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Directors Report of Shree Digvijay Cement Company Ltd.

Dec 31, 2014

Dear Members

The Directors present the 70th Annual Report together with the Audited Accounts of the Company for the year ended 31st December, 2014.

FINANCIAL HIGHLIGHTS

The financial highlights for the year under report are as under:

(Rs. In lacs)

Current Previous Year Year Ended Ended 31.12.2014 31.12.2013

Gross Turnover 46045 37263

Profit /(Loss) before Interest 2492 (472) Depreciation, Exceptional Items & Tax [PBIDT]

Less: Interest 717 263

Less: Depreciation 1410 1319

Profit/(Loss) after Interest 365 (2054) & Depreciation but before Exceptional Item & Tax

Add/(Less): Exceptional Item 0 (1415)

Profit from ordinary activities 365 (3469) before Tax

Less: Provision for Current 0 (83)

Tax(MAT)

Net Profit/(Loss) for the year 365 (3552)

Balance brought forward from (4036) (484) previous year

(Loss) Carried Over (3671) (4036)

(Previous figures have been regrouped wherever necessary)

FINANCIAL PERFORMANCE

The Gross turnover of the Company during the year under report at Rs. 46,045 lacs was higher by about 24% against the turnover of Rs. 37,263 lacs in previous year. Increased volume supported with the increase in unit realization has contributed significantly.

The PBIDT has turned in to positive as compared with the previous year. It would have been much better but for the reasons explained under Management Discussions and Analysis, forming part of the Report.

PRODUCTION AND SALES

Production and Sales during the year under review are as under:

(In lacs MT)

Current Year Previous Year Ended 31.12.2014 Ended 31.12.2013

Production

* Clinker 6.99 7.30

* Cement 10.04 8.94

Sales

* Cement 10.01 8.95

Output of the Clinker and Cement during the year 2014 was 6.99 lacs MT and 10.04 lacs MT respectively as against 7. 30 lac MT and 8.94 lac MT in 2013. Clinker production during the year under report was much lower than budgeted due to frequent stoppage of process during the period April 2014 till August, 2014. It had adversely affected the productivity. The Company had taken major steps for stability and improvement in Clinker production. The positive impact from the initiatives taken by your Company is expected to be felt from the year 2015 onwards.

Your Company had produced ever highest Cement production at 10.04 lacs MT during the year.

There has not been any change in the nature of the business of the Company.

DIVIDEND

In view of the accumulated losses Your Directors does not recommend any dividend on Share Capital.

NUMBER OF THE MEETINGS OF THE BOARD

The details of the Board meetings held during the year 2014 are as under:

a. Meetings of the Board of Directors:

Date of the meeting Place of the Meeting

27th February, 2014 Mumbai

23rd April, 2014 Digvijaygram

12th August, 2014 Mumbai

12th November, 2014 Mumbai

b. Meetings of the Audit Committee of Directors:

Date of the meeting Place of the Meeting

27th February, 2014 Mumbai

23rd April, 2014 Digvijaygram

12th August, 2014 Mumbai

12th November, 2014 Mumbai

c. Meetings of the Nomination and Remuneration Committee of Directors:

Date of the meeting Place of the Meeting

27th February, 2014 Mumbai

23rd April, 2014 Digvijaygram

d. Meeting of the Corporate Social Responsibility Committee of Directors:

Date of the meeting Place of the Meeting

14th October, 2014 Digvijaygram

e. Meeting of the Stakeholders Relationship Committee of Directors:

Date of the meeting Place of the Meeting

27th February, 2014 Mumbai

12th November, 2014 Mumbai

DIRECTORS'' RESPONSIBILITY STATEMENT

As stipulated in Section 134 (3) (c) read with sub section 5 of the Companies Act, 2013, Directors subscribe to the "Directors Responsibility Statement" and confirm that:

(a) in preparation of Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(b) the Directors had 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 at the end of the financial 2014 [as on 31st December 2014] and the profit and loss of the Company for that year;

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts of the Company on a going concern basis;

(e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operational effectively; and

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DECLARATION BY INDEPENDENT DIRECTORS

Declaration given by Independent Directors meeting the criteria of independence as provided in sub- section (6) of Section 149 of the Companies Act, 2013 is received and taken on record.

POLICY ON DIRECTORSâ'' APPOINTMENT AND REMUNERATION

The Company has a "Nomination and Remuneration Committee of Directors" in place. The Committee reviews and recommend to the Board for remuneration for Directors and key Managerial personnel and other employee up to one level below of Whole Time Director.

The Company does not pay any remuneration to the Directors of the Company other than sitting fee for attending the meetings of the Board and Committees of the Board. Non-executive Director do not take any sitting fee for attending such meetings. Remuneration to the Whole-time Director is governed under the relevant provisions of the Act and approvals.

AUDITORS'' REPORT

The observations made in the Auditors'' Report are self-explanatory and do not call for any further comments u/s 134(3)(f) of the Companies Act, 2013

LOANS, GUARANTEES OR INVESTMENTS

Your Company has neither given any loan or guarantee nor has made any investment during the year under report attracting the provisions of Section 186 of the Companies Act, 2013.

DEPOSITS

Your Company has neither accepted any deposits during the year under report nor did any deposits remain unpaid or unclaimed at the end of the year.

CONTRACTS/ARRANGEMENTS WITH RELATED PARTIES

Details of Contracts/arrangement with the Related Parties are appearing under note no. 33b and form part of this report. All related party transactions that were entered into during the year under report were on arm''s length basis and were in the ordinary course of business. The related party transactions made by the Company with Promoter Company, have no potential conflict with the interest of the Company at large.

