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TRUST does the
IMPOSSIBLE
Annual Report 2008-09
FORWARD-LOOKING STATEMENT
In this Annual Report we have disclosed forward-looking information to
enable investors to comprehend our prospects and take informed
investment decisions. This report and other statements – written and oral
– that we periodically make contain forward-looking statements that set
out anticipated results based on the management’s plans and
assumptions. We have tried wherever possible to identify such statements
by using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’,
‘plans’, ‘believes’, and words of similar substance in connection with any
discussion of future performance.
We cannot guarantee that these forward-looking statements will be
realised, although we believe we have been prudent in assumptions. The
achievement of results is subject to risks, uncertainties and even
inaccurate assumptions. Should known or unknown risks or uncertainties
materialise, or should underlying assumptions prove inaccurate, actual
results could vary materially from those anticipated, estimated or
projected. Readers should bear this in mind.
We undertake no obligation to publicly update any forward looking-
statements, whether as a result of new information, future events or
otherwise.
Content Page
Chairman's Words 05
KnowAbout Shree Cement 07Vision, Mission, Philosophy & Principles 09
UnderstandMD's Perspective 10ED's Overview 12- What Trust achieves? 15- Trust sets 'unthinkable' benchmarks 16- Trust extends 'unexpected' support 21- Trust empowers 'untried' hands 22- Trust discovers 'untested' opportunity 24- Trust delivers 'invaluable' benefits 26
GraspPerformance Highlights 28
Departmental Highlights- Material Management 33- Manufacturing 36- Logistics 39- Power 41- Quality and R&D 45- Knowledge Systems (IT) 47- Marketing and Branding 49- Human Resource 53- Finance 56- Shareholder Value 59- Corporate Sustainability 61Awards 65Profile of Directors 66Shree’s Polices 68Five & Fifteen-Year Financial Highlights 70
ExamineManagement Discussion & Analysis 72Directors' Report & Annexures 78Auditors' Certificate on Corporate Governance 87Report on Corporate Governance & Annexxures 88Code of Conduct 100Auditors' Report 101Balance Sheet 104Profit & Loss Account 105Schedules forming part of the Accounts 106Cash Flow Statement 127Company Details 128Ratio Analysis 130
index
Night view of Beawar Plant
Trust delivers.
Trust touches, assures and inspires people.
Acting thus, trust transforms organisations.
At Shree, trust has been working hard behind the scenes. It's time we brought it to the limelight.
concept note
03
wordsChairman’s
India's age-old culture has adequate references to trust and ethics as the basis
of governing daily life. Take Chaanakya's Arthashaastra written around 330 BC.
Although, it is about the accretion and management of wealth and resources,
the first Sutra or principle outlined in the book does not mention wealth at all.
Instead, it says very clearly, 'Sukhasya Moolam Dharmaha' - The Basis of
Happiness is Ethics. Besides elaborating on character development, the
Sutras also stress the importance of competency building. Another ancient
Indian contribution, the Panchatantra has numerous stories on the value of
trust and friendship.
Having been brought up on such a rich diet of wisdom since childhood, Trust
was a natural instinct with us. So, in a sense, it was inevitable we started
thinking of it in more active terms for our organisation by implementing trust-
based procedures. This is just the beginning. With more 'trust best practices'
in place, we are sure Shree Cement will acquire a hard edge from
this soft attribute.
With more 'trust best practices' in place, we
are sure Shree Cement will acquire a hard edge
from this soft attribute
B B ng r G a uEx t v Ch anecu i e airm
05
About Shree CeShree Cement is one of India's premier cement makers; the
largest in North India. Among the country's top 5 cement
groups, Shree Cement is being professionally managed by
its promoters Shri B. G. Bangur, Chairman and Shri H. M.
Bangur, Managing Director.
Shree Cement posted a turnover of Rs. 2715 crore and
generated operating profit of nearly Rs. 1034 crore during
2008-09. Operational excellence and efficiency of the
Company gets reflected in one of the highest operating
profit margins of 38%.
High-calibre project management and execution
capabilities have seen the Company compress project
timelines and push rapid capacity expansions. A striking
case in point is the commissioning of Unit VII in a world
record of 367 days.
Fast scale-up of operations, driven by such rapid capacity
ramp-ups, made it possible for the company to grab market
opportunities. Shree enjoys the highest market shares in
prime markets of Delhi, Haryana and Rajasthan.
The Company pursues a multi-brand strategy. The three
brands, viz. Shree Ultra Jung Rodhak Cement, Bangur
Cement and Rockstrong Cement, appeal to different
customers and thus create a more diverse and broad
customer base.
Shree follows the triple bottom-line approach of measuring
its performance in terms of three aspects – economic, social
and environmental. In line with this approach, the Company
goes beyond profit performance to impact community
development and environment protection in a sustainable
manner. Shree has already embarked on the 'greening' of its
processes so that its operations put the minimum burden
on the earth's finite resources. The company is on the way to
installing one of the world's largest 'green' power projects
to run on waste heat.
Shree is continuing its capacity expansion both in cement
and power plants with further investment committed to the
tune of approximately Rs.1000 crore during 2009-10. For
future growth, the Company is looking at acquiring
limestone mines within India as well as abroad.
07
Vision
“To drive and sustain industry leadership owithin a global context - by developing indivicompetencies at every level, through a robutrust, support, innovation and reward”
f the company dual leadership st backbone of
Guiding Principles
n
n
n
n
n
Enforce good corporate governance
practices
Encourage integrity of conduct
Ensure clarity and unambiguity in
communication
Remain accountable to all stakeholders
Encourage socially responsible
behaviour
Mission
n
n
n
n
n
n
n
To harness sustainability through low
carbon philosophy
To sustain its reputation as one of the
most efficient manufacturers globally
To continually have most engaged team
To drive down cost through innovative
practices
To continually add value to its products
and operations meeting expectations of
all its stakeholders
To continually build and upgrade skills
and competencies of its human resource
for growth
To be a responsible corporate citizen
with total commitment to communities
in which it operates and society at large
Philosophy
- Rigveda
“Aah no bhadra: Kratavo yantu vishwatah”
“Let noble thoughts come to us from all over the world.”
The Shree Vision
09
Prisoners work hard, give results, and do not commit any mistakes as
their hands are tied with chains
H M BangurngManagi Director
MD’s perspective
The most daunting task a leader faces is how to sell his vision to a group of people. Forget a group, try convincing even a single individual, say even someone as close as your spouse; and you will understand what I mean. This is because a team, far from being an undifferentiated unit, consists of individuals with diverse backgrounds and ambitions.
So, achieving a common vision for different members of a team is the work of the leader; achieving the highest degree of harmony among members is the touchstone of successful leadership. If the team vision is not coherent, then it is not the failure of the team, or of its ability to deliver on expectations; it is the failure of the leadership to sell its vision to the team. I was often told by my teacher ages ago that if I performed badly, it was not my fault but his; it is not the student who fails, but the teacher. Similarly, it is not the team which fails, but the leadership.
Once the common organisational vision is framed, the top management's behaviour and work has to conform to it. Disharmony between what is being said and practiced, results in total aural and visual mismatch, and thus, in total
loss of trust. We expect all our religious leaders to practice what they preach. It is equally true of corporate leadership. Confidence and trust in it always comes from the top and travels to the bottom.
At Shree Cement, telephone, traveling and other personal expenses are self-certified. All such expenses are paid without any further verification by the accounts department. Only 10% of the bills are sampled out for checking at a later date. Last year, we found that only 12% of the total bills checked had discrepancies. Out of the 12%, 4% of the bills were under-claimed and only 8% were over-claimed. Even the over-claiming was due to genuine ambiguity of the rules. In fact, we found that given the responsibility of self determination, nobody over-claims intentionally.
Trust is a two-way communication line between the top and bottom. A leader can trust only when there is faith on both capability and commitment of the people, and vice-versa. Incapable and uncommitted management cannot generate faith, irrespective of the results. At an
organisational level, top tier management has to earn faith from the middle tier management, which in turn should generate it in their juniors.
Questions raised by juniors, if not answered adequately or truthfully by the seniors, erodes trust between the ranks. Authority enjoyed by the boss may be used to cover up his failure to furnish a satisfactory answer. However, such an action prompts an immediate loss of faith in the boss, undermining his ability to deliver in the future. Thus, transparency is the first condition of generating trust.
A natural corollary of trust is the opportunity to work with freedom. Lesser the degree of trust in people, more the amount of control and lower the freedom in an organisation. Under a system of strict control, people may work hard and deliver results with machine-like efficiency, without any errors. However, machine-like efficiency is actually for robots, not human beings. Such efficiency is achieved at the high cost of sacrificing all innovations. Prisoners work hard, give results, and do not commit any mistakes as their hands are tied with chains. Similarly, unrelenting supervision and strict control creates 'prisoners' of the system. Taught to work hard and deliver results without mistakes, all their creativity gets killed by the system.
If we do not have faith in our people, we seek to control performance and outcomes through a regime of strict adherence to parameters and targets. But, in a dynamic organisation, targets have to change daily to adjust to emerging situations and opportunities. The targets we have achieved yesterday is history; what is important today is 'what next?', or future targets. Older organisations are remembered for their sense of history or past achievements; younger organisations are remembered for future expectations.
Immediately after getting the latest kiln commissioned in a world record time of 367 days, I called up a meeting to congratulate the team. To my utter surprise, I found that the team was no more celebrating the success. As soon as it was
Leadership by Trustachieved, it had become history. They were already looking for the next big milestone; they wanted to complete the next kiln in only 342 days. They have learnt with experience that 25 additional days could still have been saved in commissioning. They were setting their own benchmark, their own limit, and the world record was too small for that.
A substitute for innovation is resourcefulness and
inventiveness captured in a very desi word, 'jugaad.' I fail to understand why it has a negative connotation in terms of street-smart inventiveness, when it gets past every obstacle and delivers positive results. When the situation changes drastically, it is only 'jugaad' that comes to the rescue. With presence of mind, thinking 'on the feet' and effective actions, 'jugaad' can only be undertaken by an innovative workforce.
Repairing a breakdown in the system returns it, at best, to its original level. But, modifying the current system to achieve higher efficiency is the only way to get ahead. This is possible only after the team has the faith that their efforts, even if they result in failure, will not be misunderstood, and management will stand by their efforts.
The biggest frustration for any individual is to know what is wrong, and yet, feel powerless to take corrective steps. This results in the person losing faith in the organisation as well as the leadership. To pre-empt such a situation from developing, it is important that the individual's voice is heard at the right time by the right people. This can happen only if communication lines (trust lines) between various persons are totally open.
To take a leaf out of our ancient literature, take Hanuman, a capable hero of the 'Ramayana’. According to the myth, Hanuman had a curse upon him that made him forget his strengths; he could achieve his immense potential only when reminded of his capabilities. Great leadership is that which achieves the best out of all potential 'Hanumans' in the team.
11
Trust provides the strong roots that allow our people
to take unusually high risks and even fail on
the way to hitherto unreachable heights
i g iM K S n hxe i e Di e t rE cut v r c o
ED’s overviewWhat is our ‘bottommost' line?
We follow the triple bottom line approach of
measuring our overall performance in terms of
economic, social and environmental performance
(also called the 3Ps of performance - Profit, People and
Planet.) This is a holistic yardstick that looks at how our
performance matters to those impacted by it - our
employees, shareholders and other stakeholders, the
community and the environment.
Of course, performance is a matter of fundamentals
like people, infrastructure and resources. Does it
follow then that if the quality of tangibles like people,
infrastructure and resources were exactly the same at
two different places, performance would be the
same? I am sure it would not be so.
Besides the tangibles, I know of one intangible that
changes the picture completely - trust. Let me
illustrate with an analogy. Say, your task is to row a
boat; then, trust is like the favourable wind in its sails -
unseen and yet, impactful. Stronger the wind (or
trust), faster and easier does your rowing (or your
effort) take the boat forward (or bear results). On the
other hand, an absence of wind (or no trust), or
presence of unfavourable wind (or distrust) makes
your rowing (or effort) slower and harder.
The analogy makes clear various aspects of trust. One,
the intangible trust has a tangible impact. With the
favourable wind in its sails, the boat reaches its
destination hours faster than otherwise and the
rowers are relatively less exhausted because of the
less exertion. Likewise, for the individual, his task gets
completed ahead of schedule with little cost in terms
of effort. Say because of trust, it takes the individual
8 hours to complete a task that would otherwise take
10 hours. The Gain from Trust, or Trust Gain, in this case
is (10 - 8 =) 2 hours, or 20%. Thus, the effects of trust
can be measured and quantified in terms of time and
cost.
Two, like trust, distrust too has consequences - of
course, adverse. Say because of distrust, it takes
another individual 14 hours instead of the normal
10 hours to finish the above task. Then Loss from
Distrust, or Distrust Loss, is to the extent of (14 - 10 =) 4
hours, or 40%.
Three, what is true at the individual level is true for the
organisation too. At an organisational level, the boat
in the above analogy could refer to the Company's
Strategy and the rowing could be thought of as its
Execution. A widely known business model has it that
Strategy (S) times Execution (E) equals Results (R), or S
x E = R. Trust multiplies the effects of Strategy and
Execution to deliver much bigger Results; Distrust
discounts the effects of Strategy and Execution to
deliver much smaller Results. In this model, Trust Gain
could be as high as 40%, while Distrust Loss could be
as high as 80%.
As a later section shows, we have had demonstrated
Trust Gains in our company; our commissioning of
Unit VII in a world record time of 367 days, instead of
the industry standard of 630 days, would not have
been possible without trust. Now, 367 days is about
58% of 630; thus, Trust Gain in terms of time was (100 -
58 =) 42%. Because of trust, we could complete the
project 42% faster than the norm.
Trust is a two-way street between individuals. There is
one who trusts and another who delivers on such
trust. Our performance, as an organisation, depends
on such two-way interaction of trust and support
between bosses and subordinates, colleagues in
different departments and even between the
company and its suppliers and stakeholders. Trust
provides the strong roots that allow our people to
take unusually high risks and even fail on the way to
hitherto unreachable heights. Because, it is such a
natural performance enhancer, it is the bottom line
beneath all our three bottom lines. Surely, it is our
bottommost line.
13
What
15
Trust achiTrust, according to me, achieves the 'impossible.' By
'impossible,' I mean those things that cannot be conceived
of in an ordinary context or setting. Let me furnish a simple
logic. Can any departmental head singlehandedly run his
department without trusting those down the line? It's
completely inconceivable. So, doesn't trust achieve the
unimaginable, the unachievable, or the 'impossible?'
Transactions within the framework of trust happen faster
and cheaper. This is quite self-obvious in our everyday life.
Say you want to buy a car. You are more likely to go for a
vehicle a trusted friend or relative recommends. Because
you know clearly which car to buy, the purchase takes less
time (faster) and less effort (cheaper); less overall cost or
burden, in terms of time and effort, is borne by you. Thus,
trust has a measureable impact - lower cost of any
transaction. Imagine the impact at an organisational level
where countless such transactions take place daily. The
cumulative effect of trust across the organisation results in
huge cost-efficiencies that can be quantified. What it all
means is that trust is an intangible asset that multiplies
productivity and has tangible, measureable outcomes.
I will now dwell on what trust has achieved in our
organisation. Trust initiatives across functions and
departments can be slotted into one broad trust outcome
or the other. I have identified five such outcomes and
adopted a cross-departmental approach to elaborate on
the payoffs. This is to hit home the point that trust is the
indivisible principle that can be applied in every sphere of
the Company's activity.
Facet of Company Trust outcomes
Speed of transactions Faster
Cost of transactions Lower
Employee productivity /engagement Higher
Supplier delivery Better
Community involvement Greater
Shareholder return Bigger
Customer confidence Stronger
trust sets ‘unthinkable’ Let me list some 'unthinkable' industry records created by our
Company this year.
We set a world record of 367 days in commissioning a brownfield
1 MTPA (Million Tonnes Per Annum) Clinkerisation Unit (Unit VII). To put
the record into perspective, the industry takes 630 days for such a
project.
How did it happen? For a start, we forgot the words like 'unthinkable'
and 'unrealistic.' We sat and discussed with our project managers
deadlines that would be considered a dead 'no-no' elsewhere. We
trusted their capability and commitment to deliver on such incredible
targets. In a cascading effect of trust, the managers showed
confidence in their execution teams, who in turn, banked on the
suppliers. All in the 'trust chain' responded with great enthusiasm and
commitment. The result - the world record.
World record in commissioning a cement plant
Night view of Ras Plant
17
benchmarks
“This project itself is a record time of execution of a
brownfield plant of this size as far as our knowledge
goes with respect to various organisations and
countries where KHD-HW is working.
We would like to record our appreciation to Shree
Cement for this unique achievement which can
become a learning experience for other
entrepreneurs who are looking for faster
implementation of projects.”
- In a letter from the Sr. Vice President (Global Sales & Mktg),
A. K. Dembla and President (Delhi Operations), Martin Gierse
of KHD Humboldt Wedag
“Shree Cement is one of the country's most efficient
cement companies. This tremendous achievement is
yet another feather in the cap of the entire team.”
- In a letter from Rajasthan Chamber of Commerce & Industry
“I want to congratulate you for the speed of Shree
Cement in building and firing a kiln in barely 12
months' time…it is for sure a very fast project.”
- In a letter from the Chairman and CEO of Lafarge, Bruno
Lafont, France
Clinkerisation Unit (Unit VII), Ras
19
One of the biggest Oracle ERP implementations in Asia
A similar story happened while deploying Oracle e-Business
Suite ERP solution. We went live with all eight modules of
the Suite at one go (called the Big Bang approach) - with
zero downtime. This means two things. First, all our
departments got simultaneously migrated to the Oracle
ERP platform, practically at a single stroke of the key.
Second, all this happened with zero time lapse, or zero
blackout period. That is, every department became Oracle-
ready instantaneously, practically at the moment the key
was hit. In short, the ERP deployment was both
'simultaneous and instantaneous.'
Such an achievement was again 'unthinkable,' given that
the industry took up to seven days for the transition. The
usual practice is to queue departments onto the Oracle
platform one after the other, instead of a simultaneous
migration. Even in the case of such 'Big Bang'
implementation, there is always a blackout period during
which all accounting procedures and workflows had to be
reconfigured in terms of the new Oracle protocol. This
usually halted processes and dispatches as departments
struggled to reconcile huge accounting adjustments. We
trusted all departments to plan out accounting inflows and
outflows up to the point of migration in a way to increase
speed while keeping errors to a minimum. The reasoning
was that losses from such errors, if any, would be more than
compensated for by revenues accruing from processes and
dispatches happening days in advance.
In the Business Today-Mercer-TNS study, The Best
Companies To Work For In India - 2008, Shree came out
among the Top 20 companies in India. It was certainly the
top cement maker to do so.
This is certainly an achievement given that people generally
prefer to work at pristine IT or service set-ups close to
cosmopolitan and commercial hubs rather than the 'heat
and dust' of cement plants at remote locations. But, there
must be something in our Company that resonates with
people at a deeper level.
In the study, the Company scored higher than the average
of the Top 10 companies on Internal Employee Perception
Survey and Engagement Index, i.e., on factors that reflect
workers' attitudes and drive engagement.
I believe this happened because of a curious process: when
we trust someone, we also bestow him or her with a sense of
responsibility and moral obligation. This, in turn, fosters the
spirit of ownership over actions and ultimately, over the
Company. I will talk about this process of empowerment
and its results in a later section.
One of India's best employers
21
At Shree, we believe in creating not only engaged
employees, but also 'engaged suppliers.'
Take our captive power plant coming up at our Ras works.
Looking at the level of resources that could be mobilised by
the turnkey contractor, we began feeling that things would
run behind schedule. Enquiries with the supplier revealed a
situation of liquidity crunch because of the ongoing
recession. We immediately sanctioned a substantial
advance to the supplier, who then took to the task with
great gusto. Now, we are sure to complete the power plant
much before schedule.
In this case, we created the moral pressure of trust by
providing a handsome advance. Because, we were a partner
in their difficulty, the contractor became a partner in our
progress; about 80% of contractor's resources were
deployed at our power plant site to set it up in the fastest
time possible. Similar financial assistance, 'on faith,' for
equipment vendors is helping us achieve our targets, most
of them faster than the industry norm.
Other gestures of 'unexpected' trust and support that
create 'engaged' outside parties include payments on the
basis of work done without bills being raised, advance
payments to tide over the ERP migration period, manpower
and other resource support to expedite processes at the
supplier's end.
Shree's trust culture is infectious; suppliers react and act on
it positively. In what is perhaps an industry first, our German
vendor expedited arrangements so that we could airlift
82 MT of cargo comprising of Coal Mill and Raw Mill for the
record-breaking Unit VII. While the routine practice is to ship
such humongous cargo, we took the air route and sliced off
1 ½ months from the usual gestation lag.
Advances 'on faith'
Making our suppliers our partners
trust extendssupport‘unexpected’
The industry standard for Pre-heater installation is about
12 months. For Unit VII, our supplier rose to the occasion and
completed the job in a record 8 months.
Clinker Coolers usually arrive knocked-down from the
supplier's side. The supplier usually runs tests on the
assembled equipment before knocking it down for
transport to the cement maker's plant. Afterwards, onsite
assembly usually takes 2-3 months. What we did was simple.
We put faith in our suppliers, took their word for the
integrity of the assembled equipment without verifying the
constituent parts, trusted our own logistics capabilities and
transported the whole equipment to the Unit VII site. Doing
away with onsite assembly saved 2-3 months.
“We are pleased to know the 1200 TPH chain
elevator has been successfully erected and
commissioned in one week...Based on
experience of decades, erection of such
elevators takes at least two weeks...This is a
brilliant project construction
accomplishment we have never seen in other
elevator erection sites in China and abroad.”
- In a letter from the General Manager of Wuhu Crane &
Conveyor Co., Ltd., China
trust empowers ‘untried’ hands
23
Perhaps the most compelling reason for inculcating trust is
the feeling of empowerment enjoyed by employees. In the
words of the comic book superhero, Spiderman, '…with
great power comes great responsibility.’
We have nearly done away with micromanagement. Not
only does it take a toll on top management in terms of time
and effort, but it also creates weak second lines without
initiative or enthusiasm. Thus, the buzzwords inside the
Company are Delegation and Decentralisation across
departments and functions. Most of our departments and
project teams seem to run on 'autopilot' mode.
Direction rather than supervision
Empowered juniors
We have immense faith in our young brigade. A big case in
point is that the Unit VII record was largely the result of
efforts and initiatives of junior management promoted up
the order to take larger responsibilities.
Major events like plant shutdowns are decided collectively
and planned in a way to minimise intervention of seniors.
The logic is that shop floor personnel know their job best,
are perfectly capable of handling routine operations and
therefore, very well deserve our trust. During exigencies,
the juniors know they can turn to their seniors for guidance
and support.
trust discovers opportunity ‘untested’
25
Trusting people yields initiatives that materialise
opportunities where none existed before.
Take cement dispatches, which generally take place in
covered rail wagons for long distances. The possibility of
securing freight rebates led our managers to experiment
with open wagon dispatches. Although, initially, open
wagon loading took long, experimentation was allowed to
continue. By modifying loading chutes, open wagon
loading cycle has been reduced to 12-13 hours for 3835 MT
of cargo. This is a figure that compares well with the 9-10
hours of loading time for 2700 MT in covered wagons.
What is the opportunity? Lower freight per ton kilometre
allows us to extend radius control and reach long-distance
markets with good potential. Newer markets also mean
more diversified business. This is good news for the
Company, because we have multiple brands to take
advantage of just such a diverse customer base.
Earlier, brand managers of our three brands - Shree Ultra
Jung Rodhak Cement, Bangur Cement and Rockstrong
Cement engaged in healthy competition amongst
Open rail wagon loading
Logistics integration
themselves to cultivate their own distribution channels and
gain larger shares of the market. But, looking at the
possibility of integrating the logistics function across all the
brands, a decision was made to share transport and storage
capacities. Of course, this necessitated a spirit of trust,
cooperation and coordination between all brand managers
in the larger interests of the Company.
Our policy of keeping redundant captive power capacity
opened up a new avenue - power sales. Cashing on the right
tariff at the right time required trust and coordination
between the power sales team, the power plant and the
cement plant. The power plant had to generate enough
power to accommodate the load of the cement and
grinding plants, its own requirement of auxiliary power and
the need to push power sales volumes. The cement plant
was asked to optimise power consumption in a way that
allowed such sales to capitalise on peak-hour tariff. The
power sales team had to look at the generation of the power
plant and the need of our cement and grinding plants to
identify potential slacks in power uptake. Then power
offloads outside the system had to be planned such that
they leveraged such systemic slacks as well as market tariff
to ultimately maximise revenue.
New opportunity in power sales
27
Value for shareholders
Community benefit programmes
Greening the processes
We realise that shareholders put their trust in us by investing
their funds in our stock. We consider it our prime
responsibility to add to their value. Thus, although we have
maintained an unbroken dividend payout record, we have
been prudent in deciding the dividend rate; to ensure a
higher intrinsic value of the Company for them over the
long term, we have opted not to pursue a higher dividend
payout strategy. We have repaid their confidence in us by
generating a high return on net worth or intrinsic value.
Shree was the first Company from Rajasthan to receive the
Golden Peacock Award for excellence in corporate
governance - an affirmation of our continual efforts at
improving credibility with our shareholders.
The community looks up to Shree as a responsible and
supportive corporate citizen. The Company has been active
in promoting community interests. For instance, the
Company has renovated and created community assets like
River Ghats. As usual, the Company's annual temple
function, featuring scintillating performances by both
domestic and international artistes is a big hit with local
people and folks from surrounding areas.
It is on the Country's environment map that our company
has been a notable presence. Our 'green' credentials are
impeccable. Shree is the first cement company in the world
to earn carbon credits for its CDM project, Optimal
Utilisation of Clinker.
In a first of its kind endeavour in India, our company
developed a 'green power' system to utilise excess heat
from the main cement plant in order to turn a power
generator.
With the aim of producing 'green' cement, experiments are
being conducted to use as inputs waste materials like lead-
zinc, slag, waste gas, etc.
Trust for us is a deep-rooted and intangible instinct. But, as
shown by the interaction between Lord Krishna and Arjuna,
trust is also something that takes performance to
untouched orbits. At Shree, we too are using trust in a
material and tangible way to achieve higher levels of
performance.
Illustrating the benefits of mutual faith is a motto I am going
to leave you with - 'As faith wills, fate fulfils.’
Taking it to the next level
trust delivers benefits‘invaluable’
A primary objective of our Company is to create a circle of
trust involving all stakeholders. We pursue a sustainable
development agenda rather than a profit-centric one. This
comes out in our aforementioned triple bottom line
approach to performance.
Sustainable development is about looking after the
interests of all stakeholders, including employees,
shareholders, community and environment, and ensuring
minimum resource footprint. Such a culture in an
organisation helps it develop trust with stakeholders.
2.12.3
2.7
1.4
2.1
1.9
1.9
2.2
0.7
1.1
Current & Quick Ratio (Times)
3.0
0
Current Ratio
Quick Ratio
2.0
1.5
1.0
0.5
04-05
08-0907-08
06-0705-06
2.5
1033.7
939.2
611.0
221.5173.9
578.
0
260.
4
177.
0
18.429
.1
EBIDTA & Net Profit (Rs. Crore)
1200
0
EBIDTA
Net Profit
1000
800
600
400
200
04-05
08-0907-08
06-0705-06
Gross Fixed Assets & Net Fixed Assets (Rs. Crore)
Gross Fixed Assets
Net Fixed Assets
04-05
08-0907-08
06-0705-06
3000
2500
2000
1500
1000
500
0
2734.8
2205.32001.1
1390.91139.6
1105
.7
777.
9
891.
9
727.
7
635.
3
29
Performance Highlights
77.7
63.4
48.0
32.230.264
.2
46.2
35.1
27.7
24.8
Clinker & Cement Production (Lac Tons)
90
60
50
40
30
20
10
0
70
80
Cement Production
Clinker Production
04-05
08-0907-08
06-0705-06
Operating & Net Profit Margin (in %)
Operating Margin
Net Profit Margin
04-05
08-0907-08
06-0705-06
45
40
35
30
25
20
15
10
5
0
38.1
44.544.7
33.129.9
21.3
12.312
.9
2.75.0
Cash EPS & EPS (Rs. Per Share)
Cash EPS
EPS
04-05
08-0907-08
06-0705-06
0
25
50
75
100
125
150
175
200
225
250227.2
207.9
154.2
53.043.5
165.
9
74.7
50.8
5.38.
3
Gross Turnover & Net Turnover (Rs. Crore)
Gross Turnover
Net Turnover
04-05
08-0907-08
06-0705-06
3500
3000
2500
2000
1000
500
0
3097.1
2440.3
1613.1
824.1723.0
2715
.0
2109
.1
1368
.0
669.
4
582.
1
Debt Equity Ratio (Times)
0.9
1.71.
9
1.0
0.8
04-05
08-0907-08
06-0705-06
2.00
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0
Dividend (Rs. Per Share)
10
8
6
5
4
04-05
08-0907-08
06-0705-06
12
10
8
6
4
2
0
Book Value (Rs. Per Share)
347.3
193.
1
130.
5
85.1
83.1
04-05
08-0907-08
06-0705-06
400
350
300
250
200
150
100
50
0
Royalty & Cess
Income Tax
Sales Tax
Excise Duty & Service Tax
Other Taxes
33
19191149
11
1477
101
140
266
195
698
223186
97
27
126
180
113
474
46
183
308
242
828
Contribution to Exchequer (Rs. Crore)
04-05
08-0907-08
06-0705-06
28
4964
11
0
100
200
300
400
500
600
700
800
900
Performance Highlights
31
Return On Capital Employed (in %)
04-05
08-0907-08
06-0705-06
33.9
24.9
39.3
24.6
21.9
45%
40%
35%
30%
25%
20%
15%
10%
5%
0
Return On Net Worth (in %)
04-05
08-0907-08
06-0705-06
48.4
36.5
24.1
9.7
18.5
50
40
30
20
10
0
0
10
20
30
40
50
60
Inventory Turnover (Days)
18.226.4
35.3
50.0
36.6
04-05
08-0907-08
06-0705-06
Debtor Turnover (Days)
6.9
7.4
5.9
8.1
12.1
04-05
08-0907-08
06-0705-06
14
12
10
8
6
4
2
0
Departmental Highlights
33
Material management
Limestone
Fly ash
Since limestone is the principal raw material going into
cement, all attempts are made to increase its production
while keeping costs low. Shree enjoys 100% self-reliance in
sourcing limestone from its captive mines.
As Shree has grown, so also has the internal capacity to
process limestone – from 5000 TPD (tons per day) to 50,000
TPD in the last five years. Not content with such an
impressive trajectory, the Company is aiming bigger; Shree
has acquired prospecting licenses and mining leases in
different parts of the Country in an effort to increase its
mining area.
