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Directors Report Year End : Dec '13    « Dec 12
TO THE MEMBERS OF ACC LIMITED
 
 The Directors take pleasure in presenting the Seventy Eighth Annual
 Report together with the audited financial statements for the year
 ended December 31, 2013. The Management Discussion and Analysis has
 also been incorporated into this report.
 
 1.  HIGHLIGHTS OF PERFORMANCE
 
 Consolidated income for the year decreased by 2% to Rs. 11,389 crore as
 compared to Rs. 11,621 crore in 2012.  Consolidated profit before tax
 in 2013 was Rs. 1,214 crore as against Rs. 1,441 crore in 2012.
 Similarly, consolidated profit after tax was Rs. 1,095 crore as against
 Rs. 1,059 crore in 2012.
 
 2.  FINANCIAL RESULTS
 
                               Consolidated          Standalone 
                               Rs. Crore             Rs. Crore
                               2013         2012     2013       2012
 
 Revenue from Operations(Net) 
 and other income              11,388.55 11,621.47  11,392.73  11,622.78
 
 Profit Before Tax (PBT)        1,213.64  1,440.99   1,226.96   1,451.49
 
 Provision for Tax                131.91    391.08     131.20     390.30
 
 Profit After Tax (PAT)         1,094.67  1,059.28   1,095.76   1,061.19
 
 Balance brought forward 
 from previous year             3,845.79  3,591.12   3,861.83   3,821.54
 
 Adjustment pursuant to 
 Amalgamation                        -         -          -      (216.29)
 
 Profit available for 
 Appropriations                 4,940.46  4,650.40   4,957.59   4,666.44
 
 Appropriations:
 
 Interim Equity Dividend          206.52    206.52     206.52     206.52
 
 Proposed Final Equity 
 Dividend                         356.72    356.72     356.72     356.72
 
 Tax on Equity Dividends           95.72     91.37      95.72      91.37
 
 Previous Year Tax on 
 Equity Dividends                   2.76       -         2.76        -
 
 General Reserve                  120.00    150.00     120.00     150.00
 
 Surplus carried to the 
 next year''s account            4,158.74  3,845.79   4,175.87   3,861.83
 
 3.  DIVIDEND
 
 Your Directors are pleased to recommend a final dividend of Rs. 19/-
 per equity share of Rs. 10 each. The Company had distributed an interim
 dividend of Rs. 11/- per equity share of Rs. 10 each in August 2013.
 The total dividend for the year ended December 31, 2013 would
 accordingly be Rs. 30/- per equity share of Rs. 10 each which was the
 same as the dividend declared for the year ended December 31, 2012. The
 total outgo for the current year amounts to Rs. 658.96 crore, including
 dividend distribution tax of Rs. 95.72 crore as against Rs. 654.61
 crore including dividend distribution tax of Rs. 91.37 crore in the
 previous year and Rs.  2.76 crore being the dividend distribution tax
 pertaining to previous year.
 
 4.  ECONOMIC SCENARIO AND OUTLOOK
 
 Indian economic growth in 2013 had slowed down to 4.5%-5% which is the
 lowest in a decade.  The high borrowing cost to combat inflation
 coupled with lower private consumption, low investment in
 infrastructure and other sectors were responsible for this. Although
 agriculture and allied sectors had shown improvement following a good
 monsoon and exports grew due to the depreciation in the value of the
 Indian Rupee, the economic growth was mainly pulled down by the
 contraction of the manufacturing sector.
 
 The low economic growth appears to have bottomed out and a gradual
 increase in economic activity is expected from the middle of 2014.
 
 5.  CEMENT INDUSTRY OUTLOOK AND OPPORTUNITIES
 
 The Indian Cement Industry has an installed capacity of ~350 million
 tonnes and the domestic consumption in the calendar year 2013 was ~260
 million tonnes. Cement consumption had grown at the rate of 4% to 5% in
 the calendar year 2013. Although, cement consumption is believed to
 have a multiplying factor of 1.2 to the GDP growth, such lower than
 expected consumption growth was mainly due to the high cost of
 borrowing and low investment in the infrastructure and commercial
 segments.
 
 Your Company had a marginally negative volume growth during the last
 calendar year as our large capacity in South and West could not be
 placed in the market due to overcapacity in these regions and also on
 account of negative consumption growth in our key markets of
 Maharashtra and Karnataka. The sales volume was however, in line with
 other large cement manufacturers in India.
 
 The overall cement demand is estimated to grow at the rate of 4% to 5%
 in the calendar year 2014.  The consumption growth may pick up beyond
 5% if investment is made in the infrastructure segment. With the
 gradual reduction in fiscal deficits and Consumer Price Index, it is
 expected that the interest rates would gradually come down which would
 stimulate demand in the housing sector. Even with a modest increase in
 the consumption growth, the cement industry will continue to have a
 huge capacity surplus in 2014, particularly in the South. Your
 Company''s continued focus on cost reduction under the
 Institutionalizing Excellence programme, its thrust on increasing the
 sale of its premium products and various other customer excellence
 initiatives should help in presenting an improved performance.
 
