star ferro and cement limited - bombay stock … · annual report 2015-16 3 ‘limited’ is a word...

STAR FERRO AND CEMENT LIMITEDAnnual Report 2015-16

AAnnnuuaal RReeppoortt22001155-1166

CORPORATE SNAPSHOT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 04

BUILT ON SOLID FOUNDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 06

CONCRETE PAST, EXCITING FUTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 08

CHAIRMAN’S REVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

THE POWER OF BRAND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

OPERATIONAL SCALE AND EFFICIENCIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

WIDER REACH AND PRESENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

SUPERIOR FINANCIAL MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

INDUSTRY REVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

RISK MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

CORPORATE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

DIRECTORS’ REPORT & MANAGEMENT DISCUSSION AND ANALYSIS . . . . . 25

CORPORATE GOVERNANCE REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

STANDALONE FINANCIAL SECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

CONSOLIDATED FINANCIAL SECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

Contents

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SSTTAARR FFEERRRROO AANNDD CCEEMMENNTT LIMMIITTEEDD

Cement industry is going through a rough patch due to strong headwinds. Demand from key sectors like real estate and infrastructure has not picked up as expected. Growth in the cement space is limited.

...think againIn spite of a challenging macro-conditions, there is one cement company that demonstrated exceptional growth.

37.44% TOPLINE CAGR IN 3 YEARS

49.32%EBITDA CAGRIN 3 YEARS

54.54%PAT CAGRIN 3 YEARS

At Star Ferro and Cement Limited, this is how fast we have grown in the past three years alone.


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‘Limited’ is a word and concept we have always strived to overcome, because limits, we believe, exist only in minds and mindsets.

At Star Cement, we have constantly endeavoured to stretch beyond limits by:

Continuing aggressive branding and focussed on making value-added products to bypass the ‘commodity trap’.

Strengthening our market position in the North-East region and widening our reach to newer regions to augment growth.

Focussing on backward integration to further enhance our competencies and margins.

That is why even during a year of uphill challenges when the cement prices were falling and the raw material prices were rising, we successfully increased both our topline and bottomline by 19.93% and 10.23% respectively in 2015-16.

With a strong brand name that resonates with trust of consumers and with a product quality that is amongst the best in the industry, we are confi dent of accelerating the growth momentum with demand set to surge as both infrastructure spending increases and real estate revives in the near and mid-terms.

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Corporate snapshotWhen you cherish infrastructure marvels in North-East India, think of us.When you come across trucks carrying cement or clinkers in North-East India, think of us.When you see the world’s largest ‘Durga’ idol, think of us. When you think of a trusted brand, think of us.

We are Star Ferro and Cement Ltd. - North-Eastern India’s largest cement player with fully integrated manufacturing facilities and a fast-expanding footprint in eastern India.

Legacy

• Incorporated in 2011 by Mr. Sajjan Bhajanka, Mr. Hari Prasad Agarwal, Mr. Sanjay Agarwal and Mr. Prem Kumar Bhajanka

• Focussed on grade ‘A’ quality OPC (Ordinary Portland Cement), PPC (Portland Pozzolana Cement) and PSC (Portland Slag Cement) manufacturing

• Shares listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE)

• Market capitalisation of ` 2,587.20 crore as on March 31, 2016

Manufacturing Capacities

Certifi cations

• ISO 9001:2008 (quality), ISO 14001:2004 (environment protection) and BS OHSAS 18001:2007 (health and safety) certifi ed

2.60MMTPA CLINKER MANUFACTURINGCAPACITY

3.70MMTPA CEMENT MANUFACTURINGCAPACITY

51MW POWER GENERATIONCAPACITY


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Awards and accolades

• “Fastest Growing Company” above ` 1,000 crore at The Economic Times Bengal Corporate Awards 2016

• “Best Practices in Employee Engagement” from National HRD Network (NHRDN) in 2016

• First prize in the Thermal Power Station Sector - National Energy Conservation Award, 2015 & 2014

• ‘Most preferred Cement brand’ for5 consecutive years at the North East Consumer Awards in 2015

• Most preferred cement brand by AREIDA from 2010 to 2013

• Awards received for constructing the world’s tallest ‘Durga’ idol include:

o Recognition in the Limca Book of Records, Asian Book of Records and Indian Book of Records

o Best Integrated Marketing Award Durga Puja Campaign Industry in Cement category from BAM (Branding, Advertising and Marketing) Awards & Recognitions

o Won gold in ‘Alternative Media’ category from Outdoor Advertising Awards (OAA)

Presence

Key numbers

Headquartered in Kolkata (West Bengal)

Five owned manufacturing facilities - four in Meghalaya and one in Guwahati. Three hired grinding units in West Bengal

Marketing presence across 11 states (Assam, Meghalaya, Arunachal Pradesh, Manipur, Tripura, Nagaland, Sikkim, Mizoram, West Bengal, Bihar and Jharkhand)

Map not to scale, for illustrative purpose only

11STATES WHERE THE COMPANY OPERATES

2,380+DEALERNETWORK

76%PROPORTION OF TRADE SALES OVER TOTAL SALES

8,700+RETAILERNETWORK

1,00,000+TECHNICAL TOUCHPOINTS FOR CATERING TO END-USER REQUIREMENTS

6+REMAINING YEARS OF FISCAL INCENTIVES FROM GOVERNMENT

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Built on solid foundation

Strong brand name:

With a focus on excellent product quality, endorsement through celebrities and innovative marketing strategies, we have emerged as one of the most trusted and popular brands in the NER having the highest brand recall.

Marketing:

We maintain strong business relations across supply chain partners by providing various incentives and technical services. This has enabled us to deepen market penetration through a vast and reliable supply chain network.

Economies of scale and integration:

We are amongst the largest cement manufacturers of the NER having integrated clinkering and captive power plant providing the advantage of operational synergies, higher capacity utilisation and economies of scale.

Strong fi nancials:

We have developed a strong foundation through our robust fi nancial performance with aNet Worth of ` 749.77 crore, Cash Profi t of ` 310 crore and a Debt:Equity of 0.77 as on March 31, 2016.

Logistics advantage:

Our units are strategically located to ensure proximity of clinkering units to raw material mines, while grinding units are closer to marketing points. This creates compelling advantages from cost and time savings through reduction in transit distance, lending distinct benefi ts of operational synergies.

Fiscal incentives:

We enjoy fi scal incentives in the form of tax exemptions from the Government further strengthening our position in the cement industry.


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Performance across key markets

North-Eastern India

Bihar & Jharkhand

West Bengal

Years of operations:

12


2


2.5Market share:

26%

Market share:

3%

Market share:

6%2-year target for market share:

28%

2-year target for market share:

8%

2-year target for market share:

10%

Product portfolio:

PPC,OPC

Product portfolio:

PPC, OPC, PSC

Product portfolio:

PPC,OPC,PSC

Strategies for penetration:

• Provide technical services, demonstrations and onsite support through a strong technical team of 120+ persons

• Enhancing loyalty programs and commence point-based loyalty program to strengthen supply chain network

• Increase dump points to further widen our reach

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Concrete past, exciting future Cement production (In metric tonnes)

Strategies to enhance production:

• Enhance production through owned capacity expansion, hiring new grinding units and higher capacity utilisation

2013-14 2014-15 2015-16

16,64,037

21,71,666

26,70,287Production growth

23%OVER 2014-15

35.85%CAGR OVER 3 YEARS

Return on capital employed (In %)

Strategies to enhance return on capital employed:

• Focus on hiring grinding units in Eastern India rather than making outright investments

5.15

10.77 10.62 ROCE growth

15BASIS POINTSOVER 2014-15

692BASIS POINTSOVER 3 YEARS

Total income (In ` lacs)

Strategies to enhance revenues:

• Consolidate position in NER and strengthen sales in pockets where Company has minimal presence

• Undertake strong branding, implement marketing strategies and increase penetration in West Bengal, Bihar and Jharkhand

Revenue growth

19.93%OVER 2014-15


1,17,588

1,43,121

1,71,645

Profi t after tax (In ` lacs)

Strategies to enhance PAT:

• Re-invest profi ts in business, repay long-term debts and reduce leverage

PAT growth

10.23%OVER 2014-15


612

8,344

9,197

2013-14 2014-15 2015-16

2013-14 2014-15 2015-16 2013-14 2014-15 2015-16


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Cement Sales Volume break-up:

Share of trade sales (In %)

79.95

76.4076.30

Product-wise (in MT and %)

Portland Pozzolana Cement

Ordinary Portland Cement

Portland Slag Cement

23.2%

74.8%

2% 6,09,177

19,67,732

52,786

Region-wise (in MT and %)

North-East India

West Bengal

Bihar & Jharkhand

22.7%

64.8%

12.5% 5,95,665

17,03,415

3,30,615

2013-14 2014-15 2015-16

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Chairman’s review

Dear Shareholders,

The year 2015-16 was a mixed one for the cement industry in India. On the one hand, the industry witnessed a marginal growth of 6% in demand due to subdued demand from key consuming industries (real estate and infrastructure). This resulted in lower capacity utilisation of 70% and a decline in cement prices, pressurising margins.On the other hand, amendments in Mines and Minerals (Development and Regulation) Act are expected to open up opportunities for consolidation enabling mergers and acquisition deals. While input costs like limestone and rail freight increased, international coal, pet-coke and road freight costs declined.

Highlights, 2015-16

Amidst this challenging scenario, the Company managed to perform considerably well. On operational front, clinker, cement and power production increased 12.86%, 22.96% and 9.05% respectively to 21.21 lacs metric tonne (LMT), 26.7 LMT and 1,831.14 lac kWh respectively in 2015-16.

On marketing front, the Company’s cement sales increased 21.23% from 21.69 LMT in 2014-15 to 26.30 LMT in volume terms. A major achievement during the year was the Company’s strengthening footprint in the north eastern region where sales grew by 38% - accounting for 35.22% of the Company’s total sales compared to 30.93% in 2014-15.

On fi nancial front, the Company’s total revenues increased 19.93% from ` 1,431.21 crore in 2014-15 to ` 1,761.45 crore in 2015-16 driven by volume growth. However, decline in cement prices and increase in logistics costs (due to split locations) led to 8.38% decline in EBITDA to ` 399.31 crore. The PAT for the year increased 10.23% to ` 91.97 crore.

Star Ferro and Cement Limited (SFCL) and the future

At SFCL, we believe that in a commodity business there are two ways of operating - one, by just focussing on large-scale volume expansion and witnessing margin erosion; the second, by being a niche player focussed on quality and growing volumes steadily. We chose the second way - we focussed on one segment (A-grade quality cement), strengthened capabilities and developed business model to create a strong brand. The strong brand name and quality of our products enable us to command higher prices resulting in increased realisations. The quality of our premium brand products is comparable to the leading cement players in the industry. The success of our strategy is evident from our numbers and our relatively de-risked business.

Some of the highlights of this year are:

Making the world’s largest ‘Durga’ idol

During the year, the Company undertook a massive brand promotion initiative in the states of West Bengal, Assam, Bihar and Jharkhand for creating the world’s largest ‘Durga’ idol for ‘Durga Puja 2015’ in Kolkata (West Bengal) from its cement. Widespread media advertisements (video, audio and print) was undertaken to promote the campaign. The brand promotion was extremely successful leading to immense popularity of the ‘Star’ brand and helped in creating a strong brand recall.

The strong brand name and quality of our products enable us to command higher prices resulting in increased realisations. The quality of our premium brand products is comparable to the leading cement players in the industry.


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Capacity expansion

In 2015-16, the Company hired a new 0.33 MMTPA grinding unit in October 2015 (West Bengal) for catering to the local cement requirements. The unit shall focus on making Portland Slag Cement (PSC) due to high availability of slag in the vicinity. De-bottlenecking of the 1.8 MMTPA grinding unit at Guwahati shall further enhance our grinding capacity by 0.3 MMTPA taking our total grinding capacity to 4 MMTPA (3.3 MMTPA in NER and 0.7 MMTPA in East).

Micro-level marketing strategies

The Company undertook signifi cant efforts in understanding the market dynamics and developed micro-level strategies to enhance sales across each small pocket in a particular region. It follows a combination of push (through strengthening network and incentivising dealer) and pull (through focus on product quality) strategy to enhance market share. The Company has dump points spread evenly across every district or a cluster of small districts to ensure timely product availability in the remotest areas. Strong brand promotion activities are one of the key focus areas of the Company.

Technical services

The Company organises ‘STARTECH’ (a technical programme) for masons and engineers, who are indirect customers, as a surrogate marketing strategy to infl uence their buying behaviour. These programmes provide technology knowhow and information on best methods of using cement to derive maximum benefi ts. This has enabled the Company to create strong business relationships which in turn enhances business

opportunities. A monthly e-newsletter (Star Technopedia), covering new initiatives and developments in construction industry, is also distributed to inform infl uencers as a marketing tool.

Certifi cation programmes

The Company provides various education and certifi cation programmes to masons (Star Pravin Mason Certifi cation programme) and engineers (Star Stellar Club). These programmes enable the masons and engineers to sharpen their skills and at the same time strengthen their relationships with the Company facilitating loyalty.

Industry optimism

The revival of the real estate and infrastructure segments generates renewed optimism for the cement industries, especially in the NER that had been long ignored. Most of the gauge conversion and road construction projects in the NER were either stalled or moving slow. However, with renewed interest from the Centre, these projects were fast-tracked resulting in construction of 900 km of broad gauge lines in two years and speeding up of road construction projects. Despite this, the region still lags behind in infrastructure development and to bridge the gap, the Government of India has come up with various initiatives that include construction of houses, smart cities, Guwahati Metro, airports, hydel power projects and cross-country road connectivity projects.

I would like to thank all the stakeholders (shareholders, bankers, suppliers, channel partners and employees) for being an important part of our journey. We are very excited and optimistic about the long-term prospects of the industry and our Company. We have demonstrated our capabilities in a region outside our comfort zone, strengthened business model, developed robust balance sheet and undertaken important strategies. From here onwards, we expect the Company to become stronger and grow faster than ever with the intention of providing superior returns to shareholders.

Warm regards,

Sajjan BhajankaChairman

The Company undertook signifi cant efforts in understanding the market dynamics and developed micro-level strategies to enhance sales across each small pocket in a particular region.

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Growingthrough…The power of brand

When you want quality cement from retailers.They suggest Star Cement.

When you ask engineers how to make the project sustainable. They recommend using Star Cement.

When you ask the top builders which cement they use.They reply Star Cement.


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We were amongst the fi rst cement companies in India to establish presence in NER. We undertook massive spending on brand promotions through celebrity endorsements and advertisements (audio, television and print).

We are amongst the fi rst companies in India to undertake a unique branding initiative by associating the most popular event (Durga puja) in Kolkata (West Bengal) with the strength of the Company’s product by making the world’s largest ‘Durga’ idol with it.

We are amongst the fi rst cement companies to initiate a unique engagement programme (STARTECH) for bringing together architect, engineers, masons, professors and industry experts for sharing knowledge and providing technical assistance.

We are amongst the fi rst cement companies to provide on-site technical assistance through unique concept of mobile vans manned by experts.

This is the power of brand ‘Star’

The Result: We are the most popular and trusted cement brand in the entire NER and eastern region of India. Our cement is no longer termed as a commodity; it is recognised as ‘Star’.

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When you ask industry experts who is the largest cementmanufacturer in NER? They answer Star Ferro and Cement Ltd.

When you ask analysts which cement company has the highest EBITDA per tonne? They reply Star Ferro and Cement Ltd.

When you ask customers who offers differentiated services?They say Star Ferro and Cement Ltd.

Growingthrough…Operational scale and effi ciencies


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We started with a small manufacturing capacity of 0.30 MMTPA clinker, 0.60 MMTPA cement. Today, we have graduated to 2.60 MMTPA clinker and 3.70 MMTPA cement manufacturing and 51 MW power generation capacities across fi ve owned manufacturing facilities (four in Meghalaya and one in Guwahati) and three hired grinding units in West Bengal.

This is the reputation of our Company.

Our logistical advantage (proximity to raw materials and end-users), fi scal incentives, operational excellence and integration enable us to be one of the lowest cost manufacturers.

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When you ask a dealer in the remotest area of North-East India which top quality cement is always available? They reply Star Cement.

When a consumer in West Bengal wants to construct their ‘baadi’ (home)? They reply ‘Star Cement chara hobe na’ (Home will not happen without Star Cement).

When you ask a mason in Jharkhand which cement is the most reliable? They retort Star Cement.

When you ask stores in Bihar to give you the best quality cement? They give you Star Cement.

Growingthrough…Wider reach and presence


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We began by having presence in states of NER. Today, we have spread across all the states in NER with marketing presence in remotest areas.

We concentrated in the NER for years. Today, we have spread to eastern parts of India with expanding market share in West Bengal, Bihar and Jharkhand. We are constantly devising marketing strategies and spreading across small pockets of the region by creating dumping points catering to a cluster of districts in the region.

This is the depth of our market penetration.

The Result:Our presence is wider and deeper than ever before contributing to the topline growth of the Company.

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When you ask investors who is the fastest growing cement player in Eastern region? They suggest Star Ferro and Cement Ltd.

When you ask bankers which cement company has strong balance sheet? They assert Star Ferro and Cement Ltd.

When you ask rating agencies which cement company is the most attractive? They mention Star Ferro and Cement Ltd.

Growingthrough…Superior fi nancial management

When you ask researchers which cement company has the fastest inventory turnaround? They say Star Ferro and Cement Ltd.


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We were a highly geared Company with a gearing of 1.10 as on March 31, 2013 as we focussed on expansion. Today, we have relatively reduced our leverage by paying-off a part of long-term debt and focussing on hiring manufacturing units rather than acquiring them. Our Debt:Equity as on March 31, 2016 stood at 0.77.

In the past four years, our Net Worth strengthened 8% from ` 69,272 lacs as on March 31, 2013 to ` 74,977 lacs as on March 31, 2016.

This is the fi nancial robustness of our Company.

The Result: Our PAT margin increased 159 basis points from 3.77% in 2012-13 to 5.36% in 2015-16.

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Industry reviewIndian economy

The Indian economy continued to outperform amongst global uncertainty buoyed by favourable Government policies and low oil prices that drove private consumption. All the sectors of the economy performed well, leading to a GDP growth of 7.6% in 2015-16 compared to 7.2% in 2014-15. The agriculture sector (in spite of defi cit rainfall and droughts in certain areas) grew 1.2%, manufacturing sector by 9.3% and consolidated services sector by 8.8%. The gross fi xed capital formation grew by 3.9% compared to 4.9% in 2014-15. Favourable policies (‘Make in India’ and ‘Start up India’) and declining interest rates led to strong growth in manufacturing activities.

The overall macro-economic scenario in the country is quite positive with fi scal defi cit, infl ation and interest rates being under control. The infl ationary trends that troubled the country over the past few years has been under control during the last fi scal declining to levels of below 5% in March 2016 compared to highs of 11.16% in November 2016. The fi scal defi cit also declined to a level of 3.99% of the GDP by the end of fi scal and is expected to be at a level of 3.5% in 2016-17. The country’s Forex reserves strengthened to an all-time high of USD 361.30 bn as on April 2016.

The current position of the Indian economy is very strong with most of the international agencies like IMF and World Bank expecting the country to be the fastest growing major economy in the coming years. The business environment in the Indian economy due to delays in clearances and obstacles in policy roll-out, though still not favourable, seems to be in a better shape. In the ease of doing business index by the World Bank, the country’s ranking moved up four places to 130 out of 189 countries. Macro-level initiatives by the government in regard to easing business policies, increase in infrastructure spending and focus on fi scal targets coupled with low commodity prices would enhance economic activities and drive GDP growth. Moreover, the increased focus on the agriculture sector is further expected to boost agri-output and in turn drive GDP growth. With all these positives, the Indian economy is expected to grow by 7.6% or above in 2016-17. (Source: Monetary Policy Report, April 2016, the Reserve Bank of India)

Indian cement industry

Overview

India is the world’s second largest cement producer and consumer with an annual production capacity of nearly 400 million tonnes (MMT) which is expected to increase to 550 MMT by 2025. The industry has nearly 550 operational units with top 20 cement companies accounting for almost 70% of the total production. While 350 small scale units account for 5% of the total production. However, a major concern has been the dumping of cement by these units at lower prices which is impacting the profi tability of the entire industry. During 2015-16, amendments were implemented in the ‘Mines and Minerals (Development and Regulation)’ which is expected to support consolidation and clear various obstacles that stalled merger and acquisition deals in the cement sector.

Performance in 2015-16

The cement production in India grew moderately by 5% from 270 MMT in 2014-15 to 282 MMT in 2015-16 lower than the last fi scal’s growth of 6% owing to muted demand from key customer industries (real estate and infrastructure sector). The capacity utilisation of the cement industry was 70% compared to 71% in the previous fi scal. The fi rst nine months of the fi scal witnessed a period of stagnancy, while from the fourth quarter of the year, the demand began to pick up. High demand growth in the eastern regions, revival in the southern and northern market and increased infrastructure spending by government led to a growth rebound in the sector.

2012-13

5.65.3

4.9

6.6 6.8

3.4

7.2

6.2

4.9

GDP Private Consumption Investment Demand

2013-14 2014-15 2015-16

7.6 7.6

5.3

Year-on-year changes in GDP, GVA, private consumption and investment demand (in %)


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Indian cement industries added an expected capacity of 24 MMTPA during 2015-16. The prices of cement fell across all markets in India owing to subdued demand. In Northern market, prices fell by ` 15-20/bag, in Southern markets, prices were relatively stable (with exception of Hyderabad where prices grew by ` 20/bag), in Western markets prices fell by ` 15/bag and in Eastern markets it fell by ` 5/bag. Improvement in the capacity utilisation of the western, northern and eastern market is likely to support prices in the near term. While in southern markets, the demand is likely to improve with capacity utilisation continuing to be moderate.

Sector-wise demand for cement

67%13%

11%

9%

Demand drivers

• Indian real estate sector growth: The Indian real estate market witnessed sluggish growth in the past 2-3 years owing to macro-economic troubles, high inventory levels, poor project management, funding crunch, escalating construction cost and high infl ation. However, the industry is set to revive with rising demand and increased private equity investments is expected to boost the construction activities. By the end of 2015, the investment potential of Indian real estate market is estimated to be USD 54-67 bn for Grade A offi ce stock and 9,00,000 units for the residential segment scheduled for completion over the next four years.(Source: Knight Frank report)

Moreover, the Government of India introduced two major projects that is expected to boost demand for the real estate sector in India - creation of 100 smart cities at an investment of ` 96,000 crore for sustaining population growth and migrations from rural areas and the ‘Housing for all by 2022’ project that focusses on providing a house to every citizen in the country. The

government has already sanctioned construction of 2.95 crore houses in the rural areas at an investment of ` 81,975 crore from government and ` 21,975 crore from borrowing through National Bank for Agriculture and Rural Development (NABARD).

Further, the relaxation in FDI policies for real estate sector, new Real Estate Regulatory Act and introduction of Real Estate Investments Trusts shall drive activity in the sector.

• Infrastructure sector: The Government of India allocated a massive sum of ` 2.21 lacs crore towards infrastructure sector, a 32% growth over the last fi scal’s allotment. The rural development, roads, shipping and railways witnessed highest increase in allotment. ` 97,000 crore has been allotted to roads sector - for reviving stalled projects (85% projects put on track), adding a proposed 10,000 kms of highway, constructing rural roads under the Pradhanmantri Gram Sadak Yojna and upgradation of 50,000 kms of state highways to national highways. ` 8,000 crore has been allocated for the development of ports sector. ` 1,21,000 crore has been allotted to railways sector for various modernisation, cleanliness and expansion programmes. Other projects include modernisation of airports and construction/expansion of metro rail projects.

According to the Indian Finance Minister Arun Jaitley, India needs USD 1.5 trillion investments over the next 10 years to meet the shortfall in infrastructure. The government expects to undertake massive modernisation plan (connecting 7,00,000 villages with road network, developing highways, modernising railway and airport) to strengthen the country’s infrastructure to support its growing economy.

• Implementation of seventh pay commission: Theimplementation of the seventh pay commission is likely to put additional funds of USD 15 bn in the hands of

6 croreCURRENT HOUSING SHORTAGE IN INDIA

11 croreHOUSES THAT NEED TO BE CONSTRUCTED FOR FULFILLING THE HOUSING FOR ALL INITIATIVE

Housing

Infrastructure

Commercial Construction

Industrial Construction

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Risk management Industry risk

A slowdown in the economy may impact the infrastructural growth which in turn could impact the Company’s performance.

Risk mitigation

The Indian economy is growing strongly with increased government focus on the fi scal targets and roll-out of favourable policies. However, for the economy to maintain its growth momentum, it is important for the government to make signifi cant investments in the infrastructure segment. The government has invested a sum of ` 2.21 lacs crore towards infrastructure sector. Moreover, the construction and housing sector that had witnessed sluggish growth in the past few years is expected to revive.

consumers. The increased funds availability in the hands of individuals is likely to boost demand for housing in India.

The North-East opportunity

• Power shortage: The NER has a total installed power capacity of 2,905 MW which is insuffi cient to meet demand resulting in power shortages. The long power requirement in the region is expected to be 5,075 MW in 2021-22 and 10,253 MW by 2031-32. Thus, the region requires huge investments in the power sector to meet the existing shortfall and rising demand for future. The region has an immense potential to generate power from renewable sources - it has nearly 58,971 MW of hydro power.

• Infrastructure: The NER is connected to rest of India by rail and road only through the 22 km wide Siliguri Corridor making connectivity a major issue. The rail and road network and air connectivity also falls short of the requirement. The Government of India invested a sum of ` 92,000 crore to develop the rail (create new and strengthen existing) and road network (6,400 km of Trans-Arunachal highway for connecting all district headquarters).

• BBIN (Bangladesh, Bhutan, India and Nepal) initiative:This agreement among the four countries focusses on connectivity - this includes electric grids, access to rail, road, air and port infrastructure.

• Trilateral highway agreement: The agreement includes construction of a 3,200 km India-Myanmar-Thailand trilateral highway forming part of Asian highway that shall facilitate seamless travel across the South-East Asian countries thereby boosting trade and economy among ASEAN countries.

• Kalandan multi-modal project: This is a ` 2,904 crore multi-modal transit transport project passing through Myanmar and providing alternative access routes to India’s North-Eastern states for enhancing trade relations. The transit route shall link Kolkata (India) port to Sittwe (Myanmar) port across Bay of Bengal, then link Sittwe to western Myanmarese town of Paletwa over river Kaladan and then link Paletwa to Indian-Myanmar border through 110 km road. The project includes:

o construction of an integrated port and inland water transport (IWT) terminal at Sittwe

o development of a navigational channel along river Kaladan in Myanmar from Sittwe to Paletwa

o construction of a highway transshipment terminal at Paletwa

Outlook

The outlook for Indian cement industry is positive on account of revival in infrastructure (primarily roads projects) and investment spending, recover in rural demand supported by favourable monsoon and pick-up in real estate and industrial activities. The sector is expected to add 16 MMTPA and 8 MMTPA capacities in 2016-17 and 2017-18 respectively, while the demand is expected to grow by 6% and 7% respectively during the same period. The increasing demand would have to be met by increasing capacity utilisation. (Source: ICRA cement report)


23

The Company primarily operates in the NER of the country with growing presence in the Eastern region - these regions have acute shortage for urban (4.3 million) and rural (17 million) housing and has the lowest per capita consumption of cement at 131 kgs compared to national average of 210 kgs. To address this shortfall in infrastructure and housing segments, the government has come up with Vision 2020 and Act East Policy that shall boost economic and infrastructural development across these regions.

Marketing risks

Inability of the Company to market products could lead to inventory pile-up and losses.

Risk mitigation

Star Ferro is one of the most trusted and reputed brands in the North-Eastern part of the country given the quality of its products. It devises aggressive and unique marketing strategies to attract more customers. It spends nearly 2% of its revenues on branding and marketing that includes celebrity endorsements and campaigning (out-of-home, television commercial, radio and press media). During the year, the Company also undertook a massive brand promotion initiative in Kolkata (West Bengal) by making the world’s largest “Durga idol” that led to immense popularity of the brand in the region. Apart from this, the Company also initiates various customer-centric incentive-based programmes like ‘Kismat ki Bori’ and ‘Dhan Varsha’ schemes as well as giving attractive gifts to dealers, masons and customers.

The Company also initiated a unique marketing strategy by organising ‘STARTECH’ programme that focusses on infl uencing the mindset of indirect customers (masons and engineers) who act as decision-makers for direct customers (individual buyers). The programme brings together architects, engineers, professors and experts for knowledge sharing and value-enriching discussions. The programme also provides technical information related to best use of its products to enable them derive maximum benefi ts from it.

Apart from 24-hour toll-free customer care number and SMS-based customer education helpline, the Company also provides on-site technical assistance through its mobile vans that is manned by experts.

Location risk

Inability of the Company to choose appropriate plant location could impact business viability.

Risk mitigation

Strategic plant location is one of the primary advantages for the Company. Its clinkering plants are closer to raw material mines while grinding units are closer to end-user industries thereby enabling it to make signifi cant savings in logistics cost. It also reduces transit time enabling the Company to have faster inventory turnaround and reach the target customers on time. Moreover, the Company’s location enables it to enjoy tax exemptions through fi scal incentives making it one of the lowest-cost producers.

Competition risk

Inability of the Company to manufacture quality products at low-cost could impact sales and profi tability.

Risk mitigation

Star Ferro is amongst the fi rst companies to establish cement manufacturing plant in the NER making it one of the most recognised brands. Years of experience in the region enabled the Company to gain signifi cant market insights for making important business decisions (selecting appropriate locations, undertaking expansion at the opportune moment, investing in plant modernisation and captive power plant and endorsements through popular regional celebrities). These initiatives coupled with the Company’s stringent focus on quality control make it one of the lowest-cost and most preferred cement manufacturers in the region. It enjoys a 26% market share in NER. The Company has replicated the same strategies to enter the eastern region and gain market share.

Finance risks

Cement business, being a commodity business, has lower margins. Thus, the inability to utilise own funds or procure cost-effective loans funds could impact profi tability.

Risk mitigation

The Company’s focusses on reducing leverage in a phased manner to enhance profi tability. During the year, long-term debt amounting to ` 116 crore has been paid-off resulting in the Company’s debt:equity and interest cover improving to 0.77 and 2.73 respectively as on March 31, 2016 from 1.02 and 2.43 respectively as on March 31, 2015.

