KESORAM INDUSTRIES LIMITED
ANNUAL REPORT 2011-2012
The Board presents its Ninety-third Annual Report and the Audited
Statements of Accounts of the Company for the year ended 31st March, 2012.
FINANCIAL RESULTS Rs./crore
Particulars 31st March, 31st March,
Total Revenue 6004.86 5559.49
Total Expenses 6018.78 5175.69
Profit/(Loss) before interest, depreciation,
tax and amortisation ["EBIDTA"] (13.92) 383.80
Depreciation and Amortisation Expenses 297.40 272.58
(Net of transfer from Revaluation Reserve)
Finance Costs 410.15 263.57
Exceptional item - Income (11.22) Nil
Tax Expenses - Net (330.51) 57.86
Loss for the year 379.74 210.21
Balance at the beginning of the year 948.51 1126.75
Add: Loss for the year (379.74) (210.21)
Amount transferred from Debenture
Redemption Reserve (Net) 65.00 61.25
Amount available for appropriation 633.77 977.79
(i) Proposed Dividend 4.57 14.87
(ii) Tax on Proposed Dividend 0.74 2.41
(iii) Interim Dividend - 10.29
(iv) Tax on Interim Dividend - 1.71
(v) Balance Carried Forward 628.46 948.51
The Board recommends a dividend of Rs.1 (Rupee One only) per Ordinary
Share of Rs. 10 in respect of the year under review as against a dividend
of Rs.5.50 per Ordinary Share of Rs. 10 in respect of the previous year.
Total Revenues of the Company during the year under review increased by
about 8% to Rs. 6005 Crore. Both major businesses, Tyres and Cement,
recorded revenue growth. Operating margins, however, came under
considerable pressure owing to spiralling input costs. These, in turn,
impacted financing costs, which too showed a steep increase during the
Brief commentaries on the performance of the Tyres, Cement and the Rayon
businesses are appended:
The year under review was pervaded by several challenges making it perhaps
the Tyre Business`s most difficult year since inception.
Revenues grew by 9% to Rs. 3922 Crore. However, inordinate pressure on
margins forced the Business`s EBIDTA to decline significantly.
Consequently, negative EBIDTA stood at Rs. 428 crore during the year under
review as compared to a negative EBIDTA of Rs. 15 crore in the previous
Margin pressure was exerted on the Business during the year as a result of
sharp volatility in raw material prices and energy costs. Although prices
of finished products (i.e. Tyres) moved up, these increases were not
entirely commensurate with the higher input costs. Moreover, given a
stagnant demand situation, price enhancements and productivity gains that
the Business strived for during the year were insufficient to offset the
sharp increases in input costs.
The Tyre Business focusses essentially on the Truck and Bus Tyre
categories. This market remained flat during the year. The previous year
had seen a 23% increase in industry wide production of Truck and Bus Tyres
from 12.8 Million in 2009-10 to 15.6 Million in 2010-11. During 2011-12, on
the other hand, this category rose by only 2.5% to 16.1 Million. In view of
the stagnant demand during 2011-12, sales to the profitable replacement
market segment also remained flat.
To stem the decline, the Tyre Business put in place several key initiatives
during the second half of the year under review. The more significant of
these were as follows :
* calibrated changes were made to the sales mix so as to increase sales of
the more profitable products. For instance, increased focus was put on
marketing of two and three wheeler tyres.
* a number of measures were taken for raising productivity on the shop
floor as well as in product development.
* the Passenger Car Radial Tyre Project at Balasore with a per day
production of 80MT is currently under implementation.
* the Business continues its focus on quality and has the distinction of
being certified for ISO 9001, TS-16949, ISO 14001, SA-8000, OSHAS-18001 and
A new management team has been in place beginning the second half of the
year under review. This team is aggressively spearheading EBIDTA positive
initiatives and will take ownership for the structural changes that such
measures would bring in their wake.
The first signs of these initiatives bearing fruit have showed through in
the fourth quarter of the year under review with EBIDTA margins rising
almost 4% as the table below shows :
Particulars April, 2011 to July, 2011 to October, 2011 to January,2012-
June, 2011 September,2011 December, 2011 March, 2012
(Rs./crore) 1057 820 1071 974
(Rs./crore) -80 -127 -135 -86
Margin% -7.6 -15.5 -12.6 -8.8
Going forward, EBIDTA margins are expected to improve further and the Tyre
Business looks to the future with confidence.
