Mar 31, 2023
Your Directors have pleasure in presenting their Seventyseventh Annual Report together with audited accounts for the year ended 31st March 2023.
FINANCIAL RESULTS Profit before Interest, Depreciation & Exceptional Items |
For the year ended 31 2023 (140.21) |
Rs.in Crore st March 2022 477.84 |
Add: Exceptional Items-Income (net) |
180.45 |
0.00 |
Less: Finance costs |
234.16 |
204.02 |
Less: Depreciation / Amortization |
212.99 |
219.79 |
Profit Before Tax |
(406.91) |
54.03 |
Current Tax |
0.00 |
39.31 |
Deferred Tax |
(218.36) |
(24.26) |
Tax Expenses |
- |
15.05 |
Profit/(Loss) After Tax |
(188.55) |
38.98 |
Other Comprehensive income (net) |
0.33 |
192.13 |
Total Comprehensive income/(loss) |
(188.22) |
231.11 |
Add : Surplus brought forward from last year |
1553.31 |
1353.19 |
Less: Dividend |
30.99 |
30.99 |
Less: Transfer to General Reserve |
0.00 |
0.00 |
Surplus carried forward |
1334.10 |
1553.31 |
In view of the loss for the year ended 31st March, 2023, the Board of Directors has not declared any dividend for the year.
The Company has not transferred any amount to the reserves for the year ended 31st March, 2023.
The paid up equity share capital of the Company was Rs.309.90 crores as on 31st March, 2023 comprising 30,98,97,201 equity shares of Rs.10/- each.
MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Regulation 34(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015, (SEBI (LODR) Regulations, 2015), a Management Discussion and Analysis Report is given in Annexure âBâ.
Pursuant to Regulation 34(3) of SEBI (LODR) Regulations, 2015, a report on Corporate Governance and Auditorsâ Certificate confirming its compliance are included as part of the Annual Report and are given in Annexure âCâ and Annexure âDâ 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 in Annexure âEâ.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
Pursuant to Regulation 34(2)(f) of SEBI (LODR) Regulations, 2015, a Business Responsibility and Sustainability Report is given in Annexure âFâ.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
A Report on CSR activities of the Company during the year 2022-23 is given in Annexure âGâ.
The Companyâs Sankari works has received Confederation of Indian Industry - Southern Region - EHS Excellence Bronze Award 2022-23 for commitment to Environmental, Health and Safety practices. Sankari works also got various prizes in the Mines Environment and Mineral conservation week celebrations for Environmental monitoring, sustainable development and afforestation.
Bureau of Indian Standards conducted Surveillance Audit for the Integrated Management System practices as per IS/ISO 9001:2015, IS/ISO 14001:2015 and IS/ISO 45001:2018 and recommended for continuing the QMS, EMS and OHSMS certificates for the Companyâs Dalavoi works. TUV India Private Limited conducted renewal audit for Energy Management System License and recommended for renewing the same for the Dalavoi works.
Bureau of Indian Standards also recommended recertification of Quality Management Systems license for the Companyâs Malkapur works valid for next two years. The Companyâs Malkapur works mines also won 1st prize in the category of afforestation in medium and large mechanized mines in that area.
Besides the above, the Companyâs other works have also won several safety awards and environmental conservation awards during mines safety week celebrations.
A detailed analysis of the operations has been outlined in the Management Discussion and Analysis section. As mentioned therein, the cement industry witnessed mixed fortune with a significant pick up in the construction activity during the first quarter and cement demand growth of 17% which however, could not be sustained in the later quarters. As per information published by Department of Industrial Policy and Promotion (DIPP), the industry witnessed a moderate growth of 8.6% for the year under review. This inconsistent movement in cement demand during the year had a telling impact particularly in the southern cement industry with huge capacity overhang.
The industry witnessed a record increase in the cost of production during the first half due to unprecedented increase in the coal price which impacted the fuel and power cost. This was compounded by the depreciation of rupee by more than 10% during the year. The industry could not recover this cost increase resulting in lower margin. However, from Novemberâ22, the coal prices have started coming down which gave some relief. But still the fuel prices are much higher than what was prevailing earlier.
The performance of the Company was severely affected with the huge cost increase which was not compensated in the market. Tougher market conditions and subdued realization resulted in steep drop in margin resulting in liquidity issues. As a prudent policy, the company had to restrict the despatch to low contributing areas of Maharashtra and east which is also the reason for the lower growth as compared to the peers. The Company also took steps to improve the liquidity through sale of investment in Madhya Pradesh which helped in the short term to improve the capacity utilization to around 72% in the 4th quarter as against 60% in the previous 9 months. In addition to the above, the fixed demand charges by the state electricity boards also underwent upward revision during the year further impacting the profitability. The Company also had to provide for impairment of investment in Andhra Pradesh Gas Power Corporation Limited (APGPCL) shares which stopped its operations. Variable cost increased by more than '' 840 per ton or 31% over that of previous year, while the net plant realization improved only by '' 200 per ton which resulted in substantial erosion of margins. Accordingly, there was a negative EBIDTA of '' 140 crores for the year as compared to an EBIDTA of '' 478 crores in the previous year. The interest and other charges were at '' 234 crores against '' 204 crores in the previous year while depreciation was '' 213 crores ('' 220 crores in the previous year). After reckoning the exceptional income representing profit on sale of investments, after net off one off charges for impairment of investments and advances, the loss before the tax for the year stood at '' 407 crores against a profit of '' 54 crores in the previous year. The total comprehensive loss for the year after tax and other adjustments was '' 188 crores as compared to a total comprehensive income of '' 231 crores in the previous year.
With the predictions of reasonable GDP growth for the country and with the infra push given by the Central and State Governments, it is expected that the capacity utilization would improve further in the near term. The Company has further plans for improving the liquidity in the short term through disposal of its non-core assets.
With the record cost push impacting the bottomline severely, the Company could not envisage any further expansion of its plants. However, with the steps taken for improving the liquidity during the year, the Sankarnagar Cement Mill project which was delayed earlier has been taken up in full swing and is likely to be completed by the 2nd quarter of the current financial year. Also the Waste Heat Recovery System at Chilamkur is also being taken up for completion during the year and both these projects are expected to bring in substantial relief in variable cost at these works. The Company has also engaged experts like FLSmith and ThyssenKrup Industries to conduct detailed study of some of its plants for refurbishment and upgradation to bring them in line with modern plants and their final reports are awaited. The Company has engaged the services of Boston Consulting Group to study the operations in three of its plants and suggest measures to improve the same.
SUBSIDIARIES & ASSOCIATES CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rules, the Audited Consolidated Financial Statement of the Company and of all the Subsidiary and Associate Companies is enclosed. A separate statement containing the salient features of the audited financial statement of all the Subsidiary and Associate Companies is also enclosed in Form AOC-1, (Annexure âHâ) as prescribed under the Companies Act, 2013 and the Rules made thereunder.
POLICY ON DETERMINATION OF MATERIAL SUBSIDIARIES
The Company has, as on date, 11 subsidiaries controlled through shareholdings in such Companies, none of which is material. SUBSIDIARIES
SPRINGWAY MINING PRIVATE LIMITED AND NKJA MINING PRIVATE LIMITED
The Company had entered into a Share Purchase Agreement with JSW Cement Limited (Buyer) on 10th October, 2022, pursuant to which, it had transferred its entire shareholdings in Springway Mining Private Limited (SMPL) and NKJA Mining Private Limited (NKJA) in favour of the Buyer for a total consideration of '' 476.88 crores and consequently, SMPL and NKJA ceased to be the wholly-owned subsidiaries of the Company.
COROMANDEL ELECTRIC COMPANY LIMITED
The plant was able to maintain the total generation (Net) for the year at 185 million KWH as against 208 million KWH in the previous financial year. During the year 2022-23, the generation was impacted due to lower off take by captive consumers consequent to steep increase in gas prices. The Company has achieved a plant load factor of 82.13% as against 92.34% in the previous year. The Company had sold 16 million KWH of power to the cement plants of The India Cements Limited located in Tamil Nadu and the balance power of 169 million KWH was sold to other group captive consumers. The Company had earned a gross operating income from operations of ''135.63 crores and made a net profit of Rs.1.95 crores for the year under review.
During the year, the Company has not operated any charters and it has plans to re-commence the charter operations during the ensuing financial year.
PT. COROMANDEL MINERALS RESOURCES, INDONESIA AND COROMANDEL MINERALS PTE LIMITED, SINGAPORE
During the year under review, the Company through its Operating Company, Viz. PT Mitra Setia Tenah Bumbu, Indonesia which owns and operates coal mining, has mined a quantity of 6.09 lakh MTs of coal and sold 5.75 lakh MTs. There was no sales to The India Cements Limited.
INDIA CEMENTS INFRASTRUCTURES LIMITED
The Company has completed the first phase of Property development in Coimbatore and for the development of Phase 2, necessary terms and conditions were finalised for Joint Development. Further, the company has entered into an agreement for sale of land admeasuring 22.7225 acres at Naranammalpuram, near Tirunelveli, Tamil Nadu.
ASSOCIATE COMPANIES COROMANDEL SUGARS LIMITED
The Company, during the year under review, put up an improved performance with higher crushing volumes, higher sales volumes and realisations in sugar and power. This, together with income from sale of surplus land, the Company has posted a PBT of ''30 lakhs.
The cane crushing volumes during the year were higher by 6.5% at 7.03 Lakh MT aided by higher cane from our command areas. The recovery was 9.58% as against 9.50% in the previous year. This led to higher sugar production, which grew by 7.4% at 6.73 Lakh Quintals, while the Power exports were higher by 10.6% at 354 Lakh units. The EBIDTA was higher by 33.2% at ''52 crores (including profit from the sale of lands).
The Company is continuing its various measures for improving the cane volumes and is hopeful of improved crushing volumes in the years ahead.
The countryâs sugar production for this Sugar Season (SS) 2022-23, is expected to be 328 lakh MT (after diversion of an estimated sugar equivalent of 40 lakh MT for Ethanol production) - lower by about 8% compared to the production of 358 lakh MT (after diversion of an estimated sugar equivalent of 34 lakh MT for Ethanol production) in SS 2021-22, due to lower yields and uneven distribution of rainfall, in Maharashtra.
The buoyancy in the international Sugar prices has helped the industry with higher export realisations, even without any subsidy from the Government. However, the exports quota was restricted to 60 Lakh MT due to lower production. The various measures of the Government in the last few years - through exports Schemes and Ethanol Blending Programmes - have benefited the Industry in addressing the liquidity concerns and in ensuring timely payment of cane dues to the farmers. The closing inventory as at 30th September 2023, is expected to be much lower at 60 Lakh MT and this will have a positive impact on the sugar prices remaining stable in the current year.
The Fair and Remunerative Price (FRP) of cane for SS 2022-23, was revised to '' 305 per Quintal, (with a base recovery of 10.25%), up from '' 290 per Quintal fixed for SS 2021-22 (with a base recovery of 10.0%). However, the unremunerative MSP (Minimum Selling Price, below which Mills cannot sell) of '' 31/- per Kg, fixed in Feb 2019, has not been revised and due to the above, as had been highlighted last year, the disconnect between sugarcane prices, fixed by the Government and the Sugar price which are market driven, continues. During the year, the Government continued with its support measures of monthly sugar releases and fixation of MSP, higher prices for Ethanol supplies to Oil Marketing Companies (OMCs) etc.
The lower rainfalls in Maharashtra and Karnataka may have a bearing on the expected sugar production in 2023-24. While the sugar prices are showing an upward trend, the success of the various efforts for increasing the crushing volumes, is a key factor for the Companyâs performance in the current year.
INDIA CEMENTS CAPITAL LIMITED (ICCL)
The main focus of the Company continues to be on various fee-based activities such as Full-Fledged Money Changing [FFMC], Travel & Tours and Forex Advisory Services. The Companyâs FFMC division continues to enjoy the status of Authorised Dealers, Category II. The wholly owned subsidiary viz. India Cements Investment Services Limited (ICISL) is in Stock Broking. The main operation of the Company viz. money changing, which largely depends on the tourism industry has restored its Pre-COVID status.
Further, good growth has happened in AD II Business Segments. The consolidated gross income from operations of ICCL was ''492.71 lakhs during the year under review as against ''314.64 lakhs in the previous year and the consolidated Net profit after tax was ''72.02 lakhs as against a Net Profit after tax of ''24.51 lakhs in the previous year. Overall comprehensive income was ''72.02 lakhs for the year as against ''24.51 lakhs in the previous year.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
In accordance with Section 134(5)(e) of the Companies Act, 2013 and Rule 8(5)(viii) of Companies (Accounts) Rules, 2014, the Company has an Internal Financial Control Policy and Procedures commensurate with the size and nature of operations and financial reporting. The Company has defined standard operating procedures covering all functional areas like sales, marketing, materials, fixed assets etc.
The Company has engaged the services of Chartered Accountant firms for carrying out internal audit of all its plants as well as marketing offices. The internal auditors have been given the specific responsibility to verify and report on compliance of standard operating procedures. The auditors have reported that there are adequate financial controls in place and are being followed by the Company. This has been further explained in the Management Discussion and Analysis Report.
Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has developed and implemented a Risk Management Policy. The Policy envisages identification of risk and procedures for assessment and mitigation thereof.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In accordance with Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015, the Company has established a Vigil Mechanism and has a Whistle Blower Policy. The Policy has been uploaded on the Companyâs website at https://indiacements.co.in/investors-corner-details.php?inv_cat=33.
The Company has always been encouraging its employees to give constructive criticism and suggestions, which will better the overall prospects of the Company and its various stakeholders. The Company will continue to adopt this as a corner stone of its Personnel Policy.
THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITIION AND REDRESSAL) ACT, 2013
The Company has in place an anti-sexual harassment policy in line with the requirements of the captioned Act and Rules made thereunder. There was no complaint of harassment, reported during the year.
POLICY ON DEALING WITH RELATED PARTIES
All related party transactions that were entered into during the financial year were on armâs length basis and were in the ordinary course of business. There are no materially significant related party transactions entered by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The policy on Related Party Transactions as approved by the Board has been uploaded on the Companyâs website. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company other than those disclosed in Note No.41.13 of the standalone financial statements for the financial year 2022-23.
TRANSACTIONS WITH RELATED PARTIES
Particulars of contracts or arrangements with related parties for the financial year ended 31st March, 2023 are provided in Note No.41.13 of the standalone financial statements of the Company. There are no material related party transactions and all related party transactions entered during the year under review are in the ordinary course of business and on an armâs length basis and are in compliance with the applicable provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. Accordingly, the disclosure in Form No.AOC 2 pursuant to Section 134(3)(h) of the Companies Act, 2013 is not applicable.
LOANS / GUARANTEES / INVESTMENTS ETC UNDER SECTION 186 OF THE COMPANIES ACT, 2013
Details of loans, investments and guarantees covered under Section 186 of the Companies Act, 2013, are given in Notes to the standalone financial statements for the financial year 2022-23.
ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS
There has been no Order passed by any Regulatory authority or Court or Tribunal impacting the going concern status and future operations of the Company.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments affecting the financial position of the Company which have occurred between 1st April, 2023 and the date of this report other than those disclosed in the financial statements.
During the year 2022-23, the Company has neither made any application nor have any proceedings pending under the Insolvency and Bankruptcy Code, 2016. There was no instance of one-time settlement with any Bank or financial institutions.
The extract of the Annual Return of the Company for the financial year ended 31st March, 2023 is made available at the Companyâs website at www.indiacements.co.in.
Your Company has not been accepting deposits from public and shareholders since 16th September 2013 and there were no unclaimed deposit(s) due to be repaid or transferred to Investor Education and Protection Fund (IEPF) as on 31st March, 2023.
Necessary particulars regarding conservation of energy etc., as per provisions of Section 134 of the Companies Act, 2013 are set out in Annexure A.
During the year, your Company spent '' 96.25 lakhs towards revenue expenditure on the R&D department.
Under Article 98 of the Articles of Association of the Company and in terms of Section 152(6) of the Companies Act, 2013, Sri. S. Christopher Jebakumar and Sri.V.Ranganathan, Directors, retire by rotation at the ensuing Annual General Meeting of the Company and are eligible for re-appointment.
Sri.Siddhartha Mohanty was appointed as a Nominee Director by Life Insurance Corporation of India (LIC) with effect from
23.03.2023 in the casual vacancy caused by the withdrawal of nomination of Smt.Nalini Murari Ratnam by LIC. The shareholders have approved the ordinary resolution in respect of appointment of Sri.Siddhartha Mohanty as a Director liable to retire by rotation through Postal Ballot on 09.05.2023. Consequent to his assuming office as Chairperson of LIC, Sri.Siddhartha Mohanty tendered his resignation and he ceased to be a Director effective from 16.05.2023.
Sri.Y.Viswanatha Gowd was appointed as a Nominee Director by Life Insurance Corporation of India (LIC) with effect from
07.08.2023 in the casual vacancy caused by the withdrawal of nomination of Sri.Siddhartha Mohanty by LIC and he will hold office upto the date of the ensuing Annual General Meeting and a resolution for his election as a Director liable to retire by rotation is included under Special Business in the Notice convening the 77th Annual General Meeting of the Company.
Smt.Lakshmi Aparna Sreekumar and Smt.Sandhya Rajan were appointed as Independent Directors of the Company for a term of five consecutive years with effect from 11.08.2018 and their first term of office as Independent Directors of the Company concludes on 10.08.2023. The Board of Directors at its meeting held on 05.04.2023, based on the recommendation of the Nomination and Remuneration Committee, reappointed both Smt.Lakshmi Aparna Sreekumar and Smt.Sandhya Rajan as Independent Directors of the Company to hold office for a second and final term of five consecutive years from 11.08.2023 to 10.08.2028 and the shareholders have approved the special resolutions in respect of their reappointment through Postal Ballot on 09.05.2023.
The Board of Directors, at its meeting held on 24.05.2023, based on the recommendation of the Nomination and Remuneration Committee, appointed Sri.V.Manickam as an Independent Director of the Company for a term of three consecutive years with effect from 24.06.2023 and special resolutions for his appointment as an Independent Director of the Company for the said term are included under Special Business in the Notice convening the 77th Annual General Meeting of the Company.
Sri.Krishna Prasad Nair was appointed as an Independent Director of the Company for a term of three consecutive years with effect from 24.06.2020 and his first term of office as an Independent Director of the Company concluded on 23.06.2023. Sri.Krishna Prasad Nair has not opted for reappointment due to his official commitments and other engagements.
The present and final term of office of Sri.Basavaraju as an Independent Director of the Company would conclude from the close of business hours on 10.08.2023.
Sri.T.S.Raghupathy, due to health issues, resigned as a Director with effect from the close of business hours on 10.08.2023.
The Board expresses its appreciation of the valuable contributions made by Smt.Nalini Murari Ratnam, Sri.Siddhartha Mohanty, Sri.Krishna Prasad Nair, Sri.Basavaraju and Sri.T.S.Raghupathy during their tenure of Office as Directors of the Company.
Brief particulars of Directors eligible for appointment / reappointment are annexed to the Notice convening the 77th Annual General Meeting of the Company.
Sri.N.Srinivasan, Vice Chairman & Managing Director and Smt.Rupa Gurunath, Wholetime Director of the Company are related to Smt.Chitra Srinivasan and are also related to each other. No other director is related to them or each other.
The details of shares and convertible instruments held by non-executive directors are given in Annexure âCâ.
A statement on declaration given by independent directors under Section 149(7) of the Companies Act, 2013 that they meet the criteria of independence as provided under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, has been received by the Company. The details of familiarization programme for independent directors are available in the Companyâs website at https://indiacements.co.in/investors-corner-details.php?inv_cat=36.
In the opinion of the Board, the independent directors are persons of high integrity and repute and possess the requisite proficiency, expertise and experience and fulfil all the conditions specified in the Act and Rules made thereunder and are independent of the management.
Senior management personnel of the Company, on a structured basis, interact with directors from time to time to enable them to understand the Companyâs strategy, business model, operations, service and product offerings, markets, organization structure, finance, human resources, technology and risk management and such other areas. The directors also are facilitated to visit Companyâs plants to familiarize themselves with factory operations.
DIRECTORSâ RESPONSIBILITY STATEMENT
Your Directors make the following statement in terms of Section 134(5) of the Companies Act, 2013:
âWe confirm
1. That in the preparation of the accounts for the year ended 31st March, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures.
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, 2023 and of the loss 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, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
4. That the annual accounts for the year ended 31st March, 2023, have been prepared on a going concern basis.
5. That internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively.
6. That proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems are adequate and operating effectively.â
As prescribed under Section 197(12) of the Companies Act, 2013 (âActâ) and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the details are given in Annexure âIâ. In terms of provisions of Section 197(12) of the Companies Act, 2013 and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing names of the employees drawing remuneration and other particulars, as prescribed in the said Rules forms part of this report. However, in terms of first proviso to Section 136(1) of the Act, the Annual Report, excluding the aforesaid information, is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member who is interested in obtaining these particulars may write to the Company Secretary of the Company.
During the year, nine Board Meetings were held. The details of the meetings of the Board and its Committees are disclosed in the Corporate Governance Report Annexure âCâ.
The Audit Committee of the Board acts in accordance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 18 and other applicable provisions of SEBI (LODR) Regulations, 2015, as amended, from time to time. The Composition, the role, terms of reference and the details of the meetings of the Audit Committee are disclosed in the Corporate Governance Report (Annexure âCâ). There has been no instance, where the Board had not accepted any recommendation of the Audit Committee.
EVALUATION OF BOARD / BOARD COMMITTEES
Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board has carried out annual performance evaluation of its own performance, the directors individually as well as evaluation of the working of its Committees.
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a Policy for selection and appointment of Directors, Key Managerial Personnel (KMP) and other employees and their remuneration for implementation. The said policy is available on the Companyâs website at https://indiacements.co.in/investors-corner-details.php?inv_cat=33.
Broadly, the performance of the employee concerned and the performance of the Company are the fundamental parameters determining the remuneration payable to an employee. More specifically, there will be reciprocity in the matter of remunerating executive directors, KMPs and other employees.
