Your Directors have pleasure in presenting their Sixtysixth Annual Reporttogether 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 |
The Board of Directors has recommended a dividend of Rs.2/- on 30,71,76,747 equityshares of Rs.10/- each for the year ended 31st March, 2012 and proportionatedividend on shares having calls in arrears, as compared to Rs.1.50 per equity share forthe 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 CementsEmployees Stock Option Scheme, 2006 (ESOS, 2006). Further, the Company has adjusted adividend of Rs.1,055 towards calls in arrears. Consequently, the paidup equity sharecapital of the Company has increased to Rs.307,17,67,470 as on 31st March, 2012comprising 30,71,76,747 equity shares of Rs.10/- each and 1,910 equity shares on which asum of Rs.13,360 has been paidup. The balance amount of Rs.5,740 represents calls inarrears.
EMPLOYEES STOCK OPTION SCHEME
Details of options granted / exercised and other disclosures as required under Clause12 of the Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines, 1999 are set out in the Annexure 'G' to thisReport.
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 theCompanies 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 madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31st March, 2012 and of the profitof the Company for the year ended on that date.
3. 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.
4. That the annual accounts for the year ended 31st March, 2012 have beenprepared on a going concern basis."
MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Clause 49 of the Listing Agreement, a Management Discussion and AnalysisReport is given as addition to this report.
Pursuant to Clause 49 of the listing agreement with Stock Exchanges, a report onCorporate Governance along with Auditors' Certificate of its compliance is included aspart 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 & ManagingDirector in his capacity as the Chief Executive Officer of the Company is given asAnnexure 'E'.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
A report on CSR activities is given in Annexure 'F'.
The details relating to the performance of the Company have been outlined in theManagement Discussion and Analysis Section. As mentioned therein while there was amarginal growth of 6.6% for cement demand on an all India basis, the Southern regionregistered practically nil growth during the year and had a negative growth of 3% uptoDecember 2011. With substantial increase in capacity in the region, the overall capacityutilization was lesser than that of all India at 63% only in the South. Given the backdrop of the tight market conditions, the cement production of the Company was lower thanthat of previous year.
The overall clinker production was at 71.95 lakh tons (76.34 lakh tons) while thegrinding was at 94.63 lakh tons (99.80 lakh tons). The sale of cement was at 94.51 lakhtons as opposed to 99.32 lakh tons with a clinker sale of 0.76 lakh tons as compared to0.32 lakh tons in the previous year.
With better selling prices prevailing, the total sales and other income for the yearwas 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 ascompared to Rs.473.30 crores in the previous year. Interest charges were higher atRs.286.73 crores as compared to Rs.141.72 crores in the previous year due to loans takenfor 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.244.03crores due to higher capitalization. The foreign currency translation difference resultedin an expenditure of Rs.3.64 crores as compared to a gain of Rs.2.32 crores in theprevious 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.5crores in the previous year. The resultant profit after tax was at Rs.292.97 crores ascompared to Rs.68.10 crores in the previous year.
The performance could have been better but for the bout of cost increases as detailedbelow:
a. Increase in wages due to All India Wage Settlement which along with the cost ofliving index by 356 points and this together with the increased provision for unavailedleave as per Accounting Standard 15.
b. Increase in the price of diesel during the year which impacted the inward andoutward 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 inTamil Nadu and Andhra Pradesh.
e. Fuller impact of power tariff increases by the State Electricity Boards in theprevious year.
f. Depreciation of rupee against dollar impacting the coal price.
The improvement in selling price together with cost reduction initiatives taken inimproving the operating parameters and improvement in blending ratio have more than offsetthe above cost increases.
The Company's Sankari cement factory was granted Licence for Quality Management Systemsin accordance with IS/ISO 9001:2008 by the Bureau of Indian Standards, Chennai and thatthe said Licence would be valid from 28th November, 2011 to 27thNovember, 2014.
The Birth Centenary of Sri T.S.Narayanaswami, one of the Founders of the Company, wascelebrated on Friday, the 11th November, 2011 and in commemoration of theCentenary, Dr.B.S.Adityan, Director, unveiled the Portrait of Sri T.S.Narayanaswami at theCorporate 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 andResearch Centre for stem cell banking.
Pursuant to General Circular No.2/2011 No.51/12/2007-CL-III dated 08.02.2011 issued bythe Ministry of Corporate Affairs, Government of India, the Company has passed aresolution 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 Auditorsof the Subsidiary Companies namely Industrial Chemicals and Monomers Limited, ICLFinancial Services Limited, ICL Securities Limited, ICL International Limited, TrishulConcrete 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 ofChartered Accountants of India, Consolidated Financial Statements presented by the Companyinclude the financials of the subsidiaries. The Company will make available thesedocuments/details upon request by any member of the Company and its subsidiariesinterested in obtaining the same. The annual accounts of the Subsidiary Companies willalso be kept for inspection by any member at the Registered / Corporate Offices of theCompany and its Subsidiary Companies.
TRINETRA CEMENT LIMITED
The Company's 1.5 million tonne per annum cement plant which commenced its operationsin January 2011 stabilised in stages and has crossed one million tonne mark in its firstfull year of operation. The captive power plant of the Company of 20 MW has since beencommissioned towards end of the last quarter of the financial year. By creating necessaryinfrastructure through completion of the enhanced capacity of stacker and reclaimer andinstallation of the fly-ash handling system at Wankbhori Thermal Power Plant in Gujaratduring 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 ConcreteProducts Limited (TCPL) was sanctioned by Hon'ble High Court of Judicature at Madras on15.02.2012. The said Scheme became effective on 19.03.2012 on filing of the Court Orderwith Registrar of Companies, Chennai, Tamil Nadu. Consequent to the said Scheme OfAmalgamation, 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 ofyour Company in Tamil Nadu. The generation could have been better but for the stoppage ofthe 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 thenet profit after tax was at Rs.12.48 crores as compared to Rs.10.87 crores in the previousyear. The Company maintained its dividend pattern of 9% on equity shares besides declaringdividend at the respective coupon rates for the participating/ non-participatingpreference share capital. During the year, the Company has redeemed the first / secondannual instalments of redeemable cumulative participating/non-participating preferenceshares 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 concessionacquired by the companies. The necessary infrastructure works - laying of roads andconstruction of bridges for facilitating the mining and transportation of coal are likelyto 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 theinfrastructure work.
CONSOLIDATED FINANCIAL STATEMENTS
As prescribed by Accounting Standard 21 issued by the Institute of CharteredAccountants of India, the audited consolidated financial statements of India Cements Groupare annexed.
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 theearlier season has increased area under sugarcane plantation. Consequent to higher caneavailability during the season, the crushing is continued beyond financial year and it isexpected 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 ensuredand the Company was able to maintain the better performance than achieved during theearlier years.
Though the Company could achieve higher crushing vis-a-vis last year, it could producemarginally lesser volume of 78693 tonnes of sugar, as against 79757 tonnes in the earlieryear, consequent to lower sugar recovery of 9.82% (10.17%). Further, the Company couldexport 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 increasein volume of free sale sugar of 72552 tonnes as compared to 64268 tonnes in the previousyear 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.37.53crores (Rs.35.85 crores) and Net Profit during the year was Rs.19.16 crores (Rs.23.03crores). The net profit during the year was lesser due to the higher provision of interestof 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. Thewholly owned subsidiary viz. India Cements Investment Services Limited (ICISL) is in StockBroking. The FFMC division operates out of 20 branches and Travels division operates atChennai as an IATA accredited branch. The subsidiary ICISL has 22 branches. The GrossIncome from operations of ICCL was Rs.416.11 lakhs and that of ICISL was Rs.176.66 lakhsfor the year ended 31st March, 2012.
EXPANSION / MODERNISATION
The upgraded new capacities at Chilamakur and Malkapur stabilized during the year andhave come upto their targeted levels of outputs. The 48 MW power plant at Sankarnagar wascommissioned in January 2012 and after stabilization the commercial production startedfrom the end of March 2012.
The total amount of fixed deposits including cumulative deposits, which had not becomedue but outstanding as at 31st March, 2012 stood at Rs.1346.02 Lakhs. Depositstotalling Rs.26.67 Lakhs that matured for repayment were neither claimed by the Depositorsnor instructions for renewal were received by the Company. Reminders were issued to thedepositholders 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 andpaid 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, 1956are set out in the Annexure 'A'.
RESEARCH & DEVELOPMENT
During the year, your Company spent Rs.66.38 Lakhs towards revenue expenditure of theR&D department besides contributing a sum of Rs.70.97 Lakhs to National Council forCement and Building Materials (NCCBM), which carries out research on behalf of theIndustry.
Industrial relations continued to remain cordial during the year.
Housing and Urban Development Corporation Limited (HUDCO) vide its letterNo.Co.Sec./Nominee Director/2011 dated 07.12.2011 withdrew the nomination of SriK.Subramanian on the Board of our Company. The Board expresses its appreciation of thevaluable 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 ensuingAnnual 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 yearsfrom 15th September, 2012 and resolutions for approval of his reappointment andterms of reappointment have been included in the notice convening the Sixtysixth AnnualGeneral Meeting of the Company.
Brief particulars of Directors eligible for reappointment in terms of Clause 49 of theListing Agreement are annexed to the Notice dated 25th April, 2012 conveningthe 66th Annual General Meeting.
Messrs Brahmayya & Co. and P.S.Subramania Iyer & Co., Chennai, the Auditors ofthe Company, retire at the ensuing Annual General Meeting and are eligible forreappointment.
