Your Directors present their 22nd Annual Report together with Audited
 Statement of Accounts of the Company for the financial year ended 31st
 March,2005.
 
 FINANCIAL RESULTS
 
                                                  2004-05      2003-04
 (Rs. in lakhs)
 
 (i)     Sales/income from                       31741.60     23443.40
 operations
 (ii)    Total expenditure                       23673.59     17938.29
 (iii)   Operating profit/(loss)                  8068.01      5505.11
 (iv) - Add: Other income                          149.37        83.58
 
 (v)    Profit/(Loss) before
 interest & depreciation                          8217.38      5588.69
 
 (vi) Less: Interest on
 working capital & other
 Financial expenses                                103.36        69.99
 
 (vii) Profit/(Loss) before
 interest on long term
 loans & depreciation                             8114.02      5518.70
 
 (viii) Less: Interest on long
 term loans                                       5960.61     10008.83
 (ix)    Less: Depreciation                       3386.87      3401.77
 (x)     Profit/(Loss) for the
 year before tax                                 (1233.46)    (7891.90)
 
 Your Directors are pleased to report that the year under review has
 indeed been a seminal one for your Company with turnover crossing the
 Rs 300 crores mark for the first time while exports exceeded Rs.200
 crores. Riding on the back of a boom in the international market, gross
 sales during 2004-05 increased by 35.40% to Rs 317.42 crores (previous
 year: Rs 234.43 crores) of which export earnings comprised Rs. 224.76
 crores (previous year: Rs. 146.11 crores) registering an increase of
 53.83%.  At the same time, operating profit jumped by 46.56% to an
 all-time high of Rs 80.68 crores (previous year: Rs 55.05 crores).
 
 The interest on long term loans reduced significantly from Rs 100
 crores in the previous year to Rs 60 crores in the year under review on
 account of payment / provision of interest at rates lower than
 originally contracted to those lenders who have accepted a structured
 settlement. As a result your Companys net profit before long term
 interest and depreciation increased by 47.02% from Rs .55.19 crores in
 the previous year to Rs. 81.14 crores during the year under review.
 However, after providing for long term interest and depreciation your
 Company incurred a net loss of Rs. 12.33 crores during the year under
 review. This, though, is significantly lower than the previous years
 net loss of Rs. 78.92 crores.  
 
 Your Directors are confident that the remaining lender will also
 approve the debt restructuring proposal and, in conjunction with lower
 interest liability arising out of accelerated repayments due to
 improved market conditions, your Company will soon be able to register
 a net profit.
 
 DIVIDEND
 
 In view of the net losses during the year, your Directors regret their
 inability to consider any , dividend for the year.
 
 CHARGE CHROME PLANT
 
 Your Directors are pleased to report that the Company achieved a
 capacity utilisation of 108% during the year under review (previous
 year: 119%) In terms of output,, ferro chrome production stood at
 67,723 MT which is 8.90% lower than the previous year (74,338 MT) with
 the lower production being mainly on account of lack of proper grade of
 reductants. It is, in fact, creditable that this level of production
 could be achieved using alternation reductants.
 
 CAPTIVE POWER PLANT
 
 Your Directors are pleased to report that you Companys captive power
 plant achieved a gross generation of 825.19 MU in the year under review
 as against 808.04 MU in the previous year. Although this is lower than
 the highest ever generation of 842.81 MU achieved in FY 2002-03, it
 nevertheless works out to a very creditable 94% PLF based on Maximum
 Economic Rating (MER) as against 92% in the previous year. It is worth
 mentioning here that during the year under review electricity
 generation suffered on account of terrible shortage of coal - inspite
 of having signed a Fuel Supply Agreement (FSA) - besides poor quality
 of coal supplies.
 
