thirteenth annual report 2015-2016 - bombay stock … · 2016. 9. 20. · [email protected]...

FACOR STEELS LIMITED

THIRTEENTHANNUAL REPORT

2015-2016

CONTENTS:

Notice to Members ................................................................ 1 Balance Sheet ...................................................................... 33

Director’s Report ................................................................... 4 Statement of Profit & Loss ................................................... 34

Auditor’s Report to Members ............................................... 29 Notes on Financial Statements ............................................. 36

............................................................................................... Principal Addresses of the Company .................................... 52

Board of Director

Narayandas SarafChairman

M. D. SarafVice-Chairman & Director

Vinod SarafManaging Director

Anurag Saraf

A. S. Kapre

M. B. Thaker

Mohandas S. Adige

K.A. Pardhi

Champaka Rangachari(Ceased w.e.f. 06.05.2016)

Bankers

Bank of India

Central Bank of India

State Bank of India

Syndicate Bank

State bank of Bikaner & Jaipur

Indian Overseas Bank

Solicitors

Mulla & Mulla ans Craige Blunt & Caroe

Statutory Auditors

SALVE & Co.Chartered Accountants

Registrars & Share Transfer Agents

(for Both Physical & Electronic)

Link Intime India Pvt. Ltd.

C-13 Pannalal Silk Mills

Compound, LBS Marg,

Bhandup (W),

MUMBAI-400 078

Phone No. 022-2594 6970

Fax No, 022-2594 26970

E-mail: [email protected]

COPORATE INFORMATION

FACOR STEELS LIMITEDTHIRTEENTHANNUAL REPORT2015-16

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Notice to MembersNotice is hereby given that the THIRTEENTH ANNUALGENERAL MEETING of the Members of the Company will beheld at the Registered Office of the Company at 46 A & B,MIDC, Industrial Estate, Hingna Road, Nagpur- 440 028 onFriday the 23rd of September, 2016 at 11.30 A.M to transact,with or without modification as may be permissible, the followingbusiness:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Financial Statementsof the Company for the year ended 31st March 2016,including Audited Balance Sheet and Statement of Profitand Loss for the year ended on that date and the Reportsof the Board of Directors and the Auditors thereon.

2. To appoint a Director in the place of Mr. M.D. Saraf (DIN:00011966), who retires from Office by rotation and, beingeligible, offers himself for re-appointment.

3. To consider and, if thought fit, to pass the followingresolution which will be proposed as an OrdinaryResolution:

“RESOLVED THAT in accordance with the provisionsof Section 139, 142 and other applicable provisions, ifany, of the Companies Act, 2013 read with the Companies(Audit and Auditors) Rules, 2014 (including any statutorymodification(s) or re-enactments therefore for the timebeing in force), appointment of M/s Salve & Company,Chartered Accountants, (Regn. No. 109003W), asStatutory Auditors of the Company, which was approvedby the shareholders for a period 3 years from theconclusion of the 12th Annual General Meeting held on28th September, 2015 be and is hereby ratified at this13th Annual General Meeting of the Company and theyare, therefore, to continue to hold office from theconclusion of this Annual General Meeting till theconclusion of the 14th Annual General Meeting of theCompany at such remuneration plus service tax asapplicable and reimbursement of expenses incurred bythem incidental to their functions, as shall be fixed bythe Board of Directors of the Company. The appointmentof the Auditors shall be subject to ratification by membersin every subsequent Annual General Meeting till theconclusion of the 14th Annual General Meeting.”

Registered Office: By ORDER OF THE BOARD46 A & B, MIDC,Industrial Estate,Hingna Road, Vinod SarafNagpur – 440028 Managing Director

Dated : 5th August, 2016Place : Nagpur

NOTES:

1. The Register of Members and the Share Transfer booksof the Company will remain closed from Saturday, 17th

September, 2016 to Friday, 23rd September, 2016 (bothdays inclusive) for annual closing.

2. A MEMBER ENTITLED TO ATTEND AND VOTE ATTHE MEETING IS ENTITLED TO APPOINT A PROXY/ PROXIES TO ATTEND AND VOTE INSTEAD OFHIMSELF / HERSELF. SUCH A PROXY/ PROXIESNEED NOT BE A MEMBER OF THE COMPANY. Aperson can act as proxy on behalf of members notexceeding fifty (50) and holding in the aggregate not morethan ten percent of the total share capital of the Company.The instrument of Proxy in order to be effective, shouldbe deposited at the Registered Office of the Company,duly completed and signed, not less than 48 hours beforethe commencement of the meeting. A Proxy form is sentherewith. Proxies submitted on behalf of the companies,societies etc., must be supported by an appropriateresolution/authority, as applicable.

3. To prevent fraudulent transactions, members are advisedto exercise due diligence and notify the Company of anychange in address or demise of any member as soon aspossible. Members are also advised not to leave theirdemat account(s) dormant for long. Periodic statementof holdings should be obtained from the concernedDepository Participant and holdings should be verified.

4. The Securities and Exchange Board of India (SEBI) hasmandated the submission of Permanent Account Number(PAN) by every participant in securities market. Membersholding shares in electronic form are, therefore, requestedto submit the PAN to their Depository Participants withwhom they are maintaining their demat accounts.Members holding shares in physical form can submit theirPAN details to the Company.

5. Details under Clause 49 of the Listing Agreement withthe Stock Exchange in respect of the Directors seekingappointment/re-appointment at the Annual GeneralMeeting, forms integral part Report on CorporateGovernance. The Directors have furnished the requisitedeclarations for their appointment/re-appointment.

6. Electronic copy of the Annual Report for 2015-2016 isbeing sent to all the members whose email IDs areregistered with the Company/Depository Participants(s)for communication purposes unless any member hasrequested for a hard copy of the same. For memberswho have not registered their email address, physicalcopies of the Annual Report for 2015- 2016 is being sentin the permitted mode. Annual Report for 2015-16 shallbe provided on request to Members.

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7. In accordance with the Companies Act, 2013 readwith the Rules framed there under Electronic copy ofthe Notice of the 13th Annual General Meeting of theCompany inter alia indicating the process and mannerof e-voting along with Attendance Slip and Proxy Formis being sent to all the members whose email IDs areregistered with the Company/Depository Participants(s)for communication purposes unless any member hasrequested for a hard copy of the same. For memberswho have not registered their email address, physicalcopies of the Notice of the 13th Annual General Meetingof the Company inter alia indicating the process andmanner of e-voting along with Attendance Slip and ProxyForm is being sent in the permitted mode.

8. Members may also note that the Notice of the 13th AnnualGeneral Meeting and the Annual Report for 2015-2016will also be available on the Company’s websitewww.facorsteel.com and www.facorgroup.in for theirdownload. The physical copies of the aforesaiddocuments will also be available at the Company’sRegistered Office in Nagpur for inspection during normalbusiness hours on working days. Even after registeringfor e-communication, members are entitled to receivesuch communication in physical form, upon making arequest for the same, by post free of cost. For anycommunication, the shareholders may also sendrequests to the Company’s investor email id:[email protected]

9. Voting through electronic meansI. In compliance with provisions of Section 108 of theCompanies Act, 2013 and Rule 20 of the Companies(Management and Administration) Rules, 2014, and also35B of the Listing Agreement, the Company is pleasedto provide members facility to exercise their right to voteat the 13th Annual General Meeting (AGM) by electronicmeans and the business may be transacted through e-Voting Services provided by Central Depository Services(India) Limited

The instructions for e-voting are as under:(i) The voting period begins on 20th September, 2016

at 9:00 a.m. and ends on 22nd September, 2016 at6:00 p.m. During this period shareholders’ of theCompany, holding shares either in physical form orin dematerialized form, as on the cut-off date (recorddate) of 16th September, 2016, may cast their voteelectronically. The e-voting module shall be disabledby CDSL for voting thereafter.

(ii) Shareholders who have already voted prior to themeeting date would not be entitled to vote at themeeting venue.

(iii) Log on to the e-voting website www.evotingindia.com

(iv) Click on “Shareholders” tab.(v) Now, select the electronic voting sequence number

(EVSN) 160812024 alongwith “FACOR STEELSLIMITED” from the drop down menu and click on“SUBMIT”

(vi) Now Enter your User IDa. For CDSL: 16 digits beneficiary ID,b. For NSDL: 8 Character DP ID followed by 8

Digits Client ID,c. Members holding shares in Physical Form

should enter Folio Number registered with theCompany.

(vii) Next enter the Image Verification as displayed andClick on Login.

(viii) If you are holding shares in demat form and hadlogged on to www.evotingindia.com and voted onan earlier voting of any company, then your existingpassword is to be used.

(ix) If you are a first time user follow the steps givenbelow:

For Members holding shares in DematForm and Physical Form

PAN* Enter your 10 digit alpha-numeric *PANissued by Income Tax Department (Applicablefor both demat shareholders as well asphysical shareholders)• Members who have not updated their PAN

with the Company/Depository Participantare requested to use the first two letters oftheir name and the last 8 digits of the demataccount/folio number in the PAN field.

• In case the folio number is less than 8 digitsenter the applicable number of 0’s beforethe number after the first two charactersof the name in CAPITAL letters. Eg. If yourname is Ramesh Kumar with folio number100 then enter RA00000100 in the PANfield.

DOB# Enter the Date of Birth as recorded in yourdemat account or in the company records forthe said demat account or folio in dd/mm/yyyyformat.

Dividend Enter the Dividend Bank Details as recordedBank in your demat account or in the companyDetails# records for the said demat account or folio.·

If both the details are not recorded with thedepository or Company please enter themember id / folio number in the Dividend BankDetails filed as mentioned in instruction (vi).

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(x) After entering these details appropriately, click on“SUBMIT” tab.

(xi) Members holding shares in physical form will thenreach directly the Company selection screen.However, members holding shares in demat formwill now reach ‘Password Creation’ menu whereinthey are required to mandatorily enter their loginpassword in the new password field. Kindly notethat this password is to be also used by the dematholders for voting for resolutions of any othercompany on which they are eligible to vote,provided that company opts for e-voting throughCDSL platform. It is strongly recommended notto share your password with any other person andtake utmost care to keep your passwordconfidential.

(xii) For Members holding shares in physical form, thedetails can be used only for e-voting on theresolutions contained in this Notice.

(xiii) Click on the EVSN no.160812024 for Facor SteelsLimited.

(xiv) On the voting page, you will see “RESOLUTIONDESCRIPTION” and against the same the option“YES/NO” for voting. Select the option YES or NOas desired. The option YES implies that you assentto the Resolution and option NO implies that youdissent to the Resolution.

(xv) Click on the “RESOLUTIONS FILE LINK” if youwish to view the entire Resolution details.

(xvi) After selecting the resolution you have decidedto vote on, click on “SUBMIT”. A confirmation boxwill be displayed. If you wish to confirm your vote,click on “OK”, else to change your vote, click on“CANCEL” and accordingly modify your vote.

(xvii) Once you “CONFIRM” your vote on the resolution,you will not be allowed to modify your vote.

(xviii) You can also take out print of the voting done byyou by clicking on “Click here to print” option onthe Voting page.

(xix) If Demat account holder has forgotten thechanged password then Enter the User ID andthe image verification code and click on ForgotPassword & enter the details as prompted by thesystem.

(xx) Note for Non-Individual Shareholders andCustodians• Non-individual shareholders (i.e. other than

Individuals, HUF, NRI etc.) and Custodian arerequired to log on to https://www.evotingindia.co.in and register themselves asCorporates.

• They should submit a scanned copy of theRegistration Form bearing the stamp and signof the entity to [email protected].

• After receiving the login details a complianceuser should be created using the admin loginand password. The Compliance user wouldbe able to link the account(s) for which theywish to vote on.

• The list of accounts should be mailed [email protected] and onapproval of the accounts they would be ableto cast their vote.

• A scanned copy of the Board Resolution andPower of Attorney (POA) which they haveissued in favour of the Custodian, if any,should be uploaded in PDF format in thesystem for the scrutinizer to verify the same.

• Any person, who acquires shares of theCompany and become Member of theCompany after dispatch of the Notice andholding shares as on the cut-off date i.e. 16th

September, 2016 may follow the sameinstructions as mentioned above for e-Voting.

• In case you have any queries or issuesregarding e-voting, you may refer theFrequently Asked Questions (“FAQs”) and e-voting manual available atwww.evotingindia.com, under help sectionor write an email to [email protected]

In case of members receiving the physical copy:(A) Please follow all steps from sl. no. (i) to sl. no. (xx)

above to cast vote.(B) In case you have any queries or issues regarding

e-voting, you may refer the Frequently AskedQuestions (“FAQs”) and e-voting manual availableat www.evotingindia.co.in under help sectionor write an email to helpdesk.evoting@cdslindia. com, as aforesaid.

(C) The e-voting per iod commences on 20th

September, 2016 (9:00 am) and ends on 22nd

September, 2016 (6:00 pm). During this periodshareholders’ of the Company, holding shareseither in physical form or in dematerialized form,as on the cut-off date (record date) of 16th

September, 2016 may cast their voteelectronically. Once the vote on a resolution iscast by the shareholder, the shareholder shall notbe allowed to change it subsequently.

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(D) The voting rights of shareholders shall be inproportion to their shares of the paid up equityshare capital of the Company as on the cut-offdate (record date) of 16th September, 2016, asreferred in preceding clause.

(E) Mr. Pradeep S. Channe, Company Secretaries,(Membership No. FCS 6265 and C. P. No.7138)has been appointed as the Scrutinizer to scrutinizethe e-voting process in a fair and transparentmanner.

(F) The Scrutinizer shall within a period not exceedingthree(3) working days from the conclusion of thee-voting period unblock the votes in the presenceof at least two(2) witnesses not in the employmentof the Company and make a Scrutinizer’s Reportof the votes cast in favour or against, if any,forthwith to the Chairman of the Company.

(G) The Results shall be declared on or after the AGMof the Company. The Results declared alongwith

the Scrutinizer’s Report shall be placed on theCompany’s website www.facorgroup.in withintwo(2) days of passing of the resolutions at theAGM of the Company and communicated to theBSE Limited.

11. All documents referred to in the accompanying Noticeand shall be open for inspection at the Registered Officeof the Company on all working days during normalbusiness hours (9.00 am to 5.00 pm) except Saturdays,Sundays and Holidays up to and including the date ofthe Annual General Meeting of the Company.

Registered Office: By ORDER OF THE BOARD46 A & B, MIDC,Industrial Estate,Hingna Road, Vinod SarafNagpur – 440028 Managing Director

Dated : 5th August, 2016Place : Nagpur

DIRECTORS’ REPORT TO THE MEMBERSYour Directors submit the THIRTEENTH ANNUAL REPORTon the business and operations of the Company and theAudited Statements of Accounts for the year ended 31stMarch, 2016.

FINANCIAL RESULTS (` in lacs)

Particulars For the For theyear ended year ended31.03.2016 31.03.2015

----------------------------------------- -------------------------------------------Gross Profit/(Loss) (1007.20) (2623.80)

Depreciation / Amortization 418.90 469.38----------------------------------------- -------------------------------------------

Profit /(Loss) beforeexceptional items & Tax (1426.10) (3093.18)

Exceptional items 0.00 1842.11----------------------------------------- -------------------------------------------

Profit/(Loss) before taxfor the year (1426.10) (1251.07)

Provision/(Credit) forMAT /DEF. TAX /WT 0.00 0.00

----------------------------------------- -------------------------------------------Profit/(Loss) after tax for the year (1426.10) (1251.07)

OVERALL PERFORMANCEYour Company’s performance during the financial year 2015-16 was badly affected due to the closure of the plant operationswith effect from 30/05/2014 due to consensus lockout declaredas per agreement reached with the workforce. This closurewas necessitated due to adverse market conditions withsubdue demand for Alloy and Stainless Steel resulting in lower

utilization of capacity. The lay off is still continuing due to nochange in the situation.

During the year under review, Company reported a totalincome of `188.96 Lakhs as against ` 3043.87 Lakhs of theprevious year. After making a provision of ` 410.34 Lakhstowards interest and ` 418.90 Lakhs towards depreciation,the loss for the current financial year amounts to ` 1426.10Lakhs as against the net loss of ` 3093.18 Lakhs of theprevious year. The net loss after exceptional items for thecurrent financial year amounts to ` 1426.10 Lakhs as againstloss of ` 1251.07 Lakhs reported in the previous year.

There are no significant material orders passed by theRegulators/Courts which would impact the going concernstatus of the Company and its future operations. A detailedManagement Discussion and Analysis Report forms part ofthis report is annexed as Annexure-1.

OUTLOOK FOR 2016-17The lay off at Company’s plant is continuing and it is unviableto operate the plant under present business conditions. Ourefforts for scouting for tie up with potential investors / strategicinvestors have not given any fruitful result. Hence the plantcontinues to remain under consensus lockout.

DIVIDENDIn the absence of profit, your directors are unable to declareany dividend for the year 2015-2016.

BOARD FOR INDUSTRIAL AND FINANCIALRECONSTRUCTIONThe accumulated losses of the Company for the financial yearended 31st March, 2014 exceeded its net worth, the Company

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has made reference to the Board for Industrial and FinancialReconstruction (BIFR) under section 15 of the Sick IndustrialCompanies (Special) Provisions Act, 1985. The reference hasbeen registered vide Case No. 74/2014 by BIFR. There werethree hearings, first hearing on 2nd July 2015, second hearingon 13th May 2016 and the third hearing on 20th July 2016. Theproceedings are in progress.

