Your Directors have pleasure in presenting their Sixty eighth Annual Report
together with audited accounts for the year ended 31st March 2014.
Rs. in Crore
For the year ended 31st March
Profit / (Loss) before Interest, Depreciation & Exceptional Items
Less : Finance costs
Less : Depreciation / Amortization
Less : Exceptional items
Profit / (Loss) Before Tax
Profit / (Loss) after Tax
Add : Surplus brought forward from last year
Less : Proposed dividend on Equity Capital (including Dividend Distribution Tax)
Less : Transfer to General Reserve
Less : Transfer to / (from) Debenture Redemption Reserve
Surplus carried forward
In view of the net loss for the year ending 31st March, 2014, the Board of
Directors has not declared any dividend for the year.
EMPLOYEES STOCK OPTION SCHEME
No fresh options have been granted under India Cements Employees Stock Option Scheme,
2006 during the financial year.
No options at all have been granted under India Cements Employees Stock Option Scheme,
DIRECTORS RESPONSIBILITY STATEMENT
Your Directors make the following statement in terms of Section 217(2AA) of the
Companies Act, 1956.
1. That in the preparation of the accounts for the year ended 31st March,
2014, the applicable accounting standards have been followed.
2. That such Accounting Policies have been selected and applied consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view
of the state of affairs of the Company as at 31st March, 2014 and of the loss
of the Company for the year ended on that date.
3. That proper and sufficient care has been taken for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act, 1956 for
safeguarding the assets of the Company and for preventing and detecting fraud and other
4. That the annual accounts for the year ended 31st March, 2014 have been
prepared on a going concern basis."
MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Clause 49 of the Listing Agreement, a Management Discussion and Analysis
Report is given as addition to this report.
Pursuant to Clause 49 of the listing agreement with Stock Exchanges, a report on
Corporate Governance along with Auditors' Certificate of its compliance is included as
part of the Annual Report and is given in Annexure 'C' and Annexure 'D' respectively.
Further, a declaration on Code of Conduct signed by the Vice Chairman & Managing
Director in his capacity as Chief Executive Officer of the Company is given as Annexure
CORPORATE SOCIAL RESPONSIBILITY (CSR)
A Corporate Social Responsibility (CSR) Committee was constituted by the Board of
Directors at the meeting held on 10th February, 2014. The CSR Committee has
since approved the Company's CSR Policy and the CSR Budget for 2014-15.
A report on CSR activities of the Company during 2013-14 is given in Annexure 'F'.
LICENCES & RECOGNITIONS
The Company's Dalavoi cement factory was granted Licence For The Environmental
Management Systems Certification in accordance with IS / ISO 14001:2004 by the Bureau of
Indian Standards, Chennai.
The Company's Sankari cement factory was granted Licence For The Environmental
Management Systems Certification in accordance with IS / ISO 14001:2004 and The
Occupational Health & Safety Management Systems Certification in accordance with IS
18001:2007 by the Bureau of Indian Standards, Chennai.
The Company's Malkapur cement factory has been recommended for granting Licence For the
Quality Management Systems Certification in accordance with IS / ISO 9001:2008 by the
Bureau of Indian Standards, Chennai.
The Company's in-house magazine "Compass" was awarded a Certificate of Merit
in an In-house House Magazine Contest in 2014.
Chennai Super Kings, the cricket team of the Chennai cricket franchise owned by your
Company has won the Trophy at the recently concluded Champions League T20 Tournament 2014.
The Companys performance has been discussed in detail in the "Management
Discussion and Analysis" section.
With a poor GDP growth of sub 5% on an all India basis and with industrial activity
taking a beating, the performance of the core industries was severely affected during the
period under review with cement being no exception.