24


Corporate Information

Board of Directors

Mr. Sajjan BhajankaChairman & Director

Mr. Hari Prasad AgarwalDirector

Mr. Sanjay AgarwalDirector

Mr. Manindra Nath BanerjeeDirector

Mr. Santanu RayDirector

Mr. Mangilal JainDirector

Mrs. Plistina DkharDirector

Auditors

Kailash B. Goel & Co.Chartered Accountants70, Ganesh Chandra Avenue, 1st Floor, Kolkata - 700 013

Chief Executive Offi cer

Mr. Sanjay Kumar Gupta

Chief Financial Offi cer

Mr. Dilip Kumar Agarwal

Company Secretary

Mr. Debabrata Thakurta

Bankers

HDFC Bank

Registered Offi ce

Vill: Lumshnong, P.O. KhaliehriatDist: East Jaintia HillsMeghalaya - 793 210

Corporate Offi ce

‘Satyam Towers’, 1st Floor,Unit No. 9B, 3, Alipore RoadKolkata - 700 027Phone: 033 22484169/70Fax: 033 22484168Email: [email protected]: www.starferrocement.co.in

Registrars & Share Transfer Agents

Maheshwari Datamatics Pvt. Ltd.6, Mango Lane, 2nd Floor,Kolkata - 700 001

CIN : L27310ML2011PLC008564


25

Directors’ Report and

Management Discussion & AnalysisDear Shareholders,

Your Directors have pleasure in presenting Sixth Annual Report of the Company together with the Audited Balance Sheet as at 31st March, 2016 and the Statement of Profi t & Loss for the year ended on that date.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURESYour Company has fi ve subsidiaries including step-down subsidiaries namely, Cement Manufacturing Company Limited (CMCL), Star Cement Meghalaya Limited (SCML), Megha Technical & Engineers Private Limited (MTEPL), Meghalaya Power Limited (MPL) and NE Hills Hydro Limited (NHHL). CMCL along with its subsidiaries operates integrated Cement plants in the State of Meghalaya and Assam with a combined installed capacity of 2.87 MMTPA of Cement and 2.54 MMTPA of cement clinker. MPL is in the business of power generation and operates 51 MW Thermal Power Plant in the State of Meghalaya. NHHL is exploring possibilities of power generation in the North Eastern Part of India. The report on the fi nancial position of the Company’s Subsidiaries for the year ended 31st March, 2016 in Form AOC 1 is attached and marked as Annexure - 1to this report.

Your Company does not have any Associate or Joint Venture.

A Policy has been formulated for determining the Material Subsidiaries of the Company. The said Policy has been posted on the Company’s website at the weblink: http://www.starferrocement.co.in/admin/docs/policy-on-material-subsidiary.pdf

INDIAN ECONOMY AND GLOBAL HEADWINDSAmidst mixed global economic landscape, India stands out as a haven of stability and an outpost of opportunity. Its macro-economy remains stable, founded on the Government’s commitment to fi scal consolidation and low infl ation. Country’s economic growth has remained the highest in the world, helped by a reorientation of Government spending towards needed public infrastructure and have been accomplished in the face of global headwinds and a second successive season of poor rainfall. During the Financial Year 2015-16 India as an economy fared well as compared to most of the developing economies as also compared to developed economies. The signs of consolidation of Indian Economy which started refl ecting during October-December Quarter of FY 2014-15 were sustained and confi rmed during the year under review. As against 7.2% of GDP growth during Financial Year 2014-15, Indian Economy is expected to register GDP growth rate of 7.6% during the FY 2015-16. Despite a weak monsoon for a second consecutive year, agriculture and food production both grew, although marginally, over previous year. Improvement in private consumption was witnessed largely on account of a pickup in urban consumption, while rural consumption remained subdued as a result of two consecutive weak monsoons. Government consumption growth also stayed tepid as the Central Government boosted capital expenditure and curtailed current expenditure. Increase in capital expenditure undertaken by the Central Government helped investment growth to improve further during the year under review as compared to previous Financial Year.

Infl ationary pressures were largely under control mainly on account of sharp fall witnessed in the prices of oil as also on account of base rate effect and softening of food prices.

As against this, Global economic growth slowed in FY 2015-16 to its weakest pace since the year 2008-09. This was mainly led by slower growth in emerging economies. China’s real GDP growth was witnessed at 6.9% during the year 2015 which is one of the slowest in last 25 years refl ecting a weaker growth in country’s industrial sector. Growth in other emerging economies also slowed in 2015 and more particularly in commodity producing countries. All major developed economies are expected to see the growth momentum picking up. Despite expectations of a more robust recovery, developed economies continue to face considerable headwinds from the legacies of the global fi nancial crisis, including subdued employment levels, elevated private and public sector debt and fi nancial sector fragilities.


26

In the backdrop of above, Indian Economy is expected to pick up further growth momentum during the ensuing Financial Year, helped by the Government’s strengthening of public sector banks’ capital and operations, private investment benefi tting from corporate deleveraging, the fi nancing of stalled projects and an uptick in bank credit.

CEMENT SCENARIO IN INDIA – OPPORTUNITIES, CHALLENGES AND OUTLOOKCement is major business vertical for subsidiaries of your Company. India is one of the largest producer of Cement in world and only second to China. It accounts for nearly 8% of the total global production having close to 400 Million MT per annum installed capacity. The cement industry capacity doubled in the last decade, with about 70 Million MT added in the last three years alone. Cement, being a bulk commodity, is a freight intensive industry and transporting it over long distances can prove to be uneconomical. This has resulted in cement being largely a regional play with the industry divided into fi ve main regions viz. North, South, West, East and the Central Region. The Southern region of India has the highest installed capacity, accounting for about one-third of the country’s total installed cement capacity.

On the consumption side, India has witnessed sustained growth in cement consumption since 2001. However, consumption growth has slowed down in last 4-5 years mainly on account of a slump in housing, infrastructure and commercial sector. The gap in the pace between capacity additions and actual demand has led to an excess capacity situation in the industry, resulting in sub-optimal utilization rates.

On Per Capita consumption front, cement in India still remains substantially low at about 195 kg which is less than 50% as compared with the world average and thus underlines the tremendous scope for growth in the Indian cement industry in the long term.

Cement is a cyclical commodity with a high correlation with GDP. The housing sector is the biggest demand driver of cement, accounting for about two-thirds of the total consumption. The other major consumers of cement include infrastructure, commercial construction and industrial construction.

First half of FY 2015-16 witnessed slowdown in consumption and demand growth. However, second half of the Financial Year started with up-tick in demand which further consolidated during the last quarter of the Financial Year. Housing sector is the major demand driver. The slow growth in cement sector is expected to remain a short-term phenomenon with the Government’s focus on constructing 50 million houses under ‘Housing for All’ scheme by 2022. Government’s other initiatives such as 100 smart cities, AMRUT cities, affordable housing as well as initiatives undertaken towards development of ports, roads, bridges, freight corridor, etc. are likely to provide further impetus to cement demand in India. This also gets refl ected with Government’s intention to unshackle the impediments in economic and infrastructural growth. The years ahead are expected to bring more cheers for Indian Cement Industry.

On the cost front power, fuel and logistic costs are the major cost drivers. Cost, quality and availability of coal are major cost driver for power as well as fuel so far as cement industry is concerned. Indian cement industry continued to face challenges on this front, both in terms of quality as well as prices. However, with all time low Baltic Dry Index (BDI), the landed cost of imported Petroleum Coke has been seen to be more cost effective for cement industry in terms of its cost as well as consistency in quality parameters. With unblocking of coal blocks and Governments intent to bring perceptible difference in power supply situation, both in terms of quantity and quality, it is expected that in years to come, the challenges currently being faced by Indian cement industry will be eased out.

In the backdrop of opportunities in Housing and Infrastructure sectors, India as an economy presents a promising future for cement industry.

EAST INDIA AND LAND OF SEVEN SISTERS – AN OPPORTUNTY FOR CEMENT INDUSTRYEast India which comprises of States of West Bengal, Bihar, Jharkhand and Orrisa as well as eastern most North Eastern Region comprising of contiguous Seven Sister States namely, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura and Himalayan State Sikkim is endowed with opportunities. North East India is 8% of land size of India where around 4% of Indian populace resides. The region offers a unique agglomeration comprising varied cultures, languages and dialects, different forms of belief and worship and diverse ways of life. Topography of North Eastern Region (NER) presents a panoramic view and an awe-inspiring landscape. Within these fascinating and fabulous environment of NER, rich potential wealth of mineral resources have been lying untapped, ready to be exploited for the benefi t of the people and economy. Despite being endowed with vast natural resources in terms of forests, biological diversity, hydroelectricity and petroleum, the region has remained largely underdeveloped on account of poor infrastructure and limited connectivity, both within the region as well as with the rest of the country. The region, connected to the rest of India by a narrow stretch of land called the ‘chicken’s neck’, needs infrastructure to support. Large Hydro potential that exists in NER and if exploited, has potential to export power to the power defi cit Northern and Western regions of the country. This under development of the region presents a lot of opportunities for industrial and infrastructure growth within the region. Development of infrastructure such as roads, communications and electricity supply to remote hilly area will result in better quality of life. The improvement in power generation will in turn help in establishing industries by annulling the effects of high transportation costs. Owing to proximity of the region with neighboring countries such as Bangladesh and Myanmar, the region has potential of augmenting trade.

On the socio-economic front, the region stands way below in comparison with the rest of India. Underdeveloped infrastructure has been one of major bottlenecks in development of region on socio-economic front. During recent years the Government has taken several steps to overcome these infrastructural bottlenecks to induce sustainable development in the region. The strong focus


27

on roads, airports and hydropower developments are some of the key steps in this direction.

Realizing these opportunities, subsidiary of your Company CMCL started setting up its fi rst cement plant in the State of Meghalaya of NER with a very small capacity of 0.3 Million MT more than a decade ago and started its commercial operations during later part of the FY 2004-05. The product and brand was well accepted in the markets of North East. Looking at the potential of the market, your subsidiary Company kept on adding the capacity which has reached to the level of 2.54 Million MT per annum of Cement Clinker and around 2.87 Million MT of Cement in North East alone. With passage of time, your subsidiary has been able to spread its foot print in the entire North Eastern region in terms of its distribution network and enjoys a premium brand reputation commanding highest market share in North Eastern Region. Owing to the vast opportunities, markets of North Eastern Region continued to remain the focus market for the products of your subsidiaries.

During the year under review the region witnessed infrastructure growth story getting realized on the ground with two major highway projects dedicated to NER on 1st May, 2015. Shillong Bye-pass Highway Project and four-lane Jorabat – Barapani section of NH-40 was opened for public on its completion. This has helped decongest the traffi c in the city of Shillong from trucks and heavy vehicles coming from or moving towards North Eastern parts of Assam, Mizoram and Tripura apart from signifi cant reduction in travel time and also ease of logistic operations for cement industry like your Company’s subsidiaries having factories in Meghalaya. Much awaited broad gauge conversion work of Silchar-Lumding railway line on a stretch of 210 Kms was completed and opened for Goods and Passenger Traffi c during the year under review. Similarly, the capital town of the landlocked State of Tripura appeared on a broad-gauge railway network connecting Tripura with the rest of the country. The project consists of 79 major bridges, 340 minor bridges and 21 tunnels. The rail line brings Assam’s underdeveloped but strategically important Barak Valley as well as State of Tripura on the broad gauge map. During the year under review, the State of Arunachal Pradesh was presented with second Broad Gauge connectivity with the commissioning of Balipara – Bhalukpong gauge conversion project. Similarly, North Lakhimpur – Murkongselek sections were converted into broad-gauge during the year under review. Commissioning of newly converted North Lakhimpur – Murkongselek section marked the completion of Rangiya – Murkongselek Gauge Conversion project running all along the North Bank of Brahmaputra. There are other major railway projects which are on a fast track of completion.

All the above developments are expected to provide better connectivity for goods and passenger traffi c for overall benefi t of public residing in these States and presents a promising future for cement industry in North East Region as also for economy of the region.

Simultaneous with expanding its horizon in the markets of North Eastern Region, your subsidiary which started its network expand in the markets of West Bengal and Bihar during the latter part of Financial Year 2013-14 has further consolidated its presence in

these markets during the year under review. States of West Bengal and Bihar have also remained under developed as compared to rest of India and has tremendous growth opportunities in infrastructure and housing sector, two major demand drivers of cement. During the year under review the subsidiary Company has successfully driven the marketing campaign in these States to bring the recall of its brand “STAR CEMENT” at the top of people’s mind. Looking at opportunities in these markets, subsidiary Company has further augmented its capacity in form of arrangements with grinding units in the State of West Bengal.

MARKET DEVELOPMENTDespite slowdown in cement demand in rest of the country, growth in cement demand in NER was close to country’s GDP growth rate. During the year under review, cement demand in NER has grown by more than 7% over previous Financial Year. Over a period of time, cement import to NER from outside region has also reduced considerably. During the year under review less than 15% of cement was imported in the region from outside as against more than 17% during previous Financial Year. During the year under review your subsidiary companies were able to sale 17,03,415 MT of cement in the markets of NER as against 14,98,380 MT during the FY 2014-15 and thus recording a growth of 13.7% over previous year.

Your Directors are pleased to report that markets of West Bengal and Bihar where the brand “STAR CEMENT” has been relatively a new player as compared to its positioning in the markets of North Eastern Region, has fared well during the year under review. Your subsidiary companies have been able to sale 9,26,280 MT of cement during the Financial Year 2015-16 in these markets as against 6,70,871 MT during the Financial Year 2014-15 registering a growth of 38% over previous year. To augment its capacity further in these markets, your subsidiary has made arrangements with one more grinding unit in the State of West Bengal during the year under review. With this arrangement, subsidiary has grinding arrangement of close to 1 Million MT of cement per annum. The capacity augmentation will help further in cutting down the logistic time to make the product available in these markets.

In line with its endeavor to focus trade segment of the business, your subsidiaries continued adding dealer and retail network across length and breadth of the North East Region as well as in the States of West Bengal and Bihar to make its foot prints more visible in these markets. At the close of the fi scal, your subsidiaries had dealer and retail network of more than 6000 spread across entire North East Region and 4000 in the States of West Bengal and Bihar on consolidated basis.

During the year under review your subsidiary Company CMCL has undertaken various marketing initiatives in order to make the brand “STAR CEMENT” more visible and attain top of mind recall. In the markets of North Bengal and Bihar, they launched its premium product “Star Anti-Rust Cement”. Marketing Campaign called “Kismat Ki Bori” was launched in various markets of North Eastern Regions and outside the region too. During the year under review your subsidiary’s branding initiative in form of “Largest Idol of Goddess Durga” was a huge success story.


28

To make the brand more visible in remote areas, a block level branding campaign was undertaken. In addition, they conducted various knowledge sharing events mainly related to construction techniques in form of “Engineers’ Workshop” and “Star Tech” to impart training to engineers. Your subsidiary also conducted more than 50 “Mason Certifi cation Programme” wherein masons were trained and their construction skills were certifi ed jointly by your subsidiary Company and local engineering institutes. These initiatives has helped them to promote the brand “STAR CEMENT” in a more effective manner in these markets and has also resulted into creation of better informed category of masons and engineers.

POWER BUSINESS

During the year under review, the performance of Meghalaya Power Limited, a step down subsidiary of the Company was very optimistic. The power generation has increased to 1,831.14 Lacs units as compared to 1,679.23 Lacs units recorded in the previous year. During the Financial year 2015-16, the Company has posted PBT of ` 1,472.07 Lacs and PAT of ` 1,082.84 Lacs as against ` 1,287.39 Lacs and ` 544.66 Lacs respectively recorded in the previous Financial Year.

OPPORTUNITIES & THREATS, RISKS AND CONCERNSIn the backdrop of initiatives being undertaken by the Central Government in form of “Housing for All’ and “Affordable Housing” in the urban and rural housing sector and initiatives in the areas of “Amrut and Smart Cities”, Development of Ports, Roads

and Highways, dedicated Freight Corridors, Gauge conversion Projects undertaken by Railways, development in the area of alternative source of energy vis Hydro and Solar Power and other infrastructure projects is expected to boost Cement and Power Demand in the region where subsidiaries of your Company operates as well as in other parts of the country too.

India’s economy being too much dependent upon vagaries of monsoon, rains play an important factor which determines commodity demand growth including cement. Cement and power industry being majorly dependent upon availability of quality coal at affordable cost remains to be a concern. However, recent initiatives in the areas of unblocking of coal mines as also all-time low Baltic Dry Index (BDI) making availability of Petroleum Coke at a cheaper cost with high consistency in quality is expected to address the concern to a great extent.

Your Company having business operations through its subsidiaries only, the Company has evolved a risk management framework to identify, assess and mitigate the key risk factors of the business of its Subsidiaries impacting your Company’s performance. The Board of the Company is kept informed about the risk management of the Company.

FINANCIAL PERFORMANCEThe highlights of the fi nancial performance of the Company for the Financial Year ended 31st March, 2016 and previous Financial Year are as under:

(` in Lacs)

ParticularsConsolidated Standalone

2015-16 2014-15 2015-16 2014-15Net Sales/ Income 1,71,644.98 1,43,121.01 2,375.38 0.10

Profi t Before Depreciation, Interest & Tax 39,931.24 43,584.75 2,225.93 (138.55)

Depreciation (17,149.21) (22,374.29) - -

Interest and Finance Charges (8,336.77) (8,738.47) (0.01) (0.03)

Exceptional Items (53.14) 1.83 - -

Profi t Before Tax 14,392.13 12,473.82 2,225.92 (138.58)

Tax Expenses (551.06) (480.13) 44.56 -

Profi t after Tax before Minority Interest 13,841.06 11,993.69 2,270.48 (138.58)

Less: Minority Interest (4,643.59) (3,650.03) - -

Net profi t after Minority Interest 9,197.48 8,343.66 - -

Surplus in the Statement of Profi t & Loss:

At the beginning of the year 44,838.24 37,165.12 41.61 180.20

Add: Profi t for the year 9,197.48 8,343.66 2,270.48 (138.58)

-Less: Interim Dividend on Equity Shares 2,221.73 - 2,221.73 -

-Less: Tax on Interim Equity Dividend - - - -

-Less: Tax on Proposed Equity Dividend - 670.55 - -

-Less: Transfer to General Reserve - - - -

Balance at the end of the year 51,813.98 44,838.24 90.36 41.61

SHARE CAPITALThe paid up Equity Share Capital as on March 31, 2016 was ` 2,221.73 Lacs. During the year under review, the Company has not issued any shares with differential voting rights nor granted stock options or sweat equity shares.

EXTRACT OF ANNUAL RETURNIn terms of requirement of Section 134 (3) (a) of the Companies Act, 2013, the extract of the Annual return in form MGT-9 is annexed herewith and marked Annexure-2.


29

MEETINGS OF THE BOARD

During the year seven (7) Board meetings and fi ve (5) Audit Committee meetings were convened and held. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. The details of the Board meetings and the Committee meetings are provided in the Corporate Governance Report.

MEETINGS OF INDEPENDENT DIRECTORS

During the year under review, a meeting of Independent Directors was held on 21st March, 2016 wherein the performance of the Non-Independent Directors and the Board as a whole was reviewed. The Independent Directors at their meeting also, inter-alia, assessed the quality, quantity and timeliness of fl ow of information between the Company management and the Board of Directors of the Company.

COMMITTEES OF THE BOARD

The composition and terms of reference of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee have been furnished in the Corporate Governance Report forming part of this Annual Report. There has been no instance where the Board has not accepted the recommendations of the Audit Committee and Nomination and Remuneration Committee.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

The Company has a Whistle Blower Policy/ Vigil Mechanism as required under Section 177 of the Companies Act, 2013 and as per Listing Obligations and Disclosures Requirements Regulations, 2015 formulated by Securities and Exchange Board of India (SEBI). The Vigil (Whistle Blower) mechanism provides a channel to the employees and Directors to report to the management, concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct or policy. The mechanism provides for adequate safeguards against victimization of employees and Directors to avail the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. The said policy may be referred to at the Company’s website at the weblink: http://www.starferrocement.co.in/admin/docs/Whistle-Blower-Policy.pdf

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to requirement of Section 134 (3) (c) read with Section 134 (5) of the Companies Act, 2013, the Directors hereby confi rm and state that:

• In the preparation of Annual Accounts, the applicable Accounting Standards have been followed along with the proper explanation relating to material departures, if any.

• The Directors have selected such accounting policies and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and of the profi t of the Company for the year under review.

• The Directors have taken proper and suffi cient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

• The Directors have prepared the annual accounts on going concern basis.

• The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

• The Directors have laid down internal fi nancial controls to be followed by the Company and that such internal fi nancial controls are adequate and were operating effectively.

DECLARATION BY INDEPENDENT DIRECTORSAll Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013. Mr. Manindra Nath Banerjee, Mr. Santanu Ray, Mr. Mangilal Jain and Mrs. Plistina Dkhar are Independent Directors on the Board of your Company. In the opinion of the Board and as confi rmed by these Directors, they fulfi l the conditions specifi ed in Section 149 of the Act and the Rules made thereunder about their status as Independent Director of the Company.

FAMILIARIZATION PROGRAMME UNDERTAKEN FOR INDEPENDENT DIRECTORSIn order to enable the Independent Directors to perform their duties optimally, the Board has devised a familiarization programme for the Independent Directors to familiarize them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. They are periodically updated about the development which takes place in the Company. The Independent Directors have been issued Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and commitments etc. The familiarization program is available on the Company’s website under the weblink: http://www.starferrocement.co.in/admin/docs/familiarisation-programme.pdf

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT EMPLOYEESThe Board has framed a Remuneration Policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Employees. The remuneration policy aims to enable the Company to attract, retain and motivate highly qualifi ed members for the Board and at other executive levels. The remuneration policy seeks to enable the Company to provide a well-balanced and performance-related compensation package, taking into account shareholder interests, industry standards and relevant Indian corporate regulations. The details on the same are given in the Corporate Governance Report.


30

AUDITORS & AUDITORS’ REPORTM/s. Kailash B. Goel & Co., Chartered Accountants (Firm Registration no. 322460E) Statutory Auditors of the Company, will retire at the conclusion of the ensuing Annual General Meeting of the Company. Being eligible, they have offered themselves for re-appointment and have confi rmed that their appointment, if made, will be in accordance to the provisions of Section 141 read with Section 139 of the Companies Act, 2013 and the rules framed there under for re-appointment of auditors. The Board, on recommendation of the Audit Committee, recommends the appointment of M/s. Kailash B. Goel & Co., as Statutory Auditors of the Company for a period of 5 (fi ve years) from the date of ensuing Annual General Meeting subject to approval of their appointment by the shareholders in the ensuing Annual General Meeting and ratifi cation of their appointment in Annual General Meetings to be held subsequent to ensuing Annual General Meeting during the tenure of their appointment.

Members are requested to consider and approve their appointment as Statutory Auditors of the Company and are also requested to empower the Board of Directors for fi xation of Auditor’s Remuneration.

The notes to the accounts referred to in the Auditors’ Report are self-explanatory and therefore, do not call for any further comments.

SECRETARIAL AUDITPursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Manoj Kumar Banthia, Practicing Company Secretary of M/s. MKB & Associates, a fi rm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith marked Annexure-3. The report is self-explanatory and do not call for any further comments.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTSDuring the year under review, your Company has not given any loan or guarantee to any person falling under ambit of Section 186 of the Companies Act, 2013.

Details of Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

RELATED PARTY TRANSACTIONSDuring the year under review, there were no materially signifi cant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential confl ict with interest of the Company at large.

A policy on ‘Related Party Transactions’ has been devised which may be referred to at the Company’s website at the weblink:

http://www.starferrocement.co.in/admin/docs/related-party-transaction-policy.pdf.

RESERVES

During the year under review no amount was transferred to reserves.

DIVIDEND

During the year, your Company has declared an interim dividend of ` 1.00 per equity share. In order to conserve resources for future operations, your Directors do not recommend any fi nal dividend for the year ended March 31, 2016.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

As the Company does not have any direct business operations, there is nothing to report under this segment.

FOREIGN EXCHANGE EARNING AND OUT-GO

During the year under review, there was no Foreign Exchange Earning and Out-go.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES (CSR)

Your Company’s Corporate Social Responsibility (CSR) Policy is committed towards improving the quality of life of communities by working on four thrust areas - employability, education, health and environment.

Company’s Corporate Social Responsibility Committee is headed by Mr. Sajjan Bhajanka, Director of your Company and consists of members as stated below:

Sl.No.

Name Category Chairman/ Members

1. Mr. Sajjan Bhajanka Non-Independent Chairman

2. Mr. Hari Prasad Agarwal Non-Independent Member

3. Mr. Mangilal Jain Independent Member

Annual Report on CSR as required to be annexed in terms of requirement of Section 135 of Companies Act, 2013 and rules framed thereunder is annexed herewith and marked Annexure-4.

The CSR Policy of the Company is available on the Company’s website under the weblink: http://www.starferrocement.co.in/admin/docs/csr-policy.pdf

EVALUATION OF THE BOARD’S PERFORMANCE

In compliance with the Companies Act, 2013 and as per Listing Obligations and Disclosures Requirements Regulations, 2015 formulated by Securities and Exchange Board of India (SEBI), the Company has adopted a policy for evaluation of performance of the Board of Directors. The Board follows a formal mechanism for the evaluation of the performance of the Board as well as Committee.


31

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specifi c duties, obligations and governance.

The Nomination and Remuneration Committee at its meeting established the criteria based on which the Board will evaluate the performance of the Directors.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders, etc. The performance evaluation of the Non-Independent Directors and Board as a whole was also carried out by the Independent Directors.

The Directors expressed their satisfaction over the evaluation process and results thereof.

DIRECTORS AND KEY MANAGERIAL PERSONNELDuring the year under review, Mr. Sanjay Agarwal will retire by rotation and being eligible offers himself for re-appointment. In view of his considerable experience, your Directors recommend his re-appointment as a Director of the Company.

The shareholders have ratifi ed the appointment of Mr. Manindra Nath Banerjee, Mr. Santanu Ray, Mr. Mangilal Jain and Mrs. Plistina Dkhar as Independent Directors at the Annual General Meeting held on 20th September, 2014 for a period of fi ve years.

The following personnel are the Key Managerial Personnel of the Company:

1. Mr. Sanjay Kumar Gupta - Chief Executive Offi cer

2. Mr. Dilip Kumar Agarwal - Chief Financial Offi cer

3. Mr. Debabrata Thakurta - Company Secretary

POLICY ON PREVENTION OF SEXUAL HARASSMENT The Company values the integrity and dignity of its employees. The Company has put in place a ‘Policy on Prevention of Sexual Harassment’ as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“Sexual Harassment Act”). We affi rm that adequate access has been provided to any complainants who wish to register a complaint under the policy. No complaint was received during the year.

CONSOLIDATED FINANCIAL STATEMENTSThe Consolidated Financial Statements of the Company have been prepared in accordance to requirements of Accounting Standards (AS-21), as prescribed by the Institute of Chartered Accountants of India and has been included as a part of this Annual Report.

The detailed fi nancial statements and audit reports of each of the subsidiaries of the Company are available for inspection

at the Registered Offi ce of the Company during offi ce hours between 11 A.M. and 1 P.M. As per the provisions of Section 136 of the Companies Act, 2013, separate audited fi nancial statements of its subsidiaries are being placed on its website: www.starferrocement.co.in and the Company will arrange to send the fi nancial statements of the subsidiaries upon written request from the shareholders to their registered address.

DEPOSITS

During the year under report, the Company has not accepted any deposits from public or from any of the Directors of the Company or their relatives falling under ambit of Section 73 of the Companies Act, 2013.

CHANGES IMPACTING GOING CONCERN STATUS AND COMPANY’S OPERATIONS

During the year under review, there have been no material orders passed by the Regulators/Courts impacting, materially, the going concern status or future operations of the Company.

There were no material changes and commitments affecting the fi nancial position of the Company during the period under review.

ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Company maintains comprehensive internal control system, commensurate with the size of its operations and monitoring procedure for all the major processes to ensure reliability of fi nancial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, laws and regulations, safeguarding of assets and economical and effi cient use of resources.

The Internal Audit Department of the Company periodically reviews the effectiveness and effi cacy of Internal Control Systems and procedures. Audits are fi nalized and conducted based on internal risk assessments. Signifi cant deviations from the standard procedures are brought to the notice of the Board periodically and corrective measures are recommended for implementation. All these steps facilitate timely detection of any irregularities, frauds and errors and early remedial measures to be undertaken so that no monetary losses are sustained. Signifi cant audit observations, if any, and corrective actions thereon are presented to the Audit Committee of the Board.

INTERNAL CONTROL OVER FINANCIAL REPORTING

The Company has in place adequate internal fi nancial controls commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The Company has policies and procedures in place for ensuring proper and effi cient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable fi nancial information.


32

MANAGERIAL REMUNERATIONDisclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 and Rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith and marked Annexure- 5.

PARTICULARS OF EMPLOYEESThe Company has no employee whose remuneration exceeds the limit prescribed under Section 197 of the Companies Act, 2013 read with Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

CORPORATE GOVERNANCEThe Company has complied with the corporate governance requirements as stipulated under the Listing Obligations and Disclosures Requirements Regulations, 2015 formulated by Securities and Exchange Board of India (SEBI). A separate section on corporate governance, along with a certifi cate from the auditors confi rming the compliance, is annexed and forms part of the Annual Report. This certifi cate will be forwarded to the Stock Exchanges along with the Annual Report of the Company.

CHIEF EXECUTIVE OFFICER (CEO) /CHIEF FINANCIAL OFFICER (CFO) CERTIFICATIONAs required under Regulation 17(8) of the Listing Obligations and Disclosures Requirements Regulations, 2015 formulated by Securities and Exchange Board of India (SEBI), the CEO/CFO certifi cation has been submitted to the Board and a copy thereof is contained in this Annual Report.

GREEN INITIATIVES IN CORPORATE GOVERNANCEMinistry of Corporate Affairs has permitted Companies to send copies of Annual report, Notices, etc., electronically to the email IDs of shareholders. Your Company has arranged to send the soft copies of these documents to the registered email IDs of the shareholders, wherever applicable. In case, any shareholder would like to receive physical copies of these documents, the same shall be forwarded upon receipt of written request in this respect.

HUMAN RESOURCE DEVELOPMENT & INDUSTRIAL RELATIONSThe Company has always provided a congenial atmosphere for work to all sections of society. It has provided equal opportunities of employment to all irrespective to their caste, religion, color, marital status and sex. The Company believes that human capital of the Company is its most valuable assets and its human resource policies are aligned towards this objective.

