Directors Report of IFGL Refractories Ltd.(Old)

Mar 31, 2014

Dear Shareholders

The Directors are pleased to present the 25th Annual Report together with Statement of Profit and Loss for financial year ended on 31st March 2014 and Balance Sheet as on that date along with Notes, Cash Flow Statement and Auditors'' Report forming part thereof.

Performance of your Company for financial year ended on 31st March 2014 on Consolidated and Stand-alone basis have been as follows :

(RsRs. in Millions)

Consolidated Stand-alone

Total Revenue 7,809.95 3,289.45

Total Expenses 6,680.02 2,823.95

EBIDTA 1,129.93 465.50

Finance Cost 69.45 23.00

Depreciation and Amortisation Expense 154.78 70.23

Profit before Tax 905.70 372.27

Provision for Current Tax/Deferred Tax 248.03 128.80

Profit after Tax excluding Minority Interest 657.67 243.47

Earning Per Share 18.25 6.79

Total Revenue, Profit before Tax and Profit for the year on Consolidated basis, are higher by Rs. 1,052.80 Millions (15.6%), Rs. 492.52 Millions (119%) and Rs. 357.98 Millions (127%) respectively compared to that of previous year ended on 31st March 2013. Earning Per Share has more than doubled and is Rs. 18.25 compared to Rs. 7.91 of the previous year. Similarly, Total Revenue, Profit before Tax and Profit for the year on Stand-alone basis are higher by Rs. 203.58 Millions (6.6%), Rs. 118.47 Millions (47%) and Rs. 72.84 Millions (43%) respectively. Earning Per Share is Rs. 6.79 compared to Rs. 4.69 of the previous year.

The aforesaid strong performance is a result of an all round good performance, including your Subsidiary Companies. Rationalisation of Raw Material and major expenses, coupled with a more efficient management of working capital made your Company more competitive and profitable. Despite following a conservative policy of booking future Foreign Exchange, your Company still benefited from Rupee depreciation specially against Euro and Sterling Pound.

Dividend

Your Directors are pleased to recommend payment of Dividend as follows for the year 2013-2014 subject to necessary approvals, including your approval at the ensuing Annual General Meeting :

a) 5% on Preference Shares ofRs. 100/- each i.e. Rs. 5/- per Preference Share.

b) 17.50% on Equity Shares of Rs. 10/- each i.e. Rs. 1.75 per Equity Share.

DIRECTORS'' REPORT AND

MANAGEMENT DISCUSSION AND ANALYSIS REPORT TO THE SHAREHOLDERS (Contd.)

Dividend on Equity Shares has been recommended following your Company''s Policy of distributing maximum profits amongst the Shareholders and is higher by 2.50% i.e. Rs. 0.25 per Equity Share than that paid for previous year.

Subsidiary Companies

During financial year 2013-2014, Subsidiaries of your Company particularly in the UK and USA performed strong. Total Income, Profit before Tax and Profit after Tax of overseas operations increased by Rs. 686 Millions (18%), Rs. 221 Millions (106%) and Rs. 177.98 Millions (135%) respectively compared to that of the previous year.

Stabilizing the quality of Isostatic Refractories in a new production facility is very crucial and time consuming. Your Directors are very pleased to report that this has been achieved by your Indian Subsidiary, IFGL Exports Limited. This has resulted in satisfactory performance inasmuch as Total Revenue increased by Rs. 309.09 Millions (339%). Profit before Tax has been Rs. 34.73 Millions compared to a loss ofRs. 57.21 Millions of the previous year. Despite this Subsidiary having substantial carry forward losses, it has effected payment of Minimum Alternate Tax of Rs. 3.50 Millions.

Your Directors are pleased to report that one of your Subsidiaries in the USA (EIC) and the Indian Subsidiary are taking steps to expand their respective production capacity. Your Directors are confident that operations of Subsidiaries will further improve during current financial year 2014-2015 barring unforeseen circumstances.

Industry Structure, Developments, Opportunities, Threats, Risks and Concerns and Future Outlook

During financial year 2013-2014, Steel Industry both in India and abroad continued to go through the process of consolidation and/or stabilization. While Steel Industry in Americas did well, that of China, Europe and Asia Pacific are still trying to recover and factors like weakened economy, increased cost of inputs particularly employees and power and fuel, political instability etc. appears to have obstructed recovery of the same to a large extent. Your Directors are however optimistic and are of the view that during current financial year, performance of Iron and Steel Industry will improve and consequently results of industries ancillary to the same.

On a Consolidated basis, only about 20% of sales of your Company is from India and your Directors are of the view that the same will increase substantially with the Indian economy improving in the coming year, especially with the increased thrust on infrastructure development to give required boost to otherwise slackening economy.

Bio Ceramic business performed better than that for previous year. Focus on this business and also few more new identified products will be stepped up during current financial year.

For improved investor relation, your Company has taken steps to improve the communication with them.

Corporate Governance/Internal Control System and their adequacy

A detailed Report on Corporate Governance Compliance duly certified by the Company''s Statutory Auditors form part of this Report as Annexure ''A''. Corporate Governance policies and procedures practiced by your Company is one of the tenets of its philosophy for effective management and distribution of wealth and discharge of social responsibility for sustainable development of all stakeholders.

The members of Audit Committee of Directors of your Company are in conformity with provisions of Section 177 of the Companies Act, 2013 (the Act) read with revised Clause 49 of the Listing Agreement and terms of reference thereof has been modified to include matters specified.

Whistle Blower Policy has been amended to include Vigil Mechanism provided in said Section. Policies and systems for Internal Control, Risk Management and Transfer Pricing are in place and are reviewed and updated from time to time as and when necessary.

