Ambuja Cements

As at        As at
                                             31.12.2008   31.12.2007
                                          Rs. in Crores   Rs. in Crores
 
 1 a) Contingent liabilities not provided 
    for in respect of :
 
 (i) Bank Guarantee given to Mines & 
     Geology Dept. Government of
     Rajasthan for setting up of Cement
     plant..                                     2.00         -
 
 (ii) Claims against the Company not 
      acknowledged as debts
 
 (a) Disputed liability relating to 
     labour matters
                                                26.31       23.69
 
 (b) For acquisition of land
                                                32.87       28.61
 
 (c) For Non Agriculture Assessment
     Tax.                                        2.65        2.65
 
 (d) Others
                                                25.56       18.26
 (iii) Tax matters :
 
 (a) Disputed liability in respect of 
 Income-tax demands (including interest) 
 - matters under appeal                         63.68       16.37
 
 (b) Disputed Sales-tax demands 
 (including interest and penalty) -
 matters under appeal
 
 (i) Matter decided in favour of the 
 Company by the Honourable High Court
 of Himachal Pradesh, against which
 the Department had filed a Special 
 Leave Petition in the Honourable 
 Supreme Court, since dismissed.                10.49       10.43
 
 (c) Disputed Excise demands - matters 
 under appeal (Deposit with Excise 
 Department Rs. 0.40 crore, 
 Previous Year Rs. 0.19 crore).                 16.55       10.06
 
 (d) Disputed Customs demands 
 - matters under appeal                          2.22        1.74
 
 (e) Disputed liabilities of RTO Tax 
 on Mining Machinery                             0.62        0.62
 
 (iv) Disputed liabilities relating 
 to Railway Freight on Cement -
 matter once decided in favour of 
 the Company by the Honourable 
 High Court of Gujarat was remanded 
 back by the Honourable Supreme Court
 pursuant to an Special Leave Petition
 filed by the railways                           5.51        5.51
 
 (v) Disputed liabilities relating to 
 Coal claims- matters pending in the
 
 Honourable High Court:
 
 (a) Railway Freight on Coal.                    1.49        1.49
 
 (b) Penal Freight on Excess 
     Weight of Coal.                             0.24        0.24
 
 (c) Interest on Premium on Coal                 3.29        3.29
 
 In respect of items above, future 
 cash outflows in respect of
 contingent liabilities are 
 determinable only on receipt of 
 judgements /decisions pending at 
 various forums / authorities.
 
 (b) The Honourable High Court of 
 Himachal Pradesh has passed an order
 in favour of the Company for its 
 claim in respect of power subsidy in
 the form of Power Tariff Freeze (PTF)
 and Peak Load Exemption Charges
 (PLEC). Against this, Government of
 Himachal Pradesh on 1 st May, 2004
 has issued 296 5.13% H P 
 Infrastructure Development Bonds 
 of face value of Rs. 10 lacs each,
 having a value of Rs. 29.60 crores
 redeemable after 10 years and balance
 of Rs. 0.08 crore is refunded to the
 Company.
 
 The Government of Himachal Pradesh 
 has filed Special Leave Petition in the
 Honourable Supreme Court against the
 decision of the Honourable High Court
 of Himachal Pradesh. The Company has
 given an undertaking to refund Rs. 29.68
 crores paid by the State Government 
 together with interest thereon upto 
 the date of final judgement in time 
 bound manner, in the event that the 
 matter is decided against the Company         29.68      29.68
 
 (c) The Government of Rajasthan has 
 granted 75% exemption from Sales Tax in
 respect of Rabriyawas unit. However,
 the eligibility of exemption in excess
 of 25% has been contested by the State
 Government in a similar matter of another
 Company and the matter is pending before
 the Honourable Supreme Court. The Company
 has given an undertaking to the Government
 of Rajasthan that the Company will deposit
 the differential amount of Sales Tax, in 
 case the Supreme Courts decision goes 
 against in the matter referred above.         82.16      82.16
 
 (d)Writ petition filed against the order
 of Madhya Pradesh State Mining Department
 demanding Rs. 4.76 crores towards payment
 of additional royalty on limestone based
 on the ratio of 1.6 tonnes of limestone
 to 1 tonne of cement produced at its 
 factory in Chhattisgarh. 
 The matter is now pending before 
 Honourable High
 
