TO THE MEMBERS OF ACC LIMITED
The Directors take pleasure in presenting the Seventy Seventh Annual Report togetherwith the audited accounts, for the year ended December 31, 2012. The Management Discussionand Analysis has also been incorporated into this report.
The Indian economy experienced a slowdown in the year 2012, consequent to adeceleration in global economic growth. As a result, two important drivers of economicgrowth viz. infrastructure and industrial projects performed below expectations. Higherinflation and a depreciating rupee lead to a fall in domestic savings and consumption.Your Company faced these challenges with a new focus to achieve cost leadership andenhance value. This was enabled by planning for all-round improvements and innovativenessin productivity and profitability, leadership development and capability enhancement ofits employees. In the process, many favourable trends were established.
Your Company closed the year by starting ground work on the next phase of theCompanys expansion programme.
2. HIGHLIGHTS OF PERFORMANCE
Operating EBITDA increased in 2012 by 14% to Rs. 2197 crore, from Rs. 1921crore in 2011.
Consolidated income for the year increased by 11% to Rs. 11621 crore, ascompared to Rs. 10428 crore in 2011.
Consolidated profit before tax in 2012 was Rs. 1441 crore, against Rs. 1505crore in 2011. Similarly, consolidated profit after tax was Rs. 1059 crore against Rs.1301 crore in 2011.
Profit Before Tax and Profit After Tax would have been higher by Rs. 364.08 crore andRs. 245.95 crore respectively, if there was no change in method of depreciation fromStraight Line method to Written Down Value method in respect of Captive Power Plants.
3. FINANCIAL RESULTS
| ||Consolidated ||Standalone |
| ||Rs. Crore ||Rs. Crore |
| ||2012 ||2011 ||2012 ||2011 |
|Revenue from Operations (Net) and Other Income ||11621.47 ||10428.20 ||11622.78 ||9852.20 |
|Profit Before Tax (PBT) ||1440.99 ||1505.29 ||1451.49 ||1540.42 |
|Provision for Tax ||391.08 ||215.45 ||390.30 ||215.16 |
|Profit After Tax (PAT) ||1059.28 ||1300.80 ||1061.19 ||1325.26 |
|Balance brought forward from previous year ||3591.12 ||3175.45 ||3821.54 ||3381.41 |
|Adjustment pursuant to Amalgamation ||- ||- ||(216.29) ||- |
|Profit available for Appropriations ||4650.40 ||4476.25 ||4666.44 ||4706.67 |
|Appropriations: || || || || |
|Interim Dividend ||206.52 ||206.52 ||206.52 ||206.52 |
|Proposed Final Dividend ||356.72 ||319.17 ||356.72 ||319.17 |
|Dividend Distribution Tax ||91.37 ||85.28 ||91.37 ||85.28 |
|Previous Year Dividend Distribution Tax ||- ||(1.49) ||- ||(1.49) |
|General Reserve ||150.00 ||250.00 ||150.00 ||250.00 |
|Debenture Redemption Reserve ||- ||25.00 ||- ||25.00 |
|Amortization Reserves ||- ||0.65 ||- ||0.65 |
|Surplus carried to the next years account ||3845.79 ||3591.12 ||3861.83 ||3821.54 |
Your Directors are pleased to recommend a final dividend of Rs. 19 per equity share ofRs. 10 each. The Company had distributed an interim dividend of Rs. 11 per equity share ofRs. 10 each in August 2012. The total dividend for the year ended December 31, 2012 wouldaccordingly be Rs. 30 per equity share of Rs. 10 each as against the total dividend of Rs.28 per equity share of Rs. 10 each for the year ended December 31, 2011. The total outgofor the current year amounts to Rs. 654.61 crore, including dividend distribution tax ofRs. 91.37 crore, as against Rs. 610.97 crore including dividend distribution tax of Rs.85.28 crore in the previous year.
5. ECONOMIC SCENARIO & OUTLOOK
The global economy experienced a slowdown especially noticed in developed economies,which had its impact on India as well. The Indian economy had to contend with highinflation in the year 2012 and increased lending rates. The tightening of the monetarypolicy further slowed the growth of the economy which affected all sectors including thecement industry.
There are signs that indicate the possibility of a revival in consumption andgovernment spending in 2013. Coupled with expectations of a normal monsoon, this augurswell for the economy in the coming year.
6. CEMENT INDUSTRY OUTLOOK AND OPPORTUNITIES
In 2012, the cement industry added ~34 million tonnes of capacity taking its installedcapacity to ~360 million tonnes. The first half of the calendar year witnessed high demandfor cement at 10% YoY. This demand fell in the second half of the year following aslowdown in the construction sector.
Cement Industry is expected to gather momentum driven by a revival in the generalinvestment climate and by reduction in interest rates which will positively impact demandfrom housing, infrastructure and industry segments. We, therefore expect a favourable rateof growth in cement consumption. At the same time, there is a likelihood of mountingpressure on costs mainly arising out of increases in the cost of coal, diesel, railfreight and exchange rate fluctuations.
In the beginning of 2012, the Company launched a new programme designed to deliversuperior value to our customers while simultaneously seeking cost leadership throughimprovements in manufacturing, sales & marketing, logistics and procurement of majorinputs. The programme called "Institutionalizing Excellence" is designed tofurther strengthen these processes so as to deliver and sustain enhanced performancelevels. Built essentially around five pillars of core processes of the Organization, theoverall objective of the programme is to achieve excellence in the functions comprisingmanufacturing, logistics, sales & marketing, people processes and certain strategicprocurement projects.
