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Directors Report of Prism Cement Ltd.

Mar 31, 2015

Dear Members,

The Directors present the Twenty-third Annual Report together with the audited Statement of Accounts of the Company for the year ended March 31, 2015.

FINANCIAL RESULTS

Particulars 2104 -15 2013 -14 Rs. Crores Rs. Crores

Sale of products and services 6,009.01 5,344.82

Other operating income 22.07 20.60

6,031.08 5,365.42

Less : Excise duty 437.20 400.56

Total Revenue from operations 5,593.88 4,964.86

Other income 33.48 140.44

Total Revenue 5,627.36 5,105.30

Expenditure 5,700.23 5,242.50

Loss before exceptional items and tax (72.87) (137.20)

Exceptional items 62.12 9.37

Loss before Tax (10.75) (127.83)

Tax expenses (25.45) 46.18

Profit/(Loss) for the year 14.70 (81.65)

Add : Surplus - opening balance 284.00 357.24

Amount available for appropriation 298.70 275.59

Add : Transfer from/(to) Debenture 11.75 8.41 Redemption Reserve

Less : Adjustment relating to Schedule II 7.39 -

Surplus - closing balance 303.06 284.00

The amount of Rs. 303.06 crores is proposed to be retained in the Statement of Profit and Loss.

DIVIDEND

In view of inadequate profits, the Directors have not recommended any dividend for the financial year ended March 31, 2015.

OPERATIONS

The gross sales and other income for the year ended March 31, 2015 was Rs. 6,064.56 crores as against Rs. 5,505.86 crores for the previous year. The Company incurred a loss before tax of Rs. 10.75 crores and profit after tax of Rs. 14.70 crores during the year ended March 31, 2015 as against loss before tax of Rs. 127.83 crores and loss after tax of Rs. 81.65 crores during the year ended March 31, 2014.

For the year ended March 31, 2015, the consolidated profit after tax of the Company and its subsidiary companies amounted to Rs. 2.62 crores as against a loss after tax of Rs. 86.20 crores for the previous year.

COAL BLOCK

Subsequent to the Order dated September 24, 2014 of the Honourable Supreme Court on de-allocation of all coal mines including Sial Ghogri coal mine of the Company in Madhya Pradesh with effect from March 31, 2015 and promulgation of the Coal Mines (Special Provisions) Ordinance, 2014 and Coal Mines (Special Provision) Rules, 2014 (the Rules), the Central Government has completed bidding process. The Nominated Authority appointed under the Rules has passed Vesting Order dated March 23, 2015 and as a result thereof, with effect from April 1, 2015, the coal mine including lands, in or adjacent to the coal mines and mine infrastructure got vested in favour of the successful bidder. In compliance of the Vesting Order, the Company has handed over possession of the mine and the assets listed in the Vesting Order to the successful bidder.

Vide email dated March 26, 2015, the Nominated Authority has communicated to the Company that a sum of Rs. 32.49 crores has been determined as compensation payable to the Company. The Company has inter-alia disputed quantum of compensation and has preferred a Writ before the Hon'ble High Court of Judicature, Delhi and the Company has lodged claim of Rs. 72.86 crores. The aggregate exposure of the Company on account of Coal Mine Development expenses, Mining Surface Rights, Land, Other infrastructure for mine, Capital work-in-progress relating to buildings under construction and other related matter is around Rs. 47.49 crores (including geological survey expenses written off in the books of accounts of Rs. 6.22 crores). Since the matter is sub-judice and pending settlement of the claim, no adjustment has been made in the accounts.

SHARE CAPITAL

The paid-up Equity Share Capital was Rs. 503.36 Crores as on March 31, 2015. During the year under review, the Company has not issued shares with differential voting rights neither granted stock options nor sweat equity.

The Company does not propose to issue any preference shares in the future. It is, therefore, proposed to reclassify the existing unissued Preference Shares into Equity shares of the Company. Attention of members is drawn to Item No. 5 of the Notice of the Annual General Meeting.

FINANCE

The Company has repaid loans of Rs. 1,087.42 crores during the year and tied-up fresh loans of Rs. 1,149.78 crores, including Rs. 750 crores by way of Secured Redeemable Non-convertible Debentures, to finance, inter alia, its ongoing long term working capital and capital expenditure during the year. The total borrowings of the Company stood at Rs. 1,896.58 crores as on March 31, 2015.

The loans were used for the purpose they were sanctioned for by the respective banks/financial institutions.

FIXED DEPOSITS

The Company accepted fixed deposits aggregating to Rs. 13.46 crores during the year ended March 31, 2015. Out of the total 8,970 deposits of Rs. 37.14 crores from the public and the shareholders as at March 31, 2015, 426 deposits amounting to Rs. 1.28 crores had matured and had not been claimed as on that date. Since then, 72 of these deposits aggregating to Rs. 0.45 crores have been claimed.

There has been no default in the repayment of the deposits or payment of interest thereon during the year under review. All deposits accepted by the Company are in compliance with the requirement of the Companies Act, 2013 and the Rules thereunder.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year, the Company has transferred a sum of Rs. 0.96 crores to the Investor Education and Protection Fund in compliance with provisions of the Companies Act, 2013 which represents unclaimed dividend and unclaimed fixed deposits and unclaimed interest on the fixed deposits.

SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES

The performance and financial performance of each of the Company's subsidiaries, associate and joint venture companies included in the consolidated financial statements is presented below :

Subsidiaries

* Raheja QBE General Insurance Company Limited (RQBE),

the general insurance subsidiary continued building upon the existing capabilities as well as seizing profitable opportunities during the year under review. During the year, the Company has booked gross written premium of Rs. 29.03 crores as against Rs. 31.63 crores in the previous year. The net earned premium stood at Rs. 19.52 crores. The total income from investment for the year under review was Rs. 20.94 crores as against Rs. 19.88 crores in the previous year. RQBE's profit after tax increased to Rs. 10.67 crores from a profit after tax of Rs. 6.42 crores in the previous year.

* Silica Ceramica Private Limited (Silica) has shown gradual improvement in performance during the financial year. Silica has started utilising its full available capacity and has achieved substantial reduction of process losses resulting in increase in production of premium quality Tiles. Value added products in the form of 600x600 mm GVT were introduced during the financial year. With continuous availability of Natural Gas from ONGC during the last quarter of 2014-15, Silica has been able to achieve a profit of Rs. 8.84 crores before interest in the last quarter of financial year. The gross revenue from operations for the year under review was Rs. 248.14 crores (previous year : Rs. 198.36 crores) and the loss after tax was Rs. 32.77 crores (previous year : Rs. 24.69 crores).

* H. & R. Johnson (India) TBK Limited, the wholly-owned subsidiary of the Company in the field of tile, bath and kitchen retailing, has presence in the state/union territories of Maharashtra, Madhya Pradesh, Telangana, Andhra Pradesh, Delhi, Chandigarh, Punjab, Himachal Pradesh, Karnataka, Uttar Pradesh. The Company and its Joint Ventures have 28 showrooms of House of Johnson and 13 showrooms of Johnson Corners as at March 31, 2015. For the year ended March 31, 2015, gross revenue from operations was Rs. 139.76 crores (previous year : Rs. 142.17 crores) and loss after Tax was Rs. 3.57 crores (previous year : Rs. 1.32 crores).