According to the information published by Department of Industrial Policy and Promotion
(DIPP), the industry had registered practically flat growth during the year under review
against an estimated growth of 5% in the previous year. Given such a back drop, the
performance of the Company can be considered to be satisfactory as it could maintain the
overall sales at 100.37 lakh tons including clinker as compared to 100.55 lakh tons in the
previous year. The total sales and other income for the year was at Rs.4529.84 crores as
compared to Rs.4615.67 crores in the previous year. With huge supply overhang particularly
in the South, the selling price of cement went down substantially from the second quarter
resulting in a top line erosion which reflected on the bottom line. The cost of production
was impacted with increase in the price of Gypsum, Fuel, depreciation of rupee, higher
transport charges resulting in a lower EBIDTA of Rs.594.20 crores as compared to Rs.841.95
crores in the previous year. Finance cost including forex loss was higher at Rs.353.65
crores (Rs.307.75 crores) while depreciation charges were lower at Rs.276.39 crores as
compared to Rs.281.84 crores in the previous year. There were also exceptional items
relating to provision for Fuel Surchage Adjustment claims of Andhra Pradesh DISCOMS and
right of recompense to lenders together amounting for Rs.126.56 crores and resultant loss
was at Rs.162.40 crores for the year as compared to a profit before tax of Rs.252.36
crores in the previous year. The year also witnessed the annual bout of cost increases in
wages due to settlement and cost of living index, monthly dosage of increase in the prices
of petroleum products, impact of power tariff increase by electricity boards of Tamil Nadu
and Andhra Pradesh during the year and huge depreciation of rupee against dollar. However,
the impact was mitigated to certain extent with the fuller availability of power from
power plant in Tamil Nadu and the commissioning of the power plant in Andhra Pradesh.
During the year the performance of the division can be considered to be satisfactory
with deployment of the three vessels which had done 54 voyages in total in the coastal
trade and tramping. The total earnings of the division for the year was at Rs.67.72 crores
as compared to Rs.58.57 crores in the previous year. In March 2014, the vessel "MV
Chennai Perrumai" was sold for a consideration of approximately $ 2.486 Million for
scraping since it had served its economic life.
MERGER OF 2 SUBSIDIARIES WITH THE COMPANY
Application has been filed in the High Court of Judicature at Madras under Sections 391
to 394 of the Companies Act, 1956 for completing the procedural requirements for the
proposed Scheme of Amalgamation and Arrangement between Trinetra Cement Limited and
Trishul Concrete Products Limited with this Company.
CHENNAI SUPER KINGS CRICKET LIMITED
The Board of Directors of the Company at the meeting held on 26th September,
2014 approved the proposal to demerge Chennai Super Kings (CSK) - BCCI-IPL Franchise 20/20
Cricket Tournament Team of your Company into a wholly-owned subsidiary of the Company, by
transferring its net assets at cost. The effective date of transfer will be 1st
January, 2015. Accordingly, a new wholly-owned subsidiary, by name Chennai Super Kings
Cricket Limited, is in the process of getting incorporated.
Pursuant to General Circular No.2/2011 No.51/12/2007-CL-III dated 08.02.2011 issued by
the Ministry of Corporate Affairs, Government of India, the Board of Directors has passed
a resolution for sending the Balance Sheet of the Company without attaching a copy of the
Balance Sheet, Statement of Profit and Loss, Report of the Board of Directors and the
Report of the Auditors of the Subsidiary Companies namely Industrial Chemicals &
Monomers Limited, ICL Financial Services Limited, ICL Securities Limited, ICL
International Limited, Trishul Concrete Products Limited, Trinetra Cement Limited,
Coromandel Electric Company Limited, India Cements Infrastructures Limited, PT. Coromandel
Minerals Resources, Indonesia and Coromandel Minerals Pte. Limited, Singapore. However,
pursuant to Accounting Standard 21 issued by the Institute of Chartered Accountants of
India, Consolidated Financial Statements presented by the Company include the financials
of the subsidiaries. The Company will make available these documents / details upon
request by any member of the Company and its subsidiaries interested in obtaining the
same. The annual accounts of the Subsidiary Companies will also be kept for inspection by
any member at the Registered / Corporate Offices of the Company and its Subsidiary
TRINETRA CEMENT LIMITED
During its third year of operation, the unit has achieved a clinker production of 8.82
lakh tons (8.92 lakh tons) while the grinding was up by 7% at 12.19 lakh tons as compared
to 11.38 lakh tons. The sale of cement was also accordingly higher at 12.12 lakh tons
(11.28 lakh tons). Significant improvements were achieved in the operating parameters with
a reduction in power consumption and heat consumption due to stabilized operation of the
plant during the year under review.
