ferro alloys corporation ltd Directors report

We present the 63rd Annual Report of your Company and the Audited Financial Statement of the Company for the financial year ended 31st March, 2019, and the audited Consolidated Financial Statements of the Company for the Financial Year ended 31st March, 2019.

FINANCIAL RESULTS

Financial snapshot of the company during the year under review is, as under:

(Rs.in lacs)

Particulars	Standalone		Consolidated
	For the year ended 31st March, 2019	For the year ended 31st March, 2018	For the year ended 31st March, 2019	For the year ended 31st March, 2018
Revenue from operations	57538.21	53908.25	57538.21	53908.25
Other income	457.68	571.10	457.68	571.10
Profit / Loss before Depreciation, Finance	5788.86	5561.31	5788.86	5549.92
Costs, Exceptional items and Tax Expense
Less: Finance Cost	928.24	986.48	928.24	986.48
Less: Depreciation / Amortisation / Impairment	577.59	575.05	577.59	575.05
Profit / Loss before Finance Costs,	4283.03	3999.78	4283.03	3988.39
Exceptional items and Tax Expense
Add/(Less): Exceptional items	(15.18)	2487.87	(15.18)	2487.87
Profit / Loss before Tax Expense	4267.85	6487.65	4267.85	6476.26
Share of Profit/(Loss) of Associate	-	-	(0.05)	-
Profit / Loss before Tax Expense	4267.85	6487.65	4267.80	6476.26
Less: Tax expense (Current & deferred)	1462.04	939.48	1462.04	939.48
Profit / Loss for the year (1)	2805.81	5548.17	2805.76	5536.78
Total Comprehensive Income / (Loss) (2)	(62.47)	(55.88)	(62.47)	(55.88)
Total (1+2)	2743.34	5492.29	2743.29	5480.90
Balance of profit / loss for earlier years	(1420.88)	(6969.05)	(1426.35)	(6963.13)
Less: Transfer to Debenture Redemption	Not applicable	Not applicable	Not applicable	Not applicable
Reserve
Less: Transfer to Reserves	-	-	-	-
Less: Dividend paid on Equity Shares	Not applicable	Not applicable	Not applicable	Not applicable
Less: Dividend paid on Preference Shares	Not applicable	Not applicable	Not applicable	Not applicable
Less: Dividend Distribution Tax	Not applicable	Not applicable	Not applicable	Not applicable
Balance carried forward	1384.93	(1420.88)	1379.41	(1426.35)

STATE OF COMPANYS AFFAIRS

During the year under review, revenue from operations increased by 6.73% to Rs.57,538.21 lacs (previous year Rs.53,908.25lacs). However, EBIDTA increased by 4.09% to

Rs.5,788.86 lacs (previous year Rs.5561.31 lacs) and profit before exceptional items and tax increased by 7.08% to Rs.4283.03 lacs (previous year Rs.3999.78 lacs).

Members may recall that the Company had executed Corporate Guarantee of Rs.517.90 crores, in tranches, to

Rural Electrification Corporation Limited which had sanctioned a Term Loan of Rs.517.90 crores to Facor Power Limited, the then subsidiary of the Company against the security of the assets of FPL, the personal guarantee of two of its directors and the Corporate Guarantee of Ferro Alloys Corporation Limited, as aforesaid.

Members may recall that pursuant to a default in the repayment of the instalments and interest on the loan as per the repayment schedule and upon an application filed by REC under section 7 of the Insolvency and Bankruptcy Code, 2016 with the National Company Law Tribunal, Kolkata ("NCLT, 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.

As reported last year, an appeal against the order of Honble NCLT, Kolkata was filed before the Honble National Company Law Appellate Tribunal, New Delhi ("NCLAT, New Delhi") which was dismissed vide order dated 8th January, 2019. An appeal was also filed against the order of the Honble NCLAT before Honble Supreme Court of India ("Supreme Court"), which too was dismissed vide order dated 11th February, 2019.