 The disputes with GRIDCO remained unresolved and, in fact, a new
 problem cropped up during the year with GRIDCO serving disconnection
 notice(s) demanding payment of certain sums for which final settlement
 had already been reached earlier. Your Company, therefore, challenged
 the action of GRIDCO before the Honble High Court of Orissa whiclj
 directed the Company to pay a sum of Rs .5 crores and remanded the
 matter to OERC. Your Directors are hopeful of a favourable decision in
 the matter.
 
 MINING OPERATIONS
 
 Your Company could not commence mining operations in the chrome ore
 mining area allotted to it in Sukinda Valley as forest & environmental
 clearances are still awaited. Your Directors are making all possible
 efforts to get these clearances as early as possible and are hopeful of
 starting mining operations soon on receipt of which the Company would
 start raising ore in its own mines.
 
 There has been no progress with regard to allotment of further mining
 area and the balance 50% area is yet to be allotted as per the
 recommendations of the Sharma Committee Report which was adopted by the
 Honble Supreme Court of India. As mentioned in earlier Annual Reports,
 your Directors are vigorously .pursuing this matter and shall take all
 such measures necessary to protect your Companys interests.
 
 MARKET CONDITIONS* FUTURE OUTLOOK
 
 Your Directors are pleased to report that the international market for
 ferro chrome was buoyant during the year under review with ferro chrome
 prices increasing significantly as a result of an upswing in the steel
 industry. The resultant improvement in margins coupled with stable
 output have meant that your Company has been able to achieve a quantum
 jump in sales and operating profits as mentioned earlier. The outlook
 continues to be positive for the current year although the gap between
 supply and demand has been steadily closing. Further, the overwhelming
 dependence upon China as the growth engine means that any hiccup will
 have significant implications. Indeed, a marginal slowdown in,the
 off-take of ferro chrome by China in the first quarter of the current
 fiscal has resulted in pricing pressure. However, barring any
 unforeseen circumstances, your Companys performance in the current
 fiscal will remain good.
 
 As reported in the last annual report, with a view to augment capacity
 so as to benefit from the current strong market conditions while also
 conserving funds so as to accelerate payments, your Company had entered
 into a conversion contract with an associate company. The said
 associate company wouki set up a 24 M VA furnace capable of producing
 35,000 MT ferro chrome per annum for a fixed fee pet tonne of output
 using chrome ore and electricity supplied by your Company. The project
 is being vigorously pursued and is expected to be commissioned in
 September, 2005. While it will commence operations in the current
 fiscal and the impact will indeed partially be reflected in the last
 quarter of the financial year, as such the full benefit will be
 realised in 2006-07.
 
 SETTLEMENT / RESTRUCTURING OF LONG TERM DEBTS
 
 Your Directors are pleased to report that consequent upon the
 settlement of its debts with lndustrial Development Bank of India Ltd.,
 IFCI Ltd. and IC1CI Bank Ltd., your Company jointly filed the consent
 terms with the said three financial institutions before the Debt
 Recovery Tribunal, Mumbai and obtained a consent decree.
 
 Further, as reported earlier, whereas one bank independently negotiated
 a settlement, five others have agreed to a settlement on similar terms
 as the three financial institutions. As a result, only one bank is yet
 to accept the restructuring proposal.  Payments are being regularly
 made to those term lenders who have accepted a restructuring of their
 debts and indeed, some acceleration has also taken place given the
 better than envisaged cash-flows.
 
 Your Directors further wish to report that the Companys petition moved
 under the provisions of Sections 391 to 394 of the Companies Act, 1956
 for sanction of the scheme of arrangement with the secured creditors is
 pending before the Honble High Court of Orissa for disposal.
 
 Your Directors are pleased that a settlement has been reached with a
 majority of secured creditors after strenuous efforts in this regard by
 the Management and are confident that the sole remaining creditor too
 will acquiesce. Your Directors wish to place on record their deep sense
 of appreciation of the cooperation & patience exhibited by the secured
 creditors during the trying times and assure you that all steps will be
 taken to not only comply with the settlement terms but, in fact,
 improve upon the same by accelerating payments so as to complete the
 restructuring much before the stipulated time frame. Indeed, efforts
 are already being made in this regard to raise funds to enable a
 partial / full one-time settlement.
 
