54 Change in Inventory of Finished Goods and Stock in Progress 32 (907.90) 352.26 Excise Duty Expenses 634.45 2,882.24 Employee Benefits Expense 33 4,346.25 4,184.44 Finance Costs 34 986.48 1,602.04 Depreciation and Amortization Expense 35 575.05 663.06 Other Expenses 36 27,306.19 26,084.69 Total Expenses 51,125.41 60,793.27 Profit/ (Loss) before Exceptional Item & Share of Profit of Associate 3,988.39 3,763.17 Exceptional Items: Profit/ (Loss) on sale of Fixed assets sold/Discarded(Net) 2,487.87 36.31 Share of Profit/(loss) of Associate after tax - (0.09) Profit/ (Loss) Before Tax 6,476.26 3,799.39 Tax Expense: 37 Current tax 1,403.27 692.88 Tax for earlier years (3.03) (93.69) Deferred tax (460.76) 999.18 Profit/ (loss) for the period (A) 5,536.78 2,201.02 Other Comprehensive Income Items that will not be reclassified subsequently to Profit or Loss Remeasurement of defined benefit plans (73.14) (334.28) Fair Value of Investment (8.05) 16.30 Income Tax on items that will not be reclassified to Profit and Loss 25.31 115.69 Items that will be reclassified subsequently to statement of Profit or Loss Foreign currency translation reserve 0.91 Income Tax on translation reserve - Total Other Comprehensive income for the period (B) (55.88) (201.38) Total Comprehensive Income for the period (A + B) 5,480.90 1,999.64 Profit attributable to : - Shareholders of the company 5,536.78 2,201.02 - Non-Controlling Interests - - Other Comprehensive Income attributable to : - Shareholders of the company (55.88) (201.38) - Non-Controlling Interests - - Total Comprehensive Income attributable to : - Shareholders of the company 5,480.90 1,999.64 - Non-Controlling Interests - - Earnings per equity share 38 Basic 2.99 1.19 Diluted 2.99 1.19 The accompanying notes are an integral part of these financial statements 1 to 52
As per our report of even date. By Order of the Resolution Professional
Abhay Upadhye Yashpal Mehta Manoj Saraf Partner Chief Financial Officer Managing Director (Membership No. 049354) (DIN: 00234570) For K.K. Mankeshwar & Co. Chartered Accountants (Firm’s Regn. No. 106009W) Ritesh Chaudhry Rohit Saraf Place: NOIDA Sr. General Manager (Legal) & Joint Managing Director Date: 29.05.2018 Company Secretary (DIN: 00003994)
94 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31ST MARCH, 2018 62 2017-18 -
(56.87) in Lacs) (197.54) 2,201.02 2,003.48 5,536.78 5,479.91 Total ` ( 23,671.16 10,736.35 12,739.83 12,739.83 18,219.74 (12,934.81) Rohit Saraf Manoj Saraf
- - - - (DIN: 00003994) (47.83) (47.83) (DIN: 00234570) Managing Director (218.59) (218.59) (218.59) (218.59) (266.42) Joint Managing Director plans Remeasurement of defined benefit
- OCI (9.72) (9.72) (0.91) (0.91) (0.99) (10.63) (10.63) By Order of the Resolution Professional Foreign Reserve Currency Translation Translation 8.25 - - - - - 16.30 16.30 16.30 16.30 (8.05) (8.05) Investment Fair Value of Fair Value
5.66 5.66
- - 270.99 270.99 276.65 276.65 Equity Portion of Borrowings -
- - 4,041.65 2,201.02 2,201.02 5,536.78 5,536.78 (9,164.15) (6,963.13) (6,963.13) (1,426.35) - - earnings Yashpal Mehta Yashpal Retained (13,205.80) Ritesh Chaudhry Company Secretary Amount in Lacs) 1,852.68 1,852.68 Chief Financial Officer ` 1,852.68 1,852.68 ( General Manager (Legal) & Sr. ------Reserves & Surplus 19,200.00 19,200.00 19,200.00 19,200.00 19,200.00 General Reserve ------439.23 439.23 439.23 439.23 439.23 185,268,241 185,268,241 185,268,241 185,268,241 No. of Shares Account Premium Securities
(a) Equity share capital April 2016 Balance at the 1 Changes in equity share capital during the year Balance at 31 March 2017 April 2017 Balance at the 1 Changes in equity share capital during the year Balance at 31 March 2018 April 2016 Balance at 1 Adjustments AS Impacts due to Ind Restated balance at the beginning of reporting period Profit for the year 2016-17 Other comprehensive income/ (loss) for the year comprehensive income for the year Total Balance at 31 March 2017 Changes in accounting policy / prior period errors Restated balance at the beginning of reporting period Profit for the year 2017-18 Other comprehensive income for the year comprehensive income for the year Total Balance at 31 March 2018 Consolidated Statement of Changes in Equity (b) Other equity As per our report of even date. Abhay Upadhye Partner (Membership No. 049354) For K.K. Mankeshwar & Co. Chartered Accountants Regn. No. 106009W) (Firm’s Place: NOIDA Date: 29.05.2018 Ferro Alloys Corporation Limited 95 SIXTY SECOND CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR Annual Report ENDED 31ST MARCH, 2018 62 2017-18
CONSOLIDATED ACCOUNTS (` in Lacs) S. No. Particulars For the year ended For the year ended 31 March 2018 31 March 2017 A Cash flows from operating activities Net Profit/ (Loss) after Prior Period Items and before Tax 6,476.26 3,799.39 Adjustments For: a) Interest Income (80.06) (72.94) b) Depreciation 632.42 720.42 c) Effect of change in foreign curreny translation reserve - 0.91 d) Interest Expense 986.48 1,602.04 Operating Cash Profit before Working Capital Changes 8,015.10 6,049.82 Movement in Working Capital:- a) Increase/(Decrease) in Trade Payables (3,326.26) 244.33 b) Increase/(Decrease) in Other Current Liabilities 653.24 (166.24) c) Increase/(Decrease) in Other Current Financial Liabilities (113.70) (307.21) d) (Increase)/Decrease in Other Non Current Financial Assets (46.17) (2.94) e) (Increase)/Decrease in Provisions (425.00) (394.83) f) (Increase)/Decrease in Other Non Current Assets (425.72) (323.06) g) (Increase)/Decrease in Other Current Financial Assets 1.94 19.69 h) (Increase)/Decrease in Inventories 407.09 (914.44) i) (Increase)/Decrease in Trade Receivables 4,734.36 (4,132.57) j) (Increase)/Decrease in Other Current Assets (433.86) 548.86 Cash Generated From/ (used in) operations 9,041.02 621.41 Less: Income Tax Paid (net of refunds) (1,568.47) (533.38) Net Cash Generated From/ (used in) Operating Activities before 7,472.55 88.03 Extraordinary item Outflow for extraordinary item (2,487.87) (36.31) Net Cash Generated From/ (used in) Operating Activities(A) 4,984.68 51.72 B Cash Flow from Investing Activities: (Purchase) of property, plant and equipment and capital work in progress (763.13) (913.65) Net proceeds of property, plant and equipment and capital work in progress 4,614.30 188.72 Interest received 89.04 73.68 Net movement in Investments (4.20) 0.59 Net Cash Generated from/ (Used in) Investing Activities (B) 3,936.01 (650.66) C. Cash Flow from Financing Activities: Net proceeds/(Repayment) of Long Term Borrowings (7,194.24) 2,424.84 Interest Expense Paid (799.51) (1,614.92) Issue of Shares - - Net Cash generated from/ (used in) Financing Activities (C) (7,993.75) 809.92 Net Increase/(Decrease) in Cash and Cash Equivalents ( A+B+C) 926.94 210.98 Cash and cash equivalents at the beginning of the year 507.71 296.73 Cash and cash equivalents at the end of the year 1,434.65 507.71
As per our report of even date. By Order of the Resolution Professional
Abhay Upadhye Yashpal Mehta Manoj Saraf Partner Chief Financial Officer Managing Director (Membership No. 049354) (DIN: 00234570) For K.K. Mankeshwar & Co. Chartered Accountants (Firm’s Regn. No. 106009W) Ritesh Chaudhry Rohit Saraf Place: NOIDA Sr. General Manager (Legal) & Joint Managing Director Date: 29.05.2018 Company Secretary (DIN: 00003994)
96 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report 62 2017-18
1. Reporting Entity The Consolidated Financial Statements comprise financial statement of Ferro Alloys Corporation Limited (referred to as “FACOR” or “the Company”) and its subsidiaries (collectively “the Group”). The company is a public company domiciled in India and is listed at Bombay Stock Exchange. 2. Significant Accounting Policies a) Basis of preparation These financial statements have been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard (‘Ind AS’), prescribed under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder, as applicable and other accounting principles generally accepted in India. The consolidated financial statement of the Group has been prepared in accordance with India Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015. The financial statements up to year ended 31st March, 2017, the Group prepared its financial statements in accordance with Accounting Standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act. These financial statements for the year ended 31 March, 2018 are the Group first Ind AS financial statements. The date of transition to Ind AS is 1st April, 2016. b) Principles of Consolidation a) The consolidated financial statements present the consolidated accounts of FACOR, its following subsidiaries
S. Name of the Company Relationship Proportion of Country of No. Ownership & Voting Incorporation Power 1. Facor Realty and Infrastructure Ltd. (FRIL) Subsidiary 100% India 2. Facor Energy Limited (FEL) Subsidiary 100% Guernsey 3. Boula Platinum Mining Private Ltd. Associate 30% India b) The financial statements of the Company and its subsidiaries have been consolidated on a line-by-line basis adding together the book value of like items of assets, liabilities, income and expenses, after eliminating intra- group balances, intra group transactions and any unrealized profits. c) The consolidated financial statements have been prepared using accounting policies for like transactions and are presented, to the extent possible, in the same manner as the company’s separate financial statements. d) The financial statements of FEL have been prepared in accordance with United Kingdom Generally Accepted Accounting Principles (UK GAAP). This subsidiary is not significant as compared to the Company’s consolidated operations and hence, the impact thereof, if any, on account of any difference to the Indian Accounting Standards (Ind AS) is not material. c) Basis of measurement The Financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value: • Property, plant and equipment at fair value; • Certain financial assets and liabilities measured at fair value • Defined benefit liability/(assets): fair value of plan assets less present value of defined benefit obligation d) Functional and presentation currency These financial statements are presented in Indian National Rupee (‘INR’), which is the Company’s functional currency. All amounts have been rounded to the nearest Rupees, unless otherwise indicated. e) Use of judgements and estimates In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the company’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
Ferro Alloys Corporation Limited 97 SIXTY SECOND Annual Report 62 2017-18
A) Judgements Information about the judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the financial statements have been given below: - Classification of financial assets: assessment of business model within which the assets are held and assessment of whether the contractual terms of the financial asset are solely payments of principal and interest on the principal amount outstanding. B) Assumptions and estimation uncertainties Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the financial statements for the year ended 31March 2018 is included below: - Impairment test: key assumptions underlying recoverable amounts, including the recoverability of development costs; - Useful life of property, plant & equipment - Recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources. i) Property, plant and equipment: Recognition and measurement Items of property, plant and equipment are stated at cost /fair market value less accumulated depreciation and accumulated impairment loss, if any. The cost of assets comprises of purchase price and directly attributable cost of bringing the assets to working condition for its intended use including borrowing cost and incidental expenditure during construction incurred upto the date when the assets are ready to use. Capital work in progress includes cost of assets at sites, construction expenditure and interest on the funds deployed. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate item (major components) of property, plant and equipment. Any gain on disposal of property, plant and equipment is recognised in Profit and loss account. Subsequent Measurement Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the company and its cost can be measured reliably. ii) Intangible assets Intangible Assets are stated at cost less accumulated amortization and impairment loss, if any. Intangible assets are amortized on straight line method basis over the estimated useful life. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the company. iii) Financial Instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial instruments also include derivative contracts such as foreign exchange forward contracts, cross currency interest rate swaps, interest rate swaps and currency options; and embedded derivatives in the host contract. Financial Assets Initial recognition and measurement All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Classifications The company classifies its financial assets as subsequently measured at either amortized cost or fair value through comprehensive income or fair value through profit and loss account depending on the company’s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. Business model assessment The company makes an assessment of the objective of a business model in which an asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management.
