It is our pleasure to present the Annual Report of the company for the
1. INDIAN ECONOMY:
NEED FOR CHANGE MANAGEMENT GROWTH
Promoting reforms and policies key to economic revival.
Due to several factors, the Indian economy witnessed sluggish growth in
first half of 2014. On the domestic front, policy paralysis of the last
couple of years continued right up to the national elections in May
2014; added to that was a virtual stoppage of all infrastructure
projects, both in the private and public sectors as well as through
public-private partnership. Also, there were continuing inflationary
pressures; interest rates remained far too high for financing long term
projects. Nevertheless, the current account deficit, while better than
a year earlier, was still in danger zone; and entrepreneurial ''animal
spirits'' so essential for economic growth were at their
nadir. On the external front, there were uncertainties regarding
growth of the Euro Zone, the conflict in Ukraine, increasing militant
activities in the Middle East and concerns about the falling growth in
Thankfully, the second half of 2014 showed signs of improvement. For
one, the Lok Sabha election results which brought the BJP-led National
Democratic Alliance into power at the centre with a comfortable
majority in the Lok Sabha created its own optimism. After a long time,
there was positive talk of growth; of infrastructure development;
unblocking of coal mines; allocation of telecom spectrum; deregulation
of diesel prices; and of the promises of an ambitious ''Make in
India'' campaign. For another, the external economic front became more
benign. Crude oil prices, which averaged USS 108 per barrel even in
June 2014, started moving south steadily reducing to under USS 50
per barrel. This, in turn, reduced the oil import bill as well as the
cost of imported naphtha, resulting in both fiscal comfort and lesser
pressure on the current account. Moreover, inflation started dropping,
creating hope for the easing of interest rates. Thus, by early 2015,
there were many more positive drivers for growth, both economic and
political, than those that existed in 2014. If anything, there seems to
be a sense that a better future awaits the Indian economy in 2015 and,
hopefully, with it, your company
GOVERNMENT SUPPORT ESSENTIAL FOR REVIVAL Cement and cementitious
materials are critical for meeting society''s needs of housing and
basic infrastructure such as bridges, roads, water treatment
facilities, schools, hospitals, airports, ports, factories and many
The operating environment for the cement industry was no different from
that of the macro economy In the first half of 2014, the industry
suffered due to muted demand and rising cost pressures on account of
rising freight (-5%) and raw material costs (-8%). It was also affected
by the shortage and ban of essential construction materials like sand,
bricks, water and the like, along with very heavy rains in most parts
of the country Infrastructure bottlenecks further added to the woes.
Major infrastructure projects got log jammed in policy paralysis,
However, with the beginning of an economic turnaround and riding on the
back of moderating inflation amidst gradually improving consumer
sentiment, industry showed some recovery in consumption, which was also
reflected in improved despatch numbers.
Groundwork to expedite the growth prospects of all end-use segments of
cement - housing, infrastructure, commercial - are being worked upon by
the Central Government. Concerns on energy and land are being taken
care via e-auction of coal blocks and the Land Ordinance signed by the
President of India. All these along with the policy push for good
governance augur well for the future of the cement industry
2. FINANCIAL RESULTS 2014
AT A GLANCE (STAND-ALONE RESULTS):
Cement production increased by 2% to reach 21.43 million tonnes, from
20.96 million tonnes while clinker production increased to 14.84
million tonnes, 4% up from 14.27 million tonnes in year 2013.
Domestic cement sales volume recorded increase of 3% at 21.46 million
tonnes from 20.94 million tonnes in year 2013. Cement exports decreased
to 0.08 million tonnes from 0.10 million tonnes in year 2013. Clinker
sales (including exports) were up at 0.61 million tonnes from 0.56
million tonnes in 2013.
Net sales at Rs.9,911 crores were 9% up than that of previous year''s Rs.
9,079 crores. Average sales realisation increased by around 7% at Rs.
4,475 per tonne against approx Rs.4,208 per tonne in 2013.
Total (operating) expenses for the year 2014 increased by 7% over
The company achieved an absolute EBITDA ofRs. 1928 crores. This is higher
by 16% over the corresponding Rs. 1,667 crores of the year 2013.
Amount in Rs. crores
Current Year Previous Year Current Year Previous Year
31.12.2014 31.12.2013 31.12.2014 31.12.2013
duty) 9,910.70 9,078.74 9,930.54 9,109.88
item 2,357.42 2,044.45 2,352.60 2,033.91
Cost 64.48 65.08 65.55 66.75
profit 2,292.94 1,979-37 2,287.05 1,967.16
expense 509.53 490.07 513-03 493-67
and Tax 1,783.41 1,489.30 1,774.02 1,473.49
items - (24.82) - (24.82)
tax 1,783.41 1,514.12 1,774.02 1,498.31
expense 287.05 219.55 287-51 219.87
Interest 1,496.36 1,294.57 1,486.51 1,278.44
interest - - (0.01) 0.13
Year 1,496.36 1,294.57 1,486.50 1,278.57
statements 1,230.69 737.01 1,525.77 1,048.09
tion 2,727.05 2,031.58 3,012.27 2,326.66
Reserve 150.00 150.00 150.00 150.00
interim) 774.61 556.34 774.61 556.34
Tax 146.51 94.55 146.51 94-55
Total 1,071.12 800.89 1,071.12 800.89
Sheet 1,655.93 1,230.69 1,941.15 1,525.77
Profit before tax at Rs. 1,783 crores was up by 18% over corresponding
figure of Rs. 1,514 crores for the year 2013.
Net Profit at Rs. 1,496 crores was up by 16% over corresponding figure
ofRs. 1,295 crores for the year 2013.
The company paid an interim dividend of 90% (Rs. 1.80 per share) during
the year. The Directors are pleased to recommend a final dividend of
160% (Rs.3.20 per share). Thus, the aggregate dividend for the year 2014
is 250% (Rs.5/- per share) and the total payout will be Rs. 921.12 crores,
including dividend distribution tax of Rs. 146.51 crores. This represents
a payout ratio of 62%.
4. MARKET DEVELOPMENTS
The company''s domestic cement sales in 2014 grew by 2.5% to 21.46
million tonnes versus 20.94 million tonnes in 2013. Total cement sales
(including exports) grew by 2.4% to 21.54 million tonnes compared to
21.04 million tonnes in 2013.
REGION WISE SALES VOLUME / GROWTH:
In the North region, domestic cement sales of the company grew by 1.2%
to 8.74 million tonnes in 2014 compared to 8.64 million tonnes in 2013.
In the East region, the company achieved sales of 4.45 million tonnes
of cement in the domestic market, registering a growth of 6% over the
previous year sales of 4.21 million tonnes.
In the West & South region, the company''s domestic cement sales in
2014 grew by 2.2% to 8.27 million tonnes as compared to 8.09 million
tonnes achieved in 2013.
Cement exports were reduced to 0.08 million tonnes in 2014 as compared
to 0.10 million tonnes in 2013.
Our product range is marketed through a countrywide network of sales
units, area offices and warehouses. This is backed by a distribution
network of over 8,700 dealers and 29,000 retailers. Their reach and
penetration helps the company to cater to rural and semi-urban markets.