 Court at Bilaspur.                            44.94      38.54
 
 Estimated amount of Contracts remaining 
 to be executed on Capital Account and
 not provided for (net of advances).          911.68     949.82
 
 Segment reporting :
 
 The Company has only one business 
 segment Cement as primary segment. 
 The secondary segment is geographical,
 which is given as under:
 
                                                 2008         2007
                                        Rs. in Crores Rs. in Crores
 
 (a)    Revenue
 
 Sales (Net of Excise Duty)
 
 Within India                                6,007.65     5,116.75
 
 Outside India                                 254.14       601.85
 
 TOTAL                                       6,261.79     5,718.60
 
 2.  Disclosure of Sundry Creditors under Current Liabilities is based
 on the information available with the Company regarding the status of
 the suppliers as defined under the Micro, Small and Medium Enterprises
 Development Act, 2006. Principal amount overdue and interest amount
 thereon payable to Micro, Small and Medium Enterprises as on 31st
 December, 2008, is Rs. 0.17 crore (31.12.2007 - Rs. Nil) and Rs. 0.09
 crore (31.12.2007 - Rs. Nil) respectively.
 
 3.  In accordance with the Put and Call option agreement entered into
 with Holderind Investments Limited, the Company has during the year
 sold the remaining 9,53,70,000 (31.12.2007 - 19,07,50,000) equity
 shares of Ambuja Cement India Private Limited for a consideration of
 Rs. 588.91 crores (31.12.2007- Rs. 1,061.52 crores) and recognised a
 profit of Rs. 303.20 crores (31.12.2007- Rs. 490.07 crores). (Gross of
 tax of Rs. 38.56 crores (31.12.2007- Rs. 63.16 crores).
 
 4.  Pursuant to the implementation of SAP ERP system, during the year,
 the Company has changed its inventory valuation method from annual
 weighted average to daily moving weighted average for items procured
 and monthly moving weighted average in case of material-in-process and
 finished goods. As a result profit for the year ended 31st December,
 2008 is higher by Rs. 83.40 crores.
 
 5.  The Company held 6,76,36,340 ordinary shares of Ceylon Ambuja
 Cements Private Limited (CACL) (including 1,72,22,500 shares acquired
 during the year) at a cost of Rs. 35.82 crores. In the previous year
 the Company has recognised a provision for diminution in the value of
 these investments of Rs. 29.54 crores. During the year the Company has
 sold its shareholding in CACL for a sale consideration of Rs. 0.42
 crore and recognised a loss of Rs. 5.86 crores. Consequently, CACL and
 its subsidiary Midigama Cements (Private) Limited ceased to be
 subsidiaries of the Company w.e.f. 2nd June, 2008.
 
 6.  The Companys subsidiary Cement Ambuja International Limited
 (CAIL), Mauritius has initiated the voluntary winding up proceedings
 under the Company Act, 2001, Mauritius and has repaid the outstanding
 paid-up capital and accumulated reserves to the Company during the
 period ended 31st December, 2006. CAIL is in the process of seeking
 necessary regulatory approvals to complete the liquidation, pending
 which the Company continues to be a member of CAIL.
 
 7.  Capital Work-in-Progress includes (a) Machinery in transit - Rs.
 3.03 crores (31.12.2007 - Rs. 2.94 crores); (b) expenditure during
 construction for project - Rs. 80.02 crores (31.12.2007 - Rs. 41.1 7
 crores).
 
 8.  The Company is carrying out its Corporate Social Responsibility
 (CSR) activities through Ambuja Cement Foundation (ACF), and was during
 the year running the schools at plant locations through the Ambuja
 Educational Institute (AEI), charitable organisations registered under
 Section 25 of the Companies Act, 1956. The Company has contributed Rs.
 18.21 crores (31.12.2007- Rs. 11.61 crores) and Rs. 1.59 crores
 (31.12.2007- Rs. 1.40 crores) to ACF and AEI respectively.
 
 9.  During the year the Company has written off pre-operative expenses
 incurred on certain capital projects and temporary structures amounting
 to Rs. 8.11 crores (31.12.2007- Rs. 2.54 crores).
 
 10.  Figures less than Rs. 50,000/- have been shown at actuals,
 wherever statutorily required to be disclosed, as the figures have been
 rounded off to the nearest lac.
 
 11.  Figures of the previous year have been regrouped wherever
 necessary to conform to the current years presentation.