The manufacturing excellence pillar includes efforts to reduce production cost throughimprovements in clinker factor, plant performance, thermal and electrical energyefficiencies. The sales and marketing teams aim to strengthen the Companys brandadvantage, sustain market share and strive for top-line growth. In logistics, the plan isto achieve best-in-class performance in terms of cost-to-serve and time-to-serve. TheCompany has deployed emerging technologies like RFID (Radio Frequency Identification) andGPS (Global Positioning Systems) for the first time in the Indian Cement Industry, toenable easy tracking of road transport vehicles in our plants and in transit to theend-consumer. The Institutionalizing Excellence journey has already shown signs ofimprovement across the Company with traction in all areas covered by it.
7. CEMENT BUSINESS PERFORMANCE AT A GLANCE
| ||2012 ||2011 ||Change % |
|Production - million tonnes ||24.12 ||23.46 ||3% |
|Sales Volume - million ||24.11 ||23.73 ||2% |
|tonnes || || || |
|Sale Value - Rs. crore ||11130.45 ||9429.62 ||18% |
|Operating EBITDA Rs. crore ||2195.57 ||1920.72 ||14% |
8. EXPANSION CAPEX
Preliminary work on the new Jamul expansion project has commenced with ground-breakingat site and ordering out major plant equipment. Scheduled for completion in a phasedmanner in 2015, the project comprises a new clinkering line of 2.79 million tonnescapacity and grinding facility of 1.10 million tonnes at Jamul. In addition, it alsoincludes the establishment of two other grinding plants in Eastern India, which willtogether enhance our capacity by 5 million tonnes of cement per annum. The total estimatedcost of this expansion is Rs. 3300 crore and shall be funded through internal accruals.
9. READY MIXED CONCRETE (RMX)
During the year under review, the sales volume of RMX fell by 16%, mainly on account ofa slowdown in the construction industry. Steps have been initiated to consolidate theCompanys RMX business through increased volumes from its existing assets. Vigorousefforts are being made to extend the customer base and leveraging the Companys vastcement network.
The outlook for the construction sector in 2013 remains stable. Maximum demand for RMXis expected from Mumbai, Gurgaon and BengaluruRs., which are likely to attract largerinvestments in real estate and infra projects. We expect pricing to remain under pressurenext year as a result of competition.
| ||2012 ||2011 ||Change % |
|Production - lakh cubic metres ||16.54 ||19.79 ||(16%) |
|Sales Volume - lakh cubic metres ||17.97 ||21.41 ||(16%) |
|Sale Value - Rs. crore ||617.06 ||687.66 ||(10%) |
|Operating EBITDA - Rs. crore ||2.12 ||(3.29) ||164% |
10. SUSTAINABLE DEVELOPMENT
10.1 Alternative Fuels and Raw Materials (AFR)
The Company continues to provide sustainable waste management solutions to variousindustries through co-processing. Our portfolio of clients has further increased with newwaste streams. Efforts continued to be made to reduce dependence on fossil fuel andincrease the use of biomass as a renewable source of energy.
Third party emission monitoring trial burns for hazardous waste, conducted in closeco-ordination with regulatory authorities and industries, demonstrated that co-processingwastes in cement kilns did not have any adverse impact on the environment and on thequality of the end product.
10.2 Renewable Energy & Clean Development Mechanism (CDM)
YourCompanygenerated42.33millionunits of wind power from its three wind power stationslocated in Rajasthan, Tamil Nadu and Maharashtra. During the year, 1,77,299 CertifiedEmission Reductions (CERs) were received from the United National Framework Convention onClimate Change (UNFCCC) for the CDM Projects of blended cements and wind power generationin Tamil Nadu. During the year, we registered our wind power generation in Rajasthan as anew CDM project.
10.3 Environment Performance
Your Company has installed Continuous Ambient Air Quality Monitoring Stations andContinuous Emission Monitoring Systems for kiln stacks at most of its plants. Onlinereporting of environment data to the Central Pollution Control Board was started inrespect of seven of its plants. During the emission year, your Company reduced CO2 by ~2%.This was achieved through several initiatives like reduction of specific thermal energy,specific electrical energy, higher usage of blended materials like flyash and slag and theuse of alternative fuels and raw materials.
Stack dust emissions were maintained well below statutory limits by installation of thestate-of-the-art pollution control equipment in different plants of ACC and kiln stackemissions were lower by 15.49% as compared to the previous year.
Several initiatives have been undertaken across all plants to reduce specific waterconsumption for cement manufacturing and also enhance water harvesting efforts indifferent plants and mines.
The Company has under implementation a 7 MW Waste Heat Recovery Power generation unitat Gagal, Himachal Pradesh, which when completed, will be capable of generating ~45million units of power per year of green energy, thereby into further reducing thedischarge of CO2 the environment.
As a member of the Cement Sustainability Initiative, your Company made key contributionin developing a Low Carbon Technology roadmap for the Indian Cement Industry.
11. COMMUNITY DEVELOPMENT
As part of its Corporate Social Responsibility, your Company undertakes a range ofactivities to improve the living conditions of the weaker sections living near its plants.These include education, healthcare, vocational guidance and rural development. Some ofthese like agriculture development were carried out in partnership with governmentagencies. During the year under review, efforts to improve the quality of education invillage schools benefitted about 28000 students. Bridge Education Support was given toabout 4200 students, and 100 Scholarships were awarded to meritorious students to helpthem continue their education. Technology aided education initiatives like smart classesand interactive kiosks in rural schools aided about 6100 rural children to keep pace withmodern methods of learning. About 800 women members of Self Help Groups (SHG) participatedin Adult Literacy Programs run by your Company.
Skill development training programmes were imparted to unemployed youth in partnershipwith specialised NGOs which helped about 2376 youth get job placements in variousmanufacturing and service sector enterprises. Your Company also supported the formation of604 SHGs and their strengthening through structured training activities. Members of theseSHGs saved about Rs. 1.12 crore which helped them to secure matching grants from banks andother financial institutions to start micro-enterprises.