98 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report 62 2017-18
Assessments whether contractual cash flows are solely payments of principal and interest For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as profit margin. In assessing whether the contractual cash flows are solely payments of principal and interest, the company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. Debt instruments at amortized cost A financial asset is measured at amortized cost only if both of the following conditions are met: - it is held within a business model whose objective is to hold assets in order to collect contractual cash flows. - the contractual terms of the financial asset represent contractual cash flows that are solely payments of principal and interest. After initial measurement, such financial assets are subsequently measured at amortised cost using the EIR method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. Debt instrument at fair value through Other Comprehensive Income (FVOCI) Debt instruments with contractual cash flow characteristics that are solely payments of principal and interest and held in a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets are classified to be measured at FVOCI. Debt instrument at fair value through profit and loss (FVTPL) Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVOCI, is classified as at FVTPL. In addition, the company may elect to classify a debt instrument, which otherwise meets amortized cost or FVOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’). Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss. On initial recognition an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in fair value in OCI. This election is made on an investment-by-investment basis. All other Financial Instruments are classified as measured at FVTPL. Derecognition of financial assets A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the company’s balance sheet) when: - The rights to receive cash flows from the asset have expired, or - The company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the company has transferred substantially all the risks and rewards of the asset, or (b) the company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset When the company has transferred its rights to receive cash flows from an asset or has entered into a pass- through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the company continues to recognize the transferred asset to the extent of the company’s continuing involvement. In that case, the company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the company has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the company could be required to repay.
Ferro Alloys Corporation Limited 99 SIXTY SECOND Annual Report 62 2017-18
On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognised) and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in OCI is recognised in profit or loss. Impairment of financial assets The Company assesses on a forwardlooking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk. With regard to trade receivable, the Company applies the simplified approach as permitted by Ind AS 109, Financial Instruments, which requires expected lifetime losses to be recognised from the initial recognition of the trade receivables. Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, amortised cost, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of amortised cost, net of directly attributable transaction costs. Subsequent measurement The measurement of financial liabilities depends on their classification, as described below: Financial Liabilities measured at amortised cost After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss. Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognised in the profit or loss. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ loss are not subsequently transferred to P&L. However, the group may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss. Derecognition of financial liabilities The company derecognises a financial liability when its contractual obligations are discharged or cancelled or expire. Modifications of financial assets and financial liabilities Financial assets If the terms of a financial asset are modified, the company evaluates whether the cash flows of the modified asset are substantially different. If the cash flows are substantially different, then the contractual rights to cash flows from the original financial asset are deemed to have expired. In this case, the original financial asset is derecognised and a new financial asset is recognised at fair value. If the cash flows of the modified asset carried at amortised cost are not substantially different, then the modification does not result in derecognition of the financial asset. In this case, the company recalculates the gross carrying amount of the financial asset and recognises the amount arising from adjusting the gross carrying amount as a modification gain or loss in profit or loss. If such a modification is carried out because of financial difficulties of the borrower, then the gain or loss is presented together with impairment losses. In other cases, it is presented as interest income.
100 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report 62 2017-18
Financial liabilities The company derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss. iv) Inventories Raw material, stores and spares, work in progress and finished goods are valued at lower of cost or net realizable value. v) Revenue Recognition • Sale of Goods:Revenue is recognised when the significant risk and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Export benefits are recognised as per schemes specified in Foreign Trade Policy, as amended from time to time on accrual basis. • Interest income is recognized using the Effective Interest Rate (‘EIR’) method. The EIR is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial instrument or a shorter period, where appropriate to the net carrying amount of the financial asset. The EIR is computed basis the expected cash flows by considering all the contractual terms of the financial instrument. The calculation includes all fees, transaction costs, and all other premiums or discounts paid or received between parties to the contract that are an integral part of the effective interest rate. • Dividend income is recognised, when the right to receive the dividend is established. vi) Foreign currency transactions (a) Foreign currency transactions are recorded at the exchange rate prevailing on the date of the transaction. (b) Monetary items denominated in foreign currencies (such as cash, receivables, payables etc.) outstanding at the year end, are translated at exchange rates applicable on year end date. (c) Non-monetary items denominated in foreign currency, (such as fixed assets) are valued at the exchange rate prevailing on the date of transaction and carried at cost. (d) Any gains or losses arising due to exchange differences arising on translation or settlement are accounted for in the Statement of Profit and Loss. vii) Employee benefits a) Short term employee benefits Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. b) Defined contribution plans Obligations for contributions to defined contribution plans are expensed as the related service is provided. The company has following defined contribution plans: a. Provident Fund b. Superannuation Fund c) Defined benefit plans The company has only one Defined benefit plan - Gratuity. The company net obligation in respect of defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the company, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.
Ferro Alloys Corporation Limited 101 SIXTY SECOND Annual Report 62 2017-18
Re-measurement of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in Other Comprehensive Income. Net interest expense/(income) on the net defined liability/(assets) is computed by applying the discount rate, used to measure the net defined liability/(asset), the start of the financial year after taking into account any changes as a result of contribution and benefit payments during the year.. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in profit or loss. The company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs. d) Other long-term employee benefits The Company’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Re-measurements are recognised in profit or loss in the period in which they arise. The company has following long term employment benefit plans: • Leave encashment Leave encashment is payable to eligible employees at the time of retirement. The liability for leave encashment is provided based on actuarial valuation as at the Balance Sheet date, based on Projected Unit Credit Method, carried out by an independent actuary. viii) Borrowing Cost General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. Other borrowing costs are expensed in the period in which they are incurred. ix) Income Tax a) Current tax Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax assets and liabilities are offset only if, the Company: • Has a legally enforceable right to set off the recognised amounts; and • Intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. b) Deffered Tax Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit nor loss. Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves. Unrecognized deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
102 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report 62 2017-18
Deferred tax assets and liabilities are offset only if: • The entity has a legally enforceable right to set off current tax assets against current tax liabilities; and • The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity. x) Impairment of non-financial assets At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication on impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment loss in respect of assets other than goodwill is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. xi) Provisions Provisions are recognised when the Company has a present (legal or constructive) obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre- tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as finance cost. xii) Segment Reporting:- Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The board of directors of FACOR has been identified as being the chief operating decision maker by the Management of the company. Refer note 40 for segment information presented. xiii) Cash & Cash Equivalent Cash and cash equivalents comprise cash at bank and on hand and short-term money market deposits with original maturities of three months or less that is readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. xiv) Notes to these consolidated financial statements are intended to serve as a means of informative disclosure and a guide to better understanding. Recognising this purpose, the Company has disclosed only such notes from the individual financial statements which fairly present the needed disclosure.
