Ferro Alloy Marketing Strategy by dyv66640

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									Not what we are.
But what we can be.
Rohit Ferro-Tech Ltd.   Annual report 2007-08
It would be simplistic to see Rohit
Ferro-Tech Ltd. as just another
commodity provider to downstream
stainless steel users.
But Rohit Ferro is far more than this
It is one of India’s largest and
fastest growing ferro alloys
It is also one of the largest High-
Carbon Ferro Chrome manufacturers
in the country.

Document milestones

About Rohit Ferro   2               6 Managing Director’s Overview 8 Q&A with CFO 20
                        Highlights 2007-08

Management Discussion and Analysis 23 Risk Management 36 Directors’ Report 40

Corporate Governance Report 45 Auditors’ Report 55 Balance Sheet 58

Profit and Loss Account 59 Cash Flow Statement 60 Schedules to Accounts 62

Corporate Information 79
The Company is rewriting even this
script with urgency.
It is integrating backwards into the
generation of power.
It is integrating backwards into the
mining of thermal and coking coal
Clearly, our report to shareholders
is simple.
We wish to be judged not on the
basis of what we are. But what we
can be.
                                          Who we are

                   About                    Part of the Rs. 1,500-cr Impex Group with interests in
                                          manufacturing, trading, import and export of a range of
                                          ferro alloys, steels, metals and minerals

                   Rohit                    Promoted and managed by Mr. Suresh Kumar Patni
                                          (Chairman), Mr. Rohit Patni (Managing Director) and

                   Ferro…                 Mr. Ankit Patni (Jt. Managing Director)

                                          What we do
                                            Leading player in the Indian ferro alloys sector with a
                                          leadership in the High-Carbon Ferro Chrome

                                            Commenced operations with 24,000 TPA capacities in
                                          October 2003, and has grown to 180,000 TPA within
                                          only five years

                                          What we make
                                            High Carbon Ferro Chrome, providing an
                                          anti-corrosive feature to steel products

                                            Ferro Manganese, used as a deoxidising agent in steel

                                            Silico Manganese used in the manufacture of a variety
                                          of carbon and stainless steels

                                              Commercial operations
                        Incorporated in            started

                         April                     October
                         2000                       2003

Rohit Ferro-Tech Ltd.
Where we are located                     Who we serve                             What we stand for
 Headquartered in Kolkata, India          Export presence across Europe, the       ISO 9001:2000 accreditation
                                         Middle East, China and other Asian
 Manufacturing facilities in Bishnupur                                             A Two-Star Export House, reflecting
(West Bengal) and Jajpur (Orissa)                                                 our growing global footprint
                                          Exports account for more than 70% of
 Listed on the Bombay Stock
Exchange (BSE) and the National Stock
Exchange (NSE)                            Key Indian clients include all the
                                         major stainless steel producers and
                                         government steel plants in the country

                                                     Initial capacity                        Current capacity

                                                     24,000                               180,000
                                                      TPA                                   TPA

                                                                                             Annual Report 2007-08 2|3
            2007-08 was a record year for
            us. We enhanced our realisation,
            revenues, margins and profits
                         Net sales                             EBIDTA                              Cash profit
                         (Rs. cr)                              (Rs. cr)                             (Rs. cr)











              Our                                       EBIDTA margin                        Net profit margin

          profitability                                19.63%                                12.38%
            analysis                                     against 15.30%                       against 9.58%
                                                           in 2006-07                          in 2006-07

Rohit Ferro-Tech Ltd.
And yet it was in many ways
only an indication of what our
shareholders can expect
Profit after tax                       Earnings per share                         Book value
   (Rs. cr)                                  (Rs.)                                  (Rs.)












    Interest cover                               RONW                                  ROCE

          5.08                          50.36%                               36.47%
         against 4.38                   against 18.16%                       against 13.76%
          in 2006-07                      in 2006-07                           in 2006-07

                                                                                        Annual Report 2007-08 4|5
How we reported
attractive growth
in 2007-08

Rohit Ferro-Tech Ltd.
Operations                                Introduced manganese alloys (Ferro      Post balance sheet
 Operational capacity increased from    Manganese and Silico Manganese) to        developments
1,00,000 TPA as on 31st March 2007      diversify our product portfolio             Acquired a 60% economic interest in
to 1,65,000 TPA as on 31st March                                                  two coal mining companies owning
                                        Project management                        thermal and coking coal assets in
                                          Commissioned two furnaces at the
                                                                                  Indonesia through a newly formed
 Production increased by 90.54% from    Jajpur unit, enhancing our capacity to
                                                                                  wholly-owned subsidiary in Singapore
51,157 TPA in 2006-07 to 97,477 TPA     110,000 TPA at that plant
                                                                                  named SKP Overseas Pte. Ltd.
in 2007-08
                                          Converted two furnaces producing
                                                                                    Acquired 40 acres of land in Haldia to
Marketing                               Ferro Chrome at Bishnupur to
                                                                                  expand ferro alloys capacities in Ferro
 Enhanced exports by 274.55% from       manganese alloys (Ferro Manganese
                                                                                  Silicon and manganese based alloys
Rs. 110.40 cr in 2006-07 to             and Silico Manganese)
Rs. 413.50 cr in 2007-08
                                        Fiscal management
 Increased average realisations per       Debt-equity ratio stood at 1.06 as on
tonne of our product mix from           31st March 2008
Rs. 37,601 in 2006-07 to Rs. 58,396
                                          Repaid Rs. 15 cr of existing term
in 2007-08
                                        loan during the year

                                   97,477                                   51,157
                                   tonnes                                   tonnes
                                What we produced in                       What we produced in
                                     2007-08                                   2006-07

                                   66,842                                   29,418
                                   tonnes                                   tonnes
                                What we exported in                       What we exported in
                                     2007-08                                   2006-07

                                                                                             Annual Report 2007-08 6|7
    The Managing Director’s overview

    “Our aggressive
    initiatives are
    expected to
    transform Rohit
    Ferro from a
    Rs. 623 cr
    company into a
    Rs. 2,000 cr
    organisation by

    Mr. Rohit Patni, Managing Director, reviews
    the Company’s performance for 2007-08
    and outlines the growth agenda

Rohit Ferro-Tech Ltd.
I am truly proud to be communicating      New business vertical                       abundant availability of manganese ore
to you at this juncture of our                                                        both domestically as well as globally. It
                                         At Rohit Ferro, we recognise that a
existence for economic, strategic and                                                 also consumes less power compared
                                         single-product focus can never make a
execution reasons.                                                                    with Ferro Chrome, fetches higher
                                         business model truly sustainable, as it
                                                                                      margins, enjoys productivity of around
We reported outstanding numbers in       would be exposed to the two-way
                                                                                      35 basis points higher than Ferro
2007-08: our revenue (net sales) grew    swing in product realisations. In view
                                                                                      Chrome and this diversification needed
208.07%, PAT grew 293.49%; the           of this, we extended our product
                                                                                      no additional capital expenditure.
EBIDTA margin strengthened               portfolio from chrome alloys to
433 basis points to 19.63% and return    manganese alloys viz. Ferro
on average capital employed increased    Manganese and Silico Manganese,
                                                                                       The second phase
2,271 basis points to 36.47%.            through a timely leverage of our swing       At Rohit Ferro, we completed the first
We executed projects with utmost         capacities with attractive implications      leg of our growth in early 2008-09 and
urgency: we enhanced our operational     from February 2008.                          embarked on the second phase with
capacity to 165,000 TPA during the                                                    three distinctive objectives: to extend
                                         Business opportunity: The extension
course of 2007-08 and embarked on                                                     operations beyond India, strengthen
                                         to manganese alloys widened our
the subsequent expansion of a fifth                                                   backward linkages and emerge as an
                                         downstream focus from stainless steel
furnace at Bishnupur by 15,000 TPA,                                                   integrated steel manufacturer.
                                         to the broad steel categories, where
which is now ready for operation.        this alloy is used as a deoxidiser. This     Backward integration: We are
We embarked on synergic strategic        extension will enable us to capitalise on    investing in a 110-MW power plant in
initiatives as well: these will extend   the significant capacity build-up of steel   Orissa to secure power for our Jajpur
                                         production in India - more than double       plant, making us completely self-
our linkages forwards and backwards
                                         in the Eleventh Plan over the Tenth.         sufficient for our captive power
over the next few years, progressively
                                                                                      requirements. We acquired a 60%
de-risking our business model.           More profitable: The Company’s
                                                                                      economic interest in two coal mining
                                         extension to Ferro Manganese rides the       companies enjoying mining assets of

                                                                                                 Annual Report 2007-08 8|9
coking and thermal coal in Indonesia,     Forward integration: Over the coming       Stainless steel: While stainless steel
with proven reserves estimated at         years, our vision is to foray into the     makers previously used 18% Ferro
5 million tonnes and 20 million tonnes,   high-value downstream products,            Chrome and 8% nickel, they
respectively. This secured us for our     including stainless steel sector,          substituted nickel with Ferro Chrome
growing raw material needs for our        completing our integration from raw        in 2007-08, a trend that is expected to
expanded ferro alloys and upcoming        material and energy to steel, among        sustain. Besides, the demand is
power generation capacities.              the few in India’s ferro alloy sector to   expected to grow on account of a
                                          enjoy this distinction.                    robust expansion in the infrastructure
Scaling capacities: We will
                                                                                     and transportation sectors.
commission a third unit of 100,000
TPA in Haldia for the manufacture of       The external scenario
                                                                                      Message for the
manganese alloys and Ferro Silicon.       At Rohit Ferro, we are optimistic for       shareholders
This will expand our total ferro alloys   the following reasons:
capacity to 330,000 TPA by 2010-11.                                                  At Rohit Ferro, this is only the
While ferro alloys for the domestic       Crude steel: Global steel demand is        beginning of an exciting journey. We
market will be manufactured at the        expected to surge at 4.9% CAGR to          are confident that every rupee
Bishnupur unit, the Jajpur unit and the   1,962 MnT [Source: International Iron      invested in our business will generate
proposed port-based Haldia unit will      and Steel Institute], while Indian steel   superior returns, transforming what
cater to our global customers. This       capacity is expected to grow to 300        was a Rs. 623 cr revenue Company in
capacity expansion will enable us to      MnT by 2020, based on an aggressive        2007-08 into a Rs. 2,000 cr revenue
widen our product portfolio across        downstream growth. Meanwhile,              organisation by 2010-11.
value-added, low-silicon,                 Chinese steel capacities are expected
low-phosphorus and extra high-carbon      to grow at 9.8% CAGR over the same
                                          period.                                    Rohit Patni
ferro alloys for the manufacture of
                                                                                     Managing Director
special steels and auto components.

Rohit Ferro-Tech Ltd.


                    FORWARD INTEGRATION

         Different                       Niche product basket
         high growth products                in existing range


      Brownfield initiatives                Greenfield initiatives

                       CAPACITY GROWTH

Coal mines                     Ore mines                         Power

                         INPUT SECURITY

                                                             Annual Report 2007-08 10|11
At Rohit Ferro, we believe that scale will
help us meet the growing needs of our
customers on the one hand, and enable us
to cover our fixed costs more effectively
on the other.

Rohit Ferro-Tech Ltd.
                                        IN VIEW OF THIS, WE SIGNIFICANTLY GREW OUR
                                        CAPACITY OVER FIVE YEARS, A COUNTER-
                                        CYCLICAL INITIATIVE IN A COMMODITY

                                          We went into business with a 24,000 TPA capacity in
                                        Bishnupur, West Bengal

                                          We invested in 110,000 TPA greenfield facility in
                                        Jajpur, Orissa

                                          We expanded our Bishnupur capacity to 70,000 TPA
                                        through the phased addition of three furnaces

                                          We are in the process of expanding our Jajpur
                                        capacity by 50,000 TPA to 160,000 TPA by 2010-11

                                          We have drawn out a blueprint and embarked on the
                                        greenfield project for 100,000-TPA facility in Haldia,

             104.87%                    the second unit in West Bengal, to be commissioned
                                        by 2010-11

              CAGR                        Therefore, from a meagre capacity of 24,000 TPA in
                                        October 2003, we are on our way to build a capacity of
         Revenue growth over            330,000 TPA of ferro alloys by 2010-11
           the last five years
                                        The ongoing expansion will enable us to emerge as the
          leading to 2007-08.
                                        largest ferro alloys manufacturer in eastern India and
                                        among the top five in India over the foreseeable future.

Our operational capacity growth

24,000       24,000 40,000 1,10,000 1,65,000 3,30,000
    TPA           TPA          TPA          TPA                TPA               TPA
in 2003-04    in 2004-05   in 2005-06   in 2006-07         in 2007-08         by 2010-11

                                                                 Annual Report 2007-08 12|13
At Rohit Ferro, we believe that raw material security
is imperative to insulate us from unexpected raw
material cost spikes and inadequate supply on the one
hand, while forward integration is essential to enhance
product and organisational value on the other.

Rohit Ferro-Tech Ltd.
                          IN VIEW OF THIS, WE ARE INTEGRATING
                          BACKWARDS AND FORWARDS

                            We share an assured supply arrangement for the
                          supply of Chromite ore in Orissa

                            We recently secured coking coal supplies for our
                          expanding ferro alloys capacity and thermal coal for
                          our proposed 110-MW power plant through the
                          acquisition of a 60% economic interest in two coal
                          mining companies in Indonesia

                            We applied for Chromite and Manganese
                          mining rights

                            We are in the process of setting up a 110-MW
                          power plant to completely secure our growing power
                          needs at our Jajpur facility and also reduce costs

                            We intend to invest in value-added downstream
                          products, including stainless steel, which will

Rs. 1,000 cr              transform our Company into an integrated player
                          with a presence across the complete value chain
 Investment in business   comprising the ownership of adequate raw material

integration by 2010-11.   and energy leading to profitable steel production

                          These ongoing initiatives will protect our margins,
                          maximising our upside in good markets and protecting
                          our downside in challenging industry periods.

                                                Annual Report 2007-08 14|15
At Rohit Ferro, we are convinced that a synergic
extension of our product portfolio will enable us
to service the growing needs of a wider
community of customers on the one hand and
reduce the risks that could possibly arise from a
selective downturn in any one or few products.

Rohit Ferro-Tech Ltd.
                                      WE ARE EXTENDING OUR PRESENCE FROM
                                      ONE TO FOUR HIGH-GROWTH BUSINESS
                                      VERTICALS THROUGH THE FOLLOWING

                                        We widened our portfolio from Ferro Chrome to
                                      Ferro Manganese and Silico Manganese, and are
                                      now investing to expand capacities in these
                                      products along with Ferro Silicon

                                        We will increase the proportion of value-added
                                      products customised for downstream use in various
                                      grades of special steels; this customisation capability
                                      will help us carve out a growing global presence

                  32                    We are investing in a captive power plant in
                                      Orissa, a part of which can be used for power
           New overseas clients       trading, which will reduce costs on the one hand
                                      and enhance revenues on the other
            added in 2007-08
                                      These initiatives will enable us to grow our
                                      revenues from Rs. 623 cr in 2007-08 to a projected
                                      Rs. 2,000 cr by 2010-11.

               Rohit Ferro is a dependable supplier of high grade ferro
strength       alloy products of consistent properties to leading Indian
               and global steel manufacturers.

                                                            Annual Report 2007-08 16|17
At Rohit Ferro, we recognise that we
must reduce our production cost with the
objective to enhance our competitiveness
across geographies and industry cycles.

Rohit Ferro-Tech Ltd.
                                    WE HAVE DONE SO THROUGH PRUDENT
                                    ASSET INVESTMENT AT DECLINING CAPITAL
                                    COSTS THROUGH THE FOLLOWING

                                      We invested in four 16.5-MVA furnaces at our
                                    Jajpur facility with an average capital cost of
                                    Rs. 1.2 cr per tonne of capacity

                                      We designed and commissioned in-house, three 9
                                    MVA furnaces for expansion at the Bishnupur unit at
                                    an average capital cost per tonne of only Rs. 1 cr,
                                    significantly below the prevailing industry benchmark

             36.47%                   We now propose to fabricate in-house six 9 MVA
                                    furnaces at the Haldia unit where the capital
         Return on average          outlay is expected to be well below the cost of
          employed capital          acquired furnaces

             (2007-08)              As a result, the Company’s gross block per tonne
                                    of installed capacity is – and will remain - way
                                    below the prevailing industry benchmark.

              The foreign and domestic institutional shareholding in
              our Company has increased from less than 1% as on
confidence    1st April 2007 to 9.80% as of 30th June 2008,
   index      reflecting a growing investor confidence in our business
              model and management capability

                                                          Annual Report 2007-08 18|19
“We are leveraging the ongoing
industry rebound to create a
de-risked business model
leading to sustainable growth.”
Mr. Pramod Jain, Chief Financial Officer reflects on the year gone
by and outlines the road map for 2008-09 and beyond

Rohit Ferro-Tech Ltd.
Q. How would you assess the
                                            Correspondingly, as this transpired,       India. The Paradeep port is also within
                                            India would need growing capacities of     100 km facilitating exports (about 70%
performance of the Company in               ferro alloys. However, with sluggish       of our production) as well as import of
2007-08?                                    realisations, little cash flow was going   coke and manganese ore, significantly
>   The year 2007-08 was a landmark         into fresh ferro alloys capacities. This   saving logistic costs. Besides, we were
in the Company’s performance,               is precisely what our management           assured of uninterrupted and
vindicating our foresight in investing      foresaw: sooner or later, ferro alloys     competitive power supply, a critical
proactively in the country’s ferro alloys   demand would far outstrip supply,          input in the manufacture of ferro alloys.
                                            starting an unprecedented correction.
                                                                                       Q. How will the ferro alloys
sector. We reported a 208.07%
revenue growth, 290.78% EBIDTA              Rohit Ferro not only went into business
growth and a 293.49% growth in PAT.         but embarked on aggressive capacity        sector play out over the coming
This increase was corresponded by a         expansions, even when industry profits     years?
sharp increase in net margin from           were modest. As a result, the
                                                                                       >   Permit me to answer this question
9.58% in 2006-07 to 12.38% in               Company finds itself in the right place
                                                                                       from a demand perspective. We
2007-08; besides, EBIDTA margins            at the right time to capitalise on the
                                                                                       expect to see sustained buoyancy in
strengthened from 15.43% in the first       unprecedented industry uptrend.
                                                                                       demand on account of a rising demand
quarter of the year under review to
23.25% in the fourth quarter. On the
overall, every rupee invested in the
                                            Q. How has the Company                     from steel manufacturers. For
                                                                                       instance, India’s current steel-making
                                            been de-risking itself during this         capacity of about 55 million TPA is
business returned 36.47% compared           period of rapid growth?                    expected to add an estimated
with 13.76% in 2006-07.
                                            >   One of our principal de-risking        70 million TPA during the Eleventh

Q. What was the reason                      initiatives was setting up plants across
                                            different manufacturing locations to
                                                                                       Plan. This will significantly fuel the
                                                                                       demand for ferro alloys in the coming
behind this significant
                                            leverage the different advantages          years.
                                            being offered by them.
                                                                                       Besides, we see a robust steel demand
>   There was an attractive
                                            Take our Bishnupur unit. It is in a        globally on account of the high
double-play in realisations and volumes
                                            declared industrially backward district,   infrastructure spending in emerging
that translated into record earnings for
                                            which provides us with the benefit of      economies like Brazil, Russia and the
our Company. One, there was a sharp
increase in the realisations of Ferro       an income tax holiday for 10 years         Middle East, inevitably translating into a
Chrome from Rs. 46,000 per tonne on         (100% for first five years and 30% for     higher appetite for ferro alloys. Besides,
average in the first quarter of 2007-08     the next five years), along with a huge    the growing international aerospace and
to Rs. 73,000 per tonne on average in       subsidy in power tariff by the             industrial gas turbine businesses are
the last quarter of the year; Two, we       Government of West Bengal and an           likely to remain robust and expected to
capitalised most effectively on this        additional subsidy for industrially        fuel medium-term demand.
industry uptrend through enhanced           backward areas. The availability of
                                                                                       So it would be important to
production: from 51,157 tonnes in           cheap and quality high-tension power
                                                                                       communicate to our shareholders that
2006-07 to 97,477 tonnes in 2007-08.        was also an important reason for
                                                                                       this unprecedented price rise is the
                                            selecting the Bishnupur location.

