Your Directors have pleasure in placing before you the TWENTY SECOND
 ANNUAL REPORT of the Company for the year ended 31st March, 2001
 together with the Audited Balance Sheet as at 31st March, 2001 and the
 Profit and Loss Account for the year ended that date.
 
 FINANCIAL RESULTS                           31.03.2001     31.03.2000
                                                      (Rupees in Lakhs)
                                                    Rs.            Rs.
 
 Sales and other Receipts                          1866           1680
 
 Profit before Interest & Depreciation              343            333
 
 Interest                                           147            155
 
 Depreciation                                       144            138
 
                                                    291            293
 
 Net Profit for the year                             52             44
 
 Less : Expenses of prior year                        2             43
 
                                                     50              1
 
 Add : Excess provision for Expenditure 
 written-back                                         1              2
 
 Income relating to prior year                        -             23
 
                                                     51             26
 
 Profit Before Tax                                   51             26
 
 Add : Balance brought forward from 
 preceding year                                      66             43
 
                                                    117             69
 
 Less : Appropriations :
 
 Provision for Taxation                               4              3
 
 Proposed Dividends                                   -              -
 
                                                      4              3
 
 Balance to be carried forward                      113             66
 
 COURSE OF BUSINESS
 
 During the year under review, the production of Ferro Silicon has
 marginally increased to 7836 MT as compared to the previous year
 production of 7028 MT; correspondingly the turnover of the Company has
 increased by 11%. However, the increase in the turnover has not
 resulted increase in profitability in view of the continuous poor price
 realisation due to sluggish market conditions and increased in product
 costs.
 
 The unit at Pondicherry & Avanashi continued to be remained closed for
 the whole year in view of the heavy power tariff increase by the
 respective Electricity Boards.
 
 The steel industries sector continues to be in bad shape because of
 very low indigenous production and dumping of imports.
 
 The Ferro Alloy Industries which depend upon the fortune of steel
 industries also suffered a lot owing to the non-favourable conditions
 of Steel Industries.
 
 Notwithstanding the fact, your Company, made a net profit of Rs.52
 Lakhs before prior period adjustments and provision for Taxation.
 
 PROJECTS
 
 The Company could not make any further progress towards
 Bhoothathankettu Hydro Electric Project since the portion of land by
 the Irrigation Department for the project has not been handed over to
 the Company. The Company has approached the Hon'ble High Court of
 Kerala requesting their intervention and direction to the concerned
 authorities to hand over the land to the Company immediately. The
 matter is still pending.
 
 Further, no significant progress has been achieved in both the Power
 Projects due to paucity of funds. The Company is on the look out for
 external commercial borrowings.
 
 FUTURE OUTLOOK
 
 The Company's request to the Government of Kerala and Kerala State
 Electricity Board to provide Power at Pre-92 Tariff till the
 commissioning of Bhoothathankettu Hydro Electric Project, was in vain.
 The Company has approached the Hon'ble High Court of Kerala for the
 same along with a Petition for handing over of Land. The Company's
 performance depends upon the early implementation of the Hydro Electric
 Projects. The Directors of the Company are working in this direction.
 
 DIVIDENDS
 
 No Dividend has been recommended for the year since the Company has not
 earned sufficient Cash Profits.
 
 AUDITORS' REPORT
 
 The observation made in the Auditors' Report have been dealt within
 item No.2(c) and 16 of Schedule 27 - Notes forming parts of Accounts.
 These are self explanatory and do not call for further comments.
 
 INDUSTRIAL RELATION
 
 The Company has been maintaining cordial relationship with the
 Employees.
 
 DEPOSITS
 
 The Company has neither accepted nor renewed any deposits during the
 year and has no overdue or unclaimed deposits of any kind.
 
 ENERGY CONSERVATION, TECHNOLOGY-ABSORPTION, FOREIGN-EXCHANGE EARNINGS
 AND OUTGO
 
 Particulars of Conservation of Energy Technology-Absorption, Foreign
 Exchange earnings and outgo in terms of requirement of Section
 217(1)(e) of the Companies Act, 1956 are set out in the Annexure-A in
 the prescribed format, forming part of this report.
 
 CORPORATE GOVERNANCE
 
 Listing Agreement with Stock Exchanges have been amended to include
 Corporate Governance Code as per SEBI directives.  The said Corporate
 Governance Code will become applicable to your Company by March, 2002.
 However, your Company has already initiated steps to put in place the
 system of Corporate Governance and all the mandatory provisions will be
 fully complied with before the deadline prescribed. The Audit Committee
 and Share Transfer Committee have already been set-up. The other
 information on Corporate Governance are given in Annexure-B.
 