On the health and nutrition front, your Companys initiatives for better healthbenefitted 1.35 lakh people. Support to 144 anganwadi centres helped 11,150 mothers andchildren get access to better health and nutrition. Nearly 17,000 people were supportedthrough counselling, testing and treatment, wherever applicable, for HIV/AIDS. The Companyreleased its Externally Assured A+ rating Sustainable Development Report 2011 in the GRI(Global Reporting Initiative) framework.
12. OCCUPATIONAL HEALTH & SAFETY (OH&S)
Your Company engages its employees in OH&S matters through a policy ofcommunication, involvement and competency build-up applied consistently and continuallythroughout its operation. Different programmes targeting critical areas are beingimplemented across all sites to address risks associated with operations. Effectiveness ofthese programmes is being constantly assessed by the Top Management. External audits arebeing conducted to check the level of implementation of these safety programmes.
A behaviour based safety training programme "ACC Chetna" was launched in June2012. The programme trains people to practice 5 simple behaviours that can preventinjuries at the workplace and at home.
Visible Safety Leadership programmes are being conducted across business units forsenior line managers. The programme comprises practical exercises and interactive sessionsand prepares line managers to act as a role model to their subordinates by visibly leadingsafety in the field.
The concept of Safety Champions has been successfully established and aims to involveand engage line managers in safety by way of execution of short term safety projects.
Risk assessment is an integral part of any job/ activity. Our line managers areprovided with different types of risk assessment tools to help them identify risk anddecide on appropriate control measures. Hazard Identification and Risk Assessment (HIRA)workshops are being continued at sites to refine anticipation capability amongst theemployees by enhancing their hazard observation skills. Apart from our employees,contractors are also being involved in HIRA workshops, which show an appreciable change inthe attitude of contractors towards safety.
A concept of "Safety Circle" has been rolled out across the plants to promotesafety ownership amongst line management. The intent of this concept is to involve as wellas to engage shop floor employees including contractor workforce to identify safetyconcerns and execute safety projects for focused improvements in their respective workareas.
Our pro-wellness programmes reached more than 7,500 employees, contractors andcommunity members during the year.
12.1 Logistics Safety
Logistics safety was given close attention with carefully planned interventions inpeople development and driver trainings. Health and safety checks have been initiated inthe plants in phases with the help of external consultants. This includes examination ofaspects such as plant packing house layouts, truck parking yards, inward and outward flowof traffic, storage areas and infrastructure for road and rail transport.
13. HUMAN RESOURCES
With an intent to create a future ready talent pool for managing our business growth,your Company has embarked on a journey towards People Excellence during the year. The aimof this journey is to re-engineer HR processes and ensure that each HR process isfine-tuned with current and future business requirement and an appropriate number ofemployees are groomed for future middle and senior leadership roles. Greater focus isgiven to hiring and retaining talent from different disciplines and streams. Under aconcept of On boarding Centres, a complete functional orientation programme isin place which is expected to deliver competent cement engineers and functionalspecialists. The concept has been evaluated as one of the best practices acrossmanufacturing companies in the industry. As extension of faster learning for young talent,your Company has embarked on a plan to impart intensive learning through challengingfunctional/ cross-functional projects and coaching to improve analytical and decisionmaking capability.
The new talent management process has adopted a bottom-up approach to conduct thetalent review process, where immediate line managers are involved in identifyinghigh-potential employees from their own teams. One-on-one Development Conversations havebeen conducted with the identified high potentials to create their individual developmentplan based on individual and Organizations aspiration.
The industrial relations scenario was peaceful. Your Company embarked on a majorprogramme for Shop Floor Associates Development with an emphasis on involving and engagingthem in a variety of small improvement projects at the shop floor level so that theirengagement level is enhanced. The Sumant Moolgaonkar Training Institute (SMTI) and ACCCement Technology Institute (ACTI) are giving their full contribution in training artisansand diploma holders.
Your Companys cash and cash equivalent as at December 31, 2012 was Rs. 3037crore. The Company continues to focus on judicious management of its working capital.Receivables, inventories and other working capital parameters are kept under strict checkthrough continuous monitoring. The Companys debt programme continues to enjoy"AAA" rating from CRISIL.
During the year, the Company had given an option of premature redemption ofNon-Convertible Debentures to the holders of its Privately Placed Debentures having couponrates of 8.45% and 11.30%. Out of Rs. 500 crore of Non-Convertible Debentures, debenturestotalling Rs. 343 crore, stand prematurely redeemed as on December 31, 2012.
15. FIXED DEPOSITS
Despite efforts to identify and repay unclaimed deposits, the total amount of fixeddeposits matured and remaining unclaimed as on December 31, 2012 was Rs. 0.02 crore.
16. STATUS OF AMALGAMATION OF SUBSIDIARY COMPANIES
During the year, ACC Concrete Limited and Encore Cement and Additives Private Limited,both wholly owned subsidiaries of your Company, have amalgamated with your Company. Theamalgamations would enable your Company to utilize the resources of the said subsidiariesto further augment its cement business and would bring down the cost of overheads andother common expenses.
The Scheme of Amalgamation of Lucky Minmat Limited and National Limestone CompanyPrivate Limited, both wholly owned subsidiary companies of your Company, was filed withthe High Court of Judicature at Bombay and is pending due to certain regulatory approvals.
17. SUBSIDIARY COMPANIES
17.1 ACC Mineral Resources Limited (AMRL)
The wholly owned Company, AMRL, is a Special Purpose Vehicle which looks into thedevelopment of the four coal blocks allotted by the Madhya Pradesh State MiningCorporation Limited (MPSMC) through four companies incorporated jointly by MPSMC and AMRLpursuant to a joint venture agreement.
In January 2013, the Company received notice of de-allocation of one of the Coal Blocksfrom the Ministry of Coal, Government of India, on the grounds of non-receipt of forestand environmental clearances from the Ministry of Environment and Forests, in view of theblocks proximity to the National Tiger Reserve at Bandhavgarh. MPSMC along with theconcerned Joint Venture Company, have together filed a writ petition in the Jabalpur HighCourt for relief in the matter.