At the middle and lower levels of management, the yardsticks of assessment are different. The ability to speedily execute policy decisions, sincerity and devotion and discipline are the main attributes expected.
The Key Managerial Personnel of the Company for the purpose of the Companies Act, 2013 are Sri.N.Srinivasan, Vice Chairman & Managing Director (Chief Executive Officer), Smt. Rupa Gurunath, Wholetime Director, Sri.R.Srinivasan, Executive President (Finance & Accounts) (Chief Financial Officer) and Sri.S.Sridharan, Company Secretary.
Industrial relations continued to remain cordial during the year.
The Shareholders of the Company at the 76th Annual General Meeting (AGM) held on 28th September, 2022, appointed Messrs Brahmayya & Co., and reappointed Messrs S.Viswanathan, LLP, Chennai, as Statutory Auditors of the Company, to hold office for a period of 5 years from the conclusion of the 76th AGM until the conclusion of 81st AGM of the Company. The Company has obtained necessary certificate from the Statutory Auditors confirming their eligibility to continue as Statutory Auditors of the Company for the financial year 2023-24.
The Auditorsâ Report does not contain any qualification or disclaimer.
Messrs. Capri Assurance and Advisory Services, Gopalaiyer & Subramanian, Kalyanasundaram & Associates, Bala & Co., Sudarasanam & Associates, P.S.Subramania Iyer & Co. and Chaturvedi SK & Fellows, have been appointed as Internal Auditors for the year 2023-24.
In terms of Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014, the Company has maintained the cost accounts and records for the year ended 31st March, 2023.
Sri.S.A.Muraliprasad, Cost Accountant, Chennai, has been appointed as Cost Auditor for the year 2023-24 at a remuneration of '' 20 lakhs. The remuneration is subject to ratification of members and hence is included in the Notice convening the 77th Annual General Meeting of the Company.
Smt.P.R.Sudha, Practising Company Secretary, has been appointed as Secretarial Auditor of the Company for the year 2023-24. Secretarial Auditorâs Report in Form MR-3, as prescribed under Section 204(1) of the Companies Act, 2013 read with Rule-9 of the Companies (Appointment and Remuneration of Managerial Personnel Rules) 2014, for the year ended 31st March, 2023, is enclosed as Annexure âJâ. The Secretarial Audit Report does not contain any qualification, reservation or other remarks.
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
N. SRINIVASAN RUPA GURUNATH S. BALASUBRAMANIAN ADITYAN
Vice Chairman & Managing Director Wholetime Director Director
(DIN: 00116726) (DIN: 01711965) (DIN: 00036898)
Place : Chennai Date : 7th August, 2023
Mar 31, 2022
Your Directors have pleasure in presenting their Seventysixth Annual Report together with audited accounts for the year ended 31st March 2022.
FINANCIAL RESULTS Profit before Interest, Depreciation & Tax |
For the year ended 31 2022 477.84 |
'' in Crore st March 2021 829.56 |
Less: Finance costs |
204.02 |
264.95 |
Less: Depreciation / Amortization |
219.79 |
241.90 |
Profit Before Tax |
54.03 |
322.71 |
Current Tax |
39.31 |
50.30 |
MAT credit entitlement |
0.00 |
87.65 |
Deferred Tax |
(24.26) |
(37.28) |
Tax Expenses |
15.05 |
100.67 |
Profit/(Loss) After Tax |
38.98 |
222.04 |
Other Comprehensive income (net) |
192.13 |
(0.40) |
Total Comprehensive income |
231.11 |
221.64 |
Add : Surplus brought forward from last year |
1353.19 |
1175.14 |
Less: Dividend |
30.99 |
18.59 |
Less: Transfer to General Reserve |
0.00 |
25.00 |
Surplus carried forward |
1553.31 |
1353.19 |
The Board of Directors has recommended a dividend of '' 1/- per equity share of '' 10/- each on 30,98,97,201 equity shares of '' 10/- each for the year ended 31st March, 2022, including proportionate dividend on 1,165 equity shares having calls in arrears. The proposed dividend, on approval by the shareholders at the ensuing Annual General Meeting, will be met out of surplus in the Statement of Profit and Loss in the Balance Sheet.
The Company has not transferred any amount to the reserves for the year ended 31st March, 2022.
The paid up equity share capital of the Company was '' 309.90 crores as on 31st March, 2022 comprising 30,98,97,201 equity shares of '' 10/- each.
MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Regulation 34(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI (LODR) Regulations, 2015), a Management Discussion and Analysis Report is given in Annexure âBâ.
Pursuant to Regulation 34(3) of SEBI (LODR) Regulations, 2015, a report on Corporate Governance and Auditorsâ Certificate confirming its compliance are included as part of the Annual Report and are given in Annexure âCâ and Annexure âDâ 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 in Annexure âEâ.
BUSINESS RESPONSIBILITY REPORT (BRR)
Pursuant to Regulation 34(2)(f) of SEBI (LODR) Regulations, 2015, a Business Responsibility Report is given in Annexure âFâ. CORPORATE SOCIAL RESPONSIBILITY (CSR)
A Report on CSR activities of the Company during the year 2021-22 is given in Annexure âGâ.
The Companyâs Sankar Nagar and Sankari plants have been awarded âOccupational Health, Safety and Environment Awards 2020-Appreciation Awardâ by the National Safety Council.
The Companyâs Sankari works has also won the Bronze Award in CII-SR EHS Excellence Awards 2021 from CII for its commitment in Environment Health and Safety practices.
The Companyâs Chilamkur works received appreciation from the Bureau of Indian Standards for consistent quality maintenance for more than 25 years in Marchâ22 during the âIconic Week under Azadi ka Amrit Mahotsav.â
The Companyâs Yerraguntla works and Parli Grinding Unit have also been granted Environment Management System for Quality Management and Environmental management and Occupational Health and Safety Management System by Bureau of Indian Standard.
Besides the above, Malkapur mines, Yerraguntla mines and Vishnupuram works have also won several safety awards and environmental conservation awards during mines safety week celebrations.
A brief of the Companyâs performance has been outlined in the Management and Discussion Analysis section. The economic recovery was visible after worst downturn in 2020 in the wake of Corona virus. The cement industry also staged a come back from the 4th Quarter of 20-21 with the pickup in construction activities after the second wave of Covid. This smart recovery, however, was impacted by the record rains and floods in some of the Southern States. As per information available from Department of Industrial Policy and Promotion (DIPP), the cement industry has recovered to register a growth of more than 20% during the year under review. However, South lagged behind with a moderate growth of 8% only with huge capacity overhang.
On the other hand, the industry was worst hit with record increase in the price of thermal coal and petcoke together with the ever-increasing petroleum product prices. This had impacted the bottom line of the industry in general. With the improvement in offtake, while the pan India players were able to recover portion of the huge cost impact, the industry in South could not pass on this cost impact due to severe competition and lesser demand.
Viewed from this backdrop, the performance of the company was severely impacted with the lesser growth in capacity utilization and dented by the significant cost push. The overall volume of the company was up by only 2%. The net plant realization remained constant with a marginal improvement of 1%. The increase in variable cost on account of substantial impact of increase in coal price was 21% and this resulted in a lower contribution for the company. For instance, the uncompensated increase in variable cost alone was over '' 400 per ton or '' 350 crores.
While the total revenue increased by 6% to '' 4730 crores from '' 4460 crores, the expenditure was substantially higher on account of increase in power and fuel cost resulting in an EBIDTA of '' 478 crores a drop of 42% as compared to '' 830 crores in the previous year. The interest and other charges were lower at '' 204 crores ('' 265 crores) while depreciation was at '' 220 crores ('' 242 crores). The resultant profit before tax was lower at '' 54 crores as compared to '' 323 crores in the previous year. After considering other comprehensive items, the total comprehensive income for the year was however marginally higher at '' 231 crores ('' 222 crores).
The Company continued to exercise control on the fixed cost which was much lesser than pre-pandemic levels. Capacity utilization of the Company was lesser than that of peers on account of the company restricting its despatches to low contribution areas.
Going forward, with all the predictions of improved cement demand as outlined elsewhere and given the infra push by the Central and State Governments, it is expected that this downtrend would get reversed in the near term.
During the year, the Shipping division had deployed its ship on the coastal movement of cargo and earned an income of '' 33 crores ('' 27 crores) while RMC sales was up at '' 116 crores ('' 86 crores). The RMC volume was at 2.61 lakh cu.m as compared to 2.13 lakh cu.m.in the previous year.
Given the low capacity utilisation, the Company has not envisaged any further expansion at this juncture and any such action will be taken up based on improved market conditions. However, the Company is committed to complete the installation of energy efficient cement mill at Sankarnagar works and the Waste Heat Recovery System at Chilamkur works during the current financial year.
SUBSIDIARIES & ASSOCIATES CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rules, the Audited Consolidated Financial Statement of the Company and of all the Subsidiary and Associate Companies is enclosed. A separate statement containing the salient features of the audited financial statement of all the Subsidiary and Associate Companies is also enclosed in Form AOC-1, (Annexure H) as prescribed under the Companies Act, 2013 and the Rules made thereunder.
POLICY ON DETERMINATION OF MATERIAL SUBSIDIARIES
The Company has, as on date, 13 subsidiaries controlled through shareholdings in such Companies, none of which is material.
SUBSIDIARIESSPRINGWAY MINING PRIVATE LIMITED AND NKJA MINING PRIVATE LIMITED
The company has purchased 184.53 Ha of limestone bearing lands at Pawai Tehsil, Panna District and 68.55 Ha of land for setting up a cement plant at Gaisabad Tehsil, Damoh District in Madhya Pradesh. Environmental clearance for Pawai mines has been obtained. Process of obtaining environmental clearance for setting up plant is in progress.
Springway Mining Private Limited became wholly-owned subsidiary of The India Cements Limited with effect from 27th June, 2022. COROMANDEL ELECTRIC COMPANY LIMITED
The gas based Power Plant at Ramanathapuram was able to maintain the total generation (Net) for the year at 208 million KWH as against 164 million KWH in the previous financial year. The Company has achieved a plant load factor of 92.34% as against 73.02% in the previous year which was impacted due to outbreak of COVID-19 pandemic. While the Company had sold 19 million KWH of power to the cement plants of The India Cements Limited located in Tamil Nadu, the balance power of 189 million KWH was sold to other group captive consumers. The Company had earned a gross operating income from operations of '' 93.41 crores and a net profit of '' 13.51 crores for the year under review.
The Company has not operated any charters during the financial year. The Company has planned to commence charter operations during the ensuing financial year.
PT. COROMANDEL MINERALS RESOURCES, INDONESIA AND COROMANDEL MINERALS PTE LIMITED, SINGAPORE
During the year under review, the Company through its Operating Company Viz. PT Mitra Setia Tenah Bumbu, Indonesia which owns and operates coal mining, has mined a quantity of 4.25 Lakh MTs of Coal and sold 4.26 Lakh Tons. There was no sale to The India Cements Limited.
INDIA CEMENTS INFRASTRUCTURES LIMITED
The company has completed the first phase of the property development in Coimbatore and has initiated necessary action for development of the second phase. The Company has also recently signed a Joint Development Contract for the development and sale of plots on its land at Naranammalpuram, near Tirunelveli.
ASSOCIATE COMPANIES COROMANDEL SUGARS LIMITED
The Company, during the year under review, crushed 6.61 Lakh MT as against 6.57 Lakh MT in FY 21. Apart from the lower availability of cane from the non-command areas consequent to recommissioning of nearby sugar Mills, the Company also faced the challenges of Harvest labour Shortage and heavy rains in Q3, disrupting the daily cane schedule and thereby severely affecting the production of sugar and Power generation and exports.
The recovery was 9.50% as against 9.56% in the previous year, the sugar production was 6.27 Lakh Quintals, more or less the same levels of last year. Power exports were 320 Lakh units (as against 372 Lakh units in FY 21). The sugar sales (including exports of White sugar and Raw sugar) were 7.49 Lakh Quintals (as against 7.03 Lakh Quintals in FY 21). The Company also achieved higher realisations in the sale of both Sugar and its by-products - Molasses and Power. The EBIDTA was '' 39.03 crores (as against '' 46.65 crores in FY 21). The Company has initiated measures for improving the cane from Command areas and is hopeful of improved crushing volumes in the near future.
The countryâs sugar production for this Sugar Season (SS) 2021-22, is expected to be 360 lakh MT (after diversion of an estimated sugar equivalent of 34 lakh MT for Ethanol production) - up by about 16% compared to the production of 311 lakh MT (after diversion of an estimated sugar equivalent of 20 lakh MT for Ethanol production) in SS 2020-21. The country''s exports are expected to be 90 lakh MT, achieved without any subsidy from the Government, and due to this the closing inventory as at 30th Sept 22 is expected to be 70 lakh MT and this is likely to help in stable prices in the current year.
The FRP of cane for SS 2021-22 was revised to '' 290 per Quintal, up from '' 285 per Quintal fixed for SS 2020-21. However, there has been no increase in the unremunerative MSP (minimum selling price, below which Mills cannot sell) of '' 31/- per Kg, which was last revised in Feb 2019 and hence the disconnect between sugarcane prices, fixed by the Government and the Sugar prices, which are market driven, continued. During the year, while the Government continued with its support measures of monthly sugar releases and fixation of MSP, higher prices for Ethanol supplies to OMCs etc, the subsidy for sugar exports, was discontinued.
As per the preliminary estimates of ISMA, the expected Sugar output for the SS 2022-23 will be 355 lakh MT (after expected diversion of 45 lakh MT for Ethanol). Considering an expected consumption of 275 lakh MT and closing stock at the same levels of this year (about 70 lakh MT), there will be surplus of 80 Lakh MT, which needs to be exported. The company hopes for continued support of the Central and State Governments in this regard.
The Company''s performance during the year depends on the Industry''s ability to export the surplus volume, which in turn depends on the international prices for Sugar / subsidies, if any extended by the Government, apart from the success of its efforts for increasing the crushing volumes.
INDIA CEMENTS CAPITAL LIMITED (ICCL)
The main focus of the Company continues to be on various fee-based activities such as Full-Fledged Money Changing [FFMC], Travel & Tours and Forex Advisory Services. The Company''s FFMC division continues to enjoy the status of Authorised Dealers, Category II. The wholly owned subsidiary viz. India Cements Investment Services Limited (ICISL) is in Stock Broking. The main operation of the Company, which largely depends on the tourism industry is slowly coming out of the impact of COVID-19 pandemic. The consolidated gross income from operations of ICCL was '' 314.64 lakhs during the year under review as against '' 240.71 lakhs in the previous year and the consolidated Net profit after tax was '' 24.51 lakhs as against a Net Loss of ('' 27.26) lakhs in the previous year. Overall comprehensive income was '' 24.51 lakhs for the year as against a Net Loss of ('' 27.26) lakhs in the previous year.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
In accordance with Section 134(5)(e) of the Companies Act, 2013 and Rule 8(5)(viii) of Companies (Accounts) Rules, 2014, the Company has an Internal Financial Control Policy and Procedures commensurate with the size and nature of operations and financial reporting. The Company has defined standard operating procedures covering all functional areas like sales, marketing, materials, fixed assets etc.
The Company has engaged the services of Chartered Accountant firms for carrying out internal audit of all its plants as well as marketing offices. The internal auditors have been given the specific responsibility to verify and report on compliance of standard operating procedures. The auditors have reported that there are adequate financial controls in place and are being followed by the Company. This has been further explained in the Management Discussion and Analysis Report.
Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has developed and implemented a Risk Management Policy. The Policy envisages identification of risk and procedures for assessment and mitigation thereof.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In accordance with Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015, the Company has established a Vigil Mechanism and has a Whistle Blower Policy. The Policy has been uploaded on the Companyâs website at www.indiacements.co.in.
The Company has always been encouraging its employees to give constructive criticism and suggestions, which will better the overall prospects of the Company and its various stakeholders. The Company will continue to adopt this as a cornerstone of its Personnel Policy.
THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an anti-sexual harassment policy in line with the requirements of the captioned Act and Rules made thereunder. There was no complaint of harassment reported during the year.
POLICY ON DEALING WITH RELATED PARTIES
All related party transactions that were entered into during the financial year were on arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions entered by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The policy on Related Party Transactions as approved by the Board has been uploaded on the Company''s website. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company other than those disclosed in Note No. 41.13 of the standalone financial statements for the financial year 2021-22.
TRANSACTIONS WITH RELATED PARTIES
Particulars of contracts or arrangements with related parties for the financial year ended 31st March, 2022 are provided in Note No. 41.13 of the standalone financial statements of the Company. There are no material related party transactions and all related party transactions entered during the year under review are in the ordinary course of business and on an armâs length basis and are in compliance with the applicable provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. Accordingly, the disclosure in Form No. AOC 2 pursuant to Section 134(3)(h) of the Companies Act, 2013 is not applicable.
Securities and Exchange Board of India advised the Company to classify Sri Saradha Logistics Private Limited (SSLPL) as Related Party and to make all disclosures and other compliances consequent to such classification. Accordingly, the Company has classified SSLPL as a Related Party and made disclosures in Note No. 41.13(b) of the standalone financial statements for the financial year 2021-22.
LOANS / GUARANTEES / INVESTMENTS ETC UNDER SECTION 186 OF THE COMPANIES ACT, 2013
Details of loans, investments and guarantees covered under Section 186 of the Companies Act, 2013, are given in Notes to the standalone financial statements for the financial year 2021-22.
ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS
There has been no order passed by any Regulatory authority or Court or Tribunal impacting the going concern status and future operations of the Company.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments affecting the financial position of the Company which have occurred between 1st April, 2022 and the date of this report other than those disclosed in the financial statements.
During the year 2021-22, the Company has neither made any application nor has any proceedings pending under the Insolvency and Bankruptcy Code, 2016. There was no instance of one-time settlement with any Bank or financial institutions.
The extract of the Annual Return of the Company for the financial year ended 31st March, 2022 is made available at the Companyâs website at www.indiacements.co.in.
Your Company has not been accepting deposits from public and shareholders since 16th September 2013 and there were no unclaimed deposit(s) due to be repaid or transferred to Investor Education and Protection Fund (IEPF) as on 31st March, 2022.
Necessary particulars regarding conservation of energy etc., as per provisions of Section 134 of the Companies Act, 2013 are set out in Annexure A.
During the year, your Company spent '' 64.82 lakhs towards revenue expenditure on the R&D department.
Under Article 98 of the Articles of Association of the Company and in terms of Section 152(6) of the Companies Act, 2013, Smt. Chitra Srinivasan and Sri T.S. Raghupathy, Directors, retire by rotation at the ensuing Annual General Meeting of the Company and are eligible for re-appointment.
Brief particulars of Directors eligible for reappointment are annexed to the Notice convening the 76th Annual General Meeting of the Company.
Sri. N.Srinivasan, Vice Chairman & Managing Director and Smt.Rupa Gurunath, Wholetime Director of the Company are related to Smt.Chitra Srinivasan and are also related to each other. No other director is related to them or each other.
The details of shares and convertible instruments held by non-executive directors are given in Annexure âCâ.
A statement on declaration given by independent directors under Section 149(7) of the Companies Act, 2013 that they meet the criteria of independence as provided under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 has been received by the Company. The details of familiarization programme for independent directors are available in the Companyâs website www.indiacements.co.in.
In the opinion of the Board, the independent directors are persons of high integrity and repute and possess the requisite proficiency, expertise and experience and fulfil all the conditions specified in the Act and Rules made thereunder and are independent of the management.
Senior management personnel of the Company, on a structured basis, interact with directors from time to time to enable them to understand the Company''s strategy, business model, operations, service and product offerings, markets, organization structure, finance, human resources, technology and risk management and such other areas. The directors also are facilitated to visit Company''s plants to familiarize themselves with factory operations.
DIRECTORSâ RESPONSIBILITY STATEMENT
Your Directors make the following statement in terms of Section 134(5) of the Companies Act, 2013:
âWe confirm
1. That in the preparation of the accounts for the year ended 31st March, 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures.
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, 2022 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, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
4. That the annual accounts for the year ended 31st March, 2022, have been prepared on a going concern basis.
5. That internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively.
6. That proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems are adequate and operating effectively.â
As prescribed under Section 197(12) of the Companies Act, 2013 ("Act") and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the details are given in Annexure âIâ. In terms of provisions of Section 197(12) of the Companies Act, 2013 and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing names of the employees drawing remuneration and other particulars, as prescribed in the said Rules forms part of this report. However, in terms of first proviso to Section 136(1) of the Act, the Annual Report, excluding the aforesaid information, is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member who is interested in obtaining these particulars may write to the Company Secretary of the Company.
During the year, five Board Meetings were held. The details of the meetings of the Board and its Committees are disclosed in the Corporate Governance Report in Annexure âCâ.
The Audit Committee of the Board acts in accordance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 18 and other applicable provisions of SEBI (LODR) Regulations, 2015, as amended, from time to time. The Composition, the role, terms of reference and the details of the meetings of the Audit Committee are disclosed in the Corporate Governance Report (Annexure âCâ). There has been no instance, where the Board had not accepted any recommendation of the Audit Committee.
EVALUATION OF BOARD / BOARD COMMITTEES
Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board has carried out annual performance evaluation of its own performance, the directors individually as well as evaluation of the working of its Committees.
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a Policy for selection and appointment of Directors, Key Managerial Personnel (KMP) and other employees and their remuneration for implementation. The said policy is available on the Companyâs website at www.indiacements.co.in.
Broadly, the performance of the employee concerned and the performance of the Company are the fundamental parameters determining the remuneration payable to an employee. More specifically, there will be reciprocity in the matter of remunerating executive directors, KMPs and other employees.
At the middle and lower levels of management, the yardsticks of assessment are different. The ability to speedily execute policy decisions, sincerity, devotion and discipline are the main attributes expected.