This, coupled with the strong brand equity and efficient channel
management, helped the company withstand severe price and volume
competition. The company''s network of ports, bulk cement terminals
and captive ships on the west coast has supported a sustainable and
strong market position in Mumbai, Surat and Cochin. Similarly, the
Mangalore Bulk Cement Terminal, with its commercial operations has
helped in expanding the company''s footprints in the southern region.
CREATING VALUE THROUGH OUR SYSTEMS Preserving our most valued resource
To live by its ''I CAN'' spirit, Ambuja started with
''Foundations'' - a knowledge initiative, called Ambuja Knowledge
Centre (AKC) for all from the construction fraternities. AKC aspires to
create a holistic resource base on the subject of cement and concrete.
It stems from Ambuja''s belief in the continuous evolution of
architecture, engineering and construction industries, thereby offering
its professionals various platforms for information, inspiration and
Raising our own high standards.
The company has also embarked upon a Customer Excellence programme (CE)
(its erstwhile Marketing and Commercial Excellence) to sharpen its
marketing, sales and distribution functions. CE has now become a way of
life at Ambuja. Excellence is what we seek and what we strive for in
every aspect under Marketing and Sales. Since all along we have had
customer centricity in our DNA, it is imperative that we reiterate our
commitment and continue to walk the talk! This is also in line with the
global strategy of Holcim - the vision of Holcim CE to be the most
customer focused company with the highest customer loyalty in our
industry thus creating more value for our customers.
5. COST DEVELOPMENTS
Upward movement in costs led to increased cost of production. The
company''s cost optimisation initiatives partly mitigated inflationary
pressures and restricted overall cost increases.
MAJOR COST MOVEMENTS:-
i) Cost of major raw materials, fly ash and gypsum, increased by 2% on
per tonne basis. During the year, royalty on limestone was hiked by 27%
from Rs. 63 to Rs. 80 per tonne. Overall, the raw material cost per tonne
increased by approximately 13% over the previous year.
ii) Power and fuel costs account for approximately 26% of the total
operating cost of the company Coal cost for kiln and captive power
plants increased by 4% and 10% respectively, mainly due to higher cost
of imported coal. However, substitution of high cost coal by pet coke
usage helped restricting the overall cost increase. Besides, there was
increased usage of alternate fuels by 5% over the usage for the year
2013. Usage of alternate fuels accounted for 4% of total thermal energy
consumption in 2014.
The cost of grid power remained stable on a per unit basis. However,
cost of captive power increased by 10% in 2014 mainly due to higher
coalprices. Captive power generation contributed 67% of the total power
Overall, power and fuel cost increasedby 7% on per tonne basis as
compared to the year 2013.
iii) Freight and forwarding cost works out to 28% of total operating
costs. On per tonne basis, cost increase was restricted to 4% due to
positive impact of various logistic optimisation efforts and declining
diesel prices during latter part of the year.
iv) The cost of packing bags went up by around 7%, driven by increase
in PP granule prices. Declining prices of PP granule in latter part of
the year helped restricting overall price increase.
COST MITIGATION MEASURES / EFFICIENCY
i) Keeping in line with the company''s philosophy of Sustainable
Operation, focus on production of fly ash based PPC was maintained and
several initiatives were taken up to enhance fly ash consumption in PPC
ii) The company worked on fuel flexibility to mitigate risk associated
with dynamic fuel market and developing the abilities to switch to most
economical fuel mix.
iii) The ''GEO 20'' project is a part of the efforts by the company
for creating a cost efficient fuel mix. It is in operation now and
will be stabilised by Qi 2015. Here, as a result of handling, storing
and processing of waste materials, the company will be able to ensure
more usage of greener fuels thereby reducing energy cost.
iv) The revision of load lines for captive ships will lead to handling
of higher cargo in environment friendly mode of sea transportation with
savings in coastal freight cost.
v) Replacement of MP turbine with HP turbine at Maratha Cement should
help to improve efficiency of captive thermal power plant and lower
power generation cost. The company has also replaced most of major
drives with VVFDs which will help to get lower power consumption
thereby reducing energy cost.
vi) With the introduction of the SCOPE (Supply Chain Optimisation
Project for Excellence), a supply chain excellence initiative, the
company is expected to derive operational efficiencies in logistics.
This is targeted by improvisation in direct despatches to customers by
undertaking fleet optimisation and route optimisation mode (rail/ road/
sea) among others.
6. EXPANSION PROJECTS AND NEW INVESTMENTS
MOVING FORWARD RESPONSIBLY The company took up several projects to
serve its customers in a more efficient, cost-effective, reliable and
environment-friendly manner, while bolstering its market position in
CAPACITY EXPANSION DURING THE YEAR The new Roller Press commissioning
at Rabriyawas will help to increase grinding capacity by 0.8 Mio T and
also result in reduction in energy consumption. One additional silo
will also be constructed by 2015, which will help in diversifying
Getting better at being the best.
The company focused on consolidation and optimisation of its existing
capacities in all the three regions. Capital investments kept flowing
in during the year, to ensure the highest standards of safety in order
to meet the company policies of ''Zero Harm'', clean and energy
efficient infrastructure, cost efficient and environment friendly
material handling systems, process optimisation and sustainability
Increasing productivity, one major step at a time.
i) A Waste Heat Recovery (WHR) plant at Rabriyawas in Rajasthan with an
investment of Rs. 92 crores is in progress to bring efficiency in fuel
utilisation, optimise power costs and meet our renewable power targets.
ii) We have completed the Geocycle platform projects at four integrated
plants which will help increase the co-processing of waste. With
a total investment of over Rs. 240 crores on these platforms, this
showcases our commitment for sustainable and environment friendly
iii) We have successfully completed the ambitious fast return projects
that the company had taken up in 2013 to optimise and enhance
efficiency The company has already started benefitting from these
UPCOMING CAPACITIES AND INVESTMENTS
i) Significant cement capacity addition of approximately 4.50 million
tonnes with associated clinkerisation capacity of 2.70 million tonnes
is expected at the proposed integrated plant at Marwar Mundwa, Nagaur
district in Rajasthan with cement capacity of 1.5 MTPA; and with
similar capacity grinding units at Osara (M.P.) and Dadri (U.P.).The
total project cost is estimated at Rs.4,000 crores.
Environmental clearances for the project were acquired but kept in
abeyance for Marwar Mundwa by the MoEF. Part of the mining land is
already in possession and the rest is under an advanced stage of
acquisition. The company is also in the process of tying-up water
sources required for construction and operations. Full- fledged
construction work is expected to commence in the later part of 2015.
ii) The new brown-field expansion project of Roller Press with master
packer and auto wagon loading is in full swing at Sankrail and will be
completed during 2015. This will help increase grinding capacity by 0.8
million tonnes and also result in reduction in energy consumption. New
packer and auto loaders will improve despatch capacity.
iii) To mitigate the increase in logistic cost, the Rabariyawas unit in
the State of Rajasthan is constructing a railway line to connect the
plant location with the nearest railway junction. It is likely to get
operational in the year 2016.
The year 2015 will see capital expenditure worth Rs.523 crores. The
entire proposed expenditure would be financed by internal accruals.
TANGIBLE POLICY ACTIONS TO FACILITATE ECONOMIC GROWTH
The bigger picture is looking favourable.