During the year under review, the preliminary and pre-development activities in theother three coal blocks are in progress. The Bicharpur Coal Block in Shahdol District isin an advanced stage of development. AMRL does not have any commercial activity orearnings from investments and therefore no income.
17.2 Bulk Cement Corporation (India) Limited (BCCI)
During the year under review, BCCI handled cement volumes of 9.20 lakh tonnes in 2012,as against 9.34 lakh tonnes in 2011. The Profit after tax for the year 2012 is Rs. 179.81lakhs, as against Rs. 68.35 lakhs in the year 2011.
17.3 Singhania Minerals Private Limited
This Company was acquired in August 2012. Being wholly owned Company, the saidacquisition will help the Company in augmenting its limestone reserves.
17.4 Audited statements of accounts of the Companys Subsidiaries
As required under Section 212 of the Companies Act, 1956, the audited statements ofaccount, along with the report of the Board of Directors relating to the Companyssubsidiaries; ACC Mineral Resources Limited, Bulk Cement Corporation (India) Limited,Lucky Minmat Limited, National Limestone Company Private Limited and Singhania MineralsPrivate Limited together with the respective Auditors Reports thereon for the yearended December 31, 2012 are annexed.
As per the Succession Policy for Directors, Mr Naresh Chandra and Mr R A Shah will bestepping down from the Board of Directors of the Company at the forthcoming Annual GeneralMeeting of the Company. The Board has placed on record its appreaciation for theoutstanding contributions made by Mr Naresh Chandra and Mr R A Shah during theirrespective tenures as Directors of the Company since May 5, 2004 and January 24, 2006respectively.
It is proposed not to fill up these vacancies and accordingly the requisite resolutionsin this behalf have been included at Items 5 & 6 of the Notice convening the AnnualGeneral Meeting.
In accordance with the provisions of the Companies Act, 1956, and in terms of theMemorandum and Articles of Association of the Company, Mr N S Sekhsaria and Mr ShaileshHaribhakti retire by rotation and are eligible for re-appointment.
19. INTERNAL CONTROL SYSTEMS AND THEIR
The Company has documented a robust and comprehensive internal control framework forall the major processes to ensure reliability of financial reporting, timely feedback onachievement of operational and strategic goals, compliance with policies, procedures, lawsand regulations, safeguarding of assets and economical and efficient use of resources.
The Internal Control System of the Company is commensurate with the size, scale andcomplexity of its operations. It is being constantly assessed and strengthened with new /revised standard operating procedures and robust internal and Information Technology (IT)controls.
The formalized systems of control facilitate effective compliance as per Clause 49 ofthe Listing Agreement with the Stock Exchanges, and Article 728(a) of the Swiss Code ofObligations applicable to the Holcim Group since 2008.
The Companys Internal Audit Department objectively and independently tests thedesign and operating effectiveness of the internal control system to provide a credibleassurance to the Board and the Audit Committee regarding the adequacy and effectiveness ofthe internal control system. The Internal Audit function monitors the effectiveness ofcontrols, and also provides an independent and objective assessment of the overallgovernance processes in the Company, including the application of a systematic riskmanagement framework.
The scope and authority of the Internal Audit activity are well defined in the InternalAudit Charter, approved by the Audit Committee. Internal Audit plays a key role byproviding an assurance to the Board of Directors, and value adding consultancy service tothe business operations.
20. BUSINESS RISK MANAGEMENT
Your Company has robust Business Risk Management (BRM) practices to identify, evaluatebusiness risks and opportunities. This is monitored both at the Corporate and at theregional levels. The business risks and opportunities so identified are integrated intothe business plan and a detailed action plan to mitigate the identified business risks isthereafter drawn up and its implementation monitored.
The key business risks identified by the Company and its mitigation plans are as under:
Availability of fuel at reasonable rates is one of the main concerns of the Company, asit uses large quantities of coal annually to meet its kiln and captive power generationrequirements. The year 2012 also witnessed an increase in the price of coal whichadversely impacted the profitability of the Company. This, coupled with limited productionof the fuel in the country, is expected to result in higher input costs for a fuelintensive industry like cement. Further, the availability of linkage coal is graduallyreducing. The Company is trying to mitigate its fuel risk by increased usage ofalternative fuels and optimization of coal mix. It has also initiated steps and is in theprocess of developing its own coal blocks which would partly go to meet its coalrequirements.
The Cement Industry is capital intensive in nature. In the execution of large projects,there could be exposure to time and cost overruns. To mitigate these risks, the Companyhas strengthened its project management team as well as its project accounting andgovernance framework. Whilst the Company continues to draw on Holcims expertise, aseparate Organization structure at project sites, with defined roles and accountability,is in place for large projects. A Capex Committee of the Board oversees the feasibilityand progress of projects and makes suitable recommendations.
The Cement Industry is becoming intensely competitive with the foray of new entrantsand some of the existing players adopting inorganic growth strategies. To mitigate thisrisk, the Company is working to enhance brand equity and visibility and enlarge itsproduct portfolio and service offerings. Simultaneously, there are several initiativesbeing taken as part of Institutionalizing Excellence programme in the areas of costcompetitiveness and cost leadership.
The Cement Industry is labour intensive and hence safety of its employees and shopfloor associates is of utmost importance to the Company. To reinforce the safety culturein the Company, it has identified OH&S as a major focus area. Your Company already hasvarious activities and programmes under way in all its plants and sales units.
21. ENHANCING SHAREHOLDERS VALUE
The processes of the Secretarial & Compliance Division, Share Department and ISDSupport, are ISO 9001:2008 certified by Det Norske Veritas AS for the robustness ofquality management processes.