Ferro Alloys Corporation Limited 103 SIXTY SECOND Annual Report 62 2017-18
4.33 4.33
111.14 111.14 211.43 211.43 259.68 223.09 238.32 101.43 163.99 263.24 256.52 265.32 2017 2016 As at As at in Lacs) 1 April 2,340.31 3,549.32 2,497.53 3,940.44 ` 31 March ( 11,200.15 11,200.15 11,196.35 18,080.62 18,746.30
Net Block Net Block 4.33 4.33
95.20 256.12 204.58 218.39 150.29 259.68 223.09 238.32 101.43 163.99 2018 2017 As at As at 9,249.21 3,016.58 3,252.09 2,340.31 3,549.32 31 March 31 March 11,200.15 11,200.15 16,446.79 18,080.62 -
7.12 3.56
- - - 42.25 83.31 87.64 23.74 43.00 28.31 14.53 47.68 2018 2017 230.19 650.54 128.70 344.50 605.71 As at As at 1,129.36 31 March 31 March
- - - -
------19.40 19.40 tions tions ments/ ments/ Deduc Deduc Adjust Adjust
- 3.56 3.56
- - - 18.51 40.31 13.78 39.96 23.74 43.00 14.53 47.68 Year Year 120.89 306.04 543.05 128.70 344.50 605.71 For the For the Depreciation Depreciation
------Impact Impact of Ind AS of Ind AS Transition Transition
3.56
------23.74 43.00 14.53 47.68 2017 2016 605.71 128.70 344.50 As at As at 1 April 31 March
4.33 4.33
115.96 115.96 211.67 263.24 246.83 301.70 237.93 263.24 246.83 281.32 123.51 2018 2017 As at As at 9,249.21 3,893.82 3,246.77 3,902.63 2,469.01 31 March 31 March 11,200.15 11,200.15 17,576.15 18,686.33
0.06 7.19 9.69 5.51 0.49 0.04
------39.87 89.62 180.00 152.41 1,950.94 2,131.00 Deletions Deletions
8.81 7.55 5.31 0.28
------11.35 11.35 20.44 26.26 10.99 43.00 21.51 92.44 957.76 1,020.82 Additions Additions
Gross Block Gross Block
------28.84 245.85 8,647.43 8,922.12 Impact of Ind Impact of Ind AS Transition AS Transition
4.33 4.33
17.39 111.14 111.14 115.96 115.96 211.67 211.43 263.24 246.83 281.32 256.52 265.32 3,911.60 3,911.60 2,469.01 3,893.82 2,548.92 2,497.53 9,824.18 11,200.15 11,200.15 18,686.33 As at As at 1 April 2016 31 March 2017
Particulars Particulars Freehold Land Leasehold Land Buildings Road and Drains Plant and Machinery Office Equipments Furniture & Fixtures Railway Sidings Vehicles Freehold Land Leasehold Land Buildings Road and Drains Plant and Machinery Office Equipments Furniture & Fixtures Railway Sidings Vehicles Tangible Assets Tangible Total Assets Tangible Total 3. Property, Plant and Equipment 3. Property, 104 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report 62 2017-18
- 654.24 654.24 2017 2016 As at As at in Lacs) 1 April 1,339.01 1,339.01 ` 31 March (
Net Block Net Block - 2018 2017 As at As at 1,249.64 1,249.64 1,339.01 1,339.01 31 March 31 March
- 2017 957.75 957.75 As at 114.71 114.71 2018 2017 114.71 114.71 204.08 204.08 As at As at 31 March 31 March 31 March CONSOLIDATED ACCOUNTS CONSOLIDATED - - - - 8.24 8.24 - - - - tions tions ments/ ments/ Deduc Deduc Adjust Adjust Deletions - - - tions 114.71 114.71 Year Year 114.71 114.71 Addi 89.37 89.37 For the For the Depreciation Depreciation ------Impact Impact Impact of Ind AS of Ind AS of Ind AS Transition Transition Transition
- - 2016 965.99 965.99 As at 114.71 114.71 2017 2016 114.71 114.71 As at As at 1 April 1 April 31 March
- 957.75 957.75 2018 As at 2018 2017 As at As at 1,453.72 1,453.72 1,453.72 1,453.72 31 March 31 March 31 March - - 257.69 257.69 - - - Deletions Deletions Deletions - - - - - 799.48 799.48 Additions Additions Additions Gross Block Gross Block 654.24 654.24 - - - - - Impact of Ind AS Transition Impact of Ind Impact of Ind AS Transition AS Transition
957.75 957.75 - - - 1,453.72 1,453.72 As at As at As at 1 April 2016 31 March 2017 31 March 2017
Particulars Particulars Particulars Intangible Assets Capital Work-in-Progress Mining Rights Mining Rights Goodwill Capital Work in Progress Capital Work Total Intangible Assets Total Intangible Assets Total 5. 4. Ferro Alloys Corporation Limited 105 SIXTY SECOND Annual Report 62 2017-18
CONSOLIDATED ACCOUNTS (` in Lacs) As at As at As at 31 March 2018 31 March 2017 1 April 2016 6 Investment in Associates
Investment Measured at Cost - In Equity Shares of Subsidiary Companies - Unquoted, fully paid up 19,80,59,930 (Previous Year 19,80,59,930) Facor Power Limited 20,614.20 20,614.20 20,614.20 of ` 10/- each Less: Provision for Impairment (20,614) (20,614.20) (20,614.20) - - - - In Pref. Shares of Subsidiary Companies - Unquoted, fully paid up 11,00,000 (Previous Year 11,00,000) Facor Power Ltd. of ` 100/- 1,100 1,100.00 1,100.00 each Less: Provision for Impairment (1,100) (1,100.00) (1,100.00) - - - Investment in Associate Company -Equity Instruments (fully paid-up) (Unquoted) 4,66,164 (Previous Year: 4,66,164) Boula Platinum Mining Pvt. 4.66 4.66 4.66 Ltd. of ` 1/- each Add: Share of profit of prior years (2.65) (2.56) (2.51) Add: Share of profit of Current years - (0.09) (0.05) 2.01 2.01 2.10 Aggregate book value of quoted investments - - - Aggregate book value of un-quoted investments 2.01 2.01 2.10
7 Investment Others Investment Measured at fair Value through OCI Others -In equity shares - Quoted, fully paid-up 5,00,000 (Previous Year: 5,00,000) Facor Alloys Limited of ` 1/- each 12.25 20.30 4.00 Investment Measured at fair Value through OCI Investments in Mutual Funds - Quoted SBI Premier Liquid Fund units - 154.197 units 4.20 - - Investment Measured at amortised cost - Government Securities - Unquoted 5 years National Savings Certificates 0.20 0.20 0.20 6 years National Savings Certificates 1.55 1.55 2.05 7 years National Savings Certificates 0.05 0.05 0.05
18.25 22.10 6.30 Aggregate book value of quoted investments 12.25 20.30 4.00 Aggregate book value of un-quoted investments 6.00 1.80 2.30
8 Other Financial assets Unsecured, considered good Security deposits 328.81 863.77 863.15 Bank Deposits held as margin money with maturity more than 12 583.45 2.32 - months 912.26 866.09 863.15
106 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report 62 2017-18
CONSOLIDATED ACCOUNTS (` in Lacs) As at As at As at 31 March 2018 31 March 2017 1 April 2016 9 Other Non-Current assets Capital Advances 1,070.08 644.36 321.30 1,070.08 644.36 321.30 10 Inventories (At cost or NRV Whichever is lower) Raw materials 4,663.70 4,515.79 3,237.88 Work-in-Process 15.13 165.10 139.58 Finished Products 2,177.50 2,648.33 3,026.11 Stores and spares (Including in Transit) 457.94 394.53 412.20 Loose Tools 52.65 50.26 43.80 7,366.92 7,774.01 6,859.57 11 Trade Receivables Unsecured and considered good -from related parties - - - -from others 850.86 5,585.22 1,452.65 850.86 5,585.22 1,452.65 12 Cash and Cash Equivalents Balance with banks: - In Current Account 106.14 319.42 231.30 - In Cash Credit Account 1,011.54 - - Cash on hand 7.47 20.38 19.25 Cheques in hand 0.38 - 0.20 Others: - Fixed Deposits with banks having maturity of twelve months or less 309.12 167.91 45.98 1,434.65 507.71 296.73 13 Other Bank Balances In earmarked accounts - Unclaimed dividend account 2.34 4.42 4.42 2.34 4.42 4.42 14 Other Financial Assets
Loans and advances to related parties 0.14 - 19.69 Interest accrued on term deposits 50.90 59.88 60.62 51.04 59.88 80.31 15 Other Current Assets Advances to vendors 963.79 624.77 558.43 Advances to employees 0.95 1.94 3.96 Taxes and duties recoverable 1,598.31 1,869.60 2,169.77 Royalty Deposits 385.36 3.41 294.48 Prepaid Expenses 73.55 88.38 110.32 Claims Recoverable 1.93 1.93 1.93 Others - 3,023.89 2,590.03 3,138.89 16 Current Tax Assets (net) Advance tax(Net of Provision for Tax ) 82.92 - - 82.92 - -
Ferro Alloys Corporation Limited 107 SIXTY SECOND Annual Report 62 2017-18
CONSOLIDATED ACCOUNTS (` in Lacs) As at As at As at 31 March 2018 31 March 2017 1 April 2016 17 Share capital Authorised: 22,00,00,000 (31 March 2017 - 22,00,00,000) equity shares of ` 1/- each 2,200.00 2,200.00 2,200.00 8,00,000 (31 March 2017 - 8,00,000) preference shares of ` 100/- each 800.00 800.00 800.00 Issued, subscribed & fully paid up: 18,52,68,241 (31 March 2017 - 18,52,68,241) equity shares of ` 1/- each 1,852.68 1,852.68 1,852.68 1,852.68 1,852.68 1,852.68
a. Terms and rights attached to equity shares The Company has only one class of equity shares having a par value of ` 1/- per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. b In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by shareholders.