Q. You mentioned that this
                                                                                       external manifestation of a real
                                            We commissioned our Jajpur unit due        underlying increase in demand, which
performance vindicated the                  to the significant advantage of raw        is likely to remain unabated over the
Company’s foresight. How?                   material proximity, as we need about       coming years.
>   The Company went into production        2.5 to 3 times of raw material to
in 2003 with a simple premise: the          produce every tonne of finished
ongoing development of the country          product. The plant is around 40 kms
required an increasing amount of steel.     from the largest chrome ore reserve in

                                                                                                Annual Report 2007-08 20|21
Q. Please come to Ferro
                                            When you put the cumulative demand of       How will these projects be
                                            just these two countries together, you      funded?
Chrome, which accounted for                 have a case for why Ferro Chrome is
about 95% of the Company’s                  expected to be buoyant across the world.    >   We estimate a Rs. 1,000 cr
revenues in 2007-08.
                                            Q. What about the usual
                                                                                        requirement for our projects over the next
>   Ferro Chrome is principally used in                                                 two-three years for investing in power and
the manufacture of stainless steel so it    fears: high profits, capacity               expansion of ferro alloys capacity in
would be relevant to understand the         expansion, declining realisations,          Orissa, setting up a new ferro alloys unit
optimism behind this product from this      industry losses?                            in Haldia and in the operation of thermal
perspective:                                >   The supply constraints will indeed      and coking coal mines in Indonesia. We
                                            taper but with a significant gestation.     expect to meet this requirement through a
Domestic demand: The demand for
                                            There is a good reason for this: due to     prudent mix of debt, internal accruals and
stainless steel is indicated by the
                                            the industry overcapacity, a large          equity. We expect that our robust
growing investments in India. Nearly 30
                                            number of ferro alloys manufacturers        earnings will strengthen our debt-equity
airports are being refurbished and a
                                            went out of business in the past            ratio and reduce the cost of our
large number of new airports are being
                                            decades. However, when the steel            borrowings. We believe that the
created, various new malls along with
                                            industry revived some of the existing       combination of our value chain, robust
other commercial space are expected
                                            manufacturers catered to the demand         cash flow, business de-risking and funding
to be launched over the next few years.
                                            increase through their unutilised           will enhance stakeholder value over the
In our opinion, this will drive stainless
                                            capacities. We are at a point in the        foreseeable future.
steel demand by around 12-15% per

                                                                                        Q. What prospects can
annum for the next few years. As a          industry cycle today where the sectoral
result, we expect stainless steel           capacity has been largely utilised and
capacities to increase significantly by     significant fresh capacities will take      shareholders look forward to
the end of the Eleventh Plan, which will    some time to hit the market. Besides,       during 2008-09?
drive the demand for Ferro Chrome.          these incremental ferro alloys              >   We expect to increase our
                                            capacities are likely to be                 production from about 97,477 tonnes
Global demand: There are significant        commissioned at a time (2010) when          in 2007-08 to around 150,000 tonnes
stainless steel capacities coming up in     there will be a significant increase in     in 2008-09. Within this, we expect to
China post the Olympics creating            downstream steel capacity. We feel          enhance the production of manganese
significant demand for ferro alloys.        what the industry should really be          alloys from about 5% of our product
Hence, China has imposed an export          investing in today is capacities that not   mix in 2007-08 to 30% in 2008-09,
duty on ferro alloys early this year to     only account for the present under-         which will strengthen realisations. We
meet its domestic requirement,              capacity, but for the projected supply      expect to capitalise on the merchant
creating a vacuum in the global ferro       shortfall a few years from now. It is       sale of thermal coal from the
alloys market. Concurrently, South          here that the established players like      Indonesian mines controlled through
Africa, which owns about 40% of the         Rohit Ferro will stand to gain: not only    our wholly-owned subsidiary in
major ferro alloys manufacturers in the     do they enjoy an insight into the           Singapore from the second half of
world and covers about 45% of the           business but they also enjoy existing       2008-09. We have already performed
global Ferro Chrome market, has             capacities that were created at             well in the first quarter of 2008-09,
pruned its production capacity by 15%       relatively lower costs, which will be an    with successful negotiations in product
due to the relative non-availability of     edge over higher cost later day             sales at attractive realisations in the
power. This factor has enhanced the         capacities.                                 second quarter. In view of these
global Ferro Chrome demand-supply

                                            Q. The Company has
                                                                                        factors, we expect to report a
gap by 6-7% and this reality is
                                                                                        significantly better performance in
expected to sustain for the next four to
                                            embarked on significant                     2008-09.
five years.
                                            backward and forward linkages.

Rohit Ferro-Tech Ltd.
Management Discussion
and Analysis
Indian economy                                    Industrial production growth was               coal) grew 5.7% over the same period
                                                catalysed by the manufacturing sector
  The Indian economy recorded an                                                                  The Indian economy is expected to
                                                (9.4% growth in 2007-08)
attractive 9% growth in 2007-08                                                                  maintain 8.5 %-plus growth over the
                                                  The country’s six core infrastructure          Eleventh Plan.
  The country emerged as a trillion-
                                                sectors (finished steel, cement, crude
dollar economy in 2007, one of only
                                                petroleum, petroleum refinery, power and
12 such countries

                                            2003-04              2004-05              2005-06           2006-07 (Q)         2007-08 (A)
 GDP @ factor cost                             8.5%                  7.5%                 9.0%                    9.6%                9.0%
 Agriculture                                   10%                     0.0                6.0%                    3.8%                2.6%
 Manufacturing                                 6.6%                  8.7%                 9.1%                 12.0%                  9.4%
 Industry                                      7.4%                  9.8%                 9.6%                 11.0%                  8.9%
 Service                                       8.5%                  9.6%                 9.8%                    4.1%               10.7%

Ferro alloys                                   followed by India and Russia. The
                                                                                                     Ferro Chrome accounts for 32%
                                               sudden demand upsurge was not
                                                                                                     of the total ferro alloys supply in
Ferro alloys are different alloys of iron      matched by global capacities and this
                                                                                                     India. The rest is accounted by
with high proportions of metals                trend is expected to sustain for the
                                                                                                     Ferro Manganese and Silico
(chromium, manganese, and silicon,             following reasons:
                                                                                                     Manganese (61%). Noble ferro
among others). Ferro alloys represent
                                                  Insufficient capacity build-up: Ferro              alloys contribute less than 1% of
a key raw material in the production of
                                               alloys demand is directly correlated to               total supply.
crude, special and stainless steel,
enhancing strength, durability and
quality. While Ferro Chrome is a key            Ferro Chrome producing countries
input for manufacturing stainless steel;
Ferro Manganese and Silico
Manganese are used in the production
                                                                                                  South Africa 45%          Finland 4%
of all kinds of steel.
                                                                                                  China 14%                 Sweden 2%
Global ferro alloys sector                                                                        Kazakhstan 13%            Zim 4%
The robust 7.5% growth in global steel                                                            India 10%                 Brazil 3%
production strengthened the upstream                                                              Russia 5%
demand for ferro alloys by 7% in
2007-08. In 2007-08, China recorded
                                                                                                      Source: Heinz parisar, estainlesssteel
the highest demand for ferro alloys,

                                                                                                         Annual Report 2007-08 22|23
stainless steel and alloys steel                      Indian ferro alloys sector                      durability, anti-corrosion and anti-stain
production. While there was a                         India, with a 5-7% share of the global          properties of steel. They are used in
significant build-up in the capacities of             ferro alloys industry, is among the 10          alloys, special and stainless steels.
the latter, ferro alloy capacity                      largest producers of the material in the
                                                                                                      Alloy steel industry: The presence of
enhancements lagged, tightening                       world. In India, majority of the ferro
                                                                                                      one or more ferro alloys – manganese,
supplies. Besides, the gestation period               alloys furnaces are located in Orissa,
                                                                                                      silicon and vanadium, among others –
required for the new ferro alloys                     Andhra Pradesh, West Bengal,
                                                                                                      enhances strength and durability. The
capacities to commence operation is                   Chattisgarh and Goa due to a
                                                                                                      use of alloy steel has increased
translating into extended buoyancy                    proximity to mines. Most ferro alloys
                                                                                                      substantially across the industrial,
                                                      companies manufacture manganese or
  South African power shortage: South                                                                 consumer durables and automobile
                                                      chrome alloys. Growing steel demand
Africa, the largest producer of Ferro                                                                 industries. In turn, the use of alloy steel
                                                      strengthened the demand for ferro
Chrome, was plagued by power                                                                          has lightened equipment without any
                                                      alloys but domestic manufacturers
shortage, disrupting production                                                                       quality compromise in the automobile,
                                                      could utilise only 65% of their capacity
                                                                                                      auto component, railway, forgings,
  Port congestion in Australia:                       (Source: Indian Ferro Alloys
                                                                                                      spring, seamless pipe and tube sectors,
Congestion in Australian ports                        Producers' Association)
                                                                                                      among others. Alloy steel finds
interrupted ore supplies to ferro
                                                                                                      applications in various sectors including
alloys producers                                      Applications
                                                                                                      automobiles and auto components and
                                                      Ferro alloys enhance the strength,
                                                                                                      railways for manufacturing rail chips
                                                                                                      and spoil springs in coaches, forgings,
                                                                                                      springs – the demand for which is
Break-up of India’s ferro alloys capacity
                                                                                                      expected to grow at a CAGR of 5%
                                                                                                      across 2013-14.

                                                                 Mn Alloys 60.2%                      Stainless steel industry: This value-
                                                                 Cr Alloys 32.5%                      added product enjoys corrosion
                                                                 Fe-Si 6.1%                           resistance due to a minimum 10.5%
                                                                 Noble Alloys 1.2%                    chromium presence. Manganese alloys

                                                                                                           There is no substitute for
                                                 Source: Indian ferro alloys producers’ association
                                                                                                           chromium in stainless steel
Stainless steel consumption by                                                                             production.
end use %



                                                                                                         India enjoys a natural advantage
                                          100%             Others
          4            9
                                      1                    Transport                                     as it remains the fifth-largest in
          11           25                                  Construction                                  chrome ore with a 100-Mn
          31           17                                  Machinery and manufacturing                   tonnes estimated reserve and
                                          40%                                                            the sixth-largest in manganese
                                                           White goods and household goods
                       46                 20%                                                            ore with an estimated 176-Mn
                                                                       Source: Industry sources          tonnes reserve.

Rohit Ferro-Tech Ltd.
are used as deoxidisers in the                     Ferro Chrome: India produces around a                   Manganese alloys: India produced
production of stainless steel. Stainless           million tonnes of Ferro Chrome and                      1.08 million tonnes of manganese
steel's resistance to corrosion and                exports 3,50,000 tonnes a year. The                     alloys in 2006-07 (Source: IFAPA)
staining, low maintenance and lustre               majority of production is of the high-                  sustained by 2.5 million tonnes of
make it an ideal base material for a               carbon variety with chrome content
host of commercial applications like               ranging between 60% and 65%. An
                                                                                                                Around 300 kgs of Ferro
utensils, infrastructure, automobile,              estimated 90% of Ferro Chrome
                                                                                                                Chrome is required for the
builders’ hardware and railways.                   produced in India is used in the
                                                                                                                production of one tonne of
                                                   production of stainless steel.
                                                                                                                stainless steel.
The installed capacity of ferro alloys in
India is 3.25 MTPA. The ferro alloys
industry is power-intensive needing
superior raw materials. High power                 Robust production and export growth
tariffs and the scarcity of quality raw
materials restricted the industry’s
capacity utilisation below 70%.
                                                                                                                        Total fe alloys production
Despite these constraints, the
production of ferro alloys increased at a                                                                                Exports
15.6% CAGR (between 2001-02 and
2005-06), while exports grew at a robust              FY02     FY03        FY04         FY05        FY06        Source: Working Committee on steel
CAGR of 31.4% over the same period.

Installed capacity and utilised capacity in India
                        Units     Installed capacity         Average capacity                  Units     Operational capacity         Average capacity
                                            (‘000 MT)                           (MT)                                 (‘000 MT)                       (MT)
 Manganese alloys          64                      1,957                   30,578                 55                      1,671                  30,387
 Chrome alloys             26                      1,055                   40,577                 22                        927                  42,156
 Ferro Silicon             29                         197                   6,806                  20                       145                      7,253
 Noble alloys              37                         40                    1,081                 37                         35                       946
 Total                    156                      3,249                   30,829                 134                     2,779                  20,737
                                                                                                   [Source: Indian Ferro Alloy Producers’ Association]

                                              Usage of key ferro alloys – a snapshot
 Alloy               Property                                Products                                   Applications
 Ferro Chrome        Corrosion resistant, passivity          Stainless steel, alloy steel, tool         Architecture, automotive, cutlery, medical
                                                             steel, high performance steel              equipment, watches, mechanical tools and dies
 Ferro Manganese     De-sulphuring, deoxidising,             Cryogenic steel, 200-series stainless      Construction, automotive, pipes
                     corrosion resistance and durability     steel, carbon steel, mild steel
 Silico Manganese    De-oxidising improves oxidation         Carbon steel, stainless steel, heat        Construction, automotive, lamination core
                     at high temperature; functions as       resisting stainless steel and              for transformers and rotors
                     a graphitiser; imparts magnetism;       electrical steel
                     and provides enhanced strength

                                                                                                                    Annual Report 2007-08 24|25
manganese ore. Manganese alloys            Lack of indigenous equipment
                                                                                    The chromium in Ferro Chrome
enjoyed applications in a number of      manufacture, leading to a huge
                                                                                    is mined from chromite ore,
sectors.                                 gestation period for setting up power
                                                                                    the 13th most common mineral
                                         generating facilities
Ferro Silicon: The production of Ferro                                              in the world. The current global
Silicon is power-intensive process,        Lack of uninterrupted power supply       chromite ore reserve is
enjoying wide metal-industry                                                        estimated at 11 billion tonnes,
                                         These problems have far-reaching
applications.                                                                       considered adequate enough
                                         implications for India’s ferro alloys
                                         producers. They adversely impact           to fulfil demand for another
                                         capacity utilisation and productivity.     100 years.
Power: The ferro alloys industry
                                         Power stoppages impact product
requires a large amount of power –
                                         quality, affecting realisations and
about 3,000-4,000 units per tonne of                                               A powerful positive
                                         enhanced power costs affect
the end product. India’s power cost is                                             Power accounts as a major cost
estimated to be three-to-four times                                                component in the production of
higher than the global average for a     Increasing cost of natural resources:     ferro alloys. Rohit Ferro has tied
number of reasons:                       The rapid growth of BRIC nations has      up with power supply utilities to
                                         strengthened the demand and price of      ensure uninterrupted power
  Huge power deficit (peak power
                                         natural resources like coal, chromite     supply to its facilities at
deficit was more than 10% in 2007-08)
                                         and manganese ores. Besides, with ore     special/reduced tariff available
as power generation has not kept pace
                                         supply concentrated in the hands of a     for power-intensive Industries.
with surging demand
                                         few nations, the negotiating power is     Besides, the Company has taken
  High transmission and distribution     relatively limited.                       an initiative to install a power
losses, as well as power theft,
                                                                                   plant for the captive requirement
enhancing costs
                                                                                   of its Jajpur unit.

                                         SAF 71%                                                   South Africa 39%
                                         Zimb 19%                                                  Others 25%
                                         Kazakh 7%                                                 India 18%
                                         India 1%                                                  Kazakhstan 18%
                                         Finland 1%
                                         Other 1%

       World chrome ore reserve by countries                     World chromite ore production 2007

                                                                                            Source: minerals.usgs.gov

Rohit Ferro-Tech Ltd.
Performance management
Manufacturing operations

  Rohit Ferro produces High-Carbon              Initiatives, 2007-08                       furnace for cost reduction and
Ferro Chrome, Ferro Manganese and               The Company’s two-pronged                  recovery of residual raw material
Silico Manganese                                approach to reduce operational costs       which are otherwise not directly
  The Company possesses two                     and enhance productivity comprised         chargeable into the furnace
operational facilities – at Bishnupur in        the following:
                                                                                           Infrastructure improvement
West Bengal (present capacity
                                                Cost reduction                               Invested in an automated material-
70,000 TPA) and at Jajpur in Orissa
                                                  Controlled the ground wastage of         handling system facilitating the
(present capacity 110,000 TPA)
                                                raw materials; reduced chrome              availability of material-handling data to
  It has adopted the conventional               content in slag by installing a material   reduce material handling time
Submerged Arc Furnace route to                  recovery plant
                                                                                             Installation of power factor
reduce production cost through the
                                                  Reduced power consumption                improvement capacitor banks to reduce
derivation of refined products
                                                through prudent raw material mix           power consumption and cost control
  Its Bishnupur facility possesses
5x9 MVA furnaces, while the Jajpur                Entered into long-term contracts
                                                                                           Agenda, 2008-09
unit has 4x16.5 MVA furnaces                    with logistic service providers to
                                                                                             Optimum capacity utilisation for its
                                                minimise cost escalations
  The Company achieved an                                                                  Jajpur plant. The Bishnupur plant is
operational efficiency through the                                                         running on optimum capacity
                                                Productivity enhancement
optimal use of raw materials and power            Reduced batch-wise production              Acquired land in Haldia for setting
                                                cycle time through efficient raw           up its third ferro alloys facility (post-
Highlights, 2007-08
                                                material mix and power utilisation         balance sheet development)
  Grew Ferro Chrome production by
76.86% over 2006-07                               Reduced plant shutdowns through           Commence the installation of a 110-
                                                preventive plant maintenance               MW captive power plant in Jajpur
  Commenced the manufacture of
Ferro Manganese and Silico                        Refurbished and relined old                Implement a new raw material
Manganese in the last quarter                   furnaces at its Bishnupur facility;        blending system in Bishnupur
                                                altered the furnace brick lining to
   Completed the Jajpur project                                                              Commission a manganese briquette
                                                produce value-added Ferro
successfully by starting production in                                                     plant at its Bishnupur facility
                                                Manganese and Silico Manganese
its balance two furnaces
                                                                                             Commence the installation of an
  Invested in 12-acres land adjacent              Improved the briquette plant, where
                                                                                           additional 33-MVA furnace in Jajpur
to its Bishnupur facility for its               ore bricks are made from the ore fines
future expansion                                  Installed a raw material
  Finalised the blueprint for a greenfield      beneficiation plant for utilising low-
ferro alloys capacity in Haldia                 grade low-cost chrome ore in the

Production (in tonnes)                                                                     Invested in 12-acres land
                                           2005-06         2006-07             2007-08     adjacent to its Bishnupur
 Ferro Chrome                                39,439          51,157             90,477     facility for its future
 Silico Manganese                                 –                –               299
 Ferro Manganese                                  –                –              6,308

                                                                                                     Annual Report 2007-08 26|27
 Materials management

   Ferro alloys production requires ore,   The Company has already established        The Company has already taken the
 coal/coke and power                       a joint venture in Iran for sourcing and   controlling economic interest in
                                           supply of raw materials from that part     thermal coal and coking coal mines in
   Raw material accounts for majority
                                           of the world.                              Indonesia to secure the coal supply to
 of the total cost of production
                                                                                      its power plant and ferro alloys plant.
   The Company maintains a minimum         Manganese ore: The Company
 two-month raw material inventory          primarily sourced manganese ore from       Power: The Company sourced power
                                           indigenous sources, though it plans to     from GRIDCO/NESCO for its Jajpur
 Chrome ore: The Company primarily         import quality manganese ore from          unit at competitive rates. For its
 procured chrome ore from the mines        Australia for most of its requirement      Bishnupur unit, the Company sourced
 in Orissa, which offer superior-grade     in current year                            power from WBSEB and was entitled
 varieties. The Company also sources                                                  for subsidy from the West Bengal
 chrome ore from Turkey, Iran, and         Coal/Coke: The Company sourced             Government. The Company has
 Oman. To secure the chrome ore            majority of it’s requirement of LAM        already taken initiative to install a
 supply the Company has applied for        coke/ coal from China and Australia        110-MW power plant in Orissa for
 mining rights in Orissa for Chromite      apart from sourcing from the               captive use.
 ore and Manganese Ore.                    domestic market.

 Quality assurance

   The Company’s quality excellence          The quality team comprises                 Deployed the LICO-CS-200
 comprised a check on all incoming         11 qualified personnel                     equipment to accelerate a check of
 raw material, multi-step shop-floor                                                  carbon and sulphur level impurities in
                                             The Company enjoys ISO 9001:2000
 quality assurance and a multi-                                                       the end product in 40 seconds as
                                           certification for quality compliance
 parameter inspection of finished                                                     compared to 24 hours earlier
 goods prior to despatch                   Highlights, 2007-08
                                                                                      Agenda, 2008-09
   The Company’s fully equipped              Restricted sulphur and silicon
                                                                                       To strengthen the laboratory
 quality laboratory comprised              content in the end products to
                                                                                      infrastructure by deploying additional
 CS apparatus and digital heat             enhance product performance
 analyser to maintain stringent              Blended the output from different
 metallurgical control across all                                                       To invest in a photo spectrometer
                                           furnaces to consistently match
 operations                                                                           for trace-analysis in end products
                                           customer specifications

Rohit Ferro-Tech Ltd.

  The Company extended its visibility      vendor status among steel and               To extend into the growing Middle
in domestic and global markets             stainless steel majors                     East and German market

  It exported Ferro alloys to entire
                                           Highlights, 2007-08
Europe, China, the Middle East and
                                             The Company enjoyed a strong
other Asian countries
                                           domestic and global presence. During
  It supplied directly to steel and        2007-08, exports accounted for 64.03%
                                                                                      Intelligent market mix!
stainless steel manufacturers on the       of revenue (51.36% in 2006-07)
                                                                                      Rohit Ferro maintained a prudent
one hand and partnered with large
                                           Agenda, 2008-09                            marketing mix. Out of the total
ferro alloys corporates to strengthen
                                            To establish a depot in Shanghai, to      targeted exports, 50% of exports
its global presence
                                           capitalise on the growing ferro alloys     were executed at spot prices, the
  It created a wide nationwide             demand in China                            rest was contracted long-term.
network of depots near steel                                                          While the former helped the
                                            To establish a depot in Rotterdam (the
producing centres like Raipur,                                                        Company capitalise on the
                                           Netherlands) to service a country that
Bhiwandi, Ghaziabad, Ahmedabad,                                                       ongoing price momentum, the
                                           relied mostly on South African supplies
Hisaar and Mandi Govindgarh                                                           latter ensured revenue stability.
                                           (now affected due to the worsening
  It graduated as the preferred            power situation in that country)

Human resource

Human resource management is               as well as professional institutes.        Appraisal: The Company’s self-
critical owing to a dearth of skills and                                              appraisal model helped rate
experience as well as high attrition.      Training: The Company provides             performance. While employees
The employee base of the Company           induction training to recruits, followed   identify their key performance areas
is a prudent mix of youth and              by on-the-job training and follow-up       and informed the management about
experience. The Company has taken a        specialised training under supervision.    their expectations, the management
policy to employ contract labours in       The employees attend conferences to        compares it with its own studies. All
its manufacturing units.                   enhance their knowledge.                   employees are appraised annually.

