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OBJECTIVES OF STUDY :

To study ACC cement market including market size and composition , market
growth .

To analyze latest trends & oppurtunities

To study policies of government related to cement industry

To analyze the cement production and capacity utilization

To trace out current scenario of demand and supply

To analyze market share of ACC cement in INDIAN market

EXECUTIVE SUMMARY

Scope:

The scope of the project undertaken was:

• Study of identification of working capital requirement of company.


.
• Analysis of the findings and observations of the study.
• Recommendations based on observations

Limitation of the Project:

• The project report is based on secondary sources of information only.


• The data collected at an earlier date and thus the Present situation could be
different.

Research Methodology:

The theoretical part of the report is based solely on secondary information. The most
important sources for this part are reports and journals.

Secondary data:
• Books
• Internet
• Articles
• Magazines
• Newspapers
INTRODUCTION

THE INDIAN CEMENT INDUSTRY

The Indian Cement industry date back to 1914, with first unit was set-up at
Porbandar with a capacity of 1000 tones. Currently the Indian cement industry with a
total capacity of about 170 m tones (excluding mini plants) in has surpassed
developed nations like USA and Japan and has emerged as the second largest
market after China. Although consolidation has taken place in the Indian cement
industry with the top five players controlling almost 50% of the capacity, the
remaining 50% of the capacity remains pretty fragmented. Per capita consumption has
increased from 28 kg in 1980-81 to 115 kg in 2005. In relative terms, India’s average
consumption is still low and the process of catching up with international averages
will drive future growth. Infrastructure spending (particularly on roads, ports and
airports), a spurt in housing construction and expansion in corporate production
facilities is likely to spur growth in this area. South-East Asia and the Middle East are
potential export markets. Low cost technology and extensive restructuring have made
some of the Indian cement companies the most efficient across global majors. Despite
some consolidation, the industry remains somewhat fragmented and merger and
acquisition possibilities are strong. Investment norms including guidelines for foreign
direct investment (FDI) are investor-friendly. All these factors present a strong case
for investing in the Indian market.
Now, the Indian cement industry is on a roll. Riding on increased activity in
real estate, cement production has registered a growth of 9.28 per cent in April, 2010,
at 14 million tones as against 11.41 million tones in the corresponding period a year
ago.
During the Tenth Plan, the industry, which is ranked second in the world in
terms of production, is expected to grow at 10 per cent per annum adding a capacity
of 40-52 million tones, according to the annual report of the Department of Industrial
Policy and Promotion (DIPP). The report reveals that this growth trend is being
driven mainly by the expansion of existing plants and using more fly ash in the
production of cement.
MAJOR PLAYERS IN CEMENT INDUSTRY:

Shree Cement:
Shree Cements Ltd. is a Rajasthan based company, located at Beawer. The company
has installed capacity of 6.825 mn tones per annum in Rajasthan. For the last 18 years,
it has been consistently producing many notches above the nameplate capacity. The
company retains its position as north India’s largest single-location manufacturer.
Shree’s principal cement consuming markets comprise Rajasthan, Delhi, Haryana,
Punjab, Uttar Pradesh and Uttranchal. Shree manufactures Ordinary Portland Cement
(OPC) and Portland Pozzolana Cement (PPC). Its output is marketed under the Shree
Ultra Ordinary Portland Cement’ and ‘Shree Ultra Red Oxide jung rodhak Cement’
brand names.

Ambuja Cement:
GACL was set up in 1986 with 0.7 million tones. The capacity has grown 25 times
since then to 18.5 million tones. GACL exports as much as 15 percent of its
production. Thirty five per cent of the company’s products transported are by sea
which is the cheapest mode. It has earned the reputation of being the lowest cost
producer in the cement industry. Ambuja cement one of GACL’s well established
brands. The company plans to increase capacity by 3-4 million tones in the near
future.

ACC Cement:
Being formed in 1936, ACC has a capacity of 22.40 million ( including 0.53 million
tones of Damodar Cement and Slag and 0.96 million tones of Bargarh Cement ).
ACC Super is one of the company’s well established brands. It is planning to expand
the capacity of its wholly-owned subsidiary Damodar cement and Slag at Purulia in
West Bengal. This is aimed at increasing its presence in the eastern region.
ACC was the largest player with a capacity of 22.4 million tones per annum
( including 0.525 mn tones per annum of its subsidiary Damodar Cement).
The Aditya Birla Group:
The Aditya Birla Group is the world’s eighth largest cement producer. The first
cement plant of Grasim, the flagship of the Aditya Birla Group, at Jawad in Madhya
Pradesh went on Stream in 1985. In total, Grasim has five integrated grey cement
plants and six ready-mix concrete plants. The company is India’s largest white cement
producer with a capacity of 4 lakh tones. It has one of the world’s largest white
cement plant at Kharia Khangar (Raj.) Shree Digvijay Cement, a subsidiary of
Grasim, which was acquired in 1998, has its integrated grey cement plant at Sikka
(Gujrat). Finally Grasim acquired controlling stake in Ultra Tech Cement Limited
(Ultra Tech), the demerged cement business of L&T. Grasim has a total capacity of
31 million tones and eyeing to increase it to 48 MT by FY 09. Grasim has a portfolio
of national brands which include Birla Supar, Birla Plus, Birla White and Birla Ready
mix and also regional brands like Vikram Cement and Rajshree Cement.

Binani Cement:
A fierce competitor with a 2.2 MTPA plant is located at Binanigram, Pindwara, a
village in Sirohi in the state of Rajasthan. It’s a tough nut player which is outside
CMA (Cement Manufacturer’s Association) and is prime reason for driving prices
low in market. Offers a good quality product at cheap rates and has very good brand
image. Sales are focused in the North India, Gujarat and Rajasthan markets. Holds
around 14% of Rajasthan market.

JK Cement:
An entrenched competitor that has brands across the price spectrum with JK
Nembahera leading the pack. Also operates in the white cement market with Birla as
its only competitor. It lost significant market when Ambuja came to Rajasthan.
CEMENT

Cements are of two basic types- gray cement and white cement. Grey cement is
used only for construction purposes while white cement can be put to a variety of
uses. It is used for mosaic and terrazzo flooring and certain cements paints. It is used
as a primer for paints besides has a variety of architectural uses. The cost of white
cement is approximately three times that of gray cement. White cement is more
expensive because its production cost is more and excise duty on white cement is also
higher. Shree cement does not manufacture white cement at present.

GREY WHITE

Portland Pozzolona Cement Ordinary Portland cement


(PPC)

Pozzolona used in the manufacture of Portland cement is burnt clay of flyash


generated at thermal power plants. PPC is hydraulic cement. PPC differs from OPC
on a number of counts. Pozzolona during manufacturing consumes lot of hydration
heat and forms ‘cementious gel’. Reduced heat of hydration leads to lesser shrinkage
cracks. An additional gel formation leads to lesser pores in concrete or mortar. It also
minimizes problem of leaching and effloresce
THE CEMENT INDUSTRY STRUCTURE

Presently the total installed capacity of Indian Cement Industry is more than
175 mn tones per annum, with a production around 168 mn tones . The whole cement
industry can be divided into Major cement plants and Mini cement plants.

Major Cement Plants:

• Plants : 140
• Typical installed capacity
• Per plant : Above 1.5 mntpa
• Total installed capacity : 170 mntpa
• Production 07-08: 161 mntpa
• All India reach through multiple plants
• Export to Bangladesh, Nepal, Sri Lanka, UAE and Mauritius
• Strong marketing network, tie-ups with customers, contractors
• Wide spread distribution network .
• Sales primarily through the dealer channel

Mini Cement Plants:

• Nearly 300 plants & Located in Gujarat, Rajasthan, MP mainly


• Typical capacity < 200 tpd
• Installed capacity around 9 mn. Tones
• Production around : 6.2 mn tones
• Mini plants were meant to tap scattered limestone reserves. However most set up
in AP
• Most use vertical kiln technology
• Production cost / tonne - Rs. 1,000 to 1,400
• Presence of these plants limited to the state
• Infrastructural facilities not the best
CHARACTERISTICS OF CEMENT INDUSTRY

This section describes the basic economic characteristics of the cement


industry by following the classical approach which consists of successively examining
demand, supply and market structure. On the basis of these characteristics are
described the main economic stakes in the sector.

Demand & Market

Demand in the cement industry is typically that of an activity which is mature,


cyclical and with low price elasticity. It is also characterized by a high degree of
horizontal differentiation in terms of location and a low degree of vertical
differentiation in terms of quality.

Cement is an homogeneous product. Most of its sales concern about half a


dozen commercial varieties, of which Portland cement is by far the leader. No brand
name exists, so that one supplier’s products can easily be substituted for another.
Cement is, however, an experience good; its quality is guaranteed by standards with
which the supplier has to comply. These standards are often national but in most cases
the products of one country can easily be approved in neighbouring countries.
Standards therefore do not constitute trade barriers as such, even if they may hinder
trade.

The demand for cement is geographically widely dispersed and corresponds


roughly to population density. Although cement is an upstream industry, it differs
from other basic industries such as aluminium, steel or glass, for which demand id
concentrated both geographically and in terms of the number of customers. In the
cement industry demand is by, by contrast, dispersed in multiple zones of
consumption, each of which comprises numerous customers. Geographical factors
thus determine the structure of the market.
a) Maritime Model b) Land Model

The above figure adapted from Tanguy (1987), illustrates this phenomenon. On
the left, producers compete on a major market; on the right, each producer is
relatively isolated on its natural market. These two extreme cases – called the
maritime and the land model, respectively, by Dumez and Jeunemaitre (2000), as well
as all the possible intermediate forms, constitute the playing field of the cement
industry. The traditional playing field is the land model, but the maritime model takes
over when communication over vast distances becomes possible.