Related party Transactions are placed before the Audit Committee as also to the Board for approval. The Policy on Related party Transactions as approved by the Board is uploaded on the Company''s website. The Company management ensures total adherence to the approved Policy on Related Party Transactions to establish Arm''s Length Basis without any compromise.

MATERIAL CHANGES AND COMMITMENTS

There have not been any material changes and commitments affecting the financial position of the Company between the end of the financial year of the Company as on 31st December, 2014 and the date of this report i. e. 25th February, 2015.

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

Information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo, required under Section 134 (3) (m) of the Companies Act, 2013 are annexed and form part of this report.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In term of Section 136 of the Act, the Report is being sent to all shareholders and others entitled thereto, excluding the aforesaid information and the said particulars are available for inspection by the Members at the Registered Office of the Company during the business hours on working days of the Company. The members interested in obtaining such particulars may write to the Company Secretary.

RISK MANAGEMENT POLICY

The Company is aware of the risks associated with the business. It regularly analyses and takes corrective actions for managing / mitigating the same. Your Company''s Risk management framework ensures compliance with the provisions of Clause 49 of the Listing Agreement.

Your Company has institutionalized the process for identifying, minimizing and mitigating risks which is periodically reviewed. Some of the risks identified and been acted upon by your Company are: Securing critical resources; ensuring sustainable plant operations; ensuring cost competitiveness including logistics; completion of CAPEX; maintaining and enhancing customer service standards and resolving environmental and safety related issues. CORPORATE SOCIAL RESPONSIBILITY [CSR] Your Company aims to remain essential to the society with its social responsibility, strongly connected with the principle of sustainability, an organization based not only on financial factors, but also on social and environmental consequences. It is responsibility of your Company to practice its corporate values through its commitment to grow in a socially and environmentally responsible way, while meeting the interest of Stakeholders. Your Company had contributed and still contributing towards development of public facilities like opening of Education Centers, Health Centers, improvement in living standard and upliftment of communities comprising weakest section of Rural section with no access to basic amenities.

As required under Section 135 of the Companies Act, 2013 and to demonstrate the responsibilities towards Social upliftment in structured way, the Company has formed a Policy to conduct the task under CSR with following composition:

A. Members of the Committee:

1. Mr. A. K. Chhatwani - Independent Director

2. Mr. A. Kumaresan - Independent Director

3. Mr. Chai Singh Jasol - Whole-Time Director

4. Mr. S. N. Malpani - Secretary to the Committee

The Committee is supported with an Executive Committee comprising of senior officers of the Company from different departments.

B. Activities undertaken by the Committee:

As stipulated under Schedule VII of the Companies Act, 2013, the Company has undertaken following activities under CSR compliance:

1. Promotion of education and education facilities up-gradation.

2. Promoting gender equality and empowering women.

3. Combating human immune - deficiency virus acquired immune deficiency syndrome, malaria and other disease.

4. Ensuring environmental sustainability.

During the year under report, the Company has spent a sum of Rs. 17.30 lacs towards CSR activities in line with the compliance with Section 135 of the Companies Act 2013.

DIRECTORS/KEY MANAGERIAL PERSONNEL

Mr. Osvaldo Ayres Filho, a Director of the Company has resigned from the office of Director. The casual vacancy caused by his resignation is filled up by the Board of Directors by co-opting Mr. Persio Morassutti in his place. Your Board takes this opportunity to acknowledge the efforts and the contributions of Mr. Osvaldo to the Company during his tenure on the Board.

Mr. Carlos Eduardo de Arruda Boggio, a Director is retiring by rotation, and being eligible, offer himself for reappointment.

Mr. A. K. Chhatwani and Mr. A. Kumaresan the Independent directors of the Company were appointed by the Company at the Sixty-ninth Annual General Meeting held on 23rd April, 2014. Their appointment was liable to retire by rotation. As per the provisions of Section 149 and 152 of the Companies Act, 2013 ("the Act"), effective from 1st April, 2014 Independent Directors shall not be liable to retirement by rotation. Accordingly appointment of the existing Independent Directors under Section 149 of the Act and Clause 49 of the Listing Agreement to hold office for 5 (Five) consecutive years for a term is recommended for consideration and approval by the members.

A brief resume of the above mentioned Directors being appointed are attached to the Corporate Governance Report.

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 of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration Committee. During the year under report, the Independent Directors met on 14th October, 2014 inter alia, to discuss:

* Performance evaluation of Non Independent Directors and Board of Directors as a whole;

* Performance evaluation of the Chairman of the Company;

* Evaluation of the quality of flow of information between the Management and Board for effective performance by the Board.

AUDITORS

Your Directors request you to appoint Auditors for current accounting year and fix up their remuneration. M/s. Price Waterhouse, Chartered Accountants, Mumbai, the existing Auditors of the Company retiring at the ensuing Annual General Meeting are available for a fresh term and have furnished certificate of their eligibility for re-appointment.

Auditor''s appointment is proposed for a period of five consecutive years from the conclusion of the 70th Annual General meeting, in line with the provisions of Section 139 of the Companies Act, 2013 and relevant Rules thereunder.

COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013, your Directors, on the recommendation of the Audit Committee of Directors, have appointed M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad as Cost Auditors to conduct the Cost Audit for the year ended 31st December, 2015. The Board recommends for ratification of remuneration payable to the Cost Auditors.

