ANALYSIS OF RESULTS

FY 2004

Note:

The above result takes into account the foreign currency difference shown separately as per the Accounting Standard. The foreign currency loans are to be marked to market as on the closing day. In the 3Q 2004 it was a credit booked on account of Rupee appreciation, which as  of   4Q 2004 is the debit charge on account of the Rupee depreciating. It is just a book entry wherein the net impact is just Rs. 5 million. The Profit after nullifying the foreign currency adjustment for the 4Q 2004 is Rs. 1444 million  and Rs. 1185 million   for the 3Q 2004 as shown above.

Full Year Performance 2003-2004

1. Operational Performance

All cement plants operated at good utilisation levels resulting in higher clinker production by 3% at 8.86million
tonnes as against 8.59 million tonnes in the previous year. Higher clinker production resulted in increased cement production by 5% at 10.37 million tonnes as against 9.84  million tonnes.

Cement sales registered an increase of  6% to 10.44 million tonnes as against 9.81 million tonnes last year. Domestic sales were higher by 9% to 8.72 million tonnes from 7.98 million last year and exports registered a drop of 6% at 1.72 million tonnes as against  1.83 million tonnes.

2.Sales Realisation

Cement prices remained very low in the first half of the year. Thereafter, there has been an improvement in the cement prices across the markets. Domestic Sales realisations increased by 5%, while export realisations for the year increased by 10%. This resulted in the overall sales realisation improving by 6%.

3.Other Income

Other income during the year was high as compared to the previous year on account of   better returns on the deployment of surplus funds, prudent forex management.

4.Costs

On the cost side there have been sharp increases in the cost of coal and fuel cost have   gone up by around 7%. However, due to efficiency in the power generation, the power cost are lower by 5%. The Company has been able to contain the cost of production inspite of increase in the fuel costs and the direct cost of production is up only 2% due to higher productivity and efficiencies.
 

5.EBDITA

The operating profit of the company is Rs. 5875.2 million as against Rs.5128.4 million in the previous year an increase of 15%.

EBDITA margin has improved to 30% as against 29% in the previous year on account of  operational efficiencies and better sales realisation.

6.Interest

The interest expenses during the current year reduced  by 11% to Rs. 784.3 million as  against Rs.879.4 million in the previous year. This is on account of restructuring of higher interest bearing debt and efficient management of surplus funds.

7.Profit After Tax

After providing for current and deferred tax of Rs. 467.1 million (as against Rs. 314.7 million in the previous year), Profit after tax is higher at Rs. 3367.9 million as compared to Rs. 2220.9 million in the previous year, an increase  of  52%.

8.Dividend

Enthused by the encouraging performance, the Board of Directors have recommended an increased Dividend of 80% (including interim dividend 50%) as against 70% in the previous year.   

9.Outlook for the current year

The year 2003-2004 has been very good for the Indian Economy, which grew by 8.2%.  But cement has witnessed a low growth of just about 5.6% and slow growth continues even during the quarter ending June 2004.   This is largely on account of South India which has been showing a negative growth for past several months.

The construction industry in India has been growing at a slower pace than other sectors of the economy. It is expected that due to increased impetus to the development of rural and urban infrastructure and robust growth in the housing sector, demand of cement may rise to about 6% during the year.  This growth, albeit low, will help in reducing the imbalance of demand supply and stable cement prices.

9.Consolodated Financial Results

The above results do not include 11 months working of ACRL prior to merger.