PARTICULAR OF LOANS, GUARANTEES ORINVESTMENTThere are no loans, Guarantees and Investments made underthe provisions of Section 186 of the Companies Act, 2013during the year under review. Details of Loans, Guaranteesand Investments as at the year end are given in the notes tothe Financial Statements.

RELATED PARTY TRANSACTIONThere are no contracts or arrangement with related partiesreferred to in Section 188 (1) by the Companies Act, 2013.The details of other transactions entered into with the relatedparties are given in Note 45 to the Financial Statement.The Policy on Related Party Transactions are approved byBoard is uploaded on the Company’s Website.

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

CAPITAL STRUCTUREAuthorised Capital of the Company is ` 60,00,00,000/- andthere was no change in the authorised capital of the companyduring the year under review.

Paid up capital of the company is ` 53,43,23,679/- comprisingof 20,65,23,679 equity shares of ` 1/- each and 32,78,0005% Redeemable Cumulative Preference Shares of ` 100/-each. During the year under review there was no change inthe paid up capital of the company.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:In view of the continuing losses, the company is not in aposition to make any expenditure under Corporate SocialResponsibility as per the Provisions of Companies Act, 2013.

INDUSTRIAL RELATIONSThe Company has declared Consensus lock out as per theagreement reached with its work force effective from 30th May,2014. Since then Company has separated 70 Officers and317 Staff and Workers through Voluntary Separation Scheme.The number at employee as on 31st March, 2016 is 55.

EXTRACT OF ANNUAL RETURNThe extract of the Annual Return in Form MGT 9 is annexedherewith as Annexure- 2

NUMBER OF BOARD MEETINGS HELDA calendar of Meetings is prepared and circulated in advanceto the Directors. During the year Five Board Meetings andFive Audit Committee Meetings were convened and held. Thedetails of which are given in the Corporate Governance Report.The intervening gap between the Meetings was within theperiod prescribed under the Companies Act, 2013.

CORPORATE GOVERNANCEThe report on corporate governance as per the requirementof the listing agreement with stock exchange forms part ofthis report is annexed as Annexure-3. The Company hascomplied with all the requirements of corporate governance.The certificate from the Auditors of the Company confirmingcompliance to the conditions of the corporate governancerequirements is also annexed.

DIRECTOR RESPONSIBILITY STATEMENTThe Directors‘ Responsibility Statement referred in Section134(5) of Companies Act, 2013 shall State that¯(a) in the preparation of the annual accounts, the applicable

accounting standards have been followed along withproper explanation relating to material departures;

(b) the directors have selected such accounting policies andapplied them consistently and made judgments andestimates that are reasonable and prudent so as to givea true and fair view of the state of affairs of the companyat the end of the financial year and of the loss of thecompany for that period;

(c) the directors have taken proper and sufficient care forthe maintenance of adequate accounting records inaccordance with the provisions of this Act forsafeguarding the assets of the company and forpreventing and detecting fraud and other irregularities;

(d) the directors have prepared the annual accounts on agoing concern basis; and

(e) the directors, have laid down internal financial controlsto be followed by the company and that such internalfinancial controls are adequate and were operatingeffectively.

(f) the directors have devised proper systems to ensurecompliance with the provisions of all applicable Laws andthat such system were adequate and operating effectively.

INFORMATION ON REMUNERATIONInformation as per the provisions of Section 197(12) of theCompanies Act, 2013 read with Rule 5(1), 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of ManagerialPersonnel) Rules , 2014 are annexed as Annexure-4 to thisreport.

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CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION, FOREIGN EXCHANGE EARNINGS ANDOUTGOThe manufacturing operations were suspended with effect from30th May 2014 and hence, there is no matter to be reportedunder this para for the period under review – Refer Annexure-5 and Form-A.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACYThe Company has an Internal Control System, commensuratewith the size, scale and complexity of its operations.

FINANCECompany’s banks accounts have been classified as NPA byall banks in the previous financial year due to non-payment ofinterest. Bank of India has issued a SARFAESI Notice underSection 13(2) of the SARFAESI Act on 25th July 2015 andfurther took symbolic possession of the assets of the Companyvide Public Notice dated 10th October 2015. Indian OverseasBank has also issued a Notice under Section 13(2) of theSARFAESI Act on 9th October 2015. The Company haschallenged the action of Bank of India in the Debt RecoveryTribunal, Nagpur on the ground that Bank of India lacks therequisite majority for initiation of action under Section 13(4)of the SARFAESI Act. The matter is under subjudice.

Invent Assets Securitisation & Reconstruction Pvt. Ltd.(INVENT) has informed the Company that the following fourBanks have assigned their debts in their favour and INVENThas executed the necessary assignment agreement.

Name of Bank Date of Assignment

Central Bank of India 01/06/2015

State Bank of India 10/08/2015

State Bank of Bikaner And Jaipur 10/08/2015

Syndicate Bank 28/08/2015

Some unsecured creditors have also filed winding up petitionin the Nagpur Bench of the Mumbai High Court against theCompany. The Company has taken necessary steps to protectits interst.

AUDITORSSTATUTORY AUDITORM/s Salve & Company, Chartered Accountants hold office uptothe conclusion of the ensuing 13th Annual General Meeting.Based on the recommendation of the Audit Committee, theBoard of Directors of the Company have proposed theappointment of M/s Salve & Co., Chartered Accountants, as theAuditors of the Company from the conclusion of theforthcoming 13th Annual General Meeting till the conclusion ofthe 14th Annual General Meeting (subject to ratification byshareholders at every Annual General Meeting). M/s Salve &

Co., have expressed their willingness to act as Auditors of theCompany, if appointed, and have further confirmed that thesaid appointment would be in conformity with the provisionsof Section 141 of the Companies Act, 2013.

Your Directors request you to ratify the appointment of M/sSalve & Company, Chartered Accountants (RegistrationNo.109003W) as Statutory Auditors of the Company at theensuing 13th Annual General Meeting and to fix theirremuneration.

COST AUDITORThe manufacturing operations have been suspended witheffect from 30th May 2014 as per the consensus lockoutagreement reached with the workforce. In view of this, theCompany has not maintained any cost records and hencequestion of cost audit does not arise.

SECRETARIAL AUDITORPursuant to the provisions of Section 204 of the CompaniesAct, 2013 and The Companies (Appointment andRemuneration of Managerial Personnel) Rules, 2014, theCompany has appointed M/s P. S. Channe & Co., a firm ofCompany Secretaries in Practice to undertake the SecretarialAudit of the Company for financial Year 2015-16. M/s P. S.Channe & Co., have expressed their willingness to act asAuditors of the Company, if appointed, and have furtherconfirmed that the said appointment would be in conformitywith the provisions of Section 141 of the Companies Act, 2013.The Report of the Secretarial Audit Report is annexed herewithas Annexure-6. There are no qualifications or observations orremarks made by Secretarial Auditor in his report.

DECLARATION BY INDEPENDENT DIRECTORS:Shri A. S. Kapre, Shri M. B. Thaker, Shri Mohan S. Adige andShri K. A. Pardhi are Independent Directors on the Board ofyour Company. In the Opinion of the Board and as confirmedby the these Directors, they fulfill the conditions specified inSection 149 of the Companies Act, 2013 and the rules madethereunder about their status as Independent Directors of theCompany.

DIRECTORS:Mr. M.D. Saraf shall retire by rotation at the 13th Annual GeneralMeeting and being eligible offers himself for reappointment inaccordance with the provisions of the Companies Act, 2013,and in terms of the Memorandum and Articles of Associationof the Company.

Mrs. (Dr) Champaka Rangachari ceased to be director witheffect from 6th May, 2016.

The Company has formulated a code of conduct for allmembers of the Board. All concerned members have affirmedcompliance with the said code.

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NOMINATION AND REMUNERATION POLICYThe Board has, on the recommendation of the Nomination &Remuneration Committee framed a policy for selection andappointment of Directors, Senior Management and theirremuneration. The Remuneration Policy is stated in theCorporate Governance Report. The above policy was approvedby the Board of Directors in their Meeting held on 14th February,2015.

AUDIT COMMITTEEAudit Committee of the Company comprises of Mr. A. S. Kapre,Mr. M. B. Thaker, Mr. M. S. Adige and Mr. Anurag Saraf, ExceptMr. Anurag Saraf, who is a Promoter Director of the Company,rest all members of the Audit Committee are IndependentDirectors. The committee has been constituted in strictcompliance with the provisions of Clause 49 of the Listingagreement and assumes all responsibilities provided therein,discharging their duties diligently with transparency andaccountability as their sole motivation.

You are requested to appoint Auditors for the current yearand to fix their remuneration.

AUDITOR’S REPORTThe report by Auditors if self explanatory. Further, in view ofconsensus lockout at plant and preparation of Accounts ongoing concern basis, the Auditors have made someobservations under “Emphasis of matter appearing in theAuditors Report which management has responded in Note1(b) under Significant Accounting Policies and 29 to theAudited Financial Statements for the year ended 31st March,2016.

DISCLOSURE WHERE COMPANY IS REQUIRED TOCONSTITUTE NOMINATION AND REMUNERATIONCOMMITTEE:The Company has constituted a Nomination & RemunerationCommittee under Clause 49 of the Listing Agreement & hasNomination & Remuneration Policy for appointment andremuneration of Directors Under Section 178 of the CompaniesAct, 2013 and Clause 49 of the Listing Agreement. All theappointments of Directors is as per the Nomination &Remuneration Policy of the Company, which were alsoapproved by the Committee.

DISCLOSURE OF VIGIL MECHANISM IN BOARD REPORT:The Company have adopted the Vigil Mechanism Policy forthe Company in its duly held Board Meeting on 14th February,2015 and the same is available on the website of the Company.

DISCLOSURE ABOUT ESOP AND SWEAT EQUITYSHARECompany has not issued any share under ESOP or SweatEquity Shares during the year.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OFWOMAN AT WORK PLACE (PREVENTION , PROHIBITIONAND REDRESSAL) ACT, 2013The Company has in place a policy for Prevention of Sexualharassment in accordance with the requirements of the SexualHarassment of Women at work place (Prevention, Prohibitionand Redressal) Act, 2013. All employees (Permanent,Contractual, temporary, trainees) are covered under this policy.The Company did not receive any complaint during the year2015-16.

ACKNOWLEDGEMENTSDirectors of the Company wish to thank the Central and StateGovernments for their continued support and co-operationextended towards the business as well as the company’s socialfunctions. The Management also thanks the shareholders,Business Associates, Financial Institutions & Banks,Customers and Suppliers for the faith reposed in the Company.The Board expresses its sincere appreciation to the dedicatedand committed team of employees and workmen of yourCompany.

On behalf of Board of Directors

Vinod Saraf Anurag SarafManaging Director Director

NagpurDated: 5th August, 2016

Annexure-1 to the Directors Report

MANAGEMENT DISCUSSION AND ANALYSIS:The country suffered from the unpresident and unfair inflowof steel import from the steel surplus countries. The steelimports pressure turned severe in the second half of the year.Government of India initiated certain actions by increasingthe Import Duty and also Safeguard Duty. However, even thesemeasures turns out to be ineffective, the Government imposedMinimum Import Price (MIP) on various steel products for six

months to create level playing field for the domestic market. Itis to be noted that the Company has declared a consensuslockout at its plant effective from 30th May 2014 as per theagreement reached with its workforce. Hence, the performanceof the Company was adversely affected due to this closure,which is continuing till date.During the year under review, the Company could achievesales of ` 150 Lakhs net of Excise as compared to ` 2961Lakhs in the previous year.

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Company has been engaged in scouting tie up with potentialinvestors / strategic partners who can introduce newer productportfolio in the market and infuse capital in the Company. TheCompany is also restructuring and rationalizing manpower andother fixed costs. The Company is planning to submit aRehabilitation Package to the BIFR for revival of the company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:Considering the size and nature of its business your companyhas an adequate internal control system. The company hasan adequate system of internal control implemented by theManagement towards achieving efficiency in operations,optimum utilization of resources, and effective monitoringthereof and in compliance with all applicable regulations.

Annexure-2 to the Directors ReportForm No. MGT-9

EXTRACT OF ANNUAL RETURNas on the financial year ended on 31st March 2016

[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 L27100MH2004PLC146283

ii) Registration Date 13TH MAY, 2004

iii) Name of the Company FACOR STEELS LIMITED

iv) Category/Sub-Category of the Company PUBLIC LIMITED COMPANY

v) Address of the Registered 46 A & B, MIDC INDUSTRIAL ESTATE,office and contact details HINGNA ROAD, NAGPUR-440028 (M.S.)

vi) Whether listed company YES, LISTED ON BSE LIMITED

vii) Name, Address and Contact M/S LINK INTIME INDIA PVT. LTD.details of Registrar and C-13, PANNALAL SILK MILLS COMPOUND,Transfer Agent, if any L. B. S. MARG, BHANDUP (W), MUMBAI-400078

PH. NO. 022-25963838 FAX NO. 022-25946969

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 NIC Code of the % to total turnover ofNo. products/services Product/ service the company

1 Semi Finished Products of Stainless Steel 721800-00 0%

2 Other Bars and Rods not further worked than Hot-Rolled, 722830-00 0%Hot-Drawn for Extruded of Other Steel

3 Bars and Rods not further worked than Hot- Rolled, 722210-00 0%Hot-Drawn or Extruded of Stainless Steel.

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES –

S. Name And Address CIN/GLN Holding/Subsidiary/ % of shares ApplicableNo. of The Company Associate held Section

NIL

CAUTIONARY STATEMENTStatement in the Management Discussion and Analysisdescribing the Company’s projections and estimates areforward looking statements and progressive within the meaningof applicable securities laws and regulations. Actual resultsmay defer materially from those expressed or implied,depending upon economic conditions, Government policiesand other incidental factors.

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IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)i) Category-wise Share Holding

Category of No. of shares held at the beginning No. of Shares held at the endShareholders of the year 01.04.2015 of the year 31.03.2016

Demat Physical Total % of Total Demat Physical Total % of TotalShare Share

A. Promoters & promoter group

(1) Indian

a) Individual/ HUF 8905728 Nil 8905728 4.31 8905728 Nil 8905728 4.31 Nilb) Central Govt.c) State Govt.d) Bodies Corp. 66256427 Nil 66256427 32.08 66256427 Nil 66256427 32.08 Nile) Banks/FIf) Any Other

(i) Directors & their Relatives 56877510 Nil 56877510 27.54 56877510 Nil 56877510 27.54 Nil(ii) Trusts 25000 Nil 25000 00.01 25000 Nil 25000 00.01 Nil(iii) Association of Person 4493148 Nil 4493148 2.18 4493148 Nil 4493148 02.18 Nil

Sub-total (A)(1):- 136557813 136557813 66.12 136557813 136557813 66.12

(2) Foreign

a) NRI’s-Individuals 119285 Nil 119285 00.06 119285 Nil 119285 00.06 Nilb) Others-Individualsc) Bodies Corp.d) Banks/FIe) Any Other

Sub-total(A)(2):- 119285 Nil 119285 00.06 119285 Nil 119285 00.06 Nil

Total Shareholding of 136677098 136677098 66.18 136677098 136677098 66.18 NilPromoters (A)=(A)(1)+ (A) (2)

B. Public Shareholding

1. Institutions

a) Mutual Fund / UTI 2869 Nil 2869 0.00 890 Nil 890 0.00 Nilb) Banks/FI 17828 1610 19438 0.01 17828 1610 19438 0.01 Nilc) Central Govt.d) State Govt’se) Venture Capital Fundsf) Insurance Companies 810 3300 4110 0.00 810 3300 4110 0.00 Nilg) FIIs Nil 60 60 0.00 Nil 60 60 0.00 Nilh) Foreign Venture Capital Funds

i) Others (specify)ii) State Finance Corporation Nil 2023 2023 0.00 Nil 2023 2023 0.00 Nil

Sub-total(B)(1):- 21507 6993 28500 0.01 19528 6993 26521 0.01 Nil

2. Non-Institutions

a) Bodies Corp. 5399353 4774 5404127 2.62 4701541 4770 4706311 2.28 (0.34)i) Indianii) Overseas

b) Individualsi) Individual shareholders 48761935 327373 49089308 23.77 51549784 335651 51885435 25.12 1.35

holding nominal sharecapital upto ` 2 lakh

ii) Individual shareholders 13127883 Nil 13127883 6.36 6899753 Nil 6899753 3.34 (3.02)holding nominal sharecapital in excess of` 2 lakh

%Change

duringthe year

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Category of No. of shares held at the beginning No. of Shares held at the endShareholders of the year 01.04.2015 of the year 31.03.2016

Demat Physical Total % of Total Demat Physical Total % of TotalShare Share

c) Others (specify)i) Trusts 9 6235 6244 0.00 2008 6235 8243 0.00 Nilii) Directors & their Relatives Nil 2647 2647 0.00 Nil 2647 2647 0.00 Niliii) NRI 1440850 21661 1462511 0.71 1617859 21661 1639520 0.79 0.08iv) Clearing Members 474541 Nil 474541 0.23 533710 Nil 533710 0.26 0.03v) NRIs/OCBs 250498 322 250820 0.12 249393 322 249715 0.12 Nilvi) HUF Nil Nil Nil 0.00 3894726 Nil 3894726 1.89 1.89