HUMAN RESOURCES

Your Company encourages and provides regular training to employees to improve skills. Your Company has performance appraisal system for senior employees and junior management staff. In- house news letters provide forum for information sharing. Rewarding individuals for their contribution is part of motivation towards Excellence. CORPORATE GOVERNANCE A separate section on Corporate Governance, in line with Clause 49 of the Listing Agreement with the Stock Exchange, forms part of this Report. The relevant Certificate from practicing Company Secretary is annexed and forms part of this report. ENVIRONMENT REPORT Environment conservation - A way of life We believe in sustainable development. We regard social, economic and environmental responsibility as integral element of our business.

Your Company is ISO 14001 Environment Management system Certified and adhere to OHSAS 18001 standards of Safety and Occupational Health. Professional Environment Auditors such as Det Norske Veritas, the State Pollution Board''s certified auditors and Environmental System Auditors conduct periodic in-depth environmental audit on our plant. The Audit Reports validate our commitment to environmental conservation. Large scale plantations in the mines, plant, colonies and surrounding areas provide a lush green cover and are reflection of our respect for the environment.

ACKNOWLEDGEMENT

The Directors take this opportunity to express their appreciation for the support and co-operation received from the State and Central Government and Lenders. The Directors also recognize the commitment and dedication of the Company''s employees.

For and on behalf of the Board

Sven Erik Oppelstrup Madsen Chain Singh Jasol Director Whole-Time Director

Place : Digvijaygram Date : 25th February, 2015


Dec 31, 2013

Dear Shareholders

The Directors present the 69th Annual Report together with the Audited Accounts of the Company for the year ended 31st December, 2013.

FINANCIAL RESULTS

The financial results for the year under report are as under:

(Rs. In lacs)

Current Previous Year Year Ended Ended 31.12.2013 31.12.2012

Gross Turnover 37263 42918

Profit /(Loss) before Interest (472) 4969 Depreciation, Exceptional Items & Tax [PBIDT]

Less: Interest 263 104

Less: Depreciation 1319 987

Profit/(Loss) after Interest (2054) 3878 & Depreciation but before Exceptional Item & Tax

Add/(Less): Exceptional Item (1415) 1215

Profit from ordinary activities (3469) 5093 before Tax

Less: Provision for Current (83) (967) Tax(MAT)

Net Profit/(Loss) for the year (3552) 4126

Balance brought forward from (484) (4610) previous year

(Loss) Carried Over (4036) (484)

(Previous figures have been regrouped wherever necessary)

FINANCIAL PERFORMANCE

The working results depict a set back in operation. The fall in Turnover is attributable to low off take of cement coupled with fall in unit realization with consequential impact on PBIDT

Other items of the working results are dealt with under Management Discussion and Analysis, forming part of the Report.

DIVIDEND

In view of the negative performance and accumulated losses, the Board of Directors does not recommend any dividend on Share Capital.

PRODUCTION AND SALES

Production and Sales during the year under review are as under:

(In lacs MT)

Current Year Previous Year Ended 31.12.2013 Ended 31.12.2012

Production

- Clinker 7.30 7.47

- Cement 8.94 9.26

Sales

- Clinker 0.00 0.00

- Cement 8.95 9.30

Output of the Clinker and Cement during the year 2013 was 7.30 lacs MT and 8.94 lacs MT respectively as against 7.47 lac MT and 9.26 lac MT in 2012.

Though the Clinker production during the year under report is comparable with the previous year but the same has been adversely affected due to inconsistency in plant operations more particularly in the last quarter of the year due to unprecedented heavy rainfall. Production of Cement was circumscribed by limitations on sales front.

The Company is taking major steps for stability in production line with improved capacity utilization. The benefit thereof is expected to be reflected during part of the year 2014 onwards.

DIRECTORS

Mr. A. K. Chhatwani, Mr. A. Kumaresan and Mr. Carlos Boggio the directors of the Company who retire by rotation under Article 167 of the Articles of Association of the Company are available for appointment.

A brief resume of the above mentioned Directors being appointed are attached to the Notice for the ensuing Annual General Meeting.

AUDITORS'' REPORT

The observations made in the Auditors'' Report are self explanatory and do not call for any further comments u/s 217(3) of the Companies Act, 1956.

AUDITORS

Your Directors request you to appoint Auditors for current accounting year and fix up their remuneration. M/s. Price Waterhouse, Chartered Accountants, Mumbai, the existing Auditors of the Company retiring at the ensuing Annual General Meeting are available for a fresh term and have furnished certificate of their eligibility for re-appointment.

COST AUDITORS

Pursuant to Section 233B of the Companies Act, 1956, your Directors have appointed M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad as Cost Auditors to conduct the Cost Audit for the year ended 31st December 2013. The appointment has been approved by the Central Government.

PARTICULARS OF EMPLOYEES

The particulars of employee required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time forms part of this report. However in pursuance of Section 219(1)(b)(iv) of the Act, this report is being sent to all shareholders of the Company excluding the aforesaid information and the said particulars are available at the Registered Office of the Company. The members interested in obtaining such particulars may write to the Secretarial Department at the Registered Office of the Company.

ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

Information relating to conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo, required under Section 217(1) (e) of the Companies Act, 1956 are annexed and form part of this report.

HUMAN RESOURCES

Your Company encourages and provides regular training to employees to improve skills. Your Company has performance appraisal system for senior employees and junior management staff. In-house news letters provide forum for information sharing. Rewarding individuals for their contribution is part of motivation towards Excellence.

CORPORATE GOVERNANCE

A separate section on Corporate Governance, in line with Clause 49 of the Listing Agreement with the Stock Exchange, forms part of this Report. The relevant Certificate from practicing Company Secretary is annexed and forms part of this report.

