REPORT OF THE DIRECTORSFor the year ended 31st March, 2011
Dear Shareholders,
We have the pleasure in presenting the 35th Annual Report of the Company with auditedstatements of accounts for the year ended 31st March, 2011. The summarised FinancialResults are given below:
1. FINANCIAL RESULTS
| Current Year ended 31st March, 2011 | Previous Year ended 31st March, 2010 |
| Gross Sales | 56470.66 | 68183.82 |
| Less: Excise Duty | 7313.63 | 6814.74 |
| Net Sales | 49157.03 | 61369.08 |
| Operating Profit before Interest and Financial Charges, Depreciation and Tax | 7107.79 | 21145.35 |
| Less: Interest and Financial Charges | 219.46 | 196.16 |
| Gross Profit before Depreciation and Tax | 6888.33 | 20949.19 |
| Less: Depreciation (net of transfer from Revaluation Reserve) | 2751.43 | 2535.96 |
| Profit before Tax | 4136.90 | 18413.23 |
| Less: Provision for Tax: | | |
| (a) Income Tax /MAT for current year (Net) | 25.00 | 6700.20 |
| (b) Income Tax for earlier years | 455.76 | -- |
| (c) Deferred Tax Credit | (168.00) | (168.00) |
| Net Profit After Tax | 3824.14 | 11881.03 |
| Provision for Dividend for 2008-09 written back | -- | 73.67 |
| Corporate Dividend Tax provided in 2008-09 written back | -- | 12.52 |
| Profit brought forward from previous year | 29555.00 | 20655.42 |
| Profit available for appropriation | 33379.14 | 32622.64 |
| APPROPRIATIONS | | |
| (a) Transfer to general Reserve | 400.00 | 1200.00 |
| (b) Proposed Dividend on Equity Shares | 1601.63 | 1601.63 |
| (c) Corporate Dividend Tax | 259.82 | 266.01 |
| (d) Balance carried forward to next year | 31117.69 | 29555.00 |
| TOTAL | 33379.14 | 32622.64 |
2. DIVIDEND
We recommend a dividend of Rs.6.00 per equity share of Rs.10/- each for the year ended31st March, 2011. Total dividend outgo will be Rs.1861.45 Lacs including corporatedividend tax.
3. DEFERRED TAX
In terms of the order dated 30th November, 2007 of the Hon’ble High Court ofRajasthan, deferred tax liability of Rs.1164.00 Lacs for the year has been adjusted fromthe Securities Premium Account. Deferred tax assets of Rs.168 lacs of the current year hasbeen credited to the Profit and Loss Account
4. OVERALL PERFORMANCE
Performance of the Company has been comprehensively covered in the ManagementDiscussions and Analysis Report which forms part of Directors’ Report.
5. WIND MILLS
All the six wind mills of 1.25 MW capacity each installed at Jaisalmer, werecommissioned in June, 2010 and with the commissioning of these wind mills, total capacityof wind mill power is 13.65 MW. Necessary steps have been taken to avail CDM benefit.
6. CAPTIVE THERMAL POWER PLANT (CPP)
The second Captive Thermal Power Plant of of 17.5 MW capacity was commissioned inFebruary, 2011. Now the combined capacity of both the CPPs is 35 MW. As the Company hasnow surplus power, it will try to sell the surplus power when profitable rate isavailable.
7. NEW PROJECTS AND CAPACITY EXPANSION
The Board on re-examination of the project for expansion of plant capacity by 1.5million MT p.a. at the existing site, considered it prudent to defer the project for thetime being. Instead, the company has decided to move forward to set up a clinker grindingunit in the District of Aligarh, U.P. with an installed capacity of upto 1.25 million M.T.p.a. and barring any unforeseen circumstances, the unit is likely to be commissioned bythe last Quarter of the financial year 2012-13.
The Company is also taking steps for upgradation of its existing plants for increasingclinker production by 5 Lac MT p.a.
The total capital expenditure estimated for both the plants is Rs.300 Cr appx whichwill be met partly by internal cash accruals and partly by loan from the Banks.
8. FINANCES
The Company continued to be debt free as on 31st March, 2011, as there was no securedloan outstanding.