 6.  CEMENT BUSINESS - PERFORMANCE AT A GLANCE_
 
                        2013         2012       Change %
 
 Production -
 million tonnes            23.86         24.12      -1
 
 Sales Volume -
 million tonnes            23.93         24.11      -1
 
 Sale Value -
 (Rs. crore)           10,908.41     11,130.45      -2
 
 Operating EBITDA -
 (Rs. crore)            1,628.79      2,195.57     -26
 
 Your Company''s constant focus on cost reduction through various
 efficiency improvement measures taken at the plants and in the areas of
 logistics under Institutionalizing Excellence programme helped in
 partially covering the high cost of inflation.
 
 Introduction of premium products such as F2R, Concrete , ACC Gold in
 the retail segment in many of our markets proved to be successful. It
 has been decided to replicate this success on an all India basis.
 
 7.  INSTITUTIONALIZING EXCELLENCE
 
 In 2012, your Company had launched the Institutionalizing Excellence
 programme across all functions to sustain overall performance
 excellence so as to deliver superior value to customers and pursue cost
 leadership.  The programme helped the Company offset inflationary
 pressure by managing its operating costs and enhancing customer value
 through improvements in manufacturing, sales, logistics and procurement
 processes. The Institutionalizing Excellence journey continues with a
 strong focus on Occupational Health
 
 & Safety.
 
 In Manufacturing Excellence, some plants have already achieved and have
 even surpassed their individual inspirational targets in respect of
 plant performance such as clinker factor, thermal and electrical energy
 efficiencies. Efforts are now directed towards raising the overall
 efficiency parameters closer to the inspirational targets and pursue
 further reductions in input costs of coal, gypsum, slag and flash.
 
 The Customer Excellence programme continued to focus on measures to
 achieve volume and price improvement and steps for the enhancement of
 brand equity.
 
 The Logistics Excellence journey saw visible and significant
 initiatives to optimize cost-to-serve and time-to-serve, reduce lead
 distances, eliminate multiple handling and enable the creation of
 modern infrastructure at our plants and warehouses. The RFID and GPS
 modules which were successfully deployed at three plants are being
 replicated at all plants of the Company in a phased manner.
 
 8.  CAPEX
 
 The on-going Jamul project in Chhattisgarh, which comprises a new
 state-of-the-art clinkering line of 2.79 million tonnes per annum
 capacity and a grinding facility of 1.10 million tonnes per annum
 capacity is progressing well and has reached its halfway mark. The
 project will be completed in a phased manner by mid 2015.  During the
 year, work also commenced on the Sindri grinding unit in Jharkhand,
 which will receive clinker from the new Jamul plant.
 
 Your Company''s first Waste Heat Recovery Boiler plant, with an output
 of ~7.5 MW, was commissioned at the Gagal Cement Plant in Himachal
 Pradesh.
 
 9.  READY MIXED CONCRETE (RMX)
 
 The Company''s RMX business turned around during the year with its
 operating EBITDA improving substantially to Rs. 19.61 crore from Rs.
 2.1 crore in the previous year, though concrete sales volume increased
 marginally. The improvement in profitability was mainly a result of
 close monitoring of operating and logistic costs and offering our
 customers value added products and solutions. Customer focus has been
 sharpened by widening the customer base and by leveraging the cement
 sales network to target the retail segment.
 
 The RMX market in the country has become more fragmented and
 competitive with many new entrants from the unorganized segment. Larger
 investments are foreseen in real estate and infrastructure projects
 across India in the coming year leading to growth in the construction
 sector. The increased demand is expected to come from the markets of
 Mumbai, Chennai and Bengaluru. The Company is taking suitable steps to
 consolidate its RMX business by striving to increase volumes from its
 existing assets, through on-site and commercial projects.
 
                        2013        2012     Change %
 
 Production -
 Lakh Cubic Meters        15.96       16.54     -4
 
 Sales Volume -
 Lakh Cubic Meters        18.00       17.97      -
 
 Sale Value -
 (Rs. crore)             655.91      617.06      6
 
 Operating EBITDA -
 (Rs. crore)              19.61        2.12    825
 
 10.  SUSTAINABLE DEVELOPMENT
 
 Sustainability is an integral part of our business philosophy. The
 Company is in the process of consolidating inputs for a new roadmap for
 sustainable development for the period 2014- 2017.
 
 The cement operations of your Company are certified under various
 management systems for quality, environment and safety. In addition to
 Corporate Social Responsibility (CSR), Human Resources (HR) and
 Occupational Health & Safety (OH&S), which are addressed later in this
 report, the important initiatives of your Company''s sustainable
 development agenda include reduction in CO2 emissions, reduction in
 stack and fugitive emissions, water management and biodiversity.
 