Supply

Two economic considerations are important a priori in structuring supply in a market


characterized by strong horizontal differentiation:
• The trade-off between fixed costs and transport costs which, depending on the
economic size of the factories, gives an initial idea of the density of the
network of production units covering the territory, in relation to the density of
demand
• The level of investment costs and the life-span of facilities which determine
the rigidity and the duration of the network.
Major Demand Drivers:

• Infrastructure & construction sector the major demand drivers. Some demand
determinants
• Economic growth
• Industrial activity
• Real estate business
• Construction activity
• Investments in the core sector
• Growth in mortgage business in retail housing
• Higher surplus income of household

Opportunities:

• Growth in the housing sector


• Central road fund established for national highways and railway over bridges
to provide the necessary impetus
• Expansion plans, Greenfield projects on the anvil
• Demand – supply balance expected in the next 12 – 15 months
• Encouraging trend in demand due to pick-up in rural housing demand and industrial
revival
• Industry likely to grow at 8-10% in the next few years
• Newer capacities in future
S.W.O.T. Analysis for Acc Cements

Strengths

 Focused strategy
 Lowest cost producer of cement in north India
 A secure source of raw materials
 High penetration in Govt. projects
 Largest single plant capacity in India
 Acc power plant , which is producing electricity enough for Ras plant

Weaknesses

 Less dealer incentives as compared to its competitors


 Color of the cement has not been perceived greatly, green color was preferred
the most
 Poor advertising and brand promotion

Opportunities

 Real estate boom will lead to increased demand


 International expansion
 Demand from Pakistan side
 Reduction in customs duties
 Government’s thrust on infrastructure and tax incentives on housing loans

Threats

 Increased competition from domestic as well as international players


 Rising input (oil) prices
 Sales highly dependent on monsoons
 Growth of counterfeits

ACC COMPANY PROFILE:

ACC – INDIA’S first name in cement .ACC Ltd is India's foremost manufacturer of
cement and concrete. The company is engaged in the manufacture of cement and
ready-mixed concrete. They manufacture a range of portland cement for general
construction and special applications. In addition, they also offer two products
namely, bulk cement and ready mix concrete. The company's operations are spread
throughout the country with 16 modern cement factories, more than 40 Ready mix
concrete plants, 20 sales offices, and several zonal offices. Their subsidiaries include
ACC Concrete Ltd, Bulk Cement Corporation (India) Ltd, ACC Mineral Resources
Ltd, Lucky Minmat Ltd, National Limestone Co Pvt Ltd and Encore Cements &
Additives Pvt Ltd. ACC Ltd was incorporated on August 1, 1996 as The Associated
Cement Companies Ltd. The company was formed by merger of ten existing cement
companies. In the year 1944, they established India's first entirely indigenous cement
plant at Chaibasa in Bihar. In the year 1956, they established bulk cement depot at
Okhla, Delhi. In the year 1965, the company established Central Research Station at
Thane. In the year 1973, they acquired The Cement Marketing Company of India. In
the year 1978, they introduced energy efficient precalcinator technology for the first
time in India. In the year 1982, the company commissioned their first 1 MTPA plant
in the country at Wadi, Karnataka. In the year 1982, the company incorporated Bulk
Cement Corporation of India, a joint venture with the Government of India. In the
year 1993, they started commercial manufacture of Ready Mixed Concrete at
Mumbai. In the year 1999, they commissioned captive power plants at the Jamul and
Kymore plants in Madhya Pradesh. The house of TATA was intimately associated
with the company upto 1999. In the year 1999, the Tata group sold their 7.2% stake in
the company to Ambuja Cement Holdings Ltd, a subsidiary of Gujarat Ambuja
Cements Ltd and in the year 2000, Tata group sold their remaining stake in the
company to Gujarat Ambuja Cements Ltd. In the year 2001, the company
commissioned a new plant of 2.6 MTPA capacity at Wadi, Karnataka. In the year
2003, IDCOL Cement Ltd becomes a subsidiary of the company, which was renamed
as Bargarh Cement Ltd during the year 2004. In the year 2004, the company was
named as Consumer Superbrand by the Superbrands Council of India, becoming the
only cement company to get this status. In the year 2005, the company completed the
modernization and expansion project at Chaibasa in Jharkhand, replacing old wet
process technology with a new 1.2 MTPA clinkering unit, together with a captive
power plant of 15 MW. In the year 2006, the subsidiary companies Damodhar
Cement & Slag Ltd, Bargarh Cement Ltd and Tarmac (India) Ltd merged with the
company. Also, the name of the company was changed from The Associated Cement
Companies Ltd to ACC Ltd with effect from September 1, 2006. In the year 2007, the
company commissioned wind energy farm in Tamilnadu. In July 2007, the company
sold their entire shareholding in their wholly owned subsidiary ACC Nihon Castings
Ltd at a consideration of Rs 30 crore to V N Enterprises Ltd of Hindustan Udyog
Group. In the year 2008, the ready mixed concrete business was hived off to a new
subsidiary called ACC Concrete Ltd. They acquired 40% stake in Alcon Cement
Company Pvt Ltd to strengthen their presence in Goa. Also, they acquired 12.41%
equity shares of Bulk Cement Corporation (India) Ltd from IDBI Bank Ltd, thereby
increasing their shareholding in the said subsidiary company to 94.65%. In March
2008, the company sold their wholly owned subsidiary, ACC Machinery Company
Ltd for a consideration of Rs 45 crore. In July 7, 2008, they inaugurated ACC Cement
Technology Institute at Jamul. In the year 2009, the company commissioned one 15
MW CPP as a part of Bargarh plant expansion. The additional captive power
generating capacity of 50 MW in Wadi, 15 MW in Bargarh and 25 MW in Chanda is
scheduled to be commissioned and stabilized in 2010. They inaugurated new Grinding
plant of capacity 1.60 million tonnes at Thondebhavi in Karnataka. During the year,
the company acquired 100% equity stake in National Limestone Company Pvt Ltd,
making it as a wholly owned subsidiary of the company. Also, they acquired 100%
equity stake in Encore Cements & Additives Pvt Ltd which has a slag grinding plant
in Vishakhapatnam in coastal Andhra Pradesh. Consequently, ECAPL became a
wholly owned subsidiary of the company with effect from January 28, 2010. In
September 2009, the company installed and commissioned a coal washery in Jamul.
Also, the company is in the process of commissioning a coal washery in the Bargarh
plant in 2010. In January 4, 2010, Kudithini Cement Grinding Plant was inaugurated
in Karnataka with a capacity of 1.1 MTPA of Portland Slag Cement. In April 2010,
the company commissioned a 2.5-MW wind energy farm near Satara, Maharashtra, at
a cost of Rs 13 crore. The wind farm has two 1.5-MW turbines. The power from the
wind farm will be supplied through a wheeling arrangement to the company's Thane
Complex and Bulk Cement Corporation (India) Ltd, a subsidiary company at
Kalamboli, near Mumbai. The company entered into an agreement with the promoters
of Asian Concrete & Cement Pvt Ltd to acquire a 45% equity stake in that company.
This transaction would be concluded in the first quarter of 2010. The new clinkering
line at Chanda in Maharashtra and a new 25 MW captive power plant, being built at a
cost of around Rs 1450 crores is expected to be completed by the third quarter of 2010
and this will increase the cement grinding capacity by 3 MTPA.

ACC (ACC Limited) is India's foremost manufacturer of cement and concrete. ACC's
operations are spread throughout the country with 16 modern cement factories, more
than 40 Ready mix concrete plants, 20 sales offices, and several zonal offices. It has a
workforce of about 9,000 persons and a countrywide distribution network of over
9,000 dealers.

Since inception in 1936, the company has been a trendsetter and important benchmark
for the cement industry in many areas of cement and concrete technology. ACC has a
unique track record of innovative research, product development and specialized
consultancy services. The company's various manufacturing units are backed by a
central technology support services centre - the only one of its kind in the Indian
cement industry.

ACC has rich experience in mining, being the largest user of limestone. As the largest
cement producer in India, it is one of the biggest customers of the domestic coal
industry, of Indian Railways, and a considerable user of the country’s road transport
network services for inward and outward movement of materials and products.
Among the first companies in India to include commitment to environmental
protection as one of its corporate objectives, the company installed sophisticated
pollution control equipment as far back as 1966, long before pollution control laws
came into existence. Today each of its cement plants has state-of-the art pollution
control equipment and devices.

ACC plants, mines and townships visibly demonstrate successful endeavours in


quarry rehabilitation, water management techniques and ‘greening’ activities. The
company actively promotes the use of alternative fuels and raw materials and offers
total solutions for waste management including testing, suggestions for reuse,
recycling and co-processing.

ACC has taken purposeful steps in knowledge building. We run two institutes that
offer professional technical courses for engineering graduates and diploma holders
which are relevant to manufacturing sectors such as cement. The main beneficiaries
are youth from remote and backward areas of the country.

ACC has made significant contributions to the nation building process by way of
quality products, services and sharing expertise. Its commitment to sustainable
development, its high ethical standards in business dealings and its on-going efforts in
community welfare programmes have won it acclaim as a responsible corporate
citizen. ACC’s brand name is synonymous with cement and enjoys a high level of
equity in the Indian market. It is the only cement company that figures in the list of
Consumer SuperBrands of India.
The Directors hereby present the Seventy Fourth Annual Report together with the
auditedaccounts, for the year ended December 31, 2009. The Management Discussion
and Analysis hasalso been incorporated into this report.

1. PREAMBLE - 2009

The year 2009 would be marked as an important year for the Indian cement industry.
Whenthe year began, the Indian economy was in a recession amidst the global
slowdown that wasstill prevailing. The cement industry then faced the prospects of a
substantial cementcapacity addition with no sign that demand would grow
significantly. However, theforecasts were belied - demand was robust, capacity
creation was delayed, cement plantsachieved higher capacity utilization and market
prices were favourable. With commodityprices including fuel remaining subdued,
most cement manufacturers were able to recordgood financial performances in 2009.

The cement industry posted a steady growth of about 10.3% during the year under
review.Overall cement despatches in 2009 were approximately 195 million tonnes, up
from 177million tonnes in 2008. Growth was registered across all regions, led by
rapiddevelopments in infrastructure and a stable housing sector. The demand-supply
scenario wasgenerally at balance with high levels of capacity utilization in most of the
regions. In2009, capacity additions of the order of 26.88 million tonnes went on
stream. There wassome delay in the materialization of fresh capacity addition which
helped ease thepressure on selling prices. The industry’s cost profile improved on
account of lowerprocurement prices of coal and other commodities.

All of the above conditions had a favourable collective impact on overallprofitability.

ACC’s installed capacity rose to 26 million tonnes per annum at the close of theyear
as compared to 23 million tonnes at the end of 2008. The Company continued with
itsstrict control over costs, while taking proactive measures to conserve cash
resourceswhich are reflected in the fact that the Company has negative net financial
debt evenafter spending Rs. 1561 crores as capital expenditure.

2. HIGHLIGHTS OF PERFORMANCE/EVENTS

• Total consolidated income for the year 2009 was Rs. 8,725 crore, an increase of9%
as compared to Rs. 7,974 crore in 2008.

• Consolidated profit before exceptional items and tax for the year 2009 was Rs.2,251
crore against Rs. 1,582 crore in the 2008, an increase of 42%.

• Consolidated profit after tax for the year 2009 was Rs. 1,564 crore as againstRs.
1,100 crore in 2008, an increase of 42%.

• The expansion project of the Bargarh Plant was substantially completed duringthe
year. The satellite grinding units which were set up as a part of Wadi
expansionprogramme at Thondebhavi in Chikballapur District and Kudithini in
Bellary District inKarnataka were also partly commissioned during the last quarter of
2009.
• There was substantial progress during the year under review in thecompany’s on-
going projects at Wadi and Chanda, which are slated for completion inthe first half of
2010.