 Some of the conditions of the settlement which are yet to be complied
 with are:
 
 Derating of the existing capital of the Company by 95%
 
 Conversion of Rs. 55.65 crores advanced by the promoter company into
 equity
 
 Conversion of part of the loan of FIs/Banks into equity
 
 Merger of your Company and the promoter company Indian Metals & Ferro
 Alloys Limited
 
 Your Directors will approach you at the appropriate time for approval
 to give effect to the above conditions.
 
 LISTING
 
 Based on the approval accorded by the shareholders for voluntary
 delisting of the Companys equity shares from certain stock exchanges,
 necessary applications were made to the said stock exchanges.  Madras
 Stock Exchange, Kolkata Stock Exchange Association Ltd., Delhi Stock
 Exchange Association Ltd and the Stock Exchange, Ahmedabad have
 accorded their approval and have confirmed that admission granted to
 dealings on the exchange for the equity shares of the Company has been
 withdrawn and the quotation for the equity shares of the Company has
 been removed from the daily official list. The Companys application
 for delisting with Bhubaneswar Stock Exchange is pending for
 consideration with the said stock exchange. In the light of the above,
 the Company has not effected the annual listing fee for the year
 2005-06 to the Bhubaneswar Stock Exchange whose approval for delisting
 of our Companys scrips is awaited. The annual listing fee for the year
 2005-06 to the Stock Exchange, Mumbai has been duly paid and the
 Companys equity shares continue to be listed in the Stock Exchange,
 Mumbai.
 
 ENERGY CONSERVATION, ETC.
 
 The information requirgd under section 217(1 )(e) of the Companies Act,
 1956 read with Companies (Disclosure of Particulars in the Report of
 Board of Directors) Rules, 1988 are set out in the annexure forming
 part of this report.
 
 PARTICULARS OF EMPLOYEES
 
 There were no employees in the Company either employed throughout the
 year under reference with receipt of remuneration not being less than
 Rs .24,00,000 per annum or employed for part of the year with receipt
 of remuneration not less than Rs. 2,00,000 per month. Accordingly, the
 relevant disclosures of such particulars as required in accordance with
 the provisions of section 217(2 A) of the Companies Act, 1956 are not
 applicable for the year under consideration.
 
 PUBLIC DEPOSITS
 
 The Company has not accepted any deposits from the public during the
 year as outlined under the provisions of Companies (Acceptance of
 Deposits) Rules 1975 as amended till date.
 
 OBSERVATIONS OF AUDITORS
 
 Observations of the Auditors on the annual accounts of the Company have
 been dealt with in the notes to the Accounts annexed as Schedule M
 which are self-explanatory in nature and do not require any further
 clarification.
 
 DIRECTORS
 
 Your Directors express their profound grief at the sudden demise of Mrs
 Ila Panda, a Co-Founder and Director, on 11 th January 2005 .Her
 immense contribution to the growth and well-being of your Company
 cannot be expressed in words. Your Directors pay glowing tributes to
 her memory and pray for the departed soul to rest in peace.
 
 The Board at their meeting held on 22nd April, 2005 have redesignated
 Dr. B Panda as Executive Chairman and appointed Mr. Subhrakant Panda as
 Managing Director for a period of 3 years with effect from 30th April
 2005. The appointment of Mr.  Subhrakant Panda is subject to approval
 of the shareholders by a special resolution and prior approval of the
 Central Government under the provisions of the Companies Act, 1956. The
 Company has made an application to the Central government for the prior
 approval, which has since been received. Your attention is invited to
 item no.5 of the accompanying notice.
 
