GUJARAT MINERAL DEVELOPMENT CORPORATION LIMITED
ANNUAL REPORT 2001-2002
Address by Shri Mukesh Zaveri, Chairman, GMDC before the 39th Annual
General Meeting held on 30th September 2002.
I am glad to welcome my esteemed shareholders, colleagues on the Board of
Directors, officers and staff of GMDC on this happy occasion of Annual
General Meeting for the year 2001-2002. The increasing use of computer
based Internet, E-mail and E-commerce facilities in the global trade and
industry in the last few years, has developed trade and industry at the
international level - far beyond the boundaries of State and the nation. It
is now imperative for a manufacturer or trader to deliver high quality
products at reasonable price if they are to sustain in their trade or
vocation in the long term.
In my last AGM speech, I had highlighted that the Government's economic
liberalization policy had forced our Company to face stiff competition from
dumping of imported coal. And that while last January's major earthquake
affecting a large part of Gujarat shook up the entire economic system, our
Company withstood the onslaught of nature's fury. It sustained its
production, marketing and other activities through efficient and prudent
administration and long-term proactive planning and registered 13% rise in
its net profits. Since last year, the Company has begun offering discount
to bulk consumers in order to promote Sales which has resulted in
substantial rise in sales.
I am happy to inform that this year also saw a significant rise in
production and sale of lignite. As against production of 45.61 lakh tonnes
last year, current year's production at 48.48 lakh tonnes reflects a rise
of 6.30%. In terms of sale value, this year's sale has been to the tune of
Rs.211 crores as against Rs.203.40 crores last year resulting in growth of
about 4%. This is a notable example of persistent growth achieved despite
recessionary trends prevalent in the industrial sector and competition from
imported coal. Further, to fulfil its responsibility of catering to lignite
fuel requirements of South Gujarat Industries, your Company has acquired
new areas near the currently operational Rajpardi mines to augment lignite
production. In yet another step in this direction, your Company has
initiated efforts to acquire mining lease at Tadkeshwar in Surat district.
Lignite Project, Mata-no-madh
In order to promote lignite production in Kutch district, your Company has
obtained mining leases in Mata-no-madh and initiated action for commencing
lignite mining. Initial overburden removal has been completed and the
project is expected to be fully operational by next month.
Lignite Project, Bhavnagar
There is very large demand of lignite in Saurashtra and especially in South
Gujarat region from cement and chemical industries and is currently met by
far off supplies from Kutch. To increase convenience and reduce freight
charges for lignite transportation, mining plans are being formulated to
exploit huge lignite reserves available around Thordi, Rampar, Bhumbhali
and Bhutesar villages of Ghogha and Bhavnagar taluka in Bhavnagar district.
It is envisaged to commence lignite production from these areas in next two
Your Company has achieved a distinct status in lignite mining and is
working towards retaining this unique position in years ahead.
Calcined Bauxite Project
In my speech three years ago, I had pledged to restart the Calcined Bauxite
Project at Gadhsisa. This Project has been operational for last three years
and is now yielding a production of 34,258 tonnes of Calcined Bauxite this
year against 33,743 tonnes last year. This project lying closed three years
ago is doing very well and contributes a total income of Rs.10 crores.
Besides, the Company proposes to introduce dual firing system using petcock
and furnace oil from single burner to affect savings in fuel and production
costs and increase profitability. Currently, bauxite mining is proceeding
in Ratadiya, Wandh and Guniasar, Naredi, Balachhod and Bhatia areas and
efforts are being made for acquiring additional areas through mining
Fluorspar project located at Kadipani, recognised as 'Mother Plant', is the
oldest project of the Company and has been operational for the last 30
years. The modernisation of the plant is now deemed necessary to keep up
with the times and it has been decided to equip the plant with the latest
state-of-the-art technology, Modernisation will significantly improve
quality, increase efficiency and productivity and raise end product quality
which in turn will result in marked improvement and increase in
As a part of this modernisation campaign, the Company has despatched a
representative sample of fluorspar for analysis to Canada based M/s. Lake
Field Research Laboratory, Toronto. Analysis of the samples has shown very
encouraging results. In order to ensure similar results from laboratory
scale tests on a pilot plant scale, M/s. McNally Bharat Engineering Company
has been engaged to perform tests at Kadipani. It will be pertinent to note
that 30 years ago, M/s. McNally Bharat Engineering Company had commissioned
this plant on turnkey basis. It is a highly experienced and renowned
company in this field. A decision for financial investment will be taken
after detailed study of the report.