TRISHUL CONCRETE PRODUCTS LIMITED
During the year, the Company achieved a volume of 3.38 Lakh cu.m. of Readymix Concrete
as compared to 3.48 Lakh cu.m. in the previous year. While the turnover of the Company was
maintained at Rs.120 crores against Rs.121 crores in the previous year, there was a
marginal improvement in profit before tax which was at Rs.84 lakhs as compared to Rs.25
lakhs in the previous year.
COROMANDEL ELECTRIC COMPANY LIMITED
With improvement in the availability of natural gas, the plant was able to generate net
units of 204 Million KWH as against 193 Million KWH in the previous year. The company had
wheeled 49 Million KWH of power to the cement plants of India Cements Limited in Tamil
Nadu and the balance power of 155 Million units was sold to other group captive and third
party consumers through the "Intra State Open Access". The total revenue earned
by the Company stood at Rs.120.26 crores (Rs.93.01 crores) and the net profit after tax
was at Rs.13.72 crores (Rs.17.80 crores) in the previous year. As per the policy, the
dividend pattern was maintained at 9% for equity shares and at the respective coupon rates
of dividend for the participating / non-participating preference share capital. During the
year under review, the company had redeemed the Third / Fourth instalments of redeemable
cumulative participating/non-participating preference shares on their respective due
INDIA CEMENTS INFRASTRUCTURES LIMITED
The company during the year under review commenced operations by acquiring land for
development. During the current year the company is expected to develop this project and
will also take up other projects.
PT. COROMANDEL MINERALS RESOURCES, INDONESIA AND COROMANDEL MINERALS PTE LIMITED,
The company has already arranged for the first shipment of coal from the mines that is
under development through its subsidiary abroad. However, with the significant drop in the
international price of coal, it was felt prudent to conserve the reserves of our mine. All
steps are being taken to secure the mines fully and the benefits of this acquisition will
accrue to the company when the international price of coal starts increasing.
CONSOLIDATED FINANCIAL STATEMENTS
As prescribed by Accounting Standard 21 issued by the Institute of Chartered
Accountants of India, the audited consolidated financial statements of India Cements Group
COROMANDEL SUGARS LIMITED
Coromandel Sugars Limited achieved a cane crushing of 7.02 lakh tonnes during the year
under review, which was substantially less than the crushing of 7.94 lakh tonnes achieved
in the previous year. However the sugar recovery had improved to 9.73% as against 9.44%
achieved last year. The crushing during the previous year was higher on account of carry
over cane from the earlier season available for crushing during the year.
The company has produced 68,240 tonnes of sugar (74948 in the previous year) and sold
61170 tonnes (67188 tonnes in the previous year).
Though the crushing was lower by nearly 12% during the year, the power export was
marginally higher at 258.55 lakh KWHs as against 253.80 lakh KWHs in the previous year,
because of the improved functioning of the boilers.
The sales and other income was lower at Rs.198.85 crores as against Rs.234.35 crores in
the previous year because of reduced sales volume and drop of 8% in the selling price of
sugar. This has resulted in the Profit Before Interest and Depreciation being lower at
Rs.22.55 crores as against Rs.42.98 crores in the previous year. Profit Before Tax was
Rs.0.79 crores as against Rs.22.78 crores in the previous year. During the current year,
the company is expected to improve the crushing in view of the improved rainfall. Further
the power plant which is in an advanced stage of completion is expected to commence
commercial operations before the end of this year.
INDIA CEMENTS CAPITAL LIMITED (ICCL)
The main focus of the Company continues to be on Full Fledged Money Changing [FFMC]
business, besides Travel & Tours and Forex Advisory Services. The Company's FFMC
division continues to enjoy the status of Authorised Dealers, Category II. The wholly
owned subsidiary viz. India Cements Investment Services Limited (ICISL) is in Stock
Broking. The FFMC division operates out of 17 branches and Travels division operates at
Chennai as an IATA accredited branch. The subsidiary ICISL runs its operations through 17
centres. The Gross income from operations of ICCL was Rs.422.17 lakhs and that of ICISL
was Rs.134.65 lakhs for the year ended 31st March, 2014.