The Company focuses on enhancing organizational performance by focusing on quick grievance resolution mechanisms and maintaining cordial relations with employees and workmen across all levels. The relation amongst its employees remained harmonious and the year under review remained free from any labor unrest.

Your Directors are pleased to report that during the year under review, direct subsidiary of your Company M/s. Cement Manufacturing Company Limited (CMCL) was awarded with Certifi cate of Appreciation in recognition for the valuable contribution towards “Best HR Practices in Employee Engagement” held by National HRD Network (NHRDN)in Bhubaneswar on 29th January, 2016 followed by HR & Leadership Award in the area of “Excellence in Employee Engagement” by ABP News on 16th February, 2016 at Mumbai.

During the year under report, there has not been any material change in Human Resources, Industrial Relations and number of people employed.

AWARDS AND ACCOLADESYour Directors are pleased to report that during the year under review, your Company was awarded ET Bengal Corporate Awards 2016 under category “Fastest Growing Company above ` 1000 Crs.” on 23rd January, 2016 at Kolkata. Your power Subsidiary M/s. Meghalaya Power Limited (MPL) was awarded with First Prize in National Energy Conservation Awards, 2015 by Ministry of Power, Government of India under <100 MW Thermal Power Plants category at a ceremony held at New Delhi on 14th December, 2015.

CAUTIONARY STATEMENTStatements in this report describing the Company’s objectives, expectations or predictions, may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could infl uence the Company’s operations include: global and domestic demand and supply conditions affecting selling prices, new capacity additions, availability of critical materials and their cost, changes in Government policies and tax laws, economic development of the country and other factors which are material to the business operations of the Company.

ACKNOWLEDGEMENTYour Directors take this opportunity to express their deep sense of gratitude to the Banks, Central and State Governments and their departments and the Local Authorities, Customers, Vendors, Business partners/associates and Stock Exchanges for their continued guidance and support.

Your Directors would also like to place on record their sincere appreciation for the commitment, dedication and hard work put in by every member of the Company and recognize their contribution towards Company’s achievements. Your Directors express their gratitude to the shareholders of the Company for reposing their confi dence and trust in the Management of the Company.

For and on behalf of the Board of Directors

Place: Kolkata Sajjan BhajankaDate: 3rd May, 2016 Chairman

(DIN: 00246043)


33

Annexure 1 to Directors’ ReportFORM AOC -1

(Pursuant to fi rst proviso to sub-section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules, 2014)Statement containing salient features of the fi nancial statement of subsidiaries

Part “A”: Subsidiaries

Part “B”: Associates and Joint Ventures

Sl. No. Name of the subsidiary Cement Manufacturing

Company Limited

Megha Technical & Engineers Pvt

Limited

Star Cement Meghalaya

Limited

Meghalaya Power

Limited

NE Hills Hydro

Limited1 Reporting period for the subsidiary

concerned, if different from the holding company’s reporting period

N.A N.A N.A N.A N.A

2 Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries.

N.A N.A N.A N.A N.A

3 Share capital 4,192.14 2,734.64 2,981.78 1,713.06 7.00 4 Reserves & surplus 53,006.55 21,622.11 43,037.29 9,164.31 - 5 Total Assets 1,49,465.79 29,271.45 84,789.95 30,079.88 7.33 6 Total Liabilities 1,49,465.79 29,271.45 84,789.95 30,079.88 7.33 7 Investments 23,878.43 2,983.33 - - 2.70 8 Turnover 1,48,433.04 14,800.01 52,854.90 11,052.69 - 9 Profi t before taxation 5,586.06 735.41 6,802.19 1,472.07 - 10 Provision for taxation (44.30) 250.70 - 389.23 - 11 Profi t after taxation 5,630.36 484.71 6,802.19 1,082.84 - 12 Proposed Dividend - - - - -13 % of shareholding 70.48 70.48 70.48 35.94 70.48

The following information shall be furnished:- 1 Names of subsidiaries which are yet to commence operations : NE Hills Hydro Limited2 Names of subsidiaries which have been liquidated or sold during the year : Not Applicable

The Company does not have Associate / Joint Venture hence, the requirement under this part is not applicable to the Company.

For and on Behalf of the Board of Directors

Dilip Kumar AgarwalChief Financial Offi cer

Sajjan BhajankaDirector

DIN:00246043

Place: KolkataDate: 3rd May, 2016

Debabrata ThakurtaCompany Secretary

Hari Prasad AgarwalDirector

DIN : 00266005


34

Annexure 2 to Directors’ ReportFORM NO. MGT - 9

EXTRACT OF ANNUAL RETURNAs on fi nancial year ended on 31st March, 2016

[Pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management & Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

1 CIN L27310ML2011PLC008564

2 Registration Date 10th March, 2011

3 Name of the Company Star Ferro and Cement Limited

4 Category/Sub-category of the Company Company limited by Shares / Non-Govt. Company

5 Address of the Registered offi ce & contact details Village: Lumshnong, P.O.: Khaliehriat, Dist.: East Jaintia Hills, Meghalaya – 793210Phone No. : 03655 - 278215Email: [email protected];[email protected]: www.starferrocement.co.in

6 Whether listed company Yes

7 Name, Address & contact details of the Registrar & Transfer Agent, if any.

Maheshwari Datamatics Private Limited6, Mangoe Lane (Surendra Mohan Ghosh Sarani)2nd Floor, Kolkata – 700 001Phone: 033-2248 2248; 033-22435029 Email id: [email protected]

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

(All the business activities contributing 10 % or more of the total turnover of the company are stated)

Sl. No.

Name and Description of main products / services

NIC Code of the Product/service % to total turnover of the company

Not Applicable

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sl. No.

Name and address of the Company CIN/GLN Holding/ Subsidiary/

Associate

% of shares

held

Applicable Section

1 Cement Manufacturing Company Limited

Village: Lumshnong, P.O.: Khaliehriat, Dist.: East Jaintia Hills, Meghalaya – 793210

U26942ML2001PLC006663 Subsidiary 70.48 2(87)

2 Megha Technical & Engineers Private Limited


U27107ML2002PTC006976 Step down Subsidiary

- 2(87)

3 Star Cement Meghalaya Limited


U63090ML2005PLC008011 Step down Subsidiary

- 2(87)

4 Meghalaya Power Limited


U40108ML2002PLC006921 Step down Subsidiary

- 2(87)

5 NE Hills Hydro Limited

Satyam Towers 3 Alipore Road, Unit No - 9B, Kolkata - 700027

U40104WB2007PLC116195 Step down Subsidiary

- 2(87)


35

Category of Shareholders

"No. of Shares held at the beginning of the year[As on 01-April-2015]”

“No. of Shares held at the end of the year[As on 31-March-2016]”

%Change during

the year Demat Physical Total % of

Total Shares

Demat Physical Total % of Total

Shares

A. Promoters

(1) Indian

a) Individual/ HUF 10,83,60,576 - 10,83,60,576 48.77 10,87,29,848 - 10,87,29,848 48.94 0.17

b) Central Govt. - - - - - - - - -

c) State Govt.(s) - - - - - - - - -

d) Bodies Corporate 3,93,29,080 - 3,93,29,080 17.70 3,93,29,080 - 3,93,29,080 17.70 -

e) Banks / FI - - - - - - - - -

f) Any other - - - - - - - - -

Sub -total (A) (1) 14,76,89,656 - 14,76,89,656 66.47 14,80,58,928 - 14,80,58,928 66.64 0.17

(2) Foreign

a) NRIs - Individuals - - - - - - - - -

b) Other - Individuals - - - - - - - - -

c) Bodies Corporate - - - - - - - - -

d) Banks / FI - - - - - - - - -

e) Any other - - - - - - - - -

Sub - total (A) (2) - - - - - - - - -

Total shareholding of promoter (A) = (A) (1) + (A) (2)

14,76,89,656 - 14,76,89,656 66.47 14,80,58,928 - 14,80,58,928 66.64 0.17

B. Public Shareholding

1. Institutions

a) Mutual Funds - - - - - - - - -

b) Banks / FI - - - - 23,546 - 23,546 0.01 0.01

c) Central Govt. - - - - - - - - -

d) State Govt(s) - - - - - - - - -

e) Venture Capital Funds

- - - - - - - - -

f) Insurance Companies

- - - - - - - - -

g) FIIs 2,49,170 - 2,49,170 0.11 2,49,170 - 2,49,170 0.11 -

h) Foreign Venture Capital Funds

- - - - - - - - -

i) Others (specify) - - - - - - - - -

Sub-total (B)(1) 2,49,170 - 2,49,170 0.11 2,72,716 - 2,72,716 0.12 0.01

2. Non-Institutions

a) Bodies Corporate

i) Indian 2,06,85,188 16,500 2,07,01,688 9.32 1,75,06,318 16,500 1,75,22,818 7.89 (1.43)

ii) Overseas - - - - - - - - -

b) Individuals

i) Individual shareholders holding nominal share capital upto Rs. 1 lakh

65,06,766 9,30,689 74,37,455 3.35 70,70,663 8,10,018 78,80,681 3.55 0.20

ii) Individual shareholders holding nominal share capital in excess of Rs 1 lakh

4,58,75,200 - 4,58,75,200 20.65 4,77,37,289 - 4,77,37,289 21.49 0.84

IV. SHARE HOLDING PATTERN (Equity share capital breakup as percentage of total equity)

(i) Category-wise Share Holding


36

Sl.No.

Shareholder’s Name Shareholding at the beginning of the year[As on 01-April-2015]

Shareholding at the end of the year [As on 31-March-2016]

% change in shareholding

during the year

No. of Shares % of total Shares of the

company

% of Shares Pledged/

encumbered to total shares

No. of Shares % of total Shares of the

company

% of Shares Pledged /

encumbered to total shares

1 Prem Kumar Bhajanka 2,73,69,386 12.32 1.35 2,79,44,845 12.58 1.35 0.26

2 Sanjay Agarwal 1,95,39,245 8.79 - 1,94,82,445 8.77 - (0.02)

3 Sajjan Bhajanka 1,67,72,675 7.55 - 1,66,15,675 7.48 - (0.07)

4 Santosh Bhajanka 1,50,49,500 6.77 - 1,50,49,500 6.77 - -

5 Divya Agarwal 1,44,88,750 6.52 - 1,44,88,750 6.52 - -

6 Sriram Vanijya Pvt. Ltd. 85,02,180 3.83 - 85,02,180 3.83 - -

7 Brijdham Merchants Pvt. Ltd. 77,43,990 3.49 - 77,43,990 3.49 - -

8 Sumangal International Pvt. Ltd. 76,66,800 3.45 - 76,66,800 3.45 - -

9 Sumangal Business Pvt. Ltd 68,31,240 3.07 - 68,31,240 3.07 - -

10 Sriram Merchants Pvt. Ltd. 67,39,870 3.03 - 67,39,870 3.03 - -

11 Yash Bhajanka 32,97,170 1.48 - 33,44,783 1.51 - 0.03

12 Hari Prasad Agarwala 24,35,760 1.10 - 24,35,760 1.10 - -

13 Bhawna Agarwal 24,02,690 1.08 - 23,21,690 1.04 - (0.04)

14 Auroville Investments Pvt. Ltd 18,45,000 0.83 - 18,45,000 0.83 - -

15 Sumitra Devi Agarwal 16,76,250 0.75 - 16,76,250 0.75 - -

16 Hari Prasad Agarwala (HUF) 15,30,990 0.69 - 15,30,990 0.69 - -

17 Sonu Bhajanka 10,30,010 0.46 - 10,30,010 0.46 - -

18 Payal Bhajanka 10,00,000 0.45 - 10,00,000 0.45 - -

19 Shraddha Agarwal 8,00,000 0.36 - 8,00,000 0.36 - -

20 Rajesh Kumar Agrawal 7,45,225 0.34 - 7,45,225 0.34 - -

21 Keshav Bhajanka 1,22,925 0.06 - 1,22,925 0.06 - -

22 Nancy Bhajanka 1,00,000 0.05 - 1,41,000 0.06 - 0.01

Total 14,76,89,656 66.47 1.35 14,80,58,928 66.64 1.35 0.17

Category of Shareholders

"No. of Shares held at the beginning of the year[As on 01-April-2015]”

“No. of Shares held at the end of the year[As on 31-March-2016]”

%Change during

the year Demat Physical Total % of

Total Shares

Demat Physical Total % of Total

Shares

c) Others

1. Clearing member

56,460 - 56,460 0.03 3,00,781 - 3,00,781 0.14 0.11

2. Non-resident Individual

53,111 - 53,111 0.02 2,69,527 - 2,69,527 0.12 0.10

3. Trusts 1,10,250 - 1,10,250 0.05 1,11,250 - 1,11,250 0.05 -

4. NBFCs registered with RBI

- - - - 19,000 - 19,000 0.01 0.01

Sub-total (B)(2) 7,32,86,975 9,47,189 7,42,34,164 33.42 7,30,14,828 8,26,518 7,38,41,346 33.24 (0.17)

Total Public shareholding (B) =(B) (1) + (B) (2)

7,35,36,145 9,47,189 7,44,83,334 33.53 7,32,87,544 8,26,518 7,41,14,062 33.36 (0.17)

C. Shares held by Custodian for GDRs & ADRs

- - - - - - - - -

Grand Total (A+B+C)

22,12,25,801 9,47,189 22,21,72,990 100.00 22,13,46,472 8,26,518 22,21,72,990 100.00 0.00

(ii) Shareholding of Promoters


37

Sl.No.

Particulars Date Reason Shareholding at the beginning of the year Cumulative Shareholding during the year

No. of Shares % of total Shares No. of Shares % of total Shares

1 Mr. Sajjan Bhajanka

At the beginning of the year 01.04.2015 1,67,72,675 7.55

Changes during the year 06.04.2015 Transfer (88,000) (0.04) 1,66,84,675 7.51

13.04.2015 Transfer (69,000) (0.03) 1,66,15,675 7.48

At the end of the year 31.03.2016 1,66,15,675 7.48 1,66,15,675 7.48

2 Mr. Sanjay Agarwal



14.07.2015 Transfer (25,800) (0.01) 1,94,82,445 8.77


3 Ms. Bhawna Agarwal

At the beginning of the year 01.04.2015 24,02,690 1.08

Changes during the year 06.04.2015 Transfer (81,000) (0.04) 23,21,690 1.04

At the end of the year 31.03.2016 23,21,690 1.04 23,21,690 1.04

4 Ms. Nancy Bhajanka


Changes during the year 30.06.2015 Transfer 41,000 0.01 1,41,000 0.06


5 Mrs. Yash Bhajanka


Changes during the year 13.02.2016 Transfer 10,000 0.01 33,07,170 1.49

15.02.2016 Transfer 15,707 0.01 33,22,877 1.50

16.02.2016 Transfer 15,206 0.01 33,38,083 1.51

17.02.2016 Transfer 6,700 0.00 33,44,783 1.51


6 Mr. Prem Kumar Bhajanka


Changes during the year 07.11.2015 Transfer 22,802 0.01 2,73,92,188 12.33

12.12.2015 Transfer 30,289 0.01 2,74,22,477 12.34

15.12.2015 Transfer 14,409 0.01 2,74,36,886 12.35

18.12.2015 Transfer 10,610 0.00 2,74,47,496 12.35

23.12.2015 Transfer 24,972 0.01 2,74,72,468 12.37

24.12.2015 Transfer 9,193 0.00 2,74,81,661 12.37

26.12.2015 Transfer 38,459 0.02 2,75,20,120 12.39

08.01.2016 Transfer 19,850 0.01 2,75,39,970 12.40

09.01.2016 Transfer 9,496 0.00 2,75,49,466 12.40

12.01.2016 Transfer 13,555 0.01 2,75,63,021 12.41

14.01.2016 Transfer 67,683 0.03 2,76,30,704 12.44

16.01.2016 Transfer 22,153 0.01 2,76,52,857 12.45

19.01.2016 Transfer 15,367 0.01 2,76,68,224 12.45

21.01.2016 Transfer 21,200 0.01 2,76,89,424 12.46

13.02.2016 Transfer 1,51,308 0.07 2,78,40,732 12.53

17.02.2016 Transfer 26,004 0.01 2,78,66,736 12.54

20.02.2016 Transfer 41,311 0.02 2,79,08,047 12.56

29.02.2016 Transfer 14,077 0.01 2,79,22,124 12.57

11.03.2016 Transfer 12,793 0.01 2,79,34,917 12.58

18.03.2016 Transfer 9,928 0.00 2,79,44,845 12.58


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


38

Sl.No.

For each of the Top 10 shareholders

Date Reason Shareholding at the beginning of the year Cumulative Shareholding during the year


1 NARANTAK DEALCOMM LIMITED *


Changes during the year 09.10.2015 Transfer 8,13,920 0.37 9,48,420 0.43

16.10.2015 Transfer 6,75,000 0.30 16,23,420 0.73

04.03.2016 Transfer (4,30,088) (0.19) 11,93,332 0.54

11.03.2016 Transfer 15,00,000 0.68 26,93,332 1.21

18.03.2016 Transfer 4,30,088 0.19 31,23,420 1.41


2 KBG CONSULTANTS PVT. LTD. *




3 PONNI TREXIM PRIVATE LIMITED #


Changes during the year 10.04.2015 Transfer (2,31,000) (0.10) 20,95,175 0.94

09.10.2015 Transfer (2,52,587) (0.11) 18,42,588 0.83

16.10.2015 Transfer (18,42,588) (0.83) - -

At the end of the year 31.03.2016 - - - -

4 BRIJ BHUSHAN AGARWAL



26.06.2015 Transfer (5,00,000) (0.23) 83,44,877 3.76

04.03.2016 Transfer 3,40,000 0.15 86,84,877 3.91


5 SUBHAM CAPITAL PRIVATE LIMITED


Changes during the year 19.06.2015 Transfer 15,21,932 0.69 34,05,353 1.53

26.06.2015 Transfer 3,068 0.00 34,08,421 1.53

06.07.2015 Transfer 5,00,000 0.23 39,08,421 1.76

14.08.2015 Transfer 5,00,000 0.23 44,08,421 1.98

18.09.2015 Transfer (15,00,000) (0.68) 29,08,421 1.31

09.10.2015 Transfer (1,46,700) (0.07) 27,61,721 1.24

11.12.2015 Transfer (7,50,000) (0.34) 20,11,721 0.91

25.12.2015 Transfer 7,50,000 0.34 27,61,721 1.24

31.12.2015 Transfer (7,50,000) (0.34) 20,11,721 0.91

04.03.2016 Transfer (3,40,000) (0.15) 16,71,721 0.75

18.03.2016 Transfer 17,58,753 0.79 34,30,474 1.54


6 MAHABIR PRASAD AGARWAL



26.06.2015 Transfer (13,000) (0.01) 37,03,102 1.67

08.01.2016 Transfer (4,000) 0.00 36,99,102 1.66

15.01.2016 Transfer (8,000) 0.00 36,91,102 1.66

(iv) Shareholding Pattern of top ten Shareholders

(Other than Directors, Promoters and Holders of GDRs and ADRs):


39

Sl.No.

For each of the Top 10 shareholders



22.01.2016 Transfer (16,000) (0.01) 36,75,102 1.65

29.01.2016 Transfer (10,397) 0.00 36,64,705 1.65

19.02.2016 Transfer (10,000) 0.00 36,54,705 1.64


7 SUPER DIAMOND NIRMAN PRIVATE LIMITED


Changes during the year - - - -


8 MITTU AGARWAL



04.09.2015 Transfer (2,071) (0.00) 67,98,986 3.06

25.09.2015 Transfer 5,00,000 0.23 72,98,986 3.29


9 SUMITRA DEVI AGARWAL



15.01.2016 Transfer (4,000) (0.00) 44,12,400 1.99


10 SUBHAM AGARWAL



07.08.2015 Transfer (4,000) (0.00) 98,98,465 4.46

14.08.2015 Transfer (325) (0.00) 98,98,140 4.46

25.09.2015 Transfer 5,00,000 0.23 1,03,98,140 4.68

04.12.2015 Transfer 7,50,000 0.34 1,11,48,140 5.02

18.12.2015 Transfer (3,000) (0.00) 1,11,45,140 5.02

08.01.2016 Transfer (450) (0.00) 1,11,44,690 5.02

15.01.2016 Transfer (3,492) (0.00) 1,11,41,198 5.01


11 SHEETIJ AGARWAL



06.07.2015 Transfer (5,00,000) (0.23) 62,73,688 2.82

10.07.2015 Transfer (5,00,000) (0.23) 57,73,688 2.60

25.09.2015 Transfer 5,00,000 0.23 62,73,688 2.82

18.12.2015 Transfer (2,000) (0.00) 62,71,688 2.82

31.12.2015 Transfer (8,000) (0.00) 62,63,688 2.82

11.03.2016 Transfer 2,07,978 0.09 64,71,666 2.91


* Not in the list of Top 10 shareholders as on 01/04/2015. The same has been refl ected above since the shareholder was one of the Top 10 shareholders as on 31/03/2016.

# Ceased to be in the list of Top 10 shareholders as on 31/03/2016. The same is refl ected above since the shareholder was one of the Top 10 shareholders as on 01/04/2015.


40

Sl.No.

Shareholding of each Directors and each Key Managerial Personnel



1 Mr. Sajjan Bhajanka, Non-Executive Director



13.04.2015 Transfer (69,000) (0.03) 1,66,15,675 7.48


2 Mr. Sanjay Agarwal, Non-Executive Director



14.07.2015 Transfer (25,800) (0.01) 1,94,82,445 8.77


3 Mr. Hari Prasad Agarwal, Non-Executive Director


Changes during the year No changes during the year

At the end of the year 31.03.2016 24,35,760 1.10

4 Mr. Mangilal Jain, Non-Executive Director

At the beginning of the year 01.04.2015 3,100 0.00

Changes during the year 10.04.2015 Transfer 100 0.00 3,200 0.00

24.04.2015 Transfer 200 0.00 3,400 0.00

18.09.2015 Transfer 100 0.00 3,500 0.00

At the end of the year 31.03.2016 3,500 0.00 3,500 0.00

5 Mr. Manindra Nath Banerjee, Non-Executive Director

At the beginning of the year 01.04.2015 Nil Nil

Changes during the year Nil Nil

At the end of the year 31.03.2016 Nil Nil

6 Mr. Santanu Ray, Non-Executive Director




7 Mrs. Plistina Dkhar, Non-Executive Director

At the beginning of the year 01.04.2015 750 0.00


At the end of the year 31.03.2016 750 0.00

8 Mr. Sanjay Kumar Gupta, Chief Executive Offi cer



At the end of the year 31.03.2016 36,000 0.02

9 Mr. Dilip Kumar Agarwal, Chief Financial Offi cer



At the end of the year 31.03.2016 3,650 0.00

10 Mr. Debabrata Thakurta, Company Secretary




(v) Shareholding of Directors and Key Managerial Personnel:


41

V. INDEBTEDNESSIndebtedness of the Company including interest outstanding/accrued but not due for payment

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNELA. Remuneration to Managing Director, Whole-time Directors and/or Manager: Not Applicable

Particulars Secured Loans excluding deposits

Unsecured Loans

Deposits Total Indebtedness

Indebtedness at the beginning of the fi nancial year

i) Principal Amount

Not Applicable ii) Interest due but not paid

iii) Interest accrued but not due

Total (i+ii+iii)

Change in Indebtedness during the Financial Year

* Addition

Not Applicable * Reduction

Net Change

Indebtedness at the end of the Financial Year

i) Principal Amount

Not Applicable ii) Interest due but not paid

iii) Interest accrued but not due

Total (i+ii+iii)

Sl. No.

Particulars of Remuneration Name of MD/WTD/ Manager

Total Amount

Name (`/Lac)

Designation

1 Gross salary

(a) Salary as per provisions contained in Section 17(1) of the Income Tax Act, 1961

- -

(b) Value of perquisites u/s 17(2) of the Income Tax Act, 1961 - -

(c) Profi ts in lieu of salary under Section 17(3) of the Income Tax Act, 1961 -

2 Stock Option - -

3 Sweat Equity - -

4 Commission

- as % of profi t - -

- others, specify - -

5 Others, please specify - -

Total (A) - -

Ceiling as per the Act 5% of Net Profi t, calculated as per Section 198 of the Companies Act, 2013


42

B. Remuneration to other Directors

Sl. No.

Particulars of Remuneration Name of Directors Total Amount

Manindra Nath Banerjee

Mangilal Jain Santanu Ray Plistina Dkhar (`/Lac)

1 Independent Directors

Fee for attending board/ committee meetings

1.80 1.35 1.50 0.15 4.80

Commission - - - - -

Others, please specify - - - - -

Total (1) 1.80 1.35 1.50 0.15 4.80

2 Other Non-Executive Directors

Fee for attending board/ committee meetings

- - - - -

Commission - - - - -

Others, please specify - - - - -

Total (2) - - - - -

Total (B)=(1+2) 1.80 1.35 1.50 0.15 4.80

Total Managerial Remuneration 4.80

Overall Ceiling as per the Act 3% of the net profi t, calculated as per Section 198 of the Companies Act, 2013

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD

Sl. No.

Particulars of Remuneration Name of Key Managerial Personnel Total Amount

Name Sanjay Kr. Gupta *

Dilip Kr. Agarwal

Debabrata Thakurta

(`/Lac)

Designation CEO CFO CS

1 Gross salary

(a) Salary as per provisions contained in Section 17(1) of the Income Tax Act, 1961

- 45.00 14.62 59.62

(b) Value of perquisites under Section 17(2) of the Income Tax Act, 1961

- - - -

(c) Profi ts in lieu of salary under Section 17(3) of the Income Tax Act, 1961

- - - -

2 Stock Option - - - -

3 Sweat Equity - - - -

4 Commission

- as % of profi t - - - -

- others, specify - - - -

5 Others, please specify - - - -

Total - 45.00 14.62 59.62

*Mr. Sanjay Kumar Gupta, Chief Executive Offi cer draws salary from its subsidiary company viz. Cement Manufacturing Company Limited

There were no penalties/ Punishments /Compounding of offences for breach of any provisions of the Companies Act, 2013 against the Company or its Directors or other Offi cer in default, during the year.

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES


43

Annexure 3 to Directors’ ReportFORM NO. MR - 3

SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 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]

ToThe Members,Star Ferro and Cement Limited

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporatepractices by M/s. Star Ferro and Cement Limited (hereinafter called “the Company”). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

The Company’s Management is responsible for preparation and maintenance of secretarial records and for devising proper systems to ensure compliance with the provisions of applicable Laws and Regulations.

Based on the verifi cation of the books, papers, minute books, forms and returns fi led and other records maintained by the Company and also the information provided by the Company, its offi cers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the fi nancial year ended on 31st March, 2016 generally complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns fi led and other records maintained by the Company for the fi nancial year ended on 31st March, 2016, to the extent applicable, according to the provisions of:

i) The Companies Act, 2013 (the Act) and the rules made thereunder;

ii) The Securities Contracts (Regulation) Act, 1956 and Rules made thereunder;

iii) The Depositories Act, 1996 and Regulations and Bye-laws framed thereunder;

iv) Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Overseas Direct Investments, Foreign Direct Investments and External Commercial Borrowings;

v) The Regulations and Guidelines prescribed under the Securities & Exchange Board of India Act, 1992 (“SEBI Act”) or by SEBI, to the extent applicable:

a) The Securities Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 2011

b) The Securities Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 and the Securities Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015

c) The Securities Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009

d) The Securities Exchange Board of India (Share Based Employee Benefi ts) Regulations, 2014

e) The Securities Exchange Board of India (Issue and listing of Debt securities) Regulations, 2008

f) The Securities Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993

g) The Securities Exchange Board of India (Delisting of Equity Shares) Regulations, 2009

h) The Securities Exchange Board of India (Buyback of Securities) Regulations, 1998


44

vi) The Company is presently not engaged in any business. As such, other than fi scal, labour and environmental laws which are generally applicable to all manufacturing/ trading companies, no laws/ acts are, inter alia, applicable to the Company.

We have also examined compliance with the applicable clauses of the following:

a) Secretarial Standards issued by The Institute of Company Secretaries of India[Applicable from 1st July, 2015];

b) The Listing Agreements entered into by the Company with the BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE) and the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations, 2015. [Applicable from 1st December, 2015];

During the period under review the Company has generally complied with the provisions of the Acts, Rules, Regulations, Guidelines, Standards, etc. mentioned above.

We further report that

a) The Board of Directors of the Company is duly constituted with proper balance of Non-Executive Directors and Independent Directors. There were no changes in the composition of the Board of Directors during the period under review.

b) Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at leastseven days in advance, and a system exists for seeking and obtaining further information and clarifi cations on the agenda items before the meeting and for meaningful participation at the meeting.

c) None of the Directors in any meeting dissented on any resolution and hence there was no instance of recording any dissenting member’s view in the minutes.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of theCompany to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period there are no specifi c events/ actions which have any major bearing on the Company’s affairs.

This report is to be read with our letter of even date which is annexed as Annexure – I which forms an integral part of this report.

For MKB & Associates Company Secretaries

Manoj Kumar Banthia[Partner]

ACS no. 11470COP no. 7596

Date: 3rd May, 2016Place: Kolkata


45

Annexure- I

ToThe Members,Star Ferro and Cement Limited

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verifi cation was done on test basis to ensure that correct facts are refl ected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verifi ed the correctness and appropriateness of fi nancial records and Books of Accounts of the company.

4. Wherever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events, etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility ofmanagement. Our examination was limited to the verifi cation 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 effi cacy or effectiveness with which the management has conducted the affairs of the company.

For MKB & Associates Company Secretaries

Manoj Kumar Banthia[Partner]

ACS no. 11470COP no. 7596

Date: 3rd May, 2016Place: Kolkata


46

Annexure 4 to Directors’ ReportREPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES/ INITIATIVES

[Pursuant to Section 135 of the Companies Act, 2013 & Rules made thereunder]

1. A brief outline of the Company’s CSR policy, including overview of the projects or programmes proposed to be undertaken andreference to the web-link to the CSR Policy and projects or programmes :

The Board has framed a Corporate Social Responsibility Policy of the Company. Your company’s CSR strategy ensures compliance with ethical standards in business practices; minimising environmental impacts and waste; addresses the challenges of improved access to education, health, sports, drinking water, sanitation and livelihood opportunities; and helping underprivileged communities to become resilient and self-reliant. Details of the CSR policy are available on the website of the Company.