Sub-total(B)(2):- 69455069 363012 69818081 33.18 69448774 371286 69820060 33.81 0.63

Total Public Shareholding 69476576 370005 69846581 33.82 69468302 378279 69846581 33.82 Nil(B)=(B)(1)+(B)(2)

C. Shares held by Custodian Nil Nil Nil NA Nil Nil Nil NA NAfor GDRs & ADRs

Grand Total (A+B+C) 206153674 370005 206523679 100.00 206145400 378279 206523679 100.00 Nil

ii) Shareholding of Promoters

Shareholder’s Name Shareholding at the beginning of Shareholding at the end of thethe year 01.04.2015 year 31.03.2016

No. of % of total % of Shares No. of % of total % of Sharesshares Shares Pledged/ shares Shares Pledged/

of the encumbered of the encumberedCompany total shares Company total shares

1 Manojkumar Umashankar Saraf 5558811 2.69 100.00 5558811 2.69 100.00 Nil

2 Yogeshkumar Umashankar Saraf 1913277 0.93 100.00 1913277 0.93 100.00 Nil

3 Aisha Ashishkumar Saraf 545750 0.26 100.00 545750 0.26 100.00 Nil

4 Ramadevi Manojkumar Saraf 459880 0.22 100.00 459880 0.22 100.00 Nil

5 Madhavhari Yogeshkumar Saraf 185981 0.09 100.00 185981 0.09 100.00 Nil

6 Madhuri Manojkumar Saraf 78974 0.04 100.00 78974 0.04 100.00 Nil

7 Raghuhari Yogeshkumar Saraf 62589 0.03 100.00 62589 0.03 100.00 Nil

8 Manojkumar Umashankar Saraf 51777 0.03 100.00 51777 0.03 100.00 Nil

9 Vibhav Vineetkumar Saraf 37869 0.02 100.00 37869 0.02 100.00 Nil

10 Sidarth Vineetkumar Saraf 3674 0.00 100.00 3674 0.00 100.00 Nil

11 Sunandadevi Yogeshkumar Saraf 2696 0.00 100.00 2696 0.00 100.00 Nil

12 Raghavendra Saraf 2400 0.00 100.00 2400 0.00 100.00 Nil

13 Yogeshkumar Umashankar Saraf 2050 0.00 100.00 2050 0.00 100.00 Nil

TOTAL 8905728 4.31 100.00 8905728 4.31 100.00 Nil

Bodies Corporate

1 R B Shreeram & Co. Pvt. Ltd. 59202982 28.67 100.00 59202982 28.67 100.00 Nil

2 Shreeram Shipping Service Pvt. Ltd. 3263374 1.58 100.00 3263374 1.58 100.00 Nil

3 Dass Papers Pvt. Ltd. 1500000 0.73 100.00 1500000 0.73 100.00 Nil

4 Shreeram Durgaprasad Ores Pvt. Ltd. 1500000 0.73 100.00 1500000 0.73 100.00 Nil

5 Saraf Bandhu Pvt. Ltd. 493725 0.24 100.00 493725 0.24 100.00 Nil

6 Suchitra Investments & Leasing Ltd. 158554 0.08 100.00 158554 0.08 100.00 Nil

7 GDP Infrastructure Pvt. Ltd. 128720 0.06 100.00 128720 0.06 100.00 Nil

8 Vidarbhe Iron & Steel Comn. Ltd. 9072 0.00 100.00 9072 0.00 100.00 Nil

TOTAL 66256427 32.08 100.00 66256427 32.08 100.00 Nil

%Change

duringthe year

%change

in share-holdingduring

the year

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Directors & their relatives

1 Anurag Murlidhar Saraf 11340279 5.49 100.00 11340279 5.49 100.00 Nil

2 Rohitkumar Narayandas Saraf 8139047 3.94 100.00 8139047 3.94 100.00 Nil

3 Sushmadevi Vinodkumar Saraf 4806497 2.33 100.00 4806497 2.33 100.00 Nil

4 Urmiladevi Narayandas Saraf 4197337 2.03 100.00 4197337 2.03 100.00 Nil

5 Vanitadevi Vineetkumar Saraf 3405759 1.65 100.00 3405759 1.65 100.00 Nil

6 Sonal Ashimkumar Saraf 3002840 1.45 100.00 3002840 1.45 100.00 Nil

7 Murlidhar Durgaprasad Saraf 2800834 1.36 100.00 2800834 1.36 100.00 Nil

8 Shailajadevi Ashishkumar Saraf 2382631 1.15 100.00 2382631 1.15 100.00 Nil

9 Vinodkumar Saraf 2344346 1.14 100.00 2344346 1.14 100.00 Nil

10 Promiladevi Ramkisan Saraf 2036014 0.99 100.00 2036014 0.99 100.00 Nil

11 Vineetkumar Vithaldas Saraf 1977476 0.96 100.00 1977476 0.96 100.00 Nil

12 Ramkisan Durgaprasad Saraf 1921714 0.93 100.00 1921714 0.93 100.00 Nil

13 Narayandas Durgaprasad Saraf 1906729 0.92 100.00 1906729 0.92 100.00 Nil

14 Ashishkumar Ramkisan Saraf 1417361 0.69 100.00 1417361 0.69 100.00 Nil

15 Manjudevi Murlidhar Saraf 1383628 0.67 100.00 1383628 0.67 100.00 Nil

16 Ashimkumar Ramkisan Saraf 1279090 0.62 100.00 1279090 0.62 100.00 Nil

17 Mohinidevi Umashankar Saraf 1258712 0.61 100.00 1258712 0.61 100.00 Nil

18 Bimladevi Vithaldas Saraf 729763 0.35 100.00 729763 0.35 100.00 Nil

19 Vineetkumar Vithaldas Saraf 293131 0.14 100.00 293131 0.14 100.00 Nil

20 Gautam Vinodkumar Saraf 98174 0.05 100.00 98174 0.05 100.00 Nil

21 Saritadevi Sanjivkumar Saraf 46529 0.02 100.00 46529 0.02 100.00 Nil

22 Gauri Sanjiv Saraf 44440 0.02 100.00 44440 0.02 100.00 Nil

23 Payal Murlidhar Saraf 41969 0.02 100.00 41969 0.02 100.00 Nil

24 Sushmadevi Vinodkumar Saraf 6852 0.00 100.00 6852 0.00 100.00 Nil

25 Preetidevi Rohitkumar Saraf 6300 0.00 100.00 6300 0.00 100.00 Nil

26 Gaurav Vinodkumar Saraf 2578 0.00 100.00 2578 0.00 100.00 Nil

27 Sakhi Sanjiv Saraf 2564 0.00 100.00 2564 0.00 100.00 Nil

28 Gauri Sanjiv Saraf 2400 0.00 100.00 2400 0.00 100.00 Nil

29 Vinodkumar Saraf 1780 0.00 100.00 1780 0.00 100.00 Nil

30 Narayandas Durgaprasad Saraf 736 0.00 100.00 736 0.00 100.00 Nil

TOTAL 56877510 27.54 100.00 56877210 27.54 100.00 Nil

Trusts

Ramkisan Durgaprasad Saraf 13788 0.01 0.00 13788 0.01 0.00 Nil

Manoj Kumar Umashankar Saraf 11212 0.01 0.00 11212 0.01 0.00 Nil

TOTAL 25000 0.01 0.00 25000 0.01 0.00 Nil

Individuals (NRI)

Sanjiv Narayandas Saraf 112313 0.05 100.00 112313 0.05 100.00 Nil

Sanjivkumar Narayandas Saraf 6972 0.00 100.00 6972 0.00 100.00 Nil

TOTAL 119285 0.06 100.00 119285 0.06 100.00 Nil

%change


the year

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Association of Persons

1 Mohinidevi Umashankar Saraf Jtly withManjudevi Murlidhar Saraf, on behalfof Premier Commercial Corporation 1500000 0.73 100.00 1500000 0.73 100.00 0.73

2 Vanitadevi Vineetkumar Saraf Jtly withSunandadevi Yogeshkumar Saraf, onbehalf of Geedee Sales Services 1493148 0.72 100.00 1493148 0.72 100.00 0.72

3 Murlidhar Durgaprasad Saraf Jtly withGaurav Vinod Saraf, on behalf ofDeepee Sales Corporation 1500000 0.73 100.00 1500000 0.73 100.00 0.73

TOTAL 4493148 2.18 100.00 4493148 2.18 100.00 2.18

GRAND TOTAL 136677098 66.18 100.00 136677098 66.18 100.00 Nil

iii) Change in Promoters’ Shareholding (please specify, if there is no change)

Shareholding at the Cumulative Shareholdingbeginning of the year during the year

No. of % of total No. of % of totalshares shares of shares shares of

the company the company

At the beginning of the year 136677098 66.18 - -

Data wise Increase/Decrease in Promoters Shareholding There is no change in number of shares held byduring the year specifying the reasons for increase/ the Promoters.decrease (e.g. allotment/transfer/bonus/sweat equity etc):

At the end of the year - - 136677098 66.18

iv) Shareholding Pattern of top ten shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):


No. of % of total shares No. of % of total sharesshares of the company shares of the company

1 SUDHA SHANTILAL SHAH

a) At the beginning of the year 2229593 1.08

b) Changes during the year No Change during the year

c) At the end of the year 2229593 1.08

2 CHIRAG SHANTILAL SHAH (HUF)




3 CHIRAG SHANTILAL SHAH




%change


the year

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4 NIMESH RATILAL PARMANI




5 GANNON DUNKERLEY FINANCE LIMITED




6 ANJU KALPESH CHOWDHARY




7 LALITKUMAR SHANTILAL SHAH




8 SONALBEN DILIPBHAI PATEL


b) Changes during the year DateReason 17-04-15 Buy 17774 0.00 280774 0.13


9 VINAYCHANDRA JAYANTILAL SHAH




10 MILLENNIUM MONEY MANAGEMENT PVT. LTD




• Information as furnished by the Registrar and Share Transfer Agent.

v) Shareholding of Directors and Key managerial Personal:



1. SHRI NARAYANDAS D. SARAF, CHAIRMAN




2 SHRI MURLIDHAR D. SARAF, VICE CHAIRMAN & DIRECTOR




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3 SHRI VINOD V. SARAF, MANAGING DIRECTOR




4 SHRI ANURAG M. SARAF, DIRECTOR




5 SHRI MAHENDRA B. THAKER, DIRECTOR




vi) IndebtednessIndebtedness of the company including interest outstanding/accrued but not due for payment (` in Lacs)

Secured Unsecured Deposits TotalLoans Loans Indebtedness

excludingdeposits

Indebtedness at the beginning of the financial year

i) Principal Amount 6479.87 1426.57 0.00 7906.44

ii) Interest Due but not paid 304.88 3.37 0.00 308.25

iii) Interest Accrued but not due 0.00 0.00 0.00 0.00

Total (i+ii+iii) 6784.75 1429.94 0.00 8214.69

Change in Indebtedness during the financial year

i. Addition 296.05 2.13 0.00 298.18

ii. Reduction 0.00 0.00 0.00 0.00

Net Change 296.05 2.13 0.00 298.18

Indebtedness at the end of the financial year

i) Principal Amount 6479.87 1428.70 0.00 7908.57

ii) Interest Due but not paid 600.93 3.37 0.00 604.30

iii) Interest Accrued but not due 0.00 0.00 0.00 0.00

Total (i+ii+iii) 7080.80 1432.07 0.00 8512.87

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vii) Remuneration of Directors and Key Managerial PersonnelA. Remuneration to Managing Director, Whole-time Director and/or Manager:

In view of continued losses, Managing Director and other Whole-time Directors have decided as per their terms ofappointment not to draw remuneration.

B. Remuneration to other directors

S. Particulars of Name of directors TotalNo. Remuneration Amount

Mr. A.S. Mr. M.B. Mr. M. S. Mr. K. A.Kapre Thaker Adige Pardhi

1. Independent Directors

- Fee for attending Board, Committee meetings 25000 25000 20000 7500 125000

- Commission — — — — —

- Others, Please specify — — — — —

Total (1) 25000 25000 20000 7500 125000

2. Other Non-Executive Directors

- Fee for attending Board, Committee meetings

- Commission Not Applicable

- Others, Please specify

Total (2) — — — — —

Total (B)=(1+2) 25000 25000 20000 7500 125000

Total Managerial Remuneration — — — — —

Overall Ceiling as per the Act — — — — —

C. Remuneration to Key Managerial Personnel Other than MD/WTD/Manager- NIL

viii).Penalties/Punishment/Compounding of Offences:

Type Section Brief Details of Authority Appeal made,of the Description Penalty/ [RD/NCLT/ if any

Companies Punishment/ COURT] (give Details)Act Compounding

fees imposed

A. Company

Penalty NIL Not Applicable NIL Not Applicable Not Applicable

Punishment NIL Not Applicable NIL Not Applicable Not Applicable

Compounding NIL Not Applicable NIL Not Applicable Not Applicable

B. Directors




C. Other Officers in Default




Segment C: Reporting of Corporate Social Responsibility (CSR) N.A.

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Annexure-3 to the Directors ReportCORPORATE GOVERNANCE REPORT

1. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE:

Your Company is committed towards good corporate governance practices and recognizes that good corporate governanceis a continuous exercise. Your Company aims at achieving transparency, accountability, equity and ethics in all facets ofits operations and in all interaction with its stakeholders. Your Company believes that all its operations and actions mustresult in enhancement of overall shareholder value over a sustained period of time without compromising in any waycompliance with laws and regulations.

The new Companies Act, 2013 and revised clause 49 of the Listing Agreement has significantly enhanced compliancelevels for the listed companies to ensure better corporate governance. Your company has already initiated steps toensure that all necessary compliances are carried out in accordance with the provisions of the new companies act, 2013to ensure better corporate governance in the company.

2. BOARD OF DIRECTORS:

The Company has a non-executive Chairman and the composition of the Board of Directors of the company complieswith the norms as set out by the Listing Agreement and has been strictly adhered to at all times. As on 31st March, 2016,the Company had an optimum ratio of independent and non-independent Directors in its Board as required by the listingagreement.

The composition of the Directors as on 31st March 2016 is as follows:-

Name and Particulars Category No of Whether No. of Outside CommitteeBoard last Outside Position Held

Meetings AGM Directorshipattended Attended held in Public

Companies

Member Chairman

Mr. N. D. Saraf, Chairman Non-Executive* 1 No 2 — —

Mr. M. D. Saraf, Executive* 2 Yes 2 — —Vice Chairman & Director

Mr. Vinod Saraf, Executive* 5 Yes 4 — —Managing Director

Mr. Anurag Saraf Non-Executive* 3 Yes 5 — —

Mr. A.S. Kapre Non-Executive 5 Yes 5 3 3Independent

Mr. M.B. Thaker Non-Executive 5 Yes 1 3 —Independent

Mr. Mohandas S. Adige Non-Executive 4 Yes 3 3 —Independent

Mr. Keshaorao A. Pardhi Non-Executive 3 Yes 3 — —Independent

Mrs. (Dr.) Champaka Non-Executive Nil No 1 —Rangachari * Independent Woman

* Represent Promoters

* Mrs. (Dr.) Champaka Rangachari was appointed as Non-Executive Independent Director (woman) on 30th March, 2015,but due to family commitment, she remained outside since then and hence could not attend any Board of DirectorsMeeting till date and ceased to be a director with effect from 6th May, 2016. The Company is in search of suitable womandirector to fill up the vacancy.

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None of the Director on the Board is a member of more than 10 Committees or a Chairman of more than 5 Committeesacross all Companies in which he is a Director. The necessary declarations regarding Committee position held have beenmade by the Directors.

Board Meetings and Procedures:The matters to be discussed at the Board Meeting are included in the Agenda in consultation with the Chairman of theCompany. The Managing Director briefs the Board at every Meeting on the overall performance of the Company followedby presentation by Senior Executives of the Company. All the major decisions of the company are reviewed by the Boardof Directors, including review of major legal issues, adoption of quarterly/ half yearly/ annual financial results and minutesof Audit Committee.

Conduct of Board Meetings:The Board generally meets once in each quarter. Additional Board Meetings are convened as and when necessitated bygiving appropriate notice. During the financial year 2015-2016 the Board met 5 times on 29th May’ 2015, 5th August’ 2015,28th September’ 2015, 30th October’ 2015 and 25th January, ’2016 to deliberate on various matters.

Code of Conduct:The Company has framed a Code of Conduct in compliance with the SEBI (Prohibition of Insider Trading) Regulations,2003. All intimation/ communication as required by the Code are received within the time prescribed. The Code ofConduct is also uploaded in the company’s website: www.facorsteel.com

All the Board members and senior management have affirmed compliance to the Code.

3. COMMITTEES OF THE BOARDA. AUDIT COMMITTEE:

Composition, Meetings and Attendance

The Audit Committee is composed of four members’ viz. Mr. A. S. Kapre, Mr. M. B. Thaker, Mr. Mohandas S. Adige, andMr. Anurag Saraf. Except Mr. Anurag Saraf, who is a Promoter Director of the Company, rest all members of the AuditCommittee are Independent Directors. Mr. A. S. Kapre, independent director is the Chairman of the Committee.

