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India Cements Ltd.

BSE: 530005 Sector: Industrials
NSE: INDIACEM ISIN Code: INE383A01012
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OPEN 174.10
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VOLUME 404814
52-Week high 226.00
52-Week low 104.65
P/E 47.35
Mkt Cap.(Rs cr) 5,442
Buy Price 0.00
Buy Qty 0.00
Sell Price 176.60
Sell Qty 579.00
OPEN 174.10
CLOSE 172.25
VOLUME 404814
52-Week high 226.00
52-Week low 104.65
P/E 47.35
Mkt Cap.(Rs cr) 5,442
Buy Price 0.00
Buy Qty 0.00
Sell Price 176.60
Sell Qty 579.00

India Cements Ltd. (INDIACEM) - Director Report

Company director report

Your Directors have pleasure in presenting their Seventy-first Annual Report togetherwith audited accounts for the year ended 31st March 2017.

Rs. in Crore
For the year ended 31 2017

st March 2016

FINANCIAL RESULTS
Profit before Interest Depreciation & Exceptional Items 877.54 797.60
Less : Finance costs 360.46 382.50
Less : Depreciation / Amortization 257.06 219.46
Less : Exceptional Items 3.20
Profit Before Tax 260.02 192.44
Current Tax 53.71 60.36
MAT credit entitlement (53.71) (27.11)
Deferred Tax 86.67 29.24
Profit After Tax 173.35 129.95
Other comprehensive income (net) (5.47)
Total comprehensive income 167.88 129.95
Add : Surplus brought forward from last year 868.56 778.61
Less : Dividend on Equity Capital (including Dividend Distribution Tax) paid during the year 36.97
Less : Transfer to General Reserve 60.00 40.00
Surplus carried forward 939.47 868.56

The Hon'ble National Company Law Tribunal (NCLT) Division Bench Chennai has videits Orders dated April 13 2017 and April 20 2017 sanctioned the Scheme of Amalgamationand Arrangement between Trinetra Cement Limited (TCL) (First Transferor Company) andTrishul Concrete Products Limited (TCPL) (Second Transferor Company) with The IndiaCements Limited (Transferee Company) and their respective shareholders subject to thedirections given by the Hon'ble High Court of Madras on 31.01.2017 in C.P.No.171 of 2015.The said Orders were filed with the Registrar of Companies Tamil Nadu Chennai on28.04.2017 and accordingly the Scheme became effective from the appointed date i.e.01.01.2014.

The aforesaid results for 2016-17 include financials of the TCL and TCPL which standsamalgamated with your Company and are therefore not strictly comparable with those of theprevious year.

Ind AS

As per Ministry of Corporate Affairs (MCA) notification dated 16.02.2015 the IndianAccounting Standards (Ind AS) are mandatory for the Company for the Financial yearcommencing 01.04.2016. Accordingly the Company has adopted Ind AS from 01.04.2016 and thefinancial statements for the year ended 31.03.2017 are prepared in accordance with theprinciples laid down in the said Ind AS. The financial statements for the correspondingyear ended 31st March 2016 is restated under Ind AS.

DIVIDEND

The Board of Directors has recommended a dividend of Re.1 per Equity Share of Rs.10/-each on 308153074 Equity Shares of Rs.10/- each for the year ended 31stMarch 2017 including on 974417 equity shares of Rs.10/- each issued for allotment tothe shareholders of TCL and TCPL and proportionate dividend on 1317 Equity shares havingcalls in arrears. The proposed dividend on approval by the Shareholders at the ensuingAnnual General Meeting will be met out of surplus in the Statement of Profit and Loss inthe Balance Sheet.

SHARE CAPITAL

The authorised share capital of the Company has gone up to Rs.1419.81 Crores fromRs.535 Crores in terms of the approved Scheme of Amalgamation referred to earlier in thereport. The paid-up equity share capital has further increased to 308153074 shares ofRs.10/- each in April 2017 on issue of 974417 equity shares of Rs.10/- each to theshareholders of TCL and TCPL in terms of the said Scheme of Amalgamation as sanctioned bythe Hon'ble National Company Law Tribunal Division Bench Chennai.