2. The composition of the CSR Committee

• Mr. Sajjan Bhajanka - Chairman

• Mr. Hari Prasad Agarwal - Non-Executive Director

• Mr. Mangilal Jain - Independent Director

3. Average Net Profi t of the Company for last 3 Financial Years: ` 111.27 Lacs

4. Prescribed CSR expenditure (2% of amount): ` 2.23 Lacs

5. Details of CSR activities/projects undertaken during the year:

a) Total amount to be spent for the Financial Year: ` 2.23 Lacs

b) Amount un-spent, if any: NIL

c) Manner in which the amount spent during Financial Year is detailed below:(` in Lacs)

1 2 3 4 5 6 7 8

Sl. No.

CSR project or activity identifi ed

Sector in which the Project is

covered

Projects/Programs

1.Local area or other

2.Specify the state and district where project or

programs was undertaken

Amount outlay

(budget) project or programs

wise

Amount spent on the projects or programs Sub-

heads:

1.Direct expenditure

on projects or programs,

2.Overheads:

Cumulative expenditure

upto the reporting

period

Amount spent: Direct/

through implementing

agency*

1. Providing non-formal primary education through cost effective One Teacher school (O.T.S.) i.e. Ekal Vidyalaya to rural and tribal people.

Education In various parts of India

7.20 7.20 7.20 Through implementing

agency

*Details of implementing Agency: Friends of Tribal Society

We hereby confi rm that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company.

Place: KolkataDate: 3rd May, 2016

Sanjay Kumar GuptaChief Executive Offi cer

Sajjan BhajankaDirector

(DIN-00246043) Chairman – CSR Committee


47

Annexure 5 to Directors’ ReportStatement pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014

(i) The ratio of the remuneration of each Director to the median remuneration of the employees and percentage increase in remuneration of the Directors and Key Managerial Personnel of the Company for the Financial Year:

Name of Directors & Key Managerial Personnel

Designation Increase in Remuneration in the Financial Year (%)

Ratio of remuneration of each Director to median

remuneration of all employees*

Mr. Sanjay Kumar Gupta# Chief Executive Offi cer Not Applicable Not Applicable

Mr. Dilip Kumar Agarwal Chief Financial Offi cer 14.18% Not Applicable

Mr. Debabrata Thakurta Company Secretary 5.67% Not Applicable

# Mr. Sanjay Kumar Gupta, Chief Executive Offi cer draws salary from the Subsidiary Company viz. Cement Manufacturing Company Limited.

* Apart from sitting fees paid to Non-Executive Directors, no remuneration is paid to any Director.

(ii) Percentage increase in the median remuneration of employees in the Financial Year: NIL

(During the year there were no employees other than the above Key Managerial personnel in the Company.)

(iii) The number of permanent employees on the roll of the Company : 2

(v) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company:

(iv) The explanation on the relationship between average increase in remuneration and Company performance: Net revenue of the Company on the consolidated basis, during the F.Y. 2015-16 was ` 1,71,502.94 Lacs as against ` 1,43,042.78 Lacs recorded in the F.Y. 2014-15. Average increase in the remuneration is guided by various factors such as infl ation, normal salary revision and other external factors.

(` in Lacs)

Particulars of Remuneration Key Managerial Personnel

Mr. Sanjay Kumar Gupta * Mr. Dilip Kumar Agarwal Mr. Debabrata Thakurta

Remuneration in F.Y. 2015-16 - 45.00 14.62

Total Revenue (Consolidated) 1,71,502.94

Remuneration (as % of total revenue)

- 0.026 0.008

Profi t before tax 14,392.13

Remuneration (as % of profi t before tax)

- 0.313 0.101

* Mr. Sanjay Kumar Gupta, Chief Executive Offi cer draws salary from the Subsidiary Company viz. Cement Manufacturing Company Limited.


48

(vi) Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current Financial Year and previous Financial Year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer:

Particulars As at March 31, 2016 As at March 31, 2015

Market CapitalisationBSE ` 2,611.64 crores BSE ` 3692.51 crores

NSE ` 2,587.20 crores NSE ` 3721.40 crore

Price earnings RatioBSE 28.46 BSE 44.20

NSE 28.20 NSE 44.54

(vii) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last Financial Year and its comparison with the percentile increase in the managerial remuneration and justifi cation thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: The Company does not have any employee other than the managerial personnel and there are no exceptional circumstances for increase in managerial remuneration.

(viii) The key parameters for any variable component of remuneration availed by the Directors: None of the Directors are paid remuneration in the Financial Year 2015-16.

(ix) The ratio of the remuneration of the highest paid Director to that of the Employees who are not Directors but receive remuneration in excess of the highest paid Director during the year: None of the Directors are paid remuneration in the Financial Year 2015-16.

(x) It is hereby affi rmed that the remuneration paid during the year is as per the Remuneration Policy of the Company.


Place: Kolkata Sajjan BhajankaDate: 3rd May, 2016 Chairman

(DIN: 00246043)


49

Report on Corporate Governancefor the year 2015-16

The Directors present the Company’s Report on Corporate Governance:

Company’s Philosophy on Corporate Governance:The Company’s philosophy on Corporate Governance is to enhance the long-tern economic value of the Company at large and its stake holders. It emphasizes the need for full transparency, accountability and compliances with laws and regulations in all its transactions and interactions with its stakeholders, employees, lenders and the Government etc., without compromising the environment and health of society at large. Your Company has complied with the requirements of Corporate Governance as laid down under SEBI Regulations.

BOARD OF DIRECTORSCompositionAs on the date of this report, the Board consists of seven

Directors, including and headed by a Non-Executive Chairman, two Non-Executive Directors and four Independent Directors. The Board members are expert in different disciplines of corporate working i.e. fi nance, accounts, banking, technical, marketing, administration, etc. The Independent Directors are expert professionals with high credentials and actively contribute in the deliberations of the Board.

None of the Directors is a member of the Board of more than twenty Companies or a Member of more than ten Board-level Committees or a Chairman of more than fi ve such Committees.

Mr. Sanjay Kumar Gupta is the Chief Executive Offi cer and Mr. Dilip Kumar Agarwal is the Chief Financial Offi cer of the Company.

The Composition is as provided below:

Name of the Director Designation Category

Mr. Sajjan Bhajanka Chairman Promoter – Non-Executive

Mr. Hari Prasad Agarwal Director Promoter – Non-Executive

Mr. Sanjay Agarwal Director Promoter – Non-Executive

Mr. Manindra Nath Banerjee Director Independent

Mr. Santanu Ray Director Independent

Mr. Mangilal Jain Director Independent

Mrs. Plistina Dkhar Director Independent

50


As on 31st March, 2016, the details of each member of the Board along with the number of Directorship(s) / Committee Membership(s)are provided herein below:

Name of the DirectorNumber of Directorship of Public Limited

Companies *Number of Membership including

Chairmanship of Board Committee(s) **

Mr. Sajjan Bhajanka 9 6 (1 as Chairman)

Mr. Hari Prasad Agarwal 9 5

Mr. Sanjay Agarwal 8 -

Mr. Manindra Nath Banerjee 5 6 (3 as Chairman)

Mr. Santanu Ray 6 6 (3 as Chairman)

Mr. Mangilal Jain 10 8 (4 as Chairman)

Mrs. Plistina Dkhar 3 -

* Includes Private Ltd. Companies which are subsidiaries of Public Limited Companies, Unlimited Liability Companies, Companies registered under Section 8 of the Companies Act, 2013, Membership of Managing Committees of Chambers of Commerce/Professional Bodies but excludes Foreign Companies.

* * Only Audit Committee and Stakeholders Relationship Committee have been considered as per SEBI Regulations.

Board Meetings and Procedures

The Board meets at regular intervals to discuss and decide on the policies and strategies with respect to the business of the Company apart from normal business. The Board generally meets at least once every quarter to review the Quarterly results. Additional meetings are held as and when necessary.

All the meetings are scheduled well in advance and notices are sent to all the Directors at their address registered with the Company. The agenda of the meeting are backed by necessary supporting information and documents to enable the Board to take informed decisions. Agenda also includes minutes of the meetings of all the Board Committees and Subsidiaries for the information of the Board. Additional agenda items in the form of “Other Business” are included with the permission of the Chairman. Drafts minutes of the proceedings of the Board/Committee Meetings are circulated in advance and comments, if any, received from the Directors are incorporated in the minutes in consultation with the Chairman. The Board periodically reviews compliance reports of all laws applicable to the Company. Information about major events/items is placed before the Board and approval of the Board is taken on all such matters wherever such approval is required. Senior executives of the Company are invited as and when required to provide additional inputs or clarifi cations required on agenda items being discussed in the Board Meeting.

Number and dates of Board Meetings held during the year

Seven Board Meetings were held during the Financial Year 2015-16 and the gap between two meetings did not exceed 120 days. The Meetings were held on 13th April, 2015, 7th May, 2015, 9th June, 2015, 22nd July, 2015, 24th September, 2015, 3rd November, 2015 and 9th February, 2016. The attendance at the Board Meetings during the Financial Year 2015-16 and at the previous Annual General Meeting is as under:

Name of DirectorNo. of Board

Meeting Attended

Last AGM Attended

Mr. Sajjan Bhajanka 6 Yes

Mr. Hari Prasad Agarwal 7 Yes

Mr. Sanjay Agarwal 3 No

Mr. Manindra Nath Banerjee

6 No

Mr. Santanu Ray 7 Yes

Mr. Mangilal Jain 6 Yes

Mrs. Plistina Dkhar 1 Yes

Separate Meeting of Independent DirectorsAs stipulated by the Code for Independent Directors under the Companies Act, 2013 and the Listing Regulations, a separate meeting of the Independent Directors of the Company was held on 21st March, 2016 to review the performance of Non-Independent Directors (including the Chairman) and the Board as a whole. The Independent Directors also reviewed the quality, content and timeliness of the fl ow of information between the Management and the Board and Committees, which is necessary to effectively and reasonably perform and discharge their duties.

Induction and Familiarization Program for DirectorsAs per the Listing Regulations, the Company shall provide suitable training to the Directors to familiarize them with the Company, nature of the industry in which the Company operates etc.

The members of the Board of Directors are well acquainted with the industry and are provided necessary reports, documents and other presentations including interactive session with the Chairman, CEO and other heads of the Company. Efforts are made to familiarize the Directors about their roles, rights and


51

responsibilities. The Directors are regularly updated on the changes in policies, laws and regulations and other developments in the business. The details of the Director’s induction and familiarization are available on the Company’s website at http://www.starferrocement.co.in/admin/docs/familiarisation-programme.pdf.

Performance EvaluationPursuant to the provisions of the Act and the SEBI Regulations, the Board has carried out the annual performance evaluation of its own performance, as well as the evaluation of the working of its Committees. A structured questionnaire for evaluation was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specifi c duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors on parameters such as attendance, contribution and independent judgement. The performance evaluation of the Chairman and the Non-Independent Directors and the Board as a whole was also carried out by the Independent Directors.

The results of the Evaluation were shared with the Board, Chairman of respective Committees and individual Directors. The Directors expressed their satisfaction over the evaluation process.

Resume of Directors proposed to be re-appointedThe brief resume of Directors retiring by rotation and seeking re-appointment is appended in the notice convening the Annual General Meeting.

COMMITTEES OF THE BOARDCurrently, the Board has four committees: Audit Committee, Nomination and Remuneration Committee, Stakeholders’ Relationship Committee and Corporate Social Responsibility Committee. The terms of reference of these Committees are determined by the Board and their relevance reviewed from time to time. Meetings of each of these Committees are convened by the respective Chairman of the Committee, who also informs the Board about the summary of discussions held in the Committee Meetings. The Minutes of the Committee Meetings are sent to all Directors individually and tabled at the Board Meetings.

Audit Committee:All the members of the Audit Committee are Non-Executive Directors with majority Independent Directors including Chairman. The Committee is governed by a Charter which is in line with the regulatory requirements mandated by the Companies Act, 2013 and SEBI Regulations.

The terms of reference of the Audit Committee are broadly inter alia as follows:

i. Oversight of the Company’s fi nancial reporting process and the disclosure of its fi nancial information to ensure that the fi nancial statement is correct, suffi cient and credible;

ii. Recommendation for appointment, remuneration and terms of appointment of auditors of the Company;

iii. Approval of payment to statutory auditors for any other services rendered by the statutory auditors;

iv. Reviewing, with the management, the annual fi nancial statements and Auditor’s Report thereon before submission to the board for approval, with particular reference to:

a. Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s Report.

b. Changes, if any, in accounting policies and practices and reasons for the same.

c. Major accounting entries involving estimates based on the exercise of judgment by management.

d. Signifi cant adjustments made in the fi nancial statements arising out of audit fi ndings.

e. Compliance with listing and other legal requirements relating to fi nancial statements.

f. Disclosure of any related party transactions.

g. Qualifi cations in the draft audit report.

v. Reviewing, with the management, the quarterly fi nancial statements before submission to the Board for approval;

vi. Reviewing, with the management, the statement of uses /application of funds raised through an issue (public issue, rights issue, preferential issue etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue and making appropriate recommendations to the Board to take up steps in this matter;

vii. Review and monitor the auditor’s independence and performance, and effectiveness of audit process;

viii. Approval or any subsequent modifi cation of transactions of the Company with related parties;

ix. Scrutiny of inter-corporate loans and investments;

x. Valuation of undertakings or assets of the Company, wherever it is necessary;

xi. Evaluation of internal fi nancial controls and risk management systems;

xii. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;

xiii. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffi ng and seniority of the offi cial heading the department, reporting structure coverage and frequency of internal audit;

xiv. Discussion with internal auditors of any signifi cant fi ndings and follow up thereon;

52


xv. Reviewing the fi ndings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board;

xvi. Discussion with statutory auditors before the audit commences, about the nature and scope of audit, audit observations as well as post-audit discussion to ascertain any area of concern;

xvii. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;

xviii. To review the functioning of the Whistle Blower mechanism;

xix. Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the fi nance function or discharging that function) after assessing the qualifi cations, experience and background, etc. of the candidate.

Composition, Number of Meetings and Attendance The Audit Committee met Five times during the Financial Year 2015-16. The Audit Committee’s composition meets with requirements of Section 177 of the Companies Act, 2013 and SEBI Regulations. Members of the Audit Committee possess fi nancial /accounting expertise/ exposure. The Committee is chaired by Mr. Mangilal Jain. The meetings were held on 7th May, 2015, 9th June, 2015, 22nd July, 2015, 3rd November, 2015 and 9th February, 2016.

The composition of the Audit Committee and the details of meetings attended by the Directors are as under:

Name Category No. of Committee Meetings Attended

Mr. Mangilal JainChairman – Independent,

Non-Executive4

Mr. Santanu RayMember – Independent,

Non-Executive5


Member – Independent, Non-Executive

5

Mr. Hari Prasad Agarwal

Member - Non-Independent, Non-

Executive5

Mr. Sajjan Bhajanka

Member - Non-Independent, Non-

Executive4

Audit Committee meetings are attended by the Chief Executive Offi cer, Chief Financial Offi cer of the Company and Representatives of Statutory Auditors and Internal Auditors, are invitees for the relevant meetings. The Company Secretary acts as the Secretary of the Audit Committee.

Nomination and Remuneration Committee:The Nomination and Remuneration Committee determines on behalf of the Board and shareholders as per agreed term of reference, the Company’s policy on specifi c remuneration packages for Executive Directors, Key Managerial Personnel and other employees. The Chairman of the Committee is an Independent Director and the Members on the Committee are Independent Directors.

The broad terms of reference of the Committee inter alia are as follows:

i. Formulation of the criteria for determining qualifi cations, positive attributes and independence of a Director and recommend to the Board a policy, relating to the remuneration of the Directors, Key Managerial Personnel and other employees;

ii. Formulation of criteria for evaluation of performance of Directors;

iii. Devising a policy on Board diversity;

iv. Identifying persons who are qualifi ed to become Directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board their appointment and removal;

v. Recommending/reviewing remuneration of the Managing Director(s) and Whole-time Director(s) based on their performance and defi ned assessment criteria.

Remuneration PolicyThe Company has formulated a remuneration policy with a focus on attracting talent and rewarding performance based on review of achievements. The remuneration to be paid to the Executive Directors is recommended by the Remuneration Committee based on the Net Profi ts of the Company which are then approved by the Board of Directors of the Company and the Shareholders of the Company in their respective meetings. The remuneration paid to the Executive Directors was determined and based on the industry benchmark, performance of the Company to the industry performance. Independent Non-Executive Directors are appointed for their performance expertise in their individual capacity as individual Professionals/Business Executives. Independent Non-Executive Directors are paid sitting fees for attending Board/Committee Meetings.

The composition of the Nomination and Remuneration Committee as at 31st March, 2016 are as under:

Name of the Member

Category Designation

Mr. Mangilal Jain Independent, Non-Executive Chairman

Mr. Santanu Ray Independent, Non-Executive Member


Independent, Non-Executive Member


53

Meetings and Attendance:The Nomination and Remuneration Committee met once on 7th May, 2015 during the Financial Year 2015-16. All the Members of the Committee attended the meeting.

Remuneration paid to the Directors:-The details of remuneration paid to the Directors for the Financial Year 2015-16 is provided below:

Sl. No. Name of the Director DesignationSalary

(`)Sitting Fees

(`)No. of Shares

held as on date

Non-Executive Directors:

1. Mr. Sajjan Bhajanka Chairman - - 1,66,15,675

2. Mr. Sanjay Agarwal Non-Executive Director - - 1,94,82,445

3. Mr. Hari Prasad Agarwal Non-Executive Director - - 24,35,760

4. Mr. Manindra Nath Banerjee Independent Director - 1,80,000 -

5. Mr. Mangilal Jain Independent Director - 1,35,000 3,500

6. Mr. Santanu Ray Independent Director - 1,50,000 -

7. Mrs. Plistina Dkhar Independent Director - 15,000 750

None of the Directors of the Company / Key Managerial Personnel had any pecuniary relationship with the Company during the year.

STAKEHOLDERS RELATIONSHIP COMMITTEEIn compliance with the provisions of Section 178 of the Companies Act, 2013 and the SEBI Regulations, the Board has constituted“Stakeholders Relationship Committee”.

The Committee oversee Share Transfers and addresses to and redressal of shareholders’ grievances etc. The Committee also evaluatesperformance and service standards of the Registrar and Share Transfer Agents of the Company.

During the Financial Year 2015-16, 9 Meetings of the Stakeholders Relationship Committee were held on 21st May, 2015, 4th June, 2015, 17th September, 2015, 12th November, 2015, 17th December, 2015, 18th February, 2016, 25th February, 2016, 10th March, 2016 and 17th March, 2016.

The Composition of the Stakeholders Relationship Committee and the details of the meeting attended by the Directors are given below:

Name of the Member Category DesignationNo. of Committee Meetings

Attended

Mr. Manindra Nath Banerjee Independent, Non-Executive Chairman 9

Mr. Hari Prasad Agarwal Non- Executive Member 9

Mr. Debabrata Thakurta, Company Secretary acts as the Compliance Offi cer.

Status of Pending Complaints:-The Company has not received any complaints during the Financial Year 2015-16. There were no complaints pending at the beginningand at the end of the Financial Year. However, during the year under review letters on various matters were received and were dulyaddressed.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEEThe Company has constituted Corporate Social Responsibility Committee (CSR) Committee as required under Section 135 of the Companies Act, 2013. The Committee consists of three Directors out of which one Director is an Independent Director.

The terms of reference of the Committee are as follows:

i. To frame the CSR policy and monitor the same from time to time

ii. To recommend the amount of expenditure to be incurred on CSR activities

During the Financial Year 2015-16, CSR Committee Meeting was held on 12th February, 2016, where all the members were present.

54


The Corporate Social Responsibility Committee comprises of the following three members and details of the meeting attended by themare given below:

Name of the Member Category DesignationNo. of Committee Meetings

Attended

Mr. Sajjan Bhajanka Non-Executive Chairman 1

Mr. Mangilal Jain Non-Executive Independent Member 1

Mr. Hari Prasad Agarwal Non-Executive Member 1

VIGIL MECHANISM / WHISTLE BLOWER POLICYThe Board of Directors of the Company has adopted a Vigil Mechanism Policy. This mechanism provides a tool in the hands of Employees and Directors to report to the management, concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct or policy. The mechanism provides for adequate safeguards against victimization of employees and Directors to availof the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases.

GENERAL BODY MEETINGSParticulars of last three Annual General Meetings:

Financial Year Venue Date and time

2014-15‘Star Club’, Village Lumshnong, P.O.: Khaliehriat, Dist. East Jaintia Hills, Meghalaya – 793210

25th September, 2015 at 10.00 A.M.

2013-14‘Star Club’, Village Lumshnong, P.O.: Khaliehriat, Dist. East Jaintia Hills, Meghalaya – 793210

20th September, 2014 at 11:00 A.M.

2012-13Indian Chamber of Commerce Auditorium, 10th Floor, 4, India Exchange Place, Kolkata – 700001

25th September, 2013 at 3:00 P.M.

Details of Special Resolution passed in the last three Annual General Meeting:

AGM Date Matter

3rd 25.09.2013 No Special Resolution

4th 20.09.2014

1. Authorization to the Board to borrow upto an amount not exceeding ` 500 crore.

2. Authorisation to the Board to mortgage, hypothecate or create charge on Company’s assets.

3. Authorisation to the Board to keep the Register and Index of Members, copies of all Annual returns, books of accounts at a place other than the Registered Offi ce.

4. Increase in limits of investments in other bodies corporate under Section 186 of the Companies Act, 2013.

5th 25.09.2015 No Special Resolution

During the year under review, no resolution has been passed through the exercise of Postal Ballot.

No Extra-Ordinary General meeting of the Shareholders was held during the year.

DISCLOSURES• No materially signifi cant related party transactions took place

between the Company and its subsidiaries, its Promoters, Directors or the Management and their relatives which have a bearing on interests of the Company at large. Other Related Party transactions as per requirements of Accounting Standard 18 have been reported in Notes to Accounts annexed to the fi nancial statements. The policy on related party transaction has been placed on the Company’s website at http://www.starferrocement.co.in/admin/docs/related-party-transaction-policy.pdf

• The Company has complied with the requirements of the Stock Exchanges, SEBI and other statutory authorities on all matters relating to capital markets during the last three years.

No penalties or strictures have been imposed on the Company by the Stock Exchanges, SEBI or other statutory authorities relating to the above.

• The Company has a well-defi ned risk management framework and the Board is kept informed about the risk assessment and minimization procedures. The risk policy provides for identifi cation of risk, its assessments and procedures to minimize risk. The risk management policy is reviewed periodically to ensure that the executive management controls the risk as per decided policy.

• The Company’s policy on Vigil mechanism is placed on the Company’s website at http://www.starferrocement.co.in/admin/docs/Whistle-Blower-Policy.pdf. We hereby affi rm that no personnel has been denied access to the audit committee.

• The Directors of the Company are not related inter-se.

• The Financial statements of the Company are prepared in accordance with the Accounting Standards stipulated under the Companies Act.


55

• During the year under review, the Company has not raised any money through public issue.

• The Company’s policy on “material subsidiary” is placed on the Company’s website at http://www.starferrocement.co.in/admin/docs/policy-on-material-subsidiary.pdf

CODE OF CONDUCTIn pursuance of the SEBI Regulations, the Board has approved the ‘Code of Conduct for Board of Directors and Senior Management’ and same has been circulated and posted on the Company’s website: www.starferrocement.co.in. The Directors and Senior Management personnel have affi rmed compliance with the provisions of above Code of Conduct. The declaration by the Chief Executive Offi cer to this effect is also attached to this Report.

MEANS OF COMMUNICATIONThe Company’s quarterly fi nancial results, after their approval by the Board of Directors, are promptly issued to all the Stock Exchanges with whom the Company has listing arrangements. These fi nancial results, in the prescribed format, as per SEBI Regulations, are published in prominent English and Khasi (Regional language) newspapers usually in The Economic Times, Business Standard and Hima. The quarterly fi nancial results and offi cial news are also posted on the website of the Company - www.starferrocement.co.in.

The audited fi nancial statements form a part of the Annual Report which is sent to the Members well in advance of the Annual General Meeting. The Annual Report of the Company, the quarterly / half yearly and the annual results of the Company are also placed on the Company’s website: www.starferrocement.co.in and can be downloaded.

All periodical compliance fi lings like shareholding pattern, corporate governance report, media releases, among others are fi led electronically on NSE Electronic Application Processing System (NEAPS) and BSE’s Listing Centre which are web-based applications designed by NSE and BSE respectively for corporates.

MANAGEMENT DISCUSSION AND ANALYSISA Management Discussion and Analysis Report, forms a part of the Directors’ Report.

GENERAL SHAREHOLDER INFORMATIONAnnual General Meeting

Date and Time 9th September, 2016 at 01:00 p.m.

Venue Star Club, Village : Lumshnong, P.O.: Khaliehriat, Dist. East Jaintia Hills, Meghalaya - 793210

Dates of Book Closure 6th September, 2016 to 9th September, 2016 (both days inclusive)

Financial Calendar (for the year 2016-17)The Company follows Financial Year starting from 1st of April of the Financial Year and ending on 31st March of the following year.

Proposed date for approval of fi nancial results

First Quarter ended 30th June, 2016

Within 45 days from the end of quarter

Second Quarter ended 30th September, 2016


Third Quarter ended 31st December, 2016


Fourth/Last Quarter ended 31st March, 2017


Listing on Stock Exchanges:The Shares of the Company are presently listed on the following Stock Exchanges:-a) National Stock Exchange of India Limited (NSE) Exchange Plaza, Bandra –Kurla Complex, Bandra (E) Mumbai- 400 051

b) BSE Ltd. (BSE) Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai – 400 001

The Company has paid listing fees to NSE and BSE for the year 2016 – 17.

Annual Custody/Issuer fee for the year 2016-17 has been paid by the Company to CDSL and the bill from NSDL is yet to be received.

Stock Code:

Name of the Exchange Stock Code

The National Stock Exchange of India Limited SFCL

The BSE Limited 536666

ISIN Allotted to the Company by the Depositories: The Company has signed Depository agreement with both National Securities Depository Limited and Central Depository Services (India) Limited. The ISIN allotted to the Company is INE935O01010

Corporate Identity Number:L27310ML2011PLC008564

Market Information:-Market Price Data: High, Low (based on the closing prices) and volume of shares traded at BSE and NSE, for the Financial Year 2015-16 are as follows:

56


Month

Bombay Stock Exchange National Stock Exchange

High Low Volume High Low Volume

April 2015 185.80 153.20 4,70,033 185.00 152.05 21,96,714

May 2015 175.00 139.10 1,92,468 175.00 125.00 7,45,991

June 2015 164.00 149.00 1,18,558 164.90 149.20 5,42,209

July 2015 170.00 150.00 3,43,973 168.80 149.05 19,60,719

August 2015 162.80 120.00 1,87,167 163.90 120.00 8,30,650

September 2015 142.00 120.10 75,423 142.35 120.00 3,19,879

October 2015 144.70 129.20 81,799 144.95 128.55 2,98,008

November 2015 141.90 130.25 81,324 141.90 130.50 2,20,864

December 2015 138.00 125.10 82,658 138.00 125.15 3,30,539

January 2016 135.00 120.00 71,498 132.70 119.50 6,33,889

February 2016 131.00 96.00 1,21,866 132.40 95.20 6,78,922

March 2016 125.85 101.00 1,06,277 124.80 100.00 11,65,493

Performance of the Shares of the Company in comparison to BSE Sensex is as under:

Month

BSE Sensex Company’s Share

Closing % Change Closing % Change

April 2015 27011.31 (3.38) 157.50 (5.23)

May 2015 27828.44 3.03 162.60 3.24

June 2015 27780.83 (0.17) 151.95 (6.55)

July 2015 28114.56 1.20 161.00 5.96

August 2015 26283.09 (6.51) 141.85 (11.89)

September 2015 26154.83 (0.49) 128.65 (9.31)

October 2015 26656.83 1.92 134.20 4.31

November 2015 26145.67 (1.92) 136.00 1.34

December 2015 26117.54 (0.11) 129.50 (4.78)

January 2016 24870.69 (4.77) 122.70 (5.25)

February 2016 23002.00 (7.51) 103.95 (15.28)

March 2016 25341.86 10.17 117.55 13.08

Registrars and Share Transfer Agents:M/s. Maheshwari Datamatics Private Limited6, Mangoe Lane (Surendra Mohan Ghosh Sarani)2nd Floor, Kolkata – 700001Phone: 033 22435029/22482248Fax - 033 22484787Email - [email protected], [email protected]

Share Transfer SystemRequests for transfer of shares can be lodged either at the offi ce of the Company or at the offi ce of the Registrar. The transfer are normally processed within a maximum period of 15 days from the receipt of documents, complete in all respect.

Transfer of Shares in dematerialized form is duly processed by NSDL/CDSL in electronic form through the respective Depository participants. Dematerialisation is required to be done with a period of 15 days from the date of lodgment of dematerilaisation request, complete in all respect, with the Depository Participant of the Shareholder.


57

Distribution of Shareholding of Ordinary Shares as on 31st March, 2016.

ShareholdingTotal No. of

Shareholders%age No. of Shares %age

1- 500 10,458 82.66 11,43,359 0.52

501-1000 712 5.62 5,98,699 0.27

1001-5000 1,013 8.01 23,73,756 1.07

5001-10000 200 1.58 14,53,036 0.65

10001- 20000 102 0.81 14,18,573 0.64

20001 and above 167 1.32 21,51,85,567 96.85

Total 12,652 100.00 22,21,72,990 100.00

Shareholding Pattern as on 31st March, 2016

CategoryNumber of

ShareholdersNumber of

Shares% of total

Share Capital

Promoter and Promoter Group 30 14,80,58,928 66.64

Foreign Institutional Investors 5 2,49,170 0.11

Bodies Corporate 308 1,75,65,364 7.91

Trusts 10 1,11,250 0.05

Clearing Member 63 3,00,781 0.14

NRIs 443 2,69,527 0.12

Individual 11,793 5,56,17,970 25.03

TOTAL 12,652 22,21,72,990 100.00

Dematerialisation of shares and liquidityThe Company’s shares are compulsorily traded in dematerialised form and are available for trading on both the Depositories in India – National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

22,13,46,472 Ordinary Shares of the Company representing 99.63% of the Company’s share capital is dematerialised as on 31st March, 2016.

