DIRECTORS REPORTTO
The Members,
Your Directors have pleasure in presenting the TWENTY NINETH ANNUAL REPORT andthe audited accounts for the financial year ended March 31, 2011.
FINANCIAL RESULTS:
| 2010-2011 | 2009 - 2010 |
| Sales and other Income | 5150.42 | 4750.21 |
| Profit/ (Loss) before Interest and Depreciation | 1088.92 | 792.20 |
| Interest | 4.62 | 3.42 |
| Profit/ (Loss) before Depreciation | 1084.30 | 788.78 |
| Depreciation | 84.65 | 95.09 |
| Profit/ (Loss) before Extraordinary Items Extraordinary Items pursuant to the Interest | 999.65 | 693.69 |
| Waiver on OTS scheme of IFCI and ICICI | - | 2802.99 |
| Profit / (Loss) after Extraordinary Items | 999.65 | 3496.68 |
| Tax Expenses | | |
| Current Tax | 368.16 | 295.00 |
| Deferred Tax | (12.77) | (30.51) |
| Fringe Benefit Tax | - | - |
| Profit/ (Loss) after Tax | 644.26 | 3232.19 |
DIVIDEND:
As the company is in need of resources to spruce up the operations, your Directors feelit prudent not to declare dividend this year.
CORPORATE GOVERNANCE:
A separate report on Corporate Governance is attached in the Annexure.
Management discussion and analysis
Your Company has been discharged by the Hon'ble BIFR from the purview of SickIndustrial Companies(Special Provisions)Act, 1985, vide its order dated 27th July 2011 .
The Company has achieved a Cement tonnage of 205,418 MT during the year asagainst a tonnage of 203,643 MT in the previous year.
Your Company has made a Net Profit before Extraordinary Items of Rs. 999.65Lakhs during the year, as against Net Profit of Rs. 693.69 Lakhs in the previousyear.
Your company could ride on the short term buoyancy in the market and despite increasinginput costs, could post a decent profit during the year under review.
ECONOMIC OUTLOOK
The construction activity has been growing very marginally over the recent past and thegrowth is sporadic. The market, of late, is able to absorb the price increase which isnecessitated owing to increase in input costs; but this trend is likely to be short-lived.Moreover, further capacities have been added particularly in the state of A.P. which wouldmake the market more competitive.
OPPORTUNITIES AND THREATS:
Your company, riding the swing of good market, has been able to sustain itself in therecent years. The major threats are the unprecedented increase in the cost of major rawmaterials like coal. There is also a shortage of availability of coal which would continueto exert pressure on the economic viability of your company.
Power continues to be another major threat as there is a high possibility of the samegetting more expensive as the year progresses.
Further as new capacities are being added, the market is likely to become morecompetitive which might result in affecting the price line for the end produce.
INDUSTRIAL RELATIONS AND STAFF WELFARE:
Industrial relations with staff and workmen remained harmonious and cordial. Wageagreement with the Workers' Union for the year 2011-13 is underway in a cordialatmosphere.
POLLUTION CONTROL:
The Company has adequate pollution control equipments and also has developed variousplantations around the factory premises.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS OUTGO:
Statement containing particulars pursuant to 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 annexed hereto and form part of this report.
DIRECTORS:
Shri. Gopalsamy Rajan and Shri. Muthusamy Subramanian, Directors, who retire byrotation and being eligible, offer themselves for re-appointment.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to section 217(2AA) of the Companies (Amendment) Act 2000, The Board ofDirectors confirm that:
1. In the preparation of annual accounts the applicable accounting standards have beenfollowed along with proper explanation relating to material departures.
2. Such accounting policies were selected and applied consistently and judgments andestimates were made that are reasonable and prudent so as to give a true and fair view ofstate of affairs and Profit of the company for the period.
3. Proper and sufficient care has been taken to safeguard the assets and for preventingand detecting fraud and other irregularities.
4. The annual accounts are prepared on a going concern basis.
PARTICULARSOF EMPLOYEES:
There are no employees falling within the purview of Section 217(2A) of the CompaniesAct, 1956 during the year.