DIRECTORS'' RESPONSIBILITY STATEMENT

As stipulated in Section 217(2AA) of the Companies Act, 1956, Directors subscribe to the "Directors Responsibility Statement" and confirm that:

(i) in preparation of Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) the accounting policies have been consistently applied and reasonable, prudent judgment and estimates are made so as to give a true and fair view of the state of affairs of the Company as on 31st December 2013 and of the profit of the Company for that Year;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts of the Company are prepared on a going concern basis.

SOCIAL REPORT

Your Company is regularly working in the areas of Health Care, Education etc. in discharging of its social obligations. During the year under report, it has conducted Medical Camps, Rural Education and various awareness programmes benefiting to the residents of nearby areas, from time to time in partnership with the District Authorities, Village Panchayat etc.

ENVIRONMENT REPORT

Environment conservation - A way of life We believe in sustainable development. We regard social, economic and environmental responsibility as integral element of our business.

Your Company is ISO 14001 Environment Management System Certified and adhere to OHSAS 18001 standards of Safety and Occupational Health. Professional Environment Auditors such as Det Norske Veritas, the State Pollution Board''s certified auditors and Environmental System Auditors conduct periodic in-depth environmental audit on our plant. The Audit Reports validate our commitment to environmental conservation. Large scale plantations in the mines, plant, colonies and surrounding areas provide a lush green cover and are reflection of our respect for the environment.

ACKNOWLEDGEMENT

The Directors take this opportunity to express their appreciation for the support and co-operation received from the State and Central Government and Lenders. The Directors also recognize the commitment and dedication of the Company''s employees. For and on behalf of the Board

Sven Erik Oppelstrup Madsen Chain Singh Jasol

Director Whole-Time Director

Place : Mumbai

Date : 27th February, 2014


Dec 31, 2012

Dear Shareholders

The Directors present the 68th Annual Report together with the Audited Accounts of the Company for the year ended 31st December, 2012.

CHANGE IN THE PROMOTERS OF THE COMPANY:

As you all are aware that Cimpor Inversiones S. A. [Cimpor] was holding 104,091,537 equity shares, representing 73.63% of the Company''s outstanding voting Equity Share Capital.

Pursuant to the restructuring agreement dated June 25, 2012 between Votorantim Cimentos S.A. [Votorantim], InterCement Austria Holding GmbH and Camargo Correa Cementos Luxembourg Sari, 73.63 % of the shares of the Company has been transferred indirectly from Cimpor to a non-resident holding entity i.e. Votorantim through another non-resident holding entity i.e. Cementos EAA Inversiones, S.L. as part of a bundle of multi-jurisdictional assets byway of transfer of shares and two swaps of shares outside India. Pursuant to the aforesaid, Cimpor has ceased to be a Promoter of your Company and Votorantim and Cementos EAA are now the Promoters of the Company.

In compliance with the SEBI guidelines under take over regulations, Votorantim has also acquired 2,321,645 equity shares constituting 1.64 % of the Company''s outstanding voting Equity Share Capital under open offer from the shareholders of the Company. The details of the transaction were elaborated in the Letter of Offer dated 6th July, 2012 sent to the shareholders.

FINANCIAL RESULTS

The financial results for the year under report are as under: (Rs. In lacs)

Current Previous Year Year Ended Ended 31.12.2012 31.12.2011

Gross Turnover 42918 37060

Profit before Interest 4942 1981 Depreciation, Exceptional Items & Tax [PBIDT]

Less: Interest 77 29

Less: Depreciation 987 1007

Profit after Interest & 3878 945 Depreciation but before Exceptional Item & Tax

Add: Exceptional Item 1215 0

Profit from ordinary activities 5093 945 before Tax

Less: Provision for Current Tax (967) 0 (MAT)

Net Profit for the year 4126 945

Balance brought forward from (4610) (5555) previous year

(LOSS) CARRIED OVER (484) (4610)

FINANCIAL PERFORMANCE

The Gross Turnover of the Company during the year under report at Rs. 42918 lacs was higher by about 13% against the turnover of Rs. 37060 lacs in previous year.

Domestic market revived and the prices firmed up during the year under report, resulted in higher PBIDT However, price benefit coupled with efficiency gains had been largely affected with hefty increase in input cost.

Other items of the working results are dealt with under Management Discussions and Analysis, forming part of the Report.

DIVIDEND

In view of accumulated losses, the Board of Directors does not recommend any dividend on Share Capital.

PRODUCTION AND SALES

Production and Sales during the year under review are as under:

(In lacs MT)

Current Previous Year Year Ended Ended 31.12.2012 31.12.2011

Production

- Clinker 7.47 7.25

- Cement 9.26 9.27

Sales

- Clinker 0.00 0.00

- Cement 9.30 9.27

Plant operation presents consistence performance and is well comparable with the previous year.

DIRECTORS

Mr. Robert Pavrey, a director of the Company who retire by rotation under Article 167 of the Articles of Association of the Company and being eligible, offers himself for reappointment.

Mr. Luis Filipe Sequeira Martins, Mr. Luis Miguel Da Ponte Alves Fernandes and Mr. Antonio Carlos Custodio de Morais Varela tendered their resignations from the directorship of the Company. The Board filled up these vacancies by co-opting Mr. Osvaldo Ayres Filho, Mr. Carlos Eduardo de Arruda Boggio and Mr. Sven Erik Oppelstrup Madsen respectively in their places.

While welcoming the new directors, the Board places on record their appreciation of matured advice and guidance of the outgoing directors during their association with the Company.

Mr. Osvaldo Ayres Filho and Mr. Sven Erik Oppelstrup Madsen, the directors of the Company who retire by rotation under Article 167 of the Articles of Association of the Company are available for appointment.

A brief resume of the above mentioned Directors being appointed are attached to the Notice for the ensuing Annual General Meeting.