The Key Managerial Personnel of the Company for the purpose of Companies Act, 2013 are Sri N.Srinivasan, Vice Chairman & Managing Director (Chief Executive Officer), Smt. Rupa Gurunath, Wholetime Director, Sri.R.Srinivasan, Executive President (Finance & Accounts) (Chief Financial Officer) and Sri S.Sridharan, Company Secretary.
Industrial relations continued to remain cordial during the year.
As per the provisions of Section 139 of the Companies Act, 2013, the term of office of M/s. K.S.Rao & Co., and M/s.S.Viswanathan LLP, Chennai, as Statutory Auditors of the Company, will conclude from the close of the 76th Annual General Meeting of the Company.
Based on the recommendations of the Audit Committee, it is proposed to appoint M/s.Brahmayya & Co., Chartered Accountants, Chennai in the place of M/s.K.S.Rao & Co., and reappoint M/s.S.Viswanathan LLP, Chartered Accountants, Chennai, as Statutory Auditors of the Company to hold office for a term of five consecutive years from the conclusion of the 76th Annual General Meeting until the conclusion of the 81st Annual General Meeting, subject to the approval of shareholders and resolutions in this respect are included in the Notice convening the 76th Annual General Meeting of the Company.
The Board of Directors places on record its appreciation for the valuable services rendered by M/s.K.S.Rao & Co.
The Auditorsâ Report does not contain any qualification, reservation or other remarks.
Messrs. Capri Assurance and Advisory Services, Gopalaiyer & Subramanian, Kalyanasundaram & Associates, Bala & Co., Sudarasanam & Associates, P.S.Subramania Iyer & Co. and Chaturvedi SK & Fellows, have been appointed as Internal Auditors for the year 2022-23.
In terms of Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014, the Company has made and maintained the cost accounts and records for the year ended 31st March, 2022.
Sri S.A.Muraliprasad, Cost Accountant, Chennai has been appointed as Cost Auditor for the year 2022-23 at a remuneration of '' 20 lakhs. The remuneration is subject to ratification of members and hence is included in the Notice convening the 76th Annual General Meeting of the Company.
Smt.P.R.Sudha, Practising Company Secretary, has been appointed as Secretarial Auditor of the Company for the year 2022-23. Secretarial Auditorâs Report in Form MR-3, as prescribed under Section 204(1) of the Companies Act, 2013 read with Rule-9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed as Annexure âJâ. The Secretarial Audit Report does not contain any qualification, reservation or other remarks.
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
N. SRINIVASAN RUPA GURUNATH S. BALASUBRAMANIAN ADITYAN
Vice Chairman & Managing Director Wholetime Director Director
(DIN: 00116726) (DIN:01711965) (DIN: 00036898)
Place : Chennai Date : 12th August, 2022
Mar 31, 2018
The Directors have pleasure in presenting their Seventy-second Annual Report together with audited accounts for the year ended 31st March 2018.
Rs. in Crore For the year ended 31st March |
||
2018 |
2017 |
|
FINANCIAL RESULTS Profit before Interest, Depreciation & Exceptional Items |
712.22 |
877.54 |
Less : Finance costs |
340.17 |
360.46 |
Less : Depreciation / Amortization |
255.94 |
257.06 |
Less : Exceptional Items |
- |
- |
Profit Before Tax |
116.11 |
260.02 |
Current Tax |
17.90 |
53.71 |
MAT credit entitlement |
(0.02) |
(53.71) |
Deferred Tax |
(2.39) |
86.67 |
Tax Expenses |
15.49 |
86.67 |
Profit After Tax |
100.62 |
173.35 |
Other Comprehensive income (net) |
6.29 |
(5.47) |
Total comprehensive income |
106.91 |
167.88 |
Add : Surplus brought forward from last year |
939.47 |
868.56 |
Less: Dividend on Equity Capital (including Dividend Distribution Tax) paid during the year |
37.09 |
36.97 |
Less: Transfer to General Reserve |
40.00 |
60.00 |
Surplus carried forward |
969.29 |
939.47 |
DIVIDEND
The Board of Directors has recommended a dividend of Rs. 0.80 per equity share of Rs. 10/- each on 30,81,52,201 equity shares of Rs. 10/- each for the year ended 31st March, 2018 including proportionate dividend on 1,217 equity shares having calls in arrears. The proposed dividend, on approval by the shareholders at the ensuing Annual General Meeting, will be met out of surplus in the Statement of Profit and Loss in the Balance Sheet.
SHARE CAPITAL
Pursuant to the Scheme of Amalgamation between Trinetra Cement Limited and Trishul Concrete Products Limited (Transferor Companies) with The India Cements Limited (Transferee Company) and its shareholders (âSchemeâ) approved by the Honâble National Company Law Tribunal, Division Bench, Chennai, vide its Order dated 20.04.2017, the Company has allotted, in June 2017, 9,73,544 equity shares of Rs. 10/- each to the erstwhile shareholders of Trinetra Cement Limited and Trishul Concrete Products Limited and consequently the paid-up equity share capital of the Company got increased to Rs. 308.15 crores comprising 30,81,52,201 equity shares of Rs. 10/- each.
EMPLOYEES STOCK OPTION SCHEME, 2016
Details of Employees Stock Option Scheme, 2016, as required under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SEBI (SBEB) Regulations), are uploaded in the Companyâs website.
Messrs K.S.Rao & Co., Statutory Auditors of the Company have certified that the aforesaid Scheme has been implemented in accordance with the SEBI (SBEB) Regulations and the resolutions passed by the members approving the Scheme.
TRANSFER TO RESERVES
The Company proposes to transfer Rs. 40 crores to the General Reserve and to retain Rs. 969.29 crores as surplus in the Profit and Loss Account.
MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Regulation 34(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, (SEBI (LODR) Regulations, 2015) a Management Discussion and Analysis Report is given in Annexure âBâ
CORPORATE GOVERNANCE
Pursuant to Regulation 34(3) of SEBI (LODR) Regulations, 2015, a report on Corporate Governance and Auditorsâ Certificate confirming its compliance are included as part of the Annual Report and are given in Annexure âCâ and Annexure âDâ 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 in Annexure âEâ.
BUSINESS RESPONSIBILITY REPORT (BRR)
Pursuant to Regulation 34(2)(f) of SEBI (LODR) Regulations, 2015, a Business Responsibility Report is given in Annexure âFâ.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
A report on CSR activities of the Company during 2017-18 is given in Annexure âGâ.
LICENCES & RECOGNITIONS
The Company has obtained license for producing Railway Sleeper Cement. The Company has already been granted license in the previous year to produce Oil Well Cement by the American Petroleum Institute, USA.
The Company was given an Award of Excellence Certificate on the International Customs Day for being the Top Importer for the year 2016-17, in the category of Rs. 50 to Rs. 100 crores in customs duty by the Office of the Commissioner of Customs (Preventive), Vijayawada.
The Companyâs Banswara Plant has got the ISO 50001 license for Energy Management during the year. The Plant has also been recommended for Silver Award for manufacturing excellence by International Research Institute for manufacturing which will be awarded in the ceremony scheduled in September 2018. The Plant has received an appreciation letter from the Rajasthan Government for companyâs contribution to the construction of minor percolation tanks.
The Companyâs Dalavoi Plant was presented with the âGood Industrial Relations Awardâ by the Tamil Nadu State Labour Department.
The Companyâs Sankarnagar Plant has been selected for âCommendation Awardâ for Health and Safety for the Calendar year 2016 by the National Safety Council, Tamil Nadu Chapter.
The Companyâs Chennai Grinding Unit has got Safety Award for Lowest Weighted Frequency Accident Rate and Longest Accident Free Period in Man Hours from Tamil Nadu Government.
OPERATIONS
The Companyâs performance for the year under review has been discussed in detail in the Management Discussion and Analysis section. The cement industry in India is the second largest in the world in terms of capacity with around 425 million tonnes next only to China. The overall demand for the cement in the country which was growing at a CAGR of 7 to 8% in the last two decades suffered with a negative growth in the previous two fiscals and a practically nil growth during the first half of 2017-18. The industry had to face stiff challenges during the year due to latent effect of demonetization, teething troubles arising out of GST roll out, RERA impact, prohibition on sand mining in certain States, etc. In addition, the Supreme Court of India also banned the usage of petcoke for a brief period which was reversed subsequently. The industry had to bear the brunt of steep increase in fuel cost and surge in petroleum products prices in addition to increase in customs duty on petcoke to 11% from around 3%.
However, from the month of Novemberâ17, the industry had started witnessing improvement in the off-take and has quickly turned around to register a double digit growth in production in the second half and ultimately ended the year with a Five year high growth of 6.3%. The capacity utilization was around 70% on an all India basis.
South India which has got the highest capacity in the country of over 150 million tons had to face severe competition in the market place with a lower demand of around 70 to 80 million tons only. Even after movement to other areas, the capacity utilization could not improve beyond 60%. With capacity overhang, the selling prices of cement also started declining from the month of Octoberâ17.
Given the tough market conditions, the capacity utilization of the Company at 71% was better than the industry peers in south. The sales volume for the year under review was at 111.75 lakh tons and the total revenue for the year was at Rs. 5360 crores. With the increase in the price of coal and oil, the EBIDTA was lower for the year at around Rs. 712 crores against Rs. 878 crores in the previous year. The interest charges were at Rs. 340 crores against Rs. 360 crores while the depreciation was Rs. 256 crores against Rs. 257 crores. The net profit before tax was Rs. 116 crores as against Rs. 260 crores in the previous year.
With the improved off-take in the States of Telangana and Andhra Pradesh on account of thrust being given by the Governments for the infrastructure creation and dams, etc. and with the lifting of ban on sand quarrying in Tamil Nadu, the outlook for cement growth to continue at its normative level of the previous two decades seems achievable.
The shipping division continued its costal movement of cargo and earned a revenue of Rs. 17.34 crores while RMC division which had a subdued sales of 2.32 lakh cu.m. of concrete (2.56 lakh cu.m.), earned a total revenue of Rs. 95 crores against Rs. 101 crores in the previous year.
EXPANSION / MODERNISATION
As earlier mentioned, your company has got approval from the relevant authorities for enhancing the capacity of Dalavoi and Sankari plants in Tamil Nadu. The Company also obtained necessary approvals from the environment authorities for installing new energy efficient cement grinding facility at Sankarnagar replacing its old cement mills.
SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rules, the Audited Consolidated Financial Statement of the Company and of all the subsidiary and Associate Companies is enclosed. A separate statement containing the salient features of the audited financial statement of all the subsidiary and Associate Companies is also enclosed in Form AOC-1, (Annexure âHâ) as prescribed under the Companies Act, 2013 and the Rules made thereunder.
POLICY ON DETERMINATION OF MATERIAL SUBSIDIARIES
The India Cements Limited has, as on date, 12 subsidiaries controlled through shareholdings in such Companies, none of which is material.
COROMANDEL ELECTRIC COMPANY LIMITED
The power generation from the Gas power plant has improved considerably due to additional natural gas availability from Oil and Natural Gas Corporation Limited (ONGC) during the complete year. The plant was able to generate (net) 201 million KWH as against 169 million KWH in the previous financial year. The Company has achieved plant load factor (PLF) of 89.22% as against 75.19% in corresponding previous year. During the year the Company has sold 37 million KWH of power to the cement plants of The India Cements Limited located in Tamil Nadu State and the balance power of 164 million KWH was sold to other group captive consumers. The gross income from operations earned by the Company was at Rs. 93.28 crores (previous year Rs. 83.02 crores) and with increase in operating costs, the net profit after tax was at Rs. 8.59 crores as against Rs. 18.16 crores in the previous year.
COROMANDEL TRAVELS LIMITED
The Company has operated the flight for a total of 283:40 flying hours during the financial year 2017-18. The Company has earned a total income of Rs. 13 crores and incurred a loss of Rs. 23 crores for the year under review.
PT. COROMANDEL MINERALS RESOURCES, INDONESIA AND COROMANDEL MINERALS PTE LIMITED, SINGAPORE
During the year, Coromandel Minerals Pte Ltd, Singapore, a 100% subsidiary of your company has completed acquisition of 100% shareholding in Raasi Minerals Pte Ltd, Singapore, which has controlling interest in coal mines in Indonesia through stepdown subsidiaries PT Adcoal Energindo, Indonesia and PT Mitra Setia Tanah Bumbu, Indonesia.
Consequent to improvement in international prices of coal, PT Mitra Setia Tanah Bumbu, Indonesia, which owns the coal mines has mined and sold 299925 Tonnes of coal during the year 2017, including 169365 Tonnes of coal sold to your company.
The financials of these companies are furnished in Annexure âHâ.
INDIA CEMENTS INFRASTRUCTURES LIMITED
The Company has not taken up any new projects during the year. The first phase of the joint development of a property in Coimbatore has been completed and as on date, nearly 70% of the units have been sold and handed over to the Owners. The Company is in the process of selling the remaining units. The second phase of the property is in progress. In order to improve the marketability of the units and due to regulatory changes, it is proposed to revise the plans and obtain the necessary regulatory approvals.
Since the Company has not taken up any new projects, the manpower has been considerably reduced and the available manpower is being used for completing the remaining part of the works already taken up.
ASSSOCIATE COMPANIES
COROMANDEL SUGARS LIMITED
During the year under review, Indiaâs sugar production touched a record high of 320 Lakh Tns far in excess of domestic consumption of about 250 Lakh Tns which led to sharp drop in sugar prices during the second half of the year. Despite this, the Company was able to achieve an EBIDTA of around Rs. 36.85 Crores (as against Rs. 34.10 Crores achieved in FY 17).
Crushing improved to 5.68 Lakh Tns (as against 3.81 Lakh Tns in FY 17) and the sugar production improved to 5.31 Lakh quintals (as against 3.39 Lakh quintals in FY 17). However, due to sharp drop in realization, the sale volume was restricted to 4.25 Lakh quintals (as against 4.47 Lakh quintals in FY 17). During the year, the power export increased to 243 Lakh units (as against 46 Lakh units in FY 17).
Due to lower crushing, the Company was not able to fully utilize the 30 MW Co-gen plant commissioned in the previous year. In view of higher rainfall in the area in which the plant is located, we expect significantly increased crushing during the current year. However, the performance of the company depends on the prevalent sugar prices, as the countryâs sugar production is expected to be significantly higher than the consumption for the 2nd year in succession.
INDIA CEMENTS CAPITAL LIMITED (ICCL)
The main focus of the Company continues to be on various fee-based activities such as Full Fledged Money Changing [FFMC], Travel & Tours and Forex Advisory Services. The Companyâs FFMC division continues to enjoy the status of Authorised Dealers, Category II. The wholly owned subsidiary viz. India Cements Investment Services Limited (ICISL) is in Stock Broking. The Consolidated Gross income from operations of ICCL was Rs. 658.19 lakhs during the year under review as against Rs. 599.89 lakhs in the previous year and the consolidated Net profit after tax was Rs. 79.90 lakhs as against Rs. 54.90 lakhs in the previous year.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
In accordance with Section 134(5)(e) of the Companies Act, 2013 and Rule 8(5)(viii) of Companies (Accounts) Rules, 2014, the Company has an Internal Financial Control Policy and Procedures commensurate with the size and nature of operations and financial reporting. The Company has defined standard operating procedures covering all functional areas like sales, marketing, materials, fixed assets etc.
The Company has engaged the services of Chartered Accountant firms for carrying out internal audit of all its plants as well as marketing offices. The internal auditors have been given the specific responsibility to verify and report on compliance of standard operating procedures. The auditors have reported that there are adequate financial controls in place and are being followed by the Company. This has been further explained in the Management Discussion and Analysis Report.
RISK MANAGEMENT POLICY
Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has developed and implemented a Risk Management Policy. The Policy envisages identification of risk and procedures for assessment and mitigation thereof.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In accordance with Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015, the Company has established a Vigil Mechanism and has a Whistle Blower Policy. The Policy has been uploaded on the Companyâs website www.indiacements.co.in.
The Company has always been encouraging its employees to give constructive criticism and suggestions, which will better the overall prospects of the Company and its various stakeholders. The Company will continue to adopt this as a corner stone of its Personnel Policy.
THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITIION AND REDRESSAL) ACT, 2013
The Company has in place an anti-sexual harassment policy in line with the requirements of the captioned Act and Rules made thereunder. There was no complaint of harassment, reported during the year.
POLICY ON DEALING WITH RELATED PARTIES
All related party transactions that were entered into during the financial year were on armâs length basis and were in the ordinary course of business. There are no materially significant related party transactions entered by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The policy on Related Party Transactions as approved by the Board has been uploaded on the Companyâs website. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company other than remuneration in the case of executive directors or sitting fee in the case of others.
TRANSACTIONS WITH RELATED PARTIES
Particulars of contracts or arrangements with related parties in Form AOC-2 along with justification are given in Annexure âIâ.
LOANS / INVESTEMENTS / GUARANTEES ETC UNDER SECTION 186 OF THE COMPANIES ACT, 2013
Details of loans, investments and guarantees covered under Section 186 of the Companies Act, 2013 are given in Note No.40.13 on accounts for the financial year 2017-18.
ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS
There has been no Order passed by any Regulatory authority or Court or Tribunal impacting the going concern status and future operations of the Company.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments affecting the financial position of the Company which have occurred between 1st April, 2018 and the date of this report other than those disclosed in the financial statements.
ANNUAL RETURN
Extract of the Annual Return in Form No. MGT-9 is attached with this Report as Annexure âJâ.
PUBLIC DEPOSITS
Your Company has not been accepting deposits from public and shareholders since 16th September 2013. Deposits totalling Rs. 9.47 lakhs have not so far been claimed by the depositors.
CONSERVATION OF ENERGY, ETC.
Necessary particulars regarding conservation of energy etc. as per provisions of Section 134 of the Companies Act, 2013 are set out in Annexure A.
RESEARCH & DEVELOPMENT
During the year your Company spent Rs. 144.26 Lakhs towards revenue expenditure on the R&D department.
DIRECTORS
Under Article 109 of the Articles of Association of the Company, Sri M.R.Kumar, representing Life Insurance Corporation of India, retires by rotation at the ensuing Annual General Meeting of the Company and he is eligible for re-appointment.
Sri Suneel Babu Gollapalli was appointed as a nominee Director by IDBI Bank Limited with effect from 10.08.2017 in the place of Sri Rabinarayan Panda and he will hold office upto the date of the ensuing Annual General Meeting and the resolution for his election as a director liable to retire by rotation is included under Special Business in the Notice convening the 72nd Annual General Meeting of the Company. The Board expresses its appreciation of the valuable contribution made by Sri Rabinarayan Panda during his tenure as Director.
The present and the final term of office of Sri Arun Datta, Sri N.R.Krishnan and Sri V.Manickam as Independent Directors of the Company expires on 28.08.2018. The Board recorded its appreciation of the valuable contributions made by them during their tenure of office as directors of the Company.
Sri Basavaraju was appointed as an independent director by the Board of Directors at its meeting held on 11.08.2018 on the recommendation of the Nomination and Remuneration Committee and the resolution for his election as an independent director for a term of 3 years from 11.08.2018 to 10.08.2021 is included under special business in the Notice convening the 72nd Annual General Meeting of the Company.
Smt Lakshmi Aparna Sreekumar and Smt. Sandhya Rajan were appointed as independent directors by the Board of Directors at its meeting held on 11.08.2018 on the recommendations of the Nomination and Remuneration Committee and the resolutions for their election as independent directors for a term of 5 years from 11.08.2018 to 10.08.2023 are included under special business in the Notice convening the 72nd Annual General Meeting of the Company.
The Board, based on the recommendation of the Nomination and Remuneration Committee, also appointed Sri N.Srinivasan (F&R), whose term of office as Independent Director expires on 28.08.2018, as a Non-executive, Non-Independent Additional Director with effect from 29.08.2018 and he will hold office upto the date of the ensuing Annual General Meeting of the Company and resolution for his election as a director liable to retire by rotation is included under special business in the Notice convening the 72nd Annual General Meeting of the Company.
Brief particulars of Directors eligible for reappointment / appointment are annexed to the Notice convening the 72nd Annual General Meeting of the Company.
Sri N.Srinivasan, Vice Chairman & Managing Director and Smt. Rupa Gurunath, Wholetime Director of the Company are related to Smt.Chitra Srinivasan and are also related to each other. No other director is related to them or each other.
The details of shares and convertible instruments held by non-executive directors are given in Annexure âCâ.
INDEPENDENT DIRECTORS
A statement on declaration given by independent directors under Section 149(7) of the Companies Act, 2013 that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013, has been received by the Company. The details of familiarization programme for independent directors can be had from the Companyâs website www.indiacements.co.in.
FAMILIARIZATION PROCESS
Senior management personnel of the Company, on a structured basis, interact with directors from time to time to enable them to understand the Companyâs strategy, business model, operations, service and product offerings, markets, organization structure, finance, human resources, technology and risk management and such other areas. The directors also are facilitated to visit Companyâs plants to familiarize themselves with factory operations.
DIRECTORSâ RESPONSIBILITY STATEMENT
Your Directors make the following statement in terms of Section 134(5) of the Companies Act, 2013.
âWe confirm
1. That in the preparation of the accounts for the year ended 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures.
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, 2018 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, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
4. That the annual accounts for the year ended 31st March, 2018, have been prepared on a going concern basis.
5. That internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively.
6. That proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems are adequate and operating effectively.
REMUNERATION
As prescribed under Section 197(12) of the Companies Act, 2013 (âActâ) and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the details are given in Annexure K. In terms of provisions of Section 197(12) of the Companies Act, 2013 and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing names of the employees drawing remuneration and other particulars, as prescribed in the said Rules forms part of this report. However, in terms of first proviso to Section 136(1) of the Act, the Annual Report, excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member who is interested in obtaining these particulars may write to the Company Secretary of the Company.
BOARD MEETINGS
During the year, five Board Meetings were held. The details of the meetings of the Board and its Committees are given in the Corporate Governance Report (Annexure âCâ).
EVALUATION OF BOARD / BOARD COMMITTEES
Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board has carried out annual performance evaluation of its own performance, the directors individually as well as evaluation of the working of its Committees.