Use of hi-tech machinery, large-sized equipment to realise
size economies, building of levelled and compacted roads
and modification of equipment design are some of the
steps that have increased the efficiency of critical mining
equipment like dumpers and excavators. For instance, such
measures have improved output of dumpers from 160 TPH
(tons per hour) to 290 TPH.
Flyash is a critical component of PPC (Pozzolana Portland
Cement) manufacturing. Its availability in the near future is
likely to come under strain as all cement manufactures push
hard to tie up long / medium term arrangements with its
suppliers, thermal power plants. Anticipating such a
situation, Shree has already forged long term agreements
with several thermal power plants. This should be enough
to fulfil our present and future requirements. Against the
present requirement of about 5000 TPD (tons per day), the
Company's long-term arrangements ensure supply security
of 7000 TPD. Shree ensures pollution-free transportation of
flyash through special purpose vehicles like pneumatic
bulkers and close body trucks.
Gypsum
The gypsum market is a monopolistic one with limited
supply. Anticipating production demands, planning
procurement schedules and developing market relations
with the suppliers have ensured procurement of nearly
4.25 Lac MT for the Company which has fully met our annual
requirements.
Considering its limited supply and increased future
demand, Shree has started using Chemical Gypsum. The
Company is also exploring use of other types of gypsum,
namely Phospho, Marine, etc. Because of the high purity of
such gypsum, quantity required per ton of cement gets
reduced. This makes the new-source gypsum very cost-
effective. The Company has already tied up with one
supplier and is in the process of making arrangements with
a few others.
Flyash Procurement (Lac Tons)
4.32
7.03
12.3
5
16.4
9
16.1
3
18
0
14
10
6
2
04-05 05-06 06-07 07-08 08-09
16
12
8
4
Raw material cost per ton of CementRaw Material 04-05 05-06 06-07 07-08 08-09Limestone & others 156 151 158 152 165Gypsum 30 33 52 46 50Flyash 53 78 131 139 106Total 239 262 341 337 321
35
Pet coke
Shree is the pioneer in the use of 100% pet coke, a waste
from petroleum refineries, both for its cement as well as
power plant operations. Today, with annual consumption of
1.2 Million Tons, Shree is the largest pet coke consumer in
the world cement industry.
The recessionary trends in the world economy depressed
international pet coke prices during the later part of
2008-09. Finding imported pet coke to be much cheaper
than domestic supplies, the Company went on a
procurement spree of pet coke from international markets
from December '08 to March '09. The Company also
engaged in hard bargaining with domestic suppliers to
reduce their prices against the background of recession and
lower imported pet coke prices.
To ensure supply security, Shree forged a two-year contract
with Indian Oil Corporation (IOC) to lift 35,000 tons per
month, which covers 35% of our total requirement. We have
also decided to widen our supplier base by turning to
international suppliers, as against the earlier approach of
banking on only domestic suppliers.
Procurement of packing bags
We have an online bidding system, which allows packing
bag suppliers to bid and compete for our orders.
A tremendous success, the system has been able to handle
larger and larger procurements. In the year under review,
we were procuring at the rate of 1.5 crore bags a month.
Such volumes are drawing more and more vendors to the
system, thereby increasing its competitiveness and
enabling procurement at lower costs.
37
Manufacturing
Power and fuel consumption
n
n
n
The higher production figures were achieved at lower
power and fuel costs. This happened partly due to energy
conservation measures taken by the Company such as:
Installation of High Efficiency Main ESP and PH fans
Increase in the stack height of Cooler ESP fan
Installation of VFDs on Dust Collector Fans in Cement
Mill, Raw Mill and Packing Plant at all the units
Clinker production in Kiln I during 2008-09, at 10.87 lac tons,
was its highest ever. Similarly, productivity of all the kilns of
the Company improved last year; surely, an outcome of
better operation & maintenance practices of equipments
and efficiency improvement initiatives.
Such practices have slashed downtime of various
equipments in the production process. Take, for instance,
the following :
36 hours to dismantle ring formation inside Kiln I from
feed to feed, instead of the earlier 72 hours
76 hours to replace old Roller Press Rollers in Cement
Mill II with new ones without the help of equipment
engineers, instead of the normal 96 hours
4 hours of downtime saved during annual shutdown
through faster cooling of Kiln by running SG Fan
24 hours to replace cracked inner race of fixed roller
drive end bearing without dismantling roller bearing,
instead of the usual 72 hours
n
n
n
n
Clinker Production (TPH)Kiln 2008-09 2007-08I 131 124II 189 183III 131 120IV 135 118V 129 110VI 132 52*
*Low because Unit VI commissioned in March 08 wasunder stabilisation.
Product mix
In response to growing demand for OPC (Ordinary Portland
Cement) coming from the institutional segment of the
market, OPC production was increased from 20% of the
total in 2007-08 to 24% in 2008-09.
Power Consumption (Kwh per Ton of Cement)
75.1
7
73.4
5
73.8
7
79.3
5
76.7
2
80
70
78
76
74
72
04-05 05-06 06-07 07-08 08-09
Fuel Consumption (% of Clinker)
10.9
6
10.3
7
11.7
3
11.3
4
10.7
5
12
7
11
10
9
8
04-05 05-06 06-07 07-08 08-09
OPC & PPC Production (%)
100
004-05 05-06 06-07 07-08 08-09
41
54
7680
7680
60
40
20
59
46
2420
24
PPCOPC
Departmental Highlights
Cement and clinker production
Our production figures have outpaced the industry. While
cement production in India increased by 7.8% in 2008-09
over 2007-08, Shree’s cement production grew nearly three
times at 22.5%, from 63.4 lac tons in 2007-08 to 77.7 lac tons
in 2008-09. This has helped the Company get the most out
of growth opportunities in the market.
For the same period, the Company’s clinker production
registered a higher growth than cement at 38.8%, from 46.2
lac tons in 2007-08 to 64.2 lac tons in 2008-09. The higher
clinker production supported higher cement production
and higher clinker sales.
Khushkhera Grinding Unit
Departmental Highlights
39
Cement and clinker dispatches
Open Wagon Loading
Cement and clinker dispatches have increased
substantially, by 27.7% - from 66.1 lac tons in 2007-08 to 84.4
lac tons in 2008-09. A larger share of dispatches happened
by road, because most of them took place from our Ras and
Khushkhera works, which did not have rail sidings. Thus, rail
dispatches, as a percentage of the total, slid down from 27%
in 2007-08 to 17% in 2008-09.
Loading restrictions on trucks as well as relatively higher
truck freight charges have implications in terms of higher
per ton cost of dispatches by road. Since, 83% of dispatches
took place by the high-freight mode of roads, the logistics
cost per ton has increased in the year under review.
A major initiative this year has been rail dispatches by open
wagon, instead of covered wagon, to take advantage of the
huge differences in freight. Open wagon loading generally
takes a lot of time. However, by modifying loading chutes,
the loading time has been improved to about 12 hours for
3835 MT of cargo weight. It takes about 9 hours to load 2700
MT of cargo weight in covered wagons. In a single hour,
nearly 320 MT of cargo gets loaded by open wagon, instead
of 300 MT by covered wagon. Since, loading efficiency was
higher in open wagons, faster dispatches were possible.
Also, since there were rebates on freight by open wagon,
huge logistics savings were possible.
Rail loading efficiency is also seen in the lower rake loading
times for cement and clinker.
Logistics
Freight saving from higher truck turnover
Larger dispatches from Khushkhera
Faster dispatches
In the year 2008-09, clinker freight from clinkerisation units
at Ras/Beawar to our grinding unit at Khushkhera came
down to Rs. 423 per ton from Rs. 477 in the previous year.
Such a significant reduction happened due to faster truck
turnarounds, which in turn speeded up the load-unload
cycle of clinkers between Ras/Beawar and Khushkhera, thus
making possible a higher frequency of trips. On an average,
a truck was able to increase frequency of trips between the
loading site (Ras) and unloading site (Khushkhera) to 9.1
every month during this year compared to 7.5 last year. With
higher revenue from higher trips, transporters willingly
provided freight bargains, which resulted in big freight
savings for the Company.
Proximity to prime north India markets makes cement
off-take from our Khushkhera grinding unit an attractive
proposition. Because faster delivery on their orders is
possible, customers prefer dispatches from this unit. In fact,
during the year under review, dispatches increased to 27.16
lac tons from 9.93 lac tons last year. An incredible three-fold
jump, it not only achieved larger sales volumes, but also
faster deliveries and more satisfied customers.
Besides increasing loading efficiency, faster dispatches
came about from other initiatives. Installation of an online
bag printing equipment did away with the need to wait for
pre-printed bags to arrive from the packing bag godown
before commencing packing. Uninterrupted availability of
printed bags made full use of the existing packing capacity,
instead of letting it remain idle. This initiative improved
average daily dispatches by 500-700 MT.
Rail & Road Dispatch (Cement)
80
0
60
40
06-07 07-08 08-09
20
40
0
30
20
10
13.6
734
.37
16.8
446
.55
12.9
064
.7229
27
17Lac T
on
% o
f Rai
l Dis
patc
h
Qty. - Road Dispatch (Lac Ton)Qty. - Rail Dispatch (Lac Ton)% Rail Dispatch to Total
Rake Load Time (hours)
35
30
20
10
06-07 07-08 08-09
32.53
19.05
12.2815
ClinkerCement
0
25
5
12.46
12.06 11.58
41
PowerGreater generational efficiency during 2008-09 was also
indicated by the lower heat rate (fuel in calorific terms
required to generate 1 Kwh) of 2744 Kcal/Kwh in 2008-09, as
against 3005 Kcal/Kwh in 2007-08. Such a massive
reduction in heat rate is a rare achievement in the power
sector.
'Green' power is power generated from waste heat in the
cement plant. Because, it does not require additional fuel, it
does not leave any carbon footprint and is therefore,
environment-friendly.
Shree is already generating Green Power from its existing
green power plant (Waste Heat Recovery plant) installed at
Kiln 1. The Company has now undertaken work of setting up
such green power plants at all its clinkerisation units. Once
all these green power plants are completed (which is
expected by end of financial year 2009-10, the total capacity
of Green Power Plants will add up to 43 MW. Outside of
China, this would be the largest green power generation
capacity in the World.
A new development this year has been the opening of the
Indian Energy Exchange, the Country's national energy
trading platform. Sensing the immense opportunity, Shree
started leveraging its ramped-up captive power capacity to
engage in power sales.
It is not only fetching additional revenue for the Company,
but also resulting in greater operational efficiency all-
round. Operations in the power plant have been
streamlined to increase power generation. Power demand
both in the cement and power plants has been rationalised
and operating efficiencies therein improved to make
available more power for sale. For instance, Ash handling,
CHP and DM operations in the power plant, consuming a lot
of power, were confined to time bands matching off-peak
hours of power demand in the Country. Such operations,
curtailed during peak hours, freed additional power for sale
at high peak power tariff. In the cement plant, operations of
Crushers, Raw Mills, Cement Mills, Stacker/Reclaimer etc.
underwent similar optimisation.
'Green’ power
Power sales
Capacity
Generation
Shree is self-sufficient in meeting its 100% power
requirements. The Company's captive power capacity rose
by 17.7%, from 101.5 MW in 2007-08 to 119.5 MW in 2008-09.
This has not only supported larger cement and clinker
production, but also opened up the virgin opportunity of
power sale.
Gross power generation surged by 45%, from 540 Million
Units in 2007-08 to 783 Million Units in 2008-09. A greater
power demand came not only from the larger production in
the cement plant, but also from the increased opportunity
of power sales. In response to this, the power plant achieved
the higher PLF of 83.48% during 2008-09. The Company
generated efficiencies in the power plant operation and
thus brought down its auxiliary consumption. In fact,
auxiliary consumption during 2008-09 was the lowest at
7.36% against 7.92% in 2007-08 of gross generation.
Captive Power Capacity (MW)
39.0 45
.0
65.0
101.
5
119.
5
140.0
0.0
120.0
100.0
80.0
60.0
40.0
04-05 05-06 06-07 07-08 08-09
20.0
Power Generation (Million Units)
800
004-05 05-06 06-07 07-08 08-09
226267
349
540
783700
600
500
400
300
200
100
Departmental Highlights
Power Plant, Beawar
43
Capacity expansion
During the year, the Company completed its Turbine
Generator, TG-VI in record time. The TG, originally scheduled
for commissioning by November - December, 2008, was put
on fast-track implementation once it was felt that early
execution meant earlier revenue realisations from power
sales. Completed two months ahead of schedule, the new
TG stabilised operations fast, helping the Company touch
higher power generation and sales revenues before
anticipated dates.
An early mover in the field of Power Sales, the Company is
now planning to consolidate its presence in this high-
growth market with additional power generation capacity.
Projects to augment such capacity by 143 MW are already
underway. This includes the 43 MW of 'green' power
capacity mentioned above.
Installation of Power Management System (PMS) for
integrated power and load management from a single
location. This has yielded complete power system
stability with zero black-out
Putting into operation unmanned substation, made
possible by advanced equipment and PMS
VFD installation in various fans, WHRB Recirculation
Pump, etc
Optimisation in the operation of ACW pumps & CT fan
Adoption of latest technology for monitoring and
control like infrared camera, laser alignment kit, belt
alignment kit, electrical discharge detector
Replacement of solid F.R.P. with hollow blades in all the
C. T. Fans for better performance
Celebration of power plant safe year (including
inauguration of safety exhibition room showing best
housekeeping and best practices with latest safety
gadgets)
Energy efficiency, automation and safety thrust
n
n
n
n
n
n
n
45
Plant rating
'Green' processes and materials
Our quality efforts are directed at monitoring and
improving equipment and processes. International cement
consultants, Whitehopleman, UK has furnished a 4 Star
rating for Shree's cement plant. This is the highest rating
received by any cement plant in the world. The Company
has been securing this rating for nine years in a row. This is a
fact that suggests the high level of plant quality.
R&D initiatives are aimed at 'greening' the process of
production as well as providing alternate materials that
could serve as inputs.
Experiments have yielded a high-volume flyash concrete
with attributes similar to that of ordinary cement. The high
flyash content obviates the need to produce clinker and
thus expend high energy. It also makes the cement a very
eco-friendly construction material.
Quality and R&DAny excessive reliance on a raw material carries with it high
risk of cost appreciation or supply shortage. Flyash is an
input that is likely to be in a scarcity in the long-run. To get
around that, we have started the use of alternate additives
like lead-zinc slag, effluent treatment plant (ETP) sludge, etc.
ETP sludge usually entails a cost of disposal. But, its use as an
additive in cement production is generating revenue rather
than incurring cost.
Departmental Highlights
Departmental Highlights
47
Knowledge systemsWith Shree's CMS (Content Management System), the
Company has entered the era of transparent knowledge
exchange. This means that users can share or publish
information faster, in a much more transparent and efficient
manner. Based on open source technology, the CMS over a
period of time is expected to serve as the Company's
knowledge bank.
Shree encourages the use of video conferencing to connect
people. Seamless connectivity has been rendered possible
with the use of MPLS VPN for online communication
between company locations, Kolkata, Beawar, Ras,
Khushkhera and all the stock points across the country.
Servers and network uptime at Shree has consistently been
above 99.99% allowing people to be more productive and
efficient.
Shree won the prestigious "Silver CIO" award in the category
of companies having a turnover in excess of Rs 1000 Crores
for the case study on "Implementation of Reverse Auction of
Cement Transportation" for the "CIOL - Dataquest
Enterprise Connect Awards 2008". These awards constituted
by "Dataquest" magazine are revered as the "Oscars" of the
Indian IT industry, and are conferred on CIOs for
demonstrating leadership combined with vision & mission
in deploying Information Technology for business benefits
through pioneering & innovative use. Shree is the first
cement company to be honoured with this coveted award
since the constitution of the awards in 2004.
To create a knowledge-driven company in tune with global
business, Shree deployed the Oracle e-Business Suite ERP
solution. Imbibing the best practices of companies
worldwide, this ERP suite impacts all processes of the
Company, right from procurement, through all techno-
commercial operations, to sales and distribution. It involves
a complete re-engineering of business processes to make
them more high-performing and tuned towards global best
practices. While launching the suite, the Company went live
with all modules, all at once with zero downtime.
Departmental Highlights
49
Marketing and BrandingTurnover
Opportunity from capacity
Multiple brand strategy
Net turnover of the Company shot up by 28.7% - from
Rs. 2109 crore in 2007-08 to Rs. 2715 crore in 2008-09. This is
nearly 3 ½ times the growth shown by the Indian cement
industry, which posted 8.4% growth in 2008-09 over
2007-08.
While there were delays in implementing new capacities by
other cement producers, Shree added capacities in record
time. This allowed the Company to take advantage of the
inevitable supply gaps in the market both retail as well as
infrastructure sectors.
The multiple brand strategy helped the Company achieve
higher sales by catering to different segments and creating
different price bands. Thus, the Company's diverse brand
portfolio creates different niches, appealing to a wider
customer base.
Sales Quantity (Lac Ton)
50
0
40
30
20
15
10
47.5
839
.47
18.4
516
.12
11.6
57.
75
Bangur Rockstrong
2007-08
2008-0945
35
25
5
Shree Ultra
51
Distribution network
Optimising ad spend
Market share
The dealer density of the Company is higher in its prime
markets compared to competitors because of its unique
multi-brand strategy. Shree's robust distribution backbone
of 4849 dealers, 11,993 retailers and 116 sales offices
ensures deeper penetration of its brands.
The Company planed its electronic media spends
judiciously through effective channel mix, which has
enabled it to achieve the lowest cost per GRP (Gross Rating
Points) in its prime markets. The Company invested Rs. 16.25
crore during the year in branding and advertising to further
strengthen its brand equity.
The result of all this was that the Company was not only able
to consolidate its numero uno market share status in
Rajasthan (23%), Delhi (18%) and Haryana (26%), but also
able to significantly improve its performance in Punjab
(10%) and Uttrakhand (13%). Overall, Shree remained North
India's premier cement maker with its share increasing from
16.4% in 2007-08 to 17.9% in 2008-09.
Rising Market Share (%)
30%
0%
25%
20%
15%
10%
5%
22%
20%
23%
24%
19%
26%
18%
18%
18%
8%7%
10%
10%
8%
13%
Rajasthan Haryana Delhi Punjab Uttrakhand
2006-07
2007-08
2008-09
Departmental Highlights
53
Human resourceOne of India's Top 20 Best Employers
Sustained policy of promotion
In a survey carried out jointly by Business Today, Mercer and
TNS in 2008, Shree emerged as one of India's Top 20 Best
Employers. Shree was the only cement company and one of
the five manufacturing companies to be considered in the
study. Such a finding only serves to bring out what we
already know – the strong commitment of the Company to
its human assets.
Shree's score in Internal Employee Perception Survey and
Employee Engagement Index was higher than the average
score of India's Top 10 companies in the study (referred as
‘The Best’ in the following graph). These two categories
together indicated the sense of ownership and belonging
Shree employees felt towards their company.
The above gets reflected in the attrition rate, which came
down from 7.5% in 2007-08 to 5.9% in 2008-09.
People at Shree can expect fast promotions on the strength
of their track record and leadership drive. The underlying
assumption is that competence rises to the level of
responsibility, i.e., the process of bestowing greater power
AttritionYear Attrition (%)2004-05 3.772005-06 5.282006-07 6.152007-08 7.532008-09 5.90
AverageScore
100
0
80
60
40
20
Engagement Score
93.2
085
.08
78.1
9
Shree Cement Ltd.
The Best
The Rest91.3
290
.90
83.9
4
makes a person more responsible, enthusiastic, competent
and committed. It yields initiatives down the line. The
percentage of people promoted has been hovering around
a high 27% for the last three years.
The number of workers promoted to staff category has
increased dramatically this year, from 97 in 2007-08 to 264 in
2008-09. More than the pay, such promotions endow
people with intangibles like pride of higher position.
In the face of rampant layoffs in the industry during the
recession, Shree has actually increased recruitment of its
people. Manpower increased from 2418 in 2007-08 to 2566
in 2008-09. Such figures illustrate more than words the fact
that the Company prizes its human assets.
The management believes that diverse skill-sets make the
Company more versatile, increase its in-house capabilities
and ultimately save costs.
For instance, the platform of Shree's robust IT infrastructure
was first laid by in-house talent. At present, the Company
has entrusted the activity of exploration and prospecting
for limestone deposits, not to outside specialists, but to our
experienced people in mining. Such endeavours not only
add new in-house capabilities, but also do away with the
need of engaging expensive outside help.
Recruitment during recession
Competency mix
PromotionsYear % of Promotions2004-05 29.312005-06 29.702006-07 27.672007-08 27.472008-09 27.50
No. of Workers promoted to Staff CategoryYear No. of Promotions2004-05 22005-06 72006-07 182007-08 972008-09 264
55
Competency building
Impact of training
Knowledge sharing
At Shree, there is continual reinforcement, retooling and
renewal of skill-sets. Such an ongoing process not only
builds overall capacity and makes it versatile, but also has
numerous impacts at the individual level. People not only
strengthen their domain experience, but also get to explore
and acquire domain skills other than their own.
In-house training programmes are conducted by both
internal as well as external experts. People can even go out to
programmes undertaken by reputed institutions. Training is
imparted to enhance technical as well as soft skills.
By boosting employee morale, developing the capacity to
absorb new technologies and methods and increasing the
appetite for innovation, such training programmes have
had numerous payoffs – lower employee turnover, better
change management, higher operational efficiencies,
faster strategy executions and larger financial gain.
Every year, a number of students from prestigious
institutions like IITs and IIMs appear at our doorsteps to
undertake research and acquire industry exposure. We look
forward to this period of sharing our experience with them
and taking in their fresh approach to old problems.
Qualification Break-up
Qualification Number of employeesEngineers 1013CA/CS/ICWA/CFA 63Legal (LLB) 18Post Graduates 177Graduates 301MBA 164MCA/MSW 12MBBS 3Others 565
“I was particularly moved by your
sense of humility and commitment
to the welfare of the men and
women who work for your
organisation...The support given to
us by your senior management
went beyond the call of duty and a
testimony of the dedication and
calibre of staff who are associated
with your company.”
- In a letter to Mr. H. M. Bangur from the
African-Nigerian Team comprising of the
daughter of Dr. Nelson Mandela
ParticularsIn-house External In-house External
Programmes 338 99 297 115Participants 6100 199 4304 217Person days spent on training 2900 471 2233 667Person-hours of training 23206 3769 17867 5341
2008-09 2007-08
Details of Training Conducted
57
Credit rating
Reflecting the high credit standing of the Company is the
high credit rating given for debt of different tenures. The
Company's MIBOR linked borrowing instrument enjoyed
the highest credit rating of CARE PR1+ for a larger short-
term debt of Rs.500 crore against the earlier limit of Rs. 250
crore in 2007-08.
Shree's long term borrowings have also secured a very high
credit rating of CARE AA+ even at a higher limit of Rs.500
crore as against Rs.100 crore in the previous year.
CARE AA+ rating has also been assigned for the purpose of
Basel II bank borrowing bench marks. In 2007-08 AA rating
was assigned for this purpose.
All these shall assist the company to access funds at a more
competitive rate. Being long in funds, such high credit
rating shall make the Company exploit the short term
versus long term fund arbitrage opportunities more
aggressively.
Departmental Highlights
The leverage to expand
The Company has leveraged its financial position well to
maintain an improving debt-equity scenario despite
aggressive capacity additions. The resources raised have
been gainfully utilised, as manifested by the improved
Secured Debt to EBIDTA ratio - from 1.24 in 2007-08 to 1.18
in the current year. This gives the Company enough room to
mobilise resources from lenders, thereby protecting the
shareholders value by obviating the need of raising any
additional capital.
Net Debt (Rs. Crore)
600.00
500.00
400.00
300.00
100.00
04-05 05-06 06-07 07-08 08-09
284.08
353.66
528.06
272.26
58.20
200.00
Net Debt
Secured Debt / EBIDTA
1.50
1.45
1.40
1.35
1.25
1.15
1.1004-05 05-06 06-07 07-08 08-09
1.461.45
1.39
1.24
1.18
1.30
1.20
Secured Debt / EBIDTA
Net indebtness
The conservative policy of restricting the financial leverage
is also exemplified by continuous reduction in net debt
position of the Company. The surplus generated has been
gainfully invested in debt market securities and debt
oriented mutual fund schemes to maximize the arbitrage
opportunity. The net debt ( total debt – cash & cash
equivalents) has reduced from Rs. 272.26 crore in 2007-08 to
Rs. 58.2 crore in 2008-09.
FinanceConservative accounting policy
Depreciation is the erosion in the value of an asset with the
passage of time. In an accounting framework, depreciation
is the method by which the gross value of an asset becomes
progressively smaller every year over the asset’s useful life; it
is a rough estimation of wear and tear.
Although essentially an accounting convention,
depreciation in the account books gives a fair idea of the
cost of earning in terms of assets utilized. Thus, post a
depreciation charge, the approximate value of assets still
working for the Company gets known. It is for this reason
that the Indian Companies Act has made it mandatory for
companies to charge minimum depreciation as per rates
prescribed in Schedule XIV of the Act. Companies are
however free to charge depreciation higher than the
statutory minimum.
A higher depreciation policy is part of a conservative
accounting approach. It assumes that assets have reduced
in value faster than normal. Being a cost, a higher
depreciation would tend to pull down book profit and net
worth. But, rather than blow up profit and net worth figures,
the Company decided to adopt the conservative policy of
charging higher depreciation. Such a company policy
underlines the confidence of the Company in its own ability
to perform and earn profit at high levels. It also reflects the
faith of the Company on its stakeholders and their
acceptance of relatively lower book value and net worth.
From the year 2004 onwards, Shree changed its
depreciation policy gradually across all its fixed assets from
“Written Down Value Method (WDV) / Straight Line Method
(SLM) rates as per Companies Act 1956” to “WDV Method at
the rates specified in the Schedule XIV of the Companies
Act, 1956 or Income Tax Act, 1961, which ever is higher.” In
case of those assets, whose WDV as per Income Tax Act,
1961 was lower than the WDV as per Books, additional
depreciation was provided to align the book WDV with WDV
as per Income Tax Act, 1961.
This has resulted in a higher depreciation charge over the
last five years as under:
If Shree had continued its earlier depreciation policy, its net
worth would have been higher by Rs. 640.05 crore as on 31st
March, 2009. Similarly, its book value per share would have
been higher by Rs. 183.73.
Particulars Total Depreciation over 2004-05 to 2008-09 (Rs. Crore)
If depreciation policy followed till 2004 had been continued 764.08Based on changed depreciation policy 1404.13Additional Depreciation Charged 640.05
Net Worth and Book ValueNet Worth Book Value
Particulars as at 31.3.09 as at 31.3.09 (Rs. Crore) (Rs./per share)
If depreciation policy followed till 2004 had been continued 1850.06 531.06Based on changed depreciation policy 1210.02 347.33
59
Shareholder valuePerformance value
Growing intrinsic value
The Shree stock has generally outperformed the industry
because of its strong fundamentals. The Company has
made it a habit of notching up higher volumes and profit
over the years. Such consistency of performance has
resulted in higher value of the Company's share.
Take intrinsic worth of the company. The fact that it is on a
steady rise is amply indicated by the increase in Book Value
Per Share of the Company. Book Value Per Share spurted
79.8%, from Rs. 193.1 in 2007-08 to Rs. 347.3 in 2008-09.
Another indicator of the Company's rising intrinsic value
comes from the Return on Net Worth (RONW). This is a
metric that shows the rate of return on resources retained
and deployed by the Company in the business rather than
distributed as dividend to shareholders. RONW was an
incredible 48.43% in 2008-09 against 36.51% in 2007-08.
From the shareholders’ viewpoint, their investments in
Shree's equity were earning him accrued return of 48.43%. If
instead the shareholder had invested his funds in the bank,
he would have earned a maximum of 10%. Although, Shree
has been increasing dividend payout over the years, the
Company shuns the policy of very high dividends in an
effort to preserve high shareholder worth and return.
Higher scrip profile
Corporate Governance
Mirroring the rise in intrinsic worth of the Company is the
improvement in ranking in terms of market cap of listed
companies on the stock exchange. The Company has
improved its ranking in terms of market capitalization from
172 as on 31st March, 2008 to 154 as on 31st March, 2009.
On a five year horizon the ranking has substantially
improved from 231 as on 31st March, 2004 to 154 as on 31st
March, 2009. (Source: Capital Market Magazine Data Bank)
Shree follows an exemplary corporate governance
approach, which creates a transparent dialogue with
stakeholders and goes beyond compliance to impact
governance in a more fundamental way. Proactive thrusts
and clear foresight are the hallmark of the approach.
Sustaining value of the enterprise for stakeholders is a
prime goal. A robust risk management structure ensures
that all known risks are identified and contained.
Departmental Highlights
61
The triple bottom line
Community focused
Shree has been a forerunner in adopting the sustainability paradigm. A reflection of the fact is that the company pursues a holistic growth agenda with emphasis on three measures, or bottom lines, of corporate performance – economic, social and environmental. Economic performance brings out the Company's contribution to production and profit; social performance highlights its contribution to community; environmental performance brings out the contribution to conserving the environment.
Shree was the first Indian and the third Asian cement company to join the Cement Sustainability Initiative (CSI) of the World Business Council for Sustainable Development, Switzerland. As a member of CSI, the Company is committed to pulling down its energy footprint, implementing best practices and sharing its knowledge with other members. The Company has also joined the league of seven nations, viz., the Asia Pacific Partnership on Clean Development & Climate Change comprising of the USA, Australia, China, Korea, Japan, Canada and India.
The Company is bringing out its fifth Corporate Sustainability Report (CSR) this year. Prepared along the lines of the latest Global Reporting Initiative (GRI) guidelines, the Report is being assured by KPMG.
Shree excels in carrying out activities for the community. The Company generally takes up people and engages contractors from the local population to create better employment prospects, livelihoods and ancillary enterprise base.
The Company undertakes numerous projects on healthcare, education, women empowerment, income generation, infrastructure development and other social-need programmes, especially in the two districts of Ajmer and Pali, which are within the ambit of the Company's works.
Well-equipped dispensaries with a team of experienced doctors at both plant sites provide free medical consultation to villagers in nearby areas. A health unit on wheels reaches out to villages at relatively distant locations within the local community.
Corporate sustainabilityHealth-related programmes conducted include Hepatitis B vaccination for 500 children, free eye camps (1193 eye operations and 3304 people cured since 1996), free polio treatment camp for 170 polio victims and 'Nukkad Nataks' or street plays to raise awareness on health and social issues. An anti-tobacco consumption drive and a 5-day yoga training programme were taken up in our plant premises.
