TRUST does the

IMPOSSIBLE

Annual Report
2008-09
 index
FORWARD-LOOKING STATEMENT

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

Content Page
enable investors to comprehend our prospects and take informed
Chairman's Words 05
investment decisions. This report and other statements – written and oral
– that we periodically make contain forward-looking statements that set Know
About Shree Cement 07
out anticipated results based on the management’s plans and
Vision, Mission, Philosophy & Principles 09
assumptions. We have tried wherever possible to identify such statements
Understand
by using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’,
MD's Perspective 10
‘plans’, ‘believes’, and words of similar substance in connection with any ED's Overview 12
discussion of future performance. - What Trust achieves? 15
- Trust sets 'unthinkable' benchmarks 16
We cannot guarantee that these forward-looking statements will be - Trust extends 'unexpected' support 21
realised, although we believe we have been prudent in assumptions. The - Trust empowers 'untried' hands 22
achievement of results is subject to risks, uncertainties and even - Trust discovers 'untested' opportunity 24
- Trust delivers 'invaluable' benefits 26
inaccurate assumptions. Should known or unknown risks or uncertainties
Grasp
materialise, or should underlying assumptions prove inaccurate, actual
Performance Highlights 28
results could vary materially from those anticipated, estimated or
Departmental Highlights
projected. Readers should bear this in mind.
- Material Management 33
We undertake no obligation to publicly update any forward looking- - Manufacturing 36
- Logistics 39
statements, whether as a result of new information, future events or
- Power 41
otherwise. - Quality and R&D 45
- Knowledge Systems (IT) 47
- Marketing and Branding 49
- Human Resource 53
- Finance 56
- Shareholder Value 59
- Corporate Sustainability 61
Awards 65
Profile of Directors 66
Shree’s Polices 68
Five & Fifteen-Year Financial Highlights 70
Examine
Management Discussion & Analysis 72
Directors' Report & Annexures 78
Auditors' Certificate on Corporate Governance 87
Report on Corporate Governance & Annexxures 88
Code of Conduct 100
Auditors' Report 101
Balance Sheet 104
Profit & Loss Account 105
Schedules forming part of the Accounts 106
Cash Flow Statement 127
Company Details 128
Ratio Analysis 130
 concept note
Trust delivers.
Trust touches, assures and inspires people.
Acting thus, trust transforms organisations.
At Shree, trust has been working hard behind the scenes.
Night view of Beawar Plant It's time we brought it to the limelight.
03
 Chairman’s words
With more 'trust best India's age-old culture has adequate references to trust and ethics as the basis

practices' in place, we of governing daily life. Take Chaanakya's Arthashaastra written around 330 BC.

are sure Shree Cement Although, it is about the accretion and management of wealth and resources,

will acquire a hard edge the first Sutra or principle outlined in the book does not mention wealth at all.

from this soft attribute 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

B G Bangur
Executive Chairman
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.

05
About Shree Ce Shree 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
 The Shree Vision
Vision
“To drive and sustain industry leadership of the company
within a global context - by developing individual leadership
competencies at every level, through a robust backbone of
trust, support, innovation and reward”

Mission Guiding Principles

To harness
n sustainability through low Enforce
n good corporate governance
carbon philosophy practices

To sustain
n its reputation as one of the Encourage
n integrity of conduct
most efficient manufacturers globally
Ensure
n clarity and unambiguity in
To continually
n have most engaged team communication

To drive
n down cost through innovative Remain
n accountable to all stakeholders
practices
Encourage
n socially responsible
To continually
n add value to its products behaviour
and operations meeting expectations of
all its stakeholders
Philosophy
To continually
n build and upgrade skills
and competencies of its human resource “Aah no bhadra: Kratavo
for growth yantu vishwatah”
To be
n a responsible corporate citizen
- Rigveda
with total commitment to communities “Let noble thoughts come to
in which it operates and society at large us from all over the world.”
09

Prisoners work hard,
give results, and do not
commit any mistakes as
their hands are tied
with chains
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
MD’s
H M Bangur
Managing Director
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
perspective
Leadership by Trust
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
achieved, 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
ED’s
strong roots that
allow our people
to take unusually high
risks and even fail on
the way to hitherto
unreachable heights
M K Singhi
Executive Director
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
overview
What is our ‘bottommost' line?
boat; then, trust is like the favourable wind in its sails -
unseen and yet, impactful. Stronger the wind (or
Execution to deliver much bigger Results; Distrust
discounts the effects of Strategy and Execution to
trust), faster and easier does your rowing (or your deliver much smaller Results. In this model, Trust Gain
effort) take the boat forward (or bear results). On the could be as high as 40%, while Distrust Loss could be
other hand, an absence of wind (or no trust), or as high as 80%.
presence of unfavourable wind (or distrust) makes
your rowing (or effort) slower and harder.
As a later section shows, we have had demonstrated
Trust Gains in our company; our commissioning of
The analogy makes clear various aspects of trust. One,
the intangible trust has a tangible impact. With the
Unit VII in a world record time of 367 days, instead of
the industry standard of 630 days, would not have
favourable wind in its sails, the boat reaches its been possible without trust. Now, 367 days is about
destination hours faster than otherwise and the 58% of 630; thus, Trust Gain in terms of time was (100 -
rowers are relatively less exhausted because of the 58 =) 42%. Because of trust, we could complete the
less exertion. Likewise, for the individual, his task gets project 42% faster than the norm.
completed ahead of schedule with little cost in terms
Trust is a two-way street between individuals. There is
of effort. Say because of trust, it takes the individual
one who trusts and another who delivers on such
8 hours to complete a task that would otherwise take
trust. Our performance, as an organisation, depends
10 hours. The Gain from Trust, or Trust Gain, in this case
on such two-way interaction of trust and support
is (10 - 8 =) 2 hours, or 20%. Thus, the effects of trust
between bosses and subordinates, colleagues in
can be measured and quantified in terms of time and
different departments and even between the
cost.
company and its suppliers and stakeholders. Trust
Two, like trust, distrust too has consequences - of provides the strong roots that allow our people to
course, adverse. Say because of distrust, it takes take unusually high risks and even fail on the way to
another individual 14 hours instead of the normal hitherto unreachable heights. Because, it is such a
10 hours to finish the above task. Then Loss from natural performance enhancer, it is the bottom line
Distrust, or Distrust Loss, is to the extent of (14 - 10 =) 4 beneath all our three bottom lines. Surely, it is our
hours, or 40%. bottommost line.
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
13
What Trust achi
Trust, 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.

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

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.

15

trust sets ‘unthinkable’
Let me list some 'unthinkable' industry records created by our
Company this year.
World record in commissioning a cement plant
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.
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
Night view of Ras Plant
“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
17
Clinkerisation Unit (Unit VII), Ras
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.
One of India's best employers
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.
19
trust extends
‘unexpected’ support
At Shree, we believe in creating not only engaged The industry standard for Pre-heater installation is about
employees, but also 'engaged suppliers.' 12 months. For Unit VII, our supplier rose to the occasion and
completed the job in a record 8 months.
Advances 'on faith'
Clinker Coolers usually arrive knocked-down from the
Take our captive power plant coming up at our Ras works.
supplier's side. The supplier usually runs tests on the
Looking at the level of resources that could be mobilised by
assembled equipment before knocking it down for
the turnkey contractor, we began feeling that things would
transport to the cement maker's plant. Afterwards, onsite
run behind schedule. Enquiries with the supplier revealed a
assembly usually takes 2-3 months. What we did was simple.
situation of liquidity crunch because of the ongoing
We put faith in our suppliers, took their word for the
recession. We immediately sanctioned a substantial
integrity of the assembled equipment without verifying the
advance to the supplier, who then took to the task with
constituent parts, trusted our own logistics capabilities and
great gusto. Now, we are sure to complete the power plant
transported the whole equipment to the Unit VII site. Doing
much before schedule.
away with onsite assembly saved 2-3 months.

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
“We are pleased to know the 1200 TPH chain
and other resource support to expedite processes at the
supplier's end. elevator has been successfully erected and
commissioned in one week...Based on
Making our suppliers our partners
experience of decades, erection of such
Shree's trust culture is infectious; suppliers react and act on elevators takes at least two weeks...This is a
it positively. In what is perhaps an industry first, our German brilliant project construction
vendor expedited arrangements so that we could airlift accomplishment we have never seen in other
82 MT of cargo comprising of Coal Mill and Raw Mill for the
elevator erection sites in China and abroad.”
record-breaking Unit VII. While the routine practice is to ship
such humongous cargo, we took the air route and sliced off - In a letter from the General Manager of Wuhu Crane &
1 ½ months from the usual gestation lag. Conveyor Co., Ltd., China

21
trust empowers 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
‘untried’ hands
great power comes great responsibility.’
Direction rather than supervision
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.
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.
23
trust discovers
‘untested’ opportunity Trusting people yields initiatives that materialise
opportunities where none existed before.
Open rail wagon loading
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.
Logistics integration
Earlier, brand managers of our three brands - Shree Ultra
Jung Rodhak Cement, Bangur Cement and Rockstrong
Cement engaged in healthy competition amongst
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.
New opportunity in power sales
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.
25

trust delivers
‘invaluable’ benefits
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.
Value for shareholders
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.
With the aim of producing 'green' cement, experiments are
Shree was the first Company from Rajasthan to receive the being conducted to use as inputs waste materials like lead-
Golden Peacock Award for excellence in corporate zinc, slag, waste gas, etc.
governance - an affirmation of our continual efforts at
Taking it to the next level
improving credibility with our shareholders.
Trust for us is a deep-rooted and intangible instinct. But, as
Community benefit programmes
shown by the interaction between Lord Krishna and Arjuna,
The community looks up to Shree as a responsible and trust is also something that takes performance to
supportive corporate citizen. The Company has been active untouched orbits. At Shree, we too are using trust in a
in promoting community interests. For instance, the material and tangible way to achieve higher levels of
Company has renovated and created community assets like performance.
River Ghats. As usual, the Company's annual temple
Illustrating the benefits of mutual faith is a motto I am going
function, featuring scintillating performances by both
to leave you with - 'As faith wills, fate fulfils.’
domestic and international artistes is a big hit with local
people and folks from surrounding areas.
Greening the processes
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.
27
Cement Production EBIDTA
Gross Turnover
Clinker Production 3500 Net Profit
90 Net Turnover 1200
3097.1
77.7 80 3000 1033.7
939.2 1000
70

2715.0
63.4 2440.3
2500

64.2
60 800

2109.1
48.0 50 611.0
1613.1 2000
600
46.2

30.2 32.2 40

578.0
1368.0
35.1

30 723.0 824.1 1000

27.7
24.8

173.9 221.5 400

582.1

29.1
669.4
20

18.4

260.4
177.0
500 200
10
04-05 04-05 04-05
05-06 05-06 05-06
06-07 0 06-07 0 06-07 0
07-08 07-08 07-08
08-09 08-09 08-09

Clinker & Cement Production (Lac Tons) Gross Turnover & Net Turnover (Rs. Crore) EBIDTA & Net Profit (Rs. Crore)

Performance Highlights
Operating Margin Cash EPS Gross Fixed Assets Current Ratio
Net Profit Margin EPS Net Fixed Assets Quick Ratio
250 3000 3.0
227.2 2734.8
44.7 44.5 45 2.7
207.9 225
40 2500 2.5
38.1 200 2.3
2205.3
35 2.1 2.1

2.2
33.1 175 2001.1
29.9 154.2 2000 2.0
165.9

30

1.9

1.9
150
25 1390.9 1.4
125 1139.6 1500 1.5
20

1.1
100
21.3

43.5 53.0 1000 1.0

1105.7
15

891.9
75
74.7

635.3

727.7

0.7
12.9

777.9
12.3

50.8

10
8.3
5.0

50
2.7

5.3

500 0.5
5 25
04-05 04-05 04-05 04-05
05-06 05-06 05-06 05-06
06-07 0 06-07 0 06-07 0 06-07 0
07-08 07-08 07-08 07-08
08-09 08-09 08-09 08-09

Operating & Net Profit Margin (in %) Cash EPS & EPS (Rs. Per Share) Gross Fixed Assets & Net Fixed Assets (Rs. Crore) Current & Quick Ratio (Times)

29
 Performance Highlights

45% 12 2.00
40% 1.80

1.9
10
50 10
39.3
48.4

1.7
33.9 35% 1.60

30% 40 8 1.40

8
1.20

36.5
25%
24.6

24.9

1.0
30 6
21.9

1.00

6
20% 0.9

0.8
5
0.80

24.1

4
18.5
15% 20 4
0.60
10%

9.7
0.40
10 2
5% 0.20
04-05 04-05 04-05 04-05
05-06 05-06 05-06 05-06
0 0 06-07 0 06-07 0
06-07 06-07 07-08 07-08
07-08 07-08 08-09 08-09
08-09 08-09

Return On Capital Employed (in %) Return On Net Worth (in %) Dividend (Rs. Per Share) Debt Equity Ratio (Times)

Royalty & Cess Excise Duty & Service Tax

Income Tax Other Taxes
400 900
60 14 Sales Tax 828
347.3 350 46 800
12
50 698 700
12.1
50.0

300 33 183
10 140 600
40 250
36.6

474
35.3

8.1

8 500
6.9 200 27
7.4

30 308

193.1
126 266 400
6
5.9

150
26.4

186 223

130.5
18.2 20 19 19 300

83.1
4 11 14 180

85.1
100 49 77
97
200
101 195 242
10 2 11 113
50 11 100
04-05 04-05 04-05 04-05 28
64
05-06 05-06 05-06 05-06
06-07 0 06-07 0 06-07 0 06-07 49 0
07-08 07-08 07-08 07-08
08-09 08-09 08-09 08-09

Inventory Turnover (Days) Debtor Turnover (Days) Book Value (Rs. Per Share) Contribution to Exchequer (Rs. Crore)

31
Departmental Highlights

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

Limestone

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. 18

16.49
16

16.13
As Shree has grown, so also has the internal capacity to
14
process limestone – from 5000 TPD (tons per day) to 50,000
12

12.35
TPD in the last five years. Not content with such an
10
impressive trajectory, the Company is aiming bigger; Shree
8
has acquired prospecting licenses and mining leases in

7.03
6
different parts of the Country in an effort to increase its
4

4.32
mining area.
2
Use of hi-tech machinery, large-sized equipment to realise 0
04-05 05-06 06-07 07-08 08-09
size economies, building of levelled and compacted roads
and modification of equipment design are some of the Flyash Procurement (Lac Tons)

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.
Fly ash
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.

33
Pet coke Procurement of packing bags

Shree is the pioneer in the use of 100% pet coke, a waste We have an online bidding system, which allows packing
from petroleum refineries, both for its cement as well as bag suppliers to bid and compete for our orders.
power plant operations. Today, with annual consumption of A tremendous success, the system has been able to handle
1.2 Million Tons, Shree is the largest pet coke consumer in larger and larger procurements. In the year under review,
the world cement industry. we were procuring at the rate of 1.5 crore bags a month.
Such volumes are drawing more and more vendors to the
The recessionary trends in the world economy depressed
system, thereby increasing its competitiveness and
international pet coke prices during the later part of
enabling procurement at lower costs.
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.

35
 Departmental Highlights

Manufacturing
Clinker production in Kiln I during 2008-09, at 10.87 lac tons, 80

79.35
was its highest ever. Similarly, productivity of all the kilns of
the Company improved last year; surely, an outcome of 78

better operation & maintenance practices of equipments

76.72
76
and efficiency improvement initiatives.

75.17
Such practices have slashed downtime of various 74

73.87
73.45
equipments in the production process. Take, for instance,
the following : 72

n36 hours to dismantle ring formation inside Kiln I from 70

04-05 05-06 06-07 07-08 08-09
feed to feed, instead of the earlier 72 hours
Power Consumption (Kwh per Ton of Cement)
Khushkhera Grinding Unit n76 hours to replace old Roller Press Rollers in Cement
12
Mill II with new ones without the help of equipment

11.73
engineers, instead of the normal 96 hours

11.34
11

10.96

10.75
n4 hours of downtime saved during annual shutdown

10.37
through faster cooling of Kiln by running SG Fan 10

n24 hours to replace cracked inner race of fixed roller 9

drive end bearing without dismantling roller bearing,
instead of the usual 72 hours 8

7
04-05 05-06 06-07 07-08 08-09

Clinker Production (TPH) Fuel Consumption (% of Clinker)

Kiln 2008-09 2007-08
I 131 124 Product mix
II 189 183
III 131 120 In response to growing demand for OPC (Ordinary Portland
IV 135 118
Cement) coming from the institutional segment of the
V 129 110
VI 132 52* market, OPC production was increased from 20% of the
*Low because Unit VI commissioned in March 08 was total in 2007-08 to 24% in 2008-09.
Cement and clinker production under stabilisation.
100 PPC
OPC
Our production figures have outpaced the industry. While Power and fuel consumption
80
cement production in India increased by 7.8% in 2008-09 80 76 76
The higher production figures were achieved at lower
over 2007-08, Shree’s cement production grew nearly three
power and fuel costs. This happened partly due to energy 59
60
times at 22.5%, from 63.4 lac tons in 2007-08 to 77.7 lac tons 54
conservation measures taken by the Company such as:
in 2008-09. This has helped the Company get the most out
40 46
of growth opportunities in the market. nInstallation of High Efficiency Main ESP and PH fans 41
24 24
20
For the same period, the Company’s clinker production nIncrease in the stack height of Cooler ESP fan 20

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 nInstallation of VFDs on Dust Collector Fans in Cement 0
04-05 05-06 06-07 07-08 08-09
clinker production supported higher cement production Mill, Raw Mill and Packing Plant at all the units
OPC & PPC Production (%)
and higher clinker sales.
37
Departmental Highlights

Logistics 35

30 32.53
Clinker
Cement

25
Cement and clinker dispatches
20 19.05
Cement and clinker dispatches have increased
substantially, by 27.7% - from 66.1 lac tons in 2007-08 to 84.4 15 12.46
12.28
lac tons in 2008-09. A larger share of dispatches happened 12.06
10 11.58
by road, because most of them took place from our Ras and
5
Khushkhera works, which did not have rail sidings. Thus, rail
dispatches, as a percentage of the total, slid down from 27% 0
06-07 07-08 08-09
in 2007-08 to 17% in 2008-09.
Rake Load Time (hours)

80 Qty. - Road Dispatch (Lac Ton) 40 Freight saving from higher truck turnover
Qty. - Rail Dispatch (Lac Ton)
% Rail Dispatch to Total
In the year 2008-09, clinker freight from clinkerisation units

64.72
60 29 30 at Ras/Beawar to our grinding unit at Khushkhera came

% of Rail Dispatch
27
down to Rs. 423 per ton from Rs. 477 in the previous year.

Lac Ton
Such a significant reduction happened due to faster truck

46.55
40 20
turnarounds, which in turn speeded up the load-unload

34.37
17
cycle of clinkers between Ras/Beawar and Khushkhera, thus

16.84
13.67

12.90
20 10
0 0
06-07 07-08 08-09
Rail & Road Dispatch (Cement)
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.
Open Wagon Loading
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.
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.
Larger dispatches from Khushkhera
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.
Faster dispatches
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.

39
Departmental Highlights
Power Plant, Beawar
Power
Capacity Greater generational efficiency during 2008-09 was also
Shree is self-sufficient in meeting its 100% power indicated by the lower heat rate (fuel in calorific terms
requirements. The Company's captive power capacity rose required to generate 1 Kwh) of 2744 Kcal/Kwh in 2008-09, as
by 17.7%, from 101.5 MW in 2007-08 to 119.5 MW in 2008-09. against 3005 Kcal/Kwh in 2007-08. Such a massive
This has not only supported larger cement and clinker reduction in heat rate is a rare achievement in the power
production, but also opened up the virgin opportunity of sector.
power sale. 'Green’ power
140.0
'Green' power is power generated from waste heat in the
120.0 cement plant. Because, it does not require additional fuel, it
119.5
does not leave any carbon footprint and is therefore,
100.0
101.5
environment-friendly.
80.0
Shree is already generating Green Power from its existing
green power plant (Waste Heat Recovery plant) installed at
65.0
60.0
Kiln 1. The Company has now undertaken work of setting up
45.0
40.0
39.0
such green power plants at all its clinkerisation units. Once
20.0
all these green power plants are completed (which is
0.0 expected by end of financial year 2009-10, the total capacity
04-05 05-06 06-07 07-08 08-09
of Green Power Plants will add up to 43 MW. Outside of
Captive Power Capacity (MW)
China, this would be the largest green power generation
Generation
capacity in the World.
Gross power generation surged by 45%, from 540 Million
Power sales
Units in 2007-08 to 783 Million Units in 2008-09. A greater
A new development this year has been the opening of the
power demand came not only from the larger production in
Indian Energy Exchange, the Country's national energy
the cement plant, but also from the increased opportunity
trading platform. Sensing the immense opportunity, Shree
of power sales. In response to this, the power plant achieved
started leveraging its ramped-up captive power capacity to
the higher PLF of 83.48% during 2008-09. The Company
engage in power sales.
generated efficiencies in the power plant operation and
thus brought down its auxiliary consumption. In fact, It is not only fetching additional revenue for the Company,
auxiliary consumption during 2008-09 was the lowest at but also resulting in greater operational efficiency all-
7.36% against 7.92% in 2007-08 of gross generation. round. Operations in the power plant have been
streamlined to increase power generation. Power demand
800
783 both in the cement and power plants has been rationalised
700
and operating efficiencies therein improved to make
600 available more power for sale. For instance, Ash handling,
500 540 CHP and DM operations in the power plant, consuming a lot
400 of power, were confined to time bands matching off-peak
349 hours of power demand in the Country. Such operations,
300
267 curtailed during peak hours, freed additional power for sale
200 226
at high peak power tariff. In the cement plant, operations of
100 Crushers, Raw Mills, Cement Mills, Stacker/Reclaimer etc.
0 underwent similar optimisation.
04-05 05-06 06-07 07-08 08-09
Power Generation (Million Units)
41
 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.