EMPLOYEES STOCK OPTION SCHEME

The Compensation Committee at its meeting held on 15th March 2017 approvedthe ‘Employees Stock Option Scheme 2016' (Scheme) and granted 18.35 lakh stockoptions to certain eligible employees of the Company effective from 01.04.2017. In termsof this Scheme options granted to employees will vest on 1st April 2018. Eachoption on such vesting can be exercised by applying for an equity share of Rs.10/- eachfully paid-up for a sum of Rs.50/- (inclusive of premium of Rs.40/-) on or before 1stApril 2019 in not more than two tranches.

TRANSFER TO RESERVES

The Company proposes to transfer Rs.60 crores to the General Reserve and to retainRs.939 crores as surplus in the Profit and Loss Account.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Regulation 34(2) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (SEBI (LODR) Regulations2015) a Management Discussion and Analysis Report is given in Annexure 'B'.

CORPORATE GOVERNANCE

Pursuant to Regulation 34(3) of SEBI (LODR) Regulations 2015 a report on CorporateGovernance along with Auditors' Certificate confirming its compliance is included as partof the Annual Report and is given in Annexure 'C' and Annexure 'D' respectively. Further adeclaration on Code of Conduct signed by the Vice Chairman & Managing Director in hiscapacity as Chief Executive Officer of the Company is given in Annexure 'E'.

BUSINESS RESPONSIBILITY REPORT (BRR)

Pursuant to Regulation 34(2)(f) of SEBI (LODR) Regulations 2015 a BusinessResponsibility Report is given in Annexure 'F'.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

A report on CSR activities of the Company during 2016-17 is given in Annexure 'G'.

LICENCES & RECOGNITIONS

The Company's Vishnupuram plant has been granted license by American PetroleumInstitute (API) USA to use the official API Monogram on manufactured products and inaccordance with the provisions of the License Agreement the API Monogram shall be used inconjunction with the Certificate Number: 10A-0138.

The Company's Banswara plant has obtained the license for Environment ManagementSystems Certification (IS/ISO14001:2015) and Quality Management System Certification(IS/ISO 9001:2015) and Occupational Health Management System Certification IS18001:2007valid for 3 years.

The Company's Chilamkur plant has been honoured by the Andhra Pradesh State Governmentwith Best Management Award for Congenial and Cordial Industrial Relations and putting inextraordinary efforts for the welfare of labour and CSR activities.

The company's inhouse magazine "Compass" earned Certificate of Merit in theinhouse magazine competition held in Mumbai and continues to remain among the top 100meritorious magazines.

OPERATIONS

The performance of the company for the year has been discussed in detail in theManagement Discussions and Analysis section. The industry which has created capacity wellahead of demand reeled under pressure with practically nil growth during the yearfollowing a meagre growth in the previous year as per the information published byDepartment of Industrial Policy and Promotion (DIPP). The production during the yearaccording to the report was 280 million tons against the capacity of over 375 million tonsresulting in an average capacity utilization of around 75%. According to DIPP reportswhile the industry had witnessed a growth of over 5% in the first half of the fiscaloverall for the year was a negative growth of 1.2% caused partially by demonetizationexercise done in November 2016.

The industry in north central and western regions clocked a capacity utilization ofover 80% while the industry in south could operate only at around 60%. With this backdropthe performance of the company can be considered to be satisfactory with a capacityutilisation of around 70% for the year. As mentioned elsewhere the current year figuresof operations and financial performance includes that of the merged entities of TrinetraCement Limited and Trishul Concrete Products Limited and hence they are not strictlycomparable with that of previous year. The sales volume for the year under reviewincluding clinker was at 11.04 million tons and the total revenue for the year was atRs.5794 crores. With the softening of the international price of coal and with higherusage of cost effective petcoke in the fuel mix and with improved clinker to cement ratiothe EBIDTA for the year net was Rs.877.54 crores. The interest charges were at Rs.360.46crores while the depreciation was at

Rs.257.06 crores resulting in profit before tax of Rs.260.02 crores. The tax expensesfor the year was Rs.86.67 crores. The profit after tax was at Rs.173.35 crores. The othercomprehensive income for the year was (Rs.5.47 crores) net and overall comprehensiveincome was Rs.167.88 crores for the year. Given the poor demand for cement and thenegative growth in consumption the performance can be considered to be satisfactory.

The shipping division continued to operate its ship mainly in coastal movement ofcargo. The total earnings of the division during the year was at Rs.13.98 crores.