 10.1 CO2 Emissions:
 
 Your Company co-chaired the group involved in developing a Low Carbon
 Technology roadmap for the Indian Cement Industry under the aegis of
 the Cement Sustainability Initiative in India (CSI) of World Business
 Council for Sustainable Development (WBCSD). The roadmap comprises a
 comprehensive plan to achieve reduction in direct emissions leading
 upto the year 2050.  This is the first plan of its kind which is a
 country-specific and sector-specific long term action plan to cut CO2
 emissions and mitigate climate change risks. Keeping in mind these
 reduction targets, your Company is working on the following levers
 simultaneously:
 
 - increasing the use of Alternative Fuels and Raw materials (AFR).
 
 - reducing Thermal Energy and Electrical Energy.
 
 - reducing clinker factor by producing blended cements using industrial
 waste materials like flash and slag.
 
 - increasing the use of renewable energy.
 
 - waste heat power generation from process waste heat.
 
 Efforts in these areas helped your Company to maintain a leadership
 position in reduction of CO2 emissions in the country, as illustrated
 by the following:
 
 - specific CO2 emissions for Portland Pozzolona Cement (PPC) during the
 year was 529 kg CO2 / tonne of cement as compared to 545 kg CO2 / tonne
 of cement in the previous year.
 
 - specific CO2 emissions for Portland Slag Cement (PSC) during the year
 was 352 kg CO2 / tonne of cement as compared to 367 kg CO2 / tonne of
 cement in the previous year.
 
 The above reduction helped the Company to maintain overall specific CO2
 emissions, at 538 kg CO2 / tonne of cement despite increase in the
 production of Ordinary Portland Cement.
 
 10.1.1 Alternative Fuels and Raw Materials (AFR):
 
 Your Company''s initiatives in utilizing Alternative Fuels and Raw
 Materials (AFR) in the cement manufacturing process is gaining momentum
 in an effort to mitigate the rising cost of conventional fossil fuels
 and raw materials. Forty six co-processing trials of different waste
 materials have so far been carried out after obtaining necessary
 clearances from the concerned authorities at the State and Centre
 levels. These trials have demonstrated that co-processing is
 environmentally and ecologically a more sustainable technology for
 managing waste than other technologies that are in practice today, such
 as landfill and incineration.  Our waste management services through
 cement kiln co-processing are gaining wider acceptance.
 
 Based on the demonstrated success of the suitability of co-processing
 technology for waste streams, the Company has received clearances for
 co-processing 127 different waste streams generated by diverse industry
 segments such as automobiles, chemicals, engineering, power, steel,
 refineries and petrochemicals. During the year under review, the
 Company conducted seven co-processing trials of different waste
 materials. Twenty three new industries accepted the co-processing
 services offered by the Company as a result of which thirty two new
 streams for co-processing have been added in various plants. Currently,
 different types of waste streams are being co-processed from
 industrial, agricultural and municipal sources as AFR.
 
 During the year 2013, a quantum leap was achieved in the usage of AFR,
 thereby enabling a Thermal Substitution Rate (TSR) of 4.36% against a
 target of 4.12%. The focus on AFR, enabled your Company to reduce fuel
 consumption in kilns, captive power plants and in dryers.
 
 Your Company is also engaged in co-processing segregated non-recyclable
 plastic waste from municipal solid waste, thereby assisting Society
 with the disposal of plastic waste. Your Company is in an active
 engagement with fifteen municipalities and local bodies in this regard
 and has co-processed 433.38 tonnes of non- recyclable plastics during
 the year.
 
 To increase the AFR utilization substantially, three pre-processing
 platforms are being set up at our plants which will prepare AFR
 material of uniform quality from various kinds of wastes that have
 different types of physical and chemical characteristics. Two of these
 facilities are expected to be ready during the course of this year.
 
 10.1.2 Reduction of Thermal Energy:
 
 Many initiatives were taken to reduce specific thermal energy in the
 manufacture of clinker as part of the Manufacturing Excellence
 initiatives, which resulted in a reduction of 10 MJ specific thermal
 energy / tonne of clinker as compared to 2012. In many plants, higher
 percentage of petcoke is being used to reduce the cost of thermal
 energy and coal costs.
 
 10.1.3 Clinker Factor:
 
 Clinker Factor in both varieties of blended Cements viz. Portland
 Pozzolana Cement (PPC) and Portland Slag Cement (PSC) was reduced
 through product innovation and research efforts.
 
 Your Company''s blended Cement initiatives is one of the biggest Clean
 Development Mechanism (CDM) project of its kind in the Indian Cement
 Industry. Continuous efforts to control clinker content in PPC has
 helped in reducing CO2 emissions over a period of four years in four
 plants and this is currently under review for issuance of 8,46,313 CERs
 (Certified Emission Reductions) by United Nations Framework Convention
 on Climate Change (UNFCCC).
 