Energy efficiency, automation and safety thrust

Installation
n 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
n into operation unmanned substation, made
possible by advanced equipment and PMS

VFD
n installation in various fans, WHRB Recirculation
Pump, etc

Optimisation in the operation of ACW pumps & CT fan

n

Adoption
n of latest technology for monitoring and
control like infrared camera, laser alignment kit, belt
alignment kit, electrical discharge detector

Replacement
n of solid F.R.P. with hollow blades in all the
C. T. Fans for better performance

Celebration
n of power plant safe year (including
inauguration of safety exhibition room showing best
housekeeping and best practices with latest safety
gadgets)

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.
43
Departmental Highlights
Quality and R&D
Plant rating Any excessive reliance on a raw material carries with it high
risk of cost appreciation or supply shortage. Flyash is an
Our quality efforts are directed at monitoring and
input that is likely to be in a scarcity in the long-run. To get
improving equipment and processes. International cement
around that, we have started the use of alternate additives
consultants, Whitehopleman, UK has furnished a 4 Star
like lead-zinc slag, effluent treatment plant (ETP) sludge, etc.
rating for Shree's cement plant. This is the highest rating
received by any cement plant in the world. The Company ETP sludge usually entails a cost of disposal. But, its use as an
has been securing this rating for nine years in a row. This is a additive in cement production is generating revenue rather
fact that suggests the high level of plant quality. than incurring cost.

'Green' processes and materials

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.

45
Departmental Highlights Knowledge systems
With 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.

47
Departmental Highlights Marketing and Branding
Turnover

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.

Opportunity from capacity

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.

Multiple brand strategy

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.

50

47.58
45 2007-08
2008-09
40

39.47
35

30

25

20

18.45
16.12
15

11.65
10

7.75
5

0
Shree Ultra Bangur Rockstrong

Sales Quantity (Lac Ton)

49
Distribution network

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.

Optimising ad spend

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.

Market share

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.

30% 2006-07
2007-08

26%
25% 2008-09

24%
23%
22%
20%

20%

19%

18%
18%
18%
15%

13%
10%

10%

10%
8%

8%
7%
5%

0%
Rajasthan Haryana Delhi Punjab Uttrakhand

Rising Market Share (%)

51
Departmental Highlights Human resource
One of India's Top 20 Best Employers makes a person more responsible, enthusiastic, competent
and committed. It yields initiatives down the line. The
In a survey carried out jointly by Business Today, Mercer and
percentage of people promoted has been hovering around
TNS in 2008, Shree emerged as one of India's Top 20 Best
a high 27% for the last three years.
Employers. Shree was the only cement company and one of
Promotions
the five manufacturing companies to be considered in the Year % of Promotions
study. Such a finding only serves to bring out what we 2004-05 29.31
2005-06 29.70
already know – the strong commitment of the Company to
2006-07 27.67
its human assets. 2007-08 27.47
2008-09 27.50
Shree's score in Internal Employee Perception Survey and
Employee Engagement Index was higher than the average The number of workers promoted to staff category has
score of India's Top 10 companies in the study (referred as increased dramatically this year, from 97 in 2007-08 to 264 in
‘The Best’ in the following graph). These two categories 2008-09. More than the pay, such promotions endow
together indicated the sense of ownership and belonging people with intangibles like pride of higher position.
Shree employees felt towards their company.
No. of Workers promoted to Staff Category
Year No. of Promotions
100 Shree Cement Ltd.
2004-05 2

83.94
The Best

93.20
2005-06 7

91.32
90.90

85.08
80 The Rest 2006-07 18

78.19
2007-08 97
2008-09 264
60
Recruitment during recession
40
In the face of rampant layoffs in the industry during the
recession, Shree has actually increased recruitment of its
20
people. Manpower increased from 2418 in 2007-08 to 2566
in 2008-09. Such figures illustrate more than words the fact
0
Average Engagement that the Company prizes its human assets.
Score Score
Competency mix
The above gets reflected in the attrition rate, which came
down from 7.5% in 2007-08 to 5.9% in 2008-09. The management believes that diverse skill-sets make the
Attrition Company more versatile, increase its in-house capabilities
Year Attrition (%) and ultimately save costs.
2004-05 3.77
2005-06 5.28
For instance, the platform of Shree's robust IT infrastructure
2006-07 6.15
2007-08 7.53 was first laid by in-house talent. At present, the Company
2008-09 5.90 has entrusted the activity of exploration and prospecting
for limestone deposits, not to outside specialists, but to our
Sustained policy of promotion
experienced people in mining. Such endeavours not only
People at Shree can expect fast promotions on the strength add new in-house capabilities, but also do away with the
of their track record and leadership drive. The underlying need of engaging expensive outside help.
assumption is that competence rises to the level of
responsibility, i.e., the process of bestowing greater power

53
“I was particularly moved by your Qualification Break-up
Qualification Number of employees
sense of humility and commitment Engineers 1013
to the welfare of the men and CA/CS/ICWA/CFA 63
Legal (LLB) 18
women who work for your Post Graduates 177
organisation...The support given to Graduates 301
MBA 164
us by your senior management MCA/MSW 12
went beyond the call of duty and a MBBS 3
Others 565
testimony of the dedication and
calibre of staff who are associated Competency building
with your company.”
At Shree, there is continual reinforcement, retooling and
- In a letter to Mr. H. M. Bangur from the renewal of skill-sets. Such an ongoing process not only
African-Nigerian Team comprising of the builds overall capacity and makes it versatile, but also has
daughter of Dr. Nelson Mandela 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.

Impact of training

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.

Details of Training Conducted

Particulars 2008-09 2007-08
In-house External In-house External
Programmes 338 99 297 115
Participants 6100 199 4304 217
Person days spent
on training 2900 471 2233 667
Person-hours of training 23206 3769 17867 5341

Knowledge sharing

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.

55
 Departmental Highlights Finance
The leverage to expand Credit rating Conservative accounting policy This has resulted in a higher depreciation charge over the
last five years as under:
The Company has leveraged its financial position well to Reflecting the high credit standing of the Company is the Depreciation is the erosion in the value of an asset with the
maintain an improving debt-equity scenario despite high credit rating given for debt of different tenures. The passage of time. In an accounting framework, depreciation
Particulars Total Depreciation
aggressive capacity additions. The resources raised have Company's MIBOR linked borrowing instrument enjoyed is the method by which the gross value of an asset becomes over 2004-05 to 2008-09 (Rs. Crore)
been gainfully utilised, as manifested by the improved the highest credit rating of CARE PR1+ for a larger short- progressively smaller every year over the asset’s useful life; it If depreciation policy followed
till 2004 had been continued 764.08
Secured Debt to EBIDTA ratio - from 1.24 in 2007-08 to 1.18 term debt of Rs.500 crore against the earlier limit of Rs. 250 is a rough estimation of wear and tear. Based on changed
depreciation policy 1404.13
in the current year. This gives the Company enough room to crore in 2007-08.
Although essentially an accounting convention, Additional Depreciation
mobilise resources from lenders, thereby protecting the Charged 640.05
Shree's long term borrowings have also secured a very high depreciation in the account books gives a fair idea of the
shareholders value by obviating the need of raising any
credit rating of CARE AA+ even at a higher limit of Rs.500 cost of earning in terms of assets utilized. Thus, post a If Shree had continued its earlier depreciation policy, its net
additional capital.
crore as against Rs.100 crore in the previous year. depreciation charge, the approximate value of assets still
1.50
worth would have been higher by Rs. 640.05 crore as on 31st
Secured Debt / EBIDTA working for the Company gets known. It is for this reason
1.46 March, 2009. Similarly, its book value per share would have
1.45 1.45 CARE AA+ rating has also been assigned for the purpose of
that the Indian Companies Act has made it mandatory for
Basel II bank borrowing bench marks. In 2007-08 AA rating been higher by Rs. 183.73.
1.40 1.39 companies to charge minimum depreciation as per rates
was assigned for this purpose.
1.35 prescribed in Schedule XIV of the Act. Companies are
Net Worth and Book Value
All these shall assist the company to access funds at a more however free to charge depreciation higher than the Net Worth Book Value
1.30
Particulars as at 31.3.09 as at 31.3.09
competitive rate. Being long in funds, such high credit statutory minimum.
1.25 1.24 (Rs. Crore) (Rs./per share)
rating shall make the Company exploit the short term If depreciation policy followed
1.20 A higher depreciation policy is part of a conservative till 2004 had been continued 1850.06 531.06
versus long term fund arbitrage opportunities more Based on changed
1.18 accounting approach. It assumes that assets have reduced
1.15 depreciation policy 1210.02 347.33
aggressively.
in value faster than normal. Being a cost, a higher
1.10
04-05 05-06 06-07 07-08 08-09 depreciation would tend to pull down book profit and net
Secured Debt / EBIDTA worth. But, rather than blow up profit and net worth figures,
Net indebtness the Company decided to adopt the conservative policy of
charging higher depreciation. Such a company policy
The conservative policy of restricting the financial leverage underlines the confidence of the Company in its own ability
is also exemplified by continuous reduction in net debt to perform and earn profit at high levels. It also reflects the
position of the Company. The surplus generated has been faith of the Company on its stakeholders and their
gainfully invested in debt market securities and debt acceptance of relatively lower book value and net worth.
oriented mutual fund schemes to maximize the arbitrage
opportunity. The net debt ( total debt – cash & cash From the year 2004 onwards, Shree changed its
equivalents) has reduced from Rs. 272.26 crore in 2007-08 to depreciation policy gradually across all its fixed assets from
Rs. 58.2 crore in 2008-09. “Written Down Value Method (WDV) / Straight Line Method
600.00 (SLM) rates as per Companies Act 1956” to “WDV Method at
Net Debt
528.06 the rates specified in the Schedule XIV of the Companies
500.00
Act, 1956 or Income Tax Act, 1961, which ever is higher.” In
400.00 case of those assets, whose WDV as per Income Tax Act,
353.66 1961 was lower than the WDV as per Books, additional
300.00
284.08 272.26 depreciation was provided to align the book WDV with WDV
200.00
as per Income Tax Act, 1961.

100.00
58.20

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

Net Debt (Rs. Crore) 57

Departmental Highlights Shareholder value
Performance value Higher scrip profile

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.
Growing intrinsic value
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

Take intrinsic worth of the company. The fact that it is on a March, 2009. (Source: Capital Market Magazine Data Bank)

steady rise is amply indicated by the increase in Book Value

Corporate Governance
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. Shree follows an exemplary corporate governance
approach, which creates a transparent dialogue with
Another indicator of the Company's rising intrinsic value
stakeholders and goes beyond compliance to impact
comes from the Return on Net Worth (RONW). This is a
governance in a more fundamental way. Proactive thrusts
metric that shows the rate of return on resources retained
and clear foresight are the hallmark of the approach.
and deployed by the Company in the business rather than
distributed as dividend to shareholders. RONW was an Sustaining value of the enterprise for stakeholders is a
incredible 48.43% in 2008-09 against 36.51% in 2007-08. prime goal. A robust risk management structure ensures
From the shareholders’ viewpoint, their investments in that all known risks are identified and contained.
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.

59
 Departmental Highlights
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
Corporate sustainability
The triple bottom line
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.
Community focused
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.
Health-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.
61
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.
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.

1000
CO2 emissions and energy use in mining equipment utilising
fossil fuel were slashed by modifying the equipment and

871
800
concreting haul roads. Fugitive dust emissions in material
handling areas were reduced by installing and upgrading

627
600
dust bag collectors, creating walled enclosures, constructing
underground storages and concrete areas and installing
400
better water sprinkling systems. To monitor and bring down

304
stack emissions, opacity metres have been installed at boiler

246
200
stacks and operational efficiency of ESPs improved.

118
0 A water conservation thrust in the power plant has resulted in
04-05 05-06 06-07 07-08 08-09
the installation of Air-cooled Fluid Cooler to partly replace the
Expenditure on Environment (Rs. Lac)
conventional water-cooled Cooling Tower.
The Company was the first in the world to register a Clean
Development Mechanism (CDM) project, 'Optimal Environment protection also comes from lower waste
Utilisation of Clinker,' with United Nations Framework generation. We have adopted zero waste disposal practices in
Convention on Climate Change (UNFCCC). This project uses our cement and power plants. For instance, boiler ash in the
less quantity of the energy-intensive clinker and greater power plant is sent to grinding mill and afterwards fed as low-
quantity of additives like flyash to produce cement. During calorific-value fuel to the cement kiln. Waste land created by
the year under consideration, 1,00,043 Certified Emission mining activity is reclaimed through tree plantation. Solid
Reduction (CERs) were issued by UNFCCC (the third such waste from our sewage treatment plant (STP) is used as
issuance for the company) for the project. CER is a tradable manure. Waste water from STP and power plant is reused for
irrigation of our green belt and sprinkling on roads to curb
credit representing greenhouse gas emission reductions
dust emissions. Waste lubricating oil and batteries are either
equivalent to one tonne of CO2 achieved through a CDM
recycled for use within the plant or for sale to authorized
project.
government dealers. Waste gases are reutilized for power and
18 Flyash
steam generation.
CO2 reduction
16

15.51
Trees protect both the ecology and climate of a region.

14.91
14

14.09
13.67
12
Realising their importance, Shree has been making a
concerted effort to green its premises. The company planted

10.71
10
334002 trees over 195 hectares till 31st March, 2009. Such

9.66
8
plants have had a healthy survival rate of 96%.
6

5.77
5.33
4 The Company's environment consciousness shows in the
3.97
2 3.66 continued spurt in expenditure on environment. The
combined figure for Beawar, Ras and Khushkhera sites has
0
04-05 05-06 06-07 07-08 08-09 increased from Rs. 627 lac in 2007-08 to Rs. 871 lac
Flyash Utilisation and CO2 reduction (Lac tons) in 2008-09.
63
Awards
Awards

Green-Tech Environment Excellence Award

n

Golden
n Peacock Award for Combating
Climate Change

National
n Safety Award awarded by the
Honourable President of India, Smt. Pratibha
Patil

First Prize
n for Energy Conservation at its
mines by Indian Bureau of Mines

Corporate
n Excellence Award by Rajasthan
Chamber of Commerce & Industry (RCCI) in
all four categories namely Corporate
Governance & Capital Market, Financial
Per formance & Analysis, Business &
Qualitative Aspects and Annual Report
Presentation as well as Management

Award
n for Best Cost Management Practices
by Institute of Cost and Works Accounts of
India (ICWAI).

SILVER CIO
n Award by the CIOL Dataquest
Enterprise Connect Awards 2008

65
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.
Sitting (From Left)
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
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.
Profile of Directors
Shri R.L. Gaggar, 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.
Shri O.P. Setia, 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.
Shri Shreekant Somany, 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.
Dr. Abid Hussain, 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.
Dr. Y.K. Alagh, 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.
Shri Amitabha Ghosh, 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 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 Policies
SUSTAINABILITY POLICY HEALTH & SAFETY POLICY SOCIAL ACCOUNTABILITY POLICY HUMAN RESOURCE POLICY
To ensure Good Health and Safe Environment for all To operate in a socially responsible manner and focus on We at Shree Cement are committed to:
To produce quality cement in an eco-friendly, healthy &
concerned by: continual improvement of workplace conditions by:
safe working environment in a socially responsible nEmpower People.
manner with continual improvement in performance and nPromoting Awareness on sound health and safe nConforming to all the requirements of SA 8000
nHonour individuality of every employee.
profitability to the satisfaction of all stake holders by working practices. standard.
ensuring: nNon discrimination in recruitment process.
nContinually improving health & safety performance by nRespecting the international instruments for Social
nCustomer satisfaction. regularly setting and reviewing objectives & targets. Accountability and complying with all applicable laws. nDevelop Competency.

nClean and green environment. nIdentifying and minimising injury and health hazards nEmployees shall be given enough opportunity for
by effective risk control measures. Betterment.
nSound health and safe working practices.
nComplying with all applicable legislations and ENERGY POLICY nNone of the person below the age of 18 years shall be
nCompliance to the applicable laws and respecting the To reduce to the maximum extent possible the
regulations. engaged to work.
international instruments. consumption of energy without impairing productivity
“PROSPERITY THROUGH HEALTH & SAFETY” which should help in: nIncidence of Sexual Harassment shall be viewed
nImplementation of the systems and continually
seriously.
improving their effectiveness. nIncrease in the profitability of the Company.
nStatute enacted shall be honoured in letter & spirit &
nAdoption of cost effective technologies and practices nConservation of Energy.
HIV / AIDS POLICY standard Labour Practices shall be followed. Every
for improved productivity and profitability.
Being a socio-economic issue concerning stakeholders of nReduction in Environmental pollution at Energy employee shall be accountable to the law of the land
nMutually beneficial stakeholders' relationship. the society Shree Cement is committed to: producing areas. & is expected to follow the same without any
deviation.
nHuman resource satisfaction. nCreate awareness on HIV/ AIDS and its prevention Since Energy is the Blood of Industry, It is the
among all stakeholders of the society. responsibility of all of us to utilize energy effectively nManagement will appreciate observance of Business
“AN ENERGY & ENVIRONMENT CONSCIOUS SUSTAINABLE
and efficiently. ethics & professional code of conduct.
ORGANISATION” nTreatment of HIV/ AIDS infected patient in the
Company's Dispensary without any discrimination. “ENERGY SAVED IS ENERGY PRODUCED” nTo follow Safety & Health, Quality, Environment,
Energy Policy.
ENVIRONMENT POLICY
To ensure: QUALITY POLICY INFORMATION TECHNOLOGY (IT) POLICY
To provide products conforming to National standards To create a robust IT platform that would focus on better WATER POLICY
nClean, green and healthy environment.
and meeting customers requirements to their total efficiency & transparency in a constantly changing and To provide sufficient and safe water to people & plant
nEfficientuse of natural resources, energy, plant and satisfaction competitive business environment. as well as to conserve water, we are committed to
equipment. efficient water management practices viz:-
To continually improve performance and effectiveness of
nReduction in emissions, noise, waste and green house quality management system by setting and reviewing nDevelop means & methods for water harvesting.
gases. quality objectives for: nTreatment of waste discharge water for reuse.
nContinual improvement in environment management. nCustomer satisfaction. nEducate people for effective utilisation & conservation
nCompliance of relevant environmental legislations. nCost effectiveness. of water.
“CLEAN AND GREEN IS PROFITABLE” “JO SOCHE, WOH PAAVE” nWater audit & regular monitoring of water
consumption.
“WATER ADDS VALUE TO PEOPLE & ORGANIZATION,
CONSERVE IT INTELLIGENTLY”

69
 Five & Fifteen Years’ Highlights

Five Years’ Financial Highlights Fifteen Years’ Highlights

(Rs. Lac)
Particulars 2004-05 2005-06 2006-07 2007-08 2008-09 Sl. Year Clinker Cement Sales Sales Value Net Worth Book Value
Production (in lac MT) No. Production Production Qty.
MT MT MT (in Rs. Lac) (in Rs. Lac) (Rs. per share)
Clinker (in lac MT) 24.83 27.71 35.09 46.23 64.18
Cement (in lac MT) 30.16 32.20 47.99 63.37 77.65 1 1993-94 858226 876150 889401 15652.65 7124.74 28.92

Sales (Clinker & Cement)(in lac MT) 30.71 32.75 49.43 66.05 84.50 2 1994-95 893291 927233 927005 18144.30 8858.99 35.99

Energy Consumption 3 1995-96 887532 861964 867551 20765.88 13487.43 46.46

Power (Kwh per ton of Cement) 75.17 73.45 73.87 79.35 76.72 4 1996-97 (15 months) 1079242 1185426 1162086 25112.19 18202.76 52.25
Coal (% of Clinker) 10.96 10.37 11.73 11.34 10.75 5 1997-98 1435803 1725531 1662332 34278.00 19056.86 54.70
Sales - Gross 72302.60 82412.79 161314.44 244032.08 309716.69 6 1998-99 1945418 2043609 2090715 44214.50 19654.48 56.42
Other Income 409.04 330.47 2127.33 7683.91 8289.61 7 1999-00 2284781 2312408 2310135 48456.13 21939.14 60.82
Total Income 72711.64 82743.26 163441.77 251715.99 318006.30 8 2000-01 2113279 2383366 2400270 55460.48 24705.98 66.61
Operating Expenses 55318.98 60963.58 102342.04 157791.11 214640.33 9 2001-02 (9 months) 1624686 1806358 1802156 39721.69 21560.59 57.58
Operating Profit 17392.66 22148.85 61099.73 93924.88 103365.97 10 2002-03 2285091 2746880 2725485 58242.94 22239.73 63.84
Interest 1982.73 1283.36 1037.37 5329.64 7443.18
11 2003-04 2293627 2840596 2841316 60692.88 25138.28 72.16
Profit before Depreciation & Tax 15409.93 21234.66 60062.36 88595.24 95922.79
Less: Depreciation & Amortisations 12296.45 18520.68 43305.33 47875.86 20538.70 12 2004-05 2483247 3015593 3060994 72302.60 28948.89 83.10
Less: Exceptional items - - (2123.73) 3888.46 3093.05 13 2005-06 2770663 3219949 3202709 82412.79 29629.67 85.05
Profit before Tax 3113.48 2713.98 18880.76 36830.92 72291.04 14 2006-07 3506064 4799088 4832851 161314.44 45454.52 130.48
Tax (including FBT) 244.14 286.24 8451.75 12265.32 13686.98
15 2007-08 4623494 6337070 6334208 244032.08 67280.53 193.13
Deferred Tax (37.25) 587.35 (7271.22) (1471.60) 807.12
16 2008-09* 6418278 7765207 7767696 309716.69 121001.69 347.33
Profit after Tax 2906.59 1840.39 17700.23 26037.20 57796.94
Absolute No. of 15 Years 7.48 8.86 8.73 19.79 16.98 11.89
Basic and Diluted EPS (in Rupees) 8.34 5.28 50.81 74.74 165.91
Times 10 Years 3.30 3.80 3.72 7.00 6.16 6.16
Cash EPS (in Rupees) 43.53 52.98 154.24 207.94 227.18
5 Years 2.80 2.73 2.73 5.10 4.81 4.81
Net Block* 41972.24 57530.85 49895.10 75995.86 62685.57
Shareholders' Fund* 28948.89 29629.67 45454.52 67280.53 121001.69 CAGR 15 Years 14.35% 15.66% 15.54% 22.02% 20.78% 17.95%
Total Capital Employed* 58661.08 66903.11 138591.37 200350.35 270617.02 10 Years 12.68% 14.28% 14.02% 21.49% 19.93% 19.93%
#
Return on Net Worth (%) 18.52 9.65 24.06 36.51 48.43 5 Years 22.85% 22.28% 22.28% 38.54% 36.93% 36.93%
Return on Avg. Capital Employed (%) 21.93 24.61 39.29 24.88 33.86

* Excluding Revaluation Reserve * Sales value includes amount of power sale.

# Return on Average capital employed has been calculated after adding additional depreciation. Note: 1. Net Worth is net of revaluation reserve.
Figures have been regrouped/rearranged whereever necessary 2. Figures regrouped and rearranged whereever necessary.

