narmada cement company ltdmerged Directors report

NARMADA CEMENT COMPANY LIMITED ANNUAL REPORT 2004-2005 DIRECTORS REPORT Dear Shareholders, Your Directors present the Annual Report and the Audited Accounts for the year ended 30th September 2005. 2004 - 05 2003 - 04 (Rs. crore) (Rs. crore) Gross Turnover 277.66 205.06 Profit / (Loss) before depreciation and taxes 26.94 (19.96) Depreciation on fixed assets 6.42 6.67 Profit / (Loss) before tax 20.52 (26.63) Provision for tax: Deferred tax (net) 0.00 (31.51) Fringe benefit tax 0.06 0.00 Profit / (Loss) after tax 20.46 (58.14) Add: Balance brought forward from the previous year (173.39) (115.25) Balance to be carried forward (152.93) (173.39) Your Directors do not recommend any dividend for the financial year under review. PERFORMANCE Sales, production and profitability Sales and other income for the financial year under review were Rs. 243.60 crore as against Rs. 181.69 crore for the previous year which showed an increase of 34%. Clinker production at the Companys Jafrabad Works was 14.07 lakh metric tonnes as against 13.45 lakh metric tonnes during 2003-04. Cement and clinker dispatches during 2004-05 were higher at 15.23 lakh metric tonnes, which showed an increase of 16% over 13.18 lakh metric tonnes achieved during the previous year. The Company reported a Profit before tax of Rs. 20.52 crore for the year 2004-05 as against a loss of Rs. 26.63 crore for the Previous year. Review of operations The Company continued its ongoing efforts to improve the efficiency of its plants through better utilization of available facilities. Market scenario The cement industry saw an encouraging growth in demand during the year. Demand continued to be good both in Gujarat arid Maharashtra States. The prices showed signs of improvement during the second half of the current year. However, in certain markets, the prices remained low for most part of the current year. Future demand for cement would depend upon Governments investment plans in various infrastructure projects as envisaged in the Budget. CAPITAL EXPENDITURE As at 30th September 2005, the gross fixed assets stood at Rs. 202.66 crore and the net fixed assets at Rs. 80.78 crore. REFERENCE TO BIFR Since the accumulated losses as at end September 2003 eroded the entire net worth of the Company, a reference was made to the Board for Industrial and Financial Reconstruction (BIFR) as per the provisions of Section 15 (1) of the Sick Industrial Companies (Special Provisions) Act, 1985. The application has been acknowledged by BIFR and a case has been registered. BIFR is yet to appoint an Operating Agency to proceed further in the matter. DEPOSITS The Company has not invited / renewed deposits from the public / shareholders in accordance with section 58A of the Companies Act, 1956. No deposits due to be paid have remained unpaid. AUDITORS REPORT The Auditors Report to the Shareholders does not contain any qualifications. DIRECTORS RESPONSIBILITY STATEMENT The Directors confirm that: (i) in preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any; (ii) they have selected the accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year under review and for the profit and loss of the Company for that period; (iii) they have taken proper and sufficient care for the maintenance of adequate accounting records ire accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities: (iv) they have prepared the Annual Accounts on a going concern basis. INDUSTRIAL RELATIONS Industrial relations continued to be cordial during the year. DIRECTORS In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Shri Sanjeev Bafna retires from the Board of Directors by rotation and is eligible for re-appointment. COST AUDIT The Central Government vide its Order No. 52/295/CAB-88 (CLB) had directed that a Cost Audit be carried out every financial year in respect of clinker and cement. The Company will make an application to the Central Government for appointment of Shri V. V. Deodhar, Cost Accountant as Cos, Auditors of the Company for the financial year October 2005 to September 2006. AUDITORS M/s. Haribhakti & Co., Chartered Accountants, who are the Auditors of the Company, hold office until the conclusion of the forthcoming Annual General Meeting and are recommended for re-appointment. DISCLOSURE OF PARTICULARS Information as per the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is given in Annexure A forming part of this report. PARTICULAR OF EMPLOYEES There were no employees covered under the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) rules, 1975. ACKNOWLEDGEMENT The Directors wish to place on record their appreciation for the co- operation and assistance received by the Company from the concerned Ministries of Government of India, various Departments of Government of Gujarat and Maharashtra, Banks and Financial Institutions. The Directors also wish to thank all the employees of the Company for their active participation and co-operation. The Directors wish to record their special thanks to the esteemed shareholders for reposing their confidence in the Company. For and on behalf of the Board V. M. Muralidharan K. C. Birla Sanjeev Bafna Directors Place : Mumbai Dated : 8th November, 2005 Annexure A to the Directors Report INFORMATION AS PER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS REPORT FOR THE YEAR ENDED 30TH SEPTEMBER 2005. A) CONSERVATION OF ENERGY a) Energy conservation measures taken: * Improvement in Plant Run factor and Reliability. * Process optimization. b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy: * Installation of Belt Bucket Elevator in Kiln feed. c) Impact of measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods: * Reduction in specific power consumption. * Reduction in heat consumption. d) Total energy consumption and energy consumption per unit of production as per FORM - A. FORM - A (RULE 2) Current Year Previous Year 2004-05 2003-04 A. POWER AND FUEL CONSUMPTION 1 Electricity: a) Purchased Unit 000 kWh 70464 50420 Total amount Rs. lakhs 3787 2811 Rate / Unit Rs. 5.37 5.58 b) Own Generation Through Diesel Generator Unit 000 kWh 49351 54314 Units (kWh) per Ltr. of fuel oil 4.14 3.68 Cost / Unit Rs. 3.98 3.61 2 Coal - For process in Cement Plants Quantity Tonnes 181725 189199 Total cost Rs. lakhs 6160 4659 Average rate Rs./Tonne 3390 2462 3 Furnace Oil (FO / HFO) Quantity K. Ltrs 11929 11994 Total amount Rs. lakhs 1355 918 Average rate Rs./K. Ltrs 11359 7650 4 Light Diesel Oil (LDO) Quantity K. Ltrs 344 2657 Total amount Rs. lakhs 86 482 Average rate Rs./K. Ltrs 24997 18139 5 High Speed Diesel Oil (HSD) Quantity K. Ltrs 591 464 Total amount Rs. lakhs 171 109 Average rate Rs./K. Ltrs 28926 23465 B CONSUMPTION PER UNIT OF PRODUCTION Product: Cement Electricity# kwh 93.63 91.89 Coal Tonne 0.13 0.14 # excludes non production power consumption FORM - B (RULE 2) Form for disclosure of particulars with respect to absorption. A. RESEARCH AND DEVELOPMENT (R&D) 1. Specific areas in which R&D carried out by the Company: NA 2. Benefits derived as a result of the above R&D: NA 3. Future plan of action: NA 4. Expenditure on R&D: (Rs. lakhs) Current Year Previous Year 2004 - 05 2003 - 04 a) Capital expenditure - - b) Recurring expenditure - - c) Total expenditure - - d) Total R&D expenditure as % of turnover - - B. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATIONS 1. Efforts in brief, made towards technology absorption, adaptation and innovation: * Imparting training to personnel in various manufacturing processes. 2. Benefits derived as a result of the above efforts: * Cost reduction. 3. Information regarding technology imported during the last 5 years: a) Technology imported No b) Year of import NA c) Has technology been fully absorbed NA d) If not fully absorbed, areas where this has not taken place,reasons therefore and future plans of action. NA C. FOREIGN EXCHANGE EARNINGS AND OUTGO (Rs. lakhs) Current Year Previous Year 2004 - 05 2003 - 04 Foreign exchange earned 320 Nil Foreign exchange used 238 248