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ACC Ltd.

BSE: 500410 Sector: Industrials
NSE: ACC ISIN Code: INE012A01025
BSE 12:54 | 25 May 2201.35 -8.30
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2214.25

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2222.30

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2190.00

NSE 12:39 | 25 May 2208.95 -2.00
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2217.00

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OPEN 2214.25
PREVIOUS CLOSE 2209.65
VOLUME 2047
52-Week high 2587.95
52-Week low 1900.50
P/E 24.00
Mkt Cap.(Rs cr) 41,339
Buy Price 2199.85
Buy Qty 4.00
Sell Price 2202.90
Sell Qty 17.00
OPEN 2214.25
CLOSE 2209.65
VOLUME 2047
52-Week high 2587.95
52-Week low 1900.50
P/E 24.00
Mkt Cap.(Rs cr) 41,339
Buy Price 2199.85
Buy Qty 4.00
Sell Price 2202.90
Sell Qty 17.00

ACC Ltd. (ACC) - Director Report

Company director report

TO THE MEMBERS

The Board of Directors are pleased to present the Company’s 86th AnnualReport on business and operations together with the audited financial statements(consolidated as well as standalone) for the year ended December 31 2021.

1. STATE OF THE AFFAIRS OF THE COMPANY

The performance of the Cement Business and Ready Mix Concrete (‘RMX’)Business are detailed out in the Management Discussion and Analysis Report which formspart of the Annual Report.

2. FINANCIAL PERFORMANCE

( ` Crore)

Consolidated Standalone
Particulars 2021 2020 2021 2020
Revenue from Operations 16151.67 13785.98 16151.35 13784.54
Other Income 206.71 216.74 204.76 203.98
Total Income 16358.38 14002.72 16356.11 13988.52
Profit before Tax* 2506.38 1708.85 2460.39 1687.78
Tax Expenses 643.28 278.59 640.12 272.84
Profit for the year 1863.10 1430.26 1820.27 1414.94
Attributable to
Owners of the Company 1862.99 1430.18 1820.27 1414.94
Non-controlling Interest 0.11 0.08 - -
Other Comprehensive Income (OCI) 5.43 (14.58) 5.44 (14.54)
Total Comprehensive Income 1868.53 1415.68 1825.71 1400.40
Owners of the Company 1868.42 1415.60 1825.71 1400.40
Non-controlling Interest 0.11 0.08 - -
Opening Balance in retained earnings 8866.04 7713.34 8834.02 7696.52
Amount available for appropriations 10734.46 9128.94 10659.73 9096.92
Appropriations
Final Dividend Paid for 2020 262.90 - 262.90 -
Interim Dividend Paid for 2019 - 262.90 - 262.90
Closing balance in retained earnings 10471.56 8866.04 10396.83 8834.02

* Profit before Tax for 2021 includes charge of `54.76 Crore towards restructuring costand `38.10 Crore towards impairment of investment (only in Standalone) and for 2020includes charge of ` 176.01 Crore towards impairment of assets and `128.92 Crore towardstime value of money of Government Incentives.

3. OVERVIEW OF COMPANY’S OPERATIONAL AND FINANCIAL PERFORMANCE

• Consolidated Income comprising Revenue from Operations and other income forthe year was `16358.38 Crore 17% higher compared to

` 14002.72 Crore in 2020

• Total consolidated Revenue from Operations increased to `16151.67 Crore from`13785.98 Crore in 2020

• Consolidated Profit before Tax for the year was

` 2506.38 Crore vis-?-vis` 1708.85 Crore in 2020

• Consolidated Profit after Tax for the year was

` 1863.10 Crore compared to ` 1430.26 Crore in 2020

• No material changes or commitments have occurred between the end of thefinancial year and the date of this Report which affect the Financial Statements of theCompany with respect to the reporting year

• Cement production increased by 13% from 23.77 Million Tonnes in 2020 to 26.92Million tonnes in 2021

• Cement Sales Volume increased by 13% from 25.53 Million Tonnes in 2020 to 28.89Million tonnes in 2021

• The net sales in cement increased by 17% from

` 12658.17 Crore in 2020 to `14772.36 Crore in 2021

• RMX Production Volume has increased by 24% from 22.70 Lakh m3 in 2020to 28.09 m3 in 2021

• RMX Sales volume increased by 24% from 22.70 Lakh m3 in 2020 to 28.09Lakh m3 in 2021

• The net sales in RMX increased by 30% from `955.42 Crore in 2020 to `1241.66Crore in 2021.

4. DIVIDEND

The Board of Directors has recommended payment of dividend at a rate of `58/- perequity share (580%) for the year ended December 31 2021 subject to the approval of theMembers at the 86th Annual General Meeting (‘AGM’).

In terms of the provisions of Regulation 43A of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 as amended (‘the ListingRegulations’) the Company has formulated a Dividend Distribution Policy. Thepolicy is given in Annexure A to this Report.

It is also available on the Company’s website and can be accessed atwww.acclimited.com/assets/new/new_pdf/ Dividend_Distribution_Policy.pdf

Unclaimed dividend pertaining to the 76th final dividend and the 77thinterim dividend respectively for the years December 31 2013 and December 31 2014totalling to `6.07 Crore have been transferred to the Investor Education and ProtectionFund (‘IEPF’) in accordance with statutory requirements.

5. TRANSFER TO RESERVES

The Company has not transferred any amount to the Reserves for the financial year endedDecember 31 2021.

6. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34 of the Listing Regulations the Management Discussion andAnalysis Report for the year under review is presented in a separate section formingpart of the Annual Report.