c. Reconciliation of number of shares outstanding at the beginning and end of the year : Number of Shares Amount Outstanding at the 1 April 2016 185,268,241 1,852.68 Equity Shares issued during the year in consideration for cash - - Outstanding at the 31 March 2017 185,268,241 1,852.68 Equity Shares issued during the year in consideration for cash - - Outstanding at the 31 March 2018 185,268,241 1,852.68
d. Shareholders holding more than 5% shares in the company Name of Shareholders As at 31 March 2018 As at 31 March 2017 As at 1 April 16 No. of Percentage No. of Percentage No. of Percentage Shares Shares Shares R.B.Shreeram & Co. Pvt. Ltd. 65,452,441 35.33% 69,448,883 37.49% 69,448,883 37.49% Premier Commercial Corporation 15,672,291 8.46% 15,672,291 8.46% 15,672,291 8.46%
18 Other equity As at As at As at 31 March 2018 31 March 2017 1 April 2016 a Capital Reserves Balance at the beginning of the year 439.23 439.23 439.23 Addition during the year - - - Balance at the end of the year 439.23 439.23 439.23 b General reserve Balance at the beginning of the year 19,200.00 19,200.00 19,200.00 Add: Transfer from surplus balance in the statement of Profit & - - - Loss Balance at the end of the year 19,200.00 19,200.00 19,200.00 c Retained earnings Balance at the beginning of the year (6,963.13) (9,164.15) 4,041.65 Ind AS transition Adjustement - (13,205.80) Add: Profit for the year after taxation as per statement of Profit and Loss 5,536.78 2,201.02 - (1,426.35) (6,963.13) (9,164.15)
108 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report 62 2017-18
CONSOLIDATED ACCOUNTS (` in Lacs) 18 Other equity As at As at As at 31 March 2018 31 March 2017 1 April 2016 d Other Comprehensive Income Foreign Currency translation reserve Balance at the beginning of the year (10.63) (9.72) (9.72) Ind AS transition Adjustement - - - Addition during the year (0.99) (0.91) - Balance at the end of the year (11.62) (10.63) (9.72)
Remeasurement of actuarial gain/loss Balance at the beginning of the year (218.60) - - Ind AS transition Adjustement - - - Addition during the year (47.83) (218.59) - Balance at the end of the year (266.43) (218.59) -
Impact of Fair Valuation of Investment Balance at the beginning of the year 16.30 - - Ind AS transition Adjustement - - - Addition during the year (8.05) 16.30 - Balance at the end of the year 8.25 16.30 (269.80) (212.92) (9.72) e Equity Portion of Loan Component Balance at the beginning of the year 276.65 270.99 - Ind AS transition Adjustement - - 270.99 Addition during the year - 5.66 - Balance at the end of the year 276.65 276.65 270.99 Total Equity (a+b+c+d+e) 18,219.73 12,739.83 10,736.35 Nature and purpose of other reserves General reserve The general reserve is used from time to time to transfer profits from retained earnings for appropriation purpose. Remeasurement of defined benefit plans Remeasurements of defined benefit plans represents the following as per Ind AS 19, Employee Benefits: (a) actuarial gains and losses (b) the return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset); and (c) any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability (asset)
19 Borrowings
Secured - From Banks (Ref. note 19.1) - - 82.17 Unsecured (Ref. note 19.2) - From related parties 1,033.65 1,263.58 1,379.48 - Others 585.36 567.97 1,289.18 1,619.01 1,831.55 2,750.83 19.1 Secured by hypothecation of Metal Recovery Plant and second pari-passu charge on other fixed assets of the company and guaranteed by two directors. 19.2 Terms of repayment : Payable in equal quarterly instalments.
Ferro Alloys Corporation Limited 109 SIXTY SECOND Annual Report 62 2017-18
CONSOLIDATED ACCOUNTS (` in Lacs) As at As at As at 31 March 2018 31 March 2017 1 April 2016 20 Deferred Tax Liabilities / (Assets) (Net) Deferred Tax Liability: Difference between Book and Income Tax depreciation 976.78 996.41 760.28 Others 56.19 86.51 95.08 Deferred Tax Assets: Mat Credit Entitlement 416.24 Disallowance u/s 43B of the Income Tax Act, 1961 to be allowed on 281.86 261.99 265.32 payment basis Unabsorbed Depreciation and Unabsorbed Business Loss 655.59 Net Deferred Tax Liabilities / (Assets) 334.87 820.93 (65.55) Reconciliation of Deferred Tax Assets/(Liabilities)
Particulars As at As at 31 March 2018 31 March 2017 Opening Balance as on 1st April 820.93 (65.55) Deferred tax income/ (expense) during the period recognised in profit & loss (460.75) 999.18 Deferred tax income/ (expense) during the period recognised in Other Equity 2.99 Deferred tax income/ (expense) during the period recognised in OCI (25.31) (115.69) Closing Balance 334.87 820.93
As at As at As at 31 March 2018 31 March 2017 1 April 2016 21 Provisions Provision for employee benefits - Compensated Absences 299.06 302.83 272.23 299.06 302.83 272.23 22 Other Non- Current Liabilities Advances from Associate 218.65 218.65 218.65 218.65 218.65 218.65 23 Borrowings From Banks (Secured) - (Refer note no. 23.1) 1,212.18 8,111.71 4,776.25 From Others (Unsecured) - (Refer note no. 23.2) 1,100.00 1,100.00 1,100.00 2,312.18 9,211.71 5,876.25 23.1 Secured by hypothecation of stock of raw material, finished products, book debts and other receivables and by way of second charge on fixed assets of the company by deposit of title deeds in respect of immovable properties and guaranteed by two directors. 23.2 Secured by way of equitable mortgage of the property by the promoters and also the personal guarantee of two promoters. 24 Trade Payable Micro Small and Medium Enterprises 0.03 0.03 4.29 Others 4,234.08 7,560.34 7,311.75 4,234.11 7,560.37 7,316.04 There were no over dues during the year, for which disclosure requirements under Micro, Small and Medium Enterprises Development Act, 2006 are applicable
110 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report 62 2017-18
CONSOLIDATED ACCOUNTS (` in Lacs) As at As at As at 31 March 2018 31 March 2017 1 April 2016 25 Other Financial Liabilities Current maturities of long-term debt - from Banks - 82.18 582.24 Interest accrued but not due on borrowings 69.89 18.21 16.95 Interest accrued but not due on borrowings (ICD) 38.53 14.62 - Interest accrued and due on borrowings 111.38 - 28.76 Unpaid dividend 2.34 4.42 4.42 Security Deposits 216.09 247.59 204.57 Other payables for: - Managerial Remuneration 406.87 187.09 364.09 - Royalty - 335.12 - -Related Party 23.37 - 188.60 - Employee Benefits Payable 192.16 180.31 - - 1,060.63 1,069.54 1,389.63
26 Other Current Liabilities
Statutory dues 145.07 141.1800 382.97 Advance from customers 467.70 942.6500 548.87 Other payables 1,567.53 443.2300 761.46 2,180.30 1,527.06 1,693.30
27 Provisions Provision for employee benefits - Gratuity 120.72 285.61 0.20 - Incentive 22.45 25.36 27.41 - Compensated Absences 140.58 126.46 139.92 Others 611.88 806.29 1,167.34 895.63 1,243.72 1,334.87 28 Current Tax Liabilities Provision for Income Tax (Net of advance tax ) - 84.31 16.67 - 84.31 16.67 Year ended Year ended 31 March 2018 31 March 2017 29 Revenue from Operations Sale of goods 53,244.92 63,419.63 Other Operating Revenues 1,297.78 606.85 54,542.70 64,026.48 30 Other Income Interest income from financial assets measured at amortised cost - on bank deposits 16.37 11.30 - Others 63.69 61.64 Excess provision/ liability written back 238.32 297.41 Foreign exchange fluctuations (net) 109.90 112.16 Realised/Unrealised gain on Investment 4.20 - Miscellaneous Receipts 138.62 47.45 571.10 529.96 Ferro Alloys Corporation Limited 111 SIXTY SECOND Annual Report 62 2017-18
CONSOLIDATED ACCOUNTS (` in Lacs) Year ended Year ended 31 March 2018 31 March 2017 31 Cost of Materials Consumed
Opening Stock of Raw Material 6,044.49 3,219.09 Add: Purchases 16,804.10 26,321.24 Less: Closing Stock of Raw Material 4,663.70 4,515.79 18,184.89 25,024.54 32 Changes in Inventories of Finished Goods and Work in Process Decrease / (Increase) in Stock : (a) Closing Stock -Finished goods 2,177.50 2,648.33 -Work in Progress 15.13 165.10 2,192.63 2,813.43 (b) Less : Opening Stock -Finished goods 1,119.63 3,026.11 -Work in Progress 165.10 139.58 1,284.73 3,165.69 Decrease/(increase) in inventories (907.90) 352.26 33 Employee Benefits Expense Salaries and wages 3,185.26 3,090.60 Contribution to provident and other funds 264.23 253.89 Staff Gratuity and Superannuation 105.02 109.41 Staff welfare expenses 522.73 492.68 Director’s Remuneration 269.01 237.86 4,346.25 4,184.44 34 Finance Cost Interest on loans 600.75 286.08 On Bill Discounting (12.67) 28.20 Other borrowing costs 397.48 1,284.36 Bank Charges on bill discounting 0.92 3.40 986.48 1,602.04 35 Depreciation and Amotisation expense Depreciation on tangible assets 485.68 548.35 Amortisation on intangible assets 89.37 114.71 575.05 663.06 Depreciation is excluding ` 57.36 lacs (Previous year ` 57.36 lacs) considered under cost of material consumed. 36 Other Expenses Mining Handling & Other Production expenses 4,059.71 2,693.40 Power and fuel 14,482.11 13,471.27 Repairs and maintenance: - Buildings 417.43 952.92 - Plant and machinery 1,387.41 2,094.67 Freight, Shipment & Sales Expenses 1,336.39 1,553.26 Stores & Spares 186.85 221.74 Work Expenses 2,038.39 1,963.59 Transportation expenses 21.69 35.41 Rent 197.13 209.60 Insurance 25.48 25.87 Rates and Taxes 80.18 103.59 Commission and Brokerage on Sales 267.61 285.97 112 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report 62 2017-18