The Committee’s terms of reference, authority and powers are in conformity with the requirements of the provisions ofClause 49 of the Listing Agreement with the Stock Exchange read with Section 292A of the Companies Act, 1956.

The Committee acts as a vital link between the Management, Statutory and Internal Auditors and the Board of Directors.The financial results of the Company are scrutinized by the Committee before being recommended to the Board for itsadoption. Similarly, other matters required to be placed in conformity with the provisions of the Listing Agreement areplaced at regular intervals to ensure that the highest level of transparency in the conduct of business is maintained.

There were five (5) meetings held of Audit Committee during the financial year 2015-2016 on 29th May, 2015, 5th August,2015, 28th September, 2015, 30th October, 2015 and 25th January, 2016 and the attendance of members was as under:

Name of the Director Category No. of meetings held during the tenure

Held Attended

Mr. A.S. Kapre, Chairman Independent 5 5

Mr. M.B. Thaker, Member Independent 5 5

Mr. M. S. Adige, Member Independent 5 4

Mr. Anurag Saraf , Member Non Executive 5 3

B. NOMINATION AND REMUNERATION COMMITTEE:

Nomination and Remuneration Committee Meeting was not held during the year under review in view of the consensuslockout at plant reached with the workforce and the same is still in force.

In view of distressed financial position of the company, the executive directors have decided to forgo their entire salaryand perquisites during the year and hence during the year there was no amount paid towards their salary.

The Non-Executive Directors are paid remuneration by way of sitting fee only for each meeting attended by them. Further,no significant material transactions have been made with the Non-Executive Directors vis-à-vis your Company.

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During the financial year 2015-2016, they were paid sitting fee/remuneration as under:

Name of Director Sitting Fee Paid No. of Equity Shares of`̀̀̀̀ 1/- each held

Mr. A.S. Kapre Rs.25,000/-* —

Mr. M.B. Thaker Rs.25,000/-* 2647

Mr. M.S. Adige Rs.20,000/-* —

Mr. K. A. Pardhi Rs. 7,500/- —

Total Rs.1,25,000/-

* 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.

C. STAKEHOLDERS RELATIONSHIP COMMIITTEE:

Status of Investors’ complaints received and resolved during the year 2015-16 is as under:-

Investors complaints Resolved Not solved to the No. of pendingreceived satisfaction of complaints

Shareholders

Nil Nil Nil Nil

4. GENERAL BODY MEETINGS

The Annual General Meeting of the Company in the last three years has been held as under:-

AGM Venue Day, date & time Whether ResolutionHeld passed in the last AGM

Special ThroughResolution Postal Ballot

10th AGM 46 A&B, MIDC Industrial Estate, Wednesday, 10th July, 2013 Yes NoHingna Road, Nagpur-440 028 at 12.30 p.m.

11th AGM 46 A&B, MIDC Industrial Estate, Thursday, 11th September, 2014 Yes NoHingna Road, Nagpur-440 028 at 2.30 p.m.

12th AGM 46 A&B, MIDC Industrial Estate, Monday, 28th September, 2015 No NoHingna Road, Nagpur-440 028 at 2.30 p.m.

5. DISCLOSURES

i) Related Party Transaction:The Company has not entered into any transaction of material nature, with its Promoters, Directors or the Management,their Shareholders or Relatives etc., that may have potential conflict with the interest of the Company at large.

ii) Compliance by the Company:The Company has complied with the requirement of the Stock Exchange, SEBI and other statutory authorities on allmatters in the last three years. There were no instances of non-compliance and no penalties or strictures have beenimposed on the Company by the Stock Exchange or SEBI or by any statutory authorities on any matter related tocapital markets or related thereto during the last three years. However, due to stringent financial condition, companycould not pay the listing fee to Bombay Stock Exchange and custodian fee to National Security Depository Limitedand Central Security Depository Limited during the year under review.

iii) SEBI Code of Conduct:Pursuant to the requirement of SEBI [Prohibition of Insider Trading] Regulations, 1992 as amended, the Companyhas adopted a code of conduct for prevention of Insider Trading [The Code]. The code is applicable to all Directors

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and such designated employees who are expected to have access to unpublished price sensitive information relatingto the Company as defined in the Code. Compliance required under the Code in respect to various intimations anddisclosures to be made both, internally and with stipulated authorities are strictly adhered to at all times.

iv) Whistle Blower Policy:The Company has adopted the Whistle Blower Policy. However, no instances of fraud or other irregularities havebeen observed, which need to be reported to the Board/Audit Committee.

v) The Company has complied with all the mandatory recommendation under Clause 49 of the Listing Agreement. TheCompany has not adopted the non-mandatory provisions of the said clause except formation of Nomination andRemuneration Committee and Stakeholder Relationship Committee.

vi) Constituents of “Group” as defined in erstwhile MRTP Act, 1969 for the purpose of erstwhile SEBI (SAST)Regulations, 1997.Person constituting group within the definition of “Group” as defined in the erstwhile Monopolies Restrictive TradePractices Act, 1969, for the purpose of regulation 3(I)(e) of the erstwhile Securities and Exchange Board of India(Substantial Acquisition of Shares and Takeover) Regulations, 1997, include the following:I Promoters:

1. Mrs. Mohinidevi Saraf2. Mrs. Bimladevi Saraf3. Mr. Narayandas Saraf4. Mr. R.K. Saraf5. Mr. Murlidhar Saraf

II Relatives of above Five Promoters as defined under Companies Act, 1956III Group/Associated Entities:

1. Ferro Alloys Corporation Limited 25. Imagetec Ltd.2. Facor Alloys Limited 26. Globalscale Investments Ltd.3. Rai Bahadur Shree Ram And Company Pvt. Ltd. 27. Tusta Trading Company Inc.4. Shree Ram Durga Prasad Ores Pvt. Ltd. 28. UMT International Ltd.5. Saraf Bandhu Pvt. Ltd. 29. Cornell Corporation SA.6. Facor Power Ltd. 30. FACOR Employees Welfare Trust7. Facor Realty and Infrastructure Ltd. 31. FAL Employees Welfare Trust8. GDP Infrastructure Pvt. Ltd. 32. Best Minerals Ltd.9. Vidharba Iron & Steel Corpn. Ltd. 33. ARKA Resources Pvt. Ltd.10. Shreeram Shipping Services Pvt. Ltd. 34. YMR Enterprise Pvt. Ltd.11. Suchitra Investments and Leasing Ltd. 35. V& G Commercial Pvt. Ltd.12. Dass Papers Pvt. Ltd. 36. ARK Mercantile Private Ltd.13. Premier Commercial Corporation 37. Vanita Enterprises Private Ltd.14. Geedee Sales Services 38. NDS Minerals Private Ltd.15. Godawaridevi Saraf and Sons 39. Raghavendra Sarkar Ventures Pvt. Ltd.16. Facor Energy India Ltd. 40. Mezeron Enterprises Pvt. Ltd.17. Facor Electric Limited 41. Vakrangee Press Ltd.18. Facor Solar Limited 42. Pioneer Facor IT Infradevelopers Pvt. Ltd.19. FAL Power Ventures Pvt. Ltd. 43. Facor Energy Ltd.20. Deepee Sales Corporation 44. Facor Minerals Pte Ltd., Singapore21. Investar Ltd. 45. Facor Minerals (Netherlands) B.V.22. Super Vision Ltd. 46. Facor Turkkrom Mining (Netherlands) B. V.23. Precisetec Ltd. 47. Cati Mandencilik Ithalat Ve Ihracat Anonim Sirketi24. Teracota Consultancy Services Ltd. 48. Asim Minerals Pvt. Ltd.

6. MEANS OF COMMUNICATIONSThe financial results, important announcements, declarations are communicated to the Shareholders by means ofadvertisements in leading national dailies. The quarterly results of the company are published in all India editions ofFinancial Express and Puyna Nagri local Marathi language newspaper in Nagpur where the registered office of thecompany is situated.

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The Company also posts the vital information such as financial results, shareholding pattern, important information,declarations etc. on its website at www.facorsteel.com which is updated at regular intervals.

The official news releases, as and when required, are being released to the Stock Exchange. Further, the same areposted at the website of the Company from time to time.

7. GENERAL SHAREHOLDERS INFORMATION

Date of AGM Time Venue

23rd September, 2016 11.30 a.m. 46 A&B, MIDC Industrial Estate, Hingna Road,Nagpur-440 028 Maharashtra

Particulars of Directors proposed to be appointed / re-appointed in the forthcoming Annual General Meeting as requiredunder Clause 49 IV(G) (i) of the Listing Agreement:-

Name of Date of Date of Experience in Qualifica- List of Other Public Chairman / Member of the No. ofDirector Birth Appointment specific tions Limited Companies committee of Board of shares

functional in which other Public Limited heldareas Directorship held Companies on which he

as on 31-3-2016 was a Director ason 31-3-2016

Mr. M. D. 4-01-1949 27-07-2007 More than 35 B. Com Vidarbha Iron & Steel Nil 4300834Saraf Years experience LLB Corporation Ltd.,

in Steel Industry FACOR EnergyIndia Ltd.

Financial Year ending : 31st March, 2016Date of Book Closure: 17th September, 2016 to 23rd September, 2016(both days inclusive)Dividend payment date: Not applicable since no dividend is recommended by the Board

CIN NO. L27100MH2004PLC146283Listing Details:

Name of Stock Exchange Stock Code ISIN No.

Bombay Stock Exchange Ltd. 532657 INE829G01011

Market Price Data:

Month Bombay Stock Exchange BSE Sensex

(Rupees)

High Low High Low

April’2015 0.60 0.42 29094.61 26897.54

May’2015 0.59 0.42 28071.16 26423.99

June’2015 0.67 0.40 27968.75 26307.07

July’2015 0.49 0.33 28578.33 27416.39

August’2015 0.61 0.38 28417.59 25298.42

September’2015 0.45 0.36 26471.82 24833.54

October’2015 0.44 0.32 27618.14 26168.71

November’2015 0.39 0.33 26824.30 25457.42

December’2015 0.49 0.39 26256.42 24867.73

January’2016 0.47 0.37 26197.27 23839.76

February’2016 0.50 0.38 25002.32 22494.61

March’2016 0.40 0.30 25327.45 23133.18

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Registrar & Transfer Agents (RTA) : Link Intime India Pvt. Limited.C-13, Pannalal Silk Mills Compound, LBS Road,Bhandup (W),Mumbai – 400 078

Share Transfer System : Transfer of shares in physical form are normally processed within aperiod of 15 days from the date of lodgment with the approval of theShare Transfer Committee of the Board of Directors subject to thedocuments being valid and complete in all respects.

Distribution of Shareholding as on 31st March:

2015 – 2016 2014 – 2015

No. of equity No. of No. of % of issued No. of No. of % of issuedshares held shareholders shares held equity share shareholders shares held equity share

capital capital

Upto 500 39480 3607081 1.75 39927 3681293 1.78

501 to 1000 5317 4995002 2.42 5429 5102334 2.47

1001 to 2000 2914 5017001 2.43 2974 5116130 2.48

2001 to 3000 1160 3145096 1.52 1177 3197941 1.55

3001 to 4000 524 1954260 0.95 536 2003077 0.97

4001 to 5000 852 4172524 2.02 846 4148890 2.01

5001 to 10000 988 7822865 3.79 988 7800831 3.78

10001 to above 986 175804850 85.12 986 175473183 84.96

Total 52221 206523679 100.00 52863 206523679 100.00

Dematerialization of shares and liquidity as on 31st March:

2015 – 2016 2014 – 2015

No. of equity No. of No. of % of issued No. of No. of % of issuedshares held shareholders shares held equity share shareholders shares held equity share

capital capital

Physical Mode 21651 378279 0.18 21788 370005 0.18

Electronic Mode 30570 206145400 99.82 31075 206153674 99.82

Total 52221 206523679 100.00 52863 206523679 100.00

Shareholding pattern as on 31st March:

Category 2015 – 2016 2014 – 2015

No. of Percentage No. of Percentage ofshares held of Shares held shares held Shares held

Promoters, their relatives, associates etc. andpersons acting in concert. 136677098 66.18 136677098 66.18

Financial Institutions/Banks 19438 0.01 19438 0.01

State Government Company / StateFinancial Corporation 0 0.00 0 0.00

Mutual Funds/ UTI 890 0.00 2869 0.00

Insurance Companies 4110 0.00 4110 0.00

Bodies Corporate 4706311 2.28 5404127 2.62

Others 65115832 31.53 64416037 31.19

Total: 206523679 100.00 206523679 100.00

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The Company has not issued any GDRs /ADRs / Warrants. None of the instruments issued by the Company is pendingfor conversion into equity shares.

Plant Locations:

The mini steel plant of the company is located at 46 A&B, MIDC Industrial Estate, Hingna Road, Nagpur – 440028(Maharashtra) Telephone No.: 07104 – 235701 – 08, Fax No.: 07104 – 235709, email: [email protected].

Address for Correspondence:

For matters relating to Company’s Shares For other matters

Link Intime India Pvt. Ltd, Registered Office:C-13 Pannalal Silk Mills Compound, LBS Road, Facor Steels Ltd.Bhandup (W), MUMBAI – 400 078 46 A&B, MIDC Industrial Estate,Tel.No.: +91-22-25946970, Fax No.:+91-22-25946969 Hingna Road, Nagpur – 440 028E-mail : [email protected] Tel.No. : +91-07104-235701

Fax.No.: +91-07104-235709E-mail : [email protected]

Useful Information for Shareholders

a) Unclaimed sharesReference of the shareholders is invited to clause 5AII in the Listing Agreement which provides that Company shalltransfer all these unclaimed shares into one Folio in the name of “Unclaimed Suspense Account” and these sharescan be dematerialized and kept with one of the Depository Participants and all corporate benefits in terms ofsecurities accruing on such shares viz. Bonus shares, Split etc. shall also be credited to such Unclaimed SuspenseAccount.

The Company, therefore, requests the shareholders holding shares in physical form to take stock of their shareholdingin the Company and in case not in possession of share certificates of the aforesaid companies, may, quotingreference to their folio no., current postal address (with pin code) and e-mail address, if any, please write to Registrar& Share Transfer Agent of the Company at the address mentioned hereinabove for receiving the custody of sharecertificates.

b) Registration of Email Addresses:The Company strongly advocates for the ‘Green Initiative in Corporate Governance’ of the Ministry of CorporateAffairs, whereby Companies are permitted to send Notices / documents including Annual Report comprising BalanceSheet, Profit & Loss Account, Directors Report, Auditors Report etc. in electronic mode (hereinafter ‘documents’),provided the Company has obtained email addresses of its members for sending these documents through email bygiving an advance opportunity to every shareholder to register their email address and changes therein from time totime with the Company.

Accordingly, Members are requested to support this green initiative by registering/ updating their email addressesto:a) The Registrars and Share Transfer Agents, M/s. Link Intime India Pvt. Ltd., Mumbai in respect of shares in

physical form; andb) Their Depository Participants in respect of shares in electronic formso that upon registration of the email address, the Company could send notices and other documents, in electronicform, to such shareholders

DECLARATIONAs provided in clause 49 of the Listing Agreement with the Stock Exchange, it is hereby declared that all the Board Membersand Senior Management personnel of the Company have affirmed the Compliance with the Code of Conduct for the yearended 31st March, 2016.

Place : Nagpur Vinod SarafDate : 05.08.2016 Managing Director

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Annexure-4 to the Directors ReportInformation under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules, 2014 and forming part of the Directors Report for the year ended March 31,2016

No employee of the company is paid gross remuneration aggregate of not less than Rs.5,00,000/- per month.

For and on behalf of the Board of Directors

Place : Nagpur Vinod SarafDate : 5th August, 2016 Managing Director

Annexure-5 to the Directors ReportAdditional information as required under the Companies (Disclosure of particulars in the Report of Board of Directors) Rules,1988.

A) CONSERVATION OF ENERGY:a) Measures Takenb) Additional investment and proposals if any

being implemented for reduction ofconsumption of energy : Nil

c) Impact of measures at (a) and (b) above forreduction of energy consumption and consequentimpact on the cost of production of goods.

d) Total energy consumption and energy consumption : Nilper 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 company : Nilb) Benefits derived as a result of the above R&Dc) Future Plan of action : Nild) Expenditure on R&D : Nile) Technology absorption, adaptation and innovation: :

i) Efforts, in brief, made towards technologyabsorption, adaptation and innovation. : Nil

ii) Benefits derived as a result of the above efforts,e.g. product improvement, cost reduction,product development, import substitution etc. : Nil

iii) Information regarding technology importedduring last 5 years : None

C) FOREIGN EXCHANGE EARNINGS AND OUTGO:1) Total Foreign Exchange used and earned : Rs. in lacs

i) CIF value of imports : Nilii) Expenditure in Foreign currency : Niliii) Foreign exchange earned on FOB basis : Nil

On behalf of Board of Directors

Nagpur Vinod Saraf Anurag SarafDated: 5th August, 2016 Managing Director Director

}}

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FORM ‘A’FORM OF DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY.

