trust does the impossible report 2008-09.pdfbrands, viz. shree ultra jung rodhak cement, bangur...

TRUST does the

IMPOSSIBLE

Annual Report 2008-09

FORWARD-LOOKING STATEMENT

In this Annual Report we have disclosed forward-looking information to

enable investors to comprehend our prospects and take informed

investment decisions. This report and other statements – written and oral

– that we periodically make contain forward-looking statements that set

out anticipated results based on the management’s plans and

assumptions. We have tried wherever possible to identify such statements

by using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’,

‘plans’, ‘believes’, and words of similar substance in connection with any

discussion of future performance.

We cannot guarantee that these forward-looking statements will be

realised, although we believe we have been prudent in assumptions. The

achievement of results is subject to risks, uncertainties and even

inaccurate assumptions. Should known or unknown risks or uncertainties

materialise, or should underlying assumptions prove inaccurate, actual

results could vary materially from those anticipated, estimated or

projected. Readers should bear this in mind.

We undertake no obligation to publicly update any forward looking-

statements, whether as a result of new information, future events or

otherwise.

Content Page

Chairman's Words 05

KnowAbout Shree Cement 07Vision, Mission, Philosophy & Principles 09

UnderstandMD's Perspective 10ED's Overview 12- What Trust achieves? 15- Trust sets 'unthinkable' benchmarks 16- Trust extends 'unexpected' support 21- Trust empowers 'untried' hands 22- Trust discovers 'untested' opportunity 24- Trust delivers 'invaluable' benefits 26

GraspPerformance Highlights 28

Departmental Highlights- Material Management 33- Manufacturing 36- Logistics 39- Power 41- Quality and R&D 45- Knowledge Systems (IT) 47- Marketing and Branding 49- Human Resource 53- Finance 56- Shareholder Value 59- Corporate Sustainability 61Awards 65Profile of Directors 66Shree’s Polices 68Five & Fifteen-Year Financial Highlights 70

ExamineManagement Discussion & Analysis 72Directors' Report & Annexures 78Auditors' Certificate on Corporate Governance 87Report on Corporate Governance & Annexxures 88Code of Conduct 100Auditors' Report 101Balance Sheet 104Profit & Loss Account 105Schedules forming part of the Accounts 106Cash Flow Statement 127Company Details 128Ratio Analysis 130

index

Night view of Beawar Plant

Trust delivers.

Trust touches, assures and inspires people.

Acting thus, trust transforms organisations.

At Shree, trust has been working hard behind the scenes. It's time we brought it to the limelight.

concept note

03

wordsChairman’s

India's age-old culture has adequate references to trust and ethics as the basis

of governing daily life. Take Chaanakya's Arthashaastra written around 330 BC.

Although, it is about the accretion and management of wealth and resources,

the first Sutra or principle outlined in the book does not mention wealth at all.

Instead, it says very clearly, 'Sukhasya Moolam Dharmaha' - The Basis of

Happiness is Ethics. Besides elaborating on character development, the

Sutras also stress the importance of competency building. Another ancient

Indian contribution, the Panchatantra has numerous stories on the value of

trust and friendship.

Having been brought up on such a rich diet of wisdom since childhood, Trust

was a natural instinct with us. So, in a sense, it was inevitable we started

thinking of it in more active terms for our organisation by implementing trust-

based procedures. This is just the beginning. With more 'trust best practices'

in place, we are sure Shree Cement will acquire a hard edge from

this soft attribute.

With more 'trust best practices' in place, we

are sure Shree Cement will acquire a hard edge

from this soft attribute

B B ng r G a uEx t v Ch anecu i e airm

05

About Shree CeShree Cement is one of India's premier cement makers; the

largest in North India. Among the country's top 5 cement

groups, Shree Cement is being professionally managed by

its promoters Shri B. G. Bangur, Chairman and Shri H. M.

Bangur, Managing Director.

Shree Cement posted a turnover of Rs. 2715 crore and

generated operating profit of nearly Rs. 1034 crore during

2008-09. Operational excellence and efficiency of the

Company gets reflected in one of the highest operating

profit margins of 38%.

High-calibre project management and execution

capabilities have seen the Company compress project

timelines and push rapid capacity expansions. A striking

case in point is the commissioning of Unit VII in a world

record of 367 days.

Fast scale-up of operations, driven by such rapid capacity

ramp-ups, made it possible for the company to grab market

opportunities. Shree enjoys the highest market shares in

prime markets of Delhi, Haryana and Rajasthan.

The Company pursues a multi-brand strategy. The three

brands, viz. Shree Ultra Jung Rodhak Cement, Bangur

Cement and Rockstrong Cement, appeal to different

customers and thus create a more diverse and broad

customer base.

Shree follows the triple bottom-line approach of measuring

its performance in terms of three aspects – economic, social

and environmental. In line with this approach, the Company

goes beyond profit performance to impact community

development and environment protection in a sustainable

manner. Shree has already embarked on the 'greening' of its

processes so that its operations put the minimum burden

on the earth's finite resources. The company is on the way to

installing one of the world's largest 'green' power projects

to run on waste heat.

Shree is continuing its capacity expansion both in cement

and power plants with further investment committed to the

tune of approximately Rs.1000 crore during 2009-10. For

future growth, the Company is looking at acquiring

limestone mines within India as well as abroad.

07

Vision

“To drive and sustain industry leadership owithin a global context - by developing indivicompetencies at every level, through a robutrust, support, innovation and reward”

f the company dual leadership st backbone of

Guiding Principles

n

n

n

n

n

Enforce good corporate governance

practices

Encourage integrity of conduct

Ensure clarity and unambiguity in

communication

Remain accountable to all stakeholders

Encourage socially responsible

behaviour

Mission

n

n

n

n

n

n

n

To harness sustainability through low

carbon philosophy

To sustain its reputation as one of the

most efficient manufacturers globally

To continually have most engaged team

To drive down cost through innovative

practices

To continually add value to its products

and operations meeting expectations of

all its stakeholders

To continually build and upgrade skills

and competencies of its human resource

for growth

To be a responsible corporate citizen

with total commitment to communities

in which it operates and society at large

Philosophy

- Rigveda

“Aah no bhadra: Kratavo yantu vishwatah”

“Let noble thoughts come to us from all over the world.”

The Shree Vision

09

Prisoners work hard, give results, and do not commit any mistakes as

their hands are tied with chains

H M BangurngManagi Director

MD’s perspective

The most daunting task a leader faces is how to sell his vision to a group of people. Forget a group, try convincing even a single individual, say even someone as close as your spouse; and you will understand what I mean. This is because a team, far from being an undifferentiated unit, consists of individuals with diverse backgrounds and ambitions.

So, achieving a common vision for different members of a team is the work of the leader; achieving the highest degree of harmony among members is the touchstone of successful leadership. If the team vision is not coherent, then it is not the failure of the team, or of its ability to deliver on expectations; it is the failure of the leadership to sell its vision to the team. I was often told by my teacher ages ago that if I performed badly, it was not my fault but his; it is not the student who fails, but the teacher. Similarly, it is not the team which fails, but the leadership.

Once the common organisational vision is framed, the top management's behaviour and work has to conform to it. Disharmony between what is being said and practiced, results in total aural and visual mismatch, and thus, in total

loss of trust. We expect all our religious leaders to practice what they preach. It is equally true of corporate leadership. Confidence and trust in it always comes from the top and travels to the bottom.

At Shree Cement, telephone, traveling and other personal expenses are self-certified. All such expenses are paid without any further verification by the accounts department. Only 10% of the bills are sampled out for checking at a later date. Last year, we found that only 12% of the total bills checked had discrepancies. Out of the 12%, 4% of the bills were under-claimed and only 8% were over-claimed. Even the over-claiming was due to genuine ambiguity of the rules. In fact, we found that given the responsibility of self determination, nobody over-claims intentionally.

Trust is a two-way communication line between the top and bottom. A leader can trust only when there is faith on both capability and commitment of the people, and vice-versa. Incapable and uncommitted management cannot generate faith, irrespective of the results. At an

organisational level, top tier management has to earn faith from the middle tier management, which in turn should generate it in their juniors.

Questions raised by juniors, if not answered adequately or truthfully by the seniors, erodes trust between the ranks. Authority enjoyed by the boss may be used to cover up his failure to furnish a satisfactory answer. However, such an action prompts an immediate loss of faith in the boss, undermining his ability to deliver in the future. Thus, transparency is the first condition of generating trust.

A natural corollary of trust is the opportunity to work with freedom. Lesser the degree of trust in people, more the amount of control and lower the freedom in an organisation. Under a system of strict control, people may work hard and deliver results with machine-like efficiency, without any errors. However, machine-like efficiency is actually for robots, not human beings. Such efficiency is achieved at the high cost of sacrificing all innovations. Prisoners work hard, give results, and do not commit any mistakes as their hands are tied with chains. Similarly, unrelenting supervision and strict control creates 'prisoners' of the system. Taught to work hard and deliver results without mistakes, all their creativity gets killed by the system.

If we do not have faith in our people, we seek to control performance and outcomes through a regime of strict adherence to parameters and targets. But, in a dynamic organisation, targets have to change daily to adjust to emerging situations and opportunities. The targets we have achieved yesterday is history; what is important today is 'what next?', or future targets. Older organisations are remembered for their sense of history or past achievements; younger organisations are remembered for future expectations.

Immediately after getting the latest kiln commissioned in a world record time of 367 days, I called up a meeting to congratulate the team. To my utter surprise, I found that the team was no more celebrating the success. As soon as it was

Leadership by Trustachieved, it had become history. They were already looking for the next big milestone; they wanted to complete the next kiln in only 342 days. They have learnt with experience that 25 additional days could still have been saved in commissioning. They were setting their own benchmark, their own limit, and the world record was too small for that.

A substitute for innovation is resourcefulness and

inventiveness captured in a very desi word, 'jugaad.' I fail to understand why it has a negative connotation in terms of street-smart inventiveness, when it gets past every obstacle and delivers positive results. When the situation changes drastically, it is only 'jugaad' that comes to the rescue. With presence of mind, thinking 'on the feet' and effective actions, 'jugaad' can only be undertaken by an innovative workforce.

Repairing a breakdown in the system returns it, at best, to its original level. But, modifying the current system to achieve higher efficiency is the only way to get ahead. This is possible only after the team has the faith that their efforts, even if they result in failure, will not be misunderstood, and management will stand by their efforts.

The biggest frustration for any individual is to know what is wrong, and yet, feel powerless to take corrective steps. This results in the person losing faith in the organisation as well as the leadership. To pre-empt such a situation from developing, it is important that the individual's voice is heard at the right time by the right people. This can happen only if communication lines (trust lines) between various persons are totally open.

To take a leaf out of our ancient literature, take Hanuman, a capable hero of the 'Ramayana’. According to the myth, Hanuman had a curse upon him that made him forget his strengths; he could achieve his immense potential only when reminded of his capabilities. Great leadership is that which achieves the best out of all potential 'Hanumans' in the team.

11

Trust provides the strong roots that allow our people

to take unusually high risks and even fail on

the way to hitherto unreachable heights

i g iM K S n hxe i e Di e t rE cut v r c o

ED’s overviewWhat is our ‘bottommost' line?

We follow the triple bottom line approach of

measuring our overall performance in terms of

economic, social and environmental performance

(also called the 3Ps of performance - Profit, People and

Planet.) This is a holistic yardstick that looks at how our

performance matters to those impacted by it - our

employees, shareholders and other stakeholders, the

community and the environment.

Of course, performance is a matter of fundamentals

like people, infrastructure and resources. Does it

follow then that if the quality of tangibles like people,

infrastructure and resources were exactly the same at

two different places, performance would be the

same? I am sure it would not be so.

Besides the tangibles, I know of one intangible that

changes the picture completely - trust. Let me

illustrate with an analogy. Say, your task is to row a

boat; then, trust is like the favourable wind in its sails -

unseen and yet, impactful. Stronger the wind (or

trust), faster and easier does your rowing (or your

effort) take the boat forward (or bear results). On the

other hand, an absence of wind (or no trust), or

presence of unfavourable wind (or distrust) makes

your rowing (or effort) slower and harder.

The analogy makes clear various aspects of trust. One,

the intangible trust has a tangible impact. With the

favourable wind in its sails, the boat reaches its

destination hours faster than otherwise and the

rowers are relatively less exhausted because of the

less exertion. Likewise, for the individual, his task gets

completed ahead of schedule with little cost in terms

of effort. Say because of trust, it takes the individual

8 hours to complete a task that would otherwise take

10 hours. The Gain from Trust, or Trust Gain, in this case

is (10 - 8 =) 2 hours, or 20%. Thus, the effects of trust

can be measured and quantified in terms of time and

cost.

Two, like trust, distrust too has consequences - of

course, adverse. Say because of distrust, it takes

another individual 14 hours instead of the normal

10 hours to finish the above task. Then Loss from

Distrust, or Distrust Loss, is to the extent of (14 - 10 =) 4

hours, or 40%.

Three, what is true at the individual level is true for the

organisation too. At an organisational level, the boat

in the above analogy could refer to the Company's

Strategy and the rowing could be thought of as its

Execution. A widely known business model has it that

Strategy (S) times Execution (E) equals Results (R), or S

x E = R. Trust multiplies the effects of Strategy and

Execution to deliver much bigger Results; Distrust

discounts the effects of Strategy and Execution to

deliver much smaller Results. In this model, Trust Gain

could be as high as 40%, while Distrust Loss could be

as high as 80%.

As a later section shows, we have had demonstrated

Trust Gains in our company; our commissioning of

Unit VII in a world record time of 367 days, instead of

the industry standard of 630 days, would not have

been possible without trust. Now, 367 days is about

58% of 630; thus, Trust Gain in terms of time was (100 -

58 =) 42%. Because of trust, we could complete the

project 42% faster than the norm.

Trust is a two-way street between individuals. There is

one who trusts and another who delivers on such

trust. Our performance, as an organisation, depends

on such two-way interaction of trust and support

between bosses and subordinates, colleagues in

different departments and even between the

company and its suppliers and stakeholders. Trust

provides the strong roots that allow our people to

take unusually high risks and even fail on the way to

hitherto unreachable heights. Because, it is such a

natural performance enhancer, it is the bottom line

beneath all our three bottom lines. Surely, it is our

bottommost line.

13

What

15

Trust achiTrust, according to me, achieves the 'impossible.' By

'impossible,' I mean those things that cannot be conceived

of in an ordinary context or setting. Let me furnish a simple

logic. Can any departmental head singlehandedly run his

department without trusting those down the line? It's

completely inconceivable. So, doesn't trust achieve the

unimaginable, the unachievable, or the 'impossible?'

Transactions within the framework of trust happen faster

and cheaper. This is quite self-obvious in our everyday life.

Say you want to buy a car. You are more likely to go for a

vehicle a trusted friend or relative recommends. Because

you know clearly which car to buy, the purchase takes less

time (faster) and less effort (cheaper); less overall cost or

burden, in terms of time and effort, is borne by you. Thus,

trust has a measureable impact - lower cost of any

transaction. Imagine the impact at an organisational level

where countless such transactions take place daily. The

cumulative effect of trust across the organisation results in

huge cost-efficiencies that can be quantified. What it all

means is that trust is an intangible asset that multiplies

productivity and has tangible, measureable outcomes.

I will now dwell on what trust has achieved in our

organisation. Trust initiatives across functions and

departments can be slotted into one broad trust outcome

or the other. I have identified five such outcomes and

adopted a cross-departmental approach to elaborate on

the payoffs. This is to hit home the point that trust is the

indivisible principle that can be applied in every sphere of

the Company's activity.

Facet of Company Trust outcomes

Speed of transactions Faster

Cost of transactions Lower

Employee productivity /engagement Higher

Supplier delivery Better

Community involvement Greater

Shareholder return Bigger

Customer confidence Stronger

trust sets ‘unthinkable’ Let me list some 'unthinkable' industry records created by our

Company this year.

We set a world record of 367 days in commissioning a brownfield

1 MTPA (Million Tonnes Per Annum) Clinkerisation Unit (Unit VII). To put

the record into perspective, the industry takes 630 days for such a

project.

How did it happen? For a start, we forgot the words like 'unthinkable'

and 'unrealistic.' We sat and discussed with our project managers

deadlines that would be considered a dead 'no-no' elsewhere. We

trusted their capability and commitment to deliver on such incredible

targets. In a cascading effect of trust, the managers showed

confidence in their execution teams, who in turn, banked on the

suppliers. All in the 'trust chain' responded with great enthusiasm and

commitment. The result - the world record.

World record in commissioning a cement plant

Night view of Ras Plant

17

benchmarks

“This project itself is a record time of execution of a

brownfield plant of this size as far as our knowledge

goes with respect to various organisations and

countries where KHD-HW is working.

We would like to record our appreciation to Shree

Cement for this unique achievement which can

become a learning experience for other

entrepreneurs who are looking for faster

implementation of projects.”

- In a letter from the Sr. Vice President (Global Sales & Mktg),

A. K. Dembla and President (Delhi Operations), Martin Gierse

of KHD Humboldt Wedag

“Shree Cement is one of the country's most efficient

cement companies. This tremendous achievement is

yet another feather in the cap of the entire team.”

- In a letter from Rajasthan Chamber of Commerce & Industry

“I want to congratulate you for the speed of Shree

Cement in building and firing a kiln in barely 12

months' time…it is for sure a very fast project.”

- In a letter from the Chairman and CEO of Lafarge, Bruno

Lafont, France

Clinkerisation Unit (Unit VII), Ras

19

One of the biggest Oracle ERP implementations in Asia

A similar story happened while deploying Oracle e-Business

Suite ERP solution. We went live with all eight modules of

the Suite at one go (called the Big Bang approach) - with

zero downtime. This means two things. First, all our

departments got simultaneously migrated to the Oracle

ERP platform, practically at a single stroke of the key.

Second, all this happened with zero time lapse, or zero

blackout period. That is, every department became Oracle-

ready instantaneously, practically at the moment the key

was hit. In short, the ERP deployment was both

'simultaneous and instantaneous.'

Such an achievement was again 'unthinkable,' given that

the industry took up to seven days for the transition. The

usual practice is to queue departments onto the Oracle

platform one after the other, instead of a simultaneous

migration. Even in the case of such 'Big Bang'

implementation, there is always a blackout period during

which all accounting procedures and workflows had to be

reconfigured in terms of the new Oracle protocol. This

usually halted processes and dispatches as departments

struggled to reconcile huge accounting adjustments. We

trusted all departments to plan out accounting inflows and

outflows up to the point of migration in a way to increase

speed while keeping errors to a minimum. The reasoning

was that losses from such errors, if any, would be more than

compensated for by revenues accruing from processes and

dispatches happening days in advance.

In the Business Today-Mercer-TNS study, The Best

Companies To Work For In India - 2008, Shree came out

among the Top 20 companies in India. It was certainly the

top cement maker to do so.

This is certainly an achievement given that people generally

prefer to work at pristine IT or service set-ups close to

cosmopolitan and commercial hubs rather than the 'heat

and dust' of cement plants at remote locations. But, there

must be something in our Company that resonates with

people at a deeper level.

In the study, the Company scored higher than the average

of the Top 10 companies on Internal Employee Perception

Survey and Engagement Index, i.e., on factors that reflect

workers' attitudes and drive engagement.

I believe this happened because of a curious process: when

we trust someone, we also bestow him or her with a sense of

responsibility and moral obligation. This, in turn, fosters the

spirit of ownership over actions and ultimately, over the

Company. I will talk about this process of empowerment

and its results in a later section.

One of India's best employers

21

At Shree, we believe in creating not only engaged

employees, but also 'engaged suppliers.'

Take our captive power plant coming up at our Ras works.

Looking at the level of resources that could be mobilised by

the turnkey contractor, we began feeling that things would

run behind schedule. Enquiries with the supplier revealed a

situation of liquidity crunch because of the ongoing

recession. We immediately sanctioned a substantial

advance to the supplier, who then took to the task with

great gusto. Now, we are sure to complete the power plant

much before schedule.

In this case, we created the moral pressure of trust by

providing a handsome advance. Because, we were a partner

in their difficulty, the contractor became a partner in our

progress; about 80% of contractor's resources were

deployed at our power plant site to set it up in the fastest

time possible. Similar financial assistance, 'on faith,' for

equipment vendors is helping us achieve our targets, most

of them faster than the industry norm.

Other gestures of 'unexpected' trust and support that

create 'engaged' outside parties include payments on the

basis of work done without bills being raised, advance

payments to tide over the ERP migration period, manpower

and other resource support to expedite processes at the

supplier's end.

Shree's trust culture is infectious; suppliers react and act on

it positively. In what is perhaps an industry first, our German

vendor expedited arrangements so that we could airlift

82 MT of cargo comprising of Coal Mill and Raw Mill for the

record-breaking Unit VII. While the routine practice is to ship

such humongous cargo, we took the air route and sliced off

1 ½ months from the usual gestation lag.

Advances 'on faith'

Making our suppliers our partners

trust extendssupport‘unexpected’

The industry standard for Pre-heater installation is about

12 months. For Unit VII, our supplier rose to the occasion and

completed the job in a record 8 months.

Clinker Coolers usually arrive knocked-down from the

supplier's side. The supplier usually runs tests on the

assembled equipment before knocking it down for

transport to the cement maker's plant. Afterwards, onsite

assembly usually takes 2-3 months. What we did was simple.

We put faith in our suppliers, took their word for the

integrity of the assembled equipment without verifying the

constituent parts, trusted our own logistics capabilities and

transported the whole equipment to the Unit VII site. Doing

away with onsite assembly saved 2-3 months.

“We are pleased to know the 1200 TPH chain

elevator has been successfully erected and

commissioned in one week...Based on

experience of decades, erection of such

elevators takes at least two weeks...This is a

brilliant project construction

accomplishment we have never seen in other

elevator erection sites in China and abroad.”

- In a letter from the General Manager of Wuhu Crane &

Conveyor Co., Ltd., China

trust empowers ‘untried’ hands

23

Perhaps the most compelling reason for inculcating trust is

the feeling of empowerment enjoyed by employees. In the

words of the comic book superhero, Spiderman, '…with

great power comes great responsibility.’

We have nearly done away with micromanagement. Not

only does it take a toll on top management in terms of time

and effort, but it also creates weak second lines without

initiative or enthusiasm. Thus, the buzzwords inside the

Company are Delegation and Decentralisation across

departments and functions. Most of our departments and

project teams seem to run on 'autopilot' mode.

Direction rather than supervision

Empowered juniors

We have immense faith in our young brigade. A big case in

point is that the Unit VII record was largely the result of

efforts and initiatives of junior management promoted up

the order to take larger responsibilities.

Major events like plant shutdowns are decided collectively

and planned in a way to minimise intervention of seniors.

The logic is that shop floor personnel know their job best,

are perfectly capable of handling routine operations and

therefore, very well deserve our trust. During exigencies,

the juniors know they can turn to their seniors for guidance

and support.

trust discovers opportunity ‘untested’

25

Trusting people yields initiatives that materialise

opportunities where none existed before.

Take cement dispatches, which generally take place in

covered rail wagons for long distances. The possibility of

securing freight rebates led our managers to experiment

with open wagon dispatches. Although, initially, open

wagon loading took long, experimentation was allowed to

continue. By modifying loading chutes, open wagon

loading cycle has been reduced to 12-13 hours for 3835 MT

of cargo. This is a figure that compares well with the 9-10

hours of loading time for 2700 MT in covered wagons.

What is the opportunity? Lower freight per ton kilometre

allows us to extend radius control and reach long-distance

markets with good potential. Newer markets also mean

more diversified business. This is good news for the

Company, because we have multiple brands to take

advantage of just such a diverse customer base.

Earlier, brand managers of our three brands - Shree Ultra

Jung Rodhak Cement, Bangur Cement and Rockstrong

Cement engaged in healthy competition amongst

Open rail wagon loading

Logistics integration

themselves to cultivate their own distribution channels and

gain larger shares of the market. But, looking at the

possibility of integrating the logistics function across all the

brands, a decision was made to share transport and storage

capacities. Of course, this necessitated a spirit of trust,

cooperation and coordination between all brand managers

in the larger interests of the Company.

Our policy of keeping redundant captive power capacity

opened up a new avenue - power sales. Cashing on the right

tariff at the right time required trust and coordination

between the power sales team, the power plant and the

cement plant. The power plant had to generate enough

power to accommodate the load of the cement and

grinding plants, its own requirement of auxiliary power and

the need to push power sales volumes. The cement plant

was asked to optimise power consumption in a way that

allowed such sales to capitalise on peak-hour tariff. The

power sales team had to look at the generation of the power

plant and the need of our cement and grinding plants to

identify potential slacks in power uptake. Then power

offloads outside the system had to be planned such that

they leveraged such systemic slacks as well as market tariff

to ultimately maximise revenue.

New opportunity in power sales

27

Value for shareholders

Community benefit programmes

Greening the processes

We realise that shareholders put their trust in us by investing

their funds in our stock. We consider it our prime

responsibility to add to their value. Thus, although we have

maintained an unbroken dividend payout record, we have

been prudent in deciding the dividend rate; to ensure a

higher intrinsic value of the Company for them over the

long term, we have opted not to pursue a higher dividend

payout strategy. We have repaid their confidence in us by

generating a high return on net worth or intrinsic value.

Shree was the first Company from Rajasthan to receive the

Golden Peacock Award for excellence in corporate

governance - an affirmation of our continual efforts at

improving credibility with our shareholders.

The community looks up to Shree as a responsible and

supportive corporate citizen. The Company has been active

in promoting community interests. For instance, the

Company has renovated and created community assets like

River Ghats. As usual, the Company's annual temple

function, featuring scintillating performances by both

domestic and international artistes is a big hit with local

people and folks from surrounding areas.

It is on the Country's environment map that our company

has been a notable presence. Our 'green' credentials are

impeccable. Shree is the first cement company in the world

to earn carbon credits for its CDM project, Optimal

Utilisation of Clinker.

In a first of its kind endeavour in India, our company

developed a 'green power' system to utilise excess heat

from the main cement plant in order to turn a power

generator.

With the aim of producing 'green' cement, experiments are

being conducted to use as inputs waste materials like lead-

zinc, slag, waste gas, etc.

Trust for us is a deep-rooted and intangible instinct. But, as

shown by the interaction between Lord Krishna and Arjuna,

trust is also something that takes performance to

untouched orbits. At Shree, we too are using trust in a

material and tangible way to achieve higher levels of

performance.

Illustrating the benefits of mutual faith is a motto I am going

to leave you with - 'As faith wills, fate fulfils.’

Taking it to the next level

trust delivers benefits‘invaluable’

A primary objective of our Company is to create a circle of

trust involving all stakeholders. We pursue a sustainable

development agenda rather than a profit-centric one. This

comes out in our aforementioned triple bottom line

approach to performance.

Sustainable development is about looking after the

interests of all stakeholders, including employees,

shareholders, community and environment, and ensuring

minimum resource footprint. Such a culture in an

organisation helps it develop trust with stakeholders.

2.12.3

2.7

1.4

2.1

1.9

1.9

2.2

0.7

1.1

Current & Quick Ratio (Times)

3.0

0

Current Ratio

Quick Ratio

2.0

1.5

1.0

0.5

04-05

08-0907-08

06-0705-06

2.5

1033.7

939.2

611.0

221.5173.9

578.

0

260.

4

177.

0

18.429

.1

EBIDTA & Net Profit (Rs. Crore)

1200

0

EBIDTA

Net Profit

1000

800

600

400

200

04-05

08-0907-08

06-0705-06

Gross Fixed Assets & Net Fixed Assets (Rs. Crore)

Gross Fixed Assets

Net Fixed Assets

04-05

08-0907-08

06-0705-06

3000

2500

2000

1500

1000

500

0

2734.8

2205.32001.1

1390.91139.6

1105

.7

777.

9

891.

9

727.

7

635.

3

29

Performance Highlights

77.7

63.4

48.0

32.230.264

.2

46.2

35.1

27.7

24.8

Clinker & Cement Production (Lac Tons)

90

60

50

40

30

20

10

0

70

80

Cement Production

Clinker Production

04-05

08-0907-08

06-0705-06

Operating & Net Profit Margin (in %)

Operating Margin

Net Profit Margin

04-05

08-0907-08

06-0705-06

45

40

35

30

25

20

15

10

5

0

38.1

44.544.7

33.129.9

21.3

12.312

.9

2.75.0

Cash EPS & EPS (Rs. Per Share)

Cash EPS

EPS

04-05

08-0907-08

06-0705-06

0

25

50

75

100

125

150

175

200

225

250227.2

207.9

154.2

53.043.5

165.