CONSOLIDATED ACCOUNTS (` in Lacs) Year ended Year ended 31 March 2018 31 March 2017 Payment to auditors 11.80 12.87 Directors’ sitting fees 0.86 2.46 Royalty 2,742.90 2,416.98 Miscelaneous Expenses 50.25 41.09 Total 27,306.19 26,084.69 36.1 Payment to Auditor as: Statutory Auditor Audit Fees 4.75 7.38 Tax Audit Fees 0.15 0.15 Certification and Consultation Fees 0.05 0.28 Reimbursement of Expenses 5.17 2.07 10.12 9.88 Cost Auditor Cost Audit Fees 0.70 0.70 Management Services 0.60 0.60 Certification and Consultation Fees - 0.24 Reimbursement of Expenses 0.38 1.45 1.68 2.99 Total 11.80 12.87 36.2 Corporate Social Responsibility (a) CSR amount required to be spent as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof by the Company during the year is ` 37.88 lacs (Previous Year ` 43.84 lacs). (b) Expenditure related to Corporate Social Responsibilities incurred is ` 39.44 lacs (Previous Year ` 44.54 Lacs). 37 Income Tax 37.1 Income Tax Expenses Particulars Current Tax Expenses Current year 1,403.27 692.88 Adjustment for previous Year (3.03) - 1,400.24 692.88 Deferred Tax Expenses Change in recognised temporary differences (460.76) 999.18 (460.76) 999.18 Total Tax Expenses 939.48 1,692.06 37.2 Reconciliation of effective tax rate Profit/(loss) before tax 6,476.26 3,799 Applicable tax rate 34.61% 34.61% Computed Tax Expenses 2,241.30 1,315
Tax Effect of: MAT Credit difference (629.73) 507.42 Adjustement of earlier year tax - - Difference of tax rate and indexation on sale of land (655.67) - Tax Allowance of Goodwill (146.31) Others tax adjustment (16.42) 16.06 Tax Expenses recognised in profit and loss 939.48 1,692.07 Effective Tax Rate 14.507% 44.535%
Ferro Alloys Corporation Limited 113 SIXTY SECOND Annual Report 62 2017-18
CONSOLIDATED ACCOUNTS (` in Lacs) Year ended Year ended 31 March 2018 31 March 2017 38 Earning per share Profit/ (loss) for the period 5,536.78 2,201 Weighted average number of equity shares of ` 1/- each 1,852.68 1,852.68 EPS - Basic and Diluted 2.99 1.19 39 The information related to Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. 40 Contingent liabilities, contingent assets and commitments A. Contingent Liabilities a. Claims against the Company not acknowledged as debts, since disputed ` 32,389.47 lacs (Previous Year ` 6,314.03 lacs). Amounts paid under protest ` 525.83 lacs (Previous Year ` 304.79 lacs) have been debited to Advance Account. b. The claim under Corporate guarantee for ` 142.40 Crores given by the Company for Facor Steels Limited with Facor Alloys Limited has been invoked to the extent of ` 33.82 Crores which liability, the Company is contesting. c. The Company has given corporate guarantee to Rural Electrification Corporation Ltd. (REC) in connection with granting a facility of Term Loan of ` 51,790 Lacs (Previous Year ` 51,790 Lacs) to Facor Power Ltd. (FPL). The Company has also pledged 19,80,59,930 shares (Previous Year 19,80,59,930 shares) with REC out of 19,80,59,930 shares (Previous Year 19,80,59,930 shares) held in FPL besides giving an undertaking to provide interest free unsecured subordinates loan or subscribe for equity / preference shares to FPL in case of cost overrun at any stage of the project. The Corporate Guarantee given by Ferro Alloys Corporation Limited in respect of REC has been invoked amounting to ` 510.98 crores and interest thereon. REC has initiated proceedings under Insolvency and Bankruptcy Code 2016, by filing an application u/s 7 of the Insolvency and Bankruptcy Code 2016 with the National Company Law Tribunal, Kolkata (NCLT, Kolkata). Corporate Insolvency Resolution process has commenced against FACOR pursuant to an order dated 6th July, 2017 of the said NCLT, Kolkata and Mr. K.G. Somani was appointed as Resolution Professional of FACOR. The Committee of Creditors of FACOR, at their last meeting held on 1st April, 2018 rejected the resolutions plans tabled before it and the Resolution Professional accordingly, submitted his report to NCLT, Kolkata on 2nd April, 2018. The Promoter Group, however, aggrieved by the order dated 6th July, 2017 of NCLT, Kolkata, had filed an appeal before the National Company Law Appellate Tribunal, New Delhi (NCLAT, New Delhi) which, after hearing the matter has, on 5th March, 2018 reserved the judgment, which is awaited. d. The Company has given corporate guarantee to Central Bank of India of ` 3,000 Lacs (Previous Year ` 3,000 Lacs) for providing Working Capital Facilities to FPL. B. Capital and Other Commitments a. Estimated amount of contracts on Capital Account remaining to be executed and not provided for in accounts ` 3,107.38 Lacs (Previous Year ` 2,599.43 lacs). C. Contingent Assets The company has no contingent asset as on ,31 March 2018, 31 March 2017 & 1 April 2016. 41 Segment information Consolidated Segment infiormation are same as segment information of Ferro Alloys Corporation Limited. 42 In Pursuance of the decision dated 2nd August 2017 by the Honourable Supreme Court of India and subsequent demand notice related to Katasahi Mines from DDM, an amount of ` 1041.48 Lacs has been provided under the head Mining, Handling & Other Production. The company has also provided for interest at the applicable rate for the period from 31st December 2017 and onwards. 43 During the Current Financial Year the Company has incurred an amount of ` 279.55 lacs towards Resolution Process Cost which has been debited under different heads of accounts in the Statement of Profit and Loss the details are as under: S. No. Particulars (` in Lacs) a) Resolution Professional Fees 214.63 b) Concurrent Auditors Fees 6.75 c) Other Professional Charges 36.05 d) Advertisement Expenses 9.06 e) Travelling and Other Expenses 13.06 Total 279.55
114 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report 62 2017-18
CONSOLIDATED ACCOUNTS 44 Royalty paid for the months of February,2018 and March,2018 has been calculated on the basis of latest IBM price published for the month of January’2018. However, the variation in Royalty Rates for the months of February, 2018 and March, 2018 will be adjusted subsequently in the next financial year after pronouncements of royalty rates by IBM. 45 The company, in the beginning of the financial year started installing an additional 27 MVA furnace at its existing location so as to meet twin objective of enhancing the production capacity of Ferro Chrome as well as to increase the generation capacity of the power plant of its subsidiary Facor Power limited (FPL). The company has put the expansion project on hold post initiation of Corporate Insolvency Resolution Process (CIRP) and appointment of Interim Resolution Professional vide order dated 6th July, 2017 of Kolkata bench of National Company Law Tribunal. The total expenditure incurred on expansion project is of ` 677.36 lacs and given a capital advances of ` 531.86 lacs till date. 46 Position of working and non-working mines. S.No. Name of Mines Lease started on Lease terminating on Status Lease period valid upto 31.03.2030 as Presently, a non-Working per section 8A (5) of MMDR Act 2015. mine. Application for revival 1 Kathpal mine w.e.f. 07.10.1972 The issue of Execution of Lease deed of mine filed on 24.01.2018 is pending before Steel & Mines Dept. Decision pending. Government of Odisha. 2 Ostapal mine w.e.f. 13.08.1985 50 years w.e.f. 13.08.1985 Working mine. 30 years w.e.f. 18.04.2008 Kalarangiatta (as per lease deed) 3 w.e.f. 18.04.2008 Working mine. mine 50 years w.e.f 18.04.2008) (as per MMDR Act, 2015) 20 years w.e.f. 01.08.1998 Non working mine as mine (as per Lease Deed) declared lapsed w.e.f. 50 years w.e.f. 01.08.1998 30.10.2011 vide proceed- 4 Katasahi mine w.e.f. 01.08.1998 (as per MMDR Act, 2015 ing no. 7730/SM, BBSR dtd. 17.08.2015 issued of Steel & Mines dept., Govt. of Mining Officer, Keonjhar vide letter Non working mine as mining No. 1601/Mines, dtd. 15.12.2016 has operations stopped as per intimated that the expiry of the Boula Supreme Court order 12th 5 Boula mines w.e.f. 06.08.1972 Chromite Mines of M/s. FACOR Limit- January, 2016. ed can be considered to have reached its finality with effect from 07.10.2016. 47 Related Party Disclosure:- Consolidated related party are same as related party transaction transaction of standalone Ferro Alloys Corporation Limited. 48 Details of Loans given, Investments made and Gurantees covered U/s 186(4) of the companies Act 2013. Loans given, Investments made and Guarantees given by the company are covered under resepective heads. 49 FORM AOC - 1 (Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014) Statement containing salient features of the financial statement of subsidiaries/ associate companies 1 SI. No. 1 2 2 Name of subsidiary Facor Realty and Facor Energy Infrastructure Limited Limited 3 Reporting period for the subsidiary concerned, if different from the holding - - company’s reporting period, 4 Reporting currency and Exchange rate as on the last date of the relevant GBP Financial year in the case of foreign subsidiaries. 92.06 5 Share Capital 10.00 184.12 6 Reserves & Surplus (8.60) (459.46) 7 Total Assets 5.88 0.41 8 Total Liabilites 0.19 53.00 9 Investments - - 10 Turnover - - 11 Profit before taxation (0.06) (11.33) 12 Provision for taxation - - 13 Profit after taxation (0.06) (11.33) 14 Proposed Dividend - - 15 % of shareholding 100% 100%
Ferro Alloys Corporation Limited 115 SIXTY SECOND Annual Report 62 2017-18
