The are pleased to present the annual report along with audited accounts
of your Company for the year ended 31st March 2012.
The financial performance of the Company for the year ended 31st March
2012 is summarised below:
Gross sales 2763.79 2,175.00
Total income (net of excise) 2512.93 1,996.64
Earnings before interest,
depreciation, amortisation & taxation 449.08 332.77
Interest/Finance costs 42.33 41.78
Profit before depreciation and taxation 406.75 290.99
Depreciation 88.40 81.48
Net profit before taxation 318.35 209.51
Taxation 106.07 66.41
Net profit 212.28 143.10
Profit brought forward from last year 105.04 169.46
Profit available for appropriations 317.32 312.56
Transfer to Debenture Redemption Reserve - 23.75
Transfer to Capital Redemption Reserve 1.00 0.00
Transfer to General Reserve 100.00 150.08
Dividend on preference shares 0.02 0.06
Dividend on ordinary shares 39.77 28.93
Corporate dividend tax 6.46 4.70
Balance carried to Balance Sheet 170.07 105.04
Total 317.32 312.56
EPS 10.94 7.42
Subject to the shareholders'' and other requisite approvals, your
Directors recommend payment of final dividend of Rs. 1/- per equity share
of Rs. 1 each (100%) for the year ended 31 March 2012. This is in
addition to the interim dividend of Rs. 1/- (100%) paid earlier during
the year, bringing the total dividend for the year Rs. 2/- (200%). The
cash outflow on account of dividend on equity capital(including interim
dividend), Preference Shares and dividend tax works out to Rs. 4625 lacs,
which constitutes 21.79% of our net profit for the year.
During the year, the Board of Directors decided to redeem 1,00,000 - 6%
redeemable Non- convertible Debentures of Rs. 100/- each for an aggregate
amount of Rs. 1,00,00,000 and the said shares were redeemed on 27th July,
Allotment of Equity Shares
During the year, 1,20,00,000 equity shares of Rs. 1/- each were allotted
to the promoter group consequent upon conversion of convertible
warrants issued by the company. Funds raised under the issue were
utilised for the purpose as sanctioned.
Forfeiture of Equity shares
During the year 16010 partly paid up equity shares were forfeited
consequent upon non payment of call money by the respective
Demerger of Cement division
The Board, shareholders and creditors of Orient Paper & Industries
Limited (OPIL) have approved a scheme for demerger of the Cement
Undertaking of OPIL to Orient Cement Limited. OPIL and Orient Cement
Limited have filed applications in Court seeking sanction for such
demerger, which is now pending final hearing.
Economic climate and our performance
There has been a perceptible slow down in the Indian economy with GDP
growth coming down to below 7% for the year under review as against
over 8% growth achieved during past several years.
While slow-down in International economy caused by Euro zone crisis
must have also contributed to this,
we believe that internal factors like slow pace of infrastructure
development, high inflation, unprecedented increases in prices of vital
input like coal and power, credit squeeze applied by RBI and general
lack of policy direction were the major factors in bringing down the
rate of growth.
However, India still continues to be one of the fastest growing
economies of the world and we hope that the Government will take
effective and pro-active steps to restore the growth momentum to above
It is a matter of satisfaction that even in the face of these
challenges, we were able to achieve a growth of 27 % in our net sales
turnover and 48 % in our net profit after tax.
Domestic cement demand grew by 6.6% during the year due to the good
growth recorded during 2nd half of the year under review. However,
there was no growth in the Southern region, mainly because of negative
growth of -8% in Andhra Pradesh. We were however able to increase our
cement sales volumes by 8% and gain market share in our core markets.
We could also achieve a capacity utilisation of 77% compared to the
industry average of 68% in South & West, where our plants are located.
In spite of huge pressure on our costs because of factors totally
beyond our control, we were also able to increase our PBIT from cement
business by 62% through a combination of higher volumes, better product
& market mix and cost reduction efforts.