The Auditors, in their Report, have referred to the need for the Tyre
Business to improve its internal control systems. The Board states that
several effective measures have been taken during the year to further
strengthen internal controls in this Business and fully address over-ride
related issues. These include an eventual roll out of Standard Operating
Procedures across the Business and finally amalgamating these with a
structured ERP system.
Production during the year under review as compared with that of the
previous year was as follows:
Vasavadatta Kesoram Total
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11
Clinker 31.74 39.21 8.20 8.94 39.94 48.15
Cement 38.83 42.78 10.74 11.50 49.57 54.28
A number of factors combined to contribute to the lower production during
the year viz slowdown in the housing and infrastructure sector, substantial
capacity additions in the recent past, the prolonged monsoon and generally
tight liquidity conditions in the economy. These constraints were further
exacerbated by the innate volatility in input costs and major logistics
issues, particularly the shortage of railway wagons for evacuating
production. To partially overcome the logistics related impediments, the
Business has begun setting up packing facilities near its key markets and
entered into contract manufacturing.
Financially, the Business continued to be intrinsically profitable with
EBIDTA at Rs. 543 crore during the year under review as against Rs. 376
crore in the previous year. Superior product mix, established brand name
and initiation of strategic marketing policies combined to make this
The Cement Business considers captive power generation to be a major thrust
area. During the year under review, both plants met virtually their entire
power requirements from captive generation. Additionally, some power was
sold to the local grid. The Vasavadatta Cement Plant is preparing to
commission its fifth captive power unit during the current year. Co-
incineration of materials, like used tyres, municipal and agricultural
waste etc. will also be taken up during the current year. This will help in
further reducing coal consumption for generating captive power. The
petition challenging the vires of imposition of duty @ 25 paise per unit on
captive power generation by the State Government of Andhra Pradesh
continues to be pending before the High Court of Andhra Pradesh.
The Cement Business`s prospects for the current year are satisfactory.
Barring unforeseen circumstances, EBIDTA is expected to improve further.
As is usual for a mature business, the Cement Business continued to win
awards and accolades during the year. Two significant awards have been the
National Award for Mines Safety and the Karnataka State Pollution Control
Board`s Environmental Excellence Award.
Revenues from the Rayon Business during the year under review at Rs. 283
crore was marginally higher than that of the previous year. However,
performance was impacted by a number of adverse factors including:
* significant softening of fibre prices in view of the sharp decline in
* high imports from China resulted in flattened demand and lower prices of
viscose filament yarn ("VFY") produced domestically.
* high industry inventories of VFY What was 11 days in March, 2011 went up
to 28 days in March, 2012.
A difficult situation was aggravated further by margin pressure consequent
upon steep rise in cost of inputs. Particularly severe was the sharp
increase in the prices of coal and the consistent weakening of the Rupee
against the US Dollar.
The Business signed a satisfactory wage settlement with its workmen during
the year under review. The settlement has removed several working
constraints faced by the manufacturing facility.
The Business is working strongly to further widen its market reach during
the current year, a measure that will considerably improve unit price
realisations. This is being combined with significant improvement in
quality standards to include fine denier material. It has also represented
to the authorities for levying anti-dumping duty on cheap imports.
Spun Pipes and Heavy Chemicals
Kesoram Spun Pipes and Foundries and Hindusthan Heavy Chemicals facilities
continued to be under suspension of work since 2nd May, 2008 and 8th
December, 2010 respectively. Barricades put up by a section of workmen do
not permit ingress/egress to or from these facilities. In view of this
position, finished goods and other materials could not be accessed at
either facility. This situation also explains the reference by the Auditors
in their Report to the Company`s inability to conduct physical verification
of fixed assets and inventories at these locations.
CORPORATE SOCIAL RESPONSIBILITY
The Company is committed to the fulfillment of its social responsibility to
society in general and those living in the vicinity of its facilities in
particular. It regards this as a thrust activity area.