 10.1.4 Renewable Energy:
 
 Your Company''s Renewable Energy portfolio consists of 19 MW in the form
 of wind farms across three states viz. 9 MW in Tamil Nadu, 7.5 MW in
 Rajasthan and 2.5 MW in Maharashtra. Cumulatively, a total of 23.53
 million units of wind power has been generated. These units helped the
 Company meet its non-solar renewable purchase obligation for Madukkarai
 and Lakheri Plants.
 
 In Maharashtra, the Company was issued Renewable Energy Certificates
 (RECs), besides meeting the power needs of our Thane complex and part
 of the requirement of our Subsidiary Company, Bulk Cement Corporation
 (India) Limited at Kalamboli.  The non-solar renewable power
 obligations of other plants viz. Wadi, Kymore, Bargarh, Tikaria and
 Jamul were met by purchasing RECs.
 
 The Tamil Nadu Wind Mill Project realized 21,745 CERs from UNFCCC.
 
 10.1.5 Waste Heat Power generation from process waste heat:
 
 The Waste Heat Recovery System at Gagal is expected to reduce 44,180
 tonnes of CO2 per annum. This is an important milestone in the
 Company''s sustainable development journey.
 
 10.2 Stack Emissions and Fugitive Emissions:
 
 The Company has implemented various initiatives/measures for improving
 the environmental performance of its Plants.  The current average Kiln
 Stack emissions are <30mg/Nm3, as against the regulatory compliance
 requirement of 30mg/Nm3.  The specific kiln dust emissions per tonne of
 cement have decreased by ~18% as compared to the previous year. This
 was achieved through various measures like conversion of Electrostatic
 Precipitators (ESPs) to Baghouse and installation of
 Polytetrafluoroethylene (PTFE) membrane filter bags in place of
 conventional filter bags.  Many initiatives were undertaken to minimize
 fugitive as well as stack emissions across all Plants. These include
 installation of dust suppression systems, dust extraction systems for
 material handling, loading, unloading areas of raw materials,
 intermediate and finished products. In some plants, covered storage has
 been provided to prevent fugitive emissions. On- line continuous
 ambient air quality monitoring stations were installed in some plants
 to monitor environment parameters.
 
 10.3 Water-positive initiatives:
 
 Your Company has adopted a two pronged strategy i.e. working
 simultaneously on reducing fresh water intensity by reducing water
 demand in process / non-process needs and waste water recycling after
 treatment, whilst simultaneously working on rain water harvesting in
 plants, mines, housing colonies and community areas.
 
 During the year 2013, the Company''s specific water consumption per
 tonne of cement was reduced by 2%. As part of its water-positive
 initiatives, the Company has taken up many water harvesting schemes
 during the year. Installation of water metering systems and increasing
 the usage of recycled water will help the Company to become
 water-positive in the near future.
 
 10.4 Biodiversity:
 
 As part of your Company''s overall objective to create a positive impact
 on biodiversity, a risk assessment exercise of all mines has been
 carried out and various initiatives are being undertaken in this
 regard. The green belt area in all cement plants is being increased to
 maintain at least 33% as green coverage. During the year 2013,
 approximately 1 lakh trees were planted under forestation programmes
 across all plants.
 
 11.  COMMUNITY DEVELOPMENT
 
 The Board of Directors constituted a Corporate Social Responsibility
 (CSR) Committee which reviewed and restated the Company''s CSR policy in
 order to make it more comprehensive and aligned with the activities
 specified in Schedule VII of the Companies Act, 2013. The new policy
 statement emphasizes the purpose of delivering superior and sustainable
 value to our stakeholders and simultaneously indicates key performance
 areas and specific deliverables mainly in respect of education, health
 & sanitation and sustainable livelihoods.
 
 During the year 2013, the Company''s community development efforts
 successfully touched the lives of almost 6 lakh people spanning ~130
 villages across the country. Overall CSR expenditure incurred during
 the year was Rs. 22.76 crore.
 
 Efforts to enhance the quality of education in the plants neighborhood
 schools benefitted approximately 18,000 students during the year.
 Scholarships were awarded to 650 meritorious students from weaker
 sections of society to help them continue their education. Technology
 aided education initiatives like smart classes and interactive kiosks
 in rural schools reached out to about 12,700 rural children to keep
 pace with modern methods of learning. Specific support was provided to
 revive education to about 850 girl children who had dropped out of
 school. The Company continued to support
 
 7 Government run ITIs under the Public Private Partnership Schemes with
 Ministry of Labour and Employment, Government of India.
 
 Skill development training programmes were imparted to unemployed youth
 in partnership with specialized NGOs, which helped about 2,500 youth
 get job placements in various manufacturing and service sector
 enterprises.  Your Company supported the formation of 737 Self Help
 Groups (SHGs) and their strengthening through structured training
 activities. Members of these SHGs saved close to Rs. 1.50 crore which
 helped them to secure matching grants from banks and other financial
 institutions to start micro-enterprises.
 
 In matters of health and nutrition, your Company''s initiatives
 benefitted more than 1 lakh people. Support to 102 anganwadi centers
 helped approximately 3,000 children get access to better health and
 nutrition. Nearly 1,500 HIV/AIDS affected persons were supported
 through counseling, testing and treatment.
 
