TAMIL NADU INDUSTRIAL EXPLOSIVES LIMITED
ANNUAL REPORT 2010-2011
Your Directors have pleasure in presenting the 28th Annual Report together
with the audited accounts of the Company for the year ended on 31st March
A summary of your Company's performance during 2010-2011 is given below:
Current year Previous year
ended 31st ended 31st
March 2011 March 2010
i. Explosives (MT) 4898.81 5018
ii. Detonators (M.Nos) 33.28 53.49
iii. Detonating Fuse 10.02 9.47
i. Explosives (MT) 4828.51 5042
ii. Detonators (M.Nos.) 34.67 53.07
iii. Detonating Fuse 9.32 10.40
(Rs. in Lakhs)
(c) Sales Revenue 3467.77 3976.26
(including Sales of
(d) Mis. Income 106.89 76.51
(e) Total expenses 4532.13 4517.04
(f) Net Profit (+)/Net loss(-) -957.47 -464.27
As informed in the last year report, due to the ban on NG explosives with
effect from 01.04.2004, your company's turnover has gone down drastically
as NG explosives were the main product of your company and more than 70% of
sales income was derived from these products. To overcome this situation,
your company has started manufacture of a range of Emulsion Explosives and
established these new products in the market for the last few years. The
Emulsion explosive products are being manufactured and sold through Small
Private Explosives Manufaturers. The shelf life of the Emulsion Explosives
Products is very low compared to the NG Explosive Products. Due to the
plethora of Private Operators in the market, there is stiff competition.
Further your company's performance was also affected due to strikes by both
the workers and staff during Sep' and Oct' 10 demanding the implementation
of new wage settlement and VI Pay Commission Scale of Pay which has
resulted jn loss of production for about 45 days. There is an all-round
increase in material cost without corresponding increase in the price of
end products which also affected the performance. Further due to the
implementation of 6th Pay Commission orders to the staff/officers w.e.f.
01.09.2010 and enhancement in the ceiling on gratuity from Rs. 3.50 lakhs
to Rs. 10 lakhs, there is an abnormal increase in the establishment
expenditure contributing substantially to the loss.
EXPORT THROUGH TUTICORIN PORT:
At present the company exports all its explosives to various foreign
countries through Mumbai Port. This involves huge transportation cost as
well as logistics problems in arranging suitable explosives vans. Due to
such high cost, the company is not able to quote competitive rates to our
importers, which often leads to losing the export business. In order to
reduce this high transportation cost and other logistics problems the
company has approached Tuticorin Port authorities, which is the only
alternative port available in India for the export of Explosives. Once we
get permission from the authorities of Tuticorin Port, the company will be
able to increase its export to East Asian countries, as the freight charges
for ships to these countries will be much cheaper compared to the exports
through Mumbai Port. This will enable TEL to obtain more export orders from
East Asian countries like Singapore, Philippines and Australia.
In view of the loss incurred , your directors do not recommend any dividend
for the year.
Your Company during the year has exported explosives and accessories to the
tune of Rs. 169.13 Lakhs (FOB value) as against Rs. 151 lakhs (FOB value)
in the previous year.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS
The particulars required under Section 217(1)(e) of the Companies Act, 1956
read with the Companies (Disclosure of Particulars in the Report of Board
of Directors) Rules, 1988.
The particulars relating to conservation of Energy is enclosed as Annexure-
A. The Foreign Exchange Inflow during the year under review was Rs. 169.13
lakhs (FOB Value). The Foreign exchange outflow (on CIF basis) was Rs. 4.51
lakhs towards import of raw materials and spares. As already informed in
the earlier reports, the imported technology was fully absorbed by the
PARTICULARS OF EMPLOYEES:
During the year none of the employees of the company drew remuneration in
excess of the limit prescribed under the provisions of Section 217 (2A) of
the Companies Act, 1956.
During the year under review and till the date of this report, Thiru
G.Prakash, IAS, Joint Secretary to Government, Industries Dept., Dr.N.
SundaradevanJAS, Principal Secretary to Government, Industries Dept. Thiru
V. Sampath, IAS, Thiru M.S. Shanmugam, IAS, Joint Secretary to Government,
Industries Dept., and Thiru M. Padmanabhan, Addl.Secretary to Government,
Finance Dept., have been inducted on the Board of the Company.
Thiru M.R. Mohan, IAS, Thiru Rajeev Ranjan, IAS. Selvi Apoorva, IAS, Thiru
G.Prakash, IAS., Thiru K. Nanthakumar, IAS, and Thiru V.Sampath, IAS were
Telieved from the Board of TEL. Your Directors wish to place on record
their appreciation of the valuable services rendered by them.
Prof. Bharat B Dhar will retire by rotation at the ensuing Annual General
Meeting and he is eligible for reappointment. '
DIRECTORS RESPONSIBILITY STATEMENT:
In compliance with the Provisions of Section 217 (2AA) of the Companies
Act, 1956, your Directors confirm:
(i) That in preparing the Annual Accounts, all the applicable accounting
standards have been followed;
(ii) That the accounting policies are adopted and consistently followed and
the judgements and estimates made 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 the financial year;
(iii) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and for
preventing/detecting fraud and irregularities.