Industrial safety and health is integral to the Shree culture. A workshop and exhibition on the issue, organised at Bangur Nagar, Beawar, evoked a good response from the participants.
Shree has been engaged in a focused campaign against the dreaded HIV / AIDS. Education and awareness programmes on the issue generally take the shape of intensive interaction sessions between trained doctors and potential victims and carriers like contract workers, truck drivers and school children.
Shree has been active in developing infrastructure to benefit surrounding villages. To improve connectivity between villages and spur development of rural enterprise, the Company has built about 15 kms of roads. Social infrastructure projects undertaken by the Company include water storage tank, school building and rooms, community hall, anicuts, check dams, etc., for rain water harvesting and irrigation.
Besides community benefit programmes in the vicinity of its operating facilities, the Company has also been active in releasing financial aid for projects over a much wider area. The Company donated Rs. 21 lacs for Bihar flood victims, Rs. 15 lacs for Rajasthan's Chamunda Mata stampede victims and Rs. 50 lacs for renovation of Budha Pushkar Ghat at Ajmer.
Since, culture is an important anchor in rural lives, projects and programmes of religious and cultural significance for the local populace are taken up. The Company's annual temple function, 'Shri Sankatmochan Hanuman Varshikotsav,' provides an occasion for cultural expression and enjoyment. With performances by celebrated national and international artistes, this annual extravaganza is a big hit with not only Shree employees but also people who come from far-flung areas to attend.
Shree Hanuman Temple, Beawar
“No matter how many plants you have visited, Beawar Plant offers you something new, something different.
Their commitment to sustainability, energy efficiency and innovations are simply unmatched. I hope that the
Shree Cement will continue its endeavour to be one the plant meeting Global Standards. “
- Shashi Ranjan Kumar, Director DPP, Ministry of Commerce and Industry, GOI
Departmental Highlights
63
Process improvements and energy conservation initiatives, by reducing the energy footprint ultimately help the cause of environment protection. Energy efficiency initiatives at Shree included those that optimized operations, rationalised equipment speed, cut down idle running, improved capacity utilization, replaced less efficient components, installed new equipment and even rearranged equipment positions.
CO emissions and energy use in mining equipment utilising 2
fossil fuel were slashed by modifying the equipment and concreting haul roads. Fugitive dust emissions in material handling areas were reduced by installing and upgrading dust bag collectors, creating walled enclosures, constructing underground storages and concrete areas and installing better water sprinkling systems. To monitor and bring down stack emissions, opacity metres have been installed at boiler stacks and operational efficiency of ESPs improved.
A water conservation thrust in the power plant has resulted in the installation of Air-cooled Fluid Cooler to partly replace the conventional water-cooled Cooling Tower.
Environment protection also comes from lower waste generation. We have adopted zero waste disposal practices in our cement and power plants. For instance, boiler ash in the power plant is sent to grinding mill and afterwards fed as low-calorific-value fuel to the cement kiln. Waste land created by mining activity is reclaimed through tree plantation. Solid waste from our sewage treatment plant (STP) is used as manure. Waste water from STP and power plant is reused for irrigation of our green belt and sprinkling on roads to curb dust emissions. Waste lubricating oil and batteries are either recycled for use within the plant or for sale to authorized government dealers. Waste gases are reutilized for power and steam generation.
Trees protect both the ecology and climate of a region. Realising their importance, Shree has been making a concerted effort to green its premises. The company planted 334002 trees over 195 hectares till 31st March, 2009. Such plants have had a healthy survival rate of 96%.
The Company's environment consciousness shows in the continued spurt in expenditure on environment. The combined figure for Beawar, Ras and Khushkhera sites has increased from Rs. 627 lac in 2007-08 to Rs. 871 lac in 2008-09.
Environment protection
Generation of energy using fossil fuels releases carbon
compounds into the atmosphere, which ultimately
precipitates climate change. Shree is committed to energy
conservation methods that not only result in higher energy
efficiencies, but also lower carbon emissions.
Flyash Utilisation and CO reduction (Lac tons)2
18
0
16
14
12
10
04-05 05-06 06-07 07-08 08-09
8
6
4
2 3.97
3.66
5.77
5.33
10.7
19.
66
14.9
113
.67 15
.51
14.0
9
Flyash
CO reduction2
Expenditure on Environment (Rs. Lac)
1000
0
800
600
400
200
118
246 30
4
627
871
04-05 05-06 06-07 07-08 08-09
The Company was the first in the world to register a Clean
Development Mechanism (CDM) project, 'Optimal
Utilisation of Clinker,' with United Nations Framework
Convention on Climate Change (UNFCCC). This project uses
less quantity of the energy-intensive clinker and greater
quantity of additives like flyash to produce cement. During
the year under consideration, 1,00,043 Certified Emission
Reduction (CERs) were issued by UNFCCC (the third such
issuance for the company) for the project. CER is a tradable
credit representing greenhouse gas emission reductions
equivalent to one tonne of CO achieved through a CDM 2
project.
65
AwardsAwards
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Green-Tech Environment Excellence Award
Golden Peacock Award for Combating
Climate Change
National Safety Award awarded by the
Honourable President of India, Smt. Pratibha
Patil
First Prize for Energy Conservation at its
mines by Indian Bureau of Mines
Corporate Excellence Award by Rajasthan
Chamber of Commerce & Industry (RCCI) in
all four categories namely Corporate
Governance & Capital Market, Financial
Performance & Analysis, Business &
Qualitative Aspects and Annual Report
Presentation as well as Management
Award for Best Cost Management Practices
by Institute of Cost and Works Accounts of
India (ICWAI).
SILVER CIO Award by the CIOL Dataquest
Enterprise Connect Awards 2008
Shri B.G. Bangur, Executive Chairman
Shri B.G. Bangur is a B.Com (Hons.) from Calcutta University and he brings with him a long experience in the industry. He is also the Director in The Didwana Industrial Corporation Ltd., NBI Industrial Finance Co. Ltd., Shree Capital Services Ltd., Khemka Properties Pvt. Ltd., Digvijay Finlease Ltd. and Marwar Textile (Agency) Pvt. Ltd. He has also been actively associated with various philanthropic and charitable institutions and trusts.
Shri H.M. Bangur, Managing Director
Shri H.M. Bangur is a Chemical Engineer from IIT, Mumbai and he brings to the board technical insights which are a driving force of the technical excellence achieved by the Company. Mr. Bangur is also a Director in The Kamla Co. Ltd. He is the President of Cement Manufacturers’ Association (CMA), the prime body for co-ordination, policy making and co-operation of the cement industry in India.
Sitting Dr. Y.K. Alagh, Director, Shri B.G. Bangur, Executive Chairman, Dr. Abid Hussain, Director Standing (From Left)Shri O.P. Setia, Director, Shri R.L. Gaggar, Director, Shri Amitabha Ghosh, Director, Shri Shreekant Somany, Director, Shri H.M. Bangur, Managing Director, Shri M.K. Singhi, Executive Director
(From Left)
Profile of DirectorsShri R.L. Gaggar,
Shri O.P. Setia,
Shri Shreekant Somany,
Dr. Abid Hussain,
Dr. Y.K. Alagh,
Director
Shri R.L. Gaggar is a B.A. (Hons) from Kolkata University and is a renowned solicitor and advocate based in Kolkata. He is practicing as a solicitor and an advocate at the High Court of Kolkata for past 50 years. Mr. Gaggar is also on the Board of Somany Ceramics Ltd., Sarda Plywood Industries Ltd., TIL Ltd., Peria Karmalai Tea and Produce Co. Ltd., Paharpur Cooling Towers Ltd., International Combustion India Ltd., Subhash Projects & Marketing Ltd., Machino Plastics Ltd., Sumedha Fiscal Service Ltd., Financial & Management Services Ltd., Machino Bassel India Ltd., Eastern Silk Industries Ltd. and Bhaskar Silicon Ltd.
Director
Shri O.P. Setia is an M.Com from Delhi University and is an eminent banker and Ex-Managing Director of State Bank of India and has held many key positions in its associate banks.
Director
Shri Shreekant Somany is an industrialist who holds a Bachelor of Science degree from Kolkata University and is currently on the Board of Somany Ceramics Ltd., S.R. Continental Ltd, Somany Retail Ltd., Cosmo Ferrites Ltd., Sarvottam Vanijya Ltd., Scope Vinimoy Pvt. Ltd.
Director
Dr. Abid Hussain is a retired IAS Officer and former Ambassador of India to United States. He is the Chairman of India-China Trade Centre (ITCT). He was also a member of the Planning Commission and Secretary, Ministry of Industries, Government of India. In the year 1988, he was honoured with PADMA BHUSHAN for meritorious services. He is on the Board of Hyderabad Flextech Ltd., Nagarjuna Oil Corp. Ltd., GVK Industries Ltd., GVK Taj Hotels & Resorts Ltd., GVK Power & Infrastructure Ltd., Zodiac Clothing Co. Ltd., Wockhardt Ltd., Havels’ India Ltd. and Gangavaram Port Limited.
Director
Dr. Y.K. Alagh is a noted Economist and visiting professor to several renowned national/international institutions. He holds a Doctoral Degree and Master Degree in Economics from University of Pennsylvania. He is currently the Chancellor of Nagaland University, Chairman of Institute of Rural Management, Anand, Gujarat and Vice Chairman of Sardar Patel Institute of Economic and Social Research,
Ahmedabad. He is a trustee of Rajiv Gandhi Foundation, New Delhi. He is also Chairman of Institute of Human Development, Chairman of Advisory Committee of N.M. Sadguru Water & Development Foundation, Dahod. He was earlier the Minister of Power and for Planning & Programme Implementation with additional charge of the Ministry of Science & Technology. He has been member of Planning Commission (in the rank of Minister of State). He has been Chairman, Bureau of Industrial Costs and Prices, Ministry of Industry. He has several books and over a hundred articles to his credit, published both at home and abroad. He has travelled widely and represented India in a number of high level official delegations and seminars. He is on the Board of Tata Chemicals Ltd.
Director
Shri Amitabha Ghosh is a Fellow Chartered Accountant and Fellow Member of Indian Institute of Bankers and has considerable experience in Finance, Banking and Administration by virtue of his association with important institutions and committees. He is the former Dy. Governor of Reserve Bank of India. He was on the Board of important institutions like IDBI, N.I.B.M., Exim Bank and also served as Chairman of Deposit Insurance Corporation Ltd. He is also on the board of Centenary Leasing Company Pvt. Ltd., Kesoram Industries Ltd., Joonktolle Tea & Industries Ltd., Heidelberg Cements (India) Ltd., Peninsula Land Ltd., Orient Paper & Industries Ltd., Palit Consultancy Pvt. Ltd., Sahara India Life Insurance Co. Ltd., Sahara Prime City Ltd., Shreyas Shipping & Logistics Ltd., Shreyas Relay System Ltd., Xpro India Ltd., Zenith Fibers Ltd., Sahara Infrastructure & Housing Ltd. and Sahara Hospitality Ltd.
Shri Amitabha Ghosh,
Shri M.K. Singhi, Executive Director
Shri M.K. Singhi is a fellow Chartered Accountant and a Science and Law Graduate. He joined the Company as President in January, 1995 and has 31 years experience of working at senior positions. He is the leader of Indian Cement Sector Task Force for Energy Conservation, appointed by Bureau of Energy Efficiency, Ministry of Power, Government of India. He is a member of Cement Sustainability Initiative (CSI) of World Business Council for Sustainable Development. He is also a member of Cement Task Force of Asia Pacific Partnership on Clean Development and Climate. He is the President of Rajasthan Cement Manufacturers Association. He is also on the Board of Shree Cement Marketing Limited.
67
Shree’s PoliciesSUSTAINABILITY POLICY
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ENVIRONMENT POLICY
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To produce quality cement in an eco-friendly, healthy &safe working environment in a socially responsible manner with continual improvement in performance and profitability to the satisfaction of all stake holders by ensuring:
Customer satisfaction.
Clean and green environment.
Sound health and safe working practices.
Compliance to the applicable laws and respecting theinternational instruments.
Implementation of the systems and continually improving their effectiveness.
Adoption of cost effective technologies and practicesfor improved productivity and profitability.
Mutually beneficial stakeholders' relationship.
Human resource satisfaction.
“AN ENERGY & ENVIRONMENT CONSCIOUS SUSTAINABLEORGANISATION”
To ensure:
Clean, green and healthy environment.
Efficient use of natural resources, energy, plant andequipment.
Reduction in emissions, noise, waste and green housegases.
Continual improvement in environment management.
Compliance of relevant environmental legislations.
“CLEAN AND GREEN IS PROFITABLE”
HEALTH & SAFETY POLICY
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HIV / AIDS POLICY
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QUALITY POLICY
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To ensure Good Health and Safe Environment for all concerned by:
Promoting Awareness on sound health and safe working practices.
Continually improving health & safety performance byregularly setting and reviewing objectives & targets.
Identifying and minimising injury and health hazardsby effective risk control measures.
Complying with all applicable legislations and regulations.
“PROSPERITY THROUGH HEALTH & SAFETY”
Being a socio-economic issue concerning stakeholders of the society Shree Cement is committed to:
Create awareness on HIV/ AIDS and its preventionamong all stakeholders of the society.
Treatment of HIV/ AIDS infected patient in theCompany's Dispensary without any discrimination.
To provide products conforming to National standards and meeting customers requirements to their totalsatisfaction
To continually improve performance and effectiveness of quality management system by setting and reviewing quality objectives for:
Customer satisfaction.
Cost effectiveness.
“JO SOCHE, WOH PAAVE”
SOCIAL ACCOUNTABILITY POLICY
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ENERGY POLICY
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INFORMATION TECHNOLOGY (IT) POLICY
To operate in a socially responsible manner and focus on continual improvement of workplace conditions by:
Conforming to all the requirements of SA 8000 standard.
Respecting the international instruments for Social Accountability and complying with all applicable laws.
To reduce to the maximum extent possible the consumption of energy without impairing productivity which should help in:
Increase in the profitability of the Company.
Conservation of Energy.
Reduction in Environmental pollution at Energyproducing areas.
Since Energy is the Blood of Industry, It is the responsibility of all of us to utilize energy effectivelyand efficiently.
“ENERGY SAVED IS ENERGY PRODUCED”
To create a robust IT platform that would focus on better efficiency & transparency in a constantly changing and competitive business environment.
HUMAN RESOURCE POLICY
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WATER POLICY
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We at Shree Cement are committed to:
Empower People.
Honour individuality of every employee.
Non discrimination in recruitment process.
Develop Competency.
Employees shall be given enough opportunity forBetterment.
None of the person below the age of 18 years shall beengaged to work.
Incidence of Sexual Harassment shall be viewed seriously.
Statute enacted shall be honoured in letter & spirit &standard Labour Practices shall be followed. Everyemployee shall be accountable to the law of the land& is expected to follow the same without anydeviation.
Management will appreciate observance of Businessethics & professional code of conduct.
To follow Safety & Health, Quality, Environment,Energy Policy.
To provide sufficient and safe water to people & plantas well as to conserve water, we are committed toefficient water management practices viz:-
Develop means & methods for water harvesting.
Treatment of waste discharge water for reuse.
Educate people for effective utilisation & conservationof water.
Water audit & regular monitoring of waterconsumption.
“WATER ADDS VALUE TO PEOPLE & ORGANIZATION,CONSERVE IT INTELLIGENTLY”
69
Five &
Five Years’ Financial Highlights
* Excluding Revaluation Reserve
# Return on Average capital employed has been calculated after adding additional depreciation.
Figures have been regrouped/rearranged whereever necessary
Particulars 2004-05 2005-06 2006-07 2007-08 2008-09
Total Income 72711.64 82743.26 163441.77 251715.99 318006.30
Profit after Tax 2906.59 1840.39 17700.23 26037.20 57796.94
#Return on Net Worth (%) 18.52 9.65 24.06 36.51 48.43Return on Avg. Capital Employed (%) 21.93 24.61 39.29 24.88 33.86
Production (in lac MT)
Clinker (in lac MT) 24.83 27.71 35.09 46.23 64.18Cement (in lac MT) 30.16 32.20 47.99 63.37 77.65
Sales (Clinker & Cement)(in lac MT) 30.71 32.75 49.43 66.05 84.50
Energy Consumption
Power (Kwh per ton of Cement) 75.17 73.45 73.87 79.35 76.72Coal (% of Clinker) 10.96 10.37 11.73 11.34 10.75
Sales - Gross 72302.60 82412.79 161314.44 244032.08 309716.69
Other Income 409.04 330.47 2127.33 7683.91 8289.61
Operating Expenses 55318.98 60963.58 102342.04 157791.11 214640.33Operating Profit 17392.66 22148.85 61099.73 93924.88 103365.97Interest 1982.73 1283.36 1037.37 5329.64 7443.18Profit before Depreciation & Tax 15409.93 21234.66 60062.36 88595.24 95922.79Less: Depreciation & Amortisations 12296.45 18520.68 43305.33 47875.86 20538.70Less: Exceptional items - - (2123.73) 3888.46 3093.05Profit before Tax 3113.48 2713.98 18880.76 36830.92 72291.04Tax (including FBT) 244.14 286.24 8451.75 12265.32 13686.98Deferred Tax (37.25) 587.35 (7271.22) (1471.60) 807.12
Basic and Diluted EPS (in Rupees) 8.34 5.28 50.81 74.74 165.91Cash EPS (in Rupees) 43.53 52.98 154.24 207.94 227.18Net Block* 41972.24 57530.85 49895.10 75995.86 62685.57Shareholders' Fund* 28948.89 29629.67 45454.52 67280.53 121001.69Total Capital Employed* 58661.08 66903.11 138591.37 200350.35 270617.02
(Rs. Lac)
Fifteen Years’ Highlights
Fifteen Years’ Highlights
* Sales value includes amount of power sale.
Note: 1. Net Worth is net of revaluation reserve.
2. Figures regrouped and rearranged whereever necessary.
Sl. Year Clinker No. Production Production Qty.
MT MT MT (in Rs. Lac) (in Rs. Lac) (Rs. per share)
1 1993-94 858226 876150 889401 15652.65 7124.74 28.92
2 1994-95 893291 927233 927005 18144.30 8858.99 35.99
3 1995-96 887532 861964 867551 20765.88 13487.43 46.46
4 1996-97 (15 months) 1079242 1185426 1162086 25112.19 18202.76 52.25
5 1997-98 1435803 1725531 1662332 34278.00 19056.86 54.70
6 1998-99 1945418 2043609 2090715 44214.50 19654.48 56.42
7 1999-00 2284781 2312408 2310135 48456.13 21939.14 60.82
8 2000-01 2113279 2383366 2400270 55460.48 24705.98 66.61
9 2001-02 (9 months) 1624686 1806358 1802156 39721.69 21560.59 57.58
10 2002-03 2285091 2746880 2725485 58242.94 22239.73 63.84
11 2003-04 2293627 2840596 2841316 60692.88 25138.28 72.16
12 2004-05 2483247 3015593 3060994 72302.60 28948.89 83.10
13 2005-06 2770663 3219949 3202709 82412.79 29629.67 85.05
14 2006-07 3506064 4799088 4832851 161314.44 45454.52 130.48
15 2007-08 4623494 6337070 6334208 244032.08 67280.53 193.13
16 2008-09* 6418278 7765207 7767696 309716.69 121001.69 347.33
Absolute No. of 15 Years 7.48 8.86 8.73 19.79 16.98 11.89Times 10 Years 3.30 3.80 3.72 7.00 6.16 6.16
5 Years 2.80 2.73 2.73 5.10 4.81 4.81
CAGR 15 Years 14.35% 15.66% 15.54% 22.02% 20.78% 17.95%
10 Years 12.68% 14.28% 14.02% 21.49% 19.93% 19.93%
5 Years 22.85% 22.28% 22.28% 38.54% 36.93% 36.93%
Cement Sales Sales Value Net Worth Book Value
71
Global Outlook
Indian Economy Outlook
Global economy witnessed one of its worst crises in the year gone by.
What started as a credit crunch caused by misapplication of risk controls
in USA transformed into a full blown economic crisis unprecedented in
recent memory. The crisis led to collapse of large financial institutions
and wiped off massive values from balance sheets. Consequent de-
leveraging of financial institutions led to global liquidity squeeze and
loss of business confidence hampering international trade.
The economic situation in most of the developed nations is still fluid
amidst a bleak economic outlook. All round efforts are being
undertaken to stimulate consumption and bring the world back to
“Business as usual”. However the road to recovery will be slow and till
then the world economy will have to go through slowdown, if not
recession.
India was not a part of the origin of this crisis. However in an integrated
global financial system, India could not remain insulated from the
effects of this crisis. The uncertainty in global economy has constrained
capital flows into emerging economies including India. Indian economy
is expected to clock a growth of 6-6.5% for 2008-09 against an average
growth rate of around 9% in the last four fiscals. However seen in
context of global economic situation where most economies are looking
at recession, the growth seems reasonable.
Global financial crisis coupled with high inflation, appreciating currency
and high interest costs led the economy to a rough patch by the middle
of the financial year. Growth in the industrial sector plummeted due to
the impact of global slow down as well as slackness in local demand.
The Index of Industrial Production (IIP) turned negative in the last
quarter of 2008-09 reflecting extreme pessimism in the economy. The
growth in the manufacturing sector slowed down to 2.7% for the year.
Timely action from Govt. in the form of relaxing monetary policy and
providing fiscal stimulus packages lifted up the sentiments. Towards the
end of FY 2008-09 the economy seemed to witness signs of revival
from the terrible mid year patch with sharp drop in inflation and revival
in demand.
Fiscal 2009-10 starts on a cautious note. The inherent strength of the
Indian economy like high share of services in GDP, high domestic savings
rate, scope for relaxing tight monetary policy, ambitious plans for
infrastructure development etc. will act as a cushion in mitigating the
adverse impacts of the global financial crises. Also the growth in Indian
economy was mainly characterized by rising domestic consumption and
increasing infrastructure activity which continue to be relatively less
impacted from external events. We feel that the resilience shown by the
Indian economy in the last few years gives confident signals that it will
sail through this uncertain period of global turmoil as well.
Cement Outlook
n
n
n
n
Indian Cement industry is largely dependent on domestic market and
has a cluster market structure. It was thus less affected by the external
events. However, signs of slackness in cement demand were felt in the
middle of the year as a result of fall in real estate, low infrastructure and
private capital expenditure and overall gloomy economic environment.
Cement industry also faced the challenges of ban on cement exports,
zero duty imports from Pakistan and high incidence of taxes on cement
which made it difficult for cement companies to protect their margins.
Along with this, high fuel prices which reached their all time peak levels
during the year increased the cost of cement production. It is worth
mentioning that Power and Fuel cost comprises of more than 50% of
the total cost of cement production.
Towards the end of calendar 2008, industry got some relief in the form
of withdrawal of ban on cement exports and removal of import duty
exemption on cement imports. Further, as part of stimulus package,
Govt. of India also lowered Excise Duty applicable on cement, provided
sops to housing etc. Strong infrastructure and housing demand
especially in semi-urban and rural India ensured that cement demand
growth rate was reasonable. As a result, the cement industry has clocked
a good performance during the year. The highlights of the year were: -
Growth in Cement production by 7.8% to reach 181.4 million tons.
Growth in consumption by 8.4% to reach 177.8 million tons.
Capacity utilization dipped to 88% against 94% in the previous year.
Addition of new capacities to the tune of 18 million ton.
Several new capacities have come up and more are expected to come
upstream in the coming year. However current housing shortage and
demand from semi-urban and rural housing segment will lead to
increased demand for housing units, a major driver of cement demand.
The implementation of recommendation of VI Pay Commission has
resulted in increasing the purchasing power in the hands of Govt
employees. A part of this is expected to be utilized in housing needs
which augurs well for cement demand. The government’s ambitious
plans for infrastructure development especially the commonwealth
games and the dedicated freight corridor will also drive cement
demand.
India’s GDP is forecast to grow at a subdued 6.5 - 7% for FY 09-10 due
to the global economic scenario. However, the resilience shown by
Indian economy to global meltdown indicates that it will be able to
sustain high growth trajectory in the medium term. Thus the medium
term outlook appears relatively better. Sometime ago, the Chief
Economic Advisor, Ministry of Finance, Govt of India also said that the
medium term potential of Indian economy is 9%. There is a general
consensus that the world economy would start recovering from second
Management Discussionand Analysis
half of 2009-10 and once again attain a positive growth track. In India,
the above 9% growth recorded during 4 years period from 2004-05 to
2007-08 has brought about a structural transformation for attracting
private investment both domestic and foreign, creating and upgrading
infrastructure and fostering open market economy. Thus India’s
fundamentals remain strong. Once the normalcy returns to the global
economy, the inherent strength of the Indian economy will lead it to a
rapid and sustained growth. Government both at center and state level
have to play a proactive role for upgrading the infrastructure and
supporting the private investments through Public-Private Partnership
and liberal policy environment. High economic activity and focus on
SHREE CEMENT LIMITED 73
infrastructure development augurs well for the cement industry.
Fiscal 2008-09 was a landmark year for the company as it created a
world record by completing Unit VII (Clinkerisation unit) in just 367
days – clear demonstration of its project execution capabilities. This
World Record achievement is the result of great team work,
commitment to excellence and focus on achieving the unachievable.
Company Performance
Performance highlights for the year 2008-09:
Particulars Unit 2008-09 2007-08 +/- %
Turnover Rs. Crore 2,715.02 2,109.12 29%
Cement Production Lac MT 77.7 63.4 23%
Cement & Clinker Sales Lac MT 84.5 66.0 28%
Profit Before Interest, Depreciation & Taxes Rs Crore 1,033.66 939.25 10%
Operating Profit Margin % 38.07 44.53 -15%
Power consumption Kwh per ton 76.7 79.4 -3%
Fuel consumption kcal/ kg of clinker 766 773 -1%
Auxiliary Consumption of the power plants % 7.36 7.92 -7%
Heat Consumption / unit of Power generated Kcal/kwh 2,744 3,005 -9%
Financial Performance
Company’s excellent financial performance during the year is the result of all round growth and improvement in efficiency levels. Snapshot of financial
performance:
Rs. Crores
Items 2008-09 2007-08
Sales 2,715.02 2,109.12
Raw materials Cost 246.13 210.99
Power & Fuel Cost 605.81 367.23
Staff cost 103.87 73.60
Freight on inter unit clinker transfer 80.66 34.91
Freight & Selling Cost 459.28 359.77
Profit before Interest, Depreciation and Taxes 1,033.66 939.25
Net Profit 577.97 260.37
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audit department works closely with outside audit firm to complement
each other in laying down and reviewing the existence, adequacy and
effectiveness of the internal control framework within the company.
Company has a well documented and comprehensive internal control
framework outlining operational and technological controls. The Audit
department charts out an annual audit plan, which is approved by top
management, and audit is conducted as per the plan. All control systems
are regularly reviewed to ensure financial propriety of business
transactions and compliance with relevant statutes and management
policies and procedures. All significant audit observations and follow-
up actions thereon are reported to the Audit Committee which monitors
the implementation of audit recommendations including those relating
to strengthening of the Company’s internal control policies and systems.
Company considers R&D as an essential tool to achieve sustainable
growth. Company has a strong and dedicated team of qualified
professionals to undertake research activities. The activities of the R&D
team is focused on identifying alternative fuels, adopting newer
technologies, improving product quality and optimizing available
resources. Some of the R&D activities undertaken during FY 08-09 were
optimization of parameters to absorb Sox and to make value added
product from them, investigation on the use of additives to improve
quality of cement, identification of various wastes to use as raw
materials, fuels and blended materials etc.
Your company is known as an organization which follows the triple
bottom-line approach in the conduct of all its business activities. The
Company actively seeks to undertake business activities that create
sustainable value for the society. Following the triple bottom-line
approach entails reporting performance under the three aspects of
economic, environment, and social. The same is detailed as under:
During the year 2008-09, company displayed commendable
performance in all sphere of business activities. Production of cement
was at all time high of 77.65 lac tons. Consequently turnover has
significantly grown during the year. Company’s innovative measures for
cost rationalization and increasing market share have led to strong
growth in its operating profits as well. Increased scale of operations has
created a number of opportunities to all people involved in the value
chain of the company’s activities.
Your Company ardently follows the maxim of “Clean and Green is
Profitable”. It is committed to a low carbon economy and strives to
Research and Development
Sustainability – Triple Bottom-line approach
Economic
Environment – Green Initiatives
reduce its carbon footprint. It actively contributes at national and
international platforms to create awareness and undertake efforts
towards a greener earth.
It has brought down its power and fuel consumption per ton from 79
kwh/ton to 76 kwh/ton. Its stack emission levels are much below the
requisite norms. The company celebrated “Enviroment day” at all its
plant sites to create awareness about greening the environment. The
company put added thrust on plantation across the area in the vicinity
of the plant.
Company received 100043 Certified Emission Reductions (CER) for its
CDM project “Optimal utilization of clinker” which is registered with
UNFCCC. These CERs have been issued for the period 1.1.07 to
31.3.08. Company proactively undertakes activities to minimize the
impact of its operations on environment, land and global warming. It
has undertaken various initiatives across its operations to reduce
emission of greenhouse gases and adverse impact of climate change
which has been appreciated at various forums. During the year the
company received the “Golden Peacock Award 2008” in recognition of
its contribution towards Climate change initiatives and achievements in
this regard. It also received “Greentech Environment Excellence Gold
Award 2008” in Cement Sector for outstanding achievement in
Environment Management practices.
The Company has regularly been issuing Corporate Sustainability
Report (CSR) for the last four years. The CSR for 2007-08,
independently assured by Ernst and Young, a leading international
consulting firm, highlights the work it has done across the three
dimensions of the triple bottom line. The Report is the first in the Indian
Cement Industry to be prepared in accordance with the latest ‘G3’
revision of Global Reporting Initiative (GRI) guidelines. Your Company
has been accorded the highest level ‘A+’ for reporting the ‘triple
bottom line’ performance from GRI. Company’s emission levels are well
within permissible levels.
Towards its commitment to provide a green and clean work
environment, the company has undertaken following activities:
(a) To set up Green Power Plants of 43 MW which will generate
power from waste heat emitted during the cement
manufacturing process thereby significantly reducing emission
levels and conserving the fast depleting fossil fuels which
otherwise would have been used for power generation. This is
the largest capacity of green power plants in world cement
industry excluding China. The company has taken steps to
register this project with the UNFCCC as Clean Development
Mechanism (CDM) project.
(b) With a view to further conserve water, Company has decided to
SHREE CEMENT LIMITED 75
Access to transmission network to private players and encouraging
private investment are aimed at tackling power shortage. The
commencement of Energy Exchange is a positive step which has
enabled short term power trading on a common platform and remove
regional constraints in short term power flow from surplus to deficit
regions. Your Company has placed itself in a position to utilize the
opportunities presented by the power sector.
