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நிறுவன பெயரின் முதல் சில எழுத்துக்களை நிரப்பி 'கோ' பட்டனை கிளிக் செய்யவும்

ACC Ltd. இன் கணக்கு குறிப்புகள்

Dec 31, 2017

Amendment to Ind AS 7:

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the Balance Sheet for liabilities arising from financing activities, to meet the disclosure requirement.

The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

Amendment to Ind AS 102:

The amendment to Ind AS 102 provides specific guidance for the measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes. However, this amendment is not applicable to the Company.

(i) The Company intends to dispose of plant and equipment in the next 12 months which it no longer intends to utilize. It was previously used in its manufacturing facility at plants. A selection of potential buyers is underway. No impairment loss was recognized on reclassification of the plant & equipment as held for sale and the Company expects the fair value less cost to sell to be higher than carrying amount.

(ii) The Company intends to dispose of Building (mainly residential flats) in the next 12 months which it no longer intends to utilize. These were previously used for residential purpose. A selection of potential buyers is underway. Impairment loss of Rs, 0.28 Crore (Previous year -Rs, Nil) is recognized in the Statement of Profit and Loss under other expenses.

*Pursuant to the Orders passed by the Special Court (TORTS) the Company has allotted Nil (Previous year - 41,907) equity shares out of the shares kept in abeyance of Rights Issue 1999.

ii) Terms / rights attached to equity shares

The Company has only one class of equity shares having par value of Rs, 10 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholder.

Companies referred above are subsidiaries of LafargeHolcim Ltd, Switzerland, the ultimate holding company.

v) There are no shares allotted as fully paid up by way of bonus shares or allotted as fully paid up pursuant to contract without payment being received in cash, or bought back during the period of five years immediately preceding the reporting date.

There are no securities which are convertible into equity shares.

Note: # The Company was a subsidiary of Holcim (India) Private Limited. Pursuant to the amalgamation of Holcim (India) Private Limited into Ambuja Cements Limited, effective August 12, 2016, the Company became a subsidiary of Ambuja Cements Limited.

The Description of the nature and purpose of each reserve within equity is as follows:

Capital Reserve: It represents the gains of capital nature which mainly includes the excess of value of net assets acquired over consideration paid by the Company for business amalgamation transaction in earlier years. Securities Premium Reserve: The amount received in excess of face value of the equity shares is recognized in Securities Premium Reserve. The reserve is utilised in accordance with the specific provision of the Companies Act, 2013.

General Reserve: The General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General reserve will not be reclassified subsequently to the statement of profit and loss. As per Companies Act 2013, transfer of profits to General Reserve is not mandatory. General Reserve is a free reserve available to the Company.

Retained Earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained Earnings is a free reserve available to the Company.

Other Comprehensive Income: Other Comprehensive Income includes re-measurement loss on defined benefit plans, net of taxes that will not be reclassified to profit and loss.

Provision for Site Restoration

Site restoration expenditure is incurred on an ongoing basis and until the closure of the site. The actual expenses may vary based on the nature of restoration and the estimate of restoration expenditure.

The tax rate used for reconciliation above is the corporate tax rate payable by corporate entities in India on taxable profits under Indian tax law.

Notes

1. Royalties on minerals expenses is net of Rs, 34.20 Crore (Previous year -Rs, Nil) related to provision for contribution towards District Mineral Foundation (DMF) under the Mines and Minerals (Development and Regulation) Amendment Act, 2015, written back on the basis of Supreme Court''s favorable Judgment dated October 23, 2017.

2. (i) Does not include any item of expenditure with a value of more than 1% of turnover.

(ii) Miscellaneous expenses includes Grinding facility charges, Commission on sales, Information technology services, Travelling expenses, Other third party services, etc.

(iii) Miscellaneous expenses includes net loss of Rs, 4.23 Crore (Previous year - Rs, Nil) on foreign currency transaction and translation.

(iv) Miscellaneous expenses includes Loss on sale / write off of Property, Plant and Equipment (net) of Rs, 2.89 Crore (Previous year -Rs, Nil).

The amount required to be spent under Section 135 of the Companies Act, 2013 for the year is Rs, 18.73 Crore (Previous year - Rs, 21.47 Crore) i.e. 2% of average net profits for last three financial years, calculated as per section 198 of the Companies Act, 2013.

Impairment of Rs, 42.81 Crore for non-current investments in a subsidiary company was made in previous year considering inordinate delay in realizing its investments in coal blocks which were cancelled in 2015.

1. EARNINGS PER SHARE [EPS]

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity shareholders by weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

2. EMPLOYEE BENEFITS

a) Defined Contribution Plans - Amount recognized and included in note 33 "Contributions to Provident and other Funds" of Statement of profit and loss Rs, 17.94 Crore (Previousyear -Rs, 17.26 Crore)

b) Defined Benefit Plans - As per actuarial valuation on December 31, 2017

The company has defined benefit gratuity, additional gratuity, post employment medical benefit plans and Trust managed provident fund plan as given below:

i. Every employee who has completed minimum five years of service is entitled to gratuity at 15 days salary for each completed year of service in accordance with Payment of Gratuity Act, 1972. The scheme is funded with insurance companies in the form of qualifying insurance policies.

ii. Every employee who has joined before December 01, 2005 and separates from service of the Company on Superannuation or on medical grounds is entitled to additional gratuity. The scheme is Non-Funded.

iii. Benefits under Post Employment Medical Benefit plans are payable for actual domiciliary treatment/ hospitalization for employees and their specified relatives. The scheme is Non-Funded.

The plans in India typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk - As the plan assets include significant investments in quoted debt and equity instruments, the Company is exposed to the risk of impacts arising from fluctuation in interest rates and risks associated with equity market.

Interest risk - A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s debt investments.

Longevity risk - The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary risk - The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

VI Sensitivity Analysis:

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation recognized in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

c) Basis used to determine expected rate of return on assets:

The expected return on plan assets is based on market expectation, at the beginning of the period, for returns over the entire life of the related obligation. The Gratuity Scheme is invested in Life Insurance Corporation (LIC) of India''s Group Gratuity-cum-Life Assurance cash accumulation policy and HDFC Standard Life''s Group Unit Linked Plan - For Defined Benefit Scheme. The Trust formed by the Company manages the investments of provident fund plan.

d) The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet date for the estimated term of the obligations.

e) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

g) Post employment defined benefit plan expenses are included under employee benefit expenses in the Statement of profit and loss.

h) Amount recognized as an expense under employee benefit expenses in the Statement of profit and loss in respect of other benefits is Rs, 9.07 Crore (Previous year -Rs, 12.31 Crore).

c) Provident Fund

Provident fund for certain eligible employees is managed by the Company through a trust "The Provident Fund of ACC Ltd.", in line with the Provident Fund and Miscellaneous Provisions Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of separation from the company or retirement, whichever is earlier. The benefits vests immediately on rendering of the services by the employee. The minimum interest rate payable by the trust to the beneficiaries every year is being notified by the Government. The company has an obligation to make good the shortfall, if any, between the return from the investments of the trust and the notified interest rate. The Company has obtained the actuarial valuation of interest rate obligation in respect of Provident Fund and there is no shortfall.

IX The Company expects to contribute Rs, 24.95 Crore (December 31, 2016 - Rs, 23 Crore; January 01, 2016 -Rs, 18.84 Crore) to trust managed provident fund in next year.

3. LEASES

Operating lease commitments — Company as lessee

The Company has entered into operating leases on certain assets (grinding facility, godowns, flats, office premises and other premises). The Company has the option, under some of its leases, to lease the assets for additional terms of three to five years.

Future lease rentals are determined on the basis of agreed terms. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases. At the expiry of the lease term, the Company has an option either to return the asset or extend the term by giving notice in writing.

Operating lease payment recognized in the Statement of profit and loss amounts to Rs, 139.79 Crore (Previous year -Rs, 132.92 Crore).

The Company has arrangement with an associate company whereby it sells clinker and purchases cement manufactured out of such clinker. The Company has evaluated such arrangement based on facts and circumstances existing at the date of transition to Ind AS and have identified them in the nature of lease as the company takes more than an insignificant amount of the cement that will be produced or generated by the asset during the term of the arrangement and the price for the output is neither contractually fixed per unit of output nor equal to the current market price per unit of output as of the time of delivery of the output. The Company has further assessed the other terms of the arrangement for classification as operating or finance lease and the arrangement classified as operating lease.

The Company has concluded that it is impracticable to separate the lease payments from other payments made under this arrangement reliably and hence all payments under the arrangement is considered as lease payments. Finance lease

The Company has entered into long-term leasing arrangements for land which has been assessed as finance lease since the present value of the minimum lease payments is substantially similar to the fair value of the leasehold land. These arrangements do not involve any material recurring payments, hence other disclosures are not given.

In respect of above matters, future cash outflows are determinable only on receipt of judgments pending

at various forums / authorities.

The Company does not expect any reimbursements in respect of the above contingent liabilities

a) The Company had filed writ / appeal petitions against the orders / notices of various authorities towards demand of additional Royalty on Limestone based on the ratio of 1.6 tonnes of Limestone to 1 tonne of Cement produced at its factories in Chattisgarh and on cement produced vis a vis consumption of limestone at its factory in Tamil Nadu. During the current year, the Chattisgarh High Court has decided this matter in favour of the Company by directing the Authorities to only demand Royalty based on quantity of Limestone actually mined and recorded through statutory documentation, and not based on any ratio.

The Company holds the view that the payment of royalty on limestone is correctly made by the Company based on the actual quantity of limestone extracted, and feels that similar relief can also be expected from the Judiciary and / or Authorities in the cases of Tamil Nadu Unit. In view of the demand being legally unjustifiable, and due to the decision of the Chattisgarh High Court, directly on this issue, the Company does not expect any liability in above matter.

b) In 2012, the Competition Commission of India (''CCI'') issued an Order imposing penalty on certain cement manufacturers, including the Company, concerning alleged contravention of the provisions of the Competition Act, 2002, and imposed a penalty of Rs, 1,147.59 Crore on the Company. On Company''s appeal, Competition Appellate Tribunal (''COMPAT''), initially stayed the penalty, and by its final order dated December 11, 2015, set aside the order of the

CCI, remanding the matter back to the CCI for fresh adjudication and for passing a fresh order. After hearing the matter, the CCI has, by its order dated August 31, 2016, imposed a penalty of Rs, 1,147.59 Crore on the Company. The Company has filed an appeal against the said Order with Competition Appellate Tribunal (''COMPAT''). Pending final disposal of the appeal, the COMPAT has stayed the penalty with a condition to deposit 10% of the penalty amount, which has been deposited and levy of interest of 12% p.a. in case the appeal is decided against the appellant. Interest amount on penalty as on December 31, 2017 is Rs, 183.74 Crore (up to December 31,2016 -Rs, 45.90 Crore).

The Competition Appellate Tribunal (COMPAT) has ceased to exist effective 26 May 2017. The appellate function under the Competition Act, 2002 (Competition Act) is now conferred to the National Company Law Appellate Tribunal (NCLAT). The matter is accordingly listed before the NCLAT. NCLAT has heard the arguments of all the appellant cement manufacturers and also of the respondent CCI. The decision has been reserved by NCLAT. Based on the advice of external legal counsel, the Company believes it has good grounds for successful appeal. Accordingly, no provision is considered necessary.

c) In a separate matter, pursuant to a reference filed by the Government of Haryana, The Competition Commission of India issued an Order dated January 19, 2017 imposing penalty on certain cement manufacturers, including the Company, concerning alleged contravention of the provisions of the Competition Act, 2002, and imposed a penalty of Rs, 35.32 Crore on the Company. On Company-s filing an appeal, Competition Appellate Tribunal (COMPAT) has stayed the penalty.

The Competition Appellate Tribunal (COMPAT) has ceased to exist effective 26 May 2017. The appellate function under the Competition Act, 2002 (Competition Act) is now conferred to the National Company Law Appellate Tribunal (NCLAT). Matter is now listed before NCLAT and is pending hearing.

Based on the advice of external legal counsel, the Company believes it has good grounds for successful appeal. Accordingly, no provision is considered necessary.

(B) Material demands and disputes relating to assets and liabilities considered as remote by the Company

a) The Company had availed sales tax incentives in respect of its new 1 MTPA Plant (Gagal II) under the Himachal Pradesh (HP) State Industrial Policy, 1991. The Company had accrued sales tax incentives aggregating Rs, 56 Crore. The Sales tax authorities introduced certain restrictive conditions after commissioning of the unit stipulating that incentive is available only for incremental amount over the base revenue and production of Gagal I prior to the commissioning of Gagal II. The Company contends that such restrictions are not applicable to the unit as Gagal II is a new unit, as decided by the HP Hon''ble High Court and confirmed by the Hon''ble Supreme Court while determining the eligibility for transport subsidy. The Department recovered Rs, 64 Crore (tax of Rs, 56 Crore and interest of Rs, 8 Crore) which is considered as recoverable.

4 CONTINGENT LIABILITIES NOT PROVIDED FOR - (Contd.)

The HP Hon''ble High Court, had, in 2012, dismissed the Company''s appeal. The Company believes the Hon''ble High Court''s judgment was based on an erroneous understanding of certain facts and legal positions and that it also failed to consider certain key facts. The Company has been advised by legal experts that there is no change in the merits of the Company''s case. Based on such advice, the Company filed a Special Leave Petition (SLP) before the Hon''ble Supreme Court, which is pending for hearing.

b) The Company was eligible for certain incentives in respect of its investment towards modernization and expansion of the Chaibasa Cement Unit pursuant to confirmation received under the State Industrial Policy of Jharkhand. Accordingly, the Company has made claims for refund of VAT paid for each financial year. However, no disbursals were made (except an amount of Rs, 7 Crore representing part of the One Time Lumpsum capital subsidy claim of Rs, 15 Crore) as the authorities have raised new conditions and restrictions, that were extraneous to the approvals and confirmations expressly received by the Company. The Company had filed two writ appeals before the Jharkhand Hon''ble High Court against these conditions, restrictions and disputes to the extent of the eligible claims which are now being sought to be effected/ raised by the Government.

The Division Bench of the Jharkhand Hon''ble High Court, while dealing with appeals by both the Company and the State Government, against a single bench order only partially allowing the Company''s claim, in its order dated February 24, 2015, allowed the Company''s appeal in totality while dismissing the Government''s appeal, thereby confirming that the entire amount claimed by the Company is correct and hence payable immediately.

The Government of Jharkhand had filed an Special Leave petition (SLP) in the Hon''ble Supreme Court against the order of the division bench, which was admitted. In its interim order, the Supreme Court had, while not staying the Division Bench Order, had only stayed disbursement of 40% of the amount due Consequently, as of date, the Company received only Rs, 64 Crore out of total Rs, 235 Crore in part disbursement from the Government of Jharkhand.

The Company is pursuing the matter of disbursement of further amounts outstanding.

The Company is of the view and has been advised legally, that the merits are strongly in its favour and it expects that the SLP shall be rejected upholding the order of the Division bench of the Jharkhand Hon''ble High Court by the Apex Court.

c) The Company is eligible for incentives for one of its cement plants situated in Maharashtra, under a Package Scheme of Incentives of the Government of Maharashtra. The scheme inter alia, includes refund of royalty paid by the Company on extraction or procurement of various raw materials (minerals). The Department of Industries has disputed the Company''s claim for refund of royalty on an erroneous technical interpretation of the sanction letter issued to the Company, that only the higher of the amount of (i) VAT refund and (ii) royalty refund claim amounts, each year, shall be considered. The Company maintains that such annual restriction is not applicable as long as the cumulative limit of claim does not exceed the amount of eligible investment. The Company has accrued an amount of Rs, 133 Crore (December 31,2016 -Rs, 133 Crore, January 01,2016 -Rs, 106 Crore) on this account. The Company has filed an appeal before the Bombay High Court challenging the stand of the Government, which is admitted and pending before the High Court for hearing on merit. The Company believes that the merits of the claim are strong.

d) The Company had set up a captive power plant (''Wadi TG 2'') in the year 1995-96. This plant was sold to Tata Power Co. Ltd., in the year 1998-99 and was subsequently repurchased from it in the year 2004-05. The Company had purchased another captive power plant (''Wadi TG 3, set up by Tata Power Co. Ltd. in the year 2002-03) in 2004-05. Both these power plants were eligible for tax holiday under the provisions of Section 80-IA of the Income-tax Act, 1961. The Income tax department has disputed the Company''s claim of deduction under Section 80-IA of the Act, on the ground that the conditions prescribed under the section are not fulfilled. In case of Wadi TG

2, in respect of the demand of Rs, 56.66 Crore (net of provision) (Previous Year -Rs, 56.66 Crore), the Company is in appeal before the ITAT and in case of Wadi TG 3 in respect of the demand of Rs, 115.62 Crore (Previous Year -Rs, 115.62 Crore), which was set aside by the ITAT, the Department is in appeal against the decision in favour of the Company. The Company believes that the merits of the claims are strong and will be allowed.

e) One of the Company''s cement manufacturing plants located in Himachal Pradesh was eligible, under the State Industrial Policy for deferral of its sales tax liability arising on sale of cement manufactured at that plant. The Excise and Taxation department of the Government of Himachal Pradesh, disputed the eligibility of the Company to such deferment on the ground that the Company also manufactures an intermediate product, viz. Clinker, arising in the manufacture of cement, and such intermediate product was in the negative list. A demand of Rs, 82.37 Crore (Previous year -Rs, 82.37 Crore) was raised. The Company filed a writ petition before the Hon''ble High Court of Himachal Pradesh against the demand. The case has been admitted and the hearing is in process. The Company believes its case is strong and the demand shall not sustain under law.

f) Consequent upon the Hon''ble Supreme Court''s judgment in Goa Foundation case, restricting the "deemed renewal" provision of captive mining leases to the first renewal period, the Company had received demand from District Mining Officer for Rs, 881 Crore as penalty for alleged illegal mining activities carried out by the Company during January 1991 to September 2014. The aforesaid demands were challenged by the Company and Writ Petition was filed with the Hon''ble High Court of Jharkhand. The petition has been admitted subject to a token deposit of Rs, 48 Crore which shall be refundable in case the matter is decided in the Company''s favour.

In the view of Company and based on legal advice, that this demand does not have merit, and shall not stand the test of judicial scrutiny, considering that the said mining, leases pending State Government''s approval, have been automatically extended up to March 31, 2030 by Mines and Minerals (Development and Regulation) (Amendment) Act, 2015 without any recourse being made available to the State Government.

