Facor Alloys Ltd
Directors Reports
TO THE MEMBERS
The Directors submit the 20th ANNUAL REPORT on the
business and operations of the Company together with the Standalone and Consolidated
Audited Financial Statements for the year ended 31st March, 2023.
FINANCIAL RESULTS
Rs in Lakh
| Particulars |
Standalone |
Consolidated |
|
2022-23 |
2021-22 |
2022-23 |
2021-22 |
| Gross Revenue from operations |
32098.81 |
25733.74 |
32098.81 |
25733.74 |
| Other Income |
305.10 |
2804.42 |
513.30 |
2831.14 |
| Total Revenue |
32403.91 |
28538.16 |
32612.11 |
28564.88 |
| Operating expenses |
31881.77 |
25262.19 |
32040.76 |
25283.75 |
| Profit before interest, Depreciation, Tax and Amortization
(EBIDTA) |
522.14 |
3275.97 |
571.35 |
3281.13 |
| Finance Costs |
87.03 |
106.88 |
87.34 |
127.25 |
| Depreciation and amortization expenses |
172.54 |
149.95 |
193.72 |
168.93 |
| Profit/(Loss) before exceptional item and tax |
262.57 |
3019.14 |
290.29 |
2984.95 |
| Exceptional item |
1332.71 |
(395.57) |
(287.02) |
(386.56) |
| Profit/(Loss) before taxation |
1595.28 |
2623.57 |
3.27 |
2598.39 |
| Taxation (including Deferred Tax) |
(692.84) |
852.77 |
(692.84) |
852.77 |
| Profit/(Loss) after Taxation (PAT) |
2288.12 |
1770.80 |
696.11 |
1745.62 |
| Other Comprehensive Income |
90.39 |
(5.01) |
940.70 |
(109.60) |
| Total Comprehensive Income for the period Comprising
profit/(loss) & Other comprehensive Income for the period |
2378.51 |
1765.79 |
1636.81 |
1636.02 |
OVERALL PERFORMANCE
During the year under consideration, Company achieved the production of
70,062 M.T. as against 69,626 M.T. in the previous year recording an increase by 1%.
Ferro alloys are one of the important ingredients in the manufacturing
of steel. The growth of Ferro alloys Industry is directly linked with the development of
Iron and Steel Industry. The principal ferro alloys are chromium, manganese and silicon.
The product series consists mainly of ferro-manganese, silico- manganese, ferro-silicon
and ferro-chrome.
Government of India's Aatma Nirbhar Bharat mission had provided
further boost to Ferro Industry by creating better infrastructure facility and road
transport facilities to boost industry demand and smooth transportation of raw material
and finished products.
Ferro industry has witnessed a drastic growth worldwide post covid-19.
In India too, we have witnessed industry growth at a rate of approx. in the range of
40-50% in terms of revenue. Facor Alloys Ltd. (the Company) had also achieved a growth by
24% in terms of revenue as compared to previous years, despite the fact that company is
mainly engaged in conversion of High Carbon Ferro Chrome and Silico Manganes and
terminated a conversion agreement with RTVNPL on violation of agreed term (Refer note no
49 of standalone financial statements).
Your Company is currently do not have working capital limits/ finance
facilities with any financial institutions/ banks. Under such exigency, company had
entered into conversion agreements and contributed to cater the industry demand and also
being able to optimize its capacity utilization while putting it's all the best
possible efforts. Your Company is exploring all available options and expected to get
working capital finance to achieve growth as per market trends in the years to come.
Exports (Deemed) are at Rs.69.61 crores as against Rs.47.38 crores in
the previous year and during the year under review foreign currency earnings in rupee
terms was NIL. The Company derived 21.78% of its total sales from deemed exports as
against 18.42% in the previous year.
On account of above and other factors including higher sales
realization, the profit before tax is at Rs.15.95 crores as compared to profit of Rs.26.24
crore in the previous year. Reduction in PBT despite higher sales revenue in current year
is due to power cost reimbursement amounting to Rs.20.26 crores were included in
Miscellaneous income of previous years (Refer note no.29.1 of Standalone Financial
Statements).
DIVIDEND
The Board has not recommended any dividend on the Equity Shares of the
company for the financial year ended 31.03.2023 in order to keep surplus fund for meeting
the internal financial requirements of the Company in the absence of non-availability of
working capital limits with the banks.
SHARE CAPITAL
The paid up Equity Share Capital as on 31st March, 2023 is
'19.55 crores. During the year under review, the Company has not issued any further
shares. The Company has not issued shares with differential voting rights. It has neither
issued employee stock options nor sweat equity shares and does not have any scheme to fund
its employees to purchase the shares of the Company.
The equity shares of the Company are listed on BSE Limited and the
Company has duly paid the annual listing fees for the current financial year i.e. 2023-24.