9

74.7

50.8

5.38.

3

Gross Turnover & Net Turnover (Rs. Crore)

Gross Turnover

Net Turnover

04-05

08-0907-08

06-0705-06

3500

3000

2500

2000

1000

500

0

3097.1

2440.3

1613.1

824.1723.0

2715

.0

2109

.1

1368

.0

669.

4

582.

1

Debt Equity Ratio (Times)

0.9

1.71.

9

1.0

0.8

04-05

08-0907-08

06-0705-06

2.00

1.80

1.60

1.40

1.20

1.00

0.80

0.60

0.40

0.20

0

Dividend (Rs. Per Share)

10

8

6

5

4

04-05

08-0907-08

06-0705-06

12

10

8

6

4

2

0

Book Value (Rs. Per Share)

347.3

193.

1

130.

5

85.1

83.1

04-05

08-0907-08

06-0705-06

400

350

300

250

200

150

100

50

0

Royalty & Cess

Income Tax

Sales Tax

Excise Duty & Service Tax

Other Taxes

33

19191149

11

1477

101

140

266

195

698

223186

97

27

126

180

113

474

46

183

308

242

828

Contribution to Exchequer (Rs. Crore)

04-05

08-0907-08

06-0705-06

28

4964

11

0

100

200

300

400

500

600

700

800

900

Performance Highlights

31

Return On Capital Employed (in %)

04-05

08-0907-08

06-0705-06

33.9

24.9

39.3

24.6

21.9

45%

40%

35%

30%

25%

20%

15%

10%

5%

0

Return On Net Worth (in %)

04-05

08-0907-08

06-0705-06

48.4

36.5

24.1

9.7

18.5

50

40

30

20

10

0

0

10

20

30

40

50

60

Inventory Turnover (Days)

18.226.4

35.3

50.0

36.6

04-05

08-0907-08

06-0705-06

Debtor Turnover (Days)

6.9

7.4

5.9

8.1

12.1

04-05

08-0907-08

06-0705-06

14

12

10

8

6

4

2

0

Departmental Highlights

33

Material management

Limestone

Fly ash

Since limestone is the principal raw material going into

cement, all attempts are made to increase its production

while keeping costs low. Shree enjoys 100% self-reliance in

sourcing limestone from its captive mines.

As Shree has grown, so also has the internal capacity to

process limestone – from 5000 TPD (tons per day) to 50,000

TPD in the last five years. Not content with such an

impressive trajectory, the Company is aiming bigger; Shree

has acquired prospecting licenses and mining leases in

different parts of the Country in an effort to increase its

mining area.

Use of hi-tech machinery, large-sized equipment to realise

size economies, building of levelled and compacted roads

and modification of equipment design are some of the

steps that have increased the efficiency of critical mining

equipment like dumpers and excavators. For instance, such

measures have improved output of dumpers from 160 TPH

(tons per hour) to 290 TPH.

Flyash is a critical component of PPC (Pozzolana Portland

Cement) manufacturing. Its availability in the near future is

likely to come under strain as all cement manufactures push

hard to tie up long / medium term arrangements with its

suppliers, thermal power plants. Anticipating such a

situation, Shree has already forged long term agreements

with several thermal power plants. This should be enough

to fulfil our present and future requirements. Against the

present requirement of about 5000 TPD (tons per day), the

Company's long-term arrangements ensure supply security

of 7000 TPD. Shree ensures pollution-free transportation of

flyash through special purpose vehicles like pneumatic

bulkers and close body trucks.

Gypsum

The gypsum market is a monopolistic one with limited

supply. Anticipating production demands, planning

procurement schedules and developing market relations

with the suppliers have ensured procurement of nearly

4.25 Lac MT for the Company which has fully met our annual

requirements.

Considering its limited supply and increased future

demand, Shree has started using Chemical Gypsum. The

Company is also exploring use of other types of gypsum,

namely Phospho, Marine, etc. Because of the high purity of

such gypsum, quantity required per ton of cement gets

reduced. This makes the new-source gypsum very cost-

effective. The Company has already tied up with one

supplier and is in the process of making arrangements with

a few others.

Flyash Procurement (Lac Tons)

4.32

7.03

12.3

5

16.4

9

16.1

3

18

0

14

10

6

2

04-05 05-06 06-07 07-08 08-09

16

12

8

4

Raw material cost per ton of CementRaw Material 04-05 05-06 06-07 07-08 08-09Limestone & others 156 151 158 152 165Gypsum 30 33 52 46 50Flyash 53 78 131 139 106Total 239 262 341 337 321

35

Pet coke

Shree is the pioneer in the use of 100% pet coke, a waste

from petroleum refineries, both for its cement as well as

power plant operations. Today, with annual consumption of

1.2 Million Tons, Shree is the largest pet coke consumer in

the world cement industry.

The recessionary trends in the world economy depressed

international pet coke prices during the later part of

2008-09. Finding imported pet coke to be much cheaper

than domestic supplies, the Company went on a

procurement spree of pet coke from international markets

from December '08 to March '09. The Company also

engaged in hard bargaining with domestic suppliers to

reduce their prices against the background of recession and

lower imported pet coke prices.

To ensure supply security, Shree forged a two-year contract

with Indian Oil Corporation (IOC) to lift 35,000 tons per

month, which covers 35% of our total requirement. We have

also decided to widen our supplier base by turning to

international suppliers, as against the earlier approach of

banking on only domestic suppliers.

Procurement of packing bags

We have an online bidding system, which allows packing

bag suppliers to bid and compete for our orders.

A tremendous success, the system has been able to handle

larger and larger procurements. In the year under review,

we were procuring at the rate of 1.5 crore bags a month.

Such volumes are drawing more and more vendors to the

system, thereby increasing its competitiveness and

enabling procurement at lower costs.

37

Manufacturing

Power and fuel consumption

n

n

n

The higher production figures were achieved at lower

power and fuel costs. This happened partly due to energy

conservation measures taken by the Company such as:

Installation of High Efficiency Main ESP and PH fans

Increase in the stack height of Cooler ESP fan

Installation of VFDs on Dust Collector Fans in Cement

Mill, Raw Mill and Packing Plant at all the units

Clinker production in Kiln I during 2008-09, at 10.87 lac tons,

was its highest ever. Similarly, productivity of all the kilns of

the Company improved last year; surely, an outcome of

better operation & maintenance practices of equipments

and efficiency improvement initiatives.

Such practices have slashed downtime of various

equipments in the production process. Take, for instance,

the following :

36 hours to dismantle ring formation inside Kiln I from

feed to feed, instead of the earlier 72 hours

76 hours to replace old Roller Press Rollers in Cement

Mill II with new ones without the help of equipment

engineers, instead of the normal 96 hours

4 hours of downtime saved during annual shutdown

through faster cooling of Kiln by running SG Fan

24 hours to replace cracked inner race of fixed roller

drive end bearing without dismantling roller bearing,

instead of the usual 72 hours

n

n

n

n

Clinker Production (TPH)Kiln 2008-09 2007-08I 131 124II 189 183III 131 120IV 135 118V 129 110VI 132 52*

*Low because Unit VI commissioned in March 08 wasunder stabilisation.

Product mix

In response to growing demand for OPC (Ordinary Portland

Cement) coming from the institutional segment of the

market, OPC production was increased from 20% of the

total in 2007-08 to 24% in 2008-09.

Power Consumption (Kwh per Ton of Cement)

75.1

7

73.4

5

73.8

7

79.3

5

76.7

2

80

70

78

76

74

72

04-05 05-06 06-07 07-08 08-09

Fuel Consumption (% of Clinker)

10.9

6

10.3

7

11.7

3

11.3

4

10.7

5

12

7

11

10

9

8

04-05 05-06 06-07 07-08 08-09

OPC & PPC Production (%)

100

004-05 05-06 06-07 07-08 08-09

41

54

7680

7680

60

40

20

59

46

2420

24

PPCOPC


Cement and clinker production

Our production figures have outpaced the industry. While

cement production in India increased by 7.8% in 2008-09

over 2007-08, Shree’s cement production grew nearly three

times at 22.5%, from 63.4 lac tons in 2007-08 to 77.7 lac tons

in 2008-09. This has helped the Company get the most out

of growth opportunities in the market.

For the same period, the Company’s clinker production

registered a higher growth than cement at 38.8%, from 46.2

lac tons in 2007-08 to 64.2 lac tons in 2008-09. The higher

clinker production supported higher cement production

and higher clinker sales.

Khushkhera Grinding Unit


39

Cement and clinker dispatches

Open Wagon Loading

Cement and clinker dispatches have increased

substantially, by 27.7% - from 66.1 lac tons in 2007-08 to 84.4

lac tons in 2008-09. A larger share of dispatches happened

by road, because most of them took place from our Ras and

Khushkhera works, which did not have rail sidings. Thus, rail

dispatches, as a percentage of the total, slid down from 27%

in 2007-08 to 17% in 2008-09.

Loading restrictions on trucks as well as relatively higher

truck freight charges have implications in terms of higher

per ton cost of dispatches by road. Since, 83% of dispatches

took place by the high-freight mode of roads, the logistics

cost per ton has increased in the year under review.

A major initiative this year has been rail dispatches by open

wagon, instead of covered wagon, to take advantage of the

huge differences in freight. Open wagon loading generally

takes a lot of time. However, by modifying loading chutes,

the loading time has been improved to about 12 hours for

3835 MT of cargo weight. It takes about 9 hours to load 2700

MT of cargo weight in covered wagons. In a single hour,

nearly 320 MT of cargo gets loaded by open wagon, instead

of 300 MT by covered wagon. Since, loading efficiency was

higher in open wagons, faster dispatches were possible.

Also, since there were rebates on freight by open wagon,

huge logistics savings were possible.

Rail loading efficiency is also seen in the lower rake loading

times for cement and clinker.

Logistics

Freight saving from higher truck turnover

Larger dispatches from Khushkhera

Faster dispatches

In the year 2008-09, clinker freight from clinkerisation units

at Ras/Beawar to our grinding unit at Khushkhera came

down to Rs. 423 per ton from Rs. 477 in the previous year.

Such a significant reduction happened due to faster truck

turnarounds, which in turn speeded up the load-unload

cycle of clinkers between Ras/Beawar and Khushkhera, thus

making possible a higher frequency of trips. On an average,

a truck was able to increase frequency of trips between the

loading site (Ras) and unloading site (Khushkhera) to 9.1

every month during this year compared to 7.5 last year. With

higher revenue from higher trips, transporters willingly

provided freight bargains, which resulted in big freight

savings for the Company.

Proximity to prime north India markets makes cement

off-take from our Khushkhera grinding unit an attractive

proposition. Because faster delivery on their orders is

possible, customers prefer dispatches from this unit. In fact,

during the year under review, dispatches increased to 27.16

lac tons from 9.93 lac tons last year. An incredible three-fold

jump, it not only achieved larger sales volumes, but also

faster deliveries and more satisfied customers.

Besides increasing loading efficiency, faster dispatches

came about from other initiatives. Installation of an online

bag printing equipment did away with the need to wait for

pre-printed bags to arrive from the packing bag godown

before commencing packing. Uninterrupted availability of

printed bags made full use of the existing packing capacity,

instead of letting it remain idle. This initiative improved

average daily dispatches by 500-700 MT.

Rail & Road Dispatch (Cement)

80

0

60

40

06-07 07-08 08-09

20

40

0

30

20

10

13.6

734

.37

16.8

446

.55

12.9

064

.7229

27

17Lac T

on

% o

f Rai

l Dis

patc

h

Qty. - Road Dispatch (Lac Ton)Qty. - Rail Dispatch (Lac Ton)% Rail Dispatch to Total

Rake Load Time (hours)

35

30

20

10

06-07 07-08 08-09

32.53

19.05

12.2815

ClinkerCement

0

25

5

12.46

12.06 11.58

41

PowerGreater generational efficiency during 2008-09 was also

indicated by the lower heat rate (fuel in calorific terms

required to generate 1 Kwh) of 2744 Kcal/Kwh in 2008-09, as

against 3005 Kcal/Kwh in 2007-08. Such a massive

reduction in heat rate is a rare achievement in the power

sector.

'Green' power is power generated from waste heat in the

cement plant. Because, it does not require additional fuel, it

does not leave any carbon footprint and is therefore,

environment-friendly.

Shree is already generating Green Power from its existing

green power plant (Waste Heat Recovery plant) installed at

Kiln 1. The Company has now undertaken work of setting up

such green power plants at all its clinkerisation units. Once

all these green power plants are completed (which is

expected by end of financial year 2009-10, the total capacity

of Green Power Plants will add up to 43 MW. Outside of

China, this would be the largest green power generation

capacity in the World.

A new development this year has been the opening of the

Indian Energy Exchange, the Country's national energy

trading platform. Sensing the immense opportunity, Shree

started leveraging its ramped-up captive power capacity to

engage in power sales.

It is not only fetching additional revenue for the Company,

but also resulting in greater operational efficiency all-

round. Operations in the power plant have been

streamlined to increase power generation. Power demand

both in the cement and power plants has been rationalised

and operating efficiencies therein improved to make

available more power for sale. For instance, Ash handling,

CHP and DM operations in the power plant, consuming a lot

of power, were confined to time bands matching off-peak

hours of power demand in the Country. Such operations,

curtailed during peak hours, freed additional power for sale

at high peak power tariff. In the cement plant, operations of

Crushers, Raw Mills, Cement Mills, Stacker/Reclaimer etc.

underwent similar optimisation.

'Green’ power

Power sales

Capacity

Generation

Shree is self-sufficient in meeting its 100% power

requirements. The Company's captive power capacity rose

by 17.7%, from 101.5 MW in 2007-08 to 119.5 MW in 2008-09.

This has not only supported larger cement and clinker

production, but also opened up the virgin opportunity of

power sale.

Gross power generation surged by 45%, from 540 Million

Units in 2007-08 to 783 Million Units in 2008-09. A greater

power demand came not only from the larger production in

the cement plant, but also from the increased opportunity

of power sales. In response to this, the power plant achieved

the higher PLF of 83.48% during 2008-09. The Company

generated efficiencies in the power plant operation and

thus brought down its auxiliary consumption. In fact,

auxiliary consumption during 2008-09 was the lowest at

7.36% against 7.92% in 2007-08 of gross generation.

Captive Power Capacity (MW)

39.0 45

.0

65.0

101.

5

119.

5

140.0

0.0

120.0

100.0

80.0

60.0

40.0

04-05 05-06 06-07 07-08 08-09

20.0

Power Generation (Million Units)

800

004-05 05-06 06-07 07-08 08-09

226267

349

540

783700

600

500

400

300

200

100


Power Plant, Beawar

43

Capacity expansion

During the year, the Company completed its Turbine

Generator, TG-VI in record time. The TG, originally scheduled

for commissioning by November - December, 2008, was put

on fast-track implementation once it was felt that early

execution meant earlier revenue realisations from power

sales. Completed two months ahead of schedule, the new

TG stabilised operations fast, helping the Company touch

higher power generation and sales revenues before

anticipated dates.

An early mover in the field of Power Sales, the Company is

now planning to consolidate its presence in this high-

growth market with additional power generation capacity.

Projects to augment such capacity by 143 MW are already

underway. This includes the 43 MW of 'green' power

capacity mentioned above.

Installation of Power Management System (PMS) for

integrated power and load management from a single

location. This has yielded complete power system

stability with zero black-out

Putting into operation unmanned substation, made

possible by advanced equipment and PMS

VFD installation in various fans, WHRB Recirculation

Pump, etc

Optimisation in the operation of ACW pumps & CT fan

Adoption of latest technology for monitoring and

control like infrared camera, laser alignment kit, belt

alignment kit, electrical discharge detector

Replacement of solid F.R.P. with hollow blades in all the

C. T. Fans for better performance

Celebration of power plant safe year (including

inauguration of safety exhibition room showing best

housekeeping and best practices with latest safety

gadgets)

Energy efficiency, automation and safety thrust

n

n

n

n

n

n

n

45

Plant rating

'Green' processes and materials

Our quality efforts are directed at monitoring and

improving equipment and processes. International cement

consultants, Whitehopleman, UK has furnished a 4 Star

rating for Shree's cement plant. This is the highest rating

received by any cement plant in the world. The Company

has been securing this rating for nine years in a row. This is a

fact that suggests the high level of plant quality.

R&D initiatives are aimed at 'greening' the process of

production as well as providing alternate materials that

could serve as inputs.

Experiments have yielded a high-volume flyash concrete

with attributes similar to that of ordinary cement. The high

flyash content obviates the need to produce clinker and

thus expend high energy. It also makes the cement a very

eco-friendly construction material.

Quality and R&DAny excessive reliance on a raw material carries with it high

risk of cost appreciation or supply shortage. Flyash is an

input that is likely to be in a scarcity in the long-run. To get

around that, we have started the use of alternate additives

like lead-zinc slag, effluent treatment plant (ETP) sludge, etc.

ETP sludge usually entails a cost of disposal. But, its use as an

additive in cement production is generating revenue rather

than incurring cost.



47

Knowledge systemsWith Shree's CMS (Content Management System), the

Company has entered the era of transparent knowledge

exchange. This means that users can share or publish

information faster, in a much more transparent and efficient

manner. Based on open source technology, the CMS over a

period of time is expected to serve as the Company's

knowledge bank.

Shree encourages the use of video conferencing to connect

people. Seamless connectivity has been rendered possible

with the use of MPLS VPN for online communication

between company locations, Kolkata, Beawar, Ras,

Khushkhera and all the stock points across the country.

Servers and network uptime at Shree has consistently been

above 99.99% allowing people to be more productive and

efficient.

Shree won the prestigious "Silver CIO" award in the category

of companies having a turnover in excess of Rs 1000 Crores

for the case study on "Implementation of Reverse Auction of

Cement Transportation" for the "CIOL - Dataquest

Enterprise Connect Awards 2008". These awards constituted

by "Dataquest" magazine are revered as the "Oscars" of the

Indian IT industry, and are conferred on CIOs for

demonstrating leadership combined with vision & mission

in deploying Information Technology for business benefits

through pioneering & innovative use. Shree is the first

cement company to be honoured with this coveted award

since the constitution of the awards in 2004.

To create a knowledge-driven company in tune with global

business, Shree deployed the Oracle e-Business Suite ERP

solution. Imbibing the best practices of companies

worldwide, this ERP suite impacts all processes of the

Company, right from procurement, through all techno-

commercial operations, to sales and distribution. It involves

a complete re-engineering of business processes to make

them more high-performing and tuned towards global best

practices. While launching the suite, the Company went live

with all modules, all at once with zero downtime.


49

Marketing and BrandingTurnover

Opportunity from capacity

Multiple brand strategy

Net turnover of the Company shot up by 28.7% - from

Rs. 2109 crore in 2007-08 to Rs. 2715 crore in 2008-09. This is

nearly 3 ½ times the growth shown by the Indian cement

industry, which posted 8.4% growth in 2008-09 over

2007-08.

While there were delays in implementing new capacities by

other cement producers, Shree added capacities in record

time. This allowed the Company to take advantage of the

inevitable supply gaps in the market both retail as well as

infrastructure sectors.

The multiple brand strategy helped the Company achieve

higher sales by catering to different segments and creating

different price bands. Thus, the Company's diverse brand

portfolio creates different niches, appealing to a wider

customer base.

Sales Quantity (Lac Ton)

50

0

40

30

20

15

10

47.5

839

.47

18.4

516

.12

11.6

57.

75

Bangur Rockstrong

2007-08

2008-0945

35

25

5

Shree Ultra

51

Distribution network

Optimising ad spend

Market share

The dealer density of the Company is higher in its prime

markets compared to competitors because of its unique

multi-brand strategy. Shree's robust distribution backbone

of 4849 dealers, 11,993 retailers and 116 sales offices

ensures deeper penetration of its brands.

The Company planed its electronic media spends

judiciously through effective channel mix, which has

enabled it to achieve the lowest cost per GRP (Gross Rating

Points) in its prime markets. The Company invested Rs. 16.25

crore during the year in branding and advertising to further

strengthen its brand equity.

The result of all this was that the Company was not only able

to consolidate its numero uno market share status in

Rajasthan (23%), Delhi (18%) and Haryana (26%), but also

able to significantly improve its performance in Punjab

(10%) and Uttrakhand (13%). Overall, Shree remained North

India's premier cement maker with its share increasing from

16.4% in 2007-08 to 17.9% in 2008-09.

Rising Market Share (%)

30%

0%

25%

20%

15%

10%

5%

22%

20%

23%

24%

19%

26%

18%

18%

18%

8%7%

10%

10%

8%

13%

Rajasthan Haryana Delhi Punjab Uttrakhand

2006-07

2007-08

2008-09


53

Human resourceOne of India's Top 20 Best Employers

Sustained policy of promotion

In a survey carried out jointly by Business Today, Mercer and

TNS in 2008, Shree emerged as one of India's Top 20 Best

Employers. Shree was the only cement company and one of

the five manufacturing companies to be considered in the

study. Such a finding only serves to bring out what we

already know – the strong commitment of the Company to

its human assets.

Shree's score in Internal Employee Perception Survey and

Employee Engagement Index was higher than the average

score of India's Top 10 companies in the study (referred as

‘The Best’ in the following graph). These two categories

together indicated the sense of ownership and belonging

Shree employees felt towards their company.

The above gets reflected in the attrition rate, which came

down from 7.5% in 2007-08 to 5.9% in 2008-09.

People at Shree can expect fast promotions on the strength

of their track record and leadership drive. The underlying

assumption is that competence rises to the level of

responsibility, i.e., the process of bestowing greater power

AttritionYear Attrition (%)2004-05 3.772005-06 5.282006-07 6.152007-08 7.532008-09 5.90

AverageScore

100

0

80

60

40

20

Engagement Score

93.2

085

.08

78.1

9

Shree Cement Ltd.

The Best

The Rest91.3

290

.90

83.9

4

makes a person more responsible, enthusiastic, competent

and committed. It yields initiatives down the line. The

percentage of people promoted has been hovering around

a high 27% for the last three years.

The number of workers promoted to staff category has

increased dramatically this year, from 97 in 2007-08 to 264 in

2008-09. More than the pay, such promotions endow

people with intangibles like pride of higher position.

In the face of rampant layoffs in the industry during the

recession, Shree has actually increased recruitment of its

people. Manpower increased from 2418 in 2007-08 to 2566

in 2008-09. Such figures illustrate more than words the fact

that the Company prizes its human assets.

The management believes that diverse skill-sets make the

Company more versatile, increase its in-house capabilities

and ultimately save costs.

For instance, the platform of Shree's robust IT infrastructure

was first laid by in-house talent. At present, the Company

has entrusted the activity of exploration and prospecting

for limestone deposits, not to outside specialists, but to our

experienced people in mining. Such endeavours not only

add new in-house capabilities, but also do away with the

need of engaging expensive outside help.

Recruitment during recession

Competency mix

PromotionsYear % of Promotions2004-05 29.312005-06 29.702006-07 27.672007-08 27.472008-09 27.50

No. of Workers promoted to Staff CategoryYear No. of Promotions2004-05 22005-06 72006-07 182007-08 972008-09 264

55

Competency building

Impact of training

Knowledge sharing

At Shree, there is continual reinforcement, retooling and

renewal of skill-sets. Such an ongoing process not only

builds overall capacity and makes it versatile, but also has

numerous impacts at the individual level. People not only

strengthen their domain experience, but also get to explore

and acquire domain skills other than their own.

In-house training programmes are conducted by both

internal as well as external experts. People can even go out to

programmes undertaken by reputed institutions. Training is

imparted to enhance technical as well as soft skills.

By boosting employee morale, developing the capacity to

absorb new technologies and methods and increasing the

appetite for innovation, such training programmes have

had numerous payoffs – lower employee turnover, better

change management, higher operational efficiencies,

faster strategy executions and larger financial gain.

Every year, a number of students from prestigious

institutions like IITs and IIMs appear at our doorsteps to

undertake research and acquire industry exposure. We look

forward to this period of sharing our experience with them

and taking in their fresh approach to old problems.

Qualification Break-up

Qualification Number of employeesEngineers 1013CA/CS/ICWA/CFA 63Legal (LLB) 18Post Graduates 177Graduates 301MBA 164MCA/MSW 12MBBS 3Others 565

“I was particularly moved by your

sense of humility and commitment

to the welfare of the men and

women who work for your

organisation...The support given to

us by your senior management

went beyond the call of duty and a

testimony of the dedication and

calibre of staff who are associated

with your company.”

- In a letter to Mr. H. M. Bangur from the

African-Nigerian Team comprising of the

daughter of Dr. Nelson Mandela

ParticularsIn-house External In-house External

Programmes 338 99 297 115Participants 6100 199 4304 217Person days spent on training 2900 471 2233 667Person-hours of training 23206 3769 17867 5341

2008-09 2007-08

Details of Training Conducted

57

Credit rating

Reflecting the high credit standing of the Company is the

high credit rating given for debt of different tenures. The

Company's MIBOR linked borrowing instrument enjoyed

the highest credit rating of CARE PR1+ for a larger short-

term debt of Rs.500 crore against the earlier limit of Rs. 250

crore in 2007-08.

Shree's long term borrowings have also secured a very high

credit rating of CARE AA+ even at a higher limit of Rs.500

crore as against Rs.100 crore in the previous year.

CARE AA+ rating has also been assigned for the purpose of

Basel II bank borrowing bench marks. In 2007-08 AA rating

was assigned for this purpose.

All these shall assist the company to access funds at a more

competitive rate. Being long in funds, such high credit

rating shall make the Company exploit the short term

versus long term fund arbitrage opportunities more

aggressively.


The leverage to expand

The Company has leveraged its financial position well to

maintain an improving debt-equity scenario despite

aggressive capacity additions. The resources raised have

been gainfully utilised, as manifested by the improved

Secured Debt to EBIDTA ratio - from 1.24 in 2007-08 to 1.18

in the current year. This gives the Company enough room to

mobilise resources from lenders, thereby protecting the

shareholders value by obviating the need of raising any

additional capital.

Net Debt (Rs. Crore)

600.00

500.00

400.00

300.00

100.00

04-05 05-06 06-07 07-08 08-09

284.08

353.66

528.06

272.26

58.20

200.00

Net Debt

Secured Debt / EBIDTA

1.50

1.45

1.40

1.35

1.25

1.15

1.1004-05 05-06 06-07 07-08 08-09

1.461.45

1.39

1.24

1.18

1.30

1.20

Secured Debt / EBIDTA

Net indebtness

The conservative policy of restricting the financial leverage

is also exemplified by continuous reduction in net debt

position of the Company. The surplus generated has been

gainfully invested in debt market securities and debt

oriented mutual fund schemes to maximize the arbitrage

opportunity. The net debt ( total debt – cash & cash

equivalents) has reduced from Rs. 272.26 crore in 2007-08 to

Rs. 58.2 crore in 2008-09.

FinanceConservative accounting policy

Depreciation is the erosion in the value of an asset with the

passage of time. In an accounting framework, depreciation

is the method by which the gross value of an asset becomes

progressively smaller every year over the asset’s useful life; it

is a rough estimation of wear and tear.

Although essentially an accounting convention,

depreciation in the account books gives a fair idea of the

cost of earning in terms of assets utilized. Thus, post a

depreciation charge, the approximate value of assets still

working for the Company gets known. It is for this reason

that the Indian Companies Act has made it mandatory for

companies to charge minimum depreciation as per rates

prescribed in Schedule XIV of the Act. Companies are

however free to charge depreciation higher than the

statutory minimum.

A higher depreciation policy is part of a conservative

accounting approach. It assumes that assets have reduced

in value faster than normal. Being a cost, a higher

depreciation would tend to pull down book profit and net

worth. But, rather than blow up profit and net worth figures,

the Company decided to adopt the conservative policy of

charging higher depreciation. Such a company policy

underlines the confidence of the Company in its own ability

to perform and earn profit at high levels. It also reflects the

faith of the Company on its stakeholders and their

acceptance of relatively lower book value and net worth.

From the year 2004 onwards, Shree changed its

depreciation policy gradually across all its fixed assets from

“Written Down Value Method (WDV) / Straight Line Method

(SLM) rates as per Companies Act 1956” to “WDV Method at

the rates specified in the Schedule XIV of the Companies

Act, 1956 or Income Tax Act, 1961, which ever is higher.” In

case of those assets, whose WDV as per Income Tax Act,

1961 was lower than the WDV as per Books, additional

depreciation was provided to align the book WDV with WDV

as per Income Tax Act, 1961.