Company commenced power sale in the month of August’08 by selling
10 MW power on the India Energy Exchange (IEX) platform.
Subsequently, it has obtained direct membership of IEX to optimize its
margin on power sale. Since then it has steadily augmented the sales
volume as well as avenues of sale. Power business has added Rs. 80.6
crores to the turnover of the company.
Power market in the country is at a nascent stage. Company was one of
the few having Captive Power Plants to tap the opportunity in power
sale and an early entrant to this business. Power is now a high growth
area for the country. Keeping in mind the immense potential of power
business, the company is now embarking on expanding its power
generation capacity. Company has already undertaken new projects to
bring in another 143 MW of new capacity. Out of the above, 43 MW will
be Green Power Plants which will generate energy from waste heat
generated from the cement manufacturing process. This new power
capacity will be utilized to grow its power business segment. The
company is also in the process of setting up a Power Trading Division to
further tap the opportunities provided by the evolving power sector.
In 2008-09, your company took another important step towards
becoming a truly integrated enterprise. To cater to the increasing scale
of operations, the company has implemented an Enterprise Resource
Planning (ERP) with Oracle E Business Suite. The ERP was rolled out
across all business processes of the company with effect from November
2008. Your company is one of the few companies in Asia to roll out
Oracle E Business suite across all business processes at the same time.
The ERP implementation provides a significant scalable platform to
conduct business activities in an integrated manner.
In line with the rapidly expanding scale of operations, your company
has instituted a new in-house Internal Audit Department to further
strengthen internal controls within the company. This department
consisting of highly experienced and qualified technical and
commercial professionals who will review the entire gamut of
operations of the company. Company also continues to engage the
services of a professional firm, which currently carries out internal audit
of all business processes within the company. The In-house internal
Information Technology
Internal Control
To further meet the growing demand, the company has undertaken new
projects of 1.5 and 1.0 million ton Grinding units at Suratgarh and
Roorkee respectively. Company is constantly on a lookout for suitable
opportunities both within and outside India.
Company’s operational efficiency was tested during the year. Global
slowdown was looming large over the economy which forced the
Company into looking at newer and innovative ways to protect margins.
However as the financial performance reflects, your company showed
enormous flexibility in adjusting to changing times.
Cement Production during the year saw a jump of 23% from 63.4 lac
tons to 77.7 lac tons. Production of OPC cement was higher (18.5 lac
tons in 08-09 against 12.7 lac tons in 07-08) during the year. The strong
increase in production could be achieved mainly due to faster
stabilization and consequent higher production from newer plants
commissioned last year. Faster stabilization helped the company to
achieve capacity utilization of 114%, a significant achievement
considering that a high proportion of company’s capacity was
commissioned in the last 2 years.
Company continued its superior performance in energy efficiency.
Power consumption per ton of cement brought down from 79.4
kwh/ton to 76.7 kwh/ton. Fuel consumption also recorded a drop from
773 to 766 kcal / kg of clinker. There was all round improvement in the
power plant operations. Plant load factor both at Beawar and Ras
improved during the year. The heat consumption per unit of power
generation showed remarkable improvement of 8.7%. Similarly the
Auxiliary consumption was also brought down by 7.1%. Also sale of
power ensured that the power plants can generate at the maximum
capacity thereby leading to increased efficiency.
The company’s popular brands, Shree Ultra Jung Rodhak, Bangur
Cement and Rockstrong Cement continued to strike a chord with the
consumers and has been cementing its position in the north Indian
market. Company saw its sales volume grew by 28% against North
India market growth of 5%. It captured higher volumes both in trade
segment as well as bulk cement business. The team tested unchartered
waters by successfully venturing into high grade concrete application
segments. It succeeded in maintaining its leadership position in the
markets of Rajasthan, Delhi and Haryana even in the backdrop of stiff
competition.
Power sector is evolving in India with increased govt’s impetus to drive
growth in this sector. New developments especially allowing Open
Operations
Sales & Marketing
New Business Initiative - Power
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replace existing Water Cooled Condensers at power plants with
Air Cooled Condensers.
Shree is actively engaged in Climate protection and actively participates
in international discussions on climate change. Shree Cement, with a
group of members of Cement Sustainability Initiative (CSI) was invited
by OECD to discuss its views on Sectoral Agreements for GHG reduction
at the 22nd meeting of the Round Table on Sustainable Development
held on 12th and 13th March, 2009 at OECD Headquarters, Paris. Shree
impressively advocated the benefits of Sectoral Agreements for GHG
reduction based on Global benchmark and company wise approach
instead of country wise, involvement of all sectors, National level
targets for developed countries and No-Lose commitment for
developing countries, further R&D initiatives and development of clean
technologies for CO2 emission reduction. Shree was also invited by
Department of Natural Resources and Energy Policy under Ministry of
Economy Trade and Industry, Japan to attend the workshop supported
by the European Commission DG Enterprise and Industry on “Global
Sectoral Approaches as Part of a Post-2012 Framework” held on 25th to
26th February, 2009 at Tokyo, Japan. Presentations were delivered by
Shree on “The benefits and limitations of Sectoral Approaches in India”
and “Business and sectoral approaches in India”, which demonstrated
India’s response to climate change. Shree also delivered a presentation
on need for transfer of clean technologies from developed countries to
developing countries at a one day meeting of International High Level
Stakeholders was conducted by European Commission on 17th
November, 2008 at Brussels.
Shree Cement was invited to participate in the Global conference on
“Low Carbon Economy” organized by European commission.
The Executive Director, attended the conference. He underlined the
important of the role of business enterprises in achieving the low carbon
economy and stressed on increased energy efficiency in processes,
switching to renewable/ alternate fuel sources and reducing overall
fossil fuel usage. The conference appreciated efforts made by Shree to
reduce its carbon footprint.
The concept of society includes all its stakeholders be it shareholders,
customers, employees, suppliers or the local community. The company
strives to engage its resources in a manner that takes care of the interests
of the society at large as well as to create economic value.
Company proactively engages in understanding the need and concerns
of the local community and deploys its resources to address their
concern. It provides basic and technical education through distribution
Active Participation at International Forums
Social
of books and computers to the needy. It provides sustainable livelihood
by imparting vocational training and courses as well as relevant
infrastructure and facilities that leads to lifelong income generation and
make people self dependent. There are mandatory Medical checkup of
employees, contract labourers, school children etc. It also regularly
undertakes welfare activities aimed at the upliftment of the society at
large through activities like Mobile Medical units providing medical
facilities in nearby communities, Polio camps, eye camps, dental check
ups, awareness campaigns, educational support etc. It regularly
conducts skill upgradation programmes for contract workers.
During the year Company had taken the lead to contribute Rs. 21 Lac
towards relief work for the flood affected people of Bihar. The
contribution was the first from the corporate world of Rajasthan
towards this tragedy caused by the Kosi River. It also lends a helping
hand when tragedy struck at Chamunda Devi temple in Jodhpur by
contributing Rs. 15 lacs for the stampede effected victims. Company has
also contributed Rs. 11 lac to Rajiv Gandhi Study Circle, New Delhi.
In order to institutionalize and strengthen the social welfare activities
undertaken by the company, the company has set up “Shree Rural
Foundation”. The foundation is an important step in converting the
present social expenditure structure of the company from “Need based”
to “Plan Based”. The foundation shall serve as a single platform through
which all social welfare activities will be undertaken by the company to
contribute towards ensuring comprehensive social upliftment.
- Your Company has embedded
Occupational Health and Safety as an inherent part of its production
processes. The company has documented health and safety policies to
create awareness towards health & safety hazards and preventive
measures thereby making it a safe place to work. All its plants have
appropriate medical facilities with qualified doctors. Safety training is
provided to all employees prior to engaging them. Company regularly
arranges training sessions for employees and workers to create
awareness about safe working practices, usage of appropriate safety
equipments etc. Under the leadership of the Executive Director, a
mandatory safety meeting is conducted on every 1st day of the month
with participation from all workers and employees. Measures related to
health, hygiene, safety and improvement of the working environment
are reviewed in this meeting.
The company has implemented a total ban on tobacco consumption
within its plant boundaries. During the year the company conducted a
rally on the safety day and also a one day workshop on Industrial Health
& Safety at Bangur Nagar to create awareness and impart training on
health and safety procedures. It launched Road safety campaign under
which safety signboards were placed at different locations.
Occupational Health and Safety
It invited expert faculties from Traffic police to conduct training
programmes for drivers and security personnel. There were no fatal
accidents in FY2008 09.
Your company has always pride itself in creating a work atmosphere
which brings the best minds to apply their best skills in the best jobs in
the most fair and competitive manner. This concept is deeply inculcated
in all its policies and strategies and has reaped good results to the
company.
Every employee goes through an annual performance appraisal for him
to clearly visualize his performance, role alignment with the broader
vision of the company, career development and perspective building.
Shree follows an open policy which discourages compartmentalization
and restriction of employees to their department specific roles.
Employees are encouraged to actively participate and contribute in the
overall performance of the company as a whole. Ideas are welcome
from any quarter and any employee from any rung or hierarchy. The top
management is easily available to everyone to come up with anything
that can be of benefit to the company. This has enabled it to maintain a
high engagement level of its employees.
Business today magazine along with Mercer TNS conducted a survey of
top best 20 employers in India. Your company was selected among the
top 20 best employers in the country. It is worthwhile to mention that
the company was (a) the only company from the cement sector, (b) the
only company from Rajasthan and (c) one out of only 5 manufacturing
companies to be included in the list. This was an appropriate reflection
of the “Shree Parivar” culture where everyone feels himself as part of the
extended Shree Family.
Total number of employees as on 31.03.2009 was 2566.
The present global economic turmoil has put effective risk management
at the forefront of all business activities. Large institutions have
collapsed for not applying risk control measures. Your company is fully
aware of the importance of managing risks and has integrated it into its
management philosophy. The company has a comprehensively
documented Risk Management Framework. At the primary level this
framework seeks to identify risk at each business process level and then
to develop mitigation strategies to address the same. A certificate to this
effect that risks identification and mitigation strategies have been
evaluated at each department and business process level is obtained
from the responsible executive to ensure that the risk management
framework is implemented in the true spirit. On a broader level, this
framework seeks to align company’s risk appetite with evaluation of
Human Resources
Risks and Concerns
SHREE CEMENT LIMITED 77
strategic alternatives, setting related objectives and developing
mechanisms for effective identification, assessment, reporting and
mitigation of risks. Key Risks identified by the company are set forth
below:
Several new projects
have come up and many are expected to go upstream in the coming
year. Some of them with big capacity have come up in the northern
region where your company operates. This may led to increase in
supply which may adversely effect prices and market share. However
we feel that the demand is also expected to grow at reasonable levels
which may set off negative impacts of new supplies. Company is also
constantly endeavoring to increase its market share through innovative
marketing, timely capacity enhancement, expanding its market reach
etc.
Company is targeting power business as its new growth
engine. However the market is subject to volatile price movements.
Company intends to mitigate the risk of volatile price movements
through advance planning and bilateral contracts which fixes the rate
for the contract period. Power market is currently developing and
provides immense opportunities. Company is fully geared to take
advantage of this new business through addition of new capacity.
Rise in cost of input is another risk area. Company
has displayed immense flexibility in managing these risks through
utilization of alternate raw materials, identifying newer sources for
existing fuel as also identifying alternative fuels etc.
High dependence on certain suppliers for raw material
and fuel put the company in a vulnerable situation in case of inability of
the supplier to honour its commitments. Company constantly strives to
adequately expand its supply base to mitigate the risk. Also company
constantly scouts for alternate materials which can substitute scarce raw
materials.
To protect itself from the volatility
prevailing in the current global financial system, company maintains all
its long term borrowing on fixed interest rate. Company, as a policy,
hedges all its foreign currency borrowings through appropriate forward
covers and swap instruments.
Supply overhang due to new capacity addition –
Power business -
Rise in cost of inputs –
Suppliers’ risk –
Interest rate and Currency risk -
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Directors' Report
Dear Shareholders,
Your Directors are pleased to present their report of your Company for the year ended on 31st March, 2009.
Your Company has recorded turnover of Rs. 2715.02 crores during year under review, which went up by 29%. Profit before Tax and Net Profit was at Rs.
722.91 crores and Rs. 577.97 crores, up 96% and 122% respectively. The summary of your Company’s financial performance is as under:
Financial Results
Rs. in crores, except per share data
Particulars Year ended on
31st March, 2009 31st March, 2008
Net Sales 2715.02 2109.12 29%
Other Income 82.90 76.84
Total Revenue 2797.92 2185.96 28%
Earning before Interest, Depreciation and Taxes
(EBIDTA) (before exceptional items) 1033.66 939.25 10%
Interest 74.43 53.30
Depreciation 205.39 478.76
Earning before Taxes and Exceptional Items 753.84 407.19
Exceptional Items 30.93 38.88
Earning before Taxes 722.91 368.31 96%
Taxes:
- Current Tax & Fringe Benefit Tax 136.87 107.69
- Prior period Tax (net) - 14.96
- Deferred Tax 8.07 -14.72
Earning after Taxes 577.97 260.37 122%
Add: Balance brought forward from previous year 348.70 149.41
Debenture Redemption Reserve no 2.02 1.52
longer required
Earning available for Appropriation 928.69 411.30
Appropriations:
- Interim Dividend @ Rs. 5/- per share &
Final Dividend @ Rs. 5 per share on
Equity share (Previous year Dividend Rs. 8/- per share) 34.84 27.87
- Tax on dividend distribution 5.92 4.74
- Transfer to General Reserve 80.00 30.00
Earning Per Share (EPS)
a. Basic and Diluted 165.91 74.74 122%
b. Cash 227.18 207.94 9%
Year ended on +/ - %
Operational Performance
Dividend
Management Discussion and Analysis
Corporate Governance
Capacity Expansions
Total Cement Production during the year under review increased by
23% from 63.37 lac ton to 77.65 lac ton. Clinker Production increased
by 39% from 46.23 lac ton to 64.18 lac ton. Cement and Clinker sale
during the year was at 84.50 lac ton against 66.02 lac ton in previous
year. Company’s sales volume grew by 28% against North India market
growth of 5%. As a result of energy conservation measures taken by the
Company during the year, the power consumption dropped from 79.35
Kwh/MT of Cement to 76.72 Kwh/MT. Fuel consumption also dropped
from 11.34% (of Clinker) to 10.75%.
Recently Govt. has deferred the applicability of accounting requirement
for mark to market losses on foreign exchange exposure as required as
per Accounting Standard 11 (Accounting for the Effects of Changes in
Foreign Exchange Rates). However, Company did not have any foreign
exchange exposure during the year for which it had to record any mark
to market liability. As such the same does not have any implication on
the Company.
Your Directors have declared interim dividend @Rs. 5 per share and
recommended a final dividend @Rs. 5 /- per share for the year 2008-09
(Previous year final dividend Rs. 8/- per share). The confirmation of the
members’ for interim dividend shall be sought during the ensuing
Annual General Meeting.
The Management Discussion and Analysis Report forming part of
Directors’ Report for the year under review, as stipulated under clause
49 of the Listing Agreement with the Stock Exchange(s), is discussed in
separate section of this Annual Report.
A separate section on Corporate Governance together with a certificate
from the Auditors of the Company regarding full compliance of
conditions of Corporate Governance as stipulated under clause 49 of the
Listing Agreement with the Stock Exchange(s) forms part of Annual
Report.
The year 2008-2009 has been a historical year for the Company.
Company has created a world record by completing and starting trial
production of its 1.0 million ton per annum (MTPA) Clinkerisation Unit
(Unit –VII) at Bangur City Ras on 24th March, 2009 in a record time of
367 days. Company also increased its thermal power generation
capacity during the year by commissioning a 18 MW Turbine Generator
(TG-VI) at Bangur City, Ras.
To further augment the Cement and Power Plant Capacity, Company has
undertaken the following projects:
Clinker Grinding Unit at Suratgarh (Rajasthan) and Roorkee
(Uttrakhand) having capacity of 1.5 MTPA and 1.0 MTPA
respectively. The work on these projects is running as per
schedule and the same are expected to be commissioned by
fourth quarter of FY2009-10.
100 MW Capacity (50MWx2) Power Plants at Bangur City, Ras.
These power plants would be used for the purpose of merchant
sale of power as well as for meeting power requirement of future
expansion/new cement units of the Company. The first 50 MW
Power Plant is expected to be commissioned by fourth quarter of
FY2009-10 while second 50 MW Power Plant is expected to be
commissioned by first half of 2010-11.
43 MW Green Power Projects (Waste Heat Recovery Projects) at
Bangur Nagar, Beawar and Bangur City, Ras. Green Power
Projects, when completed will be the largest capacity of Green
Power in the entire world cement industry except China. The
work on these projects is running as per schedule and are
expected to be completed by fourth quarter of FY 2009-10. Post
commissioning of its power plants under implementation,
overall power generation capacity will increase over 250 MW.
Your Directors have pleasure to report the following prestigious awards
and recognitions conferred during the year on your Company in
recognition of its achievements in the field of Corporate Governance,
Environment Management, Energy Efficiency, Human Resources etc.:
“Golden Peacock Award 2008” in recognition of its contribution
towards Climate change initiatives and achievements in this
regard.
“Greentech Environment Excellence Gold Award 2008” in
Cement Sector for outstanding achievement in Environment
Management practices.
“Corporate Excellence Award” by Rajasthan Chamber of
Commerce and Industry (RCCI) consecutively for third year in all
the four categories set for evaluation i.e. Corporate Governance
& Capital Market, Financial Performance & analysis, Business &
Qualitative aspect and Annual Report presentation &
Management.
“National Award for Excellence in Cost Management -2008” by
the Institute of Cost and Works Accountants of India (ICWAI) in
recognition of its best Cost Management Practices.
In a survey conducted by Business Today Magazine along with
Mercer-TNS, Shree Cement has been rated in top 20 best
Employers of India. It is the only Company from Cement Sector
and Rajasthan, which finds place in the list.
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Awards & Recognitions
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SHREE CEMENT LIMITED 79
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Statement of Particulars of Employees pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors’ Report for the year ended 31st March, 2009
SHREE CEMENT LIMITED 81
S. Name of the Designation Nature of Remunera Qualifi Age Exper Date of Last Employment
No Employee Duties -tion(Rs.) -cation (Years) -ience Commence
Years -ment of Name of
employment the Organi- Position held
sation
EMPLOYED THROUGHOUT THE FINANCIAL YEAR AND WERE IN RECEIPT OF REMUNERATION IN AGGREGATE OF NOT LESS THAN RS.
24,00,000/- PER ANNUM
1. Bangur B.G. Executive Overall 6,94,59,862 B.Com 75 56 13.08.1992 Hasting Mill, Chief Executive
Chairman management of A division of (Production
operations and Shree Digvijay and
policy decisions Cement Development)
Company Ltd.
2. Bangur H.M. Managing Management 6,45,16,774 B.E. 57 31 01.01.1992 Shree Digvijay Financial
Director of operations (Chemical) Cement Advisor
Company Ltd.
3. Singhi M.K. Executive Management 1,98,29,792 B.Sc., LLB., 57 31 17.01.1995 Rajshree Cement Sr. Vice
Director of operations FCA A unit of Indian President
Rayon & (Commercial)
Industries Ltd.
4. Bangur Sr. Executive Management 34,91,600 B. Sc. 29 05 22.06.2004 ---- ----
Prashant of operations MBA
5. Bhandari Chief Finance Financial 75,05,273 B.Sc. Hons 56 31 01.04.1990 PT Indo Rama Vice President
Ashok Officer Management FCA Synthetics (Finance)
6. Payal Diwakar Jt. President Sales & 70,00,682 B. Tech. 51 27 23.10.2001 Ambuja Vice President
(Marketing) Marketing PGDM Cements Ltd. (Marketing)
7. Wadhawa Sr. Vice Sales & 70,56,421 B.A.(Hons.) 53 28 01.12.2006 Binani Cement Executive Vice
Vinay President Marketing M.B.A. Limited President
(Marketing) Marketing (Marketing)
8. Reddy A.B. Sr. Vice Sales & 69,49,167 B.Sc. 60 36 25.07.2007 Seshasayee President
President Marketing Agriculture Papers & (Commercial)
(Marketing) MBA Board Ltd.
9. Tripathy P.K. Sr. Vice President Cement Plant 47,39,693 B. Sc. 51 26 06.04.1997 Aditya Cement Sr. Manager
(Works) Operation (Engg) (Technical Cell)
10. Chhangani Sr. Vice Cement Plant 44,24,527 B. Sc. 49 26 03.04.2006 Holtec General
P.N. President Operation (Chemical Consulting Pvt. Manager
(Works) -Engg) Ltd.
11. Sharma M.M. Sr. Vice Project 43,40,616 B. Sc. 59 36 15.06.1992 U. P State Manager
President Management (Mech. En Cement Corpo- (Maintenance)
(Projects) -gineering) ration Limited
12. Biyani C.R. Vice President Raw Material 40,37,890 B.E.- Hons 58 37 24.08.2002 BFL Infotech Director
(Business Procurement and (Electronics) Ltd.
Development) IT administration
13. Daga Gopal Vice President Project 37,45,253 B. Com 59 35 07.09.1994 Rilaxon (Divisi- Vice President
(Project) Management on of Shree (Project)
Digvijay Cement
Company Ltd.)
Annexure to the Directors' ReportANNEXURE - I
Directors
Directors’ Responsibility Statement
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Auditors
Shri Shreekant Somany and Dr. Abid Hussain, Directors of the Company,
would retire by rotation at the ensuing Annual General Meeting in
accordance with the provisions of the Companies Act, 1956 and
Company’s Articles of Association and being eligible, offer themselves,
for re-appointment.
Shri Amitabha Ghosh appointed as Director of the Company on 14th
May, 2007 to fill casual vacancy created consequent upon resignation of
Shri R.S. Agarwal from Board of Directors of the Company. Pursuant to
Section 262 of the Companies Act, 1962, Shri Amitabha Ghosh will hold
office as Director up to the date upto which Shri R.S. Agarwal would
have held Office, if it had not been vacated i.e. upto this Annual General
Meeting. He being eligible, offers himself for re-appointment.
Pursuant to the requirements of Section 217 (2AA) of the Companies
Act, 1956, the Directors, to the best of their knowledge and belief and
according to the information and explanations obtained by them,
confirm that they have taken all reasonable steps, as are required, to
ensure that;
The applicable accounting standards have been followed in the
preparation of the annual accounts for the year ended 31st
March, 2009 and in case of material departures, proper
explanation has been given in the Accounts and notes thereon.
They have selected such accounting policies and applied them
consistently, and they have made judgments and estimates that
are reasonable and prudent so as to give a true and fair view of
the state of affairs of your Company as at 31st March, 2009 and
of the profit of your Company for the year ended on that date.
They have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the
assets of your Company and for preventing and detecting fraud
and other irregularities.
The annual accounts are prepared on a going concern basis.
The Statutory Auditors M/s. B. R. Maheswari & Company, Chartered
Accountants, Delhi, will retire at the conclusion of the ensuing Annual
General Meeting of the Company and are eligible for reappointment.
They have sought re-appointment and have confirmed that their re-
appointment, if made, shall be within the limits laid down under
Section 224(1B) of the Companies Act, 1956.
The Board of Directors recommends the re-appointment of M/s. B. R.
Maheswari & Company as Statutory Auditors of the Company from
conclusion of ensuing Annual General Meeting till the conclusion of
next Annual General Meeting.
The notes to accounts referred to in the Auditor's Report are self
explanatory and, therefore, do not call for any further comments on
observations of auditors.
Pursuant to directives of Central Government, your Company has
appointed M/s. K. G. Goyal & Associates, Cost Accountants as Cost
Auditors of the Company under section 233B of the Companies Act,
1956 for the year 2008-2009. The audit of Cost Accounts of the
Company is being done by them.
As required under the provisions of Section 217(2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, the names and other particulars of employees are
set out in the Annexure I to this report and forms part thereof.
The information required under Section 217 (1)(e) of the Companies
Act, 1956 read with Companies (Disclosure of particulars in the report
of the Board of Directors) Rules, 1988 is set out in Annexure II annexed
hereto and forms part of this Report.
Your Directors take the opportunity to place on record the co-operation
and support received from various agencies of the Central Government
and State Government(s), financial institutions and banks. Your
Directors also express their deep sense of gratitude to various
stakeholders i.e. customers, dealers, suppliers, transporters, advisors
etc. for their continuous committed engagement with the Company.
Your Directors further appreciate the support and co-operation received
from the employees for their contribution to the growth and success of
the Company. Your Company’s consistent growth has been made
possible by only through their dedication, innovation, excellence and
support.
And to you, our Shareholders, your Directors are deeply grateful for
your confidence, faith and trust in the Company.
Cost Audit
Particulars of Employees’
Particulars of Conservation of Energy, Technology Absorption
and Foreign Exchange Earning / Outgo
Acknowledgement
For and on behalf of the Board
Place: Kolkata
Date: 28th April, 2009
Executive Chairman
B. G. Bangur
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ANNEXURE - II
Disclosure of particulars with respect to conservation of energy,
technology absorption and foreign exchange earnings and outgo as
required under Companies (Disclosures of Particulars in the report of the
Board of Directors) Rules, 1988 and forming part of Directors' Report for
the year ended 31st March, 2009
(a) Measures taken for conservation of energy.
(i) Replacement of conventional lamps with Compact
Fluorescent Lamps (CFL).
(ii) Replacement of conventional water pumps by high
efficiency water pumps.
(iii) Installation of High Efficiency Main ESP fan in Unit – II.
(iv) Installation of High Efficiency PH fan - 1 in Unit –II.
(v) Installation of Variable Frequency Drives (VFDs) on Dust
collector Fans in Cement Mill, Raw Mill and Packing Plant at
all the Units.
(vi) Increase in the stack height of Cooler Electro-Static
Precipitator (ESP) fan.
(vii) Installation of Solar water heater system.
(viii) Installation of power saver panel for lighting system.
(ix) Installation of Energy saver on Lighting Panel.
(x) Replacement of the Cement Mill-IV vent fan and SKS vent
fan by new high efficiency fans.
(xi) Replacement of the higher ratings motor by lower
rating motors in Cement mill-3 vent fan and 102 BC 6 belt
conveyor.
(xii) Increase in the height of the clinker cooler vent fan stack in
Units-V & VI.
(xiii) In de-dusting bag house fans in different areas, operating
efficiency has been improved by installing smaller
diameter pulleys in place of existing bigger diameter
pulleys.
(xiv) Cooler ESP fan motor changed from 250 kW, HT by 200 kW
LT with VFD.
(b) Additional investments and proposals, if any, being
implemented for reduction of consumption of energy.
(i) Implementation of Green Power Projects (Waste Heat
Recovery Systems).
(ii) Identification and replacement of motors with high
efficiency motors.
(iii) Replacement of low efficiency reciprocating compressors
with screw compressors.
(iv) Installation of Variable Frequency Drive (VFD) in vent bag
filter fan.
A. Conservation of Energy
(v) Installation of New Vertical Roller Mill (VRM) for Coal Mill
and Raw Mill in Unit -I.
(vi) Increase the height of the cooler vent stack of Units-III & IV.
(vii) VFD’s to be installed in Cement Mill -III & Cement Mill -IV
vent bag house and Cement Mill -III SKS venting bag house
fan for saving in electrical energy.
(viii) Cooler ESP HT motor replacement with LT motor & VFD in
Unit -II.
(ix) Installation of single high efficiency Fan [Smoke Gas
(SG) Fan] against SG Fan and Booster Fan in Unit -I.
(x) Roller press installation in Cement Mills.
(xi) Slip Power Recovery System (SPRS) installation in Raw Mill
ESP Fan Unit -II & Sepax Fan in cement mill -II.
(c) Impact of measures taken at (a) and (b) above for
reduction of energy consumption and consequent
impact on cost of production of goods.
(i) Saving of thermal and electrical energy
(ii) Conservation of natural resources
(iii) Increased efficiency and process optimization
(iv) Improvement in product quality
(v) Reduction in cost of production
(d) Total energy consumption and energy consumption
per unit of products
Information given in the prescribed “Form – A” annexed.
Information given in the prescribed “Form – B” annexed.
(a) Activities relating to export, initiative taken to increase
export, development of new export market for products
and services and export plans. There have been no exports
during the year as the sale in domestic market was
considered to be more remunerative for the company than
exports.
(b) Total Foreign Exchange used and earned
B. Technology Absorption
C. Foreign Exchange Earnings and Outgo
SHREE CEMENT LIMITED 83
Particulars Year ended on
31st March, 2009 31st March, 2008
Used 7027.62 5176.84
Earned 1849.08 1707.73
Year ended on
(Rs. In Lac)
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NOTES:
1. All appointments are contractual and terminable by applicable notice period as per contractual terms.
2. Remuneration includes salary, allowances, bonus, commission, perquisites (including medical, leave travel and leave encashment on payment basis and monetary value of taxable perquisites) and Company’s Contribution to Provident and Superannuation Funds. In addition to the said remuneration, employees are entitled to Gratuity in accordance with the Company’s rules.
3. Other terms and conditions are as per Company’s Rules
4. Shri B.G. Bangur & Shri H.M. Bangur directors of the Company and Shri Prashant Bangur, Sr. Executive of the Company are relatives and belong to promoters group. Except them, no employee was holding voting right of 2% or more of the company alongwith relatives during the year. None of the other employees are related to directors of the Company.
14. Gandhi K.C. Vice President Fuel 32,56,448 B.Sc. 53 30 01.07.1991 Shree Digvijay Purchase
(Materials) Management Cement Co. Ltd. Officer
15. Mehta Sanjay Vice President Project Management 32,28,492 F. C.A. 44 21 11.11.1995 Aditya Cement Dy. Manager
(Comml.) (Comml. activities) (Accounts)
16. Khicha Arvind Jt. Vice Management of 30,71,325 F.C.A. 45 22 17.01.1991 Indorama Dy. Manager
President Commercial Synthetics Ltd. (Commercial)
(Comml.) activities
17. Jhawar P.C. Jt. Vice Personnel & 29,92,234 LL.B. 55 34 16.05.1995 DLF Cement Sr. Manager
President (P&A) Administration D.LL. (P&A)
18. Suthar S.C. Jt. Vice Mines 29,02,640 Diploma in 49 29 17.06.1996 JK Cement Ltd. Mines
President Administration Mnes – 1st Manager
(Mines) Class; Mines
Manager
19. Singh A.K. Jt. Vice Electrical & 28,03,634 B.E. 60 35 15.07.2004 Diamond General
President (E&I) Instrumentation (Electrical) Cement Manager (E&I)
Management
20. Manawat R.K. Asst. Vice Management of 24,11,460 B.Sc. 53 34 18.08.1992 Shree Digvijay Process
President Process function Cement Engineer
(Process) Company Ltd.
