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India Cements Ltd

BSE: 530005 | NSE: INDIACEM ISIN: INE383A01012
Market Cap: [Rs.Cr.] 2,531.15 Face Value: [Rs.] 10
Industry: Cement - South India

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Director's Report

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
2014 2013
Profit / (Loss) before Interest, Depreciation & Exceptional Items 594.20 841.95
Less : Finance costs 353.65 307.75
Less : Depreciation / Amortization 276.39 281.84
Less : Exceptional items 126.56
Profit / (Loss) Before Tax (162.40) 252.36
Current Tax 0.00 83.64
Deferred Tax 0.00 5.17
Profit / (Loss) after Tax (162.40) 163.55
Add : Surplus brought forward from last year 1192.57 1088.47
Less : Proposed dividend on Equity Capital (including Dividend Distribution Tax) 0.00 71.87
Less : Transfer to General Reserve 0.00 40.00
Less : Transfer to / (from) Debenture Redemption Reserve 0.00 (52.42)
Surplus carried forward 1030.17 1192.57


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.


No fresh options have been granted under India Cements Employees Stock Option Scheme, 2006 during the financial year.

No options at all have been granted under India Cements Employees Stock Option Scheme, 2007.


Your Directors make the following statement in terms of Section 217(2AA) of the Companies Act, 1956.

"We confirm

1. That in the preparation of the accounts for the year ended 31st March, 2014, the applicable accounting standards have been followed.

2. That such Accounting Policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the loss of the Company for the year ended on that date.

3. That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. That the annual accounts for the year ended 31st March, 2014 have been prepared on a going concern basis."


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 'E'.


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'.


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 Company’s performance has been discussed in detail in the "Management Discussion and Analysis" section.

With a poor GDP growth of sub 5% on an all India basis and with industrial activity taking a beating, the performance of the core industries was severely affected during the period under review with cement being no exception.

According to the information published by Department of Industrial Policy and Promotion (DIPP), the industry had registered practically flat growth during the year under review against an estimated growth of 5% in the previous year. Given such a back drop, the performance of the Company can be considered to be satisfactory as it could maintain the overall sales at 100.37 lakh tons including clinker as compared to 100.55 lakh tons in the previous year. The total sales and other income for the year was at Rs.4529.84 crores as compared to Rs.4615.67 crores in the previous year. With huge supply overhang particularly in the South, the selling price of cement went down substantially from the second quarter resulting in a top line erosion which reflected on the bottom line. The cost of production was impacted with increase in the price of Gypsum, Fuel, depreciation of rupee, higher transport charges resulting in a lower EBIDTA of Rs.594.20 crores as compared to Rs.841.95 crores in the previous year. Finance cost including forex loss was higher at Rs.353.65 crores (Rs.307.75 crores) while depreciation charges were lower at Rs.276.39 crores as compared to Rs.281.84 crores in the previous year. There were also exceptional items relating to provision for Fuel Surchage Adjustment claims of Andhra Pradesh DISCOMS and right of recompense to lenders together amounting for Rs.126.56 crores and resultant loss was at Rs.162.40 crores for the year as compared to a profit before tax of Rs.252.36 crores in the previous year. The year also witnessed the annual bout of cost increases in wages due to settlement and cost of living index, monthly dosage of increase in the prices of petroleum products, impact of power tariff increase by electricity boards of Tamil Nadu and Andhra Pradesh during the year and huge depreciation of rupee against dollar. However, the impact was mitigated to certain extent with the fuller availability of power from power plant in Tamil Nadu and the commissioning of the power plant in Andhra Pradesh.


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.


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.


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 Companies.


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.


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.


With improvement in the availability of natural gas, the plant was able to generate net units of 204 Million KWH as against 193 Million KWH in the previous year. The company had wheeled 49 Million KWH of power to the cement plants of India Cements Limited in Tamil Nadu and the balance power of 155 Million units was sold to other group captive and third party consumers through the "Intra State Open Access". The total revenue earned by the Company stood at Rs.120.26 crores (Rs.93.01 crores) and the net profit after tax was at Rs.13.72 crores (Rs.17.80 crores) in the previous year. As per the policy, the dividend pattern was maintained at 9% for equity shares and at the respective coupon rates of dividend for the participating / non-participating preference share capital. During the year under review, the company had redeemed the Third / Fourth instalments of redeemable cumulative participating/non-participating preference shares on their respective due dates.


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.


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.


As prescribed by Accounting Standard 21 issued by the Institute of Chartered Accountants of India, the audited consolidated financial statements of India Cements Group are annexed.



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.