71
 TRUST DOES THE IMPOSSIBLE

Management Discussion TRUST DOES THE IMPOSSIBLE

and Analysis
Global Outlook Cement Outlook half of 2009-10 and once again attain a positive growth track. In India, infrastructure development augurs well for the cement industry.
the above 9% growth recorded during 4 years period from 2004-05 to
Global economy witnessed one of its worst crises in the year gone by. Indian Cement industry is largely dependent on domestic market and Company Performance
What started as a credit crunch caused by misapplication of risk controls has a cluster market structure. It was thus less affected by the external 2007-08 has brought about a structural transformation for attracting
Fiscal 2008-09 was a landmark year for the company as it created a
in USA transformed into a full blown economic crisis unprecedented in events. However, signs of slackness in cement demand were felt in the private investment both domestic and foreign, creating and upgrading
world record by completing Unit VII (Clinkerisation unit) in just 367
recent memory. The crisis led to collapse of large financial institutions middle of the year as a result of fall in real estate, low infrastructure and infrastructure and fostering open market economy. Thus India’s
days – clear demonstration of its project execution capabilities. This
and wiped off massive values from balance sheets. Consequent de- private capital expenditure and overall gloomy economic environment. fundamentals remain strong. Once the normalcy returns to the global
World Record achievement is the result of great team work,
leveraging of financial institutions led to global liquidity squeeze and Cement industry also faced the challenges of ban on cement exports, economy, the inherent strength of the Indian economy will lead it to a
commitment to excellence and focus on achieving the unachievable.
loss of business confidence hampering international trade. zero duty imports from Pakistan and high incidence of taxes on cement rapid and sustained growth. Government both at center and state level
which made it difficult for cement companies to protect their margins. have to play a proactive role for upgrading the infrastructure and
The economic situation in most of the developed nations is still fluid
Along with this, high fuel prices which reached their all time peak levels supporting the private investments through Public-Private Partnership
amidst a bleak economic outlook. All round efforts are being
during the year increased the cost of cement production. It is worth and liberal policy environment. High economic activity and focus on
undertaken to stimulate consumption and bring the world back to
“Business as usual”. However the road to recovery will be slow and till mentioning that Power and Fuel cost comprises of more than 50% of
then the world economy will have to go through slowdown, if not the total cost of cement production.
recession. Towards the end of calendar 2008, industry got some relief in the form
Indian Economy Outlook of withdrawal of ban on cement exports and removal of import duty Performance highlights for the year 2008-09:
exemption on cement imports. Further, as part of stimulus package,
India was not a part of the origin of this crisis. However in an integrated Particulars Unit 2008-09 2007-08 +/- %
Govt. of India also lowered Excise Duty applicable on cement, provided
global financial system, India could not remain insulated from the
sops to housing etc. Strong infrastructure and housing demand Turnover Rs. Crore 2,715.02 2,109.12 29%
effects of this crisis. The uncertainty in global economy has constrained
especially in semi-urban and rural India ensured that cement demand
capital flows into emerging economies including India. Indian economy Cement Production Lac MT 77.7 63.4 23%
growth rate was reasonable. As a result, the cement industry has clocked
is expected to clock a growth of 6-6.5% for 2008-09 against an average Cement & Clinker Sales Lac MT 84.5 66.0 28%
a good performance during the year. The highlights of the year were: -
growth rate of around 9% in the last four fiscals. However seen in Profit Before Interest, Depreciation & Taxes Rs Crore 1,033.66 939.25 10%
Growth in Cement production by 7.8% to reach 181.4 million tons.
n
context of global economic situation where most economies are looking
Growth in consumption by 8.4% to reach 177.8 million tons.
n
Operating Profit Margin % 38.07 44.53 -15%
at recession, the growth seems reasonable.
Capacity utilization dipped to 88% against 94% in the previous year.
n
Power consumption Kwh per ton 76.7 79.4 -3%
Global financial crisis coupled with high inflation, appreciating currency
and high interest costs led the economy to a rough patch by the middle Addition of new capacities to the tune of 18 million ton.
n
Fuel consumption kcal/ kg of clinker 766 773 -1%
of the financial year. Growth in the industrial sector plummeted due to Several new capacities have come up and more are expected to come Auxiliary Consumption of the power plants % 7.36 7.92 -7%
the impact of global slow down as well as slackness in local demand. upstream in the coming year. However current housing shortage and Heat Consumption / unit of Power generated Kcal/kwh 2,744 3,005 -9%
The Index of Industrial Production (IIP) turned negative in the last demand from semi-urban and rural housing segment will lead to
quarter of 2008-09 reflecting extreme pessimism in the economy. The increased demand for housing units, a major driver of cement demand.
growth in the manufacturing sector slowed down to 2.7% for the year. The implementation of recommendation of VI Pay Commission has
Timely action from Govt. in the form of relaxing monetary policy and Financial Performance
resulted in increasing the purchasing power in the hands of Govt
providing fiscal stimulus packages lifted up the sentiments. Towards the employees. A part of this is expected to be utilized in housing needs Company’s excellent financial performance during the year is the result of all round growth and improvement in efficiency levels. Snapshot of financial
end of FY 2008-09 the economy seemed to witness signs of revival which augurs well for cement demand. The government’s ambitious performance:
from the terrible mid year patch with sharp drop in inflation and revival Rs. Crores
plans for infrastructure development especially the commonwealth
in demand. games and the dedicated freight corridor will also drive cement Items 2008-09 2007-08
Fiscal 2009-10 starts on a cautious note. The inherent strength of the demand. Sales 2,715.02 2,109.12
Indian economy like high share of services in GDP, high domestic savings India’s GDP is forecast to grow at a subdued 6.5 - 7% for FY 09-10 due Raw materials Cost 246.13 210.99
rate, scope for relaxing tight monetary policy, ambitious plans for to the global economic scenario. However, the resilience shown by
infrastructure development etc. will act as a cushion in mitigating the Power & Fuel Cost 605.81 367.23
Indian economy to global meltdown indicates that it will be able to
adverse impacts of the global financial crises. Also the growth in Indian sustain high growth trajectory in the medium term. Thus the medium Staff cost 103.87 73.60
economy was mainly characterized by rising domestic consumption and term outlook appears relatively better. Sometime ago, the Chief Freight on inter unit clinker transfer 80.66 34.91
increasing infrastructure activity which continue to be relatively less Economic Advisor, Ministry of Finance, Govt of India also said that the Freight & Selling Cost 459.28 359.77
impacted from external events. We feel that the resilience shown by the medium term potential of Indian economy is 9%. There is a general
Profit before Interest, Depreciation and Taxes 1,033.66 939.25
Indian economy in the last few years gives confident signals that it will consensus that the world economy would start recovering from second
sail through this uncertain period of global turmoil as well. Net Profit 577.97 260.37

SHREE CEMENT LIMITED 73


TRUST DOES THE IMPOSSIBLE
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.
Operations
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.
Sales & Marketing
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.
New Business Initiative - Power
Power sector is evolving in India with increased govt’s impetus to drive
growth in this sector. New developments especially allowing Open
TRUST DOES THE IMPOSSIBLE
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.
Information Technology
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.
Internal Control
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
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.
Research and Development
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.
Sustainability – Triple Bottom-line approach
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:
Economic
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.
Environment – Green Initiatives
Your Company ardently follows the maxim of “Clean and Green is
Profitable”. It is committed to a low carbon economy and strives to
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
SHREE CEMENT LIMITED 75

replace existing Water Cooled Condensers at power plants with
Air Cooled Condensers.
Active Participation at International Forums
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.
Social
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
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.
Occupational Health and Safety - 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.
TRUST DOES THE IMPOSSIBLE
TRUST DOES THE IMPOSSIBLE
It invited expert faculties from Traffic police to conduct training strategic alternatives, setting related objectives and developing
programmes for drivers and security personnel. There were no fatal mechanisms for effective identification, assessment, reporting and
accidents in FY2008 09. mitigation of risks. Key Risks identified by the company are set forth
below:
Human Resources
Supply overhang due to new capacity addition – Several new projects
Your company has always pride itself in creating a work atmosphere
have come up and many are expected to go upstream in the coming
which brings the best minds to apply their best skills in the best jobs in
year. Some of them with big capacity have come up in the northern
the most fair and competitive manner. This concept is deeply inculcated
region where your company operates. This may led to increase in
in all its policies and strategies and has reaped good results to the
supply which may adversely effect prices and market share. However
company.
we feel that the demand is also expected to grow at reasonable levels
Every employee goes through an annual performance appraisal for him
which may set off negative impacts of new supplies. Company is also
to clearly visualize his performance, role alignment with the broader
constantly endeavoring to increase its market share through innovative
vision of the company, career development and perspective building.
marketing, timely capacity enhancement, expanding its market reach
Shree follows an open policy which discourages compartmentalization
etc.
and restriction of employees to their department specific roles.
Power business - Company is targeting power business as its new growth
Employees are encouraged to actively participate and contribute in the
engine. However the market is subject to volatile price movements.
overall performance of the company as a whole. Ideas are welcome
Company intends to mitigate the risk of volatile price movements
from any quarter and any employee from any rung or hierarchy. The top
through advance planning and bilateral contracts which fixes the rate
management is easily available to everyone to come up with anything
for the contract period. Power market is currently developing and
that can be of benefit to the company. This has enabled it to maintain a
provides immense opportunities. Company is fully geared to take
high engagement level of its employees.
advantage of this new business through addition of new capacity.
Business today magazine along with Mercer TNS conducted a survey of
Rise in cost of inputs – Rise in cost of input is another risk area. Company
top best 20 employers in India. Your company was selected among the
has displayed immense flexibility in managing these risks through
top 20 best employers in the country. It is worthwhile to mention that
utilization of alternate raw materials, identifying newer sources for
the company was (a) the only company from the cement sector, (b) the
existing fuel as also identifying alternative fuels etc.
only company from Rajasthan and (c) one out of only 5 manufacturing
Suppliers’ risk – High dependence on certain suppliers for raw material
companies to be included in the list. This was an appropriate reflection
and fuel put the company in a vulnerable situation in case of inability of
of the “Shree Parivar” culture where everyone feels himself as part of the
extended Shree Family. the supplier to honour its commitments. Company constantly strives to
adequately expand its supply base to mitigate the risk. Also company
Total number of employees as on 31.03.2009 was 2566.
constantly scouts for alternate materials which can substitute scarce raw
Risks and Concerns materials.
The present global economic turmoil has put effective risk management Interest rate and Currency risk - To protect itself from the volatility
at the forefront of all business activities. Large institutions have prevailing in the current global financial system, company maintains all
collapsed for not applying risk control measures. Your company is fully its long term borrowing on fixed interest rate. Company, as a policy,
aware of the importance of managing risks and has integrated it into its hedges all its foreign currency borrowings through appropriate forward
management philosophy. The company has a comprehensively
covers and swap instruments.
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
SHREE CEMENT LIMITED 77
 TRUST DOES THE IMPOSSIBLE

Directors' TRUST DOES THE IMPOSSIBLE

Report
Dear Shareholders, Operational Performance Clinker
n Grinding Unit at Suratgarh (Rajasthan) and Roorkee
Your Directors are pleased to present their report of your Company for the year ended on 31st March, 2009. Total Cement Production during the year under review increased by (Uttrakhand) having capacity of 1.5 MTPA and 1.0 MTPA
23% from 63.37 lac ton to 77.65 lac ton. Clinker Production increased respectively. The work on these projects is running as per
Financial Results by 39% from 46.23 lac ton to 64.18 lac ton. Cement and Clinker sale schedule and the same are expected to be commissioned by
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. during the year was at 84.50 lac ton against 66.02 lac ton in previous fourth quarter of FY2009-10.
722.91 crores and Rs. 577.97 crores, up 96% and 122% respectively. The summary of your Company’s financial performance is as under: year. Company’s sales volume grew by 28% against North India market 100
n MW Capacity (50MWx2) Power Plants at Bangur City, Ras.
growth of 5%. As a result of energy conservation measures taken by the These power plants would be used for the purpose of merchant
Rs. in crores, except per share data Company during the year, the power consumption dropped from 79.35 sale of power as well as for meeting power requirement of future
Particulars Year ended on Year ended on +/ - % Kwh/MT of Cement to 76.72 Kwh/MT. Fuel consumption also dropped expansion/new cement units of the Company. The first 50 MW
31st March, 2009 31st March, 2008 from 11.34% (of Clinker) to 10.75%. Power Plant is expected to be commissioned by fourth quarter of
Recently Govt. has deferred the applicability of accounting requirement FY2009-10 while second 50 MW Power Plant is expected to be
Net Sales 2715.02 2109.12 29% for mark to market losses on foreign exchange exposure as required as commissioned by first half of 2010-11.
Other Income 82.90 76.84 per Accounting Standard 11 (Accounting for the Effects of Changes in 43 MW
n Green Power Projects (Waste Heat Recovery Projects) at
Total Revenue 2797.92 2185.96 28% Foreign Exchange Rates). However, Company did not have any foreign Bangur Nagar, Beawar and Bangur City, Ras. Green Power
exchange exposure during the year for which it had to record any mark Projects, when completed will be the largest capacity of Green
Earning before Interest, Depreciation and Taxes
to market liability. As such the same does not have any implication on Power in the entire world cement industry except China. The
(EBIDTA) (before exceptional items) 1033.66 939.25 10%
the Company. work on these projects is running as per schedule and are
Interest 74.43 53.30 Dividend expected to be completed by fourth quarter of FY 2009-10. Post
Depreciation 205.39 478.76 Your Directors have declared interim dividend @Rs. 5 per share and commissioning of its power plants under implementation,
Earning before Taxes and Exceptional Items 753.84 407.19 recommended a final dividend @Rs. 5 /- per share for the year 2008-09 overall power generation capacity will increase over 250 MW.
Exceptional Items 30.93 38.88 (Previous year final dividend Rs. 8/- per share). The confirmation of the Awards & Recognitions
Earning before Taxes 722.91 368.31 96% members’ for interim dividend shall be sought during the ensuing Your Directors have pleasure to report the following prestigious awards
Annual General Meeting. and recognitions conferred during the year on your Company in
Taxes:
Management Discussion and Analysis recognition of its achievements in the field of Corporate Governance,
- Current Tax & Fringe Benefit Tax 136.87 107.69 Environment Management, Energy Efficiency, Human Resources etc.:
The Management Discussion and Analysis Report forming part of
- Prior period Tax (net) - 14.96
Directors’ Report for the year under review, as stipulated under clause “Golden
n Peacock Award 2008” in recognition of its contribution
- Deferred Tax 8.07 -14.72
49 of the Listing Agreement with the Stock Exchange(s), is discussed in towards Climate change initiatives and achievements in this
Earning after Taxes 577.97 260.37 122% separate section of this Annual Report. regard.
Corporate Governance “Greentech
n Environment Excellence Gold Award 2008” in
Add: Balance brought forward from previous year 348.70 149.41
A separate section on Corporate Governance together with a certificate Cement Sector for outstanding achievement in Environment
Debenture Redemption Reserve no 2.02 1.52
from the Auditors of the Company regarding full compliance of Management practices.
longer required
conditions of Corporate Governance as stipulated under clause 49 of the “Corporate
n Excellence Award” by Rajasthan Chamber of
Earning available for Appropriation 928.69 411.30
Listing Agreement with the Stock Exchange(s) forms part of Annual Commerce and Industry (RCCI) consecutively for third year in all
Appropriations: Report. the four categories set for evaluation i.e. Corporate Governance
Capacity Expansions & Capital Market, Financial Performance & analysis, Business &
- Interim Dividend @ Rs. 5/- per share &
Qualitative aspect and Annual Report presentation &
Final Dividend @ Rs. 5 per share on The year 2008-2009 has been a historical year for the Company.
Management.
Equity share (Previous year Dividend Rs. 8/- per share) 34.84 27.87 Company has created a world record by completing and starting trial
production of its 1.0 million ton per annum (MTPA) Clinkerisation Unit “National
n Award for Excellence in Cost Management -2008” by
- Tax on dividend distribution 5.92 4.74
(Unit –VII) at Bangur City Ras on 24th March, 2009 in a record time of the Institute of Cost and Works Accountants of India (ICWAI) in
- Transfer to General Reserve 80.00 30.00
367 days. Company also increased its thermal power generation recognition of its best Cost Management Practices.
Earning Per Share (EPS) capacity during the year by commissioning a 18 MW Turbine Generator In a
n survey conducted by Business Today Magazine along with
(TG-VI) at Bangur City, Ras. Mercer-TNS, Shree Cement has been rated in top 20 best
a. Basic and Diluted 165.91 74.74 122%
To further augment the Cement and Power Plant Capacity, Company has Employers of India. It is the only Company from Cement Sector
b. Cash 227.18 207.94 9%
undertaken the following projects: and Rajasthan, which finds place in the list.

SHREE CEMENT LIMITED 79

 TRUST DOES THE IMPOSSIBLE

TRUST DOES THE IMPOSSIBLE Annexure to the

Directors' Report
ANNEXURE - I
Directors Maheswari & Company as Statutory Auditors of the Company from Statement of Particulars of Employees pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of
conclusion of ensuing Annual General Meeting till the conclusion of Employees) Rules, 1975 and forming part of the Directors’ Report for the year ended 31st March, 2009
Shri Shreekant Somany and Dr. Abid Hussain, Directors of the Company,
would retire by rotation at the ensuing Annual General Meeting in next Annual General Meeting. S. Name of the Designation Nature of Remunera Qualifi Age Exper Date of Last Employment
The notes to accounts referred to in the Auditor's Report are self No Employee Duties -tion(Rs.) -cation (Years) -ience Commence
accordance with the provisions of the Companies Act, 1956 and
Years -ment of Name of
Company’s Articles of Association and being eligible, offer themselves, explanatory and, therefore, do not call for any further comments on
employment the Organi- Position held
for re-appointment. observations of auditors. sation
Shri Amitabha Ghosh appointed as Director of the Company on 14th Cost Audit EMPLOYED THROUGHOUT THE FINANCIAL YEAR AND WERE IN RECEIPT OF REMUNERATION IN AGGREGATE OF NOT LESS THAN RS.
May, 2007 to fill casual vacancy created consequent upon resignation of Pursuant to directives of Central Government, your Company has 24,00,000/- PER ANNUM
Shri R.S. Agarwal from Board of Directors of the Company. Pursuant to appointed M/s. K. G. Goyal & Associates, Cost Accountants as Cost 1. Bangur B.G. Executive Overall 6,94,59,862 B.Com 75 56 13.08.1992 Hasting Mill, Chief Executive
Section 262 of the Companies Act, 1962, Shri Amitabha Ghosh will hold Auditors of the Company under section 233B of the Companies Act, Chairman management of A division of (Production
office as Director up to the date upto which Shri R.S. Agarwal would 1956 for the year 2008-2009. The audit of Cost Accounts of the operations and Shree Digvijay and
have held Office, if it had not been vacated i.e. upto this Annual General Company is being done by them. policy decisions Cement Development)
Meeting. He being eligible, offers himself for re-appointment. Company Ltd.
Particulars of Employees’
Directors’ Responsibility Statement 2. Bangur H.M. Managing Management 6,45,16,774 B.E. 57 31 01.01.1992 Shree Digvijay Financial
As required under the provisions of Section 217(2A) of the Companies Director of operations (Chemical) Cement Advisor
Pursuant to the requirements of Section 217 (2AA) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, Company Ltd.
Act, 1956, the Directors, to the best of their knowledge and belief and 1975, as amended, the names and other particulars of employees are 3. Singhi M.K. Executive Management 1,98,29,792 B.Sc., LLB., 57 31 17.01.1995 Rajshree Cement Sr. Vice
according to the information and explanations obtained by them, set out in the Annexure I to this report and forms part thereof. Director of operations FCA A unit of Indian President
confirm that they have taken all reasonable steps, as are required, to Rayon & (Commercial)
Particulars of Conservation of Energy, Technology Absorption Industries Ltd.
ensure that;
and Foreign Exchange Earning / Outgo 4. Bangur Sr. Executive Management 34,91,600 B. Sc. 29 05 22.06.2004 ---- ----
The applicable
n accounting standards have been followed in the
preparation of the annual accounts for the year ended 31st The information required under Section 217 (1)(e) of the Companies Prashant of operations MBA

March, 2009 and in case of material departures, proper Act, 1956 read with Companies (Disclosure of particulars in the report 5. Bhandari Chief Finance Financial 75,05,273 B.Sc. Hons 56 31 01.04.1990 PT Indo Rama Vice President
explanation has been given in the Accounts and notes thereon. of the Board of Directors) Rules, 1988 is set out in Annexure II annexed Ashok Officer Management FCA Synthetics (Finance)
hereto and forms part of this Report. 6. Payal Diwakar Jt. President Sales & 70,00,682 B. Tech. 51 27 23.10.2001 Ambuja Vice President
They
n have selected such accounting policies and applied them
Acknowledgement (Marketing) Marketing PGDM Cements Ltd. (Marketing)
consistently, and they have made judgments and estimates that
are reasonable and prudent so as to give a true and fair view of Your Directors take the opportunity to place on record the co-operation 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
the state of affairs of your Company as at 31st March, 2009 and and support received from various agencies of the Central Government
(Marketing) Marketing (Marketing)
of the profit of your Company for the year ended on that date. and State Government(s), financial institutions and banks. Your
8. Reddy A.B. Sr. Vice Sales & 69,49,167 B.Sc. 60 36 25.07.2007 Seshasayee President
They
n have taken proper and sufficient care for the maintenance Directors also express their deep sense of gratitude to various
President Marketing Agriculture Papers & (Commercial)
of adequate accounting records in accordance with the stakeholders i.e. customers, dealers, suppliers, transporters, advisors (Marketing) MBA Board Ltd.
provisions of the Companies Act, 1956, for safeguarding the etc. for their continuous committed engagement with the Company.
9. Tripathy P.K. Sr. Vice President Cement Plant 47,39,693 B. Sc. 51 26 06.04.1997 Aditya Cement Sr. Manager
assets of your Company and for preventing and detecting fraud Your Directors further appreciate the support and co-operation received (Works) Operation (Engg) (Technical Cell)
and other irregularities. from the employees for their contribution to the growth and success of 10. Chhangani Sr. Vice Cement Plant 44,24,527 B. Sc. 49 26 03.04.2006 Holtec General
The annual accounts are prepared on a going concern basis.
n the Company. Your Company’s consistent growth has been made P.N. President Operation (Chemical Consulting Pvt. Manager
possible by only through their dedication, innovation, excellence and (Works) -Engg) Ltd.
Auditors
support. 11. Sharma M.M. Sr. Vice Project 43,40,616 B. Sc. 59 36 15.06.1992 U. P State Manager
The Statutory Auditors M/s. B. R. Maheswari & Company, Chartered President Management (Mech. En Cement Corpo- (Maintenance)
And to you, our Shareholders, your Directors are deeply grateful for
Accountants, Delhi, will retire at the conclusion of the ensuing Annual (Projects) -gineering) ration Limited
your confidence, faith and trust in the Company.
General Meeting of the Company and are eligible for reappointment.
12. Biyani C.R. Vice President Raw Material 40,37,890 B.E.- Hons 58 37 24.08.2002 BFL Infotech Director
They have sought re-appointment and have confirmed that their re- For and on behalf of the Board (Business Procurement and (Electronics) Ltd.
appointment, if made, shall be within the limits laid down under Development) IT administration
Place: Kolkata
Section 224(1B) of the Companies Act, 1956. 13. Daga Gopal Vice President Project 37,45,253 B. Com 59 35 07.09.1994 Rilaxon (Divisi- Vice President
Date: 28th April, 2009 B. G. Bangur
The Board of Directors recommends the re-appointment of M/s. B. R. (Project) Management on of Shree (Project)
Executive Chairman Digvijay Cement
Company Ltd.)