Recruitment policy: The Company            Rewards and remuneration: The              Way ahead: The Company embarked
recruited selectively through industry     Company’s compensation structure is        on restructuring its HR policies,
contacts, newspaper advertisements         designed in line with the best industry    strengthening its HR focus though the
and consultancies. The trainees were       standards; performance-linked incentives   creation of a dedicated department.
selected from reputed ITIs, technical      are paid to outstanding achievers.

                                                                                               Annual Report 2007-08 28|29
Financial analysis
The Company performed exceedingly well in 2007-08, which is clearly reflected in its reinforced financials.
The performance matrix                                                                                                                    (Rs. cr)
                                       2007-08                                 2006-07                                             % growth
 Total income                           649.89                                     213.38                                                204.57
 Net sales                              622.64                                     202.11                                                208.07
 EBIDTA                                 127.59                                      32.65                                                290.78
 Profit before tax                        95.40                                     22.86                                                317.32
 Profit after tax                         80.43                                     20.44                                                293.49
 Cash profits                             91.41                                     25.01                                                265.49
 Earnings per share (Rs.)                 23.34                                       5.93                                               293.49

Accounting system                                 Revenue across geographies: Rohit          from Rs. 1.52 cr in 2006-07 to
Rohit Ferro follows the accrual basis             Ferro enjoys a presence across the         Rs. 2.79 cr in 2007-08, largely owing to
of accounting. The accounts of the                world, mainly in Europe, Middle East,      enhanced income (interest) from fixed
Company are prepared as per the                   China and other Asian countries. High      deposits; fixed deposits increased due
accounting standards (ICAI) and the               ferro alloys demand in the international   to an increase in non-fund based
relevant provisions of the Companies              market has significantly enhanced the      working capital availed of during the
Act, 1956.                                        Company’s export revenue, besides          year to fund the growing operational
                                                  enhanced capacities facilitated            scale.
Revenue (net sales)                               catering to growing domestic demand.
Revenue grew by 208.07% from
Rs. 202.11 cr in 2006-07 to Rs. 622.64            Export: Export revenue grew by                Domestic                  Export
cr in 2007-08, thanks to the following:           274.54% in 2007-08 on account of              revenue                  revenue
                                                  additional sales volumes                               (Rs. cr)               (Rs. cr)
  Enhanced volumes: All the furnaces
                                                  (66,842 tonnes in 2007-08 against
at the Jajpur unit in Orissa became
                                                  29,418 tonnes in 2006-07) and

operational in the financial year

                                                  increased realisation (average
2007-08, enhancing the total production
                                                  realisations in the export market grew
of the Company in the year by 90%
                                                  by 65% in 2007-08 against the
  Enhanced realisation: This was                  2006-07 level). Besides, the Company
primarily due to the buoyancy in the              has reached to 58 overseas clients in
international ferro alloys market, which          the year as against 26 last year.

favourably impacted the domestic
                                                  Domestic: Income from domestic
market, resulting in per tonne average
                                                  business grew by a 119.19 % in

realisation of Rs. 58,396 compared to
                                                  2007-08 on account of increased sales
Rs. 37,601 last year
                                                  volumes (28,074 tonnes in 2007-08
  Additional business verticals: The              against 20,951 tonnes in 2006-07) and
Company ventured into other ferro                 increased realisation.
alloys such as Ferro Manganese and
                                                  Other income



Silico Manganese in the current year,
yielding higher production & returns              Non-core income increased by 83.55%

Rohit Ferro-Tech Ltd.
Cost analysis                                 Power and fuel cost: Power and fuel            Taxation
Total operating cost (excluding interest      cost is an important cost factor for the       Total tax for the Company included tax
and depreciation) increased by 189%           production of ferro alloys, one tonne of       for the current year, deferred tax and
on account of two reasons:                    Ferro Chrome consumes about 4,000              fringe benefit tax. Total tax expense
                                              units of power. Although, power cost for       increased to Rs. 14.97 cr in 2007-08
  Cost-push inflation driving key-input       the Company grew from Rs. 39.77 cr in          against Rs. 4.61 cr in 2006-07. The hike
costs                                         2006-07 to Rs. 99.69 cr in 2007-08,            in tax is due to an increase in
  Enhanced operational scale following        power cost as a proportion of total cost       profitability and increase in deferred tax
                                              declined from 22% to 19.48% over the           component. The Company is entitled to
the commencement of operations at
                                              same period, the outcome of process            receive 100% deduction for its
the Jajpur unit
                                              improvements that rationalised power           Bishnupur unit under section 80IB of the
Total operating cost as a proportion of       consumption at its facilities. To              Income Tax Act, 1962 during the year.
the total income, declined by 433 basis       optimise power costs over the medium
points from 84.69% in 2006-07 to              term, the Company is investing                 Capital employed
80.36% in 2007-08 despite an                  Rs. 525 cr for a 110 MW power plant            Total capital employed increased by
inflationary environment, reflecting Rohit    at the Jajpur unit, which is expected to       48.65% from Rs. 281.43 cr in 2006-07
Ferro’s superior resource management.         be operational by 2010-11                      to Rs. 418.35 cr in 2007-08 following an
Raw materials consumed: Raw                   Employee cost: People cost increased by        increase in owned and external funds.
material represents a major portion of        86.79% from Rs. 2.12 cr in 2006-07 to          Every rupee judiciously invested in the
the total cost in the ferro alloys            Rs. 3.96 cr in 2007-08, largely owing to       Company generated a return of 36.47%,
business. Raw material consumed at the        an expanding workforce. Besides, an            2,217-basis point growth over 2006-07.
year stood at Rs. 302.50 cr as against        increase in the annual wages of the team
                                                                                             Own funds: The net worth of the
Rs. 105.18 cr in 2006-07. This increase       also contributed to the growing manpower
                                                                                             Company for 2007-08 increased by
is attributed to two important factors:       expenses for the Company. Despite this
                                                                                             64.63% to Rs. 198.73 cr against
                                              increase, the employee cost as a
  Increased prices of ore and coal/coke                                                      Rs. 120.71 cr in 2006-07 on account of
                                              proportion to the total income declined by
                                                                                             an increase in reserve and surplus due
  Increase in operational scale,              39 basis points – reflecting the growing
                                                                                             to an increase in Net Profit and
necessitating growing raw material            contribution of every team member to the
                                                                                             proceeds from the preferential issue of
consumption                                   growth of the organisation.
                                                                                             convertible warrants.
Despite these factors, raw material           Margins                                        Equity: During the year, the Company
cost as a proportion of the total cost        Higher realisation, combined with              increased its authorised share capital
declined by 29 basis points to 57.91%         efficient cost management,                     from Rs. 40 cr comprising 4 cr equity
in 2007-08 against 58.20% in 2006-07.         strengthened the EBIDTA margin from            shares of Rs. 10 each to Rs. 45 cr
This is largely due to optimised raw          15.30% in 2006-07 to 19.63% in 2007-           comprising 4.5 cr equity shares of
material utilisation, facilitated by          08. PAT margin increased by 280 basis          Rs. 10 each. The Company’s equity
intelligent process changes.                  points to 12.38% in 2007-08 from 9.58          share capital (issued and subscribed)
                                              in 2006-07.

Segmental break-up of key expenses             (as a percentage of total income)

 Segment                                                                           2007-08                                    2006-07
 Raw material consumed                                                               46.54                                       49.29
 Power and fuel                                                                      15.34                                       18.64
 Employee cost                                                                        0.61                                        0.99
 Manufacturing expenses                                                              19.60                                       22.49
 Administrative, selling and other expenses                                           5.61                                        7.45

                                                                                                      Annual Report 2007-08 30|31
comprised 34,462,945 shares of           Loan funds: Total loan fund of the            year, making the Jajpur plant fully
Rs. 10 each and remained unchanged       Company increased by 35.23% to                operational.
throughout the year. However, on         Rs. 211.18 cr in 2007-08 as against
                                                                                       Depreciation: The Company follows
23rd November 2007, the Company          Rs. 156.16 cr in 2006-07. Debt-equity
                                                                                       Straight Line method of charging
has issued 80,00,000 (eighty lacs)       ratio strengthened moderately from
                                                                                       depreciation as prescribed in the
convertibles warrants with option to     1.29 in 2006-07 to 1.06 in 2007-08.
                                                                                       Schedule XIV of the Companies Act,
the warrant holder to convert into       The Company mobilised external funds
                                                                                       1956. Depreciation of the assets stood
equal number of equity shares within a   to partly finance its expansion plans.
                                                                                       at Rs. 7.08 cr as against Rs. 2.33 cr in
period of 18 months.                     Loan funds of the Company comprise
                                                                                       2006-07 on account of the increase in
                                         both secured and unsecured loans.
Reserves and surplus: Reserve and                                                      the gross block.
                                         Secured loans: Secured loans
surplus for 2007-08 stood at                                                           Capital WIP: Capital work in progress
                                         comprised term loans, working capital
Rs. 162.02 cr, an 84.43% surge over                                                    of the Company declined from
                                         loans, export packing credits and other
Rs. 87.86 cr in 2006-07 which                                                          Rs. 56.51 cr in 2006-07 to Rs. 17.13 cr
                                         loans. Secured loan for the Company
accounts for 38.73% of the total                                                       in 2007-08, following the completion of
                                         increased by 10.72% to Rs. 172.57 cr in
capital employed. Around 23% of the                                                    expansion activities at the Jajpur.
                                         2007-08 compared with Rs. 155.86 cr in
reserves comprise securities premium,    2006-07 and accounts for 41.25% of
3% is general reserve and 73% of the                                                   Working capital
                                         the total capital employed in the
reserves comprise free reserves which                                                  Working capital for the year under
                                         Company. The increase in the loans is
can be used for the ongoing expansion                                                  review increased by 88.05% to
                                         largely due to the ongoing expansion
plans undertaken by the Company. The                                                   Rs. 204.94 cr in 2007-08 from
                                         plans and increased working capital
Company transferred Rs. 4.5 cr to the                                                  Rs. 108.98 cr in 2006-07 due to the
                                         requirements for scaled-up operations.
general reserve account in 2007-08.                                                    following:
                                         Unsecured loans: Unsecured loans
                                                                                         Increase in the stock of finished
                                         increased from Rs. 0.30 cr in 2006-07
                                                                                       goods and raw materials due to
                                         to Rs. 38.61 cr in 2007-08.
               ROCE                                                                    increased operational scale; efficient
                (%)                      Interest: Interest outflow for the
                                                                                       inventory management facilitated a
                                         Company increased significantly to
                                                                                       reduction in the raw material inventory
                                         Rs. 25.09 cr in 2007-08 from Rs. 7.45 cr
                                                                                       cycle from 232 days in 2006-07 to 124
                                         in 2006-07 due to the increase in debt
                                                                                       days in 2007-08

                                         portfolio. Interest cover increased
                                         marginally from 4.38 in 2006-07 to 5.08         Increase in debtors by 3.35 times to
                                         in 2007-08.                                   Rs. 61.77 cr; continuous monitoring of
                                                                                       receivables resulted in a reasonable
                                         Gross block                                   debtors cycle of 35 days in 2007-08
                                         Gross block represents a Company’s              Increase in the Loans & Advances,
                                         enduring strengths. As on 31st March
                                                                                       mainly due to 65% increase in the
                                         2008, the gross block of the Company
                                                                                       subsidy receivable for power

                                         amounted to Rs. 208.55 cr against
                                                                                       Working capital as a proportion of total
                                         Rs. 121.13 cr as on 31st March 2007.
                                                                                       capital employed stood at 48.99% in
                                         This was due to capitalisation of two
                                                                                       2007-08 against 38.72% in 2006-07.
                                         furnaces at the Jajpur plant during the

                                         Liquidity ratios
                                           Segment                                  2007-08                            2006-07


                                           Current Ratio                               1.33                                  1.32
                                           Quick Ratio                                 0.82                                  0.68

Rohit Ferro-Tech Ltd.
Outlook                                        The rest of the world except India and            growth for alloy steel globally. High-
                                               China will witness a demand of 950                strength low-alloy steel is expected to
The ferro alloys industry is expected to
                                               MnT by 2020 from the level of 747                 maintain a CAGR of 3.6% over 2020
grow significantly over the coming
                                               MnT in 2007.                                      whereas the other grade of alloy steel
years on account of robust growth in
                                                                                                 used in the engineering industries will
user industries.                               Stainless steel: The global stainless
                                                                                                 maintain a CAGR of 6.7% till 2020.
                                               steel industry will ride growing BRIC
                                               and Middle East investments in                    Demand for ferro alloys: The global
Crude steel: The International Iron
                                               infrastructure. The global stainless              ferro alloys demand is expected to
and Steel Institute (IISI) forecasts
                                               steel industry is expected to grow at             remain buoyant on the basis of strong
strong growth in the use of finished
                                               14.3% annually (ISSF estimate). Asian             growth in the global steel and other
steel products. Total world steel
                                               demand is expected to grow at 12%                 value added steel industry. Demand
demand is predicted to grow at CAGR
                                               annually over the next five years, while          for ferro chrome is expected to grow
4.9% to 1,962 MnT by 2020. Though
                                               America, Western Europe and Africa                at a CAGR of 7.2% till 2020.
China will be the primary global growth
                                               will witness a moderate 4-6% growth.
engine, the growth rate of the Chinese                                                           India
steel industry will slow down in 2008.         Alloy steel: Growing preference
                                                                                                 Crude steel: The Indian steel is
                                               across the user industry will drive the
                                                                                                 expected to reach 300 MnT by 2020 –
                                                                                                 Ministry of Steel. This optimism is
World steel demand projection over the long term
                                                                                (Mn tonnes)      based on the estimated growth
 Year                                World              China          Rest of the world         projections of Indian user industries.
                                 CAGR 4.9%        CAGR 9.8%                   CAGR 2.3%          But there are challenges, rise in prices
 2020 (P)                            1,962                803                           950      of steel due to input cost will hike the
 2015 (P)                            1,644                644                           875
                                                                                                 cost of infrastructural projects and
 2010 (P)                            1,371                507                           781
                                                                                                 may effect the automotive, shipping
 2007 (E)                            1,198                398                           747
                                                                                                 and housing sector. If the challenges
 2000                                  753                124                           603
                                                                                                 can be met judiciously, the Indian steel
                                                       Source: IISI/CSO/WSD/ Primary
                                                                                                 industry is expected to become the
                                                                                                 2nd largest producer in the world by
Global stainless and alloy steel growth                                                          2020. As a result demand for ferro
                                                                                                 alloys is expected to remain robust.
CAGR(%)                              CAGR(%)
11.2 Tool High Speed Steels          4.9                        Tool High Speed Steels
7.0 Carbon and other low allow       3.9                        Stainless steel production       Stainless steel: The Indian stainless
1.3 Engineering Steel                6.7                                                         steel market is all set to grow at
5.9 High-Strength Low Alloy          3.6
6.4 Stainless steel production       7.0                        Carbon and other low allow
                                                                                                 around 15% annually for the next few
                                                                Engineering Steel                years, higher than the global average
                                                                High-Strength Low Alloy
                                                                                                 on the basis of the following realities:

                                                                                                 Per capita consumption: India’s per
                                                                                                 capita stainless steel consumption
                                                              Source: ENRC presentation          (1.9. kg) is expected to move closer to

Per capita consumption                                                                                                                  (kgs)
 Italy        Belgium              Sweden         Germany                  China              Brazil             Russia               India
 34.3              21.5               22.8             19.2                   6.0               2.1                  2.0                 1.9

                                                                                                                Source: ENRC presentation

                                                                                                          Annual Report 2007-08 32|33
the global average of 4.1 kg due to               terminals in Tier I and Tier II cities.                will require 140,000 tonnes of stainless
enhanced metal demand from diverse                Refurbishment has already commenced                    steel (nickel-free grade) in 2008-09.
user sectors.                                     in the Mumbai, Delhi, Bangalore,
                                                                                                         Water: The superior characteristics of
                                                  Chennai and Kolkata airports to
Kitchenware: An attractive                                                                               stainless steel - anti-corrosion,
                                                  accommodate growing traffic.
convergence – growing demand for                                                                         lightweight, durability and stainless
dwelling units, burgeoning middle-class           Railways: The stainless steel demand –                 quality - make it a preferred metal for
with attractive disposable incomes,               used in railway wagons – is expected                   drinking water and distribution solutions.
increasing urbanisation, growing                  to rise exponentially. The Railway                     Stainless steel also finds extensive use
nuclear families and stainless steel’s            Ministry announced its intention of                    in wastewater treatment installations.
emergence as premium crockery                     building new freight wagons and                        Both these segments are high on the
material – will catalyse the demand for           passenger coaches from this metal.                     government’s priority, warranting
stainless steel kitchenware in India.             The Indian Stainless Steel                             significant budgetary allocations.
                                                  Development Institute estimates that
Airport modernisation: India is                                                                          Increasing preference: The increasing
                                                  each freight wagon will need 7 tonnes
upgrading its airports in line with global                                                               preference for stainless steel in
                                                  of stainless steel; 20,000 such wagons                 infrastructure creation (namely
standards and adding new airport

                                                    Stainless steel - demand drivers
  Railways                     Airports          Commercial and retail sectors        Housing sectors           Automobiles
    Wagons for certain          Modernisation     Currently about 130 million         The Working Group            India is expected to emerge as the
  applications to be made      of 30 airports    square feet is acquired by IT-ITeS   on Housing of             seventh largest automobile market by
  of stainless steel           and creation of   companies and the requirement is     Planning                  2016 and the world’s third largest by
    Passenger coaches to       other new         expected to touch 500 million sq     Commission                2030, behind only China and the US,
  use enhanced grade of        airports across   ft by 2010                           estimated an urban        thanks to the following: around 26.7%
  stainless steel              the country.       According to a report on real       housing shortage at       CAGR in commercial vehicles; 16.7%
    Various railway stations                     estate trends by Merrill Lynch,      8.89 million units at     CAGR in personal vehicles; and
  across the country to be                       around 250 malls are expected to     the beginning of the      14.5% CAGR in two-wheelers
  upgraded to meet                               come up across Mumbai,               Tenth Plan (2002-            Emission nozzles to be made up of
  international benchmarks                       Bangalore, New Delhi, Hyderabad      07), with 22.44           stainless steel as per the Euro IV
    Metro network in all                         and Pune by FY10                     million cumulative        norms
  major cities requiring                                                              units during the             Motor cycles will have stainless-
  stainless steel coaches                                                             Tenth-Plan period.        steel disk brakes

End-use pattern        (%)
 End-user sector                                                                                      2004-05                     Estimated 2015-16
 Metal products (mainly kitchenware)                                                                          74                                       53
 Process industry                                                                                             10                                       12
 Construction                                                                                                  2                                       12
 Transportation                                                                                                2                                        6
 Engineering                                                                                                   5                                        6
 Electro mechanical/electronics                                                                                2                                        3
 Others                                                                                                        4                                        8
 Total (tonnes)                                                                                    1,154,000                               4,084,000
                                                                                                                                        Source: ISSDA

Rohit Ferro-Tech Ltd.
commercial and retail property, airports   Demand for alloy steel in the forgings sector                                        (‘in lac tonnes)
and railways) will strengthen demand
                                                                           FY 2007        FY 2008                    FY 2009         FY 2010
from kitchenware to other sectors.
                                            Demand                                 11.6         12.8                    14.1              15.5
Alloy steel: Domestic alloy steel                                                                          Source: KR Choksey research report
demand is likely increase significantly
based on the growth of key alloy steel     Ferro alloys demand in auto components                                                 (‘000 tonnes)
user sectors like forgings and auto-
                                                                               2007             2008                 2009              2010
                                            Piston pins                              9             10                   11                 11
Forgings sector: Forgings find              Engine valves                            6                 7                 7                     8
application across diverse and growing      Spark plugs                              6                 6                 7                     7
manufacturing and heavy engineering         Steering gear                            2                 3                 3                     3
sectors. Since India’s forgings industry    Total                                   23             25                   27                 30
is one of the largest alloy steel                                                                          Source: KR Choksey research report
consumers, alloy steel demand is also
expected to grow. (See table alongside)     Domestic demand for ferro alloys
Automobiles and auto components:                                   Crude steel production – 70 mn tonnes
                                                       million alloy-20 kg/tonne
Growth in the automobile and                                 Misc-5-10 kg/tonne
auto-component sectors will drive alloy
                                                Mn alloys – 1.4 million tonnes            Special & alloy steel – 4.0 million tonnes
steel demand. (See table alongside)
                                              Misc – 0.5 million tonnes
Demand for ferro alloys: India’s
consumption of ferro alloys is expected                               SS – 2.0 million tonnes      Other alloy steel – 2.0 mn tonnes
                                                    Other alloys-20-50 kg/tonne             Cr alloys-300 kg/tonne                   Misc
to increase at a 13.3% CAGR from 1.3                                                                                                 100 kg/tonne
million tonnes in 2005-06 to 2.75             Other alloys – 0.05 million tonnes          Cr. Alloys – 0.6 million tonnes
million tonnes by 2011-12. Ferro alloys                                                                         Misc – 0.2 million tonnes
exports, which grew from 18.4% of the          Total Alloy requirement for domestic consumption
production in 2001-02 to 27.6% of the          Mn. Alloys                               -                                 1.4 million tonnes
production in 2005-06, is expected to          Cr. Alloys                               -                                 0.6 million tonnes
                                               Other Alloys                             -                                0.75 million tonnes
drive ferro alloys demand. Assuming
                                               Total                                    -                                2.75 million tonnes
exports remain at the same levels as in
                                                                                                               Source: Ambit Capital research
2005-06, exports are expected to
touch 0.9 million tonnes by 2011-12
                                             It can only get better!
(12.1% CAGR). Cumulatively, ferro
                                             The Ministry of Steel recently revised India’s steel demand to touch an estimated
alloys demand is expected to reach 3.6
                                             125 million tonnes by 2011-12 (original estimate 70-million tonnes).
million tonnes by 2011-12.