REMUNERATON POLICY
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a Policy for selection and appointment of Directors, Key Managerial Personnel (KMP) and other employees and their remuneration for implementation.
Broadly, the performance of the employee concerned and the performance of the Company are the fundamental parameters determining the remuneration payable to an employee. More specifically, there will be reciprocity in the matter of remunerating executive directors, KMPs and other employees.
At the middle and lower levels of management, the yardsticks of assessment are different. The ability to speedily execute policy decisions, sincerity and devotion and discipline are the main attributes expected.
KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel of the Company for the purpose of Companies Act, 2013 are Sri N.Srinivasan, Vice Chairman & Managing Director (Chief Executive Officer), Smt. Rupa Gurunath, Wholetime Director, Sri.R.Srinivasan, Executive President (Finance & Accounts) (Chief Financial Officer) and Sri S.Sridharan, Company Secretary.
PERSONNEL
Industrial relations continued to remain cordial during the year.
AUDITORS
STATUTORY AUDITORS
The Shareholders of the Company at the 71st Annual General Meeting (AGM) held on 4th September, 2017, appointed Messrs K.S.Rao & Co., and Messrs S.Viswanathan, LLP, Chennai, as Statutory Auditors of the Company, to hold office for a period of 5 years from the conclusion of the 71st AGM until conclusion of 76th AGM, subject to ratification of their appointment by the Shareholders at every AGM held after the 71st AGM of the Company. In terms of the provisions of Section 139(1) of the Companies Act, 2013 which was amended by the Companies (amendment) Act, 2017, notified by the Ministry of Corporate Affairs on 7th May, 2018, the requirement of ratification of appointment of Auditors by the Shareholders at every AGM is dispensed with and accordingly, the resolution for ratification of appointment of Auditors is not included in the Notice convening the 72nd Annual General Meeting of the Company.
INTERNAL AUDITORS
Messrs. Capri Assurance and Advisory Services, Gopalaiyer & Subramanian, Kalyanasundaram & Associates, Bala & Co., Brahmayya & Co., P.S.Subramania Iyer & Co. and Chaturvedi SK & Fellows, have been appointed as Internal Auditors for the year 2018-19.
COST AUDITOR
Mr.S.A.Muraliprasad, Cost Accountant, Chennai has been appointed as Cost Auditor for the year 2018-19 at an increased remuneration of Rs. 20 lakhs. The remuneration is subject to approval of members and hence is included in the Notice convening the 72nd Annual General Meeting of the Company.
SECRETARIAL AUDITOR
Ms.P.R.Sudha, Practising Company Secretary, has been appointed as Secretarial Auditor of the Company for the year 2018-19. Secretarial Auditorâs Report in Form MR-3, as prescribed under Section 204(1) of the Companies Act, 2013 read with Rule-9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed as Annexure âLâ. The Secretarial Audit Report does not contain any qualification, reservation or other remarks.
ACKNOWLEDGEMENT
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
N.SRINIVASAN RUPA GURUNATH N.SRINIVASAN
Vice Chairman & Managing Director Wholetime Director Director
Place: Chennai
Date : 11th August, 2018
Mar 31, 2017
The Directors have pleasure in presenting their Seventy-first Annual Report together with audited accounts for the year ended 31st March 2017.
Rs. in Crore
For the year ended 31st March |
||
2017 |
2016 |
|
FINANCIAL RESULTS Profit before Interest, Depreciation & Exceptional Items |
877.54 |
797.60 |
Less : Finance costs |
360.46 |
382.50 |
Less : Depreciation / Amortization |
257.06 |
219.46 |
Less : Exceptional Items |
- |
3.20 |
Profit Before Tax |
260.02 |
192.44 |
Current Tax |
53.71 |
60.36 |
MAT credit entitlement |
(53.71) |
(27.11) |
Deferred Tax |
86.67 |
29.24 |
Profit After Tax |
173.35 |
129.95 |
Other comprehensive income (net) |
(5.47) |
- |
Total comprehensive income |
167.88 |
129.95 |
Add : Surplus brought forward from last year |
868.56 |
778.61 |
Less : Dividend on Equity Capital (including Dividend Distribution Tax) paid during the year |
36.97 |
- |
Less : Transfer to General Reserve |
60.00 |
40.00 |
Surplus carried forward |
939.47 |
868.56 |
The Hon''ble National Company Law Tribunal (NCLT), Division Bench, Chennai, has, vide its Orders dated April 13, 2017 and April 20, 2017 sanctioned the Scheme of Amalgamation and Arrangement between Trinetra Cement Limited (TCL) (First Transferor Company) and Trishul Concrete Products Limited (TCPL) (Second Transferor Company) with The India Cements Limited (Transferee Company) and their respective shareholders, subject to the directions given by the Hon''ble High Court of Madras on 31.01.2017 in C.PNo.171 of 2015. The said Orders were filed with the Registrar of Companies, Tamil Nadu, Chennai, on 28.04.2017 and accordingly, the Scheme became effective from the appointed date i.e. 01.01.2014.
The aforesaid results for 2016-17 include financials of the TCL and TCPL, which stands amalgamated with your Company and are therefore not strictly comparable with those of the previous year.
Ind AS
As per Ministry of Corporate Affairs (MCA) notification dated 16.02.2015, the Indian Accounting Standards (Ind AS) are mandatory for the Company for the Financial year commencing 01.04.2016. Accordingly the Company has adopted Ind AS from 01.04.2016 and the financial statements for the year ended 31.03.2017 are prepared in accordance with the principles laid down in the said Ind AS. The financial statements for the corresponding year ended 31st March, 2016 is restated under Ind AS.
DIVIDEND
The Board of Directors has recommended a dividend of Re.1 per Equity Share of Rs.10/- each on 30,81,53,074 Equity Shares of Rs.10/- each for the year ended 31st March, 2017, including on 9,74,417 equity shares of Rs.10/- each issued for allotment to the shareholders of TCL and TCPL and proportionate dividend on 1,317 Equity shares having calls in arrears. The proposed dividend, on approval by the Shareholders at the ensuing Annual General Meeting will be met out of surplus in the Statement of Profit and Loss in the Balance Sheet.
SHARE CAPITAL
The authorized share capital of the Company has gone up to Rs.1419.81 Crores from Rs.535 Crores in terms of the approved Scheme of Amalgamation referred to earlier in the report. The paid-up equity share capital has further increased to 30,81,53,074 shares of Rs.10/- each in April 2017, on issue of 9,74,417 equity shares of Rs.10/- each to the shareholders of TCL and TCPL in terms of the said Scheme of Amalgamation as sanctioned by the Hon''ble National Company Law Tribunal, Division Bench, Chennai.
EMPLOYEES STOCK OPTION SCHEME
The Compensation Committee at its meeting held on 15th March, 2017 approved the âEmployees Stock Option Scheme, 2016â (Scheme) and granted 18.35 lakh stock options to certain eligible employees of the Company, effective from 01.04.2017. In terms of this Scheme, options granted to employees will vest on 1st April 2018. Each option on such vesting can be exercised by applying for an equity share of Rs.10/- each fully paid-up for a sum of Rs.50/- (inclusive of premium of Rs.40/-) on or before 1st April, 2019 in not more than two tranches.
TRANSFER TO RESERVES
The Company proposes to transfer Rs.60 crores to the General Reserve and to retain Rs.939 crores as surplus in the Profit and Loss Account.
MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Regulation 34(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015, (SEBI (LODR) Regulations, 2015) a Management Discussion and Analysis Report is given in Annexure ''B''.
CORPORATE GOVERNANCE
Pursuant to Regulation 34(3) of SEBI (LODR) Regulations, 2015, a report on Corporate Governance along with Auditors'' Certificate confirming 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 in Annexure ''E''.
BUSINESS RESPONSIBILITY REPORT (BRR)
Pursuant to Regulation 34(2)(f) of SEBI (LODR) Regulations, 2015, a Business Responsibility Report is given in Annexure ''F''.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
A report on CSR activities of the Company during 2016-17 is given in Annexure ''G''.
LICENCES & RECOGNITIONS
The Company''s Vishnupuram plant has been granted license by American Petroleum Institute (API), USA, to use the official API Monogram on manufactured products and in accordance with the provisions of the License Agreement, the API Monogram shall be used in conjunction with the Certificate Number: 10A-0138.
The Company''s Banswara plant has obtained the license for Environment Management Systems Certification (IS/ISO14001:2015) and Quality Management System Certification (IS/ISO 9001:2015) and Occupational Health Management System Certification IS18001:2007 valid for 3 years.
The Company''s Chilamkur plant has been honoured by the Andhra Pradesh State Government with Best Management Award for Congenial and Cordial Industrial Relations and putting in extraordinary efforts for the welfare of labour and CSR activities.
The company''s in-house magazine "Compass" earned Certificate of Merit in the in-house magazine competition held in Mumbai and continues to remain among the top 100 meritorious magazines.
OPERATIONS
The performance of the company for the year has been discussed in detail in the Management Discussions and Analysis section. The industry which has created capacity well ahead of demand reeled under pressure with practically nil growth during the year following a meagre growth in the previous year as per the information published by Department of Industrial Policy and Promotion (DIPP). The production during the year according to the report was 280 million tons against the capacity of over 375 million tons resulting in an average capacity utilization of around 75%. According to DIPP reports, while the industry had witnessed a growth of over 5% in the first half of the fiscal, overall for the year was a negative growth of 1.2% caused partially by demonetization exercise done in November 2016.
The industry in north, central and western regions clocked a capacity utilization of over 80% while the industry in south could operate only at around 60%. With this backdrop, the performance of the company can be considered to be satisfactory with a capacity utilization of around 70% for the year. As mentioned elsewhere, the current year figures of operations and financial performance includes that of the merged entities of Trinetra Cement Limited and Trishul Concrete Products Limited and hence they are not strictly comparable with that of previous year. The sales volume for the year under review including clinker was at 11.04 million tons and the total revenue for the year was at Rs.5794 crores. With the softening of the international price of coal and with higher usage of cost effective petcoke in the fuel mix and with improved clinker to cement ratio, the EBIDTA for the year net was Rs.877.54 crores. The interest charges were at Rs.360.46 crores while the depreciation was at Rs.257.06 crores resulting in profit before tax of Rs.260.02 crores. The tax expenses for the year was Rs.86.67 crores. The profit after tax was at Rs.173.35 crores. The other comprehensive income for the year was (Rs.5.47 crores) net and overall comprehensive income was Rs.167.88 crores for the year. Given the poor demand for cement and the negative growth in consumption, the performance can be considered to be satisfactory.
The shipping division continued to operate its ship mainly in coastal movement of cargo. The total earnings of the division during the year was at Rs.13.98 crores. With the construction sector taking a hit during the year and with negative growth in cement demand, the operations of the RMC division was also subdued with a sale of 2.56 lakh cu.m. of concrete during the year as against 2.54 lakh cu.m. achieved in the previous year. The total revenue generated was at Rs.101 crores as compared to Rs.102 crores achieved in the previous year.
EXPANSION / MODERNISATION
The Company has already obtained approvals from the environmental authorities for installing new energy efficient cement grinding facility at Sankarnagar replacing some of the old cement mills. The Company has also got approval from the authorities for enhancing capacity of Sankari and Dalavoi plants in Tamil Nadu. The Company has also initiated steps for obtaining necessary approval for enhancing the capacities of one of its plants in Andhra Pradesh and that of one of its grinding units.
CHENNAI SUPER KINGS CRICKET LIMITED (CSKCL)
The Company was informed that CSKCL had sought the permission of BCCI, for the distribution of its shares by India Cements Shareholders Trust to the non-promoter shareholders of India Cements and India Cements Ex-Cricketers Trust. The Company has also been informed that the approval of BCCI is awaited.
SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rules, the Audited Consolidated Financial Statement of the Company and of all the Subsidiary and Associate Companies is enclosed. A separate statement containing the salient features of the audited financial statement of all the Subsidiary and Associate Companies is also enclosed in Form AOC-1, (Annexure ''H'') as prescribed under the Companies Act, 2013 and the Rules made there under.
POLICY ON DETERMINATION OF MATERIAL SUBSIDIARIES
The India Cements Limited has, as on date, 9 subsidiaries controlled through shareholdings in such Companies none of which is material.
COROMANDEL ELECTRIC COMPANY LIMITED
The power generation from the Gas power plant despite being affected during the year due to shortfall in natural gas supply from GAIL (India) Limited the plant was able to generate 169 million KWH as against 163 million KWH in the previous financial year. The plant load factor was maintained at 75.18% against 72.08% achieved in corresponding previous year. During the year the Company had sold 46 million KWH of power to the cement plants of The India Cements Limited located in Tamil Nadu State while the balance power of 123 million KWH was sold to other group captive consumers. In March 2017 the Company has got additional allocation from Oil and Natural Gas Corporation Limited through E-Tendering basis to meet its shortage of natural gas and this will help in improving the capacity utilization of the plant further in the coming years. The net income from operations earned by the Company was at Rs.85.62 Crores (Rs.86.43 Crores) and the net profit after tax was at Rs.18.16 Crores against Rs.5.40 Crores in the previous year.
COROMANDEL TRAVELS LIMITED
The Company owns an aircraft and is engaged in the business of chartering aircrafts as a Non-scheduled operator. The Company has earned a total revenue of Rs.12.75 Crores and has chartered aircraft for 254 flying hours. The Company has broken even at EBIDTA Level.
PT COROMANDEL MINERALS RESOURCES, INDONESIA AND COROMANDEL MINERALS PTE LTD, SINGAPORE
Since the beginning of this year, the international prices of coal have started improving and as on date, the prices remain firm.
Consequent to this, the Company has recommenced mining activity during the current year. Going forward, the Company is expected to derive the benefits from its investments in the mines, with stable international price of coal.
INDIA CEMENTS INFRASTRUCTURES LIMITED
The Company has taken up for joint development a property in Coimbatore. Necessary approvals for the project have been obtained and the first phase of the work is in an advanced stage of completion. As for the remaining phase of this project, it is proposed to consider revising the plan to suit the current market situation and the regulatory changes to improve the marketability. Meanwhile to gainfully employ its workforce, the Company has offered their services to other companies.
ASSOCIATE COMPANIES COROMANDEL SUGARS LIMITED
During the year under review, in spite of severe drought conditions in Karnataka impacting the cane availability, cane yield and recovery, the company, could take advantage of the favorable market prices and hence posted an EBIDTA of Rs.34.3 crores (as against Rs.21.08 crores in FY16) and a profit of Rs.0.90 crores (as against a loss of Rs.0.29 lakhs in FY16)
While the crushing saw a steep reduction to 3.81 lakh Tns (7.47 lakh tns in FY16) with consequent reduction in sugar production to 3.39 lakh quintals (as against 7.09 lakh quintals in FY16), the Company achieved a sale of 4.47 lakh quintals (as against 8.33 lakh quintals) by drawing from the opening stock. This coupled with higher price realization of Rs.3374 as against Rs.2519 per quintal in FY16 had enabled the company to achieve better working results.
However, the Company could not take full advantage of the increased capacity in the newly installed 30MW Cogen Plant, which suffered due to lower cane crushing and it is expected that during the current year, the Company will be able to derive higher benefits from the 30MW Cogen plant. With the prediction of favorable monsoon, the Company expects improved performance in the current year.
INDIA CEMENTS CAPITAL LIMITED (ICCL)
The main focus of the Company continues to be on various fee-based activities such as, Full Fledged Money Changing [FFMC], Travel & Tours and Forex Advisory Services. The Company''s FFMC division continues to enjoy the status of Authorised Dealers, Category II. The wholly owned subsidiary viz. India Cements Investment Services Limited (ICISL) is in Stock Broking. The Gross income from operations of ICCL was Rs.445.85 lakhs and that of ICISL was Rs.154.04 lakhs for the year ended 31st March, 2017.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
In accordance with Section 134(5)(e) of the Companies Act, 2013 and Rule 8(5)(viii) of Companies (Accounts) Rules, 2014, the Company has an Internal Financial Control Policy and Procedures commensurate with the size and nature of operations and financial reporting. The Company has defined standard operating procedures covering all functional areas like sales, marketing, materials, fixed assets etc.
The Company has engaged the services of Chartered Accountant firms for carrying out internal audit of all its plants as well as marketing offices. The internal auditors have been given the specific responsibility to verify and report on compliance of standard operating procedures. The auditors have reported that there are adequate financial controls in place and are being followed by the Company. This has been further explained in the Management Discussion and Analysis Report.
RISK MANAGEMENT POLICY
Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has developed and implemented a Risk Management Policy. The Policy envisages identification of risk and procedures for assessment and mitigation thereof.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In accordance with Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015, the Company has established a Vigil Mechanism and has a Whistle Blower Policy. The Policy has been uploaded on the Company''s website www.indiacements.co.in.
India Cements has always been encouraging its employees to give constructive criticism and suggestions, which will better the overall prospects of the Company and its various stakeholders. India Cements will continue to adopt this as a corner stone of its Personnel Policy.
THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an anti-sexual harassment policy in line with the requirements of the captioned Act and Rules made there under. There was no complaint of harassment, reported during the year.
POLICY ON DEALING WITH RELATED PARTIES
All related party transactions that were entered into during the financial year were on arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions entered by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for its approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The policy on Related Party Transactions as approved by the Board has been uploaded on the Company''s website. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company other than remuneration in the case of whole time directors or sitting fee in the case of others.
TRANSACTIONS WITH RELATED PARTIES
Particulars of contracts or arrangements with related parties in Form AOC-2 along with justification are given in Annexure ''J''.
LOANS / INVESTMENT / GUARANTEES ETC UNDER SECTION 186 OF THE COMPANIES ACT, 2013
Details of loans, investments and guarantees covered under Section 186 of the Companies Act, 2013 are given in Note No.40.13 on accounts for the financial year 2016-17.
ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS
There has been no order passed by any Regulatory authority or Court or Tribunal impacting the going concern status and future operations of the Company.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments affecting the financial position of the Company which have occurred between 1st April 2017 and the date of this report other than those disclosed in the financial statements.
ANNUAL RETURN
Extract of the Annual Return in Form No. MGT-9 is attached with this Report as Annexure ''K''.
PUBLIC DEPOSITS
Your Company has not been accepting deposits from public and shareholders since 16th September 2013. Deposits totalling Rs.11.59 lakhs have not so far been claimed by the depositors.
CONSERVATION OF ENERGY, ETC.
Necessary particulars regarding conservation of energy etc. as per provisions of Section 134 of the Companies Act, 2013 are set out in Annexure A.
RESEARCH & DEVELOPMENT
During the year your Company spent Rs.159.34 Lakhs towards revenue expenditure on the R&D department besides a contribution of Rs.19.06 lakhs to National Council for Cement and Building Materials (NCCBM) which carries out research on behalf of cement industry as a whole.
DIRECTORS
Sri R.K.Das and Sri PL. Subramanian resigned as Director with effect from 24th June 2016 and 17th June 2016 respectively. The Board expresses its appreciation of the valuable contribution made by them during their tenure of office.
Under Article 109 of the Articles of Association of the Company, Smt. Chitra Srinivasan retires by rotation at the ensuing Annual General Meeting of the Company and she is eligible for re-appointment.
Sri M.R.Kumar was appointed as a Nominee Director by Life Insurance Corporation of India in the place of Sri Basavaraju and he will hold the office upto the date of the ensuing Annual General Meeting and the resolution for his election as director liable to retire by rotation is included under Special Business in the Notice convening the 71st Annual General Meeting of the Company.
Sri K.Balakrishnan and Sri V.Ranganathan were appointed as Independent Directors by the Board of Directors at their meeting held on 29.08.2016 and the resolutions for their election as Independent Directors for a term of three years from 29.08.2016 to 28.08.2019 are included under Special Business in the Notice convening the 71st Annual General meeting of the Company.
Brief particulars of Directors eligible for appointment / re-appointment are annexed to the Notice convening the 71st Annual General Meeting of the Company.
Sri N.Srinivasan, Vice Chairman & Managing Director and Smt. Rupa Gurunath, Wholetime Director of the Company are related to Smt.Chitra Srinivasan and are also related to each other. No other director is related to them or each other.
The details of shares and convertible instruments held by non-executive directors are given in Annexure ''C''.
INDEPENDENT DIRECTORS
A declaration given by independent directors under Section 149(7) of the Companies Act, 2013 that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013, has been received by the Company. The details of familiarization programme for independent directors can be had from the Company''s website www.indiacements.co.in.
FAMILIARIZATION PROCESS
Senior management personnel of the Company, on a structured basis, interact with directors from time to time to enable them to understand the Company''s strategy, business model, operations, service and product offerings, markets, organization structure, finance, human resources, technology and risk management and such other areas. The directors also are facilitated to visit Company''s plants to familiarize themselves with factory operations.
DIRECTORS'' RESPONSIBILITY STATEMENT
Your Directors make the following statement in terms of Section 134(5) of the Companies Act, 2013.
"We confirm
1. That in the preparation of the annual accounts for the year ended 31st March, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures.
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, 2017 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, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
4. That the annual accounts for the year ended 31st March, 2017 have been prepared on a going concern basis.
5. That internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively.
6. That proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems are adequate and operating effectively."
REMUNERATION
As prescribed under Section 197(12) of the Companies Act, 2013 ("Act") and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the details are given in Annexure I. In terms of provisions of Section 197(12) of the Companies Act, 2013 and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing names of the employees and other particulars, drawing remuneration in terms of the said Rules forms part of this report. However, in terms of first proviso to Section 136(1) of the Act, the Annual Report, excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member who is interested in obtaining these particulars may write to the Company Secretary of the Company.
BOARD MEETINGS
During the year, five Board Meetings were held. The details of the meetings of the Board and its Committees are given in the Corporate Governance Report (Annexure ''C'').
EVALUATION OF BOARD / BOARD COMMITTEES
Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board has carried out annual performance evaluation of its own performance, the directors individually as well as evaluation of the working of its Committees.
REMUNERATION POLICY
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a Policy for selection and appointment of Directors, Key Managerial Personnel (KMP) and other employees and their remuneration for implementation.
