Birla Corporation, the flagship firm of the MP Birla Group, will move Supreme Court to fight the mining ban imposed by Rajasthan High Court, which has severely impacted margins.
At the 92nd annual general meeting of the company on Thursday, chairman Harsh Lodha said the company had taken a hit of R120 crore after mining was banned around the Chittorgarh fort since last August. For the quarter ended March, net profit was down 8.85 % to R57.64 crore against R63 crore in the same period last fiscal. For fiscal 2011-12, the companys net profit, on a consolidated basis, declined by over 25% to R239.44 crore, though net sales were up 5.8% to R2,246.87 crore.
We have suffered because of the order. We will take legal steps to see justice is done. We have been mining in the area for 40 years and the Indian Bureau of Mines has surveyed the area and given a report that there has been no adverse impact on the Chittorgarh fort due to the mining operations, Lodha said.
Shareholders raised questions during the meeting and demanded a poll on whether Lodha should continue as director in the backdrop of the Birla-Lodha legal row over property rights which is yet to be settled.
Lodha let shareholders air their grievances, and then said that the Company Law Board and courts had cleared his appointment. We are here for the good of Birla Corporation. Many people with vested interests have come to the annual meet with a coloured vision. Despite all the constraints, our net sales have gone up, he told the shareholders.
Lodha said margins will be under pressure for the next three-four quarters. At the Chanderia plant, the company produces 1.2 million tonne of clinker, but can expand to 2.7 million tonne. But the ban forced the company to import limestone from outside, thus impacting margins, Lodha said.
The chairman said it has got prospecting licences for a coal mine and a limestone mine in Ethiopia, but declined to give details.