Your Company believes that its Members are among its most important stakeholders.Accordingly, your Companys operations are committed to the pursuit of achieving highlevels of operating performance and cost competitiveness, consolidating and building forgrowth, enhancing the productive asset and resource base and nurturing overall corporatereputation. The Company is also committed in creating value for its other stakeholders byensuring that its corporate actions positively impact the socio-economic and environmentaldimensions for the society for sustainable growth and development.
22. DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them, your Directors make the following statement in terms ofSection 217(2AA) of the Companies Act, 1956:
that in the preparation of the annual accounts for the year ended December 31,2012, the applicable accounting standards have been followed along with proper explanationrelating to material departures, if any;
that such accounting policies as mentioned in Note 2 of the Notes to theFinancial Statements, have been selected and have been applied consistently and judgementand estimates have been made that are reasonable and prudent, so as to give a true andfair view of the state of affairs of the Company as on December 31, 2012, and of theprofit of the Company for the year ended on that date;
that proper and sufficient care has been taken for the maintenance of adequateaccounting records, in accordance with the provisions of the Companies Act, 1956, forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
?the annual accounts have been prepared on a going concern basis.
The Companys Auditors Messrs S R Batliboi & Co., Chartered Accountants,Mumbai, who retire at the ensuing Annual General Meeting of the Company, are eligible forre-appointment. They have confirmed their eligibility under Section 224 of the CompaniesAct, 1956, for re-appointment as Auditors of the Company.
Members attention is invited to the observation made by the Auditors at point(xxi) of their CARO Report, issued pursuant to the Companies (AuditorsReport) Order, 2003 (CARO Report), which is self explanatory.
As per the requirement of the Central Government, and in pursuance of Section 233B ofthe Companies Act, 1956, your Company carries out an audit of cost records relating tocement each year. Subject to the approval of the Central Government, your Directors haveappointed Messrs N I Mehta & Co., to audit the cost accounts of the Company for thefinancial year 2012.
24. CORPORATE GOVERNANCE
As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate sectionon corporate governance practices followed by the Company, together with a certificatefrom the Companys Auditors confirming compliance, is set out in the Annexure formingpart of this Report.
25. BUSINESS RESPONSIBILITY REPORTING
As per Clause 55 of the Listing Agreement with the Stock Exchanges, a separate sectionon Business Responsibility Reporting forms part of this Annual Report.
26. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company, prepared in accordance withrelevant Accounting Standards viz. AS21, AS23 and AS27 issued by the Institute ofChartered Accountants of India forms part of this Annual Report.
27. ENERGY TECHNOLOGY AND FOREIGN EXCHANGE
The information on conservation of energy, technology absorption and foreign exchangeearnings and outgo stipulated under Sec 217(1)(e) of the Companies Act, 1956, are given inAnnexure A to the Directors Report.
28. PARTICULARS OF EMPLOYEES
Information in accordance with the provisions of Section 217(2A) of the Companies Act,1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended is givenin Annexure B to the Directors Report.
Your Directors are thankful to the various Central and State Government Departments andAgencies for their continued help and co-operation. The Directors are grateful to thevarious stakeholders customers, shareholders, banks, dealers, vendors and otherbusiness partners for the excellent support received from them during the year underreview. Your Directors wish to place on record their sincere appreciation to all employeesfor their commitment and continued contribution to the Company.
30. CAUTIONARY STATEMENT
Statements in the Directors Report and the Management Discussion & Analysisdescribing the Companys objectives, expectations or forecasts, may beforward-looking within the meaning of applicable securities laws and regulations. Actualresults may differ materially from those expressed in the statement. Important factorsthat could influence the Companys operations include global and domestic demand andsupply conditions affecting selling prices of finished goods, input availability andprices, changes in government regulations, tax laws, economic developments within thecountry and other factors such as litigation and industrial relations.
| ||For and on behalf of the Board of Directors |
| ||N S Sekhsaria |
|Mumbai ||Chairman |
|February 7, 2013 || |
Annexure A to Directors Report
Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure ofParticulars in the Report of Board of Directors) Rules, 1988.
A: CONSERVATION OF ENERGY
(a) Energy conservation and efficiency measures were undertaken in various areas of thecement plants:
Thondebhavi Plant started to operate the VRM with ZERO table water spray andsuccessfully stopped heating of the system during mill startup which saved LDO and alsoimproved specific electrical energy. Optimized the compressor distribution system in milland packing plant. Optimized the velocity at the VRM Louver area and reduced the bag housefan flow.
Madukkarai Plant replaced existing separator with high efficiency V-Separator atVRM. Installed Variable Speed Drives for cooler fans (7 nos), Positive DisplacementBlower, Mill Vent fan, Separator Vent Fan. Optimised compressors by changing pipelinelayout. Installed high efficiency fan impellers for cooler fans 3 and 4. Installed andhooked-up New Air Cooled condenser in place of existing condenser to increase the de-ratedgeneration capacity from 8 MW to its full capacity of 15 MW in the Captive Power Plant.
Jamul Plant installed medium voltage Variable Speed Drive for Kiln 3 Waste GasFan. Installed multistep controllers in Raw Mills dust collector compressors for bettercontrol of outlet pressure. Dense Phase pump conveying pipe-line was re-routed to avoidpressure drop. All pre-heater cyclone dispersion plate angle measured and adjusted forbetter heat transfer. Reduced radiation losses by thermal imaging and corrective action.Installed bag filter on top of preheater to remove the cold air from material conveyingblower. Increased coal mill output by improving capacity of circulating fans.
Lakheri Plant reduced cooler exhaust gas flow from 1.2 to 1.0 Nm3/kg Clinker, byattaching cooler plate to plate gaps, inter and under compartment sealing. Reduced coolerexhaust gas temperature from 240 deg C to 220 deg C by process optimization. Reduced heatloss due to radiation and convection in PH tower, Calciner, kiln shell, tertiary air duct,cooler and kiln hood by refractory management, heat resistant paint on kiln shell,controlling shell temperatures through raw mix optimization for stable coating formationin kiln. Met requirement of compressed air for old cement mills by interconnecting withnew cement mill compressor, thereby stopping one compressor of 132 KW. Installed energyefficient impellers for cooler fan 4 and 10.