Post dismissal of the appeal by NCLAT, New Delhi and the Supreme Court, the matter was again heard by NCLT, Kolkata which granted exclusion of time pursuant to which the revised date of completion of Corporate Insolvency of the Company was fixed to 19th April, 2019. Thereafter, upon an application filed by REC Limited for change of Resolution Professional and for grant of further exclusion of time before National Company Law Tribunal, Cuttack ("NCLT, Cuttack"). Pursuant to order dated 8th July, 2019, of NCLT, Cuttack Mr. Bhuvan Madan, Resolution Professional has replaced Mr. K.G. Somani, Resolution Professional w.e.f 8th July, 2019. Further, NCLT, Cuttack granted an exclusion of 30 days which was followed by another application seeking further exclusion of time., Vide order dated 8th August, 2019, NCLT, Cuttack has granted further exclusion of time of 98 days from 7th August, 2019. Accordingly, the revised date for completing Corporate Insolvency Resolution Process of the Company is 14th November, 2019.

Pursuant to decision of the Committee of Creditors of the Company and the order of NCLT, Cuttack dated 8th August, 2019, as aforesaid, the resolution professional is inviting prospective resolution applicants to submit resolution plans for the Company.

INDUSTRIAL SCENARIO

Steel is the most versatile material, which has made the progress in every aspect on this earth possible. There are hundreds of varieties of steel because for each application it has to be made with specific properties to get the most optimum usage. Though the basic constituent of steel is iron, it is the proportion of other elements in it, which gives each type of steel, certain specific properties. These elements are added in liquid iron in the form of Ferro alloys to get the desired composition and properties. Thus, Ferro alloys are important additives in the production of steel and Ferro Alloys industry is vitally linked for its growth and development to that of the Steel Industry. India is currently the worlds 3rd largest producer of crude steel and third largest consumer of finished steel. The steel manufacturing is estimated to contribute to nearly 2% of the national GDP and employs close to 2.5 million workers. From FY 2013 till FY 2018 the finished steel production in India has increased by nearly 7% per annum. Production in FY 2019 is estimated to be marginally lower than previous year. Meanwhile consumption of finished steel has increased by nearly 3.5% per annum during the time period FY 2013-18. Construction sector is estimated to account for more than 50% of steel consumption in India, followed by engineering & fabrication, automotive, packaging & other sectors. Consequently, the steel consumption pattern in India has a close correlation with the construction activity happening in the country. The real estate construction segment has benefitted by the strong demand for residential space and commercial offices.

Meanwhile higher Government spending on infrastructure creation and capacity expansion projects in the industrial sector has benefitted infrastructure and industrial construction segments respectively. Consequently, the demand for construction materials, from steel to cement has witnessed a steady increase.

Further, during the quarter ended 30th June, 2019, the performance of the Company has been, as under:

(Rs.in lacs)

Particulars	Quarter ended 30th June, 2019	Quarter ended 30th June, 2018
1. Revenue from operations	12827.79	15297.17
2. Expenses	12571.14	13617.74
3. EBITDA	704.22	2229.69
4. Tax expense	106.04	684.88
5. Total comprehensive Income	234.50	1125.99

PROSPECTS

India has overtaken Japan to become the worlds second largest steel producer soon, and aims to achieve 300 million tonnes of annual steel production by 2025-30. Huge scope for growth is offered by Indias comparatively low per capita steel consumption and the expected rise in consumption due to increased infrastructure construction and the thriving automobile and railways sectors.