-----------------------------------------------------------------------------------------------------------------------------------------------------------------PARTICULARS STEEL

-----------------------------------------------------------------------------------------------------------------------------------------------------------------CURRENT YEAR PREVIOUS YEAR

2015-2016 2014-2015------------------------------------------------------------------ ---------------------------------------------------------------

A. POWER AND FUEL CONSUMPTION:

1. ELECTRICITYa) Purchased

Units (KWH in lacs) – 23.56Total Amount (` in Lacs) – 284.59Average rate per unit (`) – 12.08

b) Own generation

i) Through Diesel GeneratorUnits (KWH) – –Units per ltr. of diesel oil – –Cost/unit (`) – –

ii) Through Steam Turbine/GeneratorUnits – –Units per ltr. of fuel oil/gas – –Cost/unit (`) – –

2. Coal (specify quality) – –

3. Furnace OilQuantity (K. Liter) – 133.44Total cost (` in Lacs) – 63.94Average Rate (`/K. Liters) – 47919.53

4. Others/Internal Generation – –

B. CONSUMPTION PER UNIT OF PRODUCTION:

ELECTRICITY (KWH per tonne)Rolled & Forged Products – 2703.34

FURNACE OIL (K. Liter per tonne)Rolled & Forged Products – 0.122Coal (Specify quality) – –Others (Specify) – –

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Annexure 6 to Directors ReportForm No.MR-3

SECRETARIAL AUDIT REPORTFOR THE FINANCIAL YEAR ENDED ON 31STMARCH, 2016

[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,Facor Steels Limited,46-A & B, MIDC Ind. EstateHingna Road, Hingna Road,NAGPUR-440028

I have conducted the secretarial audit of the compliance of applicablestatutory provisions and the adherence to good corporate practicesby Facor Steels Limited (hereinafter called the Company) havingCIN: L27100mh2004PLC146283. Secretarial Audit was conductedin a manner that provided me a reasonable basis for evaluating thecorporate conducts/statutory compliances and expressing my opinionthereon.

Based on my verification of the Company’s books, papers, minutebooks, forms and returns filed and other records maintained by thecompany and also the information provided by the Company, itsofficers, agents and authorized representatives during the conductof secretarial audit, I hereby report that in my opinion, the companyhas, during the audit period covering the financial year ended on 31st

March, 2016 complied with the statutory provisions listed hereunderand also that the Company has proper Board-processes andcompliance-mechanism in place to the extent, in the manner andsubject to the reporting made hereinafter:

I have examined the books, papers, minute books, forms and returnsfiled and other records maintained by the Company for the financialyear ended on 31st March, 2016 according to the provisions of:

1. The Companies Act, 2013(the Act) and the rules made thereunder, as applicable;

2. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) andthe rules made thereunder;

3. The Depositories Act, 1996 and the Regulations and Bye-lawsframed thereunder;

4. Foreign Exchange Management Act, 1999 and the rules andregulations made thereunder to the extent of Foreign DirectInvestment, Overseas Direct Investment and ExternalCommercial Borrowings;

5. The following Regulations and Guidelines prescribed under theSecurities and Exchange Board of India Act, 1992 (‘SEBI Act’):-

a. The Securities and Exchange Board of India (SubstantialAcquisition of Shares and Takeovers) Regulations, 2011;

b. The Securities and Exchange Board of India (Prohibition ofInsider Trading) Regulations,1992;

c. The Securities and Exchange Board of India (Issue ofCapital and Disclosure Requirements) Regulations, 2009 –Not applicable as the Company did not issue anysecurity during the financial year under review;

d. The Securities and Exchange Board of India (Employee StockOption Scheme and Employee Stock Purchase Scheme)Guidelines, 1999 and the Securities and Exchange Board of

India (Share Based Employee Benefits) Regulations, 2014notified on 28thOctober 2014 Not applicable as the Companyhas not granted any Options to its employees during thefinancial year under review;

e. The Securities and Exchange Board of India (Issue and Listingof Debt Securities) Regulations, 2008 – Not applicable as theCompany has not issued any debt securities during thefinancial year under review;

f. The Securities and Exchange Board of India (Registrars to anIssue and Share Transfer Agents) Regulations, 1993 regardingthe Companies Act and dealing with client;

g. The Securities and Exchange Board of India (Delisting of EquityShares) Regulations, 2009- Not applicable as the Companyhas not delisted its equity shares from any stock exchangeduring the financial year under review ;

h. The Securities and Exchange Board of India (Buyback ofSecurities) Regulations, 1998 – Not applicable as theCompany has not bought back any of its securities duringthe financial year under review and

i. The Secretarial Standards issued by the Institute of CompanySecretaries of India

6. Labour Laws, Factories Act, Pollution Laws and other applicablelaws – Company has suspended its production activitycompletely and locked out is effective from 30th May 2014.I have examined compliances from the papers/register andthe information given by the staff members/officers (whohave not adequate knowledge about the subject matter)available in the office of the Company. I have audited andexamined in very specific manner to ensure whetheradequate system and process is in order or not andcommented upon irregularities seen apparently.I have also examined compliance with the applicable clausesof the Listing Agreements entered into by the Company withBSE Ltd.

I have not examined compliance by the Company with theapplicable clauses of the following:

a. Applicable financial laws, like direct and indirect tax laws,since the same have been subject to review bystatutory financial auditor and other designatedprofessionals.

During the period under review the Company has complied withthe provisions of the Act, Rules, Regulations, Guidelines,Standards, etc. mentioned above subject to the followingobservations:

a) That the Company had not given facility of Ballot Paper tothe Shareholders of the Company at the time of AnnualGeneral Meeting.

b) That Company has received two notices from BSE Limited(formerly known as Bombay Stock Exchange Ltd.) for Non-

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submission of Corporate Governance Report for theQuarter ended December 2015 and Non-submission ofShare Capital Audit Report for the Quarter endedDecember 2015. Company has not submitted Reports forfurther period also. The Company has not submittedShareholding Pattern for the Quarter ended March 2016.

c) That Company has not altered the Articles of the Companynor adopted Table- F to include the matters as requireunder the provisions of the Companies Act, 2013

d) That the Company has not published its notice for theBoard Meeting in the newspapers as require under ListingAgreement for the meeting held for adopting results forthe Quarter ended on December 2015 and March 2016..

e) That the Company has not filed its Annual Return in formMGT-7 along with MGT-8 as required under section 92 ofthe Companies Act, 2013 and Rules applicable.

f) That the Company has not appointed Key ManagerialPerson i.e. Company Secretary and Chief Financial Officerwithin 6 months from the date of vacation of respectivedesignated post.

g) That the Company has not appointed an Internal Auditorand did not carried out Cost audit as require.

h) That the Mrs. Champaka Rangachari (Independent andWomen Director) did not attend any Board Meeting duringthe year under review. We have noticed that in the MinutesBooks of the meetings, Leave of absence has beengranted but no such documents are available withCompany.

i) That the Company has not complied with procedure asprescribed in the Secretarial Standards as issued by theInstitute of Company Secretaries of India.

j) That the Company has not signed new Listing Agreementwith BSE Ltd.

k) That the Provident Fund deducted but not deposited forthe month of February 2016 and March 2016.

l) That the Company has not renewed licenses related toPollution Laws etc.

m) That the Factory License under Factories Act has not beenrenewed from 01.01.2015 and has been deposited withDeputy Director, Industrial Safety & Health, Civil Lines,Nagpur.

I further report that, based on the information provided bythe Company, its officers and authorized representativesduring the conduct of the audit, and also on the review ofquarterly compliance reports by respective department heads/ company secretary taken on record by the Board ofDirectors of the Company, in my opinion, adequate systemsand processes and control mechanism exist in the Companyto monitor and ensure compliance with applicable lawssubject to the observations made hereinbefore.I further report thatThe Board of Directors of the Company is duly constituted withproper balance of Executive Directors, Non-Executive Directorsand Independent Directors except the incidence of Women &Independent Director. The changes in the composition of theBoard of Directors that took place during the period under review

were carried out in compliance with the provisions of the Act.Adequate notice is given to all Directors to schedule theBoard Meetings. With respect to the agenda and detailednotes on agenda , start time and end time of the Boardmeeting, company has not complied with the SsecretarialStandards issued by ICSI. A system exists for seeking andobtaining further information and clarifications on the agendaitems before the meeting and for meaningful participation atthe meeting.

As per minutes of the meetings duly recorded and signed bythe Chairman, the decisions were unanimous and no dissentingviews have been recorded.

I further report that there are adequate systems and processesin the company commensurate with the size and operations ofthe company to monitor and ensure compliance with applicablelaws, rules, regulations and guidelines except to the observationsmade earlier.

I further report that Company has made application toMSEDCL for reduction in Power Contract from 7500kva to1000Kva for its mini steel plant.

I further report that Company has passed Special Resolutionby Postal Ballot and sold its investment held in Sai Wardh Power(Wardha Power Company Ltd.) .

I further report that the Invent Assets Securitization andReconstruction Private Limited acquired debt from Central Bankof India and Syndicate Bank.

I further report that the Kesari Steels Limited filed a RecoverySuit at Rohini Court, Delhi and company has received summonson 28th September 2015.

I further report that the Bank of India, a secured creditor ofthe Company, issued a notice dated July 25, 2015 u/s 13 (2) ofthe SARAESI, calling upon Company to pay the outstandingdues within 60 days from the date of said notice. Also receivedNotice under SARFEASI from Indian Overseas Bank, Vizag on9th October 2015 u/s 13 (2)

I further report that the MSEDCL has disconnected electricitysupply at Factory premises due to non-payment of electricitycharges.

I further report that Company has filed petition to the HighCourt, Nagpur for withdrawal of complaint by DRS LogisticsPrivate Limited.

I further report that we have asked for a certificate from itsRegistrar & Transfer Agent for due compliances with respect toShare Transfer, Transmission etc. & members register. Companyhas informed us that Registrar and Transfer Agent is onlyreporting to the SEBI hence we are unable to comment.

I further report that Company has not taken note ofobservation/comment made by me in the Secretarial AuditReport dated 05/08/2015.

For P S CHANNE & ASSOCIATESCompany Secretaries

CS PRADIP S CHANNEPlace : NAGPUR (Proprietor)Date : 05/08/2016 FCS No. 6265 C.P No.7138

Note: This report is to be read with my letter of even date which isannexed as ‘ANNEXURE A’ and forms an integral part of this report.

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‘Annexure A’To,The Members,Facor Steels Limited,46-A & B, MIDC Ind. EstateHingna Road,NAGPUR-440028

My 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. My responsibility is to express anopinion on these secretarial records based on my audit.

2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness ofthe contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected insecretarial records. I believe that the processes and practices, I followed provide a reasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

4. Where ever required, I have obtained the Management representation about the compliance of laws, rules and regulations andhappening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, Standards is the responsibility ofmanagement. My 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 effectivenesswith which the management has conducted the affairs of the company.

For P S CHANNE & ASSOCIATESCompany Secretaries

CS PRADIP S CHANNEPlace : NAGPUR (Proprietor)Date : 05/08/2016 FCS No. 6265 C.P No.7138

AUDITOR’S CERTIFICATE ON CORPORATE GOVERNANCETO THE MEMBERS OFFACOR STEELS LIMITED

We have examined the compliance of conditions of Corporate Governance by FACOR STEELS LIMITED (the “Company”),for the year ended 31st March 2016, as stipulated in Clause 49 of the Listing Agreement of the Company with the stockexchange.

The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination waslimited to a review of the procedures and implementation thereof adopted by the Company for ensuring compliance ofthe conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statementsof the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that theCompany has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor of theefficiency or effectiveness with which the Management has conducted the affairs of the Company.

For SALVE & COChartered Accountants

(Firm’s Registration No.109003W)

C.A. K.P. SahasrabudhePlace : NAGPUR PartnerDate : 6th May, 2016 Membership No. 07021

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INDEPENDENT AUDITOR’S REPORTToThe Members ofFacor Steels Limited

Report on the Financial StatementsWe have audited the accompanying financial statements of Facor Steels Limited (“the Company”), which comprise the BalanceSheet as at 31st March, 2016 the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summaryof the significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial StatementsThe Company’s Board of Directors are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”)with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performanceand cash flows of the Company in accordance with the accounting principles generally accepted in India, including the AccountingStandards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenanceof adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accountingrecords, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free frommaterial misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We have taken into account theprovisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report underthe provisions of the Act and the Rules made thereunder.We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements.The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of thefinancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financialcontrol relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating theoverall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.

OpinionIn our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statementsgive the information required by the Act in the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India, of the state of affairs of the Company as at 31st March, 2016 and its loss and its cash flowsfor the year ended on that date.

Emphasis of MatterWithout qualifying our opinion, we draw our attention to Note 1 (b) of the financial statement. The company’s operatingresults have been materially affected due to various factors and as on 31st March, 2016 the company’s accumulatedlosses have fully eroded the net worth of the company. The appropriateness of the going concern assumption is dependenton the company’s ability to establish consistent profitable operations as well as raising adequate finance to meet it shortterm and long term obligations. Based on the mitigation factors discussed in the said note, management believes goingconcern assumption is appropriate and no adjustment have been made in the financial statement for the year ended 31stMarch, 2016.

Report on Other Legal and Regulatory Requirements1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms

of Section 143 (11) of the Act, we give in the Annexure, a statement on the matters specified in the paragraph 3 and 4 of theOrder, to the extent applicable.

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2. As required by Section 143 (3) of the Act, 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 and the Cash Flow Statement dealt with by this Report are in

agreement with the books of account.(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of

the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.(e) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the

Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director interms 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 operatingeffectiveness of such controls, refer to our report in “Annexure A”; and

(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, in our opinion and to be best of our information and according to the explanations givento usi) the Company has disclosed the impact of pending litigations on its financial position in financial statements – refer

note 44 (b) to the financial statements;ii) the Company did not have any long term contracts including the derivative contracts for which there were any

material foreseeable losses;iii) there was no amount required to be transferred to the Investor Education and Protection Fund by the Company.

For SALVE & Co.Chartered Accountants


C.A. K.P. SAHASRABUDHEPlace : Nagpur PartnerDate : 6th May, 2016 (Membership No. 07021)

Annexure to the Independent Auditor’s ReportThe Annexure referred to in our report to the members of Facor Steels Limited (‘the Company’), for the year ended 31st March,2016.

We report that:

i) a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixedassets.

b) The company’s plant operations have been suspended with effect from 30/05/2014. The company is operating with veryfew skeleton staff and hence has not carried the physical verification of the fixed assets in the current year.

c) The company does not own any immovable property in its name.

ii) The company’s plant operations have been suspended with effect from 30/05/2014. The company is operating with a very fewskeleton staff and hence not carried the physical verification of inventories in the current year. The company has maintainedproper records of inventory.

iii) The company has not granted any loans secured or unsecured to companies, firms, Limited Liability, Partnerships or otherparties covered in the register maintained under Section 189 of the Companies Act, 2013.

iv) Company has not granted any loans, investments, guarantees or securities.

v) The Company has not accepted any deposits from the public.

vi) The Companies Act has prescribed cost records for this industry under Section 148 of the Companies Act. Company hasmaintained the records and the same have been audited by the Cost Auditor for the financial year ended 31st March 2015.However, in the current financial year 2015-16, no manufacturing activity has been carried out by the company and there wasno requirement for maintaining records and as such no audit has been carried out.

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vii) (a) According to the information and explanation give to us, the company is depositing the undisputed statutory dues includingprovident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, valueadded tax, cess and any other statutory dues with the appropriate authorities with some delay not exceeding six months.

(b) On the basis of our examination of the documents and records, there are no dues of Sales Tax, Income Tax, Wealth Tax,Service Tax, Excise Duty, Value Added Tax, Customs Duty and Cess which have not been deposited on account of anydispute except the following:

Name of Nature of Rs./Lacs Forum where the dispute Period to which the amount relatedthe Statute dues is pending (various Years covering the period)

Central Excise 30.67 Hon’ble High court Mumbai. Jan’ 1996 to Feb’ 2000Excise Act, Duty1944

Central Excise 185.41 Hon’ble High court Mumbai. Sep’ 2001 to Nov’2003Excise Act, Duty1944

Central Service 50.83 CESTAT, Mumbai Mar’ 2007 to Mar’2012Excise Act, Tax1944

Central Excise 18.45 Commissioner (Appeals), Nagpur Dec’2012Excise Act, Duty1944

viii) According to the information and explanation given to us, in our opinion, company has delayed the repayment of its dues toBanks as per details given below:

Name of Banks Term Loan Working Capital Funded Remark(Rs. Lacs) Term Loan Interest Term Loan

(Rs. Lacs) (Rs. Lacs)

Bank of India, 13.31 258.76 224.90 Installments due from June 2015Visakhapatnam to March 2016 remains unpaid

Indian Overseas Bank, 7.42 76.24 69.03 Installments due from June 2015Visakhapatnam to March 2016 remains unpaid

20.73 335.00 293.93

ix) Company has not raised any funds by way of public offer (including debt instruments) and term loans.

x) According to the information and explanation given to us, no material fraud by the company or any material fraud on thecompany by its officers or employees has been noticed or reported during the year.

xi) No managerial remuneration has been paid or provided.xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly,

paragraph 3(xii) of the Order is not applicable.

xiii) According to the information and explanation given to us, the transactions with the related parties are in compliance withSection 177 and 188 of the Companies Act, 2013 and the details have been disclosed in the financial statements as requiredby the applicable accounting standards.

xiv) Company has not made any preferential allotment or private placement of shares or fully or partly convertible debenturesduring the year under review.

xv) Company has not entered into any non-cash transactions with directors or persons connected with him.

xvi) Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.For SALVE & Co.

