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ANNUAL REPORT

ACCOUNTS

"If you don't quit, don't cheat& don't run home when troub e arrives, you can on y win."

GUJARAT NRE COKE LIMITED 2000 - 2001

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BOARD OF DIRECTORS SHRI G. L. TANDON, Padma Bhushan (Chairman Emeritus) SHRI G. L. JAGATRAMKA (Chairman) SHRIA. K. JAGATRAMKA (Mg. Director) SHRI M, G, SHAH, LA.S.Retd. (Director) SHRI S. K. AGARWAL (Director) SHRI R. K. BANKA (Director) SHRIS. R.SARKER (Nominee, IIBI)

BANKERS STATE BANK OF BANKOFBARODA INDUSIND BANK LTD.

AUDITORS M/S. N. C. BANERJEE & CO. KOLKATA-700013

SOLICITORS & ADVOCATES M/S. L. P. TtWARI & CO. 1B, OLD POST OFFICE STREET, KOLKATA - 700 001

REGISTERED OFFICE BASANT TOWER 1,CLYDE ROW, HASTINGS, KOLKATA - 700 022.

WORKS DHARAMPUR, KHAMBHALIA JAMNAGAR. GUJARAT

NICHE TECHNOLOGIES PVT. LTD. C-444, BAGREE MARKET, 71, B. R.B. B. ROAD, KOLKATA - 700 001

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OUR BELOVED CHAIRMAN EMERITUS

LATE SHRI M. C. BHATT (1919-2001)

Shri Mulshankar Chhotalal Bhatt was born in 1919 in Bhavnagar (Gujarat) and was graduated (B.A) (Hons.) from the Shamaldas College, Bhavnagar. In the earlier part of his career, he was working as Secretary to Dhrangadhara State Council and by virtue of his hard work, sincerity and dedication, he had the good fortune of being selected by Sardar Dy. Prime Minister of India as his Personal Secretary, Whom he served with loyalty and devotion and earned his confidence and trust. Later he joined Government of India, Ministry of Finance. During his tenure in the Ministry of Finance he worked as the Chief Executive of Indian Investment Centre, New with zeal and interest and contributed a great deal in attracting foreign investment in a large measure. Elevating himself by sheer merit, he retired as Joint Secretary and Controller of Capital Issues in January 1977, dealing with efficiency, difficult subjects as FERA (1973), Foreign Investment, Technology Transfer, etc. He was awarded the prestigious All India N.V. Gadgil Society Award for exemplary services in the field of social work. To quote a few, he was a founder Member of Gujarat Education Society which established Sardar Patel Vidyalaya, New Delhi. He had promoted Shri and Smt. C.R. Bhatt Centre for Informal Education and Entrepreneurship Development for women in Bhavnagar in co-operation with well known institution Bhavnagar Stree Kelavani Mandal. He actively participated in a number of social service activities and was a good think - tank. He was also a Trustee of Sardar Vallabhbhai Memorial Trust, Ahmedabad, Shreyas Pratisthan, Saraswati Vidyamandal, etc. He had given a number of talks on Sardar Patel at many places and is quite often invited by All India Radio & Doordarshan, Ahmedabad to give talks on various aspects of Sardar Pate! as well as on economic planning, NRI investment, etc. Shri Bhatt combined in himself a unique manner, expertise of a financial expert and devotion of dedicated social worker. He was the Guiding force in steering the Company in its difficult years and we remain committed to continue on the path set by him. -GUJARAT NRE COKE LTD.