Numerous welfare programmes designed to cater to the needs of the populace
around its facilities were undertaken during the year. A few such key
initiatives were as follows :
* medical camps including conducting comprehensive health checks on local
* installation of facilities for water purification to improve
accessibility to potable water ;
* provision of street lights on certain arterial roads in adopted villages;
* training villagers in water conservation methodologies ;
* animal husbandry camps including setting up of model dairy farms;
* participation in the Government mid day meal schemes through procurement
and distribution of utensils;
* arrangements for mass weddings;
* afforestation programmes ;
* imparting of vocational training spanning sections of the population
around most facilities of the Company. These programmes are enabling a
large number of unemployed or underemployed beneficiaries transform
themselves into self respecting earning family members. Tailoring, stitch
craft and needlework training, imparting computer literacy, pickle and
papad making, feature prominently amongst the vocational training
Going forward, welfare programmes will be further accelerated to benefit
larger sections of the community.
In the urban areas, the Company has begun working closely with the local
traffic police to promote road safety. With this in mind, it has taken up
several activities in the public domain to enable mould the mindset of
young adults to the need for scrupulously observing road safety norms.
DIRECTORS` RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956 and, based upon
representations from the management, the Board, to the best of its
knowledge and belief, confirms that:
* in the preparation of the Annual Accounts, applicable Accounting
Standards have been followed and there are no material depatures ;
* it has selected such Accounting Policies and applied them consistently
and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company as at 31st
March, 2012 and of the loss of the Company for the Financial Year ended on
* proper and sufficient care has been taken for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act,
1956 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities; and
* the annual accounts have been prepared on a going concern basis.
MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE
A Management Discussion & Analysis and a Report on Corporate Governance
together with the corresponding Compliance Certificate are attached as part
of this Annual Report.
Shri Vinay Sah joined the Board during the year under review as a nominee
of the Life Insurance Corporation of India. He replaced Shri G. B. Pande,
who resigned during the previous year. Shri Sah was appointed an Additional
Director under Section 260 of the Companies Act, 1956 to hold office up to
the date of the forthcoming Annual General Meeting and being eligible, has
offered himself for re-appointment.
The Board expresses its profound sorrow at the sad demise on 20th February,
2012 of B. P. Bajoria, colleague and an eminent Industrialist. He was on
the Board for nearly three decades and his contributions to the Board`s
deliberations were always distinctive. The Board places on record its deep
appreciation of his sagacious advice and wise counsel during his tenure.
Shri Kashi Prasad Khandelwal joined the Board, effective 10th April, 2012,
in the casual vacancy caused by his demise. B P Bajoria would have, in the
normal course, retired by rotation at the forthcoming Annual General
Meeting. Shri Khandelwal, being eligible, has therefore offered himself for
Shri K C Jain`s appointment as a Whole-time Director was determined by
mutual consent as at the close of business hours on 31st March, 2012. Shri
Jain has been re-appointed a Whole-time Director effective 1st April, 2012
on revised remuneration. An appropriate Resolution has, therefore, been
proposed in the Notice convening the Ninety-third Annual General Meeting
for approval of Shri Jain`s re-appointment and remuneration.
Smt. Manjushree Khaitan retires by rotation and, being eligible, offers
herself for re-appointment.
Price Waterhouse, Chartered Accountants, ("PW") Auditors of the Company,
retire at the forthcoming Annual General Meeting and offer themselves for
re-appointment. The Company has received the requisite Certificate pursuant
to Section 224(1B) of the Companies Act, 1956. PW has also confirmed that
it complies with the ongoing cycle of the peer review process as required
under the Regulations of The Institute of Chartered Accountants of India.
In response to the Auditor`s observations in their Report, the Board wishes
to state as follows :
* Paragraph 4(a) and Paragraph 21 of the Annexure to the Report:
- Note No.31 of the Financial Statements is self explanatory and do not
call for any further comment.
* Paragraph 4(b):
- As stated in Note No.24 of the Financial Statements, it is reiterated
that the principles of prudence have been duly considered by the Company in
recognising the income referred to by the Auditors in their Report.
As per directives of the Central Government under Section 233B of the
Companies Act, 1956, the Company has appointed qualified Cost Auditors to
conduct compliance reporting and cost audit on such of its products in
which audit has been ordered by the Central Government.