With the construction sector taking a hit during the year and with negative growth incement demand the operations of the RMC division was also subdued with a sale of 2.56lakh cu.m. of concrete during the year as against 2.54 lakh cu.m. achieved in the previousyear. The total revenue generated was at Rs.101 crores as compared to Rs.102 croresachieved in the previous year.

EXPANSION / MODERNISATION

The Company has already obtained approvals from the environmental authorities forinstalling new energy efficient cement grinding facility at Sankarnagar replacing some ofthe old cement mills. The Company has also got approval from the authorities for enhancingcapacity of Sankari and Dalavoi plants in Tamil Nadu. The Company has also initiated stepsfor obtaining necessary approval for enhancing the capacities of one of its plants inAndhra Pradesh and that of one of its grinding units.

CHENNAI SUPER KINGS CRICKET LIMITED (CSKCL)

The Company was informed that CSKCL had sought the permission of BCCI for thedistribution of its shares by India Cements Shareholders Trust to the non-promotershareholders of India Cements and India Cements Ex-Cricketers Trust. The Company has alsobeen informed that the approval of BCCI is awaited.

SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to Section 129(3) of the Companies Act 2013 read with Rules the AuditedConsolidated Financial Statement of the Company and of all the Subsidiary and AssociateCompanies is enclosed. A separate statement containing the salient features of the auditedfinancial statement of all the Subsidiary and Associate Companies is also enclosed in FormAOC-1 (Annexure 'H') as prescribed under the Companies Act 2013 and the Rules madethereunder.

POLICY ON DETERMINATION OF MATERIAL SUBSIDIARIES

The India Cements Limited has as on date 9 subsidiaries controlled throughshareholdings in such Companies none of which is material.

COROMANDEL ELECTRIC COMPANY LIMITED

The power generation from the Gas power plant despite being affected during the yeardue to shortfall in natural gas supply from GAIL (India) Limited the plant was able togenerate 169 million KWH as against 163 million KWH in the previous financial year. Theplant load factor was maintained at 75.18% against 72.08% achieved in correspondingprevious year. During the year the Company had sold 46 million KWH of power to the cementplants of The India Cements Limited located in Tamil Nadu State while the balance power of123 million KWH was sold to other group captive consumers. In March 2017 the Company hasgot additional allocation from Oil and Natural Gas Corporation Limited through E-Tenderingbasis to meet its shortage of natural gas and this will help in improving the capacityutilisation of the plant further in the coming years. The net income from operationsearned by the Company was at Rs.85.62 Crores (Rs.86.43 Crores) and the net profit aftertax was at Rs.18.16 Crores against Rs.5.40 Crores in the previous year.

COROMANDEL TRAVELS LIMITED

The Company owns an aircraft and is engaged in the business of chartering aircrafts asa Non-scheduled operator. The Company has earned a total revenue of Rs.12.75 Crores andhas chartered aircraft for 254 flying hours. The Company has broken even at EBIDTA Level.

PT COROMANDEL MINERALS RESOURCES INDONESIA AND COROMANDEL MINERALS PTE LTD SINGAPORE

Since the beginning of this year the international prices of coal have startedimproving and as on date the prices remain firm.

Consequent to this the Company has recommenced mining activity during the currentyear. Going forward the Company is expected to derive the benefits from its investmentsin the mines with stable international price of coal.

INDIA CEMENTS INFRASTRUCTURES LIMITED

The Company has taken up for joint development a property in Coimbatore. Necessaryapprovals for the project have been obtained and the first phase of the work is in anadvanced stage of completion. As for the remaining phase of this project it is proposedto consider revising the plan to suit the current market situation and the regulatorychanges to improve the marketability. Meanwhile to gainfully employ its workforce theCompany has offered their services to other companies.

ASSOCIATE COMPANIES

COROMANDEL SUGARS LIMITED

During the year under review in spite of severe drought conditions in Karnatakaimpacting the cane availability cane yield and recovery the company could takeadvantage of the favourable market prices and hence posted an EBIDTA of Rs.34.3 crores (asagainst Rs.21.08 crores in FY16) and a profit of Rs.0.90 crores (as against a loss ofRs.0.29 lakhs in FY16) While the crushing saw a steep reduction to 3.81 lakh Tns (7.47lakh tns in FY16) with consequent reduction in sugar production to 3.39 lakh quintals (asagainst 7.09 lakh quintals in FY16) the Company achieved a sale of 4.47 lakh quintals (asagainst 8.33 lakh quintals) by drawing from the opening stock. This coupled with higherprice realization of Rs.3374 as against Rs.2519 per quintal in FY16 had enabled thecompany to achieve better working results.