Sri S.A.Murali Prasad, Cost Accountant, Chennai, has been appointed as Cost Auditor forthe year 2012-13 subject to approval by the Government of India.
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 theircontinued support. The Directors also thank the Central Government and the various StateGovernments for their support. The stockists continued their excellent performance duringthe year and the Directors are appreciative of this. The continued dedication and sense ofcommitment 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 || |
ANNEXURE 'A' TO DIRECTORS REPORT FOR THE YEAR ENDED 31ST MARCH, 2012
Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with theCompanies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.
A. Conservation of Energy:
(a) Energy conservation measures undertaken:
i. Dynamic separator in coal mill circuit improved the utilization of petcoke andresulted in reduced power consumption.
ii. Old Reciprocating type compressor & Rotary air compressors being phased outwith energy efficiency screw compressors to reduce power consumption.
iii. Closed circuiting of cement mill at one of the plants ensured improvement in themill output and reduction in power.
iv. Installation of classifying liners instead of conventional liners resulting inimproved productivity and lower power consumption.
v. Additional power capacitors installed to improve the power factors at the AndhraPradesh plants.
vi. Modification of the hot air ducts from pre-heaters to coal mill for increasing coalmill inlet temperature to utilise the low cost high moisture imported coal.
vii. Soft Starters provided for energy saving in the kiln feed bucket elevators andclinker deep bucket conveyors. viii. Air volume optimization of compressors and coolerdone to reduce power consumption.
ix. Mechanical conveying system for cement mills along with weigh feeders installed toreduce power.
x. Modification of outlet diaphragm in coal mill resulted in marginal saving in powerconsumption.
xi. Variable frequency drives for cooler fans introduced resulting in less powerconsumption.
xii. Replacement of MOCB with VCBS in phased manner at various plants.
xiii. Commissioned the 48 MW power plant in Tamil Nadu to ensure uninterrupted power atrelatively cheaper cost.
(b) Additional investments and proposals, if any, being implemented for reduction ofconsumption of energy:
i. Modification of pre-heaters top stage cyclones for higher efficiency and lowpressure drop.
ii. Pre-Calciner M duct modification to increase the consumption of alternate fuels.
iii. Closed circuiting for 3 more cement mills at Andhra Pradesh plants to improveoutput and reduce the power consumption.
iv. Introduction of stepped liners for cement mills to optimize the output and reducepower.
v. Introduction of dynamic separators in the coal mill circuit for two of the AndhraPradesh plants for improvement of output and for enabling low cost fuel usage.
vi. VFD for raw mill, coal mill and cooler drives at one of the plants to optimizepower consumption.
vii. To improve the output of raw mill and to reduce power, tertiary crusher is to beintroduced in one of the plants.
viii. Cooler mid air tapping for increasing the hot air temperature to circumvent thehigher moisture in raw material and to ensure higher output from VRM.
ix. Installation of fly-ash drier (in the advanced stage of completion) to ensureoptimum utilization of hot gas and to improve the higher availability of fly-ash.
x. Installation of electronic packers, wagon loading arrangements at three of theplants to improve packer output and reduce power and labour cost.
xi. Installation of one more power plant of 48 MW at Vishnupuram in Andhra Pradesh.
(c) Impact of measures at (a) and (b) above for reduction of energy consumption andconsequent impact on cost of production of goods:
The measures that are proposed to be taken/under implementation are expected to reducethe power consumption by nearly 3 to 4 units/Tn of cement and overall heat consumption byaround 10-15 k.cals per kg of clinker. However, during the year, the power was broughtdown by 1 unit despite lower capacity utilization while heat consumption was reduced by 4k.cals per kg of clinker.
(d) Total energy consumption and energy consumption per unit of production: Given inForm 'A' annexed.
B. Technology Absorption:
Efforts made in technology absorption: Particulars given in Form 'B' annexed.
C. Foreign exchange earnings and outgo:
(a) Activities relating to exports, initiatives taken to increase exports, developmentof new export market for products and services and export plans: There was no significantexport sales during the year under review.
(b) Total foreign exchange used and earned:
| ||Current Year ||Previous Year |
|Used Rs. lakhs ||3516.36 ||2795.80 |
|Earned Rs. lakhs ||254.47 ||159.71 |
FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY
| || ||Current ||Previous |
| || ||Year ||Year |
|A. POWER & FUEL CONSUMPTION || || || |
|1. Electricity || || || |
|(a) Purchased || || || |
|Units - KWH - Lakhs || ||8027.06 ||8374.20 |
|Total amount - Rs. Lakhs || ||32884.15 ||29616.56 |
|Rate per unit - Rs. || ||4.10 ||3.54 |
|(b) Own Generation || || || |
|(1) Through Diesel/Furnace Oil Genset * || || || |
|Units - KWH - Lakhs || ||697.66 ||907.14 |
|Unit per Litre of Diesel/Furnace Oil-KWH || ||3.31 ||3.79 |
|Cost per unit - Rs. || ||2.69 ||3.83 |
|(2) Through Steam Turbine/Genset || || || |
|Units - KWH - Lakhs || || || |
|Unit per Litre of Furnace Oil/Gas-KWH || || || |
|Cost per unit - Rs. || || || |
|2. Coal for Kilns (various grades incl. Lignite) || || || |
|Quantity ||Tonnes ||1165984 ||1209023 |
|Total Cost ||Rs.Lakhs ||74367 ||68549 |
|Average Rate ||Rs./Tonne ||6378 ||5670 |
|3. HSD/Furnace Oil for Kilns || || || |
|Quantity ||K.Litres ||739.87 ||820.91 |
|Total Cost ||Rs.Lakhs ||314.30 ||343.74 |
|Average Rate ||Rs./K.Litre ||42480 ||41873 |
|4. Consumption per unit of Production ||Standards || || |
| ||(if any) || || |
|Electricity (KWH/Tn of Cement) ||110 ||92.40 ||93.19 |
|Coal Consumption Per Tn of Clinker ||20-25 ||16.21 ||15.84 |
|(Depending on Quality of Coal) || || || |
|Diesel Oil/Furnace Oil per Tn of Cement (Litres) || ||0.08 ||0.08 |
|* Including Power from Waste Heat Recovery Plant. || || || |
FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO ABSORPTION
|Research and Development (R & D): ||The Company has started an inhouse R&D department during December 1999 with a specified objective of carrying of R&D Projects in development of expert systems for the mills and kilns optimisation, Benchmark studies of our Cement Plants, optimisation of process Systems and Parameters ensuring Product improvement and cost reduction. |
|1. Specific areas in which R&D carried out by the Company || |
|2. Benefits derived as a result of above R & D || |
|3. Future plan of action || |
|4. Expenditure on R & D: || |
|(a) Capital : ||Nil |
|(b) Recurring : ||A sum of Rs.66.38 lakhs has been spent during the year for the functioning of R & D department. Besides this, a sum of Rs.70.97 lakhs is the contribution to National Council for Cement and Building Materials (NCCBM) which carries out Research on behalf of the Industry. Rs.137.35 lakhs |
|(c) Total : || |
|(d) Total R&D expenditure as a percentage of total turnover : ||0.03 |
|Technology absorption, adaptation and innovation: || |
|1. Efforts, in brief, made towards technology absorption, adaptation and innovation. || |
|2. Benefits derived as a result of above efforts e.g. product improvement, cost reduction, product development, import substitution etc. || |
|3. In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished: ||Not applicable |
|(a) Technology imported || |
|(b) Year of import || |
|(c) Has technology been fully absorbed || |
|(d) If not fully absorbed, areas where this has not taken place, reasons therefor and future plans of action. || |
MANAGEMENT DISCUSSION AND ANALYSIS
ECONOMY AN OVERVIEW
Against the backdrop of the Eurozone crisis, turmoil in West Asia and spike in crudeprices, the fiscal year 2011-12 was a year of "recovery interrupted" for theIndian economy. India's GDP growth is estimated at 6.9% in 2011-12 - a sharp fall from8.4% in the last year.
While the estimated growth of 6.9% in the fiscal year 2011-12 can be consideredreasonably healthy in view of the adverse global developments mentioned above, it would beunwise to ignore the fact that domestic factors like high inflation, depressed investmentclimate and unaddressed manufacturing bottlenecks also slowed down industrial activity.India's slow down in 2011-12 can be attributed almost entirely to weak industrial growthwith the good performance of the services and agricultural sectors. In 2011-12 the growthis estimated to be 2.5% in agriculture, 3.9% in industry and 9.4% in services.
Industrial growth however witnessed a sharp fall to 4.1% in February 2012 as against6.7% growth in the corresponding month of the previous fiscal. The disappointing growthwas mainly due to rather poor performance of the manufacturing sector especially consumergoods. As per the revised IIP data, the industrial production grew only by a marginal 1.1%during the year under review that too driven by the 4.1% growth in February 2012. Themarginal uptrend in the growth towards the end of the year was witnessed due to increasein the consumption of processed foods in the food and beverages sector.
EXPORTS / IMPORTS
Owing to buoyant demand from diversified overseas markets, exports, according toprovisional figures released by the Industry, Chemicals & Textiles Ministry, exceededthe targeted US$ 300 billion for the fiscal year 2011-12. The sectors that postedimpressive growth included engineering, gems & jewellery, textiles andpharmaceuticals.
Imports during 2011-12 clocked a high of US$ 485 billion mainly on account of risingglobal oil prices with oil imports touching US$ 150 billion. The trade deficit widened toUS$ 185 billion and the Government faces a stiff challenge to keep it under control in thecurrent fiscal.