 Your Company supported the process of Aadhaar enablement of the local
 communities to enhance their access to government subsidies and
 entitlements. A substantial part of the people living around our plants
 now have Aadhaar identification cards.
 
 Your Company has also been engaged in leadership roles in CSR at
 various platforms. ACC has been nominated as an Industry representative
 in the Global Fund for India''s Country Co-ordination Mechanism on
 Health. The Company has also been appointed in the CII''s Sanitation
 Committee to promote initiative of Government of India on better
 sanitation coverage in India.
 
 Your Company was quick to respond in providing timely relief to the
 people affected in two major disasters that struck the nation in 2013.
 The Chief Minister of Uttarakhand acknowledged the prompt efforts and
 unstinted help rendered by the Company''s employees to the victims of
 the landslide and flash floods in June 2013.
 
 12.  OCCUPATIONAL HEALTH & SAFETY (OH&S)
 
 In pursuit of ensuring No harm anywhere to anyone associated with
 ACC, Occupational Health & Safety (OH&S) remains the Company''s top
 priority. Accordingly, the Endeavour in 2013 was to instill OH&S as our
 license to lead.  Through widely communicated initiatives such as
 Suraksha Laher, efforts were directed to create an appropriate
 infrastructure, improve OH&S systems to make them more robust by
 identifying and addressing deficiencies and by building OH&S
 capabilities of line and functional personnel.
 
 There was a new thrust on visible leadership in creating a structure
 within plants that ensures accountability and incorporates a concept of
 Zone ownership. A Centre of Excellence has been created to implement
 safety processes and systems uniformly at all plants, for capability
 building and for sharing experiences and best practices. The centre has
 three fulltime executives to implement OH&S priority areas. It is also
 intended to involve and engage Shop Floor Associates (SFAs) and
 contract workers to identify their safety concerns and execute safety
 projects with a view to achieve focused improvements in their
 respective work areas. The behavior based safety initiative ACC
 Chetna, launched in 2012, continued to form part of the basic
 behavior expected as a practice from employees to prevent incidents.
 
 Reaching beyond plant operations, your Company also addressed the
 subject of Logistics Safety to prevent vehicle related incidents.  This
 programme included carefully planned interventions in people
 development and training in safe driving for drivers. Plant-level
 health and safety checks have been initiated in phases with the help of
 external consultants.  The safety checks include examination of factors
 influencing vehicular safety such as overall plant layout, packing
 house layout, truck parking yards, inward and outward flow of traffic,
 storage areas and infrastructure for road and rail transport.
 
 Various steps were taken to demonstrate that health constitutes an
 essential part of Occupational Health & Safety. The focus on
 occupational health in the areas of health surveillance, up gradation of
 emergency medical response and pro-wellness programmes helped save
 valuable lives while reducing health risk factors.
 
 13.  HUMAN RESOURCES
 
 Success of any organization depends upon the engagement and motivation
 levels of its employees. In Human Resources, our emphasis was to give
 autonomy to people at different levels and create a sense of ownership
 in order to unleash their potential.
 
 The Human Resources Division has played a significant role in achieving
 the overall business objectives by creating a common vision, building
 capability amongst people and more importantly, involve and engage
 employees in improvement programmes across the functions for achieving
 higher results. This process of engagement and involvement through
 special projects has created learning opportunities for the employees.
 
 To support business, processes were re-engineered to bring about
 various changes in systems in order to provide proactive support.  Some
 of the initiatives are as under:
 
 - Recruitment and On-Boarding - Right-fit talent is hired and exposed
 to a year-long induction programme in newly created On- Boarding
 Centers.
 
 - Employee Engagement Programmes - Employee feedback through various
 surveys conducted show that the employees are experiencing a greater
 sense of engagement.  This has been achieved through various on-
 the-job engagement initiatives.
 
 - Organization Excellence - The Company has carried out a variety of
 initiatives in this regard, after benchmarking Indian and Global
 best-in-class organization designs.
 
 - Skill Enhancement - A plan has been put in place for upgrading the
 skills of SFAs through training and engaging them in a variety of
 improvement programmes to enable them to align with business and
 perform better.  The unions and other stakeholders are highly
 appreciative of this initiative.
 
 - Capability Building - Your Company believes that capability can be
 built by hands-on experience and exposure. Series of programmes are
 being conducted where under a large number of middle and senior level
 leaders are assigned various turnaround projects. A continuous
 monitoring as well as a recognition and reward model has also been
 created around this initiative to encourage and recognize people in
 larger forums.
 
 - Creating a future leadership pipeline - With a view to motivating and
 retaining talent and providing growth opportunities for them in their
 respective work areas, identified talent has been given new challenges
 through engagement, mobility and special projects.
 
 - Proactive Industrial Relations - A great deal of time is spent in
 engaging Unions and sharing relevant information with them to enable
 them to participate in the growth journey.
 