Chartered Accountants(Firm’s Registration No.109003W)


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Annexure – A to the Auditor’s ReportReport on the Internal Financial Controls 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 Facor Steels Ltd. (“the Company”) as of 31st March 2016 inconjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial ControlsThe Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control overfinancial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Noteon Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). Theseresponsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, theprevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation ofreliable financial information, as required under the Companies Act, 2013.

Auditors’ ResponsibilityOur responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “GuidanceNote”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to theextent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting wasestablished 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 financialreporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understandingof internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment,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’sinternal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial ReportingA company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accountingprinciples. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to themaintenance 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 accordancewith generally accepted accounting principles, and that receipts and expenditure of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detectionof unauthorized 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 ReportingBecause of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or impropermanagement override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of anyevaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies orprocedures may deteriorate.

OpinionIn our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and suchinternal financial controls over financial reporting were operating effectively as at 31st March, 2016, based on the internal control overfinancial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Noteon Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For SALVE & Co.Chartered Accountants



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BALANCE SHEET AS AT 31ST MARCH, 2016(` in lacs)

Note As at As atNo. 31st March, 2016 31st March, 2015

----------------------- -------------------------------------------------------------------- --------------------------------------------------------------------

EQUITY AND LIABILITIESSHAREHOLDERS’ FUNDSShare Capital ......................................................... 2 5,343.24 5,343.24Reserves and Surplus ............................................. 3 (10,011.10) (8,585.00)

------------------------------------------------ ------------------------------------------------(4,667.86) (3,241.76)

NON-CURRENT LIABILITIESLong Term Borrowings ............................................. 4 6,021.92 4,048.69Deferred Tax Liabilities (Net) (Refer Note 30) ......... 5 - -Long Term Provisions ............................................... 6 10.47 37.82

------------------------------------------------ ------------------------------------------------6,032.39 4,086.51

CURRENT LIABILITIESShort Term Borrowings ............................................ 7 1,767.91 3,664.30Trade Payables ......................................................... 8 1,747.33 1,745.30Other Current Liabilities 9 1,176.53 834.50

------------------------------------------------ ------------------------------------------------4,691.77 6,244.10

------------------------------------------------ ------------------------------------------------TOTAL 6,056.30 7,088.85

==================================== ====================================ASSETS

NON-CURRENT ASSETSFixed AssetsTangible Assets ........................................................ 10 4,189.92 4,607.18Intangible Assets ...................................................... 10 - -Capital Work -in-Progress ........................................ - -

------------------------------------------------ ------------------------------------------------4,189.92 4,607.18

Non-Current Investments ......................................... 11 333.86 333.86Long Term Loans and Advances ............................. 12 31.90 49.54

------------------------------------------------ ------------------------------------------------4,555.68 4,990.58

CURRENT ASSETSInventories ......................................................... 13 783.77 1,042.76Trade Receivables .................................................... 14 300.96 406.32Cash and Cash Equivalents .................................... 15 0.14 33.10Short Term Loans and Advances ............................ 16 415.75 613.74Other Current Assets ............................................... 17 - 2.34

------------------------------------------------ ------------------------------------------------1,500.62 2,098.26

------------------------------------------------ ------------------------------------------------TOTAL 6,056.30 7,088.85

==================================== ====================================Significant Accounting Policies ........................................ 1Notes on Financial Statements ........................................ 2 to 46

As per our report of even date attached For and on behalf of the Board

For SALVE & CO. VINOD SARAF ANURAG SARAFChartered Accountants Managing Director Director(Regn.No.109003W)

C.A. K.P. SAHASRABUDHEPartnerMembership No. 07021

NAGPUR : 6th May, 2016 NAGPUR : 6th May, 2016 NAGPUR : 6th May, 2016

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STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2016(` in lacs)

Note Year Ended Year EndedNo. 31st March, 2016 31st March, 2015

----------------------- -------------------------------------------------------------------- --------------------------------------------------------------------

INCOME

Revenue from Operations ................................................ 18 169.78 3,290.99

Less:Excise duty ......................................................... 19.62 329.93------------------------------------------ ------------------------------------------

150.16 2,961.06Other Income ......................................................... 19 38.80 82.81

------------------------------------------ ------------------------------------------Total Revenue 188.96 3,043.87

EXPENDITURE :

Cost of Materials Consumed ............................................ 20 - 226.17

Changes in Inventories of Finished Goodsand Work-in-Progress ....................................................... 21 119.79 2,712.77

Employee Benefits Expense ............................................ 22 302.86 559.30

Finance Costs ......................................................... 23 410.34 781.29

Depreciation and Amortisation Expense ......................... 24 418.90 469.38

Other Expenses ......................................................... 25 363.17 1,388.14------------------------------------------ ------------------------------------------

Total Expenses 1,615.06 6,137.05------------------------------------------ ------------------------------------------

Profit/(Loss) Before Exceptional items & Tax ................... (1,426.10) (3,093.18)

Exceptional items ......................................................... - 1,842.11------------------------------------------ ------------------------------------------

Profit/(Loss) Before Tax .................................................... (1,426.10) (1,251.07)

Tax Expenses

Current Tax (Refer Note 31) ............................................. - -

Deferred tax (Refer Note 30) ............................................ - ------------------------------------------- ------------------------------------------

- ------------------------------------------- ------------------------------------------

Profit/(Loss) for the year (1,426.10) (1,251.07)------------------------------------------ ------------------------------------------

Earnings per equity share of face value of Re 1/- each

Basic and Diluted ( in `) ................................................... 26 (0.69) (0.61)

Significant Accounting Policies ........................................ 1

Notes on Financial Statements ........................................ 2 to 46





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CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2016 PURSUANT TO CLAUSE 32 OF THELISTING AGREEMENT

(` in lacs)2015-16 2014-15

-------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------(A) CASH FLOW FROM OPERATING ACTIVITIES :

Net Profit/(Loss) before tax ................................................ (1,426.10) (1,251.07)Adjustment for:

Depreciation .................................................................. 418.90 469.38ECB Loan written off ..................................................... (1,842.11)Exchange difference on translation (Net) ..................... (19.51)Interest and Dividend Income ...................................... (8.98)Finance Costs ............................................................... 410.34 781.29Profit/Loss on Sale of Fixed Assets (Net) .................... (0.05) 26.18

------------------------------------------ ------------------------------------------829.19 (593.75)

------------------------------------------ ------------------------------------------Operating Profit before Working Capital Changes .......... (596.91) (1,844.82)Adjustment for:

Trade and Other Receivables ....................................... 337.22 2,091.81Inventories .................................................................... 258.99 3,511.43Trade Payables ............................................................. 122.72 (3,530.54)

------------------------------------------ ------------------------------------------718.93 2,072.70

------------------------------------------ ------------------------------------------Cash Generated from Operations ..................................... 122.02 227.88

Direct Taxes Paid/Adjusted ........................................... 0.01------------------------------------------ ------------------------------------------

- 0.01------------------------------------------ ------------------------------------------

Net Cash Flow from Operating Activities .............................. 122.02 227.89

(B) CASH FLOW FROM INVESTING ACTIVITIES:Purchase of Fixed Assets ............................................. (2.13) (104.53)Sale of Fixed Assets ..................................................... 0.54 15.78Sale of Investments ...................................................... 106.14Interest and Dividend Income ...................................... 12.83

------------------------------------------ ------------------------------------------Net Cash Flow (used in) /from Investing Activities ............... (1.59) 30.22

(C) CASH FLOW FROM FINANCING ACTIVITIES:Proceeds from issue of Share Capital (Net) ................ - -Proceeds from Long and Short Term Borrowings ........ 268.70 (1,511.39)Finance Costs Paid ....................................................... (410.34) (781.29)ECB Loan written off ..................................................... 1,842.11Effects of Exchange Rate Change ............................... 2.13 19.51

------------------------------------------ ------------------------------------------Net Cash Flow (used in) /from Financing Activities ............. (139.51) (431.06)

------------------------------------------ ------------------------------------------Net Increase/(Decrease) in Cash and Cash Equivalents (19.08) (172.95)

------------------------------------------ ------------------------------------------Opening Balance of Cash and Cash Equivalents ................ 19.22 192.17Closing Balance of Cash and Cash Equivalents ............. 0.14 19.22

------------------------------------------ ------------------------------------------Net Increase/(Decrease) in Cash and Cash Equivalents (19.08) (172.95)

================================ ================================





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NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2016

1. SIGNIFICANT ACCOUNTING POLICIES

(a) Corporate Information:

Facor Steels Limited (“The Company”) is a Public Limited Company incorporated in India under the CompaniesAct, 1956. It is part of Worldwide reputed FACOR Group of Industries. The Company is listed at Bombay StockExchange. The Company is one of the leading Producers of Carbon/Alloy Steel/Stainless and Special Steel. Theproducts are manufactured at its works in Nagpur and caters both domestic and international market. The productsare meant for critical industrial application.

(b) Basis of Preparation of Financial Statements:

The Company’s operating results continue to be materially affected by various factors particularly poor marketconditions and deep recession in the steel market and general economic slow down. The accumulated losses ofthe company as at 31.03.2016 stand at ` 10280.24 lacs against the paid up Share capital of ` 5343.24 lacs. Thecurrent liabilities as at 31.03.2016 exceeded the current assets by ̀ 3191.17 lacs. The company has been referredto the Board for Industrial & Financial Reconstruction (BIFR) under section 15 of the Sick Industrial Companies(Special Provisions) Act, 1985, which has been registered by BIFR vide case No. 74/2014. The company hasdeclared a consensus lockout w.e.f. 30.05.2014 due to lack of demand of its products and the lockout is still inforce.

These conditions indicate the existence of material uncertainty that may cast significant doubt about the company’sability to continue as going concern, which is dependent on the company establishing the profitable operationsand sustaining cash flow. While the management is exploring various options and is in the process for restructuringthe operations of the company, it is also hopeful that BIFR will prepare the revival scheme with the help of OperatingAgency in due course of time. Accordingly, the company’s financial statements have been prepared on a goingconcern basis whereby the value of assets and liabilities are expected to be realized in the normal course ofbusiness. The accounts have been prepared under the historical cost convention on accrual basis of accounting inaccordance with the generally accepted accounting principles as per the provisions of Companies Act, 2013, asadopted consistently by the company.

(c) Fixed Assets:

All fixed assets are valued at cost net of recoverable taxes less depreciation. Roll-over charges on forward exchangecontracts and loss or gain on conversion of foreign currency liabilities for acquisition of fixed assets are added toor deducted from the cost of fixed assets.

(d) Intangible Asset:

Intangible asset acquired separately are measured at cost less amortisation and impairment losses, if any, Intangibleassets are amortised on a straight line basis over the estimated useful life.

(e) Depreciation:

Depreciation on fixed assets is provided to the extent of depreciable amount on Straight Line Method in accordancewith the requirements of Schedule II of the Companies Act, 2013 based on the useful life of the assets as prescribedin schedule II.

(f) Foreign Exchange Transactions:

(i) Transactions in foreign exchange are translated to Indian Rupees at the rate of exchange ruling on the dateof transaction.

(ii) All foreign currency liabilities related to acquisition of Fixed Assets remaining unsettled at the end of the yearare converted at contract rates, where covered by foreign exchange contracts and at year end rates in othercases and the difference in translation is adjusted in the carrying cost of such assets.

(iii) Other outstanding foreign currency liabilities and receivables are translated at the year end rates and thedifference in translation is recognized in the Statement of Profit and Loss.

(g) Investments:

Long term investments are stated at cost and provision for diminution is made, if such diminution is other thantemporary in nature.

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(h) Current Assets:

Finished Goods and Stock-in-Process are valued at cost or net realisable value whichever is lower. Other inventoriesare valued at cost. All other items of current assets are stated after provisions for any diminution in value.

(i) Revenue Recognition:

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and therevenue can be reliably measured. Sales comprise sale of goods and services, conversion charges and exports.Sales are recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.Sales are inclusive of excise duty but net of trade discounts and VAT. However, excise duty relating to sales isreduced from gross turnover for disclosing net turnover. Export benefits are recognised on accrual basis as perschemes specified in Foreign Trade Policy, as amended from time to time. Interest income is recognised on a timeproportion basis taking into account the amount outstanding and the rate applicable.

(j) Employee Benefits:

(i) Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement ofProfit and Loss for the year in which the related service is rendered.

(ii) Post employment and other long term employee benefits are recognised as an expense in the Statement ofProfit and Loss for the year in which the employee has rendered services. The gratuity expense is recognisedat the present value of the amounts payable determined using acturial valuation techniques. Acturial gainsand losses in respect of gratuity benefits are charged to the Statement of Profit and Loss.

(k) Borrowing Costs:

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarilytakes substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of therespective asset. All other borrowing costs are expensed in the period they occur.

(l) Provision for Current and Deferred Tax:

Provision for current tax is made after taking into consideration benefits admissible under the provisions of theIncome Tax Act, 1961. Deferred tax resulting from “timing differences” between taxable and accounting income isaccounted for using the tax rates and laws that are enacted or substantively enacted as on the Balance Sheetdate. The deferred tax asset is recognised and carried forward only to the extent that there is a virtual certainty thatthe asset will be realised in future.

(m) Contingent liabilities:

Contingent Liabilities are not recognised but are disclosed in the notes.

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2. SHARE CAPITAL (` in lacs)

As at As at31st March, 2016 31st March, 2015

-------------------------------------------------------------------- --------------------------------------------------------------------Authorised Share Capital:250,000,000 (Previous Year-250,000,000 ) Equity Shares of Re 1/- each 2,500.00 2,500.00

3,500,000 (Previous Year-3,500,000) 5% RedeemableCumulative Preference Shares of ` 100 each 3,500.00 3,500.00

------------------------------------------ ------------------------------------------TOTAL 6,000.00 6,000.00

================================== =================================Issued, Subscribed and Paid up:206,523,679 (Previous Year - 206,523,679) Equity Shares of ` 1/- each fully paid-up 2,065.24 2,065.24

3,278,000 (Previous Year-32,78,000) 5% Redeemable Cumulative PreferenceShares of ` 100 each fully paid up 3,278.00 3,278.00

------------------------------------------ ------------------------------------------TOTAL 5,343.24 5,343.24

================================== =================================

2.1 Details of Shareholders holding more than 5% Equity shares held:

Name of the Shareholder As at 31st March, 2016 As at 31st March, 2015

No. of Shares % held No. of Shares % held

Rai Bahadur Shreeram And Company Private Limited 59,202,982 28.67% 59,202,982 28.67%

Anurag Murlidhar Saraf 11,340,279 5.49% 11,340,279 5.49%

2.2 Details of Shareholders holding more than 5% Preference shares held:

Name of the Shareholder As at 31st March, 2016 As at 31st March, 2015

No. of Shares % held No. of Shares % held

Rai Bahadur Shreeram And Company Private Limited 2,179,000 66.47% 2,179,000 66.47%

Vineet Infin Pvt. Ltd. 225,000 6.86% 225,000 6.86%

S.D. Ores Pvt. Ltd. 332,000 10.13% 332,000 10.13%

Suchitra Investment & Leasing Limited 482,000 14.70% 482,000 14.70%

2.3 Reconciliation of Equity shares outstanding at the beginning and at the end of the reporting period:(`̀̀̀̀ in lacs)

Particulars 31.03.2016 31.03.2015 31.03.2016 31.03.2015

No. of Shares No. of Shares Amount Amount

Shares outstanding at the beginning of the year 206,523,679 206,523,679 2065.24 2065.24

Shares issued during the year - - - -

Shares bought back during the year - - - -

Shares outstanding at the end of the year 206,523,679 206,523,679 2065.24 2065.24

2.4 Reconciliation of Preference shares outstanding at the beginning and at the end of the reporting period: (`̀̀̀̀ in lacs)

Particulars 31.03.2016 31.03.2015 31.03.2016 31.03.2015

No. of Shares No. of Shares Amount Amount

Shares outstanding at the beginning of the year 3,278,000 3,278,000 3278.00 3,278.00

Shares issued during the year - - - -

Shares bought back during the year - - - -

Shares outstanding at the end of the year 3,278,000 3,278,000 3278.00 3,278.00

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2.5 Terms/rights attached to Equity Shares:

The Company has only one class of Equity Shares having par value of Re. 1/- per share. Each holder of Equity Share isentitled to one vote per share.

In the event of liquidation of the company, the holders of Equity Shares will be entitled to receive remaining assets of theCompany, after distribution of all preferential amounts. The distribution will be in proportion to the number of EquityShares held by the Shareholders.

2.6 Terms/rights attached to Preference Shares:

The Company has only one class of 5% Redeemable Cumulative Preference Shares having par value of ` 100/- pershare.

The company has alloted 1500000(nos.) 5% Redeemable Cumulative Preference Share of ` 100/- each to Rai BahadurShreeram And Company Private Limited On 4th March 2011 and 1000000(nos.) to other Promoter group entity on 17th

March, 2012.