This has resulted in a higher depreciation charge over the

last five years as under:

If Shree had continued its earlier depreciation policy, its net

worth would have been higher by Rs. 640.05 crore as on 31st

March, 2009. Similarly, its book value per share would have

been higher by Rs. 183.73.

Particulars Total Depreciation over 2004-05 to 2008-09 (Rs. Crore)

If depreciation policy followed till 2004 had been continued 764.08Based on changed depreciation policy 1404.13Additional Depreciation Charged 640.05

Net Worth and Book ValueNet Worth Book Value

Particulars as at 31.3.09 as at 31.3.09 (Rs. Crore) (Rs./per share)

If depreciation policy followed till 2004 had been continued 1850.06 531.06Based on changed depreciation policy 1210.02 347.33

59

Shareholder valuePerformance value

Growing intrinsic value

The Shree stock has generally outperformed the industry

because of its strong fundamentals. The Company has

made it a habit of notching up higher volumes and profit

over the years. Such consistency of performance has

resulted in higher value of the Company's share.

Take intrinsic worth of the company. The fact that it is on a

steady rise is amply indicated by the increase in Book Value

Per Share of the Company. Book Value Per Share spurted

79.8%, from Rs. 193.1 in 2007-08 to Rs. 347.3 in 2008-09.

Another indicator of the Company's rising intrinsic value

comes from the Return on Net Worth (RONW). This is a

metric that shows the rate of return on resources retained

and deployed by the Company in the business rather than

distributed as dividend to shareholders. RONW was an

incredible 48.43% in 2008-09 against 36.51% in 2007-08.

From the shareholders’ viewpoint, their investments in

Shree's equity were earning him accrued return of 48.43%. If

instead the shareholder had invested his funds in the bank,

he would have earned a maximum of 10%. Although, Shree

has been increasing dividend payout over the years, the

Company shuns the policy of very high dividends in an

effort to preserve high shareholder worth and return.

Higher scrip profile

Corporate Governance

Mirroring the rise in intrinsic worth of the Company is the

improvement in ranking in terms of market cap of listed

companies on the stock exchange. The Company has

improved its ranking in terms of market capitalization from

172 as on 31st March, 2008 to 154 as on 31st March, 2009.

On a five year horizon the ranking has substantially

improved from 231 as on 31st March, 2004 to 154 as on 31st

March, 2009. (Source: Capital Market Magazine Data Bank)

Shree follows an exemplary corporate governance

approach, which creates a transparent dialogue with

stakeholders and goes beyond compliance to impact

governance in a more fundamental way. Proactive thrusts

and clear foresight are the hallmark of the approach.

Sustaining value of the enterprise for stakeholders is a

prime goal. A robust risk management structure ensures

that all known risks are identified and contained.


61

The triple bottom line

Community focused

Shree has been a forerunner in adopting the sustainability paradigm. A reflection of the fact is that the company pursues a holistic growth agenda with emphasis on three measures, or bottom lines, of corporate performance – economic, social and environmental. Economic performance brings out the Company's contribution to production and profit; social performance highlights its contribution to community; environmental performance brings out the contribution to conserving the environment.

Shree was the first Indian and the third Asian cement company to join the Cement Sustainability Initiative (CSI) of the World Business Council for Sustainable Development, Switzerland. As a member of CSI, the Company is committed to pulling down its energy footprint, implementing best practices and sharing its knowledge with other members. The Company has also joined the league of seven nations, viz., the Asia Pacific Partnership on Clean Development & Climate Change comprising of the USA, Australia, China, Korea, Japan, Canada and India.

The Company is bringing out its fifth Corporate Sustainability Report (CSR) this year. Prepared along the lines of the latest Global Reporting Initiative (GRI) guidelines, the Report is being assured by KPMG.

Shree excels in carrying out activities for the community. The Company generally takes up people and engages contractors from the local population to create better employment prospects, livelihoods and ancillary enterprise base.

The Company undertakes numerous projects on healthcare, education, women empowerment, income generation, infrastructure development and other social-need programmes, especially in the two districts of Ajmer and Pali, which are within the ambit of the Company's works.

Well-equipped dispensaries with a team of experienced doctors at both plant sites provide free medical consultation to villagers in nearby areas. A health unit on wheels reaches out to villages at relatively distant locations within the local community.

Corporate sustainabilityHealth-related programmes conducted include Hepatitis B vaccination for 500 children, free eye camps (1193 eye operations and 3304 people cured since 1996), free polio treatment camp for 170 polio victims and 'Nukkad Nataks' or street plays to raise awareness on health and social issues. An anti-tobacco consumption drive and a 5-day yoga training programme were taken up in our plant premises.

Industrial safety and health is integral to the Shree culture. A workshop and exhibition on the issue, organised at Bangur Nagar, Beawar, evoked a good response from the participants.

Shree has been engaged in a focused campaign against the dreaded HIV / AIDS. Education and awareness programmes on the issue generally take the shape of intensive interaction sessions between trained doctors and potential victims and carriers like contract workers, truck drivers and school children.

Shree has been active in developing infrastructure to benefit surrounding villages. To improve connectivity between villages and spur development of rural enterprise, the Company has built about 15 kms of roads. Social infrastructure projects undertaken by the Company include water storage tank, school building and rooms, community hall, anicuts, check dams, etc., for rain water harvesting and irrigation.

Besides community benefit programmes in the vicinity of its operating facilities, the Company has also been active in releasing financial aid for projects over a much wider area. The Company donated Rs. 21 lacs for Bihar flood victims, Rs. 15 lacs for Rajasthan's Chamunda Mata stampede victims and Rs. 50 lacs for renovation of Budha Pushkar Ghat at Ajmer.

Since, culture is an important anchor in rural lives, projects and programmes of religious and cultural significance for the local populace are taken up. The Company's annual temple function, 'Shri Sankatmochan Hanuman Varshikotsav,' provides an occasion for cultural expression and enjoyment. With performances by celebrated national and international artistes, this annual extravaganza is a big hit with not only Shree employees but also people who come from far-flung areas to attend.

Shree Hanuman Temple, Beawar

“No matter how many plants you have visited, Beawar Plant offers you something new, something different.

Their commitment to sustainability, energy efficiency and innovations are simply unmatched. I hope that the

Shree Cement will continue its endeavour to be one the plant meeting Global Standards. “

- Shashi Ranjan Kumar, Director DPP, Ministry of Commerce and Industry, GOI


63

Process improvements and energy conservation initiatives, by reducing the energy footprint ultimately help the cause of environment protection. Energy efficiency initiatives at Shree included those that optimized operations, rationalised equipment speed, cut down idle running, improved capacity utilization, replaced less efficient components, installed new equipment and even rearranged equipment positions.

CO emissions and energy use in mining equipment utilising 2

fossil fuel were slashed by modifying the equipment and concreting haul roads. Fugitive dust emissions in material handling areas were reduced by installing and upgrading dust bag collectors, creating walled enclosures, constructing underground storages and concrete areas and installing better water sprinkling systems. To monitor and bring down stack emissions, opacity metres have been installed at boiler stacks and operational efficiency of ESPs improved.

A water conservation thrust in the power plant has resulted in the installation of Air-cooled Fluid Cooler to partly replace the conventional water-cooled Cooling Tower.

Environment protection also comes from lower waste generation. We have adopted zero waste disposal practices in our cement and power plants. For instance, boiler ash in the power plant is sent to grinding mill and afterwards fed as low-calorific-value fuel to the cement kiln. Waste land created by mining activity is reclaimed through tree plantation. Solid waste from our sewage treatment plant (STP) is used as manure. Waste water from STP and power plant is reused for irrigation of our green belt and sprinkling on roads to curb dust emissions. Waste lubricating oil and batteries are either recycled for use within the plant or for sale to authorized government dealers. Waste gases are reutilized for power and steam generation.

Trees protect both the ecology and climate of a region. Realising their importance, Shree has been making a concerted effort to green its premises. The company planted 334002 trees over 195 hectares till 31st March, 2009. Such plants have had a healthy survival rate of 96%.

The Company's environment consciousness shows in the continued spurt in expenditure on environment. The combined figure for Beawar, Ras and Khushkhera sites has increased from Rs. 627 lac in 2007-08 to Rs. 871 lac in 2008-09.

Environment protection

Generation of energy using fossil fuels releases carbon

compounds into the atmosphere, which ultimately

precipitates climate change. Shree is committed to energy

conservation methods that not only result in higher energy

efficiencies, but also lower carbon emissions.

Flyash Utilisation and CO reduction (Lac tons)2

18

0

16

14

12

10

04-05 05-06 06-07 07-08 08-09

8

6

4

2 3.97

3.66

5.77

5.33

10.7

19.

66

14.9

113

.67 15

.51

14.0

9

Flyash

CO reduction2

Expenditure on Environment (Rs. Lac)

1000

0

800

600

400

200

118

246 30

4

627

871

04-05 05-06 06-07 07-08 08-09

The Company was the first in the world to register a Clean

Development Mechanism (CDM) project, 'Optimal

Utilisation of Clinker,' with United Nations Framework

Convention on Climate Change (UNFCCC). This project uses

less quantity of the energy-intensive clinker and greater

quantity of additives like flyash to produce cement. During

the year under consideration, 1,00,043 Certified Emission

Reduction (CERs) were issued by UNFCCC (the third such

issuance for the company) for the project. CER is a tradable

credit representing greenhouse gas emission reductions

equivalent to one tonne of CO achieved through a CDM 2

project.

65

AwardsAwards

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Green-Tech Environment Excellence Award

Golden Peacock Award for Combating

Climate Change

National Safety Award awarded by the

Honourable President of India, Smt. Pratibha

Patil

First Prize for Energy Conservation at its

mines by Indian Bureau of Mines

Corporate Excellence Award by Rajasthan

Chamber of Commerce & Industry (RCCI) in

all four categories namely Corporate

Governance & Capital Market, Financial

Performance & Analysis, Business &

Qualitative Aspects and Annual Report

Presentation as well as Management

Award for Best Cost Management Practices

by Institute of Cost and Works Accounts of

India (ICWAI).

SILVER CIO Award by the CIOL Dataquest

Enterprise Connect Awards 2008

Shri B.G. Bangur, Executive Chairman

Shri B.G. Bangur is a B.Com (Hons.) from Calcutta University and he brings with him a long experience in the industry. He is also the Director in The Didwana Industrial Corporation Ltd., NBI Industrial Finance Co. Ltd., Shree Capital Services Ltd., Khemka Properties Pvt. Ltd., Digvijay Finlease Ltd. and Marwar Textile (Agency) Pvt. Ltd. He has also been actively associated with various philanthropic and charitable institutions and trusts.

Shri H.M. Bangur, Managing Director

Shri H.M. Bangur is a Chemical Engineer from IIT, Mumbai and he brings to the board technical insights which are a driving force of the technical excellence achieved by the Company. Mr. Bangur is also a Director in The Kamla Co. Ltd. He is the President of Cement Manufacturers’ Association (CMA), the prime body for co-ordination, policy making and co-operation of the cement industry in India.

Sitting Dr. Y.K. Alagh, Director, Shri B.G. Bangur, Executive Chairman, Dr. Abid Hussain, Director Standing (From Left)Shri O.P. Setia, Director, Shri R.L. Gaggar, Director, Shri Amitabha Ghosh, Director, Shri Shreekant Somany, Director, Shri H.M. Bangur, Managing Director, Shri M.K. Singhi, Executive Director

(From Left)

Profile of DirectorsShri R.L. Gaggar,

Shri O.P. Setia,

Shri Shreekant Somany,

Dr. Abid Hussain,

Dr. Y.K. Alagh,

Director

Shri R.L. Gaggar is a B.A. (Hons) from Kolkata University and is a renowned solicitor and advocate based in Kolkata. He is practicing as a solicitor and an advocate at the High Court of Kolkata for past 50 years. Mr. Gaggar is also on the Board of Somany Ceramics Ltd., Sarda Plywood Industries Ltd., TIL Ltd., Peria Karmalai Tea and Produce Co. Ltd., Paharpur Cooling Towers Ltd., International Combustion India Ltd., Subhash Projects & Marketing Ltd., Machino Plastics Ltd., Sumedha Fiscal Service Ltd., Financial & Management Services Ltd., Machino Bassel India Ltd., Eastern Silk Industries Ltd. and Bhaskar Silicon Ltd.

Director

Shri O.P. Setia is an M.Com from Delhi University and is an eminent banker and Ex-Managing Director of State Bank of India and has held many key positions in its associate banks.

Director

Shri Shreekant Somany is an industrialist who holds a Bachelor of Science degree from Kolkata University and is currently on the Board of Somany Ceramics Ltd., S.R. Continental Ltd, Somany Retail Ltd., Cosmo Ferrites Ltd., Sarvottam Vanijya Ltd., Scope Vinimoy Pvt. Ltd.

Director

Dr. Abid Hussain is a retired IAS Officer and former Ambassador of India to United States. He is the Chairman of India-China Trade Centre (ITCT). He was also a member of the Planning Commission and Secretary, Ministry of Industries, Government of India. In the year 1988, he was honoured with PADMA BHUSHAN for meritorious services. He is on the Board of Hyderabad Flextech Ltd., Nagarjuna Oil Corp. Ltd., GVK Industries Ltd., GVK Taj Hotels & Resorts Ltd., GVK Power & Infrastructure Ltd., Zodiac Clothing Co. Ltd., Wockhardt Ltd., Havels’ India Ltd. and Gangavaram Port Limited.

Director

Dr. Y.K. Alagh is a noted Economist and visiting professor to several renowned national/international institutions. He holds a Doctoral Degree and Master Degree in Economics from University of Pennsylvania. He is currently the Chancellor of Nagaland University, Chairman of Institute of Rural Management, Anand, Gujarat and Vice Chairman of Sardar Patel Institute of Economic and Social Research,

Ahmedabad. He is a trustee of Rajiv Gandhi Foundation, New Delhi. He is also Chairman of Institute of Human Development, Chairman of Advisory Committee of N.M. Sadguru Water & Development Foundation, Dahod. He was earlier the Minister of Power and for Planning & Programme Implementation with additional charge of the Ministry of Science & Technology. He has been member of Planning Commission (in the rank of Minister of State). He has been Chairman, Bureau of Industrial Costs and Prices, Ministry of Industry. He has several books and over a hundred articles to his credit, published both at home and abroad. He has travelled widely and represented India in a number of high level official delegations and seminars. He is on the Board of Tata Chemicals Ltd.

Director

Shri Amitabha Ghosh is a Fellow Chartered Accountant and Fellow Member of Indian Institute of Bankers and has considerable experience in Finance, Banking and Administration by virtue of his association with important institutions and committees. He is the former Dy. Governor of Reserve Bank of India. He was on the Board of important institutions like IDBI, N.I.B.M., Exim Bank and also served as Chairman of Deposit Insurance Corporation Ltd. He is also on the board of Centenary Leasing Company Pvt. Ltd., Kesoram Industries Ltd., Joonktolle Tea & Industries Ltd., Heidelberg Cements (India) Ltd., Peninsula Land Ltd., Orient Paper & Industries Ltd., Palit Consultancy Pvt. Ltd., Sahara India Life Insurance Co. Ltd., Sahara Prime City Ltd., Shreyas Shipping & Logistics Ltd., Shreyas Relay System Ltd., Xpro India Ltd., Zenith Fibers Ltd., Sahara Infrastructure & Housing Ltd. and Sahara Hospitality Ltd.

Shri Amitabha Ghosh,

Shri M.K. Singhi, Executive Director

Shri M.K. Singhi is a fellow Chartered Accountant and a Science and Law Graduate. He joined the Company as President in January, 1995 and has 31 years experience of working at senior positions. He is the leader of Indian Cement Sector Task Force for Energy Conservation, appointed by Bureau of Energy Efficiency, Ministry of Power, Government of India. He is a member of Cement Sustainability Initiative (CSI) of World Business Council for Sustainable Development. He is also a member of Cement Task Force of Asia Pacific Partnership on Clean Development and Climate. He is the President of Rajasthan Cement Manufacturers Association. He is also on the Board of Shree Cement Marketing Limited.

67

Shree’s PoliciesSUSTAINABILITY POLICY

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ENVIRONMENT POLICY

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To produce quality cement in an eco-friendly, healthy &safe working environment in a socially responsible manner with continual improvement in performance and profitability to the satisfaction of all stake holders by ensuring:

Customer satisfaction.

Clean and green environment.

Sound health and safe working practices.

Compliance to the applicable laws and respecting theinternational instruments.

Implementation of the systems and continually improving their effectiveness.

Adoption of cost effective technologies and practicesfor improved productivity and profitability.

Mutually beneficial stakeholders' relationship.

Human resource satisfaction.

“AN ENERGY & ENVIRONMENT CONSCIOUS SUSTAINABLEORGANISATION”

To ensure:

Clean, green and healthy environment.

Efficient use of natural resources, energy, plant andequipment.

Reduction in emissions, noise, waste and green housegases.

Continual improvement in environment management.

Compliance of relevant environmental legislations.

“CLEAN AND GREEN IS PROFITABLE”

HEALTH & SAFETY POLICY

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HIV / AIDS POLICY

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QUALITY POLICY

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To ensure Good Health and Safe Environment for all concerned by:

Promoting Awareness on sound health and safe working practices.

Continually improving health & safety performance byregularly setting and reviewing objectives & targets.

Identifying and minimising injury and health hazardsby effective risk control measures.

Complying with all applicable legislations and regulations.

“PROSPERITY THROUGH HEALTH & SAFETY”

Being a socio-economic issue concerning stakeholders of the society Shree Cement is committed to:

Create awareness on HIV/ AIDS and its preventionamong all stakeholders of the society.

Treatment of HIV/ AIDS infected patient in theCompany's Dispensary without any discrimination.

To provide products conforming to National standards and meeting customers requirements to their totalsatisfaction

To continually improve performance and effectiveness of quality management system by setting and reviewing quality objectives for:

Customer satisfaction.

Cost effectiveness.

“JO SOCHE, WOH PAAVE”

SOCIAL ACCOUNTABILITY POLICY

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ENERGY POLICY

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INFORMATION TECHNOLOGY (IT) POLICY

To operate in a socially responsible manner and focus on continual improvement of workplace conditions by:

Conforming to all the requirements of SA 8000 standard.

Respecting the international instruments for Social Accountability and complying with all applicable laws.

To reduce to the maximum extent possible the consumption of energy without impairing productivity which should help in:

Increase in the profitability of the Company.

Conservation of Energy.

Reduction in Environmental pollution at Energyproducing areas.

Since Energy is the Blood of Industry, It is the responsibility of all of us to utilize energy effectivelyand efficiently.

“ENERGY SAVED IS ENERGY PRODUCED”

To create a robust IT platform that would focus on better efficiency & transparency in a constantly changing and competitive business environment.

HUMAN RESOURCE POLICY

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WATER POLICY

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We at Shree Cement are committed to:

Empower People.

Honour individuality of every employee.

Non discrimination in recruitment process.

Develop Competency.

Employees shall be given enough opportunity forBetterment.

None of the person below the age of 18 years shall beengaged to work.

Incidence of Sexual Harassment shall be viewed seriously.

Statute enacted shall be honoured in letter & spirit &standard Labour Practices shall be followed. Everyemployee shall be accountable to the law of the land& is expected to follow the same without anydeviation.

Management will appreciate observance of Businessethics & professional code of conduct.

To follow Safety & Health, Quality, Environment,Energy Policy.

To provide sufficient and safe water to people & plantas well as to conserve water, we are committed toefficient water management practices viz:-

Develop means & methods for water harvesting.

Treatment of waste discharge water for reuse.

Educate people for effective utilisation & conservationof water.

Water audit & regular monitoring of waterconsumption.

“WATER ADDS VALUE TO PEOPLE & ORGANIZATION,CONSERVE IT INTELLIGENTLY”

69

Five &

Five Years’ Financial Highlights

* Excluding Revaluation Reserve

# Return on Average capital employed has been calculated after adding additional depreciation.

Figures have been regrouped/rearranged whereever necessary

Particulars 2004-05 2005-06 2006-07 2007-08 2008-09

Total Income 72711.64 82743.26 163441.77 251715.99 318006.30

Profit after Tax 2906.59 1840.39 17700.23 26037.20 57796.94

#Return on Net Worth (%) 18.52 9.65 24.06 36.51 48.43Return on Avg. Capital Employed (%) 21.93 24.61 39.29 24.88 33.86

Production (in lac MT)

Clinker (in lac MT) 24.83 27.71 35.09 46.23 64.18Cement (in lac MT) 30.16 32.20 47.99 63.37 77.65

Sales (Clinker & Cement)(in lac MT) 30.71 32.75 49.43 66.05 84.50

Energy Consumption

Power (Kwh per ton of Cement) 75.17 73.45 73.87 79.35 76.72Coal (% of Clinker) 10.96 10.37 11.73 11.34 10.75

Sales - Gross 72302.60 82412.79 161314.44 244032.08 309716.69

Other Income 409.04 330.47 2127.33 7683.91 8289.61

Operating Expenses 55318.98 60963.58 102342.04 157791.11 214640.33Operating Profit 17392.66 22148.85 61099.73 93924.88 103365.97Interest 1982.73 1283.36 1037.37 5329.64 7443.18Profit before Depreciation & Tax 15409.93 21234.66 60062.36 88595.24 95922.79Less: Depreciation & Amortisations 12296.45 18520.68 43305.33 47875.86 20538.70Less: Exceptional items - - (2123.73) 3888.46 3093.05Profit before Tax 3113.48 2713.98 18880.76 36830.92 72291.04Tax (including FBT) 244.14 286.24 8451.75 12265.32 13686.98Deferred Tax (37.25) 587.35 (7271.22) (1471.60) 807.12

Basic and Diluted EPS (in Rupees) 8.34 5.28 50.81 74.74 165.91Cash EPS (in Rupees) 43.53 52.98 154.24 207.94 227.18Net Block* 41972.24 57530.85 49895.10 75995.86 62685.57Shareholders' Fund* 28948.89 29629.67 45454.52 67280.53 121001.69Total Capital Employed* 58661.08 66903.11 138591.37 200350.35 270617.02

(Rs. Lac)

Fifteen Years’ Highlights

Fifteen Years’ Highlights

* Sales value includes amount of power sale.

Note: 1. Net Worth is net of revaluation reserve.

2. Figures regrouped and rearranged whereever necessary.

Sl. Year Clinker No. Production Production Qty.

MT MT MT (in Rs. Lac) (in Rs. Lac) (Rs. per share)

1 1993-94 858226 876150 889401 15652.65 7124.74 28.92

2 1994-95 893291 927233 927005 18144.30 8858.99 35.99

3 1995-96 887532 861964 867551 20765.88 13487.43 46.46

4 1996-97 (15 months) 1079242 1185426 1162086 25112.19 18202.76 52.25

5 1997-98 1435803 1725531 1662332 34278.00 19056.86 54.70

6 1998-99 1945418 2043609 2090715 44214.50 19654.48 56.42

7 1999-00 2284781 2312408 2310135 48456.13 21939.14 60.82

8 2000-01 2113279 2383366 2400270 55460.48 24705.98 66.61

9 2001-02 (9 months) 1624686 1806358 1802156 39721.69 21560.59 57.58

10 2002-03 2285091 2746880 2725485 58242.94 22239.73 63.84

11 2003-04 2293627 2840596 2841316 60692.88 25138.28 72.16

12 2004-05 2483247 3015593 3060994 72302.60 28948.89 83.10

13 2005-06 2770663 3219949 3202709 82412.79 29629.67 85.05

14 2006-07 3506064 4799088 4832851 161314.44 45454.52 130.48

15 2007-08 4623494 6337070 6334208 244032.08 67280.53 193.13

16 2008-09* 6418278 7765207 7767696 309716.69 121001.69 347.33

Absolute No. of 15 Years 7.48 8.86 8.73 19.79 16.98 11.89Times 10 Years 3.30 3.80 3.72 7.00 6.16 6.16

5 Years 2.80 2.73 2.73 5.10 4.81 4.81

CAGR 15 Years 14.35% 15.66% 15.54% 22.02% 20.78% 17.95%

10 Years 12.68% 14.28% 14.02% 21.49% 19.93% 19.93%

5 Years 22.85% 22.28% 22.28% 38.54% 36.93% 36.93%

Cement Sales Sales Value Net Worth Book Value

71

Global Outlook

Indian Economy Outlook

Global economy witnessed one of its worst crises in the year gone by.

What started as a credit crunch caused by misapplication of risk controls

in USA transformed into a full blown economic crisis unprecedented in

recent memory. The crisis led to collapse of large financial institutions

and wiped off massive values from balance sheets. Consequent de-

leveraging of financial institutions led to global liquidity squeeze and

loss of business confidence hampering international trade.

The economic situation in most of the developed nations is still fluid

amidst a bleak economic outlook. All round efforts are being

undertaken to stimulate consumption and bring the world back to

“Business as usual”. However the road to recovery will be slow and till

then the world economy will have to go through slowdown, if not

recession.

India was not a part of the origin of this crisis. However in an integrated

global financial system, India could not remain insulated from the

effects of this crisis. The uncertainty in global economy has constrained

capital flows into emerging economies including India. Indian economy

is expected to clock a growth of 6-6.5% for 2008-09 against an average

growth rate of around 9% in the last four fiscals. However seen in

context of global economic situation where most economies are looking

at recession, the growth seems reasonable.

Global financial crisis coupled with high inflation, appreciating currency

and high interest costs led the economy to a rough patch by the middle

of the financial year. Growth in the industrial sector plummeted due to

the impact of global slow down as well as slackness in local demand.

The Index of Industrial Production (IIP) turned negative in the last

quarter of 2008-09 reflecting extreme pessimism in the economy. The

growth in the manufacturing sector slowed down to 2.7% for the year.

Timely action from Govt. in the form of relaxing monetary policy and

providing fiscal stimulus packages lifted up the sentiments. Towards the

end of FY 2008-09 the economy seemed to witness signs of revival

from the terrible mid year patch with sharp drop in inflation and revival

in demand.

Fiscal 2009-10 starts on a cautious note. The inherent strength of the

Indian economy like high share of services in GDP, high domestic savings

rate, scope for relaxing tight monetary policy, ambitious plans for

infrastructure development etc. will act as a cushion in mitigating the

adverse impacts of the global financial crises. Also the growth in Indian

economy was mainly characterized by rising domestic consumption and

increasing infrastructure activity which continue to be relatively less

impacted from external events. We feel that the resilience shown by the

Indian economy in the last few years gives confident signals that it will

sail through this uncertain period of global turmoil as well.

Cement Outlook

n

n

n

n

Indian Cement industry is largely dependent on domestic market and

has a cluster market structure. It was thus less affected by the external

events. However, signs of slackness in cement demand were felt in the

middle of the year as a result of fall in real estate, low infrastructure and

private capital expenditure and overall gloomy economic environment.

Cement industry also faced the challenges of ban on cement exports,

zero duty imports from Pakistan and high incidence of taxes on cement

which made it difficult for cement companies to protect their margins.

Along with this, high fuel prices which reached their all time peak levels

during the year increased the cost of cement production. It is worth

mentioning that Power and Fuel cost comprises of more than 50% of

the total cost of cement production.

Towards the end of calendar 2008, industry got some relief in the form

of withdrawal of ban on cement exports and removal of import duty

exemption on cement imports. Further, as part of stimulus package,

Govt. of India also lowered Excise Duty applicable on cement, provided

sops to housing etc. Strong infrastructure and housing demand

especially in semi-urban and rural India ensured that cement demand

growth rate was reasonable. As a result, the cement industry has clocked

a good performance during the year. The highlights of the year were: -

Growth in Cement production by 7.8% to reach 181.4 million tons.

Growth in consumption by 8.4% to reach 177.8 million tons.

Capacity utilization dipped to 88% against 94% in the previous year.

Addition of new capacities to the tune of 18 million ton.

Several new capacities have come up and more are expected to come

upstream in the coming year. However current housing shortage and

demand from semi-urban and rural housing segment will lead to

increased demand for housing units, a major driver of cement demand.

The implementation of recommendation of VI Pay Commission has

resulted in increasing the purchasing power in the hands of Govt

employees. A part of this is expected to be utilized in housing needs

which augurs well for cement demand. The government’s ambitious

plans for infrastructure development especially the commonwealth

games and the dedicated freight corridor will also drive cement

demand.