However the Company could not take full advantage of the increased capacity in thenewly installed 30MW Cogen Plant which suffered due to lower cane crushing and it isexpected that during the current year the Company will be able to derive higher benefitsfrom the 30MW Cogen plant. With the prediction of favourable monsoon the Company expectsimproved performance in the current year.

INDIA CEMENTS CAPITAL LIMITED (ICCL)

The main focus of the Company continues to be on various fee-based activities such asFull Fledged Money Changing [FFMC] Travel & Tours and Forex Advisory Services. TheCompany'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 inStock Broking. The Gross income from operations of ICCL was Rs.445.85 lakhs and that ofICISL was Rs.154.04 lakhs for the year ended 31st March 2017.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

In accordance with Section 134(5)(e) of the Companies Act 2013 and Rule 8(5)(viii) ofCompanies (Accounts) Rules 2014 the Company has an Internal Financial Control Policy andProcedures commensurate with the size and nature of operations and financial reporting.The Company has defined standard operating procedures covering all functional areas likesales marketing materials fixed assets etc.

The Company has engaged the services of Chartered Accountant firms for carrying outinternal audit of all its plants as well as marketing offices. The internal auditors havebeen given the specific responsibility to verify and report on compliance of standardoperating procedures. The auditors have reported that there are adequate financialcontrols in place and are being followed by the Company. This has been further explainedin the Management Discussion and Analysis Report.

RISK MANAGEMENT POLICY

Pursuant to Section 134(3)(n) of the Companies Act 2013 and Regulation 17(9) of SEBI(LODR) Regulations 2015 the Company has developed and implemented a Risk ManagementPolicy. The Policy envisages identification of risk and procedures for assessment andmitigation thereof.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

In accordance with Section 177(9) and (10) of the Companies Act 2013 and Regulation 22of SEBI (LODR) Regulations 2015 the Company has established a Vigil Mechanism and has aWhistle Blower Policy. The Policy has been uploaded on the Company's websitewww.indiacements.co.in.

India Cements has always been encouraging its employees to give constructive criticismand suggestions which will better the overall prospects of the Company and its variousstakeholders. India Cements will continue to adopt this as a corner stone of its PersonnelPolicy.

THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL)ACT 2013

The Company has in place an anti-sexual harassment policy in line with the requirementsof the captioned Act and Rules made thereunder. There was no complaint of harassmentreported during the year.

POLICY ON DEALING WITH RELATED PARTIES

All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions entered by the Company with Promoters DirectorsKey Managerial Personnel or other designated persons which may have a potential conflictwith the interest of the Company at large. All Related Party Transactions are placedbefore the Audit Committee as also the Board for its approval. Prior omnibus approval ofthe Audit Committee is obtained for the transactions which are of a foreseeable andrepetitive nature. The transactions entered into pursuant to the omnibus approval sogranted are audited and a statement giving details of all related party transactions isplaced before the Audit Committee and the Board of Directors for their approval on aquarterly basis. The policy on Related Party Transactions as approved by the Board hasbeen uploaded on the Company's website. None of the Directors has any pecuniaryrelationships or transactions vis--vis the Company other than remuneration in the caseof whole time directors or sitting fee in the case of others.

TRANSACTIONS WITH RELATED PARTIES

Particulars of contracts or arrangements with related parties in Form AOC-2 along withjustification are given in Annexure 'J'.

LOANS / INVESTMENT / GUARANTEES ETC UNDER SECTION 186 OF THE COMPANIES ACT 2013

Details of loans investments and guarantees covered under Section 186 of the CompaniesAct 2013 are given in Note No.40.13 on accounts for the financial year 2016-17.

ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS

There has been no order passed by any Regulatory authority or Court or Tribunalimpacting the going concern status and future operations of the Company.

MATERIAL CHANGES AND COMMITMENTS

There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between 1st April 2017 and the date of thisreport other than those disclosed in the financial statements.

