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Ambuja Cements
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Directors Report Year End : Dec '14    « Dec 13
Dear Members,
 
 It is our pleasure to present the Annual Report of the company for the
 year 2014.
 
 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
 China.
 
 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
 
 CEMENT INDUSTRY:
 
 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
 other facilities.
 
 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,
 depressing demand.
 
 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
 thatofyear 2013.
 
 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
 
                         Stand-alone               Consolidated
 
             Current Year   Previous Year   Current Year   Previous Year
              31.12.2014     31.12.2013     31.12.2014       31.12.2013
 
 Sales 
 (Net of 
 excise 
 duty)          9,910.70      9,078.74        9,930.54        9,109.88
 
 Profit 
 before 
 interest 
 and 
 deprecia-
 tion and
 excep-
 tional 
 item           2,357.42      2,044.45        2,352.60        2,033.91
 
 Less: 
 Finance 
 Cost              64.48         65.08           65.55           66.75
 
 Gross 
 profit         2,292.94      1,979-37        2,287.05        1,967.16
 
 Less: 
 Deprecia-
 tion and 
 amortisa-
 tion
 expense          509.53        490.07          513-03          493-67
 
 Profit 
 before 
 Excep-
 tional 
 Items 
 and Tax        1,783.41      1,489.30        1,774.02        1,473.49
 
 Less/
 (Add):
 Excep-
 tional 
 items                 -       (24.82)              -          (24.82)
 
 Profit 
 before 
 tax            1,783.41      1,514.12       1,774.02         1,498.31
 
 Less: 
 Tax 
 expense          287.05        219.55         287-51           219.87
 
 Profit 
 after 
 tax but 
 before 
 minority 
 Interest       1,496.36      1,294.57       1,486.51         1,278.44
 
 Less: 
 Minority 
 interest              -             -         (0.01)             0.13
 
 Profit 
 for the 
 Year           1,496.36      1,294.57       1,486.50         1,278.57
 
 Add: 
 Balance 
 as per 
 the 
 last 
 financial
 statements     1,230.69        737.01       1,525.77        1,048.09
 
 Profit 
 available 
 for 
 appropria-
 tion           2,727.05      2,031.58       3,012.27        2,326.66
 
 Appropria-
 tions:
 General 
 Reserve          150.00        150.00         150.00          150.00
 
 Dividend 
 on Equity 
 Shares
 (including
 interim)         774.61        556.34         774.61          556.34
 
 Corporate 
 Dividend 
 Tax              146.51         94.55         146.51           94-55
 
 Total          1,071.12        800.89       1,071.12          800.89
 
 Balance 
 carried 
 forward 
 to 
 Balance 
 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.
 
 3.  DIVIDEND
 
 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.
 
 DISTRIBUTION FOOTPRINT
 
 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
 - knowledge.
 
 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
 interaction.
 
 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
 requirements.
 
 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
 
 IMPROVEMENT INITIATIVES:
 
 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
 with quality
 
 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
 the industry
 
 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
 product portfolio.
 
 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
 initiatives.
 
 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
 operations.
 
 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
 initiatives.
 
 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.
 
 7.  OUTLOOK
 
 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
 industry
 
 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.
 
 LAND ACQUISITION
 
 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.
 
 ENERGY
 
 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
 goals.
 
 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
 leaders.
 
 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
 programme.
 
 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
 workmen.
 
 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
 blending material.
 
 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
 sustainability
 
 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
 product traceability.
 
 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
 of assessment.
 
 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
 carbon footprint.
 
 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
 pollution parameters.
 
 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
 2014.
 
 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
 responsible operations.
 
 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.
 
 SKILL TRAINING
 
 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
 villages.
 
 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
 Rehabilitation Programme.
 
 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
 culture.
 
 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
 issues proactively
 
 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
 Amalgamation.
 
 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
 its employees.
 
 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:
 
 http ://www.ambujacement.com/wp-content/uploads/2014/Related_Party_
 Policy_30.10.2014.pdf.
 
 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
 company
 
 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
 PRACTICES
 
 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
 dealings.
 
 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
 company.
 
 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
 
 I.  CESSATION
 
 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
 company
 
 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
 their re-appointment.
 
 III. APPOINTMENT
 
 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
 April, 2014.
 
 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
 Report.
 
 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
 appointment.
 
 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
 Governance Report.
 
 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
 December, 2014.
 
 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
 basis.
 
 22.  AUDITORS
 
 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
 Act, 2013.
 
 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
 year 2015.
 
 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
 Accounts.
 
 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
 company www.ambujacement.com
 
 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
 basis.
 
 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
 2013''.
 
 - 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
 Marketing Initiative.
 
 - 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
 crops''.
 
 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
 
 31.  DISCLAIMER
 
 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.
 
 32.  ACKNOWLEDGEMENTS
 
 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
 support.
 
 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 
 Chairman
 
 Mumbai, 18 February, 2015
Source : Dion Global Solutions Limited
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