Statutory compliance                       Internal control system                              properly and the applicable statutes
                                           and audit                                            are duly complied with. The Company
The Company Secretary, as                                                                       has an internal audit system which
Compliance Officer, ensures                The Company has proper and                           strives to ensure compliance of internal
compliance of the SEBI regulations         adequate system of internal controls                 control systems, and the same is
and provisions of the Listing              commensurate with its size and nature                reviewed by the Audit Committee
Agreement. Compliance certificates         of operations to provide reasonable                  periodically for strengthening and
are obtained from various units of the     assurance that all assets are                        upgrading the system to take care of
Company and the Board is informed of       safeguarded, transactions are                        changing risk parameters.
the same at every Board meeting.           authorised, recorded and reported

                                                                                                             Annual Report 2007-08 34|35
Rohit Ferro’s institutionalised
risk management

                        Our institutionalised derisking reconciles organisational
                                   protection and sustainable growth.

                                           Risk management

 External to the Company        Related to shop-floor     Related to marketing      At the corporate level
                                     operations                operations
   Industry attractiveness                                                              Strategic path
                                   Input availability    Geographic concentration
   Enhanced competition                                                                 Funding issues
                                Operational efficiency     Client concentration
    Declining realisation                                                            Currency fluctuation
                                   Product quality           Receivables risk

                                     People risk

Rohit Ferro-Tech Ltd.
    Risks external to the Company

    Industry risk                             Competition risk                          Market realisation risk
    A sluggish ferro alloys demand from       Growing user-industry demand and
                                                                                        Growing competition could dent
    user segments could impact the            higher realisations may attract
    Company’s business.                       competition.
                                                                                        Mitigating factors
    Mitigating factors                        Mitigating factors
                                                                                          A global natural resource crunch is
      The Indian steel capacities are           A large number of ferro alloys
                                                                                        driving key input prices for ferro
    slated to increase exponentially from     manufacturers were in the BIFR for
                                                                                        alloys, namely chromite, manganese
    the present 55 million TPA to an          an extended period on account of
                                                                                        ore and coal. This phenomenon is
    estimated 125 million TPA by 2011-        industry cyclicality, limiting their
                                                                                        redefining the price base of ferro
    2012 (source: Ministry of Steel)          means to enhance capacities. Ferro
                                                                                        alloys, which is expected to sustain
                                              alloys capacities failed to keep pace
      Stainless steel is the fastest
                                              with surging steel production, leading      With incremental capacities likely to
    growing metal the world over (14.3%
                                              to supply constraints                     emerge after a considerable gestation
    per annum). Domestic stainless steel
                                                                                        and the demand for ferro alloys
    demand is expected to grow over 10%         Domestic and international ferro
                                                                                        steadily increasing, market
    over the coming years                     alloys players have recently
                                                                                        realisations are expected to remain
                                              announced capacity-creation
      The domestic ferro alloys industry is                                             buoyant
                                              initiatives, which will be
    expected to grow at a 13.3% CAGR
                                              commercialised only by 2010               Rohit Ferro’s integrated business
    till 2012
                                                                                        model will help protect profitability
                                              Rohit Ferro enjoys a significant early-
    Rohit Ferro is attractively positioned                                              through industry cyclicality. In
                                              mover advantage. Its capacity
    to capitalise following the                                                         addition, the Company maintains a
                                              addition of 50,000 TPA was
    commissioning of its expanded                                                       prudent balance of marketing 50% of
                                              commissioned in 2007-08 and further
    capacities.                                                                         its products through quarterly
                                              addition of 150,000 TPA will be
                                                                                        contract assuring price stability.
                                              commissioned by 2010-11.

                                                                                                  Annual Report 2007-08 36|37
      Risks related to the shop-floor operations

     Raw material risk                          raw materials buffer to ensure                equipped quality-control laboratory
     Inconsistent raw material supply and       seamless operation                            with contemporary equipment to act
     price increase could affect production.                                                  as a quality radar
                                                  Acquired a 60% economic interest
     Mitigating factors                         in two coal mining companies                    It institutionalised a multiple-stage
       The Company has a assured supply         owning thermal and coking coal                quality control system at the material
     arrangement with Orissa Mining             assets in Indonesia                           handling, operations and finished
     Corporation for the supply of its entire                                                 goods stage
     chromite ore requirements in Orissa
                                                Operations risk
                                                                                                It invested in a LICO-CS-200
                                                Inefficient shop-floor operations could
     from its largest ore reserve in the                                                      machine to monitor the carbon and
                                                impact production cost and
     Sukindia Valley. Also, the JV in Iran                                                    sulphur content with speed
                                                competitive edge.
     will help the Company to source raw
                                                                                                It received ISO 9001:2000
     material from that part of the world       Mitigating initiatives
                                                                                              certification for its quality systems
                                                  The Company initiated a number of
       The key inputs for manganese alloys                                                    and processes
                                                initiatives across its units for increasing
     are sourced from Australia through
                                                productivity and reducing costs
     long-term arrangement apart from                                                         People risk
     sourcing from the domestic suppliers         Innovative process modifications            People attrition could affect
                                                facilitated a reduction in the batch          operations.
       The Company enjoys long-term
                                                cycle time of production
     power supply agreements with state                                                       Mitigating initiatives
     utility in West Bengal, and                  Focus on preventive maintenance               It has entered into long term
     NESCO/GRIDCO in Orissa. The                enhanced equipment availability and           agreement with labour contractors
     proposed power plant in Orissa will        reduced losses due to untimely
                                                                                                It offers lucrative incentive on the
     reduce the fear of inconsistent power      shut-downs
                                                                                              performance of its employees
     supply to it’s plant
                                                Quality risk                                    It conducts exit interview with the
       The Company has been able to
                                                Any quality deviation across batches          parting employees to identify and
     pass on the entire input-cost
                                                could lead to client attrition.               resolve issues to reduce attrition
     escalation to end-users
                                                Mitigating initiatives                          It offers the employees to attend
       The Company maintains a fair
                                                  The Company invested in a fully-            technical seminars and workshops

    Rohit Ferro-Tech Ltd.
    Risks related to the marketing function

    Geographic and client                   other Asian countries. It added 32        Mitigating initiatives
    concentration risk                      overseas clients during the year 2007-      The Company only markets to
    Revenue concentration from a            08 and now added boundaries like          clients having proven track record for
    particular geography or customer        U.S., Japan and spreading in other        making prompt payment
    could affect growth especially in the   continents
                                                                                        Major Sales of the Company is
    event of a selective downturn.            Its widening product categories         against advance payment or against
    Mitigating initiatives                  serviced a wider range of clients         the letter of credit issued by the First
      The Company extended its                                                        Class Banks both in India and abroad
    domestic sales by setting up direct
                                            Receivable risk
                                                                                        The Company abstains itself from
                                            Inability to recover the sales proceeds
    sales depots across the country                                                   exporting its products in countries
                                            could hamper the Company’s liquidity
      Its primary export market being                                                 having high risk
    entire Europe, Middle East, China and

    Risks at the corporate level

    Strategy risk                           Funding risk                              Currency fluctuation risk
    The Company’s single-product            The Company may not be able to            Adverse currency fluctuations could
    dependence could impact growth and      mobilise adequate low-cost funds for      dent export profitability.
    could invite significant risk at        its ongoing expansion and
                                                                                      Mitigating initiatives
    downturn.                               diversification programmes.
                                                                                        Exports are made against a letter of
    Mitigating initiatives                  Mitigating initiatives                    credit arrangement, which is
      The Company commenced the               Following commercialisation of the      immediately discounted by banks,
    manufacture of Ferro Manganese and      first phase of expansion, growing         minimising the impact of adverse
    Silico Manganese in the late 2007-08    volumes are expected to generate larger   currency fluctuations
                                            accruals, facilitating capex funding
      It is creating a larger product                                                   The rupee is again weakening
    basket derived from Ferro Chrome          The Company is highly                   against US dollar resulting in
    with customised specifications to       underleveraged and it’s low debt-equity   enhancement in the export earning of
    meet the requirement of diverse user    ratio will facilitate low-cost funds      the Company
    categories                              mobilisation over the coming years
                                                                                      The Company has gained around
                                                                                      Rs. 64 lacs on account of foreign
                                                                                      currency fluctuation in 2007-08.

                                                                                               Annual Report 2007-08 38|39
Directors’ Report

Your Directors have pleasure in presenting their eighth Annual Report together with the audited statement of accounts for the
financial year ending 31st March 2008.

Financial results                                                                                                        Rs. in crores
 Particulars                                                                                   Current year           Previous year
                                                                                            31st March 2008       31st March 2007

 Net sales                                                                                           622.64                 202.11
 Operating profit                                                                                    127.59                   32.65
 Interest                                                                                                25.10                 7.45
 Depreciation                                                                                             7.09                 2.34
 Profit before tax (PBT)                                                                                 95.40                22.86
 Tax expense                                                                                             14.98                 2.42
 Profit after tax (PAT)                                                                                  80.43                20.44
 Balance brought forward from previous year                                                              48.56                33.38
 Adjustment for earlier years                                                                            (0.21)              (1.22)
 Profit available for appropriation                                                                 128.78                   52.59
 Less: Appropriated as under:
      - Proposed dividend (15%) including tax                                                             6.05                 4.03
      - Transfer to General Reserve                                                                       4.50                    –
 Surplus carried to Balance Sheet                                                                   118.23                   48.56

Dividend                                        The Company’s Bishnupur unit with              thereby expanding its product basket
The Board has recommended a 15%                 four furnaces of 9 MVA each has                from Chrome Alloys to Manganese
dividend (Rs. 1.50 per share) on equity         maintained production at full capacity         Alloys.
share capital for the year ended 31st           during the year. The Company has also
March 2008.                                     installed a fifth furnace of 9 MVA, which      Operational highlights,
                                                is expected to commence production in          2007-08:
Operational review                              2008-09. During the year under review,             Production of 90,870 MT of High-
Your Directors are pleased to announce          the Company has converted two                      Carbon Ferro Chrome compared
that the installation of all the furnaces       furnaces at the Bishnupur unit for the             with 51,157 MT, and 6,308 MT of
of the Company’s Jajpur unit was                production of Manganese Alloys – Ferro             Ferro Manganese and 299 MT of
completed during the year.                      Manganese and Silico Manganese,                    Silico Manganese

Rohit Ferro-Tech Ltd.
   Turnover of Rs.623 crores as against       operational with a total production               tonnes of thermal coal and 5 million
   Rs. 202 crores                             capacity of 110,000 MT. The Company               tonnes of coking coal. The operation of
                                              has installed a fifth furnace at its              the thermal coal mine is expected to start
   Export of Rs.414 crores as against
                                              Bishnupur unit this year, which is now            in the second half of the current financial
   Rs. 110 crores
                                              ready for production.                             year while operation of the coking coal
   Net profit of Rs. 80.42 crores,                                                              mine will start in the 2009-10.
                                              During    the        year,     the   Company
   compared with Rs. 20.44 crores in
                                              strategised to install a captive power            After this expansion, the Company will
   the previous year
                                              plant (110 MW) in Orissa to meet the              have a combined capacity of 3,30,000 MT
With firm commitment and persistent           requirements of its Jajpur plant along            of ferro alloys with different ferro alloys in
quality and efforts, the Company              with an additional 33 MVA furnace to              the product basket.
continues to maintain cordial relation        produce 50,000 MT of Ferro Alloys. The
with its global customers and has             Company        has     since     received    an   Proceeds from the
increased its client portfolio during the     assurance from the government’s nodal             preferential issue
year which increased to 58 as against 26      agency for setting up this plant along with       During the year under review, the
in the previous year.                         the promise for raw material linkage i.e.,        Company        has    issued      80,00,000
                                              coal. The Company is currently in process         warrants convertible into an equal
The Company’s products are marketed
                                              of acquiring the land for the said project.       number of equity shares of Rs. 43 each,
globally     and      are   internationally
                                                                                                totaling Rs. 34.40 crores. The Company
acclaimed for its premium quality and         The Company has recently announced to
                                                                                                received only 10% of the warrant’s value
customisation. The Company exports            set up another unit in Haldia in West
                                                                                                i.e., Rs. 3.44 crores which was deployed
High Carbon Ferro Chrome to all major         Bengal,     a    port-based          site,   to
                                                                                                for meeting the Company’s working
user countries, especially to quality-        manufacture value-added Manganese
                                                                                                capital requirements.
conscious countries in Europe, Middle         Alloys as well as Ferro Silicon. This unit
East and China. With the addition of          will have an ore sintering and a                  Directors
Manganese Alloys in its product basket,       beneficiation facility to use the low-            Mr.    Suresh        Kumar     Patni      and
the Company is expected to hold a             grade fines.                                      Mr. Jatindra Nath Rudra, Directors of
better     position    to   bargain   with
                                              The Company has floated a wholly                  your Company, are retiring by rotation at
consumers of both Chrome as well as
                                              owned subsidiary in Singapore on 9th              this Annual General Meeting and being
Manganese Alloys.
                                              April 2008 named SKP Overseas Pte.                eligible,   offer    themselves     for   re-
                                              Ltd. for acquiring 60% economic interest          appointment.
New projects and
expansion                                     in two coal mining companies in                   A notice u/s 257 has been received from
The Company’s Jajpur project is now fully     Indonesia with a reserve of 20 million            a member for the appointment of

                                                                                                            Annual Report 2007-08 40|41
Mr. Asoke Kumar Basu as a Director of                       of affairs of the Company and of the              Fixed deposits
your Company, liable to retire by                           profit or loss of the Company for                 The Company has not accepted any
rotation. Mr. Asoke Kumar Basu was                          that period;                                      fixed deposits from the public and as
appointed as an Additional Director of                                                                        such, no amount of principal and
                                                            that they have taken proper and
your Company on 11th August 2008.                                                                             interest was outstanding on the date of
                                                            sufficient care for the maintenance
Your     Directors       recommend              his                                                           the Balance Sheet.
                                                            of adequate accounting records in
                                                            accordance with the provisions of
A brief resume/details related to                           the Companies Act, 1956, for
                                                                                                              Management Discussion
Directors seeking appointment/re-                           safeguarding the assets of the
                                                                                                              and Analysis report and
appointment       is   furnished      in    the             Company and for preventing and
                                                                                                              report on Corporate
explanatory statement to the notice of                      detecting         fraud     and       other
                                                                                                              A Management Discussion and Analysis
the ensuing Annual General Meeting.                         irregularities;
                                                                                                              report and a report on Corporate
                                                            that    they      have    prepared     the        Governance along with the Certificate
Directors’ responsibility
                                                            accounts for the financial year on a              from   the   Company      Secretary       in
                                                            ‘going concern’ basis;                            practice regarding compliance with
Your Directors confirm:
                                                                                                              mandatory requirements as stipulated
   that in the preparation of the annual              Auditors and Auditors’
                                                                                                              under Clause 49 of the Listing
   accounts, the applicable accounting                Report
                                                                                                              Agreement with the Stock Exchanges,
   standards have been followed and                   M/s.         S.    Jaykishan,         Chartered
                                                                                                              is presented in a separate section
   no material departures have been                   Accountants, statutory auditors of the
                                                                                                              forming part of the Annual Report.
   made from the same;                                Company, hold the office until the
                                                      conclusion of the ensuing Annual
   that they have selected such                                                                               Particulars of employees
                                                      General Meeting and being eligible,
   accounting policies and applied                                                                            Details of employees during 2007-08,
                                                      offer themselves for reappointment.
   them       consistently      and        made                                                               drawing remuneration in excess of the
                                                      The notes to the accounts referred to in
   judgements and estimates that are                                                                          limit specified under Section 217(2A) of
                                                      the      Auditors’       Report       are    self
   reasonable and prudent so as to                                                                            the Companies Act, 1956, read with
                                                      explanatory and therefore, do not call
   give a true and fair view of the state                                                                     Companies (Particulars of Employees)
                                                      for any further comment.
                                                                                                              Rules, 1975, as amended:

Name                      Age   Qualification         Date of           Designation           Remuneration     Experience             Last employment
                        (Years)                       employment                              received (gross)  (Years)
Rohit Patni                24              BE         27.08.2007        Managing Director     Rs. 21,48,387            1           Continuing as Jt. MD in
                                                                                                                                  Ankit Metal & Power Ltd.
Ankit Patni                23           CFA           27.08.2007        Jt. Managing Director Rs. 14,32,258            2              Continuing as MD in
                                                                                                                                  Ankit Metal & Power Ltd.
Suresh Kumar Patni*        47         B.Com           07.04.2000        Managing Director     Rs. 46,50,000           23              Continuing as MD in
                                                                                                                                 Impex Ferro-Tech Limited

* Resigned from the Post of Managing Director w.e.f 27th August 2007.

Rohit Ferro-Tech Ltd.
Disclosure of particulars                    our organisation, enhancing profitability     its appreciation for the support and co-
A   statement      giving     details   of   and growth. The Company intends to            operation received from its shareholders,
conservation of energy, technology           continuously upgrade the professional         regulatory and government authorities,
absorption   and    foreign     exchange     and   human    resource    skill   of   its   suppliers, customers and bankers. Your
earning and outgo as required under          employees.    Your Directors wish to          Company has always looked upon them
Section 217(1)(e) of the Companies           place on record their appreciation for        as partners in its progress. It will be your
Act, 1956, read with Companies               the employees contribution at all levels      Company’s endeavour to build and
(Disclosure of particulars in the report     and for their hard work, dedication and       nurture strong links with trade based on
of Board of Directors) Rules, 1988, is       commitment.     The   enthusiasm        and   mutuality, respect and co-operation with
annexed to this report.                      unstinted efforts of the employees have       each other.
                                             enabled your Company to grow steadily.
Human resources and
trade relations                              Acknowledgement
Employees represent the backbone of          The Board also desires to place on record

                                                                                                    For and on behalf of the Board

                                                                                                              Suresh Kumar Patni
Kolkata, 29th August 2008                                                                                                  Chairman

                                                                                                    Annual Report 2007-08 42|43
Annexure - I

Particulars as required u/s 217 (1)(e) of the Companies Act, 1956, read with Companies (Disclosure of particulars in
the report of Board of Directors) Rule, 1988:

A. Conservation of energy                    b) Using power factor controller/             d) Continuation and increasing scale of
Measures taken for the conservation of          capacitors to maintain power factor;          measures taken.
energy:                                      c) Keeping maximum demand under
a) Close monitoring of high energy              control by scheduling other load during
   consuming equipment in plants;               equipment testing, among others;

FORM - A (Form for Disclosure of particulars with respect to conservation of energy).
                                                                                             2007-08                     2006-07

 Power and fuel consumption
 1. Electricity:
 Total unit consumed                                                                      39,80,88,800               20,80,83,850
 Amount (Rs.)                                                                             99,69,04,733               39,77,36,574
 Average rate per unit (Rs.)                                                                      2.50                       1.91
 2. Coal and coke:
 Quantity (M.T.)                                                                                65,849                     37,898
 Total cost (Rs.)                                                                         56,01,19,234               27,25,85,980
 Average rate per M.T. (Rs.)                                                                     8,506                      7,193
 Consumption per unit of production
 1. Electricity (Unit)                                                                          4,083                       4,068
 2. Coal & Coke (Kg)                                                                              676                         741

B. Technology absorption,                    b) Constant process improvement for           C. Foreign exchange
adaptation and innovation                       increasing output quality to               earning and outgo
                                                customers’ specification;                  During the year under review, the
Research and development
                                             c) Testing and         certification   of     Company has been the net foreign
Intensive R&D activity is an overriding                                                    exchange earner for the country. Total
priority at the Company. The key areas                                                     foreign exchange used and earned:
where R&D resources and initiatives are      d) Participation in conference and
focused on:                                     seminars;                                  Used :                 Rs. 65.52 crores
                                                                                           Earned:               Rs. 393.75 crores
a) Improving and optimising furnace          e) Analysing feedback from the users
   efficiency, developing process for pre-      to improve products.
   heating and pre-reduction of inputs;

                                                                                                     For and on behalf of the Board

                                                                                                              Suresh Kumar Patni
Kolkata: 29th August 2008                                                                                                Chairman

Rohit Ferro-Tech Ltd.

Corporate governance                          shareholder value, keeping in view the      Clause 49 of the Listing Agreement
philosophy                                    interest of the Company’s stakeholders.     pertaining to composition of Directors.
We stand committed to good Corporate                                                      None of the Directors on the Board are
Governance, transparency, disclosure
                                              Board of Directors
                                                                                          members of more than ten Committees
                                              The Company has an optimum Board
and independent supervision to increase                                                   and they do not act as Chairman of more
                                              headed by a Non-Executive Chairman
the value of the various stakeholders.                                                    than five committees across all the
                                              with three Executive Directors and five
The     Company     is    committed     to                                                Companies of which they are the Directors.
                                              Non-Executive Directors, of which, four
transparency in all its dealings and places
                                              are independent.                            The composition of the Board of
high emphasis on business ethics. The
                                                                                          Directors of the Company currently,
basic     philosophy      of   Corporate      The number of Non-Executive Directors
                                                                                          and the number of Board meetings
Governance in the Company is to               (NEDs) is more than 50% of the total
                                                                                          attended by the Directors during the
achieve      business    excellence   and     number of Directors. The Company is in
                                                                                          year 2007-08 are given below:
dedication     to   increase    long-term     compliance with the recent amendment of

Name of                  Status/                     No. of Board       No. of membership in other            Whether attended
Director                 Designation                    meetings        Boards and other committees              the last AGM
                                                         attended        as on 31st March 2008#

                                                                            Board        Committee $

Mr. S.K. Patni           Non-Executive Chairman                  12             5                    2                          No
Mr. Rohit Patni          Managing Director                        9             2                    –                         Yes
Mr. Ankit Patni          Jt. Managing Director                   14             2                    1                         Yes
Mr. Binit Jain           Executive Director                      13             –                    –                         Yes
Mr. K.C. Jain            Independent                              5             2       2 (Chairman-2)                         Yes
Mr. J.N.Rudra            Independent                              5             1        2(Chairman-1)                         Yes
Mr. J.K. Chatterjee      Independent                              6             –                    –                         Yes
Mr. Asoke Kr. Basu*      Independent                             NA            NA                  NA                          NA
Mrs. Sarita Patni**      Non-Executive Director                   7             1                    –                          No

# Excluding Foreign Companies, Private Companies and Companies under Section 25 of the Companies Act, 1956.
$ Only the two committees viz. Audit Committee and Shareholder’s Grievance Committee are considered for this purpose.