ANNUAL RETURN

Extract of the Annual Return in Form No. MGT-9 is attached with this Report as Annexure'K'.

PUBLIC DEPOSITS

Your Company has not been accepting deposits from public and shareholders since 16thSeptember 2013. Deposits totalling Rs.11.59 lakhs have not so far been claimed by thedepositors.

CONSERVATION OF ENERGY ETC.

Necessary particulars regarding conservation of energy etc. as per provisions ofSection 134 of the Companies Act 2013 are set out in Annexure A.

RESEARCH & DEVELOPMENT

During the year your Company spent Rs.159.34 Lakhs towards revenue expenditure on theR&D department besides a contribution of Rs.19.06 lakhs to National Council for Cementand Building Materials (NCCBM) which carries out research on behalf of cement industry asa whole.

DIRECTORS

Sri R.K.Das and Sri PL. Subramanian resigned as Director with effect from 24thJune 2016 and 17th June 2016 respectively. The Board expresses its appreciationof the valuable contribution made by them during their tenure of office.

Under Article 109 of the Articles of Association of the Company Smt. Chitra Srinivasanretires by rotation at the ensuing Annual General Meeting of the Company and she iseligible for re-appointment.

Sri M.R.Kumar was appointed as a Nominee Director by Life Insurance Corporation ofIndia in the place of Sri Basavaraju and he will hold the office upto the date of theensuing Annual General Meeting and the resolution for his election as director liable toretire by rotation is included under Special Business in the Notice convening the 71stAnnual General Meeting of the Company.

Sri K.Balakrishnan and Sri V.Ranganathan were appointed as Independent Directors by theBoard of Directors at their meeting held on 29.08.2016 and the resolutions for theirelection as Independent Directors for a term of three years from 29.08.2016 to 28.08.2019are included under Special Business in the Notice convening the 71st AnnualGeneral meeting of the Company.

Brief particulars of Directors eligible for appointment / re-appointment are annexed tothe Notice convening the 71st Annual General Meeting of the Company.

Sri N.Srinivasan Vice Chairman & Managing Director and Smt. Rupa GurunathWholetime Director of the Company are related to Smt.Chitra Srinivasan and are alsorelated to each other. No other director is related to them or each other.

The details of shares and convertible instruments held by non-executive directors aregiven in Annexure 'C'.

INDEPENDENT DIRECTORS

A declaration given by independent directors under Section 149(7) of the Companies Act2013 that they meet the criteria of independence as provided under Section 149(6) of theCompanies Act 2013 has been received by the Company. The details of familiarizationprogramme for independent directors can be had from the Company's websitewww.indiacements.co.in.

FAMILIARIZATION PROCESS

Senior management personnel of the Company on a structured basis interact withdirectors from time to time to enable them to understand the Company's strategy businessmodel operations service and product offerings markets organization structurefinance human resources technology and risk management and such other areas. Thedirectors also are facilitated to visit Company's plants to familiarize themselves withfactory operations.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors make the following statement in terms of Section 134(5) of the CompaniesAct 2013. "We confirm

1. That in the preparation of the annual accounts for the year ended 31stMarch 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures.

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 2017 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 2013 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 2017 have beenprepared on a going concern basis.

5. That internal financial controls to be followed by the Company have been laid downand that such internal financial controls are adequate and were operating effectively.

6. That proper systems to ensure compliance with the provisions of all applicable lawshave been devised and that such systems are adequate and operating effectively."

REMUNERATION

As prescribed under Section 197(12) of the Companies Act 2013 ("Act") andRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the details are given in Annexure I. In terms of provisions of Section 197(12) ofthe Companies Act 2013 and Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 a statement showing names of the employees and otherparticulars drawing remuneration in terms of the said Rules forms part of this report.However in terms of first proviso to Section 136(1) of the Act the Annual Reportexcluding the aforesaid information is being sent to the members of the Company. The saidinformation is available for inspection at the Registered Office of the Company duringworking hours and any member who is interested in obtaining these particulars may write tothe Company Secretary of the Company.

BOARD MEETINGS

During the year five Board Meetings were held. The details of the meetings of theBoard and its Committees are given in the Corporate Governance Report (Annexure 'C').