Rise in infrastructure development and automotive production is driving growth in the sector. Power and cement industries also aiding growth in the metals and mining sector. Demand for iron and steel is set to continue, given the strong growth expectations for the residential and commercial building industry. India holds a fair advantage in cost of production and conversion costs in steel and alumina. Its strategic location enables convenient exports to developed as well as the fast developing Asian markets. The Ministry of Steel aims to increase the steel production capacity to 300 million tonnes by 2030-31 from 128.28 million tonnes in 2016- 2017 indicating new opportunities in the sector. Government of Indias focus on infrastructure and restarting road projects is aiding the boost in demand for steel. Further, likely acceleration in rural economy and infrastructure is expected to lead to growth in demand for steel. The Union Cabinet, Government of India has approved the National Steel Policy (NSP) 2017, which seeks to create a globally competitive steel industry in India. NSP 2017 targets 300 million tonnes (MT) steel-making capacity and 160 kgs per capita steel consumption by 2030. Metal Scrap Trade Corporation (MSTC) Limited and the Ministry of Steel have jointly launched an e-platform called ‘MSTC Metal Mandi under the ‘Digital India initiative, which will facilitate sale of finished and semi-finished steel products. The Ministry of Steel is facilitating setting up of an industry driven Steel Research and Technology Mission of India (SRTMI) in association with the public and private sector steel companies to spearhead research and developmental activities in the iron and steel industry at an initial corpus of Rs 200 crore (US$ 30 million).

India has a significant profile in mining of chrome and production of ferrochrome. On the back of depressed market conditions, the production of chrome ore progressively came down in keeping with the policy to conserve the resource and mining disruptions due to court interventions and environment issues. In any case, India with chrome ore reserve of 70 million mt has only one per cent share of global proven deposit. Around 85 per cent of world reserve of this ore is found in South Africa and Zimbabwe. As a result, India is importing growing quantities of high grade chrome ore for blending with locally mined material.

FUTURE STRATEGY AND GROWTH

From the fledgling one million tonne capacity status at the time of independence, India has now risen to be the 3rd largest crude steel producer in the world and the largest producer of sponge iron. From a negligible global presence, the Indian steel industry is now globally acknowledged for its product quality. As it traversed its long history since independence, the Indian steel industry has responded to the challenges of the highs and lows of business cycles. According to the latest March data from worldsteel, Indias crude steel production totalled 105.54 million tonnes in April18-March19, up by 2.4 million tonnes or 2.3% YoY as compared to 103.14 million tonnes in April17-March18. Having overcome the shocks of demonetisation and the Goods & Services Tax (GST) implementation, the Indian economy is now expected to achieve faster growth starting in the second half of 2019 after the election. While the fiscal deficit might weigh on public investment to an extent, the wide range of continuing infrastructure projects is likely to support growth in steel demand above 7% in both 2019 and 2020.

Steel demand in developing Asia excluding China is expected to grow by 6.5% and 6.4% in 2019 and 2020 respectively, making it the fastest growing region in the global steel industry. In the ASEAN region, infrastructure development supports demand for steel. Further, the steel industry and its associated mining and metallurgy sectors have seen a number of major investments and developments in the recent past.

DIVIDEND

Keeping in view the future requirement of funds in working capital and other purposes, no dividend is recommended for the financial year ended 31st March, 2019.

FINANCE

Cash and cash equivalent as at March 31, 2019 was Rs.434.17 lacs. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

DEPOSITS

The Company has not accepted deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard 21 on Consolidated Financial Statements read with Accounting Standard 23 on Accounting for Investments in Associates, the audited consolidated financial statement is provided in the Annual Report for the year except the subsidiary Facor Power Limited whose Management & Control have been taken over by Rural Electrification Corporation Limited w.e.f 7th November, 2017.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2019 was 1852.68 lacs. During the year under review, the Company has neither issued shares with differential voting rights nor granted stock options nor sweat equity.

INDUSTRIAL RELATIONS

Industrial relations with workers, trade unions, and with local populace remained amicable and pleasant throughout the year.

DIRECTORS

Mr. Ashish Ramkisan Saraf shall retire by rotation at the ensuing 63rd Annual General Meeting and, being eligible, offers himself for re-appointment in accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company.

Further, while Mr. A.S. Kapre and Mr. M.B. Thaker are proposed to be re-appointed as Independent Directors for a second term of 5 (five) consecutive years w.e.f 10th September, 2019 subject to ratification and approval by the shareholders at the ensuing 63rd AGM of the Company, approval of members is also being sought at the said ensuing 63rd AGM, for reappointment of Mr. Umesh Kumar Khaitan and Mrs. Urmila Gupta, as Independent Director, for a second consecutive term of 5 (five) years w.e.f 13th February, 2020.