* Milano Bathroom Fittings Private Limited (Milano), the

wholly-owned subsidiary of the Company manufacturing bathroom fittings and accessories, has performed well during the year. Improved capacity utilisation at its Samba Unit in Himachal Pradesh, improved product portfolio and cost efficient manufacturing has contributed to the growth of Milano. For the year ended March 31, 2015, gross revenue from operations was Rs. 44.67 crores (previous year : Rs. 40.44 crores) with profit after tax of Rs. 3.03 crores (previous year : Rs. 1.44 crores).

* RMC Readymix Porselano (India) Limited is a wholly-owned subsidiary of the Company and is yet to commence operations.

* TBK Venkataramiah Tile Bath Kitchen Private Limited, a wholly-owned subsidiary of H. & R. Johnson (India) TBK Limited, is in the field of tile, bath and kitchen retailing, The gross revenue from operations was Rs. 1.93 crores (previous year : Rs. 2.53 crores) and loss after tax was Rs. 0.28 crores (previous year : profit Rs. 0.06 crores)

Associate

* Prism Power and Infrastructure Private Limited is an associate of the Company and is yet to commence operations.

Joint Ventures (JV)

* Ardex Endura (India) Private Limited (AEIPL), the joint venture with the German group Ardex, which manufactures and markets tile adhesives, grouts, flooring, waterproofing and allied products has performed satisfactorily during the year. For the year ended March 31,2015, AEIPL achieved gross revenue from operations of Rs. 101.49 crores (previous year : Rs. 92.52 crores) and profit after tax of Rs. 4.11 crores (previous year : Rs. 4.14 crores). AEIPL is in the process of setting-up a new plant in West Bengal near Durgapur and project implementation activities commenced during the year.

* Sentini Cermica Private Limited (Sentini), the mid-segment glazed floor tile JV Company in Andhra Pradesh, has performed satisfactorily during the year.With the implementation of the Coal Gassifier Plant and availability of CNG, Sentini has been able to achieve reduction in cost of production during the financial year. The production and sales of 600x600 mm Digital Floor Tiles have also contributed towards higher profitability. For the year ended March 31,2015, Sentini achieved gross revenue from operations of Rs.159.62 crores (previous year : Rs. 115.90 crores) and profit after tax of Rs. 3.54 crores (previous year loss after tax : Rs. 2.25 crores).

* Antique Marbonite Private Limited, the vitrified tile JV Company in Gujarat, has achieved gross revenue from operations of Rs. 288.86 crores (previous year : Rs. 261.05 crores) and profit after tax of Rs. 9.89 crores (previous year : Rs. 3.95 crores).

* Spectrum Johnson Tiles Private Limited (Spectrum), the mid-segment wall tiles JV Company in Gujarat, has performed satisfactorily during the year.The increase in production and sales of 300x200 mm and 375x250 mm digital tiles have contributed towards increase in profitability during the financial year. For the year ended March 31,2015, Spectrum achieved gross revenue of Rs. 91.79 crores (previous year : Rs. 82.98 crores) and profit after tax of Rs. 5.20 crores (previous year : Rs. 2.37 crores).

* Small Johnson Floor Tiles Private Limited (Small), the mid-segment floor tiles JV Company in Gujarat, has performed satisfactorily during the year. For the year ended March 31, 2015, Small achieved gross revenue from operations of Rs. 66.77 crores (previous year : Rs. 65.16 crores) and profit after tax of Rs. 2.24 crores (previous year : Rs. 2.21 crores).

CONSOLIDATED FINANCIAL STATEMENT

The audited consolidated financial statements of the Company, its subsidiaries, joint ventures and associates prepared in accordance with the Companies Act, 2013 and the applicable Accounting Standards form part of this Annual Report.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing salient features of financial statements of subsidiaries, associates and joint venture companies in Form AOC - 1 is attached to the Accounts.

The separate audited financial statements in respect of each of the subsidiary companies shall be kept open for inspection at the Registered Office of the Company during working hours for a period of 21 days before the date of the Annual General Meeting. The Company shall also provide a copy of the Annual Report and other related information of its subsidiary companies as required under Section 136 of the Companies Act, 2013 to the shareholders of the Company and the subsidiaries upon their written request. The separate audited financial statements in respect of each subsidiary company is also available on the website of the Company at www.prismcement.com/investors/FinancialResults

DIRECTORS

Mr. S. Ramnath resigned from the Board of Directors of the Company on February 4, 2015 due to personal reasons. The Board wishes to place on record its appreciation of the valuable contributions made by Mr. Ramnath during his tenure with the Company.

Pursuant to Section 152 of the Companies Act, 2013, Mr. Rajesh Kapadia retires by rotation at the forthcoming Annual General Meeting of the Company and is eligible for re-appointment.

In accordance with the requirements of the Companies Act, 2013, the shareholders, at the 22nd Annual General Meeting of the Company held on July 31, 2014, have appointed the Independent Directors - Mr. J. A. Brooks, Ms. Ameeta A. Parpia and Mr. Shobhan M. Thakore for a term of five consecutive years upto July 30, 2019.

The Company has received declarations from Mr. Brooks, Ms. Parpia and Mr. Thakore, Independent Directors of the Company, confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

The details of familiarisation programme for Independent Directors have been disclosed in the Report on Corporate Governance and on the website of the Company www.prismcement.com/AboutUs/Policies.

As required, the requisite details of the Director seeking re-appointment are included in this Annual Report.

Meetings

The Board of Directors met thirteen times during the year ended March 31, 2015. Additionally, several Committee Meetings were held including the Audit Committee, which met seven times during the year. Details of the meetings are included in the Report on Corporate Governance.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation during the year under review. Details on the same is given in the Report on Corporate Governance. Remuneration Policy

The policy on Director's appointment and remuneration including criteria for determining qualifications, positive attributes, independence of Director and also remuneration for Key Managerial Personnel and other employees forms part of Report on Corporate Governance.

KEY MANAGERIAL PERSONNEL

During the year under review, the Company has appointed the following persons as Key Managerial Personnel under the Companies Act, 2013 :

Sr. Name of the person Designation No.

1. Mr. Vijay Aggarwal Managing Director

2. Mr. Ganesh Kaskar Executive Director - HRJ

3. Mr. V. M. Panicker Executive Director - RMC

4. Mr. S. Ramnath Executive Director - Cement (resigned w.e.f February 5, 2015)

5. Mr. P. K. Akhramka Chief Financial Officer

6. Ms. Aneeta S. Kulkarni Company Secretary

COMPOSITION OF AUDIT COMMITTEE

The Board has constituted an Audit Committee, details of the same is stated in the Report on Corporate Governance.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established a vigil mechanism by adopting a Whistle Blower Policy to report concerns about unethical behaviour, actual or suspected, fraud or violation of the Company's code of conduct, if any. The details of the Policy is explained in the Report on Corporate Governance and also posted on the website of the Company at www.prismcement.com/AboutUs/Policies.