CONSOLIDATED ACCOUNTS # Financial information is based on unaudited results. Note :1. Due to loss of control and influence and curtailment of shareholder’s rights, Facor Power Limited has lost the status of Subsidiary Company of Ferro Alloys Corporation Limited, therefore, the information related to the same is not incorpo- rated. 2. Both i.e. (1) Facor Realty and Infrastructure Ltd. ; (2) Facor Energy Ltd. have not commenced operations. S. No. Name of Associate Boula Platinum Mining Pvt. Ltd. 1 Last Audited Balance sheet date 31.03.2018 2 Share of Associate held by the company on the year end No. 466,164 Amount of Investment in Associates (` in lacs) 4.66 Extend of Holding % 30% 3 Description of how there is significant influence There is significant influence due to holding more than 20% Equity Share Capital 4 Reason why associate is not considered - 5 Net Worth Attributable to Shareholding as per latest audited Balance 51.97 Sheet (` in lacs) 6 Profit/(Loss) for the year `( in lacs) (i) Considered in Consolidation 0 (ii) Not Considered in Consolidation 0
50 Financial instruments – Fair values and risk management I. Fair value measurements A. Financial instruments by category* (` in Lacs) As at 31 March 2018 As at 31 March 2017 As at 1 April 2016 FVOCI FVPL Amortised FVOCI Amortised FVOCI Amortised Cost Cost Cost Financial assets Non-current investments 12.25 4.20 1.80 20.30 1.80 4.00 2.30 Other non-current financial assets - - 912.26 - 866.09 - 863.15 Trade receivables - - 850.86 - 5,585.22 - 1,452.65 Cash and cash equivalents - - 1,434.65 - 507.71 - 296.73 Bank balances other than above - - 2.34 - 4.42 - 4.42 Other current financial assets - - 51.04 - 59.88 - 80.31 12.25 4.20 3,252.95 20.30 7,025.12 4.00 2,699.56 *Exclude financial instruments measured at cost Financial liabilities Borrowings - - 3,931.19 - 11,125.44 - 9,209.32 Trade payables - - 4,234.11 - 7,560.37 - 7,316.04 Other financial liabilities - - 1,060.63 - 987.36 - 807.39 - - 9,225.93 - 19,673.17 - 17,332.75 B. Fair Value Hierarchy This section explains the judgements and estimates made in determining the fair values of the financial instruments that are: (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
116 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report 62 2017-18
CONSOLIDATED ACCOUNTS (` in Lacs) Financial assets and liabilities measured at fair value - recurring fair value measurements As at 31 March 2017 Level 1 Level 2 Level 3 Total Financial assets Financial Investments at FVOCI Equity Shares 12.25 - - 12.25 Financial Investments at FVPL Mutual Funds 4.20 - - 4.20 Total financial assets 16.45 - - 16.45 Financial assets and liabilities which are measured at amortised cost for which fair values are disclosed As at 31 March 2017 Level 1 Level 2 Level 3 Total Financial assets Non-current investments - - 1.80 1.80 Other non-current financial assets - - 912.26 912.26 Trade receivables - - 850.86 850.86 Cash and cash equivalents - - 1,434.65 1,434.65 Bank balances other than above - - 2.34 2.34 Other current financial assets - - 51.04 51.04 Total financial assets - - 3,252.95 3,252.95 Financial liabilities Borrowings - - 3,931.19 3,931.19 Trade payables - - 4,234.11 4,234.11 Other financial liabilities - - 1,060.63 1,060.63 Total financial liabilities - - 9,225.93 9,225.93
Financial assets and liabilities measured at fair value - recurring fair value measurements As at 31 March 2017 Level 1 Level 2 Level 3 Total Financial assets Financial Investments at FVOCI Investments Equity Shares 20.30 - - 20.30 Total financial assets 20.30 - - 20.30 Financial assets and liabilities which are measured at amortised cost for which fair values are disclosed As at 31 March 2017 Level 1 Level 2 Level 3 Total Financial assets Non-current investments - - 1.80 1.80 Other non-current financial assets - - 866.09 866.09 Trade receivables - - 5,585.22 5,585.22 Cash and cash equivalents - - 507.71 507.71 Bank balances other than above - - 4.42 4.42 Other current financial assets - - 59.88 59.88 Total financial assets - - 7,025.12 7,025.12
Ferro Alloys Corporation Limited 117 SIXTY SECOND Annual Report 62 2017-18
CONSOLIDATED ACCOUNTS (` in Lacs) As at 31 March 2017 Level 1 Level 2 Level 3 Total Financial liabilities Borrowings - - 11,125.44 11,125.44 Trade payables - - 7,560.37 7,560.37 Other financial liabilities - - 987.36 987.36 Total financial liabilities - - 19,673.17 19,673.17 Financial assets and liabilities measured at fair value - recurring fair value measurements As at 31 March 2016 Level 1 Level 2 Level 3 Total Financial assets Financial Investments at FVOCI Investments Equity Shares 4.00 - - 4.00 Total financial assets 4.00 - - 4.00 Assets and liabilities which are measured at amortised cost for which fair values are disclosed As at 31 March 2016 Level 1 Level 2 Level 3 Total Financial assets Non-current Investments - - 2.30 2.30 Other non-current financial assets - - 863.15 863.15 Trade receivables - - 1,452.65 1,452.65 Cash and cash equivalents - - 296.73 296.73 Bank balances other than above - - 4.42 4.42 Other current financial assets - - 80.31 80.31 Total financial assets - - 2,699.56 2,699.56 Financial liabilities Borrowings - - 9,209.32 9,209.32 Trade payables - - 7,316.04 7,316.04 Other financial liabilities - - 807.39 807.39 Total financial liabilities - - 17,332.75 17,332.75 Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (includ- ing bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV. Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-thecounter derivatives) is determined using valuation techniques which maximise the use of observable mar- ket data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities. There are no transfers between level 1 and leve 2 during the year
118 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report 62 2017-18
CONSOLIDATED ACCOUNTS (` in Lacs) C. Fair value of financial assets and liabilities measured at amortised cost As at 31 March 2018 As at 31 March 2017 As at 1st April 2016 Carrying Fair Value Carrying Fair Carrying Fair Amount Amount Value Amount Value Financial assets Non-current investments 1.80 1.80 1.80 1.80 2.30 2.30 Other non-current financial assets 912.26 912.26 866.09 866.09 863.15 863.15 Trade receivables 850.86 850.86 5,585.22 5,585.22 1,452.65 1,452.65 Cash and cash equivalents 1,434.65 1,434.65 507.71 507.71 296.73 296.73 Bank balances other than above 2.34 2.34 4.42 4.42 4.42 4.42 Other current financial assets 51.04 51.04 59.88 59.88 80.31 80.31 3,252.95 3,252.95 7,025.12 7,025.12 2,699.56 2,699.56 Financial liabilities Borrowings 3,931.19 3,931.19 11,125.44 11,125.44 9,209.32 9,209.32 Trade payables 4,234.11 4,234.11 7,560.37 7,560.37 7,316.04 7,316.04 Other financial liabilities 1,060.63 1,060.63 987.36 987.36 807.39 807.39 9,225.93 9,225.93 19,673.17 19,673.17 17,332.75 17,332.75 II. Financial Risk Management The Company has exposure to the following risks arising from financial instruments: - Credit Risk; - Liquidity Risk; and - Market Risk Risk Management Framework A company is exposed to uncertainties owning to the sector in which it is operating. The Company is conscious of the fact that any risk that could have a material impact on its business should be included in its risk profile. Accordingly, in order to contain / mitigate the risk, the Board of Directors have approved a Risk management policy which shall be reviewed by Board and the management from time to time. The Company’s Risk Management framework is designed to identify, assess and monitor various risks related to key business and strategic objectives and lead to the formulation of a mitigation plan. Major risks in particular are monitored regularly at Executive meetings and the Board of Directors of the Company is kept abreast of such issues and the Policy was reviewed by the Board and Committee at its meeting. The Company’s Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee. i. Credit Risk Credit risk is the risk of financial loss to company if a customer or counterparty to the financial instrument fails to meet its financial obligations, and arises principally from the company’s receivables from customers. Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, cash and cash equivalents, other balances with banks and other financial assets. None of the financial instruments of the Company result in material concentration of credit risk other than trade receivable. The company maintains its Cash and cash equivalents and Bank Deposits with banks having good reputation, good past track record and high quality credit rating and also reviews their credit rating on a timely basis. The gross carrying amount of trade receivables is ` 850.86 Lacs (31 March 2017 ` 5,585.22 Lacs.) During the period, the Company has made no write-offs of trade receivables. The Company management also pursue all options for recovery of dues wherever necessary based on its internal assessment. A default on a financial asset is when counterparty fails to make payments within 365 days when they fall due. ii. Liquidity risk Liquidity risk refers to risk of financial distress or extra ordinary high financing cost arising due to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and require financing. The Company’s objective is to maintain at all times optimum levels of liquidity to meet its cash and collateral requirements. Processes and policies related to such risk are overseen by senior management and management monitors the Company’s net liquidity position through rolling forecast on the basis of expected cash flows.
