INTRODUCTION:-Cement Industry

Economic overview :
The performance of the Indian Economy in 2007-08 continued to be good with GDP growth at 9% despite rise in crude oil prices and financial turbulence. The reasons are, the flow of substantial capital investment, the fairly satisfactory performance of the industrial sector which recorded a growth of 8.5% and the rapid development of the services sector which grew at 10.8% during the year. The manufacturing and services sectors together account for 85% of the Nations economy. Further, the adverse impact of the rising rupee has so far been marginal on exports which touched USD 155.5 billion in 2007-08 recording a healthy growth of 23% over the previous fiscal. Imports grew by 27% year on year to USD 235.9 billion during 2007-08 the trade deficit widening to USD 80.4 billion. On the agricultural front, the total food grain production in 2007-08, however, has been commendable and is estimated at 227.32 million tonnes. This is 10 million tonnes more than the production achieved in 200607, representing an increase of 4.6%.

The main economic concerns have been the rising rate of inflation and the slow down in the growth of infrastructure industries. The rate of inflation moved past the critical 6% to a 14 month high of 7.4% in April 2008 driven by rise in food prices, basic metals and fuel. The growth of infrastructure industries during the period April 2007 to January 2008 was 5.5% as against 8.9% in the corresponding period in 2006-07.

In order to sustain GDP growth of around 8.5 - 9% in the years ahead, the core areas that warrant priority attention are immediate anti-inflationary measures, sustaining agricultural growth at 4% plus, accelerating infrastructure development particularly power, fiscal consolidation and investment in Primary Education and Health Care.

The Union Budget 2008-09 has addressed most of these concerns, through its focus on infrastructure, agriculture, healthcare, education and rural development. Agriculture, rural development and social sector account for over 37% of the total central plan outlay for 200809. The Government and the Reserve Bank of India are also seized off the problem of inflation and have come out with fiscal and monetary measures to curb its rising graph.

OUTLOOK FOR 2008-09 Fiscal 2008-09 began with industrial growth dipping to 7% in April 2008 compared to 11.3% in the same month in the last fiscal reflecting the impact of higher interest rates and escalating input costs.

The performance in April 2008 was, however, much better than the 3% growth registered in March 2008 testifying to the fact that economic slow down is not as severe as was being envisaged. Economists now predict that the average industrial growth during 2008-09 is likely to be around 7%.

If the inflation rate does not abate, the tempo of development is bound to suffer. In order to maintain GDP growth at 8% in 2008-09, it will be necessary for industrial output to grow by 10% and food grain production to rise to 240 million tonnes. Given the present conditions, this would be extremely difficult even taking into account the resilience of the Indian economy. The World Bank in its report on global development finance released recently, has projected GDP growth to slow further to 7% in 2008-09, on account of monetary tightening leading to softening in domestic demand.

The estimated GDP growth in 2008-09 is also closely intertwined with the vagaries of the international economic situation. If recessionary trends engulf the developed industrial nations, India will definitely be adversely impacted. However, if the winds of recession are mild and there is an easing of the tight monetary policy, then the country is likely to be on course to clock a GDP growth exceeding 7%.

INDUSTRY SCENARIO

The cement industry in India has been enjoying its best period with a healthy growth in demand in the past two years. The industry has been operating at its near full capacity during this period. The cement prices have been steady throughout the year with this firm demand position.

The all India clinker production picked up further by 6.5% to 129.70 million tonnes as compared to 121.75 million tonnes during the previous year. The overall production of cement in the country for the year ended March 2008 was up at 168.31 million tonnes as against 155.66 million tonnes in the previous year registering a growth of 8.1%. The domestic consumption of cement grew further by 9.8% over and above the double digit growth recorded in the previous two financial years and was at 164.02 million tonnes as compared to 149.40 million tonnes in the previous financial year. The cement export was, however, lower at 3.65 million tonnes as against 5.89 million tonnes in the previous year due to a buoyant domestic market. The clinker exports were also lower at 2.37 million tonnes as compared to 3.10 million tonnes in the previous year.

INTRODUCTION:THE INDIA CEMENTS LIMITED,established in the year 1946 manufactures cement, a core material in the construction industry. Since inception, making a humble beginning it has grown to a multidivisional company with seven plants of overall capacity of 9 million tonnes per annum and with a trun over of Rs.2000 crores. It is the largest manufacturer of cement in south India.

Our family of 5500 dedicated members consists of 1200 Executives committed to the growth of the company and the industry at large. Our task comprises the functions in Production, Quality Assurance, Engineering, Marketing Materials, Finance, Secretarial, Personnel, HRD, Administration, Legal Affairs, Safety, Public Relations, Projects, R&D, Information Systems etc., headed by MBA's, Engineers, Cost Accountants, Chartered Accountants, IT Specialists and HR/IR Professionals. Our Core marketing area is South India and South Maharastra upto Mumbai.