• Work was started on a project to set up a 2.5 MW wind energy farm inMaharashtra.

3. FINANCIAL RESULTS

Consolidated Standalone
Rs Crore Rs Crore
2009 2008 2009 2008
Sale of products and services (net of excise
8725.41 7974.28 8268.31 7571.58
duty) and other income
Profit after exceptional items and before tax 2250.70 1624.82 2294.39 1736.60
Provision for Tax (686.79) (525.17) (687.66) (523.81)
Profit after Tax 1563.91 1099.65 1606.73 1212.79
Balance brought forward from previous year 2357.25 2057.37 2477.91 2064.89
Profit available for appropriations 3921.16 3157.02 4084.64 3277.68
Appropriations :
Interim Dividend 187.70 187.65 187.70 187.65
Proposed Dividend 244.06 187.68 244.06 187.68
Dividend Distribution Tax 73.38 63.79 73.38 63.79
General Reserve 350.00 350.00 350.00 350.00
Debenture Redemption Reserve 25.00 10.00 25.00 10.00
Previous Year Dividend - 0.02 - 0.02
Amortisation Reserves 0.65 0.63 0.65 0.63
Balance carried forward to the next year’s
3040.37 2357.25 3203.85 2477.91
account

4. DIVIDEND

In August 2009, your Company had paid an interim dividend of Rs. 10 per equity
share,involving an outgo (including the dividend distribution tax) of Rs. 219.60 crore.
YourDirectors are now pleased to recommend a final dividend of Rs. 13 per equity
share of Rs.10 each. The total dividend for the year 2009 would accordingly be Rs. 23
per equity shareas against Rs. 20 per equity share for the year ended December 31,
2008.

The total dividend outgo for the current fiscal would amount to Rs. 505.14
crore,including dividend distribution tax of Rs. 73.38 crore, as against Rs. 439.12
crore,including dividend distribution tax of Rs. 63.79 crore in the previous year.
5. ECONOMIC SCENARIO AND OUTLOOK

After the global financial slowdown witnessed in 2008, culminating in the


expensivebailout for banks and insurance companies notably in USA, there has been a
perceptibleimprovement in the outlook for the global economy. The expansion of
output in emergingmarket economies, particularly Asia, was the principal driver of
this development. Tradeis recovering and financial market conditions are improving.
Notwithstanding theconfidence exuded by the financial sector, there are concerns that
the recovery may as yetbe fragile, as the economies of developed countries,
particularly USA, continue to lagwith high unemployment, low consumer spending
and depressed housing markets.

The Indian economy fared better than most developed economies, although its growth
wasa bit muted. The performance of the industrial sector has markedly improved.
Fundingconstraints eased with ample liquidity and a benign interest regime prevailed
during amajor part of the year. Capital inflows revived as India became a preferred
destinationfor both portfolio and direct investment. The country is now exhibiting
signs ofresurgence, despite contraction in exports and a subnormal monsoon in 2009.
Governmentexpects the GDP growth to be around 7% in the Financial Year 2009-
2010, which is animprovement over the forecast of 6 - 6.5 % growth made in the
beginning of the fiscalyear.

However, there are still areas that cause concern. Agricultural output may decline as
aresult of the weak monsoon and inflationary pressures, particularly of food prices,
couldhamper growth prospects for 2010. Bank credit growth continues to be sluggish.
Governmentfiscal deficit is expected to reach record levels. Nevertheless, the overall
economicoutlook is generally favourable, though mixed, with some concern of an
escalatinginflationary pressure.

6. CEMENT INDUSTRY OUTLOOK AND OPPORTUNITIES

In 2010, we expect additional capacity of about 70 million tonnes to materialize,


morethan half of which is coming up in South West India. Despite a growing demand
for cement,these capacity additions may create surpluses in some parts of the country.
The prices ofmajor inputs for cement viz. coal, slag, gypsum, fly ash and petroleum
products havestarted rising, and are likely to harden in 2010 pushing up
manufacturing and distributioncosts. The availability of the aforesaid raw materials
also continues to pose challenges.Supply of railway wagons is likely to worsen during
the course of the current yearaffecting cement despatches to some markets.

Government’s continued thrust on infrastructure and its stimulus packages to


boostrural and other sectors are likely to accelerate construction activity. It is,
therefore,expected that the demand for cement will grow steadily in the next few
years. The demandfrom the individual house builder segment is also likely to remain
strong. Consequently,we expect the cement industry to maintain a steady growth
impetus of 9 to 10% in 2010 andin the near future.
7. CEMENT BUSINESS – PERFORMANCE AT A GLANCE

2009 2008 Change %


Production-million tonnes 21.37 20.83 2.6
Sales volume-million tonnes* 21.52 21.01 2.4
Sales value – Rs crore 8027.19 7282.87 10.2
EBITDA % 32.3% 25.5%

* includes sale to ACC Concrete Limited and trading sales

8. YEAR OF BUILDING ORGANIZATIONAL CAPABILITIES

Duirng the year under review, the Company focussed its attention on
buildingorganizational capabilities.

Several initiatives were taken to keep costs under check and improve
productivitythereby enhancing cost competitiveness to help combat intense
competition emerging in themarketplace.

The Company aggressively pursued the utilization of alternative fuels.

It leveraged on its surplus captive generation capability and maximized the sale
ofsurplus power. Steps were taken to usher in sales and marketing excellence,
besidesstrengthening the dealer network. The Company adopted and assimilated a
series of bestpractices from Holcim that would prepare it to meet the demands of
growth and competition.

ACC Company maximized cash generation by reducing its working capital build-up
and byspending its capex budget judiciously.

9. ENERGY RESOURCES Captive Power Plants

Steam based Captive Power Plants (CPP) play a vital role in improving our
costcompetitiveness and providing quality power to our plants. In 2009, gross
generation ofpower by our CPPs was 1733 million kwh which was 14% higher than
the gross generation of1517 million kwh in 2008. This helped increase the share of
power from CPPs in total powerconsumption for cement production, from 64% in
2008 to 70% in 2009. The sale of surpluspower from CPP after meeting the
requirements of cement plants increased three times, from32 million kwh in 2008 to
113 million kwh in 2009.

During the year under review, the Company commissioned one 15 MW CPP as a part
ofBargarh plant expansion. Additional captive power generating capacity of 50 MW
in Wadi, 15MW in Bargarh and 25 MW in Chanda is scheduled to be commissioned
and stabilized in 2010.With this increased captive generation, we expect our
dependence on grid power to go downfurther.
Wind Power

The wind farms in Tamil Nadu and Rajasthan performed well and generated 39
million Kwhof power in 2009 against 27 million Kwh in 2008. The Company is
setting up a 2.5 MW windfarm in Maharashtra at a cost of about Rs. 13 crore which is
slated to be commissionedduring March 2010.

Coal Washery

The Company installed and commissioned a coal washery in Jamul in September


2009 toaddress deterioration in the quality of indigenous coal. The plant has since
stabilizedand washed coal obtained from this plant has shown a favourable impact on
the quality andcost of clinker. Encouraged by these results, the Company is
commissioning a coal washeryin the Bargarh plant in 2010.

10. ALTERNATIVE FUELS & RAW MATERIALS

The Company registered a substantial increase in the usage of Alternative Fuels and
RawMaterials (AFR) through the co-processing route. The major focus was on
industrial wastesthis year in addition to strengthening the on-going initiatives on
commodities andagro-wastes. This enabled the AFR Business to record savings of Rs.
40.8 crores during theyear as against Rs. 22.8 crores in 2008, marking an increase of
79%.

The AFR business increased its portfolio and has successfully co-processed 27
differenttypes of industrial waste streams at our plants. The clientele of our Waste
ManagementServices was widened and agreements in this regard were signed with
renowned companiesfrom chemical, FMCG, footwear, pharmaceuticals, food and
beverages sectors.

11. MODERNISATION / EXPANSION / NEW PROJECTS

A major part of the Bargarh expansion project was completed and the Vertical
RollerMill and Captive Power Plant were commissioned during 2009. The next phase
of the plant isexpected to be commissioned during the first quarter of 2010, after
which the cementgrinding capacity of Bargarh will stand enhanced to 2.1 million
tonnes.

The first phase of the programme to increase the cement grinding capacity by 3
milliontonnes per annum of capacity in Karnataka was completed with the launch of
two newsatellite grinding units. These are the Thondebhavi grinding plant in
ChikballapurDistrict near Bangalore with a capacity of 1.6 million tonnes per annum
and the Kudithinigrinding plant in Bellary District with a capacity of 1.1 million
tonnes per annum. Theremaining phase of the New Wadi Expansion Project for
creation of additional clinkeringcapacity in Karnataka, including additional captive
power plants of 2 x 25 MW capacity,are expected to be completed by mid 2010.
The new clinkering line at Chanda in Maharashtra and a new 25 MW captive power
plant,being built at a cost of around Rs. 1450 crores is expected to be completed by
the thirdquarter of 2010 and this will increase the cement grinding capacity by 3
MTPA.

The total installed capacity of ACC stood at 26 million tonnes as on January 1,


2010.After completion of the Chanda and the Wadi expansion projects, ACC’s
installedcapacity would reach 30.5 MTPA by December 2010.

12. ACQUISITIONS

With a view to enhance its limestone reserves in Rajasthan, the Company acquired a
100%equity stake in National Limestone Company Private Limited (NLCPL) making
it a whollyowned subsidiary of your Company. NLCPL has limestone leases and
reserves in SikarDistrict in Rajasthan.

ACC Company also acquired 100% equity stake in Encore Cements & Additives
PrivateLimited (ECAPL). Consequently, ECAPL has become a wholly owned
subsidiary of your Companywith effect from January 28, 2010. ECAPL has a slag
grinding unit in Visakhapatnam, whichwill help ACC strengthen its market presence
in coastal Andhra Pradesh.

ACC Company entered into an agreement with the promoters of Asian Concrete
&Cement Private Ltd. (Asian Cement) to acquire a 45% equity stake in that company.
Thistransaction would be concluded in the first quarter of 2010. Asian Cement has a
0.3million tonne cement grinding plant in the Solan District of Himachal Pradesh, and
is inthe process of setting up an additional 1 million tonne grinding facility adjacent to
theexisting plant.

13. OVERSEAS BUSINESS

The contract with Yanbu Cement Company, Saudi Arabia, for management and
operation ofits cement plants crossed 30 years of successful operation and is valid
until February2011.

The contract with Mugher Cement Enterprises, Ethiopia, an Ethiopian


Governmententerprise for providing project engineering and consultancy services for
setting up a3000 TPD greenfield clinkering line, along with a satellite grinding and
packing plant, isprogressing satisfactorily and is being renewed till December 2010.
14. CORPORATE SOCIAL RESPONSIBILITY & SUSTAINABLE
DEVELOPMENT

Corporate social responsibility :

Today we define Corporate Social Responsibility as the way a


company balances its economic, social and environmental
objectives while addressing stakeholder expectations and enhancing
shareholder value.