5. RELATED PARTY DISCLOSURE

(A) Names of the Related parties where control Nature of Relationship exists:

1 LafargeHolcim Ltd, Switzerland Ultimate Holding Company

2 Holderind Investments Ltd, Mauritius Holding Company of Holcim (India) Private

Limited (upto August 11, 2016)

Holding Company of Ambuja Cements Limited (w.e.f. August 12, 2016)

3 Holcim (India) Private Limited (Refer Note - 49) Holding Company (Upto August 11, 2016)

4 Ambuja Cements Limited Fellow Subsidiary up to August 11, 2016 and

Holding Company (w.e.f. August 12, 2016)

5 Bulk Cement Corporation (India) Limited Subsidiary Company

6 ACC Mineral Resources Limited Subsidiary Company

7 Lucky Minmat Limited Subsidiary Company

8 National Limestone Company Private Limited Subsidiary Company

9 Singhania Minerals Private Limited Subsidiary Company

10 OneIndia BSC Private Limited Joint venture Company

11 Aakaash Manufacturing Company Private Limited Joint venture Company

(B) Others - With whom transactions have been taken place during the current and/or previous year

(a) Names of other Related parties Nature of Relationship

1 Alcon Cement Company Private Limited Associate Company

2 Asian Concretes and Cements Private Limited Associate Company

3 Lafarge India Private Limited Fellow Subsidiary (Upto October 04, 2016)

4 Holcim Technology (Singapore) Pte Ltd, Singapore Fellow Subsidiary

5 Siam City Cement (Lanka) Ltd, Sri Lanka Fellow Subsidiary (Upto August 10, 2016)

6 PT Holcim Indonesia Tbk, Indonesia Fellow Subsidiary

7 Holcim Services (South Asia) Limited Fellow Subsidiary

8 Holcim Cement (Bangladesh) Ltd, Bangladesh Fellow Subsidiary

9 Holcim Philippines Inc, Philippines Fellow Subsidiary

10 Holcim Group Services Ltd, Switzerland Fellow Subsidiary

11 Holcim Technology Ltd, Switzerland Fellow Subsidiary

12 LafargeHolcim Trading Pte Ltd, Singapore Fellow Subsidiary

13 LafargeHolcim Energy Solutions SAS, France Fellow Subsidiary

14 Holcim (Liban) S.A.L., Lebanon Fellow Subsidiary

15 Cementos Apasco SA de CV (LHMEX), Mexico Fellow Subsidiary

16 Dirk India Private Limited Fellow Subsidiary (w.e.f. August 12, 2016)

17 Counto Microfine Products Private Limited Joint venture of Ambuja Cements Limited

18 The Provident Fund of ACC Ltd Post-employment benefit plan

19 ACC Limited Employees Group Gratuity scheme Post-employment benefit plan

In accordance with the provisions of Ind AS 24 "Related Party Disclosures" and the Companies Act, 2013, following Personnel are considered as Key Management Personnel (KMP).

(b) Name of the Related Parties Nature of Relationship

1 Mr. Neeraj Akhoury Managing Director & CEO

(w.e.f February 04, 2017)

2 Mr. Harish Badami CEO & Managing Director

(upto February 03, 2017)

3 Mr. Sunil K. Nayak Chief Financial Officer

4 Mr. Surendra Mehta Company Secretary

(w.e.f April 21, 2017 upto September 25, 2017)

5 Mr. Kalidas Ramaswami Company Secretary (w.e.f. September 26, 2017)

6 Mr. Burjor D. Nariman Company Secretary upto March 31, 2017

7 Mr. N S Sekhsaria Chairman, Non Executive / Non Independent

Director

8 Mr. Jan Jenisch Deputy Chairman, Non Executive / Non

Independent Director (w.e.f. October 10, 2017)

9 Mr. Eric Olsen Deputy Chairman, Non Executive /

Non Independent Director (upto September 21, 2017)

10 Mr. Martin Kriegner Non Executive / Non Independent Director

(w.e.f. February 11, 2016)

11 Mr. Shailesh Haribhakti Independent Director

(b) Name of the Related Parties Nature of Relationship

12 Mr. Sushil Kumar Roongta Independent Director

13 Mr. Ashwin Dani Independent Director

14 Mr. Farrokh K Kavarana Independent Director

15 Mr. Vijay Kumar Sharma Non Independent Director

16 Mr. Arunkumar R Gandhi Independent Director

17 Ms. Falguni Nayar Independent Director

18 Mr. Christof Hassig Non Independent Director

19 Mr. Bernard Terver Non Independent Director

(upto February 11, 2016)

6. RELATED PARTY DISCLOSURE (contd.)

#The Board of Directors at its Meeting held on December 16, 2016 had accepted the resignation of Mr. Harish Badami w.e.f. February 04, 2017. The Board had approved the severance payment of Rs, 5.27 Crore pursuant to the approval of and by the authority conferred by the members of the Company.

The Company makes monthly contributions to provident fund managed by "The Provident Fund of ACC Ltd" for certain eligible employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. During the year, the Company contributed Rs, 22.35 Crore (Previous Year -Rs, 20.52 Crore).

The Company maintains gratuity trust for the purpose of administering the gratuity payment to its employees (ACC Limited Employees Group Gratuity scheme). During the year, the Company contributed Rs, 7.19 Crore (Previous Year -Rs, 16.78 Crore).

Terms and conditions of transactions with related parties

Sales and purchases:

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. For the year ended December 31, 2017, the Company has not recorded any loss allowances for trade receivables from related parties (Previous year -Nil).

Loans to subsidiaries:

The Company had given loans to subsidiaries for general corporate purposes. Outstanding balances at the year-end are unsecured and carry an interest rate of 9% (Previousyear - 9%) and repayable on demand.

Guarantees given on behalf of subsidiaries:

Guarantee given on behalf of Lucky Minmat Limited and Singhania Minerals Private Limited, wholly owned subsidiary companies is for the purpose of approval of mining plan.

7. SEGMENT REPORTING

For management purposes, the Company is organized into business units based on the nature of the products, the differing risks and returns. The organization structure and internal reporting system has two reportable segments, as follows:

(a) Cement - Cement is a product which is obtained as clinker resulting from mixing at suitable rates, grinding and firing raw material such as limestone, clay, iron ore, Fly ash, bauxite etc; and certain amount of setting regulator (generally gypsum) are ground together and set after mixing with water and gains strength. In general, it is used in construction activities.

(b) Ready mix concrete - Ready-mix concrete is concrete that is manufactured in a batch plant, according to a set engineered mix design. In general, it is used in construction activities.

No operating segments have been aggregated to form the above reportable operating segments.

The Chief Operating Decision Maker ("CODM") monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. However, the Company''s financing (including finance costs and finance income) and income taxes are managed on a Company basis and are not allocated to operating segments.

Transfer prices between operating segments are on an arm''s length basis in a manner similar to transactions with third parties.

8. In assessing the carrying amounts of Investments (net of impairment loss) in companies which are currently not in operation, the Company considered various factors as detailed below and concluded that no further impairment is necessary.

(i) The Company has invested Rs, 38.10 Crore (As at December 31, 2016 - Rs,38.10 Crore; As at January 01, 2016 - Rs,38.10 Crore) in equity shares of Lucky Minmat Limited (LML), a wholly owned subsidiary company. LML is engaged in the extraction of limestone. The Company has through an independent external valuer has determined the value in use of investment based on discounted future cash flow approach. In making the said projections, reliance has been placed on current market analysis, estimates of future prices of mineable resources (Limestone), mining leases and assumptions relating to operational performance.

(ii) The Company has invested Rs, 14.02 Crore (As at December 31, 2016 - Rs, 14.02 Crore; As at January 01, 2016 -Rs, 14.02 Crore) in equity shares of National Limestone Company Private Limited (NLCPL) a wholly owned subsidiary company. NLCPL is engaged in the extraction of limestone. The Company has through an independent external valuer has determined the value in use of investment based on discounted future cash flow approach. In making the said projections, reliance has been placed on current market analysis, estimates of future prices of mineable resources (Limestone), mining leases and assumptions relating to operational performance.

(iii) The Company has invested Rs, 63.99 Crore (As at December 31, 2016 - Rs, 63.99 Crore; As at January 01, 2016 -Rs, 106.80 Crore) in ACC Mineral Resources Limited (AMRL), a wholly-owned subsidiary. AMRL, through its joint operations had secured development and mining rights for four coal blocks allotted to Madhya Pradesh State Mining Corporation Ltd. These allocations stand cancelled pursuant to the order of the Supreme Court ruling that allocation of various coal blocks, including these, was arbitrary and illegal. The Government of India has commenced auctioning process for all such blocks in a phased manner. The auctioning for Bicharpur, being one of the four blocks, was completed, with the block being awarded to the successful bidder on March 23,2015. AMRL has filed its claim to Ministry of Coal for compensation in respect of Bicharpur coal block pursuant to judgment issued by Delhi Hon''ble High Court dated March 09, 2017. In respect of other three blocks, auctioning dates yet been announced. During the previous year, the Company has made the impairment provision of Rs, 42.81 Crore.

9.

(i) The Company has arrangements with an associate company whereby it sells clinker and purchases cement manufactured out of such clinker. While the transactions are considered as individual sale/ purchase transactions for determination of taxable turnover and tax under VAT / GST laws, considering the accounting treatment prescribed under various accounting guidance, revenue for sale of such clinker of Rs, 22.84 Crore (Previous year -Rs,20.35 Crore) has not been recognized as a part of the turnover but has been adjusted against cost of purchase of cement so converted.

(ii) The Company has arrangement with a Joint venture company whereby it purchases Ready Mix Concrete and sells that to external customers. While the transactions are considered as individual sale/ purchase transactions for determination of taxable turnover and tax under VAT / GST laws, considering the Joint venture essentially operates as a risk bearing licensed manufacturer of Ready Mix Concrete in relation to the Company''s local sales, this arrangement is considered in nature of royalty arrangement and revenue for sale of such Ready mix concrete to customer Rs, 83.61 Crore (Previous year - Rs, 87.65 Crore) has not been recognized as a part of the turnover but has been adjusted against cost of purchase of Ready mix concrete.

10.

The Company was a subsidiary of Holcim (India) Private Limited. Pursuant to the amalgamation of Holcim (India)

Private Limited into Ambuja Cements Limited, effective August 12, 2016, the Company became a subsidiary of

Ambuja Cements Limited.

(b) Details of Investments made are given in Note 4.

(c) Guarantee given on behalf of Lucky Minmat Limited and Singhania Minerals Private Limited, wholly owned subsidiary companies, of Rs, 0.16 Crore (Previous Year -'' 0.16 Crore)are for the purpose of approval of mining plan.

(d) The loanees have not made any investments in the shares of the Company.

(e) The above loans are repayable on demand and carries rate of interest at 9% p.a. (Previous year - 9% p.a.)

11. CAPITALISATION OF EXPENDITURE

During the year, the Company has capitalized the following expenses of revenue nature to the cost of Property, Plant and Equipment / Capital work-in-progress (CWIP). Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the company.

12. FAIR VALUES

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments: Level 1: inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

Level 2: inputs other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and

Level 3: inputs that are unobservable for the asset or liability.

Set out below, is a comparison by category of the carrying amounts and fair value of the Company''s financial . instruments.

Management assessed the carrying values of Other Cash and cash equivalents, Bank balances other than cash and cash equivalents, trade receivables, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The following methods and assumptions were used to estimate the fair values:

Quoted bid prices in an active market - Unadjusted Quoted price in principle market in which equity instrument is actively traded.

Investments in liquid and short-term mutual funds, which are classified as FVTPL are measured using net asset values at the reporting date multiplied by the quantity held. Fair value of certificate of deposits is determined based on the indicative quotes of price and yields prevailing in the market at the reporting date.

Under Discounted cash flow method, future cash flows are discounted by using rates which reflect market risks. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate and credit risk. The probabilities of the various estimates within the range can be reasonably assessed and are used in management''s estimate of fair value.

13. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Financial Risk Evaluation and Management is an ongoing process within the Company. The Company has a robust risk management framework to identify, monitor, mitigate and minimize risks arising from financial instruments.

The Company is exposed to market, credit and liquidity risks. The Board of Directors (''Board'') oversee the management of these risks through its Risk Management Committee. The Company''s Risk Management Policy has been formulated by the Risk Management Committee and approved by the Board. The Policy articulates on the Company''s approach to address uncertainties in its Endeavour to achieve its stated and implicit objectives. It also prescribes the roles and responsibilities of the Company''s management, the structure for managing risks and the framework for risk management. The framework seeks to identify, assess and mitigate risks in order to minimize potential adverse effects on the Company''s financial performance. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes shall be undertaken. The Board of Directors reviews and agrees on policies for managing each of these risks, which are summarized below. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.

(i) Credit risk

Credit risk is the risk that the counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits placed with banks and financial institutions and other financial instruments.

Financial assets other than trade receivables

Credit risk from balances with banks and financial institutions is managed by the Company''s Treasury department in accordance with it''s policy. Surplus funds are parked only within approved investment categories with well defined limits. Investment category is periodically reviewed by the Company''s Board of Directors.

Credit risk arising from short term liquid funds, other balances with banks and other cash equivalents is limited and no collaterals are held against these because the counterparties are banks and recognized financial institutions with high credit ratings assigned by the credit rating agencies.

14. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (contd.)

Trade receivables

Customer credit risk is managed as per the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit or other forms of collaterals. The requirement for impairment is analysed at each reporting date on an individual basis for major customers. The management is also monitoring the receivables levels by having frequent interactions with responsible persons for highlighting potential instances where receivables might become overdue.

Trade receivables consist of a large number of customers spread across India with no significant concentration of credit risk. Ongoing credit evaluation is performed on the financial condition of accounts receivable. The Company has adopted a policy of only dealing in creditworthy counterparties and obtaining collateral i.e. security deposit. No single customer accounted for 10% or more of the Company''s net sales. Therefore, the Company does not expect any material risk on account of nonperformance by any of its counterparties.

Expected credit loss assessment

For trade receivables, as a practical expedient, the Company compute credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates. Accordingly, the Company creates provision for past due receivables beyond 180 days ranging between 80%-100% after considering the underlying collaterals.

The following table summarizes the change in the loss allowances measured using simplified approach model expected credit loss assessment:

15. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (contd.)

(ii) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due. The Company''s treasury team is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s liquidity position through rolling forecasts on the basis of expected cash flows.

The table summarizes the details regarding the remaining contractual maturities of financial liabilities at the reporting date based on the contracted undiscounted cash payments.

#Borrowing consist of short term loan taken from a wholly owned subsidiary. Amount included in the above maturity analysis assumes interest outflows based on the year end benchmark interest rates, the actual interest rates may differ based on the changes in the benchmark interest rates.

*Other financial liabilities includes deposits received from customers amounting to '' 459.30 Crore (December 31, 2016 - Rs, 435.50 Crore; January 01 2016 - Rs, 446.07 Crore). These deposits do not have a contractual re-payment term but are repayable on demand. Since, the Company does not have an unconditional right to defer the payment, these deposits have been classified under current financial liabilities. For including these amounts in the above mentioned maturity analysis, the Company has assumed that these deposits, including interest thereon, will be repayable at the end of the next reporting period. The actual maturity period for the deposit amount and the interest thereon can differ based on the date on which these deposits are settled to the customers.

(iii) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risk: interest rate risks, currency risk and other price risk, such as equity price risks and commodity risk. Financial instruments affected by market risk include loans and borrowings, investments, deposits, trade payables.

Foreign currency risk

Foreign currency risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to change in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates primarily relate to import of raw materials, fuels and capital items.

Based on sensitivity analysis, the Company has well defined forex exposure threshold limit approved by Board of Directors, beyond which all forex exposure are fully hedged. Currently our foreign currency risk exposure is below threshold limit hence not hedged.

Foreign currency sensitivity

The following tables demonstrate the sensitivity into a reasonably possible change in exchange rates, with all other variables held constant. A positive number below indicates an increase in profit where the '' strengthens 5% against the relevant currency. For a 5% weakening of the '' against the relevant currency, there would be a comparable impact on the profit and the balances below would be negative.

5% represent management assessment of reasonably possible change in foreign currency exchange rate.

16. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (contd.)

Market Risk- Price risk

Other price risk is the risk that the fair value of financial instruments will fluctuate due to change in marked traded prices. Other price risk is arises from the financial assets such as investments in equity instruments and bonds.

The Company is exposed to equity price risks arising from equity investment in Shiva Cement Limited. Company''s equity investments were held for strategic rather than trading purposes. During the current year, the Company has sold investment in Shiva Cement Limited.

Equity price sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to equity price risks at the end of the reporting period.

If equity prices of Shiva Cement Limited had been 5% higher/ lower, the Profit before tax for the year ended December 31, 2017 would have been increased / decreased by '' Nil (Previous Year -'' 1.42 Crore) as a result of the changes in fair value of equity investments measured at FVTPL.

Market Risk- Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Company''s exposure to the interest rate risk arises primarily from their loans and borrowings. Since the Company has insignificant interest bearing borrowings, the exposure to risk of changes in market interest rates is minimal. The Company has not used any interest rate derivatives.

The Company has taken interest bearing security deposit from dealers. If interest rate had been 0.50% higher/lower the Profit for the year ended December 31, 2017 would decrease / increase by Rs, 2.30 Crore (Previous year -Rs,2.28 Crore).

Unrepresentativeness of Sensitivity analysis

In management''s opinion the sensitivity analysis is unrepresentative of the above inherent risks because the exposure at the end of the reporting periods does not reflect the exposure during the year.

17. CAPITAL MANAGEMENT

The Company''s objectives when managing capital are to (a) maximize shareholder value and provide benefits to other stakeholders and (b) maintain an optimal capital structure to reduce the cost of capital.

For the purposes of the Company''s capital management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders.

As stated in the below table, the Company is a Zero debt company with no long-term borrowings. The Company is not subject to any externally imposed capital requirements.

18. FIRST-TIME ADOPTION OF IND AS

The effect of the Company''s transition to Ind AS is summarized as follows:

(i) Transition election

(ii) Reconciliations of Balance Sheet

(iii) Reconciliation of Equity

(iv) Reconciliation of Total Comprehensive Income for the year ended December 31, 2016

(v) Effect of adoption of Ind AS on the Statement of Cash Flow for the year ended December 31, 2016

(i) Transition election

These financial statements, for the year ended December 31, 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended December 31, 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act, 2013, read together with rule 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP).

Accordingly, the Company has prepared the comparative period data as at and for the year ended December 31, 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at January 01, 2016, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Previous GAAP financial statements as at and for the year ended December 31, 2016, including the opening Balance Sheet as at January 01, 2016.

Overall principle

The Company has prepared the opening Balance Sheet as per Ind AS as of January 01, 2016 (the transition date) by,

- Recognizing all assets and liabilities whose recognition is required by Ind AS,

- not recognizing items of assets or liabilities which are not permitted by Ind AS,

- by reclassifying items from Previous GAAP to Ind AS as required under Ind AS, and

- applying Ind AS in measurement of recognized assets and liabilities.

However, this principle is subject to certain optional exemptions and mandatory exceptions availed by the Company as detailed below. Since, the financial statements are the first financial statements, the first time adoption - optional exemptions and mandatory exceptions have been explained in detail.