RISK MANAGEMENT

The Company works across a wide range of products i.e. Cement, Tiles, Bath and Kitchens products, Readymixed concrete. Several of the product lines have their own unique business and operating models. These businesses operate in an evolving and challenging business environment. The ability to create sustainable value is dependent on recognising and effectively addressing key risks that exist in this environment.

To facilitate this, each of the Company's businesses has adopted a robust risk management programme. The risk management programme does not aim at eliminating risks, as that would simultaneously eliminate all chances of rewards/opportunities. It is instead focused on ensuring that risks are known and being addressed proactively through a well-defined framework.

The Risk Management Policy framed by the Company details the objectives and principles of risk management along with an overview of the risk management process, procedures and related roles and responsibilities. The risk management process includes identifying types of risks and its assessment, risk handling and monitoring and reporting.

Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee. The details of the Committee and its terms of reference are set in the Report on Corporate Governance.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

CSR is a conscious commitment of the Company to contribute to economic development while improving the quality of life of the underprivileged and their families as well as of the local community in the geographies in which the Company operates and the society at large.

The Company has adopted a CSR Policy based on which its future CSR initiatives shall be developed and implemented. The Company policy is focussed on CSR initiatives in areas such as water, health and sanitation, energy conservation, pollution-free atmosphere, clean technologies and primary health care for the villagers in the vicinity of the plants. The Policy is available on the Company's website at www.prismcement.com/AboutUs/Policies

In view of the average net profits of the three preceding financial years being in the negative, the Company was not required to spend on CSR activities for the FY 2014-15. Requisite disclosure including composition of the CSR Committee has been made in the prescribed form annexed herewith as Annexure 'A'.

LOANS, GUARANTEES AND INVESTMENTS

The particulars of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in Annexure 'B' annexed herewith.

RELATED PARTY TRANSACTIONS

All Related Party Transactions are placed before the Audit Committee as also the Board, wherever required, for prior approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature. A statement giving details of all related party transactions entered into pursuant to the omnibus approval is placed before the Audit Committee for their review on a quarterly basis. The statement is supported by a Certificate from the Managing Director, Executive Directors and the Chief Financial Officer.

The policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Company at www.prismcement.com/AboutUs/Policies.

There are no material significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.

The Company has provided Corporate Guarantees to financiers of its subsidiary - Silica Ceramica Private Limited to facilitate fund raising. Details of the said transactions pursuant to sub-section (1) of Section 188 of the Companies Act, 2013 are given in the prescribed Form AOC - 2 annexed herewith as Annexure 'C'.

Attention of the members is drawn to the disclosure of related party transactions set out in Note No. 44 of the Standalone Financial Statements forming part of this Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, to the best of their knowledge and belief and according to the information and explanations obtained by them, the Directors confirm :

a. That in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. That such accounting policies as mentioned in Note 1 of the Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date;

c. That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. That the annual financial statements have been prepared on a going concern basis;

e. That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

f. That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

EMPLOYEE REMUNERATION

The ratio of remuneration of each Director to the median employees' remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report as Annexure 'D'.

The information required under Section 197 of the Companies Act, 2013 and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report and is available for inspection by the members at the Registered Office of the Company during business hours on working days upto the date of the ensuing Annual General Meeting. Any shareholder interested in obtaining a copy of the statement may write to the Company's Registered Office at Hyderabad or to its Corporate Office at Mumbai.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, is given in Annexure 'E' forming part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India is presented in a separate section forming part of this Annual Report.

CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Corporate Governance together with a certificate from the Company's Auditors confirming compliance forms part of this Annual Report.

INTERNAL FINANCIAL CONTROL SYSTEMS

The Company has established set of standards, processes and structure which enables it to implement adequate internal financial controls and that the same are operating effectively. The Company has in place systematic measures such as reviews, checks and balances, methods and procedures to conduct its business in an orderly and efficient manner. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company towards ensuring management effectiveness and efficiency and reliable reporting. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

AUDITORS

The shareholders at the 22nd Annual General Meeting appointed M/s. G. M. Kapadia & Co., Chartered Accountants, Mumbai as the Company's Auditors upto conclusion of the 26th Annual General Meeting of the Company, subject to ratification of the appointment by the members at every AGM, to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said Section. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder. As required under Clause 49 of the Listing Agreement, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The Report given by the Auditors on the financial statements of the Company are part of the Annual Report. There is no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

Secretarial Auditor

The Company has appointed M/s. Savita Jyoti Associates, Practising Company Secretaries, Hyderabad to undertake the Secretarial Audit of the Company for the year 2014-15 pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. There were no qualification, reservation or adverse remarks given by Secretarial Auditors of the Company. The Report of the Secretarial Auditor is annexed herewith as Annexure 'F'.

Cost Auditors

As per the requirements of the Companies Act, 2013, the Company's cost records for the year ended March 31, 2015 are being audited by M/s. N. I. Mehta & Co., Cost Accountants, Mumbai. The Board of Directors of the Company has, at its meeting held on May 14, 2015, appointed M/s. N. I. Mehta & Co. as the Cost Auditors for the year ending March 31, 2016.

ANNUAL RETURN

The extract of the Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure 'G' attached to this Report.

GENERAL

1. No significant and material orders were passed by the Regulators or courts or tribunals impacting the going concern status and Company's operations in future.

2. The Company offers equal employment opportunity and is committed to creating a healthy working environment that enables employees to work without fear of prejudice, gender bias and sexual harassment. The Company has also framed a policy on Prevention of Sexual Harassment of Women at workplace. There were no cases reported during the year under review under the said Policy.

3. No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which the financial statements relate and the date of this report.

ACKNOWLEDGEMENTS

The Directors thank the shareholders, various Central and State Government departments/agencies, banks and other business associates for their valuable services and continued support during the year under review. The Board also takes this opportunity to express its sincere appreciation of the contribution and dedicated work of all the employees of the Company.

For and on behalf of the Board of Directors

RAJESH G. KAPADIA Place : Mumbai Chairman Date : May 14, 2015


Mar 31, 2014

To the Shareholders,

The Directors present the Twenty-second Annual Report together with the audited Accounts of the Company for the year ended March 31, 2014.

FINANCIAL RESULTS

2013-14 2012-13 Rs. Crores Rs. Crores

Sales of products and services 5,344.82 5,123.67

Other operating income 20.60 25.80

5,365.42 5,149.47

Less : Excise duty 400.56 381.00

Total Revenue from Operations 4,964.86 4,768.47

Other income 140.44 5.53

Total Revenue 5,105.30 4,774.00

Expenditure 5,242.50 4,858.61

Profit/(Loss) before exceptional

items and Tax (137.20) (84.61)

Exceptional items 9.37 1.62

Profit/(Loss) before Tax (127.83) (82.99)

Tax expenses 46.18 23.51

Profit/(Loss) for the year (81.65) (59.48)

Add : Dividend received on own

shares held through Trust - 0.62

Add : Surplus - opening balance 357.24 445.54

Amount available for appropriation 275.59 386.68

Add : Transfer from/(to)

Debenture Redemption Reserve 8.41 (29.44)

Surplus closing balance 284.00 357.24

OPERATIONS

The gross sales and other income for the year ended March 31, 2014 was Rs. 5,505.86 crores as against Rs. 5,1 55.00 crores for the previous year. The Company incurred a loss before tax of Rs. 127.83 crores and net loss of Rs. 81.65 crores during the year ended March 31, 2014 as against loss before tax of Rs. 82.99 crores and net loss of Rs. 59.48 crores during the year ended March 31, 2013, primarily due o sluggish demand, higher power and fuel costs, freight charges and subdued realisations.