Promoters-Indian66.64%

Foreign Institutional Investors0.11%

Private Bodies Corporate7.91%

Trusts0.05%

Clearing Member0.14%

NRIs0.12%

Indian Public25.03%

Shareholding Pattern

58


RECONCILIATION OF SHARE CAPITAL AUDITi. Pursuant to Regulation 40(9) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 certifi cates on half-

yearly basis, have been issued by a Company Secretary-in-Practice for due compliance of share transfer formalities by the Company.

ii. A Practicing Company Secretary carries out the reconciliation of Share Capital of the Company for every Quarter to reconcile the total capital admitted with National Securities Depository Limited and Central Depository Services (India) Limited(‘Depositories’)and the total issued and listed capital of the Company. The Audit confi rms that the total issued /paid up Capital is in agreement with the aggregate of the total number of shares in physical form and the total number of shares in dematerialized form.

Address for Correspondence: a) Corporate Offi ce:

The Compliance Offi cer, Star Ferro and Cement Limited,Satyam Towers, 3 Alipore Road, Kolkata - 700 027

Phone: 033 22435029, Fax: 033 22484787 Email: [email protected] Website: www.starferrocement.co.in

b) Registered Offi ce: Village: Lumshnong, P.O. Khaliehriat, Dist. East Jaintia Hills, Meghalaya – 793210


Sajjan BhajankaPlace: Kolkata DIN-00246043Date: 3rd May, 2016 Chairman

Compliance with Code of Business Conduct and EthicsAs provided under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, it is hereby declared that all Board members and Senior management personnel of the Company have affi rmed the compliance of the Code of Conduct for the year ended 31st March, 2016.

Place: Kolkata Sanjay Kumar GuptaDate: 3rd May, 2016 Chief Executive Offi cer


59

Certifi cate by Chief Executive Offi cer and Chief Financial Offi cerTo, The Board of DirectorsStar Ferro and Cement Limited

We the undersigned, in our respective capacities as Chief Executive Offi cer and Chief Financial Offi cer of Star Ferro and Cement Limited (‘the Company”), to the best of our knowledge and belief certify that:

a. We have reviewed the fi nancial statements and the cash fl ow statement for the Financial year ended 31st March, 2016 and based on our knowledge and belief, we state that:

i) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might bemisleading;

ii) These statements together present a true and fair view of the Company’s affairs and are in compliance with existing accountingstandards, applicable laws and regulations;

b. To the best of our knowledge and belief, no transactions entered into by the Company during the year are fraudulent, illegal or violative of the Company’s Code of Conduct.

c. We accept responsibility for establishing and maintaining internal controls for fi nancial reporting. We have evaluated the effectiveness of the internal control systems of the Company pertaining to fi nancial reporting. Defi ciencies in the design or operation of such internal controls, if any, of which we are aware, have been disclosed to the Auditors and the Audit Committee and steps have beentaken to rectify these defi ciencies.

d. We have indicated, based on our most recent evaluation, wherever applicable, to the Auditors and Audit Committee:

i) signifi cant changes, if any, in internal control over fi nancial reporting during the year;

ii) signifi cant changes, if any, in accounting policies made during the year and that the same has been disclosed in the notes to the fi nancial statements; and

iii) instances of signifi cant fraud of which we have become aware and the involvement therein, if any, of the management or any employee having a signifi cant role in the Company’s internal control system over fi nancial reporting.

Place: Kolkata Sanjay Kumar Gupta Dilip Kumar AgarwalDate: 3rd May, 2016 Chief Executive Offi cer Chief Financial Offi cer

60


Auditors’ Certifi cate on Corporate GovernanceToThe Members ofStar Ferro and Cement LimitedVill:-Lumshnong, P.O.: Khaliehriat,Dist. East Jaintia Hills,Meghalaya - 793 210

We have examined the compliance of conditions of the Corporate Governance by Star Ferro and Cement Limited for the year ended 31stMarch, 2016, as stipulated in Chapter IV of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations, 2015.

The compliance of the conditions of Corporate Governance is the responsibility of the management. Our examination was limited tothe procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the CorporateGovernance. It is neither an audit nor an expression of opinion on the fi nancial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company hascomplied with the conditions of Corporate Governance as stipulated in the above mentioned Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations, 2015.

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

For KAILASH B. GOEL & CO.Firm Registration No. 322460E

Chartered Accountants

CA. Arun Kumar SharmaPlace : Kolkata PartnerDate : 3rd May, 2016 Membership No. 057329


61

Financial Statements

62


Independent Auditors’ ReportToThe Members of Star Ferro and Cement Limited

REPORT ON THE STANDALONE FINANCIAL STATEMENTSWe have audited the accompanying standalone fi nancial statements of Star Ferro and Cement Limited (‘the Company’), which comprise the balance sheet as at 31 March, 2016, the statement of profi t and loss and the cash fl ow statement for the year then ended, and a summary of signifi cant accounting policies and other explanatory information.

MANAGEMENT’S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTSThe Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation and presentation of these standalone fi nancial statements that give a true and fair view of the fi nancial position, fi nancial performance and cash fl ows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specifi ed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal fi nancial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the fi nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITOR’S RESPONSIBILITY Our responsibility is to express an opinion on these standalone fi nancial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specifi ed under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the fi nancial statements.

The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal fi nancial control relevant to the Company’s preparation of the fi nancial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion on the standalone fi nancial statements.

OPINIONIn our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2016 and its profi t and its cash fl ows for the year ended on that date.

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 sub-section (11) of Section 143 of the Act, we give in the Annexure A, a statement on the matters specifi ed in the paragraph 3 and 4 of the order.

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 profi t and loss and the cash fl ow statement dealt with by this Report are in agreement with the books of account;

(d) in our opinion, the aforesaid standalone fi nancial statements comply with the Accounting Standards specifi ed 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 31 March 2016 taken on record by the Board of Directors, none of the directors is disqualifi ed as on 31 March 2016 from being appointed as a director in terms of Section 164 (2) of the Act;


63

(f) with respect to the adequacy of the internal fi nancial controls over fi nancial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”; 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 the best of our information and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its fi nancial statements.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

For KAILASH B. GOEL & CO.Firm Registration No.322460E



64


The Annexure referred to in Independent Auditors’ Report to the members of the Company on the Standalone Financial Statements for the year ended 31 March 2016, we report that:

(i) The Company has no fi xed assets during the year under audit and So the provisions of paragraph 3(i) of the Order are not applicable to the Company.

(ii) The Company has no inventories during the year under audit and accordingly, paragraph 3(ii) of the Order are not applicable to the Company.

(iii) The Company has not granted loan to any body corporate covered in the register maintained under Section 189 of the Companies Act, 2013 (‘the Act’). So the provisions of paragraph 3(iii) are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Act, with respect to the loans and investments made.

(v) On the basis of our examination of books and records of the Company, in our opinion and according to the information and explanations given to us, the company has not accepted deposits during the year and therefore the directives issued by the Reserve bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under are not applicable to the Company.

(vi) In our opinion, maintenance of Cost records under Section 148(1) of the Companies Act 2013 is not applicable to the Company.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including provident fund, employees’ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, value added tax, duty of customs, service tax, cess and other material statutory dues were in arrears as at 31 March 2016 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no material dues of duty of customs, income tax, sales tax, service tax and value added tax which have not been deposited with the appropriate authorities on account of any dispute.

(viii) Based on our audit procedures and as per the information & explanation given by the management, the Company has

Annexure - A to the Auditors’ Report not defaulted in repayment of dues to fi nancial Institution or Banks. The Company has not issued any debentures.

(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable.

(x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its offi cers or employees has been noticed or reported during the course of our audit.

(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

(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 explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the fi nancial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934.





65

Annexure - B to the Auditors’ 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 fi nancial controls over fi nancial reporting of Star Ferro and Cement Limited (“the Company”) as of 31 March 2016 in conjunction with our audit of the standalone fi nancial statements of the Company for the year ended on that date.

MANAGEMENT’S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS The Company’s management is responsible for establishing and maintaining internal fi nancial controls based on the internal control over fi nancial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal fi nancial controls that were operating effectively for ensuring the orderly and effi cient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable fi nancial information, as required under the Companies Act, 2013.

AUDITORS’ RESPONSIBILITY Our responsibility is to express an opinion on the Company’s internal fi nancial controls over fi nancial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal fi nancial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal fi nancial controls over fi nancial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal fi nancial controls system over fi nancial reporting and their operating effectiveness. Our audit of internal fi nancial controls over fi nancial reporting included obtaining an understanding of internal fi nancial controls over fi nancial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion on the Company’s internal fi nancial controls system over fi nancial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING A company’s internal fi nancial control over fi nancial reporting is a process designed to provide reasonable assurance regarding the reliability of fi nancial reporting and the preparation of fi nancial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal fi nancial control over fi nancial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly refl ect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of fi nancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the fi nancial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING Because of the inherent limitations of internal fi nancial controls over fi nancial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal fi nancial controls over fi nancial reporting to future periods are subject to the risk that the internal fi nancial control over fi nancial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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




66


(` in Lacs)Particulars Note 31.03.2016 31.03.2015 EQUITY AND LIABILITIESShareholders’ Funds

Share Capital 2 2,221.73 2,221.73 Reserves and Surplus 3 834.89 786.14

3,056.62 3,007.87 NON-CURRENT LIABILITIES

Long Term Provisions 4 10.50 6.06 10.50 6.06

CURRENT LIABILITIESOther Current Liabilities 5 7.88 17.36 Short Term Provisions 6 0.42 0.27

8.31 17.63 Total 3,075.43 3,031.56

ASSETSNON-CURRENT ASSETS

Fixed Assets- Tangible Assets 7 - - - Intangible Assets 8 - -

- - Deferred Tax Asset 9 44.56 - Non Current Investments 10 2,954.75 2,954.75

2,999.31 2,954.75

CURRENT ASSETSCurrent Investments 11 - - Cash and Cash Equivalents 12 72.02 5.94 Short Term Loans and Advances 13 0.84 70.87 Other Current Assets 14 3.26 -

76.12 76.81 Total 3,075.43 3,031.56

Summary of Signifi cant Accounting Policies 1.2The accompanying notes form an integral part of the fi nancial statements

As per our report of even date For and on Behalf of the Board of Directors

For Kailash B. Goel & Co.Firm Registration No. 322460EChartered Accountants

CA. Arun Kumar Sharma Dilip Kumar Agarwal Sajjan Bhajanka Partner Chief Financial Offi cer Chairman & DirectorMembership No : 057329 DIN : 00246043

Place: Kolkata Debabrata Thakurta Hari Prasad AgarwalDate : 3rd May, 2016 Company Secretary Director DIN : 00266005

Balance Sheetas at 31st March, 2016


67





(` in Lacs)Particulars Note 2015-16 2014-15 INCOME

Other Income 15 2,375.38 0.10

Total Revenue 2,375.38 0.10

EXPENSES

Cost of Materials Consumed 16 - -

(Increase)/Decrease in Inventories 17 - -

Employee Benefi t Expenses 18 64.46 51.61

Finance Costs 19 0.01 0.03

Other Expenses 20 84.98 87.04

Total Expenses 149.46 138.68

PROFIT/(LOSS) BEFORE EXCEPTIONAL AND EXTRAORDINARY ITEMS AND TAX

2,225.92 (138.58)

Exceptional Items - -

Profi t/(Loss) before tax 2,225.92 (138.58)

Tax Expenses

-Current Tax - -

-Deferred Tax 44.56 -

Profi t/(Loss) for the year 2,270.48 (138.58)

Earnings Per Equity Share (nominal value of share ` 1/-)

Basic Earning Per Share 1.02 (0.06)

Diluted Earning Per Share 1.02 (0.06)

Signifi cant accounting policies and notes on accounts 1.2

The accompanying notes form an integral part of the fi nancial statements

Statement of Profi t and Loss for the period ended 31st March, 2016

68


(` in Lacs)Sl. No.

Particulars 2015-16 2014-15

A CASH FLOW FROM OPERATING ACTIVITIESNet Profi t before Tax 2,225.92 (138.58)Adjustments for:

Depreciation/Amortisation - - Finance Cost 0.01 0.03 Dividend Income (2,363.80) - Interest and Other Income (11.58) (0.10)

Operating Profi t before Working Capital changes (149.45) (138.65)Adjustments for:(Increase)/ Decrease in Short Term Loans & Advances 70.02 (70.87)(Increase)/ Decrease in Other Current Assets (3.26) 76.90 Increase/ (Decrease) in Long Term Provisions 4.44 6.06 Increase/ (Decrease) in Short Term Provisions 0.15 0.27 Increase/ (Decrease) in Other Current Liabilities (8.63) 17.36 Cash Generated from Operations (86.72) (108.94)Direct Taxes Paid (Net of Refunds) (0.84) (0.00)Net Cash generated from Operating Activities (87.57) (108.94)

B CASH FLOW FROM INVESTING ACTIVITIESFixed Deposits/Margin Money (Given)/Refund - 1.85 Dividend Received 2,363.80 - Interest Received 11.58 0.10 Net Cash from Investing Activities 2,375.38 1.95

C CASH FLOW FROM FINANCING ACTIVITIESInterest Paid (0.01) (0.03)Dividend paid (2,221.73) - Net Cash used in Financing Activities (2,221.74) (0.03)Net Increase/(Decrease) in Cash and Cash Equivalents (A + B + C) 66.08 (107.02)Cash and Cash Equivalents as on 1st April, 2015 5.94 116.87 Less: Amount transferred pursuant to Scheme of Arrangement - 3.91

5.94 112.96 *Cash and Cash Equivalents as on 31st March, 2016 72.02 5.94

* It includes earmarked balance with bank of ` 1.65 Lacs (PY ` 1.67 Lacs) which are not available for use by the Company as they represent unpaid dividend liability.

Cash Flow Statementfor the year ended 31st March, 2016






69

Notes To Financial Statements1. CORPORATE INFORMATION

Star Ferro and Cement Limited (the Company) is a public Company domiciled in India and incorporated under the provisions of theCompanies Act, 1956. Its shares are listed on National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in India. The Company is holding investments in its subsidiaries which are engaged in manufacture of Cement, Cement Clinker and generation of Power.

1.1 Basis of PreparationThe fi nancial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these fi nancial statements to comply in all material respects with the Accounting Standards as prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013, to the extent notifi ed. The fi nancial statements are prepared under the historical cost convention on accrual basis and on the basis of going concern. The accounting policies are consistently followedby the Company and changes in accounting policy are separately disclosed.

1.2 Summary of Signifi cant Accounting Policies(i) Revenue Recognition

(a) Revenue is recognized to the extent that it is probable that the economic benefi ts will fl ow to the Company and the revenue can be reliably measured.

(b) Dividend income is recognized when the shareholders’ right to receive the payment is established.

(c) Interest income is recognized on a time proportion basis taking into account the amount outstanding and rate applicable.

(ii) Fixed Assets

Fixed Assets are stated at their cost of acquisition or construction less accumulated depreciation/amortization and impairment loss, if any. Cost comprises the purchase price, installation and attributable cost of bringing the asset to its working conditionfor its intended use.

(iii) Intangible Assets

Intangible assets are recognized when it is probable that the future economic benefi t that are attributable to the assets will fl ow to the Company and the cost of the assets can be measured reliably. The amortizable amount of an intangible asset is allocated over its estimated useful life.

(iv) Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external/internal factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount which represents the greater of the net selling price and ‘Value in use’ of the assets. In assessing the value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and risks specifi c to the asset.

(v) Depreciation

Depreciation on fi xed assets is provided under Written Down Value (WDV) method in accordance with the provisions of Schedule II to the Companies Act, 2013 and considering the useful lives for computing depreciation specifi ed in Part ‘C’, thereof. Depreciation is provided on components that have homogenous useful lives by using the WDV method so as to depreciate the initial cost down to the residual value over the estimated useful lives. Useful lives, components and residual amounts are reviewed annually. In respect of an asset for which impairment loss is recognized, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

(vi) Investments

Investments that are readily realisable and intended to be held for not more than a year are classifi ed as Current investments. All other investments are classifi ed as long-term investments. Current investments are carried at lower of cost and market/fair value on individual investment basis. Long Term Investments are considered at cost, unless there is an “other than temporary” decline in value, in which case adequate provision is made for the diminution in the value of Investments.

70


(vii) Retirement and other employee benefi ts

(a) Retirement benefi t in the form of Provident Fund is a defi ned contribution scheme and is charged to the Statement of Profi t and Loss for the year when the contributions to the respective funds are due. The Company has no obligations other than the contribution payable to the respective funds.

(b) Gratuity liability, being a defi ned benefi t obligation, is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each Financial Year.

(c) Short term compensated absences are provided for based on estimates. Long term compensated absences are provided for based on actuarial valuation which is done as per projected unit credit method at the end of each Financial Year.

(d) Actuarial gains / losses are immediately taken to the statement of profi t and loss and are not deferred.

(viii) Earnings per Share

Basic Earnings per Share is calculated by dividing the net profi t or loss for the year attributable to equity shareholders (after deductible preference dividend and attributable taxes) by the weighted number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, net profi t or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effect of all dilutive potential equity shares.

(ix) Taxation

Tax expenses comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred income taxes refl ect the impact of current year timing differences between taxable income for the year and reversal of timing differences of earlier years.

The deferred tax for timing differences between the book and tax profi ts for the year is accounted for using the tax rates and laws that have been substantively enacted as of the Balance Sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognized only to the extent that there is reasonable certainty that suffi cient future taxable income will be available against which such deferred tax assets can be realized. If the Company has carry forward unabsorbed depreciation and tax losses, deferred tax assets are recognized only to the extent there is virtual certainty supported by convincing evidence that suffi cient taxable income will be available against which such deferred tax asset can be realized.

The carrying amounts of deferred tax assets are reviewed at each Balance Sheet date. The Company writes-down the carrying amount of deferred tax assets to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that suffi cient future taxable income will be available against which deferred tax assets can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that suffi cient future taxable income will be available.

Minimum Alternative Tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specifi ed period. In the year in which the Minimum Alternative Tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendation contained in guidance note issued by the Institute of Chartered Accountants of India, the said assets is created by way of a credit to the Statement of Profi t and Loss and shown as MAT credit entitlement. The Company reviews the carrying amount of MAT at each Balance Sheet date and writes down MAT credit entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal income-tax during specifi ed period.

(x) Cash and Cash equivalents

Cash and cash equivalents for the purpose of Cash Flow Statement comprise cash in hand, demand deposits with Banks and other short-term highly liquid investments / deposits with an original maturity of three months or less.

Notes To Financial Statements (contd.)


71

(xi) Provision

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outfl ow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions made in terms of Accounting Standard 29 are not discounted to their present value and are determined based on best estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to refl ect the current best estimates.

(xii) Contingent Liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confi rmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outfl ow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measuredreliably. The Company does not recognize a contingent liability but discloses its existence in the fi nancial statements. Contingent assets are neither recognized nor disclosed in the fi nancial statements.


72



2. SHARE CAPITAL

(` in Lacs)31.03.2016 31.03.2015

Authorised

23,00,00,000 (23,00,00,000 as at 31.03.2015) Equity Shares of ` 1/- each fully paid up 2,300.00 2,300.00 Total 2,300.00 2,300.00 Issued

22,21,72,990 (22,21,72,990 as at 31.03.2015) Equity Shares of ` 1/- each fully paid up 2,221.73 2,221.73 Total 2,221.73 2,221.73 Subscribed and Paid up

22,21,72,990 (22,21,72,990 as at 31.03.2015) Equity Shares of ` 1/- each fully paid up 2,221.73 2,221.73 Total 2,221.73 2,221.73

a) Reconciliation of the shares outstanding at the beginning and at the end of the reporting year

Equity Shares 31.03.2016 31.03.2015No. of Shares ` in Lacs No. of Shares ` in Lacs

At the Beginning of the year 22,21,72,990 2,221.73 22,21,72,990 2,221.73 Issued/Cancelled during the year - - - - Outstanding at the end of the year 22,21,72,990 2,221.73 22,21,72,990 2,221.73

b) Terms/Rights attached to the Equity Shares & Notes

The Company has only one class of equity shares having par value of ` 1/- per share. Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by theshareholders.

c) Terms of issue of shares other than cash

Pursuant to the Scheme of Arrangement (“the scheme”) between Century Plyboards (India) Limited (CPIL), the Company and their respective shareholders as approved by the Hon’ble High Court at Kolkata vide its order dated 17th May, 2013, the Company has issued and alloted 22,21,72,990 Equity Shares to the shareholders of CPIL in ratio of 1 (one) Equity share of ` 1/- each of the Company as fully paid up for every 1 (one) Equity Share of ` 1/- each held by them in CPIL.

d) Details of Shareholders holding more than 5% shares in the Company

Particulars 31.03.2016 31.03.2015No. of Shares % of holding No. of Shares % of holding

Equity Shares of ` 1/- each fully paid-upMr. Prem Kumar Bhajanka 2,79,44,845 12.58% 2,73,69,386 12.32%Mr. Sanjay Agarwal 1,94,82,445 8.77% 1,95,39,245 8.79%Mr. Sajjan Bhajanka 1,66,15,675 7.48% 1,67,72,675 7.55%Mrs. Santosh Bhajanka 1,50,49,500 6.77% 1,50,49,500 6.77%Mrs. Divya Agarwal 1,44,88,750 6.52% 1,44,88,750 6.52%Mr. Subham Agarwal 1,11,41,198 5.01% - -

As per records of the Company, including its register of shareholders/members, the above shareholding represents legal ownershipsof shares


73

3. RESERVES & SURPLUS(` in Lacs)

31.03.2016 31.03.2015Capital Reserves

Balance as per last account 643.53 8,948.03 Addition/(Deduction) during the year - - Less : Amount adjusted pursuant to the Scheme of Arrangement - 8,304.50 Closing Balance 643.53 643.53

General ReserveBalance as per the last account 101.00 101.00 Addition/(Deduction) during the period - - Closing Balance 101.00 101.00

Surplus as per Statement of Profi t & LossBalance as per the last account 41.61 180.20 Add: Profi t /(Loss) for the period 2,270.48 (138.58)Less: Appropriations - - - Interim Equity Dividend ` 1/- (` Nil) per share 2,221.73 - Total Appropriations 2,221.73 -

Net Surplus in the Statement of Profi t and Loss 90.36 41.61 Total 834.89 786.14

4. LONG TERM PROVISIONS(` in Lacs)

31.03.2016 31.03.2015Provisions for employee benefi ts

-Gratuity 4.97 3.11 -Leave Encashment 5.53 2.95

Total 10.50 6.06

5. OTHER CURRENT LIABILITIES(` in Lacs)

31.03.2016 31.03.2015Other Payables

-Statutory Liabilities 1.16 2.89 -Creditors-Micro, Small & Medium Enterprises (Refer Note no. 21) - - -Salary & Bonus Payable to Employees 2.06 1.61 -Unclaimed dividends** 1.65 1.67 -Other Liabilities 3.01 11.18

Total 7.88 17.36

** Amount to be transferred to the Investor Education and Protection Fund shall be determined on the respective due date.

6. SHORT TERM PROVISIONS(` in Lacs)

31.03.2016 31.03.2015Provisions for employee benefi ts

-Gratuity 0.23 0.14 -Leave Encashment 0.19 0.13

Total 0.42 0.27


74


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75

8. INTANGIBLE ASSETS(` in Lacs)

ComputerSoftware

CostAs at 1st April, 2014 1.75 Transferred to the resulting Company pursuant to Scheme of Arrangement 1.75 As at 31st March, 2015 -Additions - Disposals - As at 31 March, 2016 -DepreciationAs at 1st April, 2014 0.63 Transferred to the resulting Company pursuant to Scheme of Arrangement 0.63 As at 31st March, 2015 -Charge for the year - Disposals - As at 31st March, 2016 - Net BlockAs at 31st March, 2015 - As at 31st March, 2016 -

9. DEFERRED TAX ASSET / (LIABILITY) (NET)(` in Lacs)

31.03.2016 31.03.2015Deferred Tax AssetBusiness Loss Carried forward 41.19 - Impact of expenditure charged to the Statement of Profi t and Loss in the current year but allowable for tax purposes upon payment

3.37 -

44.56 - Deferred Tax Liability -

Net Deferred Tax Asset / (Liability) 44.56 -

10. NON CURRENT INVESTMENTS(` in Lacs)

31.03.2016 31.03.2015Trade Investments (valued at cost unless stated otherwise)Investment in Unquoted Equity Instruments

Investment in subsidiaryCement Manufacturing Company Limited

29,54,75,000 (2,95,47,500 of ` 10/- as at 31.03.15 ) Equity Shares of ` 1/- each fully paid up

2,954.75 2,954.75

Total 2,954.75 2,954.75

11. CURRENT INVESTMENTS(` in Lacs)

31.03.2016 31.03.2015Trade Investments (valued at cost unless stated otherwise)Investment in Unquoted Equity Instruments

Investment in subsidiaryShyam Century Ferrous Limited

Nil (5,00,000 as at 31.03.15) Equity Shares of ` 1/- each fully paid up - 5.00 Less : Provision - 5.00

Total - -


76


12. CASH & CASH EQUIVALENTS(` in Lacs)

31.03.2016 31.03.2015Cash on Hand 0.10 0.00 Cheque in Hand 16.16 - Balance with Banks:

- In current accounts 4.11 4.27 - On unpaid Dividend Account 1.65 1.67 - Held as Fixed Deposit 50.00 -

Total 72.02 5.94

13. SHORT TERM LOANS AND ADVANCES(` in Lacs)

31.03.2016 31.03.2015Others

Advance Income Tax 0.84 0.00 Loans and Advances to Related Party

Advance recoverable from an associate - 70.87 Total 0.84 70.87

14. OTHER CURRENT ASSETS

(` in Lacs)31.03.2016 31.03.2015

Other Receivables

Prepaid Expenses 0.11 - Interest Receivable 3.14 -

Total 3.26 -

15. OTHER INCOME

(` in Lacs)2015-16 2014-15

Other Income

Dividend Income 2,363.80 - Interest Income 11.58 0.10 Total 2,375.38 0.10

16. COST OF RAW MATERIALS CONSUMED

(` in Lacs)2015-16 2014-15

Inventory at the beginning of the year - 204.80Less : Stock transferred to the resulting Company pursuant to the Scheme of Arrangement - 204.80Add: Purchases - -Less: Inventory at the end of the period - -Cost of Material Consumed - -



77


17. (INCREASE)/DECREASE IN INVENTORIES

(` in Lacs)2015-16 2014-15

Inventory at the beginning of the year - Finished Goods - 219.16 Less : Inventories transferred to the resulting Company pursuant to the Scheme of Arrangement

- 219.16

Inventory at the end of the period - - (Increase) /Decrease - -

18. EMPLOYEE BENEFIT EXPENSES

(` in Lacs)2015-16 2014-15

Salaries & Wages 61.21 48.98 Contribution to Provident Fund and other Funds 3.20 2.37 Staff Welfare Expenses 0.05 0.26 Total 64.46 51.61

19. FINANCE COSTS

(` in Lacs)2015-16 2014-15

Interest Expenses

-On Other Loans - 0.03 Other Finance Costs 0.01 0.00 Total 0.01 0.03

20. OTHER EXPENSES

(` in Lacs)2015-16 2014-15

Rent, Rates & Taxes 6.28 1.93 Travelling and Conveyance 1.43 4.95 Corporate Social Responsibility 7.20 5.00 Listing Expenses (including publication) 26.19 27.22 Legal and Professional Expenses 29.61 22.21 Miscellaneous Expenses 14.26 25.72 Total 84.98 87.04

21. There are no Micro, Small and Medium Enterprises, as defi ned in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identifi ed on the basis of the information available with the Company.

22. PAYMENT TO AUDITORS

(` in Lacs)Particulars 31.03.2016 31.03.2015As Auditor-Audit Fees 2.25 1.25-Limited Review Fees 6.00 6.00-Tax Audit Fees - -In Other CapacityCertifi cation and Other Services 0.20 0.55Total 8.45 7.80

78


23. EMPLOYEE DEFINED BENEFITS(a) Defi ned Contribution Plans : The Company has recognized an expense of ` 3.20 Lacs (Previous year ` 2.37 Lacs) towards

the defi ned contribution plans.

(b) The Company has a defi ned benefi t gratuity plan. Every employee who has completed fi ve years or more service is entitled to Gratuity on terms not less than the provisions of The Payment of Gratuity Act, 1972. The following tables summarize the components of net benefi t expenses recognized in the Statement of Profi t & Loss and amounts recognized in the Balance Sheet for the Gratuity.

(c) Under leave encashment scheme, the Company allows its employees to encash accumulated leave over and above thirty days at any time during the year.

(d) Defi ned Benefi t Plans – As per Actuarial Valuation as at 31st March, 2016.