During the period April-December 2011, the Current Account Deficit (CAD) - anindication of the gap between foreign exchange inflows and outflows, surged to US$ 53.7billion (4% of the GDP) from 3.30% of GDP in the same period last year - reflecting highertrade deficit on account of imports of petrol, oil, lubricants, gold and silver.
Inflation which had raged at double digit levels over the last two years is now lower.The decline in inflation has provided some relief and the time is ripe therefore to boostinvestment in the economy. The Prime Minister's Economic Advisory Council has opined thatinflation would drop further and hover around 5% to 6% in the current fiscal 2012-13.
Demand for cement in the country improved during the current year under review,registering a 6.60% growth better than 4.70% registered in the previous year. Given thelong term nature of business and also since it takes, of late, 24-30 months to set upcapacity, Industry created capacity much ahead of demand and this led to lower capacityutilization - more so in South, where substantial capacity came into play - Capacityutilization in South was 63% as against All India Capacity utilization of 75%. It isexpected that capacity utilization will improve steadily in line with growth in demand inthe coming years.
Demand growth was healthy in regions where Infrastructure and Housing activities werebrisk on the back of progressive policy of State Government. Western region registeredsignificant growth of 13.80% followed by North of 11%, Central of 9.30% and East of 2.90%.However, in Southern region, growth was flat primarily due to lack of infra and housingprojects in Andhra Pradesh and Karnataka.
It is heartening to note that during January - March '12 quarter, demand has grownsharply at 10% as opposed to 5.60% in the preceding 9 months. South has shown a remarkablegrowth of 9.40% as compared to negative growth of 3% in the preceding three quarters.
Southern cement industry which has the highest capacity in the country, have beenstriving hard to access Northern & Eastern markets in the interest of improving thecapacity utilization, but is constrained due to Rail Rakes availability.
Given that supply-demand imbalance in South is relatively higher, it is expected thatdemand will catch up with supply by 2014-15.
With a pronounced GDP growth of around 7.50% next year, the industry can expect areasonable growth rate of 8% - 9% in the coming years which should enable the industry tooperate at around 80% of its capacity.
In addition to the supply overhang, the industry had also to bear the substantial costpush in the form of increase in the price of coal, diesel price revision, increase in theSales Tax on cement by 2% in Tamil Nadu, heavy depreciation of Rupee against Dollar ofmore than 13% from Rs.45 to Rs.51 impacting coal prices, revision in power tariff inAndhra Pradesh and continued power cut and load shedding in the States of Tamil Nadu andAndhra Pradesh necessitating usage of high cost DG and purchased power. In addition, theUnion Budget 2012 proposes to increase the Excise Duty from 10% to 12% and steep increasein railway freight on inward and outward movement of materials ranging from 20% to 30% anda steep 35% increase in power tariff in Tamil Nadu from 1/4/2012. Given all these adversefactors your Company's main challenge during the year under review was to manage volumesand cost of production on the one hand and optimize selling prices on the other to improvethe bottom line.
The performance of the Company in terms of production and sale was as under:-
| || ||In Lakh Rs |
| ||2011-12 ||2010-11 |
|Clinker ||71.95 ||76.34 |
|Cement ||94.63 ||99.80 |
|Cement Sales ||94.51 ||99.32 |
|Clinker Sales ||0.76 ||0.32 |
|Overall sales including Clinker ||95.27 ||99.64 |
The overall production was impacted due to the negative / practically nil growth in themarkets served by the Company's plants. The Andhra Pradesh markets witnessed a furtherdrop of around 8% in demand over and above the 17% negative growth recorded in theprevious year and with the bunch of new capacities arising in that region, the severecompetition for market space resulted in the lower capacity utilization of the AndhraPradesh plants including that of your Company. Towards the end of the year the powerscenario further worsened in both Tamil Nadu and Andhra Pradesh resulting in powerholidays besides zero power during peak hours which curtailed the availability of clinkerdespite higher generation through captive power sets. The situation is likely to improveas the 48 MW power plant at Sankarnagar has since been commissioned and is expected to goon full stream during the financial year 2012-13. Towards the close of the financial yearyour Company has commissioned railway sidings at its two grinding units at Chennai andParli and the consequent reduction in the transportation cost of clinker by rail (insteadof road as hitherto) will have its full impact during FY 13. The depreciation in the valueof Rupee and increase in the ocean freights coupled with the volatility in the FOB priceof imported coal resulted in higher cost of fuel. The expanded capacity of ChilamakurCement Plant and the second line at Malkapur has stabilized and it is expected that theoverall operating efficiencies would improve further with the stabilized run of theseplants.
ENERGY EFFICIENCY AND COST REDUCTION
Despite the lower capacity utilization caused by lower demand in the market, sustainedefforts made by your company resulted in marginal reduction in power consumption per Tn ofcement and maintaining the fuel consumption/Tn of clinker on par with the previous year.The ever increasing cost of fuel and increase in power tariff by State Electricity Boardsimposed additional burden which could however be controlled through fuller utilization ofthe power from the Company's gas based power plant at Ramanathapuram and also from the lowcost power availed from Andhra Pradesh Gas Power Corporation Limited (APGPCL) in AndhraPradesh. The Company also utilized the wind power generated by its wind farms of a totalof 279 Lakh Units (315 Lakh units) and power from its Waste Heat Recovery System atVishnupuram which accounted for 539 Lakh units (475 Lakh units). Towards the end of thelast quarter the Company's captive power plant of 48 MW at Sankarnagar has beencommissioned.
During the year, your Company obtained ISO 9001 certification for quality assurance forits Sankari Plant in addition to its already certified plants at Sankarnagar, Dalavoi,Chilamakur and Vishnupuram. The ISO certification for its Yerraguntla Cement Plant is inprogress.
Your Company has also implemented Total Productive Management (TPM) for productivityimprovement in its plants at Sankarnagar, Dalavoi, Chilamakur, Yerraguntla, Vishnupuramand Malkapur.
CLEAN DEVELOPMENT MECHANISM (CDM)
Waste Heat Recovery System at Vishnupuram continues to earn certified emissionreductions as a CDM project.
OPPORTUNITIES, THREATS, RISKS AND CONCERNS
The demand supply mismatch arising out of burst of new capacity additions (and notmajorly out of lack of normal demand growth) has constricted the capacity utilizationlevels of the industry for the last two years in particular. Given the resilient nature ofthe economy, India has been able to achieve reasonable GDP growth of 6.9% in FY 12 whichis expected to increase to 7.5% to 8% in FY 13 is expected to translate into a demandgrowth of 8% to 10% over the next few years. While demand for cement grew by 6.6% in FY12, there are already encouraging signs of a pick-up in demand with demand spurting byover 10% in the last quarter of FY 12. It is therefore expected capacity utilization togradually increase over the next 3 years with parity between supply and demand beingrestored by then. While this being the overall scenario, there are still pockets of highdemand growth in certain regions of the country and your Company is already movingsignificant quantities of cement to the Eastern markets as far as Assam & Nepal tooptimize capacity utilization, given the overall surplus. Your Company's attempts in theshort run will be towards striking an optimum balance between volumes and profitabilityand achieve best results.
The availability of power from the State Electricity Boards is another area of concernwith acute shortages in power availability in Tamil Nadu and Andhra Pradesh. Your Companyhas already addressed this concern by putting a 48 MW thermal power plant at Sankarnagarto take care of the full requirements of power of all the cement plants and grinding unitin Tamil Nadu and this power plant has been commissioned towards the end of FY 12 and hasstarted supplying power. Work has already been commenced on the installation of 48 MWthermal power plant at Vishnupuram which is expected to be commissioned towards the end ofFY 13 and will thereafter fully meet the power requirements of the cement plants in AndhraPradesh. With its share of power available from the gas based power plants of APGPCL andCoromandel Electric Company Limited, Company's own windmills, diesel generating sets,waste heat recovery system at Vishnupuram, the Company has ensured that it will be fullyself-sufficient in meeting its power requirements.
Availability of indigenous coal from the nationalized coal companies and the quality ofsupplies is another area of concern. This problem has however been mitigated to a largeextent due to the coal linkages obtained during the last two years to cater to therequirements of the recent capacity expansions in Andhra Pradesh. The Company imports coalto meet its cement plants' requirements thereby adequately addressing the quantity,quality and cost aspects. Mining rights obtained in Indonesia should fructify withinfrastructure of roads and bridges under completion to ensure timely coal supplies.
The ever rising cost of energy in the form of petroleum products will also have itsimpact on the power and transportation costs, which it is hoped to be neutralized byincreasing the selling prices.
The Prime Minister's Economic Advisory Council (PMEAC) has projected a 7.5% to 8%growth for the fiscal year 2012-13.
Economic experts are banking on the domestic market to sustain growth through aGovernment led initiative to boost private sector infrastructure investments. Withindustrial growth exhibiting signs of a revival and given the Government's intention toboost agriculture development and give a fillip to infrastructural growth, the clocking ofa GDP growth of 7.5% in 2012-13 could well be achievable.
Both the Central and State Governments have plans to boost investments in housing forthe lower income groups which could help drive cement demand together with proposedinvestments on roads and other infrastructural projects. The recent proposals of theReserve Bank of India in its Credit Policy to reduce Repo and Reverse Repo rates by 50basis points is expected to soften housing loan interest rates thereby giving a fillip todemand for housing for the middle income sector.