21. Jain N.C. Sr. General Management of 24,56,640 F.C.A 51 31 02.07.1987 Steque Equip- Manager
Manager (Fin.) financial activities ment P. Ltd.
22. Rathi M.M. Sr. General Power Plants 25,42,755 BE 41 18 23.06.2000 Century Pulp Sr. Supdt. (Ph)
Manager (Operation) (Mechanical) & Papers MIlls
(Power Plant) M.B.A. Ltd.
23. Jain Gajraj Sr. General Power Plants 24,35,589 B.E. 38 16 05.08.1996 DLF Engineer (Intt.)
Manager (Project) (Electronics) Cement Ltd.
(Power Plant)
EMPLOYED FOR PART OF THE FINANCIAL YEAR AND WERE IN RECEIPT OF REMUNERATION AT THE RATE OF NOT LESS THAN RS.
2,00,000/- PER MONTH
1. Kabra H.C. Sr. Vice President Power plant 27,01,465 B.E. 62 40 30.08.2001 Century Textile Vice President
(Power Plant) Operation (Mech.) & Industries Ltd. (Utilities)
2. Khira S.M. Advisor Cement Plant 20,80,577 Diploma 63 42 31.01.1997 Tororo Cement Jt. General
(Technical) Operation (Mech.) Ind. Ltd. Manager
3. Diwan Asst. Vice Sales & 5,06,052 M.B.A. 41 16 19.01.2009 Reliance General
Himanshu President Marketing (MKTG) Industries Ltd. Manager
(Marketing)
S. Name of the Designation Nature of Remunera Qualifi Age Exper Date of Last Employment
No Employee Duties -tion(Rs.) -cation (Years) -ience Commence
Years -ment of Name of
employment the Organi- Position held
sation
ANNEXURE II
A) Research & Development (R&D)
Form-B (See Rule 2)
1. Specific area in which R&D is carried out by the
Company
R&D initiatives have been taken toward innovation keeping in
view futuristic requirement and to make value out of waste,
improvement of cement quality, reductions of energy
consumption, techno-economic study and use of alternative raw
material, fuel and blending material and optimized quality and
process parameters. Few initiatives are given below.
(a) Optimization of parameters to absorb SOx and to make
value added product
(b) Investigation on the use of additives to improve quality of
cement
(c) Use of PSA to suggest diminution of over grinding of cement
(d) Identified and optimized various wastes to use as raw
materials, fuels and blended materials
(e) Concrete mix design with high volume fly ash
(f) Standardization of kiln feed, cement, fly ash samples for
Particle Size Analysis
(g) Diagnostic study for quality assessment and proper use of
refractory
(h) Reduction of energy consumption through energy audit and
by proper modification and installation of energy efficient
equipments to minimize leakages in compressor
(i) Trials conducted for the production of sleeper grade cement
(j) Tele-operation (from 400 km distance) of Cement Mills of
Khushkhera plant through Beawar CCR.
2. Benefit derived as a result of the above R&D
(a) Quality improvement
(b) Reduction in energy consumption
(c) Reduction in production cost
(d) Helpful to make Green Cement
3. Future plan of action
(a) Continuous efforts to use of alternative fuel and raw
materials to conserve the natural resources
(b) Improvement of quality of cement through optimization of
PSD and use of additive
(c) Beneficiation of low grade limestone
4. Expenditure on R&D
Capital Expenditure (Rs. in lacs) 12.34
Recurring Expenditure (Rs. in lacs) 864.18
Total Expenditure (Rs. in lacs) 876.52
Total R&D Expenditure as a percentage
of turnover (In %) 0.32%
1. Efforts in brief, made towards technology absorption,
adaptation and innovation
The Company is continuously in touch with research
institutions, consultants, national and international agencies
to keep abreast of latest technological developments,
innovations in the field of cement technology, advancement
in the field of use of wastes gases to convert value added
products, minimize variation in the system to improve
quality and process, refractory, pollution control, water
conservation, plant automation & up-gradation, energy
conservation and use of alternative fuel and raw materials.
Shree’s executives visited Flue Gas Desulfurization unit (FGD)
at Power Plants, research institutes and boiler manufacturers
in China, participated in different seminars and workshops
organized by CII, TERI-BCSD, BEE, CSI, APP etc. & delivered
presentation on its best practices for conservation of thermal
& electrical energy, optimization of operation, efficient use
of alternate fuels and raw materials. Company is also a
member of Cement Sustainability Initiative (CSI) of World
Business Council for Sustainable Development (WBCSD),
Switzerland, which has offered the company an opportunity
to share best practices in the field of fuel and raw material
usage, health and safety, emission reduction, climate
protection etc. Company raised its voice for promotion and
transfer of new and innovative technologies and also
advocated for future technology like Geopolymer Cement,
Eco-friendly low energy cement, cement based on nano
technology, utilization of CO2 as Coal equivalent fuel in
Cement Sustainability Initiative Workshop, Washington DC,
USA.
(B) Technology Absorption, Adaptation and Innovation
SHREE CEMENT LIMITED 85
(d) Energy audit and steps accordingly to reduce energy
consumption
(e) Design for high grade and self compacted Concrete
ANNEXURE –II
(A) Power and Fuel Consumption
Form – A (See Rule 2) Form of Disclosure of Particulars with respect to Conservation of Energy
(B) Consumption per unit of production
NOTE: Electricity consumption includes electricity consumed during shutdown of plant(s).
Particulars Standard Year ended on
(if any) 31st March, 2009 31st March, 2008
Product : Cement
Unit : MT
Electricity (Kwh /MT of Cement) 75 - 100 76.72 79.35
Furnace Oil N. A. N. A. N. A.
Coal (% of Clinker) 15 10.75 11.34
Year ended on
Particulars Year ended on
31st March, 2009 31st March, 2008
1. Electricity
(a) Purchased
Unit (Kwh in lacs) 272.13 250.02
Total amount (Rs. In lacs) 1310.32 1345.25
Rate/unit (Rs.) 4.82 5.38
(b) Own Generation
i. Through Diesel Generators
Units (Kwh in lacs) 2.18 0.13
Unit per Ltr. of Diesel 2.87 1.98
Cost/unit (Rs.) 14.34 57.02
ii. Through Steam Turbine / Generators
Units (Kwh in lacs) 7361.70 5174.43
Unit per Kg. of Fuel 2.11 1.90
Cost/unit (Rs.) 2.46 2.16
2. Coal and other fuels
(a) Used in Kiln & Calciner
Quantity (in lac MT) 6.91 5.24
Total cost (Rs. In lacs) 40920 24052
Average rate per MT (Rs.) 5925 4587
(b) Used in Steam Turbine / Generators
Quantity (in lac MT) 3.48 2.73
Total cost (Rs. In lacs) 17405 12068
Average rate per MT (Rs.) 4995 4427
Year ended on
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To,
The Members of Shree Cement Limited
We have examined the compliance of conditions of Corporate Governance by Shree Cement Limited, for the year ended on 31st March, 2009, as
stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchange(s).
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and
implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor
an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the
conditions of Corporate Governance as stipulated in the above-mentioned Listing Agreement.
We state that no Investor Grievance is pending for a period exceeding one month against the Company as per records maintained by the Company or its
Registrar and Share Transfer Agents.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the
management has conducted the affairs of the Company.
for B. R. MAHESWARI & CO.
Chartered Accountants
Kolkata
28th April, 2009
Partner
Membership No. 81075
(SUDHIR MAHESHWARI)
SHREE CEMENT LIMITED 87
Auditors' Certificate on Corporate Governance
3. Information regarding technology imported during last 5 years
a. Technology imported (a) Use of bimetallic hammers in clinker crushers.
(b) Installed Grindfos (Germany) high efficiency pump
(80%) with existing pump of KSB in Power Plant.
(c) PMS-ETAP (Power Management System) for total
power generation & distribution management
system.
b. Year imported (a) 2004-05
(b) & (c) 2008-09
c. Has technology been fully absorbed? Yes
d. If not fully absorbed, areas where this has not
taken place, reasons thereof and future plan of action N.A.
2. Benefits derived as a result of above efforts
(a) A unique opportunity to learn about energy conservation
methodology, approach and technologies adopted by the
successful energy efficient units.
(b) Sharing of information by excellent energy efficient
companies.
(c) Improvement in the quality of cement.
(d) Conservation of natural resources.
(e) Increase in capacity utilization, smooth operation, increase
in productivity and improved life of refractory.
(f) Reduction in production cost
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COMPANY'S PHILOSOPHY ON CODE OF CORPORATE
GOVERNANCE
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BOARD OF DIRECTORS
In order to ensure sustainable returns to all stakeholders of the business,
it is imperative, especially for large organizations, to adopt and follow
certain policies, procedures and processes, which together constitute a
"Code of Corporate Governance". It is important that such a Code is
institutionalized, to ensure transparency, consistency and uniformity of
decision making processes and actions. The Company has always
believed in such a "Sound" Code of Corporate Governance, as a tool for
highest standards of management and business integrity. Some of the
measures adopted by the Company to ensure the highest standards of
Corporate Governance:
Composition of the Board of Directors (eg. Majority Independent
Directors)
Constitution of various Board Committees for oversight and
guidance concerning key decisions and soundness of decision
making processes connected with the functioning of the
Company
Timely dissemination of information to shareholders
Code of Conduct
The Board of Directors is the main organ of the Company who provides
a vision and strategic direction to the operations of the Company,
thereby enhancing the value of the stakeholders.
Composition of Board of Directors as on 31st March, 2009
Company ensures to have right combination of executive and
independent Directors at the Board level to maintain the independence
of the Board, and to separate the Board functions of governance and
management. The Board of Directors is headed by Shri B G Bangur, the
founder Director and promoter of the Company who is also the
Executive Chairman of the Company. The Board has nine Directors out
of which six are Independent and Non-Executive. It consists of members
having diverse backgrounds, experience and personalities ranging from
economist to bureaucrat, banker to RBI governor, industrialist to
solicitor etc.
The composition of the Board is in accordance with the Corporate
Governance requirements specified in clause 49 of the Listing
Agreement entered with Stock Exchange(s). Further, the Independent
and Non-Executive Directors do not have any material pecuniary
relationship with the Company. The Company believes to have
appropriate size of the Board looking to the current circumstances and
requirements.
Board functioning and procedure
The Board of Directors is the ‘management trustee’ of the Company
responsible for managing day-to-day affairs on behalf of the
shareholders, the true owners of the Company. Therefore, it is
absolutely necessary to ensure complete transparency and
foresightness in the decision making process. The Board takes decisions
based on detailed discussion and deliberations amongst the Directors.
The members of the Board have complete independence to raise any
issue / matter for discussion. It is ensured that Board members are
presented with all the relevant information for review of the members
on vital matters affecting the working of the Company including the
information as inter-alia specified under clause 49 Annexure - IA of the
Listing Agreement. The matters placed for review of the members of the
Board include the following:
Key elements of Annual Budgets
Business Plans and Progress thereof
Company presentation on quarterly performance
The information on recruitment and remuneration of
senior officers just below the board level, including
appointment or removal of Chief Financial Officer and
the Company Secretary
Delegation of power to the Management
Show cause, demand, prosecution notices and
penalty notices which are materially important
Any material default in financial obligations to and by the
Company, or substantial non payment for goods sold by the
Company
Transactions that involve substantial payment towards
goodwill, brand equity, or intellectual property
Significant Human Resources related issues
Sale/purchase of material nature, of investments, assets,
which is not in normal course of business
Any issue which involves possible public or product liability
claims of substantial nature, including any judgement or
order which, may have passed stricture on the conduct of the
Company or taken an adverse view regarding another
enterprise that can have negative implications on the
Company
Review of compliance of all laws applicable to the Company
including the requirements of the Listing Agreement with the
Stock Exchanges and steps taken by the Company to rectify
instances of non compliance, if any
Minutes of Meetings of Audit Committee and other
Committees of the Board
During the year, there were 4 (four) meetings of the Board held
details of which and attendance of Directors for those meetings
are as under:
n
n
n
n
n
n
n
n
n
n
n
n
n
Date of the meeting Attended by no. of Directors
07-May-2008 9
18-July-2008 6
20-October-2008 9
28-January-2009 8
Report on CorporateGovernance
*Excludes directorship held in private limited companies, foreign
companies and companies incorporated under section 25 of the
Companies Act, 1956.
**Only membership & chairmanship in Audit Committee and
Shareholders’ & Investors’ Grievances Committee has been taken
into account.
# Total four board meetings were held during the year 2008-09.
The previous Annual General Meeting of the Company held on
18th July, 2008 was attended by six Directors.
The Board has constituted Committees of Directors to look into and
monitor the matters falling within the terms of reference as follows:
The Audit Committee reviews the matters falling in its terms of
reference and addresses larger issues and examines those facts
that could be of vital concerns to the Company. The terms of
reference of the Audit Committee constituted by the Board in
terms of Section 292A of the Companies Act, 1956 and the
Corporate Governance Code as prescribed under Clause 49 of the
Listing Agreement, which broadly includes matters pertaining to
adequacy of internal control systems, review of financial
reporting process, discussion of financial results, interaction with
auditors, appointment and remuneration of auditors, adequacy
of disclosures and other relevant matters. In particular, these
include:
COMMITTEES OF THE BOARD OF DIRECTORS
A) Audit Committee
1. Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible.
2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees.
3. Approval of payment to statutory auditors for any other services rendered by them.
4. Reviewing, with the management, the annual financial statements before submission to the Board for approval, with particular reference to:
a. Matters required to be included in the Directors' Responsibility Statement to be included in the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956,
b. Changes, if any, in accounting policies and practices and reasons for the same,
c. Major accounting entries involving estimates based on the exercise of judgment by management,
d. Significant adjustments made in the financial statements arising out of audit findings,
e. Compliance with listing and other legal requirements relating to financial statements,
f Disclosure of any related party transactions,
g. Qualifications in the draft audit report.
SHREE CEMENT LIMITED 89
There has not been a time gap in excess of four months between any two meetings of the Board of Directors. The details of the attendance of each Director
at the Board Meetings held during the year and Directorship, Membership/Chairmanship in Board Committees of other Companies are as under:
Name of
Director 31.3.2009 Meetings of last AGM held Directorship Chairmanship held
the Company on 18th July, 2008 held as at in Committees of
attended in 31.3.09* other Companies
2008-09# as at 31.3.09**
Member Chairman
Shri B.G. Bangur Executive Chairman 4 Yes 4 - -
Shri H.M. Bangur Managing Director 4 Yes 1 - -
Shri R.L. Gaggar Independent and Non-executive 3 No 13 6 -
Shri Shreekant Somany Independent and Non-executive 3 No 5 - -
Shri O.P. Setia Independent and Non-executive 4 Yes - - -
Dr. Abid Hussain Independent and Non-executive 3 No 9 7 -
Dr. Y.K. Alagh Independent and Non-executive 3 Yes 1 2 1
Shri A. Ghosh Independent and Non-executive 4 Yes 14 9 5
Shri M.K. Singhi Executive Director 4 Yes 1 - -
Category as at No. of Board Whether attended No. of other No of Membership/
TRUST DOES THE IMPOSSIBLE
TRUST DOES THE IMPOSSIBLE
a) Industry trend
b) Remuneration package in other comparable Corporates
c) Job contents and key performance areas
d) Company's performance
The remuneration structure of the Whole time Directors comprises of
salary, contribution to Provident & Superannuation funds, commission
/bonus, perquisites & allowances and gratuity in accordance with
Company's rules. Necessary approvals from shareholders are sought in the
general meetings for confirming the remuneration package.
b. For Non-Executive and Independent Directors
The Non-Executives Directors are paid sitting fees of Rs. 10,000
for each meeting of the Board / Committee of the Board attended by
them. Besides the sitting fees, they are also paid commission. The
shareholders had, at the Annual General Meeting of the Company
held on 18th July, 2008, approved payment of Commission to Non-
Executive Directors not exceeding one percent of net profit of the
Company computed in the manner provided under section 198(1) of
the Companies Act, 1956. The commission is distributed equally
amongst those Non-Executive Directors who are on the Board at the
time of Board Meeting where payment of commission is determined.
The details of remuneration package, fees paid etc. to Directors for
the year ended 31st March, 2009, for information of Members, are
given hereunder:
a) Paid to Non-executive Directors: Amount in Rs
S No Name of Director Sitting fees Commission Total
1 Shri R.L. Gaggar 70,000 8,50,000 9,20,000
2 Shri Shreekant Somany 30,000 8,50,000 8,80,000
3 Shri O.P. Setia 90,000 8,50,000 9,40,000
4. Dr. Abid Hussain 70,000 8,50,000 9,20,000
5. Dr. Y.K. Alagh 60,000 8,50,000 9,10,000
6. Shri A. Ghosh 40,000 8,50,000 8,90,000
TOTAL 3,60,000 51,00,000 54,60,000
b) Paid to Executive Directors / Whole Time Directors: Amount in Rs
S Particulars Shri B. G. Bangur,
No
(i) Remuneration
Basic salary 1,23,42,000 1,23,42,000 75,00,000
Contribution to Provident and Superannuation fund 33,32,340 33,32,340 20,25,000
Benefits – allowances/perks 87,85,522 88,42,434 28,04,792
Bonus - - 75,00,000
Commission 4,50,00,000 4,00,00,000 -
Stock options - - -
Pension - - -
TOTAL 6,94,59,862 6,45,16,774 1,98,29,792
(ii) Details of Fixed Component and
performance linked incentives
along with the performance criteria
(a) Fixed Component:
• Effective date of commencement
of remuneration package 13-Aug-2007 01-Aug-2007 01-April-2008
Shri H.M. Bangur, Shri M.K. Singhi,
Executive Chairman Managing Director Executive Director
SHREE CEMENT LIMITED 91
5. Reviewing, with the management, the quarterly financial
statements before submission to the Board for approval.
6. Reviewing with the statutory and internal auditors the
adequacy of internal controls and steps to be taken for
strengthening the areas of weaknesses in internal controls.
7. Reviewing reporting structure, coverage and frequency of
internal audit.
8. Discussion with internal auditors any significant findings
and follow up there on.
9. Reviewing the findings of any internal investigations by the
internal auditors into matters where there is suspected
fraud or irregularity or a failure of internal control systems
of a material nature and reporting the matter to the board.
10. Discussion with statutory auditors before the audit
commences, about the nature and scope of audit as well as
post-audit discussion to ascertain any area of concern.
11. To look into the reasons for substantial defaults in the
payment to the depositors, debenture holders,
shareholders (in case of non payment of declared
dividends) and creditors.
12. To review the following information:
a. Management discussion and analysis of financial
condition and results of operations;
b. Statement of significant related party transactions (as
defined by the audit committee), submitted by
management;
c. Management letters/letters of internal control
weaknesses issued by the statutory auditors.
13. Carrying out any other function as is mentioned in
the terms of reference of the Audit Committee.
The composition of the Audit Committee consists of following
Directors as below mentioned. All the members of the Committee are
Non-Executive and Independent Directors.
Constitution of Audit Committee
Dr. Abid Independent and
Hussain Non –Executive He has good accounting and
Director financial management knowledge.
Dr. Y.K. Independent and Member is a noted Economist.
Alagh Non –Executive He has good accounting and
Director financial management knowledge.
Member is a retired IAS officer.
Name of the
Member Member
Shri O.P. Setia
Setia and Non – Commerce and Ex-Managing
Chairman Executive Director Director of State Bank of India.
He possesses the requisite
accounting and financial
management expertise.
Shri R.L. Independent and Member is a renowned solicitor
Gaggar Non –Executive and advocate of Kolkata. He
Director possesses good accounting and
financial management knowledge.
Category Qualification of the
Independent The Chairman is Masters in
The committee met four times during the year 2008-09 including for
approval of accounts for the year ended 31st March, 2008, before
placing the same before the board. The attendance of the members of
the Committee is as under:
For the meetings, internal auditors of the Company are invited for
discussions and review. Shri M K Singhi, Executive Director and Shri
Ashok Bhandari, Chief Finance Officer are the permanent invitees to the
meetings for responding to the observations of the Committee while
Shri S. S. Khandelwal, Company Secretary acts as Secretary to the
Committee.
The purpose of this Committee of the Board of Directors is to
discharge the Board’s responsibilities relating to nomination &
compensation of the Company’s directors. The composition of the
Committee consists of all independent and non executive directors
which is as under:
B) Remuneration cum Nomination Committee
No meeting of the Committee was held during the year 2008-09in absence of any matter relating to Committee.
Remuneration Policy: The remuneration policy is directedtowards rewarding performance based on review ofachievements on a periodical basis.
a. For Whole time Directors / Working Directors
The appointment of Whole time Directors is made by theBoard of Directors in their meeting and remuneration isagreed upon. The remuneration is decided on the basis offollowing broad criteria:-
Name of the Member Category
Shri R.L. Gaggar – Chairman Independent and Non – Executive Director
Shri O.P. Setia Independent and Non – Executive Director
Shri Shreekant Somany Independent and Non – Executive Director
Dr. Y.K. Alagh Independent and Non – Executive Director
No. of meetings
Name of the Member Held Attended
Shri O.P. Setia 4 4
Shri R.L. Gaggar 3 3
Dr. Abid Hussain 3 3
Dr. Y.K. Alagh 3 3
TRUST DOES THE IMPOSSIBLE
TRUST DOES THE IMPOSSIBLE
S Particulars Shri B. G. Bangur,
No
• Salary – Basic Rs. 9,35,000 Rs. 9,35,000 Rs. 6,25,000
#Annual increment @10%, first per month# per month# per month@
increment became effective from 01.04.08 (Effective for (Effective for
@ [Annual increase in the salary as the year 2008-09 year 2008-09
Board may decide from time to time, Rs. 10,28,500 Rs. 10,28,500
subject however, to a ceiling of per month) per month)
Rs. 12,00,000/- (Rupees Twelve lacs) per
month. First increase to be effective
from 1.4.2009].
• Contribution to Provident Fund As per rules As per rules As per rules
& Superannuation Fund
• Perks and other allowances As per terms of As per terms of As per terms of
appointment appointment appointment
(b) Performance Linked Incentive:
• Commission/Bonus Commission as may Commission as may Bonus as may be
(Based on Net Profit for the year be decided by Board, be decided by Board, decided by Board,
as computed u/s 349 of the limited to 5% of the limited to 5% of the limited to 5% of
Companies Act, 1956 within the Net Profit by way of Net Profit by way of the Net Profit by
individual/ overall ceiling for Salary, Perks and Salary, Perks and way of Salary, Perks
managerial remuneration from Commission taken Commission taken and bonus taken
time to time) together together together
(c) Minimum Remuneration in case Within the ceiling of Within the ceiling of Within the ceiling of
of inadequacy of profits in any Schedule XIII as Schedule XIII as Schedule XIII as
year as calculated under section amended from amended from amended from
198/ 349 of the Act time to time time to time time to time
(iii) Service Contracts, notice period,
severance fees
(a) Service Contract Appointment is for five Appointment is for five Appointment is for three
years period i.e. till years period i.e. till years period i.e. till
12th August, 2012. 31st July, 2012. 31st March, 2011.
(b) Notice period As per terms of appintment
(c) Severance fees
(iv) Stock Option details, if any, and No Stock option No Stock option No Stock option
whether the same has been issued issued, hence not issued, hence not issued, hence not
at discount as well as the period over which applicable applicable applicable
accrued and over which exercisable
Shri H.M. Bangur, Shri M.K. Singhi,
Executive Chairman Managing Director Executive Director
Except Gratuity and earned leave at the end of tenure,
no other severance fee is payable.
C) Shareholders’ and Investors’ Grievances Committee
The Board of Directors has constituted a Shareholders’ and
Investors’ Grievances Committee to deal with the following matters:
I. Review, on a periodic basis, status of cases relating to
transfer, transmission of shares, issue of duplicate shares etc.
II. Monitors expeditious redressal of investors' grievances,
III. Review of instances of non-receipt of Annual Report and
declared dividend, and
IV. All other matters related to shareholders.
The composition of the Shareholders’ and Investors’ Grievances
Committee consists of all independent and non-executive directors which
is as under:
The Company had appointed M/s. Karvy Computershare Pvt. Ltd.,
Hyderabad as the Share Transfer Agent to carry out the share transfer
and other related work. Shri S. S. Khandelwal, Company Secretary of the
Company is the Compliance Officer in terms of clause 47 of the Listing
Agreement.
The Share Transfer Agent/ Company has timely resolved / attended all
the complaints (total 18 complaints received during the year 2008-09)
and no complaint or grievance remains unattended / unresolved at the
year end.
The Committee during the year met once on 28th January, 2009 and
reviewed the status of investors’ complaints received and resolved
during the calendar year 2008. The Committee expressed satisfaction
on the Company’s / Share Transfer Agent’s efforts to resolve investors
grievances. Following is the composition of the complaints received and
resolved during the year 2008-09:
In addition, the Company has Share Transfer Committee of the Board of
Directors for approving transfers / transmission of physical shares and
other shareholder related matters, which met 17 times during the year
ended on 31st March, 2009. All the transfers of shares have been done
within stipulated period.
Further, the Company has paid listing fees to all the Stock Exchanges for
the year 2008-09.
The required information under clause 49 of the Listing Agreement
under this heading is given in the “Shareholders Information”
separately in the annexure to this Corporate Governance Report.
For the financial year ended 31 March, 2009, there has been no
ordinary or special resolution passed by the Company that required
approval of members by way of postal ballot under the provisions of
Section 192A of the Companies Act, 1956.
Related Party Transactions: None of the transactions with any of
the related party was in conflict with the interest of the Company
at large. The details of related party transactions are given in the
Notes on Accounts.
Non-compliance / strictures / penalties imposed: No non-
compliance / strictures / penalties have been imposed on the
Company by the Stock Exchange(s) or the SEBI or any statutory
authority on any matters related to capital markets during the
last three years.
Accounting Treatment: In the preparation of financial
statements, the Company has followed the Accounting
Standards issued by ICAI. Where, in the preparation of financial
statements, a treatment different from that prescribed in an
Accounting Standard has been followed, the fact has been
disclosed in the financial statements, together with the
management’s explanation as to why it believes such alternative
treatment is more representative of the true and fair view of the
underlying business transaction. The significant accounting
policies which are consistently applied have been set out in the
Notes on Accounts.
General Body Meetings
Postal Ballot
Disclosures
n
n
n
Name of the
Member Category
Held Attended
Shri O.P. Setia
Chairman Non – Executive Director 1 1
Shri R.L. Gaggar Independent and
Non – Executive Director 1 1
Dr. Abid Hussain Independent and
Non – Executive Director 1 1
Dr. Y.K. Alagh Independent and
Non – Executive Director 1 -
No. of meetings
Independent and
S. Nature of Complaints No. of No. of
No Complaints Complaints
received resolved
I Dividend related issues 6 6
II Duplicate shares related issues 1 1
III Shares transfer / transmission 6 6
related issues
IV Others 5 5
Total 18 18
SHREE CEMENT LIMITED 93
TRUST DOES THE IMPOSSIBLE
TRUST DOES THE IMPOSSIBLE
SHREE CEMENT LIMITED 95
Registered Office:
Bangur Nagar, Post Box No. 33,
Beawar - 305 901, District Ajmer, Rajasthan
Phone: (91)1462-228101-06
Fax: (91)1462-228117/228119
Toll free no.: 1800 180 6003 /6004
Email: [email protected]
Website: www.shreecementltd.com
Corporate Office:
21, Strand Road, Kolkata - 700 001
Phone: (91)33-22390601-05
Fax: (91)33-22434226
Email: [email protected]
Plants Location:
Unit I & II: Bangur Nagar, Beawar (Rajasthan)
Unit III, IV, V, VI & VII: Bangur City, Ras, Distt. Pali (Rajasthan)
Khushkhera Grinding Unit(s):
Plot No SP 3-II, A-1, RIICO Industrial Area,
Khushkhera (Bhiwadi), District Alwar, Rajasthan - 301707
Phone: (91) 1493-250521 / 22/ 23/ 24
Fax: (91) 1493-517227
Address for correspondence:
Shree Cement Limited,
Bangur Nagar, Post Box No. 33,
Beawar - 305 901, District - Ajmer, Rajasthan
Phone: (91)1462-228101-06
Fax: (91)1462-228117/228119
Toll free no.: 1800 180 6003 /6004
Email: [email protected]
Shareholders’ Enquiries:
Shri S.S. Khandelwal, Company Secretary
Tele:(91) 1462-228101 to 06
Toll Free: 1800 180 6003-04
Fax: (91) 1462-228117/19
E-mail: [email protected]
Exclusive e-mail ID for shareholders
queries: [email protected]
Clarifications on financial statement:
Shri Ashok Bhandari, Chief Finance Officer
Phone: (91)33-22390601-05
Fax: (91)33-22434226
E-mail: [email protected]
Annual General Meeting
Date of AGM Time Venue
24.07.2009 11.30 AM Registered Office at
Bangur Nagar,
Post Box No. 33,
Beawar - 305 901,
Distt. Ajmer, Rajasthan
(a) The details of Annual General Meetings held in last three years
are as under:
Year ended Date of AGM Time Venue
31.3.2006 31.7.2006 4.00 PM Bangur Nagar,
Beawar
(Rajasthan)
31.3.2007 14.08.2007 1.30 PM - do-
31.3.2008 18.07.2008 11.30 AM - do-
(b) Special Resolution passed in previous three AGMs
Date of AGM Special Resolution Passed by Members
31.7.2006 1. Revision in remuneration of
Shri B.G. Bangur, Executive Chairman
2. Revision in remuneration of
Shri H.M. Bangur, Managing Director
3. Revision in remuneration of
Shri M.K. Singhi, Executive Director
4. Revision in remuneration of
Shri Prashant Bangur,
Sr. Executive of the Company
14.8.2007 1. Approval of Appointment of
Shri B. G. Bangur as Executive
Chairman and his terms of
appointment and remuneration
2. Approval of Appointment of
Shri H. M. Bangur as Managing
Director and his terms of appointment
and remuneration
18.7.2008 1. Approval of Appointment of
Shri M. K. Singhi as Executive
Director and his terms of appointment
and remuneration
Annexure to Corporate Governance Report
Shareholder's InformationRisk Management: Risk evaluation and management is an
ongoing process within the Organization. During the period
under review, a detailed exercise on Risk Management was
carried out covering the entire gamut of operation of the
Company and the Board was informed about the same.
Details of compliance with mandatory requirements and
adoption of non-mandatory requirements: The Company has
complied with all mandatory requirements of Clause 49 of the
Listing Agreement and non-mandatory requirements are
reviewed by the Board from time to time.
Chief Executive Officer (CEO) and Chief Finance Officer (CFO)
Certification, on financial statements is issued pursuant to the
provisions of Clause 49 of the Listing Agreement and is annexed to the
Corporate Governance report and forms part of the Annual Report.