(` in Lacs)Particulars 2015-16 2014-15

Gratuity Leave Encashment


I. Expense recognized in the Statement of Profi t and Loss for the year ended 31st March, 20161. Current Service Cost 1.03 1.79 0.73 1.252. Interest Cost 0.34 0.35 0.13 0.123. Employee Contribution - - - -4. Expected Return on Plan Assets - - - -5. Actuarial (Gains)/Losses 0.58 0.50 2.38 2.556. Actuarial (Gains)/Losses on plan Assets - - - -7. Total Expense 1.95 2.64 3.25 3.93

II. Net Asset/(Liability) recognized in the Balance Sheet as at 31st March, 20161. Present Value of Defi ned Benefi t Obligation 5.20 5.72 3.25 3.082. Fair Value of Plan Assets - - - -3. Funded Status [Surplus/(Defi cit)] (5.20) (5.72) (3.25) (3.08)4. Net Asset/(Liability) as at 31st March, 2016 (5.20) (5.72) (3.25) (3.08)

III. Change in Obligation during the Year ended 31st March, 20161. Present value of Defi ned Benefi t Obligation at

the beginning of the year 3.25 3.08 - -

2. Current Service Cost 1.03 1.79 0.73 1.253. Interest Cost 0.34 0.35 0.13 0.124. Past Service Cost - - - -5. Employee Contribution - - - -6. Liabilities assumed on acquisition/(settled on

divesture)- - - -

7. Actuarial (Gains)/Losses 0.58 0.50 2.38 2.558. Benefi ts Payments - - - (0.84)9. Present Value of Defi ned Benefi t Obligation at

the end of the year5.20 5.72 3.25 3.08

IV. Change in assets during the Year ended 31st March, 20161. Plan Assets at the beginning of the year - - - -2. Assets acquired on amalgamation in previous

year- - - -

3. Actual return on plan assets - - - -4. Contributions by employer - - - 0.845. Actual Benefi t Paid - - - (0.84)



79




6. Actuarial Gains/(Losses) - - - -7. Plan Assets at the end of the year - - - -8. Actual Return on plan assets - - - -

V. The Principal actuarial assumptions are as follows:

- Discount Rate 8.00% 8.00% 8.00% 8.00%- Expected Return on Plan Assets - - - -- Salary increase 6% 6% 5% 5%- Withdrawal rates (Varying between per

annum depending upon the duration and age of the employees

1%-8% 1%-8% 1%-8% 1%-8%

(e) The details of the Experience adjustments for the current and previous periods are as follows:




1. Defi ned Benefi t Obligation 5.20 5.72 3.25 3.082. Plan Assets - - - -3. Surplus / (Defi cit) (5.20) (5.72) (3.25) (3.08)4. Experience adjustments on Plan Liability 0.36 0.40 0.06 0.065. Experience adjustments on Plan Assets - - - -

24. EARNINGS PER SHARE (EPS):In terms of Accounting Standard - 20, the calculation of EPS is given below: -

(` in Lacs)Particulars 2015-16 2014-15Profi t/(Loss) attributable to Equity Shareholders for basic and diluted EPS 2,270.48 (138.58)Weighted average number of Equity Shares for basic EPS 22,21,72,990 22,21,72,990Weighted average number of Equity Shares for diluted EPS 22,21,72,990 22,21,72,990Nominal value of equity shares (`) 1.00 1.00Basic earnings per share (EPS) (`) 1.02 (0.06)Diluted earnings per share (DPS) (`) 1.02 (0.06)

25. RELATED PARTY DISCLOSURES Name of the related parties and related party relationship:

A Names of the related parties where con-trol exists

Nature of relationship

Cement Manufacturing Company Limited Subsidiary CompanyMegha Technical & Engineers Private Limited

Subsidiary Company

Meghalaya Power Limited Subsidiary CompanyStar Cement Meghalaya Limited Subsidiary CompanyNE Hills Hydro Limited Subsidiary CompanySriram Merchants Private Limited Enterprises Owned/ Infl uenced by Key Management Personnel or their relativesSriram Vanijya Private Limited Enterprises Owned/ Infl uenced by Key Management Personnel or their relatives


80


Brijdham Merchants Private Limited Enterprises Owned/ Infl uenced by Key Management Personnel or their relativesAuroville Investments Private Limited Enterprises Owned/ Infl uenced by Key Management Personnel or their relativesSumangal International Private Limited Enterprises Owned/ Infl uenced by Key Management Personnel or their relativesSumangal Business Private Limited Enterprises Owned/ Infl uenced by Key Management Personnel or their relativesHari Prasad Agarwala (HUF) Enterprises Owned/ Infl uenced by Key Management Personnel or their relatives

B Others - with whom transactions have taken place during the yeara) Key Management Personnel of the Company

Names of related parties Nature of relationshipMr. Sajjan Bhajanka ChairmanMr. Sanjay Agarwal DirectorMr. Hari Prasad Agarwal Director Mr. Dilip Kumar Agarwal Chief Financial Offi cer Mr. Debabrata Thakurta Company Secretary

b) Relatives of Key Management Personnel of the CompanyNames of the related parties Nature of relationshipMrs. Santosh Bhajanka Wife of Mr. Sajjan BhajankaMr. Keshav Bhajanka Son of Mr. Sajjan BhajankaMrs. Sonu Kajaria Daughter of Mr. Sajjan BhajankaMrs. Payal Agarwal Daughter of Mr. Sajjan BhajankaMrs. Shradha Agarwal Daughter of Mr. Sajjan BhajankaMrs. Divya Agarwal Wife of Mr. Sanjay AgarwalMrs. Sumitra Devi Agarwal Wife of Mr. Hari Prasad AgarwalMr. Rajesh Kumar Agarwal Son of Mr. Hari Prasad AgarwalMrs. Bhawna Agarwal Daughter in law of Mr. Hari Prasad Agarwal

Details of transactions between the Company and related parties and the status of outstanding balance as at 31st March, 2016 aregiven hereunder:

(` in Lacs)Sl. No.

Type of Transactions Subsidiary Companies

Enterprises Owned / Infl uenced by KMP

Key Management Personnel

Relatives of KMP

2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-151. Remuneration Paid

Mr. Hari Prasad Agarwal - - - - - 1.25 - -Mr. Dilip Kumar Agarwal - - - - 45.00 20.75 - -Mr. Debabrata Thakurta - - - - 14.62 8.69 - -Mr. Om Prakash Lohia - - - - - 8.83 - -Mr. Ravi Prakash Mundra - - - - - 4.32 - -

2. Dividend ReceivedCement Manufacturing Company Limited

2,363.80 - - - - - - -

3. Dividend PaidMr. Sajjan Bhajanka - - - - 166.16 - 180.02 -Mr. Hari Prasad Agarwal - - - - 24.36 - 47.43 -Mr. Sanjay Agarwal - - - - 195.08 - 144.89 -Sriram Merchants Private Limited

- - 67.40 - - - - -

Sriram Vanijya Private Limited - - 85.02 - - - - -Brijdham Merchants Private Limited

- - 77.44 - - - - -

Auroville Investments Private Limited

- - 18.45 - - - - -

Sumangal International Private Limited

- - 76.67 - - - - -



81

(` in Lacs)Sl. No.

Type of Transactions Subsidiary Companies

Enterprises Owned / Infl uenced by KMP

Key Management Personnel

Relatives of KMP

2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15Sumangal Business Private Limited

- - 68.31 - - - - -

Hari Prasad Agarwala (HUF) - - 15.31 - - - - -4. Outstanding Balances as at

31st March, 2016-Advances ReceivableShyam Century Ferrous Limited - - - 72.36 - - - -InvestmentsCement Manufacturing Company Limited

2,954.75 2,954.75 - - - - - -

26. The Company does not have any reportable segment in accordance with the principle outlined in Accounting Standard (AS 17), “Segment Reporting”. Therefore, the disclosure requirements on “Segment Reporting” is not applicable.

27. As per Section 135 of the Companies Act, 2013, a Company, meeting the applicability threshold, needs to spend at least 2% of its average net profi t for the immediately preceding three Financial Years on Corporate Social Responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief and rural developments projects.

A CSR Committee has been formed by Company as per the Act. The funds were primarily utilized through out the year on these activities which are specifi ed in Schedule VII of the Companies Act, 2013.

a) Gross Amount required to be spent by the Company during the year is ` 2.23 Lacs (` 3.15 Lacs)

b) Amount spent during the year on:

(` in Lacs)Sl. No.

Nature of Expenditure 2015-16 2014-15

(i) Education 7.20 5.00

Total 7.20 5.00

28. Figures have been rounded off to the nearest ` in Lacs. Previous year’s fi gures including those given in brackets have been rearranged and regrouped where necessary to confi rm to the current year’s classifi cations.


For Kailash B. Goel & Co. For and on Behalf of the Board of DirectorsFirm Registration No. 322460EChartered Accountants

CA. Arun Kumar Sharma Dilip Kumar Agarwal Sajjan Bhajanka Partner Chief Financial Offi cer Chairman & Director Membership No : 057329 DIN : 00246043


82


Independent Auditors’ Report On Consolidated Financial StatementsToThe Members of Star Ferro and Cement Limited

REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS We have audited the accompanying consolidated fi nancial statements of Star Ferro and Cement Limited (“the Holding Company”) and its subsidiaries (collectively referred to as “the Company” or “the Group”), comprising of the consolidated balance sheet as at 31 March 2016, the consolidated statement of profi t and loss, the consolidated cash fl ow statement for the year then ended, and a summary of the signifi cant accounting policies and other explanatory information (hereinafter referred to as “the consolidated fi nancial statements”).

MANAGEMENT’S RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS The Holding Company’s Board of Directors is responsible for the preparation of the consolidated fi nancial statements in terms of the requirements of the Companies Act, 2013 (“the Act”) that give a true and fair view of the consolidated fi nancial position, consolidated fi nancial performance and consolidated cash fl ows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specifi ed under Section 133 of the Companies Act, 2013 (hereinafter referred to as “the Act”) read with Rule 7 of the Companies (Accounts) Rules, 2014. The Board of Directors of the Company are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal fi nancial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the fi nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated fi nancial statements by the Directors of the Holding Company, as aforesaid.

AUDITORS’ RESPONSIBILITY Our responsibility is to express an opinion on the consolidated fi nancial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specifi ed under Section 143(10) of the Act. Those standards require that we comply with ethical requirements and

plan and perform the audit to obtain reasonable assurance about whether the consolidated fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated fi nancial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal fi nancial control relevant to the Holding Company’s preparation of the consolidated fi nancial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated fi nancial statements.

We believe that the audit evidence obtained by us is suffi cient and appropriate to provide a basis for our audit opinion on the consolidated fi nancial statements.

OPINIONIn our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated fi nancial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Company, as at 31 March 2016, and their consolidated profi t and their consolidated cash fl ows for the year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS1. We did not audit the fi nancial statements of a subsidiary

(NE Hills Hydro Limited), whose fi nancial statements refl ect total assets worth of ` 7.33 Lacs as at 31st March, 2016. These fi nancial statements and other fi nancial information have been audited by other auditor whose report have been furnished to us, and our opinion is based solely on the report of the other auditor.

2. As required by sub-section 3 of Section 143 of the Act, we report, to the extent applicable, that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated fi nancial statements.

(b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated fi nancial statements have been kept so far as it appears from our examination of those books.


83

(c) The consolidated balance sheet, the consolidated statement of profi t and loss and the consolidated cash fl ow statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated fi nancial statements.

(d) In our opinion, the aforesaid consolidated fi nancial statements comply with the Accounting Standards specifi ed 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 of the Holding Company as on 31 March 2016 taken on record by the Board of Directors of the Holding Company and the report of the statutory auditors of its subsidiary companies incorporated in India, none of the Directors of the Group companies incorporated in India is disqualifi ed as on 31 March 2016 from being appointed as a Director of that company in terms of sub-section 2 of Section 164 of the Act.

(f) With respect to the adequacy of the internal fi nancial controls over fi nancial reporting of the Group and the operating effectiveness of such controls, refer to our separate 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 the best of our information and according to the explanations given to us:

i. The consolidated fi nancial statements disclose the impact of pending litigations on the consolidated fi nancial position of the Group. Refer Note 2.28 to the consolidated fi nancial statements;

ii. The Group and its jointly controlled entities did not have any material foreseeable losses on long-term contracts including derivative contracts.; and

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding Company and subsidiary companies incorporated in India.




84


Annexure - A to the Auditors’ Report REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013 (“THE ACT”) In conjunction with our audit of the consolidated fi nancial statements of the Company as of and for the year ended 31 March 2016, we have audited the internal fi nancial controls over fi nancial reporting of Star Ferro and Cement Limited (“the Holding Company”) and its subsidiary companies except NE Hills Hydro Limited which are companies incorporated in India, as of that date.

MANAGEMENT’S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS The Respective Board of Directors of the Holding Company and its subsidiary companies, which are companies incorporated in India, are responsible for establishing and maintaining internal fi nancial controls based on the internal control over fi nancial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (“ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal fi nancial controls that were operating effectively for ensuring the orderly and effi cient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable fi nancial information, as required under the Companies Act, 2013.

AUDITORS’ RESPONSIBILITY Our responsibility is to express an opinion on the Company’s internal fi nancial controls over fi nancial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by ICAI and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal fi nancial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal fi nancial controls over fi nancial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal fi nancial controls system over fi nancial reporting and their operating effectiveness. Our audit of internal fi nancial controls over fi nancial reporting

included obtaining an understanding of internal fi nancial controls over fi nancial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion on the Company’s internal fi nancial controls system over fi nancial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING A company’s internal fi nancial control over fi nancial reporting is a process designed to provide reasonable assurance regarding the reliability of fi nancial reporting and the preparation of fi nancial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal fi nancial control over fi nancial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly refl ect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of fi nancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the fi nancial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING Because of the inherent limitations of internal fi nancial controls over fi nancial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal fi nancial controls over fi nancial reporting to future periods are subject to the risk that the internal fi nancial control over fi nancial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

OPINIONIn our opinion, the Holding Company and its subsidiary companies except NE Hills Hydro Limited, which are companies incorporated in India, have in all material respects,


85

an adequate internal fi nancial controls system over fi nancial reporting and such internal fi nancial controls over fi nancial reporting were operating effectively as at 31 March 2016, based on the internal control over fi nancial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.




86


(` in Lacs)Particulars Note 31.03.2016 31.03.2015 EQUITY AND LIABILITIESShareholders’ Funds

Share Capital 2 2,221.73 2,221.73 Reserves and Surplus 3 72,755.72 65,779.97

74,977.45 68,001.70 Minority Interest 35,962.33 32,308.66 NON-CURRENT LIABILITIES

Long Term Borrowings 4 38,433.05 50,247.33 Other Long Term Liabilities 5 9,318.89 8,362.35 Deferred Tax Liability 6 1,124.01 866.08 Long Term Provisions 7 278.25 228.82

49,154.20 59,704.57 CURRENT LIABILITIES

Short Term Borrowings 8 36,474.61 18,928.83 Trade Payables 9 14,038.73 7,701.83 Other Current Liabilities 9 35,909.62 31,646.30 Short Term Provisions 10 148.52 754.86

86,571.48 59,031.82 Total 2,46,665.46 2,19,046.76

ASSETSNON-CURRENT ASSETS

Fixed AssetsTangible Assets 11 91,897.59 1,02,781.92 Intangible Assets 11 15.99 14.88 Capital Work-in-Progress 4,897.05 4,097.18

96,810.63 1,06,893.98 Non Current Investments 12 152.86 152.86 Long term Loans and Advances 13 43,597.10 39,675.30 Other Non Current Assets 14 54.86 44.91

1,40,615.44 1,46,767.05 CURRENT ASSETS

Current Investments 16 - - Inventories 17 20,916.41 10,914.48 Trade Receivables 15 44,880.17 30,980.41 Cash and Bank Balances 18 2,451.25 2,036.79 Short Term Loans and Advances 19 37,802.19 28,348.04

1,06,050.02 72,279.71 Total 2,46,665.46 2,19,046.76

Summary of Signifi cant Accounting Policies 1.2The accompanying notes form an integral part of the fi nancial statements





Consolidated Balance Sheetas at 31st March, 2016


87





(` in Lacs)Particulars Note 2015-16 2014-15 INCOME Gross Revenue from Operations 20 1,76,341.11 1,47,312.78

Excise Duty (4,838.17) (4,270.00)

Net Revenue from Operations 1,71,502.94 1,43,042.78 Other Income 21 142.04 78.23 Total Revenue 1,71,644.98 1,43,121.01

EXPENSES Cost of Raw Materials Consumed 22 20,620.81 16,791.04 Purchase of Traded Goods 15,948.63 4,971.92

(Increase)/Decrease in inventories 23 (2,018.39) 1,192.42 Employee Benefi ts Expense 24 10,844.61 9,127.90 Other Expenses 25 86,318.09 67,452.97 Deprecation and Amortisation Expense 17,149.21 22,374.29

Finance Cost 26 8,336.77 8,738.47 Total Expenses 1,57,199.71 1,30,649.01

Profi t before Tax and Exceptional Items 14,445.26 12,471.99

Exceptional Items (53.14) 1.83

Profi t before Taxation 14,392.13 12,473.82 Tax ExpensesCurrent Tax 3,231.89 2,640.09

MAT credit entitlement (2,973.55) (2,640.09)

Net Current Tax Expense 258.34 -

Deferred Tax 257.93 496.65

Income Tax for earlier years 34.79 (16.52)

Total Tax Expenses 551.06 480.13

PROFIT/(LOSS) FOR THE YEAR BEFORE MINORITY INTEREST 13,841.06 11,993.69 Minority Interest 4,643.59 3,650.03 Profi t/(loss) for the year after minority interest 9,197.48 8,343.66 Earnings per equity share (nominal value of share ` 1/- (PY ` 1/-))Basic Earning Per Share 4.13 3.76 Diluted Earning Per Share 4.13 3.76 Summary of signifi cant Accounting Policies 1.2The accompanying notes form an integral part of the fi nancial statements

Consolidated Statement of Profi t and Loss for the period ended 31st March, 2016

88


(` in Lacs)Sl. No.

Particulars 2015-16 2014-15

A CASH FLOW FROM OPERATING ACTIVITIESNet Profi t before Tax 14,445.26 12,471.99 Adjustments for :Depreciation 17,149.21 22,374.29 Finance Cost 8,336.77 8,738.47 Income Tax for Earlier year (34.79) - Provision for Wealth Tax - (1.82)Provision for Doubtful Debts (47.53) (5.10)Foreign Exchange Fluctuations gain/(Loss) (44.69) (39.22)Interest Income (142.04) (78.23)Operating Profi t before Working Capital Changes 39,662.19 43,460.39 Adjustments for:Increase/(decrease) in Trade Payables, Other Liabilities and Provisions 10,798.48 6,360.63 (Increase)/decrease in Trade Receivables (13,852.24) (18,474.00)(Increase)/decrease in Loans & Advances and other assets (10,789.29) (7,841.45)(Increase)/decrease in Inventories (10,001.93) 4,632.56

(23844.99) (15,322.25)Cash Generated from Operations 15,817.20 28,138.13 Direct Taxes paid (Net) (2,845.00) (2,075.00)Net Cash Flow from Operating Activities 12,972.20 26,063.13

B CASH FLOW FROM INVESTING ACTIVITIESSale of Fixed Assets 89.18 - Fixed Deposits/Margin Money Refund (25.62) 188.45 Interest Received 142.04 78.23 Purchase of Fixed Assets * (8,168.60) (4,335.52)Net Cash from Investing Activities (7,963.00) (4,068.84)

C CASH FLOW FROM FINANCING ACTIVITIESProceeds from Borrowings* 6,938.00 (12,311.12)Dividend Paid by Subsidiary to miniority Shareholder (989.91) - Increase in Capital Reserve / Share capital - 18.36 Interest Paid (8,336.77) (8,738.47)Dividend Paid (2,221.73) - Net Cash used in Financing Activities (4,610.42) (21,031.22)Net Increase/(Decrease) in Cash and Cash Equivalents (A + B + C) 398.79 963.07 Cash and Cash Equivalents as on 1st April, 2015 1,980.31 1,021.16 Less: Amount transferred pursuant to Scheme of Arrangement - 3.91 **Cash and Cash Equivalents as on 31st March, 2016 2,379.10 1,980.31

*Excluding notional foreign exchange loss of ` 1,005.12 Lacs (PY ` 747.24 lacs) capitalized in accordance with para 46A of AS-11

** Represents Cash and Bank Balances as indicated in Note-18 and excludes ` 72.15 lacs (PY ` 56.47 lacs) being Bank Balances with restrictive use and maturity of more than three months.

Consolidated Cash Flow Statementfor the year ended 31st March, 2016






89

Consolidated Notes To Financial Statements1. PRINCIPLES OF CONSOLIDATION

The Consolidated Financial Statements which relate to Star Ferro and Cement Limited (the Company) and its subsidiaries have been prepared on the following basis:

(a) The fi nancial statements of the Company and its subsidiaries are combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenditure, after fully eliminating intra group balances, intra group transactions and any unrealized profi t / loss included therein, in accordance with Accounting Standards (AS-21), “Consolidated Financial Statements”.

(b) The excess/shortfall of cost to the Company of its investments in the subsidiary companies, over the net assets at the time of acquisition in the subsidiaries as on the date of investment is recognized in the fi nancial statements as goodwill/capital reserve as the case may be.

(c) The subsidiary companies considered in the fi nancial statements are as follows:

Name

Country of Incorporation

% of Voting power as on 31.03.2016

% of Voting power as on 31.03.2015

Cement Manufacturing Company Limited (CMCL) India 70.48 % 70.48 %Megha Technical & Engineers Private Limited (subsidiary of CMCL) India 70.48 % 70.48 %Star Cement Meghalaya Limited (subsidiary of CMCL) India 70.48 % 70.48 %Meghalaya Power Limited (subsidiary of CMCL) India 35.94 % 35.94 %NE Hills Hydro Limited (subsidiary of CMCL) India 70.48 % 70.48 %

(d) The consolidated fi nancial statements have been prepared using uniform accounting policies, except stated otherwise, for like transactions and are presented, to the extent possible, in the same manner as the Company’s separate fi nancial statements.

(e) In terms of Accounting Standard-21 notifi ed under the Companies Accounting Standards Rules, 2006, Minority interest has been computed in respect of non-fully owned subsidiaries and adjusted against the consolidated income of the group in order to arrive at the net income attributable to the shareholders’ of the Company.

1.1. Basis of PreparationThe fi nancial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these fi nancial statements to comply in all material respects with the Accounting Standards as prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013, to the extent notifi ed. The fi nancial statements are prepared under the historical cost convention on accrual basis and on the basis of going concern.

The accounting policies are consistently followed by the Company and changes in accounting policy are separately disclosed.

1.2 Summary of Signifi cant Accounting Policies(i) Use of Estimates

The preparation of fi nancial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management’s best knowledge of current events and actions, actual results could differ from these estimates.

(ii) Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefi ts will fl ow to the Company and the revenue can be reliably measured.

(a) Revenue from sale of goods and services rendered is recognized on despatch of goods to the customers. The Company collects sales taxes and Value Added Taxes (VAT) on behalf of the Government and therefore, these are not economic benefi ts fl owing to the Company. Hence, they are excluded from revenues. Sales fi gures are including excise duty and net of rebates, trade discounts and returns, if any.

(b) Dividend Income is recognized when the shareholders’ right to receive the payment is established.

(c) Interest income is recognized on a time proportion basis taking into account the amount outstanding and rate applicable.

90


(iii) Fixed Assets

Fixed Assets are stated at cost or revalued amount, as the case may be, less accumulated depreciation / amortisation and impairment loss, if any, except freehold land which is carried at cost. Cost comprises the purchase price inclusive of duties (net of CENVAT / VAT), taxes, incidental expenses and erection / commissioning expenses etc. up to the date, the asset is ready for its intended use. In case of revaluation of fi xed assets, the original cost as written-up by the valuer, is considered in the accounts and the differential amount is transferred to revaluation reserve. Railway sidings the ownership of which vest with the Railway authorities are depreciated over fi ve years. The subsidiaries viz. Cement Manufacturing Company Limited, Star Cement Meghalaya Limited and Meghalaya Power Limited have adopted the provisions of para 46A of AS-11 “The Effects of Changes in Foreign Exchange Rates” and accordingly exchange differences arising on restatement/settlement of long-term foreign currency borrowings relating to acquisition of depreciable fi xed assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets.

(iv) Intangible Assets

Intangible assets are recognized when it is probable that the future economic benefi t that are attributable to the assets will fl ow to the Company and the cost of the assets can be measured reliably. The depreciable amount of an intangible asset is allocated over its estimated useful life. Expenditure on purchased /developed software are written off over a period of three years.

(v) Capital Work in Progress

Capital work in Progress is carried at cost comprising direct cost and pre-operative expenses during construction period to be allocated to the fi xed assets on the completion of construction.

(vi) Expenditure during construction period

In case of new projects and substantial expenses of existing units, expenditure incurred including trial production expenses net of revenue earned, and attributable interest and fi nancing cost, prior to Commencement of commercial production/completion of project, are capitalised.

(vii) Research and Development Expenditure

Revenue expenditure is charged to the Statement of Profi t & Loss and capital expenditure is added to the cost of fi xed assets in the year in which they are incurred.

(viii) Impairment of Assets

The carrying amounts of assets are reviewed at each Balance Sheet date to determine if there is any indication of impairment based on external/internal factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount which represents the greater of the net selling price and ‘Value in use’ of the assets. In assessing the value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and risks specifi c to the asset.

(ix) Depreciation

(a) Depreciation on fi xed assets is provided under Written Down Value (WDV) method (except in case of fi xed assets of power division of the subsidiary Megha Technical & Engineers Private Limited where Straight Line Method (SLM) is followed) in accordance with the provisions of Schedule II to the Companies Act, 2013 and considering the useful lives for computing depreciation specifi ed in Part ‘C’, thereof. Depreciation is provided on components that have homogenous useful lives by using the WDV/SLM method so as to depreciate the initial cost down to the residual value over the estimated useful lives. Useful lives, components and residual amounts are reviewed annually.

(b) Depreciation on amount capitalized pursuant to para 46A of AS 11 ‘The Effects of Changes in Foreign Exchange Rates‘ is provided over the balance useful life of depreciable capital assets. In respect of an asset for which impairment loss is recognized, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

(x) Foreign Currency Transactions and Balances

Transactions in foreign currencies entered into by the Company are accounted at the exchanges rates prevailing on the date of the transactions. Exchange differences arising on settlement /restatement of short term foreign currency monetary assets and liabilities of the Company and its subsidiaries are recognized as income or expenses in the Statement of Profi t and Loss. All long term foreign currency monetary items consisting of liabilities which relate to acquisition of depreciable capital assetsat the end of the period/ year are restated at the rate prevailing at the Balance Sheet date. The exchange difference arising as a result is added to or deducted from the cost of the assets in accordance with para 46A of Accounting Standard 11 ‘The

Consolidated Notes To Financial Statements (contd.)


91

Effects of Changes in Foreign Exchange Rates‘ in the case of the Company’s subsidiaries Cement Manufacturing Company Limited, Star Cement Meghalaya Limited and Meghalaya Power Limited. Profi t/Loss arising out of cancellation of forward contracts is taken to revenue in the year of cancellation.

(xi) Investments

Investments that are readily realisable and intended to be held for not more than a year are classifi ed as Current investments. All other investments are classifi ed as long-term investments. Current investments are carried at lower of cost and market value on individual investment basis. Long Term Investments are considered at cost, unless there is an “other than temporary” decline in value, in which case adequate provision is made for the diminution in the value of Investments.

(xii) Inventories

Raw Materials, stores and spares are valued at lower of cost and net realizable value. However, these items are considered to be realizable at cost if the fi nished products, in which they will be used, are expected to be sold at or above cost. Work in progress and fi nished goods are valued at lower of cost and net realisable value. Cost includes direct materials & labour and a part of manufacturing overheads based on normal operating capacity. Cost of fi nished goods includes excise duty. Cost of Inventories is computed on weighted average. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

(xiii) Government Grants and subsidies

Government grants / subsidies are recognized when there is reasonable certainty that the same will be received. Revenue grants in the nature of recoupment/ reimbursement of any particular item of expenses are recognized in the Statement of Profi t and Loss as deduction from related item of expenditure. Capital grants / subsidies are reduced from cost of respective fi xed assets where it relates to specifi c fi xed assets. Other grants / subsidies are credited to the capital reserve.

(xiv) Retirement and other employee benefi ts

(a) Retirement benefi t in the form of Provident Fund is a defi ned contribution scheme and is charged to the Statement of Profi t and Loss of the year when the contributions to the respective funds are due. The Company has no obligations other than the contribution payable to the respective funds.

(b) Gratuity liability, being a defi ned benefi t obligation, is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each Financial Year.

(c) Short term compensated absences are provided for based on estimates. Long term compensated absences are provided for based on actuarial valuation which is done as per projected unit credit method at the end of each Financial Year.

(d) Actuarial gains / losses are immediately taken to the statement of profi t and loss and are not deferred.

(xv) Earning per Share

Basic Earnings per Share is calculated by dividing the net profi t or loss for the year attributable to equity shareholders (after deductible preference dividend and attributable taxes) by the weighted number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, net profi t or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effect of all dilutive potential equity shares.

(xvi) Borrowing Costs

Borrowing costs includes interest, amortization of ancillary costs incurred in connection with the arrangements of borrowings and exchange differences arising from relevant foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

Borrowing cost directly attributable to the acquisition, construction of an asset that necessarily takes a substantial period oftime to get ready for its intended use are capitalized as part of the cost of the respective assets. All other borrowing costs areexpensed in the period they occur.

(xvii) Taxation

Tax expenses comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred income taxes refl ect the impact of current year timing differences between taxable income for the year and reversal of timing differences of earlier years.

The deferred tax for timing differences between the book and tax profi ts for the year is accounted for using the tax rates and laws that have been substantively enacted as of the Balance Sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets


92


and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognized only to the extent that there is reasonable certainty that suffi cient future taxable income will be available against which such deferred tax assets can be realized. If the company has carry forward unabsorbed depreciation and tax losses, deferred tax assets are recognized only to the extent there is virtual certainty supported by convincing evidence that suffi cient taxable income will be available against which such deferred tax asset can be realized.

The deferred tax in respect of timing differences which originate during the tax holiday period and is likely to reverse duringthe tax holiday period, is not recognized to the extent income is subject to deduction during the tax holiday period as per therequirements of the Income Tax Act, 1961. The deferred tax asset is recognized and carried forward only to the extent that there is reasonable certainty that the assets will be realized in future.

The carrying amounts of deferred tax assets are reviewed at each balance sheet date. The company writes-down the carrying amount of deferred tax assets to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that suffi cient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that suffi cient future taxable income will be available.

Minimum Alternative Tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specifi ed period. In the year in which the Minimum Alternative Tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendation contained in guidance note issued by the Institute of Chartered Accountants of India, the said assets is created by way of a credit to the Statement of Profi t and Loss and shown as MAT credit entitlement. The company reviews the carrying amount of MAT at each Balance Sheet date and writes down MAT credit entitlement to the extent there is no longer convincing evidence to the effect that the company will pay normal income-tax during specifi ed period.

(xviii) Segment Reporting

a) Identifi cation of segments:

The company has identifi ed that its business segments are the primary segments. The Company’s business are organized and managed separately according to the nature of products/services, with each segment representing a strategic business unit that offers different product / services and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the company operate.

b) Allocation of Common Costs:

Common allocable costs are allocated to each segment on case to case basis applying the ratio, appropriate to each relevant case. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segment on a reasonable basis, have been included under the head “Unallocated”.

The accounting policies adopted for segment reporting are in line with those of the Company’s accounting policies.

(xix) Cash and Cash equivalents

Cash and cash equivalents for the purpose of Cash Flow Statement comprise cash in hand, demand deposits with Banks and other short-term highly liquid investments / deposits with an original maturity of three months or less.

(xx) Provision

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outfl ow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions made in terms of Accounting Standard 29 are not discounted to their present value and are determined based on best estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to refl ect the current best estimates.

(xxi) Contingent Liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confi rmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outfl ow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measuredreliably. The Company does not recognize a contingent liability but discloses its existence in the fi nancial statements.