Broadly, the performance of the employee concerned and the performance of the Company are the fundamental parameters determining the remuneration payable to an employee. More specifically, there will be reciprocity in the matter of remunerating executive directors, KMPs and other employees.
At the middle and lower levels of management, the yardsticks of assessment are different. The ability to speedily execute policy decisions, sincerity and devotion and discipline are the main attributes expected.
KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel of the Company for the purpose of Companies Act, 2013 are Sri N.Srinivasan, Vice Chairman & Managing Director (Chief Executive Officer), Smt. Rupa Gurunath, Wholetime Director, Sri R.Srinivasan, Executive President (Finance & Accounts) (Chief Financial Officer) and Sri S.Sridharan, Company Secretary.
PERSONNEL
Industrial relations continued to remain cordial during the year.
AUDITORS
As per the provisions of Section 139 of the Companies Act, 2013, the term of office of M/s. Brahmayya & Co., and M/s. PS.Subramania Iyer & Co., Chennai, as Statutory Auditors of the Company, will conclude from the close of the 71st Annual General Meeting of the Company. The Board of Directors places on record its appreciation for the valuable services rendered by M/s. Brahmayya & Co., and M/s. PS.Subramania Iyer & Co., Chennai, as Statutory Auditors of the Company since its inception. Based on the recommendations of the Audit Committee, it is proposed to appoint M/s. K.S.Rao & Co., Chartered Accountants and M/s. S.Viswanathan, LLP, Chartered Accountants as Statutory Auditors of the Company to hold office for a term of five years from the conclusion of the 71st Annual General Meeting until the conclusion of the 76th Annual General Meeting, subject to the approval of shareholders.
INTERNAL AUDITORS
M/s. Capri, Gopalaiyer & Subramanian, Kalyanasundaram & Associates and Bala & Co., Chennai, have been appointed as Internal Auditors for the year 2017-18.
COST AUDITOR
Sri S.A.Murali Prasad, Cost Accountant, Chennai, has been appointed as Cost Auditor for the year 2017-18 at a remuneration of Rs. 17 lakhs. The remuneration is subject to ratification of members and hence is included in the Notice convening the 71st Annual General Meeting of the Company.
SECRETARIAL AUDITOR
Smt. PR.Sudha, Practising Company Secretary, has been appointed as Secretarial Auditor of the Company for the year 2017-18.
Secretarial Auditor''s Report in Form MR-3, as prescribed under Section 204(1) of the Companies Act, 2013 read with Rule-9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure ''L''. The Secretarial Audit Report does not contain any qualification, reservation or other remarks.
ACKNOWLEDGMENT
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
N.SRINIVASAN RUPA GURUNATH N.SRINIVASAN
Vice Chairman & Managing Director Wholetime Director Director
Place: Chennai
Date : 28th July, 2017
Mar 31, 2016
The Directors have pleasure in presenting their Seventieth Annual Report together with audited accounts for the year ended 31st March 2016.
Rs. in Crore
For the year ended 31st March
2016 2015
FINANCIAL RESULTS
Profit before Interest, Depreciation &
Exceptional Items 791.88 713.35
Less: Finance costs 370.35 425.99
Less: Depreciation / Amortization 218.02 257.91
Less: Exceptional Items 3.20 0.00
Profit Before Tax 200.31 29.45
Current Tax 60.37 6.40
MAT credit entitlement (27.11) (6.40)
Deferred Tax 29.24 0.00
Profit After Tax 137.81 29.45
Add : Surplus brought forward from
last year 826.95 1030.17
Less : Proposed dividend on
Equity Capital (including Dividend
Distribution Tax) 36.97 0.00
Less : Transfer to General Reserve 40.00 0.00
Less : Transfer to Depreciation Account 0.00 232.67
Surplus carried forward 887.79 826.95
DIVIDEND
The Board of Directors has recommended a dividend of Re.1/- per Equity Share of Rs.10/- each on 30,71,77,340 Equity Shares of Rs.10/- each
for the year ended 31st March, 2016 and proportionate dividend on 1317 Equity Shares having calls in arrears.
TRANSFER TO RESERVES
The Company proposes to transfer Rs.40 Crores to the General Reserve and to retain Rs.887.79 crores as surplus in the Profit and
Loss Account.
MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Regulation 34(2) of Securities and Exchange Board of India [Listing Obligations and Disclosure Requirements] Regulations, 2015,
[SEBI (LODR) Regulations, 2015] a Management Discussion and Analysis Report is given as addition to this report.
CORPORATE GOVERNANCE
Pursuant to Regulation 34(3) of SEBI (LODR) Regulations 2015, a report on Corporate Governance along with Auditors'' Certificate confirming
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 in
Annexure ''E''.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
A report on CSR activities of the Company during 2015-16 is given in Annexure ''F''.
LICENCES & RECOGNITIONS
The Company''s Malkapur plant has been granted license for Occupational Health and Safety Management System Certification in accordance
with IS 18001:2007. The Company''s Malkapur and Yerraguntla plants have been granted Environmental Management System Certification
ISO 14001:2004. The Company''s Chennai Grinding Unit and Chilamkur plant have been granted ISO 9001:2008 certification for Quality
Management Systems. The Company''s Dalavoi plant won the 3rd prize for the best safety practices among industries from the Directorate of
Industrial Safety and Health, Tamil Nadu.
OPERATIONS
The Company''s performance has been discussed in detail in the Management Discussion and Analysis section. The cement industry had to
operate in a surplus situation throughout the year with a meagre growth of around 5% only during the year as per the information published by
the Department of Industrial Policy and Promotion (DIPP). The South in particular had to operate under a nil growth scenario with a negative
growth in production of around 5% in Tamil Nadu during the year under review. Considering the fact that the entire southern Indian cement
industry operated at sub 60% of its capacity, the performance of the Company can be considered to be satisfactory with capacity utilization of
around 60% during the year. The sales volume including clinker was at 86.78 lakh tons as compared to 91.10 lakh tons in the previous year.
With fairly consistent selling prices of cement during the year, the total sales and other income was at Rs.4,249 crores as compared to
Rs.4,454 crores in the previous year, a drop of nearly 5%. The operating parameters of power and fuel consumption were kept under control
despite the lower capacity utilization. This together with the improvement in blending efficiency alongwith reduction in the fuel prices resulted in a higher EBIDTA of Rs.791.88 crores an improvement of 11% over that of previous year of Rs.713.35 crores. The interest charges were lower at Rs.370.35 crores as compared to Rs.425.99 crores while depreciation was at Rs.218.02 crores as compared to Rs.257.91 crores in the previous year. The consequent profit before exceptional items and tax was at Rs.203.51 crores compared to Rs.29.45 crores in the previous
year. The performance can be considered to be satisfactory considering the weak growth in cement demand.
EXPANSION / MODERNISATION
As already informed, necessary approvals are in place from the environmental authorities for installing new energy efficient cement grinding facility at Sankarnagar replacing some of the old cement mills. The Company has also got approval from the authorities for enhancing the
capacity of its Sankari plant and its Dalavoi plant in Tamil Nadu.
SHIPPING DIVISION
The Shipping Division continued to operate 2 vessels during the year and performed 45 voyages mainly in Coastal Trade and tramping.
The total earnings of the Division were at Rs.40.71 crores, a drop of 13% when compared to Rs.46.97 crores in the previous year due to
reduction in the overall shipping freight rates.
CHENNAI SUPER KINGS CRICKET LIMITED (CSKCL)
The Company was informed that CSKCL had sought the permission of BCCI, for the distribution of its shares by India Cements Shareholders
Trust to the non-promoter shareholders of India Cements and India Cements Ex-cricketers Trust, on September 30, 2015. The Company has
also been informed that the approval of BCCI is awaited.
SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rules, the Audited Consolidated Financial Statement of the Company and of
all the subsidiary and Associate Companies is enclosed. A separate statement containing the salient features of the audited financial statement of all the subsidiary and Associate Companies is also enclosed in Form AOC-1, (Annexure ''G'') as prescribed under the Companies Act, 2013
and the Rules made thereunder.
POLICY ON DETERMINATION OF MATERIAL SUBSIDIARIES
The India Cements Limited (India Cements) has, as on date, 10 subsidiaries controlled through shareholdings in such Companies.
India Cements has one listed subsidiary namely Trinetra Cement Limited (TCL). Four Independent Directors of India Cements are also on the
Board of TCL. It is the policy of India Cements that TCL is managed through Board of Directors consisting of non-executive directors. A Scheme of amalgamation of TCL along with Trishul Concrete Products Limited with India Cements has been filed in the Hon''ble Madras High Court for approval. The Appointed Date is 1st January, 2014. The statutory records and books of accounts of TCL are overseen from time to time by the concerned departments of India Cements.
TRINETRA CEMENT LIMITED
As mentioned elsewhere, the Northern markets had a reasonable growth of around 8% of cement production during the year under review.
The only plant which is situated in the Northern India achieved significant strides in its operations clocking the highest clinker and cement production since inception, during the year under review. The clinker production was at 9.78 lakh tons as compared to 8.68 lakh tons in the previous year while the cement grinding was at 13.46 lakh tons (12.10 lakh tons) registering a capacity utilization of 90%. The operating
parameters further improved during the year under review and the unit turned out a much improved bottom line with a net profit of
Rs.9.32 crores as compared to a loss of Rs.24.18 crores in the previous year.
TRISHUL CONCRETE PRODUCTS LIMITED
The meagre demand growth for cement also had its impact on the sale of ready mix concrete with the unit achieving only 2.54 lakh cubic meters
of sale of concrete as compared to 3.04 lakh cubic meters achieved in the earlier year. The total revenue was at Rs.103 crores against
Rs.121 crores in the previous year. While the selling prices were maintained as that of previous year, the lower volume resulted in a profit before tax of Rs.67 lakhs only during the year as compared to a profit before tax of Rs.3.88 crores in the previous year.
MERGER OF TWO SUBSIDIARIES WITH THE COMPANY
The shareholders and creditors of the Company and of Trinetra Cement Limited (TCL) and Trishul Concrete Products Limited (TCPL) have
approved a Scheme of Amalgamation and Arrangement between TCL and TCPL with the Company. Petitions have been filed in the Honorable
High Court of Judicature at Madras under Sections 391 to 394 of the Companies Act, 1956 for getting the sanction of the Honorable High Court.
COROMANDEL ELECTRIC COMPANY LIMITED
The power generation from the gas power plant was continued to be affected due to restrictions imposed on the evacuation of power by
State Load Despatch Centre of Tamil Nadu Transmission Corporation Limited during the year and hence the plant was able to generate only
163 million KWH as against 187 million KWH in the previous financial year. The company had sold 49 million KWH of power to the cement plants
of The India Cements Limited located in Tamil Nadu State while the balance power of 114 million KWH was sold to other group captive consumers, third party consumers and also to Tamil Nadu Generation and Distribution Corporation Limited on short term tender basis. The net income from operations earned by the Company was at Rs.86.43 crores (Rs.85.44 crores) and the net profit after tax was at Rs.5.18 crores against Rs.6.80 crores in the previous year. As per the existing practice, equity dividend was maintained at 9% while the dividend for the participating preference share capital was at the respective coupon rate. The Company also redeemed the 5th and final installment of redeemable cumulative participating preference shares on the due date and with this, the Company has redeemed the entire paid up preference share capital.
INDIA CEMENTS INFRASTRUCTURES LIMITED
The Company has taken up for joint development a property in Coimbatore. Necessary approvals for the project have been obtained and the
work has already commenced. During the current year, depending on the market, the Company is expected to take up additional projects.
The financials are given in Annexure - G.
PT. COROMANDEL MINERALS RESOURCES, INDONESIA AND COROMANDEL MINERALS PTE LIMITED, SINGAPORE
The international prices of coal continued to be soft and in view of this, it was felt prudent to conserve the reserves of our mines. The Company is taking steps to secure the mines fully to derive the benefits by the time international price of coal begins to harden. The financials are given in Annexure - G.
ASSOCIATE COMPANIES
COROMANDEL SUGARS LIMITED
During the year the crushing was marginally lower than last year at 7.47 lakh tonnes (7.61 lakh tonnes) and the recovery was also lower at
9.49% as against 9.69% in the previous year. Consequent to this, sugar production was lower at 70,888 tonnes as against 73,767 tonnes in the
previous year. However the company sold higher quantum of sugar drawing from stock which was at 83,330 tonnes as against 81,414 tonnes
in the previous year. During the year, sugar prices crashed well below the cane prices affecting the performance of the industry. Coromandel
Sugars Limited has earned an EBIDTA of Rs.21.08 crores as against Rs.22.41 crores in the previous year. There was a marginal loss of
Rs.0.33 crores as compared to a profit of Rs.0.32 crores made in the previous year. The sugar prices have recovered smartly in the latter part
of the year and is currently hovering around Rs.3375 per quintal as against Rs.1950 it touched during the year. The Company is expected to
derive the benefit of the 30 MW Cogeneration project from current year.
INDIA CEMENTS CAPITAL LIMITED (ICCL)
The main focus of the Company continues to be on various fee-based activities such as, Full Fledged Money Changing [FFMC], Travel & Tours
and Forex Advisory Services. The Company''s FFMC division continues to enjoy the status of Authorised Dealers, Category II. The wholly
owned subsidiary viz. India Cements Investment Services Limited (ICISL) is into Stock Broking. The Gross income from operations of ICCL
was Rs.402.72 lakhs and that of ICISL was Rs.158.85 lakhs for the year ended 31st March, 2016.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
In accordance with Section 134(5)(e) of the Companies Act, 2013 and Rule 8(5)(viii) of Companies (Accounts) Rules, 2014, the Company has
an Internal Financial Control Policy and Procedures commensurate with the size and nature of operations and financial reporting.
The Company has defined standard operating procedures covering all functional areas like sales, marketing, materials, fixed assets etc.
The Company has engaged the services of Chartered Accountant firms for carrying out internal audit of all its plants as well as marketing
offices. The internal auditors have been given the specific responsibility to verify and report on compliance of standard operating procedures.
The auditors have reported that there are adequate financial controls in place and are being followed by the Company. This has been further
explained in the Management Discussion and Analysis Report.
RISK MANAGEMENT POLICY
Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations 2015, the Company has developed
and implemented a Risk Management Policy. The Policy envisages identification of risk and procedures for assessment and mitigation thereof.
MARKET CAPITALISATION OF THE COMPANY
The details are given in Annexure H.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In accordance with Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations 2015, the Company
has established a Vigil Mechanism and has a Whistle Blower Policy. The policy has been uploaded on the Company''s website
www.indiacements.co.in.
India Cements has always been encouraging its employees to give constructive criticism and suggestions, which will better the overall prospects
of the Company and its various stakeholders. India Cements will continue to adopt this as a corner stone of its Personnel Policy.
THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an anti-sexual harassment policy in line with the requirements of the captioned Act and Rules made thereunder.
There was no complaint of harassment, reported during the year.
POLICY ON DEALING WITH RELATED PARTIES
All related party transactions that were entered into during the financial year were on arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions entered by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The policy on Related Party Transactions as approved by the Board has been uploaded on the Company''s website. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company other than remuneration in the case of whole time directors or sitting fee in the case of others.
TRANSACTIONS WITH RELATED PARTIES
Particulars of contracts or arrangements with related parties in Form AOC-2 along with justification are given in Annexure I.
LOANS / INVESTMENTS / GUARANTEES ETC UNDER SECTION 186 OF THE COMPANIES ACT, 2013
Details of loans, investments and guarantees covered under Section 186 of the Companies Act, 2013 are given in Notes No.33.4 and
33.18(B to D) on accounts for the financial year 2015-16.
ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS
There has been no order passed by any Regulatory authority or Court or Tribunal impacting the going concern status and future operations of
the Company.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments affecting the financial position of the Company which have occurred between
1st April 2016 and the date of this report other than those disclosed in the financial statements.
ANNUAL RETURN
Extract of the Annual Return in Form No. MGT-9 is attached with this Report as Annexure - J.
PUBLIC DEPOSITS
Your Company has not been accepting deposits from public and shareholders since 16th September 2013. Deposits totalling Rs.15 lakhs have
not so far been claimed by the depositors.
CONSERVATION OF ENERGY, ETC.
Necessary particulars regarding conservation of energy etc. as per provisions of Section 134 of the Companies Act, 2013 are set out in
Annexure A.
RESEARCH & DEVELOPMENT
During the year your Company spent Rs.159.40 Lakhs towards revenue expenditure on the R&D department besides a contribution of Rs.61.47 lakhs to National Council for Cement and Building Materials (NCCBM) which carries out research on behalf of cement industry as a whole.
DIRECTORS
Under Article 109 of the Articles of Association of the Company, Smt. Chitra Srinivasan retires by rotation at the ensuing Annual General
Meeting of the Company and she is eligible for reappointment.
Sri Rabinarayan Panda was appointed as a nominee Director by IDBI Bank Limited with effect from 29.12.2015 in the place of Sri Nagaraj Garla
and he will hold the office upto the date of the ensuing Annual General Meeting and the resolution for his election as director liable to retire by rotation is included under Special Business in the Notice convening the 70th Annual General Meeting of the Company.
Sri M.R.Kumar was appointed as a nominee Director of Life Insurance Corporation of India (LIC) with effect from 26th May, 2016 in the casual
vacancy caused by the withdrawal of nomination of Sri Basavaraju by LIC.
The Board expresses its appreciation of the valuable contributions made by Sri Nagaraj Garla and Sri Basavaraju during their tenure as
directors.
Sri S.Balasubramanian Adityan was appointed as an additional Director by the Board of Directors at their meeting held on 07.12.2015 and he
will hold the office upto the date of the ensuing Annual General Meeting and the resolution for his election as an Independent Director for a term
of 5 consecutive years from 7.12.2015 to 6.12.2020 is included under Special Business in the Notice convening the 70th Annual General
Meeting of the Company.
Under Section 149 of the Companies Act, 2013, Sri Arun Datta, Sri R.K.Das, Sri N.R.Krishnan, Sri V.Manickam and Sri N.Srinivasan (F&R)
were appointed as Independent Directors of the Company for a term of two consecutive years with effect from 26th December, 2014 to
25th December, 2016 or the date of 70th Annual General Meeting of the Company whichever is earlier. The Company proposes to reappoint
Sri Arun Datta, Sri N.R.Krishnan, Sri V.Manickam and Sri N.Srinivasan (F&R) as Independent Directors of the Company to hold office for a
second term of 2 consecutive years from 29th August, 2016 to 28th August 2018 and special resolutions for their reappointments as Independent
Directors of the Company are included in the Notice convening the 70th Annual General Meeting of the Company.
The Board has appointed Sri N.Srinivasan, as Managing Director for a fresh term of five years with effect from 26th May 2016 in terms of
Section 196 of the Companies Act, 2013 read with Schedule V of the said Act. Necessary Special Resolutions seeking the approval of the
Shareholders for his appointment as Managing Director alongwith Explanatory Statement justifying the appointment are included in the Notice convening the 70th Annual General Meeting of the Company.
Brief particulars of Directors eligible for appointment / reappointment are annexed to the Notice convening the 70th Annual General Meeting.
Smt. Chitra Srinivasan and Smt. Rupa Gurunath are related to Sri N.Srinivasan, Vice Chairman & Managing Director of the Company and are
also related to each other. No other director is related to them or each other.
The details of shares and convertible instruments held by non-executive directors are given in Annexure ''C''.
INDEPENDENT DIRECTORS
A statement on declaration given by Independent Directors under Section 149(7) of the Companies Act, 2013 that they meet the criteria of
independence as provided under Section 149(6) of the Companies Act, 2013, has been received by the Company. The Company has started
sponsoring Independent Directors for training programmes in a phased manner. The details of familiarization programme for independent
directors have been uploaded in the Company''s website www.indiacements.co.in.
FAMILIARIZATION PROCESS
Senior management personnel of the Company, on a structured basis, interact with directors from time to time to enable them to understand
the Company''s strategy, business model, operations, service and product offerings, markets, organization structure, finance, human resources,
technology and risk management and such other areas. The directors also are facilitated to visit Company''s plants to familiarize themselves
with factory operations.
DIRECTORS'' RESPONSIBILITY STATEMENT
Your Directors make the following statement in terms of Section 134(5) of the Companies Act, 2013.
"We confirm:
1. That in the preparation of the annual accounts for the year ended 31st March, 2016, the applicable accounting standards have been
followed along with proper explanation relating to material departures.
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, 2016 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, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
4. That the annual accounts for the year ended 31st March, 2016 have been prepared on a going concern basis.
5. That internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate
and are operating effectively.
6. That proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems are
adequate and operating effectively."
REMUNERATION
As prescribed under Section 197(12) of the Companies Act, 2013 ("Act") and Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, the details are given in Annexure H. In terms of provisions of Section 197(12) of the Companies Act, 2013
and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing names of the
employees and other particulars, drawing remuneration in excess of the limits, as prescribed in the said Rules forms part of this report.
However, in terms of first proviso to Section 136(1) of the Act, the Annual Report, excluding the aforesaid information is being sent to the
members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and
any member who is interested in obtaining these particulars may write to the Company Secretary of the Company.
BOARD MEETINGS
During the year, seven Board Meetings were held. The details of the meetings of the Board and its Committees are given in the Corporate
Governance Report (Annexure ''C'').
EVALUATION OF BOARD / BOARD COMMITTEES
Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board has carried out annual performance
evaluation of its own performance, the directors individually as well as evaluation of the working of its Committees.
REMUNERATION POLICY
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a Policy for selection and appointment of
Directors, Key Managerial Personnel (KMP) and other employees and their remuneration for implementation.
Broadly, the performance of the employee concerned and the performance of the Company are the fundamental parameters determining the
remuneration payable to an employee. More specifically, there will be reciprocity in the matter of remunerating executive directors, KMPs and
other employees.
At the middle and lower levels of management, the yardsticks of assessment are different. The ability to speedily execute policy decisions, sincerity and devotion and discipline are the main attributes expected.
KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel of the Company for the purpose of Companies Act, 2013 are Sri N.Srinivasan, Vice Chairman & Managing
Director (Chief Executive Officer), Smt. Rupa Gurunath, Wholetime Director, Sri G.Balakrishnan, Senior President & Company Secretary
(till 31.03.2016) and Sri R.Srinivasan, President (Finance & Accounts) (Chief Financial Officer).
Consequent to the attainment of superannuation by Sri G.Balakrishnan on 31.03.2016, Sri S.Sridharan has been appointed as Company
Secretary with effect from 01.04.2016.
PERSONNEL
Industrial relations continued to remain cordial during the year.
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, 2007.
AUDITORS
The Shareholders of the Company at the 68th Annual General Meeting held on 26th December, 2014, appointed Messrs. Brahmayya & Co., and
PS.Subramania Iyer & Co., Chennai, the Auditors of the Company, to hold office for a period of 3 years from the conclusion of the 68th Annual
General Meeting until the conclusion of the 71st Annual General Meeting. Their appointment is subject to ratification by members every year at the
Annual General Meeting and hence is included in the Notice convening the 70th Annual General Meeting of the Company.
INTERNAL AUDITORS
Messrs Capri, Gopalaiyer & Subramanian, Kalyanasundaram & Associates and Bala & Co., Chennai, have been appointed as Internal Auditors
for the year 2016-17.
COST AUDITOR
Sri S.A.Murali Prasad, Cost Accountant, Chennai has been appointed as Cost Auditor for the year 2016-17 at a remuneration of Rs.15 lakhs.
The remuneration is subject to ratification of members and hence is included in the Notice convening the 70th Annual General Meeting of the
Company.
SECRETARIAL AUDITOR
Smt. PR.Sudha, Practising Company Secretary, Chennai, has been appointed as Secretarial Auditor of the Company for the year 2016-17.
Secretarial Auditor''s Report in Form MR-3, as prescribed under Section 204(1) of the Companies Act, 2013 read with Rule 9 of the Companies
(Appointment and Remuneration of Management Personnel) Rules, 2014 is enclosed as Annexure K. The Secretarial Audit Report does not
contain any qualification, reservation or other remarks.
ACKNOWLEDGEMENT
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
N.SRINIVASAN RUPA GURUNATH CHITRA SRINIVASAN ARUN DATTA
Vice Chairman
& Wholetime
Director R.K DAS N R
KRISHNAN
Managing
Director V, MANICKAM RABINARAYAN
PANDA
N. SRINIVASAN PL. SUBRA
MANIAN
S.BALASUBRAMANIAN
ADITYAN
Place : Chennai
Date :26th May, 2016 Directore
Mar 31, 2015
The company
Mar 31, 2014
Dear Members,
The Directors have pleasure in presenting their Sixtyeighth Annual
Report together with audited accounts for the year ended 31st March
2014.
FINANCIAL RESULTS
Rs. in Crore
For the year ended 31st March 2014
2013
Profit / (Loss) before
Interest, Depreciation 594.20 841.95
& Exceptional Items
Less : Finance costs 353.65 307.75
Less : Depreciation / 276.39 281.84
Amortization
Less : Exceptional items 126.56 -
Profit / (Loss) Before Tax (162.40) 252.36
Current Tax 0.00 83.64
Deferred Tax 0.00 5.17
Profit / (Loss) after Tax (162.40) 163.55
Add : Surplus brought forward 1192.57 1088.47
from last year
Less : Proposed dividend on 0.00 71.87
Equity Capital (including
Dividend Distribution Tax)
Less : Transfer to General Reserve 0.00 40.00
Less : Transfer to / (from) Debenture
Redemption Reserve 0.00 (52.42)
Surplus carried forward 1030.17 1192.57
DIVIDEND
In view of the net loss for the year ending 31st March, 2014, the Board
of Directors has not declared any dividend for the year.
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, 2007.
DIRECTORSÂ 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, 2014, 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, 2014 and of the loss 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 irregularities.
4. That the annual accounts for the year ended 31st March, 2014 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. CORPORATE
GOVERNANCE
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
''E''.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
A Corporate Social Responsibility (CSR) Committee was constituted by
the Board of Directors at the meeting held on 10th February, 2014. The
CSR Committee has since approved the Company''s CSR Policy and the CSR
Budget for 2014-15.
A report on CSR activities of the Company during 2013-14 is given in
Annexure ''F''.
LICENCES & RECOGNITIONS
The Company''s Dalavoi cement factory was granted Licence For The
Environmental Management Systems Certification in accordance with IS /
ISO 14001:2004 by the Bureau of Indian Standards, Chennai.
The Company''s Sankari cement factory was granted Licence For The
Environmental Management Systems Certification in accordance with IS /
ISO 14001:2004 and The Occupational Health & Safety Management Systems
Certification in accordance with IS 18001:2007 by the Bureau of Indian
Standards, Chennai.
The Company''s Malkapur cement factory has been recommended for granting
Licence For the Quality Management Systems Certification in accordance
with IS / ISO 9001:2008 by the Bureau of Indian Standards, Chennai.
The Company''s in-house magazine "Compass" was awarded a Certificate of
Merit in an In-house House Magazine Contest in 2014.
Chennai Super Kings, the cricket team of the Chennai cricket franchise
owned by your Company has won the Trophy at the recently concluded
Champions League T20 Tournament 2014.
OPERATIONS
COMPANY PERFORMANCE
The Company''s performance has been discussed in detail in the
"Management Discussion and Analysis" section.
With a poor GDP growth of sub 5% on an all India basis and with
industrial activity taking a beating, the performance of the core
industries was severely affected during the period under review with
cement being no exception.
According to the information published by Department of Industrial
Policy and Promotion (DIPP), the industry had registered practically
flat growth during the year under review against an estimated growth of
5% in the previous year. Given such a back drop, the performance of the
Company can be considered to be satisfactory as it could maintain the
overall sales at 100.37 lakh tons including clinker as compared to
100.55 lakh tons in the previous year. The total sales and other income
for the year was at Rs.4529.84 crores as compared to Rs.4615.67 crores
in the previous year. With huge supply overhang particularly in the
South, the selling price of cement went down substantially from the
second quarter resulting in a top line erosion which reflected on the
bottom line. The cost of production was impacted with increase in the
price of Gypsum, Fuel, depreciation of rupee, higher transport charges
resulting in a lower EBIDTA of Rs.594.20 crores as compared to
Rs.841.95 crores in the previous year. Finance cost including forex
loss was higher at Rs.353.65 crores (Rs.307.75 crores) while
depreciation charges were lower at Rs.276.39 crores as compared to
Rs.281.84 crores in the previous year. There were also exceptional
items relating to provision for Fuel Surchage Adjustment claims of
Andhra Pradesh DISCOMS and right of recompense to lenders together
amounting for Rs.126.56 crores and resultant loss was at Rs.162.40
crores for the year as compared to a profit before tax of Rs.252.36
crores in the previous year. The year also witnessed the annual bout of
cost increases in wages due to settlement and cost of living index,
monthly dosage of increase in the prices of petroleum products, impact
of power tariff increase by electricity boards of Tamil Nadu and Andhra
Pradesh during the year and huge depreciation of rupee against dollar.
However, the impact was mitigated to certain extent with the fuller
availability of power from power plant in Tamil Nadu and the
commissioning of the power plant in Andhra Pradesh.
SHIPPING
During the year the performance of the division can be considered to be
satisfactory with deployment of the three vessels which had done 54
voyages in total in the coastal trade and tramping. The total earnings
of the division for the year was at Rs.67.72 crores as compared to
Rs.58.57 crores in the previous year. In March 2014, the vessel "MV
Chennai Perrumai" was sold tor a consideration of approximately $ 2.486
Million for scraping since it had served its economic life.
MERGER OF 2 SUBSIDIARIES WITH THE COMPANY
Application has been filed in the High Court of Judicature at Madras
under Sections 391 to 394 of the Companies Act, 1956 for completing the
procedural requirements for the proposed Scheme of Amalgamation and
Arrangement between Trinetra Cement Limited and Trishul Concrete
Products Limited with this Company.
CHENNAI SUPER KINGS CRICKET LIMITED
The Board of Directors of the Company at the meeting held on 26th
September, 2014 approved the proposal to demerge Chennai Super Kings
(CSK) - BCCI-IPL Franchise 20/20 Cricket Tournament Team of your
Company into a wholly-owned subsidiary of the Company, by transferring
its net assets at cost. The effective date of transfer will be 1st
January, 2015. Accordingly, a new wholly-owned subsidiary, by name
Chennai Super Kings Cricket Limited, is in the process of getting
incorporated.
SUBSIDIARIES
Pursuant to General Circular No.2/2011 No.51/12/2007-CL-NI 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 its third year of operation, the unit has achieved a clinker
production of 8.82 lakh tons (8.92 lakh tons) while the grinding was up
by 7% at 12.19 lakh tons as compared to 11.38 lakh tons. The sale of
cement was also accordingly higher at 12.12 lakh tons (11.28 lakh
tons). Significant improvements were achieved in the operating
parameters with a reduction in power consumption and heat consumption
due to stabilized operation of the plant during the year under review.
TRISHUL CONCRETE PRODUCTS LIMITED
During the year, the Company achieved a volume of 3.38 Lakh cu.m. of
Readymix Concrete as compared to 3.48 Lakh cu.m. in the previous year.
While the turnover of the Company was maintained at Rs.120 crores
against Rs.121 crores in the previous year, there was a marginal
improvement in profit before tax which was at Rs.84 lakhs as compared
to Rs.25 lakhs in the previous year.
COROMANDEL ELECTRIC COMPANY LIMITED
With improvement in the availability of natural gas, the plant was able
to generate net units of 204 Million KWH as against 193 Million KWH in
the previous year. The company had wheeled 49 Million KWH of power to
the cement plants of India Cements Limited in Tamil Nadu and the
balance power of 155 Million units was sold to other group captive and
third party consumers through the "Intra State Open Access". The total
revenue earned by the Company stood at Rs.120.26 crores (Rs.93.01
crores) and the net profit after tax was at Rs.13.72 crores (Rs.17.80
crores) in the previous year. As per
the policy, the dividend pattern was maintained at 9% for equity shares
and at the respective coupon rates of dividend for the participating /
non-participating preference share capital. During the year under
review, the company had redeemed the Third / Fourth instalments of
redeemable cumulative participating/non-participating preference shares
on their respective due dates.
INDIA CEMENTS INFRASTRUCTURES LIMITED
The company during the year under review commenced operations by
acquiring land for development. During the current year the company is
expected to develop this project and will also take up other projects.
PT. COROMANDEL MINERALS RESOURCES, INDONESIA AND COROMANDEL MINERALS
PTE LIMITED, SINGAPORE
The company has already arranged tor the first shipment of coal from
the mines that is under development through its subsidiary abroad.
However, with the significant drop in the international price of coal,
it was felt prudent to conserve the reserves of our mine. All steps are
being taken to secure the mines fully and the benefits of this
acquisition will accrue to the company when the international price of
coal starts increasing.
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 are annexed.
ASSOCIATE COMPANIES COROMANDEL SUGARS LIMITED
Coromandel Sugars Limited achieved a cane crushing of 7.02 lakh tonnes
during the year under review, which was substantially less than the
crushing of 7.94 lakh tonnes achieved in the previous year. However the
sugar recovery had improved to 9.73% as against 9.44% achieved last
year. The crushing during the previous year was higher on account of
carry over cane from the earlier season available for crushing during
the year.
The company has produced 68,240 tonnes of sugar (74948 in the previous
year) and sold 61170 tonnes (67188 tonnes in the previous year).
Though the crushing was lower by nearly 12% during the year, the power
export was marginally higher at 258.55 lakh KWHs as against 253.80 lakh
KWHs in the previous year, because of the improved functioning of the
boilers.
The sales and other income was lower at Rs.198.85 crores as against
Rs.234.35 crores in the previous year because of reduced sales volume
and drop of 8% in the selling price of sugar. This has resulted in the
Profit Before Interest and Depreciation being lower at Rs.22.55 crores
as against Rs.42.98 crores in the previous year. Profit Before Tax was
Rs.0.79 crores as against Rs.22.78 crores in the previous year. During
the current year, the company is expected to improve the crushing in
view of the improved rainfall. Further the power plant which is in an
advanced stage of completion is expected to commence commercial
operations before the end of this year.
INDIA CEMENTS CAPITAL LIMITED (ICCL)
The main focus of the Company continues to be on Full Fledged Money
Changing [FFMC] business, besides Travel & Tours and Forex Advisory
Services. The Company''s FFMC division continues to enjoy the status of
Authorised Dealers, Category II. The wholly owned subsidiary viz.
India Cements Investment Services Limited (ICISL) is in Stock Broking.
The FFMC division operates out of 17 branches and Travels division
operates at Chennai as an IATA accredited branch. The subsidiary ICISL
runs its operations through 17 centres. The Gross income from
operations of ICCL was Rs.422.17 lakhs and that of ICISL was Rs.134.65
lakhs for the year ended 31st March, 2014.
CURRENT PERFORMANCE
With the demand for cement being subdued, there was practically
negligible growth in the Southern market during the first half of the
current fiscal resulting in lowering capacity utilization further. The
clinker production was lower at 36.10 lakh tons (39.29 lakh tons) while
the cement dispatch was at 46.09 lakh tons (50.84 lakh tons). In
addition, the company achieved a sale and export of 3 lakh tons of
clinker for the current period under review. However, the cement prices
have started improving from the month of July 2014.
EXPANSION / MODERNISATION
The operation of the power plant at Vishnupuram which was commissioned
during the year got stabilized quickly after its initial teething
troubles and has been producing to its capacity.
The company is also planning to install a new energy efficient Cement
Mill Grinding facility at Sankarnagar replacing the old cement mills
for which necessary approvals have been sought.
PUBLIC DEPOSITS
Your Company has stopped accepting deposits from public and
shareholders from 16th September 2013. The total amount of fixed
deposits including cumulative deposits, which had not become due but
outstanding as at 31st March, 2014 stood at Rs.550.88 Lakhs. Deposits
totaling Rs.34.94 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, 2014, deposits
aggregating to Rs.16.50 Lakhs out of the above have either been claimed
and paid or transferred to Investor Education and Protection Fund.
CONSERVATION OF ENERGY ETC.
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.100.27 Lakhs towards revenue
expenditure of the R&D department besides contributing a sum of
Rs.73.30 Lakhs to National Council for Cement and Building Materials
(NCCBM), which carries out research on behalf of the industry as a
whole.
PERSONNEL
Industrial relations continued to remain cordial during the year.
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
as amended, the names and other particulars of the employees are to be
annexed to the Directors'' Report. However, as per the provisions of
Section 219 (1)(b)(iv) of the said Act, the Annual Report excluding the
aforesaid information is being sent to all members of the Company and
others entitled thereto. Any member interested in obtaining such
particulars may write to the Company Secretary.
DIRECTORS
IDBI Bank Limited, vide its letter No.CBG-SSCB.53/206/Nom.8 dated
08.10.2013, nominated Mr.G.M.Yadwadkar on the Board of the Company with
effect from 23.10.2013 in the place of Mr.K.PNair. The nomination of
Mr.G.M.Yadwadkar was withdrawn by IDBI Bank Limited, vide its letter
No.CBG-SSCB.53/122/Nom.8 dated 26.08.2014 and Mr.Nagaraj Garla was
appointed on the Board of the Company with effect from 25.09.2014 in
the casual vacancy caused by the withdrawal of nomination of
Mr.G.M.Yadwadkar. The Board expresses its appreciation of the valuable
contribution made by Mr.K.PNair and Mr.G.M.Yadwadkar during their
tenure as directors.
Mr.Nagaraj Garla, IDBI Nominee Director, will hold his office upto the
date of the ensuing Annual General Meeting and resolution for his
election as director of the Company is included in the Notice dated
12th November, 2014 convening the 68th Annual General Meeting of the
Company.
Under Article 109 of the Articles of Association of the Company,
Mrs.Chitra Srinivasan retires by rotation at the ensuing Annual General
Meeting of the Company and she is eligible for re-appointment.
Under Section 149(6) of the Companies Act, 2013, the Company proposes
to appoint Mr.Arun Datta, Mr.R.K.Das, Mr.N.R.Krishnan, Mr.V.Manickam
and Mr.N.Srinivasan (F&R), as independent directors of the Company to
hold office for a term of two consecutive years with effect from 26th
December, 2014 or upto the date of Annual General Meeting in 2016,
whichever is earlier and resolutions for their election as independent
directors of the Company are included in the Notice dated 12th
November, 2014 convening the 68th Annual General Meeting of the
Company.
Brief particulars of Directors eligible for reappointment in terms of
Clause 49 of Listing Agreement are annexed to the Notice dated 12th
November, 2014 convening the 68th Annual General Meeting.
AUDITORS
Messrs. Brahmayya & Co., and PS.Subramania Iyer & Co., Chennai, the
Auditors of the Company, retire at the ensuing Annual General meeting
and are proposed to be appointed to hold office from the conclusion of
the 68th Annual General Meeting until the conclusion of the 71st Annual
General Meeting.
COST AUDITOR
Mr.S.A.Murali Prasad, Cost Accountant, Chennai has been appointed as
Cost Auditor for the year 2014-15 at a remuneration of Rs.10 lakhs and
this has been approved by the Government of India. The remuneration is
subject to approval of members and hence is included in the Notice
dated 12th November, 2014 convening the 68th Annual General Meeting of
the Company.
INTERNAL AUDITORS
Messrs. Capri, Gopalaiyer and Subramanian, Kalyanasundaram & Associates
and Bala & Co., Chennai have been appointed as Internal Auditors for
the year 2014-15.
ACKNOWLEDGEMENT
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
N.SRINIVASAN RUPA GURUNATH N.SRINIVASAN
Vice Chairman &
Managing Director Wholetime Director Director
Place :Chennai
Date :12th November, 2014
Mar 31, 2013
The 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
2013 2012
FINANCIAL RESULTS
Profit before Interest & Depreciation 841.95 922.64
Less : Finance costs 307.75 290.37
Less : Depreciation / Amortization 281.84 251.29
Profit Before Tax 252.36 380.98
Current Tax 83.64 37.77
Deferred Tax 5.17 50.24
Profit after Tax 163.55 292.97
Add : Surplus brought
forward from last year 1088.47 954.48
Less : Proposed dividend on Equity
Capital (including Dividend
Distribution Tax) 71.87 71.40
Less : Transfer to General Reserve 40.00 40.00
Less : Transfer to / (from) Debenture
Redemption Reserve (52.42) 47.58
Surplus carried forward 1192.57 1088.47
DIVIDEND
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.
SHARE CAPITAL
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, 2007.
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 irregularities.
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.
CORPORATE GOVERNANCE
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
''E''.
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 April, 2015.
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.
OPERATIONS
COMPANY PERFORMANCE
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 industrial consumers.
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 conversion ratio.
SHIPPING
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.
SUBSIDIARIES
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 year.
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, SINGAPORE
The Company''s 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 are annexed.
ASSOCIATE COMPANIES
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 62542 tonnes.
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 co-gen
capacity.
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 year.
PUBLIC DEPOSITS
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.
PERSONNEL
Industrial relations continued to remain cordial during the year.
DIRECTORS
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.
AUDITORS
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 reappointment.
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 elucidation.
COST AUDITOR
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.
INTERNAL AUDITORS
Messrs. Capri, Gopalaiyer and Subramanian, Kalyanasundaram & Associates
and Bala & Co., Chennai, have been appointed as Internal Auditors for
the year 2013-14.
ACKNOWLEDGEMENT
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
N.SRINIVASAN ARUN DATTA
Vice Chairman & BASAVARAJU
Managing Director R.K.DAS
N.R.KRISHNAN
V.MANICKAM RUPA GURUNATH
K.P.NAIR
Wholetime Director
Place :Chennai N.SRINIVASAN
Date :20th May, 2013 Directors
Mar 31, 2012
The Directors have pleasure in presenting their Sixtysixth Annual
Report together with audited accounts for the year ended 31st March
2012.
Rs. in Crores
For the year ended
31st March
2012 2011
FINANCIAL RESULTS
Profit before Interest & Depreciation 922.64 473.30
Less: Interest & Other charges 286.73 141.72
Less: Depreciation / Amortization 251.29 244.03
Less: Forex Fluctuation Loss / (Gain) 3.64 (2.32)
Profit Before Tax 380.98 89.87
Deferred Tax 50.24 5.00
Provision for Taxation (net) 37.77 16.77
Profit after Tax for the year 292.97 68.10
Add : Balance brought forward from last year 954.48 986.11
Less : Proposed dividend on Equity Capital
(including Dividend Distribution Tax) 71.40 53.73
Less: Transfer to General Reserve 40.00 10.00
Less: Transfer to Contingency Reserve - 36.00
Less: Transfer to Debenture Redemption Reserve 47.58 -
Balance carried forward 1088.47 954.48
DIVIDEND
The Board of Directors has recommended a dividend of Rs.2/- on
30,71,76,747 equity shares of Rs.10/- each for the year ended 31st
March, 2012 and proportionate dividend on shares having calls in
arrears, as compared to Rs.1.50 per equity share for the year ended
31st March, 2011.
SHARE CAPITAL
The Company issued during the year 1,500 equity shares at a price of
Rs.50/- per share (including premium of Rs.40/- per share) on exercise
of options in terms of India Cements Employees Stock Option Scheme,
2006 (ESOS, 2006). Further, the Company has adjusted a dividend of
Rs.1,055 towards calls in arrears. Consequently, the paidup equity
share capital of the Company has increased to Rs.307,17,67,470 as on
31st March, 2012 comprising 30,71,76,747 equity shares of Rs.10/- each
and 1,910 equity shares on which a sum of Rs.13,360 has been paidup.
The balance amount of Rs.5,740 represents calls in arrears.
EMPLOYEES STOCK OPTION SCHEME
Details of options granted / exercised and other disclosures as
required under Clause 12 of the Securities and Exchange Board of India
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 are set out in the Annexure 'G' to this Report.
No options have been granted under India Cements Employees Stock Option
Scheme, 2007.
