DIRECTORDear Members,
Your Directors present 8th Annual Report on the operations and performancetogether with the Audited Financial Statements for the year ended on 31st March2011.
FINANCIAL HIGHLIGHTS
| | (Amount in Rs. Lacs) |
| Particulars | 2010-11 | 2009-10 |
| Net Turnover | 32009.10 | 29848.24 |
| Other Income | 237.79 | 574.13 |
| Gross Revenue | 32246.89 | 30422.37 |
| Less: Cost of Sales | 27946.19 | 25557.81 |
| Profit before depreciation, Interest & Tax | 4300.70 | 4864.56 |
| (PBDIT) / Operating Profits | | |
| Less: Depreciation & Amortisation | 1890.72 | 1960.26 |
| Less: Interest and Financial Expenses | 2213.81 | 2687.72 |
| Profit before Taxes | 196.17 | 216.58 |
| Less: Provision for Taxes | 147.32 | 89.14 |
| Net Profit after Tax but before Extraordinary Items | 48.85 | 127.44 |
| Less: Prior-Period Adjustments | 21.59 | 44.63 |
| Net Profit after Tax | 27.26 | 82.81 |
| Add: Balance brought forward from previous year | 1157.64 | 1074.83 |
| Total Profits available for Appropriations | 1184.90 | 1157.64 |
| Less: Appropriations | | |
| General Reserve | Nil | Nil |
| Balance to be carried forward | 1184.90 | 1157.64 |
OPERATIONAL OVERVIEW
During the year under review Net Turnover of the Company has been increased to Rs.320.09 Crores as compared to previous year’s turnover which was Rs. 298.48 Crores, anincrease of around 7.24%. However, Company’s profits after tax has declined a bitmainly due to the factors like lower prevailing selling price of sponge Iron, increase inprice of basic raw materials like Coal and Iron ore, inflationary conditions, cost burdensand shortage of working capital etc.
DIVIDEND
Due to inadequacy of profits, your Directors have not recommended dividend for thefinancial year 2010-11.
DIRECTORS
Shri Shri Jethabhai M. Shah, K.C Thatoi and Shri Anilkumar Pandya will be the Directorsretiring by rotation and being eligible offer themselves for re-appointment at the ensuingAnnual General Meeting.
Shri Shrikant N. Jhaveri has been appointed as Additional Director by the Board on 11thMay 2011 and he will cease to hold office at the ensuing Annual General Meeting. ShriJhaveri has consented to act as Director, if reappointed. Your Directors recommend hisappointment and request members to consider the resolution for his reappointment as statedin Notice of the Annual General Meeting.
Shri Bhaskar Ghosh has been appointed as Additional Director by the Board on 4thJuly 2011 and he will cease to hold office at the ensuing Annual General Meeting. ShriGhosh has consented to act as Director, if reappointed. Your Directors recommends hisappointment and request members to consider the resolution for his reappointment as statedin Notice of the Annual General Meeting.
WHOLE-TIME DIRECTORS
Your Directors propose re-appointment of Whole Time Directors viz. Shri Sujal A Shah,Director –Purchase and Shri Babulal M Singhal, Director-Commercial, whose tenure haveexpired on 25th April 2011 and 15th May 2011 respectively, for afurther term of 5 years. The material terms & conditions of their reappointment havebeen provided in explanatory statement attached to the Notice of the meeting. Members arerequested to consider their reappointment at the ensuing Annual General Meeting.
MOU SIGNED WITH GOVT OF GUJARAT
Your Directors are pleased to inform that in the 5th Global Investors Summitof biennially held renowned event "Vibrant Gujarat 2011", organised byGovernment of Gujarat, your Company has evinced its interest in economic development ofCountry and has entered into a "Memorandum of Understanding (MOU)" withGovernment of Gujarat for proposed investment of Rs. 1000 crores in the Cement Business inDist. Kutch, Gujarat.
The activities relating to "Cement" business is covered under "OtherObjects" of Memorandum of Association (MOA) of the Company. Pursuant to therequirement of section 149 (2A) of Companies Act, 1956 approval of members is sought topass special resolution as mentioned in "Item No. 10" in Notice of Meeting.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
As required under section 217(1)(e) of the Companies Act, 1956 read with Rule 2 of theCompanies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988,particulars relating to conservation of Energy, R & D, Technology absorption andforeign Exchange earnings / outgo are separately provided in the annexure to this report.
PARTICULARS OF THE EMPLOYEES
Particulars of the employees as required under provisions of section 217 (2A) of theCompanies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, asamended from time to time, are not attached with this report since there was no employeewho was in receipt of remuneration in excess of limits prescribed under the provisions ofSection 217(2A) of the Companies Act, 1956 read with the Companies (Particular ofEmployees), Rules 1975.
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to the requirement of section 217 (2AA) of the Companies Act, 1956, it ishereby confirmed that:
a) In the preparation of the annual accounts for the financial year ended 31stMarch 2011, the applicable accounting standards have been followed along with properexplanation relating to material departure;
b) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year andprofit and loss account of the Company for that period;
c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) The Directors have prepared the annual accounts on a going concern basis.
AUDITORS
M/s Talati & Talati, Statutory Auditors of the Company hold office until theconclusion of the ensuing Annual General Meeting of the Company and being eligible, offerthemselves for re-appointment. Your Directors recommends their re-appointment.
Pursuant to Central Government’s Order dated 3rd May 2011 Ref No.52/26/CAB-2010, mandating appointment of Cost Auditor, your directors have appointed M/sAshish S. Bhavsar & Co. as Cost Auditor, for auditing cost accounting records of theCompany for financial year 2011-12.
