The Hindu Business Line : India Cements rejigs board; 3 new directors inducted

At the helm
Ms Rupa Gurunath, Mr N.R. Krishnan, and Mr A. Sankarakrishnan are the new members.
The resignation is consequent upon Sanmar group selling its stake in India Cements to Mr N. Srinivasan and Mr N. Ramachandran.

Our Bureau

Chennai, Sept. 24 Mr N. Sankar, Chairman of the Sanmar group, has resigned as Chairman of India Cements Ltd after being associated with the company for 18 years. His brother Mr N. Kumar, who was a Director on the board of India Cements, has resigned from the board.

Simultaneously, the company’s board has inducted three new directors, including a member from the next generation of the promoter’s family. Mr Sankar and Mr Kumar resigning from the board is consequent upon the Sanmar group selling its stake in India Cements to Mr N. Srinivasan, Vice-Chairman and Managing Director, and Mr N. Ramachandran, Executive Director, India Cements, and their families.

An investment company belonging to Mr Sankar and his family sold its residual 2.64 per cent stake in India Cements on September 14 to the co-promoters, completing a process that it began in September 2005. (India Cements was jointly promoted by S.N.N. Sankaralinga Iyer, grandfather of Mr Sankar, and T.S. Narayanaswami, father of Mr Srinivasan.)

At the 61st annual general meeting of India Cements on Monday, Mr Srinivasan, who chaired the meeting, told the shareholders that “consequent to the inter-se transfer of promoter shareholdings”, Mr Sankar and Mr Kumar had resigned from the board of the company. Ms Rupa Gurunath, daughter of Mr Srinivasan, has been inducted on the board along with Mr N.R. Krishnan, a former bureaucrat, and Mr A. Sankarakrishnan, Managing Director, Kone Elevators India.

New members

Ms Gurunath, a Science graduate with a post-graduate diploma in computer applications, represents the next generation of the promoter’s family. With the consolidation in shareholding, the promoters felt that it would be appropriate for some one from the next generation to join the board. Ms Gurunath is also an accomplished golfer.

Mr Srinivasan himself, it is learnt, is not in a hurry to assume the post of chairman.

Replying to points raised by shareholders, Mr Srinivasan said India Cements, which had gone in for a corporate debt restructuring package, now had about Rs 300 crore of CDR debt on its books. It was in discussions with each of the lenders and would pay off its CDR debt either this financial year or in the next year.

The company’s capacity would go up to 15 million tonnes by December 2008, when the market would still be buoyant and prices good. The company was not raising additional capital for increasing its capacity from 9 mt now to 15 mt and would use the funds raised through a foreign currency convertible bond issue and internal accruals for the purpose.

Power cost

Mr Srinivasan told the shareholders that the company was examining various options to bring down its power cost. It averaged 86 units of electricity for a tonne of cement produced, which compared well with some of the industry leaders. It would go in for coal-based captive power plants if it were able to secure allocation from a coal mine in Andhra Pradesh, while using imported coal for captive power was out of the question.

Mr Srinivasan said cement prices would hold firm for at least two more years, considering the demand in the market and the capacity that would come into production. He did not foresee any major cement imports happening despite the steps taken by the Centre to ease imports.

The shareholders approved all the resolutions proposed at the meeting, including an employee stock option scheme, a 10 per cent dividend, and re-appointment of Mr Srinivasan as Managing Director and Mr Ramachandran as Executive Director, with a higher remuneration package.

The shares closed on the NSE at Rs 285.20, down by just over 1 per cent from Friday’s close of Rs 288.55.

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