7. SHARE CAPITAL

The Company’s paid-up equity share capital continues to stand at `187.79 Crore ason December 31 2021.

During the year under review the Company has not issued any shares or convertiblesecurities. The Company does not have any scheme for the issue of shares including sweatequity to its Employees or Directors.

8. FINANCIAL LIQUIDITY

Consolidated cash and cash equivalent as on December 31 2021 stood at ` 7366.59 Crorevis-?-vis` 5849.36 Crore in the previous year.

The Company’s working capital management is robust and involves a well-organisedprocess which facilitates continuous monitoring and control over receivables inventoriesand other parameters.

9. CREDIT RATING

As in the previous years CRISIL a reputed rating agency has given the highest creditrating of AAA/ STABLE for the long-term and A1+ for the short-term financial instrumentsof the Company. This reaffirms the reputation and trust the Company has earned for itssound financial management and its ability to meet its financial obligations.

10. DEPOSITS

The Company has not accepted any deposits falling under the ambit of Section 73 of theCompanies Act 2013 (‘the Act’) and the Rules framed thereunder duringthe year under review.

11. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

The details of Loans Guarantees and Investments covered under the provisions ofSection 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules2014 are given in the Notes to the Financial Statements (Refer Note No. 47).

12. INTERNAL CONTROL SYSTEMS

12.1 Internal audit and its adequacy

The scope and authority of the internal audit function is defined in the Internal AuditCharter. To maintain independence and objectivity in its functions the internal auditfunction reports directly to the Audit Committee of the Board.

At the beginning of each financial year a risk-based annual audit plan is rolled outafter it is approved by the Audit Committee of the Board. The audit plan aims to evaluatethe efficacy and adequacy of the internal control system(s) and compliance(s) thereofrobustness of internal processes policies and accounting procedures compliance with lawsand regulations.

The Internal Audit function consisting of professionally qualified accountantsengineers Fraud Risk and Information Technology audit specialists is adequately skilledand resourced to deliver audit assurances at highest levels.

Based on the reports of internal audit function process owners undertake correctiveaction in their respective areas. Significant audit observations and corrective actionsthereon are presented to the Audit Committee of the Board.

The onset of COVID-19 pandemic and consequent lockdowns and restrictions imposed tocurb its spread made the conduct of physical audits extremely difficult. Under suchchallenging circumstances and considering the safety and well-being of employeesCorporate Internal Audit envisioned and adopted a ‘remote audit’ approach byleveraging technology to ensure continuity in audit and assurance processes. Acomprehensive plan scoping and deployment of data analytics facilitated seamless andeffective conduct of remote internal audits during the year.

12.2 Internal Controls over Financial Reporting

The Company’s internal financial controls are commensurate with the scale andcomplexity of its operations. The controls were tested during the year and no reportablematerial weaknesses either in their design or operations were observed.

The Company has put in place robust policies and procedures which inter aliaensure integrity in conducting its business safeguarding of its assets timelypreparation of reliable financial information accuracy & completeness in maintainingaccounting records and prevention & detection of frauds & errors.

13. VIGIL MECHANISM/ WHISTLE-BLOWER POLICY

Over the years the Company has established a reputation for doing business withintegrity and maintained zero tolerance for any form of unethical behaviour. EthicalViewReporting Policy (‘EVRP’) is the vigil mechanism instituted by theCompany to report concerns about unethical behaviour in compliance with the requirementsof the Act and the Listing Regulations. The Audit Committee oversees the functioning ofthis policy. Protected disclosures can be made by a whistle-blower through severalchannels to report actual or suspected frauds and violation of the Company’s Code ofConduct. Details of the EVRP have been disclosed on the Company’s website and can beaccessed at www. acclimited.com/assets/new/pdf/ethicalview-reporting-policy.pdf

During the year the Company reached out to employees through e-learning and onlinetraining modules for creating greater awareness with respect to its Fair CompetitionDirective and Anti-Bribery and Corruption Directive. This has helped in achieving a highlevel of engagement and compliance among the employees.

14. SUBSIDIARY ASSOCIATE AND JOINT VENTURE COMPANIES

14.1 Subsidiaries

Bulk Cement Corporation (India) Limited (‘BCCI’)

During the year under review BCCI’s revenue from operations increased to `22.04Crore compared to `18.48 Crore in 2020. The profit before tax for 2021 was `2.59 Crore asagainst `2.08 Crore in 2020.

ACC Mineral Resources Limited (‘AMRL’)

The Company had a Joint Venture with Madhya Pradesh State Mining Corporation Limited (‘MPSMC’)for the development of four (4) coal blocks allotted to MPSMC by the Government of Indiathrough its wholly-owned subsidiary AMRL.

Consequent upon the cancellation of the allocation of the four (4) coal blocks to MPSMCby the Government of India as per the orders of the Supreme Court passed in September2014 AMRL does not have any business activity and correspondingly did not have anyoperating income during the period under review.

Other Subsidiaries

The Company has two (2) other Subsidiary Companies viz. Lucky Minmat Limited andSinghania Minerals Private Limited. Singhania Minerals Private Limited is operationalwhile Lucky Minmat Limited is not operational.

14.2 Material Subsidiaries

None of the subsidiaries mentioned in para 14.1 supra is a material subsidiary as perthe thresholds laid down under the Listing Regulations as amended from time to time.

