FOR THE YEAR ENDED 31st MARCH 2014
With heavy heart we inform you that our beloved Chairman Shri Satyadeva Prakash Sinhaleft for his heavenly abode on 11.4.2014. He was 72. This has created a void which isdifficult to get filled. Our homage to the departed soul.
Your Directors submit herewith their Report together with the audited accounts for theyear 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 || |
|1. Profit before depreciation interest tax and other appropriations || |
|2. Less : || || |
|(i) Finance Costs || |
|(ii) Depreciation || |
|3. Net Loss || |
|4. Loss carried to Balance Sheet || |
It was once again a bad year for the economy the fourth in succession pushing theCement Industry deeper into distress. In the face of high input cost stagnant cementprices and oversupplied market the Company experienced severe financial constraints.While this on one hand impeded smooth input supplies on the other affected plantmaintenance resulting in tower plant availability as well as efficiencies. While Capacityutilization n Clinker fell to 80% from 92% achieved lasti year capacity utilization incement was lower at 64% from 74% last year.
3.0 FINANCIAL PERFORMANCE
Economy appeared on threshold of a major crisis. Apersistently high inflation highinterest rates falling consumer spending piling up of inventories and a general declinein corporate sales and profitability were all symptoms of an economy in distress. As perthe advance estimates released by the Central Statistics Organisation GDP growth for2013-14 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 upits worst performance in 20 years in 2013-14 contracting by 0.20% following an equallydismal growth of 1.1% in 2012-13. Construction sector grew by 1.1% against 1.7% last yearand Services sector by 11.2%. But for a healthy growth of 4.6% in Agricultural sectoragainst 1.6% last year GDP growth would have been still more dismal.
The position of the cement Industry has gradually worsened over the last 3 years to theextent that now the existence of atleast the smaller units constantly squeezed by highcost uneconomic scale of operation and unremunerative prices is under threat. On the onehand while the increase in Diesel and coal rates as a part of Govt. strategy to cut backsubsidies unleashed an inflationary spiral substantial)/pushing up cost of power fueland transportation on the other unabated capacity additions without significantconsumption growth resulted n i continued supply overhang and erosion of pricing power.In view of the extraordinary situation resulting in severe working capital constraints itwas very difficult to maintain viable operations resulting in substantial losses. Theliabilities exposure of the Company including those of statutory nature went upsubstantially. All these factors cumulatively resulted in lower production at 6.39 lactons during 2013-14 a significant 13% fall compared to the immediately precedingfinancial year. This resulted in negative EBIDTA Margin and net loss as reported above.
The Directors regret their inability to recommend any dividend in view of the presentposition of the Company.
6.0 LISTING AGREEMENTS WITH STOCK EXCHANGES
The Company's 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 beenappropriately explained in a statement "Auditor's Remarks and Management'sReplies" placed at ANNEXURE- 1 hereto.
8.0 DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 217 ( 2AA ) of the Companies Act1956 your Directors have -
i. followed the applicable accounting standards in preparation of the Annual Accountsfor the year ended 31.03.14.
ii. selected the accounting policies and applied them consistently and made judgementsand estimates which are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year and of the loss of theCompany for that period.
iii. taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act for safeguarding the assetsof 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 withthe Corporate Governance Code. The Corporate Governance code has already been implementedby the Company and a separate section thereon is included in the Directors' Report asANNEXURE- 2
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 eligibleoffers himself for reappointment.
The Auditors M/s M. Mukerjee & Co. Chartered Accountants retire in terms of theirappointment and being eligible offer themselves for re-appointment .
12.0 ENERGYTECHNOLOGY & FOREIGN EXCHANGE
Statement giving the particulars relating to conservation of energy technologyabsorption 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 asANNEXURE-3 .
13.0 PARTICULARS REGARDING EMPLOYEES
The particulars regarding an employee of the Company who was in receipt of remunerationstipulated 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-2of the Directors' Report.
14.0 MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis has been appended to the Report in terms of theListing Agreement as ANNEXURE-4.
The Directors wish to put on record their appreciation for the support and contributionmade by the Employees of the Company towards the operation.
The Directors also wish to place on record their thanks and appreciation for the helpand 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 || |