Further on 14th March, 2013 company has alloted 778000 (nos.) 5% Redeemable Cumulative Preference Share of` 100/- each to Rai Bahadur Shreeram And Company Private Limited & other Promoter group entity.

The said 5% Redeemable Cumulative Preference Shares (hereinafter called “Preference Shares”) shall have the followingrights,privileges and conditions attaching thereto. Viz.

a) The Preference Shares shall be entitled to fixed cumulative Preferential dividend at the rate of 5% per annum inpriority to the equity shares, but shall not confer any further right to participate in the profits or assets.

b) Subject to the provisions of the Act, the said Preference Shares shall be redeemable in the manner following:

(i) The company may on the expiry of six years from the date of allotment thereto and after giving three monthsnotice to the holders of the Preference shares, apply any profits or monies of the company which may belawfully applied for the purpose of redemption of the Preference Shares for the time being issued and outstandingat par, together with a sum equal to the arrears of fixed dividend thereon,(whether earned or declared ornot),upto the date of redemption.

(ii) The said Preference Shares shall be redeemed in five annual installments commencing from the seventh yearfrom the date of allotment thereof.

(iii) The Arrears of Dividend on 5% Redeemable Cumulative Preference shares upto 31.03.2016 amounts to` 437. 52 lacs (previous year ` 373.63 lacs)

3. RESERVES AND SURPLUS (` in lacs)


-------------------------------------------------------------------- --------------------------------------------------------------------Capital ReserveBalance as at the beginning and end of the year 269.15 269.15

Statement of Profit and LossBalance as at the beginning of the year (8,854.15) (7,552.62)Add : Depreciation on transition to schedule II of the Companies Act

2013 on tangible Fixed assets with Nil remaining useful life (Refer Note 10.1) - (50.46)Add : Profit/(Loss) for the year (1,426.10) (1,251.07)

----------------------------------------------- -----------------------------------------------Balance as at the end of the year (10,280.25) (8,854.15)

----------------------------------------------- -----------------------------------------------TOTAL (10,011.10) (8,585.00)

===================================== =====================================

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NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 20164. LONG TERM BORROWINGS (`̀̀̀̀ in lacs)

As at As at As at As at31st March, 31st March, 31st March, 31st March,

2016 2015 2016 2015-------------------------------------------- ------------------------------------------ -------------------------------------------- ------------------------------------------

Secured Non-current Non-current Current CurrentFrom Bank : Rupee Term Loan Account

From Bank : Rupee Term Loan AccountTerm Loan Account -2 (Refer Note 4.1) 34.88 119.56 11.63 17.08Term Loan Account -3 (Refer Note 4.1) 27.32 78.31 9.11 11.19

------------------------------------------------------- ------------------------------------------------------- ------------------------------------------------------- -------------------------------------------------------62.20 197.87 20.74 28.27

------------------------------------------------------- ------------------------------------------------------- ------------------------------------------------------- -------------------------------------------------------Amount disclosed under the head‘Other Current liabilities’(Refer Note 9) - - (20.74) (28.27)

------------------------------------------------------- ------------------------------------------------------- ------------------------------------------------------- -------------------------------------------------------62.20 197.87 - -

------------------------------------------------------- ------------------------------------------------------- ------------------------------------------------------- -------------------------------------------------------Working capital Term Loan -1 (Refer Note 4.1) 759.75 1,266.26 253.25 180.89Working capital Term Loan -2 (Refer Note 4.1) 245.25 788.35 81.75 112.62

------------------------------------------------------- ------------------------------------------------------- ------------------------------------------------------- -------------------------------------------------------1,005.00 2,054.61 335.00 293.51------------------------------------------------------- ------------------------------------------------------- ------------------------------------------------------- -------------------------------------------------------

Amount disclosed under the head‘Other Current liabilities’(Refer Note 9) - - (335.00) (293.51)

------------------------------------------------------- ------------------------------------------------------- ------------------------------------------------------- -------------------------------------------------------1,005.00 2,054.61 - -------------------------------------------------------- ------------------------------------------------------- ------------------------------------------------------- -------------------------------------------------------

Funded Interest Term Loan Account(FITL-1) (Refer Note 4.1) 140.02 346.49 280.04 173.24Funded Interest Term Loan Account(FITL-2) (Refer Note 4.1) 23.15 13.89 3.31

------------------------------------------------------- ------------------------------------------------------- ------------------------------------------------------- -------------------------------------------------------140.02 369.64 293.93 176.55

------------------------------------------------------- ------------------------------------------------------- ------------------------------------------------------- -------------------------------------------------------Amount disclosed under the head‘Other Current liabilities’(Refer Note 9) - - (293.93) (176.55)

------------------------------------------------------- ------------------------------------------------------- ------------------------------------------------------- -------------------------------------------------------140.02 369.64 - -

------------------------------------------------------- ------------------------------------------------------- ------------------------------------------------------- -------------------------------------------------------Long Term Loan From ARC (Refer Note 33) 3,386.00 70.00Amount disclosed under the head‘Other Current liabilities’ (Refer Note 9) - (70.00)

------------------------------------------------------- -------------------------------------------------------Unsecured 3,386.00 - - -From BanksExternal commercial Borrowing (Baltic International Bank Latvia) 37.72 35.59 - -(Refer Note 4.2)

------------------------------------------------------- -------------------------------------------------------37.72 35.59 - -

------------------------------------------------------- -------------------------------------------------------Loans and Deposits from related parties 918.62 918.62 - -Inter corporate Deposits/LoansLess:: Interest Accrued and due Amountdisclosed under the headOther Current liabilities’(Refer Note 9) (3.37) (3.37)

------------------------------------------------------- -------------------------------------------------------915.25 915.25 - -

------------------------------------------------------- -------------------------------------------------------Others (Refer Note 4.3) 475.73 475.73 - -

------------------------------------------------------- -------------------------------------------------------475.73 475.73 - -

------------------------------------------------------- ------------------------------------------------------- ------------------------------------------------------- -------------------------------------------------------TOTAL 6,021.92 4,048.69 - -

------------------------------------------------------- ------------------------------------------------------- ------------------------------------------------------- ------------------------------------------------------

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4.1 (a) During the year 2012-13, Company filed an application for Corporate Debt Restructure(CDR) through its lead banksbefore the CDR cell. The Empowered Group of Corporate Debt Restructuring cell (CDR-EG) has approved the finalrestructuring pacakage of the company. The details thereof is as under.

(b) The CDR-EG in its meeting held on March’25th 2013 has approved the CDR package of the company. Bank of India(BOI) has been appointed as Monitoring Institution (MI).Final Letter of approval (LOA) has been issued by the CDRcell to all the lenders with a copy to the company on April 27’2013. Individual sanction letter in line with LOA isreceived. Company has signed the Master Restructure Agreement (MRA) with all the member Banks of the consortiumLenders.

(c) Cut-off date (COD) is Jan 01’2013 Holding on operation is allowed i.e. continuance of working capital limits atexisting sanctioned level till implementation of CDR package.

The Letter of credit payment devolved upto Dec 31’2012 has been converted into working capital Term loan -I.

(d) The Letter of credit payments devolved during the period between Jan 01’2013 to March 31’2013 has been convertedinto working capital Term loan -II (WCTL-II).

(e) WCTL-I and WCTL-II are proposed to be repaid in equal quarterly Instalments over a period of 8 years commencingafter a principal and interest moratorium of 24 months Repayments in 32 quarterly instalments commencing fromquarter April 2015 and ending on quarter ending Jan’ 2023.

(f) Unpaid interest on working capital cash credit limit from 01.01.2013 to 31.03.2013 to be repaid within six monthsfrom April’2013. The future interest accrued on WCTL-I and WCTL-II for the period of two years from cut-off date willbe converted into FITL-I.

The FITL-1 is proposed to be repaid over a period of 2 + 3 years in equal quarterly instalments commencing fromApril’2015.

Funded Interest Term Loan 2 is repayable in 32 quarterly instalments commencing from quarter ending April’2015.

The Term Loan 2 and 3 are repayable in 32 quarterly instalments commencing from quarter ending April’2015.

The interest for the first two years from the date of first disbursement will be funded by way of FITL-II.

(g) All facility to carry interest at the rate of 10.75% per annum.

(h) All working capital facilities, Working capital Term Loan(WCTL),Fresh Term loan and Funded Interest Term Loan(FITL) are secured by-(i) First charge by way of hypothecation of Movable Fixed Assets Plant & machinery spares,tools and accessories

and other movable Fixed assets both present and future of the company.(ii) First charge on Immovable Fixed Assets including building of Factory.(iii) second charge by way of hypothecation of entire stock of Raw materials,stock in process, finished goods,

consumable stores & sapres and Receivables etc, and all other current assets of the company both presentand future on pari passu basis.

(iv) First charge by way of equtable mortgage of Lease hold Land in the name of Vidarbha Iron & steel corporationLtd.

(v) Pledge of 100% shares of the company held by promoters.(vi) Inter - company guarantees by Ferro Alloys corpn.Ltd. Facor Alloys Ltd and vidarbha Iron & Steel corporation

Ltd.(vii) Personal guarantee of two Directors.

(J) As per the minutes of the meeting of CDR EG confirmed on 28th October 2015 ,the exit of the Company from CDRmechanism on account of failure of the CDR package

4.2 The amount is payable on revival of operations of the company without interest obligation and also refer note 37

4.3 For this loan, no repayment schedule has been specified and also no interest is payable on this loan.

42


13


5. DEFERRED TAX LIABILITIES (NET) (Refer Note 31) (` in lacs)


-------------------------------------------------------------------- --------------------------------------------------------------------Net Deferred Tax Liabilities (Refer Note 31) - -

--------------------------------------------- ---------------------------------------------

6. LONG TERM PROVISIONS

Provision for Employee Benefits:

For P.L.Encashment (Unfunded) 10.47 37.82--------------------------------------------- ---------------------------------------------

TOTAL 10.47 37.82================================== =================================

7. SHORT TERM BORROWINGS

From Banks (Secured) :[Refer Note 4.1 (h)] and Note 34

Cash Credit / Packing Credit Accounts 1,767.91 3,664.30--------------------------------------------- ---------------------------------------------

TOTAL 1,767.91 3,664.30================================== =================================

8. TRADE PAYABLES

Trade Payables (Refer Note 8.1 & 38) 1,747.33 1,745.30--------------------------------------------- ---------------------------------------------

TOTAL 1,747.33 1,745.30================================== =================================

8.1 Disclosure required under Micro, Small and Medium Enterprises Development Act, 2006 (the Act) are as follows.

The Company has not received information from Suppliers or Service Provider, whether they are coveredunder the “The Micro, Small and Medium Enterprises Development Act, 2006". Disclosure relating to amountunpaid at the year end together with interest payable, if any, as required under the said Act are not ascertainable.

9. OTHER CURRENT LIABILITIES

Current Maturities of Long- Term debt 719.67 498.33

Interest Accrued but not due on loans - -

Interest Accrued and due on loans 3.37 3.37

Other Payables * 453.49 332.80--------------------------------------------- ---------------------------------------------

TOTAL 1,176.53 834.50================================== =================================

* Includes statutory dues, security deposits and advance from customers.

43


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44


13


11 NON-CURRENT INVESTMENTS (` in lacs)


-------------------------------------------------------------------- --------------------------------------------------------------------Trade Investments : (At Cost) (Refer Note 35)In 0.01% Class ‘A” Redeemable Preference Shares- Unquoted, fully paid up

2,454,133 (Previous Year-2,454,133) Sai Wardha power co. Limited of ` 10 each 245.41 245.41

In Equity Shares - Unquoted, fully paid up884,485 (Previous Year-8,84,485) Sai Wardha Power Co. Limited of ` 10 each 88.45 88.45

---------------------------------------- ----------------------------------------

TOTAL 333.86 333.86============================== ==============================

Aggregate amount of Unquoted Investments 333.86 333.86

12. LONG TERM LOANS AND ADVANCES(Unsecured and Considered Good)

Capital Advances -Security Deposits 22.51 22.26

OthersAdvance Income Tax (Net of Provisions) 0.05 3.57Gratuity fund with LIC (Refer Note 27) 9.34 23.71

---------------------------------------- ---------------------------------------TOTAL 31.90 49.54

============================== ==============================

13. INVENTORIES(As per Inventory taken, valued and as certified by the Management)(At Cost unless otherwise stated)

Raw Materials 37.60 45.26Work-in-Progress (At Cost or Net realisable value whichever is lower) - 3.27Finished Goods (At Cost or Net realisable value whichever is lower) 13.55 130.07Stores and Spare Parts 712.04 843.58Loose Tools 20.58 20.58

---------------------------------------- ---------------------------------------TOTAL 783.77 1,042.76

============================== ==============================

14. TRADE RECEIVABLES(Unsecured)

Over six monthsConsidered good 300.96 251.62Considered doubtful 167.86 167.86

---------------------------------------- ---------------------------------------468.82 419.48

Less:Provision for Bad & doubtful debt 167.86 167.86---------------------------------------- ---------------------------------------

300.96 251.62Others (Considered good) 154.70

---------------------------------------- ---------------------------------------TOTAL 300.96 406.32

============================== ==============================

45


13


15. CASH AND CASH EQUIVALENTS (` in lacs)


-------------------------------------------------------------------- --------------------------------------------------------------------Cash in hand 0.11 0.24With Scheduled Banks:

In Current Accounts 0.03 18.97In Fixed Deposit Accounts:(With maturity upto 3 months) - -

---------------------------------------- ----------------------------------------0.14 19.21

In Fixed DepositWith maturity more than 12 months - 13.89

---------------------------------------- ----------------------------------------TOTAL 0.14 33.10

============================== ==============================

15.1 Fixed Deposit Receipts lodged with Banks as security deposit for Letters of Credit/Guarantees ` Nil lacs (Previous Year` 13.89 lacs)

16. SHORT TERM LOANS AND ADVANCES(Unsecured and Considered Good)Dues from Government Authorities 208.35 404.70Others 207.40 209.04

---------------------------------------- ----------------------------------------TOTAL 415.75 613.74

============================== ==============================

17. OTHER CURRENT ASSETSInterest accrued on Fixed Deposits - 2.34

---------------------------------------- ----------------------------------------TOTAL - 2.34

============================== ==============================

18. REVENUE FROM OPERATIONSSale of products, less returns 169.78 3,257.05Other Operating revenueSale of Services 14.13Export Incentives 19.81

---------------------------------------- ----------------------------------------- 33.94

---------------------------------------- ----------------------------------------TOTAL 169.78 3,290.99

============================== ==============================

18.1 PARTICULARS OF SALE OF PRODUCTS

Gross Sales

Year Ended Year Ended31st March, 2016 31st March, 2015-------------------------------------------------------------------- -----------------------------------------------------------

Blooms/Ingots 312.88Rolled Product 169.78 2,519.04Forge Round bars 425.13

---------------------------------------- ----------------------------------------TOTAL 169.78 3,257.05

============================== ==============================

46


13


19. OTHER INCOME (` in lacs)

Year Ended Year Ended31st March, 2016 31st March, 2015

----------------------------------------------------------------------------- --------------------------------------------------------------------INTEREST INCOME:Interest on Deposits - 5.03Other Interest 24.47 3.94

--------------------------------------- ---------------------------------------24.47 8.97

Miscelleneous receipts 5.53 24.81Profit on Sale of Fixed Assets Sold /Discarded (Net) 0.07 0.10Foreign Exchange gain (Net) - 19.51Liabilities/Provisions no longer required written back 8.73 29.42

--------------------------------------- ---------------------------------------TOTAL 38.80 82.81

=============================== ===============================

20. COST OF MATERIALS CONSUMEDOpening stock of Materials 45.26 486.57Add: Purchases (Including purchase of blooms) 276.33

--------------------------------------- ---------------------------------------45.26 762.90

Less: Sale of Materials 7.66 491.47Closing stock of Materials 37.60 45.26

--------------------------------------- ---------------------------------------45.26 536.73

--------------------------------------- ---------------------------------------Cost of Materials Consumed - 226.17

=============================== ===============================

20.1 PARTICULARS OF MATERIALS CONSUMEDScrap - 145.33Sponge Iron - 4.36Ferro Nickle - 16.89Ferro Alloys - 35.69Lime Stone - 2.13Coke & Charcoal - 0.12Blooms - 18.82Other - 2.83

--------------------------------------- ---------------------------------------TOTAL - 226.17

=============================== ===============================

21. CHANGES IN INVENTORIES OF FINISHEDGOODS AND STOCK-IN PROCESSClosing stock:Finished Goods 13.55 130.07Work-in-Progress - 3.27

--------------------------------------- ---------------------------------------13.55 133.34

Opening stock:Finished Goods 130.07 1,660.91Work-in-Progress 3.27 1,185.20

--------------------------------------- ---------------------------------------133.34 2,846.11

--------------------------------------- ---------------------------------------Decrease/(Increase) in Inventories 119.79 2,712.77

=============================== ===============================

47


13


22. EMPLOYEE BENEFITS EXPENSE (` in lacs)


----------------------------------------------------------------------------- --------------------------------------------------------------------Salaries, Wages and Bonus (Refer Note 28) 292.01 488.20Contribution to Provident and Other Funds 2.86 53.96Welfare Expenses 7.99 17.14Directors’ Remuneration - -