Ferro Alloys Corporation Limited 119 SIXTY SECOND Annual Report 62 2017-18
CONSOLIDATED ACCOUNTS (` in Lacs) (a) Financing Arrangements The group currently do not have access to the any undrawn borrowing facilities as on 31 March 2018. (b) Maturities of Financial Liabilities The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and excluding contractual interest payments and exclude the impact of netting agreements. Carrying Contractual cash flows Amounts Total Upto 1 Between Between More than 31 March year 1 and 2 2 and 5 5 year 2018 years years Non-derivative financial liabilities Borrowings 3,931.19 3,931.19 2,312.18 - 1,619.01 - Trade payables 4,234.11 4,234.11 4,234.11 - - - Other financial liabilities 1,060.63 1,060.63 1,060.63 - - - Total non-derivative liabilities 9,225.93 9,225.93 7,606.92 - 1,619.01 -
Carrying Contractual cash flows Amounts Total Upto 1 Between Between More than 31 March year 1 and 2 2 and 5 5 year 2017 years years Non-derivative financial liabilities Borrowings 11,125.44 11,125.44 9,293.89 - 1,831.55 - Trade payables 7,560.37 7,560.37 7,560.37 - - - Other financial liabilities 987.36 987.36 987.36 - - - Total non-derivative liabilities 19,673.17 19,673.17 17,841.62 - 1,831.55 -
Carrying Contractual cash flows Amounts Total Upto 1 Between Between More than 31 March year 1 and 2 2 and 5 5 year 2016 years years Non-derivative financial liabilities Borrowings 9,209.32 9,209.32 6,458.49 - 2,750.83 - Trade payables 7,316.04 7,316.04 7,316.04 - - - Other financial liabilities 807.39 807.39 807.39 - - - Total non-derivative liabilities 17,332.75 17,332.75 14,581.92 - 2,750.83 - iii. Market risk Market risk is the risk that changes in market prices, foreign exchange rates and interest rates – will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. a) Equity Price risk Commodity Price Risk is the risk that future cash flow of the Company will fluctuate on account of changes in market price of the material produced and sold by the company. The Company is exposed to the movement in price of key raw materials in domestic and international markets. The Company has in place policies to manage exposure to fluctuations in the prices of the materials. The Company enters into contracts for procurement of materials and most of the transactions are short term fixed price contracts. b) urrency risk Foreign currency risk is the risk that fair value of future cash flow of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities. The Company has foreign currency trade payables and receivables and is therefore, exposed to a foreign exchange risk. Foreign currency risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Company’s functional currency (INR). The risk is managed through a forecast of highly probable foreign currency cash flows. 120 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report 62 2017-18
CONSOLIDATED ACCOUNTS (` in Lacs) Exposure to currency risk The summary quantitative data about the Group’s exposure to currency risk as reported to the management of the Group is as follows: As at 31 March 2018 As at 31 March 2017 As at 1 April 2016 USD JPY USD JPY USD JPY Financial asset Trade receivables 111.25 - 1,938.39 - 549.90 - Net exposure to foreign currency risk(assets) 111.25 - 1,938.39 - 549.90 - Trade payables (58.08) 182.21 318.43 288.80 - Net statement of financial position exposure (58.08) - 182.21 318.43 288.80 - Sensitivity analysis A reasonably possible strengthening (weakening) of the INR against all other currencies at 31 March would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. Profit or loss, net of tax Equity, net of tax Strengthening Weakening Strengthening Weakening 31 March 2018 5% movement USD 5.54 (5.54) 5.54 (5.54) JPY 1.90 (1.90) 1.90 (1.90) 31 March 2017 5% movement USD (57.42) 57.42 (57.42) 57.42 JPY 10.41 (10.41) 10.41 (10.41) 31 March 2016 5% movement USD (8.54) 8.54 (8.54) 8.54 c) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost. Since the interest rates on loans obtained are fixed, the company does not have any interest rate risk. The Company’s exposure to interest rate risk in minimal and hence no sensitivity analysis is presented. 51 Capital Management For the purpose of the Company’s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity share holders of the Company. The primary objective of the Company’s capital management is to safeguard continuity, maintain healthy capital ratios in order to support its business and maximise shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The funding requirement is met through equity, internal accruals, long term borrowings and short term borrowings. In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. 52 First Time Adoption of Ind AS As stated in note 2, these are the Company’s first Consolidated financial statements prepared in accordance with Ind AS The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS statement of financial position at 1 April 2016 (the Company’s date of transition). In preparing its opening Ind AS statement of financial position, the Company has adjusted amounts reported previously in financial statements prepared in accordance with Indian GAAP (previous GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and the notes that accompany the tables.
Ferro Alloys Corporation Limited 121 SIXTY SECOND Annual Report 62 2017-18
CONSOLIDATED ACCOUNTS Exemptions and exceptions availed Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS. A. Ind AS optional exemptions (i) Deemed cost of Property, plant and equipment: The Company has elected to measure items of Property, Plant & Equipment (PPE) at the date of transition to Ind AS at their fair value. The Company has used the fair value of PPE, which is considered as deemed cost on transition. Fair valuations are assessed as on 1st April, 2016. (ii) Investments in Subsidiary: Ind AS 101 permits a first-time adopter to choose the previous GAAP carrying amount at the entity’s date of transition to Ind AS to measure the investment in the subsidiary as the deemed cost. Accordingly, the Group has opted to measure its investment in subsidiary at deemed cost, i.e. previous GAAP carrying amount. B. Ind AS mandatory exceptions (i) Estimates An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for Impairment of financial assets based on expected credit loss model in accordance with Ind AS at the date of transition as these were not required under previous GAAP. (ii) Classification and measurement of financial assets Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS. C. Reconciliations between previous GAAP and Ind AS Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS. Reconciliation of Equity (` in Lacs) Particulars As at 1 April 2016 As at 31 March 2017 Previous Adjustments Ind AS Previous Adjustments Ind AS GAAP* GAAP* Assets Non-Current Assets Property, Plant And Equipment 63,402 (44,655.89) 18,746.30 61,715.96 (43,635.34) 18,080.62 Capital Work-In-Progress 10,864 (9,897.89) 965.99 10,415.25 (9,457.50) 957.75 Asset Held For Sale - - - 29.97 - 29.97 Goodwill 5,163 (5,162.73) - 5,162.73 (5,162.73) - Intangible Assets - 654.24 654.24 - 1,339.01 1,339.01 Investments In Subsidiary And Associates - 2.10 2.10 - 2.01 2.01 Non-Current Financial Assets - - (i) Investments 9.80 (3.50) 6.30 9.21 12.89 22.10 (ii) Other Non-Current Financial Assets 1,379 (515.65) 863.15 1,701.36 (835.27) 866.09 Other Non-Current Assets 150 170.99 321.30 150.45 493.91 644.36 Current Assets Inventories 7,821 (961.00) 6,859.57 8,276.47 (502.46) 7,774.01 Financial Assets - (i) Trade Receivables 1,602 (149.63) 1,452.65 5,770.84 (185.62) 5,585.22 (ii) Cash and Cash Equivalents 498 (201.04) 296.73 810.98 (303.27) 507.71 (iii) Bank Balances other than (ii) above - 4.42 4.42 - 4.42 4.42 (iv) Other Current Financial Assets 115 (35.05) 80.31 112.12 (52.24) 59.88 Other Current Assets 4,483 (1,343.84) 3,138.89 5,820.28 (3,230.25) 2,590.03 Current Tax Assets (Net) ------Total Assets 95,486 (62,094.47) 33,391.95 99,975.62 (61,512.44) 38,463.18 122 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report 62 2017-18
CONSOLIDATED ACCOUNTS (` in Lacs) Particulars As at 1 April 2016 As at 31 March 2017 Previous Adjustments Ind AS Previous Adjustments Ind AS GAAP* GAAP* Equity And Liabilities Equity Equity Share Capital 1,853 - 1,852.68 1,852.68 - 1,852.68 Other Equity 7,161 3,575.75 10,736.35 579.43 12,160.40 12,739.83 Non Controlling Interest ------Non-Current Liabilities Financial Liabilities (i) Borrowings 47,158 (44,406.86) 2,750.83 2,067.91 (236.36) 1,831.55 Deferred Tax Liabilities (Net) (161) 160.63 - 734.42 (734.42) - Long Term Provisions 1,488.33 (1,216.10) 272.23 1,178.96 (876.13) 302.83 Other Non-Current Liabilities 219 - 218.65 218.65 - 218.65 Current Liabilities Financial Liabilities (i) Borrowings 6,808 (931.48) 5,876.25 9,514.37 (302.66) 9,211.71 (ii) Trade Payables 6,599 717.39 7,316.04 6,937.99 622.38 7,560.37 (iii) Other Financial Liabilities 24,204 (22,814.56) 1,389.63 76,677.38 (75,607.84) 1,069.54 Other Current Liabilities - 1,693.30 1,693.30 - 1,527.06 1,527.06 Short-Term Provisions 159 1,176.34 1,334.87 213.83 1,029.89 1,243.72 Current Tax Liabilities (Net) - 16.67 16.67 - 84.31 84.31 Total Equity and Liabilities 95,486 (62,028.92) 33,457.50 99,975.62 (62,333.37) 37,642.25 *The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note. Reconciliation of total equity as at 31 March 2017 and 1 April 2016 Particulars 31 March 2017 1 April 2016 Total equity (shareholder’s funds) as per previous GAAP 2,432.11 9,013.28 Adjustments: Impact on account of fair valuation of fixed assets - 8,893.28 Impact on account of impairment of Investment in Subsidiary - (21,714.20) Impact of interest charged as per EIR Method (57.16) 3.73 Impact of interest charged as per EIR Method in Equity Component 5.66 270.99 Depreciation and Amortisation (5.09) - Impact of Goodwill Written off - (288.43) Impact on account of fair valuation of investment through OCI 16.30 (1.00) Impact of Facor Power total Equity not considered 8,584.66 16,506.46 Tax effects of adjustments 11.56 (95.08) Other Adjustment 28.72 - Total adjustments 8,584.65 3,575.75 Net impact brought forward from Opening balance sheet 3,575.75 - Total equity as per Ind AS 14,592.51 12,589.03
Ferro Alloys Corporation Limited 123 SIXTY SECOND Annual Report 62 2017-18
CONSOLIDATED ACCOUNTS (` in Lacs) Reconciliation of total comprehensive income for the year ended 31 March 2017 Particulars Profit after tax under India GAAP (6,581.18) Adjustments Impact on account of fair valuation Fixed Assets (3.56) Impact on account of capitalisation of Spares 27.32 Impact of interest charged as per EIR Method (57.16) Impact of Facor Power profit not considered for consolidation 8,585.00 Impact of reclassification of remeasurement of employee benefit expenses 334.28 Impact of Other Adjustments 0.45 Tax effects of adjustments (104.12) Total adjustments 8,782.20 Profit after tax as per Ind AS 2,201.02 Other Comprehensive Income Fair Valuation of Investment 16.30 Impact of reclassification of remeasurement of employee benefit expenses (net (218.59) of tax) Impact of FCTR 0.91 Total Comprehensive income for the year 1,999.64
D. Notes to first-time adoption: 1 Non- Consolidation of financial statement of Facor Power Limited The Facor power limited (FPL) have defaulted in repayment of term loan to Rural Electrification Corporation Limited (REC). REC has invoked the provisions of The Securatisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARAFAESI) and have taken physical possession of the assets of the Facor Power Limited in terms of Section 13(4) and Section 13(12) of SARAFAESI Act. Further vide notice no. REC/ FIL/2017-18/FPL dated 07th November 2017, REC has outsted the board of directors of FPL and nominated its representative on the board of FPL and also curtailed the power of shareholders for passing any resolution without the approval of secured creditors. Further through a separate letter dated 7th November 2017, REC has takenover the books of accounts of FPL in terms of the section 13(4)(b) and 15 of SARFAESI Act. Due to loss of control and influence and curtailment of shareholder’s rights, Facor Power Limited has lost the status of Subsidiary company of Ferro Alloys Corporation Limited (FACOR) and therefore not required to consolidate the financial of FPL for the year 2017-18. The company has adopted Indian Accounting Standards (Ind AS) from 1st April 2017 as prescribed under section 133 of Companies Act 2013 read with relevant rules thereunder with transition date of 1st April 2016, for consolidation purpose, the accounts of subsidiary company are also required to Ind AS Compliant. Due to non availability of Ind AS compliant annual financial statements of FPL for the year ending 31st March 2017 and as at 1st April 2016, Facor is unable to consolidate the annual financial statements in respect for the same as well. In preparation of consolidated financial statements, the company has made provision for impairment of investment in equity and prefrence shares of Facor Power Limited. 2 Property, plant and equipment The Company has elected to measure items of Property, Plant & Equipment (PPE) at the date of transition to Ind AS at their fair value. The Company has used the fair value of PPE, which is considered as deemed cost on transition. Fair valuations are assessed as on 1 April, 2016 and the same had an impact of ` 8,893 Lacs in accordance with stipulations of Ind AS 101 with the resultant impact being accounted for in the reserves and depreciation for the year ended 31 March 2017 increased by ` 3.56 lacs on leasehold land. 3 Goodwill As per requirement of Ind AS 103 “Business combination” , the company have carried out impairment testing for goodwill lying in consolidated financial statement on the date of transition i.e. 01st April 2016. The amount of impairment is ` 288.43 Lacs. In accordance with stipulations of Ind AS 101 with the resultant impact being accounted for in the reserves.