                                                                                                   Annual Report 2007-08 44|45
Notes:                                              23rd April 2007; 28th May 2007;             are taken by the Company to rectify
*     Mr. Asoke Kumar Basu has been                 22nd June 2007; 29th June 2007;             instances of non-compliance, if any.
      appointed as an Additional Director           11th July 2007; 27th August 2007;
                                                                                             5. Mrs. Sarita Patni is the spouse of
      on 11th August 2008                           14th   September         2007;    28th
                                                                                                Mr. Suresh Kumar Patni. Mr. Rohit
** Mrs. Sarita Patni has resigned from              September 2007; 26th October
                                                                                                Patni and Mr. Ankit Patni are sons
      the Board on 11th August 2008                 2007; 23rd November 2007; 31st
                                                                                                of   Mr.   Suresh     Kumar    Patni.
                                                    December 2007; 29th January
                                                                                                Mr. Binit Jain is nephew of Mr.
1. None        of    the    Non-Executive           2008; 4th March 2008; 26th March
                                                                                                Suresh Kumar Patni. No other
      Independent Directors have any                2008; 31st March 2008.
                                                                                                director is related to any other
      pecuniary         relationship   or
                                                3. The information as specified in              Director on the Board.
      transactions with the Company
                                                    Annexure-IA to the Clause 49 of the
      except for holding Directorship and                                                    Code of Conduct
                                                    Listing Agreement entered into with
      receiving sitting fees.                                                                The Code of Conduct for the Board of
                                                    the Stock Exchanges, is regularly
                                                                                             Directors and senior management personnel
2. Fifteen Board meetings were held                 made   available    to    the    Board
                                                                                             as adopted is available on the Company’s
      during the year 2007-08 and the               whenever applicable.
                                                                                             website http://www.rohitferrotech.com.
      gap between two meetings did not
                                                4. The Board periodically reviews all        All the members of the Board and senior
      exceed three months. The dates on
                                                    compliance reports of all laws           management personnel have affirmed
      which the Board meetings were held
                                                    applicable to the Company. Steps         the compliances of the Code of Conduct.
      are as follows:

As provided under Clause 49 of the Listing Agreement with the Stock Exchanges, the Board members and senior management
personnel of the Company have affirmed compliances with the Code of Conduct of the Company for the year ended 31st March 2008.
                                                                                                     For Rohit Ferro-Tech Limited

                                                                                                                        Rohit Patni
Kolkata, 29th August 2008                                                                                         Managing Director

Committees of Directors:                        Listing Agreement.                           adoption by the Board.
1. Audit Committee                              Mr. K. C. Jain, Independent Director         During the financial year ended 31st
The Company has an Audit Committee              having expertise in finance, is the          March 2008, four Audit Committee
with the scope as set out in Clause 49 of       Chairman of the Audit Committee, and         Meetings were held on 29th June 2007;
the Listing Agreement read with Section         was present at the Annual General            11th July 2007; 26th October 2007;
292A of the Companies Act, 1956.                Meeting held on 28th September 2007.         29th January 2008. The necessary
                                                                                             quorum was present at these meetings.
The terms of reference of the Audit             The Annual Accounts for the year
Committee includes the powers as laid           ended 31st March 2007 were duly              The composition of the Audit Committee
down in Clause 49 (II) (C) and the role         reviewed by the Audit Committee at it’s      and the details of meetings attended by
as stipulated in Clause 49 (II) (D) of the      meeting held on 20th June 2008 prior to      the Directors are as follows:

    Name of the Director                                             Category           No. of meetings attended during the year

    Mr. K. C. Jain                           Independent Director (Chairman)                                                       4
    Mr. J. N. Rudra                                     Independent Director                                                       2
    Mr. J. K. Chatterjee                                Independent Director                                                       3

Rohit Ferro-Tech Ltd.
The Managing Director and VP-Finance                    b) To approve, in the event of loss or       Managing     Director    and    Executive
are     permanent          invitees        to    the        inadequate profit in any year, the       Directors is for a period of five years and
Committee. Mr. Pramod Kumar Jain,                           minimum remuneration payable to          three years respectively from their
CFO and Company Secretary acts as                           the   Managing       Director      and   respective date of appointment and can
the Secretary of the Audit Committee.                       Wholetime Directors within the           be terminated by giving two months’
The Audit Committee invites, as and                         limits and subject to the parameters     notice in writing. No severance fees is
when considered appropriate, the                            prescribed in Schedule XIII to the       payable to the Directors on termination
representatives from the Auditors to be                     Companies Act, 1956.                     of the employment. The Company does
present       at   the     meeting         of    the                                                 not have any scheme for Stock-option
                                                        The committee met once during the
Committee.                                                                                           either for the Directors or the employees.
                                                        year on 27th August 2007. All the
                                                        members of the Committee have                B. For Non-Executive Directors
2. Remuneration Committee
                                                        attended the meetings.                       The Non-Executive Directors are paid
The Company has a Remuneration
                                                                                                     sitting fees for attending each meeting
Committee          consisting         of        three   The Chairman of the committee has
                                                                                                     of the Board and/or committee thereof
Independent Directors, Mr. J. N. Rudra                  attended the last Annual General
                                                                                                     and the same is within the limits
(Chairman), Mr. K. C. Jain and Mr. J.                   Meeting for giving replies to the
                                                                                                     prescribed by the Companies Act, 1956.
K. Chatterjee.                                          shareholder’s queries.
The     terms      of     reference        of    the                                                 Remuneration of Executive Directors
                                                        Remuneration policy
Remuneration Committee are broadly                                                                   The Company has paid remuneration by
as follows:                                             A. For Executive Directors                   way of salary to its Executive Directors
                                                        The   Board    of   Directors     on   the   within the limit specified under Schedule
a) To determine and recommend to the
                                                        recommendation       made       by     the   XIII of the Companies Act, 1956 and
      Board        of       Directors            the
                                                        Remuneration Committee decides the           approved by the Board as well as by the
      remuneration         package         of    the
                                                        remuneration of the Executive Directors      shareholders of the Company. The
      Managing Director and Wholetime
                                                        subject to the approval of members. The      details of remuneration paid for the year
      Directors         including     periodical
                                                        remuneration structure comprises only of     ended 31st March 2008 are as follows:
      revisions therein.
                                                        the salary. The tenure of office of the

 Name of the Director                                   Salary (Rs.)                         Period of contract               Notice period
                                                                                        From                To

 Mr.    Suresh Kumar Patni*                             20,00,000/-                     01.07.2004           30.06.2009             2 months
 Mr.    Rohit Patni                                     21,48,387/-                     27.08.2007           26.08.2012             2 months
 Mr.    Ankit Patni                                     14,32,258/-                     27.08.2007           26.08.2012             2 months
 Mr.    Binit Jain                                       3,00,000/-                     01.06.2006           31.05.2009             2 months
* Resigned from the post of Managing Director w.e.f. 27th August 2007.

Remuneration of Non-Executive Directors
The remuneration of Non-Executive Directors consists only of sitting fees for attending the meeting of the Board of Directors or a
committee thereof. The details of the fees paid during the year and the shares held by them as on 31st March 2008 are as follows:

                                                                                                              Annual Report 2007-08 46|47
    Name of the Director                             Sitting fee paid (Rs.)              Shares held as on 31st March 2008

    Mrs. Sarita Patni*                                               2,500                                              6,80,100
    Mr. K. C. Jain                                                  19,000                                                    Nil
    Mr. J. N. Rudra                                                 15,500                                                    Nil
    Mr. J. K. Chatterjee                                            18,000                                                    Nil
    Mr. Ankit Patni**                                                7,500                                              3,83,807
    Mr. Suresh Kr. Patni***                                         25,000                                             10,20,100

*      Resigned from the directorship w.e.f. 11th August 2008.
** Appointed as Joint Managing Director w.e.f. 27th August 2007.
*** Resigned as MD w.e.f. 27th August 2007 and is continuing as a Non-Executive Director.

3. Investor Grievance cum                          to transfer and transmission of          transfer of shares, non-receipt of
Share Transfer Committee                           share/debenture of the Company.          balance sheet, non-receipt of
The Investor Grievance cum Share                                                            declared dividends etc. are
                                               b) To review and ensure that the
Transfer Committee has three                                                                attended and redressed in an
                                                  Registrar/Company’s   Transfer
Directors out of which two are                                                              expeditious manner.
                                                  House implement all statutory
Independent Directors and one is Non-
                                                  provisions as above.                   f) Any other matter referred to by the
Executive Director in compliance with
                                                                                            Board     relating    to     equity
the revised Clause 49 of the Listing           c) Approve transfer/transmission of
                                                                                            shareholders of the Company.
Agreement.                                        shares/debenture and demat/
                                                  remat of the shares/ debenture.        The Committee met twice during the
The Committee shall comply with the
                                                                                         year for reviewing the investor’s
following:                                     d) Approve issue of duplicate share
                                                                                         complaints/grievances    etc.   and
                                                  certificates,    consolidate/sub-
                                                                                         transfer/split/remat/demat on 27th
a) To review and ensure compliance of             division of share certificates on
                                                                                         August 2007 and 29th January 2008.
   statutory    provisions    of     the          completion of the procedures as
   Companies Act, the guidelines of               may be stipulated.                     The composition of the Committee and
   SEBI and the Stock Exchanges and                                                      the details of the meetings attended by
                                               e) Ensure all shareholders queries,
   other statutory requirements relating                                                 the Directors are given below:
                                                  grievances and complaints like

    Name of the Director                                         Category           No. of meetings attended during the year

    Mr. J. K. Chatterjee                    Independent Director (Chairman)                                                    2
    Mr. J. N. Rudra                                    Independent Director                                                    2
    Mr. S. K. Patni                                 Non- Executive Director                                                    2

Company Secretary, Mr.          Pramod         transfer/transmission, split and remat/   resolved during the period.
Kumar Jain has been designated as              demat of shares to the Company.
secretary to the committee and as                                                        Procedure for committee meetings:
                                               The Company has received total two
compliance officer to the Company. The                                                   The Company’s procedure relating to
                                               Investor's     grievances/complaints
Company Secretary has been delegated                                                     Board meetings are applicable to
                                               during the year ended 31st March
the authority to approve the requests for                                                Committee meetings as far as may be
                                               2008, all of which were replied/

Rohit Ferro-Tech Ltd.
practicable. Minutes of the proceedings    CEO / CFO Certification                             Agreement. The aforesaid certificate
of the committee meetings are placed       The Company is duly placing a                       duly signed in respect of the financial
before the Board meetings for perusal      certificate to the Board from CEO and               year ended 31st March 2008 has been
and noting.                                CFO in accordance with the provisions               placed before the Board in the meeting
                                           of Clause 49 (V) of the Listing                     held on 20th June 2008.

General Body Meetings
1. AGM:
Date, time and venue, where last three AGMs held:

 Financial year        Date                      Time                                                                            Place

 2004-2005             5th September 2005       11AM                                          35, C.R.Avenue, Kolkata-700 012
 2005-2006             21st September 2006      11AM                 ‘Rotary Sadan’, 94/2, Chowringhee Road, Kolkata- 700 020
 2006-2007             28th September 2007      11AM                 ‘Rotary Sadan’, 94/2, Chowringhee Road, Kolkata- 700 020

Special Resolutions Passed at the last three AGMs:

 Financial year                                                                                                                  Items

 2004-2005                                                                     One-Amendment in the Articles of Association
 2005-2006                                                                                                            None
 2006-2007                                                   Two-Appointment of Managing Director and Jt. Managing Director

No Special Resolution requiring postal        the ordinary course of business is                  Standards were followed.
ballot was passed during the last year.       placed periodically before the Audit
                                                                                                  The Company has complied with all
No special resolution requiring postal        Committee. The pricing of all the
                                                                                                  the requirements of the Listing
ballot is being proposed at the ensuing       transactions with the related parties
                                                                                                  Agreement      with     the    Stock
Annual General Meeting.                       were on an arms length basis. A
                                                                                                  Exchanges as well as regulations and
                                              disclosure       of        related      party
                                                                                                  guidelines of SEBI. No strictures or
Disclosures                                   relationship and transactions as per
                                                                                                  penalties were imposed on the
   There are no materially significant        AS-18 is given in the ‘Related Party
                                                                                                  Company by the Stock Exchanges or
   related party transactions, i.e.           Transactions’ Note No: B-15 in
                                                                                                  SEBI or any statutory authority on
   transactions of the Company of             Schedule-22           to     the      Annual
                                                                                                  any matter related to capital markets
   material nature with its Promoters,        Accounts of the Company.
                                                                                                  during the last three years.
   Directors or the management or
                                              While   preparation           of     financial
   relatives   etc.   that    may   have                                                          During the year, the Company has
                                              statements during the period under
   potential conflict with the interests                                                          received Rs. 3.44 crores being 10%
                                              review, no accounting treatment
   of the Company at large. A                                                                     of the total value of 80,00,000
                                              which     is    different      from      that
   statement in summary form of                                                                   (eighty lacs) Convertible Warrants
                                              prescribed       in    the     Accounting
   transactions with related parties in                                                           of Rs. 43 each convertible into an

                                                                                                       Annual Report 2007-08 48|49
   equal number of equity shares. The             Means of communication                           Secretarial department for providing
   same has been deployed into the                                                                 necessary information to the investors
                                                  1. Financial results
   working capital of the Company                                                                  as   well   as     for   registering   any
                                                  In compliance with the requirements of
   immediately and is disclosed to the                                                             complaints/grievances. The Company
                                                  the Listing Agreements, the Company
   Audit committee as required.                                                                    also holds press meets/ analysts meets
                                                  has intimated audited financial results
                                                                                                   to appraise and make public, the
   The Company has incorporated a                 as well as the unaudited quarterly
                                                                                                   information relating to the Company’s
   wholly owned subsidiary named                  results   to       the    Stock   Exchanges
                                                                                                   working     and    future   outlook.   The
   SKP Overseas Pte. Limited, in                  immediately after they are taken on
                                                                                                   Company also posts on its website all
   Singapore on 9th April 2008 (Post              record by the Board. Further coverage
                                                                                                   its official news releases, important
   Balance Sheet development)                     has been given for the benefit of the
                                                                                                   announcements        and    presentations
                                                  shareholders         and     investors     by
   The      risk        assessment         and                                                     made before the press meets, analysts
                                                  publication of the financial results in the
   minimisation procedures are in                                                                  and institutional investors from time to
                                                  leading national dailies and a local
   place and the Board is regularly                                                                time for the benefit of its investors and
                                                  vernacular newspaper widely circulated
   informed by the senior executives                                                               public at large.
                                                  in the State of West Bengal. The results
   about the business risks and the
                                                  were also placed on the Company’s
   steps taken to mitigate the same.                                                               Profile of Directors
                                                  website http://www.rohitferrotech.com.
   Though the Company does not have
                                                                                                   seeking appointment /
                                                  Results for the quarter ended 30th
   a     whistle     blower      policy,   the
                                                  September 2006 and onwards are also
                                                                                                   Resume and other information of the
   Company              promotes        ethical   available on the SEBI’s EDIFAR system
                                                                                                   Director    seeking      appointment/re-
   behaviour       in    all    its   business    which        can     be      accessed      at
                                                                                                   appointment at the ensuing Annual
   activities. All employees are free to          http://www.sebiedifar.nic.in. Hence,
                                                                                                   General Meeting as required under
   approach the Audit Committee to                the quarterly results are not sent to all
                                                                                                   Clause 49 of the Listing Agreement are
   raise their concerns relating to               households of the shareholders.
                                                                                                   given in the explanatory statement to
   fraud, malpractice or any other
                                                                                                   the notice of the ensuing Annual
   activity or event which is against the         2. Other Information
                                                                                                   General Meeting.
   Company’s interest.                            The Company has its own website
   All mandatory requirements have                                                                 Management discussion
                                                  wherein other related information is
   been appropriately complied with                                                                and analysis
                                                  available.     The       Company     has    a
   and         the             non-mandatory                                                       A Management discussion and analysis
                                                  dedicated      help       desk    email    ID:
   requirements are dealt with at the                                                              report is given separately, and forms
                                                  grievance@rohitferrotech.com in the
   end of the report.                                                                              part of Annual Report.

General shareholder information
1. Annual General Meeting (AGM)
Day, Date & Time                      : Thursday, 25th September 2008 at 11 a.m.
Venue                                 : ‘Rotary Sadan’, 94/2, Chowringhee Road, Kolkata-700 020

2. Date of book closure : 18th September 2008 to 25th September 2008 (both days inclusive)

Rohit Ferro-Tech Ltd.
3. Dividend payment date : On or after 25th September 2008

4. Financial calendar
Indicative calendar of events for the financial year 2008-09 is as under:
Financial Year                   : 1st April to 31st March
Unaudited financial results for:
First quarter                    : Already disclosed on 28th July 2008
Second quarter                   : October, 2008
Third quarter                    : January, 2009
Fourth quarter/ FY               : April, 2009 / June, 2009, if audited.
Annual General Meeting           : On or before 30th September 2009

5. Listing of the equity shares on the Stock Exchanges

 Name of the Stock Exchange                                                                  Address         Stock code

 Bombay Stock Exchange Ltd. (BSE)             “Phiroze Jeejeebhoy Tower”, Dalal Street, Mumbai-400 001           532731
 The National Stock Exchange                                   “Exchange Plaza”, Bandra-Kurla Complex       ROHITFERRO
 of India Ltd. (NSE)                                                       Bandra (E), Mumbai-400 051
The Equity Shares of the Company has been listed w.e.f. 13th April, 2006 on BSE & NSE.

The Company has paid a listing fee for the year 2008-09 to both the Stock Exchanges where the shares of the Company are
listed and also to the depositories.

6. The International Security Identification Number (ISIN) for NSDL & CDSL: INE248H01012.

7. Market price data
The stock market data on BSE and NSE for the last twelve months are provided herein:

 Month                                      National Stock Exchange of India Ltd            Bombay Stock Exchange Ltd
                                                      High                Low                      High         Low

 April 2007                                            37.00                26.25                   36.90         26.30
 May 2007                                              37.50                30.60                   35.40         30.00
 June 2007                                             35.50                29.70                   35.70         29.05
 July 2007                                             42.45                32.60                   42.50         32.50
 August 2007                                           41.35                34.00                   41.50         34.10
 September 2007                                        57.00                35.10                   57.30         38.80
 October 2007                                          60.50                43.05                   62.00         45.00
 November 2007                                         96.90                52.05                   93.00         52.10
 December 2007                                        109.90                78.00                  110.00         78.00
 January 2008                                         119.00                64.80                  127.20         64.90
 February 2008                                         98.35                72.55                    99.0         72.65
 March 2008                                            76.40                50.00                   76.90         54.15

                                                                                            Annual Report 2007-08 50|51
 25000                  Rohit Ferro-Tech - BSE monthly price                                                120

                        Sensex – monthly closings



 10000                                                                                                      20

6288.00                                                                                                     114.95
                        Rohit Ferro-Tech - Price
5757.50                 S&P CNX NIFTY


3400.00                                                                                                     22.00

9. Shareholding pattern as on 31st March 2008
  Shareholding of Promoter and Promoter Group                                     No. of Shares          %-Age

  Indian Promoters                                                                  2,08,86,507          60.61
  Financial institutions/banks                                                                -              -
  Domestic bodies corporate                                                           49,32,242          14.31
  Resident individuals                                                                83,06,095          24.10
  Non-resident individuals                                                             3,38,101           0.98
  Total                                                                            3,44,62,945          100.00

10. Distribution of Shareholding as on 31st March 2008
  No. of shares                  No. of Shareholders    % of total shareholders       No. of shares   % of total

  Upto 500                                   11,511                      82.58            19,47,470        5.65
  501    to 1,000                             1,173                       8.42             9,88,906        2.87
  1,001 to 10,000                             1,109                       7.96            33,41,114        9.69
  10,001 to 1,00,000                            125                       0.90            33,71,048        9.78
  1,00,001 and above                             21                       0.15          2,48,14,407       72.00
  Total                                      13,939                       100          3,44,62,945         100

Rohit Ferro-Tech Ltd.
11. Dematerialisation of shares              14. Name, designation and                Non-mandatory
and liquidity                                address of Compliance Officer            requirements
The Company’s shares are compulsorily        for complaints and                       1. Chairman of the Board
traded in dematerialised form which is       correspondence:                          A Chairman’s office with requisite
available for trading on both NSDL and       Mr. PRAMOD KUMAR JAIN
                                                                                      facilities is being provided and
CDSL. As on 31st March 2008,                 CFO & Company Secretary
                                                                                      maintained at the Company’s expense
3,44,62,945 shares representing 100%         ROHIT FERRO-TECH LIMITED
                                                                                      for use by the Non-Executive Chairman.
of the shares capital are held in            35, C. R. Avenue; 4th floor
                                                                                      All expenses incurred in furtherance of
dematerialised form viz. CDSL                KOLKATA – 700 012; INDIA
                                                                                      the Company’s business interest are
70,86,450 and NSDL 1,17,94,415               Tel: +91 33 2211 9805/9806 (Ext: 401)
                                                                                      reimbursed by the Company.
equity shares.                               Fax: +91 33 2211 0522
                                             E-mail: grievance@rohitferrotech.com     2. Remuneration Committee
12. Registrar and Share Transfer                                                      The Company has formed a
Agent                                        15. Plant location                       Remuneration Committee comprising of
Maheshwari Datamatics Pvt. Ltd. of 6,        Bishnupur: WBIIDC Road, P.O.
                                                                                      three Independent Non-Executive
Mangoe Lane (Surendra Mohan Ghosh            Dwarika, Bishnupur – 722 122, Dist:
                                                                                      Directors as stated under ‘Committees
Sarani), 2nd Floor, Kolkata-700 001 is       Bankura (West Bengal)
                                                                                      of Directors’ in this report.
the Registrar and Share Transfer Agent
                                             Jajpur:     Kalinganagar Industrial
of the Company, both for physical and                                                 3. Audit qualification
                                             Complex, Duburi – 755 026, Dist:
demat segments. Accordingly, all                                                      The Company does not have any audit
                                             Jajpur (Orissa)
communications on matters relating to                                                 qualification and it attempts to move
share transfers, dividend etc. may be        16. Outstanding GDR’s/ ADR’s/            towards a regime of unqualified
sent directly to them. Complaints, if any,   warrants or any convertible              financial statement.
on these matters may also be sent to the     instruments, conversion date and
Compliance Officer of the Company.           likely impact on equity                  4. Other items
                                             The Company has allotted 80,00,000       The rest of the non-mandatory
13. Share transfer system                                                             requirements such as shareholder’s
                                             (eighty lacs) convertible warrants
The share transfer requests are                                                       rights, training of Board members,
                                             convertible into an equal number of
processed on behalf of the Company by                                                 mechanism for evaluation of Non-
                                             equity shares at the option of the
Registrar and Transfer Agents M/s.                                                    Executive Board members, and whistler
                                             warrantholders within a period of 18
Maheshwari Datamatics Pvt. Ltd. and is                                                blower policy will be implemented by
                                             months from the date of allotment i.e.
placed before the Company Secretary                                                   the Company as and when required.
                                             23rd November 2007. As on 31st
who has been delegated by the Investor
                                             March 2008, the Company has not
Grievance cum Share Transfer
                                             received any request for conversion of
Committee to approve transfers.
                                             these warrants.