Given all these positive factors, it is reasonably expected a 8% to 10% annual growthin cement demand over the next few years and an early restoration of parity between cementdemand and supply which should augur well for the cement industry.
VALUE ENHANCING STRATEGIES
Through various upgrades / timely expansion at its locations, the Company has reached acapacity of 14.05 million tonnes from 8.81 million tonnes in 2002. The second strategy ofsecuring uninterrupted supply of power and fuel is also being achieved throughinstallation of power plants and also through acquisition of coal mining rights inIndonesia. The Company also secured additional linkages of domestic coal for two of itsAndhra Pradesh plants and in order to circumvent the volatility in the ocean freight, theCompany has also acquired two ships for transporting coal / other raw materials based oncost economics. The Company's strategy of optimizing the manpower strength has also beenachieved through various voluntary retirement schemes over the years and is presentlyimproving upon the skills of its workers for doing multi tasking. As North and Westmarkets have been growing, the Company is on the lookout for further growth opportunitiesavailable in that region. The Company has put in place a Management Team forinfrastructure projects. Based on the demand supply scenario in the next few years theCompany also proposes to increase its presence in its dominant South market throughfurther capacity creation at one of its existing location.
HUMAN RESOURCES & INDUSTRIAL RELATIONS
The industrial relations remained cordial throughout the year at all the units.Training and multi task development skills are given prime importance. The overall numberof employees at the end of the year under review was 3195 (3220).
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has a well defined internal control system to support efficient businessoperations and statutory compliance. A strong internal audit function carries outconcurrent audit of all the plants and offices. Suitable internal checks have been builtin to cover all monetary transactions with proper delineation of authority, which providesfor checks and balances at every stage. The Company has a strong system of budgetarycontrol which covers all aspects of operations, finance, capital expenditure at a macrolevel on a monthly basis reporting directly to top management. All the physicalperformances and efficiency parameters are monitored on a daily basis and actions aretaken then and there. The periodical operational review by top management at Head Officealso includes internal audit and cost audit observations and action taken to resolve /rectify the irregularities and correct the procedures wherever necessary. The Company hasan Audit Committee of Directors to review financial statements to shareholders. The roleand terms of reference of the Audit Committee cover the areas mentioned under Clause 49 ofthe Listing Agreement with Stock Exchanges and Section 292A of the Companies Act, 1956besides other terms as may be referred to by the Board of Directors from time to time.
FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
HIGHLIGHTS OF FINANCIAL PERFORMANCE
| ||Rs. Crores || |
| ||2011-12 ||2010-11 |
|Net Sales/Income from operations ||4203.40 ||3500.72 |
|Other Income ||19.29 ||39.61 |
|Total Income ||4222.69 ||3540.33 |
|Total Expenditure ||3300.05 ||3067.03 |
|Operating Profit ||922.64 ||473.30 |
|Operating Margin % ||21.85 ||13.37 |
|Interest & Finance Charges ||286.73 ||141.72 |
|Gross Profit after Interest but before Depreciation and Tax ||635.91 ||331.58 |
|Depreciation ||251.29 ||244.03 |
|Profit for the year ||384.62 ||87.55 |
|Foreign Exchange Fluctuation ||(3.64) ||2.32 |
|Profit before Tax ||380.98 ||89.87 |
|Deferred Tax Liability ||50.24 ||5.00 |
|Taxation provision - net ||37.77 ||16.77 |
|Profit after tax ||292.97 ||68.10 |
|Return on Capital Employed (ROCE)* ||15.30% ||8.83% |
* ROCE = Operating Profit/Capital Employed (excluding capital work-in-progress andrevaluation)
Net Sales and Other Income from operations has improved by 19% primarily due toincrease in selling price of cement by 24%. The total expenditure has gone up by 7.6%primarily on account of the increase in cost of production due to various factors detailedelsewhere in the report. Interest charges were higher on account of loans taken forredemption of FCCB while the depreciation charges are higher on account of highercapitalization including the power plant. The Deferred Taxation provision as per AS 22 hasresulted in Rs.50.24 Crores (Rs.5 Crores) while the provision for current tax works out toRs.37.77 Crores (Rs.16.77 Crores) and the resultant net profit after tax was Rs.292.97Crores as compared to Rs.68.10 Crores during the previous year.
Statements in the Management Discussion and Analysis Report describing the Company'sobjectives, expectations or predictions may be forward looking within the meaning ofapplicable securities laws and regulations. Actual results may differ materially fromthose expressed in the statement. Important factors that could influence the Company'soperations include global and domestic supply and demand conditions affecting sellingprices of finished goods, input availability and prices, changes in governmentregulations, tax laws, economic developments within the country and other factors such aslitigation and industrial relations.
ANNEXURE C TO DIRECTORS REPORT FOR THE YEAR ENDED 31STMARCH, 2012
(As required by Clause 49 of the Listing Agreement with the Stock Exchanges)
A. MANDATORY REQUIREMENTS
1] Companys Philosophy:
The Company's Philosophy on Corporate Governance aims at the attainment of the highestlevels of transparency, accountability and responsibility in all operations and allinteractions with its Shareholders, Investors, Lenders, Employees, Government and otherstakeholders.
The Company believes that all its operations and actions must serve the underlying goalof enhancing overall shareholder value, consistently over a sustained period of time.
2] Board of Directors:
The Board consists of a Vice Chairman & Managing Director and Wholetime Directorand 9 other non-executive directors including two directors nominated by IDBI Bank Limitedand Life Insurance Corporation of India. The Board functions both as a full Board andthrough Committees. The Board and Committees meet at regular intervals. Policyformulation, evaluation of performance and control functions vest with Board, while theCommittees oversee operational issues.
The Board has constituted five Committees viz., Audit Committee, Share TransferCommittee, Shareholders'/Investors' Grievance Committee, Remuneration Committee andCompensation Committee.
During the year 2011-2012, five Board Meetings were held on 30.05.2011, 12.08.2011,24.08.2011, 14.11.2011 and 06.02.2012.
The composition of Directors, attendance at the Board Meetings during the year and thelast Annual General Meeting and also number of other directorships and Committeememberships are given below:
|Sl. No. ||Name of the Director ||Category of Directorship ||No. of Board meetings attended ||Attendance at last AGM ||No. of other Director- ships held in public companies ||No. of Membership (M) / Chairmanship(C) in other Board Committee(s)* |
| || || ||(From 01.04.11 to 31.03.12) || ||(As on 31/03/2012) |
|1. ||Sri N.Srinivasan Vice Chairman & Managing Director ||Promoter, Executive Director ||5 ||Yes ||13 ||2 (M) & 4 (C) |
|2. ||Mrs Chitra Srinivasan ||Promoter, Non-Executive Director ||5 ||Yes ||Nil ||Nil |
|3. ||Ms Rupa Gurunath Wholetime Director ||Promoter, Executive Director ||5 ||Yes ||4 ||1 (M) |
|4. ||Dr. B.S.Adityan ||Independent, Non-Executive Director ||5 ||Yes ||4 ||1 (C) |
|5. ||Sri Arun Datta ||Independent, Non-Executive Director ||5 ||Yes ||3 ||2 (M) |
|6. ||Sri R.K.Das ||Independent, Non-Executive Director ||5 ||Yes ||8 ||Nil |
|7. ||Sri N.R.Krishnan ||Independent, Non-Executive Director ||4 ||Yes ||4 ||3 (M) & 1 (C) |
|8. ||Sri V.Manickam Nominee of Life Insurance Corporation of India in its capacity as Lender/Shareholder ||Independent, Non-Executive Director ||5 ||No ||2 ||Nil |
|9. ||Sri K.P.Nair Nominee of IDBI Bank Ltd., in its capacity as Lender ||Independent, Non-Executive Director ||3 ||No ||1 ||Nil |
|10. ||Sri A.Sankarakrishnan ||Independent, Non-Executive Director ||4 ||Yes ||4 ||3 (M) & 1 (C) |
|11. ||Sri N.Srinivasan (F&R) ||Independent, Non-Executive Director ||5 ||Yes ||13 ||2 (M) & 5 (C) |
|12. ||Sri K.Subramanian** Nominee of Housing and Urban Development Corporation Ltd in its capacity as Lender ||Independent, Non-Executive Director ||3 ||Yes ||NA ||NA |
* Only Audit Committee and Shareholders / Investors Grievance Committee areconsidered for the purpose.
** Ceased to be a Director of the Board w.e.f. 24.11.2011.
3] Audit Committee:
The role and terms of reference of the Audit Committee cover the areas mentioned underClause 49 of the Listing Agreement and Section 292A of the Companies Act, 1956, besidesother terms as may be referred to by the Board of Directors from time to time.
The Audit Committee met four times during the year i.e., on 30.05.2011, 12.08.2011,14.11.2011 and 06.02.2012. The composition and attendance of Audit Committee meetings aregiven below:
|Sl. No. ||Name of the Member ||No. of Meetings held ||No. of Meetings attended |
|1. ||Dr. B.S.Adityan, Chairman ||4 ||3 |
|2. ||Sri Arun Datta ||4 ||4 |
|3. ||Sri R.K. Das ||4 ||4 |
|4. ||Sri N.Srinivasan (F&R) ||4 ||4 |
The Company Secretary is also Secretary to the Audit Committee.
4] Remuneration Committee & Policy:
The Remuneration Committee has been constituted to recommend/review the remunerationpackage of the Executive Directors taking into account their qualification, experience,expertise, contribution and the prevailing levels of remuneration in Companies ofcorresponding size and stature.