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NOTICE Notice is hereby given that the 15th Annual General Meeting of the members of Gujarat NRE Coke Ltd. will be held at Somany Conference Hall, 15B, Hemanta Basu Sarani. 2nd Floor, Kofkata - 700 001 on Thursday, the 21st March, 2002 at 11.30 A.M. to transact the following business :- ORDINARY BUSINESS 1. To consider and adopt the Audited Balance Sheet of the Company as at 30th September,2001 and the Profit & Loss Account for the year ended on that date together with the Reports of the Auditors and Directors thereon. 2. To appoint a Director in place of Mr. G.L. Jagatramka, who retires by rotation and being eligible, offers himself for re-appointment. 3. To appoint a Director in place of Shri R.K, Banka, who retires by rotation and being eligible, offers himself for re-appointment. 4. To Declare a Dividend on Equity Shares, if any. 5. To appoint Auditors of the Company and to fix their remuneration. SPECIAL BUSINESS 6. To consider and, if thought fit, to pass, with or without modifications, the following resolution as an ordinary resolution: "Resolved that Mr, Subodh Kumar Agarwal, be and is hereby appointed as a Director of the Company, whose period of office shall be subject to retirement by rotation:' 7. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution : "RESOLVED that subject to provisions of sections 198, 269 and 309 read with the schedule XIII and other applicable provisions, if any, of the Companies Act, 1956, the consent of the Company be and is hereby accorded to the re-appointment of Mr. Arun Kumar Jagatramka as the Managing Director of the Company w. e. f. 28.3.2002 on remuneration and perquisites as given below with Liberty to the Board of Directors to make and/or accept any variation in the said terms and conditions within the maximum limits stipulated under the schedule XIII to the Act." "RESOLVED further that the salaries and perquisites laid down under this resolution shall be considered as the minimum remuneration payable in case of loss and/or in-adequacy of profits in any year." "RESOLVED further that Shri Arun Kumar Jagatramka, on his re-appointment as above will be designated as the Vice-Chairman cum Managing Director." REMUNERATION & PERQUISITES REMUNERATION Rs. 6,00,OOQ/- (Rupees Six Lacs) per annum with authority to the Board of Directors to increase the salary from time to time within the parameters stipulated under schedule XIII to the Act.

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GUJARAT NRE COKE LIMITED

PERQUISITES In addition to salary, he shall be entitled to perquisites like rent free furnished accomodation, gas, electricity, water and furnishings, medical re-imbursement for self and family, leave travel allowance for self and family, club fees, personal accident insurance fete, in the undenoted scale : Perquisites shall be restricted to an amount equal to Anriual Salary. a) Residential Accommodation :- (i) Free furnished residential accommodation or in case the Company hires the accommodation, then expenditure incurred by the Company on hiring the same will be subject to a limit of 60% of salary or in case no accommodation is provided, the Managing Director shall be entitled to house rent allowance @60% of the salary. (ii) In addition, the actual expenditure incurred by the Company on gas, electricity and water, but the same will be valued as per Income Tax Rules, 1 962, subject to a ceiling of 10% of the salary. b) Re-imbursement of Medical Expenses for self and family : Subject to a Maximum of 1 months salary per annum or 3 months salary for a block of 3 years. c) Leave Travel Concession for sel^ and family : Once in a year to and from any destination in India. d) Leave : One months Leave with pay for 11 months service put in. e) Club Fees : The Company will reimburse the club fees as per the applicable rules. f) Personal Accident Insurance : Premium to be paid not exceeding Rs.7500/- per annum. g) Providend Fund Contribution : As per Company's rules but subject to 10% of salary which shall not be taken into account for computation of perquisites limit. h) Gratuity : As per Company's rules and shall not be taken into consideration for computation of perquisites limit. i) Free full time use of Company's car and telephone facilities at the residence, the value of which shall not be taken into consideration for computation of perquisites limit. The overall limits of remuneration shall be subject to the ceilings stipulated under schedule XIII to the Act.

By Order of the Board

Place : Jamnagar A. K. Jagatramka Date : 25th January, 2002 Managing Director.

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GUJARAT NRE COKE LIMITED

NOTES: 1 AMEMBER ENTITLED TO ATTEND AND VOTE ATTHE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. Proxies in order to be effective must be received at the Registered Office of the Company not less than 48 hours before the time of Annual General Meeting. 2 An Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 is annexed hereto. 3 The Register of the Members and Share Transfer Books of the Company will remain closed from the 9th day of March, 2002 to the 21st day of March, 2002 (both days inclusive). 4 Members, who are holding shares in identical order of names in more than one account, are requested to intimate to the Company, the ledger folios of such accounts together with the Share Certificate(s) to enable the Company to consolidate all holdings into one account. The Share Certificates will be returned to the members after making the necessary endorsements in due course. 5 Members desiring any information on the accounts at the Annual General Meeting are requested to write to the Company atleast ten days in advance, so as to enable the Company to keep the information ready. 6 Members are requested to kindly bring their copies of the Report and Accounts to the meeting. 7 Members are requested to notify changes in their mailing address, if any.