9. CREDIT RATINGS
Your Directors are pleased to inform that Credit Analysis
& Research Ltd (CARE) has renewed and assigned to the Company ‘CARE AA-‘rating for long term and medium term facilities. ‘CARE AA’ rating is consideredto offer high safety for timely servicing of debit obligations. Such facility carries verylow credit risk. CARE assigns ‘+’ or ‘-‘ signs to be shown after theassigned rating (wherever necessary) to indicate the relative position within the bandcovered by the rating symbol.
Further, CARE has re-affirmed PR1+ (PR One Plus) rating assigned to the short termfacilities. This is the highest rating for short term facilities. PR1+ rating indicatesstrong capacity for timely payment of short term debt obligations and carries lowestcredit risk.
10. INSURANCE
Adequate insurance cover has been taken for the properties of the Company includingbuildings, plant and machinery and stocks.
11. DIRECTORS
Shri T.S.Vishwanath has resigned from the Directorship of the Company effective from21st day of April, 2011.
The Board expressed its sincere appreciation and thanks for the efficient and maturedadvices of Shri T.S.Vishwanath given to the Board during the tenure of his office asDirector of the Company.
Subject to necessary approval of the shareholders, the Board appointed Shri A.V.Jalanand Smt.Vidula Jalan as Whole-time Directors (designated as Executive Directors) of theCompany w.e.f. 1st April, 2011. Extra-ordinary General Meeting (EOGM) of the shareholdershas been convened on 29th April, 2011 at the Registered Office of the Company.
The current tenure of appointment of Shri K.C.Jain, Managing
Director, expires on 30th April, 2011 and your Directors have considered hisre-appointment for further period of 3 years w.e.f. 1st May, 2011 on the terms andconditions set out in the Notice of the Shareholders at their ensuing Annual GeneralMeeting.
In accordance with Article 99 of the Articles of Association of the Company ShriO.P.Gupta and Shri K.K.Mudgil, Directors of the Company, retire by rotation at theforthcoming Annual General Meeting of the members of Company and being eligible, offerthemselves for re-appointment.
12. MERGER OF MANGALAM TIMBER PRODUCTS LTD (MTPl)
The merger of Mangalam Timber Products Ltd (MTPL) with the Company through the judicialprocess is in progress. The Hon’ble High Court of Rajasthan, Jaipur has directedconvening of the meeting of unsecured creditors and shareholders of the Company which isscheduled to be held on Saturday, the 21st May, 2011 at the Registered office of theCompany. The merger on approval by the Hon’ble High Court of Rajasthan, Jaipur andHon’ble High Court of Orissa, Cuttack, will be effective from 1st April, 2010.
13. AUDITORS’ REPORT
Auditors’ Report to the Shareholders does not contain any qualification,reservation or adverse remark.
14. STATUTORY AUDITORS
M/s. Jain Pramod Jain & Co., Chartered Accountants, (Firm Registration No.016746N), auditors of the Company will retire at the ensuing Annual General Meeting andare eligible for re-appointment and they have confirmed that their re-appointment, ifmade, shall be within the limits of Section 224 (1B) of the Companies Act, 1956. The Boardrecommends their re-appointment.
15. COST AUDIT
Pursuant to the directives of the Central Government under provisions of Section 233-Bof the Companies Act, 1956, a Cost Auditor has been appointed to audit Cost Accounts ofyour Company for the year ended 31st March, 2011.
16. DIRECTORS’ RESPONSIBILITY STATEMENT
In terms of provisions of Section 217(2AA) of the Companies Act, 1956, your Directorsdeclare that :
(i) in preparation of Annual Accounts, applicable accounting standards have beenfollowed and that no material departure has been made from the same;
(ii) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company for Financial Year ended 31st March, 2011 and ofthe profit of the company for that year;
(iii) they have taken proper and sufficient care for maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.
(iv) they have prepared the annual accounts on a going concern basis.
17. PARTICULARS OF EMPLOYEES
There is no employee during the year under review in respect of whom the particulars asrequired to be disclosed with reference to the Companies (Particulars of Employees) Rules,1975 as amended.
18. PARTICULARS OF ENERGY CONSERVATION ETC.
Particulars as required to be disclosed as per Companies (Disclosure of Particulars inthe Report of Board of Directors) Rules, 1988 are set out in the statement attached heretoand form part of this Report.
19. CORPORATE GOVERNANCE
A separate report on Corporate Governance is enclosed as part of this Annual Report.Certificate from the Auditors of the Company regarding compliance with the CorporateGovernance norms stipulated in Clause 49 of the Listing Agreement is annexed to the Reporton Corporate Governance.