EXPLANATION TO THE AUDITOR’S REMARKS
The Directors submit their explanation to the qualifications made by the Auditors intheir report for the year 2010-11. The Para nos. of Auditors’ Report and reply are asunder:
Para ix (a)
Payments of Statutory dues were marginally delayed on account of slowrecovery/collection. However, the same have been paid.
Para xi
On account of financial problem, company defaulted in payment of interest. Company hasmade proposal to its bankers for working capital requirements. Once the working capital issanctioned and disbursed, Company will be regular in payment of dues to its bankers.
Besides, other qualification, the notes to the Accounts are self explanatory and givesuitable explanation to qualifications in Auditors’ report.
FIXED DEPOST
The Company has not accepted any public deposit during the year under review and noamount against the same was outstanding at the end of the year.
FURTHER ISSUE OF SHARES BY PREFERENTIAL ALLOTMENT
Members in its adjourned meeting held on 25th April 2011 approvedpreferential allotment of equity shares and convertible warrants to strategic investorsand authorized the Board in this regard. However, the same was abandoned by the Board inits meeting held on 4th July 2011.
REGULATORY STATEMENT
In conformity with provision of Clause 32 in the Listing Agreement(s) the Cash FlowStatement for the year ended 31.03.2011 is annexed hereto.
The equity shares of your company are listed on the Bombay Stock Exchange Limited (BSE)and the National Stock Exchange of India Limited (NSE)
The Company has paid the listing fees for the year 2011-12 to above stock exchanges.
APPRECIATION
Your Directors place on record their sincere appreciation yet again for the valuablesupport and cooperation as received from government authorities, Financial Institutionsand Banks during the year. The Directors are also thankful for the support extended byCustomers, Suppliers and contribution made by the employees at all level. The Directorswould also like to acknowledge continued patronage extended by Company’s shareholdersin its entire endeavor.
| For and on behalf of the Board |
| Sd/- |
| Rajendra V. Shah |
| Date: 23rd July 2011 | CHAIRMAN |
| Place: Santej | |
ANNEXURE TO DIRECTORS’ REPORT
A. CONSERVATION OF ENERGY
(a) Energy conservation measures taken
Your company gives priority to Energy conservation. It regularly reviews measures to betaken for Energy Conservation/Consumption and its effective utilization.
(b) Additional investments and proposals, if any, being implemented for reduction ofconsumption of energy:-
Your Company is highly power intensive industry and power is the basic requirements ofmanufacturing process. In order to reduce the cost per unit for power consumption, theCompany has installed 40 MW Captive Power Plant.
(c) Impact of measures at (a) and (b) above for reduction of energy consumption andconsequent impact on the cost of production of goods:
The company is operating 40 MW Captive Power Plant in parallel with GETCO Grid and withthe consumption of own power, your Company saves substantial amount from the same.
Total energy consumption and energy consumption per unit of production:
| (I) POWER AND FUEL CONSUMPTION | 2010-11 | 2009-10 |
| 1. ELECTRICITY | | |
| (a) Purchase | | |
| Unit (Kwh) | 909600 | 2068920 |
| Total Amount (Rs.) | 13258095 | 18697104 |
| Rate / Unit (Rs) | 14.58 | 9.04 |
| (b) Own Generation | | |
| (i) Through Diesel Generator Unit (Kwh) | NIL | NIL |
| Unit Per Ltr of Diesel Oil | NIL | NIL |
| Cost / Unit (Rs) | NIL | NIL |
| (ii) Through Steam Turbine / Generator Unit (Kwh) | 156302 | 156849 |
| Unit Per Kg of Lignite | 1.24 | 1.00 |
| Cost Lignite / Unit (Rs) | 1726 | 1905 |
| 2 COAL (Including Coal Fines) | | |
| Quantity (MT) | 64825 | 20881 |
| Total Cost (Rs) | 191013028 | 69345177 |
| Average Rate (Rs) | 2947 | 3321 |
| 3 FURNACE OIL | | |
| (used in the generation of power) | | |
| Quantity (K Ltr) | NIL | NIL |
| Total Cost (Rs) | NIL | NIL |
| Average Rate (Rs) | NIL | NIL |
| 4 OTHERS - LIGNITE | | |
| (used in the generation of steam) | | |
| Quantity (K Tonns) | 125709 | 157580 |
| Total Cost (Rs) | 269791681 | 298800612 |
| Average Rate (Rs) | 2146 | 1896 |
| II. CONSUMTION PER M.T. OF PRODUCTION | | |
| Particulars of Product | | |
| Electricity (in Unit) | NIL | NIL |
| Furnace Oil | NIL | NIL |
| Coal (Specify quantity) | NIL | NIL |
| Others | NIL | NIL |
B. TECHNOLOGY ABSORPTION
| 2010-11 | 2009-10 |
| (I) Research and Development (R & D) | | |
| 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: | | |
| a) Capital | | |
| b) Recurring | | |
| c) Total | | |
| d) Total R&D expenditure as a percentage of total turnover | NIL | NIL |
| (II) Technology absorption, adaptation | | |
| Company has not carried out research, development & innovation activities. | | |
| 1. Efforts, in brief, made towards technology absorption, adaptation and innovation. | NIL | NIL |
| 2. Benefits derived as a result of the above efforts, e.g. product improvement, cost reduction, product 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 has been fully absorbed | | |
| d) If not fully absorbed, areas where this has not taken place, reasons therefore and future plans of action. | NIL | NIL |
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
| | (Amount in Rs. Lacs) |
| Particulars | 2010-11 | 2009-10 |
| Earnings | Nil | Nil |
| Outgo | 1261.64 | 742.08 |
| For and on behalf of the Board |
| Sd/- |
| Rajendra V. Shah |
| Date: 23rd July 2011 | CHAIRMAN |
| Place: Santej | |