To facilitate rapid economic growth, it will be necessary to see big
ticket structural reforms, faster approvals on the supply side, with
major support of fiscal and monetary policy on the demand side. After
nine months plus of the new government in the Centre, tangible policy
actions are required to facilitate investment and sustained growth.
Medium to long-term economic growth depends on ensuring macroeconomic
stability and on creating an enabling environment for the private
sector to invest. Fundamentally, India''s medium-term growth
prospects looks to be promising, and a medium-term trend rate of growth
of about 7% to 8% should be within reach in view of favourable
tailwinds, both domestic and external, supported by active policy push
in all three areas of good governance, fiscal and monetary management.
Despite headwinds of a global slowdown in some parts of the world,
India has the ability to grow faster and be a leading growth engine in
the near to medium-term.
GROWTH PROSPECTS FOR THE CEMENT INDUSTRY
A positive trickle-down effect.
Investment in infrastructure and housing segments are most likely to
propel demand for the cement industry, in which road sector would act
as major end user segment. Housing will continue to remain key end-user
segment for cement demand and grow at 5-7% over the next few years.
The Government of India is starting to make efforts to provide
conducive environment for the industry by bringing out key policy
measures on ease of doing business, energy related reforms, fiscal
consolidation and the like which, along with reasonably accommodative
monetary policy, ought to open up growth opportunities for the cement
Cement demand growth bears a strong correlation with GDP growth,
particularly government revenue expenditure. As GDP growth revives, we
believe, growth in government spending (which has been curtailed for
some time to arrest fiscal deficit) will also improve, leading to a
higher cement demand. We factor -7% growth in demand for year 2015.
8. RISKS AND AREAS OF CONCERN
Staying one step ahead of risk.
The company has laid down a well-defined risk management mechanism
covering the risk mapping and trend analysis, risk exposure, potential
impact and risk mitigation process. A detailed exercise is being
carried out to identify, evaluate, manage and monitoring of both
business and non-business risks. The Board periodically reviews the
risks and suggests steps to be taken to control and mitigate the same
through a properly defined framework.
In line with the new regulatory requirements, the company has formally
framed a Risk Management Policy to identify and assess the key risk
areas, monitor and report compliance and effectiveness of the policy
and procedure. A Risk Management Committee under the Chairmanship of
Mr. Rajendra Chitale, Independent Director, has also been constituted
to oversee the risk management process in the company. Based on the
detailed review, the following key risks have been identified.
New laws bring new hope.
Restrictions on buying land, under a law championed by the previous
Government, were among barriers holding up projects worth almost U.S.D.
0 billion or nearly Rs. 20 lakh crores in infrastructure, industrial
and housing sectors. The present Government, realising the flaws has
been working on the subject and has come up with a new land acquisition
Bill to kick-start pending projects. With this Bill not being taken up
in the previous session of the Rajya Sabha, the President of India
signed an ordinance on land acquisition on 7th January 2015, which aims
at easing land acquisition rules to kick-start hundreds of billions of
dollars in stalled projects. This land ordinance protects the interests
of farmers and lifts curbs on five categories of projects including
defence, national security, rural infrastructure and low-cost housing.
We hope that the Bill will soon become law, and land can again be
acquired for economic growth.
Ambuja Cement has appointed a dedicated function at the corporate level
to look into risks relating to the land, which will help in improved
land acquisition and management.
Moving beyond coal.
Depleting coal linkages and volatility in the Indian rupee is
escalating concerns regarding coal. The company is constantly working
on efficiency improvement measures by plugging heat loss at every
possible stage of coal consumption, looking at cost- effective fuel
mixes and also increasing the usage of alternative fuels and pet coke.
As a long term solution to energy security, the company has invested in
project Geocycle, under the banner of ''Geo2o''. Waste Heat Recovery
(WHR) systems that improve fuel utilisation, by tapping renewable
energy sources are top priorities. New AFR pre-processing platforms are
running at our plant location to increase the usage of the AFR.
Taxation / Administrative Burden
Resolving the taxing problems of the cement industry.
Cement, along with steel, forms an important raw material for the
infrastructure and real estate sectors. However, steel, being included
under the category of ''Goods of Special Importance'', attracts a
lower tax rate at 4%. Even other raw materials such as clay bricks, fly
ash bricks, attract sales taxes ranging from
4% to 6%. Unfortunately, cement attracts a high rate of tax ranging
from 12.5% to 15% in the various states, which makes it subject to
higher tax in comparison with other building materials.
A solution to this lies in rolling out a uniform tax regime through the
implementation of Goods and Services Tax (GST). So far, the Government
has taken some positive steps by getting the Cabinet approval. The
central implementation of GST will play a critical role in next level
of growth and truly realise the country''s potential.
De-allocation of Coal Blocks
On 25th August 2014, the Supreme Court had ruled that the allotment of
captive coal blocks since 1993, was done with an ad-hoc and
casual approach without the application of mind. The ruling
further added that, common good and public interest suffered heavily
in the unfair distribution of the national wealth coal. The
Supreme Court termed the allocation of these coal blocks as arbitrary
and illegal and cancelled 214 of the 218 blocks. Some 40 companies were
asked to pay a fine of Rs. 295 per tonne and surrender their coal blocks.
The Government is now addressing the issue and to this effect, has
cleared a Bill on coal block auctions to replace an ordinance that was
promulgated to begin auction of coal mines that were cancelled by the
Supreme Court. This move will boost investor confidence due to
transparency in the process and reduce fuel availability risks. The
e-auction of coal mines will be open to private companies while state-
run companies would be allocated mines directly In Phase I, the
cancelled blocks will be opened for e-auction to three end users:
steel, power and cement.
ORDER OF THE COMPETITION COMMISSION OF INDIA
On 20th June 2012, the Competition Commission of India (CCI) passed an
order imposing unprecedented penalties of more than Rs.6,300 crores
against some cement manufactures of the country, including the company,
in the matter of a complaint filed by
the Builders Association of India for the alleged contravention of the
Competition Law. Following the penalty imposed on the company ofRs. 1,164
crores, the company filed an Appeal before the Competition Appellate
Tribunal (COMPAT) against the order and for granting a stay against
deposit of penalty The matter is pending before COMP AT and the next
hearing is scheduled in February 2015. The management, backed by legal
opinion from the external legal counsel, strongly believes that the
company has a good case to succeed before COMPAT and accordingly, no
provision has been made in the books of accounts. However, the amount
of penalty has been considered as contingent liability.
9. HUMAN RESOURCES
SUSTAINABLE TALENT MANAGEMENT Human resources (HR) at Ambuja plays a
vital role in realising business objectives by leading organisational
change, fostering innovation and effectively mobilising talent to
sustain the organisation''s competitive edge.
The HR strategy is aimed at integrating HR processes to result in
overall organisational effectiveness, which consequently affects the
business growth. HR in line with business clarifies the business
direction, performance expectations and actively contributes to decide
what tactics are required for managing talent to achieve business
How do we maintain our competitive edge-
By honing our talent.
HR at Ambuja has been driving various Talent Management initiatives.
Talent Management plays a vital role in combination with other business
processes in not only driving shareholder value but also in managing,
developing and retaining superior talent that defines the prime source
of competitive advantage.