Exemptions applied

Ind AS 101 "First-time adoption of Indian Accounting Standards" allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

1 Business Combinations

Ind AS 103 "Business Combinations" has not been applied to acquisitions of subsidiaries, which are considered businesses under Ind AS that occurred before January 01, 2016. Use of this exemption means that the Previous GAAP carrying amounts of assets and liabilities, that are required to be recognized under Ind AS, is their deemed cost at the date of the acquisition. After the date of the acquisition, measurement is in accordance with respective Ind AS. The Company recognizes all assets acquired and liabilities assumed in a past business combination, except (i) certain financial assets and liabilities that were derecognized and that fall under the derecognition exception, and

(ii) assets (including goodwill) and liabilities that were not recognized in the acquirer''s Balance Sheet under its previous GAAP and that would not qualify for recognition under Ind AS in the individual balance sheet of the acquiree. Assets and liabilities that do not qualify for recognition under Ind AS are excluded from the opening Ind AS balance sheet. The Company did not recognize or exclude any previously excluded or recognized amounts as a result of Ind AS recognition requirements.

2 Investments in subsidiaries, joint ventures and associates

The Company has elected to continue with the carrying value of all of its investments in subsidiaries, joint ventures and associates recognized as of January 01, 2016 (transition date) measured as per the previous GAAP as its deemed cost as at the date of transition.

3 Leases

Appendix C to Ind AS 17 "Leases" requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used Ind AS 101 exemption and assessed all arrangements for embedded leases based on conditions prevailing as at Ind AS transition date.

4 Deemed cost of property, plant and equipment and intangible assets

As per Ind AS 101, a first-time adopter has an option, inter alia, to use carrying values of property, plant and equipment and intangible assets as on the date of transition to Ind AS, if there has been no change in its functional currency on the date of transition. The Company has accordingly elected to continue with the carrying values under previous GAAP for all the items of property, plant and equipment and intangible assets.

Exceptions

1 Estimates

The estimates at January 01, 2016 are consistent with those made for the same dates in accordance with Previous GAAP (after adjustments to reflect differences if any, in accounting policies) apart from the following items where application of Previous GAAP did not require estimation:

- Impairment of financial assets based on expected credit loss model

- Fair value of unquoted equity instruments

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at January 01, 2016.

2 Derecognition of financial assets and financial liabilities

The Company has applied the derecognition requirements for financial assets and financial liabilities in Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS.

Footnotes to the reconciliation to Balance Sheet, Equity, Total Comprehensive Income and

Statement of cash flows as at January 01, 2016 and December 31, 2016

Classifications

1 Mining Leasehold land

Mining leasehold land which is controlled by an entity as a result of past events and from which future economic benefits are expected to flow to the company has been assessed as intangible assets under Ind AS 38 "Intangible assets". Consequent to this change, the carrying value of mining lease hold of Rs, 24.06 Crore (January 01,2016 -Rs,25.71 Crore)is classified as other intangible assets from tangible assets.

2 Non-current Asset held for sale

Under the previous GAAP, the Company recorded freehold non-mining land of Rs, 31.00 Crore and buildings of Rs, 3.46 Crore (January 01,2016 - Rs,31.00 Crore and Rs,3.46 Crore respectively) as "Fixed assets held for sale" under other current assets which are stated at the lower of their net book value and net realisable value.

Under Ind AS, non-current assets to be disposed of are classified as held for sale when the asset is available for immediate sale and the sale is highly probable. Since the sale of land and building is not highly probable these are reclassified to Property, plant and equipment as at transition date. Remaining balance of Fixed assets held for sale of Rs, 12.03 Crore (January 01,2016 -Rs, 12.83 Crore) is shown separately under the head "Non-current assets classified as held for sale"

3 Government grants

As per Previous GAAP, government grants in the nature of promoters'' contribution were credited to capital reserve and treated as a part of shareholders'' funds. Under Ind AS 20 ''Government Grants'' the grant received in the form of capital subsidy is recognized as deferred income on the date of receipt of grant and recognized as income in the Statement of Profit and Loss on a systematic basis over the useful life of related asset.

The Company had recognized a grant amounting to '' 15.07 Crore in capital reserve under Previous GAAP. As at transition date, useful life of related asset is already finished and there are no unfulfilled conditions attached to the existing grant therefore, the entire capital subsidy of '' 15.07 Crore is reclassified to retained earnings as on transition date under Ind AS. This is the reclassification within equity therefore overall there is no impact on equity.

4 Grossing up of Delcredere

Under Previous GAAP, delcredere balances were netted off from trade receivables. Under Ind AS, trade receivables are a financial asset and criteria for derecognition of financial asset are not met as per guidance under Ind AS 109 ''Financial Instruments''. The Company has applied the derecognition requirements for financial assets prospectively for transactions occurring on or after the date of transition to Ind AS.

Accordingly, trade receivables have been grossed up by Rs, 68.37 Crore with corresponding increase in other financial liabilities (current) as on December 31, 2016.

5 Deferred tax - MAT credit entitlement

Under Previous GAAP, MAT credit was recognized under current tax and asset was disclosed under Long-term loans and advances. In accordance with Ind AS 12 ''Income taxes'', MAT credit of Rs, 117.55 Crore as at December 31, 2016 (January 01 2016 - Rs,Nil) is reclassified under the head Deferred tax liabilities (Net) and MAT credit of Rs, 117.55 Crore is reclassified from current tax to deferred tax expenses.

6 Excise duty

Under Previous GAAP, sale of goods was presented as net of excise duty. Under Ind AS, sale of goods is presented inclusive of excise duty. Excise duty expenses is separately presented on the face of the Statement of Profit and Loss. Thus sale of goods under Ind AS has increased by Rs, 1,529.38 Crore with a separate disclosure of excise duty expenses on the face of the Statement of Profit and Loss. Further to above, excise duty expense includes excise duty of Rs, 4.29 Crore on variation of opening and closing stock recognized under other expenses which has now been regrouped.

7 Cash discount

Under Previous GAAP, cash discount provided to customers was shown as an expense. Under Ind AS, cash discounts are netted off from Revenue. Accordingly, revenue from operations has reduced by Rs, 76.68 Crore with corresponding reduction in other expenses.

8 Gross vs Net presentation

The Company has entered into an arrangement with a Joint venture, Aakaash Manufacturing Company Private Limited (Aakaash) for sale of cement and purchase of Re


Dec 31, 2016

#These balances are available for use only towards settlement of corresponding unpaid dividend liabilities. *Includes fixed deposit with lien in favour of Competition Appellate Tribunal (COMPAT) of '' 114.76 Crore (Previous Year - '' Nil) {Refer Note - 36 (A) (d)}.

**Margin money deposit is against bank guarantee given to Government authorities.

ii) Miscellaneous expenses includes:

(a) Loss on sale / write off of Fixed Assets (Net) - '' Nil (Previous Year - Rs, 30.45 Crore)

(b) Provision for diminution, other than temporary in the value of long term investment in subsidiary company of Rs, Nil (Previousyear - Rs, 15.15 Crore) {Refer Note - 41}

(c) Grinding facility charges, Commission on sales, Information technology services, Traveling expenses, Other third party services etc.

1. EMPLOYEE BENEFITS:

a) Defined Contribution Plans - Amount recognized and included in Note 25 “Contributions to Provident and

other Funds” of Statement of Profit and Loss Rs, 17.26 Crore (Previous Year - Rs, 18.28 Crore).

b) Defined Benefit Plans - As per actuarial valuation on December 31, 2016

The Company has a defined benefit gratuity, additional gratuity, post employment medical benefit plans and

Trust managed provident fund plan as given below:

i. Every employee who has completed minimum five years of service is entitled to gratuity at 15 days salary for each completed year of services. The scheme is funded with insurance companies in the form of qualifying insurance policies.

ii. Every employee who has joined before 1st December 2005 and separates from service of the Company on Superannuation and on medical grounds is entitled to additional gratuity. The scheme is Non Funded.

iii. Benefits under Post Employment medical Benefit plans are payable for actual domiciliary treatment / hospitalization for employees and their specified relatives. The scheme is Non Funded.

iv. Provident fund for certain eligible employees is managed by the Company through trust “ The Provident Fund of ACC Ltd.”, in line with the Provident Fund and Miscellaneous Provision Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of separation from the Company or retirement, whichever is earlier. The benefits vests immediately on rendering of the services by the employee.

The minimum interest rate payable by the Trust to the beneficiaries every year is being notified by the Government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate.

The ASB Guidance on Implementing AS-15, Employee Benefits (revised 2005) issued by Accounting Standards Board (ASB) states that benefit plans involving employer established provident funds, which require interest shortfalls to be recompensed are to be considered as defined benefit plans. As per the Guidance Note from the Actuarial Society of India, the Company has obtained the actuarial valuation of interest rate obligation in respect of Provident Fund and there is no shortfall as at December 31, 2016 and December 31, 2015.

b) Demographic Assumptions

1 Mortality pre-retirement Indian Assured Lives Mortality (2006-08) (Modified) Ultimate

Indian Assured Lives Mortality (2006-08) (Modified) Ultimate

2 Mortality post-retirement Mortality for annuitants LIC (1996-98) ultimate

Mortality for annuitants LIC (1996-98) ultimate

3 Turnover rate 5% p.a. (P.Y. - 5% p.a.)

4 Medical premium inflation 12% p.a. for the first 4 years and thereafter 8% p.a.

12% p.a. for the first 4 years and thereafter 8% p.a.

(Figures in italics pertain to previous year)

c) Basis used to determine expected rate of return on assets:

The expected return on plan assets is based on market expectation, at the beginning of the period, for returns over the entire life of the related obligation. The Gratuity Scheme is invested in Life Insurance Corporation (LIC) of India''s Group Gratuity-cum-Life Assurance cash accumulation policy and HDFC Standard Life''s Group Unit Linked Plan - For Defined Benefit Scheme.

The Trust formed by the Company manages the investments of provident fund plan.

d) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

e) The Company expects to contribute Rs, 18.00 Crore (Previous year - Rs, 11.00 Crore) to Gratuity fund and Rs, 23.00 Crore (Previous year - Rs, 18.84 Crore) to trust managed provident fund in the year 2017.

f) Post employment defined benefit plan expenses are included under employee benefit expenses in the statement of Profit and Loss.

*In respect of Provident Fund, Since there is surplus the same has not been recognized in Balance Sheet, only liability recognized in Balance Sheet.

h) Amount recognized as an expense under employee benefit expenses in the statement of Profit and Loss in respect of other benefits is Rs, 12.31 Crore (Previous Year - Rs, 22.29 Crore).

i) Present value of compensated absences at year end is Rs, 28.03 Crore (Previous YearRs, 38.44 Crore) after net of plan assets of Rs, 88.77 Crore (Previous year - Rs, 77.54 Crore).

j) Present value of Long service award obligation at year end is Rs, 7.63 Crore (Previous Year Rs, 7.17 Crore). This scheme is non funded.

2. SEGMENT REPORTING

The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risks and returns, the organisation structure and internal reporting system. The CompanyRs,s operations predominantly relate to manufacture of Cement and Ready Mix Concrete. The export turnover is not significant in the context of total turnover of the company and further the risk and returns are not significantly different from that of India. As such there is only one geographical segment.

b) Operating lease payment recognized in Statement of Profit and Loss amounting to Rs, 165.37 Crore (Previous Year - Rs, 173.64 Crore)

c) General description of the leasing arrangement:

(i) Leased Assets: Grinding facility, Concrete pumps, Godowns, Transit Mixer, Flats, Office premises and other premises.

(ii) Future lease rentals are determined on the basis of agreed terms.

(iii) There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases.

(iv) At the expiry of the lease term, the Company has an option either to return the asset or extend the term by giving notice in writing.

3. RELATED PARTY DISCLOSURE

(A) Names of the Related parties where control exists: Nature of Relationship

1 LafargeHolcim Ltd Ultimate Holding Company

2 Holderind Investments Ltd. Holding Company of Holcim (India) Private Limited

(up to August 11, 2016)

Holding Company of Ambuja Cements Limited (w.e.f. August 12, 2016)

3 Holcim (India) Private Limited (Refer Note - 43) Holding Company (Up to August 11, 2016)

4 Ambuja Cements Limited (Refer Note - 43) Fellow Subsidiary up to August 11, 2016 and Holding

Company (w.e.f. August 12, 2016)

5 Bulk Cement Corporation (India) Limited Subsidiary Company

6 ACC Mineral Resources Limited Subsidiary Company

7 Lucky Minmat Limited Subsidiary Company

8 National Limestone Company Private Limited Subsidiary Company

9 Singhania Minerals Private Limited Subsidiary Company

10 OneIndia BSC Private Limited Joint venture Company (w.e.f. August 13, 2015)

(B) Others - With whom transactions have been taken place during the year

(a) Names of other Related parties Nature of Relationship

1 Alcon Cement Company Private Limited Associate Company

2 Asian Concretes and Cements Private Limited Associate Company

Names of the Related parties Nature of Relationship

3 Aakaash Manufacturing Company Private Limited Associate Company

4 Lafarge India Private Limited Fellow Subsidiary

(w.e.f. July 10, 2015 and Up to October 4, 2016)

5 Holcim (Malaysia) SDN BHD Fellow Subsidiary

6 Holcim Vietnam Fellow Subsidiary

7 Holcim Technology (Singapore) Pte Ltd Fellow Subsidiary

8 Siam City Cement (Lanka) Ltd {Formerly known as Fellow Subsidiary (Up to August 10, 2016) Holcim (Lanka) Ltd}

9 PT Holcim Indonesia Tbk Fellow Subsidiary

10 Holcim Services (South Asia) Limited Fellow Subsidiary

11 Holcim Cement (Bangladesh) Ltd Fellow Subsidiary

12 Holcim Philippines Fellow Subsidiary

13 Holcim Group Services Ltd Fellow Subsidiary

14 Holcim Technology Ltd Fellow Subsidiary

15 Holcim Trading Pte Ltd Fellow Subsidiary

16 Lafargeholcim Energy Solutions SAS Fellow Subsidiary

17 Holcim (Liban) S.A.L. Fellow Subsidiary

18 Dirk India Private Limited Fellow Subsidiary (w.e.f. August 12, 2016)

(b) Key Management Personnel:

Name of the Related Party Nature of Relationship

1 Mr. Harish Badami CEO & Managing Director

2 Mr. Sunil K. Nayak Chief Financial Officer

3 Mr. Burjor D. Nariman Company Secretary

*Provision for contribution to gratuity fund, leave encashment on retirement and other defined benefits which are made based on actuarial valuation on an overall Company basis are not included in remuneration to key management personnel.

#The Board of Directors at its Meeting held on December 16, 2016 has accepted the resignation of Mr. Harish Badami w.e.f. February 04, 2017. The Board has approved the severance payment of Rs, 5.27 Crore pursuant to the authority conferred on it by the Members of the Company.

In respect of above matters, future cash outflows in respect of contingent liabilities are determinable only on receipt of judgments pending at various forums / authorities.

c) The Company had filed writ / appeal petitions against the orders / notices of various authorities demanding Rs, 114.45 Crore (Previous Year - Rs, 114.24 Crore) towards demand of additional Royalty on Limestone based on the ratio of 1.6 tonnes of Limestone to 1 tonne of Cement produced at its factories in Chattisgarh and on cement produced vis a vis consumption of limestone at its factory in Tamil Nadu. The Madhya Pradesh High Court had decided a similar matter in favour of the Company in an earlier year by directing the Authorities to only demand Royalty based on quantity of Limestone actually mined and recorded through statutory documentation, and not based on any ratio.

The Company holds the view that the payment of royalty on limestone is correctly made by the Company based on the actual quantity of limestone extracted, and feels that similar relief can also be expected from the Judiciary and / or Authorities in the cases of Chhattisgarh & Tamil Nadu Units. In view of the demand being legally unjustifiable, and due to the decision of the Madhya Pradesh High Court, directly on this issue, the Company does not expect any liability in above matter .

d) i. In 2012, the Competition Commission of India (''CCI'') issued an Order imposing penalty on certain cement manufacturers, including the Company, concerning alleged contravention of the provisions of the Competition Act, 2002, and imposed a penalty of Rs, 1,147.59 Crore on the Company. On Company''s appeal, Competition Appellate Tribunal (''COMPAT''), initially stayed the penalty, and by its final order dated 11th December, 2015, set aside the order of the CCI, remanding the matter back to the CCI for fresh adjudication and for passing a fresh order.

After hearing the matter, the CCI has, by its order dated August 31, 2016, imposed a penalty of Rs, 1,147.59 Crore on the Company. The Company has filed an appeal against the said Order with Competition Appellate Tribunal (''COMPAT''). Pending final disposal of the appeal, the COMPAT has stayed the penalty with a condition to deposit 10% of the penalty amount, which has been deposited and levy of interest of 12% p.a. in case the appeal is decided against the appellant. Interest amount on penalty as on December 31, 2016 is Rs, 45.90 Crore.

Based on the advice of external legal counsel, the Company believes it has good grounds for successful appeal. Accordingly, no provision is considered necessary.

ii. In a separate matter, pursuant to a reference filed by the Government of Haryana, The Competition Commission of India issued an Order dated January 19, 2017 imposing penalty on certain cement manufacturers, including the Company, concerning alleged contravention of the provisions of the Competition Act, 2002, and imposed a penalty of Rs, 35.32 Crore on the Company. The Company is taking steps to file an appeal against the Order with the appropriate authority. Based on the advice of external legal counsel, the Company believes it has good grounds for a successful appeal. Accordingly, no provision is considered necessary.

4. (B) MATERIAL DEMANDS AND DISPUTES CONSIDERED AS “REMOTE” BY THE COMPANY

a) The Company had availed Sales Tax Incentives in respect of it''s new 1 MTPA Plant at Gagal (Gagal II) under the HP State Industrial Policy, 1991. The Company had accrued Sales Tax Incentives aggregating '' 56 Crore. The Sales Tax Authorities had introduced certain restrictive conditions after commissioning of the unit stipulating that incentive is available only for incremental amount over the base revenue and production (of Gagal I) prior to the commissioning of Gagal II. The Company contends that such restrictions are not applicable to the unit as Gagal II is a new unit, as decided by the HP High Court and confirmed by the Supreme Court while determining the eligibility for Transport Subsidy. The Department had recovered Rs, 64 Crore (Tax of Rs, 56 Crore and interest of Rs, 8 Crore) and the same is accounted as an amount recoverable.