 14.  FINANCE
 
 Your Company''s cash and cash equivalent as at December 31, 2013 was Rs.
 2,621 crore.  The Company continues to focus on judicious management of
 its working capital. Receivables, inventories and other working capital
 parameters are kept under strict check through continuous monitoring.
 The Company''s debt programme continues to enjoy an AAA rating from
 CRISIL.  During the year under review, the Company had given an option
 of premature redemption of Non-Convertible Debentures to the holders of
 its Privately Placed Debentures.
 
 Non-Convertible Debentures of the aggregate value of Rs. 105 crore,
 stand prematurely redeemed whilst debentures of the aggregate value of
 Rs. 20 crore, stand redeemed on maturity as on December 31, 2013.
 
 As on date, Non-Convertible Debentures aggregating Rs. 32 crore remain
 outstanding.
 
 15.  FIXED DEPOSITS
 
 Despite efforts to identify and repay unclaimed deposits, the total
 amount of fixed deposits matured and remaining unclaimed as on December
 31, 2013 was Rs. 0.02 crore.
 
 16.  SUBSIDIARY COMPANIES
 
 16.1 ACC Mineral Resources Limited (AMRL)
 
 The wholly owned Company ACC Mineral Resources Limited is a Joint
 Venture Partner in four Coal Blocks allotted by the Madhya Pradesh
 State Mining Corporation Limited (MPSMC).
 
 Preliminary and pre-development activities in the three Coal Blocks out
 of four are in progress.  The Bicharpur Coal Block in the Shahdol
 District is in an advanced stage of development and will cater to the
 coal requirement of some of your Company''s cement plants when it
 becomes operational. Various clearances for Marki Barka Coal Block in
 Singrauli are in an advanced stage and a detailed project report for
 the Block is under preparation. The exploration activity in Morga IV
 Coal Block is expected to take place after the clearance from the
 Ministry of Environment & Forests.
 
 In January 2013, the Semaria Piparia Coal Block was de-allocated by the
 Ministry of Coal on the grounds of non-receipt of forest and
 environmental clearances from the Ministry of Environment and Forests,
 in view of the block''s proximity to the National Tiger Reserve at
 Bandhavgarh. On a Writ Petition filed by MPSMC and the Semaria Joint
 Venture Company, partial relief in the matter has been granted by the
 High Court at Jabalpur.
 
 16.2 Bulk Cement Corporation (India) Limited (BCCI) During the year
 under review, BCCI handled cement volumes of 9.60 lakh tonnes as
 against 9.20 lakh tonnes in 2012. The profit after tax for the year
 2013 is Rs. 270.94 lakhs as against Rs. 179.81 lakhs in the year 2012.
 
 16.3 Audited Financial Statements of Subsidiary Companies
 
 As required under Section 212 of the Companies Act, 1956, the audited
 financial statements along with the report of the Board of Directors
 relating to the Company''s subsidiaries viz. ACC Mineral Resources
 Limited, Bulk Cement Corporation (India) Limited, Lucky Minmat Limited,
 National Limestone Company Private Limited and Singhania Minerals
 Private Limited together with the respective Auditors'' Reports thereon
 for the year ended December 31, 2013 are annexed.
 
 17.  DIRECTORS
 
 The Board has appointed Mr Farrokh K Kavarana as an Additional Director
 of the Company with effect from May 3, 2013. In accordance with Section
 161 of the Companies Act, 2013 (corresponding to Section 260 of the
 Companies Act, 1956), Mr Kavarana holds office upto the date of the
 forthcoming Annual General Meeting of the Company and his candidature
 for appointment as a Director has been included in the Notice convening
 the forthcoming Annual General Meeting of the Company.
 
 The Board has appointed Mr Bernard Terver as an Additional Director of
 the Company with effect from December 4, 2013. In accordance with
 Section 161 of the Companies Act, 2013 (corresponding to Section 260 of
 the Companies Act, 1956), Mr Terver holds office upto the date of the
 forthcoming Annual General Meeting of the Company and his candidature
 for appointment as a Director has been included in the Notice convening
 the forthcoming Annual General Meeting of the Company.
 
 At the request of Life Insurance Corporation of India, the Board has
 appointed Mr V K Sharma, Managing Director, Life Insurance Corporation
 of India, as an Additional Director of the Company with effect from
 February 6, 2014.  In accordance with Section 161 of Companies Act,
 2013 (corresponding to Section 260 of the Companies Act, 1956), Mr
 Sharma holds office upto the date of the forthcoming Annual General
 Meeting of the Company and his candidature for appointment as a
 Director has been included in the Notice convening the forthcoming
 Annual General Meeting of the Company.
 
 The Board has re-appointed Mr Kuldip Kaura as Chief Executive Officer &
 Managing Director for a period of one year with effect from January 1,
 2014. The Members of the Company had approved of the aforesaid
 re-appointment and the terms of remuneration of Mr Kaura by way of a
 postal ballot, pursuant to which the Company has entered into an
 agreement with Mr Kaura detailing therein his terms of re- appointment
 and remuneration.
 
