|1. Material Demand and dispute considered as "remote" by the Company
One of the Company's Cement manufacturing plants located in Himachal
Pradesh was eligible, under the State Industrial Policy for deferral of
its sales tax liability arising on sale of cement manufactured in the
said plant. The Excise and Taxation department of the Government of
Himachal Pradesh, disputed the eligibility of the Company to such
deferment on the ground that the Company is manufacturing & using a
product covered under the negative list and raised a demand of Rs,
66.94 crores (previous year Rs, 66.94 crores). The Company has filed a
writ in the High Court of Himachal Pradesh against the demand which has
been admitted and arguments completed. The Company believes its case is
strong and the demand shall not sustain under law.
2. The Competition Commission of India (CCI), in 2012 had imposed a
penalty of Rs, 1,163.91 crores for alleged contravention of the
provisions of the Competition Act, 2002. On Company's appeal,
Competition Appellate Tribunal (COMPAT), vide an interim order, had
stayed the penalty with a condition to deposit 10% of the penalty
amount. The Company had deposited the said amount in compliance of the
condition of the order. Penalty of Rs, 1,163.91 crores was disclosed as
a contingent liability in the financial statements upto the previous
year ended December 31, 2014. The COMPAT, vide its final order dated
11th December, 2015, while disposing off the said appeal, set aside the
order of the CCI and remanded the matter to CCI for fresh adjudication
and for passing a fresh order. Further, in terms of order, the Company
has received the refund of deposit, along with accumulated interest.
3. Related party disclosure (As per Accounting Standard 18 specified
under Section 133 of the Companies Act, 2013)
1 Name of related parties
(A) Names of the related parties where control exists Nature of
(I) Lafarge Holcim Limited (Formerly known as Holcim Limited),
Switzerland Ultimate Holding Compa
(II) Holder fin BV, Netherlands Intermediate Holding
(III) Hold rind Investments Limited, Mauritius Holding Company
(IV) Kakinada Cements Limited (Refer note 52) Subsidiary
(V) M.G.T. Cements Private Limited Subsidiary
(VI) Chemical Limes Mundwa Private Limited Subsidiary
(VII) Dang Cement Industries Private Limited, Nepal Subsidiary
(VIII) Dirk India Private Limited Subsidiary
(IX) Wardha Vaalley Coal Field Private Limited Joint Venture
(X) Count Micro fine Products Private Limited Joint Venture
(XI) One India BSC Private Limited (Refer note 53) Joint Venture (w.e.f.13.08.2015)
(B) Others-with whom transactions have taken place during the year
(I) Names of other related parties Nature of Relationship
(a) ACC Limited Fellow Subsidiary
(b) Holcim (India) Private Limited (Refer note 49)
(c) Holcim (Lanka) Limited, Sri Lanka Fellow Subsidiary
(d) Holcim Group Services Limited, Switzerland Fellow Subsidiary
(e) Holcim Technology Limited, Switzerland
(f) Holcim Philippines, Inc.,
Philippines Fellow Subsidiary
(g) Holcim Services (South Asia) Limited Fellow Subsidiary
(h) Holcim Services (Asia) Limited, Thailand
(i) Holcim Trading FZCO, UAE Fellow Subsidiary
(j) Holcim Trading Pte Limited, Singapore Fellow Subsidiary
(k) PT Holcim Indonesia Tbk., Indonesia Fellow Subsidiary
(l) Holcim Cement (Bangladesh) Limited, Bangladesh Fellow
(m) Holcim (Romania) S.A. Romania Fellow Subsidiary
(n) Holcim Technology (Singapore) Pte Limited, Singapore .. Fellow
(o) Lafarge India Private Limited Fellow
(p) Siam City Cement Public Company Limited, Thailand.... Joint
Venture of Fellow Subsidiary (upto 30.03.2015)
(II) Key Management Personnel
Name of the related parties Nature of Relationship
(a) Mr. Ajay Kapur Managing Director & CEO (w.e.f.
