One-time expenses for special incentives to key employees and information technology (IT) transition costs show up as exceptional items in Ambuja Cements' December 2022 quarter financial results. The company on February 7 reported its first financial results post one full quarter of operations under the new Adani management.
For the quarter, Ambuja Cements reported exceptional items of Rs 140 crore at the consolidated level, a one-time outgo related to the change in ownership and control. In September, the Adani group took over ownership of ACC-Ambuja Cements from LafargeHolcim, making Adani Cements the second largest cement manufacturer in the country.
In the consolidated results notes, Ambuja Cements said the Rs 140-crore exceptional item includes a charge of Rs 11.1 crore towards special incentive for certain key employees pursuant to change in ownership and control. A similar charge of Rs 31.5 crore was taken in the September quarter, the notes said.
Another Rs 129.3 crore was a charge towards one-time IT transition costs in the December quarter, the company said. In an earnings call with analysts on Tuesday, the company said this has helped complete transfer of IT control from the erstwhile owners to the new promoters.
“Such charges related to incentives to employees are not a regular thing to happen when ownership changes, but definitely not unusual. The amount is also small. The IT costs were paid to Holcim, it is not clear if the incentives were paid to Holcim or current employees,” said an analyst with a domestic brokerage firm who did not wish to be identified.
An email query sent to Adani Cements on Tuesday remained unanswered.
In its results notes, Ambuja Cements, without naming Hindenburg Research, said, “A short seller has issued a research report, alleging certain issues against some of Adani group entities.” The note added, to uphold principles of good corporate governance, the management of Adani group entities are considering appointing an independent firm/agency to assess and look into the issues.
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