With the demand for cement being subdued, there was practically negligible growth in
the Southern market during the first half of the current fiscal resulting in lowering
capacity utilization further. The clinker production was lower at 36.10 lakh tons (39.29
lakh tons) while the cement dispatch was at 46.09 lakh tons (50.84 lakh tons). In
addition, the company achieved a sale and export of 3 lakh tons of clinker for the current
period under review. However, the cement prices have started improving from the month of
EXPANSION / MODERNISATION
The operation of the power plant at Vishnupuram which was commissioned during the year
got stabilized quickly after its initial teething troubles and has been producing to its
The company is also planning to install a new energy efficient Cement Mill Grinding
facility at Sankarnagar replacing the old cement mills for which necessary approvals have
Your Company has stopped accepting deposits from public and shareholders from 16th
September 2013. The total amount of fixed deposits including cumulative deposits, which
had not become due but outstanding as at 31st March, 2014 stood at Rs.550.88
Lakhs. Deposits totaling Rs.34.94 Lakhs that matured for repayment were neither claimed by
the Depositors nor instructions for renewal were received by the Company. Reminders were
issued to the depositholders and since the close of the financial year ended 31st
March, 2014, deposits aggregating to Rs.16.50 Lakhs out of the above have either been
claimed and paid or transferred to Investor Education and Protection Fund.
CONSERVATION OF ENERGY ETC.
The prescribed details as required under Section 217(1)(e) of the Companies Act, 1956
are set out in the Annexure 'A'.
RESEARCH & DEVELOPMENT
During the year, your Company spent Rs.100.27 Lakhs towards revenue expenditure of the
R&D department besides contributing a sum of Rs.73.30 Lakhs to National Council for
Cement and Building Materials (NCCBM), which carries out research on behalf of the
industry as a whole.
Industrial relations continued to remain cordial during the year.
In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975, as amended, the names and other
particulars of the employees are to be annexed to the Directors' Report. However, as per
the provisions of Section 219 (1)(b)(iv) of the said Act, the Annual Report excluding the
aforesaid information is being sent to all members of the Company and others entitled
thereto. Any member interested in obtaining such particulars may write to the Company
IDBI Bank Limited, vide its letter No.CBG-SSCB.53/206/Nom.8 dated 08.10.2013, nominated
Mr.G.M.Yadwadkar on the Board of the Company with effect from 23.10.2013 in the place of
Mr.K.P.Nair. The nomination of Mr.G.M.Yadwadkar was withdrawn by IDBI Bank Limited, vide
its letter No.CBG-SSCB.53/122/Nom.8 dated 26.08.2014 and Mr.Nagaraj Garla was appointed on
the Board of the Company with effect from 25.09.2014 in the casual vacancy caused by the
withdrawal of nomination of Mr.G.M.Yadwadkar. The Board expresses its appreciation of the
valuable contribution made by Mr.K.P.Nair and Mr.G.M.Yadwadkar during their tenure as
Mr.Nagaraj Garla, IDBI Nominee Director, will hold his office upto the date of the
ensuing Annual General Meeting and resolution for his election as director of the Company
is included in the Notice dated 12th November, 2014 convening the 68th
Annual General Meeting of the Company.
Under Article 109 of the Articles of Association of the Company, Mrs.Chitra Srinivasan
retires by rotation at the ensuing Annual General Meeting of the Company and she is
eligible for re-appointment.
Under Section 149(6) of the Companies Act, 2013, the Company proposes to appoint
Mr.Arun Datta, Mr.R.K.Das, Mr.N.R.Krishnan, Mr.V.Manickam and Mr.N.Srinivasan (F&R),
as independent directors of the Company to hold office for a term of two consecutive years
with effect from 26th December, 2014 or upto the date of Annual General Meeting
in 2016, whichever is earlier and resolutions for their election as independent directors
of the Company are included in the Notice dated 12th November, 2014 convening
the 68th Annual General Meeting of the Company.
Brief particulars of Directors eligible for reappointment in terms of Clause 49 of
Listing Agreement are annexed to the Notice dated 12th November, 2014 convening
the 68th Annual General Meeting.