During the year 2011-2012, Remuneration Committee met once i.e., on 30th May2011 to recommend to the Board payment of commission to Sri N.Srinivasan, ManagingDirector and Ms.Rupa Gurunath, Wholetime Director, out of net profit of the Company forthe year 2010-2011, pursuant to the resolutions passed by the Shareholders at their AnnualGeneral Meeting held on 24th September 2007 and 2nd August 2010respectively.
The composition and attendance of Remuneration Committee meetings are given below:
|Sl. No. ||Name of the Member ||No. of Meetings held ||No. of Meetings attended |
|1. ||Dr. B.S. Adityan, Chairman ||1 ||1 |
|2. ||Sri N.Srinivasan (F&R) ||1 ||1 |
|3. ||Sri Arun Datta ||1 ||1 |
The Remuneration including commission amounting to Rs.899.17 lakhs paid / payable toSri N.Srinivasan, Managing Director, for the financial year 2010-11 exceeded the limit of5% of the net profit under Section 309(3) of the Companies Act, 1956. Hence, anapplication seeking the approval of the Government of India (GOI), Ministry of CorporateAffairs, for payment of remuneration in excess of the prescribed limit amounting toRs.530.09 lakhs was made and GOI vide its letter dated 29th September 2011accorded its approval.
Sri N.Srinivasan, Managing Director and Ms.Rupa Gurunath, Wholetime Director havedecided not to receive the commission of Rs.3.15 crores and Rs.1.29 crores respectivelyfor the financial year 2010-11.
Details of remuneration paid/payable to the Directors for the year ended 31stMarch, 2012:
(i) Executive Directors:
| || || || || || || ||(Rs. lakhs) |
|Name & Position ||Salary ||Commission ||Perquisites & allowances ||Provident Fund ||Retirement Benefits ||Others ||Total |
|Sri N.Srinivasan Vice Chairman & Managing Director ||360.00 ||902.00 ||108.00 ||43.20 ||69.00 ||4.14 ||1486.34 |
|Ms Rupa Gurunath Wholetime Director ||120.00 ||201.00 ||36.00 ||14.40 ||23.00 ||0.00 ||394.40 |
|Total ||480.00 ||1103.00 ||144.00 ||57.60 ||92.00 ||4.14 ||1880.74 |
The two executive Directors (Managing Director and Wholetime Director) are paidremuneration as decided by the Board of Directors on the recommendation of theRemuneration Committee of the Board with the approval of Shareholders and other necessaryapprovals. There are no stock options available / issued to any Executive Director of theCompany.
(ii) Non-Executive Directors:
Remuneration by way of sitting fees is paid to all non-executive directors at the rateof Rs.20,000/- for attending each meeting of the Board and Rs.10,000/- for attending eachcommittee meeting.
Particulars of sitting fees including for committee meetings paid to non-executivedirectors during the financial year 2011-2012 are as follows:
|Name of the Director ||Sitting Fees Paid (Rs.) |
|Mrs Chitra Srinivasan ||100000 |
|Dr. B.S.Adityan ||320000 |
|Sri Arun Datta ||150000 |
|Sri R.K.Das ||140000 |
|Sri N.R.Krishnan ||80000 |
|Sri V.Manickam (Paid to Life Insurance Corporation of India) ||100000 |
|Sri K.P.Nair (Paid to IDBI Bank Limited) ||60000 |
|Sri A.Sankarakrishnan ||80000 |
|Sri N.Srinivasan (F&R) ||290000 |
|Sri K.Subramanian* (Paid to Housing and Urban Development Corporation Ltd) ||60000 |
* Ceased to be a Director of the Board w.e.f. 24.11.2011
No remuneration other than sitting fee as aforesaid is paid to Non-Executive Directors.
There has been no pecuniary relationship or transactions between the Company andNon-Executive Directors during the year 2011-2012. There are no stock optionsavailable/issued to any Non-Executive Director of the Company.
There are no convertible instruments issued to any of the Non-Executive Directors ofthe Company. The details of Equity Shares of the Company held by the Non-ExecutiveDirectors as on 31st March 2012, are as follows:
|Name of the Director ||No. of Equity Shares |
|Mrs Chitra Srinivasan ||78580 |
|Dr. B.S.Adityan ||15704 |
|Sri Arun Datta ||4000 |
|Sri R.K.Das ||1500 |
|Sri N.R.Krishnan ||Nil |
|Sri V.Manickam ||Nil |
|Sri K.P.Nair ||Nil |
|Sri A.Sankarakrishnan ||1000 |
|Sri N.Srinivasan (F&R) ||Nil |
5] a] Share Transfer Committee:
All shares received for transfer were registered in favour of transferees andcertificates despatched within a month's time, wherever the documents received were inorder.
During the year 2011-2012, 15,818 Equity Shares were transferred in physical mode infavour of transferees and despatched within a month's time from the date of receipt.
During the financial year 2011-2012, the Committee met 12 times.
The composition and attendance of the Share Transfer Committee meetings are givenbelow:
|Sl. No. ||Name of the Member ||No. of Meetings held ||No. of Meetings attended |
|1. ||Sri N.Srinivasan, Chairman ||12 ||12 |
|2. ||Dr. B.S.Adityan ||12 ||12 |
|3. ||Sri N.Srinivasan (F&R) ||12 ||12 |
b] Shareholders / Investors Grievance Committee:
During the year 2011-2012, 92 complaints were received from shareholders and investors.All the complaints have generally been solved to the satisfaction of the complainants,except for disputed cases and sub-judice matters, which would be solved on final disposalby the Courts/Forums where they are pending.
During the financial year 2011-2012, the Shareholders' / Investors' Grievance Committeemet 4 times i.e., on 25.04.2011, 16.07.2011, 03.10.2011 and 23.01.2012.
The composition and attendance of the Shareholders'/Investors' Grievance Committeemeetings are given below:
|Sl. No. ||Name of the Member ||No. of Meetings held ||No. of Meetings attended |
|1. ||Dr. B.S.Adityan, Chairman ||4 ||4 |
|2. ||Sri N.Srinivasan* ||4 ||4 |
* Vice Chairman & Managing Director of The India Cements Limited
Sri G. Balakrishnan, Company Secretary is the Compliance Officer.
c] Compensation Committee of Board of Directors:
A Compensation Committee of Board of Directors has been constituted for administrationof India Cements Employees Stock Option Scheme (ICL ESOS).
During the year 2011-2012, the Committee met once i.e. on 17.11.2011 to allot 1,500Equity Shares of Rs.10/- each to an employee who had exercised his options that vested on1st September 2011.
The composition and attendance of the Compensation Committee of Board of Directors aregiven below:
|Sl. No. ||Name of the Member ||No. of Meetings held ||No. of Meetings attended |
|1. ||Sri N.Srinivasan, Chairman ||1 ||1 |
|2. ||Dr. B.S.Adityan ||1 ||1 |
|3. ||Sri N.Srinivasan (F&R) ||1 ||1 |
6] a] Annual General Meetings:
The last three Annual General Meetings were held as under:
|Year ||Type ||Location ||Date ||Time ||Special Resolutions passed in the AGM by the Shareholders |
|2009 ||AGM ||Sathguru Gnanananda Hall, (Narada Gana Sabha), 314, T.T.K. Road, Chennai 600 018. ||07.08.2009 ||10.00 A.M. ||Yes |
|2010 ||AGM ||Sathguru Gnanananda Hall, (Narada Gana Sabha), 314, T.T.K. Road, Chennai 600 018. ||02.08.2010 ||10.00 A.M. ||Yes |
|2011 ||AGM ||Sathguru Gnanananda Hall, (Narada Gana Sabha), 314, T.T.K. Road, Chennai 600 018. ||24.08.2011 ||9.30 A.M. ||No |
b] Postal Ballot:
During the year, the Company had conducted voting by postal ballot seeking the consentof the members by way of special / ordinary resolutions for the following items ofbusiness as set out in the Notice dated 04.07.2011, sent to the members pursuant to theprovisions of Section 192A of the Companies Act, 1956 read with the Companies (Passing ofthe Resolution by Postal Ballot) Rules, 2011. The Board appointed Ms P.R.Sudha, PracticingCompany Secretary, as the Scrutinizer for conducting the voting through postal ballot in afair and transparent manner. The Scrutinizer gave her Report and on the basis of the saidReport, the results of the Postal Ballot in respect of each of the resolutions had beendeclared as passed with requisite majority on 22.08.2011.
| ||Votes cast |
|Particulars ||In favour ||Against |
| ||No. of Votes ||% ||No. of Votes ||% |
|1. Special Resolution for payment of remuneration to Sri N.Srinivasan, Managing Director, in excess of the ceiling laid down under Section 309 of the Companies Act, 1956, for the financial year 2010-11; ||12,38,15,661 ||99.82 ||2,22,497 ||0.18 |
|2. Special Resolution for payment of remuneration to the two executive directors viz. Sri N.Srinivasan, Managing Director and Ms Rupa Gurunath, Wholetime Director, put together in excess of the ceiling laid down under Section 309 of the Companies Act, 1956 for the financial year 2010-11; ||12,38,01,947 ||99.82 ||2,24,078 ||0.18 |
|3. Special Resolution under Section 17 and 149 (2A) of the Companies Act, 1956, for alteration of Objects Clause of the Memorandum of Association and Commencement of Business; and ||12,38,75,923 ||99.93 ||89,767 ||0.07 |
|4. Ordinary Resolution under Section 293(1)(a) of the Companies Act, 1956 for mortgaging and / or charging of immovable and movable properties of the Company. ||12,38,58,961 ||99.92 ||1,04,951 ||0.08 |
No item of business requiring voting by postal ballot is included in the Noticeconvening the 66th Annual General Meeting of the Company.