AUDITORS'' REPORT

The observations made in the Auditors'' Report are self explanatory and do not call for any further comments u/s 217(3) of the Companies Act, 1956.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad, the existing Auditors retire at the ensuing Annual General Meeting of your Company. They have however, intimated the Company that they do not wish to seek re-appointment. It is therefore proposed to appoint M/s. Price Waterhouse, Chartered Accountants, Mumbai as Statutory Auditors in their place, who have indicated their availability and willingness to be appointed as Statutory Auditors of your Company. A resolution seeking your approval for the appointment of the said auditors has been included in the Notice convening the Annual General Meeting.

COST AUDITORS

Pursuant to Section 233B of the Companies Act, 1956, your Directors have appointed M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad as Cost Auditors to conduct the Cost Audit for the year ended 31st December 2012. The appointment has been approved by the Central Government.

PARTICULARS OF EMPLOYEES

The Company has no employee in the category specified under the provisions of section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended.

ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

Information relating to conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo, required under Section 217(1) (e) of the Companies Act, 1956 are annexed and form part of this report.

HUMAN RESOURCES

Your Company encourages and provides regular training to employees to improve skills. Your Company has performance appraisal system for senior employees and junior management staff. In-house news letters provide forum for information sharing. Rewarding individuals for their contribution is part of motivation towards Excellence.

CORPORATE GOVERNANCE

A separate section on Corporate Governance, in line with Clause 49 of the Listing Agreement with the Stock Exchange, forms part of this Report. The relevant Certificate from practicing Company Secretary is annexed and forms part of this report.

DIRECTORS'' RESPONSIBILITY STATEMENT

As stipulated in Section 217(2AA) of the Companies Act, 1956, Directors subscribe to the "Directors Responsibility Statement" and confirm that:

(i) in preparation of Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) the accounting policies have been consistently applied and reasonable, prudent judgment and estimates are made so as to give a true and fair view of the state of affairs of the Company as on 31st December 2012 and of the profit of the Company for that Year;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts of the Company are prepared on a going concern basis.

SOCIAL REPORT

Your Company is regularly working in the areas of Health Care, Education etc. in discharging of its social obligations. During the year under report, it has conducted Medical Camps, Rural Education and various awareness programmes benefiting to the residents of nearby areas, from time to time in partnership with the District Authorities, Village Panchayat etc.

ENVIRONMENT REPORT

Environment conservation - A way of life

We believe in sustainable development. We regard social, economic and environmental responsibility as integral element of our business.

Your Company is IS014001 Environment Management system Certified and adhere to OHSAS 18001 standards of Safety and Occupational Health. Professional Environment Auditors such as Det Norske Veritas, the State Pollution Board''s certified auditors and Environmental System Auditors conduct periodic in-depth environmental audit on our plant. The Audit Reports validate our commitment to environmental conservation. Large scale plantations in the mines, plant, colonies and surrounding areas provide a lush green cover and are reflection of our respect for the environment.

ACKNOWLEDGEMENT

The Directors take this opportunity to express their appreciation for the support and co-operation received from the State and Central Government and Lenders. The Directors also recognize the commitment and dedication of the Company''s employees.

For and on behalf of the Board

Sven Erik Oppelstrup Madsen Suman Mukherjee

Director Managing Director & CEO

Place: Mumbai

Date: 20th February, 2013


Dec 31, 2011

The Directors present the 67th Annual Report together with the Audited Accounts of the Company for the year ended 31st December, 2011.

FINANCIAL RESULTS

The financial results for the year under report are as under:

(Rs. In lacs)

Current Previous Year Year Ended Ended 31.12.2011 31.12.2010

Gross Turnover 37060 32453

Profit before Interest 1981 2424

Depreciation, Exceptional Items & Tax [PBIDT]

Less: Interest 29 34

Less: Depreciation 1007 938

Profit after Interest 945 1452

& Depreciation but before Exceptional Item & Tax

Less: Exceptional Item 0 1246

Profit from ordinary 945 206 activities before Tax

Less: Provision for 0 106 Current Tax(MAT)

Net Profit for the year 945 100

Balance brought forward from previous (5555) (5655) year

(LOSS) CARRIED OVER (4610) (5555)

FINANCIAL PERFORMANCE

The Gross Turnover of the Company during the year under report at Rs. 37060 lacs was higher by about 14% against the turnover of Rs. 32453 lacs in previous year. But for hefty increase in the overall manufacturing cost, the benefits of increased volume and improvement in Cement prices in comparison with previous year could not help in maintaining the operating profit [PBIDT] at previous year level.

Other items of the working results are dealt with under Management Discussions and Analysis, forming part of the Report.

DIVIDEND

In view of accumulated losses, the Board of Directors does not recommend any dividend on Share Capital.

PRODUCTION AND SALES

Production and Sales during the year under review are as under:

(In lacs MT)

Current Previous Year ended Year ended 31.12.2011 31.12.2010

Production:

- Clinker 7.25 9.09

- Cement 9.27 9.05

Sales:

- Clinker 0.00 0.47

- Cement 9.27 9.02

Clinker production was lower by about 20.24 % over previous year.

In order to improve upon the technical performance of the plant [as was reported in previous year's Directors' Report], your Company took some steps to strengthen consistency in Plant operation as also to liquidate the heavy built-up process stock for effective inventory management. To attain the goal and to achieve the improvements, Clinkerisation was restrained to match with the Cement demand. This has resulted in lower clinker out put in comparison with the previous year. However it had not left any adverse effect on Cement production, as evident from the details herein above.

Your Company has not made any export during the year under report because on un-realistic prices. In the previous year Clinker export was for 0.47 lacs MT.

