Your Directors have pleasure in presenting their Sixtyseventh Annual Report
together with audited accounts for the year ended 31st March 2013.
||Rs. in Crore
||For the year ended 31st March
|Profit before Interest & Depreciation
|Less : Finance costs
|Less : Depreciation / Amortization
|Profit Before Tax
|Profit after Tax
|Add : Surplus brought forward from last year
|Less : Proposed dividend on Equity Capital (including Dividend Distribution Tax)
|Less : Transfer to General Reserve
|Less : Transfer to / (from) Debenture Redemption Reserve
|Surplus carried forward
The Board of Directors has recommended a dividend of Rs.2/- per equity share of Rs.10/-
each on 30,71,77,216 equity shares of Rs.10/- each for the year ended 31st March, 2013 and
proportionate dividend on 1,441 equity shares having calls in arrears.
Consequent to the adjustment of a dividend of Rs.883/- towards calls in arrears, the
paidup equity share capital of the Company has increased to Rs.307,17,81,713/- as on 31st
March, 2013 comprising 30,71,77,216 equity shares of Rs.10/- each and 1,441 equity shares
on which a sum of Rs.9,553/- has been paidup. The balance amount of Rs.4,857/- represents
calls in arrears.
EMPLOYEES STOCK OPTION SCHEME
No fresh options have been granted under India Cements Employees Stock Option Scheme,
2006 during the financial year.
No options at all have been granted under India Cements Employees Stock Option Scheme,
DIRECTORS RESPONSIBILITY STATEMENT
Your Directors make the following statement in terms of Section 217 (2AA) of the
Companies Act, 1956. "We confirm
1. That in the preparation of the accounts for the year ended 31st March, 2013, the
applicable accounting standards have been followed.
2. That such Accounting Policies have been selected and applied consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view
of the state of affairs of the Company as at 31st March, 2013 and of the profit of the
Company for the year ended on that date.
3. That proper and sufficient care has been taken for the 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
4. That the annual accounts for the year ended 31st March, 2013 have been prepared on a
going concern basis."
MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Clause 49 of the Listing Agreement, a Management Discussion and Analysis
Report is given as addition to this report.
Pursuant to Clause 49 of the listing agreement with Stock Exchanges, a report on
Corporate Governance along with Auditors` Certificate of its compliance is included as
part of the Annual Report and is given in Annexure `C` and Annexure `D` respectively.
Further, a declaration on Code of Conduct signed by the Vice Chairman & Managing
Director in his capacity as Chief Executive Officer of the Company is given as Annexure
CORPORATE SOCIAL RESPONSIBILITY (CSR)
A report on CSR activities is given in Annexure `F`.
ACCREDITIONS & RECOGNITIONS
The Company`s Yerraguntla cement factory was granted Licence For The Quality Management
Systems Certification in accordance with IS/ ISO 9001:2008 by the Bureau of Indian
Standards, Chennai and that the said Licence would be valid from 25th April, 2012 to 24th
The Company`s Vishnupuram cement factory was granted Licence For The Occupational
Health & Safety Management Systems Certification in accordance with IS 18001:2007 and
Licence For The Environmental Management Systems Certification in accordance with IS/ISO
14001:2004 by the Bureau of Indian Standards, Chennai and that both the licences would be
valid from 2nd August, 2012 to 1st August, 2015.
The Company`s in-house magazine "Compass" was awarded a Certificate of
Excellence in the All India House Magazine Contest 2011-12.
A detailed report has been enclosed regarding the operations in the Management
Discussion and Analysis Section. It can be seen that there was only a subdued growth in
cement demand during the year under review at 5.6% on an All India basis. With the huge
supply overhang in the South, the industry had to face the brunt of severe competition in
the market resulting in lowering of the prices particularly in Andhra Pradesh during the
second half of this fiscal.
Given such tight market conditions, the cement production of the Company grew
marginally by 5% to 99.40 Lakh Ts as compared to 94.63 Lakh Ts in the previous year and
the overall sales including clinker was at 100.55 Lakh Ts as compared to 95.27 Lakh Ts.
The total sales and other income for the year was higher at Rs.4615.67 Crores registering
a growth of 9% over that of previous year. As mentioned elsewhere the cost of production
was impacted with the increase in the price of input materials of fly ash, gypsum, power
and fuel, higher transport charges and the resultant EBIDTA was lower at Rs.841.95 Crores
against Rs.922.64 Crores in the previous year.