For the year ended March 31, 2014, he consolidated ne loss of the Company and is subsidiary companies amounted to Rs. 86.20 crores as agains at net loss of Rs. 62.47 crores for the previous year.

FINANCE

The Company has repaid loans of Rs. 929.09 crores during the year and tied-up fresh loans of Rs. 1,110.98 crores o finance, inter alia, is ongoing long term working capital and capital expenditure during the year. The total borrowings of the Company stood at Rs. 1,834.23 crores as on March 31, 2014.

The loans were used for the purpose ha they were sanctioned for by the respective banks/financial institutions.

FIXED DEPOSITS

Out of the total 11,103 deposits of Rs. 140.58 crores from the public and the shareholders as a March 31, 2014, 393 deposits amounting o Rs. 0.90 crores had matured and had not been claimed as on ha date. Since then, 81 of these deposits aggregating to Rs. 0.25 crores have been claimed.

During the year, he Company has transferred a sum of 0.06 crores to he Investor Education and Projection Fund in compliance with Section 205C of the Companies Ac, 1956 which represents unclaimed fixed deposits and interest thereon.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Since its inception he Company has been socially responsible and has voluntarily undertaken various Corporate Social Responsibility initiatives even when here were no legal and statutory requirements in this regard.

In is commitment to CSR initiatives, the Company has been making available medical and education assistance to economically disadvantaged and socially weaker Sections of the society. In addition, he Company independently carries out a variety of social initiatives in the areas of education, healthcare and environment where it actively involves is employees.

As part of Prism''s focus on healthcare, vaccination camps, blood donation drives, general health and eye-check camps are regularly conducted for construction workers and their families and disadvantaged communities around is operational sites. Similarly, at certain locations close to the Company''s Rs. operations, school book distributions are carried out for the children of local residents. Apart from these, awareness programmes on health, safely and hygiene are also carried out from time-to-time for labourers.

DIRECTORS

Mr. Manoj Chhabra retired as Managing Director on August 24, 2013. Mr. Akshay Raheja resigned from the Board on July 24, 2013 and was appointed as Alternate to Mr. Saish Raheja. Mr. Saish Raheja has resigned from the Board of Directors of the Company on May 27, 2014 due to personal reasons. Consequently, Mr. Akshay Raheja, who was appointed as Alternate Director to him, has ceased to be a Director of the Company with effect from the same date. The Board wishes to place on record is appreciation of the valuable contributions made by Mr. Manoj Chhabra, Mr. Saish Raheja and Mr. Akshay Raheja during their respective tenures with the Company.

The Board of Directors has been broad based by the induction of Mr. S. Ramnah and Mr. V. M. Panicker as Additional Directors with effect from August 25, 2013. They hold office up to the date of the forhcoming Annual General Meeting. The Board, a is Meeting held on July 25, 2013, has also, subject to the requisite approvals, appointed Mr. S. Ramnah as Executive Director (Cement) and Mr. V. M. Panicker as Executive Director (RMC) of the Company for a period of three years with effect from August 25, 2013, upto terms and conditions mentioned in the Notice of the ensuing Annual General Meeting read with the Explanatory Statement there. The Company has received requisite Notices in writing from a member proposing Mr. S. Ramnah and Mr. V. M. Panicker for appointment as Executive Directors. The Board recommends their appointments.

Pursuant to Section 152 of the Companies Act, 2013, Mr. Rajan Raheja retires by rotation a the forthcoming Annual General Meeting of the Company and is eligible for re-appointment.

The Companies Act, 2013 provides for appointment of independent Directors. Sub-Section (10) of Section 149 of the Companies Ac, 2013 (effective April 1, 2014) provides hat independent Directors shall hold office for a term of up to five consecutive years on the Board of a company and shall be eligible for re-appointment on passing a special resolution by the shareholders of the company.

The non-executive (independent) Directors were appointed as Directors liable to retire by rotation under the provisions of the erstwhile Companies Act, 1956. Pursuant to Section 149 and Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014, Mr. J. A. Brooks and Ms. Ameeta A. Parpia retire at the forthcoming Annual General Meeting of the Company and are eligible for appointment for a term of five consecutive years as Independent Directors in accordance with the Companies Act, 2013.

The Company has received declarations from Mr. Brooks and Ms. Parpia, Independent Directors of the Company confirming ha hey meet with the criteria of independence as prescribed both under sub-Section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

As required, he requisite details of Directors seeking appointment/re-appointment are included in his Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, relating to Directors'' Responsibility Statement, he Directors, to the best of their knowledge and belief and according o he information and explanations obtained by them, confirm that:

1. in preparation of the Annual Accounts for the year ended March 31, 2014, he applicable Accounting Standards have been followed and here has been no material departure;

2. hey have selected such accounting policies and applied hem consistently and made judgements and estimates ha are reasonable and prudent, so as to give a rue and fair view of the sae of affairs of the Company as on March 31, 2014 and of the loss of the Company for the year ended on that date;

3. hey have taken proper and sufficient care o he best of their knowledge 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;

4. hey have prepared he Accounts for the year ended March 31, 2014 on a going concern basis.

PARTICULARS OF EMPLOYEES

Pursuant o he provisions of Section 217(2A) of the Companies Act, 1956 and he rules hereunder, the particulars are given in the statement which forms part of his Report. However, as per provisions of Section 219(1 )(b)(iv) of the Companies Act, 1956, he Directors'' Report is being sent to all the shareholders excluding he aforesaid information. Any shareholder interested in obtaining a copy of the statement may write to the Company''s Registered Office a Hyderabad or to its Corporate Office at Mumbai.

CONSERVATION OF ENERGY,TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217(1 )(e) of the Companies Ac, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given in Annexure ''A'' forming part of this Report.

CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement with the Sock Exchanges, a separate Section on Corporate Governance together with a certificate from the Company''s Auditors confirming compliance is set out in the Annexure forming part of this Report.

AUDITORS

M/s. G. M. Kapadia & Co., Chartered Accountants, Mumbai, retire as Auditors at the forthcoming Annual General Meeting. The members will be required to appoint Auditors in terms of relevant provisions of the Companies Act, 2013 and fix their remuneration.

As required under the provisions of Section 139 and 141 of the Companies Ac, 2013, the Company has received written consent and certificate from M/s. G. M. Kapadia & Co., Chartered Accountants, proposing to be re-appointed as Auditors upto conclusion of the 26h Annual General Meeting of the Company, subject to ratification of the appointment by the members at every AGM, to the effect that heir re-appointment, if made, would be in conformity with the limits specified in the said Section.