DIRECTORS

Mr. Leonard D' Costa and Mr. Napoleon De la Colina, directors of the Company who retire by rotation under Article 167 of the Articles of Association of the Company, being eligible, offer themselves for re- appointment. A brief resume of the above mentioned Directors being appointed are attached to the Notice for the ensuing Annual General Meeting.

Mr. P. A. Nair - CEO & Whole-Time Director resigned from the service of the Company with effect from 2nd August, 2011. Mr. Chain Singh Jasol - Sr. Vice President (PA & Mines) was appointed as a Whole-Time Director of the Company with effect from 20th October, 2011 for a period of one year. An abstract of the terms and conditions governing his appointment was circulated to the Shareholders as required under section 302 of the Companies Act, 1956. Mr. Jasol has been relieved from the office of Whole-time Director with effect from 2nd February, 2012 and accordingly he ceased to be a Whole-Time Director of the Company with effect from that day.

Mr. Suman Mukherjee was appointed as a Managing Director of the Company with effect from 20th December 2011 subject to approval of shareholders in general meeting, for a period of three years. An abstract of the terms and conditions governing his appointment was circulated to the shareholders as required under section 302 of the Companies Act, 1956.

The Board has appointed Mr. Antonio Carlos Custodio de Morais Varela and Mr. Luis Miguel Da Ponte Alves Fernandes as Additional Directors on the Board. They hold office up to the date of the ensuing Annual General Meeting and are eligible for re-appointment. Notices have been received under section 257 of the Companies Act, 1956 from Members of your Company proposing their appointment as Directors.

AUDITORS' REPORT

The observations made in the Auditors' Report are self explanatory and do not call for any further comments u/s 217(3) of the Companies Act, 1956.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, the existing Auditors retire at the ensuing Annual General Meeting of your Company. They have however, intimated the Company that they do not wish to seek re-appointment. It is therefore proposed to appoint M/s. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad as statutory Auditors in their place. M/s. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad have indicated their availability and willingness to be appointed as Statutory Auditors of your Company. A resolution seeking your approval for the appointment of the said auditors has been included in the Notice convening the Annual General Meeting.

COST AUDITORS

Pursuant to Section 233B of the Companies Act, 1956, your Directors have appointed M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad as Cost Auditors to conduct the Cost Audit for the year ended 31st December 2011. The appointment has been approved by the Central Government.

PARTICULARS OF EMPLOYEES

The Company has no employee in the category specified under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended.

ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

Information relating to conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo, required under Section 217(1) (e) of the Companies Act, 1956 are annexed and form part of this report.

HUMAN RESOURCES

Your Company encourages and provides regular training to employees to improve skills. Your Company has performance appraisal system for senior employees and junior management staff. In- house news letters provide forum for information sharing. Rewarding individuals for their contribution is part of motivation towards Excellence.

CORPORATE GOVERNANCE

A separate section on Corporate Governance, in line with Clause 49 of the Listing Agreement with the Stock Exchange, forms part of this Report. The relevant Certificate from practicing Company Secretary is annexed and forms part of this report.

DIRECTORS' RESPONSIBILITY STATEMENT

As stipulated in Section 217(2AA) of the Companies Act, 1956, Directors subscribe to the ''Directors Responsibility Statement" and confirm that:

(i) in preparation of Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) the accounting policies have been consistently applied and reasonable, prudent judgment and estimates are made so as to give a true and fair view of the state of affairs of the Company as on 31st December 2011 and of the profit of the Company for that Year;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts of the Company are prepared on a going concern basis.

SOCIAL REPORT

Your Company is regularly working in the areas of Health Care, Education etc. in discharging of its social obligations. During the year under report, it has conducted Medical Camps, Rural Education and various awareness programmes benefiting to the residents of nearby areas, from time to time in partnership with the District Authorities, Village Panchayat etc.

ENVIRONMENT REPORT

Environment conservation - A way of life

We believe in sustainable development. We regard social, economic and environmental responsibility as integral element of our business.

Your Company is ISO 14001 Environment Management system Certified and adhere to OHSAS 18001 standards of Safety and Occupational Health. Professional Environment Auditors such as Det Norske Veritas, the State Pollution Board's certified auditors and Environmental System Auditors conduct periodic in-depth environmental audit on our plant. The Audit Reports validate our commitment to environmental conservation. Large scale plantations in the mines, plant, colonies and surrounding areas provide a lush green cover and are reflection of our respect for the environment.

ACKNOWLEDGEMENT

The Directors take this opportunity to express their appreciation for the support and co-operation received from the State and Central Government and Lenders. The Directors also recognize the commitment and dedication of the Company's employees.

For and on behalf of the Board

(Alvaro Joao Serra Nazare) (Suman Mukherjee)

Director CEO & Managing Director

Place : Mumbai,

Date : 2nd February, 2012


Dec 31, 2010

The Directors present the 66th Annual Report together with the Audited Accounts of the Company for the year ended 31st December, 2010.

FINANCIAL RESULTS

The financial results for the year under report are as under:

(Rs. In lacs)

Current Previous Year Period Ended Ended 31.12.2010 31.12.2009 (12 months) (9 months)

Gross Turnover 32453 28571

Profit before Interest 2424 4398

Depreciation,

Exceptional Item & Tax)

Less: Interest 34 176

Less: Depreciation 938 622

Profit after Interest & 1452 3600

Depreciation but before Exceptional Item & Tax

Less: Exceptional Item (1246) 0

Profit from ordinary 206 3600

activities before Tax

Provision for Current (106) (29)

Tax(MAT)

Net Profit for the year/ 100 3571 period

Balance brought (5655) (9226)

forward from previous

year

(LOSS) CARRIED OVER (5555) (5655)



FINANCIAL PERFORMANCE

The working results for the year under report show a sharp set back. Turnover is negative by about 15% (on annualized basis) in comparison with previous year. Contribution also squeezed under pressure of rising costs and falling price line, consequent to entry of two new players in the market. Demand was also lower than normal because of abnormally heavy and longer monsoon.