The HP High Court, had, in 2012, dismissed the Company''s appeal. The Company believes the Hon''ble High Court''s judgment is based on an erroneous understanding of certain facts and legal positions and that it also failed to consider certain key facts. The Company has been advised by legal experts that there is no change in the merits of the Company''s case. Based on such advice, the Company filed a Special Leave Petition before the Hon''ble Supreme Court in, which is pending .

b) The Company was eligible for certain incentives (in the nature of One Time Lumpsum Capital Subsidy and refund of incremental VAT paid) in respect of its investment towards modernization and expansion of the Chaibasa Cement Unit pursuant to confirmation received under the State Industrial Policy of Jharkhand. Accordingly, the company has made claims for refund of VAT paid each financial year. However, no disbursals were made (except an amount of Rs, 7 Crore representing part of the One Time Lumpsum Capital Subsidy Claim of Rs, 15 Crore) as the authorities have raised various new conditions and restriction, that were extraneous to the approvals and confirmations expressly received by the Company. The Company had filed two writ petitions before the Jharkhand High Court against the restrictions and disputes on the extent of the eligible claims now being sought to be effected / raised by the Government.

The division bench of the Jharkhand High Court, while dealing with appeals by both the Company and the State of Government, against a single bench order only partially allowing the Companies claim, in it''s order dated February 24, 2015, allowed the Company''s Appeal in totality while dismissing the Government''s Appeal, thereby confirming that the entire amount claimed by the Company is correct and hence payable immediately. Pursuant to this order, a cumulative amount of '' 235 Crore was standing accrued in the books up to December, 2015.

The Government of Jharkhand had filed an Special Leave Petition in the Supreme Court against the order of the division bench, which was admitted. In its interim order, the Supreme Court had, while not staying the division bench Order, had only stayed disbursement of 40% of the amount due.

The Company also pursued a contempt petition filed in the High Court of Jharkhand against non disbursal of amounts due by the Government. Consequently, as of date, the company received Rs, 64 Crore in part disbursement in the previous year from the Government of Jharkhand.

The Company is pursuing the matter of disbursement of further amounts outstanding.

The Company is of the view, and also has been advised, that the merits are strongly in its favour and it expects that the Special Leave Petition shall be rejected upholding the order of the division bench of the Jharkhand HC by the Apex Court.

c) The Company had set up a captive power plant (''Wadi TG 2'') in the year 1995-96. This plant was sold to Tata Power Co Ltd., in the year 1998-99 and was subsequently repurchased from it in the year 2004-05. The Company had purchased another captive power plant (''Wadi TG 3'', set up by Tata Power Co Ltd in the year 2002-03) in 2004-05. Both these power plants were eligible for tax holiday under the provisions of Section 80IA of the Income Tax Act, 1961. The Income tax department has disputed the Company''s claim of deduction under Section 80IA of the Act, on the ground that the conditions prescribed under the section are not fulfilled. In case of Wadi TG 2, in respect of the demand of Rs, 56.66 Crore (net of provision), the Company is in appeal before the ITAT and in case of Wadi TG 3 in respect of the demand of Rs, 115.62 Crore, which was set aside by the ITAT, the Department is in appeal against the decision in favour of the Company. The Company believes that the merits of the claims are strong and will be allowed.

d) One of the Company''s Cement manufacturing plants located in Himachal Pradesh was eligible, under the State Industrial Policy for deferral of its sales tax liability arising on sale of cement manufactured in the said plant. The Excise and Taxation department of the Government of Himachal Pradesh, disputed the eligibility of the company to such deferment on the ground that the company also manufactures an intermediate product, viz. Clinker, arising in the manufacture of cement, and such intermediate product was is in the negative list. A demand of Rs, 82.37 Crore was raised. The Company filed a writ petition before High Court of Himachal Pradesh against the demand. The case has been admitted and the hearing is in process. The Company believes its case is strong and the demand shall not sustain under law.

e) The Company is eligible for incentives for one of its cement plants situated in Maharashtra, under a Package Scheme of Incentives of the Government of Maharashtra. The scheme inter alia, includes refund of royalty paid by the Company on extraction or procurement of various raw materials (Minerals). The Department of Industries has disputed the Company''s claim for refund of royalty on an erroneous technical interpretation of the sanction letter issued to the Company, that only the higher of the amount of (i) VAT Refund and (ii) Royalty refund claim amounts, each year, shall be considered. The Company maintains that such annual restriction is not applicable as long as the cumulative limit of claim does not exceed the amount of eligible investment. The Company has accrued an amount of Rs, 133 Crore till December 31, 2016 (Previous year - Rs, 106 Crore) on this account. The Company has filed an appeal before the Bombay High Court challenging the stand of the Government, which is admitted & pending before the Court for hearing on merit. The Company believes that the merits of the claim are strong.

f) Consequent upon the Supreme Court''s judgment in Goa Foundation case, restricting the “deemed renewal” provision of captive mining leases to the first renewal period, the Company had received demand from District Mining Officer for Rs, 881 Crore for being penalty for alleged illegal mining activities carried out by the Company during January 1991 to September 2014. The aforesaid demands were challenged by the company and Writ Petition with High Court of Jharkhand was filed. The petition has been admitted subject to a token deposit of Rs, 48 Crore which shall be refundable in case the matter is decided in the Companies favour.

The Company is of the considered view based on legal advice, that this demand does not have merit, and shall not stand the test of judicial scrutiny, considering that the said mining, leases pending State Government''s approval, have been automatically extended up to March 31, 2030 by Mines and Minerals (Development and Regulation) (Amendment) Act, 2015 without any recourse being made available to the State Government.

5. INTEREST IN JOINT VENTURE

During the previous year, the Company subscribed 25,01,000 equity shares for a total consideration of Rs, 2.50 Crore in OneIndia BSC Private Limited, which is a jointly controlled entity with an equal equity participation with Ambuja Cements Limited, with aim to provide back office services with respect to routine processes.

The Company has the following investment, in a jointly controlled entity:

6. ACC Mineral Resources Limited. (AMRL), a wholly-owned subsidiary of the Company, through its joint-venture had secured development and mining rights for four coal blocks allotted to Madhya Pradesh State Mining Corporation Ltd. These allocations stand cancelled pursuant to the order of the Supreme Court ruling that allocation of various coal blocks, including these, was arbitrary and illegal. The Government of India has commenced auctioning process for all such blocks in a phased manner. The auctioning for Bicharpur, being one of the four blocks, was completed, with the block being awarded to the successful bidder on March 23, 2015. Pursuant to a vesting order in this regard, possession of the coal mine was handed over to the successful bidder on April 06, 2015, with which the Company is in discussions for transfer of remaining assets. In respect of other three blocks, auctioning dates have not yet been announced.

7. During the year, the Company has provided Rs, 42.81 Crore in ACC Mineral Resources Limited (Previous year -Rs, 15.15 Crore) for diminution in the value of this investment considering the diminution other than temporary in nature. Current year provision is considered as an exceptional item.

8. The Company has arrangements with an associate company whereby it sells clinker and purchase Cement manufactured out of such clinker. While the transactions are considered as individual sale / purchase transactions for determination of taxable turnover and tax under VAT laws, considering the accounting treatment prescribed under various accounting guidance, revenue for sale of such clinker of Rs, 20.35 Crore (Previous year - Rs, 26.29 Crore) has not been recognized as a part of the Turnover but has been adjusted against cost of purchase of cement so converted.

9. The Company was a subsidiary of Holcim (India) Private Limited. Pursuant to the amalgamation of Holcim (India) Private Limited into Ambuja Cements Limited, effective August 12, 2016, the Company has become a subsidiary of Ambuja Cements Limited.

(b) Details of Investments made are given in Note 11 & 14.

(c) Guarantee given on behalf of Lucky Minmat Limited and Singhania Minerals Private Limited, wholly owned subsidiary companies, of Rs, 0.16 Crore (Previous Year - Rs, 0.12 Crore) for the purpose of approval of mining plan.

(d) The loanees have not made any investments in the shares of the Company

(e) The above loan is repayable on demand and carries rate of interest at 9% p.a.

10. Pursuant to provisions of Schedule II of the Companies Act, 2013, becoming applicable to the Company with effect from January 1, 2015, the Company reviewed and where necessary, revised estimates of useful lives of fixed assets. Accordingly, pursuant to the transitional provisions prescribed in Schedule II to the Companies Act, 2013, an additional charge of Rs, 153.17 Crore, being the carrying amount as of January 1, 2015 of fixed assets with no remaining useful life (as revised) as of that date, was recognized in the Statement of Profit and Loss for the year ended December 31, 2015 and disclosed as an exceptional item.

11. CORPORATE SOCIAL RESPONSIBILITY EXPENSES:

The aggregate amount of expenditure incurred during the year on Corporate Social Responsibility and shown in the respective heads of account is as follows: Further, no amount has been spent on construction / acquisition of an asset of the Company.

The amount required to be spent under Section 135 of the Companies Act, 2013 for the year 2016 is Rs, 21.47 Crore (Previous year - Rs, 27.90 Crore) i.e. 2% of average net profits for last three financial years, calculated as per section 198 of the Companies Act, 2013.

12. The Companies (Indian Accounting Standards) Rules, 2015 (Ind-AS) would be applicable to the Company from financial year commencing on January 1, 2017. Accordingly, the financial statements have been prepared in compliance with Companies (Accounting Standards) Rules, 2006.

13. In the previous year, the Company had received approval from the Company Law Board under Section 2(41) of the Companies Act, 2013 permitting the Company to continue having January 1- December 31 as its Financial Year.

14. COMPARATIVE FIGURES

Previous year''s figures have been regrouped / reclassified wherever necessary, to conform to current year''s classification.


Dec 31, 2015

Allocation of common costs

Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.

Inter Segment transfers

Inter segment revenue has been accounted for based on the transaction price agreed to between segments which is based on current market prices.

Unallocated items

Revenue, expenses, assets and liabilities which relate to the Company as a whole and not allocable to segments on reasonable basis have been included under 'unallocated revenue / expenses / assets / liabilities'.

Segment Policies

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

i) Terms / rights attached to equity shares

The Company has only one class of equity shares having par value of Rs, 10 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Both these Companies are subsidiaries of LafargeHolcim Ltd (Formerly known as Holcim Ltd), Switzerland, the ultimate holding Company.

ii) The Company has issued Nil (Previous Year - 5,064) Equity shares Rs, 10 each fully paid during the period of five years immediately preceding the reporting date on exercise of options granted under the employee stock option plan, wherein part consideration was received in form of employee services.

Mines restoration expenditure is incurred on an ongoing basis and until the closure of the mine. The actual expenses may vary based on the nature of restoration and the estimate of restoration expenditure.

1. EMPLOYEE BENEFITS:

a) Defined Contribution Plans - Amount recognized and included in Note 25 "Contributions to Provident and other Funds" of Statement of Profit and Loss Rs, 18.28 Crore (Previous Year -t 14.82 Crore).

b) Defined Benefit Plans-As per actuarial valuation on December 31, 2015

The Company has a defined benefit gratuity, additional gratuity, post retirement medical benefit plans and Trust managed provident fund plan as given below:

i. Every employee who has completed minimum five years of service is entitled to gratuity at 15 days salary for each completed year of services. The scheme is funded with insurance companies in the form of qualifying insurance policies.

ii. Every employee who has joined before 1st December 2005 and separates from service of the Company on Superannuation and on medical grounds is entitled to additional gratuity. The scheme is Non Funded.

iii. Benefits under Post Employment Medical Benefit Plans are payable for actual domiciliary treatment / hospitalization for employees and their specified relatives. The scheme is Non Funded.

iv. Provident fund for certain eligible employees is managed by the Company through trust "The Provident Fund of ACC Ltd.", in line with the Provident Fund and Miscellaneous Provision Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of separation from the Company or retirement, whichever is earlier. The benefits vests immediately on rendering of the services by the employee.

The minimum interest rate payable by the Trust to the beneficiaries every year is being notified by the Government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate.

The ASB Guidance on Implementing AS-15, Employee Benefits (revised 2005) issued by Accounting Standards Board (ASB) states that benefit plans involving employer established provident funds, which require interest shortfalls to be recompensed are to be considered as defined benefit plans. As per the Guidance Note from the Actuarial Society of India, the Company has obtained the actuarial valuation of interest rate obligation in respect of Provident Fund and there is no shortfall as at December 31, 2015 and December 31, 2014.

b) Demographic Assumptions

1 Mortality pre-retirement Indian Assured Lives Mortality (2006-08) (Modified)ultimate Indian Assured Lives Mortality (2006-08) (Modified) Ultimate

2 Mortality post-retirement Mortality for annuitants LIC (1996-98) ultimate Mortality for annuitants LIC (1996-98) ultimate

3 Turnover rate 5% p.a. (P.Y. - 5% p.a.)

4 Medical premium inflation 12% p.a. for the first 4 years and thereafter 8% p.a. 12% p.a. for the first 5 years and thereafter 8% p.a.

(Figures in italics pertain to previous year)

c) Basis used to determine expected rate of return on assets:

The expected return on plan assets is based on market expectation, at the beginning of the period, for returns over the entire life of the related obligation. The Gratuity Scheme is invested in Life Insurance Corporation (LIC) of India's Group Gratuity-cum-Life Assurance cash accumulation policy and HDFC Standard Life's Group Unit Linked Plan - For Defined Benefit Scheme.

The Trust formed by the Company manages the investments of provident fund plan.

d) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

e) The Company expects to contribute Rs, 11.00 Crore (Previous Year - Rs, 9.00 Crore) to Gratuity fund and 118.84 Crore (Previous Year -t 19.12 Crore) to trust managed provident fund in the year 2016.

f) Post employment defined benefit plan expenses are included under employee benefit expenses in the statement of Profit and Loss.

*Since there is surplus, the same has not been recognized in Balance Sheet, only liability recognized in Balance Sheet.

# Experience adjustments information for the year 2011 is not available, hence not disclosed.

h) Amount recognized as an expense under employee benefit expenses in the statement of Profit and Loss in respect of other long term benefits is Rs, 22.29 Crore (Previous Year - Rs, 39.89 Crore).

i) Present value of compensated absences at year end is Rs, 38.44 Crore (Previous Year - Rs, 109.22 Crore). During the year, the Company has contributed Rs, 75 Crore to the fund against provision for compensated absences.

j) Present value of Long service award and other benefit plan obligation at year end is Rs, 7.17 Crore (Previous Year -t 9.88 Crore). This scheme is non funded.

2. SEGMENT REPORTING

The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risks and returns, the organization structure and internal reporting system. The Company's operations predominantly relate to manufacture of Cement and Ready Mix Concrete. The export turnover is not significant in the context of total turnover of the company and further the risk and returns are not significantly different from that of India. As such there is only one geographical segment.

b) Operating lease payment recognized in Statement of Profit and Loss amounting to Rs, 173.64 Crore (Previous Year -Rs, 133.82 Crore)

c) General description of the leasing arrangement:

(i) Leased Assets: Grinding facility, Concrete pumps, Godowns, Transit Mixer, Flats, Office premises and other premises.

(ii) Future lease rentals are determined on the basis of agreed terms.

(iii) There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases.

(iv) At the expiry of the lease term, the Company has an option either to return the asset or extend the term by giving notice in writing.

3. RELATED PARTY DISCLOSURE

(A) Names of the Related parties where control exists: Nature of Relationship_

1 LafargeHolcim Ltd (Formerly known as Holcim Ltd) Ultimate Holding Company

2 Holderind Investments Ltd Holding Company of Holcim(lndia)Private Limited

3 Holcim (India) Private Limited Holding Company

4 Bulk Cement Corporation (India) Limited Subsidiary Company

5 ACC Mineral Resources Limited Subsidiary Company

6 Lucky Minmat Limited Subsidiary Company

7 National Limestone Company Private Limited Subsidiary Company

8 Singhania Minerals Private Limited Subsidiary Company

9 Oneindia BSC Private Limited Joint venture Company (w.e.f 13 August 2015)

(B) Others - With whom transactions have been taken place during the year

(a) Names of other Related parties Nature of Relationship

1 Alcon Cement Company Private Limited Associate Company

2 Asian Concretes and Cements Private Limited Associate Company

3 Aakaash Manufacturing Company Private Limited Associate Company

4 Lafarge India Private Limited Fellow Subsidiary (w.e.f 10 July 2015)

5 Ambuja Cements Limited Fellow Subsidiary

6 Holcim Technology (Singapore) Pte Ltd Fellow Subsidiary

7 Holcim (Lanka) Ltd I Fellow Subsidiary

8 P T Holcim Indonesia Tbk Fellow Subsidiary

9 Holcim Services (South Asia) Limited Fellow Subsidiary

10 Holcim Cement (Bangladesh) Ltd Fellow Subsidiary

Names of other Related parties Nature of Relationship

11 Holcim (Vietnam) Ltd Fellow Subsidiary

12 Holcim (Malaysia) SDN Bhd Fellow Subsidiary

13 Holcim Foundation I Entity controlled by LafargeHolcim Ltd

14 Holcim Philippines Fellow Subsidiary

15 Holcim Services (Asia) Ltd Fellow Subsidiary

16 Holcim Group Services Ltd Fellow Subsidiary

17 Holcim Technology Ltd Fellow Subsidiary

18 Holcim Trading Pte Ltd Fellow Subsidiary

19 ALJabor Cement Industries Co. Fellow Subsidiary

20 National Cement Factory Associate Company of Fellow Subsidiary

21 Holcim (Romania) S.A. Fellow Subsidiary

22 Holcim Azerbaijan Fellow Subsidiary

23 Holcim (Canada) Inc. Fellow Subsidiary (b) Key Management Personnel:

Name of the Related Party Nature of Relationship

1 Mr. Harish Badami CEO & Managing Director (w.e.f 13th August 2014)

2 Mr. Kuldip K. Kaura CEO & Managing Director (Upto 12th August 2014)

3 Mr.Sunil K. Nayak__ Chief Financial Officer

4 Mr. Burjor D. Nariman | Company Secretary

c) The Company had filed writ / appeal petitions against the orders / notices of various authorities demanding Rs, 114.24 Crore (Previous Year -Rs, 106.59 Crore) towards demand of additional Royalty on Limestone based on the ratio of 1.6 tonnes of Limestone to 1 tonne of Cement produced at its factories in Chattisgarh and on cement produced visa vis consumption of limestone at its factory in Tamil Nadu. The Mad hya Pradesh High Court has decided this matter in favour of the Company by directing the Authorities to only demand Royalty based on quantity of Limestoneactua I ly mined and recorded through statutory documentation, and not based on any ratio. The Company holds the view that the payment of royalty on limestone is correctly made by the Company based on the actual quantity of limestone extracted, and feels that similar relief can also be expected from the Judiciary and/or Authorities in the cases of Chattisgarh & Tamil Nadu Units. In view of the demand being legally unjustifiable, and due to the decision of the Madhya Pradesh High Court, directly on this issue, the Company does not expect any liability in above matter.

4. (B) Material Demands and disputes considered as "remote" by the Company

a) The Company had availed Sales Tax Incentives in respect of it's new 1 MTPA Plant at Gagal (Gagal ll)underthe HP State Industrial Policy, 1991. The Company had accrued Sales Tax Incentives aggregating Rs, 56 Crore. The Sales Tax Authorities had introduced certain restrictive conditions after commissioning of the unit stipulating that incentive is available only for incremental amount over the base revenue and production (of Gagal I) prior to the commissioning of Gagal II. The Company contends that such restrictions are not applicable to the unit as Gagal II is a new unit, as decided by the HP High Court and confirmed by the Supreme Court while determining the eligibility for Transport Subsidy. The Department had recovered Rs, 64 Crore (Tax of Rs, 56 Crore and interest ofRs, 8 Crore) and the same is accounted as an amount recoverable.

The HP High Court, had, in 2012, dismissed the Company's appeal. The Company believes the Hon'ble High Court's judgment is based on an erroneous understanding of certain facts and legal positions and that it also failed to consider certain key facts. The Company has been advised by legal experts that there is no change in the merits of the Company's case. Based on such advice, the Company filed a Special Leave Petition before the Hon'ble Supreme Court in, which is pending.

b) The Company was eligible for certain incentives (in the nature of One Time Lumpsum Capital Subsidy and refund of incremental VAT paid) in respect of its investment towards modernization and expansion of the Chaibasa Cement Unit pursuant to confirmation received under the State Industrial Policy of Jharkhand. Accordingly, the company has made claims for refund of VAT paid each financial year. However, no disbursals were made (except an amount of Rs, 7 Crore representing part of the One Time Lumpsum capital Subsidy Claim of Rs, 15 Crore) as the authorities have raised various new conditions and restriction, that were extraneous to the approvals and confirmations expressly received by the Company. The Company had filed two writ appeals before the Jharkhand High Court against the restrictions and disputes on the extent of the eligible claims now being sought to be effected / raised by the Government.

The Division Bench of the Jharkhand High Court, while dealing with appeals by both the Company and the State of Government, against a single bench order only partially allowing the Companies claim, in it's order dated February 24, 2015, has allowed the Companies Appeal in totality while dismissing the Governments Appeal, thereby confirming that the entire amount claimed by the Company is correct and hence payable immediately. Pursuant to this order, a cumulative amount of Rs, 235 Crore stand accrued in the books up to December, 2015.

The Government of Jharkhand has filed an SLP in the Supreme Court against the order of the division bench, which has been admitted. In its interim order, the Supreme Court had, while not staying the Division Bench Order, has only stayed disbursement of 40% of the amount due.

The Company has also pursued a contempt petition filed in the High Court of Jharkhand against non disbursal of amounts due by the Government. Consequently, as of date, the company has received Rs, 64 Crore in part disbursement from the Government of Jharkhand.

The Company is pursuing the matter of disbursement of further amounts outstanding. The Company is of the view, and also has been advised, that the merits are strongly in its favor and it expects that the SLP shall be rejected upholding the order of the Division bench of the Jharkhand HC by the Apex Court.

c) The Company had set up a captive power plant ('Wadi TG 2') in the year 1995-96. This plant was sold to Tata Power Co. Ltd., in the year 1998-99 and was subsequently repurchased from it in the year 2004-05. The Company had purchased another captive power plant ('Wadi TG 3', set up by Tata Power Co. Ltd. in the year 2002-03) in 2004-05. Both these power plants were eligible for tax holiday under the provisions of Section 80IA of the Income Tax Act, 1961. The Income tax department has disputed the Company's claim of deduction under Section 80IAof the Act, on the ground that the conditions prescribed under the section are not fulfill led. In case of Wadi TG 2, in respect of the demand of Rs, 56.66 Crore (net of provision), the Company is in appeal before the ITAT and in case of Wadi TG 3 in respect of the demand of Rs, 115.62 Crore, which was set aside by the ITAT, the Department is in appeal against the decision in favour of the Company. The Company believes that the merits of the claims are strong and will be allowed.

d) One of the Company's Cement manufacturing plants located in Himachal Pradesh was eligible, under the State Industrial Policy for deferral of its sales tax liability arising on sale of cement manufactured in the said plant. The Excise and Taxation department of the Government of Himachal Pradesh, disputed the eligibility of the company to such deferment on the ground that the company also manufactures an intermediate product, viz. Clinker, arising in the manufacture of cement, and such intermediate product was is in the negative list. A demand of Rs, 82.37 Crore was raised. The Company filed a writ petition before High Court of Himachal Pradesh against the demand. The case has been admitted and the hearing is in process. The Company believes its case is strong and the demand shall not sustain under law.

e) The Company is eligible for incentives for one of its cement plants situated in Maharashtra, under a Package Scheme of Incentives of the Government of Maharashtra. The scheme inter alia, includes refund of royalty paid by the Company on extraction or procurement of various raw materials (Minerals). The Department of Industries has disputed the Company's claim for refund of royalty on an erroneous technical interpretation of the sanction letter issued to the Company, that only the higher of the amount of (i) VAT Refund and (ii) Royalty refund claim amounts, each year, shall be considered. The Company maintains that such annual restriction is not applicable as long as the cumulative limit of claim does not exceed the amount of eligible investment. The Company has accrued an amount of Rs, 106 Crore till December 31, 2015 (Rs, 73 Crore till December 31, 2014) on this account. The Company has filed an appeal before the Bombay High Court challenging the stand of the Government, which is admitted and pending. The Company believes that the merits of the claim are strong.

f) Consequent upon the Supreme Court's judgment in Goa Foundation case, restricting the "deemed renewal" provision of captive mining leases to the first renewal period, the Company had received demand from District Mining Officer for Rs, 881 Crore for being penalty for alleged illegal mining activities carried out by the Company during January 1991 to September 2014. The aforesaid demands were challenged by the Company and Writ Petition with High Court of Jharkhand. The petition has been admitted subject to a token deposit of Rs, 48 Crore which shall be refundable in case the matter is decided in the Companies favor. The Company is of the considered view based on legal advice, that this demand does not have merit, and shall not stand the test of judicial scrutiny, considering that the said mining, leases pending State Government's approval, have been automatically extended up to March 31, 2030 by Mines and Minerals (Development and Regulation) (Amendment) Act, 2015 without any recourse being made available to the State Government.

5. The Competition Commission of India (CCI) in 2012 had imposed a penalty ofRs, 1,147.59 Crore for alleged contravention of the provisions of the Competition Act, 2002 (the Act). On the Company's appeal, Competition Appellate Tribunal (COMPAT).vide its interim order, stayed the penalty with a condition to deposit 10% of the penalty amount, which was deposited. The amount of penalty was disclosed as a contingent liability in the financial statements up to the previous year.

On December 11, 2015 the COMPAT, vide its final order, set aside the order of the CCI and remitted the matter to the CCI for fresh adjudication of the issues relating to the alleged violation of relevant provisions of the Act, for passing a fresh order. Further, in terms of the order, the Company has received the refund of deposit, along- with accumulated interest.

This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

6. INTEREST IN JOINT VENTURE

During the year, the Company subscribed 25,01,000 (Previous Year - Nil) equity shares for a total consideration of Rs, 2.50Crore (Previous Year - Nil) in One India BSC Private Limited, which is a jointly controlled entity with an equal equity participation with Ambuja Cements Limited, a fellow subsidiary Company, with aim to provide back office services with respect to routine processes.

7. ACC Mineral Resources Limited (AMRL), a wholly-owned subsidiary of the Company, through its joint-venture had secured development and mining rights for four coal blocks allotted to Madhya Pradesh State Mining Corporation Ltd. These allocations stand cancelled pursuant to the order of the Supreme Court ruling that allocation of various coal blocks, including these, was arbitrary and illegal. The Government of India has commenced auctioning process for all such blocks in a phased manner. The auctioning for Bicharpur, being one of the four blocks, is completed, with the block being awarded to the successful bidder. Pursuant to a vesting order in this regard, possession of the coal mine has been handed over to the successful bidder, with which the Company is in discussions for transfer of remaining assets. In respect of other three blocks, auctioning dates have not yet been announced.

8. During the year, the Company has provided Rs, 15.15 Crore in ACC Mineral Resources Limited (Previous year -Rs, 4.13 Crore in National Limestone Company Private Limited) for diminution in the value of these investment considering the diminution other than temporary nature.

9. In the previous year, 'Tax adjustments for earlier years' aggregating Rs, 309.23 Crore comprises write-back of provision for income tax arising on conclusion of assessment of a year, and upon a consequential review of tax provisions for unassisted years.

10. The Company has arrangements with few third parties whereby it sells clinker to them and purchases Cement manufactured by them out of such clinker. While the transactions are considered as individual sale / purchase transactions for determination of taxable turnover and tax under VAT laws, considering the accounting treatment prescribed under various accounting guidance, revenue for sale of such clinker of Rs, 26.29 Crore (Previous year -Rs, 22.84 Crore) has not been recognized as a part of the Turnover but has been adjusted against cost of purchase of cement so converted.

(b) Details of Investments made are given in Note 11 & 14.

(c) Guarantee given on behalf of Lucky Minmat Limited, wholly owned subsidiary company, of Rs, 0.12 Crore (Previous Year -Rs, 0.12 Crore) for the purpose of renewal of mining lease.

(d) The loanees have not made any investments in the shares of the Company.

11. Pursuant to provisions of Schedule II of the Companies Act, 2013, becoming applicable to the Company w.e.f. January 1, 2015, the Company has reviewed and where necessary, revised estimates of useful lives of fixed assets. Accordingly, Pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, an additional charge of Rs, 153.17 Crore, being the carrying amount as of January 1, 2015 of fixed assets with no remaining useful life (as revised) as of that date, is recognized in the Statement of Profit and Loss for the year ended December 31, 2015 and disclosed as an exceptional item.

Had this change in the useful life of fixed assets not been made, depreciation for the year ended December 31, 2015 would have been lower byRs, 111.61 Crore and the profit after-tax would have been higher byRs, 173.14 Crore.

12. The Company has received approval from the Company Law Board under Section 2(41) of the Companies Act, 2013 permitting the Company to continue having 1st January - 31st December as its Financial Year.

13. COMPARATIVE FIGURES

Previous year's figures have been regrouped / reclassified wherever necessary, to conform to current year's classification.


Dec 31, 2014

1 COMPANY OVERVIEW

ACC Limited (the Company) is a public limited company domiciled and headquartered in India and incorporated under the provision of Companies Act, 1913. Its shares are listed on two stock exchanges in India. The Company is engaged in the manufacturing and selling of Cement and Ready mix concrete. The Company caters mainly to the domestic market.

2. i) Terms / rights attached to equity shares

The company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

ii) The Company has issued total 5,064 (Previous Year - 63,537) Equity shares Rs. 10 each fully paid during the period of five years immediately preceding the reporting date on exercise of options granted under the employee stock option plan, wherein part consideration was received in form of employee services.

3. LONG-TERM BORROWINGS

*Amount disclosed under the head "Other Current Liabilities" (Refer Note - 9)

i) 8.45% Debentures were redeemable at par at the end of five years from the date of allotment, viz 07 October 2009. These debentures were secured by a charge on all movable and immovable assets under the Debenture Trust Deed. During the year, the Company has redeemed 320 debentures (Previous year - Nil) of Rs. 32 Crore (Previous year -Rs. Nil).

ii) Deferred Payment Liability was payable to the Industrial Development Corporation of Orissa Limited (IDCOL) in eight equal annual installments of Rs. 1.62 Crore beginning from 2007 without interest or penalty.

iii) Deferred sales tax loan was interest-free and payable in 12 yearly installments of Rs. 1.41 Crore each beginning from 2003.

4. OTHER EXPENSES

i) Includes excise duty related to the difference between the closing stock and opening stock.

ii) Includes excise duty on captive consumption of Clinker Rs. Nil (Previous Year - Rs. 6.58 Crore)

iii) Miscellaneous expenses includes:

(a) Loss on sale / write off and impairment of Fixed Assets (Net) - Rs. 15.88 Crore (Previous Year - Rs. 15.78 Crore)

(b) Provision for other than temporary diminution in long term investment of Rs. 4.13 Crore (Previous year - Rs. 17.86 Crore)

(c) Investments written off of Rs. 0.69 Crore (Previous year - Rs. Nil)

5. EMPLOYEE BENEFITS:

a) Defined Contribution Plans - Amount recognised and included in Note 26 "Contributions to Provident and other Funds" of Statement of Profit and Loss Rs. 14.82 Crore (Previous Year- Rs. 14.59 Crore).

b) Defined Benefit Plans - As per actuarial valuation on December 31, 2014

The Company has a defined benefit gratuity and post retirement medical benefit plans as given below:

i. Every employee who has completed minimum five years of service is entitled to gratuity at 15 days salary for each completed year of services. The scheme is funded with insurance companies in the form of qualifying insurance policies.

ii. Benefits under Post Employment medical Benefit plans are payable for actual domiciliary treatment / hospitalization for employees and their specified relatives. The scheme is Non Funded.

iii. Every employee who has joined before December 01,2005 and separates from service of the Company on Superannuation and on medical grounds is entitled to additional gratuity. The scheme is Non Funded.

6. a) Basis used to determine expected rate of return on assets:

The expected return on plan assets is based on market expectation, at the beginning of the period, for returns over the entire life of the related obligation. The Gratuity Scheme is invested in Life Insurance Corporation (LIC) of India''s Group Gratuity-cum-Life Assurance cash accumulation policy and HDFC Standard Life''s Group Unit Linked Plan - For Defined Benefit Scheme.

b) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

c) The Company expects to contribute Rs. 9.00 Crore (Previous year -Rs. 7.50 Crore) to Gratuity fund in the year 2015.

d) Post employment defined benefit plan expenses are included under employee benefit expenses in the statement of Profit and Loss.

e) Provident Fund

Provident fund for certain eligible employees is managed by the Company through trust " The Provident Fund of ACC Ltd.", in line with the Provident Fund and Miscellaneous Provision Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of separation from the Company or retirement, whichever is earlier. The benefits vests immediately on rendering of the services by the employee.

In terms of the guidance note issued by the Institute of Actuaries of India for measurement of provident fund liabilities, the actuary has provided a valuation of provident fund liability and based on the assumption provided below there is no shortfall as at December 31,2014 and December 31,2013.

f) Amount recognised as an expense under employee benefit expenses in the statement of Profit and Loss in respect of other benefits is Rs. 39.89 Crore (Previous Year-Rs. 29.52 Crore).

g) Present value of other benefits obligation at year end is Rs. 119.10 Crore (Previous year Rs. 100.15 Crore). These schemes are Non Funded.

7. SEGMENT REPORTING

The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risks and returns, the organisation structure and internal reporting system. The Company''s operations predominantly relate to manufacture of cement and Ready mix concrete. The export turnover is not significant in the context of total turnover of the company and further the risk and returns are not significantly different from that of India. As such there is only one geographical segment.

Inter segment transfers:

Inter Segment Transfer Pricing Policy - Cement supplied to ready mix concrete activity and ready mix concrete supplied to Cement activity is based on current market prices. All other inter segment transfers are at cost.

8. OPERATING LEASE

a) Operating lease payment recognised in Statement of Profit & Loss amounting to Rs. 133.82 Crore (Previous Year - Rs. 116.54 Crore)

b) General description of the leasing arrangement:

(i) Leased Assets: Grinding facility, Concrete pumps, Godowns, Transit Mixer, Flats, Office premises and other premises.

(ii) Future lease rentals are determined on the basis of agreed terms.

(iii) There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases.

(iv) At the expiry of the lease term, the Company has an option either to return the asset or extend the term by giving notice in writing.

9. (A) CONTINGENT LIABILITIES NOT PROVIDED FOR -

2014 2013 Rs. Crore Rs. Crore

a) Claims not acknowledged by the Company

Sales tax 31.43 30.22

Customs demand 30.97 17.69

Claim by Suppliers 36.79 36.79

Labour related 29.57 26.48

Claims for mining Lease rent 73.46 -

Others 23.14 27.98

TOTAL 225.36 139.16

In respect of above matters, future cash outflows in respect of contingent liabilities are determinable only on receipt of judgments pending at various forums / authorities.

b) Indemnity, Guarantee/s given to Banks/ Financial Institutions, Government 341.73 256.16 Bodies and others {Including Guarantee given on behalf of Subsidiary Company of Rs. 0.12 Crore (Previous Year - Rs. Nil)}

c) Bills discounted 22.38 9.51

d) The Company had filed petitions against the orders / notices of various authorities demanding Rs. 106.59 Crore (Previous Year- Rs. 211.73 Crore including MP) towards demand of additional Royalty on Limestone based on the ratio of 1.6 tonnes of Limestone to 1 tonne of Cement produced at its factories in Chattisgarh and on cement produced vis a vis consumption of limestone at its factory in Tamil Nadu. Recently, the Madhya Pradesh High Court has decided the matter in favour of the Company by directing the Authorities to only demand Royalty based on quantity of Limestone, actually mined and recorded through statutory documentation, and not based on any ratio.

The Company holds the view that the payment of royalty on limestone is correctly made based on the actual quantity of limestone extracted from the mining area, and feels that similar relief can also be expected from the Judiciary and / or Authorities in the cases of Chattisgarh & Tamil Nadu Units. In view of the demand being legally unjustifiable, and due to the decision of the Madhya Pradesh High Court, the Company does not expect any liability in above matter.

e) The Competition Commission of India issued an Order dated June 20, 2012, imposing penalty on certain cement manufacturers, including the Company, concerning alleged contravention of the provisions of the Competition Act, 2002, and imposed a penalty of Rs. 1,147.59 Crore on the Company. The Company had filed an appeal against the said Order before the Competition Appellate Tribunal (COMPAT). Pending final disposal of the appeal, the COMPAT has stayed the penalty with a condition to deposit 10% of the penalty amount, which has been deposited in the form of short term bank fixed deposit with lien in favour of COMPAT. The fixed deposit has been renewed periodically on maturity along with interest of Rs. 13.81 Crore. Based on the advice of external legal counsel, the Company believes that it has good grounds for a successful appeal. Accordingly, no provision is considered necessary.

9. (B) MATERIAL DEMANDS AND DISPUTES CONSIDERED AS "REMOTE" BY THE COMPANY

a) The Company had availed Sales Tax Incentives in respect of it''s new 1 MTPA Plant at Gagal (Gagal II) under the HP State Industrial Policy, 1991. The Company had accrued Sales Tax Incentives aggregating Rs. 56 Crore. The Sales Tax Authorities had introduced certain restrictive conditions after commissioning of the unit stipulating that incentive is available only for incremental amount over the base revenue and production (of Gagal I) prior to the commissioning of Gagal II. The Company contends that such restrictions are not applicable to the unit as Gagal II is a new unit, as decided by the HP High Court and confirmed by the Supreme Court while determining the eligibility for Transport Subsidy. The Department had recovered Rs. 64 Crore (Tax of Rs. 56 Crore and interest of Rs. 8 Crore) and the same is accounted as an amount recoverable.

The HP High Court, had, in 2012, dismissed the Company''s appeal. The Company believes the Hon''ble High Court''s judgment is based on an erroneous understanding of certain facts and legal positions and that it also failed to consider certain key facts. The Company has been advised by legal experts that there is no change in the merits of the Company''s case. Based on such advice, the Company filed a Special Leave Petition before the Hon''ble Supreme Court in , which is pending.

b) The Company was eligible for certain incentives (in the nature of One Time Lumpsum Captal Subsidy and refund of incremental VAT paid) in respect of its investment towards modernization and expansion of the Chaibasa Cement Unit pursuant to confirmation received under the State Industrial Policy of Jharkhand. Accordingly, the company has made claims for refund of VAT paid each financial year. However, no disbursals were made (except an amount of Rs. 7 Crore representing part of the One Time Lumpsum capital Subsidy Claim of Rs. 15 Crore) as the authorities have raised various new conditions and restriction, that were extraneous to the approvals and confirmations expressly received by the Company. The Company had filed two writ appeals before the Jharkhand High Court against the restrictions and disputes on the extent of the eligible claims now being sought to be effected / raised by the Government.

In October 2013, the High Court (Single Bench) decided the matter partially in favour of the Company. Consequently, the Company has accrued, on account of VAT Refund, Rs. 95 Crore, and in respect of the unpaid One Time Lumpsum Capital Subsidy, reversed a provision of Rs. 8 Crore made in an earlier year. Based on the Court direction, the Company has submitted its revised claim in this regard.

The Company has also preferred an appeal before the Division Bench of the Jharkhand High Court for the balance claim. Similarly, the Jharkhand Government has preferred an appeal against the part of the order of the single Judge, which was in the Company''s favour. The appeals have been heard on January 19, 2015, and the order reserved.

c) The Company had set up a captive power plant (''Wadi TG 2'') in the year 1995-96. This plant was sold to Tata Power Co Ltd., in the year 1998-99 and was subsequently repurchased from it in the year 2004-05. The Company had purchased another captive power plant (''Wadi TG 3'', set up by Tata Power Co Ltd in the year 2002-03) in 2004-05. Both these power plants were eligible for tax holiday under the provisions of Section 80IA of the Income Tax Act, 1961. The Income tax department has disputed the Company''s claim of deduction under Section 80IA of the Act, on the ground that the conditions prescribed under the section are not fulfilled. In case of Wadi TG 2, in respect of the demand of Rs. 56.66 Crore (net of provision), the Company is in appeal before the ITAT and in case of Wadi TG 3 in respect of the demand of Rs. 115.62 Crore, which was set aside by the ITAT, the Department is in appeal against the decision in favour of the Company. The Company believes that the merits of the claims are strong and will be allowed.

d) One of the Company''s Cement manufacturing plants located in Himachal Pradesh was eligible, under the State Industrial Policy for deferral of its sales tax liability arising on sale of cement manufactured in the said plant. The Excise and Taxation department of the Government of Himachal Pradesh, disputed the eligibility of the company to such deferment on the ground that the company also manufactures an intermediate product, viz. Clinker, arising in the manufacture of cement, and such intermediate product was is in the negative list. A demand of Rs. 82.37 Crore was raised. Company filed a writ petition before High Court of Himachal Pradesh against the demand. The case has been admitted and the hearing is in process. The Company believes its case is strong and the demand shall not sustain under law.

e) The Company is eligible for incentives for one of its cement plants situated in Maharashtra, under a Package Scheme of Incentives of the Government of Maharashtra. The scheme inter alia, includes refund of royalty paid by the Company on extraction or procurement of various raw materials (Minerals). The Department of Industries has disputed the Company''s claim for refund of royalty on an erroneous technical interpretation of the sanction letter issued to the Company, that only the higher of the amount of (i) VAT Refund and (ii) Royalty refund claim amounts, each year, shall be considered. The Company maintains that such annual restriction is not applicable as long as the cumulative limit of claim does not exceed the amount of eligible investment. The Company has accrued an amount of Rs. 73 Crore till December 2014 on this account. The Company has filed an appeal before the Bombay High Court challenging the stand of the Government, which is admitted & pending. The Company believes that the merits of the claim are strong.

10. ACC Mineral Resources Limited (''AMRL''), a wholly owned subsidiary of the Company, had participated in four Joint Ventures with the Madhya Pradesh State Mining Corporation Limited (''MPSMCL'') for development and mining of four coal blocks allocated to MPSMCL. The Company had applied for the development and mining operations through a competitive bidding process, consequent to which the JVs were effected, in which AMRL and MPSMCL hold 49% and 51% shares respectively. As of December 31, 2014, the amount incurred, invested and advanced (including deposits to MPSMCL and other parties) by the Company in this regard is approximately Rs. 153.79 Crore.

The Hon''ble Supreme Court, vide it''s decision of September 24, 2014, held that allocation of various coal blocks, including those allocated to MPSMCL, is arbitrary and illegal, and hence liable to be cancelled. Subsequently, the Government promulgated The Coal Mines (Special Provisions) Ordinance, 2014, which intends to take appropriate action to deal with the situation arising pursuant to the Hon''ble Supreme Court''s decision.

The management, based on its understanding of it''s contractual rights under its JV agreements, its interpretation of the Ordinance and on the basis of legal advice, believes that the financial loss or operational impact if any, will not be significant.

11. During the year, the Company has provided Rs. 4.13 Crore in National Limestone Company Private Limited (Previous year- Rs. 17.86 Crore in Shiva Cement Limited) for diminution in the value of these investment considering the diminution in value of this investment other than temporary nature.

12. During the year, the Company has written back Rs. 112.75 Crore of provision for income-tax upon completion of assessment. Outcome of certain matters in this assessment, read with judicial precedents, provides additional information relating to certain tax positions, which has a bearing on some subsequent unassessed years, resulting in provision for tax recognized of Rs. 196.48 Crore for those years being considered no longer necessary. Accordingly, total amount of Rs. 309.23 Crore (Previous Year - Rs. 216.74 Crore) have been written back during the year and disclosed separately as ''Tax adjustments for earlier years.

13. The Company has arrangements with few third parties whereby it sells clinker to them and purchases Cement manufactured by them out of such clinker. While the transactions are considered as individual sale / purchase transactions for determination of taxable turnover and tax under VAT laws, considering the accounting treatment prescribed under various accounting guidance, revenue for sale of such clinker of Rs. 22.84 Crore (Previous year - Rs. 25.88 Crore) has not been recognized as a part of the Turnover but has been adjusted against cost of purchase of cement so converted.

14. COMPARATIVE FIGURES :

Previous year''s figures have been regrouped / reclassified wherever necessary, to conform to current year''s classification.


Dec 31, 2013

1 COMPANY OVERVIEW

ACC Limited (the Company) is a public limited company domiciled and headquartered in India and incorporated under the provision of Companies Act, 1956. Its shares are listed on two stock exchanges in India. The Company is engaged in the manufacturing and selling of Cement and Ready mix concrete. The Company caters mainly to the domestic market.

2. EMPLOYEE BENEFITS

a) Defined Contribution Plans - Amount recognised and included in Note 27 "Contributions to Provident and other Funds" of Statement of Profit and Loss Rs. 14.59 Crore (Previous Year - Rs. 16.23 Crore).

b) Defined Benefit Plans - As per actuarial valuation on December 31, 2013

The Company has a defined benefit gratuity and post retirement medical benefit plans as given below:

i. Every employee who has completed minimum five years of service is entitled to gratuity at 15 days salary for each completed year of services. The scheme is funded with insurance companies in the form of a qualifying insurance policy.

ii. Benefits under Post Employment medical Benefit plans are payable for actual domiciliary treatment / hospitalization for employees and their specified relatives.

iii. Every employee who has joined before 1st December 2005 and separates from service of the Company on Superannuation and on medical grounds is entitled to additional gratuity. The scheme is Non Funded.

c) Basis used to determine expected rate of return on assets:

The expected return on plan assets is based on market expectation, at the beginning of the period, for returns over the entire life of the related obligation. The Gratuity Scheme is invested in Life Insurance Corporation (LIC) of India''s Group Gratuity-cum-Life Assurance cash accumulation policy and HDFC Standard Life''s Group Unit Linked Plan - For Defined Benefit Scheme.

d) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

e) The Company expects to contribute Rs. 7.50 Crore (Previousyear - Rs. Nil) to Gratuity fund in the year 2014.

f) Post employment defined benefit plan expenses are included under employee benefit expenses in the statement of Profit and Loss.

h) Provident Fund

Provident fund for certain eligible employees is managed by the Company through trust " The Provident Fund of ACC Ltd.", in line with the Provident Fund and Miscellaneous Provision Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of separation from the Company or retirement, whichever is earlier. The benefits vests immediately on rendering of the services by the employee.

In terms of the guidance note issued by the Institute of Actuaries of India for measurement of provident fund liabilities, the actuary has provided a valuation of provident fund liability and based on the assumption provided below there is no shortfall as at December 31, 2013 and December 31, 2012.

3. SEGMENT REPORTING

The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risks and returns, the organisation structure and internal reporting system. The Company''s operations predominantly relate to manufacture of cement and Ready mix concrete. The export turnover is not significant in the context of total turnover. As such there is only one geographical segment.

Inter segment transfers:

Inter Segment Transfer Pricing Policy - Cement supplied to ready mix concrete activity and ready mix concrete supplied to Cement activity is based on current market prices. All other inter segment transfers are at cost.

4. OPERATING LEASE

b) Operating lease payment recognised in Statement of Profit & Loss amounting to Rs. 79.44 Crore (Previous Year -Rs. 87.66 Crore)

c) General description of the leasing arrangement

(i) Leased Assets: Grinding facility, Dumpers, Cranes and Tippers, Car, Locomotives, Godowns, Flats, Computers, Concrete pumps and other related Office equipments and other premises.

(ii) Future lease rentals are determined on the basis of agreed terms.

(iii) There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases.

(iv) At the expiry of the lease term, the Company has an option either to return the asset or extend the term by giving notice in writing.

5. AMALGAMATION OF WHOLLY OWNED SUBSIDIARY COMPANIES A) Encore Cement and Additives Private Limited (Encore)

a) During the previous year, pursuant to the scheme of amalgamation (''the Scheme'') of erstwhile Encore Cement and Additives Private Limited with the Company under Sections 391 to 394 of the Companies Act, 1956 sanctioned by Humble Bombay High Court on October 05 2012, entire business and all assets and liabilities of Encore Cement and Additives Private Limited were transferred and vested in the Company effective from January 01, 2011. Accordingly the Scheme was given effect to in the financial statements of previous year.

The Encore was engaged in manufacture and sale of cement.

b) The amalgamation was accounted for under the "Pooling of Interest" method as prescribed by the Accounting Standard 14 "Accounting for Amalgamations" notified under the Companies (Accounting Standards) Rules, 2006 (as amended). Accordingly, the accounting treatment had been given in the previous year as under:-

(i) The assets and liabilities as at January 01, 2011 were incorporated in the financial statement of the Company at its book value.

(ii) Debit balance in the statement of Profit and Loss of Encore as at January 01, 2011 amounting to Rs. 13.42 Crore was adjusted in "Surplus in Statement of Profit and Loss".

(iii) 5,000,000 Equity Shares of Rs. 10 each fully paid in Encore Cement and Additives Private Limited, held as investment by the Company stands cancelled and difference between the book value and face value of such shares amounting to Rs. 6.78 Crore was adjusted against the Statement of Profit and Loss of the Company.

(iv) The accounts of Encore for the year ended December 31, 2011 were finalised as a separate entity. The net profit after tax amounting to Rs. 1.87 Crore for the year ended December 31, 2011 was adjusted in "Surplus in Statement of Profit and Loss".

B) ACC Concrete Limited (ACCCL)

a) During the previous year, pursuant to the scheme of amalgamation (''the Scheme'') of erstwhile ACC Concrete Limited with the Company under Sections 391 to 394 of the Companies Act, 1956 sanctioned by Humble Bombay High Court on October 09 2012, entire business and all assets and liabilities of ACC Concrete Limited were transferred and vested in the Company effective from January 01, 2012. Accordingly the Scheme was given effect to in the financial statements of previous year.

The erstwhile ACC Concrete Limited was engaged in manufacture and sale of Ready mix concrete.

b) The amalgamation was accounted for under the "Pooling of Interest" method as prescribed by the Accounting Standard 14 "Accounting for Amalgamations" notified under the Companies (Accounting Standards) Rules, 2006 (as amended). Accordingly, the accounting treatment had been given in the previous year as under:-

(i) The assets and liabilities as at January 01, 2012 were incorporated in the financial statement of the Company at the book value.

(ii) Debit balance in the Statement of Profit and Loss of ACC Concrete Limited amounting to Rs. 197.96 Crore was adjusted in "Surplus in Statement of Profit and Loss".

(iii) 15,00,000 Equity Shares of Rs. 10 each fully paid and 10,00,00,000 1% Cumulative Redeemable Preference Share of Rs. 10 each Fully paid in ACC Concrete Limited, held as investment by the Company were cancelled.

6. (A) Contingent liabilities not provided for -

2013 2012 Rs. Crore Rs. Crore

a) Claims not acknowledged by the Company

Sales tax 30.22 30.14

Customs demand 17.69 -

Claim by Suppliers 36.79 36.79

Labour related 26.48 23.42

Others 27.98 20.24

139.16 110.59

In respect of above matters, future cash outflows in respect of contingent liabilities are determinable only on receipt of judgments pending at various forums / authorities.

b) Indemnity, Guarantee/s given to Banks/ Financial Institutions, 256.16 216.19 Government Bodies and others

c) Bills discounted 9.51 13.25

d) The Company had filed petitions against the orders / notices of various authorities demanding Rs. 211.73 Crore (Previous Year - Rs. 193.60 Crore) towards payment of additional Royalty on Limestone based on the ratio of 1.6 tonnes of Limestone to 1 tonne of Cement produced at its factories in Madhya Pradesh and Chattisgarh and on cement produced vis a vis consumption of limestone at its factory in Tamil Nadu. The Company holds the view that the payment of royalty on limestone is correctly made based on the actual quantity of limestone extracted from the mining area.

In view of above demand being legally unjustifiable, the Company does not expect any liability in above matter.

e) The Competition Commission of India issued an Order dated 20th June, 2012, imposing penalty on certain cement manufacturers, including the Company, concerning alleged contravention of the provisions of the Competition Act, 2002, and imposed a penalty of Rs. 1,147.59 Crore on the Company. The Company had filed an appeal against the said Order before the Competition Appellate Tribunal (COMPAT). Pending final disposal of the appeal, the COMPAT has stayed the penalty with a condition to deposit 10% of the penalty amount, which has been deposited in the form of short term bank fixed deposit with lien in favor of COMPAT. The fixed deposit has been renewed on maturity along with interest of Rs. 4.30 Crore. Based on the advice of external legal counsel, the Company believes that it has good grounds for a successful appeal. Accordingly, no provision is considered necessary.

(B) a) The Company had availed Sales Tax Incentives in respect of it''s new 1 MTPA Plant at Gagal (Gagal II) under the HP State Industrial Policy, 1991. The Company had in 2011 accrued Sales Tax Incentives aggregating Rs. 56 Crore even though the Sales Tax Authorities had introduced certain restrictive conditions after commissioning of the unit stipulating that incentive is available only for incremental amount over the base revenue and production (of Gagal I) prior to the commissioning of Gagal II. The Company contends that Gagal II is a new unit, as decided by the HP High Court and confirmed by the Supreme Court while determining the eligibility for Transport Subsidy, and hence such restrictions are not applicable to the unit. The Department had recovered Rs. 64 Crore (Tax of Rs. 56 Crore plus interest of Rs. 8 Crore) and the same is accounted as an amount recoverable.

The HP High Court, had in 2012 dismissed the Company''s appeal. The Company believes the Humble High Court''s judgment is based on an erroneous understanding of certain facts and legal positions and that it also failed to consider certain key facts in its order. The Company has been advised by legal experts that there is no change in the merits of the Company''s case.

Based on the advice, the Company filed a review petition before HP High Court which has recently been rejected, subsequent to which the Company submitted a Special Leave Petition before the Humble Supreme Court.

b) Pursuant to incentives available under a State Industrial Policy in respect of one of its cement plants, the Company has made claims in accordance with its eligibility. However, the disbursal of the amounts claimed was not forthcoming as the authorities have raised various new conditions and restrictions, totally extraneous to the approvals and confirmations expressly received by the Company. The Company had filed two writ appeals before the Jharkhand High Court against the restrictions and disputes on the extent of the eligible claims now being sought to be effected / raised by the Government.

The High Court (Single Bench) has recently decided the matter partially in favor of the Company. Pursuant to the decision of the High Court, the Company has accrued a further amount of Rs. 34.99 Crore and reversed the provision made earlier for capital subsidy of Rs. 8 Crore. The Cumulative amount accrued (including capital subsidy) for the entire period of claims, on this basis, stands at Rs. 86.85 Crore. Based on the court direction, the Company has submitted its revised claim in this regard.

The Company has also preferred an appeal before the Division Bench of the Jharkhand High Court for the balance claim which was turned down by the Humble Single Bench.

7. During the year, the Company has provided Rs. 17.86 Crore for diminution in the value of investment in Shiva Cement Limited considering the diminution in market value of these investments other than temporary nature.

8. During the previous year, effective from 1 January, 2012, the Company had with retrospective effect changed its method of providing depreciation on fixed assets related to Captive Power Plants from the ''Straight Line'' method to the ''Written Down Value'' method, at the rates prescribed in Schedule XIV to the Companies Act, 1956. Accordingly, an additional depreciation charge of Rs. 335.38 Crore relating to period upto December 31, 2011 was disclosed as an exceptional item.

9. Tax adjustments for earlier years of Rs. 216.74 Crore represents write back of tax provision related to earlier assessment years.

10. CAPITALISATION OF EXPENDITURE

Capital work-in-progress includes Pre-operative expenses pending allocation of Rs. 73.93 Crore (Previous year - Rs. 32.80 Crore).

During the year, the company has capitalized the following expenses of revenue nature to the cost of capital work-in-progress (CWIP). Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the company.

11. COMPARATIVE FIGURES

Previous year''s figures have been regrouped / reclassified wherever necessary, to conform to current year''s classification.


Dec 31, 2012

1. COMPANY OVERVIEW

ACC Limited (the Company) is a public limited company domiciled and headquartered in India and incorporated under the provision of Companies Act, 1956. Its shares are listed on two stock exchanges in India. The Company is engaged in the manufacturing and selling of Cement and Ready mix concrete. The Company caters mainly to the domestic market.

i) Terms / rights attached to equity shares

The company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

ii) The Company has issued total 1,20,938 (Previous Year - 3,04,110) Equity shares Rs. 10 each fully paid during the period of five years immediately preceding the reporting date on exercise of options granted under the employee stock option plan, for which, only exercise price has been recovered in cash.

i) 8.45% Debentures are redeemable at par at the end of five years from the date of allotment, viz 07, October 2009. These debentures are secured by a charge on all movable and immovable assets under the Debenture Trust Deed. During the year, the Company has bought back 2,180 debentures of Rs. 218 Crore, which have been extinguished during the year / subsequent to the year end.

ii) 11.30% Debentures are redeemable at par at the end of five years from the date of allotment, viz 09, December 2008. These debentures are secured by a charge on all movable and immovable assets under the Debenture Trust Deed. During the year, the Company has bought back 1,250 debentures of Rs. 125 Crore, which have been extinguished during the year.

iii) Deferred payment liability is payable to the Industrial Development Corporation of Orissa Limited (IDCOL) in eight equal annual installments of Rs. 1.62 Crore beginning from 2007 without interest or penalty.

iv) Deferred sales tax loan is interest-free and payable in 12 yearly installments of Rs. 1.41 Crore each beginning from 2003.

v) For the current maturities of long-term borrowings, refer note (ii) in Note 10 Other current liabilities.

There is no principal amount and interest overdue to Micro, Small & Medium Enterprises. During the year no interest has been paid to such parties. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

i) There are no amounts due and outstanding to be credited to Investor Education and Protection Fund as at December 31, 2012

ii) Current maturities of Long-term borrowings (Refer Notes (ii), (iii) and (iv) in Note 5)

Notes:-

(i) Buildings include cost of Shares Rs. 5,460 (Previous Year - Rs. 5,710) in various Co-operative Housing Societies, in respect of 25 residential flats (Previous Year - 27).

(ii) Buildings include Gross block ofRs. 23.86 Crore (Previous year - Rs. 23.86 Crore) and Net block ofRs. 22.05 Crore (Previous Year - Rs. 22.44 Crore) in respect of which the transfer of title deeds to the name of the Company is under process.

(iii) Plant and Equipment includes assets given on lease to Railways under "Own Your Wagons" Scheme of Rs. 28.48 Crore (Previous Year -Rs. 28.48 Crore) and accumulated depreciation Rs. 28.48 Crore (Previous Year-Rs. 28.48 Crore).

(iv) Plant and Equipment and Buildings include Gross Block ofRs. 12.68 Crore (Previous Year - Rs. 12.68 Crore), Rs. 26.23 Crore (Previous Year- Rs. 26.17 Crore), and Net BlockRs. Nil (Previous Year-Rs. Nil), Rs. 0.12 Crore (Previous Year-Rs. 0.37 Crore), respectively, in respect of expenditure incurred on capital assets, ownership of which does not vest in the Company.

2. EMPLOYEE BENEFITS

a) Defined Contribution Plans - Amount recognised and included in Note 27 "Contributions to Provident and other Funds" of Statement of Profit and Loss Rs. 10.03 Crore (Previous Year -Rs. 8.88 Crore).

b) Defined Benefit Plans - As per actuarial valuation on December 31, 2012

The Company has a defined benefit gratuity and post retirement medical benefit plans as given below:

i. Every employee who has completed minimum five years of service is entitled to gratuity at 15 days salary for each completed year of services. The scheme is funded with insurance companies in the form of a qualifying insurance policy.

ii. Benefits under Post Employment medical Benefit plans are payable for actual domiciliary treatment / hospitalization for employees and their specified relatives.

iii. Every employee who has joined before December 01, 2005 and separates from service of the Company on Superannuation and on medical grounds is entitled to additional gratuity. The scheme is Non Funded.

(Figures in italics pertain to previous year)

c) Basis used to determine expected rate of return on assets:

The expected return on plan assets is based on market expectation, at the beginning of the period, for returns over the entire life of the related obligation. The Gratuity Scheme is invested in Life Insurance Corporation (LIC) of India''s Group Gratuity-cum-Life Assurance cash accumulation policy and HDFC Standard Life''s Group Unit Linked Plan - For Defined Benefit Scheme.

d) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

e) The Company expects to contribute Rs. Nil to Gratuity fund in the year 2013.

f) Post employment defined benefit plan expenses are included under employee benefit expenses in the statement of Profit and Loss.

h) Provident Fund

Provident fund for certain eligible employees is managed by the Company through trust "The Provident Fund of ACC Ltd.", in line with the Provident Fund and Miscellaneous Provision Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities.The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of separation from the Company or retirement, whichever is earlier. The benefits vests immediately on rendering of the services by the employee.

In terms of the guidance note issued by the Institute of Actuaries of India for measurement of provident fund liabilities, the actuary has provided a valuation of provident fund liability and based on the assumption provided below there is no shortfall as at December 31, 2012 and December 31, 2011.

i) Amount recognised as an expense under employee benefit expenses in the statement of Profit and Loss in respect of other long term benefits is Rs. 24.95 Crore (Previous Year - Rs. 17.83 Crore).

3. SEGMENT REPORTING

The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risks and returns, the organisation structure and internal reporting system. The Company''s operations predominantly relate to manufacture of cement. Pursuant to the amalgamation of ACC concrete limited during the year, Ready mix concrete business is disclosed as a separate segment. The export turnover is not significant in the context of total turnover.

Inter segment transfers:

Inter Segment Transfer Pricing Policy - Cement supplied to ready mix concrete activity is based on current market prices. All other inter segment transfers are at cost.

b) Operating lease payment recognised in Statement of Profit & Loss amounting to Rs. 106.82 Crore (Previous Year - Rs. 66.67 Crore)

c) General description of the leasing arrangement:

(i) Leased Assets: Grinding facility, Dumpers, Cranes and Tippers, Car, Locomotives, Godowns, Flats, Computers, Concrete pumps and other related Office equipments and other premises.

ii) Future lease rentals are determined on the basis of agreed terms.

(iii) There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases.

(iv) At the expiry of the lease term, the Company has an option either to return the asset or extend the term by giving notice in writing.

4. AMALGAMATION OF WHOLLY OWNED SUBSIDIARY COMPANIES

A) Encore Cement and Additives Private Limited (Encore)

a) Pursuant to the scheme of amalgamation (''the Scheme'') of erstwhile Encore Cement and Additives Private Limited with the Company under Sections 391 to 394 of the Companies Act, 1956 sanctioned by Hon''ble Bombay High Court on October 05, 2012 entire business and all assets and liabilities of Encore Cement and Additives Private Limited were transferred and vested in the Company effective from January 01, 2011. Accordingly the Scheme has been given effect to in these financial statements.

The Encore was engaged in manufacture and sale of cement.

b) The amalgamation has been accounted for under the "Pooling of Interest" method as prescribed by the Accounting Standard 14 "Accounting for Amalgamations" notified under the Companies (Accounting Standards) Rules, 2006 (as amended). Accordingly, the accounting treatment has been given as under:-

(i) The assets and liabilities as at January 01, 2011 were incorporated in the financial statement of the Company at its book value.

(ii) Debit balance in the statement of Profit and Loss of Encore as at January 01, 2011 amounting to Rs. 13.42 Crore was adjusted in "Surplus in Statement of Profit and Loss".

(iii) 50,00,000 Equity Shares of Rs. 10 each fully paid in Encore Cement and Additives Private Limited, held as investment by the Company stands cancelled and difference between the book value and face value of such shares amounting to Rs. 6.78 Crore was adjusted against the statement of Profit and Loss of the Company.

(iv) The accounts of Encore for the year ended December 31, 2011 were finalised as a separate entity. The net profit after tax amounting to Rs. 1.87 Crore for the year ended December 31, 2011 has been adjusted in "Surplus in Statement of Profit and Loss".

B) ACC Concrete Limited (ACCCL)

a) Pursuant to the scheme of amalgamation (''the Scheme'') of erstwhile ACC Concrete Limited with the Company under Sections 391 to 394 of the Companies Act, 1956 sanctioned by Hon''ble Bombay High Court on October 09 2012, entire business and all assets and liabilities of ACC Concrete Limited were transferred and vested in the Company effective from January 01, 2012. Accordingly the Scheme has been given effect to in these financial statements.

The erstwhile ACC Concrete Limited was engaged in manufacture and sale of Ready mix concrete.

b) The amalgamation has been accounted for under the "Pooling of Interest" method as prescribed by the Accounting Standard 14 "Accounting for Amalgamations" notified under the Companies (Accounting Standards) Rules, 2006 (as amended). Accordingly, the accounting treatment has been given as under:-

(i) The assets and liabilities as at January 01, 2012 were incorporated in the financial statement of the Company at the book value.

(ii) Debit balance in the statement of Profit and Loss of ACC Concrete Limited amounting to Rs. 197.96 Crore was adjusted in "Surplus in Statement of Profit and Loss".

(iii) 15,00,00,000 Equity Shares of Rs. 10 each fully paid and 10,00,00,000 1% Cumulative Redeemable Preference Share of Rs. 10 each Fully paid in ACC Concrete Limited, held as investment by the Company stands cancelled.

In view of above amalgamations the figures for the year ended December 31, 2012 are not strictly comparable to the previous year.

5. During the previous year, the Company has written off expenditure incurred for mining rights aggregating Rs. 19.02 Crore due to an inordinate delay in ability to access the related mining reserves.

6. (A) CONTINGENT LIABILITIES NOT PROVIDED FOR

2012 2011 Rs. Crore Rs. Crore

a) Claims not acknowledged by the Company

Sales tax 30.14 28.47

Claim by Suppliers 36.79 36.79

Labour related 23.42 20.06

Others 20.24 15.71

110.59 101.03

In respect of above matters, future cash outflows in respect of contingent liabilities are determinable only on receipt of judgments pending at various forums / authorities.

b) Guarantee given on behalf of subsidiary company - 0.08

c) Indemnity, Guarantee/s given to Banks/ Financial Institutions, Government 216.19 177.91 Bodies and others

d) Bills discounted 13.25 -

e) The Company had filed petitions against the orders / notices of various authorities demanding Rs. 193.60 Crore (Previous Year - Rs. 169.75 Crore) towards payment of additional Royalty on Limestone based on the ratio of 1.6 tonnes of Limestone to 1 tonne of Cement produced at its factories in Madhya Pradesh and Chattisgarh and on cement produced vis a vis consumption of limestone at its factory in Tamil Nadu. The Company holds the view that the payment of royalty on limestone is correctly made based on the actual quantity of limestone extracted from the mining area.

In view of above demand being legally unjustifiable, the Company does not expect any liability in above matter.

f) The Competition Commission of India issued an Order dated June 20, 2012 imposing penalty on certain cement manufacturers, including the Company, concerning alleged contravention of the provisions of the Competition Act, 2002, and imposed a penalty of Rs. 1,147.59 Crore on the Company. The Company has filed an appeal against the Order before the Competition Appellate Tribunal, which is pending for disposal. Based on the advice of external legal counsel, the Company believes it has good grounds for a successful appeal. Accordingly, no provision is considered necessary.

(B) a) The Company had availed Sales Tax Incentives in respect of it''s new 1 MTPA Plant at Gagal (Gagal II) under the HP State Industrial Policy, 1991. The Company had, as on December 31, 2011, claimed and accrued Sales Tax Incentives aggregating to Rs. 56 Crore even though the Sales Tax Authorities had introduced certain restrictive conditions after commissioning of the unit stipulating that incentive is available only for incremental amount over the base revenue and production (of Gagal 1) prior to the commissioning of Gagal

II. The Company contends that Gagal II is a new unit, as decided by the HP High Court and confirmed by the Supreme Court while determining the eligibility for Transport Subsidy, and hence such restrictions are not applicable to the unit. The Department had recovered Rs. 64 Crore (Tax of Rs. 56 Crore plus interest of Rs. 7 Crore) and the same is accounted as an amount recoverable.

The HP High Court, in a recent order, has dismissed the Company''s appeal. The Company feels that the Hon''ble High Court had decided against the Company based on erroneous understanding of certain facts and legal positions and has also failed to consider certain key facts in it''s order. The Company has taken legal opinion / s on the matter and has been advised that there is no change in the merits of the Company''s case and the company should file a review before the High Court for consideration of all the facts appropriately and also file a Special Leave Petetion (SLP) in appeal before the Hon''ble Supreme Court.

The company has already filed the Review Petition before the HP High Court and is in the process of filing an SLP before the Supreme Court. The Company has not made any provision for the amounts in dispute following the legal opinion /s obtained.

b) Pursuant to incentives available under a State Industrial Policy in respect of one of its cement plants, the Company has made claims in accordance with its eligibility. However, the disbursal of the amounts claimed were not forthcoming as the authorities have raised various new conditions and restrictions, totally extraneous to the approvals and confirmations expressly received by the Company. The Company has filed two writ appeals before the Jharkhand High Court against the restrictions and disputes on the extent of the eligible claims now being sought to be effected / raised by the Government. The appeals are expected to come up for hearing on merits in the first quarter of 2013 and the Company expects completely favourable outcome.

During the year, the Company has accrued a further amount of Rs. 10 Crore, following the estimated basis followed in the previous year, representing the quantum of benefits after taking into consideration all the restrictions and disputes now raised by the Jharkhand Government. The Cumulative amount accrued for the entire period of claims, on this basis, stands at Rs. 43 Crore.

7. The Company through its Fraud Risk Mechanism detected certain instances of fraud, involving a representative of the Company colluding with vendors to receive undue benefits, resulting in a loss to the Company of Rs. 0.57 Crore, and incidents of misappropriation by employees of sale proceeds estimated at Rs. 0.30 Crore. The Company has taken necessary steps to further strengthen controls and the services of the concerned employees have been terminated.

8. The Company''s investment in 2,36,50,000 equity shares of Shiva Cement Limited amounting to Rs. 23.65 Crore is a strategic investment and the Company considers the decline in the market value of the investment to be of a temporary nature resulting from the subdued capital market situation.

9. PROPOSED AMALGAMATION

The Board of Directors at its Meeting held on February 03, 2011 and the Members of the Company at the Court convened Meeting held on June 01, 2011 have approved the Scheme of Amalgamation of Lucky Minmat Limited and National Limestone Company Private Limited, wholly owned subsidiaries with the Company.

As per the above Scheme, the appointed date is January 01, 2011. The Scheme of Amalgamation was filed with the Bombay High Court and is pending approval of the Court.

In view of the above, no effect of the above Scheme of Amalgamation has been recognized in the financial statements.

10. During the year, the Company has acquired 100% stake in Singhania Minerals Private Limited, for a total consideration of Rs. 5 Crore, a Company engaged in mining of Limestone.

11. COMPARATIVE FIGURES

Pursuant to the amalgamation of ACCCL and Encore (Refer note - 34), the figures of the current year are not strictly comparable to those of the previous year. Previous year''s figures have been regrouped / reclassified wherever necessary, to conform to current year''s classification.


Dec 31, 2010

1. Basis of preparation

(i) The financial statements have been prepared to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956.

(ii) The Financial statements have been prepared under the historical cost convention on an accrual basis, except where impairment is made.

(iii) The Accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

2. Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates.

3. Segment Reporting

The Company has only one business segment ‘Cement as its primary segment and hence disclosure of segment-wise information is not required under Accounting Standard 17 - ‘Segment Reporting notified pursuant to the Companies (Accounting Standards) Rules, 2006 (as amended).

The Company has only one Geographical Segment. The Company caters mainly to the needs of the domestic market. The export turnover is not significant in the context of total turnover.

4. Related Parties Disclosures

(A) Names of the Related parties where control exists: Nature of Relationship

(i) Bulk Cement Corporation (India) Limited Subsidiary Company (ii) ACC Mineral Resources Limited

(Formerly The Cement Marketing Company of (India) Limited) Subsidiary Company

(iii) Lucky Minmat Limited Subsidiary Company

(iv) ACC Concrete Limited Subsidiary Company

(v) National Limestone Company Private Limited Subsidiary Company w.e.f. April 20, 2009

(vi) Encore Cement and Additives Private Limited Subsidiary Company w.e.f. January 28, 2010

(vii) MP AMRL (Semaria) Coal Company Limited Joint Venture of ACC Mineral Resources Limited

(viii) MP AMRL (Bicharpur) Coal Company Limited Joint Venture of ACC Mineral Resources Limited

(ix) MP AMRL (Marki Barka) Coal Company Limited Joint Venture of ACC Mineral Resources Limited

(x) MP AMRL (Morga) Coal Company Limited Joint Venture of ACC Mineral Resources Limited

(B) Others:

(a) Names of other Related parties Nature of Relationship

(i) Alcon Cement Company Private Limited Associate Company

(ii) Asian Concretes and Cements Private Limited Associate Company w.e.f. April 01, 2010

(iii) Ambuja Cement India Private Limited Promoter Group Company

(iv) Ambuja Cements Limited Promoter Group Company

(v) Holderind Investments Limited Promoter Group Company

(vi) Holcim (India) Private Limited Promoter Group Company

(vii) Holcim Services (Asia) Limited Promoter Group Company

(viii) Holcim Group Support Limited Promoter Group Company

(ix) Holcim (Singapore) Pte Limited Promoter Group Company

(x) Holcim Trading FZCO Promoter Group Company

(xi) Holcim (Lanka) Limited Promoter Group Company

(xii) P T Holcim Indonesia Tbk Promoter Group Company

(xiii) Holcim Services (South Asia) Limited Promoter Group Company

(xiv) Siam City Cement Public Company Limited Promoter Group Company

(xv) Holcim (Bangladesh) Limited Promoter Group Company

(xvi) Holcim (Canada) INC Promoter Group Company

(xvii) Holcim (Vietnam) Limited Promoter Group Company

(xviii) Holcim Environment Services SA Promoter Group Company

(xix) Holcim Foundation Promoter Group Entity

(b) Key Management Personnel:

Name of the Related Party Nature of Relationship

(i) Mr. Kuldip K. Kaura (w.e.f. 05.08.10) CEO & Managing Director

(ii) Mr. Sumit Banerjee (up to 13.08.10) Managing Director

5. Acquisitions / Subscriptions

a) During the year the Company has acquired 100% stake in Encore Cement and Additives Private Limited for a total consideration of Rs. 11.78 Crore, a Company engaged in manufacturing and supply of ground slag.

b) During the year the Company has acquired 45% stake in Asian Concretes and Cements Private Limited for a total consideration of Rs. 36.81 Crore, a Company engaged in manufacturing of various grades of cement.

c) During the previous year the Company subscribed to 100,000,000 1% Cumulative Redeemable Preference Share for a total consideration of Rs. 100 Crore in its wholly owned subsidiary ACC Concrete Limited.

d) During the previous year the Company subscribed to 4,90,000 equity shares for a total consideration of Rs. 4.90 Crore in its wholly owned subsidiary ACC Mineral Resources Limited.

e) During the previous year the Company has acquired 100% stake in National Limestone Company Pvt. Limited for a total consideration of Rs. 16.24 Crore, a Company engaged in mining of limestone.

f) During the previous year the Ministry of Coal allocated a coal block in the state of West Bengal to a consortium in which the Company is a member. The Company plans to carry out mining activities through a joint venture Company. During the year the Company has been allotted 47,507 shares in Moira Madhujore Coal Ltd. for a total consideration of Rs. 0.35 Crore.

g) During the previous year ACC Mineral Resources Ltd., a wholly owned subsidiary of ACC Limited has entered into four Joint Venture agreements with Madhya Pradesh State Mining Corporation Limited for mining of Coal in the state of Madhya Pradesh and Chattisgarh.

6. Employee Benefits:

a) Defined Contribution Plans – Amount recognised and included in Schedule 16 "Contributions / Provisions to and for Provident and Other Funds" of Profit and Loss Account Rs. 7.28 Crore (Previous Year Rs. 7.94 Crore).

b) Defined Benefit Plans – As per actuarial valuation on December 31, 2010

The Company has a defined benefit gratuity and post employment medical benefit plans as given below:

i. Every employee who has completed minimum five years of service is entitled to gratuity at 15 days salary for each completed year of services. The scheme is funded with insurance companies in the form of a qualifying insurance policy. ii. Benefits under Post Employment medical Benefit plans are payable for actual domiciliary treatment / hospitalization for employees and their specified relatives.

c) The Guidance issued by the Accounting Standard Board (ASB) on implementing AS-15, Employee Benefits (revised 2005) states that provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. The Fund does not have any existing deficit or Interest shortfall. In regard to any future obligation arising due to interest shortfall (i.e. Government interest to be paid on provident fund scheme exceeds rate of interest earned on investment), pending the issuance of the Guidance Note from the Actuarial Society of India, the Companys actuary has expressed his inability to reliably measure the same.

d) Basis used to determine expected rate of return on assets:

The expected return on plan assets is based on market expectation, at the beginning of the period, for returns over the entire life of the related obligation. The Gratuity Scheme is invested in Life Insurance Corporation (LIC) of Indias Group Gratuity-cum-Life Assurance cash accumulation policy and HDFC Standard Lifes Group Unit Linked Plan - For Defined Benefit Scheme.

e) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

f) The Company expects to contribute Rs. Nil to Gratuity fund in the year 2011.

g) Post employment defined benefit plan expenses are included under personnel expenses in Profit and Loss Account.

h) During the previous year, pursuant to amendments in Post Employment Medical Benefits scheme the Company had recognised curtailment gain of Rs. 2.18 Crore.

7. A) Contingent Liabilities Not Provided For –

a) Guarantee given on behalf of subsidiary companies to the extent of Rs. 0.51 Crore (Previous Year – Rs. 0.15 Crore).

b) Indemnity, Guarantee/s given to Banks / Financial Institutions, Government Bodies and others Rs. 148.40 Crore (Previous Year – Rs. 138.85 Crore).

c) Sales Tax, Excise Duties & Other Dues Rs. 59.41 Crore (Previous Year – Rs. 46.96 Crore).

In respect of item (c) future cash outflows in respect of contingent liabilities are determinable only on receipt of judgments pending at various forums / authorities.

d) The Company had filed petitions against the orders / notices of various authorities demanding Rs. 155.21 Crore (Previous Year – Rs. 132.96 Crore) towards payment of additional Royalty on Limestone based on the ratio of 1.6 tonnes of Limestone to 1 tonne of Cement produced at its factories in Madhya Pradesh and Chattisgarh and on cement produced vis a vis consumption of limestone at its factory in Tamil Nadu. The Company holds the view that the payment of royalty on limestone is correctly made based on the actual quantity of limestone extracted from the mining area.

The Company has also received a demand resulting in a liability of Rs. 45.37 Crore (Previous Year– Rs. 40.18 Crore) towards payment of additional Royalty on Limestone based on the ratio of 1.4 tonnes of Limestone to 1 tonne of Clinker for one of its plant in the state of Karnataka. The Company has conducted studies to establish the quantity of Limestone consumed in the manufacture of Clinker at this plant and royalty payments towards Limestone are in accordance with such consumption ratios.

In view of these demands being legally unjustifiable, the Company does not expect any liability in these matters.

B) a) The Company was entitled to receive Transport Subsidy against actual expenditure on freight incurred for a period of five years in respect of its new 1 million MTPA plant at Gagal (Gagal II), which went into commercial production on September 15, 1994. Accordingly, the Company accrued the subsidy claim (including subsidy on clinker) aggregating Rs. 80.65 Crore (Previous Year – Rs. 80.65 Crore) up to September 1999.

In this respect, the Company had received part disbursement and the balance of Rs. 46.35 Crore was withheld on the ground that Gagal II is not a new unit but is an expansion of an existing unit, and thereby not eligible for subsidy under Transport Subsidy Scheme, 1971. Further, the Company had received a demand notice from the Government of Himachal Pradesh asking for refund of the subsidy already remitted.

During the year, the Supreme Court confirmed the eligibility of Gagal II to receive transport subsidy as claimed, by rejecting the appeal of the Union of India against the orders of the High Court of Himachal Pradesh (single bench in Aug 2003 and Division Bench in April 2008) which had confirmed that Gagal II was a new unit and consequently eligible for Transport Subsidy.

The Government has since accepted the verdict and has disbursed Rs. 45.19 Crore (leaving out an amount of Rs. 1.15 Crore relating to transport subsidy on Clinker, which the Company intends to pursue).

b) The Company had availed Sales-tax incentives in respect of Gagal II under the HP State Industrial Policy, 1991. The Company accrued Sales-tax incentives aggregating Rs. 56 Crore (Previous Year – Rs. 56 Crore). However, the Sales tax authorities had introduced certain restrictive conditions after the commissioning of the unit, stipulating that the incentive is admissible only for the incremental amount over the base revenue and production. Company contends that Gagal II being a new unit, such restrictive conditions cannot be imposed on it as per the Industrial Policy. The Company is in appeal before the Himachal Pradesh High Court against the decision of the HP Tax Tribunal on this matter. Consequent to the decision during the year of the Supreme Court in the Transport Subsidy case and acceptance by the Central Government in that case that Gagal II is a new unit, management believes there is a material shift in the merits in favour of the Company in the Sales-Tax incentives case. Therefore, during the year, the Company has written back Rs. 56 Crore which was provided as a measure of abundant caution in earlier years. The Company had also provided an amount of Rs. 7 Crore towards interest, which is also written back during the year.

c) Pursuant to incentives available under a State Industrial Policy in respect of one of its cement plants, the Company had preferred claims and till Dec 2008 accrued Rs. 15 Crore on account of Capital Investment Subsidy and Rs. 29.44 Crore as Sales Tax / VAT subsidy receivable from the State Government. However, since the payments / reimbursements were not forthcoming, management considered it prudent to create a provision against the amounts receivable, and in an earlier year, provided for an amount of Rs. 29.44 Crore by charge to Profit and Loss Account and adjusted the Capital Reserve Account to the extent of the Capital Investment Subsidy. No further accruals of the subsidy have been made for the subsequent period though the Company continues to lodge its claims with the authorities. During the year, the Companys writ before the Jharkhand High Court for recovery of the eligible amounts from the Government Authorities has been admitted.

8. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 259.05 Crore (Previous Year – Rs. 660.45 Crore).

9. There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006, to whom the Company owes dues.

This information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

10. Sales include Sales Tax incentive of Rs. 7.67 Crore (Previous Year - Rs. 60.51 Crore)

11. Deferred Payment Liability included in "Unsecured Loans – Schedule 4" comprises of Rs. 8.12 Crore (Previous Year - Rs. 9.74 Crore) payable to the Industrial Development Corporation of Orissa Limited (IDCOL) in eight equal annual instalments without interest or penalty. The fourth instalment was due for payment on December 22, 2010.

12. a) During the year, the Company changed its basis of identifying obsolescence of spare parts. Obsolescence of spare parts is now determined with respect to the actual usage pattern. Accordingly, an amount of Rs. 71.16 Crore is recognized under repairs to machinery in schedule 16 as a write down for the year (including Rs. 47.36 Crore pertaining to the period until December 31, 2009). Had this change in basis not been made, the profit before tax for the year and the closing inventory of stores and spare parts as at the year end, would have been higher by Rs. 71.16 Crore.

b) The Board of Directors have recommended payment of final dividend of Rs. 20.50 per share which is inclusive of an one-time special Platinum Jubilee dividend of Rs. 7.50 per share. Total dividend together with the interim dividend paid earlier aggregates to Rs. 30.50 per equity share.

13 Previous years figures have been regrouped/restated wherever necessary to make them comparable with current years figures.


Dec 31, 2009

1. Segment Reporting

The Company has only one business segment ‘Cement’ as its primary segment and hence disclosure of segment-wise information is not applicable under Accounting Standard 17 - ‘Segmental Information’ notified pursuant to the Companies (Accounting Standards) Rules, 2006 (as amended).

The Company caters mainly to the needs of the domestic market. The export turnover is not significant in the context of total turnover. As such there are no reportable Geographical Segments.

2. Related Party Disclosure

(A) Particulars of Subsidiaries / Associate / Promoter Group Companies

Name of the Related Party Nature of Relationship

(i) Bulk Cement Corporation (India) Limited Subsidiary Company (ii) ACC Mineral Resources Limited (Formerly The Cement Marketing Company of India Limited) Subsidiary Company

(iii) Lucky Minmat Limited Subsidiary Company

(iv) ACC Concrete Limited Subsidiary Company

(v) National Limestone Company Private Limited Subsidiary Company w.e.f. April 20, 2009

(vi) ACC Machinery Company Limited Subsidiary Company up to March 10, 2008

(vii) Alcon Cement Company Private Limited Associate Company from April 01, 2008

(viii) Ambuja Cement India Private Limited Promoter Group Company

(ix) Ambuja Cements Limited Promoter Group Company

(x) Holderind Investments Limited Promoter Group Company

(xi) Holcim (India) Private Limited Promoter Group Company

(xii) Holcim Services (Asia) Limited Promoter Group Company

(xiii) Holcim Group Support Limited Promoter Group Company

(xiv) Holcim Singapore Limited Promoter Group Company

(xv) Holcim Trading FZCO Promoter Group Company

(xvi) Holcim (Lanka) Ltd. Promoter Group Company

(xvii) P T Holcim Indonesia Tbk Promoter Group Company

(xviii) Holcim Services (South Asia) Limited Promoter Group Company

(xix) Holcim Foundation Promoter Group Entity

(xx) Holcim Ltd. Promoter Group Company

(xxi) Siam City Concrete Co. Limited Promoter Group Company

(xxii) Siam City Cement Public Company Limited Promoter Group Company

(xxiii) National Cement Factory Promoter Group Company

(xxiv) Holcim Bangladesh Limited Promoter Group Company

(B) Key Management Personnel

Name of the Related Party Nature of Relationship

Mr. Sumit Banerjee Managing Director

3. a) During the previous year, the Company subscribed to 9,99,50,000 equity shares for a total consideration of Rs. 99.95 Crore in its wholly owned subsidiary ACC Concrete Limited.

b) During the year, the Company subscribed to 100,000,000 1% Cumulative Redeemable Preference Share for a total consideration of Rs. 100 Crore (Previous year Rs. Nil) in its wholly owned subsidiary ACC Concrete Limited.

c) During the year, the Company subscribed to 4,90,000 equity shares for a total consideration of Rs. 4.90 Crore (Previous year Rs. Nil) in its wholly owned subsidiary ACC Mineral Resources Limited (Formerly Known as The Cement Marketing Co. of India Ltd.).

d) During the year, the Company has acquired 100% stake in National Limestone Company Pvt. Limited, a Company engaged in mining of limestone.

4. a) During the year, the Ministry of Coal allocated a coal block in the state of West Bengal to a consortium in which the Company is a member. The Company plans to carry out mining activities through a joint venture Company.

b) During the year, ACC Mineral Resources Ltd, a wholly owned subsidiary of ACC Limited has entered into four Joint Venture agreements with Madhya Pradesh State Mining Corporation Limited for mining of Coal in the state of Madhya Pradesh and Chattisgarh.

5. Employee Benefits

a) Defined Contribution Plans – Amount recognised and included in Schedule 15 “Contributions / Provision to and for Provident and Other Funds” of Profit and Loss Account Rs. 7.94 Crore (Previous Year Rs. 11.36 Crore).

c) The Guidance issued by the Accounting Standard Board (ASB) on implementing AS-15, Employee Benefits (revised 2005) states that provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. The Fund does not have any existing deficit or Interest shortfall. In regard to any future obligation arising due to interest shortfall (i.e. government interest to be paid on provident fund scheme exceeds rate of interest earned on investment), pending the issuance of the Guidance Note from the Actuarial Society of India, the Company’s actuary has expressed his inability to reliably measure the same.

d) Basis used to determine expected rate of return on assets:

The expected return on plan assets is based on market expectation, at the beginning of the period, for returns over the entire life of the related obligation. The Gratuity Scheme is invested in Life Insurance Corporation (LIC) of India’s Group Gratuity–cum-Life Assurance cash accumulation policy and HDFC Standard Life’s Group Unit Linked Plan - For Defined Benefit Scheme.

e) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

f) During the year, Pursuant to amendments in Post Employment Medical Benefits Scheme the Company has recognised curtailment gain of Rs. 2.18 Crore (previous Year - Rs. 11.06 Crore).

g) Contribution to Provident and Other funds is net of credit in gratuity funded scheme amounting to Rs. 12.64 Crore (Previous Year charge of Rs. 16.91 Crore) on account of change in discounting rate in valuation of present value of employee benefit liabilities.

6. Operating Lease

a) Lease payment recognised in the Profit and Loss Account Rs. 23.20 Crore (Previous Year – Rs. 23.12 Crore)

b) General description of the leasing arrangement

(i) Leased Assets: Grinding facility, Dumpers, Cranes and Tippers, Car, Locomotives, Computers and other related equipments.

(ii) Future lease rentals are determined on the basis of agreed terms.

(iii) At the expiry of the lease term, the Company has an option either to return the asset or extend the term by giving notice in writing.

7. a) Provision for current tax represents estimated tax charge based on the aggregate profits of the Company for the quarter ended March 31, 2009, and nine months ended December 31, 2009. Ultimately, the tax liability of the Company would be determined on the basis of its results for the fiscal year ending March 31, 2010.

b) The Company has been recognising in the financial statements the deferred tax assets / liabilities, in accordance with Accounting Standard 22 “Accounting for Taxes on Income” issued by the Institute of Chartered Accountants of India. During the year, the Company has charged the Profit and Loss Account with Deferred Tax Liability of Rs. 13.46 Crore (Previous Year - Rs. 4.34 Crore).

8. A) Contingent Liabilities Not Provided For

a) Guarantee given on behalf of subsidiary companies to the extent of Rs. 0.15 Crore (Previous Year – Rs. 0.07 Crore).

b) Indemnity, Guarantee/s given to Banks / Financial Institutions, Government Bodies and others Rs. 139 Crore (Previous Year – Rs. 142 Crore).

c) Sales Tax, Excise Duties & Other Dues Rs. 46.96 Crore (Previous Year – Rs. 58.07 Crore).

In respect of item (c) future cash outflows in respect of contingent liabilities are determinable only on receipt of judgments pending at various forums / authorities.

d) The Company had filed petitions against the orders / notices of various authorities demanding Rs. 132.96 Crore (Previous Year – Rs. 113.80 Crore) towards payment of additional Royalty on Limestone based on the ratio of 1.6 tonnes of Limestone to 1 tonne of Cement produced at its factories in Madhya Pradesh and Chattisgarh and on cement produced vis a vis consumption of limestone at its factory in Tamil Nadu. In a similar matter, the Company has received a demand notice amounting to Rs. 40.18 Crore (Previous Year– Rs. Nil) for one of its plant in the state of Karnataka.

The Company holds the view that the payment of royalty on limestone is based on the actual quantity of limestone extracted from the mining area. The independent report obtained from the National Council of Building Materials supports the Company’s view. In view of the demand, being legally unsustainable, the Company does not expect any liability in the matter.

B) a) The Company was entitled to receive transport subsidy against actual expenditure on freight incurred in respect of its new 1 MTPA plant at Gagal, which went into commercial production w.e.f. September 15, 1994 for a period of five years. Accordingly, the Company accrued the subsidy claim (including subsidy on clinker) aggregating Rs. 80.65 Crore (Previous Year – Rs. 80.65 Crore) for a year up to September 1999. As against this, the Company had received part disbursement and balance of Rs. 46.35 Crore (Previous Year – Rs. 46.35 Crore) is shown as receivable under “Sundry Debtors – Schedule 8”. The Company had received a demand notice from the Government of Himachal Pradesh asking for refund of Rs. 31.19 Crore during the earlier year stating that 1 MTPA plant at Gagal is not a new unit but a case of expansion of an existing unit, thereby, not eligible for subsidy under Transport Subsidy Scheme, 1971.

The High Court of Shimla had declared Gagal II as eligible for Transport Subsidy in its judgement dated August 19, 2003 and the division bench of Himachal Pradesh High Court has also confirmed the same in its judgement dated April 10, 2008. However, the Government has filed an appeal in the Supreme Court.

b) The Company had availed Sales tax incentive with respect to its investment in Gagal II under the State Industrial Policy, 1991. The Company accrued Sales tax incentives aggregating to Rs. 56 Crore (Previous year – Rs. 56 Crore). However, the Sales tax authorities of the State, interalia, have stipulated that the incentive is admissible only for the incremental amount over the base revenue. The Company is still pursuing the claim with the Government. The Company is hopeful of recovery of the amount paid under protest. The Company is also pursuing with its appeal filed before Appellate Authorities. However, as a measure of abundant caution, a sum of Rs. 56 Crore (Previous Year - Rs. 56 Crore) has been provided by the Company in earlier years.

c) Pursuant to incentives available under a State Government Policy in respect of one of its cement plants, the Company had in the past accrued Rs. 15 Crore of capital subsidy and Rs. 29.44 Crore as Sales Tax which is receivable from the concerned Government Authorities. However, despite Company’s efforts, it has not realised any amounts to date. Considering these facts, management considers it prudent to record a provision for the amount of Rs. 29.44 Crore by charge to the Profit and Loss Account and the Capital Reserve Account is adjusted to the extent of the capital subsidy.

9. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 660.45 Crore (Previous Year – Rs. 1,554.69 Crore).

10. Previous year other expenses of Schedule 15 include Donations paid of Rs. 1.00 Crore to Bhartiya Janata Party and Rs. 1.00 Crore to All India Congress Committee.

11. There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006, to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made.

The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

12. Sales include Sales Tax incentive of Rs. 60.51 Crore (Previous Year - Rs. 156.90 Crore)

12. Deferred Payment Liability included in “Unsecured Loans – Schedule 4” comprises of Rs. 9.74 Crore (Previous Year – Rs. 11.36 Crore) payable to the Industrial Development Corporation of Orissa Limited (IDCOL) on account of their dues payable by the erstwhile Bargarh Cement Ltd in eight equal annual installments without interest or penalty. The third installment was due for payment on December 22, 2009. Pending conclusion of negotiation with IDCOL the installment is yet to be paid.

13 Previous year’s figures have been regrouped / restated wherever necessary to make them comparable with current year’s figures.

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