Structured talent reviews across levels supported by individualised
development plans and cross- functional and cross-location assignments
have helped develop wholesome leadership skills. All the development
efforts are showing good results with more and more senior positions
being filled internally, while maintaining a healthy external talent
intake. Thus succession planning has helped create a talent pipeline
for key positions and a strong growth avenue for our developing
Carving out leaders from the best talent.
The core values of the organisation also emphasised the need to develop
and build leaders that will take the organisation to the path of high
performance. Keeping this in mind along with the other Talent
Management initiatives, the STEP (Sustainable Talent for Enhanced
Performance) programme was institutionalised in 2012. The prime
objective of STEP (Sustainable Talent for Enhanced Performance) is to
develop a sustainable pool of leaders equipping them with essential
leadership skills and competencies and enhancing their coaching skill
capacity to be internal coaches. The first batch of 96 managers who
were part of the STEP journey have successfully completed the
Our people strategy, systems and processes are aimed towards making us
an employer of choice with sustainable talent and concrete action plans
to enhance employee engagement. The employee engagement survey
administered this year saw 98% employee participation with an
improvement in the engagement score.
We also continued in our efforts to provide a congenial work
environment, innovative recruitment and retention practices, and
continuous learning opportunities to employees (management and non-
management staff) for their future growth and development. As part of
the Workforce Development initiative - a key initiative to build the
capability and competence of workmen and to ensure safety, productivity
and quality training opportunities have been provided to 70% of our
These efforts have led to a significant increase in manpower
productivity Efforts have also been made to design progressive and
empower HR policies and other welfare measures.
10. SUSTAINABILITY AND ENVIRONMENT
Making the Earth a better place.
We are committed to the path of corporate sustainability, with a legacy
of a responsible and ethical organisation. It is driven by our senior
management in a sustainability framework comprising of our
sustainability committees, with the mandate to assess sustainability
risks and opportunities at corporate and unit levels to monitor and
drive sustainability initiatives. Sustainability is a regular item in
our board meetings. The company sustainability initiatives are aimed
inter-alia at low carbon emissions, water positivity, and use of
biomass / industrial wastes as alternative fuels as well as fly ash as
Gaining recognition for staying light on our feet.
We improved our sustainability performance over the previous years.
This has been recognised by independent audits, and the company won the
prestigious CII Sustainability Award 2013 for ''Significant
Achievement on the Journey towards Sustainable Development''. This is
the fourth time in a row Ambuja Cements has received this award. In
addition, for Domain Excellence, our Bhatapara unit was conferred the
CII Sustainability Award for ''Commendation for Significant
Achievement in CSR''. Furthermore, this year we won the YES BANK -
Saevus Natural Capital Awards 2014 as the ''Eco-Corporate of the Year
- Manufacturing'' for the commendable work towards environmental
We have been ranked amongst the top 10 participants of the Carbon
Disclosure Leadership Index (CDLI), the highest in the Cement Sector,
under the Carbon Disclosure Project (CDP) in their recently released
CDP India 200 Report.
The year 2014 saw us achieving sustainability product certification
''Pro-Sustain'' for cement production (PPC) from our Darlaghat plant
from an independent third party DNV-GL. The product Stewardship
Standard of Pro-Sustain certification is aligned with the objective and
principle of internationally recognised standard encompassing
environmental, social and economic aspects of our operations and
A new way to equate our self-worth. And our worth to the world.
To further strengthen our commitment to build competitiveness through
sustainability, we launched the True Value Project, a unique initiative
that takes into account the value of environmental and social impacts
in monetary terms along with financial parameters. This makes Ambuja
Cement the first Indian company to carry out such an elaborate exercise
We are glad to report that in our journey to Water Positivity, we
achieved the water positive factor of ''4'' in 2014 by way of
meticulous accounting of our water consumption (debit) and water
harvesting or recharges (credit) taking place from rain water
harvesting structures at our plants, colony, mines and community We
give back to nature four times what we draw.
We are frequently reported. By ourselves.
Carbon Conscious Growth - The company monitors and reports its Carbon
emissions as per the World Business Council for Sustainable
Development''s (WBCSD)''s Cement Sustainability Initiative (CSI)
protocol. We reduced our Green House Gas (GHG) emissions by around 28%
in 2013 from the 1990 level. To further reduce the use of natural
resources and consequently our carbon emissions, our focus remained on
the fly ash based cement (PPC) as our major product. A 6.5 MW Waste
Heat Recovery (WHR) based power generation system is under installation
at our Rabriyawas plant at Rajasthan which will further lessen our
Environment Management - The company ensured availability of Continuous
Emission Monitoring Systems (CEMS) at all the kiln stacks with above
95% availability round the year for online monitoring of all vital
As a part of our consistent effort to ensure sustainable ecology by way
of biodiversity conservation, a Biodiversity Action Plan (BAP) has been
prepared for our Ambujanagar site in Gujarat. A Wildlife Conservation
Plan has also been prepared for our Darlaghat plant at Himachal
Pradesh. We have completed the installation of water meters in all the
plants as per the Holcim Water Protocol.
During the year, one more integrated plant and one grinding unit
attained the Energy Management System as per ISO 50001 certification
adding up to total two integrated plants and four grinding units to
be certified. The company has taken steps to meet its commitments under
the PAT scheme and RPO- REC obligations. Further, we are taking all
necessary actions to monitor and control our emissions to ensure that
we comply with the requirement of New Emission Standards as notified in
Partnering the environment.
Collaboration with Global Community - ACL is
one of the active co-chairs of World Business Council for Sustainable
Development (WBCSD) CSI India for implementation of the India specific
''Low Carbon Technology Road Map for Cement Industry''.
We have been partnering with WBCSD for the development of India Water
Tool (IWT) since 2012. The tool will help companies to understand and
respond to their growing challenges of managing water effectively and
identify water risk areas.
We actively collaborate with Leader for Nature (LFN) Initiative of
International Union for Conservation of Nature (IUCN) and the CII''s
India Business and Biodiversity Initiative (IBBI) on Policy dialogue
and capacity building on Biodiversity Conservation.
Sustainability Awareness & Reporting - Train the Trainer (ToT) training
was imparted during the year covering all the plants. Various training
and awareness programmes were conducted on environment and
sustainability topics, emission / environment monitoring, biodiversity
management and water management to build capacities for environmentally
Read all about it: our sustainability efforts.
We released our 71h Annual Corporate Sustainability Report, presenting
our efforts towards sustainable development for the year 2013, the
report also provided the glimpses of ''True Value Project''. The
report is aligned with Global Reporting Initiative (GRI) G3 guidelines
for A Level of reporting, having been ''assured'' by an independent
certifying agency We have responded to the Metal and Mining Sector
Supplement of the GRI while reporting on our sustainability performance
to our stakeholders. As in the previous year, the report has been
accorded the ''GRI Check'' to enhance credibility by Global Reporting
Initiative (GRI), Netherlands. The company has been issuing Business
Responsibility Report (BRR) as a part of its Annual Reports since 2012.
11. CORPORATE SOCIAL RESPONSIBILITY (CSR)
At Ambuja, the CSR has been an integral part of the way in which we
have been doing business since inception. The founders of the company
always believed it imperative for surrounding communities and
stakeholders to progress with the company This vision was translated
into the establishment of the Ambuja Cement Foundation (ACF) which is
the CSR arm of the company
The ACF operates in 12 states and 22 locations, reaching out to more
than 14 lakh people over 860 villages. ACF programmes are in line with
its mission statement - ''Energise, involve and enable communities to
realise their potential''.