Other items of the working results are dealt with under Management Discussions and Analysis, forming part of the report.

DIVIDEND

In view of accumulated losses, the Board of Directors does not recommend any dividend on Share Capital.

PRODUCTION AND SALES

Production and Sales during the year under review are as under:

(In lacs MT)

Current Corretp- Previous Period onding Year ended Period of ended 31.12.2010 previous 31.12.2009 (Jan. 2010 year (Apr. 2009 to Dec. (Jan. 2009 to Dec. 2010) to Dec. 2009 2009)

Production:

- Clinker 9.09 9.95 7.54

- Cement 9.05 10.45 7.58

Sales:

- Clinker 0.47 0.77 0.77 - Cement 9.02 10.50 7.64



Clinker production was lower, mainly because of unprecedented heavy monsoonic rain, disturbing plant operations. Cement production was also circumscribed by limitation on sales front.

Your Company has exported 0.47 lacs MT Clinker (as against 0.77 lacs MT in the corresponding period). There was no Cement export during the year.

DIRECTORS

Mr. Alvaro Joao Serra Nazare and Mr. Robert Pavrey, directors of the Company who retire by rotation under Article 167 of the Articles of Association of the Company, being eligible, offer themselves for re-appointment. A brief resume of the above mentioned Directors being appointed are attached to the Notice for the ensuing Annual General Meeting.

Mr. Jorge Manuel Tavares Salavessa Moura resigned from the Board of the Company. The Board records, with appreciation, his advice and guidance.

AUDITORS REPORT

The observations made in the Auditors Report are self explanatory and do not call for any further comments u/s 217(3) of the Companies Act, 1956.

AUDITORS

Your Directors request you to appoint Auditors for current accounting year and fix up their remuneration. M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, the existing Auditors of the Company retiring at the ensuing Annual General Meeting are available for a fresh term and have furnished certificate of their eligibility for re-appointment.

COST AUDITORS

Pursuant to Section 233B of the Companies Act, 1956, your Directors have appointed M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad as Cost Auditors to conduct the Cost Audit for the year ended 31st December 2010. The appointment has been approved by the Central Government.

PARTICULARS OF EMPLOYEES

The Particulars of employees, required under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, forms part of this Report. However in pursuance of Section 219(1)(b)(iv) of the Act, this report is being sent to all shareholders of the Company, excluding the aforesaid information and the said particulars are available at the Registered Office of the Company. The members interested in obtaining such particulars may write to the Secretarial Department at the Registered Office of the Company.

ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

Information relating to conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo, required under Section 217(1) (e) of the Companies Act, 1956 are annexed and form part of this report.

HUMAN RESOURCES

Your Company encourages and provides regular training to employees to improve skills. Your Company has performance appraisal system for senior employees and junior management staff. In-house news letters provide forum for information sharing. Rewarding individuals for their contribution is part of motivation towards Excellence.

CORPORATE GOVERNANCE

A separate section on Corporate Governance, in line with Clause 49 of the Listing Agreement with the Stock Exchange, forms part of this Report. The relevant Certificate from practicing Company Secretary is annexed and forms part of this report.

DIRECTORS RESPONSIBILITY STATEMENT

As stipulated in Section 217(2AA) of the Companies Act, 1956, Directors subscribe to the "Directors Responsibility Statement" and confirm that:

(i) in preparation of Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) the accounting policies have been consistently applied and reasonable, prudent judgment and estimates are made so as to give a true and fair view of the state of affairs of the Company as on 31st December 2010 and of the profit of the Company for that Year;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts of the Company are prepared on a going concern basis.

SOCIAL REPORT

Your Company is regularly working in the areas of Health Care, Education etc in discharging of its social obligations. During the year under report, it has conducted Medical Camps, Rural Education and various awareness programmes benefiting to the residents of nearby areas, from time to time in partnership with the District Authorities, Village Panchayat etc.

ENVIRONMENT REPORT

Environment conservation - A way of life

We believe in sustainable development. We regard social, economic and environmental responsibility as integral element of our business.

Your Company is ISO 14001 Environment Management system Certified and adhere to OHSAS 18001 standards of Safety and Occupational Health. Professional Environment Auditors such as Det Norske Veritas, the State Pollution Boards certified Auditors and Environmental System Auditors conduct periodic in-depth environmental audit on our plant. The Audit Reports validate our commitment to environmental conservation. Large scale plantations in the mines, plant, colonies and surrounding areas provide a lush green cover and are reflection of our respect for the environment.

ACKNOWLEDGEMENT

The Directors take this opportunity to express their appreciation for the support and co-operation received from the State and Central Government and Lenders. The Directors also recognize the commitment and dedication of the Companys employees.



For and on behalf of the Board

(Alvaro Joao Serra Nazare) (P. A. Nair) Director Whole Time Director

Place: Mumbai,

Date: 23rd February, 2011


Dec 31, 2009

The Directors present the 65th Annual Report together with the Audited Accounts of the Company for the year ended 31st December, 2009.