The Code of conduct applicable to all Directors and employees of the
Company has been posted on the website of the Company. For the year
under review, all Directors and senior management personnel of the
Company have confirmed their adherence to the provisions of the said
Code.
As per the amended SEBI (Prevention of Insider Trading) Regulations
1992, the Company is required to have a Compliance Officer who is
responsible for setting forth policies, procedures, monitoring
adherence to the rules for the prevention of price sensitive information,
pre-clearance of trade, monitoring of trades and implementation of the
Code of Conduct for trading in Company’s securities under the overall
supervision of the Board. The Company has adopted a Code for
prevention of Insider Trading. The Board has appointed Shri S.S.
Khandelwal Company Secretary as Compliance Officer in respect of
compliance of the Code. All the Directors on the Board as well as senior
level employees at all locations of the Company are governed by this Code.
The Annual Report is sent to each Shareholder. Quarterly and half yearly
results are published in all editions of the Economic Times, Business
Standard, Rajasthan Patrika, Danik Bhaskar and Nafa Nuksan. The
results are also provided to Stock Exchange(s) where the Company's
shares are listed. Besides that, full version of annual report, quarterly
results, shareholding pattern statement are filed on Electronic Data
Information Filing and Retrieval (EDIFAR) website maintained by
National Informatics Centre (NIC) as per requirements of Clause 51 of
n
n
CEO/CFO Certification
Code of Conduct
Trading in the Company’s shares by Directors and Designated
Employees
Means of Communication
Listing Agreement. The official news releases are given directly to the
media.
The quarterly / half yearly and the annual results of the Company are
displayed on the Company’s website www.shreecementltd.com
immediately after announcement thereof. A feedback form is being
given at the end of this report. Members are requested to send their
response about this Annual Report in the feedback form. This would
encourage us to improve our Annual Reporting.
The required information under clause 49 of the Listing Agreement
under this heading is given in the “Shareholder's Information” given
separately in the annexure to this Corporate Governance Report.
General Shareholders Information
TRUST DOES THE IMPOSSIBLE
TRUST DOES THE IMPOSSIBLE
would be paid to those shareholders who hold shares in the Company
on 5th May 2009. Company’s Board has also recommended a final
dividend of Rs.5/- per share for financial year 2008-2009 which would
be paid to those shareholders who hold shares in the Company on
24.07.2009 In respect of shares held in electronic form, the dividend
will be paid on the basis of beneficial ownership as per details furnished
by the depositories for this purpose.
(c) No special resolution was put through postal ballot last year.
(d) No special resolutions are proposed to be put through postal ballot this year.
(For the Financial Year 1st April, 2009 to 31st March, 2010)
Financial Calendar
Un-audited / Limited Review Results:
First Quarter ended
30.6.2009 By end of July, 2009
Second Quarter/Half year
ended 30.9.2009 By end of October, 2009
Third quarter/nine months
ended 31.12.2009 By end of January, 2010
Last Quarter/Yearly
Results-ended 31.3.2010 By end of April, 2010
Audited Results:
Year ended 31.3.2010 By end of May, 2010
Corporate Identification Number (CIN): L26943RJ1979PLC001935
Company’s securities are also available for trading in Futures and
Options (F&O) segment of National Stock Exchange of India Limited.
Listing on Stock Exchanges:
Name of Stock Exchange Stock Code
Bombay Stock Exchange Limited 500387
National Stock Exchange of India Limited SHREECEM EQ
Name of the Depositories
(for demat only) Scrip Code
National Securities Depository Ltd. INE070A01015
Central Depository Services (India) Ltd. INE070A01015
Market Price data
Month BSE NSE
High Low Volume (No. High Low Volume (No.
(Rs.) (Rs.) of Shares) (Rs.) (Rs.) of Shares)
April 2008 1,148.00 981.00 6,116 1,165.00 935.50 44,309
May 2008 1,040.00 781.20 23,783 1,049.50 770.40 1,08,361
June 2008 814.00 577.25 1,40,700 800.00 581.15 2,90,911
July 2008 625.00 491.00 39,109 625.00 490.00 4,82,412
August 2008 664.90 557.05 5,07,857 699.00 551.00 6,28,373
September 2008 610.00 472.05 1,25,846 620.00 468.00 1,04,782
October 2008 535.00 330.00 33,482 590.00 338.00 2,11,899
November 2008 467.70 354.00 19,751 461.95 350.25 53,405
December 2008 509.00 330.00 1,34,369 515.00 320.00 2,32,742
January 2009 539.00 452.15 2,54,876 544.80 450.05 3,45,063
February 2009 588.90 460.70 19,381 608.00 485.50 1,13,710
March 2009 719.70 555.00 4,81,572 716.00 534.00 4,96,248
TOTAL 17,86,842 31,12,215
Date of Book Closure
20.07.2009 to 24.07.2009 (both days inclusive)
Dividend payment date
Company’s Board, vide its meeting dated 28th April, 2009 has declared
interim dividend @ Rs. 5/- per share for financial year 2008-2009 which
SHREE CEMENT LIMITED 97
The performance in comparison to broad based indices:
Indices BSE (Sensex) SCL Quote at BSE NSE
01.4.2008 (open) 15771.72 1148.00 4735.65 1060.00
31.3.2009 (close) 9708.50 709.15 3020.95 710.50
Increase/ Decrease -38.44% -38.23% -36.21% -32.97%
(Nifty) SCL Quote at NSE
Apr-
08
May-
08
Jun-0
8
Ju
l-08
Au
g-08
Sep
-08
Oct
-08
Nov
-08
Dec
-08
Jan-0
9
Feb
-09
Mar
-09
8800
11350
13900
16450
19000
21550
24100
26650
Sensex Shree's Stock Price
Movement of Shree's stock vis-a-vis Sensex
(Average of monthly high-low)
BSE
Sen
sex
350
500
650
800
950
1100Sh
ree's Sto
ck Price
on B
SE
2800
3780
4760
5740
6720
7700
9
l08
Apr-
08
May-0
8
Jun-0
8
Ju
-
Aug-
08
Sep
-08
Oct-08
Nov-
08
Dec
-08
Jan-0
Feb
-09
Mar-
09
400
540
680
820
960
1100
Nifty
Lev
el
Shree's Sto
ck Price o
n N
SE
Movement of Shree's stock vis-a-vis Nifty
(Average of monthly high-low)
Nifty Shree's Stock Price
Registrar and Share Transfer Agent
M/s. Karvy Computershare Private Limited,
Unit: SHREE CEMENT LIMITED
17-24, Vithalrao Nagar, Madhapur, Hyderabad – 500 081
Contact person: Mr. K. S. Reddy, Asstt. General Manager
Phone No.: (91) 40 -23420816-824, -23440627 (Direct Line)
Fax No. : (91) 40 -23420814
E-mail: [email protected], [email protected]
Share Transfer System
Transfer of shares in dematerialized form is done through the Depository
Participant without any involvement of the Company. As regards
transfer of share in physical form, the transfer document can be lodged
with Karvy Computershare Pvt. Ltd., Registrar and Share Transfer Agent
or with the Company.
The physical shares along with transfer instruments, as and when
received, are duly processed and shares in respect of valid transfer
instruments are transferred in the name of transferees complying with
the rules in force. The shares are transferred after obtaining approval
from Share Transfer Committee, which meets at an interval of every 15-
20 days. Duly transferred share certificates are returned within a period
of 15-20 days from the date of receipt, subject to the documents being
valid and complete in all respects.
TRUST DOES THE IMPOSSIBLE
TRUST DOES THE IMPOSSIBLE
SHREE CEMENT LIMITED 99
Date: 28th April, 2009
Place: Kolkata Chief Finance Officer Managing Director
Ashok Bhandari H.M. Bangur
The Board of Directors,
Pursuant to Clause 49 of the Listing Agreement, this is to certify that:
1. We have reviewed financial statements and the cash flow statement for the year ended 31st March, 2009 and that to the best of our
knowledge and belief :
i. these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be
misleading;
ii. these statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting
standards, applicable laws and regulations.
2. There are, to the best of our knowledge and belief, no transactions entered into by the company during the year which are
fraudulent, illegal or violative of the company’s code of conduct.
3. We accept responsibility for establishing and maintaining internal controls for financial reporting. We have evaluated the effectiveness of
internal control systems of the Company pertaining to financial reporting and have disclosed to the auditors and the Audit Committee,
deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps taken or proposed to be taken
for rectifying these deficiencies.
4. We have indicated to the auditors and the Audit committee:
i. significant changes in internal control over financial reporting during the year;
ii. significant changes in accounting policies made during the year and that the same have been disclosed in the notes to the financial
statements; and
iii. instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee
having a significant role in the company’s internal control system over financial reporting.
SHREE CEMENT LIMITED
CEO /CFO Certificate(Pursuant to Clause 49 of the Listing Agreement)
Dematerialization of Shares & Liquidity
The trading in the Company's Equity Shares is permitted only in Demat form w.e.f. 29th November, 1999. The Company has entered into an agreement
with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for maintaining and facilitating transactions
in the Company’s shares in electronic mode.
In view of the advantage offered by the Depository System, Members are requested to avail the facility of dematerialization. As on 31st March, 2009,
25.99% of the Company's share capital had been dematerialized.
Shareholders holding shares in demat form are requested to give all instructions regarding the change of address, nomination, power of attorney and
bank mandate directly to their Depository Participants.
The shares are actively traded at BSE and NSE and have adequate liquidity.
There were no outstanding GDRs / ADRs / Warrants or any other Convertible Instruments as on 31st March, 2009.
As provided under Clause 49 of the Listing Agreement with the Stock Exchanges, the Board Members and the senior management executives/
personnel have confirmed compliance with the Code of Conduct for the year ended 31st March, 2009.
Declaration on Code of Conduct
for SHREE CEMENT LIMITED
Place: Kolkata
Date: 28th April, 2009
Managing Director
H.M. Bangur
Range Total no. of
Shareholders Shares held
From - To
Up to 50 9107 61.13% 211523 0.61%
51–100 2839 19.06% 265395 0.76%
101–200 1203 8.07% 205412 0.59%
201–500 1032 6.93% 387109 1.11%
501–1000 376 2.52% 299963 0.86%
1001–5000 221 1.48% 451571 1.30%
5001–10000 24 0.16% 163216 0.47%
10001 and above 96 0.64% 32853036 94.30%
TOTAL 14898 100.00% 34837225 100.00%
% Total no. of %
Distribution of Shareholding (As on 31.3.2009) Shareholding Pattern (As on 31.3.2009)
Description No. of Shares held %
Promoters 22786812 65.41%
Mutual Fund & UTI 3285446 9.43%
Financial Institutions, Banks,
Insurance Companies etc. 223322 0.64%
FIIs 1156431 3.32%
NRIs/OCBs/Non Domestic
Companies 3825288 10.98%
Private Corporate Bodies 1616475 4.64%
Indian Public 1934879 5.55%
Others- Directors/ relatives
(non- promoters) 8572 0.02%
Total 34837225 100.00%
TRUST DOES THE IMPOSSIBLE
TRUST DOES THE IMPOSSIBLE
PHILOSOPHY
FIDUCIARY DUTIES
DUTY TO EXERCISE POWER FOR PROPER PURPOSES
CONFLICT OF INTEREST
SECRET PROFITS
Shree Cement Ltd is a professionally managed company. The company
always believes in complete transparency and discharge of the fiduciary
responsibilities which has been assumed by Directors as well as by the
Senior Management Executives and/or Staff. Therefore, in order to
ensure the continuity thereof though, not written but otherwise
ingrained, the Board of Directors has approved of the following Code of
Conduct for all Directors as well as for the Senior Management
Executive and/or personnel and other employees.
All the Directors as well as Senior Management Executive and/or
Personnel owe to the Company as well as to the shareholders:
i) "fiduciary duty”
ii) “duty of skill and care”
iii) “Social responsibility”
With the above objects in mind the following code of conduct has been
evolved and it is expected that all Directors as well as Senior
Management Executives and/or personnel will adhere to it.
All Directors as well as Senior Management Executives and/or personnel
while dealing on behalf of the company will exercise the power
conferred upon him / them and fulfil his / their duties honestly and in
the best interest of the company.
The Board from time to time shall determine the powers to be exercised
by the Directors as well as the Senior Management Executives and/or
Personnel and all such powers shall be exercised reasonably.
None of the Directors and/or Senior Management Executives and/or
personnel will put himself in a position where there is potential conflict
of interest between personal interest and his duty to the company. None
of the Directors and/or Senior Management Executive and/or personnel
will exploit an opportunity arising while associated with the Company
for his personal gain either directly or indirectly.
The Director as well as Senior Management Executives and/or personnel
while discharging their duties in a fiduciary capacity is precluded from
making any personal profit from an opportunity which may arise being
a Director and / or Senior Management Executive of the Company and
should always ensure that he is acting for and on behalf and for the
good of the Company.
DUTY OF SKILL AND CARE
ATTENTION TO BUSINESS
SECRECY AND CONFIDENTIALITY
INTERNAL TRADING
RISK AND PROPER PROCESS
Since all the Directors as well as Senior Management Executives and / or
personnel are acting in a fiduciary capacity and for the benefit of the
company, being advocates of the business of the Company, none of
them will do anything which is in conflict with the interest of the
company.
All Directors as well as Senior Management Executives and/ or
personnel will give proper attention to the business of the company.
None of the Directors as well as Senior Management Executives and/or
personnel while associated or working for the company will be entitled
to disclose either directly or indirectly or make use of the confidential
information which may come in their possession while acting on behalf
of the company and shall not divulge the financial status and position
of the company to any person or persons.
None of the Directors as well as Senior Management Executives and/or
personnel will directly or indirectly in the name of his family members
and/or associates will indulge in any internal trading of the company’s
shares and stocks.
The Senior Management personnel and/or employees are expected to
keep the Directors fully informed about the effect of the policies
adopted by the company from time to time and also regarding the risk
connected with such policies.
Senior Management personnel and/or staff who have been entrusted
with specific duties for ensuring compliance of statutory requirements
including the rules and regulations shall forthwith comply with the same
and keep the Board of Directors fully informed about such compliance
or non-compliance.
Senior Management personnel will from time to time provide or cause
to be provided a true and faithful account of the company’s working
and effectiveness of the procedures adopted by the company from time
to time.
All Directors as well as Senior Management Executives and/or personnel
are aware that while working with the company they have a social
responsibility as well and therefore from time to time will devote such
time for the upliftment of the downtrodden, poor and needy persons in
the locality.
Code of ConductOn Corporate Governance
To the Members of Shree Cement Limited
1. We have audited the attached Balance Sheet of Shree Cement Limited as at 31st March, 2009 and also the Profit and Loss Account and the Cash Flow
Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A)
of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we report that:
(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our
audit.
(ii) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those
books.
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.
(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.
(v) On the basis of information & explanations given to us and representations received from the Directors of the Company, we report that none
of the Directors of the Company, is prima facie, disqualified from being appointed as Director of the Company in terms of Clause (g) of sub-
section (1) of section 274 of the Companies Act, 1956.
(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2009;
(b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
for B. R. MAHESWARI & CO.
Chartered Accountants
Kolkata
28th April, 2009
Partner
Membership No. 81075
(SUDHIR MAHESHWARI)
SHREE CEMENT LIMITED 101
Auditors'Report
1) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of
fixed assets.
(b) The fixed assets were physically verified by the
management. The discrepancies noticed were not
significant and have been properly dealt with in the
accounts.
(c) During the year, the Company has not disposed off any
major part of fixed assets that would affect the Going
Concern status of the Company.
2) (a) The inventory, except material in transit and material lying
with contractors, has been physically verified during the
year by the management. In our opinion, the frequency of
verification is reasonable.
(b) The procedures of physical verification of inventory
followed by the management are reasonable and adequate
in relation to the size of the company and the nature of its
business.
(c) The company is maintaining proper records of inventory.
The discrepancies noticed on verification between the
physical stocks and the book records were not material and
such discrepancies have been properly dealt with in the
books of accounts.
3) (a) The Company has neither granted nor taken any
loans, secured or unsecured, from Companies, firms and
other parties, mentioned in the register maintained under
section 301 of the Companies Act, 1956.
(b) Since, the company has neither granted nor taken any loans
as referred to in para 3(a) above, provisions of clause (iii)(b)
to (iii)(g) of the Order are not applicable to the Company.
4) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems
commensurate with the size of the Company and nature of its
business with regard to purchases of inventory and fixed assets
and with regard to the sale of goods. During the course of our
audit, we have not observed any continuing failure to correct
major weaknesses in the internal control system.
5) (a) According to the information and explanations given to us,
we are of the opinion that the particulars of contracts or
arrangement referred to in section 301 of the Companies
Act, 1956 have been entered in the register required to be
maintained under that section.
(b) In our opinion and according to the information and
explanations given to us, the transactions made in
pursuance of contracts or arrangements entered in the
register maintained under section 301 of the Companies
Act, 1956 and exceeding the value of rupees five lacs in
respect of any party during the year have been made at
prices which are prima facie reasonable having regard to
prevailing market prices at the relevant time.
6) The Company has not accepted any deposit from the public during
the year.
7) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8) We have broadly reviewed the accounts and records maintained by
the Company pursuant to the rules made by the Central
Government for maintenance of cost records under section
209(1)(d) of the Companies Act, 1956, and are of the opinion that
prima facie, the prescribed accounts and records have been made
and maintained. We have, however, not made a detailed
examination of record with a view to determine whether they are
accurate or complete.
9) (a) According to the information and explanations given to us,
the company has generally been regular in depositing with
appropriate authorities undisputed statutory dues including
provident fund, investor education protection fund, income
tax, sales tax, wealth tax, service tax, custom duty, excise
duty, cess and other material statutory dues applicable to it.
(b) According to the information and explanations given to us,
no undisputed amounts payable in respect of aforesaid dues
were outstanding as at 31.03.2009 for a period of more
than six months from the date they become payable.
(c) According to the information and explanations given to us,
the details of disputed amount of Income Tax, Sales Tax,
Excise Duty, Entry Tax, Service Tax and Cess not deposited by
the Company are as follows:
Annexure Referred to in Auditors' Report of even date
10) The Company does not have any accumulated losses at the end of
the financial year and the company has not incurred cash losses in
the financial year covered by our audit and in the immediately
preceding financial year.
11) Based on the information and explanations given to us, we are of
the opinion that the Company has not defaulted in repayment of
dues to the financial institutions, banks or debenture holders.
12) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other
securities.
13) In our opinion and according to the information and explanations
given to us, the Company is not a chit fund company or nidhi /
mutual benefit fund / society. Therefore, the provision of clause
4(xiii) of the order is not applicable to the Company.
14) According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures
and other investments.
15) As informed to us, the company has not given any guarantees for
loans taken by others from bank or financial institutions.
16) In our opinion, the term loans have been applied for the purpose
for which they were raised.
17) According to information and explanations given to us and on an
overall examination of the balance sheet of the company, we are of
the opinion that the funds raised on short – term basis have not
been used for long-term investment.
Name of Statute Name of Amount
the dues (Rs. in Lac) amt. related is pending
(assessment years)
Rajasthan Tax on Entry of Goods into
Local Area Act, 1999
UP Tax on Entry of Goods 50.75 2003-04 JETC Appeals,
Act, 2000 Entry Tax Ghaziabad
1341.82 2004-05 to 2008-09 High Court
Central Excise Act Cenvat credit 90.00 1994-95 to 2005-06 Commissioner (Appeals)
Cenvat Credit 17.00 1996-97 to 1998-99 Tribunal
Cenvat Credit 1.00 2006-07 to 2007-08 Tribunal
Finance Act, 1994 Service Tax 4.00 2006-07 Commissioner (Appeals)
Service Tax 152.00 2004-05 to 2005-06 Tribunal
The Rajasthan Finance Act, 2008 Environment & 531.04 2007-08 to 2008-09 High Court
Health Cess
Period to which the Forum where dispute
Entry Tax 3095.99 2005-06 to 2008-09 High Court
18) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under
section 301 of the Act and therefore, the provisions of clause 4
(xviii) of the Order are not applicable to the Company.
19) The Company has not issued any secured debentures during the
year and accordingly, the provisions of clause 4 (xix) of the Order
are not applicable to the Company.
20) During the year under audit, the Company has not raised money
by public issue and accordingly, the provisions of clause 4 (xx) of
the Order are not applicable to the Company.
21) According to the information and explanations given to us, no
material fraud on or by the Company has been noticed or reported
during the year.
for B. R. MAHESWARI & CO,
Chartered Accountants
Place: Kolkata
Date: 28th April, 2009
Partner
Membership No. 81075
(SUDHIR MAHESHWARI)
SHREE CEMENT LIMITED 103
TRUST DOES THE IMPOSSIBLE
TRUST DOES THE IMPOSSIBLE
Sudhir Maheshwari B. G. Bangur H. M. Bangur Shreekant Somany Dr. Abid Hussain O.P. Setia
Partner Executive Chairman Managing Director Director Director Director
Membership No. 81075
PLACE: KOLKATA Dr. Y.K. Alagh A. Ghosh M.K. Singhi Ashok Bhandari S.S. KhandelwalDATE: 28th April, 2009 Director Director Executive Director Chief Finance Officer Company Secretary
As per our report of even dateFor B. R. Maheswari & Co.Chartered Accountants
The schedules referred to above and notes on accounts form an integral part of the Balance Sheet.
As at As at
31.03.2009 31.03.2008
Schedule (Rs.in Lac) (Rs.in Lac)
SOURCES OF FUNDS
Shareholders' Funds
Share Capital 1 3,483.72 3,483.72
Reserves & Surplus 2 117,517.97 63,796.81
121,001.69 67,280.53
Loan Funds
Secured Loans 3 122,050.73 116,707.32
Unsecured Loans 4 27,564.60 16,362.50
149,615.33 133,069.82
Total 270,617.02 200,350.35
APPLICATIONS OF FUNDS
Fixed Assets 5
Gross Block 225,591.46 218,729.91
Less: Depreciation 162,905.89 142,734.05
Net Block 62,685.57 75,995.86
Capital Work-in-Progress 47,888.98 1,795.99
110,574.55 77,791.85
Investments 6 84,483.47 59,100.00
Deferred Tax Assets (Net) 7 1,038.98 1,846.10
Current Assets, Loans & Advances
Inventories 8 15,445.84 17,657.47
Sundry Debtors 9 5,831.73 4,938.68
Cash & Bank Balances 10 47,226.05 46,743.43
Other Current Assets 11 755.20 832.75
Loans & Advances 12 73,678.81 39,430.26
142,937.63 109,602.59
Less: Current Liabilities & Provisions 13
Liabilities 29,562.88 23,617.63
Provisions 38,854.73 24,372.56
68,417.61 47,990.19
Net Current Assets 74,520.02 61,612.40
Total 270,617.02 200,350.35
Significant Accounting Policies & Notes on Accounts 22
Balance Sheet as at31st March 2009
Sudhir Maheshwari B. G. Bangur H. M. Bangur Shreekant Somany Dr. Abid Hussain O.P. Setia
Partner Executive Chairman Managing Director Director Director Director
Membership No. 81075
PLACE: KOLKATA Dr. Y.K. Alagh A. Ghosh M.K. Singhi Ashok Bhandari S.S. Khandelwal
DATE: 28th April, 2009 Director Director Executive Director Chief Finance Officer Company Secretary
The schedules referred to above and notes on accounts form an integral part of the Profit & Loss Account.As per our report of even dateFor B. R. Maheswari & Co.Chartered Accountants
SHREE CEMENT LIMITED 105
Profit & Loss Account for the year Ended 31st March,2009
For the Year ended For the Year ended
Schedule 31.03.2009 (Rs. in Lac) 31.03.2008 (Rs. in Lac)
INCOME
Sales 14 309,716.69 244,032.08
Less: Excise Duty 38,214.67 33,120.28
Net Sales 271,502.02 210,911.80
Other Income 15 8,289.61 7,683.91
279,791.63 218,595.71
EXPENDITURE
Manufacturing Expenses 16 114,246.30 76,282.35
(Increase) / Decrease in Stock 17 962.74 903.18
Purchase of Finished Goods 652.47 618.56
Payment to and Provision for Employees 18 10,387.43 7,360.43
Administrative Expenses 19 4,249.02 3,529.38
Freight & Selling Expenses 20 45,927.70 35,976.93
Interest 21 7,443.18 5,329.64
183,868.84 130,000.47
PROFIT BEFORE DEPRECIATION, EXCEPTIONAL ITEMS & TAX 95,922.79 88,595.24
Depreciation & Amortisation` 20,538.70 47,875.86
Exceptional Items
Assets Constructed at Others' Premises W/off 3,093.05 3,888.46
PROFIT BEFORE TAX 72,291.04 36,830.92
Provision for Current Tax 13,475.00 10,662.07
Prior Period Tax Expense (Net) - 1,496.23
Provision for Fringe Benefit Tax [Includes excess 211.98 107.02
provision written back pertaining to earlier years Rs.Nil
(Previous Year Rs.55.96 Lac)]
Provision for Deferred Tax 807.12 (1,471.60)
PROFIT AFTER TAX 57,796.94 26,037.20
Balance Brought Forward from Previous Year 34,869.59 14,941.26
Debenture Redemption Reserve No Longer Required 202.43 151.76
PROFIT AVAILABLE FOR APPROPRIATION 92,868.96 41,130.22
Transferred to General Reserve 8,000.00 3,000.00
Interim Dividend on Equity Shares 1,741.86 -
Corporate Dividend Tax on Interim Dividend 296.03 -
Proposed Final Dividend on Equity Shares 1,741.86 2,786.98
Corporate Dividend Tax on Final Dividend 296.03 473.65
12,075.78 6,260.63
Balance Carried Over to Balance Sheet 80,793.18 34,869.59
92,868.96 41,130.22
Earning Per Equity Share of Rs. 10 each (In Rs.) - Cash 227.18 207.94
- Basic & Diluted 165.91 74.74
Significant Accounting Policies & Notes on Accounts 22
As at As at
31.03.2009 31.03.2008
(Rs.in Lac) (Rs.in Lac)
Authorised
6,00,00,000 Equity Shares of Rs.10/- each 6,000.00 6,000.00
(Previous Year 6,00,00,000)
15,00,000 Cumulative Preference Shares of Rs.100/- each 1,500.00 1,500.00
(Previous Year 15,00,000)
7,500.00 7,500.00
Issued
3,48,37,225 Equity Shares of Rs.10/- each 3,483.72 3,483.72
(Previous Year 3,48,37,225)
3,483.72 3,483.72
Subscribed and Paid-up
3,48,37,225 Equity Shares of Rs.10/- each fully paid-up 3,483.72 3,483.72
(Previous Year 3,48,37,225)
Note : Out of above Equity Shares, 2,40,021 Equity
Shares of Rs. 10/- each fully paid-up were issued for
consideration other than cash in pursuance of Scheme of
Amalgamation
3,483.72 3,483.72
Capital Reserve
As per last Balance Sheet 52.16 52.16
52.16 52.16
Capital Redemption Reserve
As per last Balance Sheet 1,500.00 1,500.00
1,500.00 1,500.00
Securities Premium Account
As per last Balance Sheet 2,652.73 2,652.73
2,652.73 2,652.73
Debenture Redemption Reserve
As per last Balance Sheet 202.43 354.19
Less: Transfer to Profit & Loss Account 202.43 151.76
- 202.43
Revaluation Reserve
As per last Balance Sheet - 4,923.44
Less: Transfer to Fixed Assets - 4,923.44
- -
General Reserve
As per last Balance Sheet 14,000.00 11,000.00
Add: Transfer from Profit & Loss Account 8,000.00 3,000.00
22,000.00 14,000.00
SCHEDULE 1 - SHARE CAPITAL
SCHEDULE 2 - RESERVES AND SURPLUS
Schedules Forming Part of theBalance Sheet
1) All Term loans [Except (a) Term Loans of Rs. Nil (Previous Year Rs. 12.41 Lac)
secured by way of hypothecation of specific assets purchased thereagainst and (b)
Loan of Rs. 24960.20 Lac (Previous Year Rs. 23715.67 Lac) from IDBI Bank secured
by way of charge on Current Assets subservient to Working Capital Lenders] from
Banks are secured by joint equitable mortgage on all the immovable assets and
by hypothecation of all the movable assets (save & except book debts) of the
Company both present and future subject to prior charge(s) created and/or to be
created in favour of the company’s bankers on inventories of stock-in-trade, stores &
spares, book debts and other current assets of the Company for working capital
facilities. The above charge(s) rank pari passu inter-se among these Banks.
2) 20-7.40% Non Convertible Debentures of Rs. 40,00,000/- each aggregating to Rs.
Nil (Previous Year Rs. 800 Lac) redeemed fully on 24th July, 2008 were secured by
joint equitable mortgage over all the immovable assets and by way of
hypothecation of all the movable assets (save & except book debts) of the Company
both present and future subject to prior charge(s) created and/or to be created in
favour of the Company’s bankers on inventories of stock-in-trade , stores & spares,
book debts and other current assets of the Company for Working Capital borrowings.
The charge ranked pari passu with the charges created / to be created in favour of
other first charge holders for their respective loans.The above Debentures were also
secured by a legal mortgage over immovable property of the Company situated at
Jamnagar (Gujarat).
3) Working Capital borrowings from banks are secured by hypothecation of inventories
of stock-in-trade, stores & spares, book debts and other current assets of the
Company on first charge basis and on whole of movable fixed assets of the company
on second charge basis. These borrowings are also secured by joint equitable
mortgage on all the immovable assets of the Company on second charge basis.
As at As at
31.03.2009 31.03.2008
(Rs.in Lac) (Rs.in Lac)
Special Reserve
As per last Balance Sheet 10,519.90 11,470.46
Less: Transfer to Fixed Assets - 950.56
10,519.90 10,519.90
Profit & Loss Account 80,793.18 34,869.59
117,517.97 63,796.81
Term Loans from Banks 105,716.94 112,573.18
Secured Redeemable Non Convertible Debentures
20 - 7.40% NCDs of Rs. 40,00,000/- each aggregating to Rs. Nil
(Previous Year Rs. 800 Lac) [Redeemed Rs. 800 Lac
(Previous Year Rs.600 Lac)] - 800.00
Working Capital Facilities from Banks 16,333.79 3,334.14
122,050.73 116,707.32
SCHEDULE 3 - SECURED LOANS
SHREE CEMENT LIMITED 107
TRUST DOES THE IMPOSSIBLE
TRUST DOES THE IMPOSSIBLE
SCH
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ount
No.
Am
ount
No.