Further, all Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company has formulated a code of conduct for all members of the Board and Senior Management Personnel. All concerned members/executives have affirmed compliance with the said code.

Detail of Remuneration paid to Executive Director during the year.

Name of Director	Total Remuneration
1 Mr. R. K. Saraf	1,08,90,000
2 Mr. Manoj Saraf	63,34,989
3 Mr. Ashish Saraf	-
4 Mr. Rohit Saraf	63,44,988

Detail of Remuneration paid to Non-Executive Directors during the year.

Name of Director	Sitting Fee Paid
1 Mr. A.S. Kapre	-
2 Mr. M.B. Thaker	-
3 Mr. Pinaki Misra	-
4 Mr. Umesh Khaitan	-
5 Mrs. Urmila Gupta	-
6 Mr. Vineet Saraf	-

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

All Independent Directors (IDs) inducted into the Board are given an orientation. Chairman & Managing Director and the Senior Management give an overview of the operations of the Company, to familiarise the new IDs with the Companys business operations. The new IDs are given an orientation on the group structure, its operations, subsidiaries, Board constitution and procedures besides providing them with the financials of the Company for at least 3 years and the corporate brochure etc. Also, plant visits are organized for each ID for familiarizing with the Companys operations and facilities.

BOARD EVALUATION

In view of the initiation of the Corporate Insolvency Resolution Process against the Company w.e.f 6th July, 2017, the powers of the Board of Directors of the Company stand suspended in terms of the provisions of section 17 of the Insolvency and Bankruptcy Code, 2016 and the same stood vested in the Resolution Professional. Accordingly, the exercise of evaluation of the Board could not be taken up during the year under review.

NOMINATION AND REMUNERATION POLICY

The Board, on the recommendation of the Nomination &

Remuneration Committee, has framed a Nomination and Remuneration policy for the appointment and remuneration of the Directors, Key Managerial Personnel and Senior Executives of the Company including criteria for determining qualifications, positive attributes, independence of a Director and other related matters which can be accessed at www. facor roup.in/investorrelations. In view of the initiation of the Corporate Insolvency Resolution Process against the Company w.e.f 6th July, 2017, the powers of the Board of Directors of the Company stand suspended in terms of the provisions of section 17 of the Insolvency and Bankruptcy Code, 2016 and the same stood vested in the Resolution Professional. Accordingly, the exercise of evaluation of the Board could not be taken up during the year under review.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Ferro Alloys Corporation Limited, (FACOR), believes in equal employment opportunity and remains committed to creating and nurturing a working environment for all employees to enable them work without fear of any prejudice, gender bias and sexual harassment. The Company does not tolerate sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder which can be viewed at www.facorgroup.in/investorrelations. During the Financial Year 2018-19, the policy was not reviewed in view of the ongoing Corporate insolvency Resolution Process and the powers of the Board and its Committees remaining suspended w.e.f 6th July, 2017. However, it is confirmed that during FY

2018-19, the Company has not received any complaint of sexual harassment.

MEETINGS

During the year under review no meetings of the Board and/ or its Committees were convened and held, as all the powers of the board and/or its committees are being exercised by the Resolution Professional in view of the ongoing Corporate Insolvency Resolution Process and the powers of the Board and its committees remaining suspended w.e.f 6th July, 2017 in terms of section 17 of the Insolvency and Bankruptcy Code, 2016.

SUBSIDIARIES

The Report and Accounts of the Company are prepared in consolidated form and contains results of its subsidiary Facor Realty and Infrastructure Limited. The annual accounts of the subsidiary shall be available on request to the members of the Company and are available for inspection at the registered office of the Company. Further, the Consolidated Financial Statements presented by the Company include the financial results of the subsidiary company. The Consolidated Financial Statements have been prepared without the consolidation of Facor Power Limited (Subsidiary of the Company) as Rural Electrification Corporation Limited (REC) has taken over the management and control of Facor Power Limited by issuing a letter dated 7th November, 2017 under section 13(4)(b) of SARFAESI Act, 2002.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of the Companys Subsidiaries, Associates and Joint Ventures (in Form AOC-1) is attached to the financial statements.