Finance costs were higher at Rs.307.75 Crores as compared to Rs.290.37 Crores with
higher utilization of cash credit and additional loans taken for capex. The depreciation /
amortization charges were also higher at Rs.281.84 Crores as compared to Rs.251.29 Crores
on account of power plant and other capex. The provision for tax was at Rs.83.64 Crores as
compared to Rs.37.77 Crores in the previous year while the deferred taxation provision as
per AS 22 was at Rs.5.17 Crores against Rs.50.24 Crores. The net profit after tax was
Rs.163.55 Crores against Rs.292.97 Crores in the previous year.
In addition to the low demand scenario, the profitability was subject to heavy cost
push in the form of increase in wages due to All India Wage Settlement together with the
increase in cost of living index.
Huge increase in the price of diesel in the month of September 2012 with further
dosages in the following months and steep increase in the price of bulk diesel for
Ever rising cost of indigenous coal due to price revision by collieries.
Hefty power tariff increase by the State Electricity Boards of Tamil Nadu and Andhra
Pradesh from April 2012.
Steep increase in the railway freight from April 2012 resulting in increase in freight
cost between 25% and 35%.
Depreciation of Rupee against Dollar impacting the imported coal prices.
Restriction in the availability of power in Andhra Pradesh resulting in high cost power
purchase through exchange.
All the above factors impacted the bottom line substantially, the effect of which was
offset to a certain extent with a higher volume of cement and through sustained cost
reduction efforts in improving the operating parameters and through improved clinker
Your Company acquired on 16th August, 2012 its 3rd Bulk Carrier (52489 DWT) M.V.Furness
Australia renamed as M.V.Chennai Selvam. With the commissioning of power plants by the
Company, the requirement to import coal has gone up considerably and the new acquisition
will help in this context.
FOUNDER`S CENTENARY CELEBRATION
His Excellency the Governor of Tamil Nadu, Dr.K.Rosaiah, released the Commemorative
Postage Stamp on 11th November, 2012, the birth Centenary of Shri T.S.Narayanaswami, a
Founder of the Company.
Pursuant to General Circular No.2/2011 No.51/12/2007-CL-III dated 08.02.2011 issued by
the Ministry of Corporate Affairs, Government of India, the Board of Directors has passed
a resolution for sending the Balance Sheet of the Company without attaching a copy of the
Balance Sheet, Statement of Profit and Loss, Report of the Board of Directors and the
Report of the Auditors of the Subsidiary Companies namely Industrial Chemicals &
Monomers Limited, ICL Financial Services Limited, ICL Securities Limited, ICL
International Limited, Trishul Concrete Products Limited, Trinetra Cement Limited,
Coromandel Electric Company Limited, India Cements Infrastructures Limited, PT. Coromandel
Minerals Resources, Indonesia and Coromandel Minerals Pte. Limited, Singapore. However,
pursuant to Accounting Standard 21 issued by the Institute of Chartered Accountants of
India, Consolidated Financial Statements presented by the Company include the financials
of the subsidiaries. The Company will make available these documents/details upon request
by any member of the Company and its Subsidiaries interested in obtaining the same. The
annual accounts of the Subsidiary Companies will also be kept for inspection by any member
at the Registered / Corporate Offices of the Company and its Subsidiary Companies.
TRINETRA CEMENT LIMITED
During the second full year of operations, the plant has achieved a clinker production
of 8.92 Lakh Ts with a growth of 14% over that of previous year of 7.80 Lakh Ts. The
cement production further improved to 11.38 Lakh Ts (10.07 Lakh Ts) while sale of cement
went up to 11.28 Lakh Ts as against 10.08 Lakh Ts in the previous year. The operating
parameters of power and fuel improved further during the year under review with the
stabilized operations of the plant.