SHREE CEMENT LIMITED 81

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S. Name of the Designation Nature of Remunera Qualifi Age Exper Date of Last Employment ANNEXURE - II (v) Installation of New Vertical Roller Mill (VRM) for Coal Mill
No Employee Duties -tion(Rs.) -cation (Years) -ience Commence and Raw Mill in Unit -I.
Years -ment of Name of Disclosure of particulars with respect to conservation of energy,
technology absorption and foreign exchange earnings and outgo as (vi) Increase the height of the cooler vent stack of Units-III & IV.
employment the Organi- Position held
sation required under Companies (Disclosures of Particulars in the report of the (vii) VFD’s to be installed in Cement Mill -III & Cement Mill -IV
Board of Directors) Rules, 1988 and forming part of Directors' Report for vent bag house and Cement Mill -III SKS venting bag house
14. Gandhi K.C. Vice President Fuel 32,56,448 B.Sc. 53 30 01.07.1991 Shree Digvijay Purchase the year ended 31st March, 2009 fan for saving in electrical energy.
(Materials) Management Cement Co. Ltd. Officer
A. Conservation of Energy (viii) Cooler ESP HT motor replacement with LT motor & VFD in
15. Mehta Sanjay Vice President Project Management 32,28,492 F. C.A. 44 21 11.11.1995 Aditya Cement Dy. Manager
Unit -II.
(Comml.) (Comml. activities) (Accounts) (a) Measures taken for conservation of energy.
(ix) Installation of single high efficiency Fan [Smoke Gas
16. Khicha Arvind Jt. Vice Management of 30,71,325 F.C.A. 45 22 17.01.1991 Indorama Dy. Manager (i) Replacement of conventional lamps with Compact
(SG) Fan] against SG Fan and Booster Fan in Unit -I.
President Commercial Synthetics Ltd. (Commercial) Fluorescent Lamps (CFL).
(Comml.) activities (x) Roller press installation in Cement Mills.
(ii) Replacement of conventional water pumps by high
17. Jhawar P.C. Jt. Vice Personnel & 29,92,234 LL.B. 55 34 16.05.1995 DLF Cement Sr. Manager efficiency water pumps. (xi) Slip Power Recovery System (SPRS) installation in Raw Mill
President (P&A) Administration D.LL. (P&A) ESP Fan Unit -II & Sepax Fan in cement mill -II.
(iii) Installation of High Efficiency Main ESP fan in Unit – II.
18. Suthar S.C. Jt. Vice Mines 29,02,640 Diploma in 49 29 17.06.1996 JK Cement Ltd. Mines (iv) Installation of High Efficiency PH fan - 1 in Unit –II. (c) Impact of measures taken at (a) and (b) above for
President Administration Mnes – 1st Manager reduction of energy consumption and consequent
(v) Installation of Variable Frequency Drives (VFDs) on Dust
(Mines) Class; Mines impact on cost of production of goods.
Manager collector Fans in Cement Mill, Raw Mill and Packing Plant at
all the Units. (i) Saving of thermal and electrical energy
19. Singh A.K. Jt. Vice Electrical & 28,03,634 B.E. 60 35 15.07.2004 Diamond General
(vi) Increase in the stack height of Cooler Electro-Static (ii) Conservation of natural resources
President (E&I) Instrumentation (Electrical) Cement Manager (E&I)
Management Precipitator (ESP) fan. (iii) Increased efficiency and process optimization

20. Manawat R.K. Asst. Vice Management of 24,11,460 B.Sc. 53 34 18.08.1992 Shree Digvijay Process (vii) Installation of Solar water heater system. (iv) Improvement in product quality
President Process function Cement Engineer (viii) Installation of power saver panel for lighting system. (v) Reduction in cost of production
(Process) Company Ltd. (ix) Installation of Energy saver on Lighting Panel. (d) Total energy consumption and energy consumption
21. Jain N.C. Sr. General Management of 24,56,640 F.C.A 51 31 02.07.1987 Steque Equip- Manager (x) Replacement of the Cement Mill-IV vent fan and SKS vent per unit of products
Manager (Fin.) financial activities ment P. Ltd. fan by new high efficiency fans. Information given in the prescribed “Form – A” annexed.
22. Rathi M.M. Sr. General Power Plants 25,42,755 BE 41 18 23.06.2000 Century Pulp Sr. Supdt. (Ph) (xi) Replacement of the higher ratings motor by lower
Manager (Operation) (Mechanical) & Papers MIlls B. Technology Absorption
rating motors in Cement mill-3 vent fan and 102 BC 6 belt
(Power Plant) M.B.A. Ltd. Information given in the prescribed “Form – B” annexed.
conveyor.
23. Jain Gajraj Sr. General Power Plants 24,35,589 B.E. 38 16 05.08.1996 DLF Engineer (Intt.) (xii) Increase in the height of the clinker cooler vent fan stack in C. Foreign Exchange Earnings and Outgo
Manager (Project) (Electronics) Cement Ltd.
Units-V & VI. (a) Activities relating to export, initiative taken to increase
(Power Plant)
(xiii) In de-dusting bag house fans in different areas, operating export, development of new export market for products
EMPLOYED FOR PART OF THE FINANCIAL YEAR AND WERE IN RECEIPT OF REMUNERATION AT THE RATE OF NOT LESS THAN RS. efficiency has been improved by installing smaller and services and export plans. There have been no exports
2,00,000/- PER MONTH
diameter pulleys in place of existing bigger diameter during the year as the sale in domestic market was
1. Kabra H.C. Sr. Vice President Power plant 27,01,465 B.E. 62 40 30.08.2001 Century Textile Vice President pulleys. considered to be more remunerative for the company than
(Power Plant) Operation (Mech.) & Industries Ltd. (Utilities) exports.
(xiv) Cooler ESP fan motor changed from 250 kW, HT by 200 kW
2. Khira S.M. Advisor Cement Plant 20,80,577 Diploma 63 42 31.01.1997 Tororo Cement Jt. General LT with VFD. (b) Total Foreign Exchange used and earned
(Technical) Operation (Mech.) Ind. Ltd. Manager
(b) Additional investments and proposals, if any, being (Rs. In Lac)
3. Diwan Asst. Vice Sales & 5,06,052 M.B.A. 41 16 19.01.2009 Reliance General implemented for reduction of consumption of energy. Particulars Year ended on Year ended on
Himanshu President Marketing (MKTG) Industries Ltd. Manager 31st March, 2009 31st March, 2008
(Marketing)
(i) Implementation of Green Power Projects (Waste Heat
Recovery Systems).
Used 7027.62 5176.84
NOTES: (ii) Identification and replacement of motors with high
efficiency motors. Earned 1849.08 1707.73
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 (iii) Replacement of low efficiency reciprocating compressors
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. with screw compressors.
3. Other terms and conditions are as per Company’s Rules (iv) Installation of Variable Frequency Drive (VFD) in vent bag
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 filter fan.
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.
SHREE CEMENT LIMITED 83
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ANNEXURE –II ANNEXURE II (d) Energy audit and steps accordingly to reduce energy
consumption
Form – A (See Rule 2) Form of Disclosure of Particulars with respect to Conservation of Energy Form-B (See Rule 2)
(e) Design for high grade and self compacted Concrete
(A) Power and Fuel Consumption A) Research & Development (R&D)
1. Specific area in which R&D is carried out by the 4. Expenditure on R&D
Particulars Year ended on Year ended on
31st March, 2009 31st March, 2008 Company Capital Expenditure (Rs. in lacs) 12.34
1. Electricity R&D initiatives have been taken toward innovation keeping in Recurring Expenditure (Rs. in lacs) 864.18
view futuristic requirement and to make value out of waste, Total Expenditure (Rs. in lacs) 876.52
(a) Purchased
improvement of cement quality, reductions of energy Total R&D Expenditure as a percentage
Unit (Kwh in lacs) 272.13 250.02 consumption, techno-economic study and use of alternative raw of turnover (In %) 0.32%
Total amount (Rs. In lacs) 1310.32 1345.25 material, fuel and blending material and optimized quality and
(B) Technology Absorption, Adaptation and Innovation
Rate/unit (Rs.) 4.82 5.38 process parameters. Few initiatives are given below.
1. Efforts in brief, made towards technology absorption,
(b) Own Generation (a) Optimization of parameters to absorb SOx and to make
adaptation and innovation
value added product
i. Through Diesel Generators
(b) Investigation on the use of additives to improve quality of The Company is continuously in touch with research
Units (Kwh in lacs) 2.18 0.13 institutions, consultants, national and international agencies
cement
Unit per Ltr. of Diesel 2.87 1.98 to keep abreast of latest technological developments,
(c) Use of PSA to suggest diminution of over grinding of cement
Cost/unit (Rs.) 14.34 57.02 innovations in the field of cement technology, advancement
(d) Identified and optimized various wastes to use as raw
in the field of use of wastes gases to convert value added
ii. Through Steam Turbine / Generators materials, fuels and blended materials
products, minimize variation in the system to improve
Units (Kwh in lacs) 7361.70 5174.43
(e) Concrete mix design with high volume fly ash quality and process, refractory, pollution control, water
Unit per Kg. of Fuel 2.11 1.90 (f) Standardization of kiln feed, cement, fly ash samples for conservation, plant automation & up-gradation, energy
Cost/unit (Rs.) 2.46 2.16 Particle Size Analysis conservation and use of alternative fuel and raw materials.
2. Coal and other fuels (g) Diagnostic study for quality assessment and proper use of Shree’s executives visited Flue Gas Desulfurization unit (FGD)
refractory at Power Plants, research institutes and boiler manufacturers
(a) Used in Kiln & Calciner
(h) Reduction of energy consumption through energy audit and in China, participated in different seminars and workshops
Quantity (in lac MT) 6.91 5.24
by proper modification and installation of energy efficient organized by CII, TERI-BCSD, BEE, CSI, APP etc. & delivered
Total cost (Rs. In lacs) 40920 24052 presentation on its best practices for conservation of thermal
equipments to minimize leakages in compressor
Average rate per MT (Rs.) 5925 4587 & electrical energy, optimization of operation, efficient use
(i) Trials conducted for the production of sleeper grade cement
of alternate fuels and raw materials. Company is also a
(b) Used in Steam Turbine / Generators (j) Tele-operation (from 400 km distance) of Cement Mills of member of Cement Sustainability Initiative (CSI) of World
Quantity (in lac MT) 3.48 2.73 Khushkhera plant through Beawar CCR. Business Council for Sustainable Development (WBCSD),
Total cost (Rs. In lacs) 17405 12068 2. Benefit derived as a result of the above R&D Switzerland, which has offered the company an opportunity
Average rate per MT (Rs.) 4995 4427 (a) Quality improvement to share best practices in the field of fuel and raw material
(b) Reduction in energy consumption usage, health and safety, emission reduction, climate
(B) Consumption per unit of production protection etc. Company raised its voice for promotion and
(c) Reduction in production cost
transfer of new and innovative technologies and also
Particulars Standard Year ended on Year ended on (d) Helpful to make Green Cement
(if any) 31st March, 2009 31st March, 2008 advocated for future technology like Geopolymer Cement,
3. Future plan of action Eco-friendly low energy cement, cement based on nano
Product : Cement
(a) Continuous efforts to use of alternative fuel and raw technology, utilization of CO2 as Coal equivalent fuel in
Unit : MT
materials to conserve the natural resources Cement Sustainability Initiative Workshop, Washington DC,
Electricity (Kwh /MT of Cement) 75 - 100 76.72 79.35
(b) Improvement of quality of cement through optimization of USA.
Furnace Oil N. A. N. A. N. A.
PSD and use of additive
Coal (% of Clinker) 15 10.75 11.34
(c) Beneficiation of low grade limestone

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

SHREE CEMENT LIMITED 85

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TRUST DOES THE IMPOSSIBLE Auditors' Certificate

on Corporate Governance
2. Benefits derived as a result of above efforts (c) Improvement in the quality of cement. To,
(a) A unique opportunity to learn about energy conservation (d) Conservation of natural resources. The Members of Shree Cement Limited
methodology, approach and technologies adopted by the (e) Increase in capacity utilization, smooth operation, increase We have examined the compliance of conditions of Corporate Governance by Shree Cement Limited, for the year ended on 31st March, 2009, as
successful energy efficient units. in productivity and improved life of refractory. stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchange(s).
(b) Sharing of information by excellent energy efficient (f) Reduction in production cost The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and
companies. 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.
3. Information regarding technology imported during last 5 years
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
a. Technology imported (a) Use of bimetallic hammers in clinker crushers. conditions of Corporate Governance as stipulated in the above-mentioned Listing Agreement.
(b) Installed Grindfos (Germany) high efficiency pump 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
(80%) with existing pump of KSB in Power Plant. Registrar and Share Transfer Agents.

(c) PMS-ETAP (Power Management System) for total 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
power generation & distribution management management has conducted the affairs of the Company.
system.
for B. R. MAHESWARI & CO.
b. Year imported (a) 2004-05 Chartered Accountants
(b) & (c) 2008-09 Kolkata
c. Has technology been fully absorbed? Yes 28th April, 2009
d. If not fully absorbed, areas where this has not (SUDHIR MAHESHWARI)
taken place, reasons thereof and future plan of action N.A. Partner
Membership No. 81075

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Report on Corporate TRUST DOES THE IMPOSSIBLE

Governance
COMPANY'S PHILOSOPHY ON CODE OF CORPORATE The members of the Board have complete independence to raise any 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
GOVERNANCE issue / matter for discussion. It is ensured that Board members are at the Board Meetings held during the year and Directorship, Membership/Chairmanship in Board Committees of other Companies are as under:
presented with all the relevant information for review of the members
In order to ensure sustainable returns to all stakeholders of the business, on vital matters affecting the working of the Company including the Name of Category as at No. of Board Whether attended No. of other No of Membership/
it is imperative, especially for large organizations, to adopt and follow information as inter-alia specified under clause 49 Annexure - IA of the Director 31.3.2009 Meetings of last AGM held Directorship Chairmanship held
certain policies, procedures and processes, which together constitute a Listing Agreement. The matters placed for review of the members of the the Company on 18th July, 2008 held as at in Committees of
"Code of Corporate Governance". It is important that such a Code is Board include the following:
institutionalized, to ensure transparency, consistency and uniformity of attended in 31.3.09* other Companies
decision making processes and actions. The Company has always n Key elements of Annual Budgets 2008-09# as at 31.3.09**
believed in such a "Sound" Code of Corporate Governance, as a tool for n Business Plans and Progress thereof Member Chairman
highest standards of management and business integrity. Some of the
n Company presentation on quarterly performance
measures adopted by the Company to ensure the highest standards of Shri B.G. Bangur Executive Chairman 4 Yes 4 - -
Corporate Governance: n The information on recruitment and remuneration of
senior officers just below the board level, including Shri H.M. Bangur Managing Director 4 Yes 1 - -
n Composition of the Board of Directors (eg. Majority Independent
appointment or removal of Chief Financial Officer and Shri R.L. Gaggar Independent and Non-executive 3 No 13 6 -
Directors)
the Company Secretary
n Constitution of various Board Committees for oversight and Shri Shreekant Somany Independent and Non-executive 3 No 5 - -
guidance concerning key decisions and soundness of decision n Delegation of power to the Management
Shri O.P. Setia Independent and Non-executive 4 Yes - - -
making processes connected with the functioning of the n Show cause, demand, prosecution notices and
Company penalty notices which are materially important Dr. Abid Hussain Independent and Non-executive 3 No 9 7 -
n Timely dissemination of information to shareholders n Any material default in financial obligations to and by the Dr. Y.K. Alagh Independent and Non-executive 3 Yes 1 2 1
Code of Conduct Company, or substantial non payment for goods sold by the
n Shri A. Ghosh Independent and Non-executive 4 Yes 14 9 5
Company
BOARD OF DIRECTORS Shri M.K. Singhi Executive Director 4 Yes 1 - -
n Transactions that involve substantial payment towards
The Board of Directors is the main organ of the Company who provides goodwill, brand equity, or intellectual property
a vision and strategic direction to the operations of the Company,
n Significant Human Resources related issues *Excludes directorship held in private limited companies, foreign 1. Oversight of the Company’s financial reporting process and
thereby enhancing the value of the stakeholders.
companies and companies incorporated under section 25 of the the disclosure of its financial information to ensure that the
n Sale/purchase of material nature, of investments, assets,
Composition of Board of Directors as on 31st March, 2009 Companies Act, 1956. financial statements are correct, sufficient and credible.
which is not in normal course of business
Company ensures to have right combination of executive and **Only membership & chairmanship in Audit Committee and 2. Recommending to the Board, the appointment, re-
n Any issue which involves possible public or product liability
independent Directors at the Board level to maintain the independence Shareholders’ & Investors’ Grievances Committee has been taken appointment and, if required, the replacement or removal
claims of substantial nature, including any judgement or
of the Board, and to separate the Board functions of governance and into account. of the statutory auditor and the fixation of audit fees.
order which, may have passed stricture on the conduct of the
management. The Board of Directors is headed by Shri B G Bangur, the 3. Approval of payment to statutory auditors for any other
Company or taken an adverse view regarding another # Total four board meetings were held during the year 2008-09.
founder Director and promoter of the Company who is also the services rendered by them.
enterprise that can have negative implications on the The previous Annual General Meeting of the Company held on
Executive Chairman of the Company. The Board has nine Directors out
Company 18th July, 2008 was attended by six Directors. 4. Reviewing, with the management, the annual financial
of which six are Independent and Non-Executive. It consists of members
having diverse backgrounds, experience and personalities ranging from n Review of compliance of all laws applicable to the Company statements before submission to the Board for approval,
COMMITTEES OF THE BOARD OF DIRECTORS with particular reference to:
economist to bureaucrat, banker to RBI governor, industrialist to including the requirements of the Listing Agreement with the
solicitor etc. Stock Exchanges and steps taken by the Company to rectify The Board has constituted Committees of Directors to look into and a. Matters required to be included in the Directors'
instances of non compliance, if any monitor the matters falling within the terms of reference as follows: Responsibility Statement to be included in the Board’s
The composition of the Board is in accordance with the Corporate
A) Audit Committee report in terms of clause (2AA) of section 217 of the
Governance requirements specified in clause 49 of the Listing n Minutes of Meetings of Audit Committee and other
Companies Act, 1956,
Agreement entered with Stock Exchange(s). Further, the Independent Committees of the Board The Audit Committee reviews the matters falling in its terms of
and Non-Executive Directors do not have any material pecuniary reference and addresses larger issues and examines those facts b. Changes, if any, in accounting policies and practices
During the year, there were 4 (four) meetings of the Board held
relationship with the Company. The Company believes to have and reasons for the same,
details of which and attendance of Directors for those meetings that could be of vital concerns to the Company. The terms of
appropriate size of the Board looking to the current circumstances and reference of the Audit Committee constituted by the Board in c. Major accounting entries involving estimates based on
are as under:
requirements. terms of Section 292A of the Companies Act, 1956 and the the exercise of judgment by management,
Board functioning and procedure Corporate Governance Code as prescribed under Clause 49 of the d. Significant adjustments made in the financial
Date of the meeting Attended by no. of Directors Listing Agreement, which broadly includes matters pertaining to
The Board of Directors is the ‘management trustee’ of the Company statements arising out of audit findings,
07-May-2008 9 adequacy of internal control systems, review of financial
responsible for managing day-to-day affairs on behalf of the e. Compliance with listing and other legal requirements
shareholders, the true owners of the Company. Therefore, it is 18-July-2008 6 reporting process, discussion of financial results, interaction with
relating to financial statements,
absolutely necessary to ensure complete transparency and 20-October-2008 9 auditors, appointment and remuneration of auditors, adequacy
of disclosures and other relevant matters. In particular, these f Disclosure of any related party transactions,
foresightness in the decision making process. The Board takes decisions 28-January-2009 8
based on detailed discussion and deliberations amongst the Directors. include: g. Qualifications in the draft audit report.