Am
ount
OTH
ER
TH
AN
TR
AD
E (
LON
G T
ER
M)
- U
NQ
UO
TED
(A)
In P
ublic
Fin
anci
al In
stit
uti
ons
Nat
ional
Ban
k fo
r A
gri
cultura
l A
nd
Rura
l D
evel
op
men
t2
00
00
.00
--
55
70
0.0
00
48
23
.75
-5
57
00
.00
04
82
3.7
5
Tota
l (A
)-
-55700.0
00
4823.7
5-
- 55700.0
00
4823.7
5
(B)
In U
nit
s of
Mutu
al Fund
Bir
la S
un L
ife
- F
TP I
NST
L -
Seri
es A
H-G
row
th1
0.0
05
00
00
00
.00
05
00
.00
--
--
50
00
00
0.0
00
50
0.0
0
Bir
la S
un L
ife
- FT
P I
NST
L -
Seri
es A
J-G
row
th1
0.0
02
50
00
00
0.0
00
25
00
.00
--
--
25
00
00
00
.00
02
50
0.0
0
Bir
la S
un L
ife
- FT
P I
NST
L -
Seri
es A
K-G
row
th1
0.0
02
00
00
00
0.0
00
20
00
.00
--
--
20
00
00
00
.00
02
00
0.0
0
Bir
la S
un L
ife
- FT
P I
NST
L -
Seri
es B
A G
row
th1
0.0
0-
-2
50
00
00
0.0
00
25
00
.00
--
25
00
00
00
.00
02
50
0.0
0
Bir
la S
un L
ife
- G
ilt
Plu
s R
egula
r G
row
th1
0.0
05
66
95
36
.08
91
50
0.0
04
10
85
98
.47
51
25
0.0
0-
-9
77
81
34
.56
42
75
0.0
0
Bir
la S
unLi
fe I
nco
me
Plu
s G
row
th
10
.00
--
60
59
90
9.2
39
25
00
.00
--
60
59
90
9.2
39
25
00
.00
DSP
Bla
ck R
ock
Bond
Fund
- R
egula
r Pla
n G
row
th1
0.0
0-
-3
35
73
94
.66
21
00
0.0
0-
-3
35
73
94
.66
21
00
0.0
0
DSP
Bla
ck R
ock
-
FMP 1
3 M
Ser
ies
1 I
nst
itutional
G
row
th1
0.0
01
50
00
00
0.0
00
15
00
.00
--
--
15
00
00
00
.00
01
50
0.0
0
DW
S Fi
xed
Ter
m P
lan S
erie
s 5
9 I
nst
itutional
Gro
wth
10
.00
--
50
00
00
0.0
00
50
0.0
0-
-5
00
00
00
.00
05
00
.00
Fort
is I
nve
stm
ent
- FT
P S
er 1
0 P
lan E
.Inst
.Gro
wth
10
.00
10
00
00
00
.00
01
00
0.0
0-
--
-1
00
00
00
0.0
00
10
00
.00
HD
FC A
rbitra
ge
Fund
- W
hole
sale
Pla
n -
Gro
wth
1
0.0
01
93
29
27
4.1
86
20
00
.00
52
24
28
18
.58
65
80
0.0
01
93
29
27
4.1
86
20
00
.00
52
24
28
18
.58
65
80
0.0
0
HD
FC F
MP 1
8 M
onth
Jan
. 2
00
8
VII
W
hole
sale
Pla
n G
row
th1
0.0
01
00
00
00
0.0
00
10
00
.00
--
--
10
00
00
00
.00
01
00
0.0
0
HD
FC F
MP 3
70
Day
Mar
ch 2
00
8 V
II (
2)
Whole
sale
Pla
n G
row
th1
0.0
05
00
00
00
0.0
00
50
00
.00
--
--
50
00
00
00
.00
05
00
0.0
0
HD
FC F
MP 3
70
D S
epte
mb
er 2
00
8 (
IX)
(1)-
Whole
sale
Pla
n G
row
th1
0.0
0-
-3
00
00
00
0.0
00
30
00
.00
--
30
00
00
00
.00
03
00
0.0
0
HD
FC I
nco
me
Fund
-G
row
th
10
.00
--
10
60
16
40
.58
22
16
7.0
0-
-1
06
01
64
0.5
82
21
67
.00
ICIC
I Pru
den
tial
FM
P S
erie
s 4
1-S
ixte
en M
onth
Pla
n I
nst
itutional
Cum
ula
tive
10
.00
20
00
00
00
.00
02
00
0.0
0-
--
-2
00
00
00
0.0
00
20
00
.00
ICIC
I Pru
den
tial
FM
P S
erie
s 4
3-
Thir
teen
Month
Pla
n D
Ret
ail G
row
th1
0.0
01
00
00
00
0.0
00
10
00
.00
--
--
10
00
00
00
.00
01
00
0.0
0
ICIC
I Pru
den
tial
Gilt
Fund
- I
nve
stm
ent
Pla
n-
Gro
wth
10
.00
72
37
37
5.7
63
18
00
.00
40
97
58
1.4
44
12
50
.00
42
63
61
.05
11
00
.00
10
90
85
96
.15
62
95
0.0
0
ICIC
I Pru
den
tial
Inst
itutional
Inco
me
Pla
n G
row
th1
0.0
0-
-6
59
82
97
.16
62
00
0.0
0-
-6
59
82
97
.16
62
00
0.0
0
IDFC
Arb
itra
ge
Fund
-Pla
n-B
-Gro
wth
10
.00
--
41
99
91
6.0
02
50
0.0
0-
-4
19
99
16
.00
25
00
.00
ING
Fix
ed M
aturi
ty F
und
- X
XV
III-
Gro
wth
10
.00
35
00
00
00
.00
03
50
0.0
0-
-3
50
00
00
0.0
00
35
00
.00
--
JM -
Fixe
d M
aturi
ty F
und
-Ser
ies
VII
-1
5 M
onth
s Pla
n 1
-Inst
itutional
Gro
wth
Pla
n1
0.0
02
50
00
00
0.0
00
25
00
.00
--
--
25
00
00
00
.00
02
50
0.0
0
JM -
Arb
itra
ge
Ad
vanta
ge
Fund
- G
row
th P
lan
10
.00
45
28
31
84
.76
15
00
0.0
03
09
97
64
6.4
30
37
00
.00
22
87
99
44
.35
62
50
0.0
05
34
00
88
6.8
35
62
00
.00
Kota
k -
FMP 1
2 M
Ser
ies
- 6
Inst
itutional
- G
row
th1
0.0
0-
-1
00
00
00
0.0
00
10
00
.00
--
10
00
00
00
.00
01
00
0.0
0
Kota
k -
FMP 1
6 M
Ser
ies
2 I
nst
itutional
- G
row
th1
0.0
01
50
00
00
0.0
00
15
00
.00
--
--
15
00
00
00
.00
01
50
0.0
0
Pri
nci
pal
Gove
rnm
ent
Secu
rities
Fund
Inve
stm
ent
Pla
n G
row
th P
lan
10
.00
55
80
03
1.8
59
10
00
.00
--
--
55
80
03
1.8
59
10
00
.00
Rel
igar
e F
MP-1
3 m
onth
Ser
ies-
IV-I
nst
itutional
Gro
wth
10
.00
10
00
00
00
.00
01
00
0.0
0-
--
-1
00
00
00
0.0
00
10
00
.00
Rel
igar
e FM
P-3
75
day
s Se
ries
IX
Inst
itutional
Gro
wth
10
.00
--
10
00
00
00
.00
01
00
0.0
0-
-1
00
00
00
0.0
00
10
00
.00
Rel
iance
Fix
ed H
ori
zon F
und
IV
- A
nnual
Pla
n S
erie
s 1
- I
nst
itutional
Gro
wth
10
.00
50
00
00
00
.00
05
00
0.0
0-
-5
00
00
00
0.0
00
50
00
.00
-
-
Val
ue
SHREE CEMENT LIMITED 109
SCHEDULE 5 - FIXED ASSETS (Rs. In Lac)
Particulars GROSS BLOCK DEPRECIATION/AMORTISATION NET BLOCK
As At Additions/ Deductions/ As At Up to Provisions/ Deductions/ Upto As At As At31.03.2008 Adjustments Adjustments 31.03.2009 31.03.2008 Adjustments Adjustments 31.03.2009 31.03.2009 31.03.2008
During the During the During the During theYear Year Year Year
Tangible Assets :
Free Hold Land 1053.97 959.36 - 2013.33 - - - - 2013.33 1053.97
Lease Hold Land 832.07 1.08 - 833.15 - - - - 833.15 832.07
Land & Site
Development 528.07 3.28 - 531.35 - - - - 531.35 528.07
Buildings 9843.44 369.86 10.37 10202.93 2887.22 617.96 3.23 3,501.95 6700.98 6956.22
Plant & Machinery 200475.33 5043.00 450.27 205068.06 136214.26 18746.01 300.05 154,660.22 50407.84 64261.07
Railway Siding 1227.45 - - 1227.45 1024.50 31.11 - 1,055.61 171.84 202.95
Furniture,Fixture &
Office Equipments 2871.79 466.63 15.88 3322.54 1855.74 407.38 9.45 2,253.67 1068.87 1016.05
Vehicles 1890.89 292.27 161.14 2022.02 752.33 421.43 101.57 1,072.20 949.82 1138.56
Sub Total 218723.01 7135.48 637.66 225220.83 142734.05 20223.89 (a) 414.30 162543.65 62677.18 75988.96
Intangible Assets:
"Clean Develo-
pment Mechan-
ism (Internally
Generated) " 6.90 8.39 6.90 8.39 (b) - - - - 8.39 6.90
Computer Software - 362.24 - 362.24 - 362.24 - 362.24 - -
Sub Total 6.90 370.63 6.90 370.63 - 362.24 - 362.24 8.39 6.90
Total (A) 218729.91 7506.11 644.56 225591.46 142734.05 20586.13 414.30 162905.89 62685.57 75995.86
Previous Year 165734.06 75875.81 22879.96 218729.91 110915.52 48756.20 16937.66 142734.05 75995.86 54818.54
Capital Work
In Progress (B) 47888.98 1795.99
Grand Total (A+B) 110574.55 77791.85
(a) Depreciation for the year includes Rs. 47.43 lac (Previous Year Rs. 880.34 lac) on assets during construction period .
(b) Expenses incurred on Clean Development Mechanism to be amortised against sale proceeds.
SCHEDULE 4 - UNSECURED LOANS
As at As at
31.03.2009 31.03.2008
(Rs.in Lac) (Rs.in Lac)
Security Deposits 6,184.92 6,057.39
Deferred Sales Tax 6,379.68 5,305.11
From Banks 15,000.00 5,000.00
27,564.60 16,362.50
Part
icula
rsFa
ce V
alue
As
at
Ad
ditio
ns
duri
ng
Sold
/ D
educt
ions
As
at
(R
s. P
er U
nit)
3
1.0
3.2
008
th
e ye
ar
d
uri
ng t
he
year
31.0
3.2
009
No.
Am
ount
No.
Am
ount
No.
Am
ount
No.
Am
ount
Rel
iance
Fix
ed H
ori
zon F
und
IV
-
Seri
es 8
- I
nst
itutional
Gro
wth
10
.00
25
00
00
00
.00
02
50
0.0
0-
--
-2
50
00
00
0.0
00
25
00
.00
Rel
iance
Fix
ed H
ori
zon F
und
VII
- S
erie
s 1
- I
nst
itutional
Gro
wth
10
.00
25
00
00
00
.00
02
50
0.0
0-
--
-2
50
00
00
0.0
00
25
00
.00
Rel
iance
Fix
ed H
ori
zon F
und
-IX
Ser
ies
6 I
nst
itutional
Gro
wth
Pla
n1
0.0
0-
-5
00
00
00
.00
05
00
.00
--
50
00
00
0.0
00
50
0.0
0
Rel
iance
Gilt
Secu
rities
Long t
erm
Fund
Gro
wth
Pla
n1
0.0
02
11
73
73
.04
63
00
.00
--
21
17
37
3.0
46
30
0.0
0-
-
Rel
iance
Gilt
Secu
rities
Fund
Inst
itutional
Gro
wth
Pla
n1
0.0
0-
-2
92
72
25
.88
92
92
.72
--
29
27
22
5.8
89
29
2.7
2
SBI
Arb
itra
ge
Op
port
unitie
s Fu
nd
-Gro
wth
1
0.0
0-
-5
78
77
31
8.5
34
70
00
.00
--
57
87
73
18
.53
47
00
0.0
0
Sund
aram
BN
P P
arib
as F
ixed
Ter
m P
lan D
inst
.-G
row
th1
0.0
01
00
00
00
0.0
00
10
00
.00
--
--
10
00
00
00
.00
01
00
0.0
0
Sund
aram
BN
P P
arib
as F
ixed
Ter
m P
lan E
inst
.-G
row
th1
0.0
01
50
00
00
0.0
00
15
00
.00
--
--
15
00
00
00
.00
01
50
0.0
0
Tata
Fix
ed I
nve
stm
ent
Pla
n-2
Sch
eme-
A I
nst
itutional
Pla
n-G
row
th1
0.0
0-
-1
00
00
00
0.0
00
10
00
.00
--
10
00
00
00
.00
01
00
0.0
0
Tem
ple
ton F
ixed
Hori
zon F
und
Ser
ies
VII
-Pla
n A
- In
stitutional
-G
row
th1
0.0
01
50
00
00
0.0
00
15
00
.00
--
--
15
00
00
00
.00
01
50
0.0
0
Tem
ple
ton I
nd
ia G
ove
rmen
t Se
curi
ties
Fund
-Com
posi
te P
lan-G
row
th1
0.0
05
62
17
24
.26
31
50
0.0
0-
--
-5
62
17
24
.26
31
50
0.0
0
UTI
-Sp
read
Fund
Gro
wth
Pla
n1
0.0
06
26
51
42
5.4
24
70
00
.00
--
26
92
70
81
.46
33
00
0.0
03
57
24
34
3.9
61
40
00
.00
Tota
l (B
)543489925.3
91
59100.0
0278068347.0
09
36959.7
2156680034.1
02
16400.0
0664878238.2
98
79659.7
2
SU
B T
OTA
L (
A+
B)
543489925.3
91
59100.0
0278124047.0
09
41783.4
7156680034.1
02
16400.0
0664933938.2
98
84483.4
7
OTH
ER
TH
AN
TR
AD
E (
CU
RR
EN
T)
- U
NQ
UO
TED
In U
nit
s of
Mutu
al Fu
nd
Bhar
ti A
XA
Liq
uid
Fund
-
Inst
itutional
Gro
wth
Pla
n1
0.0
0-
-1
99
20
4.9
13
20
00
.00
19
92
04
.91
32
00
0.0
0-
-
Rel
iance
Liq
uid
ity
Fund
10
.00
--
55
15
64
01
.51
65
51
7.3
55
51
56
40
1.5
16
55
17
.35
--
Rel
igar
e- A
rbitra
geF
und
-Gro
wth
10
.00
--
13
74
80
98
.18
01
50
0.0
01
37
48
09
8.1
80
15
00
.00
--
SU
B T
OTA
L
- -
69103704.6
09
9017.3
569103704.6
09
9017.3
5-
-
GR
AN
D T
OTA
L543489925.3
91
59100.0
0347227751.6
18
50800.8
2225783738.7
11
25417.3
5664933938.2
98
84483.4
7
(Rs.
In lac
)A
GG
REG
ATE B
OO
K V
ALU
E O
F :
As
at
31.0
3.2
009
As
at
31.0
3.2
008
Quote
d I
nve
stm
ent
--
Unq
uote
d I
nve
stm
ent
(at
cost
)
- In
Pub
lic
Finan
cial
Inst
ituta
tions
48
23
.75
- In
Units
of
Mutu
al F
und
s (#
)7
96
59
.72
84
48
3.4
75
91
00
.00
59
10
0.0
0
84483.4
759100.0
0
(#)
Net
Ass
et V
alue
of
Inve
stm
ent
in U
nits
of
Mutu
al F
und
s as
on 3
1st
Mar
ch,
20
09
sta
nd
s at
Rs.
85
28
9.6
5 lac
.
(Rs.
In L
ac)
As at As at
31.03.2009 31.03.2008
(Rs.in Lac) (Rs.in Lac)
Deferred Tax Assets
Arising on Account of :
- Long-term Capital Losses - 22.94
- Expenses allowed for tax purpose when paid 2,612.92 1,432.23
Less : Deferred Tax Liabilities
Arising on account of :
- Depreciation 972.11 (396.07)
- Others 601.83 5.14
1,038.98 1,846.10
(As taken, valued and certified by the Management)
Raw Materials` 701.64 719.94
Fuels 1,198.65 3,921.42
Stores, Spares, and Packing Materials 10,583.99 8,578.98
Materials-in-Transit 100.96 468.87
Goods-in-Process 1,232.61 2,222.76
Finished Goods 1,627.99 1,745.50
15,445.84 17,657.47
(Unsecured, Considered Good)
Over Six months 74.48 118.16
Others 5,757.25 4,820.52
5,831.73 4,938.68
Cash Balances on Hand 59.11 90.06
Fixed Deposits with Scheduled Banks 45,707.56
(Includes, Margin Money Pledged with Banks
Rs. 49.56 Lac )
Less: Overdrafts (3,652.48) 42,055.08 41,696.20
Balances with Scheduled Banks
- In Current Accounts 5,056.04 4,908.55
- In Unpaid Dividend Account 50.11 43.02
Balance with Non Scheduled Bank (Refer Note 9) 5.71 5.60
47,226.05 46,743.43
SCHEDULE 7 - DEFERRED TAX ASSETS
SCHEDULE 8 - INVENTORIES
SCHEDULE 9 - SUNDRY DEBTORS
SCHEDULE 10 - CASH AND BANK BALANCES
SHREE CEMENT LIMITED 111
TRUST DOES THE IMPOSSIBLE
TRUST DOES THE IMPOSSIBLE
SHREE CEMENT LIMITED 113
Schedules Forming Part of theProfit & Loss Account
For the Year
31.03.2009 31.03.2008
(Rs.in Lac) (Rs.in Lac)
Cement and Clinker Sales 301,096.77 243,332.29
Add:Captive Consumption of Cement 556.73 699.79
301,653.50 244,032.08
Power Sales 8,063.19 -
Gross Sales 309,716.69 244,032.08
(A) Other Operating Income
CERs Sale Receipt (Net of Expenses) 1,783.76 1,602.33
Interest Received on Income Tax & Sales Tax Refund 101.44 275.97
Provision No Longer Required (Net) 652.99 140.46
Profit /(Loss) on Sale of Fixed Assets 16.99 11.63
Total (A) 2,555.18 2,030.39
(B) Investment and Miscellaneous Income
Profit on Sale of Investments (Other than Trade)- Long term 1,349.52 411.35
- Current (Net) 70.44 2.15
Interest on FDR [Tax deducted at source
Rs. 993.75 Lac (Previous Year Rs.1467.86 Lac)] 4,273.26 5,024.19
Dividend from Current Investments (Other than Trade) 1.33 155.84
Miscellaneous 39.88 59.99
Total (B) 5,734.43 5,653.52
Total (A+B) 8,289.61 7,683.91
Raw Materials Consumed 24,613.31 21,098.97
Freight on Inter unit Clinker transfer 8,065.61 3,491.39
Stores, Spares & Packing Materials Consumed 16,902.52 12,643.60
Power, Fuel & Water 60,581.11 36,723.12
Mines Reclamation Expenses 562.50 -
Repair & Maintenance:
Plant & Machinery 3,081.06 2,002.78
Buildings 353.91 230.50
Others 86.28 91.99
114,246.30 76,282.35
Closing Stock
Goods-in-Process 1,232.61 2,222.76
Finished Goods 1,627.99 1,745.50
2,860.60 3,968.26
ended For the Year ended
SCHEDULE 14 - SALES
SCHEDULE 15 - OTHER INCOME
SCHEDULE 16 - MANUFACTURING EXPENSES
SCHEDULE 17 - (INCREASE) / DECREASE IN STOCK
As at As at
31.03.2009 31.03.2008
(Rs.in Lac) (Rs.in Lac)
Interest Accrued on Deposits 755.20 832.75
755.20 832.75
(Unsecured, Considered Good)
Advances Recoverable in Cash or in Kind or 22,484.64 7,194.09
for Value to be Received (Refer Note 10)
Balance with Customs, Excise and Port trust etc. on Current Accounts 4,171.51 4,851.18
Deposit with Government Departments & Others 6,550.51 3,321.61
Prepaid Expenses 61.90 96.57
Advance Tax 40,410.25 23,966.81
73,678.81 39,430.26
Liabilities
Sundry Creditors:
Micro, Medium and Small Enterprises (Refer Note 5) 33.32 -
Others 21,254.91 16,676.03
Customers Advances 4,734.69 3,813.84
Sales-tax Payable 1,758.60 1,223.50
Other Liabilities 242.22 261.72
Interest Accrued but Not Due on Loans 1,489.03 1,599.52
Investor Education and Protection Fund shall be credited by
the following amount:
- Unclaimed Dividend (There are no amounts due and
outstanding to said fund as on 31.03.2009) 50.11 43.02
29,562.88 23,617.63
Provisions
Income Tax 34,228.97 20,753.97
Fringe Benefit Tax 519.58 307.59
Wealth Tax 15.47 11.66
Staff Benefit Schemes 14.93 38.71
Proposed Dividend - Interim 1,741.86 2,786.98
- Final 1,741.86 -
Corporate Dividend Tax 592.06 473.65
38,854.73 24,372.56
68,417.61 47,990.19
SCHEDULE 11 - OTHER CURRENT ASSETS
SCHEDULE 12 - LOANS AND ADVANCES
SCHEDULE 13 - CURRENT LIABILITIES AND PROVISIONS
TRUST DOES THE IMPOSSIBLE
TRUST DOES THE IMPOSSIBLE
SCHEDULE 22 – SIGNIFICANT ACCOUNTING POLICIES AND
NOTES ON ACCOUNTS
(A) SIGNIFICANT ACCOUNTING POLICIES
01. Accounting Convention
The Financial statements of the Company are prepared under the
historical cost convention using the accrual method of accounting
under the Companies Act, 1956 unless stated otherwise
hereinafter. Accounting Policies not specifically referred to, are
consistent with Generally Accepted Accounting Principles.
02. Fixed Assets
Tangible Assets
a) Free hold and Lease hold land are disclosed at cost.
b) Fixed assets other than land are disclosed at cost less
accumulated depreciation and impairment loss, if any. Cost
comprises of purchase price and attributable cost of bringing
the asset to its working condition for its intended use (net of
credit availed, if any).
Intangible assets
Intangible assets are recognized only if its cost can be measured
reliably and it is possible that future economic benefits will flow to
the Company. Such assets are stated at cost (net of credit availed, if
any) less accumulated amortization. Cost includes any directly
attributable expenditure on making the assets ready for its
intended use.
Impairment of Assets
The carrying amount of assets are reviewed at each Balance Sheet
date, if there is any indication of impairment based on
internal/external factors. An impairment loss is recognized
wherever the carrying amount of an asset exceeds its recoverable
amount. A previously recognized impairment loss is further
provided or reversed depending on changes in circumstances.
03. Foreign Currency Transactions
Foreign currency transactions are recorded by applying the
exchange rates on the date of transaction.
At each Balance sheet date, monetary foreign currency items are
reported using the closing rates.
Exchange difference arising on the settlement of monetary items/
foreign exchange contracts are recognized as income or expense in
the period in which they arise.
04. Capital Work In Progress
Capital work in progress is carried at direct cost (including
advances) and pre-operative expenditure during construction
period is allocated to the fixed assets on the completion of project.
Expenditures on construction of assets for Company’s use at
premises owned by Government/Local Authorities/others are
charged to Profit & Loss Accounts in the year of expenditure.
05. Investments
Investments are classified into current and long-term investments.
Current Investments are carried at lower of cost or fair market
value. Long term investments are stated at cost. Provision for
diminution is made to recognize a decline, other than temporary,
in the value of long term investments by a charge to Profit and Loss
Account.
06. Inventories
Inventories are stated at cost or net realizable value whichever is
lower. The material costs are determined on weighted average
basis. The valuation of manufactured goods represents the
combined cost of material, labour and manufacturing overheads
and includes excise duty in case of finished goods only.
07. Revenue Recognition
Sales revenue is recognized on the transfer of significant risks and
rewards of the ownership of goods to the buyer.
Dividend income on investments is accounted for when the right
to receive the payment is established.
Certain insurance, railway and other claims where quantum of
accruals cannot be ascertained with reasonable certainty, are
accounted on acceptance basis.
Sale of Certified Emission Reductions (CERs) is recognized as
income on the delivery of the CERs to the buyer’s account as
evidenced by the receipt of confirmation of execution of delivery
instructions.
08. Government Grants/Subsidies
Government grants are recognized when there is a reasonable
assurance that the Company will comply with the conditions
attached thereto and the grants will be received.
Government grants in the form of promoters’ contribution are
credited to capital reserve.
Government grants related to revenue are recognized on a
systematic basis in the Profit and Loss Account over the period to
match them with the related costs.
09. Employee Benefits:
(a) Defined Contribution Plan
Superannuation and Provident Fund are considered as
defined contribution plan and the contributions are charged
to the Profit & Loss Account of the year in which the
contributions to the respective funds are due.
SHREE CEMENT LIMITED 115
Schedules Forming Part of theBalance Sheet and Profit & Loss Acccout
For the Year ended For the Year ended
31.03.2009 31.03.2008
(Rs.in Lac) (Rs.in Lac)
Opening Stock
Goods-in-Process 2,222.76 3,632.93
Finished Goods 1,745.50 1,148.01
3,968.26 4,780.94
(Increase) / Decrease 1,107.66 812.68
Add/(Less) : Excise Duty Variance on Closing/Opening Stock (144.92) 90.50
Net (Increase) / Decrease 962.74 903.18
Salaries,Wages,Bonus and Allowances 8,211.75 5,916.28
Contribution to Provident, Superannuation and Gratuity Funds 1,292.21 787.09
Employees Welfare Expenses 883.47 657.06
10,387.43 7,360.43
Rent 349.45 293.60
Rates & Taxes 486.86 719.10
Insurance 150.30 152.93
Travelling 778.16 677.29
Commission to Directors [Refer Note 15 (d)] 51.00 42.00
Directors' Sitting Fees and Expenses 10.02 14.54
Bank and Financial Charges 272.63 230.82
Foreign Exchange Rate Difference (Net) 21.51 62.89
Miscellaneous 2,142.53 1,489.12
Balances Written Off (Net) (13.44) (152.91)
4,249.02 3,529.38
Freight Charges 34,876.46 27,178.88
Publicity & Selling Exp. 5,995.78 4,473.05
Rebate & Discount 5,055.46 4,325.00
45,927.70 35,976.93
- On Fixed Loans 3,969.53 2,688.42
- On Debentures 1,282.12 596.06
- Others 2,191.53 2,045.16
7,443.18 5,329.64
SCHEDULE 18 - PAYMENT TO AND PROVISION FOR EMPLOYEES
SCHEDULE 19 - ADMINISTRATIVE EXPENSES
SCHEDULE 20 - FREIGHT & SELLING EXPENSES
SCHEDULE 21 - INTEREST
TRUST DOES THE IMPOSSIBLE
TRUST DOES THE IMPOSSIBLE
(b) Defined Benefit Plan
Gratuity is considered as defined benefit plan and is provided
for on the basis of an actuarial valuation, using the projected
unit credit method, as at the date of the Balance Sheet.
Contribution to provident Fund set up by the Company in
respect of a few employees is also defined benefit plan and
contribution is charged to Profit & Loss Accounts of the year in
which the contribution is due.
Encashable leave in case of employees covered by Cement
Wage Board is considered as defined benefit plan and is
accounted for on the basis of actuarial valuation, as at the
Balance Sheet date.
Actuarial gains and losses, if any, are recognized in the Profit &
Loss Account in the year in which they arise.
10. Borrowing Costs
Borrowing costs directly attributable to the acquisition /
construction of a qualifying asset are capitalized as part of the cost
of the asset till the date the asset is put to use. Other borrowing
costs are recognized as an expense in the period in which they are
incurred.
11. Depreciation
Tangible Assets :
(a) Depreciation is provided on Written down Value method at
the rates specified in Schedule XIV of the Companies Act,
1956 or the rates prescribed in the Income Tax Act 1961,
whichever is higher. However, in case of those assets whose
WDV as per Income Tax Act 1961 is lower than the WDV as per
books, additional depreciation is provided to align the Book
WDV with WDV as per Income Tax Act, 1961.
(b) Leasehold land is not amortized being long term in nature.
Intangible Assets :
(a) The amount of amortization is allocated on a systematic basis
over the estimated/legal life not exceeding 10 years
commencing when asset is available for use except Clean
Development Mechanism Projects which are amortized
against sale proceeds.
(b) Expenditure on Computer Software is amortized in the year in
which it is capitalized.
12. Research and Development
Expenditure on research phase is recognized as an expense when it
is incurred. Expenditure on development phase which results in
creation of assets is included in related Fixed Assets.
13. Mines Reclamation Expenditure
The Company provides for the expenditure to reclaim the quarries
used for mining. The total estimate of reclamation expenses is
apportioned over the estimate of mineral reserves and a provision
is made based on the minerals extracted.
14. Segment Reporting
Segment is identified and reported taking into account the nature
of products and services, the different risks and returns and the
internal business reporting systems. The identification of
geographical segment is based on the areas in which major
operating divisions of the Company operates.
Inter Segment Transfers are accounted for as if the sales or transfers
were to third parties at market price.
Common allocable costs are allocated to each segment according
to the relative contribution of each segment to the total common
costs.
Assets, Liabilities, Revenue and Expenses which are not allocable
to segments are included under “unallocated”.
15. Taxation
Provision is made for current, deferred and fringe benefit taxes.
Deferred tax is recognized for all the timing differences. Deferred
tax assets are recognized only to the extent that there is virtual
certainty supported by convincing evidence that sufficient future
taxable income will be available against which such deferred tax
assets can be realized.
16. Provisions and Contingent Liabilities /Assets
Provisions in respect of present obligation arising out of past
events are made in the accounts when reliable estimate can be
made of the amount of the obligations.
The contingent liabilities are disclosed, unless the possibility of
outflow of resources is remote. Contingent Assets are generally
neither recognized nor disclosed in the financial statements.
Rs. in Lac
Purpose Currency As at 31-03-2009 As at 31-03-2008
1 Outstanding creditors for Spares & Technical Consultancy Euro 0.45 1.35
2 Outstanding creditors for Technical Consultancy USD 0.13 -
3 Outstanding creditors for Spares GBP 0.07 0.10
4 Outstanding creditors for Spares JPY 152 -
7. Employee Benefits:
(a) Contribution to defined contribution plans recognized as expenses are as under: Rs. in Lac
2008-09 2007-08
Superannuation 624.55 382.69
Employees’ Pension Scheme 198.04 133.10
Provident fund 439.85 219.91
Total 1262.44 735.70
[B]NOTES ON ACCOUNTS
1. Contingent liabilities not provided for : -Counter-guarantees in
favour of banks: Rs. 10500.88 Lac (Previous Year Rs. 3430.95
Lac).