TRISHUL CONCRETE PRODUCTS LIMITED
During the year under review the company achieved a sale of 3.48 Lakh Cu.M. of Readymix
Concrete as compared to 3.32 Lakh Cu.M. during the previous year. The turnover of the
company for the year was Rs.121 Crores against Rs.117 Crores in the previous year and the
profit after tax was at Rs.160 lakhs as compared to a loss of Rs.469 lakhs in the previous
COROMANDEL ELECTRIC COMPANY LIMITED
With continued availability of adequate natural gas for major part of the year, the
plant was able to generate 193 Million KWH as against 198 Million KWH in the previous
year. During the year the company has wheeled 116 million KWH of power to the Cement
plants of your company in Tamilnadu and the balance power of 77 Million KWH to other Group
Captive and Third party consumers through Intra State Open access. The total revenue
earned by the company was at Rs.93.01 crores as against Rs.71.09 crores and the net profit
after tax was at Rs.17.80 crores as compared to Rs. 12.48 crores in the previous year. The
company maintained its dividend pattern of 9% on equity shares besides declaring dividend
at the respective coupon rates for the participating / non-participating preference share
capital. During the year the company has redeemed the Second / Third annual instalments of
redeemable cumulative participating/non-participating preference shares on the due dates.
PT. COROMANDEL MINERALS RESOURCES, INDONESIA AND COROMANDEL MINERALS PTE. LIMITED,
The Companys investment in acquiring / developing coal mines is starting to yield
results with the first shipment of coal taking place since the close of the financial
year. Considering the difficult environment in which the company is operating, it will
take a few months to stabilize the operations.
CONSOLIDATED FINANCIAL STATEMENTS
As prescribed by Accounting Standard 21 issued by the Institute of Chartered
Accountants of India, the audited consolidated financial statements of India Cements Group
COROMANDEL SUGARS LIMITED
Coromandel Sugars Limited has achieved a crushing of 7.94 lakh tonnes during the year
under review, which was marginally lesser than the crushing of 8.01 lakh tonnes achieved
in the previous year. The sugar recovery had also dropped to 9.44% as against 9.82%
achieved in the previous year. The crushing and recovery were affected mainly because of
severe drought in the region coupled with canal maintenance works undertaken by the
Government, which have affected the standing crop.
The company has produced 74950 tonnes of sugar (78693 tonnes in the previous year) and
sold 67188 tonnes (77836 tonnes in the previous year) including sale in the free market of
During the year the power export was lower by 13.6% - 254 lakh KWH as against 294 lakh
KWH in the previous year. This was mainly on account of deferring Boiler maintenance work,
as the Company was contemplating to go in for new high pressure Boiler for increasing the
Despite lower crushing, lower recovery and reduced power export, as per the unaudited
financials of the company, the earnings before Interest and Depreciation was higher at
Rs.43.70 crores against Rs.42.99 crores in the previous year. Profit before Tax was
maintained at Rs.22.78 crores as against Rs.23.00 crores in the previous year. This was
possible because of the improved realization achieved in respect of all the products
marketed by the Company.
INDIA CEMENTS CAPITAL LIMITED (ICCL)
The main focus of the company continues to be on various fund / fee-based activities
such as, Full Fledged Money Changing [FFMC], Travel & Tours and Forex Advisory
Services. The Company`s FFMC division has become Authorized Dealers-Category II. The
wholly owned subsidiary viz. India Cements Investment Services Limited (ICISL) is in Stock
Broking. The FFMC division operates out of 19 branches and Travels division operates at
Chennai as an IATA accredited branch. The subsidiary ICISL has 18 branches. The gross
income from operations of ICCL was Rs.427.51 lakhs and that of ICISL was Rs.166.19 lakhs
for the year ended 31st March, 2013.
EXPANSION / MODERNISATION
The operations of the power plant at Sankarnagar got stabilized during the year under
review and the additional 48 MW power plant at Vishnupuram is in the advanced stage of
completion and likely to be commissioned by the first quarter of the current financial
The total amount of fixed deposits including cumulative deposits, which had not become
due but outstanding as at 31st March, 2013 stood at Rs. 944.77 Lakhs. Deposits totalling
Rs.61.63 Lakhs that matured for repayment were neither claimed by the Depositors nor
instructions for renewal were received by the Company. Reminders were issued to the
depositholders and since the close of the financial year ended 31st March, 2013, deposits
aggregating to Rs.16.18 Lakhs out of the above have either been claimed and paid or have
been renewed or transferred to Investor Education and Protection Fund.
CONSERVATION OF ENERGY
The prescribed details as required under Section 217(1)(e) of the Companies Act, 1956
are set out in the Annexure `A`.