STATEMENT UNDER SECTION 134(5) OF THE COMPANIES ACT, 2013

On the basis of framework of internal financial controls established and maintained by the Company, the work performed by the internal, statutory, Cost and Secretarial auditors and external agencies, the reviews performed by Management, Mr. R.K. Saraf, Chairman & Managing Director of the Company has confirmed that the Companys internal financial controls were adequate and effective as on 31 March, 2019 and that as required under section 134(5) of the Companies Act, 2013 it is confirmed:

(a) That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) That we have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) That proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) That the annual accounts have been prepared on a going concern basis;

(f) That proper internal financial controls were laid down by the company and that such internal financial controls are adequate and were operating effectively.

(f) That proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

AUDIT COMMITTEE

Audit Committee of the Company comprises of Mr. A.S. Kapre, Mr. M.B. Thaker, and Mr. Umesh Khaitan, all Independent Directors. The committee has been constituted in compliance with the provisions of Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI(LODR) Regulations, 2015] and assumes all responsibilities provided therein, discharging their duties diligently with transparency and accountability as their sole motivation. However, during the year under review, no meeting of the Audit Committee was held as Corporate Insolvency Resolution Process was initiated against the Company w.e.f 6th July, 2017 and as a result, the powers of the Board and its committees stood suspended and vested in the Resolution Professional thereafter.

AUDITORS

The Companys Statutory Auditors, K.K. Mankeshwar & Co, Chartered Accountants having Registration no. 106009W allotted by the Institute of Chartered Accountants of India (ICAI) were appointed as Statutory Auditors of the Company for a period of 5 (five) consecutive years at the 61st Annual General Meeting (AGM) of the Members of the Company held on Thursday, 28th September, 2017. Their appointment was subject to ratification by the Members of the Company at every subsequent AGM held after the 61st AGM held on 28th September, 2017, as aforesaid.

Pursuant to the amendments made to Section 139 of the Companies Act, 2013 by the Companies (Amendment) Act, 2017, effective from 7th May, 2018, the requirement of seeking ratification of the Members for the appointment of Statutory Auditors has been withdrawn from the Statute.

In view of the above, ratification of the Members for continuance of their appointment at this AGM is not being sought. The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their appointment and that they have not been disqualified in any manner from continuing as Statutory Auditors of the Company. The remuneration plus applicable taxes and reimbursement of expenses incurred by them incidental to their functions shall be determined the Resolution Professional and/or the Board of Directors, as applicable in consultation with the said Auditors.

AUDITORS REPORT

The observations made in the Auditors Report are self-explanatory and therefore, do not call for any further comments u/s 134(3) of the Companies Act, 2013.

COST AUDITORS

Pursuant to Section 141 & 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its activity is required to be audited. The Resolution Professional has considered and decided the appointment of M/s Niran & Co., Cost Accountant (Registration No. 000113), as Cost Auditor of the Company for the financial year 2019-20 on a remuneration of Rs.70,000/- (Rupees Seventy Thousand only) per annum plus applicable taxes and out of pocket expenses and applicable taxes.

In accordance with the provisions of Section 148(3) of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified by the shareholders of the Company. It is therefore, necessary for the members to pass an Ordinary Resolution under section 148 and other applicable provisions, if any, of the Companies Act, 2013 as set out at Item no.4 of the Notice of the 63rd AGM of the Company.

None of the Directors / Key Managerial Personnel of the Company / their relatives / Resolution Professional, is, in any way, concerned or interested, financially or otherwise, in the resolution set out at Item No. 4 of the Notice.

