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ZUARI CEMENT LIMITED

5th
Annual Report
2004 - 2005

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ZUARI CEMENT LIMITED

DIRECTORS Dr. K.K. Birla, Chairman

Saroj Kumar Poddar

H.S. Bawa

Rodolfo Danielli
(Alternate Mrs. Regina Bouille)

Yves Rene Nanot

(Alternate Giorgio Bodo)

Goran L. Seifert
(Alternate Philippe Marchat)

Maurizio Caneppele, Managing Director

EXECUTIVES Director- Marketing K. Srivastava

Vice President - Works L. Srivastava

Chief Finance Officer N. Suresh Krishnan

COMPANY SECRETARY L.R. Neelakanta

BANKERS State Bank of India

BMP Paribas
Andhra Bank
Standard Chartered Bank

AUDITORS A.F. Ferguson & Co.,

Chartered Accountants, Hyderabad

REGISTERED OFFICE Jai Kisaan Bhawan

Zuarinagar
Goa 403 726

CORPORATE OFFICE No. 1, 10lhMain

HAL III Stage
Jeevanbima Nagar
Bangalore 560075

FACTORY Krishna Nagar

Yerraguntla 5 1 6 3 1 1
Cuddapah Dist.
Andhra Pradesh

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ZUARI CEMENT LIMITED

NOTICE
NOTICE is hereby given that the Fifth Annual General Meeting of
the Company will be held onTuesday, the 12lh day of July, 2005
at 1 1.00 a.m at the Registered Office of the Company at Jai
Kisaan Bhawan, Zuarinagar, Goa 403 726, to transact the
following business :
Ordinary Business
1. To receive, consider and adopt the Audited Balance Sheet as
at 31 * March, 2005, the Profit and Loss Account and Cash
Flow Statement for the year ended on that date together with
the Reports of Directors and the Auditors thereon.
2. To appoint a Director in place of Dr. K.K. Birla who retires by
rotation and being eligible offers himself for re-appointment.
NOTES
A MEMBER ENTITLED TO ATTEND AND VOTE IS
ENTITLED TO APPOINT A PROXY TO ATTEND AND
VOTE INSTEAD OF HIMSELF AND THE PROXY
NEED NOT BE A MEMBER
The Proxy form should be deposited at the Registered Office
of the Company at Zuarinagar, not less than 48 hours before
the commencement of the meeting.
3. An Explanatory Statement pursuant to Section 1 73(2) of the
Companies Act, 1 956 relating to Special Business is
annexed.

3. To appoint a Director in place of Mr. H.S. Bawa who retires EXPLANATORY STATEMENT
by rotation and being eligible offers himself for [Pursuant to Section 1 73(2) of the Companies Act, 1 956]
re-appointment.
Item No. 5
4. To appoint Auditors and to fix their remuneration.

Mr. Goran L. Seifert has been appointed as an Additional Director

Special Business
5. To consider and if thought fit to pass with or without
modification the following resolution as an Ordinary
Resolution:
"RESOLVED THAT pursuant to the Provisions of Section
257 and all other applicable provisions, if any, of the
Companies Act, 1956, Mr. Goran L. Seifert, who was appointed
as an Additional Director of the Company under Section 260
of the Companies Act, 1 956 and who holds office upto the
date of this Annual General Meeting be and is hereby appointed
as a Director of the Company liable to retire by rotation."
of the Company with effect from 1 9* May, 2005. He holds office
as director upto the date of 5th Annual General Meeting. The
Company has received a notice pursuant to Section 257 of the
Companies Act, 1956 from the Shareholder proposing his
appointment as director.
Your Directors recommend passing the resolution as set out under
Item No. 5.
None of the Directors except Mr. Goran L. Seifert, is in any way
concerned or interested in the said resolution.