As per the requirement of the Central Government and pursuant to Section 233B of the Companies Ac, 1956 and he Rules hereunder, the Company''s Cost Records for the year ended March 31, 2014 are being audited by Cost Auditors, M/s. N. I. Metha & Co. The Cost Audit Report for the year ended March 31, 2013 was filed within he stipulated due date. The Board of Directors of the Company has, a is Meeting held on May 27, 2014, appointed M/s. N. I. Metha & Co. as he Cost Auditors for the year ending March 31,2015. The members will be required o ratify the appointment of the Cost Auditors in terms of relevant provisions of the Companies Act, 2013.

SUBSIDIARY AND JOINT VENTURE COMPANIES

During the year under review, the Company''s subsidiaries and join venture companies performed satisfactorily. Subsidiaries

- Raheja QBE General Insurance Company Limited

(RQBE), the general insurance subsidiary continued is modest growth making is presence in new markets during the year under review. RQBE booked a gross written premium of Rs. 31.63 crores and earned an investment income of Rs. 19.88 crores for the year ended March 31, 2014, as against a gross written premium of Rs. 28.37 crores and investment income of Rs. 18.65 crores for the year ended March 31, 2013. After requisite adjustments and tax provisions, he profit for the year ended March 31, 2014 was Rs. 6.42 crores as against profit of Rs. 9.15 crores for the previous year.

- Silica Ceramica Private Limited has had a subdued performance during the year ended March 31, 2014. However, he performance is expect to improve in the current year.

- H. & R. Johnson (India) TBK Limited, he wholly-owned subsidiary of he Company in the field of tile, bath and Kitchen retailing, has taken Further steps to increase its geographical coverage. During the year, is Join Venture - TBK Venkataramiah Tile Bah Kitchen Pvt. Ld., was converted into a 100% subsidiary. The Company through is Join Ventures, opened during the year, four House of Johnson showrooms in Solan, Lucknow, Varanasi and Ludhiana taking the total number of showrooms to 26 as at March 31, 2014.

- Milano Bathroom Fittings Private Limited, the wholly-owned subsidiary of the Company manufacturing bathroom fillings and accessories, has performed well during the year. Improved capacity utilisation a is Samba Unit has contributed to the growth of the company.

- Lifestyle Investments PVT Limited (LIPL), he erstwhile overseas wholly-owned subsidiary, sold its stake in Norcros Pic, a Company listed on the London Stock Exchange. During the year ended March 31, 2014, he Company received an amount of Rs. 131 crores as dividend on he equity shares held in LIPL. The Company wound-up LIPL during the year and received Rs. 0.10 crores towards return of equity capital.

- RMC Ready-mix Porselano (India) Limited is a wholly owned subsidiary of the Company.

Joint Ventures (JV)

- Ardex Endura (India) Private Limited (AEIPL), JV with the German group Ardex, which manufactures and markets tile adhesives, grouts, flooring, waterproofing and allied products has performed satisfactorily during the year. AEIPL has setup another manufacturing plant in Ramanagara District in Karnataka which has become operational during the year.

- Senini Cermica Private Limited, the mid-segment glazed floor tile JV Company in Andhra Pradesh, has performed satisfactorily during the year.

- Anique Marbonie Private Limited, the vitrified tile JV Company in Gujarat, has performed satisfactorily during the year. Is wholly-owned subsidiary - Antique Johnson Ceramic Private Limited was amalgamated for beer operational benefits during the year.

- Spectrum Johnson Tiles Private Limited, the mid segment wall tiles JV Company in Gujarat, has performed satisfactorily during the year.

- Small Johnson Floor Tiles Private Limited, the mid segment floor tiles JV Company in Gujarat, has performed satisfactorily during the year.

In accordance with the General Circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Shee, Statement of Profit and Loss and other documents of the subsidiary companies are not being attached with the Balance Shee of the Company. However, the financial information of the subsidiary companies is disclosed in the Annual Report in compliance with the said circular.

The financial data of the subsidiaries has been furnished along with the statement pursuant to Section 212 of the Companies Act, 1956 forming part of the Annual Report. Further, pursuant to the applicable Accounting Standard (AS - 21) issued by the Institute of Chartered Accountants of India, the Company has presented he consolidated financial statements which include the financial information relating to is subsidiaries and forms part of the Annual Report.

The Company shall provide a copy of the Annual Report and other related information of its subsidiary companies as required under Section 212 of the Companies Act, 1956 to the shareholders of the Company and he subsidiaries upto heir written request. These documents will also be available for inspection a he registered office of the Company and he registered offices of the respective subsidiary companies during working hours up o he date of the Annual General Meeting.

ACKNOWLEDGEMENTS

The Directors thank he shareholders, various Central and Sae Government departments/agencies, banks and other business associates for heir valuable service and continued support during the year under review. The Board also takes his opportunity to express is sincere appreciation of the contribution and dedicated work of all the employees of the Company.

For and on behalf of the Board of Directors

RAJESH G. KAPADIA

Chairman

Place : Mumbai

Date: May 27, 2014


Mar 31, 2011

The Directors present the Nineteenth Annual Report together with the audited Accounts of the Company for the year ended March 31,2011.

FINANCIAL RESULTS

2010-111 2009-10 Rs. Crores Rs. Crores

Sales 3,556.94 2,988.87

Less: Excise duty 201.70 150.89

Net Sales 3,355.24 2,837.98

Other income 36.48 21.27

3,391.72 2,859.25 Expenditure 3,042.99 2,339.42

Profit before finance charges, depreciation, tax and exceptional items 348.73 519.83

Finance and other charges 105.73 52.86

Profit before depreciation, tax and exceptional items 243.00 466.97

Depreciation and amortisation 113.30 89.85

Profit before tax and exceptional items 129.70 377.12

Add: Exceptional items 0.96 (18.87) Profit before tax 130.66 358.25

Provision for tax (including fringe benefit tax) (34.87) (107.20)

Profit after tax 95.79 251.05

Add : Dividend on own shares held through Trust 1.24 1.85

Add : Balance brought forward 499.72 358.40

Add : Surplus brought forward on

Amalgamation - 48.49

Profit available for appropriation 596.75 659.79

Appropriations:

Transfer to General Reserve - (26.00)

Transfer to Capital

Redemption Reserve - (10.75)

Transfer to Debenture

Redemption Reserve (6.25) -

Preference Dividend - (0.08) Interim Dividend (50.34) (105.33) Distribution Tax on Dividend (8.36) (17.91)

Balance carried to Balance Sheet 531.80 499.72



DIVIDEND

During the year, the Company has paid an interim dividend of Rs.1.00 per equity share of Rs. 10/- each. The Board of Directors has recommended that the interim dividend be treated as final dividend for the year ended March 31, 2011. The total dividend outflow for the year ended March 31, 2011 is Rs. 58.70 crores (including dividend distribution tax of Rs. 8.36 crores) as against Rs. 123.23 crores (including dividend distribution tax of Rs. 17.90 crores) in the previous year ended March 31, 2010.