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GUJARAT NRE COKE LIMITED

EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956. ITEM No. 6 Shri Subodh Kumar Agarwai, a practising Chartered Accountant, was appointed as an additional Director by the Board of Directors of the Company in terms of Section 260 of the Companies Act. 1956. Shri Agarwal holds office only up to the date of forthcoming Annual General Meeting. The Company has received a valid notice from a member under Section 257 of the Act, proposing the candidature of Shri Agarwal, for the office of Director, In view of the knowledge and experience of Shri Agarwal, it will be in the interest of the Company that Shri Agarwal be appointed as a Director of the Company. Your Directors, recommend adoption of the resolution for the interest of the Company. None of the Directors of the Company other than Shri Agarwal is, in any way, concerned or interested in the resolution. ITEM No. 7 Shri Arun Kumar Jagatramka was appointed as the Managing Director of the Company for a period of 5 Years w. e. f. 28.03.1997 and his term expires on 27.03,2002. Shri Arun Kumar Jagatramka, aged 40 years is a Chartered Accountant holding All India first Rank. He has 17 years of experience in management and projects. Shri Jagatramka took over the charge of the Company at a crucial juncture. During these 5 years due to total devotion of Shri Jagatramka and his able Stewardship, he has been successful to turn around the Company and brought it back to the path of prosperity. He has widely travelled around the world and has been a regular speaker at international coke conferences including Coal Trans Asia, Coke Outlook and

USA, etc. : The Board considers that the re-appointment of Shri Jagatramka for a further term of 5 years is absolutely necessary in the interest of the Company. Shri Arun Kumar Jagatramka is second in seniority in the Board after the Chairman and accordingly the Board of Directors in their meeting held on 25.01.2002 proposed that Shri Jagatramka on his re-appointment be redesignated as Vice Chairman Cum Managing Director. Your Directors recommend adoption of the resolution as set out under item 7 of the notice in the interest of the Company. None of the Directors other than Shri Jagatramka and his father Shri G. L. Jagatramka. Chairman of the Company is interested and/or concerned in this resolution.

Place : Jamnagar A. K. Jagatramka Date : 25th January, 2002 Managing Director.

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GUJARAT NRE COKE LIMITED

DIRECTORS REPORT Your Directors take pleasure in presenting their 15th Annual Report together with the Audited Financial Result of the Company for the year ended on 30th September, 2001 - FINANCIAL RESULTS (Rs.in lacs) For the Year For the Year ended 30.09.2001 ended 30.09.2000 Income from Operations 1228.86 870,53 Less: Interest 269.51 363.44 959.35 507.09 Less: Depreciation 146.07 139.68 813.28 367.41 Less: Miscellaneous Exp. W/o. 363.15 183.72 Net Profit During the year 450.13 183.69 Less: Provision for Tax 33.76 13.78 Profit After Tax 416.37 169.91 Add: Balance Brought Forward 385.66 215.75 Amount Available for Appropriation 802.03 385.66 Less : Appropriation Proposed Dividend on Equity Shares 130.73 0.00 Corporate Tax on Dividend 13.33 0.00 Balance Carried to Balance Sheet 657.97 385.66

REVIEW OF OPERATIONS The Company posted an excellent financial results for the year 2000-2001. There has been a significant increase in the Profits of the Company. The Net Profit of the Company has been Rs. 450.13 lacs, registering a growth of 245% as compared to last year. The products of the Company have since established its presence in the domestic market because of its universally accepted quality of highest grade at most competetive prices. The order book of the company for the year 2001 -2002 is already full to capacity and your Directors are very much optimistic of acheiving better results this year too. DIVIDEND Taking into account the higher profits for the year and the moral obligation towards the shareholders your Directors feel proud to recommend Dividend of 10% (Previous Year Dividend-Nil) on the Paid-up Equity Share Capital of the Company in respect of the year ended 30.09.01. This will absorb a sum of Rs. 144.06 Lacs (including Rs. 13.33 Lacs by way of Tax on dividend). The pay- out ratio works out to only 34.60% of the profit aftertax leaving the rest to strengthen the financial structure of the Company. In this connection, the Directors recollected that the Company had paid dividend to the shareholders @ 20% in 1996 being the very first year of commercial production in addition to Bonus issue in the ratio of 11:10. However since then, becaue of the bad phase, the operations suffered and the Company could not pay any dividend. Now, the Company is performing well, as such, they were pleased to put the Company back on dividend list. On the pre bonus equity, the proposed dividend works out to 22%.