Bargarh Plant started utilization of HPGR-1 as semi finished grinder for Cementmill 1 and 4 to increase output rate of these mills. Optimized pre-heater fan. Improvedoutput of Raw mill by Optimization of feed size. Installed GRR in Raw Mill Fan. Compressedair lines in Slag VRM and mixing plant were re-routed in order to eliminate one 90 KWcompressor.
Chanda Plant installed Variable Speed drives for ID Fan of Limestone Crusher BagFilter at Mines and transporting Clinker Pipe conveyor. Optimised loading of PowerTransformers. Improved output from Raw Mill by optimizing Dam ring height.
Kymore Plant Optimized DDF (Dual combustion De-nitrification Furnace) firingblower by reducing coal conveying air. Modified cooler house shoe which has eliminatedfrequent stoppage of K-1. Optimised Voltage and frequency at generation side and voltageat distribution side. Changed purging of all Bag filter to DP based mode for Compressedair saving. Conducted CFD (Computational Fluid Dynamics) study and modified 4th stagecyclone for K-1 and 3rd cyclone dip tube. Optimised grinding media for both the Raw-millsfor Productivity improvement. Reduced suction pressure of cooler fans by installing bellmouth at suction side. Eliminated Raw mill-1 and 2 circuit dust collector Bag house Fan.Eliminated Fly ash air-slide blower. Eliminated Service pump at Captive Power Plant.
Gagal Plant commissioned Rota-scale for calciner coal and kiln feed in G-2.Installated Variable Speed Drives for Motor Cooling Fans for Main Motors of Raw Mill -2,Cement Mill -2, Kiln 1 BH Fan, Raw Mill 1, K1 Kiln Stream Fan, K1 Calciner String Fan,Kiln 1 ID FAN, Cement Mill 1. Variable Speed Drive were also installed for Kiln CoalPositive Displacement Blower, Raw Mills Silo Dust Collector Fan, Cooler ID Fan, K1Kiln Feed Dust Collector Fan. Installated new air-slide in Pre-grinder for Cement Mill 5to take the Cyclone product as final product.
Wadi Plant replaced two Gypsum conveyors with a single conveyor at Wadi II.Installed Variable Speed Drives for Calciner coal firing blowers at Wadi II and for CementMills - 1, 4 and 5 dust collector fans at Wadi I.
Tikaria Plant modified cooling water circulation line of Cement Mill # 2 & 3and VRM, thereby stopping two cooling tower pumps. Installed multistep controllers in allthe fly-ash unloading compressors. Revived Variable Frequency Drives of Mill Vent fan andseparator dust collector fans of all the three Cement Mills. Replaced intermediatediaphragm, feed head liner and re-graded grinding media of Cement Mill # 2. Replaced firstchamber shell, liner plate and re-graded grinding media of Cement Mill # 1.
Chaibasa Plant stopped one compressor in flotation section by removing theintercooler and converting the HP cylinder to LP cylinder. Removed orifice meter from VRMinlet fan. Modified the compressed air line to stop one small compressor. Rectified energysaver for compressed air optimization system.
Detailed Energy Audit was conducted at Gagal, Kymore, Lakheri, Chaibasa,Kudithini & Encore plant, and detailed compressed air audit was conducted at Wadiplant.
Energy Monitoring System was commissioned at Wadi II, Thondebhavi and Kudithiniplant.
Capacitor banks have been added to the system across ACC plants to improve plantpower factor.
Replacement of conventional lamps with Compact Fluorescent Lamps and LED lightfor plant and colony lighting was done across ACC plants.
ISO 50001 Certification Audit was conducted for Kymore, Jamul, Lakheri and Gagalplants.
Commissioning of New Packer with wagon loading platform at Kymore.
Thondebhavi Plant won 2nd Prize at Prestigious BEE National Energy ConservationAwards 2012, while Lakheri Plant was awarded by Confederation of Indian Industriesas well as Govt. of Rajasthan.
The Wind Farm installed at Rajasthan generated 14.63 Million Units of greenenergy during 2012, as compared to 13.73 Million units generated during 2011.
The Wind Farm installed at Tamil Nadu generated 24.2 Million units of greenenergy during 2012, as compared to 21.55 Million units generated during 2011.
The Wind Farm installed at Maharashtra generated 3.50 Million units of greenenergy during 2012, as compared to 3.61 Million units generated during 2011.
In 2012, the Company co-processed differenr types of alternative fuels totaling 53,343tonnes.
(b) Additional Proposals being implemented for further conservation of energy :
The installation of Medium Voltage and Low Voltage Drives is being carried out as partof "Fast Track Projects" in two phases across ACC plants. This will ensuresubstantial saving in electrical energy during 2013, as well in ensuring better processcontrol.
(c) Impact of the above measures for reduction of energy consumption and consequentimpact on cost of production:
The measures stated in points (a) and (b) above would further improve the thermal andelectrical energy efficiency of the Plants. During the year 2012, the electrical energyreduced by 1.59%, thermal energy reduced by 0.81% and clinker factor reduced by 1.79% over2011.