 In accordance with the provisions of the Companies Act, 1956, and in
 terms of the Memorandum and Articles of Association of the Company, the
 following Directors, viz. Mr Aidan Lynam, Mr Sushil Kumar Roongta and
 Mr M L Narula retire by rotation and are eligible for re-appointment.
 
 18.  INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
 
 The Company has an Internal Control System, commensurate with the size,
 scale and complexity of its operations. The scope and authority of the
 Internal Audit (IA) function is defined in the Internal Audit Charter.
 To maintain its objectivity and independence, the IA function reports
 to the Chairman of the Audit Committee of the Board.
 
 The Internal Audit Department monitors and evaluates the efficacy and
 adequacy of the internal control system in the Company, its compliance
 with operating systems, accounting procedures and policies at all the
 Company''s locations, and its Subsidiaries. Based on the report of
 internal audit function, process owners undertake corrective action in
 their respective areas and thereby strengthen the controls.
 Significant audit observations and corrective actions thereon are
 presented to the Audit Committee of the Board.
 
 19.  BUSINESS RISK MANAGEMENT
 
 Your Company has a robust process to identify and assess business risks
 and opportunities.  The Business Risk Management (BRM) activity is
 monitored both at the Corporate and at regional levels. Risks and
 opportunities so identified are integrated into the business plan and a
 detailed action plan to mitigate identified risks is drawn up and its
 implementation monitored. Key business risks identified by the Company
 fall into areas of fuels, projects, competition and OH&S. These risks
 together with plans for their mitigation are as under:
 
 Fuels Risk:
 
 Cement production is an energy-intensive process that requires large
 quantities of coal to meet its kiln and captive power generation
 requirements; hence, consistent supply of this fuel at reasonable and
 stable prices is a major concern for the Company. Erratic supplies of
 coal due to domestic production constraints and price fluctuations
 would adversely impact the input costs for an industry as dependent on
 coal as the Cement Industry. The Company is gradually increasing the
 use of alternative fuels and is optimizing its coal mix. To hedge this
 risk, your Company has through its Subsidiary Company ACC Mineral
 Resources Limited, entered into Joint Venture with Madhya Pradesh State
 Mining Corporation Limited for developing four coal block as earlier
 indicated. The Bicharpur Coal Block when developed would partly meet
 the coal requirement of some of the Company''s Cement Plants.
 
 Project Risks:
 
 The Cement Industry is capital intensive in nature. Its Compound Annual
 Growth Rate
 
 (CAGR) for the next five years is expected to be ~7 %. In the execution
 of large projects which are highly capital intensive in nature, there
 could be exposure to time and cost overruns. To mitigate these risks,
 the Company has strengthened its project management team as well as its
 project accounting and governance framework. Whilst the Company
 continues to draw on Holcim''s expertise, a separate organizational
 structure at Project sites with defined roles and accountability has
 been put in place for large projects.
 
 Competition Risks:
 
 The Cement Industry is becoming intensely competitive with the foray of
 new entrants and some of the existing players adopting inorganic growth
 strategies. To mitigate this risk, the Company is leveraging its
 capacities to increase market share, enhance brand equity and
 visibility, enlarge product portfolio and service offerings.  It would
 also leverage on its Infrastructure, Commercial and Institutional Sales
 teams to offer value to large customers.
 
 OH&S Risks:
 
 The Cement Industry is labor intensive and hence the safety of
 employees and workers is of utmost importance to the Company. To
 reinforce the safety culture in the Company, it has identified
 Occupational Health & Safety as a focus area of overriding importance.
 The Company already has a robust approach to tackle this risk through
 various programmes in all its Plants and Sales Units as detailed in
 para 12 of this Report.
 
 20.  AWARDS
 
 During the year under review, your Company received many awards and
 felicitations conferred by reputable organizations for achievements in
 different areas such as Safety, Manufacturing Excellence and
 Environment Management. Your Company was recognized as one of India''s
 most sustainable companies and was presented the CII-ITC Sustainability
 Prize under the category of large manufacturing companies which is a
 notable recognition.
 
 21.  ENHANCING SHAREHOLDERS'' VALUE
 
 The processes of the Secretarial & Compliance Division, Share
 Department and ISD Support, comply with ISO 9001:2008 as certified by
 Det Norske Veritas AS for the robustness of quality management
 processes.
 
 Your Company believes that its Members are among its most important
 stakeholders.  Accordingly, your Company''s operations are committed in
 the pursuit of achieving high levels of operating performance and cost
 competitiveness, consolidating and building for growth, enhancing the
 productive asset and resource base and nurturing overall corporate
 reputation. Your Company is also committed to creating value for its
 other stakeholders by ensuring that its corporate actions positively
 impact the socio-economic and environmental dimensions and contribute
 to sustainable growth and development.
 