EVALUATION OF BOARD / BOARD COMMITTEES

Pursuant to the provisions of the Companies Act 2013 and SEBI (LODR) Regulations2015 the Board has carried out annual performance evaluation of its own performance thedirectors individually as well as evaluation of the working of its Committees.

REMUNERATION POLICY

The Board has on the recommendation of the Nomination and Remuneration Committeeframed a Policy for selection and appointment of Directors Key Managerial Personnel (KMP)and other employees and their remuneration for implementation.

Broadly the performance of the employee concerned and the performance of the Companyare the fundamental parameters determining the remuneration payable to an employee. Morespecifically there will be reciprocity in the matter of remunerating executive directorsKMPs and other employees.

At the middle and lower levels of management the yardsticks of assessment aredifferent. The ability to speedily execute policy decisions sincerity and devotion anddiscipline are the main attributes expected.

KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel of the Company for the purpose of Companies Act 2013 areSri N.Srinivasan Vice Chairman & Managing Director (Chief Executive Officer) Smt.Rupa Gurunath Wholetime Director Sri R.Srinivasan Executive President (Finance &Accounts) (Chief Financial Officer) and Sri S.Sridharan Company Secretary.

PERSONNEL

Industrial relations continued to remain cordial during the year.

AUDITORS

As per the provisions of Section 139 of the Companies Act 2013 the term of office ofM/s. Brahmayya & Co. and M/s. P.S.Subramania Iyer & Co. Chennai as StatutoryAuditors of the Company will conclude from the close of the 71st AnnualGeneral Meeting of the Company. The Board of Directors places on record its appreciationfor the valuable services rendered by M/s. Brahmayya & Co. and M/s. P.S.SubramaniaIyer & Co. Chennai as Statutory Auditors of the Company since its inception. Basedon the recommendations of the Audit Committee it is proposed to appoint M/s. K.S.Rao& Co. Chartered Accountants and M/s. S.Viswanathan LLP Chartered Accountants asStatutory Auditors of the Company to hold office for a term of five years from theconclusion of the 71st Annual General Meeting until the conclusion of the 76thAnnual General Meeting subject to the approval of shareholders.

INTERNAL AUDITORS

M/s. Capri Gopalaiyer & Subramanian Kalyanasundaram & Associates and Bala& Co. Chennai have been appointed as Internal Auditors for the year 2017-18.

COST AUDITOR

Sri S.A.Murali Prasad Cost Accountant Chennai has been appointed as Cost Auditor forthe year 2017-18 at a remuneration of Rs. 17 lakhs. The remuneration is subject toratification of members and hence is included in the Notice convening the 71stAnnual General Meeting of the Company.

SECRETARIAL AUDITOR

Smt. P.R.Sudha Practising Company Secretary has been appointed as Secretarial Auditorof the Company for the year 2017-18.

Secretarial Auditor's Report in Form MR-3 as prescribed under Section 204(1) of theCompanies Act 2013 read with Rule-9 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is enclosed as Annexure 'L'. The Secretarial AuditReport does not contain any qualification reservation or other remarks.

ACKNOWLEDGMENT

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
Place:Chennai N.SRINIVASAN RUPA GURUNATH N.SRINIVASAN
Date : 28th July 2017 Vice Chairman & Managing Director Wholetime Director Director

ANNEXURE 'A' TO DIRECTORS' REPORT FOR THE YEAR ENDED 31ST MARCH 2017

[Information pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule8(3) of Companies (Accounts) Rules 2014]

A. Conservation of Energy:

(i) The steps taken or impact on conservation of energy:

(a) Continuous process diagnostic studies undertaken in one of the plants to improveoutputs of various sections resulting in reduced power consumption. (b) Plant / Colonylighting replacements done with LED lamps to reduce consumption of energy.

(c) Installation of variable frequency drives for various process fans / cooler fans tosave power.

(d) Capacitor banks improvements at various locations to improve the power factor andto reduce the penal charges. (e) Process compressed air optimization studies undertaken atall the plants to reduce power consumption. (f) Installation of dynamic separator in coalmill circuit at one of the plants to increase usage of Petcoke.

(g) Raw mill grit separator dip tube dia increased resulting in increased output andreduced power.

(h) ESP converted to Bag filters in most of the plants resulting in reduced emissionand reduced power consumption.