124 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report 62 2017-18
CONSOLIDATED ACCOUNTS 4 Other Investments (other than subsidiary and associates) Under previous GAAP, the Company used to carry the investments in equity instruments of companies(other than subsidiary and associates) at cost. Under Ind AS, the Company elected to fair value the same through the other comprehensive income. As a result, the Company recorded downward fair valuation of ` 1 Lacs as on the transition date and upward fair valuation ` 16.30 lacs during FY 2016-17. 5 Inventory As per Ind AS 16, spares meeting the definition of Property, Plant and Equipment have been capitalised on the date such spares were ready for their intended use. As a result, inventories as on 1 April 2016 decreased by ` 28.84 Lacs, Property Plant and Equipment as on 1 April 2016 increased by ` 28.84 Lacs and depreciation for the year ended 31 March 2017 increased by ` 1.52 lacs and other expenses decreased by ` 28.84 lacs during 2016-17 being booked as consumption under IGAAP. 6 Borrowings Under previous GAAP, the Company has followed the policy of charging the transaction costs to the income statement or capitalized to Property, Plant and Equipment as and when incurred. Under Ind AS, transaction costs are amortized as an adjustment of interest expense over the term of the related loan using effective interest rate method. The above resulted in reduction in borrowings as at 1 April 2016 by ` 0.68 lacs with corresponding reduction in reserves. Further, the financial liability (borrowings) needs to be measured at amortised cost using EIR and for the computation of EIR market rate of interest needs to be considered. The company had obtained certain loans which were at below market interest rate and application of EIR method had resulted in decrease of borrowings by ` 274.72 lacs with corresponding increase in reserves (including other equity). The above adjustment had decreased profit by ` 57.16 lacs during FY 2016-17. 7 Remeasurements of post-employment benefit obligations Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year (net of tax) ended 31 March 2017 increased by ` 218.59 lacs. There is no impact on the total equity as at 31 March 2017. 8 Deferred tax Deferred tax have been recognised on the adjustments made on transition to Ind AS. 9 Excise Duty Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty as the excise duty is collected by the company as a principal unlike other indirect taxes. The excise duty paid is presented on the face of the statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended 31 March 2017 by ` 2,882.24 Lacs. There is no impact on the total equity and profit. 10 Retained earnings Retained earnings as at 1 April 2016 has been adjusted consequent to the above Ind AS transition adjustments.
As per our report of even date. By Order of the Resolution Professional
Abhay Upadhye Yashpal Mehta Manoj Saraf Partner Chief Financial Officer Managing Director (Membership No. 049354) (DIN: 00234570) For K.K. Mankeshwar & Co. Chartered Accountants (Firm’s Regn. No. 106009W) Ritesh Chaudhry Rohit Saraf Place: NOIDA Sr. General Manager (Legal) & Joint Managing Director Date: 29.05.2018 Company Secretary (DIN: 00003994)
Ferro Alloys Corporation Limited 125 SIXTY SECOND Annual Report OUR PRINCIPAL ADDRESSES 62 2017-18
REGISTERED OFFICE AND WORKS REGINAL OFFICE OTHER OFFICES.
D. P. NAGAR, MUMBAI. VISAKHAPATNAM A/101, Gokul Arcade, “Manganese House”, RANDIA – 756 135 C.T.S No. 173-A, Swami Harbour Approach Road, Dist. Bhadrak [Odisha] Nityanand Marg, Vile Parle(East) Visakhapatnam-530001AP Phone : 91-6784-240320 Mumbai – 400 057 Maharashtra Phone : 91-891-2569011 FAX : 91-6784-240626 Phone : 91-22-26823931 Fax : 91-891-2564077 E-Mail : [email protected] Fax : 91-22-26823934 E-Mai : [email protected] [email protected] E-Mail : [email protected] [email protected]
HEAD OFFICE KOLKATA NAGPUR Shreeram Bhavan, Everest House,11th Floor,Block F, Shreeram Bhavan, Tumsar – 441 912 46-C, Jawaharlal Nehru Road, Ramdaspeth, Dist. Bhandara(Maharashtra) Kolkata – 700 071 Nagpur – 440 010 Phone : 91-7183-232251, 232233 Phone : 91-33-40103400 Phone : 91-712-2436920-23 Fax : 91-7183-232271 Fax : 91-33-40103434 Fax : 91-712-2432295 E-Mail : [email protected] E-Mail : [email protected] E-Mail : [email protected] [email protected]
MINING COMPLEX, BHADRAK. CHENNAI. BHUBANESWAR. Laxmi Bhavan, Kuans, 37-F, White Road, IInd Floor, GD-2/10, Chandra- Bhadrak – 756 100 Royapettah sekharpur, Dist. Bhadrak (Odisha) Chennai – 600 014 Bhubaneswar -751 023 Phone : 91-6784-250311, 250598 Phone : 91-44-28411092-6 [Odisha] Fax : 91-6784-251782 Fax : 91-44-28411097 Phone : 91-674-2302881 / 882 F-mail : [email protected] E-Mail : [email protected] Fax : 91-674-2302612 [email protected] E-Mail : [email protected]
CORPORATE OFFICE, NOIDA Facor House, A-45-50, Ground Floor, Sector 16, Noida – 201 301 Dist. Gautam Budh Nagar, U.P. Phone: 91-120-4171000 Fax: 91-120-4256700 E-Mail: [email protected]
126 Ferro Alloys Corporation Limited SIXTY SECOND Annual Report 62 2017-18
FERRO ALLOYS CORPORATION LIMITED CIN:-L45201OR1955PLC008400 Registered Office & Works: D.P. Nagar, Randia-756135, Dist. Bhadrak, Odisha, India Tel: +91-6784-240230, Fax: +91-6784-240626, E-mail: [email protected] Website: www.facorgroup.in Sixty Second Annual General Meeting on 18th September, 2018 FORM NO. MGT-11 PROXY FORM (Pursuant to section 105 (6) of the Companies Act, 2013 and rule (19)(3)of the Companies (Management and Administration) Rules,2015) CIN: L45201OR1955PLC008400 Registered Office & Works: D.P. Nagar, Randia-756135 Bhadrak, Odisha, India.
Name of the Company Ferro Alloys Corporation Limited.
Name of the Member(s)
Registered Address
E-mail ID
Folio No./DP ID-Client ID No.
I/ We, being the member(s) of the above named Company, holding ………………...... … shares, hereby appoint:
(1) Name: ...... Address: ......
E-mail Id: ...... Signature: ...... or failing him;
(2) Name: ...... Address: ......
E-mail Id: ...... Signature: ...... or failing him;
(3) Name: ...... Address: ......
E-mail Id: ...... Signature: ...... or failing him;
As my/our Proxy to attend and vote (On a Poll) for me/us and on my/our behalf at the Sixty Two Annual General Meeting of the Company, to be held on Tuesday, the 18th September, 2018 at 4.00 P.M. at, D.P. Nagar, Randia – 756 135, Dist. Bhadrak, Odisha-756135 and at any adjournment thereof in respect of the following resolution:
Resolution No. Resolutions Ordinary Business 1. Adoption of Audited Financial Statements, Report to members under section 134 of the Companies Act, 2013 and Auditors’ Report for the year 31st March,2018 and the audited consolidated financial statement of the Company for the Financial Year ended 31st March, 2018. 2 Re-appointment of Mr.Vineet Saraf (DIN00004715) as Director liable to retire by rotation. 3 Appointment of M/s. K.K. Mankeshwar & Co. Chartered Accountants, as Statutory Auditors. Special Business 4 Ratification of Cost Auditors’ Remuneration.
Signed this ...... day of ...... 2018 Affix Signature of Shareholder(s): ...... Revenue Stamp Signature of Proxy holder(s): ......
Note : The form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the meeting.
Ferro Alloys Corporation Limited 127 THROUGH REGISTERED POST / COURIER
If undelivered please return to : FERRO ALLOYS CORPORATION LIMITED “FACOR HOUSE”, Ground Floor, A-45 to A-50, Sector-16 Noida - 201301, (U.P.) INDIA