The Directors have pleasure in presenting their Sixtysixth Annual
Report together with audited accounts for the year ended 31st March
Rs. in Crores
For the year ended
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
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.
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
DIRECTORS'' RESPONSIBILITY STATEMENT
Your Directors make the following statement in terms of Section 217
(2AA) of the Companies Act, 1956.
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
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
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
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
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
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.
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.
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
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
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,
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.
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.
Industrial relations continued to remain cordial during the year.
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.
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.
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
Messrs Capri, Gopalaiyer & Subramanian, Kalyanasundaram & Associates
and Bala & Co., Chennai, have been appointed as Internal Auditors for
the year 2012-13.
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