(i) Pre-heater cyclone gas inlet duct modified/venturi area increased resulting inreduction in pressure drop and improved outputs. (j) Dispersion plates renewed/modified atthe pre-heater resulting in reduced power consumption.

(k) Conventional burner replaced with multi-channel burner resulting in reducedstart-up fuel.

(l) Dip tube replaced at various stages in some of the plants resulting in reduction ofpre-heater exit temperature.

(ii) The steps taken by the Company for utilizing alternate sources of energy:

(a) The Company has been using power from the waste heat recovery system at one of itsplants. (b) The Company also uses the power generated from Windmills.

(c) Solar lights are also being installed replacing conventional lighting at theplants. (d) The Company uses alternative fuels at some of its plants depending upon theavailability.

(iii) Further capital investment on energy conservation equipment:

(a) Installation of new energy efficient Cement Grinding System at one of the plantsreplacing conventional ball mills. (b) Retrofitting the coolers with high efficiencycoolers to reduce heat and the power consumption.

(c) Conversion of Pneumatic conversion system to Belt Bucket Elevator system for silofeed as well as kiln feed to save on power. (d) Automation of packing and loading systemto reduce manpower and to reduce power consumption.

(e) Conversion of mechanical packers to electronic packers in the remaining locationsto improve output and to save on power. (f) Replacement of old Hammer Crusher with moderncrusher to improve the output and to reduce the power consumption. (g) Installation ofDynamic Separator in Coal Mill section in one of the plants to enable usage of alternatefuel

(h) Replacement of top cyclone of the pre-heater with high efficiency cyclone toimprove the output reduce pressure drop and reduce power consumption. (i) Installation ofWaste Heat Recovery System at one more plant to recover power at cheaper cost.

(j) Closed circuiting of cement mills at two of the plants to improve the mill outputand to reduce power consumption.

(k) Installation of pre-grinder for the cement mill at one of the plants tosubstantially increase the mill output and quality and reduce power consumption. (l)Precalcinator modification and upgradation of the coal mill for improving the output andfor increasing alternate fuel usage.

(m) Pre-heater 5th stage cyclone roof height adjustments to reduce pressuredrop.

Impact of measures at (i) (ii) and (iii) above for reduction of energy consumption andconsequent impact on cost of production of goods:

The above measures that have been undertaken/proposed to be undertaken are expected toreduce power by 15 K.cals and power consumption by 3 units per ton of cement.

B. Technology Absorption:

Particulars given in Form 'A' annexed.

C. Foreign exchange earnings and outgo:

(a) Activities relating to exports initiatives taken to increase exports developmentof new exports markets for products & services and export plans: There was nosignificant export sale during the year under review.

(b) Total foreign exchange used and earned:

Current Year Previous Year
Earned Rs. /Crores 163.18 103.75
Used Rs. /Crores 5.95 3.37

 

On behalf of the Board
N.SRINIVASAN RUPA GURUNATH N.SRINIVASAN
Vice Chairman & Managing Director Wholetime Director Director
Place:Chennai
Date : 28th July 2017

FORM A

FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO ABSORPTION

Research and Development (R & D):
The Company has started an in-house 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.159.34 lakhs has been spent during the year for the functioning of R & D department. Besides this a sum of Rs.19.06 lakhs is the contribution to National Council for Cement and Building Materials (NCCBM) which carries out Research on behalf of the Industry.
(c) Total : Rs.178.40 lakhs
(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 like 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 thereof and future plans of action.

 

On behalf of the Board
N.SRINIVASAN RUPA GURUNATH N.SRINIVASAN
Place:Chennai Vice Chairman & Managing Director Wholetime Director Director
Date : 28th July 2017

ANNEXURE ‘E' TO DIRECTORS' REPORT FOR THE YEAR ENDED 31ST MARCH 2017

CODE OF CONDUCT – DECLARATION UNDER SCHEDULE V (D) OF SECURITIES AND EXCHANGEBOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS 2015.

This is to certify that all Board members and Senior Management Personnel have affirmedcompliance with the India Cements Code of Conduct for Directors and Senior Management forthe year ended 31st March 2017.

for THE INDIA CEMENTS LIMITED
Place : Sankarnagar Tirunelveli N. SRINIVASAN
Date : 27th May 2017 VICE CHAIRMAN & MANAGING DIRECTOR