But ACC has undertaken social volunteering practices almost from


its inception, – long before the term corporate social responsibility
was coined. The company’s earliest initiatives in community
development date back to the 1940's in a village on the outskirts of
Mumbai while the first formal Village Welfare Scheme was launched
in 1952. The community living around many of our factories
comprises the weakest sections of rural and tribal India with no
access to basic amenities.

Corporate social responsibility policy:

“The Company shall continue to have among its objectives the


promotion and growth of the national economy through increased
productivity, effective utilization of material and manpower
resources and continued application of modern scientific and
managerial techniques, in keeping with the national aspiration; and
the Company shall continue to be mindful of its social and moral
responsibilities to consumers, employees, shareholders, society and
the local community.

In pursuance of the above objective, ACC acknowledges the


importance of the concept of inter-dependence of all sections of
society. In particular, its focus revolves around the community
residing in the immediate vicinity of its Cement Plants and Mines
where it seeks to actively assist in improving the quality of life and
making this community self-reliant. In line with its abiding concern
for preservation of the ecological balance and safeguarding the
health of the community, ACC has always actively demonstrated its
firm resolve to protect the environment

Mindful of its great tradition, ACC is deeply committed to enhancing


its reputation and respect built over the years in industry and
society for its professional style of management based on
philosophy of the best in business ethics.”
The Company released a web update for the year 2008 to its first
SustainableDevelopment (SD) Report published in the preceding year. The year saw a
continued thrustto deepen SD participation across different functions and plants of the
organisation.

As regards Corporate Social Responsibility (CSR), the Company continued to engage


withthe local community around its operations, with a view to consolidating its trust
byencouraging active involvement of the community in various development and
welfareschemes. Each of our plants has now formulated its own CSR policy and
strategy based onsite requirements, keeping in line with the corporate CSR policy and
execution strategy.

An important approach used in this regard was the creation of Community


AdvisoryPanels, comprising groups of local residents, and the use of these panels to
promotelarger involvement of the local communities in the development of their
respectivevillages. The panels play a major role in finalizing the execution strategy
for communityprogrammes at each plant location. Involving the local community in
the execution of theirown development process, in this manner, ensures its
sustainability which in turn securesa common thread of trust from the community
towards the Company.

ACC’s Public Private Partnership (PPP), for the upgradation of seven Governmentrun
Industrial Training Institutes (ITI’s), continued to be a thrust area with theobjective of
improving the quality of training, leading to better employability of theseITI trainees.

During the year 2009, various processes were set up to measure the performance of
theseITIs and also capability building workshops were organized, with the objective
of makingthe partnered ITI’s into Centres of Excellence. The workshops were
attended bythe principals of these ITI’s, along with a coordinator from ACC, to help
improve thecourse curriculum of these ITI’s.

15. OCCUPATIONAL HEALTH & SAFETY (OH&S)

Special emphasis was placed on Occupational Health and Safety. Many


significantinitiatives were undertaken during the year, to improve safety standards and
to make theorganization a safe place to work. A series of actions were defined to
secure a sea changein the management of OH&S at an operational level through the
OH&S TransformationPlan, which was developed by integrating actions from various
sites. The objective was toinstitute actions that target all critical activities and to
accelerate implementation ofthe OH&S standards related to such activities.

In order to bring in significant improvement in managing the safety of contract


workmenin our operations, a major initiative called "Suraksha Bandhan" was
launched.The key areas of focus in this initiative are the implementation of advanced
safetymanagement standards and processes, improved contractor safety management
capabilities,building skills of contractors’ supervisors and workmen and a zero
tolerance forviolations. The initiative is significant as it demonstrates ACC’s
commitment to itsOH&S vision of "No Harm anywhere to anyone associated with
ACC".
16. HUMAN RESOURCES

In 2009, ACC launched several new programmes and strengthened existing Human
ResourceProcesses that favourably impacted its employees, judging by the results of
an annualsurvey of Employees.

Enabling Employee Communication

The "Accelerate" Portal for employees which was introduced in 2008 to a smallgroup
of employees was well received and found to facilitate employee communication
acrosslevels and locations on a wide variety of issues. Encouraged by this, the
Company went onto launch the portal in Hindi with access provided to all employees
through kiosksinstalled at all locations. In the next step, the portal will be
simultaneously offered inmajor regional languages. This platform is also being
deployed for employee self-servicefacilities.

Strategic Talent Management (STM)

A transparent and efficient system for managing talent has been conceptualized and
isunder implementation. The new Strategic Talent Management programme will help
create ablueprint for development of talent in the organization by introducing
effective measuresto identify companywide talent, build adequate strength for future
needs throughsuccession planning for critical positions while creating a healthy
balance betweeninternal and external talent in the organization.

Special Change Management initiatives for Shop Floor Associates

During the year under review, ACC launched a number of transformation initiatives
thatinvolve shop floor associates and was directed at developing greater team working
skillsamongst them and overall manufacturing excellence.

Innovate To Excel

This is a special platform to encourage change and innovation at the workplace.


Crossfunctional teams across various plants, sales units and functional departments
areencouraged to work on an innovative idea/project. The teams then compete at unit
andregional levels and finally the winning teams participate in a competitive
presentation oftheir project at the corporate level.
Employee Learning and Development

The Company continues to place great emphasis on enhancement of skills and


capabilitiesof its employees and on imparting required training for meeting
customers’requirements. This includes internal and external training workshops,
courses andseminars. The training process has been designed to suit the specific needs
of the Companyand also attain all round employee development and growth. Through
the ACC Academy atThane, ACC Cement Technology Institute at Jamul and the
Sumant Moolgaonkar TechnicalInstitute at Kymore, various training programmes
were continued to be imparted to improvethe skill sets of employees and enhance the
technical talent pool of the Company.

Employee Relations were cordial across all Plants and offices of ACC during the year.

17. FINANCE

ACC Company retained its "AAA" rating by CRISIL for its long-termnon-convertible
debenture and bank loan for working capital. In October 2009, ACC
Companyborrowed Rs. 300 crore through non-convertible debentures having a five-
year maturity atan all inclusive cost of 8.45% per annum.

As on 31st December, 2009, the Company’s debt equity ratio stood at a


comfortablelevel of 0.09:1.

18. SHARE CAPITAL

During the year, the Company allotted 58,473 equity shares of the face value of
Rs.10/- each, consequent to the exercising of Stock Options by its employees.

Details of the Employees’ Stock Option Scheme, as required under the


SEBIguidelines, are set out in Annexure ‘C’ to the Directors’ Report.

19. FIXED DEPOSITS

ACC Company had discontinued its fixed deposit schemes in the financial year2001-
2002, and as on December 31, 2009, the total amount of fixed deposits matured
andremaining unclaimed was Rs. 17.53 lakhs.
20. PERFORMANCE OF SUBSIDIARY COMPANIES

20.1 ACC Concrete Limited

Ready Mixed Concrete (RMX) business remains a strategically important channel


forcement, which the Company will continue to strengthen. In 2009, this wholly
ownedsubsidiary company, managed the challenges of a slowdown in the RMX
market which was dueto reduced demand from the real-estate sector in the main
metros and cities, where most ofthe Company’s RMX plants are located. During this
period, the Company focused onconsolidation of its existing facilities, by seeking to
grow volumes from the existingcapacity as well as from dedicated on-site project
solutions.

The numbers of available operating plants increased to 44, from 38 in 2008,


ascommitted capital projects were completed and dedicated site, plants and
collaborationopportunities were realised.

Sales volumes in 2009 grew by 6.5% with turnover decreasing marginally to Rs. 513
crorefrom Rs. 515 crore, due to market pressure on selling prices. Raw material unit
pricesalso increased in 2009, but these were more than compensated by better mixed
designoptimisation resulting in an overall reduction in the specific raw material costs.

EBITDA losses of this business were considerably reduced by 65%, from Rs. 74 crore
toRs. 26 crore, through systematic management of overhead costs and productivity.

ACC Concrete Limited is well placed to grow and add value to the group, going
forwardas the market regains momentum, as a result of Government’s infrastructure
programmeand renewed confidence in the real estate sector.

20.2 Bulk Cement Corporation (India) Limited (BCCI)

ACC holds 94.65% of the equity of this Company. BCCI handled 8.15 lakh tonnes of
bulkcement during the year, as compared to 7.60 lakh tonnes in the previous year. The
loss forthe year 2009, increased to Rs 1.08 crore from Rs 0.53 Crore in the previous
year, mainlydue to a reduction in railway freight rebate.

20.3 Lucky Minmat Limited

This wholly owned subsidiary company was fully operational during the year 2009
and thetotal limestone production for the year was 1.10 lakh tonnes. The company has
incurred aloss of Rs. 15.43 lakh for the year 2009, as compared to a loss of Rs. 22.23
lakh for theprevious year.

20.4 National Limestone Company Private Limited

This wholly owned subsidiary company was acquired in April 2009. The company
hasincurred a loss of Rs. 6 lakh for the year. The operations are to commence in 2010.
20.5 ACC Mineral Resources Limited (AMRL)

Formerly known as The Cement Marketing Company of India Limited, ACC Mineral
ResourcesLimited (AMRL) is a wholly owned subsidiary that now serves as a special
purpose vehiclefor our coal ventures. AMRL has signed agreements with Madhya
Pradesh State MiningCorporation Limited for the development of four coal blocks
through four associatecompanies. which have since been incorporated.

20.6 Audited Statements of accounts of the Company’s subsidiaries

As required under Section 212 of the Companies Act 1956, the audited statements
ofaccounts, along with the report of the Board of Directors relating to the
Company’ssubsidiaries viz. ACC Concrete Limited, Bulk Cement Corporation (India)
Limited, LuckyMinmat Limited, National Limestone Company Private Limited and
ACC Mineral ResourcesLimited, together with the respective Auditors’ Reports
thereon for the year endedDecember 31, 2009 are annexed.

22. INTERNAL CONTROL SYSTEMS AND THEIR

ADEQUACY

The Internal Audit Department functions independently, monitors and evaluates


theefficacy and adequacy of internal control systems in the Company, and their
compliancewith operating systems, accounting procedures and policies at all the
Company’slocations, including its subsidiaries. Every quarter, the Audit Committee
of the Board ispresented with the audit findings and connected issues, if any, together
with animplementation tracker which highlights management action taken on past
audit issues.

ACC Company has also implemented a well-structured Internal Control System (ICS)
andthe internal and external audit periodically tests all the defined controls to ensure
fullcompliance.