By Order of the Board of Directors By Order of the Board of Directors

L.R. Neelakanta L.R. Neelakanta

lh
Date : 1 9 May, 2005 Company Secretary Date : 19th May, 2005 Company Secretary

Registered Office: Registered Office :

Jai Kisaan Bhawan Jai Kisaan Bhawan
Zuarinagar Zuarinagar
Goa 403 726 Goa 403 726

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DIRECTORS' REPORT

To the Members, a letter from M/s. A.F. Ferguson & Co. to the effect that their
re-appointment if made, in the forthcoming Annual General
1. Your Directors place before you the Fifth Annual Report of Meeting of the Company will be within the limit prescribed
the Company together with Statement of Accounts for the under Section 224 (1 -B) of the Companies Act, 1 956.
year ended 31" March, 2005.
The Board of Directors recommend their re-appointment.
2 FINANCIAL RESULTS AND APPROPRIATION :
Your Auditors have not made any adverse comments and
Rs. In Million therefore, do not call for any comments under Section 217(3)
of the Companies Act, 1956.
2004 - 05 2003 - 04
Cash profit for the year before 73.4 10.2 9. LISTING OF SHARES :
Depreciation and taxation
Your Company is not a listed Company.
Less : Depreciation for the year 283.9 285.0
Loss before tax 210.5 274.8 10. FOREIGN EXCHANGE EARNINGS AND OUTGO :
Less : Provision for taxation
Loss after tax 210.5 274.8 During the year the Company has not engaged in any export
oriented activity and therefore, has no foreign exchange earnings.
Add : Balance of Loss brought 1450.5 175.7
forward
The Expenditure incurred in Foreign Exchange is noted under
Balance of Loss carried forward 1661.0 1450.5 Schedule 1 8, Notes on Accounts annexed to the Statement
of Accounts.
3. DIVIDEND :
1 1 OPERATIONS :
Your Directors do not recommend any dividend for the
financial year 2004 - 2005 in view of losses. During the year, clinker production was 16,37,720 MT
(previous year 15,17,300 MT) and the cement production
4 DEBT SERVICING : was 1 6,98,080 MT (previous year 1 6,71,679 MT). The sales
volume, including quantities sourced from other manufacturers,
Your Company has met all obligations towards repayment was 1 7,59,512 MT (previous year 1 6,99,345 MT).
of principal and interest on all loans availed from Financial
Institutions / Banks. During the year 2004 - 05, the market witnessed a reasonable
improvement in demand front with an over all growth of
5 PUBLIC DEPOSITS : around 8%. The prices and realisation were under pressure
through out the year in the Southern Market on account of
Your Company has not invited any Fixed Deposits from the continued excess supply position over the demand. However,
shareholders / public during the period under review. with continued growth in demand, the gap between the supply
and demand is expected to be narrowed down resulting in
6 DIRECTORS : improved price realisation.

Dr. K.K. Birla, Mr. H.S. Bawa and Mr. Michel Lefebvre,
Directors of the company retire by rotation at the forthcoming
Annual General Meeting and are eligible for re-appointment.
7. AUDIT SUB-COMMITTEE :
Your company is evaluating measures to reduce the cost of
production at all levels and to reduce the power cost in
particular. With a view to reduce the unit cost of power the
company is evaluating setting up of a coal based captive
power plant.

Your Company's Audit Sub-Committee consists of Mr. Saroj
Kumar Poddar as Chairman and Mr. H.S. Bawa, Mr. Rodolfo
Danielli, Mr. Michel Lefebvre as members. Mr. Goran L.
Seifert and Mrs. Regina Bouille are the alternate to
Mr. Rodolfo Danielli ond Mr. Michel Lefebvre respectively.
Company is also planning to further increase its market
share and for this purpose, all options including expansion
of the production capacity at Yerraguntla and acquisition /
setting up of grinding centres at its core market areas are
being evaluated.

8 AUDITORS & AUDITORS REPORT : 12 CONSERVATION OF ENERGY :

M/s. A.F. Ferguson & Co., Chartered Accountants, Auditors Information disclosing particulars of Conservation of Energy
of the company holds office until the conclusion of the is given in Annexure 'A' to this report.
ensuing Annual General Meeting. The Company has received

