Facor Steels Ltd Management Discussions

The country suffered from the unpresident and unfair inflow of steel import from the steel surplus countries. The steel imports pressure turned severe in the second half of the year. Government of India initiated certain actions by increasing the Import Duty and also Safeguard Duty. However, even these measures turns out to be ineffective, the Government imposed Minimum Import Price (MIP) on various steel products for six months to create level playing field for the domestic market. It is to be noted that the Company has declared a consensus lockout at its plant effective from 30^th May 2014 as per the agreement reached with its workforce. Hence, the performance of the Company was adversely affected due to this closure, which is continuing till date.

During the year under review, the Company could achieve sales of Rs 150 Lakhs net of Excise as compared to Rs 2961 Lakhs in the previous year.

Company has been engaged in scouting tie up with potential investors / strategic partners who can introduce newer product portfolio in the market and infuse capital in the Company. The Company is also restructuring and rationalizing manpower and other fixed costs. The Company is planning to submit a Rehabilitation Package to the BIFR for revival of the company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Considering the size and nature of its business your company has an adequate internal control system. The company has an adequate system of internal control implemented by the Management towards achieving efficiency in operations, optimum utilization of resources, and effective monitoring thereof and in compliance with all applicable regulations.

CAUTIONARY STATEMENT

Statement in the Management Discussion and Analysis describing the Company’s projections and estimates are forward looking statements and progressive within the meaning of applicable securities laws and regulations. Actual results may defer materially from those expressed or implied, depending upon economic conditions, Government policies and other incidental factors.