India’s GDP is forecast to grow at a subdued 6.5 - 7% for FY 09-10 due

to the global economic scenario. However, the resilience shown by

Indian economy to global meltdown indicates that it will be able to

sustain high growth trajectory in the medium term. Thus the medium

term outlook appears relatively better. Sometime ago, the Chief

Economic Advisor, Ministry of Finance, Govt of India also said that the

medium term potential of Indian economy is 9%. There is a general

consensus that the world economy would start recovering from second

Management Discussionand Analysis

half of 2009-10 and once again attain a positive growth track. In India,

the above 9% growth recorded during 4 years period from 2004-05 to

2007-08 has brought about a structural transformation for attracting

private investment both domestic and foreign, creating and upgrading

infrastructure and fostering open market economy. Thus India’s

fundamentals remain strong. Once the normalcy returns to the global

economy, the inherent strength of the Indian economy will lead it to a

rapid and sustained growth. Government both at center and state level

have to play a proactive role for upgrading the infrastructure and

supporting the private investments through Public-Private Partnership

and liberal policy environment. High economic activity and focus on

SHREE CEMENT LIMITED 73

infrastructure development augurs well for the cement industry.

Fiscal 2008-09 was a landmark year for the company as it created a

world record by completing Unit VII (Clinkerisation unit) in just 367

days – clear demonstration of its project execution capabilities. This

World Record achievement is the result of great team work,

commitment to excellence and focus on achieving the unachievable.

Company Performance

Performance highlights for the year 2008-09:

Particulars Unit 2008-09 2007-08 +/- %

Turnover Rs. Crore 2,715.02 2,109.12 29%

Cement Production Lac MT 77.7 63.4 23%

Cement & Clinker Sales Lac MT 84.5 66.0 28%

Profit Before Interest, Depreciation & Taxes Rs Crore 1,033.66 939.25 10%

Operating Profit Margin % 38.07 44.53 -15%

Power consumption Kwh per ton 76.7 79.4 -3%

Fuel consumption kcal/ kg of clinker 766 773 -1%

Auxiliary Consumption of the power plants % 7.36 7.92 -7%

Heat Consumption / unit of Power generated Kcal/kwh 2,744 3,005 -9%

Financial Performance

Company’s excellent financial performance during the year is the result of all round growth and improvement in efficiency levels. Snapshot of financial

performance:

Rs. Crores

Items 2008-09 2007-08

Sales 2,715.02 2,109.12

Raw materials Cost 246.13 210.99

Power & Fuel Cost 605.81 367.23

Staff cost 103.87 73.60

Freight on inter unit clinker transfer 80.66 34.91

Freight & Selling Cost 459.28 359.77

Profit before Interest, Depreciation and Taxes 1,033.66 939.25

Net Profit 577.97 260.37

TRUST DOES THE IMPOSSIBLE


audit department works closely with outside audit firm to complement

each other in laying down and reviewing the existence, adequacy and

effectiveness of the internal control framework within the company.

Company has a well documented and comprehensive internal control

framework outlining operational and technological controls. The Audit

department charts out an annual audit plan, which is approved by top

management, and audit is conducted as per the plan. All control systems

are regularly reviewed to ensure financial propriety of business

transactions and compliance with relevant statutes and management

policies and procedures. All significant audit observations and follow-

up actions thereon are reported to the Audit Committee which monitors

the implementation of audit recommendations including those relating

to strengthening of the Company’s internal control policies and systems.

Company considers R&D as an essential tool to achieve sustainable

growth. Company has a strong and dedicated team of qualified

professionals to undertake research activities. The activities of the R&D

team is focused on identifying alternative fuels, adopting newer

technologies, improving product quality and optimizing available

resources. Some of the R&D activities undertaken during FY 08-09 were

optimization of parameters to absorb Sox and to make value added

product from them, investigation on the use of additives to improve

quality of cement, identification of various wastes to use as raw

materials, fuels and blended materials etc.

Your company is known as an organization which follows the triple

bottom-line approach in the conduct of all its business activities. The

Company actively seeks to undertake business activities that create

sustainable value for the society. Following the triple bottom-line

approach entails reporting performance under the three aspects of

economic, environment, and social. The same is detailed as under:

During the year 2008-09, company displayed commendable

performance in all sphere of business activities. Production of cement

was at all time high of 77.65 lac tons. Consequently turnover has

significantly grown during the year. Company’s innovative measures for

cost rationalization and increasing market share have led to strong

growth in its operating profits as well. Increased scale of operations has

created a number of opportunities to all people involved in the value

chain of the company’s activities.

Your Company ardently follows the maxim of “Clean and Green is

Profitable”. It is committed to a low carbon economy and strives to

Research and Development

Sustainability – Triple Bottom-line approach

Economic

Environment – Green Initiatives

reduce its carbon footprint. It actively contributes at national and

international platforms to create awareness and undertake efforts

towards a greener earth.

It has brought down its power and fuel consumption per ton from 79

kwh/ton to 76 kwh/ton. Its stack emission levels are much below the

requisite norms. The company celebrated “Enviroment day” at all its

plant sites to create awareness about greening the environment. The

company put added thrust on plantation across the area in the vicinity

of the plant.

Company received 100043 Certified Emission Reductions (CER) for its

CDM project “Optimal utilization of clinker” which is registered with

UNFCCC. These CERs have been issued for the period 1.1.07 to

31.3.08. Company proactively undertakes activities to minimize the

impact of its operations on environment, land and global warming. It

has undertaken various initiatives across its operations to reduce

emission of greenhouse gases and adverse impact of climate change

which has been appreciated at various forums. During the year the

company received the “Golden Peacock Award 2008” in recognition of

its contribution towards Climate change initiatives and achievements in

this regard. It also received “Greentech Environment Excellence Gold

Award 2008” in Cement Sector for outstanding achievement in

Environment Management practices.

The Company has regularly been issuing Corporate Sustainability

Report (CSR) for the last four years. The CSR for 2007-08,

independently assured by Ernst and Young, a leading international

consulting firm, highlights the work it has done across the three

dimensions of the triple bottom line. The Report is the first in the Indian

Cement Industry to be prepared in accordance with the latest ‘G3’

revision of Global Reporting Initiative (GRI) guidelines. Your Company

has been accorded the highest level ‘A+’ for reporting the ‘triple

bottom line’ performance from GRI. Company’s emission levels are well

within permissible levels.

Towards its commitment to provide a green and clean work

environment, the company has undertaken following activities:

(a) To set up Green Power Plants of 43 MW which will generate

power from waste heat emitted during the cement

manufacturing process thereby significantly reducing emission

levels and conserving the fast depleting fossil fuels which

otherwise would have been used for power generation. This is

the largest capacity of green power plants in world cement

industry excluding China. The company has taken steps to

register this project with the UNFCCC as Clean Development

Mechanism (CDM) project.

(b) With a view to further conserve water, Company has decided to


Access to transmission network to private players and encouraging

private investment are aimed at tackling power shortage. The

commencement of Energy Exchange is a positive step which has

enabled short term power trading on a common platform and remove

regional constraints in short term power flow from surplus to deficit

regions. Your Company has placed itself in a position to utilize the

opportunities presented by the power sector.

Company commenced power sale in the month of August’08 by selling

10 MW power on the India Energy Exchange (IEX) platform.

Subsequently, it has obtained direct membership of IEX to optimize its

margin on power sale. Since then it has steadily augmented the sales

volume as well as avenues of sale. Power business has added Rs. 80.6

crores to the turnover of the company.

Power market in the country is at a nascent stage. Company was one of

the few having Captive Power Plants to tap the opportunity in power

sale and an early entrant to this business. Power is now a high growth

area for the country. Keeping in mind the immense potential of power

business, the company is now embarking on expanding its power

generation capacity. Company has already undertaken new projects to

bring in another 143 MW of new capacity. Out of the above, 43 MW will

be Green Power Plants which will generate energy from waste heat

generated from the cement manufacturing process. This new power

capacity will be utilized to grow its power business segment. The

company is also in the process of setting up a Power Trading Division to

further tap the opportunities provided by the evolving power sector.

In 2008-09, your company took another important step towards

becoming a truly integrated enterprise. To cater to the increasing scale

of operations, the company has implemented an Enterprise Resource

Planning (ERP) with Oracle E Business Suite. The ERP was rolled out

across all business processes of the company with effect from November

2008. Your company is one of the few companies in Asia to roll out

Oracle E Business suite across all business processes at the same time.

The ERP implementation provides a significant scalable platform to

conduct business activities in an integrated manner.

In line with the rapidly expanding scale of operations, your company

has instituted a new in-house Internal Audit Department to further

strengthen internal controls within the company. This department

consisting of highly experienced and qualified technical and

commercial professionals who will review the entire gamut of

operations of the company. Company also continues to engage the

services of a professional firm, which currently carries out internal audit

of all business processes within the company. The In-house internal

Information Technology

Internal Control

To further meet the growing demand, the company has undertaken new

projects of 1.5 and 1.0 million ton Grinding units at Suratgarh and

Roorkee respectively. Company is constantly on a lookout for suitable

opportunities both within and outside India.

Company’s operational efficiency was tested during the year. Global

slowdown was looming large over the economy which forced the

Company into looking at newer and innovative ways to protect margins.

However as the financial performance reflects, your company showed

enormous flexibility in adjusting to changing times.

Cement Production during the year saw a jump of 23% from 63.4 lac

tons to 77.7 lac tons. Production of OPC cement was higher (18.5 lac

tons in 08-09 against 12.7 lac tons in 07-08) during the year. The strong

increase in production could be achieved mainly due to faster

stabilization and consequent higher production from newer plants

commissioned last year. Faster stabilization helped the company to

achieve capacity utilization of 114%, a significant achievement

considering that a high proportion of company’s capacity was

commissioned in the last 2 years.

Company continued its superior performance in energy efficiency.

Power consumption per ton of cement brought down from 79.4

kwh/ton to 76.7 kwh/ton. Fuel consumption also recorded a drop from

773 to 766 kcal / kg of clinker. There was all round improvement in the

power plant operations. Plant load factor both at Beawar and Ras

improved during the year. The heat consumption per unit of power

generation showed remarkable improvement of 8.7%. Similarly the

Auxiliary consumption was also brought down by 7.1%. Also sale of

power ensured that the power plants can generate at the maximum

capacity thereby leading to increased efficiency.

The company’s popular brands, Shree Ultra Jung Rodhak, Bangur

Cement and Rockstrong Cement continued to strike a chord with the

consumers and has been cementing its position in the north Indian

market. Company saw its sales volume grew by 28% against North

India market growth of 5%. It captured higher volumes both in trade

segment as well as bulk cement business. The team tested unchartered

waters by successfully venturing into high grade concrete application

segments. It succeeded in maintaining its leadership position in the

markets of Rajasthan, Delhi and Haryana even in the backdrop of stiff

competition.

Power sector is evolving in India with increased govt’s impetus to drive

growth in this sector. New developments especially allowing Open

Operations

Sales & Marketing

New Business Initiative - Power



replace existing Water Cooled Condensers at power plants with

Air Cooled Condensers.

Shree is actively engaged in Climate protection and actively participates

in international discussions on climate change. Shree Cement, with a

group of members of Cement Sustainability Initiative (CSI) was invited

by OECD to discuss its views on Sectoral Agreements for GHG reduction

at the 22nd meeting of the Round Table on Sustainable Development

held on 12th and 13th March, 2009 at OECD Headquarters, Paris. Shree

impressively advocated the benefits of Sectoral Agreements for GHG

reduction based on Global benchmark and company wise approach

instead of country wise, involvement of all sectors, National level

targets for developed countries and No-Lose commitment for

developing countries, further R&D initiatives and development of clean

technologies for CO2 emission reduction. Shree was also invited by

Department of Natural Resources and Energy Policy under Ministry of

Economy Trade and Industry, Japan to attend the workshop supported

by the European Commission DG Enterprise and Industry on “Global

Sectoral Approaches as Part of a Post-2012 Framework” held on 25th to

26th February, 2009 at Tokyo, Japan. Presentations were delivered by

Shree on “The benefits and limitations of Sectoral Approaches in India”

and “Business and sectoral approaches in India”, which demonstrated

India’s response to climate change. Shree also delivered a presentation

on need for transfer of clean technologies from developed countries to

developing countries at a one day meeting of International High Level

Stakeholders was conducted by European Commission on 17th

November, 2008 at Brussels.

Shree Cement was invited to participate in the Global conference on

“Low Carbon Economy” organized by European commission.

The Executive Director, attended the conference. He underlined the

important of the role of business enterprises in achieving the low carbon

economy and stressed on increased energy efficiency in processes,

switching to renewable/ alternate fuel sources and reducing overall

fossil fuel usage. The conference appreciated efforts made by Shree to

reduce its carbon footprint.

The concept of society includes all its stakeholders be it shareholders,

customers, employees, suppliers or the local community. The company

strives to engage its resources in a manner that takes care of the interests

of the society at large as well as to create economic value.

Company proactively engages in understanding the need and concerns

of the local community and deploys its resources to address their

concern. It provides basic and technical education through distribution

Active Participation at International Forums

Social

of books and computers to the needy. It provides sustainable livelihood

by imparting vocational training and courses as well as relevant

infrastructure and facilities that leads to lifelong income generation and

make people self dependent. There are mandatory Medical checkup of

employees, contract labourers, school children etc. It also regularly

undertakes welfare activities aimed at the upliftment of the society at

large through activities like Mobile Medical units providing medical

facilities in nearby communities, Polio camps, eye camps, dental check

ups, awareness campaigns, educational support etc. It regularly

conducts skill upgradation programmes for contract workers.

During the year Company had taken the lead to contribute Rs. 21 Lac

towards relief work for the flood affected people of Bihar. The

contribution was the first from the corporate world of Rajasthan

towards this tragedy caused by the Kosi River. It also lends a helping

hand when tragedy struck at Chamunda Devi temple in Jodhpur by

contributing Rs. 15 lacs for the stampede effected victims. Company has

also contributed Rs. 11 lac to Rajiv Gandhi Study Circle, New Delhi.

In order to institutionalize and strengthen the social welfare activities

undertaken by the company, the company has set up “Shree Rural

Foundation”. The foundation is an important step in converting the

present social expenditure structure of the company from “Need based”

to “Plan Based”. The foundation shall serve as a single platform through

which all social welfare activities will be undertaken by the company to

contribute towards ensuring comprehensive social upliftment.

- Your Company has embedded

Occupational Health and Safety as an inherent part of its production

processes. The company has documented health and safety policies to

create awareness towards health & safety hazards and preventive

measures thereby making it a safe place to work. All its plants have

appropriate medical facilities with qualified doctors. Safety training is

provided to all employees prior to engaging them. Company regularly

arranges training sessions for employees and workers to create

awareness about safe working practices, usage of appropriate safety

equipments etc. Under the leadership of the Executive Director, a

mandatory safety meeting is conducted on every 1st day of the month

with participation from all workers and employees. Measures related to

health, hygiene, safety and improvement of the working environment

are reviewed in this meeting.

The company has implemented a total ban on tobacco consumption

within its plant boundaries. During the year the company conducted a

rally on the safety day and also a one day workshop on Industrial Health

& Safety at Bangur Nagar to create awareness and impart training on

health and safety procedures. It launched Road safety campaign under

which safety signboards were placed at different locations.

Occupational Health and Safety

It invited expert faculties from Traffic police to conduct training

programmes for drivers and security personnel. There were no fatal

accidents in FY2008 09.

Your company has always pride itself in creating a work atmosphere

which brings the best minds to apply their best skills in the best jobs in

the most fair and competitive manner. This concept is deeply inculcated

in all its policies and strategies and has reaped good results to the

company.

Every employee goes through an annual performance appraisal for him

to clearly visualize his performance, role alignment with the broader

vision of the company, career development and perspective building.

Shree follows an open policy which discourages compartmentalization

and restriction of employees to their department specific roles.

Employees are encouraged to actively participate and contribute in the

overall performance of the company as a whole. Ideas are welcome

from any quarter and any employee from any rung or hierarchy. The top

management is easily available to everyone to come up with anything

that can be of benefit to the company. This has enabled it to maintain a

high engagement level of its employees.

Business today magazine along with Mercer TNS conducted a survey of

top best 20 employers in India. Your company was selected among the

top 20 best employers in the country. It is worthwhile to mention that

the company was (a) the only company from the cement sector, (b) the

only company from Rajasthan and (c) one out of only 5 manufacturing

companies to be included in the list. This was an appropriate reflection

of the “Shree Parivar” culture where everyone feels himself as part of the

extended Shree Family.

Total number of employees as on 31.03.2009 was 2566.

The present global economic turmoil has put effective risk management

at the forefront of all business activities. Large institutions have

collapsed for not applying risk control measures. Your company is fully

aware of the importance of managing risks and has integrated it into its

management philosophy. The company has a comprehensively

documented Risk Management Framework. At the primary level this

framework seeks to identify risk at each business process level and then

to develop mitigation strategies to address the same. A certificate to this

effect that risks identification and mitigation strategies have been

evaluated at each department and business process level is obtained

from the responsible executive to ensure that the risk management

framework is implemented in the true spirit. On a broader level, this

framework seeks to align company’s risk appetite with evaluation of

Human Resources

Risks and Concerns


strategic alternatives, setting related objectives and developing

mechanisms for effective identification, assessment, reporting and

mitigation of risks. Key Risks identified by the company are set forth

below:

Several new projects

have come up and many are expected to go upstream in the coming

year. Some of them with big capacity have come up in the northern

region where your company operates. This may led to increase in

supply which may adversely effect prices and market share. However

we feel that the demand is also expected to grow at reasonable levels

which may set off negative impacts of new supplies. Company is also

constantly endeavoring to increase its market share through innovative

marketing, timely capacity enhancement, expanding its market reach

etc.

Company is targeting power business as its new growth

engine. However the market is subject to volatile price movements.

Company intends to mitigate the risk of volatile price movements

through advance planning and bilateral contracts which fixes the rate

for the contract period. Power market is currently developing and

provides immense opportunities. Company is fully geared to take

advantage of this new business through addition of new capacity.

Rise in cost of input is another risk area. Company

has displayed immense flexibility in managing these risks through

utilization of alternate raw materials, identifying newer sources for

existing fuel as also identifying alternative fuels etc.

High dependence on certain suppliers for raw material

and fuel put the company in a vulnerable situation in case of inability of

the supplier to honour its commitments. Company constantly strives to

adequately expand its supply base to mitigate the risk. Also company

constantly scouts for alternate materials which can substitute scarce raw

materials.

To protect itself from the volatility

prevailing in the current global financial system, company maintains all

its long term borrowing on fixed interest rate. Company, as a policy,

hedges all its foreign currency borrowings through appropriate forward

covers and swap instruments.

Supply overhang due to new capacity addition –

Power business -

Rise in cost of inputs –

Suppliers’ risk –

Interest rate and Currency risk -





Directors' Report

Dear Shareholders,

Your Directors are pleased to present their report of your Company for the year ended on 31st March, 2009.

Your Company has recorded turnover of Rs. 2715.02 crores during year under review, which went up by 29%. Profit before Tax and Net Profit was at Rs.

722.91 crores and Rs. 577.97 crores, up 96% and 122% respectively. The summary of your Company’s financial performance is as under:

Financial Results

Rs. in crores, except per share data

Particulars Year ended on

31st March, 2009 31st March, 2008

Net Sales 2715.02 2109.12 29%

Other Income 82.90 76.84

Total Revenue 2797.92 2185.96 28%

Earning before Interest, Depreciation and Taxes

(EBIDTA) (before exceptional items) 1033.66 939.25 10%

Interest 74.43 53.30

Depreciation 205.39 478.76

Earning before Taxes and Exceptional Items 753.84 407.19

Exceptional Items 30.93 38.88

Earning before Taxes 722.91 368.31 96%

Taxes:

- Current Tax & Fringe Benefit Tax 136.87 107.69

- Prior period Tax (net) - 14.96

- Deferred Tax 8.07 -14.72

Earning after Taxes 577.97 260.37 122%

Add: Balance brought forward from previous year 348.70 149.41

Debenture Redemption Reserve no 2.02 1.52

longer required

Earning available for Appropriation 928.69 411.30

Appropriations:

- Interim Dividend @ Rs. 5/- per share &

Final Dividend @ Rs. 5 per share on

Equity share (Previous year Dividend Rs. 8/- per share) 34.84 27.87

- Tax on dividend distribution 5.92 4.74

- Transfer to General Reserve 80.00 30.00

Earning Per Share (EPS)

a. Basic and Diluted 165.91 74.74 122%

b. Cash 227.18 207.94 9%

Year ended on +/ - %

Operational Performance

Dividend

Management Discussion and Analysis

Corporate Governance

Capacity Expansions

Total Cement Production during the year under review increased by

23% from 63.37 lac ton to 77.65 lac ton. Clinker Production increased

by 39% from 46.23 lac ton to 64.18 lac ton. Cement and Clinker sale

during the year was at 84.50 lac ton against 66.02 lac ton in previous

year. Company’s sales volume grew by 28% against North India market

growth of 5%. As a result of energy conservation measures taken by the

Company during the year, the power consumption dropped from 79.35

Kwh/MT of Cement to 76.72 Kwh/MT. Fuel consumption also dropped

from 11.34% (of Clinker) to 10.75%.

Recently Govt. has deferred the applicability of accounting requirement

for mark to market losses on foreign exchange exposure as required as

per Accounting Standard 11 (Accounting for the Effects of Changes in

Foreign Exchange Rates). However, Company did not have any foreign

exchange exposure during the year for which it had to record any mark

to market liability. As such the same does not have any implication on

the Company.

Your Directors have declared interim dividend @Rs. 5 per share and

recommended a final dividend @Rs. 5 /- per share for the year 2008-09

(Previous year final dividend Rs. 8/- per share). The confirmation of the

members’ for interim dividend shall be sought during the ensuing

Annual General Meeting.

The Management Discussion and Analysis Report forming part of

Directors’ Report for the year under review, as stipulated under clause

49 of the Listing Agreement with the Stock Exchange(s), is discussed in

separate section of this Annual Report.

A separate section on Corporate Governance together with a certificate

from the Auditors of the Company regarding full compliance of

conditions of Corporate Governance as stipulated under clause 49 of the

Listing Agreement with the Stock Exchange(s) forms part of Annual

Report.

The year 2008-2009 has been a historical year for the Company.

Company has created a world record by completing and starting trial

production of its 1.0 million ton per annum (MTPA) Clinkerisation Unit

(Unit –VII) at Bangur City Ras on 24th March, 2009 in a record time of

367 days. Company also increased its thermal power generation

capacity during the year by commissioning a 18 MW Turbine Generator

(TG-VI) at Bangur City, Ras.

To further augment the Cement and Power Plant Capacity, Company has

undertaken the following projects:

Clinker Grinding Unit at Suratgarh (Rajasthan) and Roorkee

(Uttrakhand) having capacity of 1.5 MTPA and 1.0 MTPA

respectively. The work on these projects is running as per

schedule and the same are expected to be commissioned by

fourth quarter of FY2009-10.

100 MW Capacity (50MWx2) Power Plants at Bangur City, Ras.

These power plants would be used for the purpose of merchant

sale of power as well as for meeting power requirement of future

expansion/new cement units of the Company. The first 50 MW

Power Plant is expected to be commissioned by fourth quarter of

FY2009-10 while second 50 MW Power Plant is expected to be

commissioned by first half of 2010-11.

43 MW Green Power Projects (Waste Heat Recovery Projects) at

Bangur Nagar, Beawar and Bangur City, Ras. Green Power

Projects, when completed will be the largest capacity of Green

Power in the entire world cement industry except China. The

work on these projects is running as per schedule and are

expected to be completed by fourth quarter of FY 2009-10. Post

commissioning of its power plants under implementation,

overall power generation capacity will increase over 250 MW.

Your Directors have pleasure to report the following prestigious awards

and recognitions conferred during the year on your Company in

recognition of its achievements in the field of Corporate Governance,

Environment Management, Energy Efficiency, Human Resources etc.:

“Golden Peacock Award 2008” in recognition of its contribution

towards Climate change initiatives and achievements in this

regard.

“Greentech Environment Excellence Gold Award 2008” in

Cement Sector for outstanding achievement in Environment

Management practices.

“Corporate Excellence Award” by Rajasthan Chamber of

Commerce and Industry (RCCI) consecutively for third year in all

the four categories set for evaluation i.e. Corporate Governance

& Capital Market, Financial Performance & analysis, Business &

Qualitative aspect and Annual Report presentation &

Management.

“National Award for Excellence in Cost Management -2008” by

the Institute of Cost and Works Accountants of India (ICWAI) in

recognition of its best Cost Management Practices.

In a survey conducted by Business Today Magazine along with

Mercer-TNS, Shree Cement has been rated in top 20 best

Employers of India. It is the only Company from Cement Sector

and Rajasthan, which finds place in the list.

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Awards & Recognitions

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Statement of Particulars of Employees pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors’ Report for the year ended 31st March, 2009


S. Name of the Designation Nature of Remunera Qualifi Age Exper Date of Last Employment

No Employee Duties -tion(Rs.) -cation (Years) -ience Commence

Years -ment of Name of

employment the Organi- Position held

sation

EMPLOYED THROUGHOUT THE FINANCIAL YEAR AND WERE IN RECEIPT OF REMUNERATION IN AGGREGATE OF NOT LESS THAN RS.

24,00,000/- PER ANNUM

1. Bangur B.G. Executive Overall 6,94,59,862 B.Com 75 56 13.08.1992 Hasting Mill, Chief Executive

Chairman management of A division of (Production

operations and Shree Digvijay and

policy decisions Cement Development)

Company Ltd.

2. Bangur H.M. Managing Management 6,45,16,774 B.E. 57 31 01.01.1992 Shree Digvijay Financial

Director of operations (Chemical) Cement Advisor

Company Ltd.

3. Singhi M.K. Executive Management 1,98,29,792 B.Sc., LLB., 57 31 17.01.1995 Rajshree Cement Sr. Vice

Director of operations FCA A unit of Indian President

Rayon & (Commercial)

Industries Ltd.

4. Bangur Sr. Executive Management 34,91,600 B. Sc. 29 05 22.06.2004 ---- ----

Prashant of operations MBA

5. Bhandari Chief Finance Financial 75,05,273 B.Sc. Hons 56 31 01.04.1990 PT Indo Rama Vice President

Ashok Officer Management FCA Synthetics (Finance)

6. Payal Diwakar Jt. President Sales & 70,00,682 B. Tech. 51 27 23.10.2001 Ambuja Vice President

(Marketing) Marketing PGDM Cements Ltd. (Marketing)

7. Wadhawa Sr. Vice Sales & 70,56,421 B.A.(Hons.) 53 28 01.12.2006 Binani Cement Executive Vice

Vinay President Marketing M.B.A. Limited President

(Marketing) Marketing (Marketing)

8. Reddy A.B. Sr. Vice Sales & 69,49,167 B.Sc. 60 36 25.07.2007 Seshasayee President

President Marketing Agriculture Papers & (Commercial)

(Marketing) MBA Board Ltd.

9. Tripathy P.K. Sr. Vice President Cement Plant 47,39,693 B. Sc. 51 26 06.04.1997 Aditya Cement Sr. Manager

(Works) Operation (Engg) (Technical Cell)

10. Chhangani Sr. Vice Cement Plant 44,24,527 B. Sc. 49 26 03.04.2006 Holtec General

P.N. President Operation (Chemical Consulting Pvt. Manager

(Works) -Engg) Ltd.

11. Sharma M.M. Sr. Vice Project 43,40,616 B. Sc. 59 36 15.06.1992 U. P State Manager

President Management (Mech. En Cement Corpo- (Maintenance)

(Projects) -gineering) ration Limited

12. Biyani C.R. Vice President Raw Material 40,37,890 B.E.- Hons 58 37 24.08.2002 BFL Infotech Director

(Business Procurement and (Electronics) Ltd.

Development) IT administration

13. Daga Gopal Vice President Project 37,45,253 B. Com 59 35 07.09.1994 Rilaxon (Divisi- Vice President

(Project) Management on of Shree (Project)

Digvijay Cement

Company Ltd.)

Annexure to the Directors' ReportANNEXURE - I

Directors

Directors’ Responsibility Statement

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n

Auditors

Shri Shreekant Somany and Dr. Abid Hussain, Directors of the Company,

would retire by rotation at the ensuing Annual General Meeting in

accordance with the provisions of the Companies Act, 1956 and

Company’s Articles of Association and being eligible, offer themselves,

for re-appointment.