23. BUSINESS RISK MANAGEMENT

ACC Company has implemented a Business Risk Management (BRM) process


thatsystematically identifies risks and opportunities. The BRM process supports the
ManagingCommittee in strategic decision making. The process is robust and is a
rolling exercise,with a consistent annual review at the regional level and at the
corporate level, toexamine and evaluate risks and opportunities. A detailed mind
mapping of the risks iscarried out, so as to identify the root cause of the particular
risk, to enable theManagement to take effective steps to address / mitigate such risks.
The risks are plottedon a likelihood matrix and then integrated into the annual
business plans as well as theaudit plan of the Company, as relevant.
The following is an analysis of the Company’s key business risks and mitigationplans:

Fuels Risks

ACC Company is a major consumer of coal for producing cement at various


locations. Therelease of coal and allocation of quantities of coal, are entirely
dependent upon thedemand from all sectors and is in control of the Government of
India. To ensure the timelyavailability of coal, your Company has taken steps to
acquire coal blocks, to enter intomedium term firm contracts and also to the
possibility of using alternate fuels in placeof coal.

Projects Risks

ACC Company is executing large CAPEX projects to set up new cement


manufacturingfacilities, where the Company is exposed to risks of timely completion
and costcompetitiveness. ACC has initiated semi-turnkey projects approach to reduce
the time andcosts for completion of large projects and has also restructured the project
organisation.

Compliance Risks

ACC Company is exposed to significant risks due to non-compliance with


variousstatutes and regulations including Competition Act. The Company is
mitigating these risksthrough regular reviews of legal compliance, through internal as
well as externalcompliance audits and training to relevant employees. The Company
has set up the processesto mitigate the environmental compliance risks such as
investments in pollution abatementequipment, monitoring of ambient air quality, and
construction of environmental labs.

People risks

Retaining the existing talent pool and attracting new manpower are major risks in
thisrespect. The Company has initiated various measures such as rollout of strategic
talentmanagement system and integration of learning activities in order to retain
talent.

The above key risks, along with all other risks and their mitigation plans as well
asopportunities assessed by the Management, are built into the rolling business plans
of theCompany.
24. AWARDS

The Council for Fair Business Practices (CFBP) conferred on ACC Limited, the
2008Jamnalal Bajaj Award for Fair Business Practices in the category, Large
ManufacturingEnterprises. The citation states that the award is an acknowledgement
of ACC’scommitment towards customer satisfaction and communication, employee
motivation,environment protection, CSR, legal compliance and its business practices
that ensuresustainable development and promote social equity.

ACC Directors have pleasure in informing that the Company’s Annual Report
andAccounts for the year 2008 has been adjudged winner of the Gold Shield in the
category,Manufacturing and Trading Enterprises by The Institute of Chartered
Accountants of India.Winning this coveted award is a testament to your Company’s
prudent accountingpractices, quality of financial statements and the transparency and
fair disclosure ofinformation to all stakeholders.

25. ENHANCING SHAREHOLDER VALUE

The Company’s strategic vision statement accords a very singular position to


valuecreation. The Company’s operations are guided and aligned towards
maximizingshareholder value. New projects for capacity expansion and cost reduction
exercises arecontinuously taken up to achieve growth in sales and improvement in
profitability.

26. DIRECTORS’ RESPONSIBILITIES

To the best of their knowledge and belief and according to the information
andexplanations obtained by them, ACC Directors make the following statement in
terms ofSection 217(2AA) of the Companies Act, 1956:

a) that in the preparation of the annual accounts for the year ended December 31,
2009,the applicable accounting standards have been followed along with proper
explanationrelating to material departures, if any,

b) that such accounting policies as mentioned in Note 1 of the Notes to the


Accountshave been selected and applied consistently, and judgments and estimates
have been madethat are reasonable and prudent so as to give a true and fair view of
the state of affairsof the Company as on December 31, 2009, and of the profit of the
Company for the yearended on that date,

c) that proper and sufficient care has been taken for the maintenance of
adequateaccounting records, in accordance with the provisions of the Companies Act,
1956, forsafeguarding the assets of the Company and for preventing and detecting
fraud and otherirregularities,

d) the annual accounts have been prepared on a going concern basis.


27. AUDIT & ACCOUNTS

The Company’s Auditors M/s S R Batliboi & Associates, Chartered Accountants,who


retire at the ensuing Annual General Meeting are eligible for reappointment. They
haveconfirmed their eligibility under Sec. 224 of the Companies Act, 1956 for
reappointment asauditors of the Company. As per the requirement of the Central
Government and pursuant toSec 233B of the Companies Act, 1956, your Company
carries out an audit of cost recordsrelating to cement every year. Subject to the
approval of the Central Government, theCompany has appointed M/s N I Mehta &
Co. to audit the cost accounts for the financialyear 2009.

28. PEER REVIEW

During the year, the Company received a letter from Securities and Exchange Board
ofIndia (SEBI), informing that a peer review would be undertaken in respect of
the"Limited Review" undertaken by the Statutory Auditors for the third quarter ofthe
financial year 2009 and the Audited Statement of Accounts for the year ended
December31, 2008. Pursuant thereto, BSR & Co., Chartered Accountants conducted
the aforesaidpeer review.

29. CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate
sectionon corporate governance practices followed by the Company, together with a
certificatefrom the Company’s Auditors confirming compliance, is set out in the
Annexure formingpart of this report.

30. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements prepared in accordance with Accounting


StandardAS21 –Consolidated Financial Statements of the Group form part of this
report. Thenet worth of the Group as on December 31, 2009 is Rs. 5868.97 crore as
against Rs. 4823.12crore, as at the end of the previous year.

31. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

The particulars of conservation of energy, technology absorption and foreign


exchangeearnings and outgo in accordance with the provisions of Sec 217(1)(e) of the
CompaniesAct, 1956, read with the Companies (Disclosure of Particulars in the
Report of the Boardof Directors) Rules, 1988, are given in Annexure ‘A’ to the
Directors’Report.

32. PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies


Act,1956, read with the Companies (Particulars of Employees) Rules 1975 as
amended, regardingemployees is given in Annexure ‘B’ to the Directors’ Report.
33. ACKNOWLEDGEMENT

ACC Directors would like to acknowledge and place on record their sincere
appreciationof all stakeholders – shareholders, banks, dealers, vendors and other
businesspartners for the excellent support received from them during the year. Your
Directorsrecognize and appreciate the efforts and hard work of all the employees of
the Company andtheir continued contribution to its progress.

34. CAUTIONARY STATEMENT

Statements in the Directors’ Report and the Management Discussion &


Analysisdescribing the Company’s objectives, expectations or forecasts may be
forward-lookingwithin the meaning of applicable securities laws and regulations.
Actual results maydiffer materially from those expressed in the statement. Important
factors that couldinfluence the Company’s operations include global and domestic
demand and supplyconditions affecting selling prices of finished goods, input
availability and prices,changes in government regulations, tax laws, economic
developments within the country andother factors such as litigation and industrial
relations.

ANNEXURE ‘A’ TO DIRECTORS’ REPORT (Para 31)

Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure
ofparticulars in the Report of Board of Directors) Rules 1988.

A: CONSERVATION OF ENERGY

(a) Energy conservation and efficiency improvement measures were undertaken


invarious areas of the cement plants:

• Optimisation of crusher resulting in operation of one crusher to cater torequirement


of two raw mills, thereby stopping the other crusher at Kymore plant.

• Replacement of higher KW motors by optimum capacity energy efficient motors


andcommissioning of Variable Voltage Variable Frequency Drives (VVVFD) for
variousapplications across ACC plants.

• Use Grid Rotor Resistance control for speed, thereby eliminating damper controlof
SEPEX FAN at Bargarh and Kymore plants.

• Replacement of raw mill main drive with high efficiency motor at Gagal plant.

• Installation of new screw compressor to replace multiple reciprocatingcompressors.


Installation of microprocessor based multi-step automation control forvarious
reciprocating compressors to optimise the operating pressure within narrow band
atGagal plant.

• Installation of automatic maximum demand controller with Time of Day settings


tolimit the peak demand to permissible limits at Bargarh plant.
• Conversion of pneumatic conveying to mechanical conveying for 6 cement mills
atJamul plant.

• ACC Cement House was renovated into a Green Building with many energy
savinginitiatives, which has reduced the air conditioning as well as lighting load. The
projecthas been registered under the Leadership in Energy and Environmental Design
(NewConstruction & Major renovation category) under Indian Green Building
Council (IGBC),and will be India’s first ‘renovated green building’. Apart from being
aGreen Building Project, Cement House Mumbai has been also awarded highest
rating of"Five Star" by Bureau of Energy Efficiency, Government of India.

• Various initiatives were taken at Thane complex to reduce electricityconsumption,


like installation of energy savers for air conditioners, regulations onoperating time for
the air conditioners etc.

• Energy Audit was conducted at Jamul, Gagal and Tikaria plants and compressed
airaudit was conducted for Lakheri, Wadi, Kymore and Bargarh plants.

• Capacitor banks were installed at Motor Control Centre’s (MCC’s),Power Ccntrol


Centre’s (PCC), and individual loads across all ACC plants to improvethe power
factor.

Green power –

• The Wind Farm installed at Rajasthan generated 14.04 million units of greenenergy
during 2009 as compared to 3.78 million units generated during 2008.

• The Wind Farm installed at Tamilnadu generated 25.3 million units of greenenergy
during 2009 as compared to 23.4 million units generated during 2008.

Alternative fuels –

In 2009 the Alternative Fuels and Raw Materials business has recorded savings of
Rs.40.8 Crores as against Rs. 22.8 Crores in 2008. This was achieved by co-
processing 77,800tonnes of Industrial waste as compared to 12,900 tonnes in 2008.

(b) Additional Proposals being implemented for further conservation of energy

• Installation of Programmable Logic Controller (PLC) system and closed circuitingof


cement mill is in progress at Damodhar plant.

• At Gagal, Waste Heat Recovery Boiler is planned during 2010 to supplement


theGrid Power.
• Installation of VVVFD’s are planned for additional drives identified during2009
across ACC plants.