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13. TECHNOLOGY ABSORPTION :
Apart from carrying on minor modifications to achieve energy
efficiency, your Company has absorbed no new technology
during the year.
14. ENVIRONMENT & SAFETY :
The company continued its policy of Tree plantation and
green belt development activities with special thrust by
engaging services of professional agencies to select trees
suitable for the area.
15 DIRECTORS RESPONSIBILITY STATEMENT :
Your Directors confirm :
i) that in the preparation of annual accounts, the applicable
accounting standards have been followed along with
proper explanation relating to material departures;
ii) that the directors have selected such accounting policies
and applied them consistently and made judgements and
estimates that are reasonable and prudent so as to give a
true and fair view of the state of affairs of the company as
at 31" March, 2005 and of the profit or loss of the
Company for the period ended 31 "March, 2005;
iii) that the directors 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 the company and
for preventing and detecting fraud and other irregularities.
iv) That the directors hove prepared the annual accounts
on a going concern basis.
ZUARI CEMENT LIMITED
16 SUBSIDIARY COMPANIES :
Sri Vishnu Cement Limited became a subsidiary of the
company during May, 2002. As required under Section 212
of the Companies Act, 1956, the audited statements of
accounts of Sri Vishnu Cement Limited along with the report
of the Board of Directors and Auditors Report thereon for
the year ended 311* March, 2005 are annexed.
17. PERSONNEL :
Industrial relations remained cordial and peaceful throughout
the year.
Particulars of employees, to be furnished under Section
21 7(2A) of the Companies Act, 1 956 and the Rules framed
thereunder, are given in the Annexure 'B' to this Report.
18 ACKNOWLEDGEMENTS :
Your Directors wish to place on record their appreciation of
the assistance and support received from Financial
Institutions and Company's Bankers and the customers of
the Company for their valued patronage. Your Directors
also wish to place on record their sincere appreciation for
dedicated efforts put in by the employees at all levels.
For and on behalf of the Board of Directors
K.K. BIRLA
Chairman
Bangalore
3'dMay, 2005
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ANNEXURE 'A' TO DIRECTORS' REPORT

FORM A
(See Rule 2)

Form for disclosure of particulars with respect to conservation of Energy :

Particulars Current Year Previous Year

A Power and Fuel Consumption

1. Electricity

a) Purchased

Unit(KWH) - Lacs 1237 832

Total amount (Rs. In Lacs) 4368 3204
Rate / Unit (KWH) Rs. 3.53 3.85
b) Own Generation

i) Through LSHS / Diesel Oil Generator

Units (KWH) -Lacs 377 775

Units (KWH) per Itr of LSHS / Diesel Oil 4.47 4.44
Cost / Unit (KWH) Rs. 3.42 3.38
ii) Through Steam Turbine / Generator

Units (KWH) - Lacs

Cost/Unit (KWH) Rs.

2. Coal (for Kiln)

Quantity (Tonnes) 230766 207370

Total Cost (Rs. In Lacs) 5877 4417
Average Rate (Rs. /Ton) 2546 2130
3 LSHS/HSD Oil

Quantity (k.ltrs) 8430 17450

Total Cost (Rs. In Lacs) 1137 2261
Average Rate (Rs./k.ltr) 13490 12957
B. Consumption Per Unit of Production

1. Electricity (KWH / Ton of Cement) 89.50 94.20

2. Coal (Kgs. / Ton of Clinker) 140.90 136.67

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 ANNEXURE 'B' TO DIRECTORS' REPORT

Information pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975

SI. Name Designation/ Qualification Age/ Experience Date of Remuneration Name of last employer,
No. nature of years (No. of year) commencement received post held and period
duties of employment Rs.

EMPLOYED THROUGHOUT THE YEAR

1. Maurizio Caneppele Managing Mechanical 51 23 02.05.2001 28,17,330A Italcementi SPA,

Director Engineer Head of Acquisition Dept.
6 years

2. Krishna Srivastava Director B.E. (Hons) 54 32 17.11.1997 28,44,82 1/- Etemit Everest Ltd.
(Marketing) Electrical Business Head
Flat Product Div.
24 years

Notes:

1. Remuneration has been calculated in accordance with clarifications given by the Department of Company Affairs. Accordingly, perquisites have been valued in terms of
actual expenditure incurred by the Company in providing benefits to the employees. N
C
2. Other terms and conditions: The employments are subject to rules and regulations of the Company in force from time to time.

3. None of the employees is a relative of any Director of the Company.

o
m
4. None of the employees stated above, hold more than two percent of the equity shares either by himself or along with his spouse and dependent children.
s
m
Z