 The Board at their meeting held on 22nd April, 2005 have reappointed
 Mr. S P Mathur whose term .as Director (Finance) is expiring on 30th
 June, 2005 for further term of two years effective 1st July, 2005.  he
 appointment of Mr. S P Mathur is subject to approval of the
 shareholders by a special resolution and prior approval of the Central
 Government under the provisions of the Companies Act, 1956. The company
 has made an application to the Central
 
 Government for the prior approval, which has since been received. Your
 attention is invited to item no.6 of the accompanying notice.
 
 Field Marshal Sant Manekshaw & Mr. G L Tandon, Directors, will retire
 by rotation at the ensuing.  Annual General Meeting and are eligible
 for reappointment.
 
 In terms of the consent decree obtained from the Debts Recovery
 Tribunal, Mumbai, Industrial Development Bank of India Limited
 appointed Dr. T K Mukhopadhyay, Chief General Manager, IDBI Ltd,.
 Eastern Zone as its Nominee Director on the Companys Board not liable
 to retire by rotation with effect from 28th April, 2004. However, IDBI
 later withdrew the nomination of Dr. T K Mukhopadhyay and in his place,
 appointed Mr. J K Ray, Chief General Manager, Industrial Development
 Bank of India Limited, Kolkata as its Nominee on the Board of your
 Company with effect from 4th May, 2005. Your Directors wish to place on
 record their appreciation for the valuable contribution made by Dr. T K
 Mukhopadhyay for the development and growth of your Company.  Your
 Directors also accord a hearty welcome to Mr. J K Ray and look forward
 to reaping the benefit of his rich and & varied experience.
 
 Brief resume/details relating to Directors who are to be
 appointed/reappointed are furnished in the Explanatory Statement to the
 Notice of the ensuing Annual General Meeting as required under the Code
 of Corporate Governance.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to provisions under Section 217(2AA) of the Companies Act,
 1956 your Directors hereby confirm:
 
 (i) that in the preparation of the annual accounts for the financial
 year ended 31 st March, 2005, they have followed the applicable
 accounting standards along with proper explanation relating to material
 departures;
 
 (ii) that they have selected such accounting policies and applied them
 consistently and made judgements and estimates that were reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the.  Company at the end of the financial year and of the loss for the
 year under consideration;
 
 (iii) that they have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Company and for preventing and detecting frauds and other
 irregularities;
 
 (iv) that they have prepared the annual accounts of the Company for the
 financial year ended 31 st March, 2005 on a going concern basis.
 
 AUDITORS
 
 M/s. Raghu Nath Rai & Co., Chartered Accountants, the auditors of the
 Company, who are to retire at the ensuing Annual General Meeting, being
 eligible offer themselves for reappointment. The Company has received a
 certificate to the effect that their re- appointment, if made, shall be
 within the limits prescribed under Section 224 (1B) of the Companies
 Act, 1956.
 
 CORPORATE GOVERNANCE
 
 Pursuant to Clause 49 of the Listing Agreements with the Stock
 Exchanges, a Management Discussion and Analysis, a report on the
 Corporate Governance and Auditors certificate regarding compliance of
 conditions of Corporate Governance have been made a part of the Annual
 Report.
 
 INDUSTRIAL RELATIONS
 
 During the year Under report industrial relations both at the Companys
 plants at Choudwar as well as at the mines remained cordial.
 
 ACKNOWLEDGEMENT
 
 Your Directors wish to place on record their deep sense of appreciation
 for the long term commitment and devoted services of its work force
 throughout the year. Further, your Directors would like to place on
 record with appreciation the continuous assistance and co-operation
 extended to the
 
 Company by Industrial Development Bank of Indi Ltd./ICICI Bank Limited,
 IFC1 Limited, consortiure of term lending banks led by Indian Overseas
 Bank State Bank of India for extending working capital facilities,
 shareholders, customers and publicat large
 
                                         FOR AND ON BEHALF OF THE BOARD
 
                                    Subhrakant Panda, Managing Director
                                       S.P. Mathur, Director (finance)
 New Delhi
 28th July, 2005