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| JK Cements resorts to open market coal purchase, incurs loss of Rs 87 lakh | | Company defies orders, reduces coal procurement | | Peerzada Ummer
Early Times Report
Srinagar, Nov 1: An extra expenditure of whopping Rs. 87 lakh was incurred by the JK cements due to the non-procurement of coal under e-auction and purchase of coal from open market instead.
Official documents in possession of the Early Times reveal that the JK Cements entered into the two fuel supply agreements with a firm namely M/S Eastern Coalfields Limited Kolkata for the allocation of the 24000MTs of coal for old plant and 26000MTs for the new plant.
However, the shortfall in supply of coal under Fuel Supply Agreement ranged between 31 percent and 51 percent during the year 2010-11 and 2014-15. Documents divulge that despite the shortfall, the company didn't participate in procurement of coal under e-auction from Kolkata based firm and instead resorted to purchase of imported coal from open market at higher rates. This, according to official documents, resulted in extra expenditure to the tune of Rs 87.50 lakh during the said period.
Moreover, the Board of Directors had directed the JK Cements three years ago to procure 'maximum possible coal' from JKML. J&K Minerals Limited is a fully owned Government Company. The Principal business of the company is to exploit the mineral resources and to establish mineral based industries in the state of Jammu & Kashmir.
However, no efforts were made by the company in this regard as against the purchase of 4185 MTs of coal during the financial year of 2011-12, JK Cements reduced its procurement in subsequent years and during the financial year of 2014-15 merely 1319 MTs of coal was purchased from the state owned company JKML.
When Early Times tried to contact state's Industries Minister, his PA informed this correspondent about the minister being busy in some meeting. However, Minister of State (MoS) for Industries too was not available for the comment as his phone was off.
Early Times has already reported that by the end of 2015, the JK Cements had suffered loss of more than Rs 26 cr due to less production, increase in power tarrif, rising cost of fuel and increase in the administrative expenditure.
However, the inspection report while taking a dig at the company's management has mentioned that despite refund of the central excise duty of more than Rs 37 cr till 2015 and assured captive market of the cement, the company had failed to maintain and increase its profitability.
"Due to loss, the return on capital employed became negative at 25.07 percent during 2015-15 from positive 3.90 per cent during 2010-11," reads the report.
Those privy to this development said the company had authorised share capital of Rs 60 cr and the paid-up capital of Rs 14.99 cr as on March 31, 2015 wholly contributed by the state government.
Furthermore, the state government had contributed Rs 35.32 cr towards the share capital. Also, loan of Rs 62.47 cr was obtained from the state government and Jammu and Kashmir Bank till the financial year 2015. |
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