The Board of Directors of the Company has approved a Policy for determining materialsubsidiaries in line with the Listing Regulations. The Policy has been uploaded on theCompany’s website and can be accessed at www.acclimited.com/assets/new/pdf/CG/Determiningmaterialsubsidiaries.pdf

14.3 Joint Ventures (‘JV’)/ Associate Companies

OneIndia BSC Private Limited is a JV Company with equal participation with AmbujaCements Limited to provide back-office services to the Company with respect to routinetransactional processes. During the last year the Company migrated the back-officeservices to LH Global Hub Services Private Limited (‘LHGHS’) which is theglobal shared services for the entire Holcim Group.

The Company also has a JV with Aakaash Manufacturing Company Private Limited for themanufacture and supply of ready-mix concrete. As on December 31 2021 the following isthe list of Associate Companies:

• Alcon Cement Company Private Limited

• Asian Concretes and Cements Private Limited

15. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company for the financial year 2021 areprepared in compliance with the applicable provisions of the Act including IndianAccounting Standards specified under Section 133 of the Act. The audited ConsolidatedFinancial Statements together with the Auditors’ Report thereon form part of theAnnual Report.

Pursuant to Section 129(3) of the Act a statement containing salient features of theFinancial Statements of each of the subsidiaries associates and JV Companies in theprescribed Form AOC-1 forms part of the Annual Report.

The Financial Statements of the subsidiaries are available for inspection by theMembers at the Registered Office of the Company pursuant to the provisions of Section 136of the Act. The Company shall provide free of cost a copy of the Financial Statements ofits Subsidiary Companies to the Members upon their request. The statements are alsoavailable on the website of the Company and can be accessed at www.acclimited.com underthe ‘Investors’ section.

16. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL

16.1 Directorate

A. Appointments/ Re-appointments Mr Narotam S. Sekhsaria

Mr Sekhsaria was appointed as Independent Director for a period of five (5) years inthe Extra-Ordinary General Meeting held on September 10 2014 with effect from July 242014.

However with effect from August 12 2016 consequent upon the amalgamation of Holcim(India) Pvt Ltd and Ambuja Cements Ltd Mr Sekhsaria was classified as a Non-IndependentDirector liable to retire by rotation.

In terms of Section 152 of the Act Mr Sekhsaria Non-Executive Non-IndependentDirector being liable to retire by rotation was re-appointed by the Members at the AGMheld on April 7 2021.

Mr Jan Jenisch

Mr Jan Jenisch was appointed as Non-Executive Non-Independent Director being liable toretire by rotation on the Board of Directors of the Company by the Members at the AGMheld on June 13 2018.

In terms of Section 152 of the Act Mr Jenisch Non-Executive Non-Independent Directorbeing liable to retire by rotation was re-appointed by the Members at the AGM held onApril 7 2021.

Mr Martin Kriegner

Mr Martin Kriegner was appointed as

Non-Executive Non-Independent Director being liable to retire by rotation on theBoard of Directors of the Company by the Members at the AGM held on April 13 2016.

In terms of Section 152 of the Act Mr Kriegner Non-Executive Non-IndependentDirector being liable to retire by rotation shall retire at the ensuing AGM and beingeligible for re-appointment offers himself for re-appointment.

Mr Neeraj Akhoury

Mr Neeraj Akhoury was appointed as Non-Executive Non-Independent Director being liableto retire by rotation on the Board of Directors of the Company by the Members at the AGMheld on July 6 2020.

In terms of Section 152 of the Act Mr Akhoury Non-Executive Non-Independent Directorbeing liable to retire by rotation shall retire at the ensuing AGM and being eligible forre-appointment offers himself for re-appointment.

The relevant details including profiles of Mr Martin Kriegner and Mr Neeraj Akhoury areincluded separately in the Notice of AGM and Report on Corporate Governance of the Companyforming part of the Annual Report.

B. Cessation

There was no instance of resignation/ cessation of Directorship during the year underreview.

16.2 Key Managerial Personnel (‘KMP’)

There is no change in the KMP of the Company during the financial year 2021 and the KMPof the Company are as under:

1. Mr Sridhar Balakrishnan (MD & CEO)

2. Mr Yatin Malhotra (Chief Financial Officer)

3. Mr Rajiv Choubey (Chief Legal Officer & Company Secretary)

16.3 Independent Directors

The Company’s Independent Directors have submitted requisite declarationsconfirming that they continue to meet the criteria of independence as prescribed underSection 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. TheIndependent Directors have also confirmed that they have complied with Schedule IV of theAct and the Company’s Code of Conduct.

The Board is of the opinion that the Independent Directors of the Company possessrequisite qualifications experience and expertise in the fields of manufacturingfinance people management strategy auditing tax and risk advisory servicesinfrastructure banking insurance financial services investments mining and mineralindustries and e-commerce; and they hold high standards of integrity.

Regarding proficiency the Company has adopted requisite steps towards the inclusion ofthe names of all Independent Directors in the data bank maintained with the IndianInstitute of Corporate Affairs Manesar (‘IICA’). Accordingly all theIndependent Directors of the Company have registered themselves with IICA for the saidpurpose. In terms of Section 150 of the Act read with the Companies (Appointment &Qualification of Directors) Rules 2014 as amended since all the Independent Directors ofthe Company have served as Directors for a period of not less than three (3) years on theBoard of Listed Companies as on the date of inclusion of their names in the database theyare not required to undertake online proficiency self-assessment test conducted by thesaid Institute.

16.4 Board effectiveness

a) Familiarisation programme for Independent Directors

Over the years the Company has developed a robust familiarisation process for thenewly appointed Directors with respect to their roles and responsibilities way ahead ofthe prescription of the regulatory provisions. The process has been aligned with therequirements under the Act and other related regulations. This process inter alia includesproviding an overview of the cement industry the Company’s business model the risksand opportunities the new products innovation sustainability measures digitisationmeasures etc.

