MANAGEMENT DISCUSSION & ANALYSISTo the Members,
Your Directors present their 17th Annual Report and audited accounts of the Company forthe 18 months period ended 30th September 2012.
SCHEME OF REHABILITATION
As you are aware, the Hon'ble Board for Industrial and Financial Reconstruction (BIFR)vide its Order dated 13th January 2012 has finally sanctioned the Scheme of Rehabilitationof the Company (Scheme). In terms of the said Scheme, the entire principal amount ofoutstanding Secured Loans of the Company including 13.5% Debentures held by the PublicDebenture holders, Financial Institutions and Banks were settled in full on One TimeSettlement basis. The Company has also taken other necessary steps towards implementationof the said Scheme including payments to the Employees,. Government Dues, UnsecuredCreditors, allotment of Equity Shares etc. apart from settlement with the Secured lenders.After taking the possession of the plant and mines w.e.f. 23rd July 2012, the Company nowundertaken the work towards upgradation and modernization of the Plant to make it costeffective, efficient and more viable.
During the period under review the Company posted a net loss of Rs. 1,262.32 lacs.
SHARE CAPITAL
Pursuant to the Scheme, the paid up Equity Share Capital of Rs. 6,337 lacs stoodreduced to Rs. 2,534.80 Lacs and accordingly the Company issued 6,31,03,243 new EquityShares of Rs. 4 each consequent to reduction of Capital. Further, 3,71,02,037 EquityShares of Rs. 4 each were allotted as per the Scheme. With this, the paid up Equity ShareCapital of the Company stood increased to Rs. 4008.21 lacs.
ECONOMY AND BUSINESS ENVIRONMENT
During the fiscal year 2011-12 the country recorded a GDP growth of 6.9%, a sharp dropfrom 8.5% achieved in the previous fiscal year. The fail in the GDP was primarilyattributable to the recessionary conditions prevailing in the global market as also thehigh inflation, weakening, rupees and unconclusive investment environment in the country.
Going forward the Indian economy is expected to be back on the revival path and withseveral new reforms announced / likely to be announced by the government This shall resultin increased spending on the infrastructure sector. Further, with the likely softening ofthe interest rates, the Housing sector is also expected to show signs of revival in thecoming years. Cement being a derived commodity would stand to gain with additionalspending in Infrastructure and Housing sector.
INDIAN CEMENT INDUSTRY
India is second largest producer of cement in the world . The cement capacity of largecement producers in India was 327 million tonnes at the end of March 2012 and this islikely to be increased to 350 million tonnes by the end of financial year 2012-13.
Cement Industry which has been growing at a CAGR of over 8.5% had recorded a slightlylower growth of about 7% in the financial year 2011-12 and the growth in the currentfinancial year, so far, has not shown much revival. However, notwithstanding theseintermittent years of lower growth, long term portends of the Indian cement industry aregood and is expected to growth at 8 to 9% for the next one to two decades to meet theconstruction requirement of growing Indian economy, both in the housing as well asinfrastructure sectors.
DIRECTORS
The Board has appointed Shri Ganpat Singh as Additional Director of the Company w.e.t1st November 2012. He shall hold office upto the date of the ensuing Annual GeneralMeeting (AGM). The Company has received requisite Notice from a Member proposing the nameof Shri Ganpat Singh for appointment as Director liable to retire by rotation at the AGM.The Board of Directors commends his appointment as aforesaid. .
Shri Vinit Marwaha retires by rotation at the forthcoming Annual General Meeting of theCompany and being eligible offer himself for re-appointment.
AUDITORS
M/s. Om Prakash S Chaplot & Co., Chartered Accountants, Auditors of the Company,retires and is eligible for reappointment. The observations of the Auditors in theirReport on Accounts read with relevant notes are self explanatory.
COST AUDIT
M/s S.P.Gupta, who was appointed as Cost Auditor by the Board for the Financial Year2011-12(18months), commencing from 1st April 2011, would submit his report for thatFinancial Year, within the permissible time. The Cost Audit Report for the previousfinancial year 2010-11 ended 31st March 2011 was filed by the Cost Auditor with theMinistry of Corporate Affairs, Government of india on 13.09.2011 (Due date 30.09.2011)
Shri SP Gupta has, however, expressed his inability for his further re-appointment asCost Auditor to conduct Cost Audit for the financial year 2012-13, on the health grounds.
M/s HMNV & Associates, Cost Accountants, New Delhi has been appointed as CostAuditors of the Company for the Financial Year 2012-13 commencing 1st October 2012,subject to approval of the Central Government.
PARTICULARS OF EMPLOYEES
During the period under review, there were no employees getting covered under theprovisions of Section 217(2A) of the Companies Act 1956 read with the Companies(Particulars of Employees) Rules, 1975.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act 1956, your Directors statethat: -
• in the preparation, of the Annual Accounts, the applicable accounting standardshave been followed along with proper explanation relating to material departures;
• the accounting policies have been selected and applied consistently andjudgements and estimates made are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit or loss of the Company for that period;
• proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the said Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities; and
• the annual accounts have been prepared on a going concern basis.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement, Management Discussion and Analysis,Corporate Governance Report and Auditor's Certificate confirming compliance of theconditions of Corporate Governance form a part of this Annual Report.
CONSERVATION OF ENERGY, ETC
Details as required under section 217(1)(e) of the Companies Act 1956 read withCompanies (Disclosures of Particulars in the Report of Board of Directors) Rules 1988, areannexed.
ACKNOWLEDGEMENTS
The Directors wish to acknowledge their appreciation for the continued and valuableco-operation received from Hon'ble BIFR, Financial Institutions, Banks, GovernmentAuthorities, Share holders, Debenture holders and the Employees of the Company.
On behalf of the Board of Directors
(R. K. GUPTA)
(GANPAT SINGH)
DIRECTORS
New Delhi
Date: 28.12.2012
ANNEXURES TO THE DIRECTORS' REPORT FOR THE PERIOD ENDED 30th SEPTEMBER 2012
Information in accordance with Section 217(1)(e) of the Companies Act, 1956 read withthe Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules1988
(a) Conservation of Energy and Technology Absorption etc.
Since the plant operations continued to be suspended since 26.03.2002 no significantsteps could be taken on energy conservation and technology absorption during the - periodunder review.
(b) Foreign Exchange Earnings and Outgo.
During the period ended 30th September 2012 there is no Foreign Exchange earning. TheForeign exchange outgo was also Nil.
PARTICULARS OF CONSERVATION OF ENERGY
Due to suspension of the plant operations throughout the year, there was no consumptionof electricity and coal during the year.