The Vision The new millennium will bring with it new challenges and greater opportunities. The 21st century will most certainly see the unfolding of a period of extraordinary possibilities and incredible developments bringing about more fundamental changes in the global economy than the last 200 years. The successful corporates will be those who equip themselves to meet the challenges and convert opportunities into winning strategies. If we are to keep pace, it is imperative that we learn to successfully tread the global pathway.

In this journey, clarity of vision, a readiness to cultivate a global mindset, effectiveness, harnessing of human resources to enhance job and knowledge skills of employees, a strong accent on R & D and innovation and a move away from selling, to innovative marketing in recognition of the fact that the Customer is truly King, are some of the strategies that will help corporates to survive and succeed.

However it must be remembered that it is not enough to adopt a set of values and just leave them in place. In order to move with the changing times, values and ideas must be ceaselessly re-examined so as to ensure that they are in tune with the organisation's goals.

The India Cements Limited is committed to contribute its might in making the 21st century an "Indian Century". The Mission Aiming High: We should be one of the largest Cement Companies in the Country. Our growth in size will be through continuous review of potentials of the existing manufacturing resources, strategic acquisitions and expansions Core Competency: Cement will be our mainstay. However, we shall venture into related fields which afford purposeful synergy. Quality Quest: Product quality, consistency and customer service will be pursued as an act of faith throughout the organisation.

Modern Mindset: In an environment which is intensively competitive, we shall be futuristic in outlook and effective in management. Pursuit Of Excellence: The growing size of our business permit us to have an R & D set up of our own. We shall continuously challenge methods, systems, operating parameters. We shall constantly review our manufacturing systems to upgrade quality and value of products.

Human Resources: We consider people as our valuable Assets. Our HRD Systems will be totally proactive and tuned to provide excellent working environment and transparent organisational culture for creativity, innovation and participation.

Value Addition: ICL will continuously strive to enhance its value to its customers, ShareHolders and Employees.

Community Welfare: As the organization grows, as a good Corporate Citizen, we shall be sensitive to the welfare and development needs of the Society around us.

PRODUCTS OF INDIA CEMENTS:Coromandel King-Sankar Sakthi- Raasi Gold Coromandel King, Sankar Sakthi and Raasi Gold are high strength cements to meet the needs of the consumer for high strength concrete. As per BIS requirements the minimum 28 days compressive strength of 53 Grade OPC should not be less than 53 Mpa. For certain specialised works such as prestressed concrete and certain items of precast concrete requiring consistently high strength concrete, the use of 53 Grade OPC is found very useful. 53 Grade OPC produces higher-Grade concrete at very economical cement content. In concrete mix design, for concrete M-20 and above Grades a saving of 8 to 10% of cement may be achieved with the use of above mentioned 53 Grade OPC.

Coromandel King, Sankar Sakthi and Raasi Gold can be used for the following applications.

RCC works (Preferably where grade of concrete is M-25 and above). Precast concrete items such as paving blocks, tiles building blocks etc. Prestressed concrete components Runways, concrete Roads, Bridges etc. Multistorey buildings.

COROMANDEL-SANKAR-RAASI :Coromandel, Sankar and Raasi are the 43 grade OPCs most popular general-purpose cement in the market today. The production of 43 grade OPC is nearly 50% of the total production of cement in the country. BLENDED CEMENT:Coromandel Super Power, Sankar Super Power and Raasi Super Power are the premium blended cements from THE INDIA CEMENTS LIMITED. It is produced by intergrinding of OPC clinker alongwith gypsum and mineral admixtures. Dedicated to the end user after passing through stringent tests at our R&D laboratory, it ensures durable structures that lasts for generations.

Salient features: Strength increases as time passes. High durability concrete - protects from corrosion, coastal attack and extreme temperature. Ideal cement for resisting aggressive environments like chemical, chloride and sulphate attack. Best suited for high performance concrete. High fineness - suited for plastering and finishing works. Low heat of hydration - Ideal for mass concrete pours and machine foundationsEquivalent to 53 grade cement.

Applications: It is a general purpose cement and can be used with advantage wherever OPC is used. Marine structures. Mass concrete pours such as in dams etc. Highly suited for plastering and finishing works because of it's high fineness .

SULPHATE RESISTING PORTLAND CEMENT (SRC):Sankar SRC can be used for structural concrete wherever OPC or PPC or Slag Cement is usable under normal conditions.Sankar SRC is particularly beneficial in such conditions where the concrete is exposed to the risk of deterioration due to sulphate attack. For example, in contact with soils and ground waters containing excessive amounts of sulphates as well as for concrete in seawater or exposed directly to seacoast. The IS 456 1978 (revised draft code ) has made elaborate provisions for use of particular type of cement against different percentages of soluble sulphate salts.

The use of SRC is recommended for following applications: Foundations, piles Basements and underground structures Sewage and Water treatment plants Chemical, Fertilizers and Sugar factories Food processing industries and Petrochemical projects Coastal works Also for normal construction works where OPC is used. Construction of building along the coastal area is 50 Km from sea.