Power and Fuel Consumption Cement
| ||Current Year ||Previous Year |
| ||Lakh Units ||Total Cost ||Rs. per Unit ||Lakh units ||Total Cost ||Rs. per Unit |
| ||(Kwh) ||(Rs. Lakhs) || ||(Kwh) ||(Rs. Lakhs) || |
|Electricity (Gross) || || || || || || |
|a) Purchased : ||6152 ||32949 ||5.36 ||6917 ||33625 ||4.86 |
|b) Own Generation : || || || || || || |
|i) Through Diesel Generator ||43 ||570 ||13.28 ||30 ||531 ||17.40 |
|ii) Through Steam ||17876 ||76829 ||4.30* ||17614 ||65521 ||3.72 |
|Turbine / Generator || || || || || || |
* Excluding impact due to change in depreciation method for Captive Power Plants.
| ||Quantity ||Total Cost ||Average Rate ||Quantity ||Total Cost ||Average Rate |
| ||(Lakh Tonnes) ||(Rs. Lakhs) ||(Rs./Tonne) ||(Lakh Tonnes) ||(Rs. Lakhs) ||(Rs./Tonne) |
|Coal (for kiln)** ||23.29 ||132094 ||5672 ||24.30 ||122764 ||5053 |
** Does not include other fuel / alternative fuels used in kiln.
Consumption per unit of Production
| ||@ Standard ||Current Year ||Previous year |
|a) Electricity Kwh/T of Cement # || || || |
|Semi-dry / Dry Process ||98-110 ||84 ||84 |
|b) Coal for kiln K.cal/Kg of clinker || || || |
|Cement - Semi-dry / Dry Process ||720-990 ||736 ||742 |
@ Source : Publication of Confederation of Indian Industries
# Excludes non-process power consumption.
(B) TECHNOLOGY ABSORPTION
Research & Development
1. Specific areas in which R & D is carried out by the Company
a) Improving quality of blended cement through innovative processing utilizingindustrial by-products for improved quality Performance of ACC Plants
b) Conservation of resources through maximization of use of low-grade limestone forcement manufacture
c) Development of application Oriented Cements with decreased CO2 emissions
d) Development of new products or discovering new methods of analysis
e) Productivity research for increase efficiency in use of resources
f) Recycling of wastes and research for efficient use of scarce materials
g) Characterization of Industrial wastes and looking into possibilities environmentallyfriendly co-processing of wastes in cement manufacture leading to thermal substitution andconservation of natural resources
h) Development and use of Cement Grinding aid and accelerators for PPC & PSC forimproved performance in Concrete and reduced clinker factor in Blended Cements
i) Improving the grinding efficiency of Petcoke and Coal
j) Development of Cements tailored for specific market clusters and applicationsegments
k) Development of cement based Niche products
l) Quality Benchmarking exercise for different market clusters of ACC products
2. Benefits derived as result of above R & D
a) Effective use of marginal quality raw materials and fuels with improved clinkerquality
b) Increased absorption of blending materials like fly ash and slags in blended cements
c) Effective replacement of the costlier natural Gypsum by cheaper by product Phosphogypsum without affecting the quality of cement
d) Maintain a lead position in all the market clusters of the country
e) Launch of special high performance products like F2R, Concrete Plus , Coastal Plusfor specific Market segments / Market climatic conditions
f) Reduction in sp.power consumption for grinding
g) Effective use of SPC at each stage of Cement Manufacture for improving consistencyof Operations and consistency in Product Quality
h) Fuel efficiency
3. Future plan of action
a) Exploratory research works on the above specific areas
b) Focus on development of products aimed at enhancing use of cement in variousapplications and development of application Oriented Cement based cementitious material
c) Use of waste / byproducts in cement manufacture as alternative materials
d) Improve product quality particularly with respect to long term durability andreduction in cost of manufacture
|4. Expenditure on R & D ||Rs. Lakhs |
|a. Capital ||172 |
|b. Recurring (Gross) ||652 |
|c. Total ||824 |
|d. Total R&D expenditure as percentage of total turnover ||0.07 |
|5. Foreign Exchange Earnings & Outgo ||Rs. Lakhs |
|Foreign exchange earned ||Nil |
|Foreign exchange used ||7830 |
Annexure B to Directors Report
Employed for Full Year
|Sr. No. ||Name ||Remuneration Gross ||Designation & Nature of Duties ||Qualification ||Date of Commencement of Employment ||Total Experience ||Age in years ||Last Employment |
| || ||(Rs.) || || || ||(Years) || || |
|1 ||ANIL BANCHHOR ||6244996 ||CHIEF EXECUTIVE - CONCRETE ||BE (Civil) ||13-Nov-96 ||28 ||50 ||TCE Consulting Engineer |
|2 ||B SHERDIWALA ||9589332 ||PRESIDENT - HUMAN RESOURCES ||BSc, M.A, M PHIL, LLB ||19-Mar-84 ||29 ||55 ||NIL |