Accounts of Subsidiary Companies

A statement having financial information of Subsidiary Companies form part of this Annual Report. Shareholders of the Company and those of Subsidiary Companies who are desirous of having complete statement of accounts and related detailed information of Subsidiary Companies, may send their request therefor either to the Company''s Registered Office

or to Head and Corporate Office. The same are being kept for inspection at Head Offices of your Company and Subsidiary Companies and also available on your Company''s website i.e. www.ifglref.com/group_account.php

Directors'' Responsibility Statement

Your Directors state that :

a) In preparation of the annual accounts, the applicable Accounting Standards have been followed.

b) Accounting Policies selected and applied are consistent and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Profit and Loss of the Company for that period.

c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) The annual accounts have been prepared on a Going Concern basis.

e) Internal Financial Controls i.e. policies and procedures for ensuring orderly and efficient conduct of business, including adherence to Company''s policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information, have been laid down and that such controls are adequate and operating effectively.

f) Proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems are adequate and operating effectively.

Your Company''s Statutory Auditors, M/s Deloitte Haskins & Sells, Chartered Accountants have audited the statement of accounts in accordance with Generally Accepted Accounting Standards and Practices as indicated in their Report.

CSR

A Committee of Directors on Corporate Social Responsibility in accordance with provisions of Section 135 of the Act has been constituted and going forward CSR activities as per policy formulated and recommended by this Committee will be undertaken and sum prescribed will be spent on account thereof. Nevertheless, your Company during financial year 2013- 2014 continued to pursue programmes for improvement of health, safety, education and environment in areas neighbouring its Indian manufacturing operations in Kalunga Industrial Estate (near Rourkela) in the State of Odisha and latest of such programme is setting up of a toilet complex at an Upper Primary School.

Disclosure of Employees Particulars

In an Annexure forming part of this Report, particulars of employees of your Company drawing remuneration ofRs. 60 lacs or more per annum and Rs. 5 lacs or more per month, if employed for part of the year, are given in accordance with provision of the Companies (Appointment & Remuneration of Managerial Person) Rules, 2014. However, this Annual Report is being sent to Company''s Shareholders and others entitled thereto without said Annexure and any Shareholder interested in obtaining such Annexure may write to the Company Secretary.

Industrial Relations

During financial year 2013-2014, Industrial Relations continued to remain cordial. Your Company provide conducive working environment to its team members and empower them by trainings on latest techniques and practices. Compensation packages and benefits provided compared favourably with those offered in the Refractory Industry.

Consolidated Financial Statements

In accordance with Accounting Standard 21 and other relevant provisions, Consolidated Financial Statements duly audited by Statutory Auditors, M/s Deloitte Haskins & Sells form part of this Annual Report. Consolidated Financial Statements have been prepared based on Financial Statements (including Consolidated) of immediate two Subsidiary Companies i.e. IFGL Worldwide Holdings Limited and IFGL Exports Limited, as approved by their respective Boards.

Directors

Independent Directors due to retire by rotation are Mr D K Banerji, Prof S Munshi and Prof A N Sadhu, who being eligible, offer themselves for re-appointment for a term of five consecutive years upto the conclusion of the 30th Annual General Meeting. Other Independent Directors, Mr D G Rajan, Mr K S B Sanyal and Mr S Khasnobis are being re-appointed for a term of five consecutive years upto the conclusion of the 30th Annual General Meeting. These re-appointments will be in conformity with relevant provisions including Sections 149, 150, 152 of the Act and Rules framed thereunder. Ordinary Resolutions and Explanatory Statement in respect of each of re-appointment of said Independent Directors form part of Notice of your ensuing Annual General Meeting.

Appointment of Chairman, Mr S K Bajoria and Managing Director, Mr P Bajoria will also end on 31st March 2015 and your Directors recommend their re-appointment for a further period of 5 years effective 1st April 2015 by passing special resolutions proposed for the purpose and forming part of Notice of ensuing Annual General Meeting.

Profile of your Directors seeking re-appointment is forming part of Notice of the Shareholders of ensuing Annual General Meeting.

Disclosure of Information

Information regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is given in Annexure ''B''. Particulars of contracts/arrangements entered into by your Company with related parties including those in ordinary course of business at arms length during financial year 2013-2014 are disclosed in the Financial Statements. Your Directors also propose to change terms and conditions including remuneration of Mr Akshay Bajoria, being son of the Managing Director, Mr P Bajoria on and from 1st April 2014. These require your approval and for the purpose, Special Resolutions and Explanatory Statement thereon form part of Notice of your ensuing Annual General Meeting, following provisions of Section 188 of the Act read with Rule 15(3) of the Companies (Meetings of Board and its Powers) Rules, 2014.

Auditors'' Report and Auditors

Report of the Auditors, including references made therein to the Notes forming part of the Statement of Accounts, are self explanatory.

Auditors, M/s Deloitte Haskins & Sells, Chartered Accountant will retire at conclusion of the forthcoming Annual General Meeting and being eligible for re-appointment, have signified their willingness to be so appointed for a term of five consecutive years in accordance with provisions of Section 139 read with Rules framed thereunder.

Acknowledgement

Your Directors place on record their sincere appreciation for the continued support received from all the stakeholders particularly you the Shareholders.

On behalf of the Board of Directors

Kolkata S K Bajoria P Bajoria 10th May 2014 Chairman Managing Director

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Mar 31, 2013

The Directors are happy to present the 24th Annual Report together with Statement of Profit and Loss for financial year ended on 31st March 2013 and Balance Sheet as on that date.