SHREE CEMENT LIMITED 89

 TRUST DOES THE IMPOSSIBLE

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5. Reviewing, with the management, the quarterly financial Dr. Abid Independent and Member is a retired IAS officer. a) Industry trend for each meeting of the Board / Committee of the Board attended by
statements before submission to the Board for approval. Hussain Non –Executive He has good accounting and b) Remuneration package in other comparable Corporates them. Besides the sitting fees, they are also paid commission. The
Director financial management knowledge. shareholders had, at the Annual General Meeting of the Company
6. Reviewing with the statutory and internal auditors the c) Job contents and key performance areas held on 18th July, 2008, approved payment of Commission to Non-
adequacy of internal controls and steps to be taken for Dr. Y.K. Independent and Member is a noted Economist. d) Company's performance Executive Directors not exceeding one percent of net profit of the
strengthening the areas of weaknesses in internal controls. Alagh Non –Executive He has good accounting and Company computed in the manner provided under section 198(1) of
The remuneration structure of the Whole time Directors comprises of
7. Reviewing reporting structure, coverage and frequency of Director financial management knowledge. the Companies Act, 1956. The commission is distributed equally
salary, contribution to Provident & Superannuation funds, commission
internal audit. amongst those Non-Executive Directors who are on the Board at the
The committee met four times during the year 2008-09 including for /bonus, perquisites & allowances and gratuity in accordance with
8. Discussion with internal auditors any significant findings time of Board Meeting where payment of commission is determined.
Company's rules. Necessary approvals from shareholders are sought in the
approval of accounts for the year ended 31st March, 2008, before
and follow up there on. general meetings for confirming the remuneration package. The details of remuneration package, fees paid etc. to Directors for
placing the same before the board. The attendance of the members of
9. Reviewing the findings of any internal investigations by the the year ended 31st March, 2009, for information of Members, are
the Committee is as under: b. For Non-Executive and Independent Directors
internal auditors into matters where there is suspected given hereunder:
The Non-Executives Directors are paid sitting fees of Rs. 10,000
fraud or irregularity or a failure of internal control systems No. of meetings
of a material nature and reporting the matter to the board. a) Paid to Non-executive Directors:
Name of the Member Held Attended Amount in Rs
10. Discussion with statutory auditors before the audit Shri O.P. Setia 4 4 S No Name of Director Sitting fees Commission Total
commences, about the nature and scope of audit as well as
post-audit discussion to ascertain any area of concern. Shri R.L. Gaggar 3 3 1 Shri R.L. Gaggar 70,000 8,50,000 9,20,000
11. To look into the reasons for substantial defaults in the Dr. Abid Hussain 3 3 2 Shri Shreekant Somany 30,000 8,50,000 8,80,000
payment to the depositors, debenture holders, Dr. Y.K. Alagh 3 3
3 Shri O.P. Setia 90,000 8,50,000 9,40,000
shareholders (in case of non payment of declared
For the meetings, internal auditors of the Company are invited for
dividends) and creditors. 4. Dr. Abid Hussain 70,000 8,50,000 9,20,000
discussions and review. Shri M K Singhi, Executive Director and Shri
12. To review the following information: Ashok Bhandari, Chief Finance Officer are the permanent invitees to the 5. Dr. Y.K. Alagh 60,000 8,50,000 9,10,000
a. Management discussion and analysis of financial meetings for responding to the observations of the Committee while
6. Shri A. Ghosh 40,000 8,50,000 8,90,000
condition and results of operations; Shri S. S. Khandelwal, Company Secretary acts as Secretary to the
Committee. TOTAL 3,60,000 51,00,000 54,60,000
b. Statement of significant related party transactions (as
defined by the audit committee), submitted by B) Remuneration cum Nomination Committee
management; b) Paid to Executive Directors / Whole Time Directors: Amount in Rs
The purpose of this Committee of the Board of Directors is to
c. Management letters/letters of internal control discharge the Board’s responsibilities relating to nomination & S Particulars Shri B. G. Bangur, Shri H.M. Bangur, Shri M.K. Singhi,
weaknesses issued by the statutory auditors. compensation of the Company’s directors. The composition of the No Executive Chairman Managing Director Executive Director
Committee consists of all independent and non executive directors
13. Carrying out any other function as is mentioned in (i) Remuneration
which is as under:
the terms of reference of the Audit Committee.
Basic salary 1,23,42,000 1,23,42,000 75,00,000
Name of the Member Category
Constitution of Audit Committee
Shri R.L. Gaggar – Chairman Independent and Non – Executive Director Contribution to Provident and Superannuation fund 33,32,340 33,32,340 20,25,000
The composition of the Audit Committee consists of following
Directors as below mentioned. All the members of the Committee are Shri O.P. Setia Independent and Non – Executive Director Benefits – allowances/perks 87,85,522 88,42,434 28,04,792
Non-Executive and Independent Directors. Shri Shreekant Somany Independent and Non – Executive Director Bonus - - 75,00,000
Name of the Category Qualification of the Dr. Y.K. Alagh Independent and Non – Executive Director Commission 4,50,00,000 4,00,00,000 -
Member Member
No meeting of the Committee was held during the year 2008-09 Stock options - - -
Shri O.P. Setia Independent The Chairman is Masters in in absence of any matter relating to Committee. Pension - - -
Setia and Non – Commerce and Ex-Managing
Remuneration Policy: The remuneration policy is directed
Chairman Executive Director Director of State Bank of India. TOTAL 6,94,59,862 6,45,16,774 1,98,29,792
towards rewarding performance based on review of
He possesses the requisite achievements on a periodical basis. (ii) Details of Fixed Component and
accounting and financial
a. For Whole time Directors / Working Directors performance linked incentives
management expertise.
The appointment of Whole time Directors is made by the along with the performance criteria
Shri R.L. Independent and Member is a renowned solicitor Board of Directors in their meeting and remuneration is (a) Fixed Component:
Gaggar Non –Executive and advocate of Kolkata. He agreed upon. The remuneration is decided on the basis of
Director possesses good accounting and following broad criteria:- • Effective date of commencement
financial management knowledge. of remuneration package 13-Aug-2007 01-Aug-2007 01-April-2008

SHREE CEMENT LIMITED 91

 TRUST DOES THE IMPOSSIBLE

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S Particulars Shri B. G. Bangur, Shri H.M. Bangur, Shri M.K. Singhi, C) Shareholders’ and Investors’ Grievances Committee S. Nature of Complaints No. of No. of
No Executive Chairman Managing Director Executive Director The Board of Directors has constituted a Shareholders’ and No Complaints Complaints
Investors’ Grievances Committee to deal with the following matters: received resolved
• Salary – Basic Rs. 9,35,000 Rs. 9,35,000 Rs. 6,25,000
#Annual increment @10%, first per month# per month# per month@ I. Review, on a periodic basis, status of cases relating to I Dividend related issues 6 6
increment became effective from 01.04.08 (Effective for (Effective for transfer, transmission of shares, issue of duplicate shares etc. II Duplicate shares related issues 1 1
@ [Annual increase in the salary as the year 2008-09 year 2008-09 II. Monitors expeditious redressal of investors' grievances, III Shares transfer / transmission 6 6
Board may decide from time to time, Rs. 10,28,500 Rs. 10,28,500 III. Review of instances of non-receipt of Annual Report and related issues
subject however, to a ceiling of per month) per month) declared dividend, and IV Others 5 5
Rs. 12,00,000/- (Rupees Twelve lacs) per
IV. All other matters related to shareholders. Total 18 18
month. First increase to be effective
The composition of the Shareholders’ and Investors’ Grievances
from 1.4.2009].
Committee consists of all independent and non-executive directors which In addition, the Company has Share Transfer Committee of the Board of
• Contribution to Provident Fund As per rules As per rules As per rules is as under: Directors for approving transfers / transmission of physical shares and
& Superannuation Fund other shareholder related matters, which met 17 times during the year
Name of the No. of meetings ended on 31st March, 2009. All the transfers of shares have been done
• Perks and other allowances As per terms of As per terms of As per terms of within stipulated period.
Member Category
appointment appointment appointment Held Attended Further, the Company has paid listing fees to all the Stock Exchanges for
(b) Performance Linked Incentive: Shri O.P. Setia Independent and the year 2008-09.
• Commission/Bonus Commission as may Commission as may Bonus as may be Chairman Non – Executive Director 1 1 General Body Meetings
(Based on Net Profit for the year be decided by Board, be decided by Board, decided by Board, Shri R.L. Gaggar Independent and The required information under clause 49 of the Listing Agreement
as computed u/s 349 of the limited to 5% of the limited to 5% of the limited to 5% of Non – Executive Director 1 1 under this heading is given in the “Shareholders Information”
Companies Act, 1956 within the Net Profit by way of Net Profit by way of the Net Profit by Dr. Abid Hussain Independent and separately in the annexure to this Corporate Governance Report.
individual/ overall ceiling for Salary, Perks and Salary, Perks and way of Salary, Perks Non – Executive Director 1 1 Postal Ballot
managerial remuneration from Commission taken Commission taken and bonus taken
Dr. Y.K. Alagh Independent and For the financial year ended 31 March, 2009, there has been no
time to time) together together together
Non – Executive Director 1 - ordinary or special resolution passed by the Company that required
(c) Minimum Remuneration in case Within the ceiling of Within the ceiling of Within the ceiling of approval of members by way of postal ballot under the provisions of
of inadequacy of profits in any Schedule XIII as Schedule XIII as Schedule XIII as Section 192A of the Companies Act, 1956.
year as calculated under section amended from amended from amended from The Company had appointed M/s. Karvy Computershare Pvt. Ltd.,
Disclosures
198/ 349 of the Act time to time time to time time to time Hyderabad as the Share Transfer Agent to carry out the share transfer
and other related work. Shri S. S. Khandelwal, Company Secretary of the nRelated Party Transactions: None of the transactions with any of
(iii) Service Contracts, notice period, Company is the Compliance Officer in terms of clause 47 of the Listing the related party was in conflict with the interest of the Company
severance fees Agreement. at large. The details of related party transactions are given in the
Notes on Accounts.
(a) Service Contract Appointment is for five Appointment is for five Appointment is for three The Share Transfer Agent/ Company has timely resolved / attended all
years period i.e. till years period i.e. till years period i.e. till the complaints (total 18 complaints received during the year 2008-09) nNon-compliance / strictures / penalties imposed: No non-
and no complaint or grievance remains unattended / unresolved at the compliance / strictures / penalties have been imposed on the
12th August, 2012. 31st July, 2012. 31st March, 2011.
year end. Company by the Stock Exchange(s) or the SEBI or any statutory
(b) Notice period As per terms of appintment authority on any matters related to capital markets during the
The Committee during the year met once on 28th January, 2009 and
last three years.
(c) Severance fees Except Gratuity and earned leave at the end of tenure, reviewed the status of investors’ complaints received and resolved
no other severance fee is payable. during the calendar year 2008. The Committee expressed satisfaction nAccounting Treatment: In the preparation of financial
on the Company’s / Share Transfer Agent’s efforts to resolve investors statements, the Company has followed the Accounting
(iv) Stock Option details, if any, and No Stock option No Stock option No Stock option grievances. Following is the composition of the complaints received and Standards issued by ICAI. Where, in the preparation of financial
resolved during the year 2008-09: statements, a treatment different from that prescribed in an
whether the same has been issued issued, hence not issued, hence not issued, hence not
Accounting Standard has been followed, the fact has been
at discount as well as the period over which applicable applicable applicable disclosed in the financial statements, together with the
accrued and over which exercisable 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.

SHREE CEMENT LIMITED 93

 TRUST DOES THE IMPOSSIBLE

TRUST DOES THE IMPOSSIBLE Annexure to Corporate

Governance Report
n Risk Management: Risk evaluation and management is an Listing Agreement. The official news releases are given directly to the Shareholder's Information Annual General Meeting
ongoing process within the Organization. During the period media. Registered Office: Date of AGM Time Venue
under review, a detailed exercise on Risk Management was
The quarterly / half yearly and the annual results of the Company are Bangur Nagar, Post Box No. 33,
carried out covering the entire gamut of operation of the 24.07.2009 11.30 AM Registered Office at
displayed on the Company’s website www.shreecementltd.com Beawar - 305 901, District Ajmer, Rajasthan
Company and the Board was informed about the same. Bangur Nagar,
immediately after announcement thereof. A feedback form is being
Phone: (91)1462-228101-06 Post Box No. 33,
n Details of compliance with mandatory requirements and given at the end of this report. Members are requested to send their
Fax: (91)1462-228117/228119 Beawar - 305 901,
adoption of non-mandatory requirements: The Company has response about this Annual Report in the feedback form. This would
complied with all mandatory requirements of Clause 49 of the encourage us to improve our Annual Reporting. Toll free no.: 1800 180 6003 /6004 Distt. Ajmer, Rajasthan
Listing Agreement and non-mandatory requirements are Email: shreebwr@shreecementltd.com
General Shareholders Information
reviewed by the Board from time to time. Website: www.shreecementltd.com
The required information under clause 49 of the Listing Agreement (a) The details of Annual General Meetings held in last three years
CEO/CFO Certification under this heading is given in the “Shareholder's Information” given
Corporate Office: are as under:
Chief Executive Officer (CEO) and Chief Finance Officer (CFO) separately in the annexure to this Corporate Governance Report. 21, Strand Road, Kolkata - 700 001
Year ended Date of AGM Time Venue
Certification, on financial statements is issued pursuant to the Phone: (91)33-22390601-05
Fax: (91)33-22434226 31.3.2006 31.7.2006 4.00 PM Bangur Nagar,
provisions of Clause 49 of the Listing Agreement and is annexed to the
Corporate Governance report and forms part of the Annual Report. Email: sclcal@shreecementltd.com Beawar
(Rajasthan)
Code of Conduct Plants Location:
31.3.2007 14.08.2007 1.30 PM - do-
The Code of conduct applicable to all Directors and employees of the Unit I & II: Bangur Nagar, Beawar (Rajasthan)
31.3.2008 18.07.2008 11.30 AM - do-
Company has been posted on the website of the Company. For the year Unit III, IV, V, VI & VII: Bangur City, Ras, Distt. Pali (Rajasthan)
under review, all Directors and senior management personnel of the Khushkhera Grinding Unit(s):
Company have confirmed their adherence to the provisions of the said (b) Special Resolution passed in previous three AGMs
Plot No SP 3-II, A-1, RIICO Industrial Area,
Code.
Khushkhera (Bhiwadi), District Alwar, Rajasthan - 301707 Date of AGM Special Resolution Passed by Members
Trading in the Company’s shares by Directors and Designated Phone: (91) 1493-250521 / 22/ 23/ 24
31.7.2006 1. Revision in remuneration of
Employees Fax: (91) 1493-517227
Shri B.G. Bangur, Executive Chairman
As per the amended SEBI (Prevention of Insider Trading) Regulations Address for correspondence:
1992, the Company is required to have a Compliance Officer who is 2. Revision in remuneration of
Shree Cement Limited,
responsible for setting forth policies, procedures, monitoring Shri H.M. Bangur, Managing Director
Bangur Nagar, Post Box No. 33,
adherence to the rules for the prevention of price sensitive information,
Beawar - 305 901, District - Ajmer, Rajasthan 3. Revision in remuneration of
pre-clearance of trade, monitoring of trades and implementation of the
Phone: (91)1462-228101-06 Shri M.K. Singhi, Executive Director
Code of Conduct for trading in Company’s securities under the overall
supervision of the Board. The Company has adopted a Code for Fax: (91)1462-228117/228119 4. Revision in remuneration of
prevention of Insider Trading. The Board has appointed Shri S.S. Toll free no.: 1800 180 6003 /6004 Shri Prashant Bangur,
Khandelwal Company Secretary as Compliance Officer in respect of Email: shreebwr@shreecementltd.com Sr. Executive of the Company
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. Shareholders’ Enquiries: 14.8.2007 1. Approval of Appointment of
Shri S.S. Khandelwal, Company Secretary Shri B. G. Bangur as Executive
Means of Communication
Tele:(91) 1462-228101 to 06 Chairman and his terms of
The Annual Report is sent to each Shareholder. Quarterly and half yearly Toll Free: 1800 180 6003-04 appointment and remuneration
results are published in all editions of the Economic Times, Business Fax: (91) 1462-228117/19
Standard, Rajasthan Patrika, Danik Bhaskar and Nafa Nuksan. The 2. Approval of Appointment of
E-mail: investor@shreecementltd.com Shri H. M. Bangur as Managing
results are also provided to Stock Exchange(s) where the Company's
shares are listed. Besides that, full version of annual report, quarterly Exclusive e-mail ID for shareholders Director and his terms of appointment
results, shareholding pattern statement are filed on Electronic Data queries: khandelwalss@shreecementltd.com and remuneration
Information Filing and Retrieval (EDIFAR) website maintained by Clarifications on financial statement: 18.7.2008 1. Approval of Appointment of
National Informatics Centre (NIC) as per requirements of Clause 51 of Shri Ashok Bhandari, Chief Finance Officer Shri M. K. Singhi as Executive
Phone: (91)33-22390601-05 Director and his terms of appointment
Fax: (91)33-22434226 and remuneration
E-mail: bhandaria@shreecementltd.com

SHREE CEMENT LIMITED 95

 TRUST DOES THE IMPOSSIBLE

TRUST DOES THE IMPOSSIBLE

(c) No special resolution was put through postal ballot last year. would be paid to those shareholders who hold shares in the Company The performance in comparison to broad based indices:
(d) No special resolutions are proposed to be put through postal on 5th May 2009. Company’s Board has also recommended a final Indices BSE (Sensex) SCL Quote at BSE NSE (Nifty) SCL Quote at NSE
ballot this year. dividend of Rs.5/- per share for financial year 2008-2009 which would
01.4.2008 (open) 15771.72 1148.00 4735.65 1060.00
Financial Calendar be paid to those shareholders who hold shares in the Company on
31.3.2009 (close) 9708.50 709.15 3020.95 710.50
(For the Financial Year 1st April, 2009 to 31st March, 2010) 24.07.2009 In respect of shares held in electronic form, the dividend
Increase/ Decrease -38.44% -38.23% -36.21% -32.97%
will be paid on the basis of beneficial ownership as per details furnished
Un-audited / Limited Review Results: by the depositories for this purpose.
First Quarter ended
Listing on Stock Exchanges:
30.6.2009 By end of July, 2009
Second Quarter/Half year Name of Stock Exchange Stock Code
ended 30.9.2009 By end of October, 2009 Bombay Stock Exchange Limited 500387 Movement of Shree's stock vis-a-vis Sensex Movement of Shree's stock vis-a-vis Nifty
(Average of monthly high-low) (Average of monthly high-low)
Third quarter/nine months National Stock Exchange of India Limited SHREECEM EQ 1100 7700 1100
26650

Shree's Stock Price on NSE

ended 31.12.2009 By end of January, 2010 Name of the Depositories
24100 950 6720 960

Shree's Stock Price on BSE

Last Quarter/Yearly (for demat only) Scrip Code

Nifty Level
21550 5740 820

BSE Sensex
Results-ended 31.3.2010 By end of April, 2010 National Securities Depository Ltd. INE070A01015 800
19000
Audited Results: 4760 680
Central Depository Services (India) Ltd. INE070A01015 16450 650
Year ended 31.3.2010 By end of May, 2010 13900 3780 540
Corporate Identification Number (CIN): L26943RJ1979PLC001935 500
11350 2800 400
Date of Book Closure

Aug-08
May-08

J un-08

Nov-08

Feb-09

Mar-09
Apr-08

Sep-08

Oct-08

Dec-08

J an-09
J ul-08
Company’s securities are also available for trading in Futures and 8800 350

May-08

J un-08

S ep-08

Dec-08

Mar-09
J ul-08

Aug-08

Oct-08

Nov-08

J an-09

Feb-09
Apr-08
20.07.2009 to 24.07.2009 (both days inclusive) Options (F&O) segment of National Stock Exchange of India Limited. Nifty Shree's Stock Price
Dividend payment date Sensex Shree's Stock Price
Company’s Board, vide its meeting dated 28th April, 2009 has declared
interim dividend @ Rs. 5/- per share for financial year 2008-2009 which

Market Price data

Registrar and Share Transfer Agent Share Transfer System
Month BSE NSE
M/s. Karvy Computershare Private Limited, Transfer of shares in dematerialized form is done through the Depository
High Low Volume (No. High Low Volume (No.
Unit: SHREE CEMENT LIMITED Participant without any involvement of the Company. As regards
(Rs.) (Rs.) of Shares) (Rs.) (Rs.) of Shares) transfer of share in physical form, the transfer document can be lodged
17-24, Vithalrao Nagar, Madhapur, Hyderabad – 500 081
Contact person: Mr. K. S. Reddy, Asstt. General Manager with Karvy Computershare Pvt. Ltd., Registrar and Share Transfer Agent
April 2008 1,148.00 981.00 6,116 1,165.00 935.50 44,309
or with the Company.
Phone No.: (91) 40 -23420816-824, -23440627 (Direct Line)
May 2008 1,040.00 781.20 23,783 1,049.50 770.40 1,08,361
Fax No. : (91) 40 -23420814 The physical shares along with transfer instruments, as and when
June 2008 814.00 577.25 1,40,700 800.00 581.15 2,90,911 received, are duly processed and shares in respect of valid transfer
E-mail: ksreddy@karvy.com, mailmanager@karvy.com
July 2008 625.00 491.00 39,109 625.00 490.00 4,82,412 instruments are transferred in the name of transferees complying with
the rules in force. The shares are transferred after obtaining approval
August 2008 664.90 557.05 5,07,857 699.00 551.00 6,28,373
from Share Transfer Committee, which meets at an interval of every 15-
September 2008 610.00 472.05 1,25,846 620.00 468.00 1,04,782 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
October 2008 535.00 330.00 33,482 590.00 338.00 2,11,899
valid and complete in all respects.
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

SHREE CEMENT LIMITED 97

 TRUST DOES THE IMPOSSIBLE

TRUST DOES THE IMPOSSIBLE CEO /CFO Certificate

(Pursuant to Clause 49 of the Listing Agreement)

Distribution of Shareholding (As on 31.3.2009) Shareholding Pattern (As on 31.3.2009) The Board of Directors,
Range Total no. of % Total no. of % Description No. of Shares held % SHREE CEMENT LIMITED
Shareholders Shares held Promoters 22786812 65.41% Pursuant to Clause 49 of the Listing Agreement, this is to certify that:
From - To Mutual Fund & UTI 3285446 9.43% 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
Up to 50 9107 61.13% 211523 0.61% knowledge and belief :
Financial Institutions, Banks,
51–100 2839 19.06% 265395 0.76% i. these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be
Insurance Companies etc. 223322 0.64%
101–200 1203 8.07% 205412 0.59% misleading;
201–500 1032 6.93% 387109 1.11% FIIs 1156431 3.32%
ii. these statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting
501–1000 376 2.52% 299963 0.86% NRIs/OCBs/Non Domestic standards, applicable laws and regulations.
1001–5000 221 1.48% 451571 1.30% Companies 3825288 10.98%
2. There are, to the best of our knowledge and belief, no transactions entered into by the company during the year which are
5001–10000 24 0.16% 163216 0.47% Private Corporate Bodies 1616475 4.64% fraudulent, illegal or violative of the company’s code of conduct.
10001 and above 96 0.64% 32853036 94.30% Indian Public 1934879 5.55% 3. We accept responsibility for establishing and maintaining internal controls for financial reporting. We have evaluated the effectiveness of
TOTAL 14898 100.00% 34837225 100.00%
Others- Directors/ relatives internal control systems of the Company pertaining to financial reporting and have disclosed to the auditors and the Audit Committee,
(non- promoters) 8572 0.02% 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.
Total 34837225 100.00%
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.
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. Date: 28th April, 2009 Ashok Bhandari H.M. Bangur
In view of the advantage offered by the Depository System, Members are requested to avail the facility of dematerialization. As on 31st March, 2009, Place: Kolkata Chief Finance Officer Managing Director
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.