93

2. SHARE CAPITAL

(` in Lacs)31.03.2016 31.03.2015

Authorised

23,00,00,000 (23,00,00,000 as at 31.03.2015) Equity Shares of ` 1/- each fully paid up 2,300.00 2,300.00 Total 2,300.00 2,300.00 Issued

22,21,72,990 (22,21,72,990 as at 31.03.2015) Equity Shares of ` 1/- each fully paid up 2,221.73 2,221.73 Total 2,221.73 2,221.73 Subscribed and Paid up

22,21,72,990 (22,21,72,990 as at 31.03.2015) Equity Shares of ` 1/- each fully paid up 2,221.73 2,221.73 Total 2,221.73 2,221.73

a) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period

Equity Shares 31.03.2016 31.03.2015No of Shares ` in Lacs No of Shares ` in Lacs

At the Beginning of the year 22,21,72,990 2,221.73 22,21,72,990 2,221.73 Issued/Cancelled during the year - - - - Outstanding at the end of the year 22,21,72,990 2,221.73 22,21,72,990 2,221.73

b) Terms/Rights attached to the Equity Shares & Notes

The Company has only one class of equity shares having par value of ` 1/- per share. Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by theshareholders.

c) Details of Shareholders holding more than 5% shares in the Company

Particulars 31.03.2016 31.03.2015No. of Shares % of holding No. of Shares % of holding

Equity Shares of ` 1/- each fully paid-upMr. Prem Kumar Bhajanka 2,79,44,845 12.58% 2,73,69,386 12.32%Mr. Sanjay Agarwal 1,94,82,445 8.77% 1,95,39,245 8.79%Mr. Sajjan Bhajanka 1,66,15,675 7.48% 1,67,72,675 7.55%Mrs. Santosh Bhajanka 1,50,49,500 6.77% 1,50,49,500 6.77%Mrs. Divya Agarwal 1,44,88,750 6.52% 1,44,88,750 6.52%Mr. Subham Agarwal 1,11,41,198 5.01% - -

As per records of the Company, including its register of shareholders/members, the above shareholding represents legal ownershipsof shares.


94


3. RESERVES & SURPLUS(` in Lacs)

31.03.2016 31.03.2015Capital Reserves

Balance as per last Account 18,148.28 26,452.78 Less : Amount adjusted pursuant to the Scheme of Arrangement - (8,304.50)

18,148.28 18,148.28

General ReserveBalance as per last Account 2,793.45 2,793.45 Addition/(Deduction) during the year - -

2,793.45 2,793.45

Surplus as per Statement of Profi t & LossBalance as per last Account 44,838.24 37,165.12 Profi t /(Loss) for the year 9,197.48 8,343.66

Amount available for appropriation 54,035.71 45,508.78 Interim Equity Dividend 2,221.73 - Tax on Proposed Equity Dividend - (670.55) Total Appropriations 2,221.73 (670.55)

Net Surplus in the Statement of Profi t and Loss 51,813.98 44,838.24 Total 72,755.72 65,779.97

4. LONG TERM BORROWINGS(` in Lacs)

31.03.2016 31.03.2015Term Loans

Rupee Loans from Banks (Secured) 30,408.80 36,420.75 Rupee Loan from a Financial Institution (Secured) 3,000.00 - Rupee Loan from a Body Corporate (Secured) 2,895.02 3,997.77 Foreign Currency Loan from Banks (Secured) 18,563.43 25,073.34

Loans and Advances from a Related Party From a Director (Unsecured) 2,256.66 3,300.00

Other Loans and Advances (Secured) Hire Purchase Finance from a Body Corporate (Secured) 0.14 23.45 Hire Purchase Finance from Banks (Secured) 380.93 302.60

57,504.99 69,117.90

Less: Current Maturities of long term borrowings 19,071.94 18,870.57 Total 38,433.05 50,247.33

(a) Rupee Term Loan of ` 2,185.58 Lacs from a bank is repayable in further 5 equal quarterly installments ending on June 2017. The Loan is secured by pari passu fi rst charge on current assets and pari passu fi rst charge on fi xed assets of the subsidiary’s cement plant at Lumshnong, Meghalaya.

(b) Rupee Term Loans of ` 6,662.45 Lacs from banks are repayable in further 15 unequal quarterly installments ending on December 2019. Rupee Term Loan of ̀ 5,000.00 Lacs from a bank is repayable in 16 equal quarterly installments commencing from June 2017. Foreign Currency loan of ` 2,158.89 Lacs from a bank is repayable in further 14 unequal quarterly installments ending on December 2019. The loans are secured by pari passu fi rst charge on fi xed assets and pari passu second charge on current assets of the Company’s Cement Grinding Unit at Guwahati, Assam.

(c) Rupee Term Loan of ` 3,000.00 Lacs for the subsidiary’s Cement Grinding Unit at Guwahati, Assam availed from a Financial Institution is repayable in 16 equal quarterly installments commencing from January 2017. The loan is to be secured by fi rst charge on fi xed assets of Cement

Plant at Lumshnong, Meghalaya of Megha Technical & Engineers Private Limited.

(d) Rupee Term Loan of ` 14,714.05 Lacs and ` 2,895.02 Lacs from Banks and Body Corporates are repayble in further 15 unequal quarterly installments ending on December 2019. Foreign Currency Loan of ` 6,186.10 Lacs are repayable in further 14 unequal quarterly installments ending on December 2019. Term Loans are secured by fi rst charge on the fi xed assets of the subsidiary’s Cement clinker plant at Lumshnong, Meghalaya on pari passu basis.



95

(e) Rupee Term Loan of ` 1,846.72 Lacs from a bank is repayble in further 16 unequal quarterly installments ending on March 2020 and Foreign currency loan of ` 9,402.68 Lacs from a bank is repayble in further 15 unequal quarterly installments ending on December 2019 and Foreign currency loan of ` 815.76 Lacs from a bank is repayable by 31st March, 2017. These Term Loans are secured by fi rst charge on the fi xed assets of the subsidiary’s power plants at Lumshnong, Meghalaya on pari-passu basis.

(f) Hire Purchase Finance from banks and body corporates of ` 381.07 Lacs is secured by hypothecation of susidiary’s vehicles / equipments and is repayable within three to four years having varying date of payment.

(g) Term Loans of ` 31,072.08 Lacs from Banks have been guaranteed by some of the Directors of the Company.

5. OTHER LONG TERM LIABILITIES(` in Lacs)

31.03.2016 31.03.2015Security Deposits 8,935.65 7,636.89 Others 383.25 725.45 Total 9,318.89 8,362.35

6. DEFERRED TAX LIABILITIES(` in Lacs)

31.03.2016 31.03.2015Deferred tax liabilityFixed assets: Impact of difference between tax depreciation and depreciation/ amortization charged for the fi nancial reporting

1,261.99 866.08

1,261.99 866.08

Deferred tax asset

Business Loss Carried forward 41.19 - Fixed assets: Impact of difference between tax depreciation and depreciation/ amortization charged for the fi nancial reporting

58.69 -

Impact of expenditure charged to the statement of profi t and loss in the current year but allowable for tax purposes upon payments

27.07 -

Provision for Bad & Doubtful Debts 11.03 - 137.98 -

Total 1,124.01 866.08

7. LONG TERM PROVISIONS(` in Lacs)

31.03.2016 31.03.2015Provision for Employee Benefi ts Provision for Gratuity 111.49 80.00 Provision for Leave Encashment 166.75 148.82 Total 278.25 228.82

8. SHORT TERM BORROWINGS(` in Lacs)

31.03.2016 31.03.2015Working Capital facilities from Banks

Cash Credit (Secured) 20,022.49 12,799.29 Foreign Currency Demand Loan (Secured ) - 3,129.54

Short Term Loan

From Banks (Unsecured) 11,245.23 3,000.00 Foreign Currency Demand Loan from a Bank (Unsecured) 2,956.89 - From a Body Corporate (Unsecured) 2,250.00 -

Total 36,474.61 18,928.83


96


Notes:-

(a) Working Capital facilities of ` 2,131.82 Lacs from banks are secured by fi rst pari passu charge on current assets and second pari passu charge on fi xed assets of the subsidiary’s cement plant at Lumshnong, Meghalaya.

(b) Working capital facilities of ` 8,471.81 Lacs from banks are secured by pari passu fi rst charge on current assets and pari passu second charge on fi xed assets of the subsidiary’s cement cement grinding unit at Guwahati, Assam.

(c) Working capital facilities of ` 1,196.63 Lacs from banks are secured by fi rst charge on current assets and second charge on fi xed assets of subsidiary’s Cement Grinding unit at Lumshnong, Meghalaya on pari passu basis.

(d) Working capital facilities of ` 5,640.34 Lacs from banks are secured by fi rst charge on current assets and second charge on fi xed assets of subsidiary’s Clinker unit at Lumshnong, Meghalaya on pari passu basis.

(e) Cash credit of ` 2,581.89 Lacs from a bank is secured by fi rst charge on current assets and second charge on fi xed assets of subsidiary’s power plants at Lumshnong, Meghalaya.

(f) Further, the short term borrowing for ` 23,700 Lacs are also guranteed by some Directors of the Company.

(g) Short term loan from banks of subsidiaries is due for repayment on June, 2016 and Foreign Currency demand loan from a bank of subsidiariesis due for repayment on September 2016.

(h) Short term loan from a body corporate of subsidiaries is due for repayment on November, 2016.

9. OTHER CURRENT LIABILITIES

(` in Lacs)31.03.2016 31.03.2015

Trade Payables Dues to Micro and Small Enterprises - - Dues to Others 14,038.73 7,701.83

14,038.73 7,701.83

Other Liabilities

Current Maturities of Long Term Borrowings 19,071.94 18,870.57 Interest accrued but not due on Borrowings 138.87 41.43 Creditors for Capital goods 150.79 176.42 Unclaimed dividends* 1.65 1.67 Advances from Customers 2,186.02 1,221.04 Salary and Bonus to employees 298.67 258.36 Other Liabilities 11,992.48 9,550.07 Statutory Dues Payable 2,069.20 1,526.74

Total 35,909.62 31,646.30

* Amount to be transferred to the Investor Education and Protection Fund shall be determined on the respective due date.

10. SHORT TERM PROVISIONS

(` in Lacs)31.03.2016 31.03.2015

Provision for Employee Benefi tsProvision for Gratuity 50.29 47.59 Provision for Leave Encashment 98.23 36.73

Other Provisions

Tax on Proposed Equity Dividend - 670.55 Total 148.52 754.86



97

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98


12. NON-CURRENT INVESTMENTS (` in Lacs)

31.03.2016 31.03.2015A Non Trade Investments (valued at cost unless stated otherwise)

Investment in Quoted Equity InstrumentsReliance Power Ltd.8,743 (8,743 as at 31.03.15) Equity Shares of ` 10/- each fully paid up

24.54 24.54

24.54 24.54 B Trade Investments (valued at cost unless stated otherwise)

Investment in Unquoted Equity InstrumentsAra Suppliers Pvt. Ltd.3,23,190 (3,23,190 as at 31.03.15) Equity Share of ` 10/- each fully paid up

31.36 31.36

Arham Sales Pvt. Ltd.3,23,190 (3,23,190 as at 31.03.15) Equity Share of ` 10/- each fully paid up

31.42 31.42

Adonis Vyapar Pvt. Ltd.3,23,190 (3,23,190 as at 31.03.15) Equity Share of ` 10/- each fully paid up

31.42 31.42

Apanapan Viniyog Pvt. Ltd.3,23,190 (3,23,190 as at 31.03.15) Equity Share of ` 10/- each fully paid up

31.42 31.42

Ribhoi Engineering Company Pvt Ltd.27,000 (27,000 as at 31.03.15) Equity Shares of of ` 10/- each fully paid up 2.70 2.70

128.32 128.32 Total 152.86 152.86 Aggregate Amount of InvestmentsQuoted 24.54 24.54 Unquoted 128.32 128.32 Market Value of Quoted Investments 4.31 4.94

13. LONG TERM LOANS AND ADVANCES(` in Lacs)

31.03.2016 31.03.2015Capital Advances

Unsecured, Considered Good 4,305.81 3,788.74 Security Deposits

Unsecured, Considered Good 802.51 814.12 Other Loans and advances

Unsecured, Considered GoodAdvance Income Tax (net of provision for taxation), including MAT Credit Entitlement 15,429.06 12,383.68 Subsidies/Incentives Receivable from Central/State Governments 21,219.50 21,219.50 Balances with Statutory/Government Authorities 1,840.22 1,469.26

Total 43,597.10 39,675.30

14. OTHER NON CURRENT ASSETS(` in Lacs)

31.03.2016 31.03.2015Others

Balance with banks held as margin money deposits with original maturity of more than 12 months

54.86 44.91

Total 54.86 44.91



99

15. TRADE RECEIVABLES (` in Lacs)

31.03.2016 31.03.2015Secured Considered Good

Over Six months 253.24 145.97 Other debts 4,757.15 4,453.75

5,010.39 4,599.72

Unsecured

Over Six Months

I - Considered Good 1,236.46 329.71 Considered Doubtful 140.44 187.96 Less: Provision for Doubtful Debts (140.44) (187.96)

1,236.46 329.71

II- Claims due from Central Government - Considered Good 14,650.82 5,899.03 Other Debts

I - Considered Good 18,999.94 15,496.26 II- Claims due from Central Government - Considered Good 4,982.57 4,655.68

23,982.50 26,050.97

Total 44,880.17 30,980.41

Note:-

Periodically, the Company evaluates realisability of all customer dues. The need for provision is assessed based on various factors including collectability of specifi c dues, risk perceptions of the industry in which the customer operates, general economic factors, which could effect the customers’s ability to settle. The Company and its Subsidiaries normally provides for debtor dues oustanding for six months or longer from the invoice date, at the Balance

Sheet date. The Company and its subsidaries pursues the recovery of the dues, in part or full.

16. CURRENT INVESTMENTS(` in Lacs)

31.03.2016 31.03.2015Trade Investments (valued at cost unless stated otherwise)

Shyam Century Ferrous Limited

NIL (5,00,000 as at 31.03.15) Equity Shares of ` 1/- each fully paid up - 5.00 Less : Provision - (5.00)

Total - -

17. INVENTORIES(` in Lacs)

31.03.2016 31.03.2015Raw Materials 2,798.85 1,657.80 Work in Progress 226.39 191.75 Finished Goods [including Power inventory (with MeECL) ` 1,183.99 Lacs,PY ` 593.05 Lacs]

4,403.85 2,674.87

Stock in Trade 348.74 93.97 Fuels, packing materials, etc. 9,289.51 2,508.62 Stores & Spares Parts, etc 3,849.07 3,787.47 Total 20,916.41 10,914.48 Note:

The above includes stock in transit as below:

Stock in Trade 38.39 13.92 Finished Goods 636.91 450.48


100


18. CASH AND BANK BALANCES

(` in Lacs)31.03.2016 31.03.2015

Cash and Cash Equivalents

Balances with Banks On Current accounts/ Cash credit accounts 1,177.22 889.24 On Unpaid Dividend account 1.65 1.67 Deposits with Original Maturity of less than three months - 11.64 Cheques in hand 1,118.83 1,012.89 Cash on hand 81.39 64.88

2,379.10 1,980.31

Other Bank BalancesDeposits with Original Maturity of more than 3 months but less than 12 months 72.15 56.47

72.15 56.47

Total 2,451.25 2,036.79

19. SHORT TERM LOANS AND ADVANCES

(` in Lacs)31.03.2016 31.03.2015

Loans and advances to related parties

Advances recoverable from an enterprise infl uenced by KMP 35.00 105.86 35.00 105.86

Other

Unsecured, Considered Good

Advances to suppliers 790.79 1,388.78 Loan and advances to employees 84.84 87.93 Balances with/ Receivables from Government authorities 3,978.62 5,220.32 Subsidies Receivable from Central/State Governments 29,303.52 18,486.01 Advances for Services & Expenses 3,230.33 2,723.45 Income Tax Refund Receivable 77.21 - Prepaid expenses 301.26 335.67 Unsecured, Considered Doubtful

Loan and advances to employees & suppliers 19.23 - Less: Provision for Bad & Doubtful advances (18.60) -

37,767.19 28,242.17

Total 37,802.19 28,348.04

20. REVENUE FROM OPERATIONS

(` in Lacs)2015-16 2014-15

Revenue from Operations Sale of Products

Domestic 1,71,977.67 1,43,345.56 Export 3,807.53 3,620.85

1,75,785.20 1,46,966.41

Other Operating revenue Shortage Recovery of Cement & Clinker 356.00 152.06 Others 199.91 194.31 Revenue from Operations (Gross) 1,76,341.11 1,47,312.78



101

(` in Lacs)2015-16 2014-15

Details of Products SoldFinished Goods Sold

Cement 1,61,735.46 1,34,776.92 Clinker 14,049.74 11,607.75 Gypsum - 77.38 Power - 504.37

1,75,785.20 1,46,966.41

21. OTHER INCOME

(` in Lacs)2015-16 2014-15

Interest Income 60.02 51.74 Other Non Operating Income 82.02 26.48 Total 142.04 78.23

22. COST OF RAW MATERIALS CONSUMED

(` in Lacs)2015-16 2014-15

Inventory at the beginning of the year 1,657.80 1,995.76 Less: Inventories transferred pursuant to the Scheme of Arrangement - (204.80)Add : Purchases 21,761.86 16,657.87

23,419.66 18,448.83 Less : Inventory at the end of the year 2,798.85 1,657.80 Cost of Raw Materials Consumed 20,620.81 16,791.04 Details of Raw Material consumed

Fly Ash 7,489.30 5,655.07 Limestone 6,470.16 5,758.79 Iron Mill Scale & Fines 188.40 726.16 Gypsum 798.08 253.06 Shale 419.20 292.73 Others including freight on clinker 5,255.67 4,105.22

20,620.81 16,791.04

23. (INCREASE)/DECREASE IN INVENTORIES

(` in Lacs)2015-16 2014-15

Inventories at the beginning of the year

Finished Goods 2,674.87 4,082.25 Less : Inventories transferred pursuant to the Scheme of Arrangement - (219.16)Work in Progress 191.75 289.92 Stock in Trade 93.97 -

2,960.59 4,153.01

Inventories at the end of the year

Finished Goods 4,403.85 2,674.87 Work in Progress 226.39 191.75 Stock in Trade 348.74 93.97

4,978.98 2,960.59

Total (2,018.39) 1,192.42


102


(` in Lacs)2015-16 2014-15

Details of Inventory

Finished Goods

Power 1,183.99 570.42 Cement 2,961.75 1,681.70 Clinker 258.11 422.75

4,403.85 2,674.87

Work in Progress

Clinker 226.39 191.75 Stock in Trade

Cement 348.74 93.97

24. EMPLOYEE BENEFITS EXPENSE

(` in Lacs)2015-16 2014-15

Salaries, Wages & other Manpower Expenses 10,090.24 8,571.55 Contribution to Provident, Gratuity and other Funds 300.28 252.53 Employees Welfare Expenses 454.08 303.81 Total 10,844.61 9,127.90

25. OTHER EXPENSES

(` in Lacs)2015-16 2014-15

Stores & Spare parts consumed 1,089.50 1,186.88 Packing Materials 3,959.02 4,079.66 Power and Fuel 21,545.21 17,200.41 (Increase)/decrease of excise duty on inventory 175.74 (120.76)Insurance 301.24 370.45 Heavy Vehicle / Equipment Running Expenses 978.67 1,565.24 Rent, Rates & Taxes 1,479.08 1,500.15 Research & Development Expenses 79.84 54.77 Travelling and Conveyance 1,142.22 849.09 Repairs & Maintenance

-Buildings 370.60 530.22 -Plant & Machinery 2,146.24 1,411.02 -Others 386.47 238.47 Outward Freight Charges 29,598.47 24,260.18 Commission & Incentives 13,563.31 7,574.08 Advertisement, Publicity and Sales Promotion 6,794.04 4,618.78 Charity and Donations 158.69 156.17 CSR Expenses 191.38 102.00 Miscellaneous Expenses 2,358.37 1,876.15 Total 86,318.09 67,452.97



103

26. FINANCE COST

(` in Lacs)2015-16 2014-15

Interest Expenses

-On Fixed Loans 5,267.64 6,804.53 -Others 2,673.83 1,559.05 -Exchange Difference to the extent considered as an adjustment to borrowing costs 169.75 126.55 Other Finance Cost 225.55 248.34Total 8,336.77 8,738.47

27. CAPITAL & OTHER COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(` in Lacs)Particulars As at

31.03.2016As at

31.03.2015Estimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of advances)

125.23 -

28. CONTINGENT LIABILITIES

(` in Lacs)Sl. No.

Particulars As at 31.03.2016

As at 31.03.2015

Contingent Liabilities not provided for in respect of :–

(a) Claims against the Company not acknowledged as debts- Excise / VAT / Income Tax matters 1,072.18 2,794.49(b) Un-redeemed bank guarantees 699.35 431.17(c) Bills discounted with banks 17.22 386.73(d) Letters of credit issued by the banks 162.22 183.83(e) Custom Duty on import under EPCG Scheme against which Export obligation is to be

fulfi lled1,001.48 1,063.64

(f) Guarantee provided to bank on behalf of Contractors - 80.91(g) Solvent surety furnished to Excise Department against differential excise duty refund

(Refer note no. 31)2,131.40 2,131.40

Note:-

Based on discussion with the solicitors/favourable decisions in similar cases/legal opinion taken by the Company, the management believes that the Company has a good chance of success in cases mentioned here-in-above and hence, no provision there against is considered necessary.

29. BORROWING COSTS CAPITALIZED

(` in Lacs)Particulars 2015-16 2014-15Borrowing Costs Capitalized - 61.69

30. There is a diminution of ` 20.23 Lacs (` 19.60 Lacs as at 31.03.2015) in the value of a quoted investment based on last quoted price. The above investment being long term and strategic in nature, the said diminution, in the opinion of the management, is temporary in nature and hence no provision is considered necessary.

31. Against claim for refund of differential excise duty, Hon’ble High Court at Guwahati (Shillong Bench) vide its order dated 12thSeptember, 2012, has directed the Excise Department to release 50% of the differential amount against furnishing of solvent surety in line with the Interim Order dated 13th January, 2012 passed by Hon’ble Supreme Court in case of “VVF Ltd and others”.Based on the said judgment of Hon’ble High Court in favour of the Company and its subsidiaries Viz. Cement Manufacturing Company Limited and Megha Technical & Engineers Private Limited and based on legal opinion obtained the differential excise duty refund of ` 223.19 Lacs (PY ` 803.30 Lacs) has been recognized as revenue.


104


32. Ministry of Corporate Affairs (MCA) vide notifi cation dated 29th August, 2014 has amended Schedule II to the Companies Act, 2013 requiring mandatory componentization of fi xed assets for fi nancial statements in respect of Financial Years commencing on or after 1st April, 2015. During the year, the Company has undertaken the Componentization of fi xed assets w.e.f. 1st April, 2015 on the basis of technical evaluation and useful life thereof. Consequent to the same, the Depreciation expenses is higherby ` 26.22 Lacs and profi t before tax is lower by ` 26.22 lacs for the year ended 31st March, 2016.

33. EMPLOYEE DEFINED BENEFITS (a) Defi ned Contribution Plans: The Company has recognized an expense of ` 300.28 Lacs (PY ` 252.53 Lacs towards the

defi ned contribution plans).

(b) The Company has a defi ned benefi t gratuity plan. Every employee who has completed fi ve years or more service is entitled to Gratuity on terms not less than the provisions of The Payment of Gratuity Act, 1972. The said scheme in respect of its subsidiaries is funded with an Insurance Company. The following tables summarize the components of net benefi t expenses recognized in the Statement of Profi t & Loss and the funded status of its subsidiaries and amounts recognized in the balance sheet for the Gratuity.

(c) Under leave encashment scheme, the Company allows its employees to encash accumulated leave over and above thirty days at any time during the year. The scheme is not funded by the Company.

(d) Defi ned Benefi t Plans – As per Actuarial Valuation as at 31st March, 2016.




I. Expense recognized in the statement of Profi t and Loss for the year ended 31st March, 20161. Current Service Cost 79.58 80.72 58.28 59.052. Interest Cost 28.32 18.07 20.29 11.823. Employee Contribution - - - -4. Expected Return on Plan Assets (16.67) - (12.21) -5. Actuarial (Gains)/Losses 30.83 52.79 18.87 65.436. Past Service Cost - - - -7. Settlement Cost - - - -8. Losses/(gains) on acquisition/divesture (0.05) - 1.42 -9. Total Expense 122.01 151.58 86.66 136.30

II. Net Asset/(Liability) recognized in the Balance Sheet as at 31st March, 20161. Present Value of Defi ned Benefi t Obligation 409.53 264.98 296.56 185.542. Fair Value of Plan Assets 247.75 - 168.98 -3. Funded Status [Surplus/(Defi cit)] (161.78) (264.98) (127.58) (185.54)4. Net Asset/(Liability) as at 31st March, 2016 (161.78) (264.98) (127.58) (185.54)

III. Change in Obligation during the Year ended 31st March, 20161. Present value of Defi ned Benefi t Obligation at

the beginning of the year 296.57 185.54 210.68 109.74

2. Current Service Cost 79.58 80.72 58.28 59.053. Interest Cost 28.32 18.07 20.29 11.824. Past Service Cost - - - -5. Employee Contribution - - - -6. Liabilities assumed on acquisition/(settled on

divesture)- - (1.73) -



105




7. Actuarial (Gains)/Losses 27.99 52.79 18.87 65.438. Benefi ts Payments (22.93) (72.15) (9.82) (60.50)9. Present Value of Defi ned Benefi t Obligation

at the end of the year409.53 264.98 296.57 185.54

IV. Change in assets during the Year ended 31st March, 20161. Plan Assets at the beginning of the year 168.99 - 137.11 -2. Assets acquired on amalgamation in previous

year- - - -

3. Settlements - - - -4. Expected return on plan assets 16.67 - 12.21 -5. Contributions by employer 87.81 72.15 32.05 60.506. Actual Benefi t Paid (22.93) (72.15) (9.82) (60.50)7. Actuarial Gains/(Losses) (2.79) - (2.56) -8. Plan Assets at the end of the year 247.74 - 168.99 -9. Actual Return on plan assets 11.16 - 8.54 -

V. The Principal actuarial assumptions are as follows:

- Discount Rate 8.00% 8.00% 8.25% 8.25%- Expected Return on Plan Assets 8% - 9% -- Salary increase 6% 6% 5% 5%- Withdrawal rates (Varying between per

annum depending upon the duration and age of the employees

1%-8% 1%-8% 1%-8% 1%-8%

(e) The details for the current and previous periods are as follows:




1. Defi ned Benefi t Obligation 409.53 264.98 296.57 185.542. Plan Assets 247.74 - 168.99 -3. Surplus / (Defi cit) (161.79) (264.98) (127.58) (185.54)4. Experience adjustments on Plan Liability 39.06 29.36 7.76 5.205. Experience adjustments on Plan Assets (2.78) - (2.56) -

34. EARNINGS PER SHARE (EPS):In terms of Accounting Standard - 20, the calculation of EPS is given below: -

(` in Lacs)Particulars 2015-16 2014-15Profi t attributable to Equity Shareholders for basic and diluted EPS 9,197.48 8,343.66Weighted average number of Equity Shares for basic EPS 22,21,72,990 22,21,72,990Nominal value of equity shares (`) 1.00 1.00Basic earnings per share (EPS) (`) 4.13 3.76Diluted earnings per share (`) 4.13 3.76


106


35. DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE.The particulars of unhedged foreign currency exposures as on the balance sheet dates are as follows:

Particulars 2015-16 2014-15Foreign Currency In Millions ` in Lacs Foreign Currency In Millions ` in Lacs

FCNRB Term Loan

USD 1.23 815.76 USD 2.74 1,714.99

FCNRB Demand Loan

USD 4.46 2,956.89 USD 5.00 3,129.54

ECB-Term Loan USD 110.69 17,747.68 USD 166.68 23,358.35

36. RELATED PARTY DISCLOSURES

A Names of the related parties where control exists Nature of relationshipCentury Plyboards (India) Limited Enterprises Owned/ Infl uenced by Key Management Personnel or their

relativesShyam Century Ferrous Limited (SCFL) Enterprises Owned/ Infl uenced by Key Management Personnel or their

relativesBrijdham Merchants Private Limited (BMPL) Enterprises Owned/ Infl uenced by Key Management Personnel or their

relativesSriram Vanijya Private Limited (SVPL) Enterprises Owned/ Infl uenced by Key Management Personnel or their

relativesStar India Cement Limited (SICL) Enterprises Owned/ Infl uenced by Key Management Personnel or their

relativesSriram Merchants Private Limited (SMPL) Enterprises Owned/ Infl uenced by Key Management Personnel or their

relativesAuroville Investments Private Limited (AIPL) Enterprises Owned/ Infl uenced by Key Management Personnel or their

relativesSumangal International Private Limited (SIPL) Enterprises Owned/ Infl uenced by Key Management Personnel or their

relativesSumangal Business Private Limited (SBPL) Enterprises Owned/ Infl uenced by Key Management Personnel or their

relativesHari Prasad Agarwala (HUF) (HPAHUF) Enterprises Owned/ Infl uenced by Key Management Personnel or their

relativesB Others - with whom transactions have taken place

during the yeara) Key Management Personnel of the Company

Names of related parties Nature of relationshipMr. Sajjan Bhajanka ChairmanMr. Sanjay Agarwal DirectorMr. Hari Prasad Agarwal Director Mr. Dilip Kumar Agarwal Chief Financial Offi cer Mr. Debabrata Thakurta Company Secretary

b) Key Management Personnel of the SubsidiariesNames of the related parties Nature of relationshipMr. Rajendra Chamaria Vice Chairman & Managing DirectorMr. Pankaj Kejriwal Managing DirectorMr. Prem Kumar Bhajanka Managing DirectorMr. Sanjay Kumar Gupta Chief Executive Offi cer Mr. Vishal Agarwal Chief Financial Offi cer Mr. Vivek Lahoti Chief Financial Offi cer Mr. Swarup Chand Kayal Chief Financial Offi cer Mr. Manoj Agarwal Company Secretary Mr. Mohit Mahana Company Secretary (upto 18th May, 2015 & w.e.f. 15th September, 2015)



107

Mr. Divyang Jain Company Secretary (from 22nd July, 2015 to 14th September, 2015)Ms. Nupur Burman Company Secretary (up to 31st January, 2016)Mr. Kamal Sewoda Company Secretary (w.e.f. 8th February 2016 & upto 18th March, 2016 )

c) Relatives of Key Management Personnel of Company and its subsidiariesNames of the related parties Nature of relationshipMrs. Santosh Bhajanka Wife of Mr. Sajjan BhajankaMr. Keshav Bhajanka Son of Mr. Sajjan BhajankaMrs. Sonu Kajaria Daughter of Mr. Sajjan BhajankaMrs. Payal Agarwal Daughter of Mr. Sajjan BhajankaMrs. Shraddha Agarwal Daughter of Mr. Sajjan BhajankaMrs. Sumitra Devi Agarwal Wife of Mr. Hari Prasad AgarwalMr. Rajesh Kumar Agarwal Son of Mr. Hari Prasad AgarwalMrs. Bhawna Agarwal Daughter in law of Mr. Hari Prasad AgarwalMrs. Divya Agarwal Wife of Mr. Sanjay AgarwalMr. Rahul Chamaria Son of Mr. Rajendra ChamariaMr. Sachin Chamaria Son of Mr. Rajendra Chamaria

Details of transactions between the Company and related parties and the status of outstanding balance as at 31st March, 2016 aregiven hereunder :

(` in Lacs)Sl. No.