a) There are no significant Related Party transactions during the year of materialnature with the promoters, directors or the management or their subsidiaries or relatives,etc., potentially conflicting with Company's interests at large. Related Partytransactions are disclosed in the notes to Accounts forming part of this Annual Report.
b) As per Clause 49(V) of the Listing Agreement, the Chief Executive Officer i.e.Managing Director and the Chief Financial Officer i.e. Joint President (Finance &Accounts) certified to the Board on their review of financial statements and cash flowstatements for the financial year ended 31st March 2012 in the form prescribedby Clause 49 of the Listing Agreement which is annexed.
c) There were no instances of non-compliance on any matter relating to the capitalmarket, during the last three years.
d) Presently, the Company does not have a Whistle Blower Policy.
e) The Company has complied with all mandatory requirements of the Clause 49 of thelisting agreement. As regards the non-mandatory requirements, the extent of compliance hasbeen stated in Part B of this report.
f) Details of information on re-appointment of directors: A brief resume, nature ofexpertise in specific functional areas, number of equity shares held in the Company by theDirector or for other person on a beneficial basis, names of companies in which the personalready holds directorship, membership of committees of the Board and relationship withother directors, forms part of the Notice convening the 66th Annual General Meeting.
g) ICL Code of Conduct for Prevention of Insider Trading: The Company has adopted andimplemented ICL Code of Conduct for Prevention of Insider Trading based on SEBI(Prohibition of Insider Trading) Regulations, 1992, as amended. The Code prohibitspurchase/sale of securities of the Company by an 'insider' including Directors, Designatedemployees, etc., while in possession of unpublished price sensitive information.
h) ICL Code of Conduct for Directors and Senior Management: The Company has framed andimplemented ICL Code of Conduct for its Directors and Senior Management. The Code ofConduct has also been posted on the Company's website "www.indiacements.co.in".Affirmation on compliance of Code of Conduct for the financial year 2011-12 has beenreceived from all the Directors and Senior Management personnel of the Company.
i) Transfer to Investor Education and Protection Fund: During the year, there was noamount due to be transferred to Investor Education and Protection Fund established by theCentral Government.
j) Unclaimed Shares: The Company does not have any share(s) remaining unclaimed, issuedpursuant to public / other issues.
k) Subsidiary Company: The Company does not have a "material non-listed Indiansubsidiary" as defined in clause 49(III) of the Listing Agreement.
l) Cost Auditor and Cost Audit Report 2010-2011:
|Name, Membership number & address of Cost Auditor ||Sri S.A. Murali Prasad || |
| ||Membership No.2730 || |
| ||4 (New), Brindavan Street Chennai 600004. || |
|Filing of Cost Audit Report 2010-2011 with the Central ||Due date of filing ||27th September 2011 |
|Government ||Actual Date of filing ||27th September 2011 |
8] Means of Communication:
a) Quarterly results are published in the pro-forma prescribed by Stock Exchanges, inleading English newspapers including 'The Hindu' and Tamil newspaper 'Dina Thandhi'. Asthe Company publishes the audited annual results within the stipulated period of 60 daysfrom the close of the financial year as required by the Listing Agreement with StockExchanges, the unaudited results for the last quarter of the financial year are notpublished.
b) The annual financial results of the Company are also communicated in the prescribedpro-forma to Stock Exchanges and also published in the newspapers.
c) The financial results are displayed on the Company's website"www.indiacements.co.in".
9] General Information for Shareholders:
|(i) ||Date, Time and Venue of the Annual General Meeting ||13th August, 2012 at 10.00 A.M at Sathguru Gnanananda Hall, (Narada Gana Sabha), No.314, T.T.K. Road, Alwarpet, Chennai 600 018. |
|(ii) ||Financial year 1st April to 31st March (Provisional) ||Will be published on or before: |
| ||Results for Quarter ending June 30, 2012 ||14th August, 2012 |
| ||Results for Quarter ending September 30, 2012 ||14th November, 2012 |
| ||Results for Quarter ending December 31, 2012 ||14th February, 2013 |
| ||Results for Quarter ending March 31, 2013 (audited) ||30th May, 2013 |
|(iii) ||Date of Book Closure ||8th August 2012 to 13th August 2012 (both days inclusive) |
|(iv) ||Dividend payment date ||11th September 2012 |
(v) Listing on Stock Exchanges:
I a) The Company's Equity Shares are listed on the following Stock Exchanges:
i) Madras Stock Exchange Limited, Exchange Building, 11, Second Line Beach, Chennai -600 001 (Stock Code: INDCEM).
ii) Bombay Stock Exchange Limited, P.J. Towers, Dalal Street, Fort, Mumbai - 400 001(Stock Code : 530005).
iii) National Stock Exchange of India Limited, Exchange Plaza, 5th Floor,Plot No. C/1, G Block, Bandra Kurla Complex, Bandra (E), Mumbai - 400 051 (Stock Code EQ:INDIACEM).
b) Company's Equity Shares are traded in Group "B" category in Bombay StockExchange Limited.
c) The Company has paid the Listing Fees for the year 2012-13 to all Stock Exchangeswhere the Company's equity shares are listed.
II The Company's Global Depository Receipts (GDRs) are listed in Luxembourg StockExchange, P.O. Box 165, L-2811 Luxembourg, Europe and Listing Fee for the year 2012 hasbeen paid.
III The Company's Global Depository Shares (GDSs) are listed in Luxembourg StockExchange, P.O. Box 165, L-2811 Luxembourg, Europe and Listing Fee for the year 2012 hasbeen paid.
IV The equity shares of the Company have been included in the list of equity shares onwhich derivatives are available for trading in futures and options segment by NationalStock Exchange of India Limited.
|(vi) Market Price Data: || || || || || ||(In Rupees) |
|Month ||Madras Stock Exchange Limited ||Bombay Stock Exchange Limited ||National Stock Exchange of India Limited |
| ||High ||Low ||High ||Low ||High ||Low |
|April 2011 || || ||103.00 ||98.15 ||103.00 ||98.05 |
|May 2011 || || ||96.90 ||81.85 ||96.80 ||81.60 |
|June 2011 || || ||86.05 ||68.50 ||86.15 ||68.55 |
|July 2011 || || ||75.10 ||69.75 ||75.25 ||69.70 |
|August 2011 || || ||71.90 ||63.10 ||72.00 ||62.95 |
|September 2011 || || ||76.20 ||66.70 ||76.35 ||66.55 |
|October 2011 || || ||82.30 ||69.20 ||82.40 ||69.15 |
|November 2011 || || ||80.25 ||67.60 ||80.20 ||67.65 |
|December 2011 || || ||75.55 ||65.90 ||75.60 ||65.95 |
|January 2012 || || ||83.30 ||66.45 ||83.55 ||66.50 |
|February 2012 || || ||108.35 ||84.00 ||108.85 ||84.20 |
|March 2012 || || ||117.45 ||95.45 ||117.50 ||95.95 |
(vii) Stock price performance in comparison to BSE Sensex:
(viii) Registrar and Share Transfer Agent:
The Company has appointed Integrated Enterprises (India) Limited as Registrar and ShareTransfer Agent (RTA). Shareholders / Investors / Depository Participants are requested tosend all their documents and communications pertaining to both physical and demat sharesto the Registrar at the following address: Integrated Enterprises (India) Limited 2ndFloor, "Kences Towers" No.1, Ramakrishna Street North Usman Road, T.NagarChennai - 600017.
Phone : 044-28140801 to 28140803 Fax: 044-28142479 Email: firstname.lastname@example.org
(ix) Share Transfer System:
Shares lodged in physical form with the Company / RTA are processed and returned, dulytransferred, within 30 days from the date of receipt, if the documents submitted are inorder. In case of shares in electronic form, the transfers are processed by NSDL/CDSLthrough the respective Depository Participants.