(iv) That the Directors have prepared the Annual Accounts on a going
Your Company has taken adequate steps to comply with all mandatory
provisions of 'Corporate governance' as provided in the Listing Agreements
of the Stock Exchange.
A separate Report on Corporate Governance along with a Compliance
Certificate from the Auditors of the Company in this behalf is annexed with
this report as Annexure-B. A report on Management Discussion & analysis is
annexed as Annexure-C as a part of Director's Report.
In terms of Section 619(2) of the Companies Act, 1956, the Comptroller and
Auditor General of India have appointed M/s. V. Ramaswamy Iyer & Co.,
Chartered Accountants, Vellore as Auditors of your Company for the year
2010-2011. With reference to the observations of the Statutory Auditors
under Paragraph 4 of their report, the note No 9 and 17 of Schedule 21
forming part of the Annual Accounts of the company is self-explanatory and
therefore do not call for any further comments.
Your Directors take this opportunity to thank and acknowledge the co-
operation and assistance received from various agencies of the Central
Government, State Government of Tamil Nadu, Financial Institutions, Banks,
Insurance Companies, valued customers and other agencies during the year
under review. The Board of Directors also wish to place on record their
appreciation of the continued support of the Shareholders of the company.
For and on behalf of the Board of Directors
Dr. N. SUNDARADEVAN, I.A.S.,
Place: Chennai - 02
Date : 20.03.2012
ANNEXURE TO DIRECTORS'REPORT
ANNEXURE - A
A. POWER AND FUEL CONSUMPTION:
1. ELECTRICITY Current Year- Previous Year-
Units 2006324 2082068
Total amount (Rs. in lakhs) 106.19 98.18
Rate/Units Rs. 5.29 per unit 4.72 per unit
b. Own generation:
I Through Diesel Generator:
Units 179279 281001
Units per Ltr. of diesel oil 2.79 Unit/Ltr 2.93 Unit/Ltr
Cost/Unit Rs. 13.35 per unit 11.70 per unit
II. Through Steam
-Units Nil Nil
Units per ltr. of diesel oil/gas N.A N.A
Cost/Unit N.A N.A
Quantity(Tonnes) Nil Nil
Total Cost N.A N.A
Average rate N.A N.A
3. FURNACE OIL:
Quantity (Kilo litres) 558.79 592.12
Total amount (Rs. in lakhs) 159.23 142.63
Average rate (Rs.) 28495.26/K.L. 24088.79/K.L.
4. OTHER-INTERNAL GENERATION
Quantity Nil Nil
Total Cost N.A N.A
Rate/Unit N.A N.A
B. CONSUMPTION PER UNIT OF PRODUCTION
Current Year (2010-11)
Expl. Pet. D.F
Unit (MT) 1000 Nos 1000 Mtrs
Electricity 217.64 26.77 23.35
Furnace Oil 78.26 3.11 6.69
(Specify Qty) Nil Nil Nil
(Specify) Nil Nil Nil
Previous Year (2009-10)
Expl. Pet. D.F
Unit (MT) 1000 Nos 1000 Mtrs
Electricity 187.74 23.09 20.14
Furnace Oil 85.49 1.87 6.93
(Specify Qty) Nil Nil Nil
(Specify) Nil Nil Nil
MANAGEMENT DISCUSSION AND ANALYSIS
INDUSTRY STRUCTURE AND DEVELOPMENTS:
Tamilnadu Industrial Explosives Ltd (TEL) is engaged in the manufacture and
marketing of commercial Explosives, Detonators and Detonating Fuses which
are used for mining, well digging, tunnelling, stone blasting, earth moving
etc to exploit the natural resources.
OPPORTUNITIES AND THREATS:
The phenomenal growth in the infrastructure sector in recent years has
increased the scope for production of more explosives. However, ttie
frequent strikes resorted to by workers and staff under one pretex or other
and general fall in the economy and incessant rainfall may affect to some
extent the sale of explosives.
The Segmentwise performance of the Company is as under:
Indication Explosives Detonators Detonating
(MT) (M Nos) Fuses
Production (Qty) 4898.81 33.28 10.02
Sales (Qty), 4828.51 34.67 9.32
(Rs. In Lakhs) 1740.30 1307.08 385.06
OUTLOOK, RISKS AND CONCERNS;
TEL has taken all out efforts to improve its performance by increasing its
export volumes and also through various cost reduction measures.
INTERNAL CONTROL AND THEIR ADEQUACY
As the Company is an ISO Certified Company, it has an adequate internal
control system monitored by Internal Audit, Safety and Security
Departments. Periodical Audits are conducted to review the adequacy and
effectiveness of internal controls.
The financial performance of your Company continues to be critical.
The Company has achieved the turnover of Rs. 34.67 Crores during the 2010-
11 when compared to Rs. 39.76 Crores of the previous year.
The Company has, under its employment, 554 numbers of personnel on the
close of 31.03.2011. Industrial relations have generally remained peaceful,
cordial and positive throughout the year.
Estimates and expectations stated in this Management Discussion and
Analysis may be 'forward-looking' statements within the meaning of
applicable securities laws and regulations. Actual results could differ
materially from those expressed or implied. Important factors that could
make a difference to your Company's operations include economic conditions
affecting demand/supply and price conditions in the domestic and
international markets, changes in the Government regulations, tax laws,
statutes and other incidental factors.