IMPROVING LIVES THROUGH INVOLVEMENT.
At Ambuja, stakeholder engagement is the key to implement CSR
programmes and several tools and processes have been established to aid
this objective. To integrate business and community needs, Community
Engagement Plans (CEP) are prepared in close engagement with the
community and then the unit. The Community Advisory Panels consists of
community members and members from the company to deliberate upon
programmes and decide for the future. The Social Engagement Scorecard
assesses the work done in communities. The Site Specific Impact
Assessment (SSIA) captures perceptions and feelings of all stakeholders
at sites and enables the Foundation to address potential risks. These
processes ensure that programmes introduced are relevant and dynamic in
nature. Based on assessment of needs, the ACF works in thrust areas
namely - water resource management, agro - based and skill- based
livelihoods, and socio-economic development.
WATER RESOURCE MANAGEMENT The ACF''s work on water resource management
has ensured access to quality water in its neighbouring communities.
The work was initiated in salinity ingress areas of Kodinar which has
now spread to the dry arid territories of Rajasthan and hilly regions
of Darlaghat. Programme adaptability according to the topography of the
region has increased ground water table, and better water availability
in farms. Micro irrigation has ensured optimum utilisation of water and
is being widely adopted by farmers. Continued water management
programmes undertaken by the ACF have contributed significantly for the
company to be four times water positive.
AGRO BASED LIVELIHOOD
Supporting the backbone of the nation''s economy.
Assured availability of quality water has enabled farmers to grow more
than one crop on their fragmented lands impacting the economic status
of their families. The farmers have also benefitted from the numerous
training programmes conducted by the ACF. For instance, the Foundation
manages the Krishi Vigyan Kendra at Ambujanagar, a one-stop-shop for
latest and best agriculture technologies in the region, and has reached
out to 265 villages through training programmes and fairs. The ACF
also works with farmers to promote animal care by organising regular
camps. In Darlaghat, the Pashu Swasthya Sevika (PSS) have been trained
by the Foundation to ensure animal care.
Based on geographical suitability, programmes like organic farming in
the north and Systemic Rice Intensification (SRI) in the east have
enhanced agricultural practices. The Better Cotton Initiative (BCI), a
global initiative for sustainable cotton production, reaches out to
over 17,200 farmers. Implementing BCI practices has guaranteed work
ethics on farms, ensured soil health and better profit margins coupled
with safe environment practices. In 2014, 70,565 tonnes of cotton was
produced by our farmers, all licensed as ''Better Cotton''.
The ACF has also partnered with farmers through establishment of
Producer Companies to provide biomass to the company to be used as
Alternate Fuel Resource (AFR). It is hoped that this supply chain will
appear as an inclusive business model in the near future.
Ensuring talent doesn''t go wasted.
Skill training through the ACF''s 16 Skill and Entrepreneurship
Development Institute (SEDI) has changed the social and economic
dynamics through assured jobs and by addressing the industry demand of
skilled personnel. In Kodinar, young girls contribute to their family
income after training in bedside attendant course. In Chandrapur,
unemployed youth have gained jobs in industries or have gained
construction assignments in nearby villages after being trained as
masons. In 2014, SEDI also provided supplementary skills training and
valid certification to the company''s workers. SEDI not only imparts
training in 45 different trades but complements these by providing
training in computer, English and soft skills. A number of courses at
SEDI are government affiliated. Till date, SEDIs have reached out to
more than 20,000 youth with a placement rate of 76%.
SOCIO ECONOMIC DEVELOPMENT
Building stronger communities.
The ACF ensures holistic development of its communities by focusing on
health, education and women development. Clinical health care is met
through Mobile Medicare Units, Community Health Clinics, Diagnostic
Centres and specialised health camps. The training of village health
functionaries (Sakhis) has ensured maternal and child care for women
and 24 x 7 health access at their doorstep. The Sakhi has also
developed relevant linkages with government to ensure services for her
village. ACF trained Sakhis are much sought after as much as the ASHAs
of the government cadre. Till date, 337 Sakhis have been trained of
which 110 have been absorbed as ASHA workers.
The Sakhi has also become the forerunner to initiate other programmes
like tobacco control, nutrition programme and child development for
The ACF has been working rigorously to ensure complete sanitation in
its host communities. The programme is being run in a campaign mode and
till date 11 villages have received the Nirmal Gram Puraskar. The ACF
has facilitated construction of over 12,000 individual and community
toilets apart from soak pits and drains.
HIV and AIDS prevention programme at Ambuja reaches out to truckers in
the plant and communities through counselling sessions, street plays,
camps etc. The ACF implements io targeted intervention projects in
collaboration with state-level AIDS Control Societies and four health
care centres at truck halt points neighbouring our sites.
Looking out for the next generation.
The company promotes education in the five integrated plants through
Ambuja Vidya Niketan Trust (AVNT). The ACF also conducts programmes in
nearby government schools through teacher training programmes. The
methodologies introduced in schools have made subjects interesting and
easier to understand. ACF-trained Balmitra supports children in
understanding mathematics and science. ACF also provides
infrastructural support to schools like the establishment of science
centres and libraries.
The Ambuja Manovikas Kendra (AMK) is a special school for mentally
challenged children in Ropar. A range of activities and programmes
like therapies, sports and cultural activities, etc. at the AMK help
them grow as independent and productive individuals. The children have
won awards at the state-level Olympics Championship since the past nine
years and at the World Special Olympics. The school also extends its
services to children who cannot travel to school through its Home-based
Women''s Empowerment is a part of the ACF''s DNA and is interwoven in
all its programmes. Assured access to water, developing a cadre of
women to ensure health and education and relevant skills training
provide an opportunity to women to showcase their leadership. Access to
finance and knowledge of running small businesses has also boosted the
confidence of many women. In Kodinar and Chandrapur, women have
federated from small self-help groups of 15-20 members, to form a
federation consisting of 2,000-3,000 women. The Sorat Mahila Mandal in
Kodinar, Gujarat, has opened its retail outlet, and runs a stitching
course for its members. The government reached out to the group for its
insurance scheme giving it the much needed recognition. The federation
extends its support to members in times of emergencies as well. These
initiatives have played a critical role in ensuring an elevated status
of women. Since the process has been participatory, the changes brought
forth are irreversible and have become a permanent feature.
PURSUING CSR AS A PASSION INSTEAD OF A MANDATE.
CSR has been an integral part at Ambuja Cements much before the passing
of Companies Act, 2013. The company has made conscious efforts to
involve communities in its development journey with a spending of more
than 2% since manyyears. Continuous and meaningful community engagement
since 22 years has made the company the ''neighbour of choice''.
''Ambuja Cements'' has received appreciations from the government, as
well as other stakeholders, which makes us feel a sense of pride and an
encouragement to continue our resolve further and better.
Pursuant to Section 135 of the Companies Act, 2013, and the relevant
rules, the Board has constituted the Corporate Social Responsibility
(CSR) Committee under the Chairmanship of the Board Chairman, Mr. N. S.