Declaration on Code of Conduct

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.

for SHREE CEMENT LIMITED

Place: Kolkata
Date: 28th April, 2009 H.M. Bangur
Managing Director

SHREE CEMENT LIMITED 99

Code of Conduct
On Corporate Governance
PHILOSOPHY
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.
FIDUCIARY DUTIES
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.
DUTY TO EXERCISE POWER FOR PROPER PURPOSES
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.
CONFLICT OF INTEREST
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.
SECRET PROFITS
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
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.
ATTENTION TO BUSINESS
All Directors as well as Senior Management Executives and/ or
personnel will give proper attention to the business of the company.
SECRECY AND CONFIDENTIALITY
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.
INTERNAL TRADING
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.
RISK AND PROPER PROCESS
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.
Auditors'
Report
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.
Chartered Accountants
Kolkata
28th April, 2009
(SUDHIR MAHESHWARI)
Partner
Membership No. 81075
SHREE CEMENT LIMITED 101
 TRUST DOES THE IMPOSSIBLE

Annexure Referred to in TRUST DOES THE IMPOSSIBLE

Auditors' Report of even date

1) (a) The Company has maintained proper records showing full (b) In our opinion and according to the information and Name of Statute Name of Amount Period to which the Forum where dispute
particulars including quantitative details and situation of explanations given to us, the transactions made in the dues (Rs. in Lac) amt. related is pending
fixed assets. pursuance of contracts or arrangements entered in the (assessment years)
register maintained under section 301 of the Companies
(b) The fixed assets were physically verified by the Rajasthan Tax on Entry of Goods into Entry Tax 3095.99 2005-06 to 2008-09 High Court
Act, 1956 and exceeding the value of rupees five lacs in
management. The discrepancies noticed were not Local Area Act, 1999
respect of any party during the year have been made at
significant and have been properly dealt with in the
prices which are prima facie reasonable having regard to UP Tax on Entry of Goods 50.75 2003-04 JETC Appeals,
accounts.
prevailing market prices at the relevant time. Act, 2000 Entry Tax Ghaziabad
(c) During the year, the Company has not disposed off any
6) The Company has not accepted any deposit from the public during 1341.82 2004-05 to 2008-09 High Court
major part of fixed assets that would affect the Going
the year.
Concern status of the Company. Central Excise Act Cenvat credit 90.00 1994-95 to 2005-06 Commissioner (Appeals)
7) In our opinion, the Company has an internal audit system Cenvat Credit 17.00 1996-97 to 1998-99 Tribunal
2) (a) The inventory, except material in transit and material lying
commensurate with the size and nature of its business. Cenvat Credit 1.00 2006-07 to 2007-08 Tribunal
with contractors, has been physically verified during the
year by the management. In our opinion, the frequency of 8) We have broadly reviewed the accounts and records maintained by Finance Act, 1994 Service Tax 4.00 2006-07 Commissioner (Appeals)
verification is reasonable. the Company pursuant to the rules made by the Central Service Tax 152.00 2004-05 to 2005-06 Tribunal
Government for maintenance of cost records under section
(b) The procedures of physical verification of inventory The Rajasthan Finance Act, 2008 Environment & 531.04 2007-08 to 2008-09 High Court
209(1)(d) of the Companies Act, 1956, and are of the opinion that
followed by the management are reasonable and adequate Health Cess
prima facie, the prescribed accounts and records have been made
in relation to the size of the company and the nature of its
and maintained. We have, however, not made a detailed
business.
examination of record with a view to determine whether they are
(c) The company is maintaining proper records of inventory. accurate or complete.
The discrepancies noticed on verification between the 10) The Company does not have any accumulated losses at the end of 18) According to the information and explanations given to us, the
9) (a) According to the information and explanations given to us, the financial year and the company has not incurred cash losses in Company has not made any preferential allotment of shares to
physical stocks and the book records were not material and
the company has generally been regular in depositing with the financial year covered by our audit and in the immediately parties and companies covered in the register maintained under
such discrepancies have been properly dealt with in the
appropriate authorities undisputed statutory dues including preceding financial year. section 301 of the Act and therefore, the provisions of clause 4
books of accounts.
provident fund, investor education protection fund, income (xviii) of the Order are not applicable to the Company.
3) (a) The Company has neither granted nor taken any tax, sales tax, wealth tax, service tax, custom duty, excise 11) Based on the information and explanations given to us, we are of
loans, secured or unsecured, from Companies, firms and duty, cess and other material statutory dues applicable to it. the opinion that the Company has not defaulted in repayment of 19) The Company has not issued any secured debentures during the
other parties, mentioned in the register maintained under dues to the financial institutions, banks or debenture holders. year and accordingly, the provisions of clause 4 (xix) of the Order
(b) According to the information and explanations given to us, are not applicable to the Company.
section 301 of the Companies Act, 1956. 12) According to the information and explanations given to us, the
no undisputed amounts payable in respect of aforesaid dues
(b) Since, the company has neither granted nor taken any loans were outstanding as at 31.03.2009 for a period of more Company has not granted any loans and advances on the basis of 20) During the year under audit, the Company has not raised money
as referred to in para 3(a) above, provisions of clause (iii)(b) than six months from the date they become payable. security by way of pledge of shares, debentures and other by public issue and accordingly, the provisions of clause 4 (xx) of
to (iii)(g) of the Order are not applicable to the Company. securities. the Order are not applicable to the Company.
(c) According to the information and explanations given to us,
4) In our opinion and according to the information and explanations the details of disputed amount of Income Tax, Sales Tax, 13) In our opinion and according to the information and explanations 21) According to the information and explanations given to us, no
given to us, there are adequate internal control systems Excise Duty, Entry Tax, Service Tax and Cess not deposited by given to us, the Company is not a chit fund company or nidhi / material fraud on or by the Company has been noticed or reported
commensurate with the size of the Company and nature of its the Company are as follows: mutual benefit fund / society. Therefore, the provision of clause during the year.
business with regard to purchases of inventory and fixed assets 4(xiii) of the order is not applicable to the Company.
and with regard to the sale of goods. During the course of our 14) According to the information and explanations given to us, the for B. R. MAHESWARI & CO,
audit, we have not observed any continuing failure to correct Company is not dealing or trading in shares, securities, debentures Chartered Accountants
major weaknesses in the internal control system. and other investments.
5) (a) According to the information and explanations given to us, 15) As informed to us, the company has not given any guarantees for
we are of the opinion that the particulars of contracts or loans taken by others from bank or financial institutions. Place: Kolkata
arrangement referred to in section 301 of the Companies Date: 28th April, 2009 (SUDHIR MAHESHWARI)
Act, 1956 have been entered in the register required to be 16) In our opinion, the term loans have been applied for the purpose
Partner
maintained under that section. for which they were raised.
Membership No. 81075
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.

SHREE CEMENT LIMITED 103

Balance Sheet as at Profit & Loss Account
31st March 2009 for the year Ended 31st March,2009

As at As at For the Year ended For the Year ended

31.03.2009 31.03.2008 Schedule 31.03.2009 (Rs. in Lac) 31.03.2008 (Rs. in Lac)
Schedule (Rs.in Lac) (Rs.in Lac) INCOME
Sales 14 309,716.69 244,032.08
SOURCES OF FUNDS Less: Excise Duty 38,214.67 33,120.28
Shareholders' Funds Net Sales 271,502.02 210,911.80
Share Capital 1 3,483.72 3,483.72 Other Income 15 8,289.61 7,683.91
Reserves & Surplus 2 117,517.97 63,796.81 279,791.63 218,595.71
121,001.69 67,280.53 EXPENDITURE
Loan Funds Manufacturing Expenses 16 114,246.30 76,282.35
(Increase) / Decrease in Stock 17 962.74 903.18
Secured Loans 3 122,050.73 116,707.32
Purchase of Finished Goods 652.47 618.56
Unsecured Loans 4 27,564.60 16,362.50
Payment to and Provision for Employees 18 10,387.43 7,360.43
149,615.33 133,069.82 Administrative Expenses 19 4,249.02 3,529.38
Freight & Selling Expenses 20 45,927.70 35,976.93
Total 270,617.02 200,350.35
Interest 21 7,443.18 5,329.64
APPLICATIONS OF FUNDS 183,868.84 130,000.47
Fixed Assets 5
PROFIT BEFORE DEPRECIATION, EXCEPTIONAL ITEMS & TAX 95,922.79 88,595.24
Gross Block 225,591.46 218,729.91 Depreciation & Amortisation` 20,538.70 47,875.86
Less: Depreciation 162,905.89 142,734.05 Exceptional Items
Net Block 62,685.57 75,995.86 Assets Constructed at Others' Premises W/off 3,093.05 3,888.46
Capital Work-in-Progress 47,888.98 1,795.99 PROFIT BEFORE TAX 72,291.04 36,830.92
110,574.55 77,791.85 Provision for Current Tax 13,475.00 10,662.07
Prior Period Tax Expense (Net) - 1,496.23
Investments 6 84,483.47 59,100.00 Provision for Fringe Benefit Tax [Includes excess 211.98 107.02
Deferred Tax Assets (Net) 7 1,038.98 1,846.10 provision written back pertaining to earlier years Rs.Nil
(Previous Year Rs.55.96 Lac)]
Current Assets, Loans & Advances Provision for Deferred Tax 807.12 (1,471.60)
Inventories 8 15,445.84 17,657.47
PROFIT AFTER TAX 57,796.94 26,037.20
Sundry Debtors 9 5,831.73 4,938.68 Balance Brought Forward from Previous Year 34,869.59 14,941.26
Cash & Bank Balances 10 47,226.05 46,743.43 Debenture Redemption Reserve No Longer Required 202.43 151.76
Other Current Assets 11 755.20 832.75
PROFIT AVAILABLE FOR APPROPRIATION 92,868.96 41,130.22
Loans & Advances 12 73,678.81 39,430.26 Transferred to General Reserve 8,000.00 3,000.00
142,937.63 109,602.59 Interim Dividend on Equity Shares 1,741.86 -
Corporate Dividend Tax on Interim Dividend 296.03 -
Less: Current Liabilities & Provisions 13 Proposed Final Dividend on Equity Shares 1,741.86 2,786.98
Liabilities 29,562.88 23,617.63 Corporate Dividend Tax on Final Dividend 296.03 473.65
Provisions 38,854.73 24,372.56
12,075.78 6,260.63
68,417.61 47,990.19 Balance Carried Over to Balance Sheet 80,793.18 34,869.59
Net Current Assets 74,520.02 61,612.40 92,868.96 41,130.22
Total 270,617.02 200,350.35 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
Significant Accounting Policies & Notes on Accounts 22

The schedules referred to above and notes on accounts form an integral part of the Balance Sheet. The schedules referred to above and notes on accounts form an integral part of the Profit & Loss Account.
As per our report of even date As per our report of even date
For B. R. Maheswari & Co. For B. R. Maheswari & Co.
Chartered Accountants Chartered Accountants

Sudhir Maheshwari B. G. Bangur H. M. Bangur Shreekant Somany Dr. Abid Hussain O.P. Setia Sudhir Maheshwari B. G. Bangur H. M. Bangur Shreekant Somany Dr. Abid Hussain O.P. Setia
Partner Executive Chairman Managing Director Director Director Director Partner Executive Chairman Managing Director Director Director Director
Membership No. 81075 Membership No. 81075

PLACE: KOLKATA Dr. Y.K. Alagh A. Ghosh M.K. Singhi Ashok Bhandari S.S. Khandelwal 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 DATE: 28th April, 2009 Director Director Executive Director Chief Finance Officer Company Secretary

SHREE CEMENT LIMITED 105

 TRUST DOES THE IMPOSSIBLE

Schedules Forming Part of the TRUST DOES THE IMPOSSIBLE

Balance Sheet
As at As at As at As at
31.03.2009 31.03.2008 31.03.2009 31.03.2008
(Rs.in Lac) (Rs.in Lac) (Rs.in Lac) (Rs.in Lac)

SCHEDULE 1 - SHARE CAPITAL Special Reserve

As per last Balance Sheet 10,519.90 11,470.46
Authorised
Less: Transfer to Fixed Assets - 950.56
6,00,00,000 Equity Shares of Rs.10/- each 6,000.00 6,000.00
(Previous Year 6,00,00,000) 10,519.90 10,519.90

15,00,000 Cumulative Preference Shares of Rs.100/- each 1,500.00 1,500.00 Profit & Loss Account 80,793.18 34,869.59
(Previous Year 15,00,000) 117,517.97 63,796.81
7,500.00 7,500.00
Issued SCHEDULE 3 - SECURED LOANS
3,48,37,225 Equity Shares of Rs.10/- each 3,483.72 3,483.72
Term Loans from Banks 105,716.94 112,573.18
(Previous Year 3,48,37,225)
Secured Redeemable Non Convertible Debentures
3,483.72 3,483.72
20 - 7.40% NCDs of Rs. 40,00,000/- each aggregating to Rs. Nil
Subscribed and Paid-up (Previous Year Rs. 800 Lac) [Redeemed Rs. 800 Lac
3,48,37,225 Equity Shares of Rs.10/- each fully paid-up 3,483.72 3,483.72 (Previous Year Rs.600 Lac)] - 800.00
(Previous Year 3,48,37,225) Working Capital Facilities from Banks 16,333.79 3,334.14
Note : Out of above Equity Shares, 2,40,021 Equity 122,050.73 116,707.32
Shares of Rs. 10/- each fully paid-up were issued for
consideration other than cash in pursuance of Scheme of
Amalgamation 1) All Term loans [Except (a) Term Loans of Rs. Nil (Previous Year Rs. 12.41 Lac)
3,483.72 3,483.72 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
SCHEDULE 2 - RESERVES AND SURPLUS by way of charge on Current Assets subservient to Working Capital Lenders] from
Capital Reserve Banks are secured by joint equitable mortgage on all the immovable assets and
As per last Balance Sheet 52.16 52.16 by hypothecation of all the movable assets (save & except book debts) of the
52.16 52.16 Company both present and future subject to prior charge(s) created and/or to be
Capital Redemption Reserve created in favour of the company’s bankers on inventories of stock-in-trade, stores &
As per last Balance Sheet 1,500.00 1,500.00 spares, book debts and other current assets of the Company for working capital
1,500.00 1,500.00 facilities. The above charge(s) rank pari passu inter-se among these Banks.

Securities Premium Account 2) 20-7.40% Non Convertible Debentures of Rs. 40,00,000/- each aggregating to Rs.
As per last Balance Sheet 2,652.73 2,652.73 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
2,652.73 2,652.73
hypothecation of all the movable assets (save & except book debts) of the Company
Debenture Redemption Reserve both present and future subject to prior charge(s) created and/or to be created in
As per last Balance Sheet 202.43 354.19 favour of the Company’s bankers on inventories of stock-in-trade , stores & spares,
Less: Transfer to Profit & Loss Account 202.43 151.76 book debts and other current assets of the Company for Working Capital borrowings.
- 202.43 The charge ranked pari passu with the charges created / to be created in favour of
Revaluation Reserve other first charge holders for their respective loans.The above Debentures were also
As per last Balance Sheet - 4,923.44 secured by a legal mortgage over immovable property of the Company situated at
Less: Transfer to Fixed Assets - 4,923.44 Jamnagar (Gujarat).
- - 3) Working Capital borrowings from banks are secured by hypothecation of inventories
General Reserve of stock-in-trade, stores & spares, book debts and other current assets of the
As per last Balance Sheet 14,000.00 11,000.00
Company on first charge basis and on whole of movable fixed assets of the company
Add: Transfer from Profit & Loss Account 8,000.00 3,000.00
on second charge basis. These borrowings are also secured by joint equitable
22,000.00 14,000.00 mortgage on all the immovable assets of the Company on second charge basis.

SHREE CEMENT LIMITED 107

 (a)
(b)
Vehicles
Buildings
Particulars

Sub Total
Sub Total

Total (A)
Land & Site

Previous Year
Development

Capital Work
Railway Siding

Generated) "
"Clean Develo-
Free Hold Land

ism (Internally

In Progress (B)
pment Mechan-
Lease Hold Land
Tangible Assets :

Office Equipments
Plant & Machinery

Furniture,Fixture &

Grand Total (A+B)

Intangible Assets:

Computer Software
From Banks
Security Deposits
Deferred Sales Tax

165734.06
1890.89
200475.33

218729.91
6.90
-
6.90
2871.79
1227.45
9843.44
528.07
832.07
1053.97

218723.01
As At
SCHEDULE 5 - FIXED ASSETS

362.24

75875.81
7506.11
370.63
8.39
292.27
466.63
-
5043.00

7135.48
369.86
3.28
1.08
959.36
Year
During the
SCHEDULE 4 - UNSECURED LOANS

GROSS BLOCK

22879.96
644.56
6.90
-
6.90
161.14
15.88

637.66
-
450.27
10.37
-
-
-
Year
During the
31.03.2008 Adjustments Adjustments
Additions/ Deductions/

362.24

218729.91
225591.46
370.63
2022.02
3322.54
1227.45
205068.06
10202.93
531.35
833.15
2013.33

225220.83
31.03.2009
As At

8.39 (b)

110915.52
142734.05
-
-
-
752.33
1855.74
1024.50
136214.26
2887.22

142734.05
-
-
-
31.03.2008
Up to

48756.20
20586.13
362.24
362.24
-
421.43
407.38
31.11
18746.01
617.96
-
-
-
Year
During the
Provisions/
Adjustments

20223.89 (a)

16937.66
414.30
-
-
-
414.30
101.57
9.45
-
300.05
3.23
-
-
-
Year
During the
Adjustments
Deductions/
DEPRECIATION/AMORTISATION

Expenses incurred on Clean Development Mechanism to be amortised against sale proceeds.

27,564.60
15,000.00
6,379.68
6,184.92
(Rs.in Lac)
31.03.2009
As at

2,253.67
1,055.61
154,660.22

142734.05
162905.89
362.24
362.24
-
1,072.20
3,501.95

162543.65
-
-
-
31.03.2009
Upto

47888.98
8.39
-
8.39
949.82
1068.87
171.84
50407.84
6700.98
531.35
833.15
2013.33
31.03.2009
As At

Depreciation for the year includes Rs. 47.43 lac (Previous Year Rs. 880.34 lac) on assets during construction period .
NET BLOCK
16,362.50
5,000.00
5,305.11
6,057.39
(Rs.in Lac)
31.03.2008
As at

110574.55 77791.85
1795.99
1138.56

75995.86 54818.54
62685.57 75995.86
6.90
-
6.90
1016.05
202.95
64261.07
6956.22

62677.18 75988.96
528.07
832.07
1053.97
31.03.2008
As At
(Rs. In Lac)

SCHEDULE 6 - INVESTMENTS (Rs. In Lac)

Particulars Face Value As at Additions Sold / Deductions As at
(Rs. Per Unit) 31.03.2008 during the year during the year 31.03.2009
No. Amount No. Amount No. Amount No. Amount

OTHER THAN TRADE (LONG TERM) - UNQUOTED

(A) In Public Financial Institutions
National Bank for Agricultural And Rural Development 20000.00 - - 55700.000 4823.75 - 55700.000 4823.75
Total (A) - - 55700.000 4823.75 - - 55700.000 4823.75
(B) In Units of Mutual Fund
Birla Sun Life - FTP INSTL - Series AH-Growth 10.00 5000000.000 500.00 - - - - 5000000.000 500.00
Birla Sun Life - FTP INSTL - Series AJ-Growth 10.00 25000000.000 2500.00 - - - - 25000000.000 2500.00
Birla Sun Life - FTP INSTL - Series AK-Growth 10.00 20000000.000 2000.00 - - - - 20000000.000 2000.00
Birla Sun Life - FTP INSTL - Series BA Growth 10.00 - - 25000000.000 2500.00 - - 25000000.000 2500.00
Birla Sun Life - Gilt Plus Regular Growth 10.00 5669536.089 1500.00 4108598.475 1250.00 - - 9778134.564 2750.00
Birla SunLife Income Plus Growth 10.00 - - 6059909.239 2500.00 - - 6059909.239 2500.00
DSP Black Rock Bond Fund - Regular Plan Growth 10.00 - - 3357394.662 1000.00 - - 3357394.662 1000.00
DSP Black Rock - FMP 13 M Series 1 Institutional Growth 10.00 15000000.000 1500.00 - - - - 15000000.000 1500.00
DWS Fixed Term Plan Series 59 Institutional Growth 10.00 - - 5000000.000 500.00 - - 5000000.000 500.00
Fortis Investment - FTP Ser 10 Plan E.Inst.Growth 10.00 10000000.000 1000.00 - - - - 10000000.000 1000.00
HDFC Arbitrage Fund - Wholesale Plan - Growth 10.00 19329274.186 2000.00 52242818.586 5800.00 19329274.186 2000.00 52242818.586 5800.00
HDFC FMP 18 Month Jan. 2008 VII Wholesale Plan Growth 10.00 10000000.000 1000.00 - - - - 10000000.000 1000.00
HDFC FMP 370 Day March 2008 VII (2) Wholesale Plan Growth 10.00 50000000.000 5000.00 - - - - 50000000.000 5000.00
HDFC FMP 370D September 2008 (IX) (1)-Wholesale Plan Growth 10.00 - - 30000000.000 3000.00 - - 30000000.000 3000.00
HDFC Income Fund -Growth 10.00 - - 10601640.582 2167.00 - - 10601640.582 2167.00
ICICI Prudential FMP Series 41-Sixteen Month Plan Institutional Cumulative 10.00 20000000.000 2000.00 - - - - 20000000.000 2000.00
ICICI Prudential FMP Series 43- Thirteen Month Plan D Retail Growth 10.00 10000000.000 1000.00 - - - - 10000000.000 1000.00
ICICI Prudential Gilt Fund - Investment Plan- Growth 10.00 7237375.763 1800.00 4097581.444 1250.00 426361.051 100.00 10908596.156 2950.00
ICICI Prudential Institutional Income Plan Growth 10.00 - - 6598297.166 2000.00 - - 6598297.166 2000.00
IDFC Arbitrage Fund-Plan-B-Growth 10.00 - - 4199916.002 500.00 - - 4199916.002 500.00
ING Fixed Maturity Fund - XXVIII- Growth 10.00 35000000.000 3500.00 - - 35000000.000 3500.00 - -
JM -Fixed Maturity Fund-Series VII -15 Months Plan 1-Institutional
Growth Plan 10.00 25000000.000 2500.00 - - - - 25000000.000 2500.00
JM - Arbitrage Advantage Fund- Growth Plan 10.00 45283184.761 5000.00 30997646.430 3700.00 22879944.356 2500.00 53400886.835 6200.00
Kotak - FMP 12 M Series - 6 Institutional- Growth 10.00 - - 10000000.000 1000.00 - - 10000000.000 1000.00
Kotak - FMP 16 M Series 2 Institutional - Growth 10.00 15000000.000 1500.00 - - - - 15000000.000 1500.00
Principal Government Securities Fund Investment Plan Growth Plan 10.00 5580031.859 1000.00 - - - - 5580031.859 1000.00
Religare FMP-13 month Series- IV-Institutional Growth 10.00 10000000.000 1000.00 - - - - 10000000.000 1000.00
Religare FMP-375days Series IX Institutional Growth 10.00 - - 10000000.000 1000.00 - - 10000000.000 1000.00
Reliance Fixed Horizon Fund IV - Annual Plan Series 1 - Institutional
Growth 10.00 50000000.000 5000.00 - - 50000000.000 5000.00 - -
SHREE CEMENT LIMITED
109
 (Rs. In Lac)
Particulars Face Value As at Additions during Sold / Deductions As at
(Rs. Per Unit) 31.03.2008 the year during the year 31.03.2009
No. Amount No. Amount No. Amount No. Amount