                                                                                              For and on behalf of the Board

                                                                                                       Suresh Kumar Patni
Kolkata, 29th August, 2008                                                                                         Chairman

                                                                                              Annual Report 2007-08 52|53
Certificate of Compliance with the Corporate Governance
requirements under Clause 49 of the Listing Agreement

The Members of
Rohit Ferro-Tech Limited

We have examined the compliance with             review    of   the    procedures     and    the Company has complied with the
conditions of Corporate Governance by            implementations thereof adopted by          conditions of Corporate Governance as
Rohit Ferro-Tech Limited, for the year           the Company for ensuring compliance         stipulated in Clause 49 of the above-
ended 31st March 2008, as stipulated             with     conditions    of    Corporate      mentioned Listing Agreement.
in    Clause     49   of    the        Listing   Governance as stipulated in the said
                                                                                             We further state that such compliance
Agreement(s) of the said Company                 clause. It is neither an audit nor an
                                                                                             is neither an assurance as to the future
with the Stock Exchange(s).                      expression of opinion on the financial
                                                                                             viability of the Company nor the
                                                 statements of the Company.
The    compliance     of   conditions      of                                                efficiency or effectiveness with which
Corporate        Governance       is      the    In our opinion and to the best of our       the management has conducted the
responsibility of the management. Our            information and according to the            affairs of the Company.
examination has been limited to a                explanations given to us, we certify that

                                                                                                           For AJ & ASSOCIATES
                                                                                                              Company Secretaries

Place: Kolkata                                                                                                         Abhijeet Jain
Dated: 29th August 2008                                                                                                      Partner
                                                                                                                       C.P. No. 3426

Rohit Ferro-Tech Ltd.
Auditors’ Report

The members of
Rohit Ferro Tech Limited.

l.   We have audited the attached Balance Sheet of ROHIT             c) The Balance Sheet, Profit & Loss Account and Cash
     FERRO TECH LIMITED as at 31st March 2008 and also                  Flow Statement dealt with by this report are in
     the Profit & Loss Account and the Cash Flow Statement              agreement with the books of account;
     for the year ended on that date, annexed thereto. These
                                                                     d) In our opinion, the Balance Sheet, Profit & Loss
     financial statements are the responsibility of the
                                                                        Account and Cash Flow Statement dealt with by this
     Company's management. Our responsibility is to express
                                                                        report comply with the Accounting Standards referred
     an opinion on these financial statements based on our
                                                                        to in sub-section (3C) of section 211 of the Companies
                                                                        Act, 1956;
2. We conducted our audit in accordance with auditing
                                                                     e) On the basis of the written representations received
   standards generally accepted in India. Those standards
                                                                        from the directors and taken on record by the Board of
   require that we plan and perform the audit to obtain
                                                                        Directors, none of the directors is disqualified as on
   reasonable assurance about whether the financial
                                                                        31st March 2008 from being appointed as a director in
   statements are free of material misstatement. An audit
                                                                        terms of clause (g) of sub-section (1) of section 274 of
   includes examining, on a test basis, evidence supporting
                                                                        the Companies Act, 1956;
   the amounts and disclosures in the financial statements.
   An audit also includes assessing the accounting principles        f) In our opinion and to the best of our information and
   used and significant estimates made by management, as                according to the explanations given to us, the said
   well as evaluating the overall financial statement                   statements of accounts, read with the Accounting
   presentation. We believe that our audit provides a                   Policies & Notes thereon, give the information required
   reasonable basis for our opinion.                                    by the Companies Act, 1956 in the manner so required
                                                                        and give a true and fair view in conformity with the
3. As required by the Companies (Auditor’s Report) Order,
                                                                        accounting principles generally accepted in India:
   2003 (as amended) issued by the Central Government in
   terms of sub-section (4A) of Section 227 of the                      i.   in the case of the Balance Sheet, of the state of
   Companies Act, 1956 and on the basis of such checks as                    affairs of the Company as at 31st March 2008,
   we considered appropriate, and according to the                      ii. in the case of the Profit & Loss Account, of the
   information and explanations given to us, we enclose in the              profit of the Company for the year ended on that
   Annexure a statement on the matters specified in                         date, and
   paragraphs 4 and 5 of the said Order to the extent
   applicable to the Company.                                           iii. in the case of the Cash Flow Statement, of the
                                                                             cash flows for the year ended on that date.
4. Further to our comments in the Annexure referred to in
   paragraph 3 above, we report that :                                                                      For S. Jaykishan
                                                                                                       Chartered Accountants
     a) We have 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
                                                                                                                B. K. Newatia
        law have been kept by the Company so far as appears
                                                                  Place: Kolkata                                       Partner
        from our examination of those books;
                                                                  Date: 20th June 2008                          M. No. 050251

                                                                                                Annual Report 2007-08 54|55
Annexure to the Auditors’ Report
(Referred to in Paragraph 3 of our Report of even date)

i)     a) The Company has maintained proper records to show                   as to repayment thereof.
          full particulars, including quantitative details and
                                                                     iv)   In our opinion and according to the information and
          situation of its fixed assets.
                                                                           explanations given to us, there are adequate internal
       b) We are informed that fixed assets of significant value           control procedures commensurate with the size of the
          have been physically verified by the management at               Company and nature of its business, for the purchase of
          reasonable intervals, in a phased programme and no               inventory and fixed assets and for the sale of goods.
          material discrepancies were noticed in respect of the            Further, on the basis of our examination of the books and
          assets verified.                                                 records of the Company, we have neither come across
                                                                           nor have we been informed of any continuing failure to
       c) The Company has not made any disposal of Fixed
                                                                           correct major weaknesses in the aforesaid internal
          Assets during the year.
                                                                           control system.
ii)    a) As explained to us, inventories have been physically
          verified by the    management during the year at           v)    a) To the best of our knowledge and belief and
          reasonable intervals.                                               according to the information and explanations given
                                                                              to us, we are of the opinion that the particulars of the
       b) In our opinion, the procedures of physical verification             contracts or arrangements that need to be entered in
          of inventories followed by the management are                       the register maintained under Section 301 of the
          reasonable and adequate in relation to the size of the              Companies Act, 1956, have been so entered.
          Company and the nature of its business.
                                                                           b) In our opinion, the transactions made in pursuance of
       c) In our opinion, the Company has maintained proper                   such contracts or arrangements and exceeding the
          records of inventories and the discrepancies noticed                value of five lakh rupees in respect of any party
          on physical verification as compared to book records                during the year have been made at prices which are
          were not material.                                                  reasonable having regard to prevailing market prices
iii)   a) The Company has not granted any loans, secured or                   at the relevant time.
          unsecured, to companies, firms or other parties
                                                                     vi)   The Company has not accepted any deposit during the
          covered in the register maintained under Section 301
                                                                           year from the public within the meaning of the provisions
          of the Companies Act,1956.
                                                                           of Sections 58A and 58AA of the Companies Act, 1956,
       b) Since the company has not granted any Loans as                   and the rules framed there under.
          aforesaid, sub-clauses (b), (c) & (d) of this clause are
                                                                     vii) In our opinion, the Company has an internal audit system
          not applicable.
                                                                          commensurate with the size and nature of its business.
       c) Except interest-free Unsecured Loan of Rs
          1,35,00,000/- (repaid Rs. 1,00,00,000/- during the         viii) The maintenance of cost records under section 209(1)(d)
          year) from a company, the Company has not taken                  of the Companies Act,1956, has not been prescribed by
          any loan, secured or unsecured, from companies,                  the Central Government in respect of the products of the
          firms or other parties covered in the register                   Company.
          maintained under section 301 of the Companies              ix)   a) According to the records of the Company examined
          Act,1956.                                                           by us, the Company is generally regular in depositing
       d) The terms and conditions of loan taken from a                       undisputed statutory dues including Provident Fund,
          company as aforesaid are prima facie not prejudicial                Income-tax, Sales-tax, Wealth-tax, Service Tax,
          to the interest of the Company.                                     Custom Duty, Excise Duty, Cess and any other
                                                                              statutory dues except Fringe Benefit Tax. According
       e) In respect of the above loan, there are no stipulations

Rohit Ferro-Tech Ltd.
         to the information and explanations given to us, there      xv) According to the information and explanations given to
         is no undisputed outstanding statutory dues as at               us, the Company has not given any guarantee for loans
         31st March 2008 for a period exceeding six months               taken by others from banks or financial institutions.
         from the date they became payable except
                                                                     xvi) On the basis of review of utilisation of funds pertaining to
         Professional Tax of Rs. 20,355/-, Sales Tax at
                                                                          term loans on a overall basis and related information as
         Source of Rs. 9,520/-, Purchase Tax Payable
                                                                          made available to us, we are of the opinion that the
         Rs.12,339/- and Fringe Benefit Tax of Rs. 2,40,500/-
                                                                          Company has applied the term loans for the purpose for
                                                                          which they were obtained during the year.
      b) On the basis of our examination of records and
                                                                     xvii) In our opinion, and according to the information and
         according to explanations given to us, there are no
                                                                           explanations given to us, the funds raised on short-term
         dues as on 31st March 2008 of Sales tax, Income tax,
                                                                           basis have not been used for long-term investment.
         Customs Duty, Wealth Tax, Service Tax, Excise Duty
         and Cess which have not been deposited on account           xviii) The Company has made no fresh allotment of shares
         of any dispute.                                                    during the year to parties and companies covered in the
                                                                            Register maintained u/s 301 of the Companies Act,
x)    The Company has neither accumulated losses at the end
      of the financial year nor has it incurred cash losses in the
      financial year under report or in the immediately              xix) No debentures have been issued by the Company and
      preceding financial year.                                           hence the question of creating security or charge in
                                                                          respect thereof does not arise.
xi)   According to the records of the Company examined by us
      and the information and explanations given to us, the          xx) The company has not raised any money by way of public
      Company has not defaulted in repayment of dues to                  issue during the year.
      financial institutions or banks.                               xxi) According to the information and explanations given to
xii) As explained to us, the Company has not granted any                  us, no fraud on or by the Company has been noticed or
     loans and advances on the basis of security by way of                reported during the year.
     pledge of shares, debentures and other securities.
                                                                                                                 For S. Jaykishan
xiii) Clause(xiii) of the Order is not applicable, as the                                                   Chartered Accountants
      Company is not a chit fund company or nidhi/mutual
      benefit fund/society.

xiv) No transaction and contract has been entered into by the
     company in respect of shares, securities, debentures and
     other investments during the year. Proper records have
                                                                                                                     B. K. Newatia
     been maintained in respect of investments, which are
                                                                     Place: Kolkata                                         Partner
     held by the company in its own name.
                                                                     Date: 20th June 2008                            M. No. 050251

                                                                                                     Annual Report 2007-08 56|57
Balance Sheet as at 31st March 2008
                                                                                                            (Amount in Rupees)
                                                                     Schedule                31.03.2008          31.03.2007
   1. Shareholders' Funds
       a) Share Capital                                                   1                 344,629,450          344,629,450
       b) Deposit against share warrants                                                     34,400,000                    –
       c) Reserves and Surplus                                            2                1,620,169,949         878,500,168
   2. Loan Funds
       a) Secured Loans                                                   3                1,725,703,278        1,558,645,023
       b) Unsecured Loans                                                 4                 386,115,754             3,024,339
   3. Deferred Tax Liability                                                                 84,417,765            45,560,880
       Total                                                                              4,195,436,195        2,830,359,860
   1. Fixed Assets
       a) Gross Block                                                     5                2,085,589,155        1,211,359,234
       b) Less: Depreciation                                                                123,638,392            52,783,831
       c) Net Block                                                                        1,961,950,763        1,158,575,403
       d) Capital Work-in-progress                                                          171,340,425          565,177,563
   2. Investments                                                         6                       849,026            849,026
   3. Current Assets, Loans & Advances
       a) Inventories                                                     7                1,267,909,845         813,691,833
       b) Sundry Debtors                                                  8                 617,774,571          142,011,339
       c) Cash & Bank Balances                                            9                 395,425,175          112,511,461
       d) Loans & Advances                                               10                 991,979,862          606,707,347
                                                                                           3,273,089,453        1,674,921,980
          Less: Current Liabilities & Provisions
       a) Current Liabilities                                            11                1,052,315,375         521,553,510
       b) Provisions                                                     12                 171,379,884            63,612,818
                                                                                           1,223,695,259         585,166,328
       Net Current Assets                                                                 2,049,394,195        1,089,755,652
   4. Miscellaneous Expenditure                                          13                  11,901,786            16,002,216
       Total                                                                              4,195,436,195        2,830,359,860
       Significant Accounting Policies & Notes on Accounts               22

Schedule 1 to 13 & 22 referred above form an integral part of the Balance Sheet.
In terms of our report of even date attached.
For S. Jaykishan                                         For & on behalf of the Board
Chartered Accountants

B.K.Newatia                                         S. K. Patni                 Rohit Patni                    P K Jain
Partner                                              Chairman                 Managing Director                 CFO &
Membership No. 050251                                                                                       Company Secretary
Place: Kolkata.
Dated: 20th June 2008

Rohit Ferro-Tech Ltd.
Profit and Loss Account for the year ended 31st March 2008
                                                                                                             (Amount in Rupees)
                                                                      Schedule                31.03.2008          31.03.2007
   Sales                                                                  14                6,457,991,587        2,149,773,520
   Less: Excise Duty                                                                        (231,611,876)        (128,662,128)
                                                                                            6,226,379,711        2,021,111,392
   Other Income                                                           15                   27,959,387           15,273,011
   Increase / (Decrease) in Stock                                         16                  244,540,775           97,369,311
                                                                                           6,498,879,874        2,133,753,714
    Raw Materials Consumed                                                17                3,025,069,921        1,051,885,948
    Purchase of Traded Goods                                                                  519,791,859           95,204,585
    Manufacturing Expenses                                                18                1,274,172,750          479,878,222
    Payments to & Provisions for Employees                                19                   39,602,026           21,251,514
    Administrative, Selling & Other Expenses                              20                  364,358,936          159,031,862
    Interest & Finance Charges                                            21                  250,986,363           74,539,776
    Depreciation                                                                               70,854,560           23,355,289
                                                                                            5,544,836,415        1,905,147,196
   Profit Before Tax                                                                         954,043,459          228,606,517
   Provision for Taxation:
   – Current                                                                                (109,700,000)         (23,062,799)
   – Deferred                                                                                (38,856,886)         (22,334,266)
   – Fringe Benefit Tax                                                                        (1,200,000)            (721,461)
   Deferred MAT Credit Entitlement                                                                       –          21,884,956
   Profit After Tax                                                                          804,286,573          204,372,948
   Less: Income Tax for Earlier Years                                                          (2,136,908)          (2,870,965)
   Add/(Less): Extra-ordinary item (net of tax)                                                          –          (9,319,864)
   Surplus from last year                                                                     485,615,268          333,753,072
   Balance available for Appropriation                                                     1,287,764,933          525,935,190
   Proposed Dividend                                                                           51,694,418           34,462,945
   Corporate Tax on Dividend                                                                    8,785,466            5,856,978
   Transfer to General Reserve                                                                 45,000,000                    –
   Balance carried to Balance Sheet                                                         1,182,285,049          485,615,268
                                                                                           1,287,764,933          525,935,190
   Earnings per Share (Face Value - Rs. 10/- each)
   Before extraordinary item
      – Basic                                                                                       23.34                 5.96
      – Diluted                                                                                     21.57                 5.96
   After extraordinary item
      – Basic                                                                                       23.28                 5.61
      – Diluted                                                                                     21.52                 5.61
   Significant Accounting Policies & Notes on Accounts                    22

Schedule 14 to 22 referred above form an integral part of the Profit & Loss Account.
In terms of our report of even date attached.
For S. Jaykishan                                          For & on behalf of the Board
Chartered Accountants

B.K.Newatia                                          S. K. Patni                 Rohit Patni                    P K Jain
Partner                                               Chairman                 Managing Director                 CFO &
Membership No. 050251                                                                                        Company Secretary
Place: Kolkata.
Dated: 20th June 2008

                                                                                               Annual Report 2007-08 58|59
Cash Flow Statement for the year ended 31st March 2008
                                                                                                     (Amount in Rupees)
                                                           Year ended 31.03.2008            Year ended 31.03.2007
   Net Profit before Tax & Extraordinary Items                             954,043,459                       228,606,517
   Adjustments for:
   Depreciation                                            70,854,560                       23,355,289
   Provision for gratuity                                           –                           710,093
   Loss on Investment                                               –                         1,516,711
   Interest Income                                       (21,602,332)                       (6,633,310)
   Interest Expenses                                     250,986,363                        74,539,776
   Share Issue Expenses written off                         3,967,262                         3,967,262
   Preliminary Expenses written off                           133,168       304,339,020         133,168       97,588,989
   Operating Profit before Working Capital Changes                       1,258,382,479                      326,195,506
   Adjustments for:
   Trade & Other Receivables                            (882,030,037)                      (48,798,573)
   Inventories                                          (454,218,012)                     (508,915,924)
   Trade Payables & Other Liabilities                     617,680,448     (718,567,601)     281,546,849     (276,167,648)
   Cash Generated from Operations                                          539,814,879                        50,027,858
   Direct Taxes Paid                                     (25,209,092)                      (22,732,504)
   Extraordinary item                                               –                      (10,497,707)
                                                                          (25,209,092)                       (33,230,211)
   Net Cash from/ (used in) Operating Activities                          514,605,787                         16,797,647
   Purchase of Fixed Assets & Capital W.I.P.            (448,516,408)                     (873,189,964)
   Interest Capitalised                                  (31,876,375)                      (68,190,561)
   Purchase of Investment                                           –                       (2,365,737)
   Advances for Capital Goods                              32,726,367                     (126,670,475)
   Sundry Creditors for Capital Expenditure              (86,080,467)                        69,900,240
   Interest Received                                       10,359,636                         6,309,155
   Increase in Fixed Deposits                           (266,858,500)                      (18,713,784)
   Net Cash from/ (used in) Investing Activities                         (790,245,746)                    (1,012,921,126)
   Capital Investment Subsidy received                               –                      24,000,000
   Deposit against share warrants                          34,400,000                                 –
   Share Application Money Refunded                                  –                    222,110,040)
   Increase in Long Term Loan                              84,800,000                      171,646,112
   Term Loan Repayments                                 (148,100,000)                                 –
   Increase in Short Term Borrowings                      230,358,255                      530,037,392
   Increase in Inter Corporate Deposits & Other Loans     383,091,415                       (4,436,965)
   Share Issue Expenses                                              –                    (16,369,839)
   Interest Paid                                        (252,384,066)                     (73,142,073)
   Dividend paid                                         (34,462,945)                     (34,462,945)
   Corporate Dividend Tax Paid                             (5,856,978)                      (4,833,428)
   Net Cash from / (used in) Financing Activities                         291,845,681                       370,328,214
   Net Increase/(Decrease) in Cash and Cash
   Equivalents (A+B+C)                                                     16,205,721                      (625,795,266)
   Cash and Cash Equivalents at the
   beginning of period                                                     14,735,263                       640,530,529
   Cash and Cash Equivalents at the end of period                          30,940,984                        14,735,263

Rohit Ferro-Tech Ltd.
Cash Flow Statement (Contd.)

i) The Cash Flow Statement has been prepared under the "Indirect Method" set out in Accounting Standard-3 on "Cash Flow
    Statement" notified in the Companies (Accounting Standards) Rules, 2006

ii) Cash and cash equivalents include cash in hand and bank balances on current account. (Refer Schedule 9)

iii) Figures in brackets indicate Cash outflow.