PARTICULARS OF EMPLOYEES
The information required under Section 217(2A) of the Companies Act, 1956
read together with the Companies (Particulars of Employees) Rules, 1975,
forms a part of this Report. However, based upon the provisions of Section
219(1)(b)(iv) of the Act, the Report and Accounts that are being circulated
to Members do not include the Statement of Particulars of Employees under
Section 217(2A). Any Member interested in obtaining a copy may write to the
Company Secretary at the Registered Office and a copy thereof will be
forwarded by post.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS
A Statement containing the information, as required under the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988, is annexed.
The Board gratefully acknowledges the understanding and support received by
the Company from its employees. It also places on record its deep gratitude
for the unstinted support the Company has received from the Banks,
Institutions, the Central Government, the various State Governments and the
local authorities during the year.
Specific acknowledgement is also made for the confidence and understanding
shown by the Members in the Company.
K.C. Jain P.K. Mallik
Whole-time Director Manjushree Khaitan
Place: Kolkata Gautam Ganguli K.P. Khandelwal
Date : 28th April, 2012 Company Secretary Director
MANAGEMENT DISCUSSION AND ANALYSIS
Industry Structure and Developments
The Indian Tyre Industry is dominated by five major Indian manufacturers -
Apollo Tyres, Birla Tyres, Ceat Tyres, JK Tyres and MRF - who together
account for more than 85% of the industry turnover. The major market
segments of business are replacement, institutional (Original Equipment
Manufacturers- ["OEM"] and State Transport Undertakings) and exports. In
terms of products, the market is split into two broad segments - Commercial
Vehicle Tyres (trucks & buses, light commercial vehicles, agriculture and
specialty vehicles) and Personal Vehicle Tyres (car, SUV, motorcycle,
scooter and moped).
Commercial vehicle tyres continue to constitute the largest segment of the
Indian market. A few years back, these tyres constituted more than 80% of
the market. Over the last few years, however, the Indian passenger vehicle
industry (cars as well as two wheelers) has grown at a pace that outstrips
growth of commercial vehicle sales, driven by greater disposable incomes,
the rising aspirations of a burgeoning middle class, and the presence of
almost every international vehicle manufacturer in India. Growing passenger
vehicle sales in the country has meant the proportion of commercial vehicle
tyres in the total tyre industry has dropped to a little more than 60%
A key trend in the Indian market is the shift away from the old technology
cross-ply tyres to radials. While radialisation is greater than 95% in
passenger vehicles today, in commercial vehicle tyres it is still below
25%. This is, however, picking up and India should soon catch up with the
world on this parameter. Growing preference for radials by fleets on
account of their better performance, increasing fitment of radials by OEMs
and massive investments in increasing capacities for truck and bus radials
by industry players seems to be driving this change. Radialisation in the
truck and bus segment is forecast to cross 40% in the next few years.
The automotive market has a direct correlation with the growth of the
Indian economy. The deceleration in the Indian economy has had a negative
impact on the automotive industry as a whole. Declining growth of economic
activity slows the demand for commercial vehicles something that is evident
in India today. Consequently, the overall domestic truck and bus tyre
market also saw stagnation in 2011-12 as compared to the previous year,
which had seen a growth of over 20%.Sales of passenger vehicles suffered a
mid-year slump resulting in lower offtake of tyres by OEMs. Nonetheless,
towards the end of the Financial Year 2011-12, indications were that sales
were beginning to look up once again.
On the cost front, volatility in raw material prices, especially of natural
rubber, has been a major factor impacting the fortunes of the Indian Tyre
Industry in the previous year. Volatile raw material prices continue to
pose the biggest risk for the tyre business.
China continues to be the world`s largest cement producer followed by
India. India has the facilities and technology to produce world class
The cement industry in India is estimated to have recorded a growth of 6%
during the Financial Year 2011-12 as against a growth of 5% during the
previous year. This was achieved despite a perceptible slow down in the
housing and infrastructure space, the major cement consumer.
Cement capacity utilisation in India during the Financial Year 2011-12 is
estimated to have been around 75%. New capacities are being continuously
added much ahead of the increase in demand. Such additions have tended to
impact higher capacity utilisations.