Shri Amitabha Ghosh appointed as Director of the Company on 14th

May, 2007 to fill casual vacancy created consequent upon resignation of

Shri R.S. Agarwal from Board of Directors of the Company. Pursuant to

Section 262 of the Companies Act, 1962, Shri Amitabha Ghosh will hold

office as Director up to the date upto which Shri R.S. Agarwal would

have held Office, if it had not been vacated i.e. upto this Annual General

Meeting. He being eligible, offers himself for re-appointment.

Pursuant to the requirements of Section 217 (2AA) of the Companies

Act, 1956, the Directors, to the best of their knowledge and belief and

according to the information and explanations obtained by them,

confirm that they have taken all reasonable steps, as are required, to

ensure that;

The applicable accounting standards have been followed in the

preparation of the annual accounts for the year ended 31st

March, 2009 and in case of material departures, proper

explanation has been given in the Accounts and notes thereon.

They have selected such accounting policies and applied them

consistently, and they have made judgments and estimates that

are reasonable and prudent so as to give a true and fair view of

the state of affairs of your Company as at 31st March, 2009 and

of the profit of your Company for the year ended on that date.

They have taken proper and sufficient care for the maintenance

of adequate accounting records in accordance with the

provisions of the Companies Act, 1956, for safeguarding the

assets of your Company and for preventing and detecting fraud

and other irregularities.

The annual accounts are prepared on a going concern basis.

The Statutory Auditors M/s. B. R. Maheswari & Company, Chartered

Accountants, Delhi, will retire at the conclusion of the ensuing Annual

General Meeting of the Company and are eligible for reappointment.

They have sought re-appointment and have confirmed that their re-

appointment, if made, shall be within the limits laid down under

Section 224(1B) of the Companies Act, 1956.

The Board of Directors recommends the re-appointment of M/s. B. R.

Maheswari & Company as Statutory Auditors of the Company from

conclusion of ensuing Annual General Meeting till the conclusion of

next Annual General Meeting.

The notes to accounts referred to in the Auditor's Report are self

explanatory and, therefore, do not call for any further comments on

observations of auditors.

Pursuant to directives of Central Government, your Company has

appointed M/s. K. G. Goyal & Associates, Cost Accountants as Cost

Auditors of the Company under section 233B of the Companies Act,

1956 for the year 2008-2009. The audit of Cost Accounts of the

Company is being done by them.

As required under the provisions of Section 217(2A) of the Companies

Act, 1956, read with the Companies (Particulars of Employees) Rules,

1975, as amended, the names and other particulars of employees are

set out in the Annexure I to this report and forms part thereof.

The information required under Section 217 (1)(e) of the Companies

Act, 1956 read with Companies (Disclosure of particulars in the report

of the Board of Directors) Rules, 1988 is set out in Annexure II annexed

hereto and forms part of this Report.

Your Directors take the opportunity to place on record the co-operation

and support received from various agencies of the Central Government

and State Government(s), financial institutions and banks. Your

Directors also express their deep sense of gratitude to various

stakeholders i.e. customers, dealers, suppliers, transporters, advisors

etc. for their continuous committed engagement with the Company.

Your Directors further appreciate the support and co-operation received

from the employees for their contribution to the growth and success of

the Company. Your Company’s consistent growth has been made

possible by only through their dedication, innovation, excellence and

support.

And to you, our Shareholders, your Directors are deeply grateful for

your confidence, faith and trust in the Company.

Cost Audit

Particulars of Employees’

Particulars of Conservation of Energy, Technology Absorption

and Foreign Exchange Earning / Outgo

Acknowledgement

For and on behalf of the Board

Place: Kolkata

Date: 28th April, 2009

Executive Chairman

B. G. Bangur



ANNEXURE - II

Disclosure of particulars with respect to conservation of energy,

technology absorption and foreign exchange earnings and outgo as

required under Companies (Disclosures of Particulars in the report of the

Board of Directors) Rules, 1988 and forming part of Directors' Report for

the year ended 31st March, 2009

(a) Measures taken for conservation of energy.

(i) Replacement of conventional lamps with Compact

Fluorescent Lamps (CFL).

(ii) Replacement of conventional water pumps by high

efficiency water pumps.

(iii) Installation of High Efficiency Main ESP fan in Unit – II.

(iv) Installation of High Efficiency PH fan - 1 in Unit –II.

(v) Installation of Variable Frequency Drives (VFDs) on Dust

collector Fans in Cement Mill, Raw Mill and Packing Plant at

all the Units.

(vi) Increase in the stack height of Cooler Electro-Static

Precipitator (ESP) fan.

(vii) Installation of Solar water heater system.

(viii) Installation of power saver panel for lighting system.

(ix) Installation of Energy saver on Lighting Panel.

(x) Replacement of the Cement Mill-IV vent fan and SKS vent

fan by new high efficiency fans.

(xi) Replacement of the higher ratings motor by lower

rating motors in Cement mill-3 vent fan and 102 BC 6 belt

conveyor.

(xii) Increase in the height of the clinker cooler vent fan stack in

Units-V & VI.

(xiii) In de-dusting bag house fans in different areas, operating

efficiency has been improved by installing smaller

diameter pulleys in place of existing bigger diameter

pulleys.

(xiv) Cooler ESP fan motor changed from 250 kW, HT by 200 kW

LT with VFD.

(b) Additional investments and proposals, if any, being

implemented for reduction of consumption of energy.

(i) Implementation of Green Power Projects (Waste Heat

Recovery Systems).

(ii) Identification and replacement of motors with high

efficiency motors.

(iii) Replacement of low efficiency reciprocating compressors

with screw compressors.

(iv) Installation of Variable Frequency Drive (VFD) in vent bag

filter fan.

A. Conservation of Energy

(v) Installation of New Vertical Roller Mill (VRM) for Coal Mill

and Raw Mill in Unit -I.

(vi) Increase the height of the cooler vent stack of Units-III & IV.

(vii) VFD’s to be installed in Cement Mill -III & Cement Mill -IV

vent bag house and Cement Mill -III SKS venting bag house

fan for saving in electrical energy.

(viii) Cooler ESP HT motor replacement with LT motor & VFD in

Unit -II.

(ix) Installation of single high efficiency Fan [Smoke Gas

(SG) Fan] against SG Fan and Booster Fan in Unit -I.

(x) Roller press installation in Cement Mills.

(xi) Slip Power Recovery System (SPRS) installation in Raw Mill

ESP Fan Unit -II & Sepax Fan in cement mill -II.

(c) Impact of measures taken at (a) and (b) above for

reduction of energy consumption and consequent

impact on cost of production of goods.

(i) Saving of thermal and electrical energy

(ii) Conservation of natural resources

(iii) Increased efficiency and process optimization

(iv) Improvement in product quality

(v) Reduction in cost of production

(d) Total energy consumption and energy consumption

per unit of products

Information given in the prescribed “Form – A” annexed.

Information given in the prescribed “Form – B” annexed.

(a) Activities relating to export, initiative taken to increase

export, development of new export market for products

and services and export plans. There have been no exports

during the year as the sale in domestic market was

considered to be more remunerative for the company than

exports.

(b) Total Foreign Exchange used and earned

B. Technology Absorption

C. Foreign Exchange Earnings and Outgo




Used 7027.62 5176.84

Earned 1849.08 1707.73

Year ended on

(Rs. In Lac)



NOTES:

1. All appointments are contractual and terminable by applicable notice period as per contractual terms.

2. Remuneration includes salary, allowances, bonus, commission, perquisites (including medical, leave travel and leave encashment on payment basis and monetary value of taxable perquisites) and Company’s Contribution to Provident and Superannuation Funds. In addition to the said remuneration, employees are entitled to Gratuity in accordance with the Company’s rules.

3. Other terms and conditions are as per Company’s Rules

4. Shri B.G. Bangur & Shri H.M. Bangur directors of the Company and Shri Prashant Bangur, Sr. Executive of the Company are relatives and belong to promoters group. Except them, no employee was holding voting right of 2% or more of the company alongwith relatives during the year. None of the other employees are related to directors of the Company.

14. Gandhi K.C. Vice President Fuel 32,56,448 B.Sc. 53 30 01.07.1991 Shree Digvijay Purchase

(Materials) Management Cement Co. Ltd. Officer

15. Mehta Sanjay Vice President Project Management 32,28,492 F. C.A. 44 21 11.11.1995 Aditya Cement Dy. Manager

(Comml.) (Comml. activities) (Accounts)

16. Khicha Arvind Jt. Vice Management of 30,71,325 F.C.A. 45 22 17.01.1991 Indorama Dy. Manager

President Commercial Synthetics Ltd. (Commercial)

(Comml.) activities

17. Jhawar P.C. Jt. Vice Personnel & 29,92,234 LL.B. 55 34 16.05.1995 DLF Cement Sr. Manager

President (P&A) Administration D.LL. (P&A)

18. Suthar S.C. Jt. Vice Mines 29,02,640 Diploma in 49 29 17.06.1996 JK Cement Ltd. Mines

President Administration Mnes – 1st Manager

(Mines) Class; Mines

Manager

19. Singh A.K. Jt. Vice Electrical & 28,03,634 B.E. 60 35 15.07.2004 Diamond General

President (E&I) Instrumentation (Electrical) Cement Manager (E&I)

Management

20. Manawat R.K. Asst. Vice Management of 24,11,460 B.Sc. 53 34 18.08.1992 Shree Digvijay Process

President Process function Cement Engineer

(Process) Company Ltd.

21. Jain N.C. Sr. General Management of 24,56,640 F.C.A 51 31 02.07.1987 Steque Equip- Manager

Manager (Fin.) financial activities ment P. Ltd.

22. Rathi M.M. Sr. General Power Plants 25,42,755 BE 41 18 23.06.2000 Century Pulp Sr. Supdt. (Ph)

Manager (Operation) (Mechanical) & Papers MIlls

(Power Plant) M.B.A. Ltd.

23. Jain Gajraj Sr. General Power Plants 24,35,589 B.E. 38 16 05.08.1996 DLF Engineer (Intt.)

Manager (Project) (Electronics) Cement Ltd.

(Power Plant)

EMPLOYED FOR PART OF THE FINANCIAL YEAR AND WERE IN RECEIPT OF REMUNERATION AT THE RATE OF NOT LESS THAN RS.

2,00,000/- PER MONTH

1. Kabra H.C. Sr. Vice President Power plant 27,01,465 B.E. 62 40 30.08.2001 Century Textile Vice President

(Power Plant) Operation (Mech.) & Industries Ltd. (Utilities)

2. Khira S.M. Advisor Cement Plant 20,80,577 Diploma 63 42 31.01.1997 Tororo Cement Jt. General

(Technical) Operation (Mech.) Ind. Ltd. Manager

3. Diwan Asst. Vice Sales & 5,06,052 M.B.A. 41 16 19.01.2009 Reliance General

Himanshu President Marketing (MKTG) Industries Ltd. Manager

(Marketing)

S. Name of the Designation Nature of Remunera Qualifi Age Exper Date of Last Employment

No Employee Duties -tion(Rs.) -cation (Years) -ience Commence

Years -ment of Name of

employment the Organi- Position held

sation

ANNEXURE II

A) Research & Development (R&D)

Form-B (See Rule 2)

1. Specific area in which R&D is carried out by the

Company

R&D initiatives have been taken toward innovation keeping in

view futuristic requirement and to make value out of waste,

improvement of cement quality, reductions of energy

consumption, techno-economic study and use of alternative raw

material, fuel and blending material and optimized quality and

process parameters. Few initiatives are given below.

(a) Optimization of parameters to absorb SOx and to make

value added product

(b) Investigation on the use of additives to improve quality of

cement

(c) Use of PSA to suggest diminution of over grinding of cement

(d) Identified and optimized various wastes to use as raw

materials, fuels and blended materials

(e) Concrete mix design with high volume fly ash

(f) Standardization of kiln feed, cement, fly ash samples for

Particle Size Analysis

(g) Diagnostic study for quality assessment and proper use of

refractory

(h) Reduction of energy consumption through energy audit and

by proper modification and installation of energy efficient

equipments to minimize leakages in compressor

(i) Trials conducted for the production of sleeper grade cement

(j) Tele-operation (from 400 km distance) of Cement Mills of

Khushkhera plant through Beawar CCR.

2. Benefit derived as a result of the above R&D

(a) Quality improvement

(b) Reduction in energy consumption

(c) Reduction in production cost

(d) Helpful to make Green Cement

3. Future plan of action

(a) Continuous efforts to use of alternative fuel and raw

materials to conserve the natural resources

(b) Improvement of quality of cement through optimization of

PSD and use of additive

(c) Beneficiation of low grade limestone

4. Expenditure on R&D

Capital Expenditure (Rs. in lacs) 12.34

Recurring Expenditure (Rs. in lacs) 864.18

Total Expenditure (Rs. in lacs) 876.52

Total R&D Expenditure as a percentage

of turnover (In %) 0.32%

1. Efforts in brief, made towards technology absorption,

adaptation and innovation

The Company is continuously in touch with research

institutions, consultants, national and international agencies

to keep abreast of latest technological developments,

innovations in the field of cement technology, advancement

in the field of use of wastes gases to convert value added

products, minimize variation in the system to improve

quality and process, refractory, pollution control, water

conservation, plant automation & up-gradation, energy

conservation and use of alternative fuel and raw materials.

Shree’s executives visited Flue Gas Desulfurization unit (FGD)

at Power Plants, research institutes and boiler manufacturers

in China, participated in different seminars and workshops

organized by CII, TERI-BCSD, BEE, CSI, APP etc. & delivered

presentation on its best practices for conservation of thermal

& electrical energy, optimization of operation, efficient use

of alternate fuels and raw materials. Company is also a

member of Cement Sustainability Initiative (CSI) of World

Business Council for Sustainable Development (WBCSD),

Switzerland, which has offered the company an opportunity

to share best practices in the field of fuel and raw material

usage, health and safety, emission reduction, climate

protection etc. Company raised its voice for promotion and

transfer of new and innovative technologies and also

advocated for future technology like Geopolymer Cement,

Eco-friendly low energy cement, cement based on nano

technology, utilization of CO2 as Coal equivalent fuel in

Cement Sustainability Initiative Workshop, Washington DC,

USA.

(B) Technology Absorption, Adaptation and Innovation


(d) Energy audit and steps accordingly to reduce energy

consumption

(e) Design for high grade and self compacted Concrete

ANNEXURE –II

(A) Power and Fuel Consumption

Form – A (See Rule 2) Form of Disclosure of Particulars with respect to Conservation of Energy

(B) Consumption per unit of production

NOTE: Electricity consumption includes electricity consumed during shutdown of plant(s).

Particulars Standard Year ended on

(if any) 31st March, 2009 31st March, 2008

Product : Cement

Unit : MT

Electricity (Kwh /MT of Cement) 75 - 100 76.72 79.35

Furnace Oil N. A. N. A. N. A.

Coal (% of Clinker) 15 10.75 11.34

Year ended on



1. Electricity

(a) Purchased

Unit (Kwh in lacs) 272.13 250.02

Total amount (Rs. In lacs) 1310.32 1345.25

Rate/unit (Rs.) 4.82 5.38

(b) Own Generation

i. Through Diesel Generators

Units (Kwh in lacs) 2.18 0.13

Unit per Ltr. of Diesel 2.87 1.98

Cost/unit (Rs.) 14.34 57.02

ii. Through Steam Turbine / Generators

Units (Kwh in lacs) 7361.70 5174.43

Unit per Kg. of Fuel 2.11 1.90

Cost/unit (Rs.) 2.46 2.16

2. Coal and other fuels

(a) Used in Kiln & Calciner

Quantity (in lac MT) 6.91 5.24

Total cost (Rs. In lacs) 40920 24052

Average rate per MT (Rs.) 5925 4587

(b) Used in Steam Turbine / Generators

Quantity (in lac MT) 3.48 2.73

Total cost (Rs. In lacs) 17405 12068

Average rate per MT (Rs.) 4995 4427

Year ended on



To,

The Members of Shree Cement Limited

We have examined the compliance of conditions of Corporate Governance by Shree Cement Limited, for the year ended on 31st March, 2009, as

stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchange(s).

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and

implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor

an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the

conditions of Corporate Governance as stipulated in the above-mentioned Listing Agreement.

We state that no Investor Grievance is pending for a period exceeding one month against the Company as per records maintained by the Company or its

Registrar and Share Transfer Agents.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the

management has conducted the affairs of the Company.

for B. R. MAHESWARI & CO.

Chartered Accountants

Kolkata

28th April, 2009

Partner

Membership No. 81075

(SUDHIR MAHESHWARI)


Auditors' Certificate on Corporate Governance

3. Information regarding technology imported during last 5 years

a. Technology imported (a) Use of bimetallic hammers in clinker crushers.

(b) Installed Grindfos (Germany) high efficiency pump

(80%) with existing pump of KSB in Power Plant.

(c) PMS-ETAP (Power Management System) for total

power generation & distribution management

system.

b. Year imported (a) 2004-05

(b) & (c) 2008-09

c. Has technology been fully absorbed? Yes

d. If not fully absorbed, areas where this has not

taken place, reasons thereof and future plan of action N.A.

2. Benefits derived as a result of above efforts

(a) A unique opportunity to learn about energy conservation

methodology, approach and technologies adopted by the

successful energy efficient units.

(b) Sharing of information by excellent energy efficient

companies.

(c) Improvement in the quality of cement.

(d) Conservation of natural resources.

(e) Increase in capacity utilization, smooth operation, increase

in productivity and improved life of refractory.

(f) Reduction in production cost



COMPANY'S PHILOSOPHY ON CODE OF CORPORATE

GOVERNANCE

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BOARD OF DIRECTORS

In order to ensure sustainable returns to all stakeholders of the business,

it is imperative, especially for large organizations, to adopt and follow

certain policies, procedures and processes, which together constitute a

"Code of Corporate Governance". It is important that such a Code is

institutionalized, to ensure transparency, consistency and uniformity of

decision making processes and actions. The Company has always

believed in such a "Sound" Code of Corporate Governance, as a tool for

highest standards of management and business integrity. Some of the

measures adopted by the Company to ensure the highest standards of

Corporate Governance:

Composition of the Board of Directors (eg. Majority Independent

Directors)

Constitution of various Board Committees for oversight and

guidance concerning key decisions and soundness of decision

making processes connected with the functioning of the

Company

Timely dissemination of information to shareholders

Code of Conduct

The Board of Directors is the main organ of the Company who provides

a vision and strategic direction to the operations of the Company,

thereby enhancing the value of the stakeholders.

Composition of Board of Directors as on 31st March, 2009

Company ensures to have right combination of executive and

independent Directors at the Board level to maintain the independence

of the Board, and to separate the Board functions of governance and

management. The Board of Directors is headed by Shri B G Bangur, the

founder Director and promoter of the Company who is also the

Executive Chairman of the Company. The Board has nine Directors out

of which six are Independent and Non-Executive. It consists of members

having diverse backgrounds, experience and personalities ranging from

economist to bureaucrat, banker to RBI governor, industrialist to

solicitor etc.

The composition of the Board is in accordance with the Corporate

Governance requirements specified in clause 49 of the Listing

Agreement entered with Stock Exchange(s). Further, the Independent

and Non-Executive Directors do not have any material pecuniary

relationship with the Company. The Company believes to have

appropriate size of the Board looking to the current circumstances and

requirements.

Board functioning and procedure

The Board of Directors is the ‘management trustee’ of the Company

responsible for managing day-to-day affairs on behalf of the

shareholders, the true owners of the Company. Therefore, it is

absolutely necessary to ensure complete transparency and

foresightness in the decision making process. The Board takes decisions

based on detailed discussion and deliberations amongst the Directors.

The members of the Board have complete independence to raise any

issue / matter for discussion. It is ensured that Board members are

presented with all the relevant information for review of the members

on vital matters affecting the working of the Company including the

information as inter-alia specified under clause 49 Annexure - IA of the

Listing Agreement. The matters placed for review of the members of the

Board include the following:

Key elements of Annual Budgets

Business Plans and Progress thereof

Company presentation on quarterly performance

The information on recruitment and remuneration of

senior officers just below the board level, including

appointment or removal of Chief Financial Officer and

the Company Secretary

Delegation of power to the Management

Show cause, demand, prosecution notices and

penalty notices which are materially important

Any material default in financial obligations to and by the

Company, or substantial non payment for goods sold by the

Company

Transactions that involve substantial payment towards

goodwill, brand equity, or intellectual property

Significant Human Resources related issues

Sale/purchase of material nature, of investments, assets,

which is not in normal course of business

Any issue which involves possible public or product liability

claims of substantial nature, including any judgement or

order which, may have passed stricture on the conduct of the

Company or taken an adverse view regarding another

enterprise that can have negative implications on the

Company

Review of compliance of all laws applicable to the Company

including the requirements of the Listing Agreement with the

Stock Exchanges and steps taken by the Company to rectify

instances of non compliance, if any

Minutes of Meetings of Audit Committee and other

Committees of the Board

During the year, there were 4 (four) meetings of the Board held

details of which and attendance of Directors for those meetings

are as under:

n

n

n

n

n

n

n

n

n

n

n

n

n

Date of the meeting Attended by no. of Directors

07-May-2008 9

18-July-2008 6

20-October-2008 9

28-January-2009 8

Report on CorporateGovernance

*Excludes directorship held in private limited companies, foreign

companies and companies incorporated under section 25 of the

Companies Act, 1956.

**Only membership & chairmanship in Audit Committee and

Shareholders’ & Investors’ Grievances Committee has been taken

into account.

# Total four board meetings were held during the year 2008-09.

The previous Annual General Meeting of the Company held on

18th July, 2008 was attended by six Directors.

The Board has constituted Committees of Directors to look into and

monitor the matters falling within the terms of reference as follows:

The Audit Committee reviews the matters falling in its terms of

reference and addresses larger issues and examines those facts

that could be of vital concerns to the Company. The terms of

reference of the Audit Committee constituted by the Board in

terms of Section 292A of the Companies Act, 1956 and the

Corporate Governance Code as prescribed under Clause 49 of the

Listing Agreement, which broadly includes matters pertaining to

adequacy of internal control systems, review of financial

reporting process, discussion of financial results, interaction with

auditors, appointment and remuneration of auditors, adequacy

of disclosures and other relevant matters. In particular, these

include:

COMMITTEES OF THE BOARD OF DIRECTORS

A) Audit Committee

1. Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible.

2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees.

3. Approval of payment to statutory auditors for any other services rendered by them.

4. Reviewing, with the management, the annual financial statements before submission to the Board for approval, with particular reference to:

a. Matters required to be included in the Directors' Responsibility Statement to be included in the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956,

b. Changes, if any, in accounting policies and practices and reasons for the same,

c. Major accounting entries involving estimates based on the exercise of judgment by management,

d. Significant adjustments made in the financial statements arising out of audit findings,

e. Compliance with listing and other legal requirements relating to financial statements,

f Disclosure of any related party transactions,

g. Qualifications in the draft audit report.


There has not been a time gap in excess of four months between any two meetings of the Board of Directors. The details of the attendance of each Director

at the Board Meetings held during the year and Directorship, Membership/Chairmanship in Board Committees of other Companies are as under:

Name of

Director 31.3.2009 Meetings of last AGM held Directorship Chairmanship held

the Company on 18th July, 2008 held as at in Committees of

attended in 31.3.09* other Companies

2008-09# as at 31.3.09**

Member Chairman

Shri B.G. Bangur Executive Chairman 4 Yes 4 - -

Shri H.M. Bangur Managing Director 4 Yes 1 - -

Shri R.L. Gaggar Independent and Non-executive 3 No 13 6 -

Shri Shreekant Somany Independent and Non-executive 3 No 5 - -

Shri O.P. Setia Independent and Non-executive 4 Yes - - -

Dr. Abid Hussain Independent and Non-executive 3 No 9 7 -

Dr. Y.K. Alagh Independent and Non-executive 3 Yes 1 2 1

Shri A. Ghosh Independent and Non-executive 4 Yes 14 9 5

Shri M.K. Singhi Executive Director 4 Yes 1 - -

Category as at No. of Board Whether attended No. of other No of Membership/



a) Industry trend

b) Remuneration package in other comparable Corporates

c) Job contents and key performance areas

d) Company's performance

The remuneration structure of the Whole time Directors comprises of

salary, contribution to Provident & Superannuation funds, commission

/bonus, perquisites & allowances and gratuity in accordance with

Company's rules. Necessary approvals from shareholders are sought in the

general meetings for confirming the remuneration package.

b. For Non-Executive and Independent Directors

The Non-Executives Directors are paid sitting fees of Rs. 10,000

for each meeting of the Board / Committee of the Board attended by

them. Besides the sitting fees, they are also paid commission. The

shareholders had, at the Annual General Meeting of the Company

held on 18th July, 2008, approved payment of Commission to Non-

Executive Directors not exceeding one percent of net profit of the

Company computed in the manner provided under section 198(1) of

the Companies Act, 1956. The commission is distributed equally

amongst those Non-Executive Directors who are on the Board at the

time of Board Meeting where payment of commission is determined.

The details of remuneration package, fees paid etc. to Directors for

the year ended 31st March, 2009, for information of Members, are

given hereunder:

a) Paid to Non-executive Directors: Amount in Rs

S No Name of Director Sitting fees Commission Total

1 Shri R.L. Gaggar 70,000 8,50,000 9,20,000

2 Shri Shreekant Somany 30,000 8,50,000 8,80,000

3 Shri O.P. Setia 90,000 8,50,000 9,40,000

4. Dr. Abid Hussain 70,000 8,50,000 9,20,000

5. Dr. Y.K. Alagh 60,000 8,50,000 9,10,000

6. Shri A. Ghosh 40,000 8,50,000 8,90,000

TOTAL 3,60,000 51,00,000 54,60,000

b) Paid to Executive Directors / Whole Time Directors: Amount in Rs

S Particulars Shri B. G. Bangur,

No

(i) Remuneration

Basic salary 1,23,42,000 1,23,42,000 75,00,000

Contribution to Provident and Superannuation fund 33,32,340 33,32,340 20,25,000

Benefits – allowances/perks 87,85,522 88,42,434 28,04,792

Bonus - - 75,00,000

Commission 4,50,00,000 4,00,00,000 -

Stock options - - -

Pension - - -

TOTAL 6,94,59,862 6,45,16,774 1,98,29,792

(ii) Details of Fixed Component and

performance linked incentives

along with the performance criteria

(a) Fixed Component:

• Effective date of commencement

of remuneration package 13-Aug-2007 01-Aug-2007 01-April-2008

Shri H.M. Bangur, Shri M.K. Singhi,

Executive Chairman Managing Director Executive Director


5. Reviewing, with the management, the quarterly financial

statements before submission to the Board for approval.

6. Reviewing with the statutory and internal auditors the

adequacy of internal controls and steps to be taken for

strengthening the areas of weaknesses in internal controls.

7. Reviewing reporting structure, coverage and frequency of

internal audit.

8. Discussion with internal auditors any significant findings

and follow up there on.

9. Reviewing the findings of any internal investigations by the

internal auditors into matters where there is suspected

fraud or irregularity or a failure of internal control systems

of a material nature and reporting the matter to the board.

10. Discussion with statutory auditors before the audit

commences, about the nature and scope of audit as well as

post-audit discussion to ascertain any area of concern.

11. To look into the reasons for substantial defaults in the

payment to the depositors, debenture holders,

shareholders (in case of non payment of declared

dividends) and creditors.

12. To review the following information:

a. Management discussion and analysis of financial

condition and results of operations;

b. Statement of significant related party transactions (as

defined by the audit committee), submitted by

management;

c. Management letters/letters of internal control

weaknesses issued by the statutory auditors.

13. Carrying out any other function as is mentioned in

the terms of reference of the Audit Committee.

The composition of the Audit Committee consists of following

Directors as below mentioned. All the members of the Committee are

Non-Executive and Independent Directors.

Constitution of Audit Committee

Dr. Abid Independent and

Hussain Non –Executive He has good accounting and

Director financial management knowledge.

Dr. Y.K. Independent and Member is a noted Economist.

Alagh Non –Executive He has good accounting and

Director financial management knowledge.

Member is a retired IAS officer.

Name of the

Member Member

Shri O.P. Setia

Setia and Non – Commerce and Ex-Managing

Chairman Executive Director Director of State Bank of India.

He possesses the requisite

accounting and financial

management expertise.

Shri R.L. Independent and Member is a renowned solicitor

Gaggar Non –Executive and advocate of Kolkata. He

Director possesses good accounting and

financial management knowledge.