ANNUAL RETURN
The annual return of the company as on March 31, 2023, in terms of the
provisions of Section 134(3)(a) of the Companies Act, 2013 is available on the
company's website www.facoralloys.in.
NUMBER OF MEETINGS OF THE BOARD
The Board met five (5) times in FY 2022-23 viz. on 13th May,
2022, 29th July 2022, 9th November, 2022, 9th February,
2023 & 21st March, 2023. The maximum interval between any two meetings did
not exceed 120 days or / except as permissible by law in this regard.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Companies Act, 2013 and implementation
requirements of Indian Accounting Standards (‘IND-AS') under Companies Act, 2013
on accounting and disclosure requirements, and as prescribed by SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, the Audited Consolidated Financial
Statements are provided in this Annual Report.
SUBSIDIARIES
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 Company's Subsidiaries and Associates' (in updated
Form AOC-1) is given in the Note No.-40 of the consolidated financial statements. Further,
the Consolidated Financial Statements presented by the Company also includes the financial
results of the subsidiary companies.
Further, the company has already uploaded the Annual Accounts of the
subsidiary company(s) on its website which is accessible to all the member. The annual
accounts of the Company as well as its respective subsidiary company(s) shall also be kept
open for inspection at the Registered Office of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to provisions the under Section 134 (5) of the Companies Act,
2013, your Directors hereby confirm:
(i) that in the preparation of the annual accounts for the financial
year ended 31st March, 2023, the applicable accounting standards read with
requirements set out under schedule III of the Companies Act, 2013 have been followed and
there are no material departures from the same;
(ii) that they have selected such accounting policies and applied them
consistently and made judgments and estimates that were 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 for the year under consideration;
(iii) that they have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for preventing and
detecting frauds and other irregularities;
(iv) that they have prepared the annual accounts of the Company for the
financial year ended 31st March, 2023 on a going concern basis;
(v) they have laid down internal financial controls to be followed by
the Company and that such internal financial controls are adequate and were operating
effectively; and
(vi) that they had devised proper system to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
DECLARATION GIVEN BY INDEPENDENT DIRECTORS
The Independent Directors have given declaration that they meet the
criteria specified under Section 149 (6) of the Companies Act, 2013 read with the
applicable rules framed thereunder as well as regulation 25(8) of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). The
Board is of the opinion that the Independent Directors of the Company possess requisite
qualifications, experience and expertise and they hold highest standards of integrity.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Company has a policy for remuneration of Directors, Key Managerial
Personnel and Senior Management Personnel as well as well-defined criteria for the
selection of candidates for appointment to the said positions which has been approved by
the Board. The Policy broadly lays down the guiding principles for determining
qualifications, positive attributes, independence of a Director and other matters provided
under sub-section (3) of section 178 of Companies Act, 2013.
During the year under review, no changes were made in the above policy.
Salient features of this policy are enumerated in the Corporate Governance Report which
forms part of the Annual Report. The above policy is available at the website of the
Company at:
http://facoralloys.in/assets/pdf/policy/
Nomination%20and%20Remuneration%20Policy-Revise.pdf
AUDITORS AND AUDITORS' REPORT Statutory Auditors
In terms of Section 139 of the Companies Act, 2013, read with the
Companies (Audit and Auditors) Rules, 2014, Members of the Company at their 19th
Annual General Meeting held on 28th September, 2022 approved the reappointment
of M/s K K Mankeshwar & Co., Chartered Accountants (Firm Registration no.106009W) as
the Statutory Auditors of the Company for further term of 5 years i.e. from the conclusion
of 19th Annual General Meeting till the conclusion of 24th Annual
General Meeting of the Company to be held in the year of 2027.
The statutory auditor has confirmed their eligibility and submitted a
confirmation in writing that they are not being disqualified to hold the office of the
statutory auditor.
The Auditors' Report to the Shareholders on the Standalone &
Consolidated Audited Financial Results for the year under review has expressed unmodified
opinion in the respective audit reports for the financial year 2022-2023. There were no
qualifications, observations or adverse comments on financial statements and matters,
which have any material bearing on the functioning of the Company.
Secretarial Auditors
The Company has appointed Mr. Tumul Maheshwari of M/S. MT & Co.,
New Delhi, Company Secretaries to conduct secretarial audit and his Report on
Company's Secretarial Audit is appended to this Report as Annexure-1.
There are no qualifications, reservations or adverse remarks or
disclaimers made in the Secretarial Audit Report.
Cost Auditor
Maintenance of cost account records and requirement of cost audit as
prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are
applicable for the business activities carried out by the Company during the period under
review.
Mr. Prakash Uppalapati, Cost Accountant has been appointed by the Board
as Cost Auditor of the Company to conduct audit of cost account records for the year ended
31st March 2023 pursuant to the provisions of Section 148 of the Companies Act,
2013 and the rules made there under. Members are requested to consider the ratification of
the remuneration payable to Mr. Prakash Uppalapati being the Cost Auditor.