Because of slow-down in construction activities, overall demand for
Fans also came down by 2.8% compared to previous year. However, we
were still able to achieve a 5.6% growth in our Fan volumes through
introduction of new and exciting models and increasing our distribution
reach. In lighting products, we increased our sales volumes by 38 % and
introduced several new SKUs. Towards the end of this financial year, we
also launched a wide range of household electrical appliances. Overall
our electrical division achieved a growth of 18 % in net sales turnover
for the year. Also, we were able to achieve similar profitability level
in this division as the preceding year in spite of substantial cost and
In our paper division also, we were able to increase our Paper volumes
by 22 % in spite of 43 days shut down in the 1st quarter due to water
scarcity and loss of 5 days output in December due to a minor fire
incident in the power plant. Paper volume could have still been higher
but for frequent break-down of our aging power plant. The Chemical
plant performed satisfactorily. However, there were unprecedented
increases in prices of pulp wood, coal and power which resulted in
substantially increased losses from this business. Going forward, we
expect this division''s performance to improve once the new 55 MW power
plant, now nearing completion, gets commissioned as it will not only
bring down the cost of energy but will also contribute towards
stabilizing operations. We also do not expect any water scarcity
related shut down in 2012-13 as there is adequate water available in
our water reservoirs. The proportion of value added Tissue papers is
also expected to increase as the additional rewinder for the 2nd Tissue
machine is now fully operational.
Detailed business analysis, review and operational performance of each
of our business segments are covered in the management discussion and
analysis chapter, which forms a part of this report.
Your Company is in full compliance with the Corporate Governance
requirements in terms of Clause 49 of the Listing Agreement(s). A
report on Corporate Governance and a certificate from our auditors
confirming compliance with the Corporate Governance requirements are
attached and form part of this report.
Sustainable development and environment
We consider sustainable development and environment protection as
integral parts of our management culture and philosophy. Significant
work continues to be done in these areas on a consistent and
sustainable basis. In new initiative, we have agreed to partner with
Madhya Pradesh Government in all round development of 2 areas around our
Paper plant under the Rajiv Gandhi water shed development project.
Details of our efforts and activities in this direction are provided in
the chapters covering detailed analysis of each of our businesses.
Carbon credits for cement division
We received 126317 CERs for the year 2008-09 during this year.
Therefore, an income of only Rs. 3.33 cr has been recognised during this
year based upon prevailing market prices as at 31st March 2012. Our
claim for a further 47000 CERs for the year 2009-10 is presently under
consideration of the CDM Board. No income from these expected CERs has
been accounted for during the year under review. This will be taken
into account on receipt of the approved CERs.
Cash flow analysis
In conformity with the provisions of Clause 32 of the Listing
Agreement(s), the cash flow statement for the year ended 31 March 2012
is included in the annual accounts.
Statutory matters Debentures
The funds raised by issue of debentures from time to time were utilised
for the purposes as sanctioned.
Shri P.K. Sen ceased to be a Director of the Company w.e.f. 8
August,2011. The Board places on record its appreciation of the
valuable contribution made by Shri P.K. Sen during his long tenure as a
member of our Board.
Mr. Michael Bastian and Shri B.K. Jhawar , directors of the company,
retire by rotation and are eligible for re election.
M/s. S. R. Batliboi & Co., Chartered Accountants and Auditors of the
Company, retire and offer themselves for reappointment.
As required under the provisions of Section 233B of the Companies Act,
1956, qualified cost auditors were appointed to conduct cost audits.
Conservation of energy, technology absorption, foreign exchange
earnings and outgo
Details regarding conservation of energy, Research and Development,
foreign exchange earnings and outgo are furnished in Annexure A to
this report, pursuant to the provisions of the Companies Act, 1956 read
with the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988.
Directors'' responsibility statement
Directors'' responsibility statement pursuant to section 217(2AA) of the
Companies Act, 1956 are given in Annexure B to the annual report.
Note No.40 appearing in accounts referred to in the Auditors'' Report is
Particulars of employees
Particulars of employees pursuant to section 217(2A) of the Companies
Act, 1956 are given in Annexure C to the annual report.
Your Directors place on record their sincere gratitude to the
shareholders, customers, bankers, financial institutions, government
agencies, supply chain partners and the employees for their valuable
contribution, cooperation and support in the Company''s endeavours to
achieve continuous growth and progress.
By Order of the Board
New Delhi, C. K. Birla
2 May, 2012 Chairman