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CORPORATE GOVERNANCE The Security and Exchange Board of India (SEBI) has recently introduced a Code of Corporate Governance and made certain provisions mandatory for the listed companies through the route of the Listing Agreement. The requirement under the listing agreement in relation to Corporate Governance are not yet applicable to' the Company, However recognising the need for and importance of sound Code of governance, the Company has already initiated measures to ensure that we are fully complaint within the time stipulated, a report on which is appended hereto. DIRECTORS Your Directors deeply mourn the sudden demise of the Chairman Emeritus Shri M C Bhatt. Stiri Bhatt had always been the most encouraging sprit in all development activities. Your Directors place on record their appriciation of the valuable services rendered by Shri Bhatt during the course of his long association with your Company. Shri G.L. Tandon resigned from the Board on his personal grounds. The Board placed on record its appriciation for the valuable services rendered by Shri Tandon during his tenure of office. However, Shri G.L. Tandon has very kindly agreed to continue his association with the company as Chairman Emeritus. Shri G. L. Jagatramka and Shri R K Banka, Directors of the Company are due to retire by rotation at the forthcoming Annual General Meeting and they being eligible, offer themselves for re-appointment. The Board of Directors appointed Shri Subodh Kumar Agarwal as an additional Director with effect from 10.10.2001. Shri Agarwal will hold office as Director up to the date of ensuing Annual General Meeting. The Company has received a notice u/s 257 of the Companies Act, 1956, proposing his appointment as Director, subject to retirement by rotation. Shri S. R. Sarker has been nominated to the Board by IIBI Ltd. in place of its earlier nominee. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to the requirement under section 217(2AA) of the Companies Act 1956, with respect to Director's Responsibility Statement, it is hereby confirmed : a) That in the preparation of annual accounts for the financial year ended 30th September,2001, the applicable accounting standards had been followed along with proper explanation relating to material departures. b) That the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review. c) That the Directors had taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. d) That the Directors had prepared the Annual Accounts for the financial year ended 30.09.2001 on a 'going concern' basis.

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AUDITORS M/s. N.C. Banerjee & Co., Chartered Accountants retire as Auditor of the Company and being eligible, offer themselves for re-appointment. REPORT OF AUDITORS The notes on Accounts and the Report of the Auditors as annexed are self explanatory and need no elaboration. PARTICULARS OF EMPLOYEES The Company had no employee drawing salaries in excess of the prescribed limit, to whom the provisions of Section 217(2A) of the Companies Act, 1956 are attracted. PERSONNEL Industrial Relations throughout the year remained cordial and healthy. Employees at all levels have extended their full support and are actively participating in attaining the objectives of the Company. The Directors record their warm appreciation for the dedication, hardworking and efficiency of all the employees. DEPOSITORY SYSTEM Your Company has signed agreements with the National Securities Depository Limited (NSDL) and the Central Depository Services (I) Ltd. (CDSL) for dematerialisation of the Company's shares. The Securities and Exchange Board of India (SEBI) through a circular dated 29.05.2000. have indicated that the trading in shares of your Company in dematerialised form be compulsory w.e.f. 26.03.2001. Trading in Equity Shares of the Company on any stock exchange is permitted only in the dematerialised form now. PUBLIC DEPOSITS The Company has not accepted and/or renewed any Public Deposit during the year. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/OUTGO The information required under Section 217(1 ){e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules. 1988 with respect to these matters is annexed hereto and form part of this report. ACKNOWLEDGEMENT'S The Directors wish to express their gratitude to the officials in the Government Departments. Financial Institutions, Company's Bankers and the shareholders who have extended their valuable support to the Company.

By Order of the Board

Place : Jamnagar G. L. Jagatramka Date ; 25th January, 2002 Chairman

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