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, 2012, 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, 2012 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 irregularities.
4. That the annual accounts for the year ended 31st March, 2012 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. CORPORATE
GOVERNANCE
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 the Chief Executive Officer of the Company is given as
Annexure 'E'.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
A report on CSR activities is given in Annexure 'F'.
OPERATIONS COMPANY PERFORMANCE
The details relating to the performance of the Company have been
outlined in the Management Discussion and Analysis Section. As
mentioned therein while there was a marginal growth of 6.6% for cement
demand on an all India basis, the Southern region registered
practically nil growth during the year and had a negative growth of 3%
upto December 2011. With substantial increase in capacity in the
region, the overall capacity utilization was lesser than that of all
India at 63% only in the South. Given the back drop of the tight market
conditions, the cement production of the Company was lower than that of
previous year.
The overall clinker production was at 71.95 lakh tons (76.34 lakh tons)
while the grinding was at 94.63 lakh tons (99.80 lakh tons). The sale
of cement was at 94.51 lakh tons as opposed to 99.32 lakh tons with a
clinker sale of 0.76 lakh tons as compared to 0.32 lakh tons in the
previous year.
With better selling prices prevailing, the total sales and other income
for the year was higher at Rs.4222.69 crores registering a growth of
19% over that of previous year. The cost of production was higher on
account of the increase in the prices of materials, fuel, power,
transport charges and consequently the EBIDTA was at Rs.922.64 crores
as compared to Rs.473.30 crores in the previous year. Interest charges
were higher at Rs.286.73 crores as compared to Rs.141.72 crores in the
previous year due to loans taken for redemption of FCCB and higher
utilization of cash credit. The depreciation / amortization charges
were marginally higher at Rs.251.29 crores as compared to Rs.244.03
crores due to higher capitalization. The foreign currency translation
difference resulted in an expenditure of Rs.3.64 crores as compared to
a gain of Rs.2.32 crores in the previous year. The provision for
current tax was at Rs.37.77 crores (Rs.16.77 crores) while the deferred
tax provision as per AS 22 was at Rs.50.24 crores as compared to Rs.5
crores in the previous year. The resultant profit after tax was at
Rs.292.97 crores as compared to Rs.68.10 crores in the previous year.
The performance could have been better but for the bout of cost
increases as detailed below:
a. Increase in wages due to All India Wage Settlement which along with
the cost of living index by 356 points and this together with the
increased provision for unavailed leave as per Accounting Standard 15.
b. Increase in the price of diesel during the year which impacted the
inward and outward freight cost and raw material prices.
c. Increase in the price of coal by Singareni Colleries Ltd. from
April 2011.
d. Fuller impact of increase in price of fly-ash by the state owned
thermal plants in Tamil Nadu and Andhra Pradesh.
e. Fuller impact of power tariff increases by the State Electricity
Boards in the previous year.
f. Depreciation of rupee against dollar impacting the coal price.
The improvement in selling price together with cost reduction
initiatives taken in improving the operating parameters and improvement
in blending ratio have more than offset the above cost increases.
The Company's Sankari cement factory was granted Licence for Quality
Management Systems in accordance with IS/ISO 9001:2008 by the Bureau of
Indian Standards, Chennai and that the said Licence would be valid from
28th November, 2011 to 27th November, 2014.
FOUNDER'S CENTENARY
The Birth Centenary of Sri T.S.Narayanaswami, one of the Founders of
the Company, was celebrated on Friday, the 11th November, 2011 and in
commemoration of the Centenary, Dr.B.S.Adityan, Director, unveiled the
Portrait of Sri T.S.Narayanaswami at the Corporate Office and released
a Special Issue of the Company's In-house Magazine 'Compass'. A sum of
Rs.30 lakhs was donated on the occasion to Jeevan Blood Bank and
Research Centre for stem cell banking.
SUBSIDIARIES
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 Company has passed a resolution for sending the Balance
Sheet without attaching a copy of the Balance Sheet, Profit and Loss
Account, Report of the Board of Directors and the Report of the
Auditors of the Subsidiary Companies namely Industrial Chemicals and
Monomers Limited, ICL Financial Services Limited, ICL Securities
Limited, ICL International Limited, Trishul Concrete Products Limited,
Trinetra Cement Limited, Coromandel Electric Company 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
The Company's 1.5 million tonne per annum cement plant which commenced
its operations in January 2011 stabilised in stages and has crossed one
million tonne mark in its first full year of operation. The captive
power plant of the Company of 20 MW has since been commissioned towards
end of the last quarter of the financial year. By creating necessary
infrastructure through completion of the enhanced capacity of stacker
and reclaimer and installation of the fly-ash handling system at
Wankbhori Thermal Power Plant in Gujarat during the year the unit could
achieve gradual increase in the capacity utilization.
TRISHUL CONCRETE PRODUCTS LIMITED
A Scheme of Amalgamation of Jubilee Cements Limited (JCL) with Trishul
Concrete Products Limited (TCPL) was sanctioned by Hon'ble High Court
of Judicature at Madras on 15.02.2012. The said Scheme became effective
on 19.03.2012 on filing of the Court Order with Registrar of Companies,
Chennai, Tamil Nadu. Consequent to the said Scheme Of Amalgamation, the
shareholders of erstwhile JCL were allotted 5 equity shares of Rs.10/-
each of TCPL for every equity share of Rs.10/- each of erstwhile JCL.
COROMANDEL ELECTRIC COMPANY LIMITED
Coromandel Electric Company Limited became a subsidiary during the
year.
With continued availability of adequate natural gas, the plant was able
to generate (net) 198 Million kwh (205 Million kwh) which was wheeled
and used by the cement plants of your Company in Tamil Nadu. The
generation could have been better but for the stoppage of the engines
for upgradation of instrumentation/process control systems for nearly
20 days. The total revenue earned by the unit was at Rs.71.08 crores
(Rs.64.44 crores) while the net profit after tax was at Rs.12.48 crores
as compared to Rs.10.87 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 first / second annual instalments of
redeemable cumulative participating/non-participating preference shares
on the due dates.
PT. COROMANDEL MINERALS RESOURCES, INDONESIA AND COROMANDEL MINERALS
PTE. LIMITED, SINGAPORE
The companies are in an advanced stage of commencing the mining in the
coal concession acquired by the companies. The necessary infrastructure
works - laying of roads and construction of bridges for facilitating
the mining and transportation of coal are likely to be completed in the
next two months. The mining contractor has already been appointed, who
will commence the development of mines immediately after completion of
the infrastructure work.
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 are annexed.
ASSOCIATE COMPANIES COROMANDEL SUGARS LIMITED
Coromandel Sugars Limited has achieved a record crushing of 8.01 lakh
mts of sugarcane (7.84 lakh mts) during the year under review. Improved
cane price paid to growers in the earlier season has increased area
under sugarcane plantation. Consequent to higher cane availability
during the season, the crushing is continued beyond financial year and
it is expected till end May 2012. With expanded plant capacity of 4000
tonnes crushing per day (tcd) in place, higher sugarcane availability
with reasonable sugar recovery was ensured and the Company was able to
maintain the better performance than achieved during the earlier years.
Though the Company could achieve higher crushing vis-a-vis last year,
it could produce marginally lesser volume of 78693 tonnes of sugar, as
against 79757 tonnes in the earlier year, consequent to lower sugar
recovery of 9.82% (10.17%). Further, the Company could export power to
the grid of 294 lakh kwhs during the year compared to 297 lakh kwhs.
Sales and Other income have grown by 10% to Rs.228 crores mainly on
account of increase in volume of free sale sugar of 72552 tonnes as
compared to 64268 tonnes in the previous year and also on account of
marginal increase in average free sale price realization.
Based on unaudited financials, the Profit before Interest and
Depreciation was Rs.37.53 crores (Rs.35.85 crores) and Net Profit
during the year was Rs.19.16 crores (Rs.23.03 crores). The net profit
during the year was lesser due to the higher provision of interest of
Rs.11.87 crores as against Rs.6.55 crores in the previous year.
INDIA CEMENTS CAPITAL LIMITED (ICCL)
The main focus of the Company continues to be on various fee-based
activities such as, Full Fledged Money Changing [FFMC], Travel & Tours
and Forex Advisory Services. The wholly owned subsidiary viz. India
Cements Investment Services Limited (ICISL) is in Stock Broking. The
FFMC division operates out of 20 branches and Travels division operates
at Chennai as an IATA accredited branch. The subsidiary ICISL has 22
branches. The Gross Income from operations of ICCL was Rs.416.11 lakhs
and that of ICISL was Rs.176.66 lakhs for the year ended 31st March,
2012.
EXPANSION / MODERNISATION
The upgraded new capacities at Chilamakur and Malkapur stabilized
during the year and have come upto their targeted levels of outputs.
The 48 MW power plant at Sankarnagar was commissioned in January 2012
and after stabilization the commercial production started from the end
of March 2012.
PUBLIC DEPOSITS
The total amount of fixed deposits including cumulative deposits, which
had not become due but outstanding as at 31st March, 2012 stood at
Rs.1346.02 Lakhs. Deposits totalling Rs.26.67 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, 2012, deposits aggregating to Rs.5.32 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 ETC.
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.66.38 Lakhs towards revenue
expenditure of the R&D department besides contributing a sum of
Rs.70.97 Lakhs to National Council for Cement and Building Materials
(NCCBM), which carries out research on behalf of the Industry.
PERSONNEL
Industrial relations continued to remain cordial during the year.
DIRECTORS
Housing and Urban Development Corporation Limited (HUDCO) vide its
letter No.Co.Sec./Nominee Director/2011 dated 07.12.2011 withdrew the
nomination of Sri K.Subramanian on the Board of our Company. The Board
expresses its appreciation of the valuable contribution made by Sri
K.Subramanian during the tenure of his Directorship.
Under Article 109 of the Articles of Association of the Company, Sri
N.Srinivasan (F&R), Sri V.Manickam and Sri A.Sankarakrishnan retire by
rotation at the ensuing Annual General Meeting of the Company and are
eligible for reappointment.
The Board has reappointed Sri N.Srinivasan as Managing Director for a
period of 5 years from 15th September, 2012 and resolutions for
approval of his reappointment and terms of reappointment have been
included in the notice convening the Sixtysixth Annual General Meeting
of the Company.
Brief particulars of Directors eligible for reappointment in terms of
Clause 49 of the Listing Agreement are annexed to the Notice dated 25th
April, 2012 convening the 66th Annual General Meeting.
AUDITORS
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 reappointment.
COST AUDITOR
Sri S.A.Murali Prasad, Cost Accountant, Chennai, has been appointed as
Cost Auditor for the year 2012-13 subject to approval by the Government
of India.
INTERNAL AUDITORS
Messrs Capri, Gopalaiyer & Subramanian, Kalyanasundaram & Associates
and Bala & Co., Chennai, have been appointed as Internal Auditors for
the year 2012-13.
ACKNOWLEDGEMENT
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
N.Srinivasan Rupa Gurunath
Vice Chairman & Managing Director Wholetime Director
Place : Chennai N.Srinivasan
Date :25th April, 2012 Director
Mar 31, 2011
Dear Members,
The Directors have pleasure in presenting their Sixtyfifth Annual
Report together with audited accounts for the year ended 31st March
2011.
Rs. in Crores
For the year ended 31st March
2011 2010
FINANCIAL RESULTS
Profit before Interest &
Depreciation 473.30 863.51
Less: Interest & Other Charges 141.72 142.64
Less: Depreciation 244.03 233.12
Less: Forex Fluctuation Loss/(Gain) (2.32) (43.57)
Add: Transfer from Share Premium - 13.28
Less: Shares/Bond issue expenses - 13.28
Profit before Tax 89.87 531.32
Deferred Tax 5.00 13.66
Provision for Taxation (net) 16.77 163.32
Profit after Tax 68.10 354.34
Add: Balance brought forward
from last year 986.11 823.41
Less: Dividend proposed on
Equity Capital (including Dividend
Distribution Tax) 53.73 71.64
Less: Transfer to General Reserve 10.00 70.00
Less: Transfer to Contingency Reserve 36.00 50.00
Balance carried in Profit & Loss A/c 954.48 986.11
DIVIDEND
The Board of Directors has recommended a dividend of Rs.1.50 per equity
share of Rs.10/- each on 30,71,74,910 equity shares of Rs.10/- each for
the year ended 31st March, 2011 and proportionate dividend on shares
having calls in arrears.
SHARE CAPITAL
The Company issued during the year 1500 equity shares at a price of Rs.
50/- per share (including premium of Rs. 40/- per share) on exercise of
options in terms of India Cements Employees Stock Option Scheme, 2006
(ESOS 2006). Further, the Company received during the year calls in
arrears of Rs. 4746. Consequently, the paidup equity share capital of
the Company has increased to Rs.307,17,64,775 as on 31st March, 2011
comprising 30,71,74,910 equity shares of Rs. 10/- each and 2247 equity
shares on which a sum of Rs.15,675 has been paidup. The balance of
Rs.6,795 represents calls in arrears.
REDEMPTION OF FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs)
The Company redeemed fully all the outstanding Foreign Currency
Convertible Bonds on the maturity date i.e., 12th May, 2011.
EMPLOYEE STOCK OPTION SCHEME
Details of options granted / exercised and other disclosures as
required under Clause 12 of the Securities and Exchange Board of India
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 are set out in the Annexure ÃF' to this Report.
Messrs. Brahmayya & Co., Statutory Auditors of the Company have
certified that the aforesaid Scheme has been implemented in accordance
with the Securities and Exchange Board of India (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the
resolutions passed by the members approving the Scheme.
No options have been granted under India Cements Employees Stock Option
Scheme, 2007.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors make the following statement in terms of Section 217
(2AA) of the Companies Act, 1956 with respect to Directors'
responsibility.
We confirm
1. That in the preparation of the accounts for the year ended 31st
March, 2011, the applicable accounting standards have been followed.
2. That such Accounting Policies have been selected and applied
consistently and made judgements 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, 2011 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 irregularities.
4. That the annual accounts for the year ended 31st March, 2011 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.
CORPORATE GOVERNANCE
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 ÃC' and Annexure ÃD' respectively. Further, a declaration on
Code of Conduct signed by the Vice Chairman & Managing Director in his
capacity as the Chief Executive Officer of the Company is given as
Annexure ÃE'.
OPERATIONS
COMPANY PERFORMANCE
The details relating to the Company's performance have been set out in
the Management Discussion and Analysis section. The year under review
had the full benefit from the upgraded kiln at Vishnupuram Plant and
the enhanced capacity of Malkapur Plant but given the tight market
conditions the overall production was lower than that of previous year.
The clinker production of your company stood at 76.34 Lakh Ts (86.82
Lakh Ts) while the cement grinding was at 99.80 Lakh Ts (104.94 Lakh
Ts). The sale of cement was at 99.32 Lakh Ts (105.01 Lakh Ts) while the
clinker sale was lower at 0.32 Lakh Ts (4.63 Lakh Ts).
The total sales and other income for the year under review was lower at
Rs.4011.34 Crores against Rs.4221.69 Crores in the previous year
registering a drop of 5% . As informed elsewhere the cement price
declined substantially in the third quarter and has started recovering
from the fourth quarter. In addition there was substantial increase in
cost of production due to increase in the price of raw materials,
power, fuel and other operating expenses and consequently the operating
profit was lower at Rs.473.30 Crores as compared to Rs.863.51 Crores in
the previous year. Interest charges were marginally lower at Rs.141.72
Crores (Rs.142.64 Crores) while depreciation was at Rs.244.03 Crores as
compared to Rs.233.12 Crores in the previous year. The resultant profit
before tax and exceptional items was lower at Rs.87.55 Crores as
against Rs.487.75 Crores recorded in the previous year. The foreign
exchange translation difference as per AS 11 resulted in an exceptional
income of Rs.2.32 Crores (Rs.43.57 Crores), the provision for current
tax liability is at Rs.16.77 Crores against Rs.163.32 Crores in the
previous year. The deferred tax provision as per AS 22 resulted in a
liability of Rs.5 Crores against Rs.13.66 Crores in the previous year
and consequent profit after tax was at Rs.68.10 Crores against
Rs.354.34 Crores in the previous year.
Substantial impact was felt due to cost push on account of various
factors as follows:- a) Increase in wages due to All India Wage
settlement which together with the increase in cost of living index by
446 points coupled with revision in the minimum wages payable to
contract workmen and retirement benefits meant an additional outgo of
Rs.13 Crores which was offset to a certain extent by the reduction in
provision for unavailed leave as per Accounting Standard 15.
b) Fuller impact of increase in royalty on limestone done in the
previous year.
c) Increase in the price of diesel during the year.
d) Fuller impact of increase in Excise Duty on cement to 10% from 8% in
March 2010.
e) Increase in the price of fly-ash by the state owned thermal plants
in Tamil Nadu in phases from Rs.60 per Tonne to Rs.350 per Tonne.
f) Increase in the electricity tariff of Tamil Nadu and Andhra Pradesh
Electricity Boards.
g) Increase in the administered price of gas resulting in higher cost
of generation.
All these together with the fuller impact of such revisions in the
previous year impacted the cost of production substantially which could
not be passed on fully due to the tight market conditions.
SETTING UP OF INFRASTRUCTURE DIVISION
Considering the enormous scope for infrastructure development in the
country, which incidentally will boost cement consumption, the company
during the year initiated steps to set up a division for infrastructure
activities. The Division is in the process of finalizing the main areas
of focus and is likely to commence activities during the current year.
SUBSIDIARIES
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 without attaching a copy of the Balance Sheet, Profit and
Loss Account, 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, 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 (FORMERLY INDO ZINC LIMITED)
The company's 1.5 million tonnes cement plant in Banswara District,
Rajasthan has commenced the commercial production in end January 2011.
The company is in an advanced stage of completing a 20 mw captive power
plant, which is expected to be commissioned by September 2011. In
addition to this, the company is also in the process of enhancing the
capacity of Limestone Stacker Reclaimer and commissioning of Fly-ash
Handling System at Wankbhori Thermal Power Station. These projects are
expected to be completed during the next six months.
COROMANDEL MINERALS PTE. LIMITED
The Company has invested US$ 5 million for purchase of 70,11,500
ordinary shares of Coromandel Minerals Pte. Limited (CMPL), Singapore
representing 99.99% of its share capital, making CMPL a subsidiary.
This company has acquired a coal concession in Indonesia and is in an
advanced stage of getting various approvals for commencing the mining.
In the meanwhile, the company has initiated steps to create necessary
infrastructure à laying of roads and construction of bridges for
facilitating the mining and transportation of coal.
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 are annexed.
ASSOCIATE COMPANIES
COROMANDEL SUGARS LIMITED
Coromandel Sugars Ltd., has achieved record crushing of 7.84 Lakh Ts
(5.28 Lakh Ts) during the year under review. The sugar recovery stood
at 10.17% as was in previous year. It may be noted that higher cane
availability during the season continued till April 2011 resulting in
total crushing of 8.50 lakh tonnes for the season 2010-11. Improved
cane price paid to growers in the earlier season has motivated the
growers to up the area under sugarcane plantation by over 60%. With
expanded plant capacity of 3500 tonnes crushing per day (tcd) in place,
higher sugar cane availability with reasonable sugar recovery, the
company was able to maintain the excellent performance achieved during
the earlier years.
The company has produced 79757 Tonnes of sugar (53634 Tonnes), molasses
of 35226 tonnes (23983 mts) and exported power to the grid of 297 lakh
kwh (200 lakh kwh). Sales turnover rose by 40% to Rs.215 crores (Rs.153
crores). Sales volume increased by 41% for sugar, 70% for molasses and
49% for Power. However, the free sale sugar price realization has
dropped by 6% to Rs.2602 per quintal while in the case of molasses
realization fell by 52% to Rs.2915 per Tn as compared to previous year.
Based on unaudited financials, the Profit Before Interest and
Depreciation has marginally dropped to Rs.36.25 cr (Rs.36.71 cr).
Profit Before Tax for the year was lower at Rs.23.41 cr. (Rs.25.25
cr.). Profit from the improved operational efficiency achieved during
the year was partly offset by drop in sales price realization.
INDIA CEMENTS CAPITAL LIMITED (ICCL)
The main focus of the Company continues to be on various fee-based
activities such as, Full Fledged Money Changing [FFMC], Travel & Tours
and Forex Advisory Services. The wholly owned subsidiary viz. India
Cements Investment Services Limited (ICISL) is in Stock Broking. The
FFMC division operates out of 27 branches and Travels division operates
at Chennai as an IATA accredited branch. The subsidiary ICISL has 31
branches. The Gross income from operations of ICCL was Rs.487.38 lakhs
and that of ICISL was Rs.243.05 lakhs for the year ended 31st March,
2011.
COROMANDEL ELECTRIC COMPANY LIMITED (CECL)
Due to additional availability of natural gas during the year, the
Company was able to generate 205 Million units of power as compared to
170 million units in the previous year, which was wheeled and used at
the cement plants of your Company in TamilNadu. The total revenue
earned by the Company during the year was Rs.64.42 Crores (Provisional)
as against Rs.44.78 Crores in the previous year and net profit after
tax was Rs.10.81 Crores (Provisional) against the previous year figure
of Rs.8.42 Crores. 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 first annual instalment of
redeemable cumulative participating / non-participating preference
shares on the due dates.
CURRENT PERFORMANCE
The cement market was sluggish during the month of April 2011
registering a dip in the overall consumption for the country as a whole
(as per information furnished by CMA). The market registered a negative
growth of 1.8% for the month which was more pronounced in the markets
of your company in South, which registered a dip of 8.8%. This with the
huge capacity increase in the South necessitated a lower capacity
utilization with the industry in the South registering a capacity
utilization of 63% in the month of April 2011. Given such a backdrop,
your company's capacity utilization of 71% can be considered to be
satisfactory. The overall clinker production was lower at 5.96 Lakh Ts
(7.54 Lakh Ts) and the cement grinding was at 8.27 Lakh Ts (9.54 Lakh
Ts). The operating parameters of power and fuel were kept under check
despite the lower capacity utilization for the month under review.