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AUDITORS' REPORT
AUDITORS' REPORT TO THE MEMBERS OF ZUARI CEMENT LIMITED
1. We hove audited the attached Balance Sheet of Zuari Cement
Limited as at 31" March, 2005 and also the Profit and Loss
Account and the Cash Flow Statement forthe 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 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
issued by the Central Government of India in terms of sub-
section (4A) of Section 227 of the Companies Act, 1 956, we
enclose in the Annexure a statement on the matters specified
in paragraph 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above,
we report that:
a. we have obtained all information and explanations,
which to the best of our knowledge and belief were
necessary for the purposes of our audit;
b. in our opinion, proper books of account as required by
law have been kept by the Company so far as appears
from our examination of those books;
c the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report are in agreement
with the books of account;
d. 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, 1 956;
e. on basis of the written representations received from the
directors as on 31" March, 2005, and taken on record by
the Board of Directors, we report that none of the directors
is disqualified as on 31 * March, 2005 from being appointed
as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Companies Act, 1 956;
f. 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, 1 956, in the manner so required and
give a true and fair view in conformity with the accounting
principles generally accepted in India;
(i) in case of the Balance Sheet, of the state of affairs
of the Company as at 31 sl March, 2005;
(ii) in cose of the Profit and Loss Account, of the loss
for the year ended on that date; and
(iii) in case of the Cash Flow Statement, of the cash
flows for the year ended on that date.
For A.F. Ferguson & Co.,
Chartered Accountants
A.C. Gupta
Place : Hyderabad Partner
Date : 3'd May, 2005 M. No. 8538
ANNEXURE TO THE AUDITORS' REPORT TO THE
MEMBERS OF ZUARI CEMENT LIMITED ON THE
ACCOUNTS FOR THE YEAR ENDED 31ST MARCH
2005
(i) (a) The Company has maintained proper records showing
full particulars including quantitative details and
situation of fixed assets.
(b) All the fixed assets have not been physically verified by
the management during the year but there is a regular
programme of verification which, in our opinion, is
reasonable, having regard to the size of the Company
and the nature of its assets and no material
discrepancies were noticed in respect of those assets
which have been physically verified.
(c) There has been no disposal of substantial part of the
fixed assets during the year.
(ii) (a) Inventory has been physically verified by the
management at reasonable intervals during the year.
(b) In our opinion and according to the information and
explanations given to us, 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. No material discrepancies were noticed on
physical verification.
(iii) According to the information and explanations given to us,
the Company, during the year has not granted / taken any
loans, secured or unsecured to / from companies, firms or
other parties as per the register maintained under Section
301 of the Companies Act, 1956.
(iv) In our opinion and according to the information and
explantations given to us, there are adequate internal control
systems commensurate with the size of the Company and the
nature of its business with regard to purchase of inventory and
fixed assets and with regard to the sale of goods and services.
Further, on the basis of our examination, and according to the
information and explanations given to us, we have neither
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ZUARI CEMENT LIMITED

come across nor we have been informed of any instance of 3. APGST Act, Dispute on 589.34 2000-01 Sales Tax
major weakness in the aforesaid internal control system. 1957 calculation Appellate
of base Tribunal
(v) As explained to us, there are no transactions that need to be turnover for
determent
entered in the register maintained in pursuance of Section 301
Sales Tax 25.27 2002-03 Appellate Dy.
of the Companies Act, 1 956 and exceeding the value of five Commissioner
lacs rupees in respect of any party during the financial year. (Commercial)
Taxes)
(vi) The Company has not accepted deposits from the public to
1,776.36
which the provisions of Section 58 (A) and 58 (AA) of the
Companies Act, 1956 and the rules framed there under apply. (x) The accumulated losses of the Company at the end of the
financial year are less than fifty percent of its net worth as on
(vii) In our opinion the Company's present internal audit system
thot date. The Company has not incurred cash losses in the
is commensurate with its size and nature of its business.
immediately proceeding financial year
(viii) We have broadly reviewed the books of account maintained
(xi) According to the information and explanations given to us,
by the Company pursuant to the Order made by the Central
the Company during the year has not defaulted in repayment
Government for the maintenance of cost records under
of dues to financial institutions or bank or debenture holders.
Section 209 (1) (d) of the Companies Act, 1956, and are of
the opinion that prima facie the prescribed accounts and (xii) The Company during the year has not granted any loan and
records have been maintained. We have not, however, made advances on the basis of security by way of pledge of shares,
a detailed examination of the said records. debentures and other securities.