(c) Impact of the above measures for reduction of energy consumption and
consequentimpact on cost of production -

The measures stated in points (a) and (b) above would further improve the thermal
andelectrical energy efficiency of the Plants. Year 2009 saw a reduction of 2.45%
inElectrical Energy over 2008.
Form A

Power and Fuel Consumption

Current Year Previous Year


Total Total
Lakh Rs. Per Lakh Rs. Per
Cost (Rs Cost (Rs
Units(Kwh)@ Unit Units(Kwh) Unit
Lakhs) Lakhs)
1. Electricity
a) Purchased 5840 21971 3.76 6812 25868 3.80
b) Own Generation
i) Through DG 45 723 16.01 129 1294 10.00
ii) Through Steam
Turbine/Generator* 17721 43874 2.48 15437 47627 3.09

Current Year Previous Year


Total Average Total Average
Quantity Quantity
Cost Rate Cost Rate
(Lakh (Rs. (Lakh (Rs.
(Rs./Tonne) (Rs./Tonne)
Tonnes) Lakhs) Tonnes) Lakhs)
2. Coal (for
22.44 86430 3852 22.89 84628 3697
Kiln)**

* Includes WTG generation

** Does not include other fuel/alternative fuels used in Kiln Above are at gross level
Consumption Per Unit of Production

@ Standard Current Year Previous Year


a) Electricity Kwh/T *
Cement
Wet Process 89-105
Semidry / Dry process 98-110 85 87
b) Furnace Oil KLtrs/T
Cement - - -
c) Coal for Kiln
K.cal/Kg of clinker
Wet process 1350
Semidry / Dry process 720-990 746 754

@ Source: Publication of Confederation of Indian Industries

* Excludes non-process power consumption


(B) TECHNOLOGY ABSORPTION

Research & Development

1. Specific areas in which R & D is carried out by the Company

a) Improving quality of blended cement through innovative process utilizing


industrialby-products

b) Conservation of resources through use of low-grade limestone for cement


manufacture

c) emissions Development of application Oriented Cements with decreased Specific


CO2

d) Enhanced absorption of blending materials

e) Process / product design improvements

f) Development of new products or discovering new methods of analysis

g) Productivity research for increased efficiency in use of resources

h) Recycling of wastes and research for efficient use of scarce materials

i) Characterization of Industrial wastes and looking into possibilities of


environmentfriendly co-processing of wastes in cement manufacture leading to
thermal substitution andconservation of natural resources

j) Beneficiations of raw materials and fuels

2. Benefits derived as result of above R & D

a) Effective use of marginal quality raw materials and fuels with improved
clinkerquality

b) Increased absorption of blending materials in blended cements

c) Effective replacement of the costlier natural Gypsum by cheaper (by-product)


Phosphogypsum without affecting the quality of cement

d) Maintain a lead position in all the market clusters of the country

e) Enhanced fuel efficiency


3. Future plan of action

a) Exploratory research work on the above specific areas

b) Focus on development of products aimed at enhancing use of cement in


variousapplications

c) Use of waste / by-products in cement manufacture as alternative materials

d) Improve product quality particularly with respect to long term durability


andreduction in its cost of manufacture

4. Expenditure on R & D Rs Lakhs


a. Capital 37
b. Recurring (Gross) 325
c. Total 362
d. Total R&D expenditure as percentage of total turnover 0.05%
5. Foreign Exchange Earnings & Outgo Rs Lakhs
Foreign exchange earned 5561
Foreign exchange used 4217
MILESTONES:

MILESTONES

1936 Incorporation of The Associated Cement Companies


Limited on August 1, 1936.
1936 First Board Meeting of The Associated Cement Companies
Limited held at Esplanade House, Mumbai on November
10, 1936.
1937 With the transfer of the 10th company to ACC, viz.
Dewarkhand Cement Company, the formation of ACC is
complete on October 23, 1937.
1944 ACC’s first community development venture near Bombay
1947 India’s first entirely indigenous cement plant established
at Chaibasa in Bihar
1952 Village Welfare Scheme launched
1955 Sindri cement works used the waste product calcium
carbonate sludge from fertilizer factory at Sindri.
1956 Bulk Cement Depot established at Okhla, Delhi
1957 Technical training institute established at Kymore, Madhya
Pradesh.
1957 Katni Refractories
1961 Blast furnace slag from TISCO used at the Chaibasa Unit
to manufacture Portland Slag Cement for the first time in
India.
1961 Manufacture of Accocid Cement, which resists the
corrosive action of acids and chemicals.
1961 Oilwell Cement manufactured at ACC Shahabad Cement
Works in Karnataka for cementation of oilwells upto a
depth of 6,000 feet.
1961 Manufacture of Hydrophobic (waterproof) cement at ACC
Khalari Cement Works in Bihar.
1962 Manufacture of Accoproof, a waterproofing additive.
1965 ACC’s Central Research Station (CRS) established at
Thane
1965 Manufacture of Portland Pozzolana Cement.
1965 Manufacture of Calundum, a High Alumina Binder;
Firecrete, Low Density Alumina Castables and High
Alumina Refractory Cement.
1968 Advent of computers in ACC for data processing and
designing management information and control systems.
1968 ACC supplied and commissioned one-million-tonne iron
ore pelletising plant ordered by TISCO
1971 Manufacture of Whytheat Castables A, K, C and Cal-Al-75
1973 Take-over of The Cement Marketing Company of India
(CMI)
1977 ACC receives ASSOCHAM first national award for the year
1976 instituted for outstanding performance in promoting
rural and agricultural development activities.
1978 Introduction of the energy efficient precalcinator
technology for the first time in India. Full scale commercial
production based on MFC technology at Wadi in 1979.
1979 ACC wins international contract for operation and
management of a new one million tonne cement plant at
Yanbu-Ras Biridi in Saudi Arabia.
1982 Commissioning of the first 1 MTPA plant in the country at
Wadi, Karnataka.
1984 ACC achieves a breakthrough in import substitution by
developing and supplying a special G type of oil well
cement to ONGC.
1987 ACC develops a new binder for use at sub-zero
temperatures, which is successfully used in the Indian
expedition to Antarctica.
1992 Incorporation of Bulk Cement Corporation of India, a joint
venture with the Government of India.
1993 ACC starts the commercial manufacture of Ready Mixed
Concrete at Mumbai.
1995 ACC selected as Most Respected Company in India by
Business India.
1998 Commissioning of the 0.6 MTPA cement grinding unit at
Tikaria, Uttar Pradesh.
1999 Commissioning of captive power plants at the Jamul and
Kymore plants in Madhya Pradesh.
1999 Tata group sells 7.2% of its stake in ACC to Ambuja
Cement Holdings Ltd, a subsidiary of Gujarat Ambuja
Cements Ltd. (GACL)
2000 Tata Group sells their remaining stake in ACC to the GACL
group, who with 14.45% now emerge as the single largest
shareholder of ACC.

2001 Commissioning of the new plant of 2.6 MTPA capacity at


Wadi, Karnataka plant, the largest in the country, and
among the largest sized kilns in the world.
2002 ACC wins PHDCCI Good Corporate Citizen Award
2003 IDCOL Cement Ltd becomes a subsidiary of ACC
2004 IDCOL Cement Limited is renamed as Bargarh Cement
Limited (BCL).
2004 ACC raises US $ 100 million abroad through Foreign
Currency Convertible Bonds (FCCB’s) for US$ 60 million
and Global Depository Shares (GDS’s) for US $ 40 million.
Both offerings are listed on the London Stock Exchange.
2004 ACC named as a Consumer Superbrand by the
Superbrands Council of India, becoming the only cement
company to get this status.
2004 GreenTech Safety Gold and Silver Awards awarded to
Madukkarai Cement Works and Katni Refractory Works by
Greentech Foundation for outstanding performance in
Safety Management System.
2005 ACC receives the CFBP Jamnalal Bajaj Uchit Vyavahar
Puraskar Certificate of Merit – 2004 from Council For Fair
Business Practices.
2005 Holcim group of Switzerland enters strategic alliance with
Ambuja Group by acquiring a majority stake in Ambuja
Cements India Ltd. (ACIL) which at the time held 13.8 %
of the total equity shares in ACC. Holcim simultaneously
makes an open offer to ACC shareholders, through
Holdcem Cement Pvt. Limited and ACIL, to acquire a
majority shareholding in ACC. Pursuant to the open offer,
ACIL’s shareholding in ACC increases to 34.69 % of the
Equity share capital of ACC.
2005 Commissioning of Modernisation and Expansion project at
Chaibasa in Jharkhand, replacing old wet process
technology with a new 1.2 MTPA clinkering unit, together
with a captive power plant of 15 MW.
2005 Financial accounting year of the company changed to
calendar year January-December
2006 Subsidiary companies Damodhar Cement & Slag Limited,
Bargarh Cement Limited and Tarmac (India) Limited
merged with ACC
2006 ACC announces new Workplace policy for HIV/AIDS
2006 Change of name to ACC Limited with effect from
September 1, 2006 from The Associated Cement
Companies Limited.
2006 ACC receives Good Corporate Citizen Award 2005-06 from
Bombay Chamber of Commerce and Industry
2006 New corporate brand identity and logo adopted from
October 15, 2006
2006 ACC establishes Anti Retroviral Treatment Centre for
HIV/AIDS patients at Wadi in Karnataka– the first ever
such project by a private sector company in India.
2007 ACC partners with Christian Medical College for treatment
of HIV/AIDS in Tamil Nadu
2007 Sumant Moolgaokar Technical Institute completes 50
years and reopens with new curriculum
2008 Ready mixed concrete business hived off to a new
subsidiary called ACC Concrete Limited.
2008 ACC Cement Technology Institute formally inaugurated at
Jamul on July 7.
2008 First Sustainable Development Report released on June 5.

2008 ACC wins CNBC-TV18 India Business Leader Award in the


category India Corporate Citizen of the year 2008
2008 Project Orchid launched to transform our Corporate Office,
Cement House into a green building.
2009 ACC received the Jamanalal Bajaj "Uchit Vyavahar
Puraskar" of Council for Fair Business Practices
2009 ACC is allotted coal blocks in Madhya Pradesh and West
Bengal.
2009 ACC's new Grinding plant of capacity 1.60 million tonnes
inaugurated at Thondebhavi in Karnataka.
2010 Kudithini Cement Grinding Plant inaugurated in Karnataka
on January 4, 2010 with a capacity of 1.1 MTPA of
Portland Slag Cement.
2010 ACC acquires 100 percent of the financial equity of Encore
Cements & Additives Private Limited which is a slag
grinding plant in Vishakhapatnam in coastal Andhra
Pradesh. This company became a wholly-owned subsidiary
of ACC in January 2010.

AWARDS & ACCOLADES


ACC was the first recipient of ASSOCHAM’s first ever National Award
for outstanding performance in promoting rural and agricultural
development activities in 1976. Decades later, PHD Chamber of
Commerce and Industry selected ACC as winner of its Good
Corporate Citizen Award for the year 2002. Over the years, there
have been many awards and felicitations for achievements in Rural
and community development, Safety, Health, Tree plantation,
afforestation, Clean mining, Environment awareness and protection.

Awards received in 2010


Awards received in 2009
Awards received in 2008
Awards received in 2007 & 2006

Other prominent awards won by us over the years comprise some


coveted ones conferred by organisations of repute.

Awards & Accolades

• Indira Priyadarshini Vrikshamitra Award --- by The


Ministry of Environment and Forests for "extraordinary work"
carried out in the area of afforestation.

• FICCI Award --- for innovative measures for control of


pollution, waste management & conservation of mineral resources
in mines and plant.

• Subh Karan Sarawagi Environment Award - by The


Federation of Indian Mineral Industries for environment
protection measures.

• Drona Trophy - By Indian Bureau Of Mines for extra ordinary


efforts in protection of Environment and mineral conservation in
the large mechanized mines sector.