--------------------------------------- ---------------------------------------TOTAL 302.86 559.30

=============================== ===============================

23. FINANCE COSTSInterest 410.34 781.29

24. DEPRECIATION AND AMORTISATION EXPENSEDepreciation 418.90 453.48Amortisation - 15.90

--------------------------------------- ---------------------------------------TOTAL 418.90 469.38

=============================== ===============================

25. OTHER EXPENSESPower and Fuel 122.91 349.56Production and Handling Expenses - 25.62Freight, Shipment and Sales Expenses 50.51 63.50Lease rent - 21.00Stores and Spares 86.46 319.22Works Expenses 95.86 259.98Transport Expenses 0.13 1.29Repairs and Maintenance to Plant and Machinery 1.05 19.02Repairs and Maintenance to Buildings 0.02 1.65Insurance 4.25 19.93Rent - 1.28Rates and Taxes 5.78 15.93Comission and Brokerage on Sales - 3.20Payments to Auditors 1.98 2.25Directors’ Sitting Fees 0.97 1.56Foreign Exchange Loss (Net) - -Loss on sale of Fixed Assets Sold Discarded (Net) 0.06 26.27Provision and adjustments relating to earlier years 5.66 0.20Provision for Bad & doubtful debts - 118.41Advances claims and other receivables written off - 122.67Miscelleneous Expenses (12.47) 15.60

--------------------------------------- ---------------------------------------TOTAL 363.17 1,388.14

=============================== ===============================

48


13


25.1 PAYMENTS TO AUDITORS (` in lacs)


---------------------------------------------------------------------------- --------------------------------------------------------------------(A) Statutory Auditor

Audit Fees 1.50 1.50Tax Audit Fees 0.15 0.15Certification and Consultation Fees 0.10 0.10Reimbursement of Expenses - -

--------------------------------------- ---------------------------------------Sub-Total (A) 1.75 1.75

--------------------------------------- ---------------------------------------(B) Cost Auditor

Audit Fees 0.23 0.50Reimbursement of Expenses -

--------------------------------------- ---------------------------------------Sub-Total (B) 0.23 0.50

--------------------------------------- ---------------------------------------TOTAL ( A + B ) 1.98 2.25

=============================== ===============================

26. EARNINGS PER SHARE BASIC AND DILUTED(i) Net Profit/(Loss) after Tax (1,426.10) (1,251.07)(ii) Weighted average number of equity shares (Nos. in lacs) 2,065.24 2,065.24(iii) Earnings per Share: (` per share) (0.69) (0.61)

27. Disclosure pursuant to Accounting Standard - 15 (Revised) “Employee Benefits”:The company provides for Gratuity, a defined benefit retirement plan covering eligible employees. As per thescheme, the Gratuity fund trust, administered and managed by the Life Insurance Corporation of India (LIC), makepayment to vested employees at retirement, death or termination of employment of an amount based on therespective employees salary and the tenure of employment.Liability for employee benefit has been determined by an acturial valuation in conformity with the principles set outin the accounting standard 15 (Revised) the details of which are as under.

(` in lacs)

Particulars 2015-16 2014-15Gratuity Gratuity-------------------------------- --------------------------------

Amount to be Recognised in Balance SheetPresent value of Funded Obligation 34.16 84.88Fair value of Plan Assets 43.50 108.58

Net Liability (9.34) (23.70)Amounts in Balance SheetLiability - -Assets 9.34 23.70Net Liability (9.34) (23.70)

Expenses to be Recognised in the Statement of Profit and LossCurrent Service Cost 3.07 15.44Interest on Defined Benefit Obligation 4.08 14.73Expected Return on Plan Assets (5.56) (17.52)Net Acturial Losses/(Gains) Recognised in Year 46.73 12.38Total, Included in “Employee benefit expenses” 48.32 25.03

Reconciliation of Benefit Obligations and Plan Assets forthe period Change in Defined Benefit ObligationOpening Defined Benefit Obligation 50.99 184.13Current Service Cost 3.07 15.44

49


13

NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2016(` in lacs)

Particulars 2015-16 2014-15Gratuity Gratuity-------------------------------- --------------------------------

Interest Cost 4.08 14.73Acturial Losses/(Gains) 46.73 12.38Benefit Paid (70.71) (141.80)Closing Defined Benefit Obligation 34.16 84.88

Change in Fair Value of AssetsOpening Fair Value of Plan Assets 108.58 230.05Expected return on Plan Assets 5.56 17.52

Acturial Losses/(Gains)Contribution by Employer 0.07 2.81Benefit Paid (70.71) (141.80)

Closing Fair Value of Plan Assets 43.50 108.58Principal Acturial AssumptionsDiscount rate (p.a.) 8.00% 8.00%Salary Escalation Rate (p.a.) 5.00% 5.00%

28. This includes ` 140.52 lacs being the additional compensation payable under the Employees Separation Schemenotified by the company for employees who have submitted resignation.

29. The slowing industrial activity and depressed market conditions had seriously affected the operations of the company.Considering the dwindling order position, the company has discussed with Workers union and reached an agreementfor consensus lock out effective from Jan’ 2013 and which was in force upto 8th Aug’2013. The company restartedits operation from 9th Aug’2013 after getting revised fund and non fund based limits approved and released by theindividual banks. The company’s application for Corporate Debt Restructure (CDR) has been approved by CDR -Empowered Group vide its Letter of Approval dated April 27, 2013. Inspite of the best efforts the company continuedto incur cash loss and the capacity utilisation could not be improved to avoid cash loss situation The Company hasagain reached an agreement for consensus lock out with its workers union effective from 30th May’2014which isstill in force. The Company is exploring various alternatives for revival of the company.

30. As per the Corporate Debt Restructure (CDR) package approved by Empowered Group of Corporate DebtRestructuring cell (CDR-EG) approval dated April 27, 2013 the amount of Recompense payable from cut off dateto end of package period i.e. March 31, 2023 ` 852 lacs.

31. In view of accumulated losses and no reasonable certainty of future income to recover Deferred Tax Assets, noprovision for deferred tax assets has been considered necessary.

32. No provision for current Income-Tax is considered necessary in view of the current year and brought forwardBusiness losses and unabsorbed depreciation. In view of current year book loss, no provision for Minimum AlternateTax is required.

33. During the year under review, four members of the consortium banks have assigned their rights to an AssetReconstruction Company named Invent Assets Securitisation & Reconstruction Private Limited. Company reachedan understanding with the said Asset Reconstruction Company for settlement of liabilities during year underreview. The total outstanding in terms of settlement for all the four banks amounts to ` 3491 lacs. As per thesettlement agreement, the company will have to repay this loan over a period of five years. During the year underreview, company has already paid ` 35 lacs as per the payment schedule on due dates.

34. During the year under review, company received a notice from Bank of India, Visakhapatnam and Indian OverseasBank, Visakhapatnam under Section 13(2) of the SARFAESI Act. Company gave detailed replies to the banksrequesting additional time for repayment. However, Bank of India, Visakhapatnam published a public notice in thelocal newspapers on 10/10/2015 taking symbolic possession of the assets of the company under Section 13(4) ofthe SARFAESI Act. As per the legal opinion obtained by the company, the notice issued by the Bank of India,Visakhapatnam under SARFAESI Act is in violation of law and company has filed an appeal under Section 17 ofthe SARFAESI Act before the Debt Recovery Tribunal, Nagpur challenging the action initiated by the bank withoutrequisite majority.

50


13

NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 201635. The Company has entered into a Power Delivery agreement with Sai Wardha Power Company Limited (WPCL) for

procurement of power for its manufacturing activity at the term set out in the said agreement for twenty five yearsfrom the commencement of commercial operation of power plant to be declared by WPCL. As per the terms ofanother related agreement with WPCL, the company has invested ̀ 440 lacs (Previous year ̀ 440 lacs) shown underNon current investments (Note 11) in Equity shares of 884485 of ` 10/- each aggregating to ` 8844850/- and2454133 no. of 0.01% redeemable class A preference shares aggregating to ` 24541330/-. Therefore said sharesare/shall be under lien with WPCL. Upon the expiry of Power Delivery agreement, Class A Equity Shares and ClassA Redeemable Preference Shares will be bought back by WPCL for total consideration of ` 1.

36. Short term loans and advances include ` 75.58 lacs (previous year ` 75.58 lacs) towards advance paid againstsupply of scrap by overseas supplier against which company has initiated action for recovery towards quality dispute.

37. M/s Madhur Engineering Pvt. Ltd. and M/s Tarini steel co. Ltd. have filed winding up petition u/s 433 and 434 of thecompanies Act, 1956 in the Nagpur bench of Bombay High court at Nagpur. The matter is yet to be heard beforethe court and company has taken all steps to suitably defend the case.

38. Some unsecured creditors have filed winding up petition under Section 433 and 434 of the Companies Act forrecovery of their outstanding dues. The matter is yet to be heard and company is taking steps to defend the case.

2015-16 2014-15

`̀̀̀̀ in lacs Percentage ` in lacs Percentage------------------------------------------- ------------------------------------------------ ---------------------------------- ------------------------------------------

39. (a) 1. Value of Consumption of imported Raw Materials - - 28.54 12.622. Value of Consumption of indigenous Raw Materials - - 197.63 87.38

-------------------------------------------- -------------------------------------------- ------------------------------------------- -------------------------------------------- - 226.17 100.00

======================================== ======================================== ==================================== ====================================

(b) 1. Value of Consumption of imported Components andSpare Parts - - - -

2. Value of Consumption of indigenous Componentsand Spare Parts - - - -

(` in lacs)40. C.I.F. Value of Imports: 2015-16 2014-15

------------------------------- -------------------------------(a) Raw Materials - 12.24(b) Components, Stores and Spare Parts - -

-------------------------------------- -------------------------------------------- 12.24

=================================== ====================================41. Expenditure in Foreign Currency:

(i) Commission on Sales - 2.77(ii) Travelling Expenses - -(iii) Cash Discount - 2.20(iv) Interest paid on Loan - -(v) Legal & Professional charges - -

-------------------------------------- -------------------------------------------- 4.97

=================================== ====================================42. Earnings in Foreign Exchange on account of Export of Goods on F.O.B. basis - 790.37

43. Segment Information:The Management Information System of the Company identifies and monitors Steel Product as the business segment.The Company is managed organisationally as a single unit. In the opinion of the management, the Company isprimarily engaged in the business of Steel Product. As the basic nature of these activities are governed by thesame set of risk and return, these constitute and are grouped as single segment as per Accounting Standard (AS)17 dealing with segment reporting issued by ICAI.

44. CONTINGENT LIABILITIES AND COMMITMENTS:(I) Contingent Liabilities:

(a) Estimated amount of contracts on Capital Account & other Commitments remaining to be executed and notprovided for in accounts ` Nil lacs (Previous Year NIL).

51


13

NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2016(b) Claims against the Company not acknowledged as debts, since disputed with Excise Authority ` 322.59 lacs

(Previous Year ` 302.80 lacs). Amounts already paid under protest ` 37.23 lacs (Previous year ` 35.89 lacs)have been debited to Advance Account.

45. Related Party Disclosure:-As per Accounting Standard 18, the disclosure of transactions with the related parties are given below:

I List of related parties:-A. Name and nature of relationship with the related party where control exists:

Vidarbha Iron and Steel Corporation Limited (VISCO) – AssociatesB. Enterprise, over which key management personnel and their relatives exercise significant influence, with whom

transactions have taken place during the year.1 Ferro Alloys Corporation Limited 2 Facor Alloys Limited3 Rai Bahadur Shreeram And Company Pvt. Ltd. 4 Dass Papers Products Ltd.5 Godavari Devi Saraf & Sons 6 S.D. Ores Pvt. Ltd.7 GDP Infrastructure Pvt. Ltd. 8 Shreeram Shipping Services Pvt. Ltd.

C. Key Management Personnel:i) N.D. Saraf Chairmanii) M.D. Saraf Vice Chairman & Directoriii) Vinod Saraf Managing Directoriv) Anurag Saraf Director

II Transactions with Related Parties during the year ended 31-03-2016 in the ordinary course of business. (` in lacs)

Particulars With Subsidiary With Key With EnterprisesManagement where significant

Personnel influence exists

2015-16 2014-15 2015-16 2014-15 2015-16 2014-15

i) Lease rent - 21.00ii) Finance received/(repaid) - - - - - -iii) Balances outstanding at the year end

a) Unsecured loans taken/ (Given)i) Rai Bahadur Shreeram & Co. Pvt. Ltd. - - - - 899.00 899.00ii) Dass Papers Products Ltd. - - - - 3.17 3.17iii) GDP Infrastructure Pvt. Ltd. - - - - 2.00 2.00iv) S.D. Ores Pvt. Ltd. - - - - 0.20 0.20v) Shreeram Shipping Services Pvt. Ltd. - - - - 14.25 14.25

b) Trade Payables:i) Vidarbha Iron & Steel Corporation Ltd. 119.64 120.13ii) Ferro Alloys Corp. Ltd. - - - - 44.70 44.70iii) Facor Alloys Ltd. - - - - 97.89 97.89iv) Godavari Devi Saraf & Sons - - - - 23.43 23.43

46. Previous Year’s figures have been re-grouped wherever necessary.


For SALVE & CO.Chartered Accountants VINOD SARAF ANURAG SARAF(Regn. No. 109003W) Managing Director Director


Nagpur, 6th MAY, 2016 Nagpur, 6th MAY, 2016 Nagpur, 6th MAY, 2016

PRINCIPAL ADDRESS OF THE COMPANY

Registered Office & Works Regional Offices Other OfficesNagpur : Mumbai : Visakhapatnam :46 A & B, A/101, Gokul Arcade, Manganese House,MIDC Industrial Estate, C.T.S. No. 173-A, Swami Nityanand Harbour Road,Hingna Road, Marg, Vile Parle (East), Visakhapatnam- 530 001Nagpur- 440 028 Mumbai - 400 057 Phone : 91-891-2569011 / 13[Maharashtra] Phone : 91-22-26823931 Gram : FACORPhone : 91-7104-235701 Fax : 91-22-26823934 E-mail : [email protected] : FACORSTEEL Gram : FACOR [email protected] : [email protected] E-mail : [email protected] [email protected] : 91-7104-235709 [email protected] Fax : 91-891-2564077

Shri Anil Banka Shri K. Naresh KumarManager Dy. General Manager [Finance]

Corporate & Head OfficeTumsar : New Delhi : Nagpur :Shreeram Bhavan Facor House, A-45-50, Sector-16, Shreeram BhavanTumsar-441 912 Noida, Dist. Gautam Buddh Nagar, Ramdaspeth, Nagpur 440 010Dist : Bhandara [Maharashtra] U. P.- 201 301 India Phone : 91-712-2436920-23Phone : 91-7183-232251, 232233, Phone : 91-120-4171000 Gram : FACOR

233090 & 232341 Fax : 91-120-425 6700 Fax : 91-712-2432295Gram : FACOR E-mail : [email protected] Shri H. S. ShahE-mail : [email protected] Shri Ishwar Das Dy. General ManagerFax : 91-7183-232271 Manager [Administration]

Bhubaneshwar :GD-2/10, ChandrasekharpurBhubaneshwar 751 023[Odisha]Phone : 91-674-2302881 / 882

91-674-2302481Gram : FACORE-mail : [email protected] : 91-674-2302612Shri M. V. RaoResident Manager

52


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FACOR STEELS LIMITEDCIN: L27100MH2004PLC146283

Registered Office & Works: 46 (A&B) MIDC Industrial Estate, Hingna Road, Nagpur-440028, IndiaPhones: +91-7104-235701, Fax: +91-7104-235709

E-Mail: [email protected], Website: www.facorsteel.com

Thirteenth Annual General Meeting on 23rd September, 2016FORM NO. MGT-11

PROXY FORM(Pursuant to section 105 (6) of the Companies Act, 2014 and rule 19(3) of the Companies

(Management and Administration) Rules, 2015)

CIN: L27100MH2004PLC146283 Registered Office & Works: 46 (A&B) MIDC Industrial Estate, Hingna Road, Nagpur-440028, India

Name of the Company Facor Steels 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:...........................................................................................

as my/ our Proxy to attend and vote (on a poll) for me/ us and on my/our behalf at the Thirteenth Annual General Meeting of the Company, to be heldon Friday, the 23rd September, 2016 at 11.30 a.m. at 46 A & B, MIDC, Industrial Estate, Hingna Road, Nagpur-440 028 and at any adjournment thereofin respect of the following resolutions:

Resolution No. Resolutions

Ordinary Business

1. Adoption of Financial Statements, Directors’ and Auditors’ Report for the year ended 31st March, 2016

2. Re-appointment of Mr. Murlidhar Saraf, who retires by rotation

3. Appoint Auditors and fix their remuneration

Signed this....................................day of.....................2016

Signature of Shareholder(s) : ...........................................................................

Signature of Proxy holder(s) : ...........................................................................

Note :1. This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company at 46 A & B, MIDC,

Industrial Estate, Hingna Road, Nagpur-440 028 not less than (48) fourty eight hours before the commencement of the Meeting.2. For the Resolutions, Explanatory Statement and notes, please refer to the notice of the Thirteenth Annual General Meeting.

AffixRevenue

Stamp

If undelivered please return to :

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thirteenth annual report 2015-2016 - bombay stock … · 2016. 9. 20. · [email protected]...

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