 PARTICULARS OF EMPLOYEES
 
 No employee of the Company is covered under the provisions of Section
 217(2A) of the Companies Act, 1956.
 
 DIRECTORS' RESPONSIBILITY STATEMENT
 
 As required by Section 217(2AA) of the Companies Act, 1956 introduced
 by the Companies (Amendment) Act 2000. your Directors state that :
 
 i) in the preparation of the annual accounts for the year ended
 31.03.2001, the applicable accounting standards have been followed
 along with proper explanation relating to material departures.
 
 ii) that the accounting policies adopted in the preparation of the
 annual accounts have been applied consistently and reasonable and
 prudent judgements and estimates have been made 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 or loss of the Company for the year
 ended that date.
 
 iii) proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company for
 preventing and detecting fraud and other irregularities. 
 
 iv) the annual accounts for the year ended 31.03.2001 have been
 prepared on a going concern basis.
 
 GENERAL
 
 M/s. Indian Renewable Energy Development Agency Ltd., (IREDA) has also
 filed a case against the Company with Debt Recovery Tribunal (DRT) in
 line with M/s. Industrial Investment Bank of India (IIBI) which is
 already pending before DRT for the recovery of outstanding. The Company
 has requested time for making payment on the plea that the Company has
 incurred losses on account of continuous power-cuts imposed by the
 Kerala State Electricity Board. As reported in the previous year, one
 of the project creditors has filed a case in Hon'ble High Court of
 Chennai for winding-up of the Company for non-payment of the dues to
 them. The Company is contending the case since this is not a fit case
 for winding-up. In the meantime, the said creditor has also initiated
 Arbitration Proceedings claiming damages.
 
 DIRECTORS
 
 Sri. K. Chandran and Sri. C.V. Krishnaswamy, Directors of the Company,
 retire at the ensuing Annual General Meeting and, being eligible, offer
 themselves for re-appointment. Smt. M. Roopa Rajalakshmi has been
 co-opted as Director of the Company till the ensuing Annual General
 Meeting. The Company has received notice from a member of his intention
 to propose Smt.  M. Roopa Rajalakshmi as Director of the Company whose
 office is subject to retirement by rotation at the forthcoming Annual
 General Meeting.
 
 Sri. S. Ranganathan (Nominee of IREDA) & Smt. N. Amsaveni, Directors of
 the Company have resigned from the Board during the year. Your
 Directors place on record their deep appreciation for the services
 rendered by them during their tenure.
 
 AUDITORS
 
 M/s. T. Nagarajan & Co., Chartered Accountants, Coimbatore retire at
 the forthcoming Annual General Meeting and being eligible, offer
 themselves for re-appointment.
 
 APPRECIATION
 
 Your Directors acknowledge with gratitude the co-operation and
 assistance given by the Financial Institutions and Banks during the
 year under review.
 
 Your Directors also wish to place on record their sense of appreciation
 of the devoted services rendered by Executives, Staff and Workers of
 the Company.
 
 FINALE
 
 Your Directors are constantly striving to improve the performance and
 strength of the Company with the help of Lord Almighty.
 
                                            BY ORDER OF THE BOARD
 
 COIMBATORE                                  C. R. NARAYANASWAMY
 11.09.2001                                   MANAGING DIRECTOR
 
 ANNEXURE TO DIRECTORS' REPORT
 
 INFORMATION UNDER SECTION 217(1)(e) OF THE COMPANIES ACT 1956, READ
 WITH COMPANIES DISCLOSURE OF PARTICULARS RULES, 1988 AND FORMING PART
 OF THE DIRECTORS' REPORT FOR THE YEAR ENDED 31st MARCH, 2001.
 
 I.  Conservation of Energy
 
 a) Energy conservation measures taken
 
 The specific energy consumption of various products is being
 continuously monitored and effective steps are being taken to reduce
 it, continuously.
 
 b) Additional investments and proposals, if any.
 
 The company has been spending huge amounts every year for conservation
 of energy and reduction in consumption of Units of Power. In view of
 the impending Hydel Projects presently, no additional investments have
 been made.
 
 c) Impact of the measures at (a) and (b) above for reduction of energy
 consumption and consequent impact on the cost of production.
 
 The measures have started yielding results in reduction in the power
 consumption
 
 d) Total energy consumption and energy consumption per unit of
 production as per Form-A of the Annexure.
 
 Not Applicable.
 
 II. Technology Absorption
 
 The process know-how & product-mix has been modified to improve and
 optimise the performance of the Plant.
 
 III. Foreign Exchange Earnings and Outgo : 
 
 Earnings - Nil Lakhs 
 
 Outgo - 14.08 Lakhs