 22.  DIRECTORS'' RESPONSIBILITY STATEMENT
 
 To the best of their knowledge and belief and according to the
 information and explanations obtained by them, your Directors make the
 following statement in terms of Section 217(2AA) of the Companies Act,
 1956:
 
 - that in the preparation of the annual accounts for the year ended
 December 31, 2013, the applicable accounting standards have been
 followed along with proper explanation relating to material departures,
 if any;
 
 - that such accounting policies as mentioned in Note 2 of the Notes to
 the Financial Statements have been selected and have been applied
 consistently and judgment and estimates have been made that are
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the Company as on December 31, 2013, and of the profit of
 the Company for the year ended on that date;
 
 - that proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956, for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities;
 
 - that the annual accounts have been prepared on a going concern basis.
 
 23.  AUDIT
 
 The Company''s Auditors Messrs S R Batliboi & Co LLP, Chartered
 Accountants, who are the Statutory Auditors of the Company and who hold
 office upto the date of the Annual General Meeting, have, arising out
 of their internal restructuring, expressed their inability to continue
 as Auditors of the Company.
 
 Messrs S R Batliboi & Co LLP, were appointed as Auditors of the Company
 in 2012. The Board has placed on record its appreciation of the
 services rendered by the Auditors.
 
 The Members are requested to appoint S R B C & CO LLP (ICAI Firm
 Registration No. 324982E) one of the four firms in the overall S R
 Batliboi & Co network, as the Auditors of the Company for the year 2014
 and to authorize the Board of Directors to fix their remuneration as
 per Item 6 of the Notice. S R B C & CO LLP have confirmed their
 eligibility under Section 224 of the Companies Act, 1956, for
 appointment as Auditors of the Company.
 
 As per the requirement of the Central Government and in pursuance of
 Section 233B of the Companies Act, 1956, your Company carries out an
 audit of cost records relating to cement each year. Subject to the
 approval of the Central Government, your Directors have appointed
 Messrs N I Mehta & Co to audit the cost accounts of the Company for the
 financial year 2013.
 
 24.  CORPORATE GOVERNANCE
 
 As per Clause 49 of the Listing Agreement with the Stock Exchanges, a
 separate section on corporate governance practices followed by the
 Company, together with a certificate from the Company''s Auditors
 confirming compliance, is set out in the Annexure forming part of this
 Report.
 
 25.  BUSINESS RESPONSIBILITY REPORTING
 
 As per Clause 55 of the Listing Agreement with the Stock Exchanges, a
 separate section on Business Responsibility forms part of this Annual
 Report.
 
 26.  CONSOLIDATED FINANCIAL STATEMENTS
 
 The Consolidated Financial Statements of the Company prepared in
 accordance with relevant Accounting Standards viz. AS 21, AS 23 and AS
 27 issued by the Institute of Chartered Accountants of India form part
 of this Annual Report.
 
 27.  ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
 
 The information on conservation of energy, technology absorption and
 foreign exchange earnings and outgo stipulated under Section 217(1)(e)
 of the Companies Act, 1956, are furnished in Annexure ''A'' to the
 Directors'' Report.
 
 28.  PARTICULARS OF EMPLOYEES
 
 The information required under Section 217 (2A) of the Companies Act,
 1956, read with Companies (Particulars of Employees) Rules, 1975 as
 amended, in respect of the employees of the Company, is provided in the
 Annexure forming part of this Report. In terms of Section 219(1)(b)(iv)
 of the Act, the Report and Accounts are being sent to the Members and
 others entitled thereto, excluding the aforesaid Annexure which is
 available for inspection by the Members at the Registered Office of the
 Company during business hours on working days of the Company upto the
 date of the ensuing Annual General Meeting.  If any Member is
 interested in obtaining a copy thereof, such Member may write to the
 Company Secretary in this regard.
 
 29.  ACKNOWLEDGEMENTS
 
 Your Directors thank the various Central and State Government
 Departments, Organizations and Agencies for the continued help and
 co-operation extended by them. The Directors also gratefully
 acknowledge all stakeholders of the Company viz. customers,
 shareholders, dealers, vendors, banks and other business partners for
 the excellent support received from them during the year. The Directors
 place on record their sincere appreciation to all employees of ACC for
 their unstinted commitment and continued contribution to the Company.
 
 30.  CAUTIONARY STATEMENT
 
 Statements in the Directors'' Report and the Management Discussion &
 Analysis, describing the Company''s objectives, expectations or
 forecasts, may be forward-looking within the meaning of applicable
 securities, laws and regulations. Actual results may differ materially
 from those expressed in the statement. Important factors that could
 influence the Company''s operations include global and domestic demand
 and supply conditions affecting selling prices of finished goods, input
 availability and prices, changes in government regulations, tax laws,
 economic developments within the country and other factors such as
 litigation and industrial relations.
  
                    For and on behalf of the Board of Directors
 
                                                  N S Sekhsaria
 
                                                       Chairman
 
 Mumbai
 
 February 6, 2014
Source : Dion Global Solutions Limited
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