The capacity utilisation in the country`s Southern Region, where the
Company`s cement plants are located, is estimated to have been only 61%
during the Financial Year 2011-12 as against 65% during the previous year.
Moreover, a de-growth of 3% in the consumption of cement is reported to
have been also recorded in this Region during Financial Year 2011-12.
The demand for Viscose Filament Yarn (VFY) was subdued during Financial
Year 2011-12 owing to severe competition from other competing fibres. The
inventory of the industry increased substantially as compared to the
previous year. Consequently, the unit price realisations for the industry
as a whole came under intense pressure.
Opportunities, Threats, Risks and Concerns
Although growth might have temporarily slowed, the trend rate of India`s
economic growth remains intact at a healthy level. This, coupled with
increased investments in infrastructure should result in a rapidly
expanding automotive market in India, and provide numerous growth
opportunities for the tyre business. In the near term, however, there is
some concern whether the automotive segment would grow as aggressively as
in the past owing to a slowing economy.
Increased competition from global majors like Michelin, Bridgestone and
Continental who are putting up or expanding capacities could emerge as a
challenge for domestic manufacturers.
The industry`s large installed capacities in commercial vehicle cross ply
tyres at a time of advancing radialisation could be another concern.
The cement industry has been augmenting capacity progressively over the
years. Cement production is reported to have already surpassed the Eleventh
Five Year Plan target. The Central Government has now set a production
target of 479 Million Tonnes of cement by the end of the Twelfth Five Year
Plan i.e. 2017. There is therefore hope of increased spending by the
Government on infrastructure.
Power is a major input for cement. Much of the power output in India today
is thermal. Quality Power output quality is dependent critically on coal
availability and its pricing. There is some concern in the industry on both
issues. As a controlled commodity, coal is not always readily available in
quantities that the industry would like it to be made available. For
instance, coal quantities under the linkage system is frequently subject to
uncertainty. Consequently, the industry has to either purchase coal from
the open market through e-auctions or alternatively import the commodity.
These have to be done at prices that are not always economical. In
addition, logistics constraints like, for instance, non-availability of
railway wagons for evacuating the cement produced and for inward movement
of raw materials are a concern.
Spiralling input costs, stiff competition from China, substitution of rayon
by cheaper fibres are concerns. In an environment of increasing costs and
subdued demand, the recent increase of excise duty on rayon products in the
Union Budget could prove to be another dampener.
Despite concerns of a slowing economy in the near term and the consequent
impact on the automotive sector, the overall outlook for the tyre industry
is positive. Infrastructure investments in roads, growing income of the
country`s middle class, increasing mechanisation of agriculture and the
continued ready availability of loan finance for vehicles will act as an
impetus to tyre sales.
The near term outlook is expected to be bright. This country`s per capita
cement consumption is only about 180 kg. against the world average of 447
kg. . Moreover, infrastructure growth in the country is still considered to
be in a state of infancy. It is a given that infrastructure growth will be
dependent on sufficient availability of cement and this will in turn
further boost cement demand in the country.
The demand for VFY is likely to improve due to expected change in fashion
trends leading to increased consumption of VFY value added products. The
price of pulp, a major raw material, is also likely to reduce.
Internal Control System and their adequacy
The Company has robust internal control systems and continues to seek ways
to further strengthen these. The functioning of the control systems
operating in the Company are reviewed and reassessed by the management on a
continuous basis to ensure their efficacy. During the Financial Year 2011-
12, for instance, several measures were initiated to further tone up
control systems in the tyre business. These include an eventual roll out of
Standard Operating Procedures and finally amalgamating these with an ERP
The Company as a whole had 16,695 persons on its rolls as on 31.03.2012.
Statements in this report on Management Discussion and Analysis describing
the Company`s objectives, projections, estimates, expectations or
predictions may be forward looking statements within the meaning of
applicable laws or regulations. These statements are based on certain
assumptions and reasonable expectation of future events. Actual results
could, however, differ materially from those expressed or implied.
Important factors that could make a difference to the Company`s operations
include global and domestic demand-supply conditions, finished goods
prices, raw materials cost & availability, changes in Government
regulations and tax structure, economic developments within India and the
countries with which the Company has business contacts and other factors
such as litigation and industrial relations.