20. PUBLIC DEPOSITS
The Company has neither invited nor accepted any deposits from the public within themeaning of Section 58(A) of the Companies Act, 1956 during the year under review. As suchno amount of principal or interest was outstanding on the date of the Balance Sheet.
21. CASH FLOW ANALYSIS
In conformity with the provisions of Clause 32 of the Listing Agreement(s), cash flowstatement for the financial year ended 31st March, 2011 is annexed hereto.
22. AWARDS
Your Directors are pleased to inform that the Company has received the following awardsduring the year :
(a) During the First Mines Safety Week, 2010 of Hadoti Division, Gwalior Regioncelebrated under the aegis of Directorate General of Mines Safety, Govt of India, Dhanbad.
1. For Overall performance 1st prize.
2. Opencast working, places, plans and supervision 1st prize
3. Explosives (Storage, Transport and Use) 1st prize.
4. Transport roads and dust suppression 1st prize.
5. Welfare Amenities and Protective Equipment, 1st prize.
6. Publicity propaganda and House Keeping. 1st prize.
7. Electrical installation and Mines Lighting. 1st prize.
8. Heavy earth moving machinery and maintenance 2nd prize.
9. Vocational training 2nd prize.
10. In different trade tests 1st prize 29 and 2nd prize 3.
(b) During 21st Mines Environment and Mineral Conservation Week 2010-11 celebratedunder the aegis of Indian Bureau of Mines, Ajmer.
1. For overall performance
1st and 2nd prize in cement Industry of Rajasthan.
2. Reclamation and Rehabilitation of land 1st prize.
3. For Environmental Protection and Mineral-Conservation 1st prize.
4. Afforestation and plantation 2nd prize.
5. Water pollution control 3rd prize.
6. Poster competition 3rd prize.
23. ACKNOWLEDGEMENTS
Your Directors place on record, their deep appreciation of the devoted servicesrendered by the employees of the Company who have contributed towards an excellentperformance of the Company. Their grateful thanks are due to the State Government ofRajasthan, investors, Bankers and the District level authorities for their supportextended to the Company from time to time. Shareholders’ appreciation of theManagement’s efforts expressed at the General Meetings of the Company are a greatfillip to strive for better performance.
| Yours faithfully, |
| O. P. Gupta, Chairman |
| New Delhi | K. K. Mudgil, Director |
| The 27th day of April, 2011 | K.C. Jain, Managing Director |
INFORMATION AS PER SECTION 217(1)(E) READ WITH COMPANIES (DISCLOSURES OF PARTICULARS INTHE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS’REPORT FOR THE YEAR ENDED 31ST MARCH, 2011.
1. Conservation of Energy:
A) Energy Conservation Measures Taken
(i) Projects implemented:
We have commissioned 6 wind mills of 7.5 MW capacity at Jaisalmer in June, 2010.
ii) Other energy conservation measures taken:
a. Optimisation of Unit-II cement mill output rate.
b. Optimisation of Unit-II VRM output rate.
c. Optimisation of Fly ash consumption in Unit-I and II.
d. Optimisation of Unit-I Pyro section for reduction of thermal energy consumption.
iii) Utilisation of renewable electrical energy for captive use:
We have utilised 114.25 lakhs Kwh of electricity for captive use from 13 wind millswith a total capacity of 13.65 MW installed at Jaisalmer.
B) Additional Investments and Proposals, if any, Being Implemented for Reduction ofConsumption of Energy
i) Projects to be implemented:
a. Upgradation of Unit-I Pyro section by installation of new 6 stage Pre Heater withpre-calciner and installation of new high efficiency Clinker Cooler with TA Duct.
b. Installation of Medium Voltage VVVF Drives in Unit-II PH Fan and ESP Fan.
C) Impact of the Measures at (A) & (B) above for Reduction of Energy Consumptionand Consequent Impact on the Cost of Production of Goods.
By the efforts mentioned in (A)(ii) we have reduced the Sp. Electrical EnergyConsumption by 2.14 Kwh per Ton of cement in Unit-II and reduced the Sp. Thermal Energyconsumption by 1 K.cal per Kg of Clinker in Unit-I.
On implementation of Project mentioned in (B)(i)(a), the expected saving in Sp. ThermalEnergy consumption is 143 K.cal per Kg of clinker and the expected saving in Sp.Electrical Energy consumption is 2 units per Ton of clinker in Unit-I.