Category Qualification of the

Independent The Chairman is Masters in

The committee met four times during the year 2008-09 including for

approval of accounts for the year ended 31st March, 2008, before

placing the same before the board. The attendance of the members of

the Committee is as under:

For the meetings, internal auditors of the Company are invited for

discussions and review. Shri M K Singhi, Executive Director and Shri

Ashok Bhandari, Chief Finance Officer are the permanent invitees to the

meetings for responding to the observations of the Committee while

Shri S. S. Khandelwal, Company Secretary acts as Secretary to the

Committee.

The purpose of this Committee of the Board of Directors is to

discharge the Board’s responsibilities relating to nomination &

compensation of the Company’s directors. The composition of the

Committee consists of all independent and non executive directors

which is as under:

B) Remuneration cum Nomination Committee

No meeting of the Committee was held during the year 2008-09in absence of any matter relating to Committee.

Remuneration Policy: The remuneration policy is directedtowards rewarding performance based on review ofachievements on a periodical basis.

a. For Whole time Directors / Working Directors

The appointment of Whole time Directors is made by theBoard of Directors in their meeting and remuneration isagreed upon. The remuneration is decided on the basis offollowing broad criteria:-

Name of the Member Category

Shri R.L. Gaggar – Chairman Independent and Non – Executive Director

Shri O.P. Setia Independent and Non – Executive Director

Shri Shreekant Somany Independent and Non – Executive Director

Dr. Y.K. Alagh Independent and Non – Executive Director

No. of meetings

Name of the Member Held Attended

Shri O.P. Setia 4 4

Shri R.L. Gaggar 3 3

Dr. Abid Hussain 3 3

Dr. Y.K. Alagh 3 3



S Particulars Shri B. G. Bangur,

No

• Salary – Basic Rs. 9,35,000 Rs. 9,35,000 Rs. 6,25,000

#Annual increment @10%, first per month# per month# per month@

increment became effective from 01.04.08 (Effective for (Effective for

@ [Annual increase in the salary as the year 2008-09 year 2008-09

Board may decide from time to time, Rs. 10,28,500 Rs. 10,28,500

subject however, to a ceiling of per month) per month)

Rs. 12,00,000/- (Rupees Twelve lacs) per

month. First increase to be effective

from 1.4.2009].

• Contribution to Provident Fund As per rules As per rules As per rules

& Superannuation Fund

• Perks and other allowances As per terms of As per terms of As per terms of

appointment appointment appointment

(b) Performance Linked Incentive:

• Commission/Bonus Commission as may Commission as may Bonus as may be

(Based on Net Profit for the year be decided by Board, be decided by Board, decided by Board,

as computed u/s 349 of the limited to 5% of the limited to 5% of the limited to 5% of

Companies Act, 1956 within the Net Profit by way of Net Profit by way of the Net Profit by

individual/ overall ceiling for Salary, Perks and Salary, Perks and way of Salary, Perks

managerial remuneration from Commission taken Commission taken and bonus taken

time to time) together together together

(c) Minimum Remuneration in case Within the ceiling of Within the ceiling of Within the ceiling of

of inadequacy of profits in any Schedule XIII as Schedule XIII as Schedule XIII as

year as calculated under section amended from amended from amended from

198/ 349 of the Act time to time time to time time to time

(iii) Service Contracts, notice period,

severance fees

(a) Service Contract Appointment is for five Appointment is for five Appointment is for three

years period i.e. till years period i.e. till years period i.e. till

12th August, 2012. 31st July, 2012. 31st March, 2011.

(b) Notice period As per terms of appintment

(c) Severance fees

(iv) Stock Option details, if any, and No Stock option No Stock option No Stock option

whether the same has been issued issued, hence not issued, hence not issued, hence not

at discount as well as the period over which applicable applicable applicable

accrued and over which exercisable

Shri H.M. Bangur, Shri M.K. Singhi,

Executive Chairman Managing Director Executive Director

Except Gratuity and earned leave at the end of tenure,

no other severance fee is payable.

C) Shareholders’ and Investors’ Grievances Committee

The Board of Directors has constituted a Shareholders’ and

Investors’ Grievances Committee to deal with the following matters:

I. Review, on a periodic basis, status of cases relating to

transfer, transmission of shares, issue of duplicate shares etc.

II. Monitors expeditious redressal of investors' grievances,

III. Review of instances of non-receipt of Annual Report and

declared dividend, and

IV. All other matters related to shareholders.

The composition of the Shareholders’ and Investors’ Grievances

Committee consists of all independent and non-executive directors which

is as under:

The Company had appointed M/s. Karvy Computershare Pvt. Ltd.,

Hyderabad as the Share Transfer Agent to carry out the share transfer

and other related work. Shri S. S. Khandelwal, Company Secretary of the

Company is the Compliance Officer in terms of clause 47 of the Listing

Agreement.

The Share Transfer Agent/ Company has timely resolved / attended all

the complaints (total 18 complaints received during the year 2008-09)

and no complaint or grievance remains unattended / unresolved at the

year end.

The Committee during the year met once on 28th January, 2009 and

reviewed the status of investors’ complaints received and resolved

during the calendar year 2008. The Committee expressed satisfaction

on the Company’s / Share Transfer Agent’s efforts to resolve investors

grievances. Following is the composition of the complaints received and

resolved during the year 2008-09:

In addition, the Company has Share Transfer Committee of the Board of

Directors for approving transfers / transmission of physical shares and

other shareholder related matters, which met 17 times during the year

ended on 31st March, 2009. All the transfers of shares have been done

within stipulated period.

Further, the Company has paid listing fees to all the Stock Exchanges for

the year 2008-09.

The required information under clause 49 of the Listing Agreement

under this heading is given in the “Shareholders Information”

separately in the annexure to this Corporate Governance Report.

For the financial year ended 31 March, 2009, there has been no

ordinary or special resolution passed by the Company that required

approval of members by way of postal ballot under the provisions of

Section 192A of the Companies Act, 1956.

Related Party Transactions: None of the transactions with any of

the related party was in conflict with the interest of the Company

at large. The details of related party transactions are given in the

Notes on Accounts.

Non-compliance / strictures / penalties imposed: No non-

compliance / strictures / penalties have been imposed on the

Company by the Stock Exchange(s) or the SEBI or any statutory

authority on any matters related to capital markets during the

last three years.

Accounting Treatment: In the preparation of financial

statements, the Company has followed the Accounting

Standards issued by ICAI. Where, in the preparation of financial

statements, a treatment different from that prescribed in an

Accounting Standard has been followed, the fact has been

disclosed in the financial statements, together with the

management’s explanation as to why it believes such alternative

treatment is more representative of the true and fair view of the

underlying business transaction. The significant accounting

policies which are consistently applied have been set out in the

Notes on Accounts.

General Body Meetings

Postal Ballot

Disclosures

n

n

n

Name of the

Member Category

Held Attended

Shri O.P. Setia

Chairman Non – Executive Director 1 1

Shri R.L. Gaggar Independent and

Non – Executive Director 1 1

Dr. Abid Hussain Independent and

Non – Executive Director 1 1

Dr. Y.K. Alagh Independent and

Non – Executive Director 1 -

No. of meetings

Independent and

S. Nature of Complaints No. of No. of

No Complaints Complaints

received resolved

I Dividend related issues 6 6

II Duplicate shares related issues 1 1

III Shares transfer / transmission 6 6

related issues

IV Others 5 5

Total 18 18





Registered Office:

Bangur Nagar, Post Box No. 33,

Beawar - 305 901, District Ajmer, Rajasthan

Phone: (91)1462-228101-06

Fax: (91)1462-228117/228119

Toll free no.: 1800 180 6003 /6004

Email: [email protected]

Website: www.shreecementltd.com

Corporate Office:

21, Strand Road, Kolkata - 700 001

Phone: (91)33-22390601-05

Fax: (91)33-22434226


Plants Location:

Unit I & II: Bangur Nagar, Beawar (Rajasthan)

Unit III, IV, V, VI & VII: Bangur City, Ras, Distt. Pali (Rajasthan)

Khushkhera Grinding Unit(s):

Plot No SP 3-II, A-1, RIICO Industrial Area,

Khushkhera (Bhiwadi), District Alwar, Rajasthan - 301707

Phone: (91) 1493-250521 / 22/ 23/ 24

Fax: (91) 1493-517227

Address for correspondence:

Shree Cement Limited,

Bangur Nagar, Post Box No. 33,

Beawar - 305 901, District - Ajmer, Rajasthan

Phone: (91)1462-228101-06

Fax: (91)1462-228117/228119

Toll free no.: 1800 180 6003 /6004


Shareholders’ Enquiries:

Shri S.S. Khandelwal, Company Secretary

Tele:(91) 1462-228101 to 06

Toll Free: 1800 180 6003-04

Fax: (91) 1462-228117/19

E-mail: [email protected]

Exclusive e-mail ID for shareholders

queries: [email protected]

Clarifications on financial statement:

Shri Ashok Bhandari, Chief Finance Officer

Phone: (91)33-22390601-05

Fax: (91)33-22434226

E-mail: [email protected]

Annual General Meeting

Date of AGM Time Venue

24.07.2009 11.30 AM Registered Office at

Bangur Nagar,

Post Box No. 33,

Beawar - 305 901,

Distt. Ajmer, Rajasthan

(a) The details of Annual General Meetings held in last three years

are as under:

Year ended Date of AGM Time Venue

31.3.2006 31.7.2006 4.00 PM Bangur Nagar,

Beawar

(Rajasthan)

31.3.2007 14.08.2007 1.30 PM - do-

31.3.2008 18.07.2008 11.30 AM - do-

(b) Special Resolution passed in previous three AGMs

Date of AGM Special Resolution Passed by Members

31.7.2006 1. Revision in remuneration of

Shri B.G. Bangur, Executive Chairman

2. Revision in remuneration of

Shri H.M. Bangur, Managing Director


Shri M.K. Singhi, Executive Director


Shri Prashant Bangur,

Sr. Executive of the Company

14.8.2007 1. Approval of Appointment of

Shri B. G. Bangur as Executive

Chairman and his terms of

appointment and remuneration

2. Approval of Appointment of

Shri H. M. Bangur as Managing

Director and his terms of appointment

and remuneration

18.7.2008 1. Approval of Appointment of

Shri M. K. Singhi as Executive

Director and his terms of appointment

and remuneration

Annexure to Corporate Governance Report

Shareholder's InformationRisk Management: Risk evaluation and management is an

ongoing process within the Organization. During the period

under review, a detailed exercise on Risk Management was

carried out covering the entire gamut of operation of the

Company and the Board was informed about the same.

Details of compliance with mandatory requirements and

adoption of non-mandatory requirements: The Company has

complied with all mandatory requirements of Clause 49 of the

Listing Agreement and non-mandatory requirements are

reviewed by the Board from time to time.

Chief Executive Officer (CEO) and Chief Finance Officer (CFO)

Certification, on financial statements is issued pursuant to the

provisions of Clause 49 of the Listing Agreement and is annexed to the

Corporate Governance report and forms part of the Annual Report.

The Code of conduct applicable to all Directors and employees of the

Company has been posted on the website of the Company. For the year

under review, all Directors and senior management personnel of the

Company have confirmed their adherence to the provisions of the said

Code.

As per the amended SEBI (Prevention of Insider Trading) Regulations

1992, the Company is required to have a Compliance Officer who is

responsible for setting forth policies, procedures, monitoring

adherence to the rules for the prevention of price sensitive information,

pre-clearance of trade, monitoring of trades and implementation of the

Code of Conduct for trading in Company’s securities under the overall

supervision of the Board. The Company has adopted a Code for

prevention of Insider Trading. The Board has appointed Shri S.S.

Khandelwal Company Secretary as Compliance Officer in respect of

compliance of the Code. All the Directors on the Board as well as senior

level employees at all locations of the Company are governed by this Code.

The Annual Report is sent to each Shareholder. Quarterly and half yearly

results are published in all editions of the Economic Times, Business

Standard, Rajasthan Patrika, Danik Bhaskar and Nafa Nuksan. The

results are also provided to Stock Exchange(s) where the Company's

shares are listed. Besides that, full version of annual report, quarterly

results, shareholding pattern statement are filed on Electronic Data

Information Filing and Retrieval (EDIFAR) website maintained by

National Informatics Centre (NIC) as per requirements of Clause 51 of

n

n

CEO/CFO Certification

Code of Conduct

Trading in the Company’s shares by Directors and Designated

Employees

Means of Communication

Listing Agreement. The official news releases are given directly to the

media.

The quarterly / half yearly and the annual results of the Company are

displayed on the Company’s website www.shreecementltd.com

immediately after announcement thereof. A feedback form is being

given at the end of this report. Members are requested to send their

response about this Annual Report in the feedback form. This would

encourage us to improve our Annual Reporting.

The required information under clause 49 of the Listing Agreement

under this heading is given in the “Shareholder's Information” given

separately in the annexure to this Corporate Governance Report.

General Shareholders Information



would be paid to those shareholders who hold shares in the Company

on 5th May 2009. Company’s Board has also recommended a final

dividend of Rs.5/- per share for financial year 2008-2009 which would

be paid to those shareholders who hold shares in the Company on

24.07.2009 In respect of shares held in electronic form, the dividend

will be paid on the basis of beneficial ownership as per details furnished

by the depositories for this purpose.

(c) No special resolution was put through postal ballot last year.

(d) No special resolutions are proposed to be put through postal ballot this year.

(For the Financial Year 1st April, 2009 to 31st March, 2010)

Financial Calendar

Un-audited / Limited Review Results:

First Quarter ended

30.6.2009 By end of July, 2009

Second Quarter/Half year

ended 30.9.2009 By end of October, 2009

Third quarter/nine months

ended 31.12.2009 By end of January, 2010

Last Quarter/Yearly

Results-ended 31.3.2010 By end of April, 2010

Audited Results:

Year ended 31.3.2010 By end of May, 2010

Corporate Identification Number (CIN): L26943RJ1979PLC001935

Company’s securities are also available for trading in Futures and

Options (F&O) segment of National Stock Exchange of India Limited.

Listing on Stock Exchanges:

Name of Stock Exchange Stock Code

Bombay Stock Exchange Limited 500387

National Stock Exchange of India Limited SHREECEM EQ

Name of the Depositories

(for demat only) Scrip Code

National Securities Depository Ltd. INE070A01015

Central Depository Services (India) Ltd. INE070A01015

Market Price data

Month BSE NSE

High Low Volume (No. High Low Volume (No.

(Rs.) (Rs.) of Shares) (Rs.) (Rs.) of Shares)

April 2008 1,148.00 981.00 6,116 1,165.00 935.50 44,309

May 2008 1,040.00 781.20 23,783 1,049.50 770.40 1,08,361

June 2008 814.00 577.25 1,40,700 800.00 581.15 2,90,911

July 2008 625.00 491.00 39,109 625.00 490.00 4,82,412

August 2008 664.90 557.05 5,07,857 699.00 551.00 6,28,373

September 2008 610.00 472.05 1,25,846 620.00 468.00 1,04,782

October 2008 535.00 330.00 33,482 590.00 338.00 2,11,899

November 2008 467.70 354.00 19,751 461.95 350.25 53,405

December 2008 509.00 330.00 1,34,369 515.00 320.00 2,32,742

January 2009 539.00 452.15 2,54,876 544.80 450.05 3,45,063

February 2009 588.90 460.70 19,381 608.00 485.50 1,13,710

March 2009 719.70 555.00 4,81,572 716.00 534.00 4,96,248

TOTAL 17,86,842 31,12,215

Date of Book Closure

20.07.2009 to 24.07.2009 (both days inclusive)

Dividend payment date

Company’s Board, vide its meeting dated 28th April, 2009 has declared

interim dividend @ Rs. 5/- per share for financial year 2008-2009 which


The performance in comparison to broad based indices:

Indices BSE (Sensex) SCL Quote at BSE NSE

01.4.2008 (open) 15771.72 1148.00 4735.65 1060.00

31.3.2009 (close) 9708.50 709.15 3020.95 710.50

Increase/ Decrease -38.44% -38.23% -36.21% -32.97%

(Nifty) SCL Quote at NSE

Apr-

08

May-

08

Jun-0

8

Ju

l-08

Au

g-08

Sep

-08

Oct

-08

Nov

-08

Dec

-08

Jan-0

9

Feb

-09

Mar

-09

8800

11350

13900

16450

19000

21550

24100

26650

Sensex Shree's Stock Price

Movement of Shree's stock vis-a-vis Sensex

(Average of monthly high-low)

BSE

Sen

sex

350

500

650

800

950

1100Sh

ree's Sto

ck Price

on B

SE

2800

3780

4760

5740

6720

7700

9

l08

Apr-

08

May-0

8

Jun-0

8

Ju

-

Aug-

08

Sep

-08

Oct-08

Nov-

08

Dec

-08

Jan-0

Feb

-09

Mar-

09

400

540

680

820

960

1100

Nifty

Lev

el

Shree's Sto

ck Price o

n N

SE

Movement of Shree's stock vis-a-vis Nifty

(Average of monthly high-low)

Nifty Shree's Stock Price

Registrar and Share Transfer Agent

M/s. Karvy Computershare Private Limited,

Unit: SHREE CEMENT LIMITED

17-24, Vithalrao Nagar, Madhapur, Hyderabad – 500 081

Contact person: Mr. K. S. Reddy, Asstt. General Manager

Phone No.: (91) 40 -23420816-824, -23440627 (Direct Line)

Fax No. : (91) 40 -23420814

E-mail: [email protected], [email protected]

Share Transfer System

Transfer of shares in dematerialized form is done through the Depository

Participant without any involvement of the Company. As regards

transfer of share in physical form, the transfer document can be lodged

with Karvy Computershare Pvt. Ltd., Registrar and Share Transfer Agent

or with the Company.

The physical shares along with transfer instruments, as and when

received, are duly processed and shares in respect of valid transfer

instruments are transferred in the name of transferees complying with

the rules in force. The shares are transferred after obtaining approval

from Share Transfer Committee, which meets at an interval of every 15-

20 days. Duly transferred share certificates are returned within a period

of 15-20 days from the date of receipt, subject to the documents being

valid and complete in all respects.





Place: Kolkata Chief Finance Officer Managing Director

Ashok Bhandari H.M. Bangur

The Board of Directors,

Pursuant to Clause 49 of the Listing Agreement, this is to certify that:

1. We have reviewed financial statements and the cash flow statement for the year ended 31st March, 2009 and that to the best of our

knowledge and belief :

i. these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be

misleading;

ii. these statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting

standards, applicable laws and regulations.

2. There are, to the best of our knowledge and belief, no transactions entered into by the company during the year which are

fraudulent, illegal or violative of the company’s code of conduct.

3. We accept responsibility for establishing and maintaining internal controls for financial reporting. We have evaluated the effectiveness of

internal control systems of the Company pertaining to financial reporting and have disclosed to the auditors and the Audit Committee,

deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps taken or proposed to be taken

for rectifying these deficiencies.

4. We have indicated to the auditors and the Audit committee:

i. significant changes in internal control over financial reporting during the year;

ii. significant changes in accounting policies made during the year and that the same have been disclosed in the notes to the financial

statements; and

iii. instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee

having a significant role in the company’s internal control system over financial reporting.

SHREE CEMENT LIMITED

CEO /CFO Certificate(Pursuant to Clause 49 of the Listing Agreement)

Dematerialization of Shares & Liquidity

The trading in the Company's Equity Shares is permitted only in Demat form w.e.f. 29th November, 1999. The Company has entered into an agreement

with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for maintaining and facilitating transactions

in the Company’s shares in electronic mode.

In view of the advantage offered by the Depository System, Members are requested to avail the facility of dematerialization. As on 31st March, 2009,

25.99% of the Company's share capital had been dematerialized.

Shareholders holding shares in demat form are requested to give all instructions regarding the change of address, nomination, power of attorney and

bank mandate directly to their Depository Participants.

The shares are actively traded at BSE and NSE and have adequate liquidity.

There were no outstanding GDRs / ADRs / Warrants or any other Convertible Instruments as on 31st March, 2009.

As provided under Clause 49 of the Listing Agreement with the Stock Exchanges, the Board Members and the senior management executives/

personnel have confirmed compliance with the Code of Conduct for the year ended 31st March, 2009.

Declaration on Code of Conduct

for SHREE CEMENT LIMITED

Place: Kolkata


Managing Director

H.M. Bangur

Range Total no. of

Shareholders Shares held

From - To

Up to 50 9107 61.13% 211523 0.61%

51–100 2839 19.06% 265395 0.76%

101–200 1203 8.07% 205412 0.59%

201–500 1032 6.93% 387109 1.11%

501–1000 376 2.52% 299963 0.86%

1001–5000 221 1.48% 451571 1.30%

5001–10000 24 0.16% 163216 0.47%

10001 and above 96 0.64% 32853036 94.30%

TOTAL 14898 100.00% 34837225 100.00%

% Total no. of %

Distribution of Shareholding (As on 31.3.2009) Shareholding Pattern (As on 31.3.2009)

Description No. of Shares held %

Promoters 22786812 65.41%

Mutual Fund & UTI 3285446 9.43%

Financial Institutions, Banks,

Insurance Companies etc. 223322 0.64%

FIIs 1156431 3.32%

NRIs/OCBs/Non Domestic

Companies 3825288 10.98%

Private Corporate Bodies 1616475 4.64%

Indian Public 1934879 5.55%

Others- Directors/ relatives

(non- promoters) 8572 0.02%

Total 34837225 100.00%



PHILOSOPHY

FIDUCIARY DUTIES

DUTY TO EXERCISE POWER FOR PROPER PURPOSES

CONFLICT OF INTEREST

SECRET PROFITS

Shree Cement Ltd is a professionally managed company. The company

always believes in complete transparency and discharge of the fiduciary

responsibilities which has been assumed by Directors as well as by the

Senior Management Executives and/or Staff. Therefore, in order to

ensure the continuity thereof though, not written but otherwise

ingrained, the Board of Directors has approved of the following Code of

Conduct for all Directors as well as for the Senior Management

Executive and/or personnel and other employees.

All the Directors as well as Senior Management Executive and/or

Personnel owe to the Company as well as to the shareholders:

i) "fiduciary duty”

ii) “duty of skill and care”

iii) “Social responsibility”

With the above objects in mind the following code of conduct has been

evolved and it is expected that all Directors as well as Senior

Management Executives and/or personnel will adhere to it.

All Directors as well as Senior Management Executives and/or personnel

while dealing on behalf of the company will exercise the power

conferred upon him / them and fulfil his / their duties honestly and in

the best interest of the company.

The Board from time to time shall determine the powers to be exercised

by the Directors as well as the Senior Management Executives and/or

Personnel and all such powers shall be exercised reasonably.

None of the Directors and/or Senior Management Executives and/or

personnel will put himself in a position where there is potential conflict

of interest between personal interest and his duty to the company. None

of the Directors and/or Senior Management Executive and/or personnel

will exploit an opportunity arising while associated with the Company

for his personal gain either directly or indirectly.

The Director as well as Senior Management Executives and/or personnel

while discharging their duties in a fiduciary capacity is precluded from

making any personal profit from an opportunity which may arise being

a Director and / or Senior Management Executive of the Company and

should always ensure that he is acting for and on behalf and for the

good of the Company.

DUTY OF SKILL AND CARE

ATTENTION TO BUSINESS

SECRECY AND CONFIDENTIALITY

INTERNAL TRADING

RISK AND PROPER PROCESS

Since all the Directors as well as Senior Management Executives and / or

personnel are acting in a fiduciary capacity and for the benefit of the

company, being advocates of the business of the Company, none of

them will do anything which is in conflict with the interest of the

company.

All Directors as well as Senior Management Executives and/ or

personnel will give proper attention to the business of the company.

None of the Directors as well as Senior Management Executives and/or

personnel while associated or working for the company will be entitled

to disclose either directly or indirectly or make use of the confidential

information which may come in their possession while acting on behalf

of the company and shall not divulge the financial status and position

of the company to any person or persons.

None of the Directors as well as Senior Management Executives and/or

personnel will directly or indirectly in the name of his family members

and/or associates will indulge in any internal trading of the company’s

shares and stocks.

The Senior Management personnel and/or employees are expected to

keep the Directors fully informed about the effect of the policies

adopted by the company from time to time and also regarding the risk

connected with such policies.

Senior Management personnel and/or staff who have been entrusted

with specific duties for ensuring compliance of statutory requirements

including the rules and regulations shall forthwith comply with the same

and keep the Board of Directors fully informed about such compliance

or non-compliance.

Senior Management personnel will from time to time provide or cause

to be provided a true and faithful account of the company’s working

and effectiveness of the procedures adopted by the company from time

to time.

All Directors as well as Senior Management Executives and/or personnel

are aware that while working with the company they have a social

responsibility as well and therefore from time to time will devote such

time for the upliftment of the downtrodden, poor and needy persons in

the locality.

Code of ConductOn Corporate Governance

To the Members of Shree Cement Limited

1. We have audited the attached Balance Sheet of Shree Cement Limited as at 31st March, 2009 and also the Profit and Loss Account and the Cash Flow

Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our

responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform

the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on

a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles

used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit

provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A)

of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our

audit.

(ii) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those

books.

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting

Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

(v) On the basis of information & explanations given to us and representations received from the Directors of the Company, we report that none

of the Directors of the Company, is prima facie, disqualified from being appointed as Director of the Company in terms of Clause (g) of sub-

section (1) of section 274 of the Companies Act, 1956.

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information

required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles

generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2009;

(b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

for B. R. MAHESWARI & CO.


Kolkata

28th April, 2009

Partner


(SUDHIR MAHESHWARI)


Auditors'Report

1) (a) The Company has maintained proper records showing full

particulars including quantitative details and situation of

fixed assets.

(b) The fixed assets were physically verified by the

management. The discrepancies noticed were not

significant and have been properly dealt with in the

accounts.

(c) During the year, the Company has not disposed off any

major part of fixed assets that would affect the Going

Concern status of the Company.

2) (a) The inventory, except material in transit and material lying

with contractors, has been physically verified during the

year by the management. In our opinion, the frequency of

verification is reasonable.

(b) The procedures of physical verification of inventory

followed by the management are reasonable and adequate

in relation to the size of the company and the nature of its

business.

(c) The company is maintaining proper records of inventory.

The discrepancies noticed on verification between the

physical stocks and the book records were not material and

such discrepancies have been properly dealt with in the

books of accounts.

3) (a) The Company has neither granted nor taken any

loans, secured or unsecured, from Companies, firms and

other parties, mentioned in the register maintained under

section 301 of the Companies Act, 1956.

(b) Since, the company has neither granted nor taken any loans

as referred to in para 3(a) above, provisions of clause (iii)(b)

to (iii)(g) of the Order are not applicable to the Company.

4) In our opinion and according to the information and explanations

given to us, there are adequate internal control systems

commensurate with the size of the Company and nature of its

business with regard to purchases of inventory and fixed assets

and with regard to the sale of goods. During the course of our

audit, we have not observed any continuing failure to correct

major weaknesses in the internal control system.

5) (a) According to the information and explanations given to us,

we are of the opinion that the particulars of contracts or

arrangement referred to in section 301 of the Companies

Act, 1956 have been entered in the register required to be

maintained under that section.

(b) In our opinion and according to the information and

explanations given to us, the transactions made in

pursuance of contracts or arrangements entered in the

register maintained under section 301 of the Companies

Act, 1956 and exceeding the value of rupees five lacs in

respect of any party during the year have been made at

prices which are prima facie reasonable having regard to

prevailing market prices at the relevant time.

6) The Company has not accepted any deposit from the public during

the year.

7) In our opinion, the Company has an internal audit system

commensurate with the size and nature of its business.

8) We have broadly reviewed the accounts and records maintained by

the Company pursuant to the rules made by the Central

Government for maintenance of cost records under section

209(1)(d) of the Companies Act, 1956, and are of the opinion that

prima facie, the prescribed accounts and records have been made

and maintained. We have, however, not made a detailed

examination of record with a view to determine whether they are

accurate or complete.

9) (a) According to the information and explanations given to us,

the company has generally been regular in depositing with

appropriate authorities undisputed statutory dues including

provident fund, investor education protection fund, income

tax, sales tax, wealth tax, service tax, custom duty, excise

duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us,

no undisputed amounts payable in respect of aforesaid dues

were outstanding as at 31.03.2009 for a period of more

than six months from the date they become payable.