Multi-metal Project, Ambaji
I had informed in last year's AGM that steps are being taken to re-start
the Ambaji Multimetal Project. In this context, I am happy to inform that
we have formulated a plan for starting this project in joint sector. To
this end, a Memorandum of Understanding has been signed with Binani Group
and Rajasthan State Mineral Development Corporation. There is a proposal to
put up a large scale plant using ore and mineral deposit at Ambaji and
adjoining Rajasthan areas. I am glad to inform that an American agency has
extended assistance of US $5,00,000 for analysis of raw ore and preparation
of detailed feasibility report and its detailed report will be available by
December 2002. Necessary steps are taken between our Company and partner
companies to realise these plans and increase possibilities of re-starting
this closed project.
Power Project, Akrimota
Implementation of the 250 MW Akrimota Power Plant, a star project of the
Corporation, is progressing as per schedule. Construction of first boiler
is nearing completion and the turbine set has been positioned in place.
Structure of one of the chimneys has been erected to the stipulated height.
Reverse Osmosis Plant for filtration of sea-water has become operational;
condenser has been placed on foundation; installation of process water
piping is in progress; and facilities for drawing sea-water to the power
plant have been completed.
In terms of work status, a total of Rs.490 crores have been spent and for
balance expenditure, a final decision has been taken to avail financial
assistance from banks and financial institutions.
The power plant, likely to commence operations around July 2003, will
generate about 15,000 lakh units of energy, which will be provided to the
Gujarat Electricity Board. An Agreement covering all the facets of this
arrangement have been finalised and consent has been received from the
Gujarat Electricity Board for operating the Escrow account. received from
the Gujarat Electricity Board for operating the Escrow account.
It is a matter of pride and pleasure that your Company's net profits grew
by 13% - Rs.66.18 crores this year against Rs.58.75 crores last year. Our
Board has recommended dividend @ 40% and earning per share of Rs.20.81 (as
against Rs.11.83 last year). Book value of the 10 rupee share of the
Company has significantly shot up from Rs.155.19 last year to Rs.168.40
Thus, in spite of overall recession on a world-wide scale and a huge
requirement of funds for the Power Project, the Company made appreciable
profit and decided to pay dividend at the rate of Rs.4 per share a generous
consideration on the part of the Company towards its shareholders.
The option of share holding in Demat form is available to the company's
shareholders from the very beginning and the Company has made necessary
agreements with National Securities Depositories Limited and Central
Depositories Limited. Further, 90% of the 26% share holding disinvested has
been dematerialised. Currently, the trading of Company's shares is
compulsorily transacted in Demat form.
From its inception, the Company has been honouring its social
responsibilities. The Company has provided mobile dispensary vans for the
benefit of the people of surrounding areas of its Projects. Company has
made available facilities for higher education and medical treatment in a
big way and has also constructed check dams.
There has been valuable co-operation from different departments of the
State Government in the activities of the Corporation. Wholehearted co-
operation has also come from various ministries and related departments of
the Central Government. We have been constantly receiving help and co-
operation from the State Geology and Mining Department. In the activities
of the Corporation, land acquisition plays a crucial role. District and
taluka level administration has been lending a helping hand in this regard
which I note with appreciation. During this year, relations with the
employees and officers have remained cordial and I am sure similar
harmonious and amicable industrial relations will be maintained in the
Thank You. Vande Mataram!