Sekhsaria. The other members of the Committee are Mr. Nasser Munjee,
Mr. Rajendra Chitale, Mr. Bernard Terver, Mr. B.L. Taparia and Mr. Ajay
Kapur. A detailed CSR Policy has also been framed which is placed on
the company''s website. Other details of the CSR activities as
required under Section 135 of the Companies Act, 2013, are given in the
CSR Report at Annexurel.
i2. OCCUPATIONAL HEALTH & SAFETY (OH&S)
After a disappointing OH&S performance in 2013, we had a very deep
introspection and detailed management review. Based on this, we
kick-started the ''We Care'' initiative to transform our OH&S
Although we did significant work in establishing good OH&S standards
and organisation over the last 5-6 years, we found significant gaps in
real implementation on ground. We have significant complexity of having
17 operating sites, some 15,000 people of which most are not adequately
literate and have a culturally poor OH&S mind set. We thought that the
best way to deal with this was to engage our people emotionally and
make them very much the building blocks of Ambuja''s OH&S
transformation journey, while, at the same time, working with subject
experts to prioritise and address all issues related to both unsafe
conditions and unsafe acts.
''We Care'' is a big change management programme. The primary
objective of this initiative is to achieve our OH&S ambitions by making
it a People''s Movement. We believed that this could be possible only
when we connected and engaged with 100% people entering our sites;
reinforced that OH&S is primarily a line accountability; achieved a
right balance between people aspects, engineering solutions and OH&S
systems; and created the right organisation and processes to achieve
our OH&S ambitions.
In our ''We Care'' programme, each plant was divided into total
manageable zones; each Zone owner was supported by 7 - 9 Safety
Ambassadors. We trained some 250 Zone Owners and 1,600 Safety
Ambassadors to implement the programme and directly connected to 100%
of our workforce (approximately 15,000 people) through 4-6 hours of
sensitisation and idea generation workshops. We introduced a company-
wide reward and recognition programme to encourage safe behaviour and
exceptional contribution to safety
Safety results show when nothing happens.
The result was very evident with a significant improvement in OH&S
performance with no onsite fatality for 10 months and very visible
change in the safety behaviour of our people at all levels.
For 2015, we have prepared a clear strategy and implementation plan to
keep the momentum and drive the next level of Initiatives to further
strengthen ''We Care''. This year, we will have a very intensive
focus on Workmen Capability building, effective implementation of
Fatality Prevention Elements & Contractor Safety Management directives,
simplifying procedures to achieve scale and speed and are in the
process of preparing a structure to address Occupational Health related
We will again directly connect to all our people entering our sites to
update them about the progress, plan for 2015 and listen to them so
that we can collectively transform our OH&S culture.
13. PURCHASE OF SHARES IN HOLCIM INDIA PVT. LTD. (HIPL) AND
AMALGAMATION OF HIPL WITH THE COMPANY
The Members may be aware that the company had proposed to acquire 24%
equity shares of HIPL from Holderind Investment Limited, Mauritius and
subsequently amalgamating HIPL with the company under the Scheme of
The Scheme of Amalgamation has been approved by the requisite majority
of the Members and has also received ascent from the Hon''ble High
Courts at Gujarat and Delhi. However, the scheme will be effective upon
receipt of approval from the Foreign Investment Promotion Board,
Government of India which is yet to be received.
On the Scheme being effective, the company will hold 50.01% equity
shares in ACC Limited and consequently ACC Limited and all its
subsidiaries will become the subsidiary of the company
14. EMPLOYEE STOCK OPTION SCHEME
During the year, the company has not granted any fresh stock option to
i5. DISCLOSURES UNDER THE COMPANIES ACT, 2013
i) Extract of Annual Return:
The details forming part of the extract of the annual return is
enclosed in Annexure II.
ii) Number of Board Meetings:
The Board of Directors met 5 (five) times in the year 2014. The details
of the board meetings and the attendance of the Directors are provided
in the Corporate Governance Report.
iii) Changes in Share Capital:
During the year under review, your company allotted 38,85,500 equity
shares of the face value of Rs.2/- each upon exercise of stock options
under various Employee Stock Option Schemes. Consequently the equity
share capital has increased from Rs.309,17,20,572/- divided into
154,58,60,286 equity shares of Rs.2/- each to Rs.309,94,91,572/- divided
into i54,97,45,786 equity shares of Rs.2/- each.
iv) Composition of Audit Committee:
The Board has constituted the Audit Committee which comprises of Mr.
Rajendra Chitale as the Chairman and Dr. Omkar Goswami, Mr. Nasser
Munjee and Mr. Bernard Terver as the members. More details on the
committee are given in the Corporate Governance Report.
v) Related Party Transactions:
All the related party transactions are entered on arm''s length basis
and are in compliance with the applicable provisions of the Act and the
Listing Agreement. There are no materially significant related party
transactions made by the company with Promoters, Directors or Key
Managerial Personnel etc. which may have potential conflict with the
interest of the company at large. During the year, the Board reviewed
the Technology and Know-how (TKH) Agreement and decided that the rate
of TKH Fees be maintained at 1% of the Net Sales of the company for the
remaining three years period commencing from 1st January, 2015. This
disclosure is being made as a matter of prudence.
All Related Party Transactions are presented to the Audit Committee and
the Board. Omnibus approval is obtained for the transactions which are
foreseen and repetitive in nature. A statement of all related party
transactions is presented before the Audit Committee on a quarterly
basis, specifying the nature, value and terms and conditions of the
transactions. The statement is supported by the certificate from the
MD & CEO and the CFO.
The Related Party Transactions Policy as approved by the Board is
uploaded on the company''s website at the web link:
The details of the transactions with Related Party are provided in the
accompanying financial statements.
16. CORPORATE GOVERNANCE
The company has complied with the corporate governance requirements
under the Companies Act, 2013, and as stipulated under the listing
agreement with the stock exchanges. A separate section on corporate
governance under the Listing Agreement, along with a certificate from
the auditors confirming the compliance, is annexed and forms part of
the Annual Report.
17. BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Report for the year ended 31st December
2014, as stipulated under clause 55 of the Listing Agreement is annexed
and forms part of the Annual Report.
18. INTERNAL CONTROL SYSTEM
A strong internal control culture is pervasive in the company: The
company has documented a robust and comprehensive internal control
system for all the major processes to ensure reliability of financial
reporting, timely feedback on achievement of operational and strategic
goals, compliance with policies, procedures, laws, and regulations,
safeguarding of assets and economical and efficient use of resources.
The formalised systems of control facilitate effective compliance as
per Clause 49 of the Listing Agreement, and article 728 (a) of the
Swiss Code of Obligations applicable to the Holcim Group. The company
also has well documented Standard Operating Procedures (SOPs) for
various processes which is periodically reviewed for changes warranted
due to business needs. The Internal Audit department continuously
monitors the efficacy of internal controls / compliance with SOPs with
the objective of providing to the Audit Committee and the Board of
Directors, an independent, objective and reasonable assurance on the
adequacy and effectiveness of the organisation''s risk management,
control and governance processes.
The scope and authority of the Internal Audit activity are well defined
in the Internal Audit Charter, approved by the Audit Committee.