FINANCIAL RESULTS

The financial results for the year under report are as under:

(Rs. In lacs)

Current Previous Year Year Ended Ended 31.12.2009 31.03.2009 (9 months) (12 months)

Gross Turnover 28571 34192

PBIDT (Profit before 4397 3951 Interest, Depreciation and Tax)

Less: Interest 176 1095

Gross Profit 4221 2856

Less: Depreciation 622 671

Profit before Tax 3599 2185

Fringe Benefit Tax/MAT (29) (19)

Net Profit during the 3570 2166

year

Balance brought forward (9225) (11391)

from previous year

(LOSS) CARRIED OVER (5655) (9225)



CHANGE IN ACCOUNTING YEAR:

Accounting year of the Company for the period under report consists of nine months, ended on 31st December 2009 [1st April 2009 to 31st December 2009]. Hereafter, the accounting year will be for 12 months period ending on 31st December every year, to coincide with the accounting year of Cimpor Inversiones S. A., the Holding Company. For this change, the financial results for the period under report are not comparable with the previous year.

DIVIDEND:

In view of accumulated losses, the Board of Directors does not recommend any dividend on Preference and Equity Share Capital.

FINANCIAL PERFORMANCE:

The turnover and working result show improvement over previous year. But for pressure on unit realization in the last quarter of the year, the profitability would have further contributed to the strength of the Company.

Other items of the working results are dealt with under Management Discussion and Analysis, forming part of the report.

PRODUCTION AND SALES

Production and Sales during the year under review are as under:

(In lacs MT)

Current Corresp- Previous period onding Year ended Period of ended

31.12.2009 previous 31.03.2009 (Apr. 09 to year (Apr. 08 to Dec. 09) Mar. 09)

Production:

- Clinker 7.54 6.46 8.87

- Cement 7.58 6.12 8.98

Sales:

- Clinker 0.77 0.49 0.49 Cement 7.64 6.14 8.99

Plant operations present performance improvement. Cement demand in the State of Gujarat (home market for your Company) has registered growth by about 16.12% during the period under review. Your Company has achieved growth in cement sales by about 24% over corresponding period. Consequentially, Cement production was also at higher side i.e. by about 23% over corresponding period.

Your Company has exported 0.77 lacs MT clinker (as against 0.48 lacs MT in the corresponding period) registering an increase of 60% over corresponding period. There was no Cement export during the period. (Previous year 0.26 lacs MT)

DIRECTORS

Mr. Leonard D Costa, Mr. Napoleon De la Colina and Mr. Luis Filipe Sequeira Martins, who retire by rotation under Article 167 of the Articles of Association of the Company, being eligible, offer themselves for re-appointment.

A brief resume of the above mentioned Directors being appointed are attached to the Notice for the ensuing Annual General Meeting.

AUDITORS REPORT

The observations made in the Auditors Report are self explanatory and db not call for any further comments u/s 217(3) of the Companies Act, 1956.

AUDITORS

Your Directors request you to appoint Auditors for current accounting year and fix up their remuneration. M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, the existing

Auditors of the Company retiring at the ensuing Annual General Meeting are available for a fresh term and have furnished certificate of their eligibility for re-appointment.

COST AUDITORS

Pursuant to Section 233B of the Companies Act, 1956, your Directors have appointed M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad as Cost Auditors to conduct the Cost Audit for the year ended 31s1 December 2009. The appointment has been approved by the Central Government.

PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956

The Particulars of employees, required under section 217(2A) of the Companies Act, 1956, and Information relating to conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo, required under Section 217(1) (e) of the Companies Act, 1956 are annexed and form part of this report.

HUMAN RESOURCES

Your Company encourages and provides regular training to employees to improve skills. Your Company has performance appraisal system for senior employees and junior management staff. In- house news letters provides forum for information sharing. Rewarding individuals for their contribution is part of motivation towards Excellence.

CORPORATE GOVERNANCE

A separate section on Corporate Governance, in line with Clause 49 of the Listing Agreement with the Stock Exchange, forms part of this Report. The relevant Certificate from practicing Company Secretary is annexed and forms part of this report.

DIRECTORS RESPONSIBILITY STATEMENT

As stipulated in Section 217(2AA) of the Companies Act, 1956, Directors subscribe to the "Directors Responsibility Statement" and confirm that:

(i) in preparation of Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) the accounting policies have been consistently applied and reasonable, prudent judgment and estimates are made so as to give a true and fair view of the state of affairs of the Company as on 31st December 2009 and of the profit of the Company for that period;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting

records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts of the Company are prepared on a going concern basis.

SOCIAL REPORT

Your Company is regularly working in the areas of Health Care, Education etc in discharging of its social obligations. During the year under report, it has conducted various Medical Camps, awareness programme on HIV, Swine Flue etc, benefiting to the residents of nearby areas, from time to time in partnership with the District Authorities, Village Panchayat etc.

ENVIRONMENT REPORT

Environment conservation - A way of life

We believe in sustainable development. We regard social, economic and environmental responsibility as integral element of our business.

Your Company is ISO 14001 Environment Management system Certified and adhere to OHSAS 18001 standards of Safety and Occupational Health. Professional Environment Auditors such as Det Norske Veritas, the State Pollution Boards certified auditors and Environmental System Auditors conduct periodic in- depth environmental audit on our plant. The Audit Reports validate our commitment to environmental conservation.

Large scale plantations in the mines, plant, colonies and surrounding areas provide a lush green cover and are reflection of our respect for the environment.

ACKNOWLEDGEMENT

The Directors take this opportunity to express their appreciation for the support and co-operation received from the State and Central Government and Lenders. The Directors also recognize the commitment and dedication of the Companys employees.

For and on behalf of the Board

(Alvaro Joao Serra Nazare) (P. A. Nair)

Director Whole Time Director

Place : Digvijaygram, Date : 9th March, 2010

 
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