Further, the report on Cost audit for Financial Year ended 31st March, 2019 would be filed with Central Government in accordance with the timelines specified under the Companies Act, 2013.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s RAA & Associates, LLP, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for financial Year 2019-20. The Report of the Secretarial Audit, for FY 2018-19, in Form MR-3 is annexed to this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed as Annexure ‘A which forms part of this Report.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report. 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 (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said Rules forms part of the Report.

However, having regard to the provisions of the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available for inspection at Registered Office of the Company during working hours. Any member interested in obtaining such information may write to the Company Secretary, at the registered office and the same will be furnished on request. Further the details are also available on the Companys website: www.facorgroup. in

CORPORATE GOVERNANCE

Corporate Governance in your Company is about Commitment to values, ethical business conduct, nurturing good business ethics and creating value for its stakeholders in line with the principles of fairness, equity, transparency, accountability and dissemination of information. Your Companys efforts are driven by the fundamental objectives of maximizing value by employing resources in opportunities that generate consistent returns and position it for sustained growth.

In terms of Regulation 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate report on Corporate Governance, Management Discussion and Analysis along with your Companys Statutory Auditors Certificate 31st August, 2019 confirming the above compliance is annexed to and forms part of the Directors Report.

HUMAN RESOURCE DEVELOPMENT

The Company takes great pride in the commitment, competence and vigour shown by its workforce in all realms of business and its commitment in the trying times, in particular. The Company continues to take new initiatives to further align its HR policies to meet the growing needs of its business.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure D".

SECRETARIAL AUDIT REPORT

Report of Secretarial Auditor in Form MR-3, for FY 2018-19, forms part of the Report under section 134 of the Companies Act, 2013.

RELATED PARTY TRANSACTION

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.

Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contract or arrangement in

Form AOC-2 does not form part of the report.

PARTICULAR OF LOAN & INVESTMENT

There have been no transactions by the Company and the Directors, the management, the subsidiaries or the Resolution Professional except for those disclosed in the financial statements.

RISK MANAGEMENT POLICY

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 Company has a Risk management policy approved by the Board. The Companys 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. However, the review of the policy could not be taken up during the year under review by the Board in view of the ongoing Corporate Insolvency Resolution Process and the powers of the Board remaining suspended in terms of the provisions of section 17 of the Insolvency and Bankruptcy Code, 2016.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, your Company approved a Policy on CSR and the Policy was parked on the website of the Company. As part of CSR initiatives, your Company during the financial year 2018-19 has amongst other activities, undertaken projects in areas of promoting healthcare, empowerment of woman, ecological balance. These projects are in accordance with Schedule VII of the Companies Act, 2013. The report on CSR activities is attached as Annexure to this Report.

DISCLOSURE WHERE COMPANY IS REQUIRED TO CONSTITUTE NOMINATION AND REMUNERATION COMMITTEE:

The Company has constituted a Nomination & Remuneration Committee under Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Further, the Company has a Nomination & Remuneration Policy for appointment and remuneration of Directors under Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015. While terms of reference of the Committee include appointments of Directors as per the Nomination & Remuneration Policy of the Company, no new Director was appointed on the Board of Company during the year under review. Further, no meetings of the aforesaid committee has been held during the year under review in view of the ongoing Corporate Insolvency Resolution Process and the powers of the Board remaining suspended in terms of the provisions of section 17 of the Insolvency and Bankruptcy Code, 2016.

DISCLOSURE IF MD/WTD IS RECEIVING REMUNERATION OR COMMISSION FROM SUBSIDIARY COMPANY

As per Section 197(14) of the Act, 2013 A MD/WTD of company can receive remuneration or commission from any holding company or subsidiary company of such company and the same should be disclosed by the company in Boards Report. Accordingly, it is informed, as under:

Name of Director	Total Remuneration including Perquisites & Allowance / Sitting Fee
1. Mr. R.K. Saraf, Chairman & Managing Director	-
2. Mr. Manoj Saraf, Managing Director	-
3. Mr. Ashish Saraf, Joint Managing Director	-
4. Mr. Rohit Saraf, Joint Managing Director	-

DISCLOSURE OF VIGIL MECHANISM IN BOARD REPORT

The Company has adopted the Vigil Mechanism Policy for the Company and the same is available on the website of the Company www.facorgroup.in/investorrelations.