Reliance Fixed Horizon Fund IV -

Series 8 - Institutional Growth 10.00 25000000.000 2500.00 - - - - 25000000.000 2500.00
Reliance Fixed Horizon Fund VII - Series 1 - Institutional Growth 10.00 25000000.000 2500.00 - - - - 25000000.000 2500.00
Reliance Fixed Horizon Fund-IX Series 6 Institutional Growth Plan 10.00 - - 5000000.000 500.00 - - 5000000.000 500.00
Reliance Gilt Securities Long term Fund Growth Plan 10.00 2117373.046 300.00 - - 2117373.046 300.00 - -
Reliance Gilt Securities Fund Institutional Growth Plan 10.00 - - 2927225.889 292.72 - - 2927225.889 292.72
SBI Arbitrage Opportunities Fund-Growth 10.00 - - 57877318.534 7000.00 - - 57877318.534 7000.00
Sundaram BNP Paribas Fixed Term Plan D inst.-Growth 10.00 10000000.000 1000.00 - - - - 10000000.000 1000.00
Sundaram BNP Paribas Fixed Term Plan E inst.-Growth 10.00 15000000.000 1500.00 - - - - 15000000.000 1500.00
Tata Fixed Investment Plan-2 Scheme-A Institutional Plan-Growth 10.00 - - 10000000.000 1000.00 - - 10000000.000 1000.00
Templeton Fixed Horizon Fund Series VII-Plan A- Institutional -Growth 10.00 15000000.000 1500.00 - - - - 15000000.000 1500.00
Templeton India Goverment Securities Fund-Composite Plan-Growth 10.00 5621724.263 1500.00 - - - - 5621724.263 1500.00
UTI -Spread Fund Growth Plan 10.00 62651425.424 7000.00 - - 26927081.463 3000.00 35724343.961 4000.00
Total (B) 543489925.391 59100.00 278068347.009 36959.72 156680034.102 16400.00 664878238.298 79659.72
SUB TOTAL (A+B) 543489925.391 59100.00 278124047.009 41783.47 156680034.102 16400.00 664933938.298 84483.47
OTHER THAN TRADE (CURRENT) - UNQUOTED
In Units of Mutual Fund
Bharti AXA Liquid Fund - Institutional Growth Plan 10.00 - - 199204.913 2000.00 199204.913 2000.00 - -
Reliance Liquidity Fund 10.00 - - 55156401.516 5517.35 55156401.516 5517.35 - -
Religare- ArbitrageFund-Growth 10.00 - - 13748098.180 1500.00 13748098.180 1500.00 - -
SUB TOTAL - - 69103704.609 9017.35 69103704.609 9017.35 - -
GRAND TOTAL 543489925.391 59100.00 347227751.618 50800.82 225783738.711 25417.35 664933938.298 84483.47

AGGREGATE BOOK VALUE OF : (Rs. In lac)

As at 31.03.2009 As at 31.03.2008
Quoted Investment - -
Unquoted Investment (at cost)
- In Public Financial Institutations 4823.75
- In Units of Mutual Funds (#) 79659.72 84483.47 59100.00 59100.00
84483.47 59100.00

(#) Net Asset Value of Investment in Units of Mutual Funds as on 31st March, 2009 stands at Rs. 85289.65 lac.

-
-
-
-
-
-

Fuels

Others
Others

Rs. 49.56 Lac )

Finished Goods
Raw Materials`

Less: Overdrafts
Over Six months
Goods-in-Process
Depreciation

Materials-in-Transit
Deferred Tax Assets

Arising on account of :
Arising on Account of :

Cash Balances on Hand

In Current Accounts
Long-term Capital Losses

(Unsecured, Considered Good)

Balances with Scheduled Banks

Less : Deferred Tax Liabilities

In Unpaid Dividend Account

Fixed Deposits with Scheduled Banks
Stores, Spares, and Packing Materials
SCHEDULE 8 - INVENTORIES

(Includes, Margin Money Pledged with Banks

SCHEDULE 9 - SUNDRY DEBTORS

Balance with Non Scheduled Bank (Refer Note 9)

Expenses allowed for tax purpose when paid

(As taken, valued and certified by the Management)

SCHEDULE 7 - DEFERRED TAX ASSETS

SCHEDULE 10 - CASH AND BANK BALANCES

TRUST DOES THE IMPOSSIBLE

(3,652.48)
45,707.56

47,226.05
5.71
50.11
5,056.04
42,055.08
59.11
5,831.73
5,757.25
74.48
15,445.84
1,627.99
1,232.61
100.96
10,583.99
1,198.65
701.64
1,038.98
601.83
972.11
2,612.92
-
(Rs.in Lac)
31.03.2009
As at

46,743.43
5.60
43.02
4,908.55
41,696.20
90.06
4,938.68
4,820.52
118.16
17,657.47
1,745.50
2,222.76
468.87
8,578.98
3,921.42
719.94
1,846.10
5.14
(396.07)
1,432.23
22.94
(Rs.in Lac)
31.03.2008
As at

SHREE CEMENT LIMITED

TRUST DOES THE IMPOSSIBLE

111
 TRUST DOES THE IMPOSSIBLE

TRUST DOES THE IMPOSSIBLE Schedules Forming Part of the

Profit & Loss Account
As at As at For the Year ended For the Year ended
31.03.2009 31.03.2008 31.03.2009 31.03.2008
(Rs.in Lac) (Rs.in Lac) (Rs.in Lac) (Rs.in Lac)

SCHEDULE 11 - OTHER CURRENT ASSETS SCHEDULE 14 - SALES

Interest Accrued on Deposits 755.20 832.75 Cement and Clinker Sales 301,096.77 243,332.29
Add:Captive Consumption of Cement 556.73 699.79
755.20 832.75
301,653.50 244,032.08
SCHEDULE 12 - LOANS AND ADVANCES
Power Sales 8,063.19 -
(Unsecured, Considered Good)
Advances Recoverable in Cash or in Kind or 22,484.64 7,194.09 Gross Sales 309,716.69 244,032.08
for Value to be Received (Refer Note 10)
SCHEDULE 15 - OTHER INCOME
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 (A) Other Operating Income
Prepaid Expenses 61.90 96.57 CERs Sale Receipt (Net of Expenses) 1,783.76 1,602.33
Advance Tax 40,410.25 23,966.81 Interest Received on Income Tax & Sales Tax Refund 101.44 275.97
Provision No Longer Required (Net) 652.99 140.46
73,678.81 39,430.26
Profit /(Loss) on Sale of Fixed Assets 16.99 11.63
SCHEDULE 13 - CURRENT LIABILITIES AND PROVISIONS Total (A) 2,555.18 2,030.39
Liabilities (B) Investment and Miscellaneous Income
Sundry Creditors: Profit on Sale of Investments (Other than Trade)- Long term 1,349.52 411.35
Micro, Medium and Small Enterprises (Refer Note 5) 33.32 - - Current (Net) 70.44 2.15
Others 21,254.91 16,676.03 Interest on FDR [Tax deducted at source
Customers Advances 4,734.69 3,813.84 Rs. 993.75 Lac (Previous Year Rs.1467.86 Lac)] 4,273.26 5,024.19
Sales-tax Payable 1,758.60 1,223.50 Dividend from Current Investments (Other than Trade) 1.33 155.84
Other Liabilities 242.22 261.72 Miscellaneous 39.88 59.99
Interest Accrued but Not Due on Loans 1,489.03 1,599.52
Total (B) 5,734.43 5,653.52
Investor Education and Protection Fund shall be credited by
the following amount: Total (A+B) 8,289.61 7,683.91
- Unclaimed Dividend (There are no amounts due and
outstanding to said fund as on 31.03.2009) 50.11 43.02 SCHEDULE 16 - MANUFACTURING EXPENSES
29,562.88 23,617.63 Raw Materials Consumed 24,613.31 21,098.97
Freight on Inter unit Clinker transfer 8,065.61 3,491.39
Provisions
Stores, Spares & Packing Materials Consumed 16,902.52 12,643.60
Income Tax 34,228.97 20,753.97
Power, Fuel & Water 60,581.11 36,723.12
Fringe Benefit Tax 519.58 307.59
Mines Reclamation Expenses 562.50 -
Wealth Tax 15.47 11.66
Repair & Maintenance:
Staff Benefit Schemes 14.93 38.71
Plant & Machinery 3,081.06 2,002.78
Proposed Dividend - Interim 1,741.86 2,786.98
Buildings 353.91 230.50
- Final 1,741.86 -
Others 86.28 91.99
Corporate Dividend Tax 592.06 473.65
114,246.30 76,282.35
38,854.73 24,372.56
SCHEDULE 17 - (INCREASE) / DECREASE IN STOCK
68,417.61 47,990.19
Closing Stock
Goods-in-Process 1,232.61 2,222.76
Finished Goods 1,627.99 1,745.50
2,860.60 3,968.26

SHREE CEMENT LIMITED 113

 TRUST DOES THE IMPOSSIBLE

Schedules Forming Part of the

TRUST DOES THE IMPOSSIBLE
Balance Sheet and Profit &
Loss Acccout
For the Year ended For the Year ended SCHEDULE 22 – SIGNIFICANT ACCOUNTING POLICIES AND Expenditures on construction of assets for Company’s use at
31.03.2009 31.03.2008 NOTES ON ACCOUNTS premises owned by Government/Local Authorities/others are
charged to Profit & Loss Accounts in the year of expenditure.
(Rs.in Lac) (Rs.in Lac) (A) SIGNIFICANT ACCOUNTING POLICIES
05. Investments
Opening Stock 01. Accounting Convention
Goods-in-Process 2,222.76 3,632.93 Investments are classified into current and long-term investments.
The Financial statements of the Company are prepared under the Current Investments are carried at lower of cost or fair market
Finished Goods 1,745.50 1,148.01 historical cost convention using the accrual method of accounting value. Long term investments are stated at cost. Provision for
3,968.26 4,780.94 under the Companies Act, 1956 unless stated otherwise diminution is made to recognize a decline, other than temporary,
hereinafter. Accounting Policies not specifically referred to, are in the value of long term investments by a charge to Profit and Loss
(Increase) / Decrease 1,107.66 812.68 consistent with Generally Accepted Accounting Principles. Account.
Add/(Less) : Excise Duty Variance on Closing/Opening Stock (144.92) 90.50 02. Fixed Assets 06. Inventories
Net (Increase) / Decrease 962.74 903.18 Tangible Assets Inventories are stated at cost or net realizable value whichever is
SCHEDULE 18 - PAYMENT TO AND PROVISION FOR EMPLOYEES a) Free hold and Lease hold land are disclosed at cost. lower. The material costs are determined on weighted average
b) Fixed assets other than land are disclosed at cost less basis. The valuation of manufactured goods represents the
Salaries,Wages,Bonus and Allowances 8,211.75 5,916.28 combined cost of material, labour and manufacturing overheads
accumulated depreciation and impairment loss, if any. Cost
Contribution to Provident, Superannuation and Gratuity Funds 1,292.21 787.09 comprises of purchase price and attributable cost of bringing and includes excise duty in case of finished goods only.
Employees Welfare Expenses 883.47 657.06 the asset to its working condition for its intended use (net of 07. Revenue Recognition
10,387.43 7,360.43 credit availed, if any). Sales revenue is recognized on the transfer of significant risks and
Intangible assets rewards of the ownership of goods to the buyer.
SCHEDULE 19 - ADMINISTRATIVE EXPENSES
Intangible assets are recognized only if its cost can be measured Dividend income on investments is accounted for when the right
Rent 349.45 293.60
reliably and it is possible that future economic benefits will flow to to receive the payment is established.
Rates & Taxes 486.86 719.10 the Company. Such assets are stated at cost (net of credit availed, if Certain insurance, railway and other claims where quantum of
Insurance 150.30 152.93 any) less accumulated amortization. Cost includes any directly accruals cannot be ascertained with reasonable certainty, are
Travelling 778.16 677.29 attributable expenditure on making the assets ready for its accounted on acceptance basis.
Commission to Directors [Refer Note 15 (d)] 51.00 42.00 intended use.
Sale of Certified Emission Reductions (CERs) is recognized as
Directors' Sitting Fees and Expenses 10.02 14.54 Impairment of Assets income on the delivery of the CERs to the buyer’s account as
Bank and Financial Charges 272.63 230.82 The carrying amount of assets are reviewed at each Balance Sheet evidenced by the receipt of confirmation of execution of delivery
Foreign Exchange Rate Difference (Net) 21.51 62.89 date, if there is any indication of impairment based on instructions.
Miscellaneous 2,142.53 1,489.12 internal/external factors. An impairment loss is recognized 08. Government Grants/Subsidies
Balances Written Off (Net) (13.44) (152.91) wherever the carrying amount of an asset exceeds its recoverable
amount. A previously recognized impairment loss is further Government grants are recognized when there is a reasonable
4,249.02 3,529.38 provided or reversed depending on changes in circumstances. assurance that the Company will comply with the conditions
attached thereto and the grants will be received.
SCHEDULE 20 - FREIGHT & SELLING EXPENSES 03. Foreign Currency Transactions
Government grants in the form of promoters’ contribution are
Freight Charges 34,876.46 27,178.88 Foreign currency transactions are recorded by applying the credited to capital reserve.
Publicity & Selling Exp. 5,995.78 4,473.05 exchange rates on the date of transaction.
Government grants related to revenue are recognized on a
Rebate & Discount 5,055.46 4,325.00 At each Balance sheet date, monetary foreign currency items are systematic basis in the Profit and Loss Account over the period to
45,927.70 35,976.93 reported using the closing rates. match them with the related costs.
Exchange difference arising on the settlement of monetary items/ 09. Employee Benefits:
SCHEDULE 21 - INTEREST
foreign exchange contracts are recognized as income or expense in
- On Fixed Loans 3,969.53 2,688.42 the period in which they arise. (a) Defined Contribution Plan
- On Debentures 1,282.12 596.06 04. Capital Work In Progress Superannuation and Provident Fund are considered as
- Others 2,191.53 2,045.16 defined contribution plan and the contributions are charged
Capital work in progress is carried at direct cost (including to the Profit & Loss Account of the year in which the
7,443.18 5,329.64 advances) and pre-operative expenditure during construction contributions to the respective funds are due.
period is allocated to the fixed assets on the completion of project.

SHREE CEMENT LIMITED 115

 TRUST DOES THE IMPOSSIBLE

TRUST DOES THE IMPOSSIBLE

(b) Defined Benefit Plan 13. Mines Reclamation Expenditure [B]NOTES ON ACCOUNTS depreciation of Rs 47.68 lac on assets during construction period
(Previous Year Rs. 0.25 Lac).
Gratuity is considered as defined benefit plan and is provided The Company provides for the expenditure to reclaim the quarries 1. Contingent liabilities not provided for : -Counter-guarantees in
for on the basis of an actuarial valuation, using the projected used for mining. The total estimate of reclamation expenses is favour of banks: Rs. 10500.88 Lac (Previous Year Rs. 3430.95 5. Disclosure of Sundry Creditors under Current Liabilities is based
unit credit method, as at the date of the Balance Sheet. apportioned over the estimate of mineral reserves and a provision Lac). on the information available with the Company regarding the
is made based on the minerals extracted. status of the suppliers as defined under the “Micro, Small and
Contribution to provident Fund set up by the Company in 2. Estimated amount of contracts remaining to be executed on capital
Medium Enterprises Development Act, 2006” and there are no
respect of a few employees is also defined benefit plan and 14. Segment Reporting account (net of advances) Rs. 43800.21 Lac. (Previous Year Rs.
delays in payments to Micro, Small and Medium Enterprises as
contribution is charged to Profit & Loss Accounts of the year in 9094.37 Lac)
Segment is identified and reported taking into account the nature required to be disclosed under the said Act. This has been relied
which the contribution is due. of products and services, the different risks and returns and the 3. Installments of Secured Loans falling due for repayment in next upon by the Auditors.
Encashable leave in case of employees covered by Cement internal business reporting systems. The identification of 12 months amounting to Rs. 13184.01 Lac (Previous Year Rs.
6. Unhedged Foreign Currency Exposure:
Wage Board is considered as defined benefit plan and is geographical segment is based on the areas in which major 8900.76 Lac).
accounted for on the basis of actuarial valuation, as at the operating divisions of the Company operates. 4. Capital Work-in-Progress includes Pre-operative expenses of Rs
Balance Sheet date. Inter Segment Transfers are accounted for as if the sales or transfers 1878.37 lac (Previous Year Rs. 15.34 Lac) which includes
Actuarial gains and losses, if any, are recognized in the Profit & were to third parties at market price.
Loss Account in the year in which they arise. Common allocable costs are allocated to each segment according
10. Borrowing Costs to the relative contribution of each segment to the total common Rs. in Lac
Borrowing costs directly attributable to the acquisition / costs. Purpose Currency As at 31-03-2009 As at 31-03-2008
construction of a qualifying asset are capitalized as part of the cost Assets, Liabilities, Revenue and Expenses which are not allocable 1 Outstanding creditors for Spares & Technical Consultancy Euro 0.45 1.35
of the asset till the date the asset is put to use. Other borrowing to segments are included under “unallocated”.
costs are recognized as an expense in the period in which they are 2 Outstanding creditors for Technical Consultancy USD 0.13 -
15. Taxation
incurred. 3 Outstanding creditors for Spares GBP 0.07 0.10
Provision is made for current, deferred and fringe benefit taxes.
11. Depreciation Deferred tax is recognized for all the timing differences. Deferred 4 Outstanding creditors for Spares JPY 152 -
Tangible Assets : tax assets are recognized only to the extent that there is virtual
(a) Depreciation is provided on Written down Value method at certainty supported by convincing evidence that sufficient future 7. Employee Benefits:
the rates specified in Schedule XIV of the Companies Act, taxable income will be available against which such deferred tax
(a) Contribution to defined contribution plans recognized as expenses are as under:
1956 or the rates prescribed in the Income Tax Act 1961, assets can be realized. Rs. in Lac
whichever is higher. However, in case of those assets whose 16. Provisions and Contingent Liabilities /Assets 2008-09 2007-08
WDV as per Income Tax Act 1961 is lower than the WDV as per Provisions in respect of present obligation arising out of past Superannuation 624.55 382.69
books, additional depreciation is provided to align the Book events are made in the accounts when reliable estimate can be
WDV with WDV as per Income Tax Act, 1961. Employees’ Pension Scheme 198.04 133.10
made of the amount of the obligations.
(b) Leasehold land is not amortized being long term in nature. Provident fund 439.85 219.91
The contingent liabilities are disclosed, unless the possibility of
Intangible Assets : outflow of resources is remote. Contingent Assets are generally Total 1262.44 735.70
(a) The amount of amortization is allocated on a systematic basis neither recognized nor disclosed in the financial statements.
over the estimated/legal life not exceeding 10 years
(b) Defined Benefit Plans – disclosure for defined benefit plans based on actuarial reports :
commencing when asset is available for use except Clean
Rs. in Lac
Development Mechanism Projects which are amortized
Gratuity (Funded Plan)
against sale proceeds.
As at 31-03-2009 As at 31-03-2008
(b) Expenditure on Computer Software is amortized in the year in
which it is capitalized. I Change in Obligation
12. Research and Development 1 Present Value of defined benefit obligation at the beginning of the year 1858.71 1621.32
Expenditure on research phase is recognized as an expense when it 2 Current service cost 166.98 34.05
is incurred. Expenditure on development phase which results in 3 Interest cost 148.70 121.60
creation of assets is included in related Fixed Assets.
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