RESEARCH & DEVELOPMENT
During the year, your Company spent Rs.75.63 Lakhs towards revenue expenditure of the
R&D department besides contributing a sum of Rs.74.65 Lakhs to National Council for
Cement and Building Materials (NCCBM), which carries out research on behalf of the
industry as a whole.
Industrial relations continued to remain cordial during the year.
With profound grief, the Board condoles the demise of Dr.B.S.Adityan and
Mr.A.Sankarakrishnan, Directors of the Company, on 19th April, 2013 and 9th April, 2013
respectively. The Board records the excellent contribution made by Dr.B.S.Adityan and
Mr.A.Sankarakrishnan during their tenure as directors.
Under Section 262 of the Companies Act, 1956, Mr.Basavaraju was appointed as a Director
with effect from 14.02.2013 in the casual vacancy caused by withdrawal of nomination of
Mr.V.Manickam by Life Insurance Corporation of India.
Mr.V.Manickam was appointed by the Board as additional director of the Company with
effect from 14.02.2013. Under Article 103 of the Articles of Association of the Company,
Mr.V.Manickam will hold his office up to the date of the ensuing Annual General Meeting
and resolution for his election as director of the Company is included in the Notice dated
20th May, 2013 convening the 67th Annual General Meeting of the Company.
Under Article 109 of the Articles of Association of the Company, Mr.N.R.Krishnan and
Mr.Arun Datta retire by rotation at the ensuing Annual General Meeting of the Company and
they are eligible for re-appointment.
Brief particulars of Directors eligible for appointment / reappointment in terms of
Clause 49 of Listing Agreement are annexed to the Notice dated 20th May, 2013 convening
the 67th Annual General Meeting.
Messrs. Brahmayya & Co. and P.S.Subramania Iyer & Co., Chennai, the Auditors of
the Company, retire at the ensuing Annual General Meeting and are eligible for
The statutory auditors have drawn attention to certain matters referred to in the
respective financial notes which are self-explanatory and do not call for further
Mr.S.A.Murali Prasad, Cost Accountant, Chennai, has been appointed as Cost Auditor for
the year 2013-14 subject to approval by the Government of India.
Messrs. Capri, Gopalaiyer and Subramanian, Kalyanasundaram & Associates and Bala
& Co., Chennai, have been appointed as Internal Auditors for the year 2013-14.
The Directors are thankful to the Financial Institutions and the Bankers for their
continued support. The Directors also thank the Central Government and the various State
Governments for their support. The stockists continued their excellent performance during
the year and the Directors are appreciative of this. The continued dedication and sense of
commitment shown by the employees at all levels during the year deserve special mention.
||On behalf of the Board
||Vice Chairman & Managing Director
|Place : Chennai
|Date : 20th May, 2013
ANNEXURE `A` TO DIRECTORS REPORT FOR THE YEAR ENDED 31ST MARCH, 2013
Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the
Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.
A. Conservation of Energy:
(a) Energy conservation measures undertaken:
i. Closed circuiting of Cement Mill ensuring improvement in the mill output, reduction
in power consumption and improvement in quality.
ii. Phasing out old reciprocating type compressors with energy efficient screw
iii. Classified liners installed in Cement Mills ensuring increase in output and
reduction in power.
iv. High capacity energy efficient fan for Raw Mill Circuit to increase the output and
reduce the power at one of the plants.
v. Installation of weigh feeders in place of feed table in the Cement Mill Circuit
aimed at efficiency improvement and output increase.
vi. Rerouting of ducts in coal mill circuits for reduction in specific power
consumption by 2 units per Tn of coal at one of the plants.
vii. Additional power capacitors at various plants to improve the power factor.
viii. VFD for cooler fans for some more plants resulting in reduced power consumption.
ix. Conventional lamps replaced with LEDs in various plants for street lighting and
x. Replacement of MOCB with VCBs in phased manner at some of the plants.
xi. Optimisation of compressed air, cooler air resulting in reduced power.
xii. Advanced energy management system introduced to monitor the power consumption
xiii. Fly ash Drier installed at one of the plants to ensure optimum utilization of hot
gas and improved availability of fly ash through wet fly ash drying.
xiv. Installed Electronic Packers, Wagon loading arrangements at two of the plants to
ensure improvement in packer output, reduced power and labour cost.