Type of Transactions Enterprise Owned/ Infl uenced by KMP

KMP Relatives of KMP

2015-16 2014-15 2015-16 2014-15 2015-16 2014-151. Purchase Transactions

CPIL - 7.47 - - - -SCFL 23.12 16.36 - - - -

2. Sale TransactionsCPIL 9.12 6.79 - - - -SCFL - 505.59 - - - -

3. Loans & Advances TakenMr. Prem Kumar Bhajanka - - 250.00 3,300.00 - -

4. Loan Taken RepaidMr. Prem Kumar Bhajanka - - 1,350.00 - - -

5. Loan GivenSCFL - 200.00 - - - -

6. Loan Given ReceivedSCFL - 200.00 - - - -

7. Interest PaidMr. Prem Kumar Bhajanka - - 297.00 48.42 - -

8. Interest ReceivedSCFL - 5.40 - -

9. Dividend PaidMr. Sajjan Bhajanka - - 166.16 - 180.02 -Mr. Hari Prasad Agarwal - - 24.36 - 47.43 -Mr. Sanjay Agarwal - - 195.08 - 144.89 -SMPL 67.40 - - - - -SVPL 85.02 - - - - -BMPL 77.44 - - - - -AIPL 18.45 - - - - -SIPL 76.67 - - - - -SBPL 68.31 - - - - -HPAHUF 15.31 - - - - -


108


(` in Lacs)Sl. No.

Type of Transactions Enterprise Owned/ Infl uenced by KMP

KMP Relatives of KMP

2015-16 2014-15 2015-16 2014-15 2015-16 2014-1510. Remuneration Paid

Mr. Sajjan Bhajanka - - 60.00 48.00 - -Mr. Hari Prasad Agarwal - - - 1.25 - -Mr. Sanjay Agarwal - - 60.00 48.00 - -Mr. Pankaj Kejriwal - - 42.00 42.00 - -Mr. Rajendra Chamaria - - 66.00 48.00 - -Mr. Prem Kumar Bhajanka - - 60.00 48.00 - -Mr. Rahul Chamaria - - - - 30.00 30.00Mr. Sachin Chamaria - - - - 24.00 24.00Mr. Sanjay Kumar Gupta - - 84.78 73.72 - -Mr. Dilip Kumar Agarwal - - 45.00 20.75 - -Mr. Debabrata Thakurta - - 14.62 8.69 - -Mr. Om Prakash Lohia - - - 8.83 - -Mr. Ravi Prakash Mundra - - - 4.32 -Mr. Vishal Agarwal - - 7.80 4.03 - -Mr. Pramod Mundhra - - - 4.93 - -Mr. Manoj Agarwal - - 41.89 36.85 - -Mr. Vivek Lahoti - - 27.04 12.88* - -Mr. Mohit Mahana - - 3.53 4.51 - -Mr. Divyang Jain - - 0.36 - - -Ms. Nupur Burman - - 3.63 3.81 - -Mr. Kamal Kishore Sewoda - - 0.46 - - -Mr. Swarup Chand Kayal - - 9.61 - - -

11. Balance Outstanding:a Advances Receivable

SCFL - 72.63 - - - -b Loans & Advances paid

SICL 35.00 35.00 - - - -c Loans & Advances received

Mr. Prem Kumar Bhajanka - - 2,256.66 3,300.00 - -d Share Capital

SCFL 3,373.50 3,373.50 - - - -e Guarantees Obtained

Mr. Sajjan Bhajanka - - 56,772.08 56,103.07 - -Mr. Rajendra Chamaria - - 36,206.92 37,692.13 - -Mr. Sanjay Agarwal - - 39,206.92 37,692.13 - -Mr. Prem Kumar Bhajanka - - 13,399.40 15,345.96 - -

* In 2014-15, for part of the year

37. In line with the Notifi cation dated 29th December, 2011 issued by the Ministry of Corporate Affairs, the subsidiaries Cement Manufacturing Company Limited, Star Cement Meghalaya Limited and Meghalaya Power Limited have availed the option given in paragraph 46A of the Accounting Standard 11 (AS-11) – ‘’The Effects of Changes in Foreign Exchange Rates”. Accordingly they have, with effect from 1st April, 2013, depreciated the foreign exchange (gain)/loss arising on revaluation on long term foreignCurrency monetary items in so far as they relate to the acquisition of depreciable capital assets over the balance useful life of such assets. The depreciated portion of net foreign exchange (gain)/loss on such long term foreign currency monetary items for the yearended 31st March, 2016 of the subsidiaries is ` 691.69 (PY ` 713.90) Lacs. The unamortized portion carried forward as at 31st March, 2016 is ` 4,948.40 (` 4,170.02) Lacs.



109

38. Additional Information pursuant to Schedule III of the Companies Act, 2013

Sl. No.

Name of the entity Net Assets i.e. total assets minus total liabilities

Share in profi t or loss

As % of consolidated net

assets

Amount As % of consolidated profi t or loss

Amount

Parent 2.76% 3,056.62 (0.67%) (93.32)

Subsidiaries

Indian:

1 Cement Manufacturing Company Limited 19.86% 22,035.77 10.94% 1,513.91

2 Megha Technical & Engineers Private Limited 19.44% 21,563.26 3.08% 425.863 Star Cement Meghalaya Limited 23.09% 25,617.66 49.12% 6,798.774 Meghalaya Power Limited 2.44% 2,704.13 3.99% 552.255 NE Hills Hydro Limited - - - -

Foreign :

Minority Interest in subsidiaries 32.42% 35,962.33 33.55% 4,643.59

TOTAL 100% 1,10,939.78 100% 13,841.06

39. DONATIONS TO POLITICAL PARTIES

(` in Lacs)Particulars 2015-16 2014-15Bharatiya Janta party - 1.65

40. The Company’s segment information as at and for the Year ended 31st March, 2016 are as below:

(` in Lacs)Sl. No.

Particulars 2015-16 2014-15Cement Power Total Cement Power Total

A Revenue(Gross)

External Sales 1,75,767.94 17.26 1,75,785.20 1,46,391.02 575.39 1,46,966.41

Inter-segment Sales 39,775.23 10,460.75 50,235.98 39,746.83 9,190.51 48,937.34

Elimination (39,775.23) (10,460.75) (50,235.98) (39,746.83) (9,190.51) (48,937.34)

Total Revenue (Gross) 1,75,767.94 17.26 1,75,785.20 1,46,391.02 575.39 1,46,966.41

B Result

Segment Results 19,988.34 2,404.21 22,392.55 19,083.82 1,685.59 20,769.41Unallocated Income / (-) Expenses (Net of unallocated Income)/ (-) Expenses (including exceptional items)

- - 336.34 - - 442.88

Operating Profi t - - 22,728.89 - - 21,212.29

Interest & Finance Cost (net) - - 8,336.77 - - 8,738.47

Provision for Taxation - - 3,231.89 - - 2,640.09

Deferred Tax Charge / Credit - - 257.93 - - (496.65)

MAT Credit Entitlement - - (2,973.55) - - (2,640.09)

Income Tax for earlier year - - 34.79 - - 16.52

Net Profi t (before minority interest) - - 13,841.06 - - 11,993.69

Other Information

a Total Assets


110


(` in Lacs)Sl. No.

Particulars 2015-16 2014-15Cement Power Total Cement Power Total

Segment Assets 2,12,850.49 30,050.22 2,42,900.71 1,83,215.21 28,998.98 2,12,214.19

Unallocated Corporate/ Other Assets - - 3,764.74 - - 6,832.57

Total - - 2,46,665.45 1,83,215.21 28,998.98 2,19,046.76

b Total Liabilities

Segment Liabilities 1,16,188.78 17,148.05 1,33,336.83 99,823.82 17,911.09 1,17,734.91

Unallocated Corporate / Other Liabilities

- - 2,388.85 - - 1,001.48

Total - - 1,35,725.68 99,823.82 17,911.09 1,18,736.39

C Capital Expenditure 5,834.75 1,103.22 6,937.97 3,713.28 1,158.95 4,872.23D Depreciation/ Amortisation 15,189.87 1,959.33 17,149.21 20,322.96 2,051.33 22,734.29

Notes:

(a) Business Segments: The business segments have been identifi ed on the basis of the products of the Company. Accordingly, the Company has

identifi ed following business segments:

Power - Generation of Power

Cement - Cement and Clinker

(b) Geographical Segments: The Company operates predominantly within the geographical limits of India and accordingly secondary segments have

not been considered.

41. Figures have been rounded off to the nearest ` in Lacs. Previous year’s fi gures including those given in brackets have been rearranged and regrouped where necessary to confi rm to the current year’s classifi cations.


For Kailash B. Goel & Co. For and on Behalf of the Board of DirectorsFirm Registration No. 322460EChartered Accountants




111

STAR FERRO AND CEMENT LIMITEDRegd. Offi ce: Vill: Lumshnong, P.O.: Khaliehriat, Dist.: East Jaintia Hills, Meghalaya – 793210Corporate Offi ce: Satyam Towers, Unit No. 9B, 1st Floor, 3 Alipore Road, Kolkata - 700027Tel: 03655 – 278215/16/18, Fax: 03655-278217, Email: [email protected]

Website: www.starferrocement.co.in CIN-L27310ML2011PLC008564

NOTICE TO THE SHAREHOLDERS

NOTICE is hereby given that the SIXTH ANNUAL GENERAL MEETING of the members of Star Ferro and Cement Limited will be held on Friday, 9th September, 2016 at 1.00 P.M. at “Star Club”, Vill: Lumshnong, P.O.: Khaliehriat, Dist.: East Jaintia Hills, Meghalaya - 793210 to transact the following business:

ORDINARY BUSINESS:1. To receive, consider and adopt the Audited Financial

Statements (including audited consolidated fi nancial statements) for the Financial Year ended 31st March, 2016 and the Reports of Directors and Auditors thereon.

2. To confi rm Interim Dividend of ` 1/- (Rupee one only) per equity Share of ` 1/- (Rupee one only) each fully paid up (i.e. @ 100%) declared and paid for the Financial Year 2015-16.

3. To appoint a Director in place of Mr. Sanjay Agarwal (DIN: 00246132), who retires by rotation and being eligible, offers himself for re-appointment.

4. To re-appoint Statutory Auditors and fi x their remuneration and in this regard, to consider and if thought fi t, to pass the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 139, 142 and other applicable provisions, if any, of the Companies Act, 2013 and Rules made thereunder (including any statutory modifi cation(s) or re-enactment thereof, for the time being in force), M/s. Kailash B. Goel & Co., Chartered Accountants (Firm Registration No. 322460E), be and are hereby re-appointed as the Statutory Auditors of the Company, to hold offi ce for a period of 5 years from the conclusion of this Annual General Meeting till the conclusion of 11th (Eleventh) Annual General Meeting subject to ratifi cation of their appointment at every Annual

General Meeting to be held subsequent to this Annual General Meeting at such remuneration as shall be fi xed by the Board of Directors of the Company.”

SPECIAL BUSINESS:5. Fee for service of documents

To consider and, if thought fi t, to pass, with or without modifi cation(s), the following resolution as an Ordinary Resolution:-

“RESOLVED THAT pursuant to the provisions of Section 20(2) of the Companies Act, 2013, a uniform fee of` 200/-(Rupees Two Hundred only) be charged towards cost of dispatch and handling for service of each document within India and ` 1,000/- (Rupees One Thousand only) for service of each document outside India by any specifi c mode of service requested by any shareholder, provided such service mode along with the requisite fee has been duly received by the Company at least one week in advance of the dispatch of the documents by the Company and no such request shall be entertained by the Company post the dispatch of the document by the Company to the member;

RESOLVED FURTHER THAT the Board of Directors or Key Managerial Personnel of the Company be and are hereby authorized to do all acts and take such steps as may be necessary, proper or expedient to give effect to this resolution and to put such reasonable conditions from time to time in its absolute discretion in this regard.”

By Order of the BoardFor Star Ferro and Cement Limited

Dated: 1st August, 2016 Debabrata ThakurtaPlace: Kolkata Company Secretary

NOTES:1. An Explanatory Statement pursuant to Section 102(1) of the

Companies Act, 2013 relating to the Special Business to be transacted at the Meeting is annexed hereto.

2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT ONE OR MORE

PROXY (IES) TO ATTEND AND VOTE ON POLL ON HIS/HER BEHALF AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY. Pursuant to the provisions of Section 105 of the Companies Act, 2013 read with Rules made thereunder, a person can act as a proxy on behalf of not more than fi fty members and holding in aggregate not more than ten percent of the total Share Capital of the Company. Members holding more than ten percent


112

of the total Share Capital of the Company may appoint a single person as proxy, who shall not act as a proxy for any other Member. The instrument of Proxy, in order to be effective, should be deposited at the Registered Offi ce of the Company, duly completed and signed, not later than 48 hours before the commencement of the meeting. A Proxy Form is annexed to this Report. Proxies submitted on behalf of limited companies, societies, etc., must be supported by an appropriate resolution / authority, as applicable.

3. Corporate Members intending to send their authorized representatives to attend the Meeting pursuant to Section 113 of the Companies Act, 2013 are requested to send a certifi ed copy of the relevant Board Resolution together with specimen signatures of those representative(s) authorized under the said resolution to attend and vote on their behalf at the Meeting.

4. The Board of Directors of the Company at their meeting held on 9th June, 2015, declared an interim dividend of `1/- (Rupee one only) per equity share of ` 1/- (Rupee one only) each fully paid up (i.e. @ 100%) for the Financial Year 2015-16. The Interim dividend has been paid/ warrants, demand drafts etc., dispatched to the shareholders of the Company before 6th July, 2015.

5. Members holding shares in the physical form are requested to notify change in address, email id, bank mandate and bank particulars, if any, under their signatures to M/s. Maheshwari Datamatics Pvt. Ltd., 6 Mangoe Lane (Surendra Mohan Ghosh Sarani), 2nd Floor, Kolkata – 700001, the Registrars and Share Transfer Agents (RTA) of the Company, quoting their Folio numbers. Members holding shares in electronic form may update such information with their respective Depository Participants.

6. Additional information in respect of the Director seeking appointment/re-appointment at the Annual General Meeting pursuant to Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Companies Act, 2013 and Secretarial Standard on General Meeting are furnished as an Annexure and forms a part of the Notice. The Director has furnished the requisite consents / declarations for his appointment / re-appointment.

7. The Register of Members and Share Transfer Books of the Company will remain closed from Tuesday, 6th September, 2016 to Friday, 9th September, 2016 (both days inclusive).

8. Pursuant to Section 101 and Section 136 of the Companies Act, 2013 read with relevant Rules made thereunder, Companies can serve Annual Reports and other communications through electronic mode to those Members who have registered their e-mail address either with the Company or with the Depository Participant(s). Members who have not registered their e-mail address with the Company can now register the same by writing to the Registrar of the Company, M/s. Maheshwari Datamatics Private Limited (RTA) at the following address:-

Maheshwari Datamatics Private Limited 6, Mangoe Lane, 2nd Floor, Kolkata - 700001

Members holding shares in demat form are requested to register their e-mail address with their Depository Participant(s) only. Members of the Company, who have registered their e-mail address, are entitled to receive such communication in physical form upon request.

9. Pursuant to Section 72 of the Companies Act, 2013, members holding shares in physical form are advised to fi le nomination in prescribed form SH-13 with the RTA. Nomination form can be downloaded from the Company’s website: www.starferrocement.co.in under the section ‘Investors’. In respect of shares held in Electronic/Demat form, members may please contact their respective Depository Participants.

10. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number to the Company/ RTA for registration of transfer of shares, for securities market transactions and off-market/ private transactions involving transfer of shares in physical form. In this connection, the Transferees of Company’s shares are requested to submit a copy of their PAN card along with the Transfer Deed. Members holding shares in electronic form are requested to submit their PAN to the Depository Participants with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN to the Company or M/s. Maheshwari Datamatics Private Limited.

11. Members seeking information regarding fi nancial accounts of the Company are requested to write to the Company at least 7 (seven) days before the date of meeting so as to enable the management to keep the information ready.

12. All documents meant for inspection and referred to in the Notice and accompanying Annual Report are open for inspection at the Corporate Offi ce of the Company during offi ce hours between 11:00 A.M to 1:00 P.M on all working days till the date of the Annual General Meeting (AGM).

13. The Notice of AGM, Annual Report and Attendance Slip are being sent in electronic mode to Members whose e-mail IDs are registered with the Company or the Depository Participant(s) unless the Members have registered their request for a hard copy of the same. Physical copy of the Notice of AGM, Annual Report and Attendance Slip are being sent to those Members who have not registered their e-mail IDs with the Company or Depository Participant(s). Members who have received the Notice of AGM, Annual Report and Attendance Slip in electronic mode are requested to print the Attendance Slip and submit a duly fi lled in Attendance Slip at the registration counter to attend the AGM. Members are requested to bring their admission slip along with the copy of the Annual Report at the Annual General Meeting.


113

14. Members may also note that the Notice of the 6th AGM and the Annual Report for 2015-16 will also be available on the Company’s website for their download.

15. The Register of Directors and Key Managerial Personnel and their shareholding, maintained under Section 170 and Register of Contracts or Arrangements in which the Directors are interested, maintained under Section 189 of the Companies Act, 2013, will be available for inspection by the members at the Annual General Meeting.

16. Pursuant to Section 108 of the Companies Act, 2013, read with Rule 20 of the Companies (Management and Administration) Rules, 2014, as amended and Regulation 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is pleased to provide the facility of remote e-voting to all the Members for which the Company has engaged the services of National Securities Depository Limited (NSDL). The Members holding shares either in physical form or in dematerialized form, desiring to vote through electronic mode may refer to the detailed procedure on e-voting given hereinafter.

17. The facility for voting through ballot paper shall be made available at the Annual General Meeting and the Members who have not cast their votes by remote e-voting as on Cut-off date i.e. 2nd September, 2016 shall be able to exercise their right at the Annual General Meeting through ballot paper. Members who cast their votes by remote e-voting prior to the meeting, may attend the meeting but will not be entitled to cast their vote again.

18. The Members, whose names appear in the Register of Members / list of Benefi cial Owners as on Friday, 2nd September, 2016, are entitled to vote on the Resolutions set forth in this Notice and a person who is not a Member as on cut-off date should treat this notice for information purpose only. The members may cast their votes on electronic voting system from place other than the venue of the meeting (remote e-voting). Members who have acquired shares after the dispatch of the Notice of Annual General Meeting and before the cut-off date may approach the Company for issuance of the User ID and Password for exercising their right to vote by electronic means.

19. The e-voting period will commence at 9.00 a.m. on Tuesday, 6th September, 2016 and will end at 5.00 p.m. on Thursday, 8th September, 2016. The Company has appointed Md. Shahnawaz, Practising Company Secretary, to act as the Scrutinizer, for conducting the scrutiny of the votes cast. The Members desiring to vote through electronic mode may refer to the detailed procedure on e-voting.

20. The Route map of the venue of Annual General Meeting i.e. “Star Club”, Vill: Lumshnong, P.O.: Khaliehriat, Dist.: East Jaintia Hills, Meghalaya - 793210 is annexed at the end of this Notice.

21. PROCEDURE FOR REMOTE E-VOTING

The Company has entered into an arrangement with National Securities Depository Limited (NSDL) for facilitating e-voting for AGM. The instructions for remote e-voting are as under:

A. In case of Members who receive the Notice in electronic mode:

1. Open the PDF fi le ‘SFCL e-Voting.pdf’ attached to the e-mail, using your Client ID / Folio No. as password. The PDF fi le contains your User ID and Password for e-voting. Please note that the Password provided in PDF is an ‘Initial Password’.

2. Launch an internet browser and open https://www.evoting.nsdl.com

3. Click on Shareholder - Login.

4. Insert ‘User ID’ and ‘Initial Password’ as noted in step (1) above and click ‘Login’.

5. Password change menu will appear. Change the Password with a new Password of your choice. Please keep a note of the new Password. It is strongly recommended not to share your Password with any person and take utmost care to keep it confi dential.

6. Home page of e-voting will open. Click on e-Voting - Active Voting Cycles.

7. Select the ‘EVEN’ (E-Voting Event Number) of Star Ferro and Cement Limited.

8. Now you are ready for e-voting as ‘Cast Vote’ page opens.

9. Cast your vote by selecting appropriate option and click on ‘Submit’. Click on ‘Confi rm’ when prompted.

10. Upon confi rmation, the message ‘Vote cast successfully’ will be displayed.

11. Once you have voted on the resolution, you will not be allowed to modify your vote.

12. Institutional shareholders (i.e. other than individuals, HUF, NRI, etc.) are required to send scanned copy (PDF/JPG Format) of the relevant Board Resolution/ Authority Letter, along with attested specimen signature of the duly authorised signatory (ies) who are authorised to vote, to the Scrutinizer by an e-mail at [email protected] with a copy marked to [email protected].


114

B. In case of Members who receive Notice by post:

1. Initial Password is provided, as follows, at the bottom of the Attendance Slip.

EVEN(E-voting

Event Number)

USER ID PASSWORD

- - -

2. Please follow all steps from Sl. No. 2 to Sl. No. 12 above, to cast vote.

C. In case of any queries, you may refer to the ‘Frequently Asked Questions’ (FAQs) and ‘e-voting user manual’ available in the downloads section of NSDL’s e-voting website: www.evoting.nsdl.com

D. If you are already registered with NSDL for e-voting then you can use your existing User ID and Password for casting vote.

E. The voting rights shall be as per the number of equity share held by the Member(s) as on 2nd September,

2016. Members are eligible to cast vote electronically only if they are holding shares as on that date.

F. The Companies (Management and Administration) Rules, 2014, as amended provides that the electronic voting period shall remain open for atleast three days and shall close at 5.00 p.m. on the date preceding the date of the AGM. Accordingly, the voting period shall commence at 9.00 a.m. on Tuesday, 6th September, 2016 and will end at 5.00 p.m. on Thursday, 8th September, 2016.

G. The results shall be declared within 48 hours from the conclusion of the AGM. The results along with the Scrutinizer’s Report shall also be placed on the website of the Company and such results will also be forwarded to the Stock Exchanges where the Company’s shares are listed.



Item No. 5As per the provisions of Section 20 of the Companies Act, 2013, a document may be served on any member by sending it to him by post or by registered post or by speed post or by courier or by delivery at his offi ce or residential address or by such electronic or other mode as may be prescribed. Further, proviso to sub-section (2) of Section 20 states that a member may request for delivery of any document through a particular mode, for which he shall pay such fees in advance as may be determined by the Company in its Annual General Meeting. The requisite fee (by way of Demand Draft) has to be sent to the Company by the shareholder clearly stating the document desired to be received through a particular mode.

Further, considering the large number of shareholders of the Company, it would not be practically feasible to accept ‘lump-sum’ advances from shareholders and continue maintaining their running ledger balances for this purpose.

Therefore to enable the members to avail of this facility, it is necessary for the Company to determine the fees to be charged for delivery of a document in a particular mode as mentioned in the resolution.

The Board recommends the Ordinary Resolution as set out in the Notice for approval of the Members.

None of the Directors, Key Managerial Personnel of the Company and their relatives are, in any way, concerned or interested, fi nancially or otherwise, in the resolution set out at Item No.5 of the Notice.



EXPLANATORY STATEMENT(PURSUANT TO SECTION 102(1) OF THE COMPANIES ACT, 2013)


115

ANNEXURE TO ITEM NO. 3 OF THE NOTICE

Information provided in respect of an individual proposed to be re-appointed as Director at the forth coming Annual General Meeting

[Pursuant to Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Companies Act, 2013and Secretarial Standard on General Meeting]

Name of the Director Sanjay Agarwal

DIN 00246132

Age 55 years

Nationality Indian

Date of First Appointment on the Board of the Company 10th March, 2011

Qualifi cation Commerce Graduate

Experience (years) 29

Expertise in special functional Area Marketing & Sales Promotion

Terms & condition of re-appointment Non-executive Director & liable to retire by rotation

Shareholding in the Company [Equity share of face value ` 1/- each]

1,94,82,445

Relationship between the Directors inter se and other Key Managerial Person

Nil

Number of Board Meetings attended during the year 3

List of Directorship held in other Companies (excluding Foreign Company)

1. Century Plyboards (India) Ltd.2. Auroville Investments Pvt. Ltd. 3. Bengal Rowing Club 4. Star Cement Ltd. 5. Century Coats Ltd. 6. Century Infotech Ltd. 7. Indian Chamber of Commerce Calcutta. 8. Pacifi c Plywoods Pvt. Ltd.9. Ranisati Vihar Pvt. Ltd. 10. Sumangal International Pvt. Ltd. 11. Sumangal Business Pvt. Ltd. 12. Star Cement Meghalaya Ltd

Membership/ Chairmanships of Committees of Boards of other Companies. (only Audit Committee and Stakeholders Relationship Committee has been considered)

Nil


116

STAR FERRO AND CEMENT LIMITEDCIN: L27310ML2011PLC008564

Regd. Offi ce: Vill.: Lumshnong, P.O.: Khaliehriat, Dist.: East Jaintia Hills, Meghalaya – 793210Website: www.starferrocement.co.in, email: [email protected], Ph:(03655)-278215/16/18

PROXY FORM NO. MGT -11[Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration)

Rules, 2014]

Affi xRevenue Stamp of

` 1/-

Name of the Member(s):

Registered Address:

Email Id:

Folio No./DP ID and Client ID:

I/We, being the member(s) of the Company and holding ___________________ shares of the Company, hereby appoint:-

1. Name: ______________________________________, Address: ___________________________________________________

Email: ______________________________________, Signature:________________________________, or failing him/her

2. Name: ______________________________________, Address: ___________________________________________________

Email: ______________________________________, Signature:________________________________, or failing him/her

3. Name: ______________________________________, Address: ___________________________________________________

Email: ______________________________________, Signature:________________________________

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the Sixth Annual General Meeting of the Company, to be held on Friday, 9th day of September, 2016 at 1:00 P.M. at ”Star Club”, Vill: Lumshnong, P.O.: Khaliehriat, Dist.: East Jaintia Hills, Meghalaya - 793210 and at any adjournment thereof in respect of such resolutions as are indicated below:

Sl. No. RESOLUTIONS Optional*

Ordinary Business For Against

1 Adoption of Audited Financial Statements for the year ended March 31, 2016 (including audited consolidated fi nancial statements) and the Reports of Directors and Auditors thereon.

2 Confi rmation of Interim Dividend of ` 1/- per share (i.e., @ 100%) declared and paid for the Financial Year 2015-16.

3 Re-appointment of Mr. Sanjay Agarwal (DIN: 00246132) as a Director of the Company, liable to retire by rotation.

4 Re-appointment of M/s. Kailash B. Goel & Co. Chartered Accountants as Statutory Auditors of the Company and fi xing their remuneration.

Special Business

5 Fee for service of documents.

Signed this ____ day of _______________, 2016

Signature of the shareholder __________________________________

Signature of the proxy holder __________________________________

Notes:

1. This form of proxy in order to be effective should be duly completed and deposited at the Registered Offi ce of the Company, not less than 48 hours before the commencement of the Meeting.

2. For the Resolutions, Explanatory Statements and Notes, please refer to the Notice of 6th Annual General Meeting.

3. * It is optional to put ‘X’ in the appropriate column against the Resolutions indicated in the Box. If you leave the ‘For’ or ‘Against’column blank against any or all resolution, your proxy will be entitled to vote in the manner as he / she thinks appropriate.

4. Please complete all details including details of member(s) in the above box before submission.

STAR FERRO AND CEMENT LIMITEDCIN: L27310ML2011PLC008564

Regd. Offi ce: Vill.: Lumshnong, P.O.: Khaliehriat, Dist.: East Jaintia Hills, Meghalaya – 793210Website: www.starferrocement.co.in, email: [email protected], Ph:(03655)-278215/16/18

ATTENDANCE SLIP FOR ANNUAL GENERAL MEETINGANNUAL GENERAL MEETING - 9th September, 2016 at 1:00 P.M.

Folio No./ DP ID and Client ID:

Name:

Address:

No. of Shares held:

I/We certify that I/We am/are a registered shareholder/Proxy for the registered shareholder of the Company.

I/We hereby record my/our attendance at the Sixth Annual General Meeting of the Company at ”Star Club”, Vill: Lumshnong, P.O.: Khaliehriat, Dist.: East Jaintia Hills, Meghalaya – 793210 on Friday, 9th September, 2016.

_________________________________ _______________________

Member’s/Proxy’s name in block letters Member’s/Proxy’s signature

Notes:

1. Registration will start at 11:00 A.M. and close at 12:45 P.M. on the day of Annual General Meeting.

2. The members are required to produce their duly signed Attendance Slips and get their entry passes from the registration counter.

3. The members should produce their entry passes at the entrance of the AGM Hall for attending the AGM.

4. The Members are informed that in case of joint holders attending the meeting, only such joint holder whose name appears in the chronological order in the Demat account /Folio will be entitled to vote.

5. This Attendance Slip is valid only in case shares are held on the date of the Annual General Meeting.

6. The Members who have received Annual Report and Attendance Slip in electronic mode are requested to print the Attendance Slip and submit duly fi lled in Attendance Slip at the registration counter to attend the Annual General Meeting.

STAR FERRO AND CEMENT LIMITEDRegistered Offi ce:Vill: Lumshnong, P.O.: Khaliehriat,Dist: East Jaintia Hills, Meghalaya - 793 210www.starferrocement.co.inCIN: L27310ML2011PLC008564

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