SHREE CEMENT LIMITED 117

 TRUST DOES THE IMPOSSIBLE

TRUST DOES THE IMPOSSIBLE

Rs. in Lac (c) The estimates of future salary increases have been considered 8. Revenue expenditure on Research and Development amounting
Gratuity (Funded Plan) in actuarial valuation after taking into consideration the to Rs. 864.18 Lac (Previous Year Rs. 744.00 Lac) is included under
As at 31-03-2009 As at 31-03-2008 impact of inflation, seniority, promotion and other relevant relevant heads of expenditure. Capital expenditure relating to
II Change in the Fair Value of Plan Assets factors such as supply and demand situation in the Research and Development amounting to Rs. 12.34 Lac (previous
employment market. year Rs.1.76 Lac) has been included in fixed assets.
1 Fair Value of plan assets at the beginning of the year 1858.71 1106.43
(d) In terms of the Guidance Note on implementing the 9. Balance with non scheduled bank represents balance in current
2 Expected return on plan assets 182.30 144.19
Accounting Standard 15 (revised 2005), issued by the account with Sir M Vishweshwaraiah Sahakar Bank Niyamitha,
3 Contributions by employer 354.05 661.07 Accounting Standard Board of the Institute of Chartered Gulberga. Maximum balance outstanding during the year Rs.
4 Actuarial gain/(loss) on plan assets - - Accountants of India, the provident fund set up by the 176.84 lac (previous year Rs. 20.40 lac). None of the directors or
5 Benefits paid (42.06) (52.98) company is treated as defined benefit plan since the their relatives are interested in the bank.
Company has to meet the interest shortfall, if any. However, 10. Advance recoverable in cash or in kind or for value to be received
6 Fair value of plan assets at the end of the year 2353.00 1858.71
as at the end of the year no shortfall remains unprovided for. includes application money of Rs. 12085.50 lac in NABARD’s
III Expenses recognized in the Profit and Loss Account As advised by an independent actuary, it is not feasible to Bhavishya Nirman Bonds.
1 Current service cost 166.98 34.05 actuarially value the liability considering that the rate of
11. Segment Reporting :
2 Interest cost 148.70 121.60 interest as notified by the Government can vary annually.
3 Expected return on plan assets (182.30) (144.19) The Company has two primary business segments, namely
Further the pattern of investments for investible funds is as
4 Net actuarial loss/(gain) recognized in the current year 220.67 134.72 Cement and Power. There is no reportable secondary segment as
prescribed by the Government. Accordingly other related
5 Expenses recognized in Profit and Loss Account 354.05 146.18 the Company operates only in one geographical area.
disclosures in respect of provident fund have not been made.
IV Amount recognized in the Balance Sheet as at the end of the year (e) Basis used to determine expected rate of return on assets:
1 Present value of defined benefit obligation 2353.00 1858.71 The expected return on plan assets is based on market
2 Fair Value of plan assets at the end of the year 2353.00 1858.71 expectation, at the beginning of the period, for returns over
3 Funded status [ Surplus/(Deficit)] - - the entire life of the related obligations. The Gratuity Scheme
4 Net assets/(liability) as at the end of the year - - is invested in a Group Gratuity-cum-Life Assurance cash
accumulation policy offered by Life Insurance Corporation
V The major categories of plan assets as a percentage of total plan
(LIC) of India. The investment return earned on the policy
1 Qualifying Insurance Policy 100% 100%
comprises bonuses declared by LIC having regard to LIC’s
VI Actuarial Assumptions investment earnings. The information on the allocation of the
1 Discount rate 8.00% p.a. 7.50% p.a. fund into major asset classes and expected return on each
2 Mortality rate LIC (1994-96 Ultimate) LIC (1994-96 Ultimate) major class are not readily available. We understand that
LIC’s overall portfolio of assets is well diversified and the long
3 Withdrawal rate 1-3% depending on age 1-3% depending on age
term return on the policy is expected to be higher than the
4 Actual return on plan assets 182.30 144.19 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)

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Revenue, Results and other information : 12. Related Party Disclosure (AS-18):
(Rs. in Lac)
Relationships:
Particulars 2008-09 2007-08
(a) Enterprises over which Key Management Personnel (KMP) are able to exercise significant influence
Cement Power Inter- Total Cement Power Inter- Total
Segment Segment (i) The Kamla Company Limited
(ii) Ramgopal Holding Private Limited
Eliminations Eliminations
(b) Key Management Personnel
Revenue
(i) Shri B.G. Bangur Executive Chairman
External Sales 263438.83 8063.19 - 271502.02 210911.80 - - 210911.80
(ii) Shri H.M. Bangur Managing Director
Inter Segment
(iii) Shri M.K. Singhi Executive Director
Revenue - 45630.62 (45630.62) - - 32420.98 (32420.98) -
(c) Relatives to Key Management Personnel
Total Revenue 263438.83 53693.81 (45630.62) 271502.02 210911.80 32420.98 (32420.98) 210911.80
(i) Shri Prashant Bangur
Results
Details of Transactions :
Segment Results
(Profit before 2008-09 2007-08
Interest, (Rs. in lac) (Rs. in Lac)
Exceptional items 47267.64 29763.64 - 77031.28 30450.76 9728.76 - 40179.52
(a) Enterprise where KMP have significant influence:
and Tax)
Add: Un-allocated Usage charges of common facilities
Income - - - 5795.99 - - - 5869.50 - The Kamla Company Limited 15.45 14.39
Less: Interest Expenses - - - 7443.18 - - - 5329.64 Purchase of Fixed Assets
Profit before exceptional - Ramgopal Holding Private Limited 52.32 -
items & Tax - - - 75384.09 - - - 40719.38
(b) Key Management Personnel :
Less: Exceptional Items - - - 3093.05 - - - 3888.46
Remuneration
Profit before Tax - - - 72291.04 - - - 36830.92
- Shri B.G. Bangur 694.60 522.28
Less: Tax Expenses - - - 14494.10 - - - 10793.72
- Shri H.M. Bangur 645.16 472.28
Profit after Tax - - - 57796.94 - - - 26037.20
- Shri M.K. Singhi 198.30 149.35
Other Information
Total 1538.06 1143.91
Segment Assets 128169.52 24313.55 - 152483.07 104151.76 11644.34 - 115796.10
(C) Relatives of Key Management Personnel :
Un-allocated Assets - - - 186551.56 - - - 132544.44
Remuneration
Total Assets - - - 339034.63 - - - 248340.54
- Shri Prashant Bangur 34.92 29.18
Segment Liabilities 25929.31 1852.21 - 27781.52 19838.39 1804.91 - 21643.30
Purchase of Fixed Assets
Un-allocated
- Shri Prashant Bangur - 52.00
Liabilities & Provisions - - - 40636.09 - - - 26346.89
Total Liabilities - - - 68417.61 - - - 47990.19 There is no outstanding balance in receivable/payable and in loan account of the above parties at the end of the year.

Depreciation & 13. Earning per share (EPS) (AS-20):

Amortization 14965.96 5572.74 - 20538.70 36282.19 11593.67 - 47875.86
2008-09 2007-08
Capital expenditure 35591.48 17960.19 - 53551.67 28455.71 13960.50 - 42416.21
Significant Non Cash - Profit attributable to Equity shareholders Rs. Lac 57796.94 26037.20
Expenses other than - Equity share capital Rs. Lac 3483.72 3483.72
Depreciation &
- Weighted average number of Equity shares outstanding
Amortization. - - - - - - - -
(Face value of Rs.10/- per share) Nos. 34837225 34837225
- Earning Per Share – Basic and Diluted Rs. 165.91 74.74

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14. Payment made to Auditors : (c) Commission/ Bonus to Wholetime Directors:

2008-09 2007-08 2008-09 2007-08
(Rs. in Lac) (Rs. in Lac) (Rs. in Lac) (Rs. in Lac)
Statutory Auditors - Eligible Remuneration in terms of Section 309 of the Companies 7221.69 6906.05
- Audit Fee 15.00 11.00 Act, 1956 [10% of Net Profit (b) above]
- Less: Remuneration (Excluding Commission/Bonus) 613.06 543.91
- Tax Audit Fee 1.00 0.75
- Balance available for payment of Commission/ Bonus 6608.63 6362.14
- Certification / Other Services 1.13 1.10
- Commission/ Bonus to be paid as determined by the Board of Directors 925.00 600.00
- Reimbursement of Expenses 2.35 0.66
Cost Auditors (d) Commission to other Directors:
- Audit Fee 1.25 1.25 2008-09 2007-08
- Reimbursement of Expenses 0.08 0.04 (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
15. (a) The Break-up of remuneration to the Wholetime Directors is as under:
2008-09 2007-08 16. Expenses charged to limestone raising cost during the year:
(Rs. in Lac) (Rs. in Lac)
2008-09 2007-08
- Salary 357.60 310.73 (Rs. In Lac) (Rs. in Lac)
- Bonus / Commission 925.00 600.00 - Payment to and provision for Employees 955.71 544.28
- Contribution to Provident and Superannuation Funds 86.90 75.74 - Royalty and Cess 4812.21 3082.08
- Allowances and Perquisites 168.56 157.44 - Stores & Spares, Repairs & Maintenance and Other expenses 5308.45 4533.86
1538.06 1143.91 11076.37 8160.22
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.
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.
(b) Computation of Net Profit in accordance with Section 198 read with Section 349 of the Companies Act, 1956:
2008-09 2007-08 (A) Licensed, Installed Capacity and Production:
(Rs. in Lac) (Rs. in Lac) (a) Cement
Profit before Tax 72291.04 36830.92
2008-09 (MT) 2007-08 (MT)
Add/ (Deduct)
(i) Licensed Capacity(*)
- Remuneration to Whole Time Directors 1538.06 1143.91
(ii) Installed Capacity(**) 6825000 6825000
- Commission to other Directors 51.00 42.00
(iii) Production (Includes Trial run production Nil) (Previous Year 1257 MT) 7765207 6337070
- Directors’ Sitting Fee 3.60 4.10
- Depreciation as per Books 20538.70 47875.86 (*) 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
- Provision for Wealth Tax 14.00 11.00 (**) As certified by the Management (based on OPC)

- Depreciation under Section 350 of the Companies Act,1956 (22219.45) (16846.68) (b) Thermal Power
- Profit on Sale of Fixed Assets (0.01) (0.65)
Unit 2008-09 2007-08
Net Profit as per Section 349 of the Companies Act, 1956 72216.94 69060.46 (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

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(B) Sales and Stocks:

(F) Expenditure incurred in foreign currencies:
2008-09 2007-08
Quantity Value Quantity Value 2008-09 2007-08
(a) Cement (MT) (Rs. in Lac) (MT) (Rs. in Lac) (Rs. In Lac) (Rs. in Lac)

(i) Opening Stock 73694 1745.50 54362 1148.01 (i) Foreign Travel 44.33(#) 83.38

(ii) Sales 7767696 263438.83* 6334208 210911.80 (ii) Consultancy charges 201.08(#) 167.18

(iii) Closing Stock 88329 1627.99 73694 1745.50 (iii) Others 31.53(#) 34.93
(#) For Capital Projects Rs. 85.64 Lac (Previous Year Rs. 115.82 Lac)
(*) Includes Rs 14250.17 Lac (Previous Year Rs. 6487.37 Lac) being value of clinker sold

(G) Earning in foreign currencies:

2008-09 2007-08 2008-09 2007-08
(b) Thermal Power Unit Quantity Value Quantity Value (Rs. In Lac) (Rs. in Lac)
(Rs. in Lac) (Rs. in Lac)
(i) CERs sale receipts 1849.08 1707.73
Sales Lac Unit 1171.23 8063.19 - -

(H) Value of imported and indigenous stores, spare parts, components consumed and their percentage to total consumption:

(C) Raw Materials consumed (All Indigenous) excluding Consumption during Trial Run Production: 2008-09 2007-08
Value % Value %
2008-09 2007-08
(Rs. in Lac) (Rs. in Lac)
Quantity Value Quantity Value
(MT) (Rs. in Lac) (MT) (Rs. in Lac) (i) Imported 2060.06 24.48 857.98 14.92
(ii) Indigenous 6356.72 75.52 4890.78 85.08
(i) Limestone 9411505 11115.15 6674970 8230.84
(ii) Gypsum 422052 3835.66 349515 2868.40
(I) Net dividend remitted to non-resident shareholders in foreign currency:
(iii) Fly Ash 1621986 8119.46 1656049 8707.51
(iv) Slag 183200 505.54 62607 174.49 2008-09 2007-08
(Rs. In Lac) (Rs. in Lac)
(v) Iron Ore 19305 109.78 76089 398.35
(i) No. of non-resident share holders 1 1
(vi) Others 927.72 719.38
(ii) No. of shares held 3600000 3600000
(iii) Year to which dividend relates 2007-08 2006-07
(D) Trade Purchases: (iv) Amount remitted (Rs. In Lac) 288.00 216.00
2008-09 2007-08
Quantity Value Quantity Value 19. The figures of previous year have been regrouped and rearranged wherever necessary.
(MT) (Rs. in Lac) (MT) (Rs. in Lac)
Signature to Schedule 1 to 22.
(i) Cement 17124 652.47 16470 618.56

As per our report of even date

For B. R. Maheswari & Co.
(E) Value of imports during the year calculated on CIF basis: Chartered Accountants
2008-09 2007-08 Sudhir Maheshwari B. G. Bangur H. M. Bangur Shreekant Somany Dr. Abid Hussain O.P. Setia
(Rs. in Lac) (Rs. in Lac) Partner Executive Chairman Managing Director Director Director Director
Membership No. 81075
(i) Fuel 2532.62 -
(ii) Stores, Spare parts and components 1689.90 1603.18
PLACE: KOLKATA Dr. Y.K. Alagh A. Ghosh M.K. Singhi Ashok Bhandari S.S. Khandelwal
(iii) Capital Goods 2240.16 3072.17 DATE: 28th April, 2009 Director Director Executive Director Chief Finance Officer Company Secretary

SHREE CEMENT LIMITED 125

Balance Sheet Abstract &
Company's General Business Profile Cash Flow Statement
as required under Part IV of Schedule VI to the Companies Act, 1956 -

I. Registration Details
For The Year Ended on 31st March, 2009
Registration No. 1 9 3 5 State Code 1 7

Balance Sheet Date 3 1 0 3 2 0 0 9 ( Rs. In Lac)

Date Month Year For the year ended For the year ended
31st March, 2009 31st March, 2008
II. Capital raised during the Year (Amount in Thousand of Rupees) A Cash Flow From Operating Activities

Public Issue Rights Issue Net Profit Before Tax 72291.04 36830.92
Exceptional Items 3093.05 3888.46
N I L N I L Net Profit Before Tax & Exceptional Items 75384.09 40719.38
Bonus Issue Private Placement Adjustment For :
Depreciation and Amortisation 20538.70 47875.86
N I L N I L
Foreign Exchange Rate Difference (Net) 21.51 62.89
III. Position of Mobilization and Deployment of Funds (Amount in Thousand of Rupees) Balances Written Off (Net) (13.44) (152.91)
Interest Income (4374.69) (5300.15)
Total Liabilities Total Assets Profit on Sale of Investment (1419.96) (413.50)
Dividend Received (1.33) (155.84)
2 7 0 6 1 7 0 2 2 7 0 6 1 7 0 2 Loss/ (Profit) on Sale/Disposal of Fixed Assets (16.99) (11.63)
Interest Expenses 7443.18 22176.98 5329.64 47234.36
SOURCES OF FUNDS
Operating Profit Before Working Capital Changes 97561.07 87953.74
Paid-Up Capital Reserves and Surplus
Adjustment For :
3 4 8 3 7 2 1 1 7 5 1 7 9 7 (Increase)/ Decrease in Trade And Other Receivables (6062.66) (7308.95)
(Increase)/ Decrease In Inventories 2211.63 (2050.15)
Secured Loans Unsecured Loans Increase/ (Decrease) in Trade Payables and Other Liabilities 6045.40 2194.37 3968.21 (5390.89)
1 2 2 0 5 0 7 3 2 7 5 6 4 6 0 Cash Generated From Operations 99755.44 82562.85
Foreign Exchange Rate Difference (Net) (21.51) (62.89)
APPLICATION OF FUNDS Direct Taxes Paid (16439.62) (12354.30)
Cash Flow Before Exceptional Items 83294.31 70145.66
Net Fixed Assets Investments Exceptional Items (3093.05) (3888.46)
1 1 0 5 7 4 5 5 8 4 4 8 3 4 7 Net Cash From Operation Activities 80201.26 66257.20

Deferred Tax Assets Net Current Assets B Cash Flow From Investing Activities
Purchase of Fixed Assets (53551.67) (42416.21)
1 0 3 8 9 8 7 4 5 2 0 0 2 Sale of Fixed Assets 247.25 79.92
Misc. Expenditure Accumulated Losses (Purchase)/Sale of Investments (Net) (38018.97) (54100.00)
Profit on Sale of Investment 1419.96 413.50
N I L N I L Dividend Received 1.33 155.84
Interest Received 4452.25 6206.97
IV. Performance of Company (Amount in Thousand Rupees)
Net Cash Used in Investing Activities (85449.85) (89659.98)
Turnover Total Expenditure C Cash Flow From Financing Activities
2 7 9 7 9 1 6 3 2 0 7 5 0 0 5 9 Proceeds From Long Term Borrowings (Net) 3545.86 36598.83
Proceeds From Short Term Borrowings (Net) - -
+/- Profit/Loss Before Tax +/- Profit/Loss After Tax Proceeds From Working Capital Borrowings from Banks 12999.65 3334.14
+ 7 2 2 9 1 0 4 + 5 7 7 9 6 9 4 Interest Paid (7553.67) (5117.66)
Capital Subsidy from Government - -
Earning Per Share in Rs. Dividend Rate % Dividend & Tax there on Paid (Interim and/or Final) (3260.63) -
1 6 5 . 9 1 1 0 0 Net Cash From Financing Activities 5731.21 34815.31
Net Increase/(Decrease) In Cash & Cash Equivalents 482.62 11412.53
V. Generic Name of Principal Product of Company 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
Item Code No. (ITC Code) 2 5 2 3 . 2 9
As per our report of even date
Product Description C E M E N T For B. R. Maheswari & Co.
Chartered Accountants
Sudhir Maheshwari B. G. Bangur H. M. Bangur Shreekant Somany Dr. Abid Hussain O.P. Setia
B. G. Bangur H. M. Bangur Shreekant Somany Dr. Abid Hussain O.P. Setia Partner Executive Chairman Managing Director Director Director Director
Executive Chairman Managing Director Director Director Director Membership No. 81075

PLACE: KOLKATA Dr. Y.K. Alagh A. Ghosh M.K. Singhi Ashok Bhandari S.S. Khandelwal
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
DATE: 28th April, 2009 Director Director Executive Director Chief Finance Officer Company Secretary

SHREE CEMENT LIMITED 127

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Company Details TRUST DOES THE IMPOSSIBLE

Board of Directors Company Secretary Plants

Shri B.G. Bangur - Executive Chairman Shri S.S. Khandelwal
Shri H.M. Bangur - Managing Director Unit I & II
Bankers
Shri R.L. Gaggar
State Bank of Bikaner & Jaipur Bangur Nagar, Beawar – 305 901 District, Ajmer, Rajasthan (India)
Shri O.P. Setia
State Bank of India Phone: (91) 1462-228101-06 * Fax: (91) 1462-228117/228119 * Email: shreebwr@shreecementltd.com
Shri Shreekant Somany
ICICI Bank Ltd.
Dr. Abid Hussain
IDBI Bank Ltd.
Dr. Y.K. Alagh Unit III, IV, V, VI & VII
Axis Bank Ltd.
Shri A. Ghosh
BNP Paribas Bangur City, Ras, Tehsil Jaitaran – 306 107, Distt. Pali, Rajasthan (India)
Shri M.K. Singhi - Executive Director
Standard Chartered Bank Phone: (91) 1462-228101-06 * Fax: (91) 1462-228117/228119 * Email: shreebwr@shreecementltd.com
Management Team HSBC
Shri Prashant Bangur - Executive Jt. President
Advertising Consultant Khushkhera Cement Grinding Unit(s)
Shri Ashok Bhandari - Chief Finance Officer
Shri Alyque Padamsee Plot No SP 3-II, A-1, RIICO Industrial Area, Khushkhera (Bhiwadi) – 301 707, District Alwar, Rajasthan
Shri Diwakar Payal - Jt. President (Marketing)
Shri M.M. Sharma - Sr. Vice President (Project) Phone: (91) 1493-250521/22/23/24 * Fax: (91) 1493-517227
Auditors
Shri P.K. Tripathy - Sr. Vice President (Works) M/s. B.R. Maheswari & Co., New Delhi
Shri P.N. Chhangani - Sr. Vice President (Works)
Shri Vinay Wadhva - Sr. Vice President (Marketing) Cost Auditors
Shri C.R. Biyani - Vice President (Business Development) M/s. K.G. Goyal & Associates, Jaipur
Marketing Offices
Shri Gopal Daga - Vice President (Project)
Internal Auditors
Shri K.C. Gandhi - Vice President (Materials) Shree Ultra Cement
M/s. P.K. Ajmera & Co., Ahmedabad
Shri Sanjay Mehta - Vice President (Commercial) 122-123, Hans Bhawan A-6 Yudhisther Marg, Opp. Yojana Bhawan,
Shri Ramakant Sharma - Vice President (P.R.) Registered Office 1 Bahadur Shah Zafar Marg, New Delhi-110 002 C Scheme, Jaipur-302 005, Rajasthan
Shri P.C. Jhawar - Jt. Vice President (P&A) Bangur Nagar, Beawar - 305 901, Distt. Ajmer, Rajasthan Phone: (91) 11-23370828, 23379218, 23370776 Phone: (91) 141-2223918, 2225950
Shri S.C. Suthar - Jt. Vice President (Mines) Phone: (91) 1462-228101-06, Fax: (91) 1462-228117/19 Fax: (91) 11-23370499 Fax: (91) 141-2381091
Shri A.K. Singh - Jt. Vice President (E&I) Toll free no.: 1800 180 6003-04 Email: scldel@shreecementltd.com Email: scljpr_jp1@shreecementltd.com
Shri C.S. Sharma - Jt. Vice President (Project) website: www.shreecementltd.com
Shri Arvind Khicha - Jt. Vice President (Comml.) email: sclbwr@shreecementltd.com
Bangur Cement
Shri N.C. Jain - Asst. Vice President (Finance)
Shri S.K. Soni - Asst. Vice President (Sales Accounts) Corporate Office 6B, 6 Floor, Hansalaya Building, 91, Dulheshwar Garden,
Shri R.K. Agarwal - Asst. Vice President (Mechanical) 21, Strand Road, Kolkata - 700 001 15, Barakhamba Road, C Scheme, Sardar Patel Marg, Jaipur-302 001, Rajasthan
Shri R.K. Manawat - Asst. Vice President (Process) Phone: (91) 33-22390601-05 New Delhi-110 001 Phone: (91) 141-2361735, 2361696
Shri G.L. Nandwana - Asst. Vice President (Mines) Fax: (91) 33-22434226 Fax: (91) 11-23702794-96 Fax: (91) 141-2360891
Shri Rakesh Bhargava - Asst. Vice President (Environment) email:sclcal@shreecementltd.com Email: sharmaps@bangurcement.com Email: jhanwara@bangurcement.com
Shri Nitin Mukul - Asst. Vice President (Packing Plant)
Shri M.M. Rathi - Asst. Vice President (Power Plant)
Rockstrong Cement
Shri Gajraj Jain - Asst. Vice President (Power Project)
Shri S.L. Bhansali - Asst. Vice President (Legal) 14E, 14 Floor, Hansalaya Building, 15-Barakhamba Road, 14-15, Indira Plaza,
Shri Nirip Bajwa - Asst. Vice President (Marketing) New Delhi-110 001 Hawa Sarak, Sodala, Jaipur-302 001 (Rajasthan)
Shri Himanshu Dewan - Asst. Vice President (Marketing) Phone: (91) 11-23731085, 61512430 Phone: (91) 141-2222032, 6455692
Shri R.C. Bohra - Asst. Vice President (P&A) Fax: (91) 11-23731084 Fax: (91) 141-2222031
Shri S.R. Singhvi - Asst. Vice President (HRD)

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Ratio Analysis
Notes
FINANCIAL 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 2008-09 2007-08 2006-07 2005-06 2004-05

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
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Notes
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