Thus, the Company should and need not be held responsible, if, which is not
unlikely, the future turns out to be something quite different. Subject to
this management disclaimer, this discussion and analysis should be perused.
K.C. Jain P.K. Mallik
Whole-time Director Manjushree Khaitan
Place: Kolkata Gautam Ganguli K.P. Khandelwal
Date : 28th April, 2012 Company Secretary Director
INFORMATION AS REQUIRED UNDER SECTION 217(1)(e) READ WITH COMPANIES
(DISCLOSURE OF PARTICULARS IN RESPECT OF BOARD OF DIRECTORS) RULES, 1988
I. CONSERVATION OF ENERGY:
(a) Energy conservation measures taken:
i) Installation of energy efficient pumps.
ii) Installation of VFD motors at various locations.
iii) Redesigning of chilled water systems to make these more energy
(b) Additional investment proposals, if any, being implemented for
reduction of consumption of energy:
i) Replacement of sodium vapour lights by LEDs.
ii) Increased use of VFD motors in identified areas.
iii) Redesigning of hot and cold water operating systems.
iv) Energy audit of manufacturing operations.
(c) Impact of measures at (a) & (b) above for reduction of energy
consumption and consequent impact on the cost of production of goods:
There has been a reduction in the consumption of coal and electricity per
unit of production in certain business areas.
(d) Total energy consumption and energy consumption per unit of production
as per Form "A" is appended.
FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY
(A) Power and Fuel Consumption Current Year Previous Year
(a) Purchased Units (in lac) 1112.57 1419.95
Total Amount (Rs./crore) 58.26 68.99
Rate/Unit (Rs.) 5.24 4.86
(b) Own Generation
(i) Through Diesel Generator
Units (in lac) 44.41 107.21
Units per Ltr. of diesel oil 3.52 3.54
Cost/Unit (Rs) 10.07 9.41
(ii) Through Steam Turbine/ Generator
Units (in lac) 6216.59 7160.01
Unit per Kg. of Coal 1.00 1.01
Cost/Unit (Rs.) 3.86 2.95
(2) Coal (Grade B, C, D, E, F, Steam/ 14.55 17.16
Slack, ROM, Lignite and Grade-A
Steam Coal used in Boiler Houses,
calcining of raw meals, firing of
Kiln and gas plant)
Total Cost (Rs./crore) 671.01 581.09
Average Rate/MT (Rs.) 4613.28 3385.97
(3) Furnace Oil
Quantity (K.Ltrs.) 772.07 3016.09
Total Cost (Rs./crore) 3.31 9.27
Average Rate/Ltr. (Rs.) 42.92 30.73
i) HSD Oil
Quantity (K.Ltrs.) 274.02 291.72
Total Cost (Rs./crore) 1.05 1.03
Rate/Ltr. (Rs.) 38.45 35.44
Quantity (MT/lac) .027 .026
Total Cost (Rs./crore) 15.83 12.92
Rate/Ltr. (Rs.) 57.24 50.47
iii) Diesel Oil
Quantity (K.Ltrs.) 1255.94 3000.78
Total Cost (Rs./crore) 4.45 9.97
Rate/Ltr. (Rs.) 35.46 33.21
Quantity (MT/lac) 0.02 -
Total Cost (Rs./crore) 0.47 -
Rate/Kg. (Rs.) 2.15 -
v) Wood Chip
Quantity (MT/lac) 0.01 -
Total Cost (Rs./crore) 0.16 -
Rate/Kg. (Rs.) 1.83 -
vi) Rice Husk
Quantity (MT) 167.00 -
Total Cost (Rs./crore) 0.08 -
Rate/Kg. (Rs.) 4.64 -
(B) Consumption per Unit of Production
Production Standards Current Previous
Unit if any Year Year
1. Electricity (kwh)
Vis. Filament Rayon Yarn M.T. - 4257 4188
(b) Transparent Paper
(Cellulose Film) M.T. - 2079 2167 (a)
Sulphuric Acid M.T. - 41 40 (b)
Caustic Soda M.T. - - 3903
Purified Hydrogen Gas M3 - - 0.42
Sodium Hypochloride M.T. - - 45
Carbon-di-Sulphide M.T. - 1077 1071 (c)
Sodium Sulphate M.T. - 105 97 (b)
Sodium Sulphide M.T. - 285 285
Cement M.T. - 77 79 (a)
Tyres, Tubes & Flaps M.T. - 1328 1180 (f)
Vis. Filament Rayon Yarn M.T. - 4.13 3.95 (d)
(Cellulose Film) M.T. - 7.18 6.94 (d)
Carbon-di-Sulphide M.T. - 0.49 0.35 (d)
Sodium Sulphate M.T. - 0.46 0.45 (d)
Cement M.T. - 0.13 0.15 (a)
Tyres, Tubes & Flaps M.T. - 1.13 0.97 (f)
3. Furnace Oil
Tyres, Tubes & Flaps K.L. - 0.005 0.016 (e)
Tyres, Tubes & Flaps M.T. - 0.017 0.014 (f)
Reasons of variation:
(a) energy conservation measures taken.