Messrs. Brahmayya & Co., and P.S.Subramania Iyer & Co., Chennai, the Auditors
of the Company, retire at the ensuing Annual General meeting and are proposed to be
appointed to hold office from the conclusion of the 68th Annual General Meeting
until the conclusion of the 71st Annual General Meeting.
Mr.S.A.Murali Prasad, Cost Accountant, Chennai has been appointed as Cost Auditor for
the year 2014-15 at a remuneration of Rs.10 lakhs and this has been approved by the
Government of India. The remuneration is subject to approval of members and hence is
included in the Notice dated 12th November, 2014 convening the 68th
Annual General Meeting of the Company.
Messrs. Capri, Gopalaiyer and Subramanian, Kalyanasundaram & Associates and Bala
& Co., Chennai have been appointed as Internal Auditors for the year 2014-15.
The Directors are thankful to the Financial Institutions and the Bankers for their
continued support. The Directors also thank the Central Government and the various State
Governments for their support. The stockists continued their excellent performance during
the year and the Directors are appreciative of this. The continued dedication and sense of
commitment shown by the employees at all levels during the year deserve special mention.
On behalf of the Board
Vice Chairman & Managing Director
Place : Chennai
Date : 12th November, 2014
ANNEXURE 'A' TO DIRECTORS REPORT FOR THE YEAR ENDED 31ST MARCH, 2014
Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the
Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.
A. Conservation of Energy:
(a) Energy conservation measures undertaken:
i. Cooler mid air tapping for increasing the hot air temperature to dry the higher
moisture in raw material and to ensure higher output from VRM.
ii. Installation of 48 MW power plant at Vishnupuram in Andhra Pradesh for energy
security and on cost economics.
iii. Hydraulic drive of VRM Separator replaced with Variable Frequency Drive for energy
iv. Installation of variable speed drive for cooler mill and cooler fans at some of the
v. Optimization of raw mill output by installing cyclone separator at one of the
vi. Modification of Kiln inlet venturi to allow more gas flow resulting in improved
combustion efficiency and improved operations of the kiln avoiding inlet coating.
vii. Modification of the cooler first grate plate with conventional one undertaken
resulting in saving in electricity energy consumption.
viii. Modification of the GCT outlet duct to improve air flow resulting in reduced load
on the pre-heater fan.
ix. Plant lighting modification done with the LED lighting.
x. Top cyclone roof modification done to reduce heat loss due to radiation and to
reduce false air.
xi. Modification of dynamic separator to improve coal mill production and also to
enable usage of Petcoke.
xii. Modification of VRM damper to reduce load on main motor.
(b). Additional investments and proposals, if any, being implemented for reduction of
consumption of energy:
i. Dynamic Separator in Coal Mill section is being implemented in one more plant to
reduce power consumption and to enable usage of Petcoke.
ii. VFD for raw mill, coal mill and cooler drives for the plants in Andhra Pradesh to
optimize power consumption.
iii. Modification of preheater top stage cyclones for improving efficiency and for low
iv. Installation of new energy efficient cement grinding system at one of the plants
replacing all the old conventional ball mills.
v. Introduction of coal stacker reclaimer at two of the plants to ensure optimum
blending efficiency aiming at reduction in heat consumption.
vi. Bag house in replacement of ESP for kiln for better efficiency and improvement in
(c) Impact of measures at (a) and (b) above for reduction of energy consumption and
consequent impact on cost of production of goods: The measures that are proposed to be
taken/under implementation are expected to reduce the power consumption by nearly 2 to 3
units/Tn of cement and overall heat consumption by around 10-15 kcals per kg of clinker.
However, during the year, the power consumption was higher than that of previous year by 1
unit while the fuel consumption marginally came down.
(d) Total energy consumption and energy consumption per unit of production: Given in
Form 'A' annexed.
B. Technology Absorption:
Efforts made in technology absorption: Particulars given in Form 'B' annexed.
C. Foreign exchange earnings and outgo:
(a) Activities relating to exports, initiatives taken to increase exports, development
of new export market for products and services and export plans: There was no significant
export sales during the year under review.
Used Rs. lakhs
Earned Rs. lakhs
FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY