AND MANAGEMENT DISCUSSION AND ANALYSIS
TO THE MEMBERS OF
The Directors take pleasure in presenting the Seventy Ninth Annual Report together withthe audited financial statements for the year ended December 31 2014. The ManagementDiscussion and Analysis has also been incorporated into this report.
1. HIGHLIGHTS OF PERFORMANCE
Consolidated income for the year increased by 5% to Rs. 11995.42 Crore ascompared to Rs. 11431.10 Crore in 2013;
Consolidated net sales for the year was Rs. 11480.31 Crore as compared to Rs.10889.08 Crore in 2013 a growth of 5.4%;
Consolidated profit before tax for the year was Rs. 1119.54 Crore as comparedto Rs. 1213.64 Crore in 2013;
Consolidated Profit after tax for the year was Rs. 1161.82 Crore (including taxwrite back of Rs. 309.23 Crore) as compared to Rs. 1094.67 Crore in 2013 (including taxwrite back of Rs. 216.74 Crore).
2. FINANCIAL RESULTS
| ||Consolidated ||Standalone |
| ||Rs. Crore ||Rs. Crore |
| ||2014 ||2013 ||2014 ||2013 |
|Revenue from Operations(Net) and other income ||11995.42 ||11431.10 ||12006.49 ||11435.28 |
|Profit Before Tax (PBT) ||1119.54 ||1213.64 ||1135.20 ||1226.96 |
|Provision for Tax ||(31.13) ||131.91 ||(33.09) ||131.20 |
|Profit After Tax (PAT) ||1161.82 ||1094.67 ||1168.29 ||1095.76 |
|Balance brought forward from previous year ||4158.74 ||3845.79 ||4175.87 ||3861.83 |
|Profit available for Appropriations ||5320.56 ||4940.46 ||5344.16 ||4957.59 |
|Appropriations: || || || || |
|Interim Equity Dividend ||281.62 ||206.52 ||281.62 ||206.52 |
|Proposed Final Equity Dividend ||356.72 ||356.72 ||356.72 ||356.72 |
|Tax on Equity Dividends ||119.18 ||95.72 ||119.18 ||95.72 |
|Previous Year Tax on Equity Dividends ||- ||2.76 ||- ||2.76 |
|General Reserve ||130.00 ||120.00 ||130.00 ||120.00 |
|Surplus carried to the next years account ||4433.04 ||4158.74 ||4456.64 ||4175.87 |
The Company proposes to transfer an amount of Rs. 130 Crore to the General Reserves. Anamount of Rs. 4456.64 Crore is proposed to be retained in the Statement of Profit andLoss.
Your Directors are pleased to recommend a final dividend of Rs. 19/- per equity shareof Rs. 10 each. The Company had distributed an interim dividend of Rs. 15/- per equityshare of Rs. 10 each in August 2014. The total dividend for the year ended December 312014 would accordingly be Rs. 34/- per equity share of Rs. 10 each. The total outgo forthe current year amounts to Rs. 757.52 Crore including dividend distribution tax of Rs.119.18 Crore as against Rs. 658.96 Crore including dividend distribution tax of Rs. 95.72Crore in the previous year.
During the year the unclaimed dividend pertaining to the 69th dividend forthe year ended December 31 2006 and the 70th Interim dividend for the yearended December 31 2007 were transferred to the Investor Education & Protection Fundafter giving due notice to the Members.
4. SHARE CAPITAL
The paid up Equity Share Capital as on December 31 2014 was Rs. 187.95 Crore. Duringthe year under review the Company has not issued shares with differential voting rightsnor granted stock options nor sweat equity. As on December 31 2014 none of the Directorsof the Company hold shares or convertible instruments of the Company.
Cash and cash equivalent as at December 31 2014 was Rs. 1686 Crore. The Companycontinues to focus on judicious management of its working capital. Receivablesinventories and other working capital parameters were kept under strict check throughcontinuous monitoring.
5.1 NON CONVERTIBLE DEBENTURES
During the year the Non-Convertible Debentures aggregating Rs. 32 Crore were redeemed(Rs. 125 Crore were bought back / redeemed in 2013). Accordingly all the debentures standextinguished.
The Company had discontinued its fixed deposit scheme in the financial year 2001-02.Despite efforts to identify and repay unclaimed deposits the total amount of fixeddeposits matured and remaining unclaimed with the Company as on December 31 2014 was Rs.0.02 Crore. The Company has not accepted deposit from the public falling within the ambitof Section 73 of the Companies Act 2013 and The Companies (Acceptance of Deposits) Rules2014.
5.3 PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
6. ECONOMIC SCENARIO AND OUTLOOK
Indian economic growth in 2014 rose to ~5.2% from 4.7% last year as a result of theimproving macro-economic situation. The wholesale and consumer price inflation has fallento ~4.2% and 7.4% from last years 6.3% and 10.1% on the back of a strong baseeffect. Falling oil prices lower food and commodity prices and the proactive measurestaken by the Government helped in containing inflation in 2014.
Contrary to expectations agricultural growth was strong at ~4.5% in 2014. However theslow pace of reforms lack of impetus for infrastructure projects high interest rates andtightening of fiscal policies adversely impacted the capital goods sector. Industrialproduction / output was also sluggish.
The low economic growth appears to have bottomed out and a gradual increase in economicactivity is expected in 2015. The medium term to long term growth prospects look positivein view of the Governments determination to bring in reforms. For the year 2015 theeconomy is expected to grow at a higher rate than in 2014. The long term prospects for theeconomy is optimistic.
7. CEMENT INDUSTRY OUTLOOK AND OPPORTUNITIES
The Indian Cement Industry has an installed capacity of ~360 million tonnes and thedomestic consumption in the calendar year 2014 was ~264 million tonnes. Cement consumptiongrew at the rate of ~6% in the calendar year 2014.
The overall cement demand is estimated to grow at the rate of 6% in 2015. Theconsumption growth may go beyond 6% if investment is made in the infrastructure segment.With the gradual reduction in fiscal deficits and Consumer Price Index it is expectedthat the interest rates would gradually come down which would stimulate demand in thehousing sector. The Companys continued focus on cost reduction its thrust onincreasing the sale of premium products and various other customer excellence initiativesshould help in presenting an improved performance.
8. CEMENT BUSINESS PERFORMANCE AT A GLANCE
| ||2014 ||2013 ||Change % |
|Production - million tonnes ||24.24 ||23.86 ||1.59 |
|Sales Volume - million tonnes ||24.21 ||23.93 ||1.17 |
|Sale Value (Rs. Crore) ||10720.28 ||10233.17 ||4.76 |
|Operating EBITDA (Rs. Crore) ||1473.13 ||1609.19 ||-8.45 |
|Operating EBITDA Margin (%) ||13.74 ||15.73 || |
9. MARKET DEVELOPMENT
Domestic sales in 2014 increased by 1.5% to 24.14 million tonnes as compared to 23.80million tonnes achieved in 2013. Cement exports in 2014 reduced to 0.07 million tonnes ascompared to 0.13 million tonnes in 2013. Total cement sales (including exports) increasedby 1.2% to 24.21 million tonnes as compared to 23.93 million tonnes achieved in 2013. TheCompany continues to focus on the Individual House Builder segment for higherprofitability.
The sale volumes of premium products in 2014 was 2.73 MT as against 1.55 MT in 2013.
9.2 Selling Price
Selling price of cement improved by 4% in 2014 over 2013.
10. COSTS CEMENT BUSINESS
During the year 2014 the economy witnessed an upward movement in the overall coststructure and the Company continued to focus on cost improvements through its excellenceprogrammes.
10.1 Cost of materials consumed
Cost of materials consumed accounted for 15%oftotalincomefromoperations(14.4%in 2013).Cost of material consumed increased by 11% in 2014 over 2013. Slag prices were lower by17% in 2014 as compared to 2013 while gypsum prices remained almost flat. Fly ash pricesincreased by 11% in 2014 over 2013. The cost of material consumed during the yearincreased on account of purchase of clinker as a result of temporary suspension oflimestone mining operation at Chaibasa and Bargarh.
10.2 Power & Fuel
The power and fuel spend was Rs. 2441.82 Crore which constitutes 21% of the totalincome from operations of the Company (Rs. 2375.97 Crore in 2013 i.e. 21% of the totalincome from operations of the Company). The various initiatives taken such as the usage ofindustrial waste and biomass as alternate fuels and optimization of fuel mix has limitedthe power and fuel costs increases to 2.8% in 2014 over 2013. Coal cost for kilnsincreased by 3.6% in 2014 over 2013 mainly on account of a drop in supply of linkage coaldue to shortage of rakes and resultant higher procurement of imported and e-auction coal.Use of imported coal increased to 24% in 2014 (21% in 2013) while linkage coalavailability reduced to 57% in 2014 (67% in 2013). Coal cost for captive power plantsincreased by 10% mainly because of limited availability of CPP grade linkage coal andresultant higher procurement of market / imported coal. Improved operating efficiencies ofkiln and captive power plants and benefits derived from Waste Heat Recovery System (WHRS)operations had a positive impact in limiting cost increases.
The Company continues to focus on maximizing Alternative Fuels & Raw Materials(AFR) consumption in the cement manufacturing process.
10.3 Freight & Forwarding expenses
Freight and forwarding expenses were Rs. 2598.33 Crore which constitutes 22% of totalincome from operations of the Company (Rs. 2308.87 Crore in 2013 i.e. ~21% of totalincome from operations). Freight and forwarding expenses went up by 12.5% in 2014 over2013.
Freight on clinker transfer increased mainly on account of railway freight increasefreight rationalization by Railways and long lead inter unit movements of clinker.
Freight on cement despatches increased on account of higher cement sale volumes as alsoon account of hike in rail and road freight. This increase was partially offset byimprovement in logistics operational efficiencies.
10.4 Other Expenditure
Other expenditure constitutes ~21% of total income from operations of the Company. Theincrease in other expenditure was restricted to 3.5% in 2014 over 2013.
Continued focus on reduction in fixed cost helped in restricting the fixed costincreases to ~3% in 2014 on a YoY basis.
11. INSTITUTIONALIZING EXCELLENCE
In 2012 an Institutionalizing Excellence programme was launched across all functionsto sustain exceptional performance over time. The programme is now central to theCompanys growth initiatives and the whole organization is galvanized to accomplishtargets. Over a period of two years the programme has yielded encouraging results and hashelped the Company balance inflationary pressures by improving efficiencies. TheInstitutionalizing Excellence journey continues with a strong focus on Safety.
In Manufacturing Excellence two Plants Chanda and Jamul figured in the top fifteenamongst all Holcim Plants globally in terms of efficiency. Efforts are underway towardsraising the Companys overall efficiency parameters closer to aspirational targetsand to pursue further reductions in input costs of coal power generation and in mineralcomponents like gypsum slag and fly ash. A manufacturing academy was setup that drivescontinuous improvement in each Plant by regular training and skill enhancement.
The Customer Excellence programme focuses on the customer and seeks to achieve volumeand price improvement and steps for the enhancement of brand equity.
The Logistics Excellence journey saw visible and significant initiatives to optimizecost-to-serve and time-to-serve reduce lead distances eliminate multiple handling andinitiate the creation of modern infrastructure at the plants and warehouses. The RadioFrequency Identification Device (RFID) and Global Positioning Systems (GPS) modules whichwere successfully deployed at three plants are being replicated at all plants of theCompany in a phased manner.
The ongoing Jamul Project in Chhattisgarh which comprises a new state-of-the-artclinkering line of a capacity of 2.79 million tonnes per annum and grinding facilities ofa capacity of 1.10 million tonnes at Jamul and of 1.35 million tonnes at Sindri areexpected to be commissioned during 2015.
The pre-processing and co-processing Alternative Fuel and Raw Materials (AFR) platformsat Wadi in Karnataka and Kymore in Madhya Pradesh have been commissioned in December 2014.
13. COAL BLOCKS
During the year 2009 the Company through its wholly owned subsidiary ACC MineralResources Limited (AMRL) had entered into four separate Joint Venture Agreements (JVA)with Madhya Pradesh State Mining Corporation Limited (MPSMC) for the development andoperation of four coal blocks with an equity participation of 49% by AMRL and 51% byMPSMC. The coal from these four coal blocks was earmarked for supplies to cement plants ofthe Company.
Out of the four coal blocks being developed the Bicharpur Coal Block in districtShahdol was in an advanced stage of development. The second coal block Marki Barka indistrict Singrauli was also ready for commencement of mine development activities with allits regulatory clearances in place.
While the development of coal blocks was in progress on September 24 2014 theHonble Supreme Court of India cancelled the allocation of Coal Blocks by theGovernment of India to State and private sectors. Consequently allocation of Marki BarkaSemaria/Piparia and Morga IV coal blocks to MPSMC stood cancelled with immediate effect.However by virtue of an advanced stage of development the Bicharpur coal block is liablefor cancellation with effect from March 31 2015.
As of December 31 2014 the amount incurred invested and advanced (including deposits/ advances to MPSMC and other parties) by the Company in this regard is ~Rs. 153.79 Crore.Subsequently the Government promulgated The Coal Mines (Special Provisions) Ordinance2014 which intends to take appropriate action to deal with the situation arising pursuantto the Honble Supreme Courts decision. The Management based on itsunderstanding of its contractual rights under its JV agreements its interpretationof the Ordinance and on the basis of legal advice believes that the financial loss oroperational impact if any will not be significant.
In addition to the above "Moira Madhujore North and South" Coal block in theState of West Bengal was allocated to six companies by Ministry of Coal in December 2009wherein your Company holds equity of 14.37%. The allocation of the said coal block hasalso been cancelled by the aforementioned Order of Supreme Court. The Company has impairedits investment amounting to Rs. 0.69 Crore made in this Joint Venture Company.
14. LIMESTONE MINING NEW REGULATORY CHANGES:
As a sequel to the Supreme Courts Order dated May 16 2014 in two separate PublicInterest Litigations policy changes were made by the Government with regard to renewal ofmines and deemed mining rights.
As per the Supreme Courts directive such of the mines which were hithertooperating under "deemed renewal" without any express orders of renewal passed bythe State Governments were not allowed to operate until express orders were passed by therespective State Governments in terms of Section 8(3) of the Mine and Mineral (Developmentand Regulation) Act 1957. Pursuant thereto the Government of India amended Sub Rule24A(6) of the Mineral Concession Rules which had the effect of disallowing deemed renewalstatus for second and subsequent mining leases and limiting the deemed renewal status evenin case of the first renewal application to only two years. This development hastemporarily impacted the mining operations at Bargarh and Chaibasa which in turn affectedthe clinker production at the said Plants and clinker was required to be procured fromother sister plants as well as from outside. The Government has since passed the Mines andMinerals (Development and Regulation) Ordinance on January 12 2015 in terms of which themining leases would stand extended from the date of their last renewal upto March 31 2030in cases where the mines were being operated for captive consumption such as in the caseof the Company.
15. READY MIXED CONCRETE (RMX)
Ready Mixed Concrete business continues to perform well despite the fact that in 2014the Industry witnessed the entry of more players and increased liquidity issues. The RMXmarket is greatly fragmented and with increased participation by the unorganized segmentsthere is pressure on pricing. Against this backdrop the Operating EBITDA increased to Rs.34.12 Crore in 2014 from Rs. 19.61 Crore in 2013. Sales volume improved by 18%.
The growth in business is attributed to the efforts made to enhance customersatisfaction. ACC Concrete is being perceived as a solutions provider rather than merelyas a concrete supplier. This was made possible by continuous customer involvement inprojects and by offering various products and providing value added services for itsstakeholders. A new line of allied products which could be supplied in the form of readyto use mortar were developed produced and marketed. The Centre of Excellence set up bythe Company facilitates and supports capability demonstration initiatives helps inengaging with customers and trains professionals in advanced construction techniques.
There is considerable focus by the Government on infrastructure development and in theyear 2015 the construction sector is expected to grow at a higher rate than in 2014.Demand for RMX is expected to revive in almost all markets across the country and islikely to be stronger in metro markets like Mumbai Bengaluru Chennai and Delhi. Majordemand is expected to come from large investments in infrastructure and development ofreal estate across India in proposed future cities. Reduction in lending rates by banksand restructuring of loans should ease the liquidity position and help boost sales andprofitability. Ready Mix Concrete is expected to maintain the momentum and contribute tothe overall business with enhanced participation.
| ||2014 ||2013 ||Change % |
|Production - Lakh Cubic Meters ||19.65 ||15.96 ||23.12 |
|Sales volume - Lakh Cubic Meters ||21.24 ||18.00 ||18.00 |
|Sale value - (Rs. Crore) ||760.77 ||655.91 ||15.99 |
|Operating EBITDA - (Rs. Crore) ||34.12 ||19.61 ||73.99 |
|Operating EBITDA Margin (%) ||4.48 ||2.99 || |
16. SUSTAINABLE DEVELOPMENT
Sustainability has been deeply embedded into the Companys business and has becomean integral part of its decision making process while considering social economic andenvironmental dimensions. During the year 2014 a Sustainability Development road map forthe period 2014-2017 was developed with a focus on the following areas:
(a) Reduction of Specific CO2 emissions;
(b) Enhancing Thermal Substitution Rate (TSR);
(c) Reducing specific water consumption;
(d) Reduction of specific total energy intensity (Thermal & Electrical);
(e) Improving CSR footprint focusing on inclusive business projects.
The Companys cement operations retained its certifications under variousmanagement systems for quality environment energy and safety.
16.1 CO2 Emissions:
The Company continued in its efforts towards achieving the commitments of Low CarbonTechnology Roadmap for the Indian Cement Industry under the umbrella of the CementSustainability Initiative (CSI) in India of the World Business Council for SustainableDevelopment (WBCSD). The various initiatives taken resulted in reducing the specific CO2emissions per tonne of cement to 526 Kg CO2/tonne of cement from 538 Kg CO2/tonne ofcement.
The CO2 emission per tonne of cement including emissions from on site power generationhas been reduced to 617 Kg CO2/ tonne of cement from 641 Kg CO2/tonne of cement.
16.2 Alternative Fuels and Raw Materials (AFR):
The Company provides co-processing and waste management services to over a hundredcustomers which facilitates disposal of a wide range of hazardous and non-hazardousindustrial waste streams in the form of solids sludges and liquids.
The pre-processing and co-processing platforms which were commissioned during the yearat Kymore and at Wadi will add momentum to co-processing of larger volumes of wastes in anefficient manner. The AFR feeding and storage systems have also been ramped up in theseplants to the required levels.
16.3 Reduction of Thermal Energy
Many initiatives for process optimization were taken to reduce specific thermal energyin the manufacturing of clinker. These efforts resulted in reduction of 16 MJ of specificthermal energy / tonne of clinker to 3050 MJ in 2014 as compared to 3066 MJ in 2013. Othermeasures such as enhancing the usage of industrial waste and biomass as alternative fuelsand optimization of fuel mix has helped to contain the energy costs to some extent.
16.4 Clinker Factor
Through research and product innovation the Company has been able to reduce clinkerfactor in both varieties of blended cements viz. Portland Slag Cement and PortlandPozzolana Cement. The use of slag and fly ash in cement manufacture helps the steelindustry and power plants to dispose of their waste in an environmentally friendly manner.
The Companys blended cement production activities at Wadi Kymore Chanda andTikaria are registered with United Nations Framework Convention on Climate Change (UNFCCC)as a Clean Development Mechanism (CDM) Project. The blended cement project is one of thebiggest CDM of its kind in the Indian Cement Industry.
16.5 Renewable Energy:
The Companys renewable energy portfolio consists of 19 MW in the form of windfarms across three states viz. 9 MW in Tamil Nadu 7.5 MW in Rajasthan and 2.5 MW inMaharashtra. These helped the Company meet its non-solar renewable purchase obligationsfor Madukkarai and Lakheri Plants.
Various options are being evaluated to enhance the renewable energy portfolio such assetting up new assets of renewable energy and by use of renewable energy through the PowerPurchase Agreement route.
16.6 Waste Heat Power generation from process waste heat
During the year 2014 the Waste Heat Recovery System (WHRS) at Gagal Cement Worksbecame fully operational and produced 46.64 million kWh of electrical energy.
16.7 Dust Emissions
The Companys average kiln stack dust emissions were well below the statutorynorms fixed by the States in which the Company operates. This has been achieved throughvarious controls and maintenance measures which were implemented on a continuous basis.The Company has also implemented various measures across all its operations to controlfugitive emissions.
16.8 Water Initiatives:
Multiple initiatives were taken in process and non process areas to improve the waterperformance which resulted in 15.6% reduction of specific water consumption/ tonne ofcement. These include: ??
Increased use of recycled water for process and non-process applications; ??
Minimizing leakages and wastages; ??
Implementing water metering systems for accurate measurement of waterconsumption/withdrawal and to initiate more intense and focused measures for conservingwater;
Implementing rain water harvesting measures in mines plant colony andsurrounding communities.
A biodiversity risk assessment of all mines of the Company has been carried out.Afforestation and biodiversity conservation programmes have been initiated / implementedacross all the Companys plants and mines. The Company has become a member of IndianBusiness Biodiversity Initiative (IBBI) a collaborative initiative of Confederation ofIndian Industry (CII) and Ministry of Environment Forest and Climate Change (MoEF &CC) and Leaders for Nature (LfN) an initiative led by International Union forConservation of Nature (IUCN) India. It has agreed to their charters and is in the processof implementing various associated initiatives.
16.10 Green Products
The Company made efforts to promote and increase sales of various innovative cementproducts like ACC-Gold ACC-F2R ACC Plus ACC Coastal+ and concrete products such asPermecrete Stampcrete and Imprincrete ready to use mortar Thermocrete and Hi-densecretewhich have lower environmental footprint.
16.11 Green Building Material Centres:
During the year 2014 four new Green Building Material Centres were setup in differentparts of India. These centres provide a one-stop solution in housing expertise andbuilding materials required for high quality low cost housing. These centres also offerarchitectural services skilled masons for housing construction. The building materialsupplies include bricks blocks tiles cement etc. These materials are produced fromlocal resources and incorporate waste material like fly ash which help in reducing CO2emissions. This initiative received global recognition for its environment and socialbenefits. The Company is planning to scale up these centres in the coming years.
17. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As part of its initiatives under "Corporate Social Responsibility (CSR) theCompany has undertaken projects in the areas of Education Livelihood Health Water andSanitation. These projects are largely in accordance with Schedule VII of the CompaniesAct 2013.
During the year 2014 the Companys community development efforts successfullytouched the lives of almost 500000 people spanning ~150 villages across the country.Providing quality education initiatives in the plants neighborhood schools benefited~29000 students during the year. Scholarships were awarded to ~500 meritorious studentsfrom weaker sections of the society to help them continue with their education. Technologyaided education initiatives like smart classes and interactive kiosks reached out tostudents in ~26 rural schools to keep pace with modern methods of learning. Specificsupport was provided to revive education for ~750 girl children under "ACC kiLadli" Project. The Company continued to support 7 Government-run Industrial TrainingInstitutes under the Public Private Partnership Schemes with Ministry of Labour andEmployment Government of India.
Skill development training programmes were imparted to unemployed youth in partnershipwith specialized NGOs which helped ~3800 youth get job placements in variousmanufacturing and service sector enterprises. The Company supported the formation of 486Self Help Groups (SHGs) and in their strengthening through structured training activities.In matters of health and nutrition the Companys initiatives benefitted more than100000 people. Support to 134 "anganwadi centers" helped ~8000 children getaccess to better health and nutrition. A Centre for awareness prevention and treatment ofSexually Transmitted Infections (STI) was established at Tikaria Cement Works. Nearly 3042HIV/ AIDS affected persons were supported through counselling testing and treatmentthrough Anti Retroviral Therapy (ART) and STI Centers.
Sanitation being a national agenda the Company has developed four affordableprototypes of toilets through the Green Building Center. It has also led the forum ofConfederation of Indian Industries(CII) Sanitation Committee to promote the sanitationinitiative of Government of India and has also actively participated in forums on PublicHealth & Education.
The Annual Report on CSR activities is annexed herewith as "Annexure A".
18. OCCUPATIONAL HEALTH & SAFETY (OH&S)
In pursuit of ensuring "No harm anywhere to anyone associated with ACC"Occupational Health & Safety (OH&S) remains the Companys top priority. Incontinuation with the "Surakhsha Laher" initiative which was launched in 2013"Suraksha Laher 2" and "Suraksha Laher 3" initiatives were launched.The "Suraksha Laher 2" aimed at building Line Ownership and OH&S Competencyestablish forums for improving communication and focused on Fatality Prevention. Underthis initiative "Suraksha Samvad" forum was set up for improving bottom upcommunication. This initiative successfully involved and positively engaged all levels ofpersonnel on the shop floor including Shop Floor Associates (SFA) and the Companysbusiness partners in the process of identification and closure of hazards. Another majorcontribution of Suraksha Laher 2 was the OH&S Leadership Training Program forimproving OH&S capabilities of Middle Management level employees. The Zone ownershipstructure was further enhanced to improve visible leadership with performance targets andreviews being conducted in the plant.
Suraksha Laher 3 aimed at revisiting the implementation of some of the importantFatality Prevention Elements (FPEs) such as working at heights isolation and lockout witha view to close the gaps identified during audit assessments.
With regard to contractor safety two key areas of focus identified were FacilityManagement for the contractors employees and Equipment Tools & MaterialManagement. The Facility Management initiative was implemented to ensure adequate welfarefacilities for contract labour such as washrooms with bathing facilities rest roomsavailability of drinking water etc. The Equipment Tools & Material Management programensured that the tools used by contractors were safe. The process of screening ofcontractors was made more stringent to ensure that the contractors were aligned with theCompanys objectives to ensure Zero Harm.
18.1 Logistics Safety
The focus on Logistics Safety continued with a view to prevent vehicle relatedincidents through various planned interventions viz.:
Defensive Driving training for drivers;
vehicle inspection at plants;
segregation of pedestrian and vehicular traffic inside plants;
Suraksha Kawach campaign for seat belt usage aimed at truck drivers;
installation of GPS in dedicated trucks in a phased manner for journeymonitoring;
entering into MOUs on logistics safety with our authorized roadtransporters;
engagement sessions with truck drivers and felicitating safe drivers.
A programme for improving safety in the warehouses has also been initiated. The Companywas declared as Holcims Regional Award Winner for South Asia/ASEAN in recognition ofits Logistics Safety Improvement Programme.
18.2 Occupational Health
In 2014 the Emergency Medical Response (EMR) capabilities in mines were furtherimproved. Each mine site has an ALS ambulance appropriate stretchers Automated ExternalDefibrillator (AEDs) units and proper first aid facilities. In each of the plants atleast 50% of the shift supervisors have been trained in basic life support techniques anda total 2000 shift supervisors have been trained in this regard.
To reduce health risk factors among employees and their families various programmeswere launched and implemented with the assistance of health peers selected and trainedfrom Shop Floor Associates and through the extensive use of the Companys intranetportal "Accelerate".
19. HUMAN RESOURCES
Many initiatives have been taken to support business through organizational efficiencyprocess change support and various employee engagement programmes which has helped theOrganization achieve higher productivity levels. A significant effort has also beenundertaken to develop leadership as well as technical/ functional capabilities in order tomeet future talent requirement.
The Companys HR processes such as hiring and on-boarding fair transparent onlineperformance evaluation and talent management process state-of-the-art workmen developmentprocess and market aligned policies have been seen as benchmark practices in theIndustry. These state-of-the-art HR processes within the Organization have enabled theCompany to earn the No. 1 position of being the Best Company to work for in Cement Sectorby Fortune India Magazine in 2014.
During the year under review the following Human Resources initiatives receivedgreater focus:
Employer of Choice: The Company has positioned itself with leading educationalinstitutes as one of the best companies to work for. Employees have an option to work withworld class cement technology and have the flexibility to pursue different functions.Employees are encouraged to express their views and are empowered to work independently.Employees are given the opportunity to learn through various small projects which makethem look at initiatives from different perspectives and thus provide them with a platformto become result oriented. This has helped greatly in overall development of the employeeand has significantly arrested the attrition rate.
Leadership Development: As a part of leadership development ~40 talentedemployees have been seconded to the senior leadership team to mentor them and prepare themfor the next higher role. Apart from this a large number of senior middle and otheremployees are sent for leadership programmes or are assigned to small independent projectswhich are planned for identified talent.
Industrial Relations: The Companys Industrial Relations policy has beenbenchmarked by the manufacturing sector. The Company shares relevant business informationwith the Unions in order to enlighten them and make them sensitive towards businessrequirements. This has helped to build a healthy relationship and resolve issues throughmutual dialogue.
A unique dual educational program has been developed on the lines of the SwissGerman vocational educational and training program (VET). The program has beensuccessfully implemented in one of the Companys technical institutes.
20. BUSINESS RISK MANAGEMENT
Pursuant to the requirement of Clause 49 of the Listing Agreement the Company hasconstituted a Business Risk Management Committee. The details of Committee and its termsof reference are set out in the Corporate Governance Report forming part of theBoards Report.
The Company has a robust Business Risk Management (BRM) framework to identify evaluatebusiness risks and opportunities. This framework seeks to create transparency minimizeadverse impact on the business objectives and enhance the Companys competitiveadvantage. The business risk framework defines the risk management approach across theenterprise at various levels including documentation and reporting. The framework hasdifferent risk models which help in identifying risks trend exposure and potential impactanalysis at a Company level as also separately for business segments viz. cement and RMX.Risk management forms an integral part of the Companys Mid-Term Planning cycle.
The key business risks identified by the Company and its mitigation plans are as under:
The Cement Industry is capital intensive in nature. Its Compound Annual Growth Rate(CAGR) for the next five years is expected to be ~6.5 %. In the execution of largeprojects which are highly capital intensive in nature there could be exposure to time andcost overruns. To mitigate these risks the project management team and the projectaccounting and governance framework has been further strengthened. Whilst the Companycontinues to draw on Holcims expertise a separate Organization structure at Projectsites with defined roles and accountability is put in place for large projects.
The Cement Industry is becoming intensely competitive with the foray of new entrantsand some of the existing players adopting inorganic growth strategies. To mitigate thisrisk the Company is leveraging on its expertise experience and its created capacities toincrease market share enhance brand equity / visibility and enlarge product portfolio andservice offerings. It would also leverage on its Infrastructure Commercial andInstitutional Sales team to offer value to large customers.
Safety of employees and workers is of utmost importance to the Company. To reinforcethe safety culture in the Company it has identified Occupational Health & Safety asone of its focus areas. Various training programmes have been conducted at the plants andsales units such as behavior based safety training program Visible Safety Leadershipprogram Logistics Safety program etc. The accountability structure has also beenstrengthened with the introduction of a Zone Ownership concept and by integrating OH&Scompetencies into the job descriptions of all Top Management Line Management and SafetyProfessionals.
21. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit (IA) functionis defined in the Internal Audit Charter. To maintain its objectivity and independencethe Internal Audit function reports to the Chairman of the Audit Committee of the Board.
The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company and its subsidiaries. Based on thereport of internal audit function process owners undertake corrective action in theirrespective areas and thereby strengthen the controls. Significant audit observations andcorrective actions thereon are presented to the Audit Committee of the Board.
22. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a vigil mechanism named Fraud Risk Management Policy (FRM) to deal withinstance of fraud and mismanagement if any. The details of the FRM Policy is explained inthe Corporate Governance Report and also posted on the website of the Company.
23. SUBSIDIARY COMPANIES
23.1 ACC Mineral Resources Limited (AMRL)
AMRL had entered into a Joint Venture Agreement with Madhya Pradesh State MiningCorporation Limited (MPSMC) for development of four coal blocks viz. Bicharpur MarkiBarka Simaria Piparia and Morga IV. Pursuant to the Supreme Courts Order asdiscussed in para 13 above the allocation of three coal blocks to MPSMC viz. Marki BarkaSimaria Piparia and Morga IV were immediately cancelled. The fourth coal block viz.Bicharpur is liable for cancellation w.e.f. March 31 2015. While work on Bicharpur CoalBlock has been temporarily suspended following the Supreme Courts Order the safetyand security of the block is being maintained and will continue to be maintained till thevesting of the coal block in accordance with the The Coal Mines (Special Provisions)Ordinance 2014.
AMRL has neither operating nor trading activity. The Consolidated Other Income of Rs.1.74 Crore represents the interest received on the loans advanced by it to its JointVenture Companies. The Consolidated loss after depreciation amortization and tax for theyear ended December 31 2014 was Rs. 5.85 Crore.
23.2 Bulk Cement Corporation(India)Limited(BCCI)
During the year under review BCCI handled cement volumes of 10.30 lakh tonnes asagainst 9.60 lakh tonnes in 2013. The profit after tax for the year 2014 is Rs. 432.99lakhs as against Rs. 270.94 lakhs in the year 2013.
23.3 As regards the other three Subsidiary Companies i.e. Lucky Minmat LimitedNational Limestone Company Private Limited and Singhania Minerals Private Limited theseare limestone deposit companies and are currently not operational.
23.4 Audited financial statements of the Companys Subsidiaries
The audited financial statements the Auditors Report thereon and the BoardsReport for the year ended December 31 2014 for each of the Companys subsidiariesviz. ACC Mineral Resources Limited Bulk Cement Corporation (India) Limited Lucky MinmatLimited National Limestone Company Private Limited and Singhania Minerals Private Limitedare annexed.
The Board of Directors had appointed Mr Arunkumar Gandhi and Mrs Falguni Nayar asAdditional Directors of the Company in the category of Independent Directors with effectfrom April 24 2014. Thereafter at the Extraordinary General Meeting (EGM) of the Companyheld on September 10 2014 the Members of the Company appointed the said Directors asIndependent Directors under the Companies Act 2013 for a period of 5 years with effectfrom April 24 2014.
At the said EGM held on September 10 2014 the Members had also appointed the existingIndependent Directors viz. Mr N S Sekhsaria Mr Shailesh Haribhakti Mr Sushil KumarRoongta Mr Ashwin Dani Mr Farrokh Kavarana as Independent Directors under the Act eachfor a term of five years with effect from July 24 2014.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Clause 49 ofthe Listing Agreement.
The Board of Directors had on there commendation of the Nomination & RemunerationCommittee appointed Mr Harish Badami as Chief Executive Officer & Managing Director(CEO & MD) Designate for the period August 1 2014 till August 12 2014 and thereafteras the CEO & MD of the Company for a period of 5 years with effect from August 132014. The Members of the Company had at the aforesaid EGM also approved the saidappointment and terms of remuneration of Mr Harish Badami as CEO & MD.
Mr Kuldip Kaura former CEO & MD retired from the services of the Company witheffect from August 13 2014.
Mr M L Narula a Non Executive Director of the Company retired from the Board ofDirectors with effect from July 25 2014.
The Board has placed on record its appreciation for the outstanding contributions madeby Mr Kuldip Kaura and Mr M L Narula during their respective tenures of office.
In accordance with the provisions of the Companies Act 2013 and in terms of theMemorandum and Articles of Association of the Company Mr Bernard Fontana and Mr AidanLynam retire by rotation and are eligible for re-appointment.
24.1 Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board has carried out an annual performance evaluation of its ownperformance the directors individually as well as the evaluation of the working of itsAudit Nomination & Remuneration and Compliance Committees. The manner in which theevaluation has been carried out has been explained in the Corporate Governance Report.
24.2 Remuneration Policy
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report.
A calendar of Meetings is prepared and circulated in advance to the Directors.
During the year six Board Meetings and six Audit Committee Meetings were convened andheld. The details of which are given in the Corporate Governance Report. The interveninggap between the Meetings was within the period prescribed under the Companies Act 2013.
25. DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a. that in the preparation of the annual financial statements for the year endedDecember 31 2014 the applicable accounting standards have been followed along withproper explanation relating to material departures if any;
b. that such accounting policies as mentioned in Note 2 of the Notes to the FinancialStatements have been selected and applied consistently and judgement and estimates havebeen made that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at December 31 2014 and of the profit of the Company for theyear ended on that date;
c. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d. that the annual financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
f. that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
26. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onan arms length basis and were in the ordinary course of business. There are nomaterially significant related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large.
All Related Party Transactions are placed before the Audit Committee as also the Boardfor approval. Prior omnibus approval of the Audit Committee is obtained on a quarterlybasis for the transactions which are of a foreseen and repetitive nature. The transactionsentered into pursuant to the omnibus approval so granted are audited and a statementgiving details of all related party transactions is placed before the Audit Committee andthe Board of Directors for their approval on a quarterly basis. The statement is supportedby a Certificate from the CEO & MD and the CFO. The Company has developed a RelatedParty Transactions Manual Standard Operating Procedures for purpose of identification andmonitoring of such transactions.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompanys website.
None of the Directors has any pecuniary relationships or transactions vis--vis theCompany.
27. TECHNOLOGY & KNOWHOW AGREEMENT
An Ordinary Resolution was passed by the Members of the Company by means of a PostalBallot approving the Technology and Know-how Agreement with Holcim Technology Limited(HTL) which inter alia provided for the payment of technology and knowhow fees @ 1% ofthe net sales of the Company to HTL. Whilst the Agreement was valid for a period of fiveyears the technology and know-how fee was to remain in force for a period of two yearswith effect from January 1 2013. The Members had authorized the Board of Directors toreview the technology and knowhow fee rate before the end of the financial year 2014.Accordingly the Board of Directors had at its Meeting held on December 10 2014 reviewedthe rate of technology and know-how fee payable to HTL and have decided that the rate beretained @ 1% of the net sales till the end of the period of the agreement i.e. upto andincluding December 31 2017.
28. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations. Pursuant to acomplaint filed before the Competition Commission of India (CCI) by the BuildersAssociation of India against some of the cement manufacturers including the Company theCCI had in June 2012 held that the cement manufacturers had contravened the provisions ofSection 3(3)(a) and 3(3)(b) read with Section 3(1) of the Competition Act 2002. The CCIhad accordingly imposed a penalty on the cement manufacturers aggregating Rs. 6300 Crore.The penalty imposed on the Company is Rs. 1147 Crore. The cement manufacturers includingthe Company has filed an Appeal before the Competition Appellate Tribunal (COMPAT) and thematter is sub-judice. COMPAT has directed the cement manufacturers including the Companyto deposit 10% of the penalty amount. Accordingly the Company has deposited Rs. 114.7Crore in the form of a bank fixed deposit with a lien in favour of COMPAT. Based on expertlegal advice the Company believes that it has a good case and expects a favourabledecision in the appellate proceedings.
29.1 Statutory Auditors
The Companys Auditors Messrs S R B C & CO. LLP Chartered AccountantsMumbai who retire at the ensuing Annual General Meeting of the Company are eligible forreappointment. They have confirmed their eligibility under Section 141 of the CompaniesAct 2013 and the Rules framed thereunder for reappointment as Auditors of the Company. Asrequired under Clause 49 of the Listing Agreement the auditors have also confirmed thatthey hold a valid certificate issued by the Peer Review Board of the Institute ofChartered Accountants of India.
Members attention is invited to the observation made by the Auditors under"Emphasis of Matter" appearing in the Auditors Reports.
29.2 Cost Auditors
PursuanttoSection148oftheCompaniesAct 2013 read with The Companies (Cost Records andAudit) Amendment Rules 2014 the cost audit records maintained by the Company in respectof its cement activity is required to be audited. Your Directors had on therecommendation of the Audit Committee appointed Messrs N I Mehta & Co. to audit thecost accounts of the Company for the financial year 2014 on a remuneration of Rs. 10lakhs. As required under the Companies Act 2013 the remuneration payable to the costauditor is required to be placed before the Members in a general meeting for theirratification. Accordingly a Resolution seeking Members ratification for theremuneration payable to Messrs N I Mehta & Co. Cost Auditors is included at Item No.6 of the Notice convening the Annual General Meeting.
29.3 Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Messrs Pramod S Shah & Associates a firm of Company Secretaries in Practiceto undertake the Secretarial Audit of the Company. The Report of the Secretarial AuditReport is annexed herewith as "Annexure B".
During the year under review your Company received many awards and felicitationsconferred by reputable organizations for achievements in different areas such as SafetyManufacturing Excellence and Environment Management. ACC ranked as "Indias MostAdmired Companies" in Cement Sector in a Fortune India - Hay Group Survey for thesecond consecutive year. Your Companys Annual Report for 2013 won the Gold Shieldfrom the prestigious Institute of Chartered Accountants of India for "Excellencein Financial Reporting".
31. ENHANCING SHAREHOLDERS VALUE
Your Company believes that its Members are among its most important stakeholders.
Accordingly your Companys operations are committed to the pursuit of achievinghigh levels of operating performance and cost competitiveness consolidating and buildingfor growth enhancing the productive asset and resource base and nurturing overallcorporate reputation. Your Company is also committed to creating value for its otherstakeholders by ensuring that its corporate actions positively impact the socio-economicand environmental dimensions and contribute to sustainable growth and development.
32. CORPORATE GOVERNANCE
As per Clause 49 of the Listing Agreement with the Stock Exchanges a separate sectionon corporate governance practices followed by the Company together with a certificatefrom the Companys Auditors confirming compliance forms an intergal part of thisReport.
33. BUSINESS RESPONSIBILITY REPORTING
As per Clause 55 of the Listing Agreement with the Stock Exchanges a separate sectionon Business Responsibility Reporting forms an intergal part of this Report.
34. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company prepared in accordance withrelevant Accounting Standards (AS) viz. AS 21 AS 23 and AS 27 issued by the Institute ofChartered Accountants of India form part of this Annual Report.
35. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as "AnnexureC".
36. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as "Annexure D".
37. PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act theReport and Accounts are being sent to the Members and others entitled thereto excludingthe information on employees particulars which is available for inspection by theMembers at the Registered Office of the Company during business hours on working days ofthe Company up to the date of the ensuing Annual General Meeting. If any Member isinterested in obtaining a copy thereof such Member may write to the Company Secretary inthis regard.
Your Directors thank the various Central and State Government DepartmentsOrganizations and Agencies for the continued help and co-operation extended by them. TheDirectors also gratefully acknowledge all stakeholders of the Company viz. customersmembers dealers vendors banks and other business partners for the excellent supportreceived from them during the year. The Directors place on record their sincereappreciation to all employees of the Company for their unstinted commitment and continuedcontribution to the Company.
39. CAUTIONARY STATEMENT
Statements in the Boards Report and the Management Discussion & Analysisdescribing the Companys objectives expectations or forecasts may be forward-lookingwithin the meaning of applicable securities laws and regulations. Actual results maydiffer materially from those expressed in the statement. Important factors that couldinfluence the Companys operations include global and domestic demand and supplyconditions affecting selling prices of finished goods input availability and priceschanges in government regulations tax laws economic developments within the country andother factors such as litigation and industrial relations.
The Ministry of Corporate Affairs vide its Circular No. 08/2014 dated April 4 2014clarified that the financial statements and the documents required to be attached theretothe Auditors and Boards Report in respect of the financial year underreference shall continue to be governed by the relevant provisions of the Companies Act1956 schedules and rules made thereunder. Accordingly whilst the financial statementsand the Auditors Report as aforesaid are prepared as per the requirements of theCompanies Act 1956 the Company as per its commitment to transparency and goodgovernance has to the extent possible provided the information in the Boards Reportand the Corporate Governance Report as per the Companies Act 2013.
| ||For and on behalf of the Board of Directors |
| ||N S Sekhsaria |
| ||Chairman |
|Mumbai || |
|February 3 2015 || |
ANNEXURE A TO BOARDS REPORT
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES
1. A brief outline of the Companys CSR policy including overview of projectsor programmes proposed to be undertaken and a reference to the web-link to the CSR policyand projects or programmes.
CSR Policy is stated herein below:
2. Composition of the CSR Committee:
Mr Shailesh Haribhakti Chairman (Independent Director)
Ms Falguni Nayar (Independent Director)
Mr Farrokh K Kavarana (Independent Director)
Mr Harish Badami (CEO & MD)
3. Average net profit of the Company for last three financial years:
Average net profit: Rs. 1360 Crore
4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above):
The Company is required to spend Rs. 27.20 Crore towards CSR.
5. Details of CSR spend for the financial year:
a. Total amount spent for the financial year: Rs. 27.45 Crore
b. Amount unspent if any: Nil
c. Manner in which the amount spent during the financial year is detailed below:
|Sr. No. ||Projects / Activities ||Sector ||Locations ||Amount Outlay (Budget) Project or Programs wise ||Amount Spent on the project or programs ||Cumulative Expenditure upto reporting period ||Amount spent: Direct or through implementing agency* |
| || || ||Districts (State) ||Rs. Crore ||Rs. Crore ||Rs. Crore ||Rs. Crore |
|1 ||Educational Scholarship Bridge Education Tuition Support Book Provisioning Setting up library and providing educational aid to Govt. Schools ||Literacy ||Bilaspur (Himachal Pradesh) Katni (Madhya Pradesh) Bundi (Rajasthan) Gauriganj (Uttar Pradesh) Bargarh (Odisha) West Singhbhum (Jharkhand) Purulia (West Bengal) Durg (Chhatisgarh) Dhanbad (Jharkhand) Chandrapur (Maharashtra) Yavatmal (Maharashtra) Bellary (Karnataka) Chikkaballarpur (Karnataka) Gulbarga (Karnataka) Kadapa (Simandhra) Sitapur (Uttar Pradesh) Stravasti (Uttar Pradesh) Jaunpur (Uttar Pradesh) Shahazanhapur (Uttar Pradesh) Rudraprayag (Uttarakhand) & Alwar (Rajasthan) Coimbatore (Tamil Nadu) ||3.21 ||3.89 ||3.89 ||3.89 |
|2 ||Vocational training to unemployed youth school drop outs placement linked skills development training to unemployed youth ||Vocational Training ||Bilaspur (Himachal Pradesh) Katni (Madhya Pradesh) Bundi (Rajasthan) Gauriganj (Uttar Pradesh) Bargarh (Odisha) West Singhbhum (Jharkhand) Purulia (West Bengal) Durg (Chhatisgarh) Dhanbad (Jharkhand) Chandrapur (Maharashtra) Yavatmal (Maharashtra) Bellary (Karnataka) Chikkaballarpur (Karnataka) Gulbarga (Karnataka) Kadapa (Simandhra) ||1.84 ||2.33 ||2.33 ||2.33 |
|3 ||Scholarship to meritorious students ||Scholarship through Diamond Jubilee Educational Trust ||Bilaspur (Himachal Pradesh) and Katni (Madhya Pradesh) ||0.50 ||0.01 ||0.01 ||0.01 |
|4 ||Infant Mortality Rate (IMR) Maternal Mortality Rate (MMR) and Malnutrition reduction Health camps etc. ||Healthcare ||Bilaspur (Himachal Pradesh) Katni (Madhya Pradesh) Bundi (Rajasthan) Gauriganj (Uttar Pradesh) Bargarh (Odisha) West Singhbhum (Jharkhand) Purulia (West Bengal) Durg (Chhatisgarh) Dhanbad (Jharkhand) Chandrapur (Maharashtra) Yavatmal (Maharashtra) Bellary (Karnataka) Chikkaballarpur (Karnataka) Gulbarga (Karnataka) ||3.15 ||2.52 ||2.52 ||2.52 |
|5 ||Development support to people belonging to tribal backward class (capacity building on livelihood projects) ||Upliftment Tribal Backward Class ||Bilaspur (Himachal Pradesh) Katni (Madhya Pradesh) Bundi (Rajasthan) Gauriganj (Uttar Pradesh) Bargarh (Odisha) West Singhbhum (Jharkhand) Purulia (West Bengal) Durg (Chhatisgarh) Dhanbad (Jharkhand) Chandrapur (Maharashtra) Yavatmal (Maharashtra) Bellary (Karnataka) Chikkaballarpur (Karnataka) Gulbarga (Karnataka) Kadapa (Simandhra) ||0.50 ||0.89 ||0.89 ||0.89 |
|6 ||Capacity Buliding of women for livelihood projects formation of Self Help Groups (SHGs) their trainings supporting in setting up of enterprises ||Upliftment / Empowerment Women ||Bilaspur (Himachal Pradesh) Katni (Madhya Pradesh) Bundi (Rajasthan) Gauriganj (Uttar Pradesh) Bargarh (Odisha) West Singhbhum (Jharkhand) Purulia (West Bengal) Durg (Chhatisgarh) Dhanbad (Jharkhand) Chandrapur (Maharashtra) Yavatmal (Maharashtra) Bellary (Karnataka) Chikkaballarpur (Karnataka) Gulbarga (Karnataka) Coimbatore (Tamil Nadu) ||3.15 ||2.53 ||2.53 ||2.53 |
|7 ||Development support to underprivileged community including agriculture support to farmers ||Community Organization ||Bilaspur (Himachal Pradesh) Katni (Madhya Pradesh) Bundi (Rajasthan) Gauriganj (Uttar Pradesh) Bargarh (Odisha) West Singhbhum (Jharkhand) Purulia (West Bengal) Durg (Chhatisgarh) Dhanbad (Jharkhand) Chandrapur (Maharashtra) Yavatmal (Maharashtra) Bellary (Karnataka) Chikkaballarpur (Karnataka) Gulbarga (Karnataka) ||7.05 ||6.85 ||6.85 ||6.85 |
|8 ||All weather rural roads construction as per community needs ||Transportation Infrastructure ||Bilaspur (Himachal Pradesh) Katni (Madhya Pradesh) Bundi (Rajasthan) Gauriganj (Uttar Pradesh) Bargarh (Odisha) West Singhbhum (Jharkhand) Purulia (West Bengal) Durg (Chhatisgarh) Dhanbad (Jharkhand) Chandrapur (Maharashtra) Yavatmal (Maharashtra) Bellary (Karnataka) Chikkaballarpur (Karnataka) Gulbarga (Karnataka) ||3.78 ||4.49 ||4.49 ||4.49 |
|9 ||Supporting construction of houses for victims of natural calamities ||Housing ||Rudraprayag (Uttarakhand) and Wadi (Karnataka) ||0.50 ||0.08 ||0.08 ||0.08 |
|10 ||Providing safe drinking water to community installing handpumps water tanks recharging ponds maintenance of water harvesting structures supporting in toilet construction supporting in construction of drainage ||Sanitation Drinking Water ||Bilaspur (Himachal Pradesh) Katni (Madhya Pradesh) Bundi (Rajasthan) Gauriganj (Uttar Pradesh) Bargarh (Odisha) West Singhbhum (Jharkhand) Purulia (West Bengal) Durg (Chhatisgarh) Dhanbad (Jharkhand) Chandrapur (Maharashtra) Yavatmal (Maharashtra) Bellary (Karnataka) Chikkaballarpur (Karnataka) Gulbarga (Karnataka) Kadapa (Simandhra) Coimbatore (Tamil Nadu) ||2.52 ||3.07 ||3.07 ||3.07 |
|11 ||ACC supporting two Anti Retroviral Treatment Centres at Wadi and CMC Vellore through its own Trusts for HIV/ AIDS prevention and treatment ||Anti Retroviral Treatment Centres ||Wadi (Karnataka) and Vellore (Tamil Nadu) ||1.00 27.20 ||0.79 27.45 ||0.79 27.45 ||0.79 27.45 |
* Details of the implementing agencies - 1. Himachal Pradesh Voluntary HealthAssociation Simla 2. We the People New Delhi 3. Udyogini New Delhi 4. PanchamResearch & Biotech Sansthan Lucknow (UP) 5. DEHAT Behraich (UP) 6. Mahatma GandhiIntegrated Development & Education Institute Dausa (RJ) 7. Muskan Foundation (UP)8. IIMPACT-New Delhi 9. CENTUM Learning-New Delhi 10. Mahashakti Foundation 11. LokaKalyan Parishad 12. Help Student India 13. Vijay Foundation 14. Amhi AmchyaArogyasathi Kurkheda Gadchiroli (Maharashtra) 15. ACC MAVIM Loksanchalit Sadhan Kendra -CMRC- Ghugus 16. Dilasa Janvikas Pratishthan Aurangabad 17. Rashtriya Gramin VikasNidhi Bhuvneshwar 18. SEED - New Delhi
(approved by the Board of Directors on May 3 2013)
Our aim is to be one of the most respected companies in India delivering superior andsustainable value to all our customers business partners shareholders employees andhost communities.
The CSR initiatives focus on holistic development of host communities and createsocial environmental and economic value to the society.
To pursue these objectives we will continue to:
Uphold and promote the principles of inclusive growth and equitable development.
Develop Community Development Plans based on needs and priorities of hostcommunities and measure the effectiveness of community development programmes.
Work actively in areas of preventive health and sanitation education skillsfor employability livelihoods. and income generation waste resource management and waterconservation for host communities for enhancing Human Development Index.
Collaborate with like minded bodies like governments voluntary organizationsand academic institutes in pursuit of our goals.
Interact regularly with stakeholders review and publicly report our CSRinitiatives.
ANNEXURE B TO BOARDS REPORT
SECRETARIAL AUDIT REPORT
FORM NO. MR-3
FOR THE FINANCIAL YEAR ENDED DECEMBER 31 2014
[Pursuant to Section 204(1) of the Companies Act 2013 and Rule No. 9 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by ACC Limited (hereinaftercalled the Company). Secretarial Audit was conducted in a manner that provided me areasonable basis for evaluating the corporate conducts/statutory compliances andexpressing my opinion thereon.
Based on my verification of ACC Limiteds books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit I hereby report that in my opinion the Company has duringthe audit period covering the financial year ended December 31 2014 complied with thestatutory provisions listed hereunder and also that the Company has proper Board-processesand compliance mechanism in place to the extent in the manner and subject to thereporting made hereinafter.
I have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on December 31 2014according to the provisions of:
(1) The Companies Act 2013 (the Act) and the rules made thereunder;
(2) The Securities Contracts (Regulation) Act 1956 (SCRA) and the rulesmade thereunder;
(3) The Depositories Act 1996 and the Regulations and bye-laws framed thereunder;
(4) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder;
(5) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (SEBI Act):-
a. The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2013;
b. The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;
c. The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;
(6) Employees Provident Fund and Miscellaneous Provisions Act 1952
(7) Employees State Insurance Act 1948
(8) Employers Liability Act 1938
(9) Environment Protection Act 1986 and other environmental laws
(10) Equal Remuneration Act 1976
(11) Factories Act 1948
(12) Hazardous Wastes (Management and Handling) Rules 1989 and Amendment Rule 2003
(13) Indian Contract Act 1872
(14) Income Tax Act 1961 and Indirect Tax Laws
(15) Indian Stamp Act 1999
(16) Industrial Dispute Act 1947
(17) Maternity Benefits Act 1961
(18) Minimum Wages Act 1948
(19) Negotiable Instruments Act 1881
(20) Payment of Bonus Act 1965
(21) Payment of Gratuity Act 1972
(22) Payment of Wages Act 1936 and other applicable labour laws
I have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards issued by The Institute of Company Secretaries of India.
(ii) The Listing Agreements entered into by the Company with BSE Limited and NationalStock Exchange of India Limited.
During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc. mentioned above.
I further report that the Board of Directors of the Company is duly constitutedwith proper balance of Executive Directors Non Executive Directors and IndependentDirectors. The changes in the composition of the Board of Directors that took place duringthe period under review were carried out in compliance with the provisions of the Act.
Adequate notice is given to all Directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.
Majority decision is carried through while the dissenting members views arecaptured and recorded as part of the minutes.
I further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.
I further report that during the audit period there were no instances of:
(i) Public / Rights / Preferential issue of shares / debentures / sweat equity.
(ii) Redemption / buy-back of securities.
(iii) Major decisions taken by the Members in pursuance to Section 180 of the CompaniesAct 2013.
(iv) Merger / amalgamation / reconstruction etc.
(v) Foreign technical collaborations.
| ||Pramod Shah-Partner |
| ||Pramod S. Shah & Associates |
| ||FCS No.: 334 |
| ||C P No.: 3804 |
|Place : Mumbai || |
|Date: 24.01.2015 || |
ANNEXURE C TO BOARDS REPORT
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
[Section 134(3)(m) of The Companies Act 2013 read with Rule 8(3) of The Companies(Accounts) Rules 2014]
Sustainability is an integral part of the Companys business philosophy. Duringthe Financial Year 2014 the Company has adopted GRI G4 principles and released the firstexternally assured GRI G4 Sustainable Development Report 2013 in India. YourCompanys Sustainable Development Road Map for 2014-2017 Emission Reduction includestargets for specific CO2 increase in Thermal Substitution Rate reduction in SpecificWater Consumption Environment Certification (ISO 14001) of all plants reduction inSpecific Energy Consumption and implementation of business inclusive CSR Projects.
A: CONSERVATION OF ENERGY
Company has achieved a reduction of specific thermal energy and specific electricalenergy by 0.52% and 0.53% respectively for the year 2014 as compare to 2013. ThondebhaviPlant has been awarded with Merit certificate towards Energy conservation by Bureau ofEnergy Efficiency for 2013-14 a record feat of three times in a row.
a. Energy conservation and efficiency measures were undertaken in various areas of theCement Manufacturing and Captive Power Plants (CPPs):
Madukkarai Plant - Carried out automation of Hydro-cyclone for Ball Millthroughput improvement. Installed low voltage variable frequency drive for Boiler FeedPump of Captive Power Plant (CPP) for optimizing feed water by converting the powersource from Medium Voltage (6.6KV) to Low Voltage (415 V).
Jamul Plant - Commissioned Low Voltage Variable Speed Drives (VSD) forCalciner Compressor Forced Draft fans bag filter fans CPP pumps and CPP cooling tower (total 12 nos). Replaced raw water pump with high efficiency pump at mines.Installed 2 Nos APFC (Automatic Power Factor Correction) panels to improve power factor.
Lakheri Plant - Commissioned Medium Voltage (6.6 KV) Variable FrequencyDrive (MVVFD) in place of GRR (Grid Rotor Resistance) for Vertical Roller Mill (Raw Mill 2Fan) and Low Voltage VSD for Positive Displacement (PD) Blower of kiln firing.Commissioned Rota scale for Cement Mill feeding.
Bargarh Plant - Commissioned VSDs for coal mill booster fan. Optimizedoperation of SILO 5 top Bagfilter fan by installing VSD.
Chanda Plant - Replaced aluminum blades by FRP blades for Kiln Shell coolingfans GRR cooling fan Cooling Tower fans. Commissioned HT (11KV 4980 Kvar) & LT (415V 1000 Kvar) APFC panels to improve Power Factor.
Kymore Plant - Replaced existing GRR controls by installation Medium Voltage(6.6 KV) VSD for Bag House Fan Line-2. Replaced Line-1 pre-heater fan with energyefficient fan. Commissioned low voltage VSDs (6 Nos) for Boiler Feed Pump of CPP foroptimizing feed water by converting the power source from Medium Voltage (6.6 KV) to LowVoltage (415 V). VSDs were also commissioned for two condensate extraction pumps. TertiaryCrusher closed circuiting was done to enhance the Raw mill throughput. Coal firing systemof Line -2 was modified with Coriolis feeding systems for kiln & calciner coal firingsystems. Various other debottlenecking / optimization activities were carried out forefficient operation of the kiln.
Gagal Plant - Replaced Separator fans for Asano Vertical Mill Pre-grinder(AVMP) - 5 & Cement Mill - 4 with high efficiency fan. Installed High Efficiency TurboBlowers in Pyro-section for efficient petcoke firing.
Wadi Plant (unit II) - Optimized the Raw Mill Fan circuit to enhance fanefficiency by 10%. Commissioned Slip Power Recovery system (6.6 KV SPRS) for Raw Mill 2fan; Optimized Mill to improve Production Rate Index (PRI) in Portland Pozzolana Cement(PPC) from 89% to 95% and in Ordinary Portland Cement (OPC) from 180 TPH to 184 TPH. BagHouse fan draught was optimized to reduce fan speed. Cement mill grinding media patternwas redesigned to suit to Mill - Pregrinder combination; Regular monitoring by thermographfor all electrical feeders and panels was done to avoid breakdowns. Air Blast Compartment(ABC) inlet modification was done in Cooler to avoid coating formation in the coolerplates. Medium Voltage (6.6 KV) drive was installed for Boiler Feed pump for optimizingfeed water.
Tikaria Plant - Installed Mist cooling System in place of conventionalCooling Tower. Optimized Pre-grinder circuit to feed the Pre-grinder output at dischargeof Cement Mill # 3 to improve the mill output. Energy Monitoring System was upgraded.
Chaibasa Plant - Commissioned VSD for cooler fan no 47 Cement Mill-06circulating air fan Calciner coal firing blower. Commissioned lower capacity PD blowerfor Kiln coal after optimizing existing circuit. Commissioned high momentum burner forpet-coke firing.
Kudithini Plant - Revived auto Proportional Integral Derivative (PID) loopsfor Mill Differential Pressure (DP) vs Feed rate and Bag house fan DP and Fan Flow.Reduced Bag House Fan Cone gap.
Detailed Energy Audits were conducted at Jamul Kudithini and Chanda plantsand a detailed compressed air audit was conducted at Wadi Madukkarai Thondebhavi andKymore plants.
Energy Monitoring Systems were commissioned at Vizag and Chanda plants.
Capacitor banks have been added to the system across the plants to improve plantpower factor and also to reduce harmonics.
Replacement of conventional lamps with LED lights is being done in phases forplant and colony lighting across ACC plants.
Kudithini plant was adjudged as Excellent Energy Efficient unit by Confederationof Indian Industries (CII) and Jamul Lakheri Bargarh and Thondebhavi Plants wereshortlisted as Energy Efficient plants.
Green Power -
The Companys Renewable Energy Portfolio consists of 19 MW in the form ofWind Farms across 3 states viz 9 MW in the state of Tamil Nadu 7.5 MW in the State ofRajasthan and 2.5 MW in the State of Maharashtra. Cumulatively approx 32.5 Million Unitsof green power has been generated. (Rajasthan - 11.53 Million Units Tamil Nadu 17.70 Million Units Maharashtra - 3.26 Million Units).
These units helped to meet the Renewable Purchase Obligation (Non Solar) forMadukkarai Plant (Tamil Nadu) and Lakheri Plant (Rajasthan) fully. In MaharashtraRenewable Energy Certificates (RECs) were issued to the Company besides meeting the Thanecomplex power needs and also part requirement of the Companys subsidiary Bulk CementCorporation (India) Limited at Kalamboli.
The Renewable Power Obligations (Non Solar) of other plants (Wadi in KarnatakaKymore in Madhya Pradesh Bargarh in Orissa Tikaria in Utter Pradesh and Jamul inChhatisgarh) were met by purchasing Renewable Energy Certificates.
b. Additional Proposals being implemented for further conservation of energy
Replacement of the pre-heater fan with an energy efficient pre-heater fan forline-2 at Kymore;
Cooler efficiency improvement at Wadi 1 by replacing 3 number low pressure fanswith high pressure fans;
Installation of VSDs;
Up-gradation of existing fans with high efficiency fans;
The above actions would ensure further saving in electrical and thermal energy during2015 in addition to achieving better process control.
c. Impact of the above measures for reduction of energy consumption and consequentimpact on cost of production
The measures stated in points (a) and (b) above would further improve the thermal andelectrical energy efficiency of the Plants.
In the second phase of the initiatives connected with the Low Carbon Technology roadmapfor the Indian Cement Industry under the umbrella of the Cement Sustainability Initiativein India (CSI) of World Business Council for Sustainable Development (WBCSD) a detailedenergy audit was carried out at Bargarh Plant and majority of the recommended initiativestowards further energy and CO2 reduction were implemented.
The Company often supported by Holcims knowhow and experience made availablethrough the Technology and Knowhow Agreement continues to pursue various levers asindicated below to achieve continuous progress in its CO2 performances.
Increase in the Thermal Substitution Rate (TSR) by using Alternative Fuels andRaw Materials (AFR)
Increase the use of Alternative Raw materials (AR)
Reduction of Thermal Energy and Electrical Energy
Reducing Clinker Factor by producing blended cements using industrial wastematerials like Fly ash and Slag
Increasing the use of renewable energy
Waste Heat Power generation from the process waste heat
Efforts on these fronts helped the Company to maintain a leadership position in CO2reduction performance as illustrated by the following achievements:
The overall specific net C02 emissions per tonne of cement has beenbrought down to 526 kg CO2/ tonne of cement from 538 kg CO2/ tonneof cement.
The overall specific net CO2 emission per tonne of cement includingemissions from on-site power generation has been reduced to 617 Kg CO2/tonne ofcement from 641 Kg CO2/tonne of cement.
Continuous efforts to control Clinker content in PPC helped the Company reduce CO2emissions over four years in four of its plants pursuant to which the Company hadrealized 843190 CERs (Certified Emission Reductions) by United Nations FrameworkConvention on Climate Change (UNFCCC). The Companys efforts in this regard weresupplemented by Holcims knowhow IP accessed by the Company through the Technologyand Knowhow Agreement.
Stack Emissions and Fugitive Emissions:
The Company has implemented various initiatives/ measures for improving theenvironmental performance of its Plants and surroundings. In some cases such efforts havebeen supplemented by Holcims knowhow under the Technolodgy and Knowhow Agreementduly implemented and absorbed by the Company. The Company has reduced average specifickiln stack dust emissions from 35.37 mg/Nm3 during the year 2013 to 30.03 mg/Nm3during the year 2014 against varying statutory compliance limits of 50-150 mg/Nm3in different states of the country. Apart from the stack emissions the Company has alsoimplemented various measures across all its operations in controlling the fugitiveemissions. ACCs Kiln stack dust emissions data and ambient air quality data wascontinuously uploaded on Central Pollution Control Board (CPCB) website and respectiveState Pollution Control Boards (SPCBs) website.
With an objective to continuously improve water performance at a Company level a twopronged strategy was adopted i.e. (i) working simultaneously on reducing fresh waterintensity by reducing water demand in process and non-process needs and waste waterrecycling after treatment and (ii) working on rain water harvesting in plants minescolonies community areas.
During the year 2014 the Companys specific water consumption per tonne of cementwas reduced by 15.6% with respect to 2013. To strengthen the drive for reduction ofspecific water consumption the Company has initiated the process of installing automatedwater measurement system to capture the water performance with respect to water withdrawaland water consumption. This will help in identifying the potential areas of waterconservation areas of leakages and improve the water performance. As a part of the waterconservation initiatives the Company has taken up many water harvesting measures duringthe year which helped some of the plants like Kymore Jamul to become self sustainablewithout depending on natural resources like rivers bore wells etc.
The Company understands the importance of mines rehabilitation and sees a good businesscase in managing ecosystem and biodiversity. Many capacity building programmes onbiodiversity were organized at all manufacturing locations to generate awareness aboutbiodiversity and sensitize the people about the importance of biodiversity conservation.As a practice The Company continues to develop green belts in and around its plantpremises with native species of plants. During the year 2014 the Company continued itsafforestation programmes across all plants.
POWER AND FUEL CONSUMPTION - CEMENT
| ||Current Year ||Previous Year |
| ||Lakh Units (Kwh) ||Total Cost (Rs. Lakhs) ||Rs. per Unit ||Lakh units (Kwh) ||Total Cost (Rs. Lakhs) ||Rs. per Unit |
|Electricity GROSS || || || || || || |
|a) Purchased : ||5566 ||31922 ||5.74 ||5407 ||31678 ||5.86 |
|b) Own Generation : || || || || || || |
|i) Through Diesel Generator ||15 ||381 ||26.08 ||6 ||224 ||36.49 |
|ii) Through Steam : Turbine / Generator ||17182 ||80301 ||4.67 ||17639 ||77555 ||4.40 |
| ||Quantity (Lakh Tonnes) ||Total Cost (Rs. Lakhs) ||Average Rate (Rs./Tonne) ||Quantity (Lakh Tonnes) ||Total Cost (Rs. Lakhs) ||Average Rate (Rs./Tonne) |
|Coal (for kiln) * ||22.25 ||134816 ||6060 ||22.75 ||132465 ||5822 |
* Does not include other fuel / alternative fuels used in kiln.
CONSUMPTION PER UNIT OF PRODUCTION
| ||@ Standard ||Current Year ||Previous year |
|a) Electricity Kwh / T of Cement* || || || |
|Semi-dry / Dry process ||98-110 ||80 ||81 |
|b) Coal for kiln K.cal / Kg of clinker || || || |
|Semi-dry / Dry process ||720-990 ||730 ||733 |
@ Source : Publication of Confederation of Indian Industries
* Excludes non-process power consumption.
(B) TECHNOLOGY ABSORPTION
Research & Development (R & D)
1. Specific areas in which R & D is carried out by the Company
a. Development of application oriented cements with decreased CO2 emissions.
b. Conservation of resources through maximization of use of low-grade limestone forcement manufacture improving quality of blended cement through innovative processingutilizing industrial by-products for improved quality performance of the CompanysPlants.
c. Development of new products or discovering new methods of analysis.
d. Productivity research for increasing efficiency in use of resources.
e. Recycling of wastes and research for efficient use of scarce materials.
f. Characterization of industrial wastes and looking into possibilities forenvironmentally friendly co-processing of wastes in cement manufacture leading to thermalsubstitution and conservation of natural resources.
g. Development and use of Cement Grinding aid and accelerators in the manufacture ofPortland Pozzolana Cement (PPC) and Portland Slag Cement (PSC) for improved performance inconcrete and reduced clinker factor in blended cements.
h. Improving the grinding efficiency of Pet-coke and Coal.
i. Development of cements tailored for specific market clusters and applicationsegments.
j. Development of one of its kind cement in India for reducing water seepage.
k. Development of cement based niche products.
l. Quality benchmarking exercise for different market clusters of the Company products.
m. Quality audit from mining to packing as well as labs to ensure proper samplingensuring reproducibility & repeatability of evaluation at each stage of themanufacturing process with automation and availability of analysis data through LaboratoryInformation Management System (LIMS).
The aforesaid areas of R&D were sometimes supported by Holcims IPs andknowhow / experience made available to all its operating group companies under thetechnology and knowhow agreement.
2. Benefits derived as result of above R & D
a. Effective use of marginal quality raw materials and fuels with improved clinkerquality.
b. Increased absorption of blending materials like fly ash and slag in blended cements.
c. Launch of special high performance products like F2R Concrete+ Coastal+ ACC PlusACC Gold for specific market segments / market climatic conditions.
d. Effective replacement of the natural Gypsum by Phospho-gypsum without affecting thequality of cement.
e. Reduction in specific power consumption for grinding.
f. Effective use of SPC at each stage of cement manufacture for improving consistencyof operations and consistency in product quality. g. Fuel efficiency.
3. Future plan of action
a. Exploratory research work on the above specific areas.
b. Focus on development of products aimed at enhancing use of cement in variousapplications and development of application oriented cement based cementitious material.
c. Use of waste / byproducts in cement manufacture as alternative materials.
d. Improve product quality particularly with respect to long term durability andreduction in cost of manufacture.
4. Expenditure on R & D
| ||2014 ||2013 |
| ||Rs. Lakhs ||Rs. Lakhs |
|a. Capital ||276 ||106 |
|b. Recurring (Gross) ||665 ||743 |
|c. Total ||941 ||849 |
|d. Total R&D expenditure as percentage of total turnover (%) ||0.07 ||0.07 |
(C) FOREIGN EXCHANGE EARNINGS & OUTGO
| ||2014 ||2013 |
| ||Rs. Lakhs ||Rs. Lakhs |
|Foreign exchange earned ||185 ||78 |
|Foreign exchange used ||13539 ||18803 |
ANNEXURE D TO BOARDS REPORT
EXTRACT OF ANNUAL RETURN
as on the financial year ended 31.12.2014
[Pursuant to Section 92(3) of the Companies Act 2013 and Rule 12(1) of the Companies(Management and Administration) Rules 2014]
FORM NO. MGT - 9
|I. Registration and other details || |
|CIN ||L26940MH1936PLC002515 |
|Registration Date ||1st August 1936 |
|Name of the Company ||ACC Limited |
|Category / Sub-Category of the Company ||Company having Share Capital |
|Address of the Registered Office and contact details ||Cement House 121 Maharshi Karve Road Mumbai 400020 Tel. No. 022 3302 4321 |
|Whether listed company ||Yes |
|Name address and contact details of ||The Company has an in-house Share Department at the |
|Registrar and Transfer Agent if any ||registered office address. Tel. No. 022 3302 4469 |
II. Principal Business Activities of the Company
All the Business Activities contributing 10% or more of the total turnover of theCompany shall be stated:
|Name and Description of main Products / Services ||NIC Code of the Product / Service ||% to total turnover of the Company |
|Cement ||3242 ||93.37% |
|Ready Mixed Concrete ||3279 ||6.63% |
|III. || || || || |
|Name and address of the Company ||CIN / GLN ||Holding / Subsidiary / Associate ||% of shares held ||Applicable Section |
|Holcim (India) Private Limited || || || || |
|Suite 304 3rd floor DLF South Court Plot A-1 Saket District Centre Saket Delhi - 110 017 ||U26943DL2002PTC116851 ||Holding ||50.01 ||2(46) |
|Holderind Investments Limited || || || || |
|Holicim Group Support (Zurich) Ltd. Hagenholzstrasse 85 CH-8050 Zurich Switzerland ||Foreign Company ||Holding ||0.29 ||2(46) |
|ACC Mineral Resources Limited || || || || |
|Cement House 121 Maharshi Karve Road Mumbai 400 020 ||U10100MH1930PLC001612 ||Subsidiary ||100 ||2(87) |
|Bulk Cement Corporation (India) Ltd. || || || || |
|Plot No. W-7 KWC Kalamboli Dist. Raigad 410 218 ||U99999MH1992PLC066679 ||Subsidiary ||94.65 ||2(87) |
|Lucky Minmat Limited || || || || |
|G-9/C Kabir Marg Bani Park Jaipur 302 016 ||U14219RJ1976PLC001697 ||Subsidiary ||100 ||2(87) |
|National Limestone Company Private Limited || || || || |
|G-9/C Kabir Marg Bani Park Jaipur 302 016 ||U26944RJ1981PTC002227 ||Subsidiary ||100 ||2(87) |
|Singhania Minerals Private Limited || || || || |
|Paryavas Bhavan 2nd Floor Block No. 1 Jail Road Arera Hills Bhopal 462 011 (MP) ||U14109MP1992PTC007264 ||Subsidiary ||100 ||2(87) |
|Alcon Cement Company Private Limited || || || || |
|2nd Floor Velho Bldg Opp. Municipal Garden Panaji Goa 403 001 ||U26942GA1992PTC001281 ||Associate ||40 ||2(6) |
|Asian Concretes and Cements Private Limited || || || || |
|SCF-270 Motor Market Mansadevi Road Chandigarh 160 101 ||U26940CH2009PTC031641 ||Associate ||45 ||2(6) |
|Aakaash Manufacturing Company Private Limited || || || || |
|2nd Floor Velho Bldg Opp. Municipal Garden Panaji Goa 403 001 ||U55101GA1995PTC001908 ||Associate ||40 ||2(6) |
IV. SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of TotalEquity) i) Category-wise Shareholding
| ||No. of Shares held at the beginning of the year ||No. of Shares held at the end of the year ||% |
|Category of Shareholders ||Demat ||Physical ||Total ||% of Total Shares ||Demat ||Physical ||Total ||% of Total Shares ||Change during the year |
|A. Promoters || || || || || || || || || |
|(1) Indian || || || || || || || || || |
|a) Individual / HUF || || || || || || || || || |
|b) Central Govt. || || || || || || || || || |
|c) State Govt.(s) || || || || || || || || || |
|d) Bodies Corporate ||93888120 ||- ||93888120 ||50.01 ||93888120 ||- ||93888120 ||50.01 ||- |
|e) Banks / FI || || || || || || || || || |
|f) Any Other
. || || || || || || || || || |
|Sub-Total (A)(1): ||93888120 ||- ||93888120 ||50.01 ||93888120 ||- ||93888120 ||50.01 ||- |
|(2) Foreign || || || || || || || || || |
|a) NRIs - Individuals || || || || || || || || || |
|b) Other - Individuals || || || || || || || || || |
|c) Bodies Corporate ||541000 ||- ||541000 ||0.29 ||541000 ||- ||541000 ||0.29 ||- |
|d) Banks / FI || || || || || || || || || |
|e) Any Other
. || || || || || || || || || |
|Sub-Total (A)(2): ||541000 ||- ||541000 ||0.29 ||541000 ||- ||541000 ||0.29 ||- |
|Total Shareholding of Promoters (A) = (A)(1)+(A)(2) ||94429120 ||- ||94429120 ||50.30 ||94429120 ||- ||94429120 ||50.30 ||- |
|B. Public Shareholding || || || || || || || || || |
|(1) Institutions || || || || || || || || || |
|a) Mutual Funds / UTI ||5838104 ||46926 ||5885030 ||3.13 ||7782296 ||46926 ||7829222 ||4.17 ||1.04 |
|b) Banks / FI ||18005016 ||62165 ||18067181 ||9.62 ||21129205 ||62165 ||21191370 ||11.29 ||1.67 |
|c) Central Govt. ||- ||- ||- ||- ||- ||- ||- ||- ||- |
|d) State Govt.(s) ||56475 ||231340 ||287815 ||0.15 ||56475 ||231340 ||287815 ||0.15 ||- |
|e) Venture Capital Funds ||- ||- ||- ||- ||- ||- ||- ||- ||- |
|f) Insurance Companies ||- ||- ||- ||- ||- ||- ||- ||- ||- |
|g) FIIs ||37512985 ||17090 ||37530075 ||19.99 ||31328117 ||17175 ||31345292 ||16.70 ||-3.29 |
|h) Foreign Venture Capital Funds ||- ||- ||- ||- ||- ||- ||- ||- ||- |
|i) Others (specify) ||- ||- ||- ||- ||- ||- ||- ||- ||- |
|Sub-Total (B)(1): ||61412580 ||357521 ||61770101 ||32.90 ||60296093 ||357606 ||60653699 ||32.31 ||-0.59 |
IV. SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of TotalEquity)
i) Category-wise Shareholding
| ||No. of Shares held at the beginning of the year ||No. of Shares held at the end of the year || |
|Category of Shareholders ||Demat ||Physical ||Total ||% of Total Shares ||Demat ||Physical ||Total ||% of Total Shares ||% Change during the year |
|(2) Non-Institutions || || || || || || || || || |
|a) Bodies Corporate ||5322759 ||133623 ||5456382 ||2.91 ||6479350 ||133311 ||6612661 ||3.52 ||0.61 |
|i) Indian ||- ||- ||- ||- ||- ||- ||- ||- ||- |
|ii) Overseas ||- ||- ||- ||- ||- ||- ||- ||- ||- |
|b) Individuals || || || || || || || || || |
|i) Individual Shareholders holding nominal share capital upto Rs. 1 lakh ||14680056 ||6653025 ||21333081 ||11.36 ||14303617 ||6405742 ||20709359 ||11.03 ||-0.33 |
|ii) Individual Shareholders holding nominal share capital in excess of Rs. 1 lakh ||1961104 ||1227716 ||3188820 ||1.70 ||1895623 ||962894 ||2858517 ||1.52 ||-0.18 |
|c) Others (specify) || || || || || || || || || |
|i) Shares held by Pakistani citizens vested with the Custodian of Enemy Property ||- ||385965 ||385965 ||0.21 ||- ||385965 ||385965 ||0.21 ||- |
|ii) Other Foreign Nationals ||900 ||- ||900 ||- ||900 ||- ||900 ||- ||- |
|iii) Foreign Bodies ||- ||- ||- ||- ||- ||- ||- ||- ||- |
|iv) NRI / OCBs ||568649 ||218900 ||787549 ||0.42 ||591806 ||209350 ||801156 ||0.43 ||0.01 |
|v) Clearing Members / Clearing House ||91231 ||- ||91231 ||0.05 ||214940 ||- ||214940 ||0.11 ||0.06 |
|vi) Trusts ||299003 ||- ||299003 ||0.16 ||717789 ||- ||717789 ||0.38 ||0.22 |
|vii) Limited Liability Partnership ||3154 ||- ||3154 ||- ||3086 ||- ||3086 ||- ||- |
|viii)Foreign Portfolio Investor (Corporate) ||- ||- ||- ||- ||358164 ||- ||358164 ||0.19 ||0.19 |
|ix) Qualified Foreign Investor ||50 ||- ||50 ||- ||- ||- ||- ||- ||- |
|Sub-Total (B)(2): ||22926906 ||8619229 ||31546135 ||16.80 ||24565275 ||8097262 ||32662537 ||17.40 ||0.60 |
|Total Public Shareholding (B)=(B)(1)+(B)(2) ||84339486 ||8976750 ||93316236 ||49.70 ||84861368 ||8454868 ||93316236 ||49.70 ||0.00 |
|C. Shares held by Custodian for GDRs & ADRs ||- ||- ||- ||- ||- ||- ||- ||- ||- |
|Grand Total (A+B+C) ||178768606 ||8976750 ||187745356 ||100.00 ||179290488 ||8454868 ||187745356 ||100.00 ||- |
ii) Shareholding of Promoters
| ||Shareholding at the beginning of the year ||Shareholding at the end of the year || |
|Shareholders Name ||No. of Shares ||% of total shares of the Company ||% of Shares Pledged / encumbered to total shares ||No. of Shares ||% of total shares of the Company ||% of Shares Pledged / encumbered to total shares ||% change in shareholding during the year |
|Holcim (India) Private Limited ||93888120 ||50.01 ||- ||93888120 ||50.01 ||- ||- |
|Holderind Investments Limited ||541000 ||0.29 ||- ||541000 ||0.29 ||- ||- |
|Total ||94429120 ||50.30 ||- ||94429120 ||50.30 ||- ||- |
iii) Change in Promoters Shareholding (Please specify if there is nochange)
| ||Shareholding at the beginning of the year ||Cumulative Shareholding during the year |
| ||No. of Shares ||% of total shares of the Company ||No. of Shares ||% of total shares of the Company |
|At the beginning of the year ||No change during the year |
|Datewise Increase/Decrease in Promoters Shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/sweatequityetc): ||No change during the year |
|At the end of the year ||No change during the year |
iv) Shareholding Pattern of Top Ten Shareholders (Other than DirectorsPromoters and Holders of GDRs and ADRs)
| || |
Shareholding at the beginning of the year
Shareholding at the end of the year
|For Each of the Top 10 Shareholders ||No. of Shares ||% of total shares of the Company ||No. of Shares ||% of total shares of the Company |
|1. Life Insurance Corporation of India ||15392891 ||8.20 ||17971429 ||9.57 |
|2. Aranda Investments (Mauritius) PTE Ltd. ||4743636 ||2.53 ||1994039 ||1.06 |
|3. Aberdeen Global Indian Equity (Mauritius) Limited ||4123936 ||2.20 ||3968936 ||2.11 |
|4. J P Morgan Funds - Emerging Markets Equity Fund ||2873698 ||1.53 ||1033438 ||0.55 |
|5. J P Morgan Sicav Investment Company (Mauritius) Limited ||2385199 ||1.27 ||2054678 ||1.09 |
|6. Government Pension Fund Global ||1733689 ||0.92 ||- ||- |
|7. J P Morgan Emerging Markets Equity Fund ||1689262 ||0.90 ||- ||- |
|8. J P Morgan India Fund ||1685852 ||0.90 ||1561882 ||0.83 |
|9. ICICI Prudential Life Insurance Company Ltd. ||1351594 ||0.72 ||1473109 ||0.79 |
|10. Commingled Pension Trust Fund (Emerging Markets Equity Focused) of J P Morgan Chase Bank ||1321368 ||0.70 ||- ||- |
|11. Abu Dhabi Investment Authority - Jhelum ||- ||- ||1083211 ||0.58 |
|12. J P Morgan Indian Investment Company (Mauritius) Limited ||- ||- ||1041660 ||0.56 |
|13. Vanguard Emerging Markets Stock Index Fund Aseries of Vanguard International Equity Index Fund ||- ||- ||940798 ||0.50 |
v) Shareholding of Directors and Key Managerial Personnel
| ||Shareholding at the beginning of the year ||Cumulative Shareholding during the year |
| ||% of total shares ||% of total shares |
|For Each of the Directors and KMP ||No. of Shares of the Company ||No. of Shares of the Company |
|At the beginning of the year ||None of the Directors hold shares in the Company |
|Date wise Increase/Decrease in shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/sweat equity etc): ||None of the Directors hold shares in the Company |
|At the end of the year ||None of the Directors hold shares in the Company |
| ||Name of the Key Managerial Personnel |
|For Each of the Directors and KMP ||Shareholding at the beginning of the year ||Cumulative Shareholding during the year |
| ||No. of Shares ||% of total shares of the Company ||No. of Shares ||% of total shares of the Company |
|Mr Sunil K Nayak Chief Financial Officer || || || || |
|At the beginning of the year ||- ||- ||- ||- |
|Date wise Increase/Decrease in shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/sweat equity etc): ||- ||- ||- ||- |
|At the end of the year ||- ||- ||- ||- |
|Mr Burjor D Nariman Company Secretary & Head Compliance || || || || |
|At the beginning of the year ||200 ||- ||200 ||- |
|Date wise Increase/Decrease in shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/sweat equity etc): ||- ||- ||- ||- |
|At the end of the year ||200 ||- ||200 ||- |
Indebtedness of the Company including interest outstanding/accrued but not due forpayment
| ||Secured Loans excluding deposits ||Unsecured Loans ||Deposits ||Total Indebtedness Rs. Crores |
|Indebtedness at the beginning of the financial year || || || || |
|i) Principal Amount ||32.00 ||3.03 ||0.02 ||35.05 |
|ii) Interest due but not paid ||- ||- ||- ||- |
|iii) Interest accrued but not due ||0.64 ||- ||- ||0.64 |
|Total (i+ii+iii) ||32.64 ||3.03 ||0.02 ||35.69 |
|Change in Indebtedness during the financial year || || || || |
|Addition ||- ||- ||- ||- |
|Reduction ||32.64 ||3.03 ||- ||35.67 |
|Net Change ||32.64 ||3.03 ||- ||35.67 |
|Indebtedness at the end of the financial year || || || || |
|i) Principal Amount ||- ||- ||0.02 ||0.02 |
|ii) Interest due but not paid ||- ||- ||- ||- |
|iii) Interest accrued but not due ||- ||- ||- ||- |
|Total (i+ii+iii) ||- ||- ||0.02 ||0.02 |
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director Whole-time Directors and/or Manager:
|Sr. No. ||Particulars of Remuneration ||Mr Harish Badami CEO & MD* ||Mr Kuldip Kaura Former CEO & MD** ||Total Amount |
| || || || ||Rs. Lakhs |
| ||Gross Salary || || || |
|1 ||(a) Salary as per provisions contained in Section 17(1) of the Income Tax Act 1961 ||266.46 ||397.85 ||664.31 |
| ||(b) Value of perquisites under Section 17(2) Income Tax Act 1961 ||0.16 ||0.24 ||0.40 |
| ||(c) Profits in lieu of salary under Section 17(3) Income Tax Act 1961 ||- ||- ||- |
|2 ||Stock Options ||- ||- ||- |
|3 ||Sweat Equity ||- ||- ||- |
|4 ||Commission ||- ||- ||- |
| ||- as % of profit ||- ||- ||- |
| ||- others specify
. ||- ||- ||- |
|5 ||Others please specify i. Deferred bonus (pertaining to the current Financial year payable in 2018) ||29.00 ||- ||29.00 |
| ||ii. Retirals ||15.30 ||35.27 ||50.57 |
| ||Total (A) ||310.92 ||433.36 ||744.28 |
*CEO & MD (Designate) w.e.f. 01.08.2014 till 12.08.2014 and CEO & MD w.e.f.13.08.2014
**upto August 12 2014
B. Remuneration to other Directors:
1. Independent Directors
|Sr. No. Particulars of Remuneration ||Name of Director || |
| ||Mr Sekhsaria ||Mr Haribhakti ||Mr Roongta ||Mr Dani ||Mr Kavarana ||Mr Gandhi ||Ms Nayar ||Mr S M Palia - Director retired during the year ||Total Amount Rs. Lakhs |
|-Fee for attending Board/Committee Meetings ||4.40 ||7.40 ||3.70 ||6.60 ||7.90 ||4.30 ||2.80 ||0.40 ||37.50 |
|- Commission ||37.00 ||28.00 ||28.00 ||28.00 ||30.50 ||22.22 ||11.05 ||3.45 ||188.22 |
|- Others please specify ||- ||- ||- ||- ||- ||- ||- ||- ||- |
|Total (B)(1) || || || || || || || || ||225.72 |
2. Other Non Executive Directors
| ||Name of Director || |
| ||Mr Terver ||Mr Fontana ||Mr Lynam ||Mr Sharma ||Mr Hugentobler - Director retired during the year ||Mr Narula - Director retired during the year ||Total Amount Rs. Lakhs |
|- Fee for attending Board / Committee Meetings ||8.70 ||0.90 ||1.70 ||1.90 ||1.00 ||3.50 ||17.70 |
|- Commission ||28.00 ||16.00 ||16.00 ||14.42 ||2.84 ||15.73 ||92.99 |
|- Others please specify ||- ||- ||- ||- ||- ||- ||- |
|Total (B)(2) || || || || || || ||110.69 |
|Total (B)= (B)(1)+ (B)(2) || || || || || || ||336.41 |
C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD
| || ||Key Managerial Personnel |
|Sr. No. ||Particulars of Remuneration ||Mr Sunil K Nayak Chief Financial Officer ||Mr Burjor D Nariman Company Secretary & Head Compliance ||Total Amount Rs. Lakhs |
|1. ||Gross Salary || || || |
| ||(a) Salary as per provisions contained in Section 17(1) of the Income Tax Act 1961 ||175.20 ||115.83 ||291.03 |
| ||(b) Value of perquisites under Section 17(2) Income Tax Act 1961 ||11.09 ||- ||11.09 |
| ||(c) Profit in lieu of salary under Section 17(3) Income Tax Act 1961 ||- ||- ||- |
|2. ||Stock Options ||- ||- ||- |
|3. ||Sweat Equity ||- ||- ||- |
|4. ||Commission ||- ||- ||- |
| ||- as % of profit ||- ||- ||- |
| ||- others specify
. ||- ||- ||- |
|5. ||Others please specify - Retirals ||15.53 ||6.21 ||21.74 |
| ||Total (C) ||201.82 ||122.04 ||323.86 |
VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES:
|Type ||Section of the Companies Act ||Brief Description ||Details of Penalty / Punishment / Compounding fees imposed ||Authority [RD / NCLT / COURT] ||Appeal made if any (give details) |
|A. COMPANY || || || || || |
|Penalty || || || || || |
|Punishment || || ||None || || |
|Compounding || || || || || |
|B. DIRECTORS || || || || || |
|Penalty || || || || || |
|Punishment || || ||None || || |
|Compounding || || || || || |
|C. OTHER OFFICERS IN DEFAULT || || || || || |
|Penalty || || || || || |
|Punishment || || ||None || || |
|Compounding || || || || || |