(c) According to the information and explanations given to us,

the details of disputed amount of Income Tax, Sales Tax,

Excise Duty, Entry Tax, Service Tax and Cess not deposited by

the Company are as follows:

Annexure Referred to in Auditors' Report of even date

10) The Company does not have any accumulated losses at the end of

the financial year and the company has not incurred cash losses in

the financial year covered by our audit and in the immediately

preceding financial year.

11) Based on the information and explanations given to us, we are of

the opinion that the Company has not defaulted in repayment of

dues to the financial institutions, banks or debenture holders.

12) According to the information and explanations given to us, the

Company has not granted any loans and advances on the basis of

security by way of pledge of shares, debentures and other

securities.

13) In our opinion and according to the information and explanations

given to us, the Company is not a chit fund company or nidhi /

mutual benefit fund / society. Therefore, the provision of clause

4(xiii) of the order is not applicable to the Company.


Company is not dealing or trading in shares, securities, debentures

and other investments.

15) As informed to us, the company has not given any guarantees for

loans taken by others from bank or financial institutions.

16) In our opinion, the term loans have been applied for the purpose

for which they were raised.

17) According to information and explanations given to us and on an

overall examination of the balance sheet of the company, we are of

the opinion that the funds raised on short – term basis have not

been used for long-term investment.

Name of Statute Name of Amount

the dues (Rs. in Lac) amt. related is pending

(assessment years)

Rajasthan Tax on Entry of Goods into

Local Area Act, 1999

UP Tax on Entry of Goods 50.75 2003-04 JETC Appeals,

Act, 2000 Entry Tax Ghaziabad

1341.82 2004-05 to 2008-09 High Court

Central Excise Act Cenvat credit 90.00 1994-95 to 2005-06 Commissioner (Appeals)

Cenvat Credit 17.00 1996-97 to 1998-99 Tribunal

Cenvat Credit 1.00 2006-07 to 2007-08 Tribunal

Finance Act, 1994 Service Tax 4.00 2006-07 Commissioner (Appeals)

Service Tax 152.00 2004-05 to 2005-06 Tribunal

The Rajasthan Finance Act, 2008 Environment & 531.04 2007-08 to 2008-09 High Court

Health Cess

Period to which the Forum where dispute

Entry Tax 3095.99 2005-06 to 2008-09 High Court


Company has not made any preferential allotment of shares to

parties and companies covered in the register maintained under

section 301 of the Act and therefore, the provisions of clause 4

(xviii) of the Order are not applicable to the Company.

19) The Company has not issued any secured debentures during the

year and accordingly, the provisions of clause 4 (xix) of the Order

are not applicable to the Company.

20) During the year under audit, the Company has not raised money

by public issue and accordingly, the provisions of clause 4 (xx) of

the Order are not applicable to the Company.

21) According to the information and explanations given to us, no

material fraud on or by the Company has been noticed or reported

during the year.

for B. R. MAHESWARI & CO,


Place: Kolkata


Partner


(SUDHIR MAHESHWARI)




Sudhir Maheshwari B. G. Bangur H. M. Bangur Shreekant Somany Dr. Abid Hussain O.P. Setia

Partner Executive Chairman Managing Director Director Director Director


PLACE: KOLKATA Dr. Y.K. Alagh A. Ghosh M.K. Singhi Ashok Bhandari S.S. KhandelwalDATE: 28th April, 2009 Director Director Executive Director Chief Finance Officer Company Secretary

As per our report of even dateFor B. R. Maheswari & Co.Chartered Accountants

The schedules referred to above and notes on accounts form an integral part of the Balance Sheet.

As at As at

31.03.2009 31.03.2008

Schedule (Rs.in Lac) (Rs.in Lac)

SOURCES OF FUNDS

Shareholders' Funds

Share Capital 1 3,483.72 3,483.72

Reserves & Surplus 2 117,517.97 63,796.81

121,001.69 67,280.53

Loan Funds

Secured Loans 3 122,050.73 116,707.32

Unsecured Loans 4 27,564.60 16,362.50

149,615.33 133,069.82

Total 270,617.02 200,350.35

APPLICATIONS OF FUNDS

Fixed Assets 5

Gross Block 225,591.46 218,729.91

Less: Depreciation 162,905.89 142,734.05

Net Block 62,685.57 75,995.86

Capital Work-in-Progress 47,888.98 1,795.99

110,574.55 77,791.85

Investments 6 84,483.47 59,100.00

Deferred Tax Assets (Net) 7 1,038.98 1,846.10

Current Assets, Loans & Advances

Inventories 8 15,445.84 17,657.47

Sundry Debtors 9 5,831.73 4,938.68

Cash & Bank Balances 10 47,226.05 46,743.43

Other Current Assets 11 755.20 832.75

Loans & Advances 12 73,678.81 39,430.26

142,937.63 109,602.59

Less: Current Liabilities & Provisions 13

Liabilities 29,562.88 23,617.63

Provisions 38,854.73 24,372.56

68,417.61 47,990.19

Net Current Assets 74,520.02 61,612.40

Total 270,617.02 200,350.35

Significant Accounting Policies & Notes on Accounts 22

Balance Sheet as at31st March 2009




PLACE: KOLKATA Dr. Y.K. Alagh A. Ghosh M.K. Singhi Ashok Bhandari S.S. Khandelwal

DATE: 28th April, 2009 Director Director Executive Director Chief Finance Officer Company Secretary

The schedules referred to above and notes on accounts form an integral part of the Profit & Loss Account.As per our report of even dateFor B. R. Maheswari & Co.Chartered Accountants


Profit & Loss Account for the year Ended 31st March,2009

For the Year ended For the Year ended

Schedule 31.03.2009 (Rs. in Lac) 31.03.2008 (Rs. in Lac)

INCOME

Sales 14 309,716.69 244,032.08

Less: Excise Duty 38,214.67 33,120.28

Net Sales 271,502.02 210,911.80

Other Income 15 8,289.61 7,683.91

279,791.63 218,595.71

EXPENDITURE

Manufacturing Expenses 16 114,246.30 76,282.35

(Increase) / Decrease in Stock 17 962.74 903.18

Purchase of Finished Goods 652.47 618.56

Payment to and Provision for Employees 18 10,387.43 7,360.43

Administrative Expenses 19 4,249.02 3,529.38

Freight & Selling Expenses 20 45,927.70 35,976.93

Interest 21 7,443.18 5,329.64

183,868.84 130,000.47

PROFIT BEFORE DEPRECIATION, EXCEPTIONAL ITEMS & TAX 95,922.79 88,595.24

Depreciation & Amortisation` 20,538.70 47,875.86

Exceptional Items

Assets Constructed at Others' Premises W/off 3,093.05 3,888.46

PROFIT BEFORE TAX 72,291.04 36,830.92

Provision for Current Tax 13,475.00 10,662.07

Prior Period Tax Expense (Net) - 1,496.23

Provision for Fringe Benefit Tax [Includes excess 211.98 107.02

provision written back pertaining to earlier years Rs.Nil

(Previous Year Rs.55.96 Lac)]

Provision for Deferred Tax 807.12 (1,471.60)

PROFIT AFTER TAX 57,796.94 26,037.20

Balance Brought Forward from Previous Year 34,869.59 14,941.26

Debenture Redemption Reserve No Longer Required 202.43 151.76

PROFIT AVAILABLE FOR APPROPRIATION 92,868.96 41,130.22

Transferred to General Reserve 8,000.00 3,000.00

Interim Dividend on Equity Shares 1,741.86 -

Corporate Dividend Tax on Interim Dividend 296.03 -

Proposed Final Dividend on Equity Shares 1,741.86 2,786.98

Corporate Dividend Tax on Final Dividend 296.03 473.65

12,075.78 6,260.63

Balance Carried Over to Balance Sheet 80,793.18 34,869.59

92,868.96 41,130.22

Earning Per Equity Share of Rs. 10 each (In Rs.) - Cash 227.18 207.94

- Basic & Diluted 165.91 74.74

Significant Accounting Policies & Notes on Accounts 22

As at As at

31.03.2009 31.03.2008

(Rs.in Lac) (Rs.in Lac)

Authorised

6,00,00,000 Equity Shares of Rs.10/- each 6,000.00 6,000.00

(Previous Year 6,00,00,000)

15,00,000 Cumulative Preference Shares of Rs.100/- each 1,500.00 1,500.00

(Previous Year 15,00,000)

7,500.00 7,500.00

Issued

3,48,37,225 Equity Shares of Rs.10/- each 3,483.72 3,483.72


3,483.72 3,483.72

Subscribed and Paid-up

3,48,37,225 Equity Shares of Rs.10/- each fully paid-up 3,483.72 3,483.72


Note : Out of above Equity Shares, 2,40,021 Equity

Shares of Rs. 10/- each fully paid-up were issued for

consideration other than cash in pursuance of Scheme of

Amalgamation

3,483.72 3,483.72

Capital Reserve

As per last Balance Sheet 52.16 52.16

52.16 52.16

Capital Redemption Reserve

As per last Balance Sheet 1,500.00 1,500.00

1,500.00 1,500.00

Securities Premium Account


2,652.73 2,652.73

Debenture Redemption Reserve

As per last Balance Sheet 202.43 354.19

Less: Transfer to Profit & Loss Account 202.43 151.76

- 202.43

Revaluation Reserve

As per last Balance Sheet - 4,923.44

Less: Transfer to Fixed Assets - 4,923.44

- -

General Reserve


Add: Transfer from Profit & Loss Account 8,000.00 3,000.00

22,000.00 14,000.00

SCHEDULE 1 - SHARE CAPITAL

SCHEDULE 2 - RESERVES AND SURPLUS

Schedules Forming Part of theBalance Sheet

1) All Term loans [Except (a) Term Loans of Rs. Nil (Previous Year Rs. 12.41 Lac)

secured by way of hypothecation of specific assets purchased thereagainst and (b)

Loan of Rs. 24960.20 Lac (Previous Year Rs. 23715.67 Lac) from IDBI Bank secured

by way of charge on Current Assets subservient to Working Capital Lenders] from

Banks are secured by joint equitable mortgage on all the immovable assets and

by hypothecation of all the movable assets (save & except book debts) of the

Company both present and future subject to prior charge(s) created and/or to be

created in favour of the company’s bankers on inventories of stock-in-trade, stores &

spares, book debts and other current assets of the Company for working capital

facilities. The above charge(s) rank pari passu inter-se among these Banks.

2) 20-7.40% Non Convertible Debentures of Rs. 40,00,000/- each aggregating to Rs.

Nil (Previous Year Rs. 800 Lac) redeemed fully on 24th July, 2008 were secured by

joint equitable mortgage over all the immovable assets and by way of

hypothecation of all the movable assets (save & except book debts) of the Company

both present and future subject to prior charge(s) created and/or to be created in

favour of the Company’s bankers on inventories of stock-in-trade , stores & spares,

book debts and other current assets of the Company for Working Capital borrowings.

The charge ranked pari passu with the charges created / to be created in favour of

other first charge holders for their respective loans.The above Debentures were also

secured by a legal mortgage over immovable property of the Company situated at

Jamnagar (Gujarat).

3) Working Capital borrowings from banks are secured by hypothecation of inventories

of stock-in-trade, stores & spares, book debts and other current assets of the

Company on first charge basis and on whole of movable fixed assets of the company

on second charge basis. These borrowings are also secured by joint equitable

mortgage on all the immovable assets of the Company on second charge basis.

As at As at

31.03.2009 31.03.2008


Special Reserve


Less: Transfer to Fixed Assets - 950.56

10,519.90 10,519.90

Profit & Loss Account 80,793.18 34,869.59

117,517.97 63,796.81

Term Loans from Banks 105,716.94 112,573.18

Secured Redeemable Non Convertible Debentures

20 - 7.40% NCDs of Rs. 40,00,000/- each aggregating to Rs. Nil

(Previous Year Rs. 800 Lac) [Redeemed Rs. 800 Lac

(Previous Year Rs.600 Lac)] - 800.00

Working Capital Facilities from Banks 16,333.79 3,334.14

122,050.73 116,707.32

SCHEDULE 3 - SECURED LOANS




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Val

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SCHEDULE 5 - FIXED ASSETS (Rs. In Lac)

Particulars GROSS BLOCK DEPRECIATION/AMORTISATION NET BLOCK

As At Additions/ Deductions/ As At Up to Provisions/ Deductions/ Upto As At As At31.03.2008 Adjustments Adjustments 31.03.2009 31.03.2008 Adjustments Adjustments 31.03.2009 31.03.2009 31.03.2008

During the During the During the During theYear Year Year Year

Tangible Assets :

Free Hold Land 1053.97 959.36 - 2013.33 - - - - 2013.33 1053.97

Lease Hold Land 832.07 1.08 - 833.15 - - - - 833.15 832.07

Land & Site

Development 528.07 3.28 - 531.35 - - - - 531.35 528.07

Buildings 9843.44 369.86 10.37 10202.93 2887.22 617.96 3.23 3,501.95 6700.98 6956.22

Plant & Machinery 200475.33 5043.00 450.27 205068.06 136214.26 18746.01 300.05 154,660.22 50407.84 64261.07

Railway Siding 1227.45 - - 1227.45 1024.50 31.11 - 1,055.61 171.84 202.95

Furniture,Fixture &

Office Equipments 2871.79 466.63 15.88 3322.54 1855.74 407.38 9.45 2,253.67 1068.87 1016.05

Vehicles 1890.89 292.27 161.14 2022.02 752.33 421.43 101.57 1,072.20 949.82 1138.56

Sub Total 218723.01 7135.48 637.66 225220.83 142734.05 20223.89 (a) 414.30 162543.65 62677.18 75988.96

Intangible Assets:

"Clean Develo-

pment Mechan-

ism (Internally

Generated) " 6.90 8.39 6.90 8.39 (b) - - - - 8.39 6.90

Computer Software - 362.24 - 362.24 - 362.24 - 362.24 - -

Sub Total 6.90 370.63 6.90 370.63 - 362.24 - 362.24 8.39 6.90

Total (A) 218729.91 7506.11 644.56 225591.46 142734.05 20586.13 414.30 162905.89 62685.57 75995.86

Previous Year 165734.06 75875.81 22879.96 218729.91 110915.52 48756.20 16937.66 142734.05 75995.86 54818.54

Capital Work

In Progress (B) 47888.98 1795.99

Grand Total (A+B) 110574.55 77791.85

(a) Depreciation for the year includes Rs. 47.43 lac (Previous Year Rs. 880.34 lac) on assets during construction period .

(b) Expenses incurred on Clean Development Mechanism to be amortised against sale proceeds.

SCHEDULE 4 - UNSECURED LOANS

As at As at

31.03.2009 31.03.2008


Security Deposits 6,184.92 6,057.39

Deferred Sales Tax 6,379.68 5,305.11

From Banks 15,000.00 5,000.00

27,564.60 16,362.50

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.

(Rs.

In L

ac)

As at As at

31.03.2009 31.03.2008


Deferred Tax Assets

Arising on Account of :

- Long-term Capital Losses - 22.94

- Expenses allowed for tax purpose when paid 2,612.92 1,432.23

Less : Deferred Tax Liabilities

Arising on account of :

- Depreciation 972.11 (396.07)

- Others 601.83 5.14

1,038.98 1,846.10

(As taken, valued and certified by the Management)

Raw Materials` 701.64 719.94

Fuels 1,198.65 3,921.42

Stores, Spares, and Packing Materials 10,583.99 8,578.98

Materials-in-Transit 100.96 468.87

Goods-in-Process 1,232.61 2,222.76

Finished Goods 1,627.99 1,745.50

15,445.84 17,657.47

(Unsecured, Considered Good)

Over Six months 74.48 118.16

Others 5,757.25 4,820.52

5,831.73 4,938.68

Cash Balances on Hand 59.11 90.06

Fixed Deposits with Scheduled Banks 45,707.56

(Includes, Margin Money Pledged with Banks

Rs. 49.56 Lac )

Less: Overdrafts (3,652.48) 42,055.08 41,696.20

Balances with Scheduled Banks

- In Current Accounts 5,056.04 4,908.55

- In Unpaid Dividend Account 50.11 43.02

Balance with Non Scheduled Bank (Refer Note 9) 5.71 5.60

47,226.05 46,743.43

SCHEDULE 7 - DEFERRED TAX ASSETS

SCHEDULE 8 - INVENTORIES

SCHEDULE 9 - SUNDRY DEBTORS

SCHEDULE 10 - CASH AND BANK BALANCES





Schedules Forming Part of theProfit & Loss Account

For the Year

31.03.2009 31.03.2008


Cement and Clinker Sales 301,096.77 243,332.29

Add:Captive Consumption of Cement 556.73 699.79

301,653.50 244,032.08

Power Sales 8,063.19 -

Gross Sales 309,716.69 244,032.08

(A) Other Operating Income

CERs Sale Receipt (Net of Expenses) 1,783.76 1,602.33

Interest Received on Income Tax & Sales Tax Refund 101.44 275.97

Provision No Longer Required (Net) 652.99 140.46

Profit /(Loss) on Sale of Fixed Assets 16.99 11.63

Total (A) 2,555.18 2,030.39

(B) Investment and Miscellaneous Income

Profit on Sale of Investments (Other than Trade)- Long term 1,349.52 411.35

- Current (Net) 70.44 2.15

Interest on FDR [Tax deducted at source

Rs. 993.75 Lac (Previous Year Rs.1467.86 Lac)] 4,273.26 5,024.19

Dividend from Current Investments (Other than Trade) 1.33 155.84

Miscellaneous 39.88 59.99

Total (B) 5,734.43 5,653.52

Total (A+B) 8,289.61 7,683.91

Raw Materials Consumed 24,613.31 21,098.97

Freight on Inter unit Clinker transfer 8,065.61 3,491.39

Stores, Spares & Packing Materials Consumed 16,902.52 12,643.60

Power, Fuel & Water 60,581.11 36,723.12

Mines Reclamation Expenses 562.50 -

Repair & Maintenance:

Plant & Machinery 3,081.06 2,002.78

Buildings 353.91 230.50

Others 86.28 91.99

114,246.30 76,282.35

Closing Stock



2,860.60 3,968.26

ended For the Year ended

SCHEDULE 14 - SALES

SCHEDULE 15 - OTHER INCOME

SCHEDULE 16 - MANUFACTURING EXPENSES

SCHEDULE 17 - (INCREASE) / DECREASE IN STOCK

As at As at

31.03.2009 31.03.2008


Interest Accrued on Deposits 755.20 832.75

755.20 832.75

(Unsecured, Considered Good)

Advances Recoverable in Cash or in Kind or 22,484.64 7,194.09

for Value to be Received (Refer Note 10)

Balance with Customs, Excise and Port trust etc. on Current Accounts 4,171.51 4,851.18

Deposit with Government Departments & Others 6,550.51 3,321.61

Prepaid Expenses 61.90 96.57

Advance Tax 40,410.25 23,966.81

73,678.81 39,430.26

Liabilities

Sundry Creditors:

Micro, Medium and Small Enterprises (Refer Note 5) 33.32 -

Others 21,254.91 16,676.03

Customers Advances 4,734.69 3,813.84

Sales-tax Payable 1,758.60 1,223.50

Other Liabilities 242.22 261.72

Interest Accrued but Not Due on Loans 1,489.03 1,599.52

Investor Education and Protection Fund shall be credited by

the following amount:

- Unclaimed Dividend (There are no amounts due and

outstanding to said fund as on 31.03.2009) 50.11 43.02

29,562.88 23,617.63

Provisions

Income Tax 34,228.97 20,753.97

Fringe Benefit Tax 519.58 307.59

Wealth Tax 15.47 11.66

Staff Benefit Schemes 14.93 38.71

Proposed Dividend - Interim 1,741.86 2,786.98

- Final 1,741.86 -

Corporate Dividend Tax 592.06 473.65

38,854.73 24,372.56

68,417.61 47,990.19

SCHEDULE 11 - OTHER CURRENT ASSETS

SCHEDULE 12 - LOANS AND ADVANCES

SCHEDULE 13 - CURRENT LIABILITIES AND PROVISIONS



SCHEDULE 22 – SIGNIFICANT ACCOUNTING POLICIES AND

NOTES ON ACCOUNTS

(A) SIGNIFICANT ACCOUNTING POLICIES

01. Accounting Convention

The Financial statements of the Company are prepared under the

historical cost convention using the accrual method of accounting

under the Companies Act, 1956 unless stated otherwise

hereinafter. Accounting Policies not specifically referred to, are

consistent with Generally Accepted Accounting Principles.

02. Fixed Assets

Tangible Assets

a) Free hold and Lease hold land are disclosed at cost.

b) Fixed assets other than land are disclosed at cost less

accumulated depreciation and impairment loss, if any. Cost

comprises of purchase price and attributable cost of bringing

the asset to its working condition for its intended use (net of

credit availed, if any).

Intangible assets

Intangible assets are recognized only if its cost can be measured

reliably and it is possible that future economic benefits will flow to

the Company. Such assets are stated at cost (net of credit availed, if

any) less accumulated amortization. Cost includes any directly

attributable expenditure on making the assets ready for its

intended use.

Impairment of Assets

The carrying amount of assets are reviewed at each Balance Sheet

date, if there is any indication of impairment based on

internal/external factors. An impairment loss is recognized

wherever the carrying amount of an asset exceeds its recoverable

amount. A previously recognized impairment loss is further

provided or reversed depending on changes in circumstances.

03. Foreign Currency Transactions

Foreign currency transactions are recorded by applying the

exchange rates on the date of transaction.

At each Balance sheet date, monetary foreign currency items are

reported using the closing rates.

Exchange difference arising on the settlement of monetary items/

foreign exchange contracts are recognized as income or expense in

the period in which they arise.

04. Capital Work In Progress

Capital work in progress is carried at direct cost (including

advances) and pre-operative expenditure during construction

period is allocated to the fixed assets on the completion of project.

Expenditures on construction of assets for Company’s use at

premises owned by Government/Local Authorities/others are

charged to Profit & Loss Accounts in the year of expenditure.

05. Investments

Investments are classified into current and long-term investments.

Current Investments are carried at lower of cost or fair market

value. Long term investments are stated at cost. Provision for

diminution is made to recognize a decline, other than temporary,

in the value of long term investments by a charge to Profit and Loss

Account.

06. Inventories

Inventories are stated at cost or net realizable value whichever is

lower. The material costs are determined on weighted average

basis. The valuation of manufactured goods represents the

combined cost of material, labour and manufacturing overheads

and includes excise duty in case of finished goods only.

07. Revenue Recognition

Sales revenue is recognized on the transfer of significant risks and

rewards of the ownership of goods to the buyer.

Dividend income on investments is accounted for when the right

to receive the payment is established.

Certain insurance, railway and other claims where quantum of

accruals cannot be ascertained with reasonable certainty, are

accounted on acceptance basis.

Sale of Certified Emission Reductions (CERs) is recognized as

income on the delivery of the CERs to the buyer’s account as

evidenced by the receipt of confirmation of execution of delivery

instructions.

08. Government Grants/Subsidies

Government grants are recognized when there is a reasonable

assurance that the Company will comply with the conditions

attached thereto and the grants will be received.

Government grants in the form of promoters’ contribution are

credited to capital reserve.

Government grants related to revenue are recognized on a

systematic basis in the Profit and Loss Account over the period to

match them with the related costs.

09. Employee Benefits:

(a) Defined Contribution Plan

Superannuation and Provident Fund are considered as

defined contribution plan and the contributions are charged

to the Profit & Loss Account of the year in which the

contributions to the respective funds are due.


Schedules Forming Part of theBalance Sheet and Profit & Loss Acccout

For the Year ended For the Year ended

31.03.2009 31.03.2008


Opening Stock



3,968.26 4,780.94

(Increase) / Decrease 1,107.66 812.68

Add/(Less) : Excise Duty Variance on Closing/Opening Stock (144.92) 90.50

Net (Increase) / Decrease 962.74 903.18

Salaries,Wages,Bonus and Allowances 8,211.75 5,916.28

Contribution to Provident, Superannuation and Gratuity Funds 1,292.21 787.09

Employees Welfare Expenses 883.47 657.06

10,387.43 7,360.43

Rent 349.45 293.60

Rates & Taxes 486.86 719.10

Insurance 150.30 152.93

Travelling 778.16 677.29

Commission to Directors [Refer Note 15 (d)] 51.00 42.00

Directors' Sitting Fees and Expenses 10.02 14.54

Bank and Financial Charges 272.63 230.82

Foreign Exchange Rate Difference (Net) 21.51 62.89

Miscellaneous 2,142.53 1,489.12

Balances Written Off (Net) (13.44) (152.91)

4,249.02 3,529.38

Freight Charges 34,876.46 27,178.88

Publicity & Selling Exp. 5,995.78 4,473.05

Rebate & Discount 5,055.46 4,325.00

45,927.70 35,976.93

- On Fixed Loans 3,969.53 2,688.42

- On Debentures 1,282.12 596.06

- Others 2,191.53 2,045.16

7,443.18 5,329.64

SCHEDULE 18 - PAYMENT TO AND PROVISION FOR EMPLOYEES

SCHEDULE 19 - ADMINISTRATIVE EXPENSES

SCHEDULE 20 - FREIGHT & SELLING EXPENSES

SCHEDULE 21 - INTEREST



(b) Defined Benefit Plan

Gratuity is considered as defined benefit plan and is provided

for on the basis of an actuarial valuation, using the projected

unit credit method, as at the date of the Balance Sheet.

Contribution to provident Fund set up by the Company in

respect of a few employees is also defined benefit plan and

contribution is charged to Profit & Loss Accounts of the year in

which the contribution is due.

Encashable leave in case of employees covered by Cement

Wage Board is considered as defined benefit plan and is

accounted for on the basis of actuarial valuation, as at the

Balance Sheet date.

Actuarial gains and losses, if any, are recognized in the Profit &

Loss Account in the year in which they arise.

10. Borrowing Costs

Borrowing costs directly attributable to the acquisition /

construction of a qualifying asset are capitalized as part of the cost

of the asset till the date the asset is put to use. Other borrowing

costs are recognized as an expense in the period in which they are

incurred.

11. Depreciation

Tangible Assets :

(a) Depreciation is provided on Written down Value method at

the rates specified in Schedule XIV of the Companies Act,

1956 or the rates prescribed in the Income Tax Act 1961,

whichever is higher. However, in case of those assets whose

WDV as per Income Tax Act 1961 is lower than the WDV as per

books, additional depreciation is provided to align the Book

WDV with WDV as per Income Tax Act, 1961.

(b) Leasehold land is not amortized being long term in nature.

Intangible Assets :

(a) The amount of amortization is allocated on a systematic basis

over the estimated/legal life not exceeding 10 years

commencing when asset is available for use except Clean

Development Mechanism Projects which are amortized

against sale proceeds.

(b) Expenditure on Computer Software is amortized in the year in

which it is capitalized.

12. Research and Development

Expenditure on research phase is recognized as an expense when it

is incurred. Expenditure on development phase which results in

creation of assets is included in related Fixed Assets.

13. Mines Reclamation Expenditure

The Company provides for the expenditure to reclaim the quarries

used for mining. The total estimate of reclamation expenses is

apportioned over the estimate of mineral reserves and a provision

is made based on the minerals extracted.

14. Segment Reporting

Segment is identified and reported taking into account the nature

of products and services, the different risks and returns and the

internal business reporting systems. The identification of

geographical segment is based on the areas in which major

operating divisions of the Company operates.

Inter Segment Transfers are accounted for as if the sales or transfers

were to third parties at market price.

Common allocable costs are allocated to each segment according

to the relative contribution of each segment to the total common

costs.

Assets, Liabilities, Revenue and Expenses which are not allocable

to segments are included under “unallocated”.

15. Taxation

Provision is made for current, deferred and fringe benefit taxes.

Deferred tax is recognized for all the timing differences. Deferred

tax assets are recognized only to the extent that there is virtual

certainty supported by convincing evidence that sufficient future

taxable income will be available against which such deferred tax

assets can be realized.

16. Provisions and Contingent Liabilities /Assets

Provisions in respect of present obligation arising out of past

events are made in the accounts when reliable estimate can be

made of the amount of the obligations.

The contingent liabilities are disclosed, unless the possibility of

outflow of resources is remote. Contingent Assets are generally

neither recognized nor disclosed in the financial statements.