2. Estimated amount of contracts remaining to be executed on capital
account (net of advances) Rs. 43800.21 Lac. (Previous Year Rs.
9094.37 Lac)
3. Installments of Secured Loans falling due for repayment in next
12 months amounting to Rs. 13184.01 Lac (Previous Year Rs.
8900.76 Lac).
4. Capital Work-in-Progress includes Pre-operative expenses of Rs
1878.37 lac (Previous Year Rs. 15.34 Lac) which includes
SHREE CEMENT LIMITED 117
(b) Defined Benefit Plans – disclosure for defined benefit plans based on actuarial reports : Rs. in Lac
As at 31-03-2009 As at 31-03-2008
I Change in Obligation
1 Present Value of defined benefit obligation at the beginning of the year 1858.71 1621.32
2 Current service cost 166.98 34.05
3 Interest cost 148.70 121.60
4 Actuarial (gain)/loss on obligation 220.67 134.72
5 Benefits paid (42.06) (52.98)
6 Present value of defined benefit obligation at the end of the year 2353.00 1858.71
Gratuity (Funded Plan)
depreciation of Rs 47.68 lac on assets during construction period
(Previous Year Rs. 0.25 Lac).
5. Disclosure of Sundry Creditors under Current Liabilities is based
on the information available with the Company regarding the
status of the suppliers as defined under the “Micro, Small and
Medium Enterprises Development Act, 2006” and there are no
delays in payments to Micro, Small and Medium Enterprises as
required to be disclosed under the said Act. This has been relied
upon by the Auditors.
6. Unhedged Foreign Currency Exposure:
TRUST DOES THE IMPOSSIBLE
TRUST DOES THE IMPOSSIBLE
SHREE CEMENT LIMITED 119
(c) The estimates of future salary increases have been considered
in actuarial valuation after taking into consideration the
impact of inflation, seniority, promotion and other relevant
factors such as supply and demand situation in the
employment market.
(d) In terms of the Guidance Note on implementing the
Accounting Standard 15 (revised 2005), issued by the
Accounting Standard Board of the Institute of Chartered
Accountants of India, the provident fund set up by the
company is treated as defined benefit plan since the
Company has to meet the interest shortfall, if any. However,
as at the end of the year no shortfall remains unprovided for.
As advised by an independent actuary, it is not feasible to
actuarially value the liability considering that the rate of
interest as notified by the Government can vary annually.
Further the pattern of investments for investible funds is as
prescribed by the Government. Accordingly other related
disclosures in respect of provident fund have not been made.
(e) Basis used to determine expected rate of return on assets:
The expected return on plan assets is based on market
expectation, at the beginning of the period, for returns over
the entire life of the related obligations. The Gratuity Scheme
is invested in a Group Gratuity-cum-Life Assurance cash
accumulation policy offered by Life Insurance Corporation
(LIC) of India. The investment return earned on the policy
comprises bonuses declared by LIC having regard to LIC’s
investment earnings. The information on the allocation of the
fund into major asset classes and expected return on each
major class are not readily available. We understand that
LIC’s overall portfolio of assets is well diversified and the long
term return on the policy is expected to be higher than the
rate of return on Central Government Bonds. Historically too,
the returns declared by LIC on such policies have been higher
than Government Bond yields. The expected return on assets
assumption is taken by adding a margin of 0.5% on the
current market yield on the Central Government Bonds (of
term consistent with the terms of liabilities).
(f) Amount recognized as an expense in respect of leave
encashment and compensated absences is Rs. 370.28 lac
(Previous Year Rs. 216.63 Lac)
8. Revenue expenditure on Research and Development amounting
to Rs. 864.18 Lac (Previous Year Rs. 744.00 Lac) is included under
relevant heads of expenditure. Capital expenditure relating to
Research and Development amounting to Rs. 12.34 Lac (previous
year Rs.1.76 Lac) has been included in fixed assets.
9. Balance with non scheduled bank represents balance in current
account with Sir M Vishweshwaraiah Sahakar Bank Niyamitha,
Gulberga. Maximum balance outstanding during the year Rs.
176.84 lac (previous year Rs. 20.40 lac). None of the directors or
their relatives are interested in the bank.
10. Advance recoverable in cash or in kind or for value to be received
includes application money of Rs. 12085.50 lac in NABARD’s
Bhavishya Nirman Bonds.
11. Segment Reporting :
The Company has two primary business segments, namely
Cement and Power. There is no reportable secondary segment as
the Company operates only in one geographical area.
Rs. in Lac
As at 31-03-2009 As at 31-03-2008
II Change in the Fair Value of Plan Assets
1 Fair Value of plan assets at the beginning of the year 1858.71 1106.43
2 Expected return on plan assets 182.30 144.19
3 Contributions by employer 354.05 661.07
4 Actuarial gain/(loss) on plan assets - -
5 Benefits paid (42.06) (52.98)
6 Fair value of plan assets at the end of the year 2353.00 1858.71
III Expenses recognized in the Profit and Loss Account
1 Current service cost 166.98 34.05
2 Interest cost 148.70 121.60
3 Expected return on plan assets (182.30) (144.19)
4 Net actuarial loss/(gain) recognized in the current year 220.67 134.72
5 Expenses recognized in Profit and Loss Account 354.05 146.18
IV Amount recognized in the Balance Sheet as at the end of the year
1 Present value of defined benefit obligation 2353.00 1858.71
2 Fair Value of plan assets at the end of the year 2353.00 1858.71
3 Funded status [ Surplus/(Deficit)] - -
4 Net assets/(liability) as at the end of the year - -
V The major categories of plan assets as a percentage of total plan
1 Qualifying Insurance Policy 100% 100%
VI Actuarial Assumptions
1 Discount rate 8.00% p.a. 7.50% p.a.
2 Mortality rate LIC (1994-96 Ultimate) LIC (1994-96 Ultimate)
3 Withdrawal rate 1-3% depending on age 1-3% depending on age
4 Actual return on plan assets 182.30 144.19
Gratuity (Funded Plan)
TRUST DOES THE IMPOSSIBLE
TRUST DOES THE IMPOSSIBLE
Revenue, Results and other information :(Rs. in Lac)
Particulars 2008-09 2007-08
Cement Power Inter- Total Cement Power Inter- Total
Segment Segment
Eliminations Eliminations
Revenue
External Sales 263438.83 8063.19 - 271502.02 210911.80 - - 210911.80
Inter Segment
Revenue - 45630.62 (45630.62) - - 32420.98 (32420.98) -
Total Revenue 263438.83 53693.81 (45630.62) 271502.02 210911.80 32420.98 (32420.98) 210911.80
Results
Segment Results
(Profit before
Interest,
Exceptional items 47267.64 29763.64 - 77031.28 30450.76 9728.76 - 40179.52
and Tax)
Add: Un-allocated
Income - - - 5795.99 - - - 5869.50
Less: Interest Expenses - - - 7443.18 - - - 5329.64
Profit before exceptional
items & Tax - - - 75384.09 - - - 40719.38
Less: Exceptional Items - - - 3093.05 - - - 3888.46
Profit before Tax - - - 72291.04 - - - 36830.92
Less: Tax Expenses - - - 14494.10 - - - 10793.72
Profit after Tax - - - 57796.94 - - - 26037.20
Other Information
Segment Assets 128169.52 24313.55 - 152483.07 104151.76 11644.34 - 115796.10
Un-allocated Assets - - - 186551.56 - - - 132544.44
Total Assets - - - 339034.63 - - - 248340.54
Segment Liabilities 25929.31 1852.21 - 27781.52 19838.39 1804.91 - 21643.30
Un-allocated
Liabilities & Provisions - - - 40636.09 - - - 26346.89
Total Liabilities - - - 68417.61 - - - 47990.19
Depreciation &
Amortization 14965.96 5572.74 - 20538.70 36282.19 11593.67 - 47875.86
Capital expenditure 35591.48 17960.19 - 53551.67 28455.71 13960.50 - 42416.21
Significant Non Cash
Expenses other than
Depreciation &
Amortization. - - - - - - - -
12. Related Party Disclosure (AS-18):
Relationships:
(a) Enterprises over which Key Management Personnel (KMP) are able to exercise significant influence
(i) The Kamla Company Limited
(ii) Ramgopal Holding Private Limited
(b) Key Management Personnel
(i) Shri B.G. Bangur Executive Chairman
(ii) Shri H.M. Bangur Managing Director
(iii) Shri M.K. Singhi Executive Director
(c) Relatives to Key Management Personnel
(i) Shri Prashant Bangur
Details of Transactions :
2008-09 2007-08
(Rs. in lac) (Rs. in Lac)
(a) Enterprise where KMP have significant influence:
Usage charges of common facilities
- The Kamla Company Limited 15.45 14.39
Purchase of Fixed Assets
- Ramgopal Holding Private Limited 52.32 -
(b) Key Management Personnel :
Remuneration
- Shri B.G. Bangur 694.60 522.28
- Shri H.M. Bangur 645.16 472.28
- Shri M.K. Singhi 198.30 149.35
Total 1538.06 1143.91
(C) Relatives of Key Management Personnel :
Remuneration
- Shri Prashant Bangur 34.92 29.18
Purchase of Fixed Assets
- Shri Prashant Bangur - 52.00
There is no outstanding balance in receivable/payable and in loan account of the above parties at the end of the year.
13. Earning per share (EPS) (AS-20):
2008-09 2007-08
- Profit attributable to Equity shareholders Rs. Lac 57796.94 26037.20
- Equity share capital Rs. Lac 3483.72 3483.72
- Weighted average number of Equity shares outstanding
(Face value of Rs.10/- per share) Nos. 34837225 34837225
- Earning Per Share – Basic and Diluted Rs. 165.91 74.74
SHREE CEMENT LIMITED 121
TRUST DOES THE IMPOSSIBLE
TRUST DOES THE IMPOSSIBLE
(d) Commission to other Directors:
2008-09 2007-08
(Rs. in Lac) (Rs. In Lac)
- Maximum eligible commission in terms of Section 309 of the
Companies Act, 1956 [1% of Net Profit (b) above] 722.17 690.60
- Commission to be paid as determined by the Board of Directors 51.00 42.00
(A) Licensed, Installed Capacity and Production:
(a) Cement
2008-09 (MT) 2007-08 (MT)
(i) Licensed Capacity(*)
(ii) Installed Capacity(**) 6825000 6825000
(iii) Production (Includes Trial run production Nil) (Previous Year 1257 MT) 7765207 6337070
(*) The Company’s product is exempt from Licensing requirement under new Industrial policy in terms of Notification No. S.O. 477(E) dated 25.07.91
(**) As certified by the Management (based on OPC)
(b) Thermal Power
Unit 2008-09 2007-08
(i) Licensed Capacity(No license is required) MW - -
(ii) Installed Capacity(as certified by Management) MW 119.50 101.50
(iii) Production Lac Unit 7361.70 5174.43
17. The Equity Shares of the Company are listed at Bombay Stock Exchange Limited and National Stock Exchange of India Limited and the
annual listing fee has been paid for the year.
18. Information pursuant to provisions of paragraphs 3, 4-C and 4-D of Part-II of Schedule VI to the Companies Act, 1956.
16. Expenses charged to limestone raising cost during the year:
2008-09 2007-08
(Rs. In Lac) (Rs. in Lac)
- Payment to and provision for Employees 955.71 544.28
- Royalty and Cess 4812.21 3082.08
- Stores & Spares, Repairs & Maintenance and Other expenses 5308.45 4533.86
11076.37 8160.22
SHREE CEMENT LIMITED 123
(c) Commission/ Bonus to Wholetime Directors:
2008-09 2007-08
(Rs. in Lac) (Rs. in Lac)
- Eligible Remuneration in terms of Section 309 of the Companies 7221.69 6906.05
Act, 1956 [10% of Net Profit (b) above]
- Less: Remuneration (Excluding Commission/Bonus) 613.06 543.91
- Balance available for payment of Commission/ Bonus 6608.63 6362.14
- Commission/ Bonus to be paid as determined by the Board of Directors 925.00 600.00
14. Payment made to Auditors :
2008-09 2007-08
(Rs. in Lac) (Rs. in Lac)
Statutory Auditors
- Audit Fee 15.00 11.00
- Tax Audit Fee 1.00 0.75
- Certification / Other Services 1.13 1.10
- Reimbursement of Expenses 2.35 0.66
Cost Auditors
- Audit Fee 1.25 1.25
- Reimbursement of Expenses 0.08 0.04
15. (a) The Break-up of remuneration to the Wholetime Directors is as under:
2008-09 2007-08
(Rs. in Lac) (Rs. in Lac)
- Salary 357.60 310.73
- Bonus / Commission 925.00 600.00
- Contribution to Provident and Superannuation Funds 86.90 75.74
- Allowances and Perquisites 168.56 157.44
1538.06 1143.91
Note: The above figures do not include contribution to gratuity fund since the same is provided on an actuarial basis for the Company as a whole.
(b) Computation of Net Profit in accordance with Section 198 read with Section 349 of the Companies Act, 1956:
2008-09 2007-08
(Rs. in Lac) (Rs. in Lac)
Profit before Tax 72291.04 36830.92
Add/ (Deduct)
- Remuneration to Whole Time Directors 1538.06 1143.91
- Commission to other Directors 51.00 42.00
- Directors’ Sitting Fee 3.60 4.10
- Depreciation as per Books 20538.70 47875.86
- Provision for Wealth Tax 14.00 11.00
- Depreciation under Section 350 of the Companies Act,1956 (22219.45) (16846.68)
- Profit on Sale of Fixed Assets (0.01) (0.65)
Net Profit as per Section 349 of the Companies Act, 1956 72216.94 69060.46
TRUST DOES THE IMPOSSIBLE
TRUST DOES THE IMPOSSIBLE
(B) Sales and Stocks:
2008-09 2007-08
Quantity Value Quantity Value
(a) Cement (MT) (Rs. in Lac) (MT) (Rs. in Lac)
(i) Opening Stock 73694 1745.50 54362 1148.01
(ii) Sales 7767696 263438.83* 6334208 210911.80
(iii) Closing Stock 88329 1627.99 73694 1745.50
(*) Includes Rs 14250.17 Lac (Previous Year Rs. 6487.37 Lac) being value of clinker sold
2008-09 2007-08
(b) Thermal Power Unit Quantity Value Quantity Value
(Rs. in Lac) (Rs. in Lac)
Sales Lac Unit 1171.23 8063.19 - -
(C) Raw Materials consumed (All Indigenous) excluding Consumption during Trial Run Production:
2008-09 2007-08
Quantity Value Quantity Value
(MT) (Rs. in Lac) (MT) (Rs. in Lac)
(i) Limestone 9411505 11115.15 6674970 8230.84
(ii) Gypsum 422052 3835.66 349515 2868.40
(iii) Fly Ash 1621986 8119.46 1656049 8707.51
(iv) Slag 183200 505.54 62607 174.49
(v) Iron Ore 19305 109.78 76089 398.35
(vi) Others 927.72 719.38
(D) Trade Purchases:
2008-09 2007-08
Quantity Value Quantity Value
(MT) (Rs. in Lac) (MT) (Rs. in Lac)
(i) Cement 17124 652.47 16470 618.56
(E) Value of imports during the year calculated on CIF basis:
2008-09 2007-08
(Rs. in Lac) (Rs. in Lac)
(i) Fuel 2532.62 -
(ii) Stores, Spare parts and components 1689.90 1603.18
(iii) Capital Goods 2240.16 3072.17
Sudhir Maheshwari B. G. Bangur H. M. Bangur Shreekant Somany Dr. Abid Hussain O.P. Setia
Partner Executive Chairman Managing Director Director Director Director
Membership No. 81075
PLACE: KOLKATA Dr. Y.K. Alagh A. Ghosh M.K. Singhi Ashok Bhandari S.S. Khandelwal
DATE: 28th April, 2009 Director Director Executive Director Chief Finance Officer Company Secretary
As per our report of even dateFor B. R. Maheswari & Co.Chartered Accountants
SHREE CEMENT LIMITED 125
(G) Earning in foreign currencies:
2008-09 2007-08
(Rs. In Lac) (Rs. in Lac)
(i) CERs sale receipts 1849.08 1707.73
(H) Value of imported and indigenous stores, spare parts, components consumed and their percentage to total consumption:
2008-09 2007-08
Value % Value %
(Rs. in Lac) (Rs. in Lac)
(i) Imported 2060.06 24.48 857.98 14.92
(ii) Indigenous 6356.72 75.52 4890.78 85.08
(F) Expenditure incurred in foreign currencies:
2008-09 2007-08
(Rs. In Lac) (Rs. in Lac)
(i) Foreign Travel 44.33(#) 83.38
(ii) Consultancy charges 201.08(#) 167.18
(iii) Others 31.53(#) 34.93
(#) For Capital Projects Rs. 85.64 Lac (Previous Year Rs. 115.82 Lac)
(I) Net dividend remitted to non-resident shareholders in foreign currency:
2008-09 2007-08
(Rs. In Lac) (Rs. in Lac)
(i) No. of non-resident share holders 1 1
(ii) No. of shares held 3600000 3600000
(iii) Year to which dividend relates 2007-08 2006-07
(iv) Amount remitted (Rs. In Lac) 288.00 216.00
19. The figures of previous year have been regrouped and rearranged wherever necessary.
Signature to Schedule 1 to 22.
TRUST DOES THE IMPOSSIBLE
TRUST DOES THE IMPOSSIBLE
I. Registration Details
Registration No. State Code
Balance Sheet Date
Date Month Year
II. Capital raised during the Year (Amount in Thousand of Rupees)
Public Issue Rights Issue
Bonus Issue Private Placement
III. Position of Mobilization and Deployment of Funds (Amount in Thousand of Rupees)
Total Liabilities Total Assets
SOURCES OF FUNDS
Paid-Up Capital Reserves and Surplus
Secured Loans Unsecured Loans
APPLICATION OF FUNDS
Net Fixed Assets Investments
Deferred Tax Assets Net Current Assets
Misc. Expenditure Accumulated Losses
IV. Performance of Company (Amount in Thousand Rupees)
Turnover Total Expenditure
Profit/Loss Before Tax Profit/Loss After Tax
Earning Per Share in Rs. Dividend Rate %
V. Generic Name of Principal Product of Company
Item Code No. (ITC Code)
Product Description
1 9 3 5
3
N
N
N
N
I
I
I
I
L
L
L
L
1 0 3 2 0 0 9
2 7 0 6 1 7 0 2 0 272 7 0 6 1
71 1 7 5 13 4 8 3 7 2
1 2 2 0 5 0 7 3 2 7 5 6 4 6
1 1 0 5 7 4 55 8 4 4 8 3 4
1 0 3 8 9 8 7 4 5 2 0 0
N I L N I L
2 7 9 7 9 1 6 3 2 0 7 5 0 0
+ +7 2 2 9 1 0 4 5 7 7 9 6
1 7
9 7
0
7
2
5 9
9 4
1 6 5 . 9 1 1 0 0
2
C E M E N T
5 2 3 . 2 9
+/- +/-
Balance Sheet Abstract & Company's General Business Profileas required under Part IV of Schedule VI to the Companies Act, 1956 -
B. G. Bangur H. M. Bangur Shreekant Somany Dr. Abid Hussain O.P. Setia
Executive Chairman Managing Director Director Director Director
PLACE: KOLKATA Dr. Y.K. Alagh A. Ghosh M.K. Singhi Ashok Bhandari S.S. Khandelwal
DATE: 28th April, 2009 Director Director Executive Director Chief Finance Officer Company Secretary
Sudhir Maheshwari B. G. Bangur H. M. Bangur Shreekant Somany Dr. Abid Hussain O.P. Setia
Partner Executive Chairman Managing Director Director Director Director
Membership No. 81075
PLACE: KOLKATA Dr. Y.K. Alagh A. Ghosh M.K. Singhi Ashok Bhandari S.S. Khandelwal
DATE: 28th April, 2009 Director Director Executive Director Chief Finance Officer Company Secretary
As per our report of even dateFor B. R. Maheswari & Co.Chartered Accountants
( Rs. In Lac)
For the year ended
31st March, 2009 31st March, 2008
A Cash Flow From Operating Activities
Net Profit Before Tax 72291.04 36830.92
Exceptional Items 3093.05 3888.46
Net Profit Before Tax & Exceptional Items 75384.09 40719.38
Adjustment For :
Depreciation and Amortisation 20538.70 47875.86
Foreign Exchange Rate Difference (Net) 21.51 62.89
Balances Written Off (Net) (13.44) (152.91)
Interest Income (4374.69) (5300.15)
Profit on Sale of Investment (1419.96) (413.50)
Dividend Received (1.33) (155.84)
Loss/ (Profit) on Sale/Disposal of Fixed Assets (16.99) (11.63)
Interest Expenses 7443.18 22176.98 5329.64 47234.36
Operating Profit Before Working Capital Changes 97561.07 87953.74
Adjustment For :
(Increase)/ Decrease in Trade And Other Receivables (6062.66) (7308.95)
(Increase)/ Decrease In Inventories 2211.63 (2050.15)
Increase/ (Decrease) in Trade Payables and Other Liabilities 6045.40 2194.37 3968.21 (5390.89)
Cash Generated From Operations 99755.44 82562.85
Foreign Exchange Rate Difference (Net) (21.51) (62.89)
Direct Taxes Paid (16439.62) (12354.30)
Cash Flow Before Exceptional Items 83294.31 70145.66
Exceptional Items (3093.05) (3888.46)
Net Cash From Operation Activities 80201.26 66257.20
B Cash Flow From Investing Activities
Purchase of Fixed Assets (53551.67) (42416.21)
Sale of Fixed Assets 247.25 79.92
(Purchase)/Sale of Investments (Net) (38018.97) (54100.00)
Profit on Sale of Investment 1419.96 413.50
Dividend Received 1.33 155.84
Interest Received 4452.25 6206.97
Net Cash Used in Investing Activities (85449.85) (89659.98)
C Cash Flow From Financing Activities
Proceeds From Long Term Borrowings (Net) 3545.86 36598.83
Proceeds From Short Term Borrowings (Net) - -
Proceeds From Working Capital Borrowings from Banks 12999.65 3334.14
Interest Paid (7553.67) (5117.66)
Capital Subsidy from Government - -
Dividend & Tax there on Paid (Interim and/or Final) (3260.63) -
Net Cash From Financing Activities 5731.21 34815.31
Net Increase/(Decrease) In Cash & Cash Equivalents 482.62 11412.53
Cash & Cash Equivalents as at the beginning of the year 46743.43 35330.90
Cash & Cash Equivalents as at the close of the year 47226.05 46743.43
For the year ended
SHREE CEMENT LIMITED 127
Cash Flow StatementFor The Year Ended on 31st March, 2009
Board of Directors
Management Team
Shri B.G. Bangur - Executive Chairman
Shri H.M. Bangur - Managing Director
Shri R.L. Gaggar
Shri O.P. Setia
Shri Shreekant Somany
Dr. Abid Hussain
Dr. Y.K. Alagh
Shri A. Ghosh
Shri M.K. Singhi - Executive Director
Shri Prashant Bangur - Executive Jt. President
Shri Ashok Bhandari - Chief Finance Officer
Shri Diwakar Payal - Jt. President (Marketing)
Shri M.M. Sharma - Sr. Vice President (Project)
Shri P.K. Tripathy - Sr. Vice President (Works)
Shri P.N. Chhangani - Sr. Vice President (Works)
Shri Vinay Wadhva - Sr. Vice President (Marketing)
Shri C.R. Biyani - Vice President (Business Development)
Shri Gopal Daga - Vice President (Project)
Shri K.C. Gandhi - Vice President (Materials)
Shri Sanjay Mehta - Vice President (Commercial)
Shri Ramakant Sharma - Vice President (P.R.)
Shri P.C. Jhawar - Jt. Vice President (P&A)
Shri S.C. Suthar - Jt. Vice President (Mines)
Shri A.K. Singh - Jt. Vice President (E&I)
Shri C.S. Sharma - Jt. Vice President (Project)
Shri Arvind Khicha - Jt. Vice President (Comml.)
Shri N.C. Jain - Asst. Vice President (Finance)
Shri S.K. Soni - Asst. Vice President (Sales Accounts)
Shri R.K. Agarwal - Asst. Vice President (Mechanical)
Shri R.K. Manawat - Asst. Vice President (Process)
Shri G.L. Nandwana - Asst. Vice President (Mines)
Shri Rakesh Bhargava - Asst. Vice President (Environment)
Shri Nitin Mukul - Asst. Vice President (Packing Plant)
Shri M.M. Rathi - Asst. Vice President (Power Plant)
Shri Gajraj Jain - Asst. Vice President (Power Project)
Shri S.L. Bhansali - Asst. Vice President (Legal)
Shri Nirip Bajwa - Asst. Vice President (Marketing)
Shri Himanshu Dewan - Asst. Vice President (Marketing)
Shri R.C. Bohra - Asst. Vice President (P&A)
Shri S.R. Singhvi - Asst. Vice President (HRD)
Company Details
Company Secretary
Bankers
Advertising Consultant
Auditors
Cost Auditors
Internal Auditors
Registered Office
www.shreecementltd.com
Corporate Office
Shri S.S. Khandelwal
State Bank of Bikaner & Jaipur
State Bank of India
ICICI Bank Ltd.
IDBI Bank Ltd.
Axis Bank Ltd.
BNP Paribas
Standard Chartered Bank
HSBC
Shri Alyque Padamsee
M/s. B.R. Maheswari & Co., New Delhi
M/s. K.G. Goyal & Associates, Jaipur
M/s. P.K. Ajmera & Co., Ahmedabad
Bangur Nagar, Beawar - 305 901, Distt. Ajmer, Rajasthan
Phone: (91) 1462-228101-06, Fax: (91) 1462-228117/19
Toll free no.: 1800 180 6003-04
website:
email:
21, Strand Road, Kolkata - 700 001
Phone: (91) 33-22390601-05
Fax: (91) 33-22434226
email:
Plants
Unit I & II
Unit III, IV, V, VI & VII
Khushkhera Cement Grinding Unit(s)
Bangur Nagar, Beawar – 305 901 District, Ajmer, Rajasthan (India)
Phone: (91) 1462-228101-06 * Fax: (91) 1462-228117/228119 * Email:
Bangur City, Ras, Tehsil Jaitaran – 306 107, Distt. Pali, Rajasthan (India)
Phone: (91) 1462-228101-06 * Fax: (91) 1462-228117/228119 * Email:
Plot No SP 3-II, A-1, RIICO Industrial Area, Khushkhera (Bhiwadi) – 301 707, District Alwar, Rajasthan
Phone: (91) 1493-250521/22/23/24 * Fax: (91) 1493-517227
Shree Ultra Cement
[email protected] [email protected]
Bangur Cement
[email protected] [email protected]
Rockstrong Cement
122-123, Hans Bhawan A-6 Yudhisther Marg, Opp. Yojana Bhawan,
1 Bahadur Shah Zafar Marg, New Delhi-110 002 C Scheme, Jaipur-302 005, Rajasthan
Phone: (91) 11-23370828, 23379218, 23370776 Phone: (91) 141-2223918, 2225950
Fax: (91) 11-23370499 Fax: (91) 141-2381091
Email: Email:
6B, 6 Floor, Hansalaya Building, 91, Dulheshwar Garden,
15, Barakhamba Road, C Scheme, Sardar Patel Marg, Jaipur-302 001, Rajasthan
New Delhi-110 001 Phone: (91) 141-2361735, 2361696
Fax: (91) 11-23702794-96 Fax: (91) 141-2360891
Email: Email:
14E, 14 Floor, Hansalaya Building, 15-Barakhamba Road, 14-15, Indira Plaza,
New Delhi-110 001 Hawa Sarak, Sodala, Jaipur-302 001 (Rajasthan)
Phone: (91) 11-23731085, 61512430 Phone: (91) 141-2222032, 6455692
Fax: (91) 11-23731084 Fax: (91) 141-2222031
Marketing Offices
SHREE CEMENT LIMITED 129
TRUST DOES THE IMPOSSIBLE
TRUST DOES THE IMPOSSIBLE
NotesFINANCIAL PERFORMANCE RATIONS 2008-09 2007-08 2006-07 2005-06 2004-05
RAW MATERIAL COST/TOTAL TURNOVER (%) 8.34 8.90 10.60 11.65 10.36
POWER COST/TOTAL TURNOVER (%) 5.55 5.19 5.10 6.08 7.15
FUEL COST/ TOTAL TURNOVER (%) 14.01 9.86 9.44 10.58 12.00
MANPOWER & ADMINISTRATIVE COST/ 4.73 4.46 5.25 6.49 6.76
TOTAL TURNOVER (%)
INTEREST /TOTAL TURNOVER (%) 2.40 2.18 0.64 1.56 2.74
PRE-INTEREST PROFIT/ TOTAL TURNOVER (%) 33.37 38.49 37.88 27.32 24.06
POST-INTEREST PROFIT/ TOTAL TURNOVER (%) 30.97 36.30 37.23 25.77 21.31
DEPRECIATION / TOTAL TURNOVER (%) 6.63 19.62 26.53 18.92 13.56
TAX/ TOTAL TURNOVER (%) 4.68 4.42 0.73 1.06 0.29
NET PROFIT/ TOTAL TURNOVER (%) 18.66 10.67 10.97 2.23 4.02
CASH PROFIT / TOTAL TURNOVER (%) 25.55 29.69 33.31 22.84 20.98
ROCE (PBIT/ AVERAGE CAPITAL EMPLOYED) (%) 33.86 24.88 39.29 24.61 21.93
TURNOVER / AVERAGE CAPITAL EMPLOYED (%) 131.52 144.00 157.00 131.27 121.78
EARNING PER SHARE (RS.) 165.91 74.74 50.81 5.28 8.34
CASH EARNING PER SHARE (RS.) 227.18 207.94 154.24 52.98 43.53
TAX / NET PROFIT (%) 25.08 35.71 7.03 47.47 7.12
BALANCE SHEET RATIOS
DEBT -EQUITY RATIO 0.87 1.69 1.87 1.03 0.80
DEBTORS TURNOVER (DAYS) 6.87 7.39 5.94 8.09 12.09
INVENTORY TURNOVER ( DAYS) 18.20 26.41 35.31 50.02 36.64
CURRENT RATIO 2.09 2.28 2.72 1.42 2.05
QUICK RATIO 1.86 1.92 2.17 0.69 1.07
BOOK VALUE PER SHARE (RS) 347.33 193.13 130.48 85.05 83.10
2008-09 2007-08 2006-07 2005-06 2004-05
Ratio AnalysisTRUST DOES THE IMPOSSIBLE
TRUST DOES THE IMPOSSIBLE
Notes
TRUST DOES THE IMPOSSIBLE
TRUST DOES THE IMPOSSIBLE
www.shreecementltd.com