Details of the familiarisation programme are explained in the Report on CorporateGovernance and are also available on the Company’s website and can be accessed atwww.acclimited.com/assets/new/pdf/CG/Familiarization-Programme-for-Independent-Directors.pdf

b) Formal annual evaluation

The Board carries out its annual performance evaluation of its own performance theDirectors individually as well as the evaluation of the working of its Audit Nomination& Remuneration Risk Management Stakeholders’ Relationship CSR and ComplianceCommittees as mandated under the Act and the Listing Regulations as amended from time totime. The criteria applied in the evaluation process are explained in the Report onCorporate Governance which forms part of the Annual Report.

16.5 Remuneration policy and criteria for selection of candidates for appointment asDirectors KMP and Senior Leadership positions

The Company has in place a policy for remuneration of Directors KMP and Members of theExecutive Committee (‘ExCo’) as well as a well-defined criterion for theselection of candidates for appointment to the said positions which has been approved bythe Board. The Policy broadly lays down the guiding principles philosophy and the basisfor payment of remuneration to the Executive and Non-Executive Directors (by way ofsitting fees and commission) KMP and ExCo.

The criteria for the selection of candidates for the above positions cover variousfactors and attributes which are considered by the Nomination & RemunerationCommittee and the Board of Directors while selecting candidates. The policy onremuneration of Directors KMP and Members of the ExCo is given in Annexure B tothis Report and is also available at the website of the Company and can be accessed atwww.acclimited.com/ assets/new/pdf/CG/Policy_remuneration_selection_for_ appointment.pdf

The Board of Directors of the Company also formulated and adopted the policy on the‘Diversity of the Board’ and ‘Succession Policy for Directors’. Thedetails of the same are available at the website of the Company and can be accessed atwww.acclimited.com/assets/new/ new_pdf/Policyondiversityoftheboard.pdf www.acclimited.com/assets/new/pdf/CG/succession_policy_for_directors.pdf

17. NUMBER OF MEETINGS OF THE BOARD & ITS COMMITTEES

Regular meetings of the Board and its Committees are held to discuss and decide onvarious business policies strategies financial matters and other businesses. Theschedule of the Board/ Committee Meetings to be held in the forthcoming financial year iscirculated to the Directors in advance to enable them to plan their schedule for effectiveparticipation in the meetings. Due to business exigencies the Board has also beenapproving several proposals by circulation from time to time.

During the year seven (7) Board Meetings were convened and held the details of whichare given in the Report on Corporate Governance which forms part of the Annual Report.

The Company has the following seven (7) Board-level Committees which have beenestablished in compliance with the requirements of the business and relevant provisions ofapplicable laws and statutes:

1. Audit Committee

2. Risk Management Committee

3. Corporate Social Responsibility Committee*

4. Nomination and Remuneration Committee

5. Stakeholders’ Relationship Committee

6. Compliance Committee

7. Sustainability Committee*

* Corporate Social Responsibility (CSR) & Sustainability Committee is split intotwo (2) separate Committees i.e. CSR Committee and Sustainability Committee with effectfrom January 1 2022.

The Committee meetings were held during the year including Audit Committee andStakeholders’ Relationship Committee Meetings which met six (6) and three (3) timesrespectively during the year. The details with respect to the composition terms ofreference number of meetings held etc. of these Committees are included in the Report onCorporate Governance which forms part of the Annual Report.

18. AUDIT COMMITTEE

The Audit Committee comprises of five (5) members. The Committee is chaired by MrSundaram (Independent Director). The other Members of the Committee are Mr Kriegner(Non-Executive Director) Mr Chatterjee (Independent Director) Mr Mehta (IndependentDirector) and Mr Roongta (Independent Director). The Committee comprises of majority ofIndependent Directors.

Details of the role and responsibilities of the Audit Committee the particulars ofmeetings held and attendance of the Members at such Meetings are given in the Report onCorporate Governance which forms part of the Annual Report.

During the year under review the recommendations made by the Audit Committee wereaccepted by the Board.

19. CORPORATE SOCIAL RESPONSIBILITY (‘CSR’) COMMITTEE

The CSR & Sustainability Committee is split into two (2) separate Committees i.e.CSR Committee and Sustainability Committee with effect from January 1 2022.

The CSR Committee comprises of four (4) members of which two (2) are IndependentDirectors. The Committee is chaired by Mr Haribhakti (Independent Director). During theyear under review the other members of the Committee were Ms Nayar (IndependentDirector) Mr Akhoury (Non-Executive Director) and Mr Balakrishnan (MD & CEO). TheCommittee met thrice (3) during the reporting period. Details of the role and functioningof the Committee are given in the Report on Corporate Governance which forms part of theAnnual Report.

In compliance with Section 135 of the Act read with the Companies (Corporate SocialResponsibility Policy) Rules 2014 as amended the Company has set up CSR Committee andstatutory disclosures with respect to the CSR Committee and an Annual Report on CSRActivities forms part of this Report as Annexure C.

The CSR Policy as recommended by the CSR Committee and as approved by the Board isavailable on the website of the Company and can be accessed at https://acclimited.com/assets/new/new_pdf/CSR-Policy.pdf

20. RISK MANAGEMENT FRAMEWORK

The Company’s governance structure has well-defined roles and responsibilitieswhich enable and empower the Management to identify assess and leverage businessopportunities and manage risks effectively. There is also a comprehensive framework forstrategic planning implementation and performance monitoring of the business plan which interalia includes a well-structured Business Risk Management process. To systematicallyidentify risks and opportunities and monitor their movement a heat map has been designedcomprising two (2) parameters:

a) likelihood of the event and

b) the impact it is expected to have on the Company’s operations and performance.