Internal Audit department develops a risk based annual audit plan with
inputs from business risk management, prominent stack holders and
previous audit reports. The Internal audit plan is approved by the
Audit Committee. During the year, the Audit Committee met regularly to
review reports submitted by the Internal Audit department. All
significant audit observations and follow-up actions thereon were
reported to the Audit Committee. The Audit Committee also met the
company''s Statutory Auditors to ascertain their views on the
financial statements, including the financial reporting system,
compliance to accounting policies and procedures, the adequacy and
effectiveness of the internal controls and systems followed by the
The Internal Audit department also assesses opportunities for
improvement in business processes, systems and controls, provides
recommendations, designed to add value to the organisation and follows
up on the implementation of corrective actions and improvements in
business processes after review by the Audit Committee.
19. MANAGING THE RISKS OF FRAUD, CORRUPTION AND UNETHICAL BUSINESS
i) Vigil Mechanism / Whistle Blower Policy
Fraud-free and corruption-free work culture has been core to the
company In view of the potential risk of fraud and corruption due to
rapid growth and geographical spread of operations, the company has put
an even greater emphasis to address this risk.
To meet this objective, a comprehensive Fraud Risk Management (FRM)
Policy akin to vigil mechanism or the whistleblower policy has been
laid down. More details about the FRM Policy are given in the
Corporate Governance Report, which forms part of this Annual Report.
ii) Anti Bribery and Corruption Directives (ABCD)
In furtherance to the company''s philosophy of conducting business in
an honest, transparent and ethical manner, the Board has laid down ABCD
as part of the company''s Code of Business Conduct and Ethics. As a
company, we take a zero-tolerance approach to bribery and corruption
and are committed to act professionally and fairly in all our business
To spread awareness about the company''s commitment to conduct
business professionally, fairly and free from bribery and corruption,
training and awareness workshops were extended to select vendors of the
company based on their risk profile and business relationship with the
As part of continuous education on ABCD to the employees, a mandatory
on-line training through a web-based application tool was undertaken
during 2014 by approximately 4,000 employees.
The above policies and its implementation are closely monitored by the
Audit and Compliance Committees of Directors and periodically reviewed
by the Board.
20. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Onne van derWeijde, (DIN 00009181) Managing Director decided to
return to the parent company Holcim and accordingly resigned from the
Board w.e.f. 25th April, 2014. Mr. Onne joined the Board in January
2009 and in May 2010 was appointed as the Managing Director of the
The Board placed on record its appreciation for the valuable services
rendered by Mr. Onne van der Weijde.
II. RETIREMENT BY ROTATION
In accordance with the provisions of Section 152(6) and Article 147 of
the Articles of Association of the company, (i) Mr. Ajay Kapur (DIN
03096416) and (ii) Mr. B. L. Taparia (DIN 00016551) will retire by
rotation at the ensuing Annual General Meeting of the company and being
eligible, offer themselves for re-appointment. The Board recommends
Mr. Ajay Kapur (DIN 03096416)
Mr. Ajay Kapur who was holding the position of the Dy Managing Director
& CEO of the company since August, 2013, was appointed as the Managing
Director & CEO we.f. 25th April, 2014, for a period of five years.
Ms. Usha Sangwan (DIN 02609263)
Ms. Usha Sangwan has been appointed as an Additional Director (Non
Independent) under Section 161 of the Companies Act, 2013 w.e.f. 24th
Ms. Usha Sangwan is the Managing Director of Life Insurance Corporation
of India and holds a Master''s Degree in Economics and a Post Graduate
Diploma in Human Resource Management. She joined LIC as Direct Recruit
Officer in 1981. She has worked in almost all core areas of life
insurance including Marketing, Personnel, Operations, Housing
Finance, Group Business, Direct Marketing, International Operations and
Corporate Communications. She has been awarded the ''Women Leadership
Award'' in BFSI sector by Institute of Public Enterprise and ''Brand
Slam Leadership Award'' by CMO Asia.
As an Additional Director, Ms Sangwan shall hold office up to the date
of the ensuing Annual General Meeting. The company has received a
notice as per the provisions of Section 160(1) the Companies Act, 2013,
from a member proposing her appointment as Director. The Board of
Directors recommends her appointment.
Further details about the above directors are given in the Corporate
Governance Report as well as in the Notice of the ensuing Annual
General Meeting being sent to the shareholders along with the Annual
IV. APPOINTMENT OF INDEPENDENT DIRECTORS With coming into the force of
the Companies Act, 2013, the Board appointed all the existing
Independent Directors viz. Mr. Nasser Munjee, Mr. Rajendra Chitale, Mr.
Shailesh Haribhakti, Dr. Omkar Goswami and Mr. Haigrieve Khaitan as
Independent Directors under section 149 of the Companies Act, 2013 for
a term up to 31st March, 2019. The shareholders at their Extra
Ordinary General Meeting held on nth September 2014, approved their
The Independent Directors have submitted the Declaration of
Independence, as required pursuant to section 149(7) of the Companies
Act, 2013, stating that they meet the criteria of independence as
provided in sub-section (6). The profile of the Independent Directors
forms part of the Corporate Governance Report.
V. EVALUATION OF THE BOARD''S PERFORMANCE In compliance with the
Companies Act, 2013, and Clause 49 of the Listing Agreement, the
performance evaluation of the Board was carried out during the year
under review. More details on the same is given in the Corporate
VI. REMUNERATION POLICY
The company follows a policy on remuneration of Directors and Senior
Management Employees. The policy is approved by the Nomination &
Remuneration Committee and the Board. More details on the same is given
in the Corporate Governance Report.
21. DIRECTORS'' RESPONSIBILITY
Pursuant to Section 217 (2AA) of the Companies Act, 1956 as amended,
the Directors confirm that:
i) In the preparation of the financial statements, the applicable
accounting standards have been followed along with proper explanations
relating to material departures.
ii) Appropriate accounting policies have been selected and applied
consistently, except for the change in accounting policies stated in
notes to the accounts and judgments and estimates made are reasonable
and prudent, so as to give a true and fair view of the state of affairs
of the company as on 31st December, 2014, and of the statement of
profit and loss and cash flow of the company for the period ended 31st
iii) 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.
iv) The financial statements have been prepared on a going concern
I. AUDITORS AND THEIR REPORT: - M/s SRBC & Co. LLP (ICAI Lirm
Registration N0.324982E), the Statutory Auditors of the company, will
hold office until the conclusion of the ensuing Annual General Meeting
and are eligible for re-appointment as per Section 139 of the Companies
M/s SRBC & Co. LLP have expressed their willingness to get re-appointed
as the Statutory Auditors of the company and has furnished a
certificate of their eligibility and consent under Section 141 of the
Companies Act, 2013, and the rules framed thereunder.In terms of the
Listing Agreement, the Auditors have confirmed vide their letter dated
22nd January, 2015, that they hold a valid certificate issued by the
Peer Review Board of the ICAI. The Board, based on the recommendation
of the Audit Committee, recommends the appointment of M/s SRBC & Co.
LLP as the Statutory Auditors of the company.
The members are requested to appoint M/s SRBC & Co. LLP, Chartered
Accountants as Auditors from the conclusion of the ensuing annual
general meeting till the conclusion of the next Annual General Meeting
in 2016 and to authorise the Board to fix their remuneration for the
The Auditors'' Report to the Shareholders for the year under review
does not contain any qualification.