Financial Performance of your Company for financial year ended on 31st March 2013 on Stand-alone and Consolidated basis have been as follows :

(Rs. in Millions) Stand-alone Consolidated

Total Revenue 3,084 6,756

Total Expenses 2,719 6,130

EBIDTA 365 626

Finance Cost 41 79

Depreciation and Amortisation Expense 71 134

Profit before Tax 253 413

Provision for Current Tax/ Deferred Tax 83 160

Profit after Tax 170 253

Total Revenue, both on Stand-alone and Consolidated basis, are higher by Rs. 312 Millions (11%) and Rs. 685 Millions (11%) compared to that of previous year ended on 31st March 2012. Profit before Tax is however lower by 3% and 29% respectively. Earning per Share, on Stand-alone and Consolidated basis are Rs. 4.69 and Rs. 7.91 respectively.

Dividend

Your Directors are pleased to recommend payment of Dividend as follows for the year 2012-2013 subject to necessary approvals, including your approval at the ensuing Annual General Meeting :

a) 5% on Preference Shares of Rs. 100/- each i.e. Rs. 5/- per Preference Share.

b) 15% on Equity Shares of Rs. 10/- each i.e. Rs. 1.50 per Equity Share.

Subsidiary Companies

During the year under review, operating Subsidiaries in Germany, UK and USA performed satisfactorily. Because of changes in market dynamics and more particularly the prevailing conditions in Europe, operations of Chinese Subsidiaries were somewhat affected. Performance of Brazilian Subsidiary continued to deteriorate and as a result, the operations were shut down from January 2013. Revenue from the operations ofthe Indian Subsidiary, IFGL Exports Limited having facilities for manufacture of Continuous Casting Refractories at new area of Kandla Special Economic Zone, Gujarat (India), which commenced commercial production on and from 1st May 2012, aggregated to Rs. 90.22 Millions comprising ofRs. 60.26 Millions from exports (including indirect). However, operations are still being stabilized and optimum capacity utilization could not be reached and thus ended financial year 2012-2013 with loss of Rs. 57.21 Millions, which includes Rs. 24.58 Millions and Rs. 16.23 Millions towards finance costs and depreciation and amortization expenses respectively. Your Directors are hopeful that operations of said Subsidiary would improve substantially during current financial year 2013-2014.

Industry Structure, Developments, Opportunities, Threats, Risks and Concerns and Future Outlook

During substantial part ofthe year under review, Steel Industry, both in India and abroad, more particularly in Europe remained sluggish because of several adverse macro economic factors. Despite the not too encouraging market scenario and other areas of concern like increase in cost of major inputs, employees, power and fuel, your Company has continued to perform consistently. Exports (including indirect) effected for the year 2012-2013 aggregated to Rs. 1,566 Millions. Your Directors are of the view that these economies have bottomed out and there are more positives emanating than negatives. Thus going forward, demand of major commodities including Iron and Steel should improve, resulting in greater requirement of Refractories.

Bio Ceramic business is still at the nascent stage although performance has improved during the year compared to that of the preceding year. This business being highly specialized is being pursued gradually.

Corporate Governance/Internal Control System and their adequacy

A detailed Report on Corporate Governance compliance duly certified by the Company''s Statutory Auditors form part of this Report as Annexure ''A''. Your Company practices best Corporate Governance Policies and Procedures, both statutory and otherwise with an objective to maximise value of its stakeholders. Terms of reference of Audit Committee is following Clause 49 of the Listing Agreement. Policies and systems for Internal Control, Risk Management and Transfer Pricing have also been adopted and are reviewed and updated from time to time as and when necessary.

Accounts of Subsidiary Companies

The Ministry of Corporate Affairs (MCA) has granted general exemption under Section 212(8) of the Act for attachment of Statement of the Subsidiaries to its accounts, subject to fulfilment of conditions specified vide General Circular No. 2/2011 dated 8th February 2011, amended to date. In accordance therewith, a statement having financial information of Subsidiary Companies form part of this Annual Report. Shareholders of the Company, and those of Subsidiary Companies who are desirous of having complete statement of accounts and related detailed information of Subsidiary Companies, may send their request - either to the Company''s Registered Office or to Head and Corporate Office. The same are being kept for inspection at Head Offices of your Company and Subsidiary Companies and also available on your Company''s website i.e. www.ifglref.com

Directors'' Responsibility Statement

Your Directors, in terms ofSection 217(2AA) ofthe Act, state that:

a) In preparation of statement of accounts for the financial year under review, the applicable Accounting Standards have been followed and in case of departures therefrom, proper explanations relating thereto have been given in the Notes forming part thereof.

b) Accounting Policies selected have been applied consistently and judgments and estimates made are reasonable and prudent as they give true and fair state of affairs of the Company at the end of the financial year under review and of the Profit of the Company for that period.

c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) Annual Accounts have been prepared on a Going Concern basis.

Your Company''s Statutory Auditors, Messers Deloitte Haskins & Sells, Chartered Accountants have audited the statement of accounts in accordance with Generally Accepted Accounting Standards and Practices as indicated in their Report.

CSR, Human Resources and Industrial Relations

Your Company has taken up several programmes for improving health, safety, environment and community neighbouring its manufacturing operations in Kalunga Industrial Estate near Rourkela in the State of Odisha, India. During the year, besides operating charitable Homeo and Allopathy Clinics, financial support to an Upper Primary School and Public Toilet Complex, several free Medical Camps on ailments like diabetes, generally found to be affecting public at large were organised. Your Directors have decided to allocate about 1% of the yearly Profit before Tax for pursuing these activities.