The risks that fall under the purview of high likelihood and high impact are identifiedas key risks. This structured process in identifying risks supports the ExCo in strategicdecision-making and in the development of detailed mitigation plans. The identified risksare then integrated into the Company’s planning cycle which is a rolling process tointer alia periodically review the movement of the risks on the heat map and theeffectiveness of the mitigation plan.

The detailed section on key business risks and opportunities forms part of theIntegrated Report which forms part of the Annual Report.

21. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Company has developed a Related Party

Transactions (‘RPTs’) Manual and Standard Operating Procedures toidentify and monitor RPTs.

All transactions with related parties are placed before the Audit Committee as well asthe Board for approval. Prior omnibus approval of the Audit Committee and the Board isobtained for the RPTs which are foreseeable and repetitive. The RPTs are entered withprior approvals of the Audit Committee and the same are subject to audit. A statementgiving details of all RPTs is placed before the Audit Committee and the Board of Directorson a quarterly basis. The statement is supported by a certificate from the MD & CEOand the Chief Financial Officer (‘CFO’).

The policy on RPTs as approved by the Board of Directors has been uploaded on theCompany’s website and can be accessed at https://acclimited.com/assets/new/pdf/CG/Related-Party-Transactions-Policy-20210824.pdf

All transactions with related parties during the year were on arm’s length basisand were in the ordinary course of business. The details of the material related-partytransactions entered into during the year as per the policy on RPTs approved by the Boardhave been reported in Form AOC 2 which is given in Annexure D to this Report.

None of the Directors and the KMP has any pecuniary relationships or transactions vis-?-visthe Company.

22. TRANSFER OF EQUITY SHARES UNPAID/ UNCLAIMED DIVIDEND TO THE IEPF

In line with the statutory requirements the Company has transferred to the credit ofIEPF set up by the Government of India equity shares in respect of which dividend hadremained unpaid/ unclaimed for a period of seven (7) consecutive years within thetimelines laid down by the Ministry of Corporate Affairs. Unpaid/ unclaimed dividend forseven (7) years or more has also been transferred to the IEPF pursuant to the requirementsunder the Act.

23. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

Builders Association of India complaint under the provisions of the Competition Act2002 against the cement manufacturers – Order of the Supreme Court of India in Appeal

It was reported in detail in reports of earlier years that a penalty of `1147.59Crore was levied on the Company by the Competition Commission of India (‘CCI’)based on a complaint filed by the Builders’ Association of India for allegedviolation of the provisions of the Competition Act 2002.

The National Company Law Appellate Tribunal (‘NCLAT’) dismissed theappeal of the Company dated July 25 2018 upholding the levy of penalty of `1147.59 Croreas imposed by the CCI vide its order dated August 31 2016.

The Company preferred an appeal before the Hon’ble Supreme Court against the aboveorder of NCLAT. The Hon’ble Supreme Court vide its order dated October 5 2018 hasadmitted the Company’s Civil Appeal and ordered for continuance of the interim orderspassed by NCLAT towards stay of the demand subject to deposit of 10% of the penaltyamount. The matter is currently subjudice and as on December 31 2021 the penalty amountof `1147.59 Crore and interest thereon has been disclosed as a contingent liability inthe Notes to Financial Statements [Refer Note 40(A)(a)].

CCI’s order on complaint filed by Director Supplies & Disposals State ofHaryana in 2013

The Director Supplies & Disposals State of Haryana had filed a complaint beforeCCI alleging collusion and bid rigging by cement manufacturers in violation of Section3(1) and Section 3(3)(d) of the Competition Act 2002. In January 2017 the CCI passed anorder against seven (7) cement manufacturers including the Company imposing a penaltycalculated at the rate of 0.3% of the average turnover of the last three (3) years fromfinancial year 2012-13 to financial year 2014-15. In respect of the Company the amount ofpenalty works out to `35.32 Crore.

An appeal is pending before NCLAT in the said matter against the orders of the CCI. Inthe intervening period there was no progress due to Covid related lockdowns and limitedvirtual functioning. As on December 31 2021 the penalty amount of `35.32 Crore isdisclosed as a contingent liability in the Notes to Financial Statements [Refer Note40(A)(b)]. There are no further developments during the year under review in respect ofthe above cases.

Reference is drawn to the ‘Emphasis of Matter’ by the Auditors in theirreports on the above matters.

24. RISK ARISING OUT OF LITIGATION CLAIMS AND UNCERTAIN TAX POSITIONS

The Company is exposed to a variety of different laws regulations positions andinterpretations thereof which encompasses direct taxation and legal matters.

In the normal course of business provisions and contingencies may arise due touncertain tax positions and legal matters.

Based on the nature of matters the management applies significant judgement whenconsidering evaluation of risk including how much to provide for the potential exposureof each of the matters.

These estimates could change substantially over time as new facts emerge as each matterprogresses hence these are reviewed regularly. For matters where expert opinion isrequired the Company involves the best legal counsel.

Reference is drawn to the ‘Key audit matters’ by the auditors in theirreports on the above matters.

25. AUDITORS

25.1 Statutory Auditor

M/s Deloitte Haskins & Sells LLP Chartered Accountants (ICAI Firm RegistrationNumber 117366W/ W-100018) were appointed as Statutory Auditor of the Company at the 81stAGM held on March 29 2017 to hold office from the conclusion of the said meeting till theconclusion of the 86th AGM to be held in the year 2022. The term of office ofM/s Deloitte Haskins & Sells LLP as Statutory Auditors of the Company will concludefrom the close of the forthcoming AGM of the Company.