• Indira Gandhi Memorial National Award - for excellent


performance in prevention of pollution and ecological
development

• Excellence in Management of Health, Safety and


Environment : Certificate of Merit by Indian Chemical
Manufacturers Association

• Good Corporate Citizen Award - by PHD Chamber of


Commerce and Industry

• FIMI National Award - for valuable contribution in Mining


activities from the Federation of Indian Mineral Industry under
the Ministry of Coal.

• Rajya Sthariya Paryavaran Puraskar - for outstanding


by the Madhya Pradesh Pollution. Control Board.

• National Award for Fly Ash Utilisation - by Ministry of


Power, Ministry of Environment & Forests and Dept of Science &
Technology, Govt of India - for manufacture of Portland Pozzolana
Cement.
ACC honoured with FE-EVI Green Business Leadership Award 2009-10 The
Financial Express-EVI Green Business Leadership Award 2009-2010 was conferred
on ACC for being the 'Best Performer' in the cement category. This award is an
acknowledgement of ACC's commitment towards its environmental friendly
initiatives in the country.

OCCUPATIONAL HEALTH & SAFETY : :

Occupational Health & Safety (OHS) is a vital part of ACC’s journey towards
Sustainable development. Safety Audits are being carried out in ACC since 1995 by
National Safety Council based on the 5 Star Auditing System of British Safety
Council. There is a continuous effort to measure and improve Safety Management
Systems to avoid accidents.

We have an Apex OH & S Committee headed by the Managing Director. This


committee oversees implementation of our OH & S policy Each of our plants and
manufacturing units have Professional Doctors and medical facilities for continuous
monitoring and observation of workplace hygiene and occupational health.

The following are some OH & S initiatives at our plants:

• OH & S brochures, signages, posters and mailers used extensively


• Monthly Safety Gate Meetings held at all our plants.
• Safety Audit and TPM Audits carried out annually
• Safety Professionals meets twice a year to discuss and share knowledge on
Safety Statistics and implementation of safety measures at each unit.
• Safety Observation Tours (SOT) conducted weekly by all line managers
• Behavioral Safety Training programmes for workers at all plants
• OUR
Incident investigations OH
for all & S POLICY
incidents including near misses (with potential
for injuries). The findings and recommendation are shared across the company
We manage our activities in a responsible manner to avoid causing
any harm to the health and safety of our employees, contract
personnel and visitors.

We apply OH&S standards and guidelines; provide the necessary


resources, training and education and measure performance for
continuous improvement.
OUR OH & S VISION

“NO HARM ANYWHERE TO ANYONE ASSOCIATED WITH ACC”

“NO HARM” means:


No fatalities
No disabling Injuries
No Lost Time Injuries
No Medical treatment Injuries
No First Aid Injuries
No Occupational Illness

“ANYONE” means:
Employees
Contractors personnel on site
Ready-mix drivers on job
Third party contractors on site
Visitors to ACC site

FIVE CARDINAL RULES FOR SAFETY

1. Do not override or interfere with any safety provision nor


allow anyone else to override or interfere with them.
2. Personal Protection Equipment (PPE) rules, applicable to a
given task, must be adhered to at all times.
3. Isolation and Lock Out procedures must always be followed.
4. No person may work if under the influence of alcohol or
drugs.
5. All the injuries and incidents must be reported
Particulars Dec-09 Dec-08 Dec-07 Dec-06 Dec-05 Mar-05
INCOME :
Sales Turnover 8,724.24 8,234.02 7,848.32 6,453.07 3,717.18 4,539.35
Excise Duty 781.58 1,068.23 967.66 736.09 539.71 651.95
Net Sales 7,942.66 7,165.79 6,880.66 5,716.98 3,177.47 3,887.40
Other Income 261.44 337.57 390.60 326.77 392.27 109.37
Stock
28.74 0.33 6.93 -32.29 45.26 53.44
Adjustments
Total Income 8,232.84 7,503.69 7,278.19 6,011.46 3,615.00 4,050.21
EXPENDITURE
:
Raw Materials 984.67 886.48 861.04 1,272.49 918.34 1,326.38
Power & Fuel
1,539.65 1,598.96 1,243.63 430.98 299.52 348.48
Cost
Employee Cost 363.75 412.99 349.68 325.24 195.25 220.67
Other
Manufacturing 654.06 655.85 600.20 496.22 323.39 376.25
Expenses
Selling and
Administration 1,653.63 1,597.36 1,638.95 1,326.94 845.31 915.47
Expenses
Miscellaneous
295.97 281.31 275.46 210.65 118.51 133.70
Expenses
Less: Pre-
operative
0.00 0.00 0.00 0.00 0.00 0.00
Expenses
Capitalised
Total
5,491.73 5,432.95 4,968.96 4,062.52 2,700.32 3,320.95
Expenditure
Operating Profit 2,741.11 2,070.74 2,309.23 1,948.94 914.68 729.26
Interest 104.63 39.96 73.87 75.19 66.19 96.32
Gross Profit 2,636.48 2,030.78 2,235.36 1,873.75 848.49 632.94
Depreciation 342.09 294.18 305.07 254.25 164.37 188.82
Profit Before
2,294.39 1,736.60 1,930.29 1,619.50 684.12 444.12
Tax
Tax 673.30 510.47 472.75 386.98 63.94 45.50
Fringe Benefit
0.90 9.00 8.22 5.85 6.00 0.00
tax
Deferred Tax 13.46 4.34 10.73 -5.17 70.00 20.23
Reported Net
1,606.73 1,212.79 1,438.59 1,231.84 544.18 378.39
Profit
Extraordinary
-1.71 28.90 157.61 134.70 235.12 22.44
Items
Adjusted Net
1,608.44 1,183.89 1,280.98 1,097.14 309.06 355.95
Profit
Adjst. below
0.00 0.00 0.00 0.00 6.92 0.00
Net Profit
P & L Balance
2,477.91 2,064.89 1,248.94 462.72 134.90 164.78
brought forward
Statutory
0.00 0.00 0.00 0.00 0.00 0.00
Appropriations
Appropriations 880.79 799.77 622.64 445.62 223.28 408.27
P & L Balance
3,203.85 2,477.91 2,064.89 1,248.94 462.72 134.90
carried down
(Rs. in Crores)

Balance Sheet
(Rs. in Crores)
Particulars Dec-09 Dec-08 Dec-07 Dec-06 Dec-05 Mar-05
SOURCES OF
FUNDS :
Share Capital 187.94 187.88 187.83 187.48 184.72 178.74
1,418.4
Reserves Total 5,828.20 4,739.85 3,964.78 2,955.16 1,951.21
5
Total
1,597.1
Shareholders 6,016.14 4,927.73 4,152.61 3,142.64 2,135.93
9
Funds
1,141.0
Secured Loans 550.00 450.00 266.03 720.96 950.12
7
Unsecured
16.92 32.03 40.38 195.02 226.05 368.00
Loans
1,509.0
Total Debt 566.92 482.03 306.41 915.98 1,176.17
7
3,106.2
Total Liabilities 6,583.06 5,409.76 4,459.02 4,058.62 3,312.10
6
APPLICATION
OF FUNDS :
4,094.1
Gross Block 6,826.27 5,835.67 5,464.07 4,816.25 4,628.64
4
Less :
1,576.6
Accumulated 2,667.98 2,365.97 2,149.35 1,893.76 1,722.29
7
Depreciation
Less:Impairmen
0.00 0.00 0.00 0.00 0.00 0.00
t of Assets
2,517.4
Net Block 4,158.29 3,469.70 3,314.72 2,922.49 2,906.35
7
Lease
0.00 0.00 0.00 0.00 0.00 0.00
Adjustment
Capital Work in
2,156.21 1,602.86 649.19 558.42 215.68 354.28
Progress
Investments 1,475.64 679.08 844.81 503.54 293.75 279.14
Current Assets,
Loans &
Advances
Inventories 778.98 793.27 730.86 624.13 600.95 542.38
Sundry Debtors 203.70 310.17 289.29 213.96 199.17 190.54
Cash and Bank 746.38 984.24 743.48 620.17 102.79 57.32
Loans and
565.41 671.95 439.41 462.98 518.25 423.47
Advances
Total Current 1,213.7
2,294.47 2,759.63 2,203.04 1,921.24 1,421.16
Assets 1
Less : Current
Liabilities and
Provisions
Current
2,060.34 1,801.79 1,555.02 1,025.01 914.10 774.38
Liabilities
Provisions 1,091.88 963.93 666.27 502.28 316.77 200.91
Total Current
3,152.22 2,765.72 2,221.29 1,527.29 1,230.87 975.29
Liabilities
Net Current
-857.75 -6.09 -18.25 393.95 190.29 238.42
Assets
Miscellaneous
Expenses not 0.00 0.00 0.00 0.94 6.41 12.41
written off
Deferred Tax
149.14 132.24 104.90 106.23 90.56 53.82
Assets
Deferred Tax
498.39 468.03 436.35 426.95 390.94 349.28
Liability
Net Deferred
-349.25 -335.79 -331.45 -320.72 -300.38 -295.46
Tax
3,106.2
Total Assets 6,583.14 5,409.76 4,459.02 4,058.62 3,312.10
6
Contingent
359.25 313.94 225.08 244.20 205.58 150.26
Liabilities

December 1, 2010

ACC Media Release - Cement Production and Despatches in November 2010

Our cement production and despatch figures for the month of November 2010 are as
follows:
November– 2010
Cement production 1.76 million tonnes
Cement despatches 1.74 million tonnes
November– 2009
Cement production 1.68 million tonnes
Cement despatches 1.66 million tonnes
Cumulative
January – November 2010
Cement production 19.31 million tonnes
Cement despatches 19.24 million tonnes
January – November 2009
Cement production 19.51 million tonnes
Cement despatches 19.47 million tonnes
R Nand Kumar
Head – Corporate Communications

Top

November 1, 2010

ACC Media Release - Cement Production and Despatches in October 2010

Our cement production and despatch figures for the month of October 2010 are as
follows:
October– 2010
Cement production 1.98 million tonnes
Cement despatches 1.92 million tonnes
October– 2009
Cement production 1.71 million tonnes
Cement despatches 1.69 million tonnes
Cumulative
January – October 2010
Cement production 17.55 million tonnes
Cement despatches 17.51 million tonnes
January – October 2009
Cement production 17.83 million tonnes
Cement despatches 17.81 million tonnes

R Nand Kumar
Head – Corporate Communications

Support to national Sport

ACC has had an old and close association with the game of cricket.
From the 1950’s to the 70’s, many cricket legends were employees
of ACC during their active cricket careers. This was in the days
before cricketers became like the superstars they are today. ACC
was then among the few companies which went out of its way to
employ young cricketers, including budding young Ranji Trophy
hopefuls. ACC joined hands with the Confederation of Indian
Industry to sponsor India’s National Boxing team at the Athens
Olympics in 2004 and the Commonwealth Games. ACC also
sponsors and supports other sports at National, regional and local
levels such as inter-regional Badminton championships, youth
soccer and Rural Sports Meets.