OPERATIONS

The gross sales and other income for the year ended March 31,2011 was Rs. 3,593.42 crores as against Rs. 3,010.14 crores for the previous year. The Company earned a profit before tax of Rs. 130.66 crores and net profit of Rs. 95.79 crores during the year ended March 31, 2011 as against profit before tax of Rs. 358.25 crores and net profit of Rs. 251.05 crores during the year ended March 31, 2010.

FINANCE

During the year under review, the Company privately placed Secured Redeemable Non-convertible Debentures of Rs. 100 crores and Unsecured Redeemable Non-convertible Debentures of Rs. 50 crores to fund its ongoing capital expenditure. The Non-convertible Debentures (NCDs) are listed on The Bombay Stock Exchange Limited.

The Company has repaid loans of Rs. 259.04 crores during the year and tied up term loans of Rs. 623.89 crores (inclusive of NCDs of Rs. 150 crores) to finance its long term working capital/capital expenditure during the year. The total borrowings of the Company stood at Rs. 1,169.84 crores as on March 31, 2011.

The loans were used for the purpose that they were sanctioned for by the respective banks/financial institutions.

FIXED DEPOSIT

Out of the total 10,267 deposits of Rs. 27.38 crores from the public and the shareholders as at March 31, 2011, 479 deposits amounting to Rs. 0.92 crores had matured and had not been claimed as on that date. Since then, 60 of these deposits aggregating to Rs. 0.11 crores have been claimed.

During the year, the Company has transferred a sum of Rs. 0.03 crores to the Investor Education and Protection Fund in compliance with Section 205C of the Companies Act, 1956 which represents unclaimed fixed deposits and interest thereon.

DIRECTORS

Mr. Manoj Chhabra holds office as Managing Director of the Company upto August 24, 2011. Subject to the requisite approvals, the Board at its Meeting held on April 29, 2011, has re-appointed Mr. Chhabra as Managing Director of the Company for a period of two years with effect from August 25, 2011, upon terms and conditions mentioned at Item No. 8 read with the Explanatory Statement of the accompanying Notice of the ensuing Annual General Meeting.

In accordance with the requirements of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Rajesh G. Kapadia, Mr. Akshay R. Raheja and Ms. Ameeta A. Parpia retire by rotation at the forthcoming Annual General Meeting and being eligible, have offered themselves for re-appointment.

As required, the requisite details of Directors seeking re-appointment are included in this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, relating to Directors Responsibility Statement, the Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them, confirm that:

1. in preparation of the Annual Accounts for the year ended March 31, 2011, the applicable Accounting Standards have been followed and there has been no material departure;

2. they have selected such accounting policies and applied them consistently and made judgements 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 on March 31,2011 and of the profit of the Company for the year ended on that date;

3. they have taken proper and sufficient care to the best of their knowledge 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;

4. they have prepared the accounts for the year ended March 31, 2011 on a going concern basis.

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, the particulars are given in the statement which forms part of this Report. However, as per provisions of Section 219(1) (b) (iv) of the Companies Act, 1956, the Directors Report is being sent to all the shareholders excluding the aforesaid information. Any shareholder interested in obtaining a copy of the statement may write to the Companys

Registered Office at Hyderabad or to its Corporate Office at Mumbai.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217(l)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given in the Annexure A forming part of this Report.

CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Corporate Governance together with a certificate from the Companys Auditors confirming compliance is set out in the Annexure forming part of this Report.

AUDITORS

The Statutory Auditors, M/s. N. M. Raiji & Co., Chartered Accountants, hold office until the conclusion of the ensuing Annual General Meeting and have given their consent for re-appointment. A certificate from the Statutory Auditors has been received to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224 (IB) of the Companies Act, 1956.

The Branch Auditors, M/s. Borkar & Muzumdar, Chartered Accountants, hold office until the conclusion of the ensuing Annual General Meeting and have given their consent for re-appointment. A certificate from the Branch Auditors has been received to the effect that their re-appointment, if made, as the Branch Auditors of the H & R Johnson (India) and RMC Readymix (India) Divisions of the Company would be within the prescribed limits under Section 224 (IB) of the Companies Act, 1956.

As per the requirement of the Central Government and pursuant to Section 233 B of the Companies Act, 1956, the Companys Cost Records in respect of cement for the year ended March 31, 2011 are being audited by Cost Auditors, M/s. N. I. Mehta & Co. The Cost Audit Report for the year ended March 31, 2010 required to be filed on or before September 30,2010, was filed on September 27,2010.

SUBSIDIARY AND JOINT VENTURE COMPANIES

During the year under review the Companys subsidiaries and joint venture companies performed satisfactorily.

Subsidiaries

- Raheja QBE General Insurance Company Limited (RQBE), the general insurance subsidiary introduced significant number of liability products including other general insurance policies during the year. RQBE booked a gross written premium of Rs. 8.80 crores and earned an investment income of Rs. 12.36 crores for the year ended March 31, 2011. After requisite adjustments and tax provisions, the loss for the year under review was Rs. 7.27 crores.

- Silica Ceramica Pvt. Limited (SCPL) has performed satisfactorily during the year. The Company increased its stake in the subsidiary from 65.7% to 92.6% during the year under review. SCPL has increased its capacity from 7,500 m2 per day to 16,500 m2 per day in April 2011. The enhanced capacity would enable it to manufacture value-added, multi-coloured vitrified tiles and is likely to be commissioned by Ql of FY 2011-12. Subsequent upgrade to manufacture value-added products is likely to be completed by Q2 of FY 2011- 12. A further capacity expansion for the plant is in progress to increase the capacity by 9,000 m2 per day. This further expansion is likely to be completed by Q4 of FY 2011-12 and would increase the plant capacity to 25,500 m2 per day.

H. & R. Johnson (India) TBK Limited, the wholly-owned subsidiary of the Company in the field of tile, bath and kitchen retailing has taken necessary steps to increase its geographical coverage. Its Joint Ventures have opened House of Johnson showrooms in Mumbai, Pune and Bangalore during the year taking the total number of JVs to 11 with 13 showrooms.

- During the year, the Company acquired the remaining 50% stake in Milano Bathroom Fittings Pvt. Limited (MBF). Post acquisition, MBF has become a wholly-owned subsidiary of the Company. MBF has a manufacturing plant in Baddi, Himachal Pradesh. The plants capacity has been increased from 3 lakh pieces per annum to 6 lakh pieces per annum in March 2011. It is now putting-up a plant in Jammu to manufacture bath fittings with a capacity of 6 lakh pieces per annum which is likely to be operational by Q4 of FY 2011- 12.

- Lifestyle Investments Pvt Limited (LIPL) is an overseas wholly-owned subsidiary. During the year, LIPL received a dividend income of £ 2,07,249 from its investment in Norcros Pic.

- RMC Readymix Porselano (India) Limited (erstwhile Porselano Tiles Limited) is a wholly-owned subsidiary of the Company.