The Board of Directors of the Company at its meeting held on February 9 2022 appointedM/s S R B C & Co. LLP Chartered Accountants (ICAI Firm Registration Number 324982E/E300003) as the Statutory Auditor of the Company to hold office from the conclusion of the86th AGM till the conclusion of the 91st AGM to be held in the year2027 based on the recommendation of the Audit Committee and subject to the approval of theshareholders at the ensuing 86th AGM. The Statutory Auditors have confirmedtheir independent status and eligibility for the said appointment.

The Shareholders’ attention is drawn to a Resolution proposing the appointment ofM/s S R B C & Co. LLP as Statutory Auditors of the Company which is included at ItemNo. 5 of the Notice convening the 86th AGM.

25.2 Cost Auditor

The cost accounts and records are required to be maintained under Section 148(1) of theAct. They are duly made and maintained by the Company. In terms of the provisions ofSection 148 of the Act read with the Companies (Cost Records and Audit) Rules 2014 theBoard of Directors of the Company has on the recommendation of the Audit Committeeappointed M/s D. C. Dave & Co. Cost Accountants Mumbai (Firm Registration No.000611) to conduct the cost audit of the Company for the financial year ending December31 2022 at a remuneration as mentioned in the Notice convening the 86th AGM.

As required under the Act read with the Companies (Cost Records and Audit) Rules 2014the remuneration payable to Cost Auditors must be placed before the Members at a generalmeeting for ratification. Hence a resolution for the same forms part of the Notice of theensuing AGM.

M/s D. C. Dave & Co. have confirmed the cost records for the financial year endedDecember 31 2020 are free from any disqualifications as specified under Section 141 (3)and proviso to Section 148(3) read with Section 141(4) of the Act. They have furtherconfirmed their independent status.

25.3 Secretarial Auditor and Secretarial Audit Report

In terms of the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board hasappointed M/s Mehta & Mehta Company Secretaries in Practice Mumbai as theSecretarial Auditor for conducting Secretarial Audit of the Company for the financial yearended December 31 2021.

The report of the Secretarial Auditor is given in Annexure_E. The SecretarialAudit Report does not contain any qualification reservation or adverse remark. TheCompany is in compliance with the Secretarial Standards specified by the Institute ofCompany Secretaries of India (‘ICSI’).

26. MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE_COMPANY

There are no material changes and commitments affecting the financial position of theCompany which has occurred between the end of the financial year for the Company i.e.December 31 2021 and the date of this Board’s Report i.e. February 9 2022.

27. AWARDS AND RECOGNITIONS

In 2021 the Company committed to Net Zero Pledge by signing the Business Ambition 1.5oC. ACC has also emission reduction targets under validated its CO2

Science Based Target Initiative (SBTi) under well below 2o C scenario. ACCis the first Indian Cement Company to have both of these.

ACC has also been recognised for demonstrating leadership in climate change efforts byglobal environmental non-profit CDP securing a place on its prestigious ‘AList’ for its climate change disclosure. ACC has also received B rating by CDP inWater disclosure for which the Company participated for the first time.

ACC has scored 73 in Dow Jones Sustainability Index and is among the top 15 companiesacross construction material sector globally.

28. ENHANCING SHAREHOLDER VALUE

ACC is committed to creating and returning value to shareholders. Accordingly theCompany is dedicated to achieving high levels of operating performance costcompetitiveness enhancing the productive asset and resource base and striving forexcellence in all areas of operations.

The Company firmly believes that its success in the marketplace and good reputation areamong the primary determinants of shareholder value. Its close relationship with customersand a deep understanding of their challenges and expectations drive the development of newproducts and services. With decades of expertise and know-how ACC offers its customerssolutions that enhance their projects and builds trust.

Anticipating customer requirements early and being able to address them effectivelyrequires a strong commercial backbone. ACC continues to develop this strength byinstitutionalising sound commercial processes and building world-class commercialcapabilities across its marketing and sales teams.

The Company uses an innovative approach in the development of its products andservices as well as execution of growth opportunities. The Company is also committed tocreating value for all its stakeholders by ensuring that its corporate actions positivelyimpact the economic societal and environmental dimensions of the triple bottom line.

29. CORPORATE GOVERNANCE

The Board of Directors reaffirm their continued commitment to good corporate governancepractices. During the year under review the Company complied with the provisions relatingto corporate governance as provided under the Listing Regulations. The compliance reporttogether with a certificate from the Company’s auditors confirming the compliance isprovided in the Report on Corporate Governance which forms part of the Annual Report.

30. BUSINESS RESPONSIBILITY REPORTING

A separate section on Business Responsibility forms part of this Annual Report asrequired under Regulation 34(2) (f) of the Listing Regulations.

31. PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are given in Annexure_F to this Report.

In accordance with the provisions of Sections 197(12) & 136(1) of the Act read withthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the listpertaining to the names and other particulars of employees drawing remuneration in excessof the limits set out in the aforesaid Rules is kept open for inspection during workinghours at the Registered Office of the Company and the Report & Accounts as set outtherein are being sent to all the Members of the Company. Any Member who is interested inobtaining these may write to the Chief Legal Officer & Company Secretary at theRegistered Office of the Company.

32. REPORTING OF FRAUDS BY AUDITORS

During the year under review neither the Statutory Auditors nor the SecretarialAuditor have reported to the Audit Committee of the Board under Section 143(12) of theAct any instances of fraud committed against the Company by its officers or employeesthe details of which would need to be mentioned in this Report.

33. ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act read withRule 12 of the Companies (Management and Administration) Rules 2014 the draft of theAnnual Return of the Company for the financial year December 31 2021 is uploaded on thewebsite of the Company and can be accessed at www. acclimited.com

34. COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors affirms that the Company has complied with the applicableSecretarial Standards (‘SS’) issued by the Institute of CompanySecretaries of India (SS1 and SS2) relating to Meetings of the Board and its Committeesand General Meetings respectively which have mandatory application during the year underreview.

35. STATUTORY DISCLOSURES

The disclosures required to be made under Section 134(3)(m) of the Act read with Rule8(3) of the Companies (Accounts) Rules 2014 on the Conservation of Energy TechnologyAbsorption and Foreign Exchange Earnings and Outgo are given as under:

A. Conservation of energy

A1. Power cost optimisation

During the year efforts were made to reduce the impact of increasing electrical energycost by partly replacing grid power through consumption of Open Access (‘OA’)power from comparatively cheaper sources. The plants which actively participated in OAprocurement of power were Kudithini Thondebhavi Gagal Madukkarai Wadi and Bargarh.Overall purchase of power from OA has resulted in a saving of ~`5.7 Crore.In addition the Waste Heat Recovery System (WHRS) at Gagal generated ~48.7Million units for internal consumption in place of grid power.

A2. Renewable power obligation

Your Company is putting all efforts to increase the share of Renewable Energy.

The captive wind power generation from Tamil Nadu and Rajathan wind farms contributedconsiderably in this front. This has resulted in a saving of ~`1 Crore onaccount of RPO cash outgo. Besides this the Company sourced Solar power atThondebhavi Kudithini and Wadi and Non Solar power at Thondebhavi to fulfill the SolarRPO and partly Non Solar RPO. This resulted in savings in total cash outgo of ~`12.7Crore.

Following energy conservation and efficiency improvement measures were undertakenin various areas of the cement manufacturing and Captive Power Plants (‘CPPs’)through Operational and Capex measures. A few highlights are as under:

• Energy efficiency improvement through installation of efficient equipment suchas fans blowers compressors and motors across all ACC plants;

• Conduction of mandatory energy audits and identification of energy conservationprojects;

• Implementation of projects identified as part of Mandatory Energy audits;

• Focus on Productivity Rate Index (‘PRI’) improvement throughComputational Fluid Dynamics (‘CFD’) studies and through other inhousemodification at Jamul Wadi Kymore and Madukkarai Tikarai;

• Installation of medium voltage variable frequency drives (‘MVVFD’)and low; • voltage variable frequency drives (‘LVVFD’) for processfans across all ACC plants.

Some of the additional proposals being implemented for further conservation of energy

• Installation of variable frequency drives and high efficiency fans across ACCplants;

• Conducting CFD Study for modification of cyclones at Bargarh;

• Installation of active Volt-ampere reactive (‘VAR’)compensation for 132kV substation at Bargarh;

• Reduction of Preheater pressure drop through enlargement of kiln inlet neck andreduction of pressure drop across V-separator of Roller Press (‘RP’);

• Improve the Raw mill PRI by improving feeding and increasing the roller grindingpressure at Jamul at Jamul;

• Installation of new design cooler plates at Wadi.

Impact of the above measures for reduction of energy consumption and consequent impacton cost of production

The measures stated in points (A) above would further improve the thermal andelectrical energy efficiency of the ACC Plants.

The capital investment on energy conservation equipment

Your Company invested ~`378.5 Crore on productivity/ efficiencyimprovement besides implementation low-cost measures to reduce energy consumption.

The steps taken by the Company for utilising alternate sources of energy

Besides the use of Renewable Energy (Solar and Non-Solar) your Company utilised 0.3Million tonnes of Alternative Fuels during the cement manufacture.

B. Technology Absorption

Research and Development (R&D)

1. Specific areas in which R&D is carried out by the Company a)Conservation of resources through maximisation of the use of low-grade limestone forcement manufacturing improvement in the quality of blended cement through innovativeprocess utilising industrial by-products for improved quality and performance of ACCplants;

b) Maximsation of industrial wastes utilisation and looking into possibilities ofenvironmentally friendly co-processing of wastes in cement manufacture leading to thermalsubstitution and conservation of natural resources;

c) Optimisation of fuel mix for lowering the cost;

d) Effective replacement of the costlier natural Gypsum by other form of gypsum andbyproducts without affecting the quality of cement;

e) Productivity research for increased efficiency in use of resources development ofapplication oriented emissions; cements with decreased CO2

f) Development of Integral waterproofing Compound;

g) Development of cement based niche products like water repellent and self-curing DryMix Mortar thin bed jointing mortar plasters tile adhesives range;

h) Development of Concrete Admixture for ACC RMX.

2. Benefits derived as result of above R&D a) Effective use of marginalquality raw materials and fuels with improved clinker quality;

b) Reduction in raw material cost–gypsum and mineral components;

c) Launch of special high-performance products like F2R Concrete+ ACC Gold forspecific market segments/ market climatic conditions;

d) Launch of Leak Block–an integral waterproofing compound/ dry-mix mortars forplasters tile fixing thin-bed jointing for blocks;

e) Increased absorption of blending materials like fly ash and slags in blendedcements;

f) Fuel efficiency;

g) Reduction in special power consumption for grinding;

h) ACC Concrete admixture project resulted in cost savings on admixture buying costwith a consistent quality.

3. Plan of action

a) Development of application oriented cement focusing customer pain points withreduced carbon footprint;

b) Development of cement-based niche products;

c) Exploratory research works on the above specified areas;

d) Maximisation of use of waste/ byproducts in cement manufacture as alternativematerials;

e) Improve product quality particularly with respect to long-term durability andreduction in cost of manufacture;

f) Implementing & developing complete range of concrete admixture for ACC RMX tomaximise the potential for quality & cost.