(x) a) Distribution of Shareholding as on 31st March, 2012:
|No. of Shares held ||No. of Shareholders ||% of Shareholders ||No. of Shares held ||% of Shareholding |
|Upto 500 ||92365 ||91.59 ||10809486 ||3.52 |
|501 to 1000 ||4681 ||4.64 ||3701852 ||1.20 |
|1001 to 2000 ||2039 ||2.02 ||3060961 ||1.00 |
|2001 to 3000 ||547 ||0.54 ||1408121 ||0.46 |
|3001 to 4000 ||282 ||0.28 ||1009172 ||0.33 |
|4001 to 5000 ||221 ||0.22 ||1043424 ||0.34 |
|5001 to 10000 ||287 ||0.29 ||2122729 ||0.69 |
|10001 and above ||420 ||0.42 ||284022912 ||92.46 |
|TOTAL ||100842 ||100.00 ||307178657 ||100.00 |
b) Pattern of Shareholding as on 31st March, 2012:
|Category code ||Category of shareholder ||Number of share- holders ||Total number of shares ||Number of shares held in demater- ialized form ||Total shareholding as a percentage of total number of shares ||Shares Pledged or otherwise encumbered |
| || || || || ||As a percentage of (A+B) ||As a percentage of (A+B+C) ||Number of Shares ||As a percentage |
|(I) ||(II) ||(III) ||(IV) ||(V) ||(VI) ||(VII) ||(VIII) ||(IX) = (VIII)/(IV) * 100 |
|(A) ||Promoter and Promoter Group || || || || || || || |
|(1) ||Indian || || || || || || || |
|(a) ||Individuals / Hindu || || || || || || || |
| ||Undivided Family ||3 ||20015896 ||20013956 ||6.81 ||6.52 || || |
|(b) ||Central Government / State Government(s) || || || || || || || |
|(c) ||Bodies Corporate ||3 ||58568057 ||58568057 ||19.92 ||19.07 ||53500625 ||91.35 |
|(d) ||Financial Institutions / Banks || || || || || || || |
|(e) ||Any Other (specify): || || || || || || || |
| ||Directors & Relatives ||5 ||568540 ||542420 ||0.19 ||0.18 || || |
| ||Sub-Total (A) (1) ||11 ||79152493 ||79124433 ||26.92 ||25.77 ||53500625 ||67.59 |
|(2) ||Foreign || || || || || || || |
|(a) ||Individuals (Non-Resident || || || || || || || |
| ||Individuals / Foreign Individuals) || || || || || || || |
|(b) ||Bodies Corporate || || || || || || || |
|(c) ||Institutions || || || || || || || |
|(d) ||Any Other (specify) || || || || || || || |
| ||Sub-Total (A)(2) || || || || || || || |
| ||Total Shareholding of Promoter and Promoter || || || || || || || |
| ||Group (A)= (A)(1)+(A)(2) ||11 ||79152493 ||79124433 ||26.92 ||25.77 ||53500625 ||67.59 |
|(B) ||Public shareholding || || || || || ||N.A. ||N.A. |
|(1) ||Institutions || || || || || ||N.A. ||N.A. |
|(a) ||Mutual Funds / UTI ||82 ||26296059 ||26281569 ||8.95 ||8.56 || || |
|(b) ||Financial Institutions / Banks ||29 ||1876946 ||1869021 ||0.64 ||0.61 || || |
|(c) ||Central Government / State Government(s) || || || || || || || |
|(d) ||Venture Capital Funds || || || || || || || |
|(e) ||Insurance Companies ||7 ||26545451 ||26545201 ||9.03 ||8.64 || || |
|(f) ||Foreign Institutional Investors ||143 ||89533753 ||89492053 ||30.45 ||29.15 || || |
|(g) ||Foreign Venture Capital Investors || || || || || || || |
|(h) ||Any Other (specify) || || || || || || || |
| ||Sub-Total (B)(1) ||261 ||144252209 ||144187844 ||49.07 ||46.96 || || |
|Category of shareholder ||Number of share- holders ||Total number of shares ||Number of shares held in demater- ialized form ||Total shareholding as a percentage of total number of shares ||Shares Pledged or otherwise encumbered |
| || || || ||As a percentage of (A+B) ||As a percentage of (A+B+C) ||Number of Shares ||As a percentage |
|(I) (II) ||(III) ||(IV) ||(V) ||(VI) ||(VII) ||(VIII) ||(IX) = (VIII)/(IV) * 100 |
|(2) Non-institutions || || || || || ||N.A. ||N.A. |
|(a) Bodies Corporate ||1344 ||32827710 ||32765813 ||11.17 ||10.69 || || |
|(b) Individuals || || || || || || || |
|i. Individual shareholders holding nominal share capital upto Rs.1 lakh ||95830 ||20215014 ||18800643 ||6.88 ||6.58 || || |
|ii. Individual shareholders holding nominal share capital in excess of Rs.1 lakh. ||116 ||3818880 ||3725052 ||1.30 ||1.24 || || |
|(c) Any Other (specify) || || || || || || || |
|i Directors & Relatives ||4 ||22204 ||8000 ||0.01 ||0.01 || || |
|ii Foreign Corporate Body ||3 ||8796848 ||8796848 ||2.99 ||2.86 || || |
|iii Overseas Corporate Bodies ||2 ||2000 ||1500 ||0.00 ||0.00 || || |
|iv Non-Resident Individuals ||1377 ||860074 ||854476 ||0.29 ||0.28 || || |
|v Custodian of enemy || || || || || || || |
|Property ||37 ||11854 ||0 ||0.00 ||0.00 || || |
|vi Trust ||19 ||453644 ||453644 ||0.15 ||0.15 || || |
|vii Hindu Undivided Families ||1683 ||831668 ||831668 ||0.28 ||0.27 || || |
|viii Clearing Member ||153 ||2758735 ||2758735 ||0.94 ||0.90 || || |
|Sub-Total (B)(2) ||100568 ||70598631 ||68996379 ||24.01 ||22.98 || || |
|Total Public Shareholding (B)= (B)(1)+(B)(2) ||100829 ||214850840 ||213184223 ||73.08 ||69.94 ||N.A. ||N.A. |
|TOTAL (A)+(B) ||100840 ||294003333 ||292308656 ||100.00 ||95.71 ||53500625 ||18.20 |
|(C) Shares held by Custodians and against which Depository Receipts have been issued || || || ||N.A. || ||N.A. ||N.A. |
|(1) Promoter and Promoter || || || || || || || |
|Group || || || || || || || |
|(2) Public || || || || || || || |
|i. Global Depository || || || || || || || |
|Receipts (GDRs) ||1 ||3744506 ||3733069 || ||1.22 || || |
|ii. Global Depository || || || || || || || |
|Shares (GDSs) ||1 ||9430818 ||9430818 || ||3.07 || || |
|TOTAL (C) ||2 ||13175324 ||13163887 ||N.A. ||4.29 ||N.A. ||N.A. |
|GRAND TOTAL (A)+(B)+(C) ||100842 ||307178657 ||305472543 || ||100.00 ||53500625 ||17.42 |
(xi) Dematerialisation of Equity Shares and Liquidity:
As on 31st March, 2012, 99.44% of the Company's Equity Shares have beendematerialized.
As per directives issued by SEBI, it is compulsory to trade in the Company's shares inthe dematerialised form with effect from 29th November, 1999. The ISIN Numberallotted by National Securities Depository Limited (NSDL) and Central Depository Services(India) Limited (CDSL) for the Company's shares in Demat form is INE383A01012.
During the year 2011-2012, the Company had received 232 requests for dematerialisationof shares. The Company has acted upon all valid requests received for dematerialisationduring the year 2011-2012.
(xii) Outstanding GDRs / ADRs / Warrants or any Convertible Debentures, conversion dateand likely impact on equity shares as on 31st March, 2012.
37,44,506 GDRs are outstanding (1.22% of total paidup equity share capital). Each GDRrepresents one underlying equity share of Rs.10/- each.
47,15,409 GDSs are outstanding. Each GDS represents two underlying equity shares ofRs.10/- each (94,30,818 underlying shares represented by GDS constitutes 3.07% of totalpaidup equity share capital).
India Cements Employees Stock Option Scheme, 2006:
a) 14,79,000 options were issued to eligible employees under India Cements EmployeesStock Option Scheme, 2006. In terms of the Scheme, 50% of the options allotted to anemployee vested on 1st December 2007 and the balance 50% on 1stDecember 2008. Each option on such vesting can be exercised by applying for an equityshare of Rs.10/- each fully paidup for a sum of Rs.50/- (inclusive of premium of Rs.40/-)on or before 1st December 2008 and 1st December 2009 respectively.
Out of the aforesaid options issued, 48,500 options expired.
Out of 7,23,500 options vested on 01/12/2007, 7,19,000 options were exercised bythe employees and equal number of shares were allotted to them and balance 4,500 optionslapsed since the same were not exercised.
Out of 7,07,000 options vested on 01/12/2008, 7,00,000 options were exercised bythe employees and equal number of shares were allotted to them and balance 7,000 optionslapsed since the same were not exercised. b) 3000 options were issued to an eligibleemployee under India Cements Employees Stock Option Scheme, 2006 on 6th August2009.
In terms of the Scheme, 50% of the options allotted to an employee vested on 1stSeptember 2010 and the balance 50% vested on 1st September 2011. Each option onsuch vesting can be exercised by applying for an equity share of Rs.10/- each fully paidupfor a sum of Rs.50/- (inclusive of premium of Rs.40/-) on or before 1stSeptember 2011 and 1st September 2012 respectively.
1,500 options vested on 01/09/2010 were exercised by an employee and equalnumber of shares were allotted to him on 2nd March 2011.
1,500 options vested on 01/09/2011 were exercised by an employee and equalnumber of shares were allotted to him on 17th November 2011.