Toint Ventures (TV)

- Ardex Endura (India) Pvt. Ltd., the Joint Venture with the German group Ardex, has performed satisfactorily during the year.

- Sentini Ceramica Pvt. Ltd., the mid-segment glazed floor tile JV Company in Andhra Pradesh has performed satisfactorily during the year.

- Antique Marbonite Pvt.- Ltd., the vitrified tile JV Company in Gujarat has performed satisfactorily during the year. The JV is setting-up a Plant to manufacture Quartz and Agglomerated marble which is slated to commence production by Q4 of FY 2011-12.

- Spectrum Johnson Tiles Pvt. Ltd., the mid-segment wall tiles JV Company in Gujarat, has performed satisfactorily. The JV is putting up a floor tile manufacturing facility which would be operational by Ql of FY 2012-13.

The financial data of the subsidiaries has been furnished along with the statement pursuant to Section 212 of the Companies Act, 1956 forming part of the Annual Report. Further, pursuant to Accounting Standard (AS - 21) issued by the Institute of Chartered Accountants of India, the Company has presented the consolidated financial statements which include the financial information relating to its subsidiaries and forms part of the Annual Report.

The Company shall provide a copy of the Annual Report and other related information of its subsidiary companies as required under Section 212 of the Companies Act, 1956 to the shareholders of the Company and the subsidiaries upon their written request. These documents will also be available for inspection at the registered office of the Company and the registered offices of the respective subsidiary companies during working hours up to the date of the Annual General Meeting.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards (AS - 21, AS - 23 and AS - 27) issued by the Institute of Chartered Accountants of India.

For the year ended March 31, 2011, the consolidated net profit of the Company and its subsidiary companies amounted to Rs. 104.95 crores as compared to Rs. 95.79 crores for the Company on a standalone basis.

ACKNOWLEDGEMENTS

The Board takes this opportunity to express its sincere appreciation of the excellent contribution made by all the employees towards the overall performance of the Company. The Directors also thank the shareholders, various Central and State Government departments/ agencies, banks and other business associates for their valuable service and support during the year under review.

For and on behalf of the Board of Directors

RAJESH G. KAPADIA Chairman

Place : Mumbai

Date : April 29, 2011


Mar 31, 2010

The Directors present the Eighteenth Annual Report together with the audited Accounts of the Company for the year ended March 31, 2010.

OPERATING RESULTS

2009-10 2008-09 (12 months) (9 months) Rs. Crores Rs. Crores

Sales 2988.87 741.52

Less: Excise duly 150.89 94.17

Net Sales 2837.98 647.35

Other income 22.05 9.69

2860.03 657.04

Expenditure 2340.54 477.21 Profit before linance charges, depreciation, tax and exceptional items 519.49 179.83

Finance and other charges 52.52 3.54 Profit before depreciation,

tax and exceptional items 466. 97 176.29

Depreciation 89.85 24.31

Profit before tax and exceptional items 377.12 151.98

Exceptional items 18.87 --

Profit before tax 358.25 151.98

Provision for tax (including fringe benefit tax) (107.20) (55.75)

Profit after tax 251.05 96.23

Add : Dividend on own shares held through Trust 1.85 -

Add : Surplus brought forward 358.40 319.52

Add : Surplus on Amalgamation 48.49 -

Profit available for appropriation 659.79 415.75

Appropriation: Transfer to General

Reserve 26.00 5.00

Transfer to Capital Redemption Reserve 10.75 --

Preference Dividend 0.08 -

Interim Dividend 105.33 29.83

Proposed Dividend -- 14.92

Tax on Dividend 17.91 7.60

Surplus carried to Balance Sheet 499.72 358.40

The Scheme of Amalgamation ("the Scheme") of H. & R. Johnson (India) Limited and RMC Readymix (India) Private Limited (Transferor Companies) with the Company was sanctioned by the Honble High Courts of Judicature at Bombay and Andhra Pradesh on January 22, 2010 and February 4, 2010, respectively. The Scheme became effective on March 3, 2010 and is operative from April 1, 2009, the appointed date fixed in the sanctioned Scheme. Pursuant to the Orders, the entire undertaking and business of the Transferor Companies, as going concerns, stood transferred and became vested with the Company. Previous period figures are for nine months, while the current year figures include operations of the Transferor Companies consequent to the amalgamation. The current year figures are, therefore, not comparable with previous period.

DIVIDEND

During the year, the Company has paid an aggregate interim dividend of Rs. 2.50 per equity share of Rs. 10/- each. The Board of Directors has recommended that the interim dividend be treated as final dividend for the year ended March 31, 2010. The total dividend outflow for the year ended March 31, 2010 is Rs. 123.23 crores (including dividend distribution tax of Rs. 17.90 crores) as against Rs. 52.35 crores (including dividend distribution tax of Rs. 7.60 crores) in the previous period ended March 31, 2009.

Preference dividend of Rs. 0.09 crores (including dividend distribution tax of Rs. 0.01 crores) was paid to the shareholders of the erstwhile H. & R. Johnson (India) Limited on the preference shares which were fully redeemed during the year.

OPERATIONS

The gross sales and other income for the year ended March 31, 2010 was Rs. 3,010.92 crores. The profit before tax was Rs. 358.25 crores and the net profit was Rs. 251.05 crores.

CAPITAL & FINANCE

Pursuant to the Scheme, the Company has issued and allotted 20,51,06,580 equity shares of the Company, of the face value of Rs. 10/- each, to each of the members of H. & R. Johnson (India) Limited and RMC Readymix (India) Private Limited. Out of the said allotment, 1,23,51,600 equity shares were allotted to the Prism Trust, set up pursuant to the Scheme for the benefit of the Company, against the equity shares held by H. & R. Johnson (India) Limited in the paid-up capital of RMC Readymix (India) Private Limited.

Upon the Scheme becoming effective, the issued, subscribed and paid-up equity share capital of the Company post allotment of shares as aforesaid stands at Rs. 503.36 crores comprising of 50,33,56,580 equity shares of Rs. 10/- each fully paid-up and the Authorised Capital stands at Rs. 525 crores comprising of 50,50,00,000 equity shares of Rs. 10/- each and 2,00,00,000 preference shares of Rs. 10/- each.

During the year under review, the Company tied up term loans to finance its ongoing capital expenditure and the total borrowings of the Company stood at Rs. 801.57 crores as on March 31, 2010.

FIXED DEPOSIT

Out of the total 12,290 deposits of Rs. 32.45 crores from the public and the shareholders as at March 31, 2010, 532 deposits amounting to Rs. 0.97 crores had matured and had not been claimed as on that date. Since then, 312 of these deposits aggregating to Rs. 0.70 crores have been claimed.

During the year, the Company has transferred a sum of Rs. 0.02 crores to the Investor Education and Protection Fund in compliance with Section 205C of the Companies Act, 1956 which represents unclaimed fixed deposits.

DIRECTORS

Mr. Aziz H. Parpia resigned from the Board on May 5, 2010. The Board wishes to place on record its appreciation of the valuable contributions made by Mr. Parpia during his tenure as Director of the Company.