4. Expenditure on R&D

` Crore
a) Capital Nil
b) Recurring (Gross) 0.63
c) Total 0.63
d) Total R&D expenditure as percentage of total turnover -

C. Foreign Exchange Earnings and Outgo

` Crore

Foreign Exchange earned 4.19
Foreign exchange outgo 473.87

36. OTHER DISCLOSURES

36.1 There were no material changes and commitments affecting the financial position ofthe Company between the end of the financial year and the date of this report.

36.2 The Company has not issued any shares with differential voting rights/ sweatequity shares.

36.3 There was no revision in the Financial Statements.

36.4 There has been no change in the nature of business of the Company as on the dateof this report.

36.5 There are no proceedings either filed by ACC or filed against ACC pending underthe Insolvency and Bankruptcy Code 2016 as amended before National Company Law Tribunalor other courts during the year 2021.

36.6 Prevention of Sexual Harassment of Women at the Workplace

ACC is an equal employment opportunity Company and is committed to creating a healthyworking environment that enables employees to work without fear of prejudice and genderbias. As an organisation the Company is committed to ensure that every employee istreated with dignity and respect and works in a conducive work environment which promotesprofessional growth of employee and encourages equality of opportunity. The Company haszero tolerance towards any act on the part of any executive which may fall under theambit of ‘sexual harassment’ at workplace and is fully committed to uphold andmaintain the dignity of every woman executive working in the Company.

Further to provide an empowering and enabling atmosphere to women employees theCompany has continuously endeavoured to build the work culture which promotes the respectand dignity of all women employees across the organisation. The Company has formulated acomprehensive policy on prevention prohibition and redressal against sexual harassment ofwomen at workplace which is also in accordance with the provisions of the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 (‘POSH’).The said policy has been made available on the internal portal of the Company as well asthe website of the Company.

The Company has constituted of Internal Complaints Committee (‘ICC’)under the POSH and has complied with the provisions relating to the same. The ICC has beenset up comprising four (4) female employees of whom one female employee (1) is theChairperson of the ICC and two (2) male employees of whom one (1) is the secretary of theICC. There are two (2) external Members on the Committee who are specialists in dealingwith such matters. The employees are sensitised from time to time in respect of mattersconnected with prevention of sexual harassment. Awareness programmes are conducted at unitlevels to sensitise the employees to uphold the dignity of their female colleagues atworkplace. The Company also conducted an E-learning programme for employees to covervarious aspects of the subject matter. Number of cases filed and their disposal underSection 22 of the POSH is as follows:

Particulars Numbers
Number of complaints pending as on the beginning of the financial year 1
Number of complaints filed during the financial year 0
Number of complaints pending as on the end of the financial year 0

37. 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 statement in terms ofSection 134 of the Act:

a) that in the preparation of the annual Financial Statements for the year endedDecember 31 2021 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 1 of the Notes to the Accountshave been selected and applied consistently and judgement and estimates have been madethat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as on December 31 2021 and of the profit of the Company for the yearended 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 Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.

d) that the annual accounts have been prepared on a going concern basis.

e) that proper internal financial controls laid down by the Directors were followed bythe Company and such internal financial controls are adequate and were operatingeffectively.

f) that proper systems to ensure compliance with the provisions of all applicable lawshave been devised and such systems were adequate and were operating effectively.

38. INTEGRATED REPORTING

For the fourth (4th) year the Company has drawn up an Integrated Reportwhich encompasses both financial and non-financial information to enable Members to have amore holistic understanding of the Company’s long-term perspective. This year theIntegrated Reporting is more robust than before and details such as theorganisation’s strategy governance framework performance and prospects of valuecreation based on the six (6) forms of capital viz. financial capital manufacturedcapital intellectual capital human capital social & relationship capital andnatural capital have been added. The Integrated Report for the year 2021 is presented in aseparate section forming part of the Annual Report and also hosted on the Company’swebsite www.acclimited.com

The Annual Report also carries a detailed section containing the ‘BusinessResponsibility Report’. Since 2007 the Company has been publishing an annualCorporate Sustainable Development Report (‘SD_Report’) conforming to theguidelines of the Global Reporting Initiative. From the year 2016 these reports are basedon the GRI standards in accordance with the ‘Comprehensive’ option and have beenexternally assured. This year also the SD Report has been combined with the IntegratedReport.

39. ACKNOWLEDGEMENTS

The Directors express their deep sense of gratitude to the Central and State GovernmentMinistries and departments shareholders customers business associates bankersemployees trade unions and all other stakeholders for their support and look forward totheir continued assistance in future.

40. CAUTIONARY STATEMENT

Statements in the Board’s Report and the Management Discussion and Analysisdescribing the Company’s objectives projections estimates expectations orpredictions may be ‘forward looking statements’ within the meaning of applicablesecurities laws and regulations. Actual results could differ materially from thoseexpressed or implied. Important factors that could make a difference to the Company’soperations include global and Indian demand supply conditions finished goods prices feedstock availability and prices cyclical demand and pricing in the Company’s principalmarkets changes in government regulations tax regimes economic developments withinIndia and the countries within which the Company conducts business and other factors suchas litigation and labour negotiations. The Company is not obliged to publicly amendmodify or revise any forward-looking statement on the basis of any subsequentdevelopment information or events or otherwise.

For and on behalf of the Board of Directors

For ACC Limited

N S Sekhsaria

Chairman

Mumbai

February 9 2022

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