DETAILS OF DIRECTOR AND KMP

Pursuant to the provisions of section 203 and other applicable provisions, if any, of the Companies Act, 2013 and the rules framed there under, Mr. R.K. Saraf, Chairman & Managing Director, Mr. Yashpal Mehta, Chief Finance Officer and Mr. Ritesh Chaudhry, Company Secretary are Key Managerial Personnel of the Company.

Further, during the year under review, Mr. Pinaki Misra, an Independent director on the Board of the Company has resigned from the Board of the Company on 22nd September, 2018.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board.

The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board. However, during the year under review, the Internal audit reports were reviewed by the Resolution Professional in view of the suspension of the powers of the Board and its Committees pursuant to the provisions of section 17 of the Insolvency and Bankruptcy Code, 2016.

DISCLOSURE ABOUT ESOP AND SWEAT EQUITY SHARE

Company has not issued any share under ESOP or Sweat Equity Shares during the year.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

As reported last year, an appeal against the order of Honble

NCLT, Kolkata was filed before the Honble National Company Law Appellate Tribunal, New Delhi ("NCLAT, New Delhi") which was dismissed vide order dated 8th January, 2019. An appeal was also filed against the order of the Honble NCLAT before Honble Supreme Court of India ("Supreme Court"), which too was dismissed vide order dated 11th February, 2019.

Post dismissal of the appeal by NCLAT, New Delhi and the Supreme Court, the matter was again heard by NCLT, Kolkata which granted exclusion of time pursuant to which the revised date of completion of Corporate Insolvency of the Company was fixed to 19th April, 2019. Thereafter, upon an application filed by REC Limited for change of Resolution Professional and for grant of further exclusion of time before National Company Law Tribunal, Cuttack ("NCLT, Cuttack"). Pursuant to order dated 8th July, 2019, of NCLT, Cuttack Mr. Bhuvan Madan, Resolution Professional has replaced Mr. K.G. Somani, Resolution Professional w.e.f 8th July, 2019. Further, NCLT, Cuttack granted an exclusion of 30 days which was followed by another application seeking further exclusion of time., Vide order dated 8th August, 2019, NCLT, Cuttack has granted further exclusion of time of 98 days from 7th August, 2019. Accordingly, the revised date for completing Corporate Insolvency Resolution Process of the Company is 14th November, 2019.

Pursuant to decision of the Committee of Creditors of the Company and the order of NCLT, Cuttack dated 8th August, 2019, as aforesaid, the resolution professional is inviting prospective resolution applicants to submit resolution plans for the Company.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year to which the financial statements related and the date of the report.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND

In terms of Section 125 of the Companies Act, 2013, unclaimed or unpaid Dividends have been transferred to the Investor Education and Protection Fund established by the Central Government.

CAUTIONARY STATEMENT

Statements in the Boards Report and the Management

Discussion & Analysis describing the Companys objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations.

Actual results may differ materially from those expressed in the Statement. Important factors that could influence the Companys operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

ACKNOWLEDGEMENTS

The Company thanks the Central and State Governments for their continued support and co-operation extended towards the business as well as the companys social functions. The Management also thanks the shareholders, Business Associates, Financial Institutions & Banks, Customers and Suppliers for the faith reposed in the Company and in them and expresses its sincere appreciation to the dedicated and committed team of employees and workmen without whom reaching this far and maintaining the standard and quality of the products for which the company is famous, would not have been possible. The management also thanks the Resolution

Professional and its team for the efforts put in sustaining the operations of the Company during the year without any hindrance.

By order of Resolution Professional

for Ferro Alloys Corporation Limited

(Ram Kisan Saraf)

Chairman & Managing Director

Place : Noida

Dated : 31st August, 2019