The Board of Directors has been broad based by the induction of Mr. James Arthur Brooks, Mr. Vijay Aggarwal and Mr. Ganesh Kaskar as Additional Directors with effect from March 3, 2010. Ms. Ameeta A. Parpia was appointed as Additional Director with effect from May 5, 2010. They hold office up to the date of the forthcoming Annual General Meeting. In this connection, your attention is drawn to the relevant items of the accompanying Notice of the Annual General Meeting. The Board recommends their appointments.

Mr. Vijay Aggarwal was appointed as Managing Director and Mr. Ganesh Kaskar was appointed as Executive Director of the Company for a period of three years with effect from March 3, 2010. The said appointments were approved by the shareholders at the Extra-ordinary General Meeting of the Company held on April 6, 2010.

Mr. Vijay Aggarwal ceased to be an Alternate Director effective from March 2, 2010.

In accordance with the requirements of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Rajan B. Raheja and Mr. Satish B. Raheja retire by rotation at the forthcoming Annual General Meeting and being eligible, have offered themselves for re-appointment.

As required, the requisite details of Directors seeking re-appointment are included in this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2 A A) of the Companies Act, 1956, relating to Directors Responsibility Statement, the Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them, confirm that:

1. in preparation of the Annual Accounts for the year ended March 31, 2010, the applicable Accounting Standards have been followed and there has been no material departure;

2. they have selected such accounting policies and applied them consistently and made judgements 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 on March 31,2010 and of the profit of the Company for the year ended on that date;

3. they have taken proper and sufficient care to the best of their knowledge 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;

4. they have prepared the accounts for the year ended March 31, 2010 on a going concern basis.

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, the particulars are given in the statement which forms part of this Report. However, as per provisions of Section 219(l)(b)(iv) of the Companies Act, 1956, the Directors Report is being sent to all the shareholders excluding the aforesaid information. Any shareholder interested in obtaining a copy of the statement may write to the Companys Registered Office at Hyderabad or to its Corporate Office at Mumbai.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217(l)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given in the Annexure A forming part of this Report.

CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Corporate Governance together with a certificate from the Companys Auditors confirming compliance is set out in the Annexure forming part of this Report.

AUDITORS

The Statutory Auditors, M/s. N. M. Raiji & Co., Chartered Accountants, hold office until the conclusion of the ensuing Annual General Meeting and have given their consent for re-appointment. A certificate from the Auditors has been received to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224 (IB) of the Companies Act, 1956.

The Board, on the recommendation of the Audit Committee, has also proposed that M/s. Borkar & Muzumdar, Chartered Accountants, be appointed as the Branch Auditors of H & R Johnson (India) and RMC Readymix (India) Divisions of the Company.

As per the requirement of the Central Government and pursuant to Section 233 B of the Companies Act, 1956, the Companys Cost Records in respect of cement for the year ended March 31, 2010 are being audited by Cost Auditors, M/s. N. I. Mehta & Co.

SUBSIDIARY AND JOINT VENTURE COMPANIES

Pursuant to the Scheme, the subsidiaries and joint venture companies of the erstwhile H. & R. Johnson (India) Limited have come under the fold of the Company. During the year under review the Companys subsidiaries and joint venture companies performed satisfactorily.

Subsidiaries

- Raheja QBE General Insurance Company Limited, the insurance JV Company with QBE Holdings (AAP) Pty Ltd., is in growing stage and has introduced significant number of liability products including other general insurance policies approved by the IRDA during the year.

- Silica Ceramica Private Limited, the vitrified tile Company in Andhra Pradesh, has completed one full year of manufacturing operations and has been running at a utilisation level of over 90% since the last quarter of the year under review. During the year, the Company increased its stake in the Joint Venture from 50% to 65.7%.

- H. & R. Johnson (India) TBK Limited, the wholly owned subsidiary of the Company in the field of tile, batii and kitchen retailing has taken necessary steps to increase its geographical coverage. The Company is .going through a learning curve and based on its initial learning has modified its business model for further scale-up.

- Lifestyle Investments Private Limited (LIPL) is an overseas wholly owned subsidiary. LIPL issued 60,05,000 preference shares of 1 GBP each and redeemed 53,45,884 preference shares of 1 GBP during the year.

- Porselano Tiles Limited, the wholly owned subsidiary of the Company, is yet to commence business.

Joint Ventures (JV)

- Ardex Endura (India) Private Limited, the JV with the German group Ardex, completed one full year of successful operations of its second plant at Vadodara.

- Sentini Cermica Private limited, the mid-segment glazed floor tile JV Company in Andhra Pradesh has been consistently operating at full capacity.

- Antique Granito Private Limited, the vitrified tile JV Company in Gujarat has installed and commissioned a new Multi-Colour charging system (Magic Brush) enabling the plant to manufacture value-added, full-body effect products. During the year, Antique Granito Private Limited has acquired a 50% stake in Umiya Ceramics Private Limited. Umiya Ceramics has an installed capacity of 7.26 million m2 per annum of ceramic vitrified tiles at Gujarat.

- Milano Bathroom Fittings Private Limited, the bath fittings JV at Baddi, Himachal Pradesh, has been consistently operating at full capacity.

- Spectrum Tiles Private Limited, the mid-segment wall tiles JV Company in Gujarat, has performed satisfactorily.

The Company has received the exemption from the Central Government under Section 212(8) of the Companies Act, 1956, from attaching a copy of the Balance Sheet, Profit and Loss Account, Directors Report and Auditors Report of the subsidiary companies and other documents required to be attached under Section 212(1) of the Act to the Balance Sheet of the Company. Accordingly, the said documents are not being attached herewith. However, the financial data of the subsidiaries has been furnished along with the statement pursuant to Section 212 of the Companies Act, 1956 forming part of the Annual Report. Further, pursuant to Accounting Standard (AS - 21) issued by the Institute of Chartered Accountants of India, the Company has presented the consolidated financial statements which include the financial information relating to its subsidiaries and forms part of the Annual Report.

The Company shall provide a copy of the Annual Report and other documents of its subsidiary companies as required under Section 212 of the Companies Act, 1956 to the shareholders upon their written request. These documents will also be available for inspection at the registered office of the Company and the registered offices of the respective subsidiary companies during working hours up to the date of the Annual General Meeting.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards (AS - 21, AS - 23 and AS - 27) issued by the Institute of Chartered Accountants of India.

For the year ended March 31, 2010, the consolidated net profit of the Company and its subsidiary companies amounted to Rs. 259.78 crores as compared to Rs. 251.05 crores for the Company on a stand alone basis.

ACKNOWLEDGEMENTS

The Board takes this opportunity to express its sincere appreciation of the excellent contribution made by all the employees towards the overall performance of the Company. The Directors also thank the shareholders, various Central and State Government departments/agencies, banks and other business associates for their valuable service and support during the year under review.

For and on behalf of the Board of Directors

RAJESH G. KAPADIA

Chairman

Place : Mumbai Date : May 5, 2010

Aug 25, 4:01 pm
27,835.91
-224.03
0.80%
Aug 25, 4:14 pm
8,592.20
-58.10
0.67%
 
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