(ix) (a) According to the information and explanations given to (xiii) The Company is not a nidhi / mutual benefit fund / society
us and according to the books and records as produced to which the provisions of special statute relating to chit
and examined by us in accordance with the generally fund are applicable.
accepted auditing practices in India, ths Company is
(xiv) In our opinion and according to the information and
regular in depositing undisputed statutory dues including
explanations given to us, the Company is not a dealer or
provident fund, employees state insurance, income tax,
trader in securities.
sales tax, wealth tax, service tax, excise duty, customs
duty, cess and other statutory dues as applicable with (xv) According to the information and explanations given to us,
the appropriate authorities. There are no dues in respect in our opinion, the Company has not given any guarantee
of investor education and protection fund. for loans taken by others from bank or financial institutions,
the terms and conditions whereof are prejudicial to the
(b) As at 31sl March 2005, according to the records of the
interest of the Company.
Company and the information and explanations given
to us, the following are the particulars of dues on (xvi) According to the information and explantations given to us,
account of income tax, sales tax, wea!4h tax, service the term loans taken by the Company have been applied for
tax, customs duty, excise duty and cess matters that the purpose for which they were obtained.
have not been deposited on account of any dispute.
(xvii) According to the information and explantations given to us
SI. Name of the Nature Amount Period to Forum where funds raised on short term basis have not been used for
No. Statute of dues (Rs. Lacs) which dispute is long term investment.
amount pending
relates (xviii)The Company has not made any preferential allotment of
1. Centra Excise Excise Duty/ 1.45 2001-02 Central Excise shares to parties and companies covered in the Register
Act, 1944 Interest. & & Service Tax maintained under Section 301 of the Companies Act, 1956.
2002-03 Appellate
Tribunal (xix) As there are no debentures outstanding as at year end,
Excise Duty/ 0.22 2002-03 Asst. Comm- paragraph (xix) of the order is not applicable.
Interest. issioner
(xx) The Company has not raised any money by way of public
Excise Duty 0.10 2000-01 Central Excise issue during the year.
& Service Tax
Appellate (xxi) According to the information and explanations given to us,
Tribunal
during the year no fraud on or by the Company has been
Excixe Duty/ 0.50 2003-04 Commissio- noticed or reported.
Interest. ner (Appeals)

2. CST Act, Sales Tax 1,070.04 1997-98 High Court/

For A.F. Ferguson & Co.,
1956 on stock Supreme
transfers Court Chartered Accountants
Sales Tax 89.44 2001-02 Appellate Dy.
on freight & Commissio- A.C. Gupta
2004-05 ner (Comm- Place : Hyderabad Partner
ercial Taxes)
Date:'3 May, 2005 M. No.8538

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BALANCE SHEET AS AT 31 ST MARCH, 2005

As at As at
Schedule 31 "March, 2005 31s1 March, 2004
Rs. Lacs Rs. Lacs
I. SOURCES OF FUNDS
(1) Shareholders'funds:
Share capital 42,796.14 42,796.14
Reserves and surplus 21,901.93 21,901.93
64,698.07 64,698.07
(2) Loan funds:
Secured loans 17,431.03 19,018.51
Unsecured loans 9,767.41 9,070.51
27,198.44 28,089.02
TOTAL 91,896.51 92,787.09
II. APPLICATION OF FUNDS
(1) Fixed assets:
Gross block 53,550.07 53,331.74
Less- Depreciation 19,787.74 16,982.13
Net block 33,762.33 36,349.61
Capital work-in-progress including advances for
capital expenditure 140.42 128.23
33,902.75 36,477.84
(2) Investments 36,557.57 36,525.14
(3) Current assets, loans and advances:
Inventories 7 2,503.20 2,281.92
Sundry debtors 8 2,467.39 3,109.72
Cash and bank balances 9 1,290.71 1,716.40
Loans and advances 10 1,906.20 1,771.46
8,167.50 8,879.50
Less: Current liabilities and provisions:
Current liabilities 11 3,381.69 3,827.41
Provisions 12 127.90 50.43
3,509.59 _ 3,877.84
Net current assets 4,657.91 5,001.66
(4) Miscellaneous expenditure
(to the extent not written off or adjusted)
[see Note 10 on Schedule 1 8] 169.10 278.19
(5) Profit and loss account 16,609.18 J 4,504.26
TOTAL 91,896.51 92,787.09
Significant accounting policies 17
Notes to the accounts

Per our report attached On behalf of the Board of Directors

For A. F. Ferguson & Co., S. K. PODDAR H. S. BAWA M. CANEPPELE

Chartered Accountants Director Director Managing Director

A.C. GUPTA N. SURESH KRISHNAN L. R. NEELAKANTA

Partner Chief Finance Officer Company Secretary

Place : Hyderabad Place : Bangalore

Date : 3'd May, 2005 Date : 3rd May, 2005

10

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