iv) Previous year's figures have been regrouped/rearranged, wherever considered necessary to conform to this year's

In terms of our report of even date attached.
For S. Jaykishan                                         For & on behalf of the Board
Chartered Accountants

B.K.Newatia                                         S. K. Patni              Rohit Patni                  P K Jain
Partner                                              Chairman              Managing Director               CFO &
Membership No. 050251                                                                                  Company Secretary
Place: Kolkata.
Dated: 20th June 2008

                                                                                             Annual Report 2007-08 60|61
Schedules Annexed to and forming part of the Balance Sheet as at 31st March 2008
                                                                                            (Amount in Rupees)
                                                                              31.03.2008         31.03.2007

    45,000,000 Equity Shares of Rs.10 /- each                                450,000,000         400,000,000
               (PreviousYear - 40,000,000 Equity Shares of Rs.10/- each)
Issued, Subscribed & Paid-up:
    34,462,945 Equity Shares of Rs. 10/- each fully paid up in cash          344,629,450          344,629,450
                                                                            344,629,450          344,629,450


Securities Premium -
As per last account                                                          368,884,900          29,930,000
Add: Received during the year                                                          –         338,954,900
                                                                             368,884,900         368,884,900
Capital Investment Subsidy
As per last account                                                           24,000,000          24,000,000
General Reserve
Transfer From Profit & Loss a/c                                                45,000,000
Surplus as per Profit & Loss A/c annexed                                    1,182,285,049         485,615,268
                                                                           1,620,169,949         878,500,168


A) Term Loans
   State Bank of India                                                       219,760,542         297,552,675
   State Bank of Travancore                                                   80,976,458         100,000,000
   State Bank of Hyderabad                                                    80,929,882          99,997,714
   United Bank of India                                                      300,078,290         267,777,637
B) Working Capital Loans
   Cash Credit
      State Bank of India                                                     58,761,230         301,910,122
      State Bank of Hyderabad                                                 89,368,207          78,932,144
      State Bank of Travencore                                                86,394,316                   –
      United Bank of India                                                   214,533,587         154,981,581
   Export Packing Credit
      State Bank of India                                                    251,977,811                   –
   Stand by Line of Credit
      State Bank of India                                                     50,671,721                   –
      State Bank of Hyderabad                                                 25,143,837                   –
   Buyers' Credit
      State Bank of India                                                              –         117,504,444
      United Bank of India                                                    67,107,397                   –
      State Bank of Hyderabad                                                          –          27,488,706
C) Rupee Loan
   IDBI Ltd.                                                                  200,000,000         112,500,000
                                                                           1,725,703,278       1,558,645,023

Rohit Ferro-Tech Ltd.
Schedules Annexed to and forming part of the Balance Sheet as at 31st March 2008
1) Term Loans are secured by way of pari passu charge on Land and Building, Plant and Machinery and other fixed assets owned
   by the Company and landed property held in the name of Subham Complex (P) Ltd. and Personal Guarantee of the Promoter
   Directors & Corporate Guarantee of group Companies.
2) Working Capital Loans are secured by way of pari passu charge on Inventories, Book Debts and Other Current Assets with
   collateral charge on Company's Fixed Assets, Office Premises and Personal Guarantee of Promoter Directors & Corporate
   Guarantee of group Companies.
3) Loan from IDBI Ltd. Is secured against all monies receivable from WBIDC.
                                                                                                                                                           (Amount in Rupees)
                                                                                                                                         31.03.2008             31.03.2007

From Standard Chartered Bank                                                                                                            148,986,970                                  –
(Personally guaranteed by the promoter directors & one of the group companies)
WBIDC Ltd. (Bridge Loan against Subsidy receivable)                                                                                      129,967,507                             –
From Other Bodies Corporate                                                                                                              107,161,277                     3,024,339
                                                                                                                                        386,115,754                      3,024,339

                                                             GROSS BLOCK                                                DEPRECIATION                             NET BLOCK
         Particulars                         As on        Additions     Deductions             As on           As on              For           As on            As on           As on
                                       01.04.2007            during          during      31.03.2008      01.04.2007          the year     31.03.2008       31.03.2008      31.03.2007
                                                           the year        the year

 1       Land and Land
         a) Leasehold                   47,381,130     124,765,889                 –    172,147,019                 –               –                –    172,147,019       47,381,130
         b) Freehold                     3,820,075                 –               –       3,820,075                –               –                –       3,820,075       3,820,075
 2       Factory Shed & Building       329,141,835     116,144,276                 –    445,286,111        9,063,926      12,848,155      21,912,081      423,374,030     320,077,909
 3       Office Building                 7,883,533        1,125,000                –       9,008,533         183,405         128,601         312,006         8,696,527       7,700,128
 4       Guest House                     1,725,500                 –               –       1,725,500          56,252           28,126          84,378        1,641,122       1,669,248
 5       Plant & Machinery             471,412,874     382,413,801                 –    853,826,675       26,269,931      33,178,577      59,448,508      794,378,167     445,142,943
 6       Electrical Installations      324,597,389     238,789,868                 –    563,387,257       14,621,866      22,333,602      36,955,468      526,431,789     309,975,523
 7       Tools & Equipments              7,715,092           49,000                –       7,764,092         412,305         367,898         780,203         6,983,889       7,302,787
 8       Air Conditioners                2,301,039           76,020                –       2,377,059         108,318         110,197         218,515         2,158,543       2,192,721
 9       Office Equipments               1,029,853          663,617                –       1,693,470          90,246           66,145        156,391         1,537,079         939,607
 10      Computers                       2,171,587        1,306,977                –       3,478,564         472,597         428,678         901,275         2,577,289       1,698,990
 11      Motor Cars                      5,432,087        6,038,848                –     11,470,935          987,522         838,714        1,826,236        9,644,699       4,444,565
 12      Furniture & Fixtures            6,716,915        2,856,625                –       9,573,540         512,217         524,426        1,036,643        8,536,897       6,204,698
 13      Fire Extinguisher                   30,325                –               –          30,325           5,247            1,440           6,687           23,638          25,078
         Total                       1,211,359,234     874,229,921                 –   2,085,589,155      52,783,832      70,854,560     123,638,392 1,961,950,763 1,158,575,402
         Figure as on 31.03.07         379,774,818     831,584,416                 –   1,211,359,234      29,428,542      23,355,289      52,783,832 1,158,575,402
         Capital Work-in-Progress     565,177,563     342,434,470      736,271,608     171,340,425                  –               –                –   171,340,425      565,177,563

a)    The original cost of vehicles & equipments includes Rs. 69,51,912/- (P.Y. Rs.1,10,53,893/-) acquired from loans taken from banks & financial institutions, of which Rs. 37,43,924/-
      (P.Y. Rs.20,19,625) were outstanding as at 31.03.2008.
b)    Leasehold land includes Rs. 1,22,71,600/- in respect of which lease deeds are pending for execution.

                                                                                                                                           Annual Report 2007-08 62|63
Schedules Annexed to and forming part of the Balance Sheet as at 31st March 2008
                                                                                           (Amount in Rupees)
                                                                             31.03.2008         31.03.2007

Schedule 6 INVESTMENTS (Long Term- Other than trade)
Investments in Mutual Fund
– Bajaj Allianz Equity Plus Fund (590.184 units)                                  7,067               7,067
– Bajaj Allianz Cash Plus Fund (70317.307 units)                                841,959             841,959
                                                                                849,026             849,026

NAV as on 31/03/08- Rs. 9,17,834/-

Schedule 7 INVENTORIES (as taken, valued & certified by the management)

Raw Materials                                                                846,079,118         660,119,890
Finished Goods                                                               264,634,706          46,464,019
Work in Progress                                                             142,577,929          97,814,940
Stores & Spares inluding Packing Materials                                    14,618,091           9,292,984
                                                                          1,267,909,845         813,691,833

Schedule 8 SUNDRY DEBTORS (Unsecured, Considered Good)

Due for more than 6 months                                                   16,034,503            2,398,270
Other Debts                                                                 601,740,068          139,613,069
                                                                           617,774,571          142,011,339


Cash in Hand (As Certified by the Management)                                 5,841,665            9,499,967
Balances With Scheduled Banks
In Current Accounts                                                          25,099,319            5,235,296
In Public Issue Account
    H.D.F.C Bank Ltd.                                                            14,820              14,820
In Dividend Account
    H.D.F.C Bank Ltd.                                                            60,038             210,545
In Fixed Deposit Accounts (pledged with Banks as margin for
Bank Guarantees and Letter of Credit facility)
State Bank of India                                                         273,952,833           73,787,833
State Bank of Hyderabad                                                       5,572,000            5,763,000
State Bank of Travencore                                                     37,500,000                    –
United Bank of India                                                         32,600,000           18,000,000
Centurion Bank of Punjab Ltd                                                 14,784,500                    –
                                                                           395,425,175          112,511,461

Rohit Ferro-Tech Ltd.
Schedules Annexed to and forming part of the Balance Sheet as at 31st March 2008
                                                                                       (Amount in Rupees)
                                                                         31.03.2008         31.03.2007

Schedule 10 LOANS & ADVANCES (Unsecured, Considered good)
Advances recoverable in cash or in kind or for value to be received
    For Capital Goods                                                    18,444,626           51,170,993
    To Suppliers & Others                                               279,204,254          117,067,096
CENVAT / VAT Credit Receivable                                           55,077,743           56,873,215
Security & Other Deposits                                               194,940,985           76,518,376
Balance with Excise Department                                           23,987,787           42,916,769
DEPB Licence Receivable                                                  38,423,806           20,474,168
Power Subsidy Receivable                                                316,303,729          191,036,593
Income Tax Payments (including TDS)                                       4,560,054            4,070,673
Income Tax Refundable                                                       203,770                    –
Accrued Interest on deposits                                             11,566,851              324,155
Prepaid Expenses                                                          5,775,857            2,684,346
Welfare Cess Receivable                                                           –               80,564
MAT Credit Entitlement                                                   43,490,399           43,490,399
                                                                       991,979,862          606,707,347


Acceptances                                                             357,592,573         199,089,823
Sundry Creditors
Dues to Micro, Small & Medium Enterprises                                         –                   –
Dues to Others
    For Supplies                                                         325,155,707          63,422,263
    For Capital Goods                                                     22,116,838         108,197,305
    For Expenses                                                         248,044,306         136,276,927
    For Pending Disbursements                                             32,711,967           9,110,205
Interest accrued but not due                                                       –           1,397,703
Unpaid Dividend Account                                                       60,038             210,545
Share Application Money Refundable                                            14,820              14,820
Advances from Parties                                                     65,843,478           3,833,919
Income Received in advance                                                   775,647                   –
                                                                      1,052,315,375         521,553,510

Schedule 12 PROVISIONS

For   Taxation                                                          109,700,000           21,884,956
For   Fringe Benefit Tax                                                  1,200,000              697,847
For   Gratuity                                                                    –              710,093
For   Proposed Dividend                                                  51,694,418           34,462,945
For   Corporate Tax on Dividend                                           8,785,466            5,856,978
                                                                       171,379,884           63,612,818

                                                                          Annual Report 2007-08 64|65
Schedules Annexed to and forming part of the Balance Sheet as at 31st March 2008
                                                                                                     (Amount in Rupees)
                                                                                       31.03.2008         31.03.2007

Schedule 13 MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted)
Preliminary Expenses
   Opening Balance                                                                        133,168             266,336
   Less: Amortised during the year                                                        133,168             133,168
                                                                                                –             133,168
Share Issue Expenses
   Opening Balance                                                                      15,869,048           3,466,471
   Addition during the year                                                                      –          16,369,839
                                                                                        15,869,048          19,836,310
   Less: Amortised during the year                                                       3,967,262           3,967,262
                                                                                        11,901,786          15,869,048
                                                                                       11,901,786          16,002,216

Schedules Annexed to and forming part of the Profit and Loss Account for the year ended 31st March
                                                                                                  (Amount in Rupees)
                                                                                       31.03.2008      31.03.2007

Schedule 14 SALES
Export Sales                                                                         4,135,009,660       1,104,041,310
Domestic Sales                                                                       2,227,735,407       1,016,310,016
Export Incentives                                                                       95,246,520          29,422,194
                                                                                    6,457,991,587       2,149,773,520

Schedule 15 OTHER INCOME

Interest on Credit sales (TDS Rs. 24,32,824/-, P.Y.- 6,70,446/-)                         6,959,293          3,270,034
Interest on Deposits (TDS Rs. 12,32,183/-, P.Y.-Rs.5,80,062/-)                          14,643,039          3,363,276
Exchange Fluctuation Gain                                                                6,357,055          8,487,659
Miscellaneous Income                                                                             –            152,042
                                                                                       27,959,387          15,273,011


Closing Stock of Finished Goods                                                       264,634,706          46,464,019
Closing Work-in-Progress                                                              142,577,929          97,814,940
                                                                                      407,212,635         144,278,959
Less : Opening Stock of Finished Goods & Work-in-Progress                             144,278,959          40,031,699
                                                                                      262,933,676         104,247,260
Excise Duty on variation in Stocks                                                   (18,392,901)          (6,877,949)
                                                                                     244,540,775          97,369,311

Rohit Ferro-Tech Ltd.
Schedules Annexed to and forming part of the Profit and Loss Account for the year ended 31st March
2008                                                                                      (Amount in Rupees)
                                                                            31.03.2008         31.03.2007
Opening Stock                                                               660,119,890         255,873,250
Add: Purchases (including freight)                                        3,211,029,150       1,456,132,588
                                                                          3,871,149,040       1,712,005,838
Less: Closing Stock                                                         846,079,118         660,119,890
                                                                         3,025,069,921       1,051,885,948


Labour Charges                                                              49,579,187          18,521,132
Power & Fuel                                                               996,904,733         397,736,574
Water Supply Charges                                                         2,126,015             810,515
Stores, Spares & Consumables (including Packing Materials)                 178,205,602          55,131,067
Material Handling Charges                                                   25,420,028           5,311,129
Machinery Hire Charges                                                       3,691,045                   –
Repairs & Maintenance:
   To Factory Shed & Buildings                                                4,898,241            588,106
   To Plant & Machinery                                                      13,347,898          1,779,699
                                                                         1,274,172,750         479,878,222


Factory Wages                                                                20,125,230          8,359,025
Salaries                                                                      9,204,789          5,432,764
Contribution to Provident Fund                                                1,649,632            669,572
Gratuity                                                                        599,042            710,093
Directors' Remuneration                                                       5,880,645          4,950,000
Welfare Expenses                                                              2,142,688          1,130,060
                                                                            39,602,026          21,251,514

                                                                             Annual Report 2007-08 66|67
Schedules Annexed to and forming part of the Profit and Loss Account for the year ended 31st March 2008
                                                                                           (Amount in Rupees)
                                                                             31.03.2008         31.03.2007


Rent                                                                          1,513,158              563,772
Rates & Taxes                                                                 1,704,410              631,897
Electricity Charges                                                             273,434              131,669
Insurance                                                                     5,604,093            4,297,702
Printing & Stationery                                                         1,941,555              519,690
Postage,Telegram & Courier                                                      661,966              334,479
Telephone Charges                                                             2,244,334            1,144,311
Travelling & Conveyance                                                       8,605,302            4,412,683
Car Running & Maintenance                                                     4,280,445            1,937,014
Other Repairs & Maintenance                                                   1,474,128              217,330
Security Service Charges                                                     14,605,937            7,129,332
Membership & Subscription                                                     1,588,689              451,622
Legal & Professional Charges                                                  3,587,794            2,160,439
Auditors Remuneration
    – For Audit                                                                  100,000              57,500
    – For Tax Audit                                                               30,000              15,000
    – For Other Services                                                          28,000              10,500
Directors' Sitting Fees                                                           87,500              49,000
Miscellaneous Expenses                                                         8,815,442           3,512,903
Bank Charges                                                                  41,972,503          23,184,685
Processing Fees to WBIDC Ltd                                                   1,373,814           7,275,412
Testing & Inspection Charges                                                   4,557,981           2,471,942
Donations                                                                        947,362           1,250,000
Advertisement,Publicity & Sales Promotion                                      6,380,814           2,726,652
Freight & Forwarding on Export                                               153,218,845          28,783,640
Transportation, Loading & Labour Charges                                      88,845,627          57,706,577
Commission on Sales- other than sole selling agent                             1,784,878           1,584,270
Discounts & Rebates                                                            2,322,683              45,290
Loss on Investment                                                                     –           1,516,711
Excise Duty/ Sales Tax for earlier years                                         540,307             659,660
Prior Period Expenses                                                            792,086             149,751
Sundry Balances Written Off                                                      375,419                   –
Preliminary Expenses                                                             133,168             133,168
Share Issue Expenses Written Off                                               3,967,262           3,967,262
                                                                            364,358,936         159,031,862


Interest to Banks/ Financial Institutions
    – On Fixed Loans                                                          91,466,865          22,861,381
    – Others                                                                 154,949,793          51,313,458
Motor Car Finance Charges                                                        245,508              69,313
Equipment Finance Charges                                                          9,365             155,663
Interest to Others                                                             4,314,832             139,961
                                                                            250,986,363          74,539,776

Rohit Ferro-Tech Ltd.
Schedules forming part of the Accounts

1.   Basis of preparation of financial statements.
     a) The financial statements are prepared in accordance with Generally Accepted Accounting Principles (Indian GAAP)
        under the historical cost convention on accrual basis and on principles of going concern. The accounting policies are
        consistently applied by the Company.
     b) The financial statements are prepared to comply in all material respects with the accounting standards notified by the
        Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.
     c)   The preparation of the financial statements requires estimates and assumptions to be made that affect the reported
          amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and
          expenses during the reporting period. Differences between the actual results and estimates are recognised in the period
          in which the results are known / materialised.
2.   Revenue Recognition
     a) Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the
        revenue can be reliably measured.
     b) Sales are recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Sales
        are inclusive of excise duty but net of trade discounts and VAT. However, excise duty relating to sales is reduced from
        gross turnover for disclosing net turnover.
     c)   Export incentives arising out of Export Sales are accounted for on accrual basis.
     d) Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate
3.   Fixed Assets
     a) Fixed Assets are stated at cost, less accummulated depreciation and impairment losses, if any. Cost comprises the
         purchase price (net of CENVAT / duty credits availed or available thereon) and any attributable cost of bringing the
         asset to its working condition for the intended use.
     b) Depreciation is provided using the Straight Line Method as per the useful lives of the assets estimated by the
        management, or at the rates prescribed under schedule XIV of the Companies Act, 1956, whichever is higher. No write
        off is made in respect of leasehold land as these are long term lease.
     c)   The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based
          on internal/external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its
          recoverable amount. The recoverable amount is the higher of the asset’s net selling price and value in use, which is
          determined by the present value of the estimated future cash flows.
     d) Cost of the fixed assets not ready for their intended use at the Balance Sheet date together with all related expenses
        are shown as Capital Work-in-progress.
4.   Investments
     Investments classified as long-term investments are stated at cost. Provision is made to recognise any diminution other than
     temporary in the value of such investments. Current investments are carried at lower cost and fair value.
5.   Inventories
     Inventories are valued at lower of cost and net realisable value. Cost of inventories comprises material cost on FIFO basis,
     labour and manufacturing overheads incurred in bringing the inventories to their present location and condition. Cost of
     finished goods includes excise duty.
6.   Foreign Currency Transactions
     i) Initial Recognition
         Foreign currency transcations are recorded in the reporting currency, by applying to the foreign currency amount the
         exchange rate between the reporting currency and the foreign currency at the date of the transaction.

                                                                                                 Annual Report 2007-08 68|69
Schedules forming part of the Accounts

     ii) Conversion
          Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of
          historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.
     iii) Exchange Differences
          Exchange differences arising on the settlement of monetary items are recognised as income or as expense in the year
          in which they arise.
     iv) Forward Exchange Contracts
         The company enters into Forward Exchange Contracts which are not intended for trading or speculation purposes. The
         premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the
         life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year
         in which the exchange rates change. Any profit or loss arising on cancellation or renewal of foreign exchange contract
         is recognised as income or expense for the year.
7.   Financial Derivatives and Commodity Hedging Transactions
     In respect of derivative contracts, premium paid, gains/losses on settlement and provisions for losses for cash flow hedges
     are recognized in the Profit and Loss Account, except in case where they relate to borrowing costs that are attributable to
     the acquisitions or construction of fixed assets, in which case, they are adjusted to the carrying cost of such assets.
8.   Subsidy
     a) The Company is registered under the West Bengal Incentive Scheme 2000 of the Director of Industries, Government of
        West Bengal. Under the said scheme, the Company is entitled to receive Capital Investment Subsidy, Interest Subsidy,
        Employment Generation Subsidy, Waiver of Electricity Duty and Remission of Stamp Duty & Registration Fees, which
        except Electricity Duty are accounted for in the year of receipt.
     b) The Company has been granted eligibility certificate (EC) under the West Bengal Incentive to Power Intensive Industries
        Scheme, 2005, promulgated by the Department of Commerce & Industries, Government of West Bengal, vide
        notification no.276-CI/O/Incentive/052/05/I dated 19.05.2005 effective from 1st April, 2004. Under the said scheme,
        the Company is entitled to receive incentive on energy charges, which is accounted for in the books on accrual basis.
9.   Retirement Benefits
     a) Defined Contribution Plan
         Contributions as per the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 towards provident fund
         and family pension fund are charged to the Profit and Loss Account of the year when the contributions to the respective
         funds are due. There is no other obligation other than the contribution payable to the respective funds.
     b) Defined Benefit Plan
        Liability with regard to gratuity is provided for on the basis of an actuarial valuation at the Balance Sheet date. Actuarial
        gain / loss is recognised immediately in the statement of profit and loss. The Company has an Employees Gratuity Fund
        managed by the Life Insurance Corporation of India (LIC).
         Compensated Absences
         The Company provides for the encashment of absence or absence with pay based on the policy of the Company in this
         regard. Short-term compensated absences are provided for based on estimates. Long-term compensated absences are
         provided for based on actuarial valuation.
10. Borrowing Costs
    a) Borrowing costs that are directly attributable to the acquisition of qualifying assets are capitalised for the period untill
        the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to
        get ready for its intended use.
     b) Other Borrowing costs are recognised as expense in the period in which they are incurred.
11. Expenditure on new projects & substantial expansion
    Preliminary project expenditure, capital expenditure, indirect expenditure incidental and related to construction/
    implementation, interest on term loans to finance fixed assets and expenditure on start-up of the project are capitalized upto
    the date of commissioning of project to the cost of the respective assets.