EXPANSION / MODERNISATION
The upgradation of capacity at Chilamakur to 4500 Tonnes per day was
completed during the month of June 2010 and after initial teething
troubles the plant has been stabilizing at higher levels of production.
PUBLIC DEPOSITS
The total amount of fixed deposits including cumulative deposits, which
had not become due but outstanding as at 31st March, 2011 stood at
Rs.1,503.94 Lakhs. Deposits totalling Rs.49.12 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, 2011, deposits aggregating to Rs.9.43 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 ETC.
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.50.32 Lakhs towards revenue
expenditure of the R&D department besides contributing a sum of
Rs.74.72 Lakhs to National Council for Cement and Building Materials
(NCCBM), which carries out research on behalf of the industry.
PERSONNEL
Industrial relations continued to remain cordial during the year.
DIRECTORS
Under Article 109 of the Articles of Association of the Company,
Dr.B.S.Adityan, Mr.K.Subramanian and Mr.R.K.Das retire by rotation at
the ensuing Annual General Meeting of the Company and are eligible for
re-appointment.
Brief particulars on Directors eligible for reappointment in terms of
Clause 49 of Listing Agreement are annexed to the Notice dated 30th May
2011 convening the 65th Annual General Meeting.
AUDITORS
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 reappointment.
With regard to the observation of the Auditors in Clause 4(f) of the
Auditors' Report dated 30th May, 2011 on payment and provision of
managerial remuneration in excess of the prescribed limit, the Company
is making an application to the Government of India for approval in
terms of the provisions of the Companies Act, 1956.
COST AUDITOR
Mr.S.A.Murali Prasad, Cost Accountant, Chennai, has been appointed as
Cost Auditor for the year 2011-12 subject to approval by the Government
of India.
INTERNAL AUDITORS
Messrs. Capri, Gopalaiyer & Subramanian & Co., Kalyanasundaram
Associates and Bala & Co., Chennai, have been appointed as Internal
Auditors for the year 2011-12.
CORPORATE SOCIAL RESPONSIBILITY
The Company has continued, during the year, its active involvement for
improvement of socio-economic conditions and bringing about development
of infrastructure, human resources, environment, sports and cultural
activities in its neighbourhood. In fact, the Company's CSR activities
encompass as on date 108 Villages in 14 Talukas of 13 Districts in the
four States namely, Tamil Nadu, Andhra Pradesh, Rajasthan and
Maharashtra, where our cement plants are situated and have benefited
nearly one lakh people.
There is all-round appreciation of Company's CSR activities in the
neighbourhood of its plants and the media. The already prevalent
cordiality between the plants and the local communities has only
increased. The rapport between the Governmental agencies and the plants
has also improved as a result of conscious and demonstrable development
of neighbourhood of Company's plants.
The Company has brought out a booklet ÃEnriching Lives à A Vision
Beyond Cement' which has been received very well by the public and the
governmental agencies.
The Company plans to increase its focus in future on education and
community health related activities to make a discernible difference in
the lives of people living in its neighbourhood.
CHENNAI SUPER KINGS
Chennai Super Kings, the cricket team of the Chennai cricket franchise
owned by your company continues to add shareholder value with its
outstandingly consistent performance. Besides winning the Champions
League in 2010 whereby completing a Cup and League double, your team
has been crowned champions for the second year in succession in the
just concluded IPL 2011. It has also won the Fair Play Award for 2011 Ã
third time in four years exemplifying the team's underlying philosophy.
The fact that the latest entrants to IPL 2011 have had to pay nearly
Rs.1700 Crores for Franchise rights is an indication of what brand
valuation your most successful franchise presently commands.
ACKNOWLEDGEMENT
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
N.Srinivasan Rupa Gurunath
Vice Chairman & Managing
Director Wholetime Director
N.Srinivasan
Director
Place : Chennai
Date : 30th May, 2011
Mar 31, 2010
The Directors have pleasure in presenting their Sixtyfourth Annual
Report together with audited accounts for the year ended 31st March
2010.
Rs. in Crores
For the year ended 31st March
2010 2009
FINANCIAL RESULTS
Profit before interest & Depreciation 863.51 1043.20
Less: Interests Other Charges 142.64 112.15
Less: Depreciation 233.12 203.32
Less: Forex Fluctuation Loss/(Gain) (43.57) 79.43
Add: Transfer from Share Premium 13.28 -
Less: Shares/Bond issue expenses 13.28 -
Profit before Tax 531.32 648.30
Fringe Benefit Tax - 4.78
Deferred Tax 13.66 29.89
Provision for Taxation (net) 163.32 181.45
Profit after Tax 354.34 432.18
Add: Baiance brought forward from last year 823.41 527.32
Less: Dividend proposed on Equity Capital
(including Dividend Distribution Tax) 71.64 66.09
Less: Transfer tc General Reserve 70.00 70.00
Less: Transfer to Contingency Reserve 50.00 -
Balance carried in Profit & Loss A/c 986.11 823.41
DIVIDEND
The Board of Directors has recommended a dividend of Rs.2/- per equity
share of Rs.10/- each on 30,71,72,765 equity shares of Rs.10/- each
outstanding as on date. The Board has also recommended payment of such
dividend reduced proportionately to the amount paid up on shares on
which there are calls in arrears.
SHARECAPITAL
The paid up equity share capital of the Company has increased to
Rs.307.18 crore as on 31st March, 2010 comprising of 30,71,75,657
equity shares of Rs. 10/- each on issue of 1,49,750 equity shares at a
price of Rs.50/- per share (including premium of Rs.40/- per share)
during 2009-10 on exercise of options in terms of India Cements
Employees Stock Option Scheme, 2006 (ESOS, 2006) and consequent to
issue of 2,45,94,000 equity shares of Rs.10/- each at a price of
Rs.120.20 per share (including premium of Rs.110.20 per share) by way
of Qualified Institutional Placement (QIP) made in March 2010..
EMPLOYEE STOCK OPTION SCHEME
Details of options granted / exercised and other disclosures as
required under Clause 12 of the Securities and Exchange Board of India
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 are set out in the AnnexureJF to this Report.
Messrs. Brahmayya & Co., Statutory Auditors of the Company have
certified that the aforesaid Scheme has been implemented in accordance
with the Securities and Exchange Board of India (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the
resolutions passed by the-members approving the Scheme.
No options nave been granted so far under India Cements Employees Stock
Option Scheme, 2007.
DIRECTORSRESPONSIBILITY STATEMENT
The Directors make the following statement in terms of Section 217
(2AA) of the Companies Act, 1956 with respect to Directors
responsibility. "We confirm
1. That in the preparation of the accounts for the year ended 31 st
March, 2010, the applicable Accounting Standards have been followed.
2. That such Accounting Policies have been selected and applied
consistently and made judgements 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 31 st March, 2010 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 irregularities.
4. That the annual accounts for the year ended 31 st March, 2010 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.
CORPORATE GOVERNANCE
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 Managing Director in his capacity as the
Chief Executive Officer of the Company is given as Annexure E.
OPERATIONS
COMPANY PERFORMANCE
The performance of the company has been discussed in detail in the
Management Discussion and Analysis section. The steps taken by the
company to enhance the capacity yielded results in the form of
increased production of clinker and cement during the year. The second
line at Malkapur and the upgraded kiln-1 at Vishnupuram quickly
stabilized during the year. The Parli Grinding Unit which was
commissioned towards the end of the previous year also contributed for
the overall improvement. The clinker production of the company was at
86.82 Lakh Ts (69.83 Lakh Ts), cement production was at 104.94 Lakh Ts
(91.11 Lakh Ts) while the cement sales was at 105 Lakh Ts (91.18 Lakh
Ts). There was also a clinker sale of 4.63 Lakh Ts (0.02 Lakh Ts)
during the year under review.
Sales and other income for the year ended 31st March 2010 was at
Rs.4221.69 Crores as against Rs. 3954.53 Crores in the previous year,
registering an increase of 6.8%. The cement prices which were firm
during the first two quarters declined due to reasons mentioned
elsewhere in the report during the third quarter but has started
recovering slowly from the month of February 2010 onwards. Cost push
was felt in the form of increase in the price of raw materials, power
and other operating expenses and consequently the operating profit was
lower at Rs. 863.51 Crores against Rs. 1043.20 Crores in the previous
year. The interest charges were higher at Rs. 142.64 Crores against
Rs.112.15 Crores in the previous year while the depreciation charges
amounted to Rs. 233.12 Crores against Rs.203.32 Crores due to higher
capitalization. Consequently the net profit before tax was lower at Rs.
487.75 Crores against Rs.727.64 Crores in the previous year.
The foreign exchange translation difference as per AS 11 has resulted
in an exceptional income of Rs. 43.57 Crores against an expense of
Rs.79.43 Crores in the previous year. The provision for current tax
liability works out to Rs. 163.32 Crores (Rs.181.45 Crores). The
deferred tax provision as per AS 22 resulted in a liability of Rs.
13.66 Crores (Rs.29.89 Crores) while there was no Fringe Benefit Tax
during the year (Rs.4.78 Crores). Consequently the profit after tax was
Rs. 354.34 Crores against Rs.432.18 Crores in the previous year.
The year under review witnessed substantial increase in cost of
production on account of various factors which include the following:-
a) Increase in wages to workmen due to increase in cost of living index
by 329 points which along with increase in the salaries of management
staff in line with the industry together with the provision for
unavailed leave as per AS 15 accounted for additional outgo of Rs.51
Crores.
b) Revision in the minimum wages payable for the contract workmen.
c) Increase in royalty on limestone from Rs.45/Tn to Rs.63/Tn with
effect from August09.
d) Increase in the price of petroleum products namely Diesel.
e) Increase in power generation and purchase of power from alternate
sources due to power cut and restriction of power resulting in higher
overall cost of power. Ã
f) Increase in Excise Duty on cement to 10% from 8%.
All this together with the residual impact of such increases in the
previous year substantially impacted the cost, which was partially
offset through increased blended cement tonnage and through
contribution from higher volume of production.
SUBSIDIARIES
INDO ZINC LIMITED (IZL)
ICL Financial Services Limited (ICLFSL), the Companys wholly owned
subsidiary, acquired 12.97% of equity shares in IZL and entered into an
agreement with the promoters for purchase of another 39.73% of equity
share capital. Since IZL was a listed Company, an open offer was made
to non-promoter shareholders of IZL for acquiring their holdings in IZL
subject to amaximum of 20% under SEBI (Substantial Acquisition of
Shares and Takeovers) Regulations, 1997 (Takeover Code). All the
formalities under the Takeover Code have been completed and ICLFSL
presently holds 60.89% of equity share capital of IZL (including 8.19%
acquired under open offer) and IZL became a subsidiary of ICLFSL,
thereby becoming the stepdown subsidiary of your Company.
IZL is presently implementing a project involving construction of an
1.5 million tonne cement plant in Rajasthan. The project is expected to
be commissioned in July 2010.
PT. COROMANDEL MINERALS RESOURCES
The company has set up this subsidiary in Indonesia for acquiring coal
concessions. Pending acquisition of coal mines, the company is yet to
commence operations. However, the company is in discussion with various
concession owners for acquiring coal mines.
The Company has been exempted by the Central Government vide its letter
No. 47/236/2010-CL-lll dated 21.4.2010 under Section 212 (8) of the
Companies Act, 1956, from attaching a copy of the Balance Sheet, Profit
and Loss Account, 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,
Indo Zinc Limited and PT: Coromandel Minerals Resources, Indonesia.
However, pursuant to Accounting Standard 21 issued by the Institute of
Chartered Accountants of India, Consolidated Financial Statements
presented by the Company include the financial information 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.
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 are annexed.
ASSOCIATE COMPANIES COROMANDEL SUGARS LIMITED
During the year ended March 31,2010, Coromandel Sugars Ltd has achieved
the highest Profit before tax of Rs.26.92 crores (unaudited), since
commissioning of the plant. Despite the lowef crushing of 5.28 lakh
tonnes of sugarcane during the year as against 5.63 lakh tonnes in the
earlier year, this was possible, primarily because of significant
increase in the market price for sugar and molasses and also due to
higher sugar recovery of 10.17% achieved as against 9% in the earlier
year.
The company has produced 53634 tonnes of sugar (50677 tonnes) and
molasses of 23653 tonnes (29824 tonnes). Power exported to grid was
marginally lower at 200 lakh kwh as against 212 lakh kwh in the
previous year, due to lower crushing. Sugar Sales volume fell by over
12%, i.e., from 60167 tonnes in the previous year to 52723 tonnes in
the current year, while molasses sales volume dropped by over 32%,
i.e., from 30568 tonnes in the previous year to 20766 tonnes during the
year under review. Despite lower sales volume of Sugar and Molasses,
total gross revenue of the company increased by 25% to an all time high
of Rs. 153.17 cr(Rs.122.17 cr). It may be noted that due to shortage of
sugar cane, there was stiff competition among mills resulting in higher
Cane price of Rs.1950 per tonne (Rs.1250/tonne). Based on unaudited
financial, the Earnings before Interest and Depreciation was higher at
Rs. 38.38 cr(Rs. 15.98 cr). Profit Before Tax for the year was Rs.26.92
cr. (Rs.2.85 cr.).
INDIA CEMENTS CAPITAL LIMITED (ICCL)
The main focus of the Company continues to be on various fee-based
activities such as, Full Fledged Money Changing [FFMC], Travel & Tours
and Forex Advisory Services. The wholly owned subsidiary viz. India
Cements Investment Services LiTnited (ICISL) is in Stock Broking. The
FFMC division operates out of 29 branches and Travels division operates
at Chennai as an IATA accredited branch. The subsidiary ICISL has 25
branches. The Gross income from operations of ICCL was Rs.990.66 lakhs
and that of ICISL was Rs.245.37 lakhs for the year ended 31st March,
2010.
COROMANDEL ELECTRIC COMPANY LIMITED (CECL)
Due to higher gas availability during the last quarter of the year, the
company was able to generate 170 million units of power as compared to
163.6 million units in the corresponding period of previous year, which
was wheeled and used at the cement plants of your company in Tamil
Nadu. The total revenue earned by the company during the year was
Rs.44.78 Crores (Provisional) (45.33 Crores) and net profit after tax
was Rs.8.44 Crores (Provisional) (Rs.6.66 Crores). 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.
EXPANSION / MODERNISATION
Most of the ongoing expansion programmes have been completed towards
the end of the previous financial year. The upgraded capacity of the
kiln-1 at Vishnupuram commissioned in March 2009 stabilised quickly and
has been operating to its enhanced production levels. The expansion of
Kiin-2 at Malkapur after initial trial runs has also stabilized earlier
than expected and has been running to capacity. The Parli Grinding Unit
has started producing cement from the month of May 09 and had to face
initial bottlenecks in the form of evacuation problems being a new
location. The problem has since been overcome and the plant has
started grinding to its full levels. The upgradation of the capacity at
Chilamakur to 4500 TPD has been delayed by nearly 6 months and is
expected to be completed by the first quarter of FY 2011.
PUBLIC DEPOSITS
The total amount of fixed deposits including cumulative deposits, which
had not become due but outstanding as at 31st March, 2010 stood at
Rs.1,285.85 Lakhs. Deposits totalling Rs.41.11 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
deposit holders and since the close of the financial year ended 31st
March, 2010, deposits aggregating to Rs.11.36 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 ETC.
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.51.81 Lakhs towards revenue
expenditure of the R&D department besides contributing a sum of
Rs.78.72 Lakhs to National Council for Cement and Building Materials
(NCCBM), which carries out research on behalf of the industry.
PERSONNEL
Industrial relations continued to remain cordial during the year.
In terms of the provisions of Section 217(2A) ofthe Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
as amended, the names and other particulars of the employees are to be
annexed to the Directors Report. However, as per the provisions of
Section 219 (1)(b)(iv) of the said Act, the Annual Report excluding the
aforesaid information is being sent to all members of the Company and
others entitled thereto.
DIRECTORS
Mr.N.Ramachandran resigned as Executive Director and Director with
effect from 12th August, 2009. The directors record their appreciation
of the valuable contribution made by Mr.N.Ramachandran during his
tenure as non-executive director and later as Executive Director of the
Company.
IDBI Bank Limited appointed Mr.K.P.Nair on the Board of the Company
with effect from 14.10.2009 in the casual vacancy caused by withdrawal
of nomination of Mr.Arun Datta.
Mr.Arun Datta and Mrs.Chitra Srinivasan were appointed by the Board as
additional directors of the Company with effect from 28.10.2009 and
05.03.2010 respectively. Under Article 103 of the Articles of
Association of the Company, Mr.Arun Datta and Mrs.Chitra Srinivasan
will hold their offices upto the date of the ensuing Annual General
Meeting and resolutions for their election as directors of the Company
are included in the Notice dated 30th April, 2010 convening the 64th
Annual General Meeting of the Company.
Ms.Rupa Gurunath was appointed as a wholetime director effective from
5th March, 2010 for a period of 5 years on terms recommended by the
Remuneration Committee of the Board. A resolution for the approval of
her appointment as a wholetime "director is included in the Notice
dated 30th April, 2010 convening the 64th Annual General Meeting of the
Company,
Under Article 109 of the Articles of Association of the Company,
Mr.V.Manickam, Mr.A.Sankarakrishnan and Mr.N.R.Krishnan retire by
rotation at the ensuing Annual General Meeting of the Company and are
eligible for re-appointment.
Information on Directors eligible for appointment / reappointment in
terms of Clause 49 of Listing Agreement is annexed to the Notice dated
30th April, 2010 convening the 64th Annual General Meeting.
AUDITORS
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 reappointment.
Sam Services of Mr.S.A.Muraliprasad, Cost Accountant, Chennai has been
appointed as Cost Auditor for the year 2010-11 subject to approval by
the Government of India. J
CORPORATE SOCIAL RESPONSIBILITY
Your Company is one of the few Companies in the country which have
taken a number of initiatives for community development right from
inception.
It spends approximately a sum of Rs.375 lakhs annually for imparting
education at its colleges and schools. The following deserve special
mention.
A Balavidyalaya was started in Sankarnagar, Tirunelveli District as
early as in 1952. Sankar Higher Secondary School was started in
Sankarnagar in 1957. The school has today 1900 students.
A Polytechnic College was started in Sankarnagar in 1958. The College
has evolved into one of the best polytechnics in the country and
celebrated its Golden Jubilee in 2008.
The other plants of the Company namely Sankaridurg and Dalavoi in Tamil
Nadu and Chilamakur, Vishnupuram and Malkapur in Andhra Pradesh also
have matriculation and higher secondary schools imparting education in
all to about 2669 students.
A College by name T.S.Narayanaswami College of Arts and Science was
started in 1996 at Navalur near Chennai. It is a postgraduate College
offering affordable education to about 950 students - mostly from the
lower strata of society.
Besides assisting schools run by the Company, India Cements has been
helping other educational institutions also. Nearly 50 such schools
have benefited in the recent.past by having their infrastructure
strengthened.
Besides education, India Cements has been donating liberally for the
construction and renovation of .temples, mosques and churches. The
donation made by the Company for these and other purposes during the
last 5 years is Rs.90 lakhs per annum on an average.
The Company contributed liberally to alleviate the sufferings of people
affected by earthquake in Gujarat, floods in Andhra Pradesh and tsunami
in Tamil Nadu in the recent past.
In the matter of healthcare, India Cements is second to none in taking
proactive steps for supporting primary health centres.-Conducting of
medical camps has been another major area and at least 7500 people have
been covered by health camps.
The importance your Company attaches to Corporate Social Responsibility
(CSR) can be gleaned from the fact that an exclusive department
consisting of 6 executives has been established at the Corporate Office
and a CSR policy was .officially adopted on 1st April, 2009. The policy
is based on the globally accepted Triple Bottom Approach, which is an
initiative to create new value to Economic, Environmental and Social
issues. The policy specifies 6 sectors namely socio-economic and
cultural, infrastructure, health, human development and capacity
building for self- employment, environment, sports and recreation.
In the year 2009-10, in the aforesaid 6 sectors, the cement plants of
the Company have carried out nearly 40 different specific activities
like health camps, veterinary camps, provision of drinking water and
other infrastructure to the Government schools in the nearby villages,
repairing and provision of infrastructure facilities at the villages
etc. The empowerment of the communities in and around our plants is of
special significance.
Support to self-employment activities at Dalavoi and two lift
irrigation projects in Vishnupuram and a check dam near Yerraguntla
plant are some examples.
In the matter of environment, the wind mills setup by the Company in
Coimbatore and Tirunelveli Districts, waste heat recovery plant in
Vishnupuram and the use of fly ash need special mention.
CHENNAI SUPER KINGS
As the shareholders are aware, your company has bought the Chennai
cricket franchise of the Indian Premier League in 2008. The cricket
team of the Chennai franchise styled "Chennai Super Kings" has garnered
very quickly an eminent brand value and various analysts have valued
the Chennai franchise in multiples of the original investment. The
company besides having built up this excellent brand has also fostered
a successful cricket team with the most consistent record among all
teams over the last 3 years. This well knit unit has cornered the glory
of being champions of the just concluded Indian Premier League in April
2010. The Companys investment in the cricket franchise has not only
served to enhance shareholder value, built up a strong brand which can
be used to market the companys products in future but also has
promoted cricket and a large fan following all over the world.
NEW CORPORATE OFFICE BUILDING
Your 64 year old company has been helping people move into their own
homes. Your directors thought it was time your company also moved into
its own premises. Its long cherished dream has been realized in
February 2010 with the company moving its corporate office to its own
building at "Coromandel Towers", 93, Santhome High Road, Karpagam
Avenue, R.A. Puram, Chennai 600 028. ,,-
ACKNOWLEDGEMENT
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
N.Srinivasan RupaGurunath
Vice Chairman &
Managing Director Wholetime Director
B.S.Adityan ArunDatta
R.K.Das N.R.Krishnan
V.Manickam A.Sankarakrishnan
N.Srinivasan K.Subramanian
Place: Chennai 600 028
Date :30th April, 2010 Directors