| A new management team has been in place beginning the second half of the year under review. This team is aggressively spearheading EBIDTA positive initiatives and will take ownership for the structural changes that such measures would bring in their wake. |
| The first signs of these initiatives bearing fruit have showed through in the fourth quarter of the year under review with EBIDTA margins rising almost 4% as the table below shows : |
| Particulars |
April, 2011 to
June, 2011 |
July, 2011 to
September, 2011 |
October, 2011 to
December, 2011 |
January, 2012 to
March, 2012 |
| Sales (Rs./crore) |
1057 |
820 |
1071 |
974 |
| EBIDTA (Rs./crore) |
-80 |
-127 |
-135 |
-86 |
| EBIDTA Margin % |
-7.6 |
-15.5 |
-12.6 |
-8.8 |
|
| Going forward, EBIDTA margins are expected to improve further and the Tyre Business looks to the future with confidence. |
| The Auditors, in their Report, have referred to the need for the Tyre Business to improve its internal control systems. The Board states that several effective measures have been taken during the year to further strengthen internal controls in this Business and fully address over-ride related issues. These include an eventual roll out of Standard Operating Procedures across the Business and finally amalgamating these with a structured ERP system. |
| |
| Cement |
| Production during the year under review as compared with that of the previous year was as follows : |
| (lakh/MT) |
| |
Vasavadatta |
Kesoram |
Total |
| 2011-12 |
2010-11 |
2011-12 |
2010-11 |
2011-12 |
2010-11 |
| Clinker |
31.74 |
39.21 |
8.20 |
8.94 |
39.94 |
48.15 |
| Cement |
38.83 |
42.78 |
10.74 |
11.50 |
49.57 |
54.28 |
|
| A number of factors combined to contribute to the lower production during the year viz. slowdown in the housing and infrastructure sector, substantial capacity additions in the recent past, the prolonged monsoon and generally tight liquidity conditions in the economy. These constraints were further exacerbated by the innate volatility in input costs and major logistics issues, particularly the shortage of railway wagons for evacuating production. To partially overcome the logistics related impediments, the Business has begun setting up packing facilities near its key markets and entered into contract manufacturing.
|
| Financially, the Business continued to be intrinsically profitable with EBIDTA at Rs. 543 crore during the year under review as against Rs. 376 crore in the previous year. Superior product mix, established brand name and initiation of strategic marketing policies combined to make this possible.
|
| The Cement Business considers captive power generation to be a major thrust area. During the year under review, both plants met virtually their entire power requirements from captive generation. Additionally, some power was sold to the local grid. The Vasavadatta Cement Plant is preparing to commission its fifth captive power unit during the current year. Co-incineration of materials, like used tyres, municipal and agricultural waste etc. will also be taken up during the current year. This will help in further reducing coal consumption for generating captive power. The petition challenging the vires of imposition of duty @ 25 paise per unit on captive power generation by the State Government of Andhra Pradesh continues
to be pending before the High Court of Andhra Pradesh.
|