(xiii) Plant Locations:
|Sankarnagar, Tirunelveli District, Tamil Nadu ||Chilamakur, Kadapa District, Andhra Pradesh |
|Sankari, Salem District, Tamil Nadu ||Yerraguntla, Kadapa District, Andhra Pradesh |
|Dalavoi, Ariyalur District, Tamil Nadu ||Vishnupuram, Nalgonda District, Andhra Pradesh |
|Vallur Village, Tiruvallur District, Tamil Nadu ||Malkapur, Ranga Reddy District, Andhra Pradesh |
| ||Parli Vaijnath, Beed District, Maharashtra |
|(xiv) Address for Correspondence: ||The India Cements Limited, |
| ||Regd. Office: "Dhun Building", |
| ||827, Anna Salai, Chennai 600 002. |
| ||Corporate Office: "Coromandel Towers", |
| ||93, Santhome High Road, Karpagam Avenue, |
| ||R.A. Puram, Chennai - 600 028 |
| ||Tel. No. : (091) (044) 28521526 / 28572100 / 400 |
| ||Fax No. : (091) (044) 28517198 / 28516271 |
|For Investor Complaints: || |
|Contact Person ||Sri G.Balakrishnan |
| ||President & Company Secretary |
|Email-Id ||email@example.com |
|B. NON-MANDATORY REQUIREMENTS: || |
|1. The Board - A non-executive Chairman may be entitled to maintain a Chairman's office at the Company's expense and also allowed reimbursement of expenses incurred in performance of his duties. ||The Company does not have a non-executive Chairman. |
|Independent Directors may have a tenure not exceeding, in the aggregate, a period of nine years, on the Board of a company. ||No tenure has been fixed for independent directors. |
|The Company may ensure that the person who is being appointed as an independent director has the requisite qualifications and experience which would be of use to the Company and which, in the opinion of the Company, would enable him to contribute effectively to the Company in his capacity as an independent director. ||This is ensured. |
|Remuneration Committee. ||Please refer to Serial No. A - 4 of this Report. |
|Shareholders Rights - A half-yearly declaration of financial performance including summary of the significant events in last six months, may be sent to each household of Shareholders. ||As the Company's half-yearly results are published in leading English newspapers having circulation all over India and in Tamil newspaper and also in the Company's website, the same are not sent to the Shareholders of the Company. There is no publication of second half-yearly results as the annual results are approved by the Board and then published in the newspapers and also communicated to the shareholders through the Annual Report. |
|Audit qualifications - Company may move towards a regime of unqualified financial statements. ||Nil |
|Training of Board Members - A Company may train its Board Members in the business model of the Company as well as the risk profile of the business parameters of the Company, their responsibilities as directors and the best ways to discharge them. ||At present, the Company does not have any such Training programme for Directors. |
|Mechanism for evaluating non-executive Board Members - The performance evaluation of non-executive directors could be done by a Peer Group comprising the entire Board of Directors, excluding the director being evaluated; and Peer Group evaluation could be the mechanism to determine whether to extend / continue the terms of appointment of non-executive directors. ||At present, the Company does not have any such mechanism for evaluating the performance of non-executive Board Members. |
|Whistle Blower Policy. ||The Company does not have a Whistle Blower Policy. |
The Ministry of Corporate Affairs, Government of India, has issued in December 2009"Corporate Governance Voluntary Guidelines 2009". While the Board welcomes theissue of these guidelines intended for better governance of corporates, introduction ofthe recommended measures will be considered carefully at the appropriate time.
CEO AND CFO CERTIFICATION
To the Board of Directors of The India Cements Limited
In compliance with Clause 49(V) of the Listing Agreement with the Stock Exchanges, wehereby certify that:
(a) We have reviewed financial statements and the cash flow statements for the yearended 31st March 2012 and that to the best of our knowledge and belief:
(i) these statements do not contain any materially untrue statement or omit anymaterial fact or contain statements that might be misleading;
(ii) these statements together present a true and fair view of the Company's affairsand are in compliance with existing accounting standards, applicable laws and regulations;and
(b) There are, to the best of our knowledge and belief, no transactions entered into bythe Company during the year 2011-2012, which are fraudulent, illegal or violative of theCompany's Code of Conduct.
(c) We accept responsibility for establishing and maintaining internal controls andthat we have evaluated the effectiveness of the internal control systems of the Companyand we have not observed any deficiencies in the design or operation of internal controls.
(d) We have indicated to the Auditors and the Audit Committee that there are: (i) nosignificant changes in the internal control during the year; (ii) no significant changesin accounting policies during the year; and
(iii) no instances of significant fraud where the involvement of management or anemployee having a significant role in the Company's internal control system have beenobserved.
|Place : Chennai ||N.Srinivasan ||R.Srinivasan |
|Date : 25th April, 2012 ||Vice Chairman & Managing Director ||Joint President (Finance & Accounts) |
ANNEXURE D TO DIRECTORS REPORT FOR THE YEAR ENDED 31STMARCH, 2012
AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE
The Members, The India Cements Limited.
We have examined the compliance of conditions of Corporate Governance by The IndiaCements Limited, for the year ended March 31, 2012, as stipulated in clause 49 of theListing Agreement of the said Company with Stock Exchange(s).
The compliance of conditions of Corporate Governance is the responsibility of theManagement. Our examination was limited to procedures and implementation thereof, adoptedby the Company for ensuring the compliance of the conditions of the Corporate Governance.It is neither an audit nor an expression of opinion on the financial statements of theCompany.
In our opinion and to the best of our information and according to the explanationsgiven to us and the representations made by the Directors and the Management, we certifythat the Company has complied with the conditions of Corporate Governance as stipulated inthe above mentioned Listing Agreement.
As required by the Guidance Note issued by The Institute of Chartered Accountants ofIndia, we have to state that as per the records maintained by the Company, there were noinvestor grievances remaining unattended/pending for more than 30 days.
We further state that such compliance is neither an assurance as to the futureviability of the Company nor the efficiency or effectiveness with which the Management hasconducted the affairs of the Company.
|For P. S. SUBRAMANIA IYER & CO., ||For BRAHMAYYA & CO., |
|Chartered Accountants ||Chartered Accountants |
|Firm Registration No. 004104S ||Firm Registration No. 000511S |
|G. HARIHARAN ||N. SRI KRISHNA |
|Partner ||Partner |
|Membership No.15071 ||Membership No. 26575 |
|Place : Chennai || |
|Date : 25th April, 2012 || |
ANNEXURE E TO DIRECTORS REPORT FOR THE YEAR ENDED 31STMARCH, 2012
CODE OF CONDUCT DECLARATION UNDER CLAUSE 49(I)(D)
This is to certify that :
1. In pursuance of the provisions of Clause 49(I)(D) of the Listing Agreement withStock exchanges, a Code of Conduct for the Board members and the Senior ManagementPersonnel of the Company has been approved by the Board in its meeting held on 9thNovember 2005.
2. The said Code of Conduct has been uploaded on the website of the Company and hasalso been circulated to the Board Members and the Senior Management Personnel of theCompany.
3. All Board Members and Senior Management Personnel have affirmed compliance with thesaid Code of Conduct, for the period ended 31st March, 2012.
| ||for THE INDIA CEMENTS LIMITED |
|Place : Chennai ||N. SRINIVASAN |
|Date : 25th April, 2012 ||VICE CHAIRMAN & MANAGING DIRECTOR |
ANNEXURE 'F' TO DIRECTORS' REPORT FOR THE YEAR ENDED 31ST MARCH, 2012
CORPORATE SOCIAL RESPONSIBILITY
While the Company has been active in the sphere of Corporate Social Responsibility(CSR) right from inception, it has adopted a structured CSR policy from 2009. The Companyhas developed systems for planning, executing, monitoring and reporting on CSR activities.Rapport with local communities near cement plants has been established as integral part toCompanys CSR activities.
The Company has established an unaided Arts and Science College at Navalur, nearChennai and unaided schools in Dalavoi Works, Chilamakur Works, Malkapur Works andVishnupuram Works. Sankar Polytechnic College was started in 1958 and the Company has beenfinancially supporting it. There are also aided Higher Secondary Schools and BalaVidyalayas functioning at Sankarnagar and Sankaridurg Works with infrastructure and othersupport of the Company.
The major highlight of CSR during 2011-12 has been to move from onetime to long-termand sustainable activities. Creation of employment opportunities and increased incomes forthe farmers, women and youth and enhancing the quality of education in the RuralGovernment Schools were the highlights. The geographical coverage by March 2012 was 108villages in 14 Talukas of 11 Districts in Tamil Nadu, Andhra Pradesh, Rajasthan andMaharashtra.
In particular, the Company has been instrumental in:
Construction of toilets in rural schools, classrooms, compound wall andprovision of safe drinking water through RO systems.
Provision of computers, notebooks, dictionaries, school books, facilities forlibrary and provision of sports materials to schools.
Training through Chennai Grinding Unit in the Abacus method for Government AdiDravidar welfare high school leading to improvement in their learning abilities.
Establishment of a tailoring unit and training 75 women in tailoring throughMalkapur Works in Andhra Pradesh.
Distribution of sewing machines to needy women through the Chennai and ParliGrinding units.
Distribution of umbrellas for street vendors through Parli Grinding Unit.
Organization of four-wheeler driving courses for rural youth throughSankarnagar, Sankaridurg and Dalavoi Plants.
Organization of health camps through Chilamakur, Yerraguntla, Vishnupuram,Malkapur, Sankarnagar Plants and Parli Grinding Unit.
Organization of veterinary camps through Parli Grinding Unit and Dalavoi Plant.
Donation of medical equipment to Government Public Health Centres throughChilamakur Plant.
Provision of bus shelters, drinking water facility, laying of cement concreteroads and construction of toilets in areas near cement plants.
Tree planting and provision of tree guards through Parli and Vishnupuram Plants.
Donation of sports materials to Government High Schools through YerraguntlaPlant.
Support to construction of synthetic tennis court at Ariyalur through DalavoiPlant.
Support to a group of visually challenged persons to establish a fancy goodsstore in Chennai.
Support to orphanage in Erode through Sankaridurg Plant and provision ofuniforms to children in an orphanage through Parli Grinding Unit.
Capacity Building and financially supporting farmers for implementing a LiftIrrigation Programme through Vishnupuram Plant.
Organizing celebrations of important days like Independence Day, Children's Day,Environment Day and International Women's Day.
Provision of Iftar dinner through Vishnupuram Plant and support to localtemples, churches and mosques through all the cement plants.