There are no qualifications, reservations or adverse remarks or
disclaimers made in the Cost Audit Report for the financial year 2022-2023.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
The Company has not provided any guarantee, made a Loan and investment
pursuant to Section 186 of the Companies Act, 2013 during the Financial Year.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
There are no contracts/arrangements/transactions which are not at
arm's length basis and there are no material contracts/ arrangements/transactions
which are at arm's length basis.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF
THE COMPANY AFTER CLOSE OF THE FINANCIAL YEAR
The Company was having a production linked lease agreement for
operation of ‘Briquetting plant' owned by M/s Rai Bahadur Shreeram and Company
Private Limited (RBS). Lease agreement was recurring in nature duly renewed from time to
time. Last renewal was occurred effective from 01.04.2022 for further period of three
years, ending on 31.03.2025. RBS is a promoters' group closely held company and
holding approx. 32% equity shares in the company in under the promoters' category,
hence, agreement falls under the related party transaction within the meaning of section
188 of Companies Act, 2013. Briquetting plant was in use for production of
‘Briquettes' from Chrome Ore to feed in furnaces, therefore, serves as an
intermediary product to be used as prime raw material for production of Ferro Alloys. RBS
has terminated the said lease agreement vide notice dated 11.10.2023 to the Company. The
Company has no alternative arrangement for production of ‘Briquettes',
consequently, company has closed down its operation w.e.f. 31.10.2023 due to
non-availability of briquettes. The Company has received fresh proposal vide email dated
10.11.2023 from RBS for the briquetting plant agreement. The analysis and potential impact
of the same are presently under review.
CHANGE IN THE NATURE OF BUSINESS, IF ANY
During the year, there was no change in the nature of business of the
company. Further, there was no significant change in the nature of business carried on by
its subsidiaries.
DISCLOSURE OF INTERNAL FINANCIAL CONTROLS
The Internal Financial Controls with reference to the financial
statements as designed and implemented by the Company are adequate and commensurate with
the size and scale of its operation. The internal controls are tested for adequacy,
efficiency and effectiveness through audits by the internal auditors and the observations,
corrective and preventive actions are reviewed by the management and Audit Committee of
the Board of Directors.
During the financial year under review, no material or serious
observation has been received from the Internal Auditors of the Company for inadequacy or
ineffectiveness of such controls.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR
TRIBUNAL
There are no significant and/or material orders passed by the
Regulator(s) or Court(s) or Tribunal(s) impacting the going concern status of the Company
and its business operations in future.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information required under Section 134 of the Companies Act, 2013
read with Companies (Accounts) Rules, 2014 are set out in Annexure-2 hereto forming
part of this report.
RISK MANAGEMENT POLICY
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.
DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance policy towards sexual harassment at the
workplace.
The Company has complied with the provisions relating to the
constitution of Internal Complaints Committee under the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013.
No complaints has been received by the committee during the year under
review.
CORPORATE SOCIAL RESPONSIBILITY
Pursuant to Section 135 of the Companies Act, 2013 read with the
Companies (Corporate Social Responsibility Policy) Rules, 2014, your Company has already
approved a Policy on CSR as amended from time to time and the same is hosted on the
website of the Company at www.facoralloys.in.
During the year under review, the Company has duly made CSR spending of
2% of the average net profit for last three financial years as per the applicable
provisions.
In view of the same, the Company has made the requisite CSR spending on
the specified activities during the financial year ended 31.03.2023, the details of which
is provided in Annexure-3.
ANNUAL BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Regulations
of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Independent
Directors at their meeting without the participation of the Non-independent Directors and
Management, considered/evaluated the Boards' performance, performance of the Chairman
and other Non- independent Directors.
The Board subsequently evaluated its own performance, the working of
its Committees (Audit, Nomination and Remuneration and Stakeholders Relationship
Committee) and Independent Directors (without participation of the relevant Director).
In the opinion of the Board, the independent directors possessing the
necessary skills like integrity, expertise and experience (including the proficiency) etc.
for being appointed on the Board of the Company.
DISCLOSURE WITH RESPECT TO UNCLAIMED SUSPENSE ACCOUNT
Pursuant to IEPF Fund Authority (Accounting, Audit, Transfer &
Refund) Rules, 2016, all unclaimed shares have already been transferred to the IEPF
Authority.
All the corporate benefits in terms of securities accruing to on these
unclaimed shares shall be credited to the aforesaid account. Voting rights on these shares
shall remain frozen till the rightful owner of such shares claim the shares.
Any person, whose unclaimed or unpaid amount has been transferred by
the Company to IEPF may claim his/her refunds from the IEPF authority. The detailed
procedure for claiming shares and/or dividend amount is available on the website of IEPF
(www.iepf.gov.in).