(b) Additional investments and proposals, if any, being implemented for reduction of
consumption of energy:
i. Dynamic Separator in Coal Mill circuit planned in two of the Andhra Pradesh plants
for utilization of petcoke and also to reduce the power consumption.
ii. VFD for raw mill, coal mill and cooler drives for the plants in Andhra Pradesh to
optimize power consumption.
iii. Cooler mid air tapping for increasing the hot air temperature to dry the higher
moisture in raw material and to ensure higher output from VRM.
iv. Installation of one more 48 MW power plant at Vishnupuram in Andhra Pradesh for
energy security and on cost economics.
v. Modification of preheater top stage cyclones for improving efficiency and for low
vi. Installation of new energy efficient cement grinding system at one of the plants
replacing all the old conventional ball mills.
vii. Hydraulic drive of VRM Separator to be replaced with Variable Frequency Drive for
viii. VFD for cooler fans and coal mill fan. ix. Introduction of coal stacker reclaimer
at two of the plants to ensure optimum blending efficiency aiming at reduction in heat
(c) Impact of measures at (a) and (b) above for reduction of energy consumption and
consequent impact on cost of production of goods: The measures that are proposed to be
taken/under implementation are expected to reduce the power consumption by nearly 2 to 3
units / Tn of cement and overall heat consumption by around 10-15 k.cals per kg of
clinker. However, during the year, the power consumption was maintained despite lower
capacity utilization while heat consumption was reduced by 7 k.cals per kg of clinker.
(d) Total energy consumption and energy consumption per unit of production: Given in
Form `A` annexed.
B. Technology Absorption:
Efforts made in technology absorption:
Particulars given in Form `B` annexed.
C. Foreign exchange earnings and outgo:
(a) Activities relating to exports, initiatives taken to increase exports, development
of new export market for products and services and export plans: There was no significant
export sales during the year under review.
(b) Total foreign exchange used and earned:
|Used Rs. lakhs
|Earned Rs. lakhs
FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY
|A. POWER & FUEL CONSUMPTION
|Units - KWH - Lakhs
|Total amount - Rs. Lakhs
|Rate per unit - Rs.
|(b) Own Generation
|(1) Through Diesel/Furnace Oil Genset *
|Units - KWH - Lakhs
|Unit per Litre of Diesel/Furnace Oil-KWH
|Cost per unit - Rs.
|(2) Through Steam Turbine/Genset
|Units - KWH - Lakhs
|Cost per unit - Rs.
|2. Coal for Kilns (various grades incl. Lignite)
|3. HSD/Furnace Oil for Kilns
|B. CONSUMPTION PER UNIT OF PRODUCTION
|Electricity (KWH/Tn of Cement)
|Coal Consumption Per Tn of Clinker (Depending on Quality of Coal)
|Diesel Oil/Furnace Oil per Tn of Cement (Litres)
|* Including Power from Waste Heat Recovery Plant.
FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO ABSORPTION
|Research and Development (R & D):
|1. Specific areas in which R&D carried out by the Company
||The Company has started an in-house R&D department during December 1999 with a
specified objective of carrying of R&D Projects in development of expert systems for
the mills and kilns optimisation, Benchmark studies of our Cement Plants, optimisation of
process systems and parameters ensuring product improvement and cost reduction.
|2. Benefits derived as a result of above R & D
|3. Future plan of action
|4. Expenditure on R & D:
|(a) Capital :
|(b) Recurring :
||A sum of Rs.75.63 lakhs has been spent during the year for the functioning of R &
D department. Besides this, a sum of Rs.74.65 lakhs is the contribution to National
Council for Cement and Building Materials (NCCBM) which carries out Research on behalf of
|(c) Total :
|(d) Total R&D expenditure as a percentage of total turnover :
|Technology absorption, adaptation and innovation:
|1. Efforts, in brief, made towards technology absorption, adaptation and innovation.
|2. Benefits derived as a result of above efforts e.g. product improvement, cost
reduction, product development, import substitution etc.
|3. In case of imported technology (imported during the last 5 years reckoned from the
beginning of the financial year), following information may be furnished:
|(a) Technology imported
|(b) Year of import
|(c) Has technology been fully absorbed
|(d) If not fully absorbed, areas where this has not taken place, reasons therefor and
future plans of action.