On implementation of project mentioned in (B)(i)(b), the expected saving in Sp.Electrical Energy consumption is 0.5 Units per Ton of Clinker in Unit-II.
2 Total Energy Consumption and Energy Consumption Per Unit of Production as PerForm - A of the Annexure to the Rules in Respect of Industries Specified in the Schedule.
A. Power and Fuel Consumption
| 2010-11 | 2009-10 |
| 1. Electricity | | |
| a. Purchased(Net) | | |
| Unit (in lacs) | 187.99 | 365.84 |
| Total amount (Rs.in lacs) | 1070.02 | 1765.29 |
| Rate/Unit (Rs.) | 5.69 | 4.83 |
| b. Own Generation(Net) | | |
| i. Through Diesel Generators | | |
| Units (in lacs) | 0.08 | 8.00 |
| Unit per Ltr. of Diesel Oil | 2.90 | 3.40 |
| Cost/unit (Rs.) | 40.48 | 9.71 |
| ii.Through Steam Turbine/Generator | | |
| a. Unit (Kwh in lacs) | 1217.22 | 1223.13 |
| b. Unit per Kg of coal | 0.979 | 1.037 |
| c. Cost/Unit (Rs.) | 3.27 | 2.90 |
| iii. Through Wind Mills | | |
| Gross Units (Kwh in Lacs) | 120.11 | 100.29 |
| Net Units (Kwh in Lacs) | 114.25 | 95.77 |
| 2. Coal | | |
| a. Used for Calcining of Raw Meal | | |
| Quantity. (M.T) | 249285 | 277363 |
| Total cost (Rs. in lacs) | 10047.59 | 10030.56 |
| Average Rate (Rs. /MT) | 4030.56 | 3616.35 |
| b. Used in steam turbine/generator. | | |
| Quantity (M.T) | 124377 | 117940 |
| Total cost (Rs. in Lacs) | 3554.24 | 3143.01 |
| Average rate (Rs./MT) | 2857.64 | 2664.92 |
| 3. Furnace oil | N.A. | N.A. |
A. Consumption per unit of Production
| Products Unit | Industry Avg | Cement M.T. | Cement M.T. |
| Electricity | | | |
| i) Unit I | 100-120 Kwh | 98 Kwh | 95 Kwh |
| ii) Unit II | 70-90 Kwh | 79 Kwh | 81 Kwh |
| Furnace Oil | | N.A. | N.A. |
| Coal per ton on Cement | | | |
| i) Unit I | | 163 Kg | 155 Kg |
| ii) Unit II | | 144 Kg | 138 Kg |
3. Technology Absorption
1. Research and Development (R&D)
| (a) Specific areas in which R&D carried out by the Company | NIL |
| (b) Benefit derived as a result of above. | NIL |
| (c) Future plan of action | NIL |
| (d) Expenditure on R&D | |
| (i) Capital | Rs.2.66 Lacs |
| (ii) Recurring | Rs.131.53 Lacs |
| (iii) Total | Rs.134.19 Lacs |
| (iv) Total R&D Expenditure as a percentage of total turnover | 0.24 |
2. Technology absorption, adoption and innovation
| (a) Efforts in brief made Towards technology absorption | 1. Continuous interaction with the main plant supplier and others for technical assistance, has helped to achieve optimum benefits of the advancement in technology such as plant optimisation, efficient use of energy etc. |
| 2. Plant personnel were trained by experts, in-house and outside through Seminars and visits. |
| (b) Benefits derived as a result of the above efforts e.g. product improvement, cost reduction, product development, import substitution etc. | Improved quality and productivity improved throughput and cost reduction, due to thermal and electrical energy savings. |
(c) In case of imported technology (imported during the last 5 years reckoned from thebeginning of the financial year) following information may be furnished
| (i) Technology imported | NIL |
| (ii) Year of import | N.A. |
| (iii) Has Technology been fully absorbed | N.A. |
| (iv) If not fully absorbed, areas where this has not taken place, reason thereof and future plan of action. | N.A. |
| 4. Foreign Exchange Earning and Outgo: | |
| (a) Total foreign exchange earned | Rs. NIL |
| (b) Total foreign exchange used | Rs.1253.86 Lacs |
| O. P. Gupta, Chairman |
| New Delhi | K. K. Mudgil, Director |
| The 27th day of April, 2011 | K.C. Jain, Managing Director |