The Nodal Officer for the purpose of IEPF is Company Secretary and the
website address is www.facoralloys.in.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Pursuant to Section 177 (9) of the Companies Act, 2013 read with Rule 7
of the Companies (Meetings of Board and its Powers) Rules, 2014 and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors had
approved the Policy on Vigil Mechanism/Whistle Blower and the same is hosted on the
website of the Company. This Policy inter-alia provides a direct access to the Chairman of
the Audit Committee.
Your Company hereby affirms that no Director/ employee has been denied
access to the Chairman of the Audit Committee and that no complaints were received during
the year.
PUBLIC DEPOSITS
During the year under review, the Company has not invited any deposits
from the public.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
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, during the year under review, there were no employees
receiving remuneration in excess of ' 1,02,00,000/- per annum or ' 8,50,000/- per month
requiring disclosure.
Disclosures pertaining to remuneration and other details as required
under Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the
Annexure forming part of the Annual Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
As on date, the Company has total no. of 6 Directors out of which 1 is
Executive Chairman & Managing Director and 5 are Non-Executive Directors. The 5
Non-Executive Directors consist of 3 Independent Directors including one Woman Independent
Director and 2 are Non-Executive Non Independent Directors. The Composition of the Board
is in conformity with the provisions of the Companies Act, 2013 read with the rules framed
thereunder and relevant Regulations of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
Mr. Manojkumar Umashankar Saraf, Director retires by rotation at the
forthcoming Annual General Meeting and being eligible offers himself for re-appointment.
Mr. Vinodkumar Vithaldasji Saraf and Mr. Anurag Saraf, Non- Executive
Directors have resigned from the directorship of the company w.e.f. 11.03.2023 and
13.03.2023 respectively.
Mr. K. Jayabharat Reddy and Mr. K. L. Mehrotra, Independent Directors
have resigned / ceased from the directorship of the company w.e.f. 14.09.2023 and
09.10.2023 respectively.
Currently, Mr. R. K. Saraf (Managing Director), Mr. Vijay Vashisth (Dy.
CFO) and Mr. Piyush Agarwal (Company Secretary & Compliance Officer) are the key
managerial personnel of the Company.
None of the Whole-time Key Managerial Personnel (KMP) of the Company is
holding office in any other Company as a Key Managerial Personnel.
Further, none of the Directors / KMP of the Company is disqualified
under any of the provisions of the Companies Act, 2013 and relevant Regulations of 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.
COMMITTEES OF THE BOARD
The Board of Directors have constituted all the requisite committees of
Directors as are required by law from time to time.
Details of composition of all the committees of the Board are provided
in the corporate governance report and majority of the committees consists entirely of
independent directors. During the year, all recommendations made by the committees were
approved by the Board.
REPORTING OF FRAUDS BY AUDITORS OF THE COMPANY
During the year under review, none of the Auditors of the company has
reported to the audit committee under Section 143 (12) of the Companies Act, 2013 any
instances of fraud committed against the Company by its officers or employees, the details
of which would need to be mentioned in the Board's report.
CORPORATE GOVERNANCE
Pursuant to SEBI (Listing Obligations & Disclosure Requirements)
Regulations, 2015, a report on the Corporate Governance, Management Discussion and
Analysis, Certificate from Practicing Company Secretary regarding compliance of conditions
of Corporate Governance have been made a part of the Annual Report.
DISCLOSURE UNDER INSOLVENCY AND BANKRUPTCY CODE
During the year under review, there are no application made or any
proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016).
DISCLOSURE UNDER ONE TIME SETTLEMENT
During the year under review, your Company has not made any one time
settlement with any of its Banks or Financial Institutions.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Board of Directors affirms that the Company has complied with the
applicable Secretarial Standards issued by the Institute of Company Secretaries of India
(SS-1 and SS-2) respectively relating to Meetings of the Board and its Committees
including general meetings of the company which are mandatory in nature.
INDUSTRIAL RELATIONS
During the year under review, the overall industrial relations in the
Company remained cordial.
ACKNOWLEDGEMENT AND APPRECIATION
The Board wishes to place on record its sincere appreciation for the
support and co-operation extended by all the customers, vendors, business associates and
investors at large.
Further, the Board places on record their sincere appreciation for the
significant contribution made by its employees through their dedication, hard work and
commitment and also for the trust reposed in the company by all other stakeholders.
The Company sincerely thanks the Central & State Governments for
their continued support and warm co-operation extended towards the business as well as the
Company's social functions. It looks forward to your continued support in the
company's endeavour to accelerate access to innovative and affordable business.
|
On behalf of Board of Directors for Facor
Alloys Ltd. |
| Place : Delhi |
R.K. SARAF |
| Dated : 2nd December, 2023 |
Chairman & Managing Director Din :
00006102 |
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