|3 ||BHARAT PAREKH ||7650822 ||JT. PRESIDENT - CAPEX, MRO & SERVICES ||BE Electronics ||10-Jul-08 ||35 ||59 ||Aditya Birla Group |
|4 ||BURJOR DORAB NARIMAN ||9228103 ||COMPANY SECRETARY & HEAD COMPLIANCE ||BCom,FCS ||14-Dec-09 ||38 ||58 ||Bombay Dyeing & MFG Company Ltd |
|5 ||G P TIWARI ||6800674 ||DIRECTOR - PLANT ||MSc Chemistry ||9-Jul-09 ||29 ||50 ||Ultratech Cement |
|6 ||GEOFFREY DEAN CURRIE ||11593390 ||DIRECTOR - OH & S ||Bachelor of Business ||18-Apr-11 ||16 ||44 ||Cement Australia |
|7 ||HANS FUCHS ||16671984 ||MD - CONCRETE ||Certificate in Mgt ||19-May-08 ||29 ||47 ||PT Holcim Indonesia TBK(HIL) |
|8 ||J V B SASTRY ||7957451 ||DIRECTOR - LOGISTICS ||Mcom, M.Phil, MBA ||24-Jun-88 ||33 ||53 ||Coromandel Fertilisers Ltd |
|9 ||J.DATTA GUPTA ||12487531 ||CHIEF COMMERCIAL OFFICER ||B.Tech (IIT) ||10-Aug-76 ||37 ||59 ||NIL |
|10 ||JOYDEEP MUKHERJEE ||8072684 ||DIRECTOR - SALES ||B.A ( Hons ) , PGDMM, EMIB. ||21-Jun-07 ||23 ||46 ||Hindalco |
|11 ||KULDIP K KAURA ||52783462 ||CEO & MANAGING DIRECTOR ||B.E. (Honours) in Mechanical Engineering ||5-Aug-10 ||42 ||65 ||Vedanta Resources PLC |
|12 ||M.K. MISHRA ||7781056 ||DIRECTOR - PLANT ||BE ||10-Feb-85 ||28 ||52 ||Lakshmi Cement |
|13 ||MARTIN MULLER ||9300560 ||HEAD - TECHNICAL EDUCATION ||Engineer HTL ||1-Nov-11 ||34 ||62 ||Holcim Indonesia |
|14 ||P N IYER ||10114638 ||CHIEF EXECUTIVE - SOUTH WEST REGION ||BCom,PGDBA ||2-Jan-09 ||31 ||57 ||Holcim (Bangladesh) ltd |
|15 ||R S RATHORE ||8735760 ||DIRECTOR - PLANT ||BE ||26-Jul-80 ||35 ||56 ||Rajasthan State Minerals Development Corprn. (RSMDC) |
|16 ||RAJESH SETH ||6189005 ||VICE PRESIDENT - CENTRAL LOGISTICS ||B.Sc. (Hons.), PGDM (IIMA) ||1-Jun-78 ||35 ||56 ||NIL |
|17 ||RAJIV KUMAR ||7157190 ||Director Special Projects ||BCom,MBA ||2-Jun-89 ||26 ||50 ||ABC India Ltd |
|18 ||RAJIV PRASAD ||20180926 ||CHIEF EXECUTIVE - NORTH REGION ||BE, PG Diploma ||27-Nov-09 ||28 ||51 ||Halonix Limited |
|19 ||RAJU J. MISRA ||7747457 ||SR. VICE PRESIDENT - LEGAL SERVICES ||BSc Science, BSc Shipping, LLB, PG Diploma in Security Law ||7-Mar-08 ||26 ||52 ||ESSEL Group |
|20 ||RAKESH SINHA ||7386084 ||DIRECTOR - PLANT ||BE ||24-Dec-09 ||31 ||56 ||The India Cement Ltd |
|21 ||S B SINGH ||7274846 ||DIRECTOR - PLANT ||MSc Chemistry, Ph. D Chemistry ||3-Dec-84 ||32 ||54 ||Central Board for the Prevention & Control Water and Air Pollution |
|22 ||SA KHADILKAR ||6839735 ||DIRECTOR - QUALITY & PRODUCT ||BSc , MSc Chemistry ||1-Apr-81 ||35 ||57 ||Morarjee Mills (Piramal Organic |
| || || ||DEVELOPMENT || || || || ||Chemicals) |
|23 ||SHAKTI ARORA ||14695330 ||CHIEF CENTRAL PROCUREMENT OFFICER ||BE,MBA ||13-Jul-09 ||30 ||52 ||Mahindra & Mahindra Limited |
|24 ||SUDIPTO BHATTACHARYA ||6362421 ||VICE PRESIDENT - TAXATION & SPECIAL PROJECTS ||BCom, CA ||25-Jan-10 ||27 ||52 ||MTAR Technologies Pvt Ltd |
|25 ||SUNIL NAYAK ||15263234 ||CHIEF FINANCIAL OFFICER ||BCom, FCA, FCS, AICWA, LLB, GAMP (ISB/Kellogg) ||14-Aug-08 ||30 ||53 ||Clariant Chemicals India Limited |
|26 ||U.V. PARLIKAR ||6054159 ||DIRECTOR - Geocycle Business ||M.Tech ||1-Mar-95 ||30 ||54 ||National Peroxide Ltd |
|27 ||VIVEK CHAWLA ||14217948 ||CHIEF EXECUTIVE - EAST REGION ||BE Mining ||3-Jan-94 ||32 ||52 ||Grasim Ind.Ltd |
Employed for Part of the Financial Year
|Sr. No. ||Name ||Remuneration Gross ||Designation & Nature of Duties ||Qualification ||Date of Commencement of Employment ||Total Experience ||Age in years ||Last Employment |
| || ||(Rs.) || || || ||(Years) || || |
|1 ||A. K. SAXENA ||1338847 ||PRESIDENT - WADI CEMENT CLUSTER ||Diploma,BE ||18-Nov-85 ||27 ||50 ||Lohia Starlinger Pvt Ltd |
|2 ||ATUL KHOSLA ||7535737 ||PRESIDENT - PROJECTS ||ME ||18-Jul-07 ||30 ||54 ||Lafarge India Pvt Ltd |
|3 ||ERNESTO JR. SEGALES MATELA ||1935742 ||DY. GENERAL MANAGER - SAFETY ||BSc Civil Engineering ||17-Sep-12 ||27 ||50 ||Holcim Ltd |
|4 ||R VASUDEVAN ||5344728 ||SR. VICE PRESIDENT ||B Tech ,PG Diploma ||7-Dec-77 ||36 ||60 ||Synthetic Foams Ltd |
|5 ||RAMIT BUDHRAJA ||12777644 ||CHIEF EXECUTIVE - SOUTH WEST REGION ||B.Tech,MBA ||1-May-06 ||26 ||52 ||Holcim Ltd |
(I) Gross Remuneration shown above is subject to tax and comprises salary, allowances,incentive, monetary value of perquisites and Companys contribution to Provident Fundand Officers Superannuation Fund and National Pension Scheme.
(II) In addition to the above remuneration, employees are entitled to Gratuity inaccordance with the Companys rules.
(III) All the employees have adequate experience to discharge the responsibilityassigned to them.
(IV) The nature of employment in all cases is contractual.
| ||For and on behalf of the Board of Directors |
|Mumbai ||N. S. Sekhsaria |
|February 7, 2013 ||Chairman |