(b) lower production.
(c) difference considered normal.
(d) inferior quality of coal.
(e) lesser use.
(f) due to variety in product mix.
Note: Previous year`s figures have been re-arranged, where necessary.
II. TECHNOLOGY ABSORPTION:
Efforts made in technology absorption disclosed as per Form B appended.
1. Research & Development (R&D)
(a) Specific areas in which R&D carried out:
Viscose preheating to control ripening index. Reduction of agitation speed
in viscose tanks and trial of polycarbonate funnels in spinning machines.
Increased utilisation of fly ash in PPC production and grinding aids used
to increase output of Cement. Development of truck radial (tubeless) tyres
and new products in the existing range of truck radial and two wheeler
(b) Benefits derived as a result of above R&D:
Improved yarn quality by reducing broken filaments. Improvement in quality
(c) Future Plan of Action:
Modifications in textile machines and tensioner adjustment for uniform
tension and oil pick up. Installation of Waste Heat Recovery Systems and
utilisation of alternative fuels for Kiln. Introduction of passenger radial
tyres, two wheeler (tubeless) tyres. Development of cost effective truck
radial tyres specially for export markets.
d) Expenditure on R&D (Rs./crore)
(i) Capital 0.82
(ii) Recurring 2.74
(iii) Total 3.56
(iv) Total R&D expenditure as a percentage of total turnover:
The Cement Business has incurred the above expenditure. In addition, a
Cess @ Rs. 0.75 per tonne of cement despatched is payable to the
Development Commissioner for Cement Industry, Government of India, who in
turn financially assists the National Council of Cement & Building
Materials to carry out Research & Development Programmes for the Cement
Industry. During the Financial Year 2011-12, the Company paid Rs. 0.37
crore on this account.
2. Technology Absorption, Adaptation and Innovation
(a) Efforts, in brief, made towards technology absorption, adaptation and
Motor less vane type exhaust fan and `D` canter type centrifuge in place
of bucket centrifuge. Replacement of existing Cement Mill-3 ESP Bag House
and automisation of 1 & 2 fly ash feeding arrangements for Cement Mills.
(b) Benefits derived as a result of the above efforts e.g. product
improvement, cost reduction, product development, import substitution etc.:
Improvement in the quality of yarn. Reduction in power consumption,
improvement in quality & optimum capacity utilisation.
3. In case of imported technology (imported during last 5 years reckoned
from the beginning of the financial year), following information may be
(i) Technology imported }
(ii) Year of import } Not Applicable.
(iii) Has technology been fully absorbed? }
III. FOREIGN EXCHANGE EARNINGS & OUTGO:
1. Activities relating to exports, initiatives taken to increase exports,
development of new export markets for products and export plans:
Exports were focused on value added products of VFY Transparent Paper
exports to regular countries were maintained and new markets in New
Zealand, Portugal, U.K., Yemen etc. are being explored. Tyre Exports were
made to several countries during the year and efforts are being made to
increase volume of exports by exploring new markets.
2. Total Foreign Exchange used and earned:-
Used Rs. 1067.04 crore
Earned (on F.O.B. realisation basis) Rs. 511.87 crore
K.C. Jain P.K. Mallik
Whole-time Director Manjushree Khaitan
Place: Kolkata Gautam Ganguli K.P. Khandelwal
Date : 28th April, 2012 Company Secretary Director