INTRODUCTION OF RASSI CEMENTS:1978 : The Company was Incorporated on 15th April, at Hyderabad. The Company was promoted by Andhra Pradesh Industrial Development Corporation Ltd. (APIDC), in the joint sector with N.K.P. Raju. - The Company's object is to manufacture ordinary portland cement, pozzolana portland cement, blast furnace slag cement, masonary cement, oil well cement, rapid hardening cement and acid resistant cement.

1979 :- 11,12,000 shares taken up by promoters, directors etc. 11,57,000 shares allotted to APIDC. 25,000 pref. and 21,80,500 No. of equity shares offered at par to public in December.

1981: - 8,90,000 Rights equity shares issued at par in prop. 1:5 in 1980/81.

1984 :- Production increased marginally but profits were lower due to higher costs of inputs.

1986:- The Company offered 4,00,000 - 15% secured redeemable non-convertible debentures of Rs.100 each to the equity shareholders on a rights basis. Debentures worth Rs.3 crores were taken up by the equity shareholders. - The Company acquired limestone mining lease over an area of Wadapalli, Irukagunda and Kothapalli villages. 2,133.36 acres in

- Preference dividends amounting to Rs.15,81,000 were in arrears for the period from 1st July 1987 to 31st March 1995.

1987 : - 17,80,000 bonus shares issued in prop. 1:3.

1989 : - 3 more Skoda DG sets with a total capacity of 4.5 MW were installed.

1990 : - Profitability also improved due to improved realisation and timely decision to instal diesel generator sets to take care of powercuts.

1991: - The Company undertook the implemenation of expansion scheme by installation of ropeway across river Krishna and certain energy saving equipments.

1992 : - Production marginally decreased due to recessionary trends and crashing of selling prices in all the markets.

1994 : - The Company proposed to undertake trading in sanitary wares such as water closets, wash basin, flush tanks etc. - Pref. shares redeemed 71,20,000 rights issued (prop. 1:1; prem. 70,80,848 shares taken up. Rs.10). Till date

1995 : - Raasi Ceramic Industry Ltd. became a subsidiary of the Company. RCIL is engaged in production and sales of sanitaryware. - 21,12,550 No. of equity shares of Rs.10 each allotted to Financial Institutions at par on conversion of 10.65% of the Funded Interest.

1996 : - The Company proposed to set up a new cement project at Andhra Pradesh POI with a capacity of about 6 lakh tonnes per annum. - The Company also proposed to invest in the equity capital of Vennar Ceramics Ltd. which is setting up necessary facilities for refiring high value ceramic products and also a gas based power plant of 3 MW capacity. - The power produced by VCL would be first utilised for its refiring operation and the balance power would be purchased by the Company. - The Company acquired limestone mining lease over an area of Wadapalli, Irukagunda and Kothapalli villages. 2,133.36 acres in

1997 : - Effective 31st March, Raasi Ceramic Industry Ltd. and Telangana Paper Mills Ltd. were amalgamated with the company. Pursuant to the scheme of amalgamation 30,235 No. of equity shares of the Company were allotted to the shareholders of erstwhile RCIL in the ratio of one equity share of the company for every 64 shares of erstwhile RCIL. - Simultaneously 21,721 No. of equity shares of the company were allotted to the shareholders of erstwhile TPML in the ratio of one equity share of the company for every 93 equity shares held in erstwhile TML.

- The Indian Cements Group has acquired the controlling interest in the company. - 22,93,76 No. of equity shares of Rs.10 each allotted to the shareholders of erstwhile Raasi Ceramic Industry Ltd. and Telungana Paper Mills Ltd. pursuant to scheme of amalgamation with the Company with effect from 31st March.

1998 : - Raasi Cements has recently merged two sick units, Raasi Ceramics Industry and Telangana Paper Mills, which is expected to adversely impact the bottomline of the company. - Raasi Cements Ltd (RCL), under the new management of India Cements Ltd, is all set to consolidate its position by expanding its capacity from two million tonne per annum to twoand-a-half million tonne. - Raasi Cements is a good, profit-making company with a market share of 62 per cent (both in AP and Karnataka). - Raasi is setting up another 6 lakh-tpa cement unit in Anantpur (Andhra Pradesh), and holds a substantial stake in Sri Vishnu Cements, which will also, post-takeover, go to India Cements. - India Cements has taken management control of Raasi Cement, the company it recently bought out from original promoters, the Secunderabad-based Rajus, and has announced that it is all set to arrange an `expeditious' merger between the two companies.

1999 : - India Cements (ICL) has concluded a Rs 85 lakh voluntary retirement scheme (VRS) at the paper unit of Raasi Cement. - Raasi is also promoting two more information technology (IT) companies, Raasi Netcom Ltd, and Raasi Information Systems Ltd, to carry out web technology and e-commerce development work and hardware solutions implementation, respectively. - The financial institutions (FIs) and banks have approved the merger of Raasi Cements Ltd (RCL) with India Cements Ltd (ICL) with effect from April 1, 1998.