| GENERAL REVIEW |
| The Company's turnover has increased about 15% to Rs. 5750 crore compared to Rs. 5020 crore in previous year. The growth is mainly due to increase in sales of Tyre Section which standalone registered a growth of about 27% from Rs. 2850 crore to Rs. 3609 crore. Current year was a tough period as the Company faced challenges, where Tyre Section went through sharp hikes in raw material cost and Cement exhibited a sluggish trend for most part of the year. |
| Cement sales have dropped about 3% due to lower cement prices industry wide, especially in southern India. Other Sections of the Company i.e Rayon and Chemicals have witnessed about 16% growth in turnover. |
| The Company could manage the overall volume growth in various business segments, but the margins were adversely affected by sharp increase in input and distribution costs as well as higher depreciation cost by Rs. 100 crore and higher interest cost by Rs. 130 crore. |
| Work at Spun Pipe Section and Hindusthan Heavy Chemicals Section continues to be under suspension. |
| CEMENT SECTIONS |
| Vasavadatta Cement |
| Operational performance of this Section continues to be good and it has achieved highest ever production of Cement during the year. The production figures of this Section are as under : |
| |
2010 - 11 |
2009 - 10
(Metric Tons) |
| (Metric Tons) |
| Clinker |
39,20,723 |
42,98,390 |
| Cement |
42,77,698 |
42,03,373 |
|
| Increase in the production of cement, though marginal, has been achieved despite sluggish demand conditions prevailing in the construction sector. New capacity additions by other companies have created a supply surplus situation, which has depressed the cement prices. Substantial increase in the cost of coal and raw materials has additionally increased pressure on the profit margins.
|
| Shortage of rail wagons for movement of Cement has also hampered our Cement production, due to which clinker stock continued to remain high. This Industry considerably depends on railway for movement of its input as well as finished products to the long distance market. The shortage of wagons coupled with increase in freight charges by railway as well as road has increased the distribution cost.
|
| This Section has been able to withstand severe competition coupled with depressed demand, due to its consistent quality, strong brand image and extensive distribution network.
|
| Captive power generation was 444.33 million kwh during the year under review which has catered to about 97% of the total power requirement of the Section. 71.13 million kwh of power generated from the power plants was sold to Gulbarga Electricity Supply Company Ltd., as against last year's 54.15 million kwh.
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| As a part of corporate social responsibility, the unit has continued to undertake various social welfare and development activities around the area of the unit such as Free Health Check up and Treatment Camps, Free Eye Camps, Blood Donation Camps, Dental Camps, Pulse Polio Camps, Fixing Street Lights, Fixing of Animal Trackers, Tree Plantation, Soil Testing & Agriculture Camps and other social activities.
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