kalyanpur cements ltd Directors report

DIRECTORS

FOR THE YEAR ENDED 31st MARCH, 2014

The Shareholders,

With heavy heart, we inform you that our beloved Chairman Shri Satyadeva Prakash Sinha left for his heavenly abode on 11.4.2014. He was 72. This has created a void which is difficult to get filled. Our homage to the departed soul.

Your Directors submit herewith their Report together with the audited accounts for the year ended 31st March 2014

1.0 FINANCIAL RESULTS

		(Rupees in Lacs)
	Year ended 31.03.2014		Year ended 31.03.2013
Total Turnover including other income	25665.92		27511.19
1. Profit before depreciation, interest, tax and other appropriations	(542.02)		(957.15)
2. Less :
(i) Finance Costs	1808.92		1582.59
(ii) Depreciation	768.34		993.43
3. Net Loss	(3119.28)		(3533.17)
4. Loss carried to Balance Sheet	(3119.28)		(3533.17)

2.0 PRODUCTION

It was once again a bad year for the economy, the fourth in succession, pushing the Cement Industry deeper into distress. In the face of high input cost, stagnant cement prices and oversupplied market, the Company experienced severe financial constraints. While this on one hand impeded smooth input supplies, on the other affected plant maintenance resulting in tower plant availability as well as efficiencies. While Capacity utilization n Clinker fell to 80% from 92% achieved lasti year, capacity utilization in cement was lower at 64% from 74% last year.

3.0 FINANCIAL PERFORMANCE

Economy appeared on threshold of a major crisis. Apersistently high inflation, high interest rates , falling consumer spending, piling up of inventories and a general decline in corporate sales and profitability were all symptoms of an economy in distress. As per the advance estimates released by the Central Statistics Organisation, GDP growth for 2013-14 was expected to be below 5% for the second year in succession, at 4.9%. Manufacturing sector, which had grown at a CAGR of over 10% between 2005 till 2011 put up its worst performance in 20 years in 2013-14, contracting by 0.20% following an equally dismal growth of 1.1% in 2012-13. Construction sector grew by 1.1% against 1.7% last year and Services sector by 11.2%. But for a healthy growth of 4.6% in Agricultural sector against 1.6% last year, GDP growth would have been still more dismal.

4.0 FINANCES

The position of the cement Industry has gradually worsened over the last 3 years to the extent that now the existence of atleast the smaller units, constantly squeezed by high cost, uneconomic scale of operation and unremunerative prices, is under threat. On the one hand, while the increase in Diesel and coal rates, as a part of Govt. strategy to cut back subsidies, unleashed an inflationary spiral, substantial)/pushing up cost of power, fuel and transportation, on the other, unabated capacity additions without significant consumption growth, resulted n i continued supply overhang and erosion of pricing power. In view of the extraordinary situation resulting in severe working capital constraints, it was very difficult to maintain viable operations resulting in substantial losses. The liabilities exposure of the Company, including those of statutory nature, went up substantially. All these factors cumulatively resulted in lower production at 6.39 lac tons during 2013-14, a significant 13% fall compared to the immediately preceding financial year. This resulted in negative EBIDTA Margin and net loss as reported above.

5.0 DIVIDENDS

The Directors regret their inability to recommend any dividend in view of the present position of the Company.

6.0 LISTING AGREEMENTS WITH STOCK EXCHANGES

The Companys Equity Shares are listed on the Calcutta Stock Exchange and BSE Ltd. There are no arrears of Annual Listing Fees pending with the Company.

7.0 AUDITORS REPORT

The adverse remarks / qualifications contained in the Auditors Report have been appropriately explained in a statement "Auditors Remarks and Managements Replies" placed at ANNEXURE- 1 hereto.

8.0 DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 217 ( 2AA ) of the Companies Act,1956 , your Directors have -

i. followed the applicable accounting standards in preparation of the Annual Accounts for the year ended 31.03.14.

ii. selected the accounting policies and applied them consistently and made judgements and estimates which 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 and of the loss of the Company for that period.

iii. taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. prepared the Accounts on a going concern basis.

9.0 CORPORATE GOVERNANCE

In terms of Clause 49 of the listing Agreement, the Company is required to comply with the Corporate Governance Code. The Corporate Governance code has already been implemented by the Company and a separate section thereon is included in the Directors Report as ANNEXURE- 2

10.0 DIRECTORS

Under Articles 108 & 109 of the Articles of Association of the Company, Mr. Mahendra Lodha retires by rotation in this Annual General Meeting and being eligible offers himself for reappointment.

11.0 AUDITORS

The Auditors M/s M. Mukerjee & Co., Chartered Accountants retire in terms of their appointment and being eligible offer themselves for re-appointment .

12.0 ENERGY,TECHNOLOGY & FOREIGN EXCHANGE

Statement giving the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed as ANNEXURE-3 .

13.0 PARTICULARS REGARDING EMPLOYEES

The particulars regarding an employee of the Company who was in receipt of remuneration stipulated under Section 217 (2A) of the Companies Act, 1956 read with the companies (Particulars of Employees) Rules, 1975 have been provided in para 7 (v)(f) of Annexure-2 of the Directors Report.

14.0 MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis has been appended to the Report, in terms of the Listing Agreement, as ANNEXURE-4.

15.0 APPRECIATION

The Directors wish to put on record their appreciation for the support and contribution made by the Employees of the Company towards the operation.

The Directors also wish to place on record their thanks and appreciation for the help and support given by State Govt. and Central Govt. in carrying out its operations.

	On behalf of the Board
	(Shailendra Prakash Sinha)
	Managing Director
	(Dr. K.C. Varshney)
	Director
	(B.C. Srivastava)
	Director
Patna
Dated: 23rd May, 2014