Rohit Ferro-Tech Ltd.
Schedules forming part of the Accounts
12. Taxes on Income
    Tax expense comprises of current tax, deferred tax and fringe benefit tax.
     a)   Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities,
          computed in accordance with the applicable tax rates and tax laws. In case of tax payable as per provisions of MAT under
          section 115JB of the Income Tax Act, 1961, MAT credit is recognised as an asset only when and to the extent there is
          convincing evidence that the Company will pay normal income tax during the specified period.
     b) Deferred Tax arising on account of "timing differences" and which are capable of reversal in one or more subsequent
        periods is recognised, using the tax rates and tax laws that are enacted or substantively enacted. Deferred tax asset is
        recognised only to the extent there is reasonable certainty with respect to reversal of the same in future years as a
        matter of prudence.
13. Earnings per Share (EPS)
    a) Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders
        by the weighted average number of equity shares outstanding during the period.
     b) For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity
        shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of
        all dilutive potential equity shares.
14. Provisions & Contingent Liabilities
    a) A provision is recognised when the company has a present obligation as a result of past event and it is probable that an
        outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.
     b) Contingent Liablities are not provided for in the accounts and are shown seperately in the Notes on Account.
15. Preliminary and Share Issue Expenses
    Preliminary and Share Issue Expenses are amortised over a period of 5 years U/s 35D of the Income Tax Act, 1961.

1.   Contingent Liabilities not provided for in the books of Accounts:
     a)   In respect of Bank Guarantees - Rs.1,721,042/- (Previous year Rs.25,621,748/-)
     b) In respect of Bills discounted with Banks, outstanding as on 31st March, 2008- Rs.873,526,956/- (P.Y. -
     c)   In respect of Letters of Credit opened in favour of suppliers, outstanding as on 31st March, 2008 - Rs.453,246,166/-.
          (P.Y. - Rs.112,846,245/-)
2.   Estimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of Advances) -
     Rs.28,300,000/-, (Previous Year Rs. 23,657,346).
3.   In the opinion of the Board of Directors, the Current Assets, Loans & Advances have a value on realisation in the ordinary
     course of business at least equal to the amount at which they are stated in the accounts. Adequate provisions have been
     made for all known losses and liabilities.
4.   Certain balances of the Sundry Creditors, Sundry Debtors, Unsecured Loans and Advances are subject to Confirmation.
5.   There are no Micro, Small and Medium Enterprises to whom the Company owes dues, which are oustanding for more than
     45 days as at 31st March, 2008. This information as required to be disclosed under the Micro, Small and Medium Enterprises
     Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information
     available with the Company.
6.   The Company has issued during the year 80,00,000 warrants convertible within 18 months from the date of its allotment into
     equal number of shares of Rs. 10/- each at a premium of Rs. 33/- per share to Promoter Group and Strategic Investors
     belonging to Non-Promoter group and received Rs. 3,44,00,000/- towards 10% of the warrant subscription amount.
7.   Miscellaneous Expenses include Filing Fee of Rs.2,50,000/- for increase in Authorised Share Capital of the Company.
8.   Sundry Debtors include Rs.321,752,489/- (P.Y. Rs.82,459,307/-) covered by letters of credit in favour of the Company.

                                                                                                   Annual Report 2007-08 70|71
Schedules forming part of the Accounts

9.   Managerial Remuneration:                                                                             (Amount in Rupees)
                                                                                            31.03.2008          31.03.2007
     a) Remuneration to Managing Directors
        S.K.Patni (upto 31st July, 2007)                                                      2,000,000          4,650,000
        Rohit Patni - M.D. (from 27.08.07)                                                    2,148,387                  –
        Ankit Patni - Joint M.D. (from 27.08.07)                                              1,432,258                  –
                                                                                              5,580,645          4,650,000
     b) Remuneration to Executive Director
        Binit Jain                                                                              300,000            300,000
                                                                                                300,000            300,000
     c) Sitting Fees to Other Directors                                                          87,500             49,000
                                                                                                 87,500             49,000
                                                                                              5,968,145          4,999,000

10. Prior period expenses for the year comprise of the followings:
                                                                                                             Amount in Rs.
     Labour Charges                                                                                                 21,420
     Electricity Charges                                                                                             3,750
     Provident Fund                                                                                                 21,078
     Interest on car Loan                                                                                           54,213
     Entry Tax                                                                                                     326,837
     Bank Charges                                                                                                  364,788

11. The Company has commenced commercial production at its Jajpur unit from 3rd furnance on 9/10/07 and 4th furnance on
    26/11/07. Accordingly, pre-operative expenses upto the respective dates have been capitalised by transfer to Factory Shed
    & Building, Plant & Machinery and Electrical installations in proportion to their respective costs.
12. Capital Work-in- Progress includes Rs. 73,90,534/- (Previous Year Rs. 53,275,524/-) as Pre-operative Expenses relating to
    projects under implementation, pending allocation to Fixed Assets.
13. Disclosure pursuant to Accounting Standard- 15 ( Revised) " Employee Benefits" :
     a.   The Company, during the year, has adopted Accounting Standard 15 ( revised) " Employee Benefits" issued by the
          Institute of Chartered Accountants of India.
     b.   Defined Contribution Plan: Amount of Rs 16,49,632/- is recognised as expense and included in "Payments to and
          Provision For Employees" in Schedule-19 of the Profit & Loss Account.
     c.   Defined Benefit Plan:

          i.   Reconciliation of Opening and Closing balances of the Present Value of the Defined Benefit Obligation:
                                                                                                             Gratuity (Rs.)
          a.   Present Value of Defined Benefit Obligation at the beginning of the year                             710,093
          b.   Interest Cost                                                                                         56,807
          c.   Current Service Cost                                                                                 382,818
          d.   Actuarial Losses/ (Gains)                                                                            160,716
          e.   Benefits Paid                                                                                              –
          f.   Present Value of Defined Benefit Obligation at the close of the year                               1,310,434

Rohit Ferro-Tech Ltd.
Schedules forming part of the Accounts

     ii.   Changes in the Fair Value of Plan Assets and recociliation thereof:
                                                                                                             Gratuity (Rs.)
     a.    Fair Value of Plan Assets at the Beginning of the year                                                         –
     b.    Add: Expected Return on Plan Assets                                                                        1,299
     c.    Add / (Less): Actuarial Losses / (Gains)                                                                       –
     d.    Add: Contributions                                                                                     1,309,135
     e.    Less: Benefits Paid                                                                                            –
     f.    Fair Value of Plan Assets at the close of the year                                                     1,310,434
           Actual Return on Plan Assets                                                                               1,299

     iii. Amount Recognised in the Balance Sheet including a reconciliation of the present value of the defined
          obligation in (i) and the fair value of the plan assets in (ii) to assets and liabilities recognised in the Balance
                                                                                                             Gratuity (Rs.)
     a.    Present Value of Defined Benefit Obligation                                                            1,310,434
     b.    Less: Fair Value of Plan Assets                                                                        1,310,434
     c.    Present Value of unfunded obligation                                                                           –
     d.    Net Liability / (Assets) recognised in the Balance Sheet                                                       –

     iv. Amount recognised in the Profit and Loss Account are as follows:
                                                                                                             Gratuity (Rs.)
     a.    Current Service Cost                                                                                     382,818
     b.    Interest Cost                                                                                             56,807
     c.    Expected return on Plan Assets                                                                            (1,299)
     d.    Actuarial Losses / (Gains)                                                                               160,716
     e.    Past Service Costs                                                                                              –
     f.    Effect of curtailment / settlement                                                                              –
     g.    Recognised in the Profit and Loss Account                                                                599,042

     v.    Broad Categories of Plan Assets as a percentage of Total Assets as at 31.03.2008
                                                                                                              Gratuity Plan
     Qualifying Insurance Policy                                                                                         Yes

     vi. Actuarial Assumptions as at the Balance Sheet date:
     a.    Discount Rate                                                                                                 8%
     b.    Salary Escalation Rate                                                                                        3%

     vi. The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority,
          promotion and other relevant factors.
     viii. This being the first year of implementation of AS- 15 (Revised), previous year figures have not been given.

                                                                                              Annual Report 2007-08 72|73
Schedules forming part of the Accounts
14. (A) Business segments: The Company is mainly engaged in a single business segment of manufacture & sale of Ferro Alloys
          and accordingly this is the only primary reportable segment.

    (B) Geographical segments: The Company's secondary geographical segments have been identified based on the location
          of customers and are disclosed based on revenues within India and revenues outside India. Secondary segment assets
          and liabilities are based on the location of such asset/ liability.
                                                                                                          (Rupees in lakhs)
                                                                                            31.03.2008        31.03.2007
          Revenue (Gross Sales)
          Within India                                                                        23,229.82          10,163.10
          Outside India                                                                       41,350.10          11,040.41
                                                                                             64,579.92          21,203.51
          Carrying Amount of Segment Assets
          Within India                                                                        50,971.44          33,314.58
          Outside India                                                                        3,100.86             680.66
                                                                                             54,072.30          33,995.24
          Capital Expenditure
          Within India                                                                         8,742.30           8,315.84
          Outside India                                                                               –                  –
                                                                                               8,742.30          8,315.84

15. Related Party Disclosures
    (A) List of related parties over which control of the Company exists - None.

    (B) List of Related Parties with whom transactions have taken place during the year:

          Key Managerial Personnel
    i.    Suresh Kumar Patni
    ii.   Rohit Patni
    iii. Ankit Patni
    iv. Binit Jain

          Relative of Key Managerial Personnel
    i.    Sarita Patni

          Enterprises in which Key Managerial Personnel have significant influence
    i.    Impex Metal & Ferro Alloys Ltd.
    ii.   Impex Ferro Tech Ltd
    iii. Ankit Metal & Power Ltd.
    iv. Vasupujya Enterprises (P) Ltd.

Rohit Ferro-Tech Ltd.
Schedules forming part of the Accounts

   (C) Transactions with the related parties during the year
                                                                                                  (Amount in Rupees)
                                                               Key Managerial   Relative of Key        Enterprises in
                                                                    Personnel       Managerial which Key Managerial
              Nature of Transactions                                                 Personnel       Personnel have
                                                                                                significant influence
        1.    Purchase of Goods                                             –                –           74,737,256
        2.     Sales of Goods                                               –                –          301,066,375
        3.    Loans Taken                                                   –                –           13,500,000
        4.    Loans Repaid                                                                               10,000,000
        4.    Deposit against Share Warrants                       10,320,000                –                    –
        5.    Directors' Remuneration                               5,880,645                –                    –
        6.    Sitting Fees                                             32,500            2,500                    –

   (D) Outstanding Balances as on 31.03.2008

         1.   Sundry Creditors                                                                             7,815,807
         2.   Sundry Debtors                                                                              58,585,284
         3.   Loan Payable                                                                                 3,500,000

16. Earnings Per Share (EPS)
    Particulars                                                                        As at 31st        As at 31st
                                                                                      March, 2008       March, 2007
   (a) Number of Shares considered as weighted average shares for calculation
       of Basic Earnings Per Share                                                      34,462,945        34,277,216
       Dilutive effect of potential shares outstanding                                   2,819,672                 –
       Number of shares considered as weighted average shares and potential
       shares outstanding for calculation of diluted EPS                                37,282,617       34,277,216
   (b) (i) Profit after tax, before extraordinary item (Rs.)                           804,286,573      204,372,948
       (ii) Profit after tax, after extraordinary item (Rs.)                           802,149,665      192,182,118
   (c) Nominal Value of Ordinary Shares (Rs.)                                                10.00            10.00
   (d) Earning Per Share (Basic) in Rs. :
       (i) Before extraordinary item                                                         23.34              5.96
       (ii) After extraordinary item                                                         23.28              5.61
   (e) Earning Per Share (Diluted) in Rs. :
       (i) Before extraordinary item                                                         21.57              5.96
       (ii) After extraordinary item                                                         21.52              5.61

17. Components of Deferred Tax Liability as per AS-22, “Accounting for Taxes on Income” is as under:
    Nature of Timing Differences                                                       As at 31st        As at 31st
                                                                                      March, 2008       March, 2007
   Deferred Tax Lability
       – Depreciation                                                                   84,417,765        45,560,880
   Net Deferred Tax Liability                                                           84,417,765        45,560,880

                                                                                         Annual Report 2007-08 74|75
Schedules forming part of the Accounts

18. No Forward contracts/ hedging instruments are outstanding at the Balance Sheet date. Particulars of Unhedged
    foreign currency exposure as at 31.03.08:                                                    (Rupees in lakhs)
   Amount Receivable                                                                                              3100.86
   Amount Payable                                                                                                 3934.80

19. Additional information pursuant to the provisions of paragraphs 3 & 4 of Part II of Schedule VI to the Companies
                                                        For the Year ended                     For the Year ended
         Particulars                                        31.03.2008                             31.03.2007
                                                     Qty. (M.T.)        Value (Rs.)        Qty. (M.T.)         Value (Rs.)
   A) Capacity, Production, Sales & Stock
      Licenced Capacity: N.A.
      Installed Capacity : Ferro Alloys 151,525 M.T. Per Annum (P.Y- 101,525 M.T.) (Installed Capacity has been certified by
      the management and not verified by the auditors being a technical matter)
   Opening Stock                                       1071.100          46,464,019            282.740          8,870,792
   Production                                         97476.560                              51157.400
   Sales                                              94916.170      5,648,818,946           50369.040      1,923,258,775
   Closing Stock                                       3631.490        264,634,706            1071.100         46,464,019

   B) Raw Materials Consumed
   Chrome Ore                                        270667.910      1,972,257,084         146252.462         699,373,519
   Manganese Ore                                      17045.570        309,306,542                  –                   –
   Coke                                               65848.605        560,119,234          37897.940         272,585,980
   Others (being less than 10%
   of total consumption individually)                 57147.557         183,387,061                            79,926,450
                                                                     3,025,069,921                         1,051,885,948
   Imported                                          615,368,915            20.34%         232,443,799            22.10%
   Indigenious                                     2,409,701,007            79.66%         819,442,149            77.90%
   Total                                          3,025,069,921            100.00%      1,051,885,948            100.00%

   C) Stores, Spares & consumables                              –      178,205,602                    –        55,131,067
   Imported                                                    –                 –                   –                 –
   Indigenious                                       178,205,602           100.00%          55,131,067           100.00%
   Total                                            178,205,602            100.00%         55,131,067            100.00%

   D) Purchases & Sales of Items traded
   i)    Purchases
         Iron & Steel                                  11253.870        288,682,976           1369.280          39,084,615
         Minerals                                      28552.775        231,108,883          11552.400          56,119,970
                                                      39806.645        519,791,859          12921.680          95,204,585
   ii)   Sales
         Iron & Steel                                  11253.870        297,131,870           1369.280          39,023,526
         Minerals                                      28552.775        280,428,895          11552.400          58,829,092
                                                      39806.645        577,560,765          12921.680          97,852,618

Rohit Ferro-Tech Ltd.
Schedules forming part of the Accounts

                                                                                                        (Amount in Rupees)
                                                                                          31.03.2008          31.03.2007
    E) Value of Imports / Expenditure in Foreign Currency
    CIF Value of Imports
    a) Raw Materials                                                                      645,853,815         268,407,737
    b) Capital Goods                                                                        5,179,373                   –
                                                                                         651,033,188         268,407,737
    Expenditure in Foreign Currency
    a) Tours & Travels                                                                     3,215,490           1,230,470
    b) Membership & Subscription                                                             829,461                   –
    c) Legal & Professional Fees                                                              40,070                   –
    d) Miscellaneous Expenses                                                                113,386
                                                                                           4,198,407           1,230,470

    F) Earnings in Foreign Currency
    FOB Value of Exports                                                                3,937,544,723       1,043,940,287

20. Previous year's figures have been regrouped/rearranged, wherever considered necessary. The previous year's figures may
    therefore be different from audited figures for the year ended 31.03.2007, hence are not comparable.

In terms of our report of even date attached.

For S. Jaykishan                                        For & on behalf of the Board
Chartered Accountants

B.K.Newatia                                        S. K. Patni              Rohit Patni                    P K Jain
Partner                                             Chairman              Managing Director                 CFO &
Membership No. 050251                                                                                   Company Secretary
Place: Kolkata.
Dated: 20th June 2008

                                                                                            Annual Report 2007-08 76|77
Balance Sheet Abstract
Information as required under part IV of schedule VI of the Companies Act. 1956.
a.   Registration Details
     Registration No.                                        9   1        6        2   9     State Code                                     2   1

     Balance Sheet Date      3       1       0       3       2        0        0       8
                              Date           Month                    Year

b.   Capital Raised during the year

     Public Issue                                                 N        I       L         Rights Issue                               N   I   L

     Bonus Issue                                                  N        I       L        Private Placement                           N   I   L

c.   Position of Mobilisation and Deployment of Funds
     Total Liabilities                   4       1       9   5    4        3       6        Total Assets               4   1    9   5   4   3   6

     Sources of Funds
     Paid–up Capital                             3       4   4    6       2        9         Secured Loans             1   7    2   5   7   0   3

     Deposit Against                                     3   4    4        0       0         Unsecured Loans               3    8   6   1   1   6
     Share Warrants
     Reserves & Surplus                  1       6       2   0    1        7       0         Deferred Tax Liability             8   4   4   1   8

     Application of Funds
     Net Fixed Assets                    1       9       6   1    9        5       1       Capital Work in Progress    1   7    1   3   4   0

     Investments                                                  8        4       9       Net Current Assets          2   0    4   9   3   9   4
     Misc. expenditure to                                1   1    9        0       2
     the extent Not written off

c.   Performance of the Company

     Total Income                        6       2       5   4    3        3       9        Total Expenditure          5   3    0   0   2   9   6

     Profit Before Tax                           9       5   4    0        4       3         Profit After Tax              8    0   4   2   8   7

     Earning per share                                                     2       3         Dividend Rate %                                1   5

e.   Generic Names of The Principal Products / Services of Company
     ITC Code No. (ITC Code)             Product Description
     7202 2100                           Ferro Alloys

In terms of our report of even date attached.
For S. Jaykishan                                                          For & on behalf of the Board
Chartered Accountants

B.K.Newatia                                                      S. K. Patni                         Rohit Patni                  P K Jain
Partner                                                           Chairman                         Managing Director               CFO &
Membership No. 050251                                                                                                          Company Secretary
Place: Kolkata.
Dated: 20th June 2008

Rohit Ferro-Tech Ltd.
                        Corporate Information

Board of Directors
Mr. S.K. Patni                                      Non-Executive Chairman
Mr. Rohit Patni                                             Managing Director
Mr. Ankit Patni                                        Jt. Managing Director
Mr. Binit Jain                                              Executive Director
Mr. K.C. Jain                                                         Director
Mr. J.N.Rudra                                                         Director
Mr. J.K. Chatterjee                                                   Director
Mr. Asoke Kr. Basu                                                    Director
(Appointed as an Additional Director on 11th August 2008)
Mrs. Sarita Patni                                                     Director
(Resigned from the Board w.e.f. 11th August 2008)

M/s S. Jaykishan
Chartered Accountants
12, Ho-Chi Minh Sarani, Kolkata – 700071

State Bank of India
State Bank of Travancore
State Bank of Hyderabad
United Bank of India

Registered and Corporate office
35, Chittaranjan Avenue, Kolkata – 700012
Phone: +91-33-2211 9805/9806
Fax: +91-33-22114134
E-mail: enquiry@rohitferrotech.com

Website: www.rohitferrotech.com

Plant information
WBIIDC Road, P.S. – Bishnupur, P.O. Dwarika – 722122
Dist – Bankura, West Bengal

Kalinganagar Industrial Complex
P.O.: Duburi – 755026, Dist: Jajpur, Orissa

                                                                           Annual Report 2007-08 78|79
  I try to learn from the past, but I plan for the future by
focusing exclusively on the present. That's were the fun is.

                                               – Donald Trump
In this Annual Report we have disclosed forward-looking information to enable investors to know our product
portfolio, business logic and direction and comprehend our prospects. This report and other statements —
written and oral — that we periodically make are based on our assumptions. We have tried wherever possible
to identify such statements by using words such as ‘anticipate’, ‘believe’, ‘estimate’, ‘expect’, ‘intend’, ‘plan’,
‘project’ and words of similar substance in connection with any discussion of future performance.

We cannot guarantee that these forward looking statements will be realised, although we believe that we
have been prudent in our assumptions. The achievement of results is subject to risks, uncertainties and even
inaccurate assumptions. If known or unknown risks or uncertainties materialise, or if underlying assumptions
prove inaccurate, actual results can vary materially from those anticipated, estimated or projected. Readers
may bear this in mind.

We undertake no obligation to publicly update any forward-looking statements, whether as a result of new
information, future events or otherwise.

                                              A             PRODUCT
      Rohit Ferro-Tech Ltd.
35, Chittaranjan Avenue, 4th Floor
         Kolkata 700 012

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