Rs. in Lac

Purpose Currency As at 31-03-2009 As at 31-03-2008

1 Outstanding creditors for Spares & Technical Consultancy Euro 0.45 1.35

2 Outstanding creditors for Technical Consultancy USD 0.13 -

3 Outstanding creditors for Spares GBP 0.07 0.10

4 Outstanding creditors for Spares JPY 152 -

7. Employee Benefits:

(a) Contribution to defined contribution plans recognized as expenses are as under: Rs. in Lac

2008-09 2007-08

Superannuation 624.55 382.69

Employees’ Pension Scheme 198.04 133.10

Provident fund 439.85 219.91

Total 1262.44 735.70

[B]NOTES ON ACCOUNTS

1. Contingent liabilities not provided for : -Counter-guarantees in

favour of banks: Rs. 10500.88 Lac (Previous Year Rs. 3430.95

Lac).

2. Estimated amount of contracts remaining to be executed on capital

account (net of advances) Rs. 43800.21 Lac. (Previous Year Rs.

9094.37 Lac)

3. Installments of Secured Loans falling due for repayment in next

12 months amounting to Rs. 13184.01 Lac (Previous Year Rs.

8900.76 Lac).

4. Capital Work-in-Progress includes Pre-operative expenses of Rs

1878.37 lac (Previous Year Rs. 15.34 Lac) which includes


(b) Defined Benefit Plans – disclosure for defined benefit plans based on actuarial reports : Rs. in Lac

As at 31-03-2009 As at 31-03-2008

I Change in Obligation

1 Present Value of defined benefit obligation at the beginning of the year 1858.71 1621.32

2 Current service cost 166.98 34.05

3 Interest cost 148.70 121.60

4 Actuarial (gain)/loss on obligation 220.67 134.72

5 Benefits paid (42.06) (52.98)

6 Present value of defined benefit obligation at the end of the year 2353.00 1858.71

Gratuity (Funded Plan)

depreciation of Rs 47.68 lac on assets during construction period

(Previous Year Rs. 0.25 Lac).

5. Disclosure of Sundry Creditors under Current Liabilities is based

on the information available with the Company regarding the

status of the suppliers as defined under the “Micro, Small and

Medium Enterprises Development Act, 2006” and there are no

delays in payments to Micro, Small and Medium Enterprises as

required to be disclosed under the said Act. This has been relied

upon by the Auditors.

6. Unhedged Foreign Currency Exposure:




(c) The estimates of future salary increases have been considered

in actuarial valuation after taking into consideration the

impact of inflation, seniority, promotion and other relevant

factors such as supply and demand situation in the

employment market.

(d) In terms of the Guidance Note on implementing the

Accounting Standard 15 (revised 2005), issued by the

Accounting Standard Board of the Institute of Chartered

Accountants of India, the provident fund set up by the

company is treated as defined benefit plan since the

Company has to meet the interest shortfall, if any. However,

as at the end of the year no shortfall remains unprovided for.

As advised by an independent actuary, it is not feasible to

actuarially value the liability considering that the rate of

interest as notified by the Government can vary annually.

Further the pattern of investments for investible funds is as

prescribed by the Government. Accordingly other related

disclosures in respect of provident fund have not been made.

(e) Basis used to determine expected rate of return on assets:

The expected return on plan assets is based on market

expectation, at the beginning of the period, for returns over

the entire life of the related obligations. The Gratuity Scheme

is invested in a Group Gratuity-cum-Life Assurance cash

accumulation policy offered by Life Insurance Corporation

(LIC) of India. The investment return earned on the policy

comprises bonuses declared by LIC having regard to LIC’s

investment earnings. The information on the allocation of the

fund into major asset classes and expected return on each

major class are not readily available. We understand that

LIC’s overall portfolio of assets is well diversified and the long

term return on the policy is expected to be higher than the

rate of return on Central Government Bonds. Historically too,

the returns declared by LIC on such policies have been higher

than Government Bond yields. The expected return on assets

assumption is taken by adding a margin of 0.5% on the

current market yield on the Central Government Bonds (of

term consistent with the terms of liabilities).

(f) Amount recognized as an expense in respect of leave

encashment and compensated absences is Rs. 370.28 lac

(Previous Year Rs. 216.63 Lac)

8. Revenue expenditure on Research and Development amounting

to Rs. 864.18 Lac (Previous Year Rs. 744.00 Lac) is included under

relevant heads of expenditure. Capital expenditure relating to

Research and Development amounting to Rs. 12.34 Lac (previous

year Rs.1.76 Lac) has been included in fixed assets.

9. Balance with non scheduled bank represents balance in current

account with Sir M Vishweshwaraiah Sahakar Bank Niyamitha,

Gulberga. Maximum balance outstanding during the year Rs.

176.84 lac (previous year Rs. 20.40 lac). None of the directors or

their relatives are interested in the bank.

10. Advance recoverable in cash or in kind or for value to be received

includes application money of Rs. 12085.50 lac in NABARD’s

Bhavishya Nirman Bonds.

11. Segment Reporting :

The Company has two primary business segments, namely

Cement and Power. There is no reportable secondary segment as

the Company operates only in one geographical area.

Rs. in Lac

As at 31-03-2009 As at 31-03-2008

II Change in the Fair Value of Plan Assets

1 Fair Value of plan assets at the beginning of the year 1858.71 1106.43

2 Expected return on plan assets 182.30 144.19

3 Contributions by employer 354.05 661.07

4 Actuarial gain/(loss) on plan assets - -

5 Benefits paid (42.06) (52.98)

6 Fair value of plan assets at the end of the year 2353.00 1858.71

III Expenses recognized in the Profit and Loss Account

1 Current service cost 166.98 34.05

2 Interest cost 148.70 121.60

3 Expected return on plan assets (182.30) (144.19)

4 Net actuarial loss/(gain) recognized in the current year 220.67 134.72

5 Expenses recognized in Profit and Loss Account 354.05 146.18

IV Amount recognized in the Balance Sheet as at the end of the year

1 Present value of defined benefit obligation 2353.00 1858.71

2 Fair Value of plan assets at the end of the year 2353.00 1858.71

3 Funded status [ Surplus/(Deficit)] - -

4 Net assets/(liability) as at the end of the year - -

V The major categories of plan assets as a percentage of total plan

1 Qualifying Insurance Policy 100% 100%

VI Actuarial Assumptions

1 Discount rate 8.00% p.a. 7.50% p.a.

2 Mortality rate LIC (1994-96 Ultimate) LIC (1994-96 Ultimate)

3 Withdrawal rate 1-3% depending on age 1-3% depending on age

4 Actual return on plan assets 182.30 144.19

Gratuity (Funded Plan)



Revenue, Results and other information :(Rs. in Lac)

Particulars 2008-09 2007-08

Cement Power Inter- Total Cement Power Inter- Total

Segment Segment

Eliminations Eliminations

Revenue

External Sales 263438.83 8063.19 - 271502.02 210911.80 - - 210911.80

Inter Segment

Revenue - 45630.62 (45630.62) - - 32420.98 (32420.98) -

Total Revenue 263438.83 53693.81 (45630.62) 271502.02 210911.80 32420.98 (32420.98) 210911.80

Results

Segment Results

(Profit before

Interest,

Exceptional items 47267.64 29763.64 - 77031.28 30450.76 9728.76 - 40179.52

and Tax)

Add: Un-allocated

Income - - - 5795.99 - - - 5869.50

Less: Interest Expenses - - - 7443.18 - - - 5329.64

Profit before exceptional

items & Tax - - - 75384.09 - - - 40719.38

Less: Exceptional Items - - - 3093.05 - - - 3888.46

Profit before Tax - - - 72291.04 - - - 36830.92

Less: Tax Expenses - - - 14494.10 - - - 10793.72

Profit after Tax - - - 57796.94 - - - 26037.20

Other Information

Segment Assets 128169.52 24313.55 - 152483.07 104151.76 11644.34 - 115796.10

Un-allocated Assets - - - 186551.56 - - - 132544.44

Total Assets - - - 339034.63 - - - 248340.54

Segment Liabilities 25929.31 1852.21 - 27781.52 19838.39 1804.91 - 21643.30

Un-allocated

Liabilities & Provisions - - - 40636.09 - - - 26346.89

Total Liabilities - - - 68417.61 - - - 47990.19

Depreciation &

Amortization 14965.96 5572.74 - 20538.70 36282.19 11593.67 - 47875.86

Capital expenditure 35591.48 17960.19 - 53551.67 28455.71 13960.50 - 42416.21

Significant Non Cash

Expenses other than

Depreciation &

Amortization. - - - - - - - -

12. Related Party Disclosure (AS-18):

Relationships:

(a) Enterprises over which Key Management Personnel (KMP) are able to exercise significant influence

(i) The Kamla Company Limited

(ii) Ramgopal Holding Private Limited

(b) Key Management Personnel

(i) Shri B.G. Bangur Executive Chairman

(ii) Shri H.M. Bangur Managing Director

(iii) Shri M.K. Singhi Executive Director

(c) Relatives to Key Management Personnel

(i) Shri Prashant Bangur

Details of Transactions :

2008-09 2007-08

(Rs. in lac) (Rs. in Lac)

(a) Enterprise where KMP have significant influence:

Usage charges of common facilities

- The Kamla Company Limited 15.45 14.39

Purchase of Fixed Assets

- Ramgopal Holding Private Limited 52.32 -

(b) Key Management Personnel :

Remuneration

- Shri B.G. Bangur 694.60 522.28

- Shri H.M. Bangur 645.16 472.28

- Shri M.K. Singhi 198.30 149.35

Total 1538.06 1143.91

(C) Relatives of Key Management Personnel :

Remuneration

- Shri Prashant Bangur 34.92 29.18

Purchase of Fixed Assets

- Shri Prashant Bangur - 52.00

There is no outstanding balance in receivable/payable and in loan account of the above parties at the end of the year.

13. Earning per share (EPS) (AS-20):

2008-09 2007-08

- Profit attributable to Equity shareholders Rs. Lac 57796.94 26037.20

- Equity share capital Rs. Lac 3483.72 3483.72

- Weighted average number of Equity shares outstanding

(Face value of Rs.10/- per share) Nos. 34837225 34837225

- Earning Per Share – Basic and Diluted Rs. 165.91 74.74




(d) Commission to other Directors:

2008-09 2007-08

(Rs. in Lac) (Rs. In Lac)

- Maximum eligible commission in terms of Section 309 of the

Companies Act, 1956 [1% of Net Profit (b) above] 722.17 690.60

- Commission to be paid as determined by the Board of Directors 51.00 42.00

(A) Licensed, Installed Capacity and Production:

(a) Cement

2008-09 (MT) 2007-08 (MT)

(i) Licensed Capacity(*)

(ii) Installed Capacity(**) 6825000 6825000

(iii) Production (Includes Trial run production Nil) (Previous Year 1257 MT) 7765207 6337070

(*) The Company’s product is exempt from Licensing requirement under new Industrial policy in terms of Notification No. S.O. 477(E) dated 25.07.91

(**) As certified by the Management (based on OPC)

(b) Thermal Power

Unit 2008-09 2007-08

(i) Licensed Capacity(No license is required) MW - -

(ii) Installed Capacity(as certified by Management) MW 119.50 101.50

(iii) Production Lac Unit 7361.70 5174.43

17. The Equity Shares of the Company are listed at Bombay Stock Exchange Limited and National Stock Exchange of India Limited and the

annual listing fee has been paid for the year.

18. Information pursuant to provisions of paragraphs 3, 4-C and 4-D of Part-II of Schedule VI to the Companies Act, 1956.

16. Expenses charged to limestone raising cost during the year:

2008-09 2007-08

(Rs. In Lac) (Rs. in Lac)

- Payment to and provision for Employees 955.71 544.28

- Royalty and Cess 4812.21 3082.08

- Stores & Spares, Repairs & Maintenance and Other expenses 5308.45 4533.86

11076.37 8160.22


(c) Commission/ Bonus to Wholetime Directors:

2008-09 2007-08

(Rs. in Lac) (Rs. in Lac)

- Eligible Remuneration in terms of Section 309 of the Companies 7221.69 6906.05

Act, 1956 [10% of Net Profit (b) above]

- Less: Remuneration (Excluding Commission/Bonus) 613.06 543.91

- Balance available for payment of Commission/ Bonus 6608.63 6362.14

- Commission/ Bonus to be paid as determined by the Board of Directors 925.00 600.00

14. Payment made to Auditors :

2008-09 2007-08


Statutory Auditors

- Audit Fee 15.00 11.00

- Tax Audit Fee 1.00 0.75

- Certification / Other Services 1.13 1.10

- Reimbursement of Expenses 2.35 0.66

Cost Auditors

- Audit Fee 1.25 1.25

- Reimbursement of Expenses 0.08 0.04

15. (a) The Break-up of remuneration to the Wholetime Directors is as under:

2008-09 2007-08


- Salary 357.60 310.73

- Bonus / Commission 925.00 600.00

- Contribution to Provident and Superannuation Funds 86.90 75.74

- Allowances and Perquisites 168.56 157.44

1538.06 1143.91

Note: The above figures do not include contribution to gratuity fund since the same is provided on an actuarial basis for the Company as a whole.

(b) Computation of Net Profit in accordance with Section 198 read with Section 349 of the Companies Act, 1956:

2008-09 2007-08


Profit before Tax 72291.04 36830.92

Add/ (Deduct)

- Remuneration to Whole Time Directors 1538.06 1143.91

- Commission to other Directors 51.00 42.00

- Directors’ Sitting Fee 3.60 4.10

- Depreciation as per Books 20538.70 47875.86

- Provision for Wealth Tax 14.00 11.00

- Depreciation under Section 350 of the Companies Act,1956 (22219.45) (16846.68)

- Profit on Sale of Fixed Assets (0.01) (0.65)

Net Profit as per Section 349 of the Companies Act, 1956 72216.94 69060.46



(B) Sales and Stocks:

2008-09 2007-08

Quantity Value Quantity Value

(a) Cement (MT) (Rs. in Lac) (MT) (Rs. in Lac)

(i) Opening Stock 73694 1745.50 54362 1148.01

(ii) Sales 7767696 263438.83* 6334208 210911.80

(iii) Closing Stock 88329 1627.99 73694 1745.50

(*) Includes Rs 14250.17 Lac (Previous Year Rs. 6487.37 Lac) being value of clinker sold

2008-09 2007-08

(b) Thermal Power Unit Quantity Value Quantity Value


Sales Lac Unit 1171.23 8063.19 - -

(C) Raw Materials consumed (All Indigenous) excluding Consumption during Trial Run Production:

2008-09 2007-08


(MT) (Rs. in Lac) (MT) (Rs. in Lac)

(i) Limestone 9411505 11115.15 6674970 8230.84

(ii) Gypsum 422052 3835.66 349515 2868.40

(iii) Fly Ash 1621986 8119.46 1656049 8707.51

(iv) Slag 183200 505.54 62607 174.49

(v) Iron Ore 19305 109.78 76089 398.35

(vi) Others 927.72 719.38

(D) Trade Purchases:

2008-09 2007-08


(MT) (Rs. in Lac) (MT) (Rs. in Lac)

(i) Cement 17124 652.47 16470 618.56

(E) Value of imports during the year calculated on CIF basis:

2008-09 2007-08


(i) Fuel 2532.62 -

(ii) Stores, Spare parts and components 1689.90 1603.18

(iii) Capital Goods 2240.16 3072.17








(G) Earning in foreign currencies:

2008-09 2007-08


(i) CERs sale receipts 1849.08 1707.73

(H) Value of imported and indigenous stores, spare parts, components consumed and their percentage to total consumption:

2008-09 2007-08

Value % Value %


(i) Imported 2060.06 24.48 857.98 14.92

(ii) Indigenous 6356.72 75.52 4890.78 85.08

(F) Expenditure incurred in foreign currencies:

2008-09 2007-08


(i) Foreign Travel 44.33(#) 83.38

(ii) Consultancy charges 201.08(#) 167.18

(iii) Others 31.53(#) 34.93

(#) For Capital Projects Rs. 85.64 Lac (Previous Year Rs. 115.82 Lac)

(I) Net dividend remitted to non-resident shareholders in foreign currency:

2008-09 2007-08


(i) No. of non-resident share holders 1 1

(ii) No. of shares held 3600000 3600000

(iii) Year to which dividend relates 2007-08 2006-07

(iv) Amount remitted (Rs. In Lac) 288.00 216.00

19. The figures of previous year have been regrouped and rearranged wherever necessary.

Signature to Schedule 1 to 22.



I. Registration Details

Registration No. State Code

Balance Sheet Date

Date Month Year

II. Capital raised during the Year (Amount in Thousand of Rupees)

Public Issue Rights Issue

Bonus Issue Private Placement

III. Position of Mobilization and Deployment of Funds (Amount in Thousand of Rupees)

Total Liabilities Total Assets

SOURCES OF FUNDS

Paid-Up Capital Reserves and Surplus

Secured Loans Unsecured Loans

APPLICATION OF FUNDS

Net Fixed Assets Investments

Deferred Tax Assets Net Current Assets

Misc. Expenditure Accumulated Losses

IV. Performance of Company (Amount in Thousand Rupees)

Turnover Total Expenditure

Profit/Loss Before Tax Profit/Loss After Tax

Earning Per Share in Rs. Dividend Rate %

V. Generic Name of Principal Product of Company

Item Code No. (ITC Code)

Product Description

1 9 3 5

3

N

N

N

N

I

I

I

I

L

L

L

L

1 0 3 2 0 0 9

2 7 0 6 1 7 0 2 0 272 7 0 6 1

71 1 7 5 13 4 8 3 7 2

1 2 2 0 5 0 7 3 2 7 5 6 4 6

1 1 0 5 7 4 55 8 4 4 8 3 4

1 0 3 8 9 8 7 4 5 2 0 0

N I L N I L

2 7 9 7 9 1 6 3 2 0 7 5 0 0

+ +7 2 2 9 1 0 4 5 7 7 9 6

1 7

9 7

0

7

2

5 9

9 4

1 6 5 . 9 1 1 0 0

2

C E M E N T

5 2 3 . 2 9

+/- +/-

Balance Sheet Abstract & Company's General Business Profileas required under Part IV of Schedule VI to the Companies Act, 1956 -

B. G. Bangur H. M. Bangur Shreekant Somany Dr. Abid Hussain O.P. Setia

Executive Chairman Managing Director Director Director Director









( Rs. In Lac)

For the year ended


A Cash Flow From Operating Activities

Net Profit Before Tax 72291.04 36830.92

Exceptional Items 3093.05 3888.46

Net Profit Before Tax & Exceptional Items 75384.09 40719.38

Adjustment For :

Depreciation and Amortisation 20538.70 47875.86

Foreign Exchange Rate Difference (Net) 21.51 62.89

Balances Written Off (Net) (13.44) (152.91)

Interest Income (4374.69) (5300.15)

Profit on Sale of Investment (1419.96) (413.50)

Dividend Received (1.33) (155.84)

Loss/ (Profit) on Sale/Disposal of Fixed Assets (16.99) (11.63)

Interest Expenses 7443.18 22176.98 5329.64 47234.36

Operating Profit Before Working Capital Changes 97561.07 87953.74

Adjustment For :

(Increase)/ Decrease in Trade And Other Receivables (6062.66) (7308.95)

(Increase)/ Decrease In Inventories 2211.63 (2050.15)

Increase/ (Decrease) in Trade Payables and Other Liabilities 6045.40 2194.37 3968.21 (5390.89)

Cash Generated From Operations 99755.44 82562.85

Foreign Exchange Rate Difference (Net) (21.51) (62.89)

Direct Taxes Paid (16439.62) (12354.30)

Cash Flow Before Exceptional Items 83294.31 70145.66

Exceptional Items (3093.05) (3888.46)

Net Cash From Operation Activities 80201.26 66257.20

B Cash Flow From Investing Activities

Purchase of Fixed Assets (53551.67) (42416.21)

Sale of Fixed Assets 247.25 79.92

(Purchase)/Sale of Investments (Net) (38018.97) (54100.00)

Profit on Sale of Investment 1419.96 413.50

Dividend Received 1.33 155.84

Interest Received 4452.25 6206.97

Net Cash Used in Investing Activities (85449.85) (89659.98)

C Cash Flow From Financing Activities

Proceeds From Long Term Borrowings (Net) 3545.86 36598.83

Proceeds From Short Term Borrowings (Net) - -

Proceeds From Working Capital Borrowings from Banks 12999.65 3334.14

Interest Paid (7553.67) (5117.66)

Capital Subsidy from Government - -

Dividend & Tax there on Paid (Interim and/or Final) (3260.63) -

Net Cash From Financing Activities 5731.21 34815.31

Net Increase/(Decrease) In Cash & Cash Equivalents 482.62 11412.53

Cash & Cash Equivalents as at the beginning of the year 46743.43 35330.90

Cash & Cash Equivalents as at the close of the year 47226.05 46743.43

For the year ended


Cash Flow StatementFor The Year Ended on 31st March, 2009

Board of Directors

Management Team

Shri B.G. Bangur - Executive Chairman

Shri H.M. Bangur - Managing Director

Shri R.L. Gaggar

Shri O.P. Setia

Shri Shreekant Somany

Dr. Abid Hussain

Dr. Y.K. Alagh

Shri A. Ghosh

Shri M.K. Singhi - Executive Director

Shri Prashant Bangur - Executive Jt. President

Shri Ashok Bhandari - Chief Finance Officer

Shri Diwakar Payal - Jt. President (Marketing)

Shri M.M. Sharma - Sr. Vice President (Project)

Shri P.K. Tripathy - Sr. Vice President (Works)

Shri P.N. Chhangani - Sr. Vice President (Works)

Shri Vinay Wadhva - Sr. Vice President (Marketing)

Shri C.R. Biyani - Vice President (Business Development)

Shri Gopal Daga - Vice President (Project)

Shri K.C. Gandhi - Vice President (Materials)

Shri Sanjay Mehta - Vice President (Commercial)

Shri Ramakant Sharma - Vice President (P.R.)

Shri P.C. Jhawar - Jt. Vice President (P&A)

Shri S.C. Suthar - Jt. Vice President (Mines)

Shri A.K. Singh - Jt. Vice President (E&I)

Shri C.S. Sharma - Jt. Vice President (Project)

Shri Arvind Khicha - Jt. Vice President (Comml.)

Shri N.C. Jain - Asst. Vice President (Finance)

Shri S.K. Soni - Asst. Vice President (Sales Accounts)

Shri R.K. Agarwal - Asst. Vice President (Mechanical)

Shri R.K. Manawat - Asst. Vice President (Process)

Shri G.L. Nandwana - Asst. Vice President (Mines)

Shri Rakesh Bhargava - Asst. Vice President (Environment)

Shri Nitin Mukul - Asst. Vice President (Packing Plant)

Shri M.M. Rathi - Asst. Vice President (Power Plant)

Shri Gajraj Jain - Asst. Vice President (Power Project)

Shri S.L. Bhansali - Asst. Vice President (Legal)

Shri Nirip Bajwa - Asst. Vice President (Marketing)

Shri Himanshu Dewan - Asst. Vice President (Marketing)

Shri R.C. Bohra - Asst. Vice President (P&A)

Shri S.R. Singhvi - Asst. Vice President (HRD)

Company Details

Company Secretary

Bankers

Advertising Consultant

Auditors

Cost Auditors

Internal Auditors

Registered Office

www.shreecementltd.com

[email protected]

Corporate Office

[email protected]

Shri S.S. Khandelwal

State Bank of Bikaner & Jaipur

State Bank of India

ICICI Bank Ltd.

IDBI Bank Ltd.

Axis Bank Ltd.

BNP Paribas

Standard Chartered Bank

HSBC

Shri Alyque Padamsee

M/s. B.R. Maheswari & Co., New Delhi

M/s. K.G. Goyal & Associates, Jaipur

M/s. P.K. Ajmera & Co., Ahmedabad

Bangur Nagar, Beawar - 305 901, Distt. Ajmer, Rajasthan

Phone: (91) 1462-228101-06, Fax: (91) 1462-228117/19

Toll free no.: 1800 180 6003-04

website:

email:

21, Strand Road, Kolkata - 700 001

Phone: (91) 33-22390601-05

Fax: (91) 33-22434226

email:

Plants

Unit I & II

[email protected]

Unit III, IV, V, VI & VII

[email protected]

Khushkhera Cement Grinding Unit(s)

Bangur Nagar, Beawar – 305 901 District, Ajmer, Rajasthan (India)

Phone: (91) 1462-228101-06 * Fax: (91) 1462-228117/228119 * Email:

Bangur City, Ras, Tehsil Jaitaran – 306 107, Distt. Pali, Rajasthan (India)

Phone: (91) 1462-228101-06 * Fax: (91) 1462-228117/228119 * Email:

Plot No SP 3-II, A-1, RIICO Industrial Area, Khushkhera (Bhiwadi) – 301 707, District Alwar, Rajasthan

Phone: (91) 1493-250521/22/23/24 * Fax: (91) 1493-517227

Shree Ultra Cement

[email protected] [email protected]

Bangur Cement

[email protected] [email protected]

Rockstrong Cement

122-123, Hans Bhawan A-6 Yudhisther Marg, Opp. Yojana Bhawan,

1 Bahadur Shah Zafar Marg, New Delhi-110 002 C Scheme, Jaipur-302 005, Rajasthan

Phone: (91) 11-23370828, 23379218, 23370776 Phone: (91) 141-2223918, 2225950

Fax: (91) 11-23370499 Fax: (91) 141-2381091

Email: Email:

6B, 6 Floor, Hansalaya Building, 91, Dulheshwar Garden,

15, Barakhamba Road, C Scheme, Sardar Patel Marg, Jaipur-302 001, Rajasthan

New Delhi-110 001 Phone: (91) 141-2361735, 2361696

Fax: (91) 11-23702794-96 Fax: (91) 141-2360891

Email: Email:

14E, 14 Floor, Hansalaya Building, 15-Barakhamba Road, 14-15, Indira Plaza,

New Delhi-110 001 Hawa Sarak, Sodala, Jaipur-302 001 (Rajasthan)

Phone: (91) 11-23731085, 61512430 Phone: (91) 141-2222032, 6455692

Fax: (91) 11-23731084 Fax: (91) 141-2222031

Marketing Offices




NotesFINANCIAL PERFORMANCE RATIONS 2008-09 2007-08 2006-07 2005-06 2004-05

RAW MATERIAL COST/TOTAL TURNOVER (%) 8.34 8.90 10.60 11.65 10.36

POWER COST/TOTAL TURNOVER (%) 5.55 5.19 5.10 6.08 7.15

FUEL COST/ TOTAL TURNOVER (%) 14.01 9.86 9.44 10.58 12.00

MANPOWER & ADMINISTRATIVE COST/ 4.73 4.46 5.25 6.49 6.76

TOTAL TURNOVER (%)

INTEREST /TOTAL TURNOVER (%) 2.40 2.18 0.64 1.56 2.74

PRE-INTEREST PROFIT/ TOTAL TURNOVER (%) 33.37 38.49 37.88 27.32 24.06

POST-INTEREST PROFIT/ TOTAL TURNOVER (%) 30.97 36.30 37.23 25.77 21.31

DEPRECIATION / TOTAL TURNOVER (%) 6.63 19.62 26.53 18.92 13.56

TAX/ TOTAL TURNOVER (%) 4.68 4.42 0.73 1.06 0.29

NET PROFIT/ TOTAL TURNOVER (%) 18.66 10.67 10.97 2.23 4.02

CASH PROFIT / TOTAL TURNOVER (%) 25.55 29.69 33.31 22.84 20.98

ROCE (PBIT/ AVERAGE CAPITAL EMPLOYED) (%) 33.86 24.88 39.29 24.61 21.93

TURNOVER / AVERAGE CAPITAL EMPLOYED (%) 131.52 144.00 157.00 131.27 121.78

EARNING PER SHARE (RS.) 165.91 74.74 50.81 5.28 8.34

CASH EARNING PER SHARE (RS.) 227.18 207.94 154.24 52.98 43.53

TAX / NET PROFIT (%) 25.08 35.71 7.03 47.47 7.12

BALANCE SHEET RATIOS

DEBT -EQUITY RATIO 0.87 1.69 1.87 1.03 0.80

DEBTORS TURNOVER (DAYS) 6.87 7.39 5.94 8.09 12.09

INVENTORY TURNOVER ( DAYS) 18.20 26.41 35.31 50.02 36.64

CURRENT RATIO 2.09 2.28 2.72 1.42 2.05

QUICK RATIO 1.86 1.92 2.17 0.69 1.07

BOOK VALUE PER SHARE (RS) 347.33 193.13 130.48 85.05 83.10

2008-09 2007-08 2006-07 2005-06 2004-05

Ratio AnalysisTRUST DOES THE IMPOSSIBLE


Notes



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