DEPOSITS AND LOANS/ADVANCES:
Your Company has not invited or accepted any fixed deposits and hence no amount ofprincipal or interest was outstanding as on the date of the Balance Sheet.
AUDITORS:
M/s. B.Purushottam & Co, Chartered Accountants, Chennai who retire at theconclusion of this General meeting have offered to be re-appointed.
COST AUDITOR:
The Company has engaged Shri R. Srinivasa Rao as the Cost Auditor for the year 2011-12.
ACKNOWLEDGEMENT:
Your directors would like to place on record their appreciation for the guidance andsupport received from various departments of State and Central Governments.
Banks and Financial Institutions have shown cordial understating and support and yourDirectors place on record their appreciation for the same
Your directors also place on record their appreciation of the services rendered andco-operation extended by all the employees of the Company.
| BY ORDER OF THE BOARD OF DIRECTORS |
| Place : Chennai | K . GOPI PRASAD |
| Date : 10.08.2011 | MANAGING DIRECTOR |
ANNEXURE TO DIRECTORS REPORT
FORM-A
CONSERVATION OF ENERGY
A. POWER AND FUEL CONSUMPTION
| 2010-2011 | 2009-10 |
| 1. ELECTRICITY: | | |
| a) Purchased | | |
| Units | 23,002,518 | 24,046,400 |
| Total Amount Rs | 86,196,660 | 78,598,182 |
| Average Rate / Unit Rs | 3.75 | 3.2 |
| b) Own Generation | | |
| Through Diesel Generation Unit | — | — |
| Units Per Ltr. Of Diesel Generation | — | — |
| Cost/Unit Rs. | — | — |
| 2. COAL: | | |
| Quantity (Tons) | 42,677 | 44,655 |
| Total Cost RS. | 140,533,990 | 134,586,622 |
| Average Rate (Rs) | 3293.00 | 3013.92 |
| 3. FURNACE OIL: | NA | NA |
| Quantity (Tons) | — | — |
| Total Cost RS. | — | — |
| Average Rate (Rs) | — | — |
| 4. OTHER/INTERNAL GENERATION: | NA | NA |
| Quantity | — | — |
| Total Cost RS. | — | — |
| Rate / Unit | — | —- |
B. CONSUMPTION PER UNIT PRODUCTION :
| Standards (If any) | | |
| Electrical Consumption Per ton of Cement | 140.00 units | 119.69 units | 118.43 units |
| Coal Consumption Per ton of Cement | 0.2 5 MTS | 0.22 MTS | 0.2 4 MTS |
TECHNOLOGY ABSORPTION FROM FOREGIN COUNTRIES:
During the year the Company had no occasion to absorb any foreign technology.
FOREIGN EXCHANGE EARINGS AND OUT GO:
During the year, the Company had no foreign exchange earnings and out go.
FORM-B
| A. RESEARCH AND DEVELOPMENT ( R & D): | 2010-2011 | 2009-2010 |
| 1. Specific areas in which R & D carried out by the Company | NIL | NIL |
| 2. Benefits derived as a result of the above R & D | NIL | NIL |
| 3. Future plan of action | NIL | NIL |
| 4. Expenditure on R & D | NIL | NIL |
| a) Capital | | |
| b) Recurring | | |
| c) Total | | |
| d) Total R & D expenditures as a percentage of total turnover | NIL | NIL |
| B. TECHNOLOGY ABSORPTION, ADOPTION INNOVATION : | | |
| 1. Efforts, in brief, made towards Technology absorption, adoption and innovation | NIL | NIL |
| 2. Benefits derived as a result of the above efforts e. g., product Improvement, cost reduction, Products development, import substitution etc. | NIL | NIL |
| 3. in case of imported technology (Imported during the last 5 years reckoned from the beginning of the financial year). | | |
| Following information may be furnished | NIL | NIL |
| a) Technology imported | | |
| b) Year of import | | |
| c) Has technology been fully absorbed | | |
| d) If not fully absorbed, areas where this has not taken place reasons therefore and future plans of action | | |
| BY ORDER OF THE BOARD OF DIRECTORS |
| Place : Chennai | K. GOPI PRASAD |
| Date : 10.08.2011 | MANAGING DIRECTOR |