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 July 2014.


The operation of the power plant at Vishnupuram which was commissioned during the year got stabilized quickly after its initial teething troubles and has been producing to its capacity.

The company is also planning to install a new energy efficient Cement Mill Grinding facility at Sankarnagar replacing the old cement mills for which necessary approvals have been sought.


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.


The prescribed details as required under Section 217(1)(e) of the Companies Act, 1956 are set out in the Annexure 'A'.


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 Secretary.


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 directors.

Mr.Nagaraj Garla, IDBI Nominee Director, will hold his office upto the date of the ensuing Annual General Meeting and resolution for his election as director of the Company is included in the Notice dated 12th November, 2014 convening the 68th Annual General Meeting of the Company.

Under Article 109 of the Articles of Association of the Company, Mrs.Chitra Srinivasan retires by rotation at the ensuing Annual General Meeting of the Company and she is eligible for re-appointment.

Under Section 149(6) of the Companies Act, 2013, the Company proposes to appoint Mr.Arun Datta, Mr.R.K.Das, Mr.N.R.Krishnan, Mr.V.Manickam and Mr.N.Srinivasan (F&R), as independent directors of the Company to hold office for a term of two consecutive years with effect from 26th December, 2014 or upto the date of Annual General Meeting in 2016, whichever is earlier and resolutions for their election as independent directors of the Company are included in the Notice dated 12th November, 2014 convening the 68th Annual General Meeting of the Company.

Brief particulars of Directors eligible for reappointment in terms of Clause 49 of Listing Agreement are annexed to the Notice dated 12th November, 2014 convening the 68th Annual General Meeting.


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 Wholetime Director Director
Place : Chennai
Date : 12th November, 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 improvement.

iv. Installation of variable speed drive for cooler mill and cooler fans at some of the plants.

v. Optimization of raw mill output by installing cyclone separator at one of the plants.

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 pressure drop.

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 output.

(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.

Current Year Previous Year
Used Rs. lakhs 3930.22 3497.96
Earned Rs. lakhs 9166.38 824.53



Related News
Current Year Previous Year
1. Electricity
(a) Purchased
Units - KWH - Lakhs 5526.36 7185.18
Total amount - Rs. Lakhs 32221.65 38530.99
Rate per unit - Rs. 5.83 5.36
(b) Own Generation
(1) Through Diesel/Furnace Oil Genset *
Units - KWH - Lakhs 524.64 637.96
Unit per Litre of Diesel/Furnace Oil-KWH 3.95 3.10
Cost per unit - Rs. 0.95 2.64
(2) Through Steam Turbine/Genset
Units - KWH - Lakhs 3394.24 1469.71
Cost per unit - Rs. 4.31 3.76
2. Coal for Kilns (various grades incl. Lignite)
Quantity Tonnes 1226599 1259573
Total Cost Rs.Lakhs 79423 79372
Average Rate Rs./Tonne 6475 6301
3. HSD/Furnace Oil for Kilns
Quantity K.Litres 728.33 653.57
12-Aug-15 India Cements Q1 net profit at Rs.40.3 cr
15-Jul-15 India Cements down on negative sentiment
14-Jul-15 India Cements tanks 4% after SC bans CSK for 2 years
14-Jul-15 India Cements falls 3.6%
26-Jun-15 India Cements jumps 9% on fund buying
26-Jun-15 India Cements spurts on fund buying
Futures & Options Quote
Expiry Date :
99.80    0.45 (0.45%)
Instrument: FUTSTK
Expiry Date: 31-Jul-2014
Open Price: 100.15
Average Price: 100.28
No. of Contracts Traded: 1,813
Open Interest: 97,60,000
Underlying: INDIACEM
Market Lot: 4,000
Previous Close: 99.80
Day's High | Low: 102.55 | 97.80
Turnover (Cr.): 72.72
Open Int. Change: 0,31,80,000 ([24.57]% )
Key Information

Key Executives:

N Srinivasan , Vice Chairman & M.D.

Rupa Gurunath , Whole-time Director

Arun Datta , Director

R K Das , Director

Company Head Office / Quarters:

Dhun Building,
827 Anna Salai,
Tamil Nadu-600002
Phone : Tamil Nadu-91-44-28521526/27/30/28592476 / Tamil Nadu-
Fax : Tamil Nadu-91-44-28520702/0638/1344 / Tamil Nadu-
E-mail : investor@indiacements.co.in
Web : http://www.indiacements.co.in


Integrated Enterprises (I) Ltd
Kences Tower,2nd Floor No 1,Ramakrishna Street,Chennai - 600 017

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