In an Annexure forming part of this Report, particulars of employees of your Company drawing remuneration of Rs. 60 lacs or more per annumand Rs. 5 lacs or more per month, if employed for part of the year, are given as per provisions of Section 217(2A) of the Act read with the Companies (Particulars of Employees) Rules, 1975 as amended. However this Annual Report is being sent to Company''s Shareholders and others entitled thereto excluding the Annexure in view of provisions of Section 219(1)(b)(iv) of the Act. Any Shareholder interested in obtaining this Annexure may write to the Company Secretary.

During financial year 2012-2013, Industrial Relations remained most cordial. Your Company continued to provide conducive working environment to its team members and empowered them by trainings on latest techniques and practices. Compensation packages and benefits provided compared favourably with those offered in the Refractory Industry.

Consolidated Financial Statements

In accordance with Accounting Standard 21 and General Circular No. 2/2011 dated 8th February 2011 of MCA, Consolidated Financial Statements duly audited by Statutory Auditors, Messers Deloitte Haskins & Sells form part of this Annual Report. Consolidated Financial Statements have been prepared based on Financial Statements (including Consolidated) of immediate two Subsidiary Companies i.e. IFGL Worldwide Holdings Limited and IFGL Exports Limited, as approved by their respective Boards.

Directors

Directors due to retire by rotation are Mr Sadayoshi Tateishi, Mr D G Rajan and Mr K S B Sanyal, who being eligible, offer themselves for re-appointment for further period.

Profile of all your Directors seeking re-appointment is forming part of Notice to the Shareholders of ensuing Annual General Meeting.

Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988

Information in accordance with provision of Section 217(1)(e) of the Act read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is given in Annexure ''B''.

Auditors'' Report

Report of the Auditors, including references made therein to the Notes forming part of the Statement of Accounts, are self explanatory.

Auditors

Messers Deloitte Haskins & Sells, Auditors will retire at conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

Acknowledgement

Your Directors place on record their sincere appreciation for the continued support received from all the stakeholders particularly you the Shareholders.

On behalf of the Board of Directors

Kolkata S K Bajoria P Bajoria

11th May 2013 Chairman Managing Director

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Mar 31, 2012

The Directors are happy to present the 23rd Annual Report together with Statement of Profit and Loss for financial year ended on 31st March 2012 and Balance Sheet as on that date.

Financial Performance of your Company for financial year ended on 31st March 2012 on Stand-alone and Consolidated basis have been as follows :

(Rs.in Millions)

Stand-alone Consolidated

Revenue from Operations (Net) 2,748 6,039

Other Income 24 26

Total Revenue 2,772 6,065

Less: Total Expenses 2,400 5,287

Profit before Finance Cost and Depreciation 372 778

Less: Finance Cost 47 68

Depreciation and Amortization Expense 63 129

Profit before Tax 262 581

Less: Provision for Current Tax/Deferred Tax 88 183

Profit after Tax 174 398

Total Revenue, both on Stand-alone and Consolidated basis, are higher by Rs 661 Millions and Rs 1,307 Million compared to that of previous year ended on 31st March 2011. Similarly Profit before Tax is higher by 139% and 78% respectively. Profit after Tax on Stand-alone basis is higher by 136%, Profit after Tax and Minority Interest on Consolidated basis is higher by 64%. Earnings per Share, on Stand-alone and Consolidated basis are Rs 4.79 and Rs 11.28 which compare favorably with Rs 1.99 and Rs 6.87 respectively for the year 2010-2011. Your Company had undertaken several measures to enhance overall operational efficiencies and results there from were yielded and reflected in above given financial performance.

Dividend

As a result of a very good performance, your Directors are pleased to recommend payment of Dividend as follows for the year 2011-2012 subject to necessary approvals, including your approval at the ensuing Annual General Meeting :

a) 5% on Preference Shares of Rs 100/- each i.e. Rs 5/- per Preference Share.

b) 15% on Equity Shares of Rs 10/- each i.e. Rs 1.50 per Equity Share.

Indian Operations

Production of Ceramic Filters for foundries as per Know-how of Hofmann Ceramic GmbH, Germany was stabilized and your Company started manufacturing Big Filters also.

Your Company continued to be recognized for exports and received CAPEXIL's Award for 9th consecutive year for the year 2010-2011. The value of exports (including indirect) for the year 2011-2012 aggregated to Rs 1,443 Millions.

Subsidiary Companies

Your Company's Subsidiaries are situated across 4 Continents, in Asia (PRC), Europe (Germany, United Kingdom, Czech Republic), North America (USA) and South America (Brazil), which are also engaged in manufacture of Specialized Refractoriness and Operating Systems for use in the Steel Plants and Foundries. Despite the economic scenario in some of the Western Countries not being too healthy, your Company's Subsidiaries except those in Brazil and Czech Republic performed satisfactorily inasmuch as they contributed 58% and 47% of Total Income and Profit after Tax respectively on Consolidated basis for the year 2011-2012.

IFGL Exports Ltd (IEL), which has become your Company's Subsidiary on and from 30th March 2012, has implemented facilities for manufacture of ISO products i.e. Continuous Casting Refractoriness (CCR) in the Special Economic Zone in Kandla, Gujarat. Trial production commenced on 1st November 2011 and the same has been stabilized inasmuch as commercial production has recently been started from Tuesday, 1st May 2012. Our long-term partners/Shareholders, Krosaki Harima Corporation (KHC), a Subsidiary of Nippon Steel Corporation of Japan, hold 20% Equity in IEL and also provide technology. This new manufacturing facility in the Western Coast of India will provide synergistically, logistical and operational advantages to your Company.

Industry Structure, Developments, Opportunities, Threats, Risks and Concerns and Future Outlook Your Directors continue to be optimistic about future of the Iron and Steel Industry both in India and abroad and envisage that going forward, there will be a greater thrust on "Clean Metal" and thus the demand for Specialized Refractories and Operating Systems produced by your Company will continue to grow barring unforeseen circumstances. Your Directors however continue to be concerned about steep increases in cost including manufacturing, selling and employees. Other areas of concern are scarcity of raw-materials and steep fluctuation in Foreign Exchange. As usual, all these factors would continue to be monitored closely and measures necessary will be taken as and when required.

Bio Ceramic business for health particularly Dental, Ophthalmic and Orthopedic segments, being in the nature of a diversification project for your Company, remained at nascent stage during the year 2011-2012. Several steps however have been taken to up-scale the same and results there from are likely to be yielded in the current financial year.

Corporate Governance/Internal Control System and their adequacy Your Company's motto is to maximize value of its stakeholders and in connection therewith, practices best Corporate Governance policies and procedures, both statutory and otherwise. Terms of reference of Audit Committee are in line with those provided in Clause 49 of the Listing Agreement. Policies and systems for Internal Control, Risk Management and Transfer Pricing have also been adopted and are reviewed and updated from time to time as and when necessary. A detailed Report on Corporate Governance Compliance duly certified by the Company's Statutory Auditors form part of this Report as Annexure 'A'.

Accounts of Subsidiary Companies

The Ministry of Corporate Affairs (MCA) has granted general exemption under Section 212(8) of the Act for attachment of Statement of the Subsidiaries to its accounts, subject to fulfillment of conditions specified vide General Circular No. 2/2011 dated 8th February 2011, amended to date. In accordance therewith, a statement having financial information of Subsidiary Companies form part of this Annual Report. Shareholders of the Company and those of Subsidiary Companies who are desirous of having complete statement of accounts and related detailed information of Subsidiary Companies, may send their request therefore either to the Company's Registered Office or to Head and Corporate Office. The same are being kept for inspection at Head Offices of your Company and Subsidiary Companies and also available on your Company's website i.e. www.ifglref.com.

Directors' Responsibility Statement

Your Directors, in terms of Section 217(2AA) of the Act, state that:

a) in preparation of statement of accounts for the financial year under review, the applicable Accounting Standards have been followed and in case of departures there from, proper explanations relating thereto have been given in the Notes forming part thereof.

b) Accounting Policies selected have been applied consistently and judgments and estimates made are reasonable and prudent as they give true and fair state of affairs of the Company at the end of the financial year under review and of the Profit of the Company for that period.

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) Annual Accounts have been prepared on a Going Concern basis.

Your Company's Statutory Auditors, Messers Deloitte Haskins & Sells, Chartered Accountants have audited the statement of accounts in accordance with Generally Accepted Accounting Standards and Practices as indicated in their Report.

CSR, Human Resources and Industrial Relations

Your Company is committed to discharge its responsibilities as a good Corporate and in pursuit of the same has taken several programmes for improving health, safety, environment and community adjoining its manufacturing operations. Besides operating free Homeo/Allopathy Clinics, extending financial sponsorship to an Upper Primary School, maintenance of public utilities like bus stand, tree plantation, a public toilet complex is being constructed on the land allotted for the purpose by Orissa Industrial Infrastructure Development Corporation, Rourkela.

In an Annexure forming part of this Report, particulars of employees of your Company drawing remuneration of Rs 60 lacs or more per annumand Rs 5 lacs or more per month, if employed for part of the year, are given as per provisions of Section 217(2A) of the Act read with the Companies (Particulars of Employees) Rules, 1975 as amended. However this Annual Report is being sent to Company's Shareholders and others entitled thereto excluding said Annexure in view of provisions of Section 219(1)(b)(iv) of the Act. Any Shareholder interested in obtaining such Annexure may write to the Company Secretary.

During financial year 2011-2012 also, Industrial Relations remained most cordial. Your Company continued to provide conducive working environment to its team members and empowered them by trainings on latest techniques and practices. Compensation packages and benefits provided compared favorably with those offered in the Refractory Industry.

Consolidated Financial Statements

In accordance with Accounting Standard-21 and General Circular No. 2/2011 dated 8th February 2011 of MCA, Consolidated Financial Statements duly audited by Statutory Auditors, Messers Deloitte Haskins & Sells form part of this Annual Report. Consolidated Financial Statements have been prepared based on Financial Statements (including Consolidated) of immediate two Subsidiary Companies i.e. IFGL Worldwide Holdings Limited and IFGL Exports Limited, as approved by their respective Boards.

Directors

Directors due to retire by rotation are Prof Amar Nath Sadhu and Mr Kunal Dalmia, who being eligible, offer themselves for re-appointment for further period.

On and from Friday, 26th August 2011, Mr Sudhamoy Khasnobis was appointed as an Additional Director of your Company. On and from Saturday, 5th November 2011, Mr Yoshihiro Konno of Sojitz Corporation, Japan was appointed as a Casual Director of your Company in vacancy caused due to resignation of Mr Osamu Matsuura. Mr Khasnobis and Mr Konno hold said offices until forthcoming Annual General Meeting only. Notices under provisions of Section 257 of the Act have been received proposing their candidature for the office of Director for further period liable to retire by rotation and they, being eligible, offer themselves for appointment as Director of your Company.