II. COST AUDITOR AND COST AUDIT REPORT Pursuant to section 148 of the
Companies Act 2013, the Board of Directors on the recommendation of the
Audit Committee appointedM/s P.M. Nanabhoy & Co. Cost Accountants, as
the Cost Auditors ofthe company for the Linancial Year 2015 and has
recommended their renumeration to the Shareholders for their
ratification at the ensuing Annual General Meeting. M/s P.M. Nanabhoy
& Co. have confirmed that their appointment is within the limits of the
Section 224 (iB) of the Companies Act, 1956, and have also certified
that they are free from any disqualifications specified under Section
233B (5) read with Section 224 sub-section (3) or sub-section (4) of
Section 226 ofthe Companies Act 1956.
The Audit Committee has also received a certificate from the Cost
Auditor certifying their independence and arm''s length relationship
with the company. Pursuant to Cost Audit (Report) Rules 2001, the Cost
Audit Report for the financial year 2013, was filed on 28th April, 2014
vide SRN N0.Q31060932 on the Ministry of Corporate Affairs website.
III. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT
The Board had appointed M/s Rathi & Associates, Company Secretaries in
Whole-time Practice, to carry out Secretarial Audit under the
provisions of Section 204 of the Companies Act, 2013 for the financial
year 2014. The report of the Secretarial Auditor is annexed to this
report as Annexure III. The report does not contain any qualification.
23. TRANSFERTO INVESTOR EDUCATION AND PROTECTION FUND
The company has transferred a sum of Rs.207.88 lakh during the financial
year 2014 to the Investor Education and Protection Fund established by
the Central Government, in compliance with Section 205C of the
Companies Act, 1956. The said amount represents unclaimed dividends
which were lying with the company for a period of seven years from
their respective due dates of payment. Prior to transferring the
aforesaid sum, the company has sent reminders to the shareholders for
submitting their claims for unclaimed dividend.
24. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
Information on conservation of energy, technology absorption, foreign
exchange earnings and out go, is required to be given pursuant to
provision of Section 134 of the Companies Act, 20i3,read with the
Companies (Accounts) Rules, 2014 is annexed here to marked Annexure IV
and forms part of this report.
25. PARTICULARS OF EMPLOYEES
The information required under Section 217 (2A) of the Companies Act,
1956 (the old Act) and corresponding Section 197 of the Companies
Act, 2013 (the new Act) and the rules thereunder forms part of
this Report. However, in terms of Section 2i9(i)(b)(iv) of the old Act
and Section 136(1) of the new Act, the Report and Accounts are being
sent to the members and others entitled there to, excluding the
Statement of Particulars of Employees. The Annexure is available for
inspection by the members at the Registered Office of the company
during business hours on working days up to the date of the ensuing
Annual General Meeting. If any member is interested in obtaining a copy
there of, such member may write to the Company Secretary, whereupon a
copy would be sent.
26. SUBSIDIARY COMPANIES
Pursuant to the circular dated 8th February, 2011, issued by the
Ministry of Corporate Affairs, Government of India and Section 136 of
the Companies Act, 2013, which has exempted companies from attaching
the Annual Reports and other particulars of its subsidiary companies
along with the Annual Report of the company, the Annual Reports of the
subsidiary companies viz. (1) Chemical Limes Mundwa Pvt. Ltd. (2)
M.G.T. Cements Pvt. Ltd. (3) Kakinada Cements Ltd. (4) Dang Cement
Industries Pvt. Ltd. and (5) Dirk India Pvt. Ltd. are not attached with
this Annual Report. However, a statement giving certain information as
required vide aforesaid circular is placed along with the Consolidated
The financial statements of the subsidiary Companies are kept for
inspection by the shareholders at the Registered Office of the company
The company shall provide free of cost, the copy of the financial
statements of its subsidiary companies to the shareholders upon their
request. The statements are also available on the website of the
27. CONSOLIDATED FINANCIAL STATEMENTS
As stipulated by Clause 32 of the listing agreement with the stock
exchanges, the consolidated financial statements have been prepared by
the company in accordance with the applicable Accounting Standards.
The audited consolidated financial statements together with Auditors''
Report form part of the Annual Report.
The consolidated net profit of the company and its subsidiaries
amounted to Rs. 1486.50 crores for the corporate financial year ended on
31st December, 2014 as compared to Rs. 1496.36 crores on a standalone
28. EQUAL OPPORTUNITY EMPLOYER
The company has always provided a congenial atmosphere for work to all
employees that is free from discrimination and harassment including
sexual harassment. It has provided equal opportunities of employment to
all without regard to their caste, religion, colour, marital status and
sex. The company has also framed a policy on ''Prevention of Sexual
Harassment'' at the workplace. There were no cases reported during the
year under review under the said Policy
29. AWARDS AND ACCOLADES
- ACF Darlaghat bags NABARD''s Best Partnership Award.
- Ambuja bags CII-ITC Sustainability Award - 2014.
- Roorkee Grinding Unit has been awarded with the ''CERTIFICATE of
MERIT'' for ''Energy Conservation in Cement Sector for the year
- Ambuja Cement Foundation - Chirawa has won the UNESCO supported
Water Digest Water Award 2013-14.
- Ambuja Cement bags Bronze at the Flame Awards 2013 for Rural
- Ambuja Cement bagged the 1st runner up award at the ASSOCHAM CSR
Excellence award during the 6th Global Corporate Social Responsibility
Summit held in Delhi.
- ACEs Rabriyawas Unit won the 14th Annual Greentech Environment
award in the Gold Category
- Greentech Environmental Excellence Gold Award 2013.
- Ambuja Cements - Rabriyawas Plant won Productivity Excellence Award
2011-12, presented by Rajasthan State Productivity Council.
- Ambuja Cement Foundation - Bathinda won the NABARD ''Partnership
Excellence Award'' in the category of''Improving productivity of
30. CAUTIONARY STATEMENT
Statements in the Directors'' Report and the Management Discussion and
Analysis describing the company''s objectives, expectations or
predictions, 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, new capacity
additions, availability of critical materials and their cost, changes
in government policies and tax laws, economic development of the
country, and other factors which are material to the business
operations of the company
The Ministry of Corporate Affairs vide Circular No. 08/2014 dated 4th
April, 2014 clarified that the financial statements and the documents
required to be attached thereto, the Auditor''s and Directors''
report in respect of the financial year under reference shall continue
to be governed by the relevant provisions of the Companies Act, 1956,
schedules and rules made there under. However, the company has made
efforts to provide the information in the Directors'' Report and the
Corporate Governance Report as per the Companies Act, 2013, to the
extent possible as a matter of prudence and good governance.
Your Directors take this opportunity to express their deep sense of
gratitude to the banks, Central and State governments and their
departments and the local authorities for their continued guidance and
We would also like to place on record our sincere appreciation for the
commitment, dedication and hard work put in by every member of the
Ambuja family. To them goes the credit for the company''s
achievements. And to you, our shareholders, we are deeply grateful for
the confidence and faith that you have always reposed in us.
For and on behalf of the Board of Ambuja Cements Limited
N. S. Sekhsaria
Mumbai, 18 February, 2015