ACC's Communication on Progress 2009

ACC Limited is proud to be a signatory to the UN Global Compact.


Each year, since 2007, we have communicated our progress against
the 10 UN Principles.

ACC clearly understands that UN Global Compact is both a policy


platform and a practical framework for organizations that are
committed to sustainability and responsible business practices.

We publish a full Sustainable Development Report every two years


and provide regular updates on our progress in our Sustainable
Development Report via our corporate website.

We believe that it is our responsibility to uphold the UN Global


Compact and its 10 Principles. For our long term future and that of
our stakeholders, it is in our mutual interests that we have created
a world in which our business will grow and thrive.

Our activity around human and labour rights, environmental


responsibility and business integrity is described in detail in our
printed Sustainable Development Report 2009. It is also available
on our Corporate Website www.acclimited.com. Over here we are
providing an index against the ten principles, illustrating our
approach and giving progress highlights from 2009.
This index below explains how our own principles reflect those of
the Global Compact and provides page number to the Sustainable
Development Report pages that describe how we implement these
principles in our business.

Human Rights ACC understands and accepts that as a


responsible business enterprise it has
• Principle 1: the responsibility to uphold human
Businesses should rights at the workplace and within its
support and respect the sphere of influence.
protection of
internationally Our Code of Business Principles states:
proclaimed human “We conduct our operations with
rights; and honesty, integrity and openness, and
• Principle 2: make with respect for the human rights and
sure that they are not interests of our employees.”
complicit in human
rights abuses. ACC recognizes that it has a
responsibility to uphold human rights in
the workplace. At the workplace, human
rights typically take the form of non-
discrimination and diversity in personnel
practices, professional development that
aids employability, and work life balance
programmes that support a healthy
balance between professional and
private life.

ACC protects human rights in the


community through contributions to
poverty alleviation and increasing levels
of education.

Labour Standards ACC does not use forced labour and we


work with suppliers and business
• Principle 3: partners to ensure they do not use
Businesses should forced labour either.
uphold the freedom We respect people’s rights to have
of association and employee representation, including their
the effective right to join unions and we do not
recognition of the tolerate harassment.
right to collective During 2009 our permanent full time
bargaining; employees numbered 8,916 out of which
• Principle 4: the 61% are engaged under bargainable
elimination of all category. 25% of our management staff
forms of forced and belongs to the minority groups.
compulsory labour; Also, an important approach to motivate
• Principle 5: the employees has been through addressing
effective abolition of the information needs of employees and
child labour; and providing regular feedback to them by
• Principle 6: the creating a robust internal
elimination of communication system. One element of
discrimination in this was the “Accelerate” intranet Portal
respect of for employees first introduced in 2008 to
employment and a limited group of employees. It
occupation. provides information useful to all
employees on various policies,
procedures and functions. Personal
remuneration and performance details
are made available with password
protection. A unique feature is the
portal’s discussion board which
encourages employees to communicate
their views, voice their grievances and
make valuable suggestions.

Environment ACC is committed to continuously


improve its environmental performance
• Principle 7: and provide positive contributions to its
Businesses should business.
support a "Quarry to Lorry" is a motto that
precautionary encapsulates our concern for
approach to environmental conservation. It is
environmental integrated into all activities of our value
challenges; chain. Environment management has
• Principle 8: always been an essential and distinct
undertake initiatives function in the company's organisation
to promote greater structure. We continue to implement
environmental various initiatives to conserve natural
responsibility; and resources and to prevent pollution.
• Principle 9:
encourage the ACC is an active member of the TERI-
development and BCSD (Business Council for Sustainable
diffusion of Development) India. In addition to its
environmentally active participation in the Stakeholder
friendly Discussion Forums to promote a Cement
technologies. Sustainability Initiative (CSI) in India, it
also championed along with five other
member companies of the Business
Council a Corporate Action Plan on
Climate Change complementing the
Government of India’s National Action
Plan on Climate Change (NAPCC). The
task force led by Mr. Sumit Banerjee,
Managing Director focuses on the
business role in the National Solar
Mission and National Mission for
Enhanced Energy Efficiency.
ACC has been a pioneer in the
manufacture and promotion of blended
cements. Today nearly 90 % of ACC’s
production is made up of blended
cements, well ahead of the industry
average of 75 %.

In the year 2009 ACC utilized over 6.5


million tonnes of alternative materials
consisting of marble slurry, chemical
gypsum, granulated slag, fly ash, lime
sludge, chemical sludge etc.
The consumption of alternative raw
materials in the year 2009 increased by
45% compared to the year 2008.

The Indian cement industry is being


recognized for efforts in lowering its
carbon footprint. This include measures
such as promoting green cement,
modernization and adoption of new
technology, process improvements,
steps to achieve greater thermal and
electrical energy efficiency, the pursuit
of renewable energy, alternative fuels
and raw materials, optimizing
transportation costs and leads and
striving for cost-competitiveness.

Anti-Corruption Our Code of Business Conduct & Ethics


clearly mentions behaviorus expected of
• Principle 10: individuals and actions to be taken in
Businesses should case of non-adherence. Each permanent
work against employee of the Company has been
corruption in all its given a copy of this Code of Business
forms, including Conduct & Ethics and has agreed to
extortion and adhere to all the clauses in it.
bribery. The Company’s Internal Audit
Department follows a well structured
risk assessment approach to draw up its
Annual Internal Audit plan. This risk
assessment is conducted every year and
includes all business processes and all
units. Potential fraud risk areas, their
probability and impact are a vital input
for the risk assessment.
A Fraud Risk Management (FRM) Policy
was adopted with effect from January 1,
2009. A Fraud Risk Management
committee was constituted with the
Company Secretary as its chairman and
the Head Legal and Chief Internal
Auditor as members to review and take
appropriate action on all suspected
cases of fraud/misconduct. Any person
with knowledge of any incident of
misconduct/ fraud can communicate to
the committee through a dedicated e-
mail and hotline or by written letter,
with assured confidentiality.
FRM awareness programmes are
conducted companywide by displaying
posters at prominent locations in the
units, screensavers on all company
computers and workshops for
management staff covering all business
units of ACC comprising 16 plants, 20
sales units, 3 regional offices, Corporate
Office and ACC Thane. In all a total of
2,064 management staff employees
(64%) attended these workshops. The
rest of the employees have been
communicated the FRM policy and
related presentations through e-mail.
Corruption: There were 2 incidents in
which employees were dismissed or
disciplined for corruption. There were no
instances where a contract with
business partners was not renewed due
to violation related with corruption.
Conservation of heritage structures

The services of ACC’s Concrete experts have often been utilized in


the restoration of several national heritage buildings across the
country - such as sections of the Chhatrapati Shivaji Terminus
(formerly Victoria Terminus) at Mumbai, the J N Petit and David
Sassoon Libraries in Mumbai, churches in Goa, palaces and royal
mansions in Mysore and Hyderabad and other old structures in the
country.

The historic Vijayraghavgarh fort in Madhya Pradesh was recently


restored under ACC’s patronage. This is not a core business of the
company but an act of corporate volunteering by way of sharing
knowledge and expertise.

Disaster Relief

ACC and its employees make timely contribution to help in any


national disaster. This is done both at the corporate level, by local
units and employees. Apart from the Kargil cause, collective
contributions by way of cash, food and clothing has been sent to
help victims of calamities such as the Latur earthquake, Himachal
Pradesh floods, Orissa cyclone, Gujarat earthquake, Tsunami and
floods in Maharashtra.

Healthcare
ACC takes pride in providing various forms of medical assistance to
the families of our employees and also to all those living in
surrounding villages. Each factory has a medical center with full-
fledged doctors and the latest of basic equipment. Mobile medical
services are provided in the vicinity and regular medical camps are
held to eradicate diseases, offer medical help, treatment and
preventive care.

ACC has come out to provide support to state and national health
initiatives such as the eradication of malaria, dengue fever and the
dreaded HIV.

Education
Education is imparted not only to children of ACC employees but
also more importantly to children from rural areas who do not have
access to any medium of information or education. ACC schools
maintain high standards and are open to other children of the
vicinity. Often these schools are the most preferred centers of
learning in the district and adjoining areas. Wherever possible, ACC
provides funds and infrastructure to help set up local schools,
colleges and centers for learning and education.

Community & Rural Welfare


Our community development activities revolve around the under-
privileged community that lives in the immediate vicinity of our
cement plants and is thus more dependent on us. The range of our
activities begins with extending educational and medical facilities
and goes on to cover vocational guidance and supporting
employment-oriented and income-generation projects like
agriculture, animal husbandry, cottage industries by developing
local skills, using local raw materials and helping create marketing
outlets.
Central procurement :

At all our cement factories we share our amenities and facilities with
members of the local community. This includes sharing education
and medical facilities, sports and recreation. Wherever possible we
share access to Bore Wells, drinking water and the usage of colony
roads.

ACC has a countrywide spread of 14 modern cement plants. This


large network of manufacturing units consumes a wide spectrum of
inputs – about 60,000 different items ranging from Coal, Gypsum,
Slag, Packaging material (bags), Refractories, Steel, Grinding
Media, Electrodes, Cables, Bearings, Conveyor Belts, Spares of
various mechanical, electrical and instrumentation equipment,
Mining Equipment and their spares and explosives.

ACC has a vendor base of more than 6000 suppliers spread across
the country.

A team of professionals at Corporate, Regions and Plant Level


manages the procurement function. The function is organized so as
to derive maximum value for the company through economies of
scale from central pooling and procurement of some inputs at the
corporate level while meeting individual operational requirements at
plant level. The Procurement function comprises a Central
procurement team at the corporate office for the requirement of
major inputs for the operations of cement plants.

Code of conduct
ACC treats its vendors as business associates. All vendors are
treated with respect and dignity. Our vendor base includes reputed
manufacturers and trusted brand names, usually the leading 3-4
vendors of their particular industry segment who are technically and
financially sound and have the intrinsic capacity to supply material
of desired quality and on time. ACC prefers vendors who
demonstrate good corporate citizenship and promote sustainable
development.

Adequate care is taken to ensure transparency in procurement


processes. Our procurement policy has a clearly defined code of
practice for procurement conduct and encourages fair and open
competition in markets.

Questionnaire

How is cement produced ?


Cement manufacturing is the basic processing of selected and prepared
mineral raw materials to produce the synthetic mineral mixture (clinker)
that can be ground to a powder having the specific chemical
composition and physical properties of cement."

What is the weight of each ACC cement bag ?


How many bags of cement produced daily ?
How many people are employee in this company ?
What are the health and safety measures for workers ?
What is the storage system for cement bags ?