Profile of all your Directors seeking appointment/re-appointment is forming part of Notice to the Shareholders of ensuing Annual General Meeting.

Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988

Information in accordance with provision of Section 217(1)(e) of the Act read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is given in Annexure 'B'.

Auditors' Report

Report of the Auditors, including references made therein to the Notes forming part of the Statement of Accounts, are self explanatory.

Auditors

Messers Deloitte Haskins & Sells, Auditors will retire at conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

Acknowledgement

Your Directors place on record their sincere appreciation for the continued support received from all the stakeholders particularly you the Shareholders.

On behalf of the Board of Directors

Kolkata S K Bajoria P Bajoria

19th May 2012 Chairman Managing Director

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Mar 31, 2011

Dear Shareholders

The Directors present the 22nd Annual Report together with Profit and Loss Account for financial year ended on 31 st March 2011 and Balance Sheet as on that date.

Performance of your Company for financial year ended on 31 st March 2011 on stand-alone and consolidated basis have been as follows:

(Rs. in Millions)

Stand-alone Consolidated

Sales (Net of Excise Duty) 2,081.99 4,689.44

Other Income 6.42 43.26

Total Income 2,088.41 4,732.70

Less: Total Expenses 1,886.35 4,262.85

Profit before Interest and Depreciation 202.06 469.85

Less: Interest 39.50 55.75

Depreciation 52.86 87.22

Profit before Tax 109.70 326.88

Less: Provision for Current Tax/ Deferred Tax 35.98 84.24

Profit after Tax 73.72 242.64

Total Income, both on stand alone and consolidated basis, are higher by Rs. 330.76 Millions (19%) and Rs. 546.18 Millions (13%) compared to that of previous year ended on 31 st March 2010. Profit before Tax and Profit after Tax are lower and major contributing factors are depreciation of Euro and increase in cost of raw materials, energy etc and other expenses. Your Directors took several actions to step up efficiencies and improve overall performance and pursue both organic and inorganic growth of your Company. Your Directors have largely been successful in doing so despite radical changes in market dynamics and achieved aforesaid financial performance, which strictly is not comparable with that of previous financial year for reasons appearing hereinafter. Earning per Share, on consolidated basis, for the year is Rs. 6.87 compared to Rs. 9.91 for previous year.

During the year, on 10th September 2010 your Company, acquired EI Ceramics LLC (EIC) and CUSC International Limited (CUSC), both based in Cincinnati (Ohio), USA. EIC is engaged in manufacture of Isostatically pressed Alumina Graphite Continuous Casting Refractories and CUSC is its ancillary unit. EIC is a prominent supplier of CC Refractories to steel mills in USA and Canada. With these acquisitions your Company has production facilities for ISO products in not only two locations but in completely different geographies. This will also play a pivotal role in expansion plan of your Company as now also has a business model and team to provide the opportunity to grow customer base in USA.

During the year, your Company started commercial production of pressed Ceramic Filters for foundries as per know how of Hofmann Ceramic GmbH, Germany. Product response has been very encouraging and now all small filters for Indian market are supplied from Kalunga works. With success of this, your Company will shortly start manufacturing big filters also.

During the year a high temperature kiln was installed for slide gate production enhancing capability of your Company to supply full fired sliding gate plates for Indian and export markets.

Various projects were undertaken to improve efficiency of Isostatically pressed products. These have resulted in cost savings, improved and consistent product.

Your Company during the year augmented funds by issue of 14,50,000 - 5% Non Cumulative Preference Shares of Rs. 100/- each for an amount aggregating to Rs. 145 Millions on a private placement basis.

Your Company is predominantly a manufacturer and trader of Specialised Refractories and Ceramics, accordingly a single business segment Company. The Company has adopted geographical location of its operations (where its products are produced or service rendering activities are based) as its primary segment in terms of Accounting Standard 17 'Segment Reporting' and the Segment Revenue, Segment Results and Capital Employed, on consolidated basis, in terms of said Accounting Standard are given at Note 15 forming part of Consolidated Statement of Accounts.

Your Company in recognition of exports made during financial year 2009-2010 received CAPEXIL's Award for eighth consecutive year. Exports effected (including indirect) by your Company during the year aggregated to Rs. 1,073.87 Millions.

Dividend

Your Directors are pleased to recommend payment of dividend as follows subject to necessary approvals, including your approval at the ensuing Annual General Meeting :

a) 5% on Equity Shares of Rs. 10/- each i.e. Rs. 0.50 per Equity Share for the year.

b) 5% on Preference Shares of Rs. 100/- each i.e. Rs. 2.88 per Preference Shares on pro-rata basis for the period from 3rd September 2010 (date of allotment) to 31 st March 2011.

Subsidiary Companies

Subsidiaries of your Company have contributed more than 50% of total income and profits for the year and thus have performed well even under severe market conditions.

All subsidiaries have been reporting satisfactory profit figures except that in Brazil where also your directors are confident of reversing the trend during current financial year.

Current order book of all subsidiary is healthy and they are expected to do well barring unforeseen adverse market conditions.

Industry Structure, Developments, Opportunities, Threats, Risks and Concerns and Future Outlook Your Company continues to be focused on Iron and Steel Industry. With the sustainable growth in steel producing capacities particularly in India and increased demand for quality Iron and Steel particularly from manufacturing, construction and automobile sectors, it is expected that demand for refractories and operating systems therefor manufactured by your Company would continue to rise. Dampening factors are likely to be escalating manufacturing, selling and employee costs and likely scarcity of raw materials. Nevertheless, your Directors are optimistic about overall scenario going forward of the Iron and Steel Industry and particularly manufacturers and suppliers of niche Refractories thereto.

Accordingly, your Group Company, IFGL Exports Limited is going ahead full steam with setting up of new CCR Plant at new area of Kandla Special Economic Zone in Gujarat. Krosaki Harima Corporation (KHC), a subsidiary of Nippon Steel Corporation of Japan, being the technology provider to your Company has 20% equity participation in this company. Trial production is expected to start by September 2011 and commercial production by November 2011. Once this production facility will be on-stream, your Company along with its subsidiaries/associates will have production facilities for ISO products in three locations.

Bio Ceramics

Your Company continue to pursue Bio Ceramic business for health segment, being a diversification from producer of specialised Refractories for Iron and Steel Industry and have had reasonable success during the year. A collaborative project has been undertaken with National Metallurgical Laboratory, Jamshedpur for development of Nano-hydroxyapatite based Injectable Scaffold having applications in dental and orthopaedic segments. Technology for several new products for dental and orthopaedic segments have been tied up and would be launched in current financial year.

Corporate Governance / Internal Control System and their adequacy Your Company is committed to and practices principles of good Corporate Governance to maximise value of its stakeholders. Terms of Reference of Audit Committee are commensurate with those provided in Clause 49 of the Listing Agreement. Internal Control Systems and frame work thereof are reviewed and strengthened from time to time and are adequate to identify risks, assess and or evaluate impact thereof and take steps for control and mitigation thereof. Risk Management Manual and Risks Register and Global Transfer Pricing Policy for transactions with Associated Enterprises have been adopted and are reviewed and updated periodically. A detailed Report on Corporate Governance Compliance duly certified by the Company's Statutory Auditors form part of this Report as Annexure 'A'.

Accounts of Subsidiary Companies

Vide General Circular No. 2/2011 dated 8th February 2011, the Ministry of Corporate Affairs (MCA) has granted general exemption under Section 212(8) of the Act for attachment of statement of accounts of the subsidiaries to its accounts, subject to fulfilment of conditions mentioned therein. A statement having financial information of subsidiary Companies form part of this Annual Report. Shareholders of the Company, and those of Subsidiary Companies who are desirous of having complete statement of accounts and related detailed information of subsidiary companies, may send their request therefor either to the Company's registered office or to head and corporate office. The same are being kept for inspection at Head Offices of your Company and subsidiary companies and also available on your Company's website i.e. www.ifglref.com.

Directors'Responsibility Statement

Your Directors, in terms of Section 217(2AA) of the Act, state that:

a) in preparation of statement of accounts for the financial year under review, the applicable Accounting Standards have been followed and in case of departures therefrom, proper explanations relating thereto have been given in the Notes forming part thereof.

b) Accounting Policies selected have been applied consistently and judgments and estimates made are reasonable and prudent as they give true and fair state of affairs of the Company at the end of the financial year under review and of the profit and loss of the Company for that period.

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) Annual Accounts have been prepared on a going concern basis.

Your Company's Statutory Auditors, Messers Deloitte Haskins & Sells, Chartered Accountants have audited the statement of accounts in accordance with Generally Accepted Accounting Standards and Practices as indicated in their Report.

Consolidated Financial Statements

In accordance with Accounting Standard 21 and General Circular No. 2/2011 dated 8th February 2011 of MCA, Consolidated Financial Statements duly audited by Statutory Auditors, Messers Deloitte Haskins & Sells form part of this Annual Report. Consolidated Financial Statements have been prepared based on Financial Statements (including Consolidated) of immediate two levels of Subsidiary Companies i.e. IFGL Worldwide Holdings Limited and IFGL Monocon Holdings Limited, as approved by their respective Boards.

Directors

Directors due to retire by rotation are Mr D G Rajan and Mr K S B Sanyal, who being eligible, offer themselves for re-appointment for further period.

On and from Wednesday, 25th May 2011, Mr Debal Kumar Banerji has been appointed as an Additional Director of your Company. He will shall cease to hold said office at the conclusion of forthcoming Annual General Meeting. Notice under provisions of Section 257 of the Act has been received proposing his candidature for the office of Director for further period liable to retire by rotation and he, being eligible, offer himself for appointment as Director of your Company.

Profile of all your Directors seeking re-appointment/appointment is forming part of Notice to the Shareholders of ensuing Annual General Meeting.

CSR, Human Resources and Industrial Relations

Your Company recognizes its responsibilities towards health, safety, environment and community adjoining its operations. In this regard, several programmes have been undertaken, some of them being Free Homeo/Allopathy Clinics, sponsoring operations of an Upper Primary School, maintenance of public utilities like Bus Shelter, tree plantation etc. and these would be a continued endeavour.

During financial year 2010-2011, Industrial Relations remained most cordial. Your Company continued to provide conducive working environment to its team members and empowered them by trainings on latest techniques and practices. Compensation packages and benefits provided compared favourably with best offered in the Refractory Industry.

Save and except Whole-time Directors being Chairman, Mr S K Bajoria and Managing Director, Mr P Bajoria, none of the employees of your Company was in receipt of remuneration of Rs. 60 lacs or more per annum, for the year under review. Particulars of their remuneration are appearing under Clause 3B of the Corporate Governance Report and also in the Annexure forming part of this Report as per provisions of Section 217(2A) of the Act read with the Companies (Particulars of Employees) Rules, 1975 as amended. Having regard to the provisions of Section 219(1 )(b)(iv) of the said Act, the Annual Report excluding said Annexure is being sent to all the shareholders of the Company and others entitled thereto. Any Shareholder interested in obtaining such Annexure may write to the Company Secretary.

Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988

Information in accordance with provisions of Section 217(1 )(e) of the Act read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in Annexure 'B'.

Auditors'Report

Report of the Auditors, including references made therein to the Notes forming part of the Statement of Accounts, are self explanatory.

Auditors

Messers Deloitte Haskins & Sells, Auditors will retire at conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

Acknowledgement

Your Directors place on record their sincere appreciation for the continued support received from all the stakeholders particularly you the shareholders.

On behalf of the Board of Directors

Kolkata SK Bajoria P Bajoria

25th May 2011 Chairman Managing Director

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Mar 31, 2010

The Directors are happy to present the 21 st Annual Report together with Profit and Loss Account for financial year ended on 31 st March 2010 and Balance Sheet as on that date.

Performance of your Company for financial year ended on 31 st March 2010 on stand-alone and consolidated basis is summarized below:

(Rs. in Millions)

Stand-alone Consolidated

Sales (Net of Excise Duty) 1,752.28 4,152.33 Add: Other Income 5.37 1,757.65 34.19 4,186.52

Less: Total Expenses 1,461.71 3,568.90 Interest 26.78 1,488.49 45.24 3,614.14

Gross Profit after Interest but before Depreciation and Taxation 269.16 572.38

Less: Depreciation 45.32 75.22

Profit before Tax 223.84 497.16

Less: Provision forCurrentTax 77.00 155.07

Profit after Current Tax and before Deferred Tax 146.84 342.09

Less: Provision for Deferred Tax (0.54) (0.56)

Profit after Tax 147.38 342.65

Add : Minority Interest - 0.39

Profit afterTax and Minority Interest 147.38 343.04

Add: Profit brought forward from previous year 470.57 650.44

Profit available for appropriation 617.95 993.48

Total Income, Profit before Tax and Profit afterTax on stand-alone basis are higher by Rs. 82.59 Millions (4.9%), Rs. 23.66 Millions (11.8%) and Rs. 20.50 Millions (16.2%) respectively compared to that of previous year ended on 31st March 2009. Similarly Total Income, Profit before Tax and Profit afterTax and Minority Interest on consolidated basis are higher by Rs. 180.99 Millions (4.5%), Rs. 369.39 Millions (289.3%) and Rs. 281.93 Millions (461.4%) respectively. Earning per Share on stand-alone and consolidated basis is Rs. 4.26 and Rs. 9.91 compared to Rs. 3.67 and Rs. 1.77 relating to previous year ended on 31st March 2009.

After one of the sharpest down turn the World has ever seen, it is heartening to note that most of the countries are now enroute to recovery though at varied pace, with some still reeling under its affect. Your Companys performance, as reported above, has been very satisfactory and is a source of future optimism.

Manufacturing facilities of your Company are its primary locations and the Segment Revenue, Segment Results and Capital Employed, on consolidated basis, in terms of Accounting Standard 17 of the Institute of Chartered Accountants of India (ICAI) are as follows:

(Rs. in Millions) Year ended Year ended 31 st March 2010 31st March 2009

Segment Revenue India 1,753 1,668

Outside India Asia (excluding India) 590 462

Europe 1,776 1,435

Americas 638 646

Total 4,757 4,211

Less: Inter Segment Adjustment 605 229

Total Segment Revenue 4,152 3,982 Segment Results (Profit before tax)

India 251 251 Outside India

Asia (excluding India) 78 52

Europe 194 (83)

Americas 52 23

Total (Profit before interest) 575 243

Add/(Less): Inter Segment Adjustment (13) 1

Less interest Expenses (Net) 45 96

Less Unallocable Items 20 20

Profit before tax 497 128

(Rs. in Millions) As AT As AT 31 st March 2010 31st March 2009

Segment Capital Employed (Assets - Liabilities) India 998 888 Outside India Asia (excluding India) 147 154 Europe 424 418 Americas 211 196

Total 1,780 1,656 Less: Inter Segment Adjustment 23 12 Less: Liabilities 381 500

Total Capital Employed 1,376 1,144

Your Company has received CAPEXIL Award in recognition of export achievement during financial year 2008-2009 also. CAPEXILs Award has now been received for seventh consecutive year. During financial year 2009-2010 your Company effected exports (including indirect) aggregating to Rs. 801.21 Millions.

Dividend

In keeping with your Companys Dividend Policy, your Directors are pleased to recommend payment of Dividend at the rate of 10% i.e. Rs. 1 per Equity Share for financial year 2009-2010. Dividend recommended is subject to necessary approvals, including approval of the shareholders at the ensuing Annual General Meeting. Subsidiary Companies

Your Directors are very pleased to report that all the subsidiaries have performed satisfactorily, some more than the other. Some of the factors contributing to this positive performance has been cost cutting, better cash flow management and technical upgradation.

Auditors Report

Report of the Auditors, including references made therein to the Notes forming part of the Statement of Accounts, are sel explanatory and does not require to be elucidated further.

Auditors

Messrs Price Waterhouse, Auditors will retire at conclusion of the forthcoming Annual General Meeting as have expressed theii inability to be re-appointed for further period. Accordingly, your Directors recommend that Deloitte Haskins & Sells, Charterec Accountants, who have signified their willingness in writing, are appointed as Statutory Auditors of your Company at forthcoming Annual General Meeting.

Acknowledgement

Your Directors place on record their sincere appreciation for the continued support received from all the stakeholders particularly you the shareholders.

On behalf of the Board of Directors

25th May 2010 S K Bajoria P Bajoria

Kolkata Chairman Managing Director