25th April, 2014)
Deputy Managing Director & CEO (upto 24th April, 2014)
(b) Mr. Onne van der Weijde Managing Director
(upto 24th April, 2014)
b) Defined Benefit Plans - as per actuarial valuation
Funded plan includes gratuity benefit to employees who have completed
five years or more of service on departure, at 15 days salary (on last
drawn basic salary) for each completed year of service.
Other non funded plan include death & disability benefit, non-funded
gratuity and post employment healthcare benefits to certain employees.
c) Amount recognised as expense in respect of compensated absences is
Rs, 12.02 crores (previous year - Rs, 20.29 crores).
d) Provident fund managed by a trust set up by the Company The Company
has contributed Rs, 7.29 crores (previous year - Rs, 7.34 crores)
towards provident fund liability. Deficit of Rs, Nil (previous year -
deficit of Rs, 2.13 crores) in the accumulated corpus fund is
recognised in the Statement of profit and loss. Further, considering
net surplus in the accumulated corpus fund, liability of Rs, 2.13
crores provided in the previous year, has been written back.
4 Basis used to determine expected rate of return on assets :
To develop the expected long-term return on assets assumption, the
Company considered the current level of returns declared on its
insurance policy. This resulted in the selection of the 8.50 %
assumption for gratuity (funded) plan.
5.X The estimates of future salary increases, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
The weighted average share price at the date of exercise for stock
option was Rs, 242.29 (previous year Rs, 208.29) The weighted average
share price for the period over which stock option were exercised was
Rs, 228.84 (previous year Rs, 205.45)
6. (a) Other income includes Rs, Nil (previous year Rs, 35.79 crores)
written back towards interest on income tax relating to earlier years.
(b) Tax expense for earlier years represents write back upon completion
of assessments and change in estimate of allow ability of certain
7. The Company has incurred Rs, 40.98 crores towards Social
Responsibility activities. It is included in different heads of
expenses in the Statement of Profit and Loss. Further, no amount has
been spent on construction / acquisition of an asset of the Company and
entire spent is on cash basis.
The amount required to be spent under Section 135 of the Companies Act,
2013 for the year 2015 is Rs, 34.64 crores i.e. 2% of average net
profits for last three financial years, calculated as per section 198
of the Companies Act, 2013.
8. During the year 2013, the Board of Directors and members have
approved the Scheme of amalgamation of Holcim (India) Private Limited
(HIPL) with the Company with effect from 1st April 2013, wherein the
Company will acquire HIPL from Hollering Investments Ltd., Mauritius
for a cash consideration of Rs, 3,500.00 crores and issue of 58.44
crores equity shares of Rs, 2 each at a premium of Rs, 187.66 per
share. During the previous year, Hon'ble High Courts of Gujarat and New
Delhi have approved the above scheme. Pending fulfillment of certain
conditions precedent specified in the Scheme, no impact of amalgamation
has been given in the financial statements.
9. During the year, the Board of Directors has approved the
amalgamation of Dirk India Private Limited, a wholly owned subsidiary,
with the Company w.e.f. 1st April, 2015, in terms of the scheme of
amalgamation. Pending regulatory approvals, no effect of the proposed
amalgamation has been given in the financial statements.
10. Pursuant to the enactment of the Companies Act, 2013 ('the Act'),
the Company has, effective 1st January, 2015, reviewed and revised the
estimated useful lives of fixed assets, as per the life indicated in
the Act. Accordingly, as per the transition provisions of the Act, the
Company has adjusted Rs, 106.63 crores (net of tax of Rs, 54.90 crores)
in opening balance of "Surplus in the statement of profit and loss" as
on 1st January, 2015, in respect of assets, whose useful life is
exhausted as at 1st January, 2015. Further, as a result of this change,
depreciation for the year ended 31st December, 2015 is higher by Rs,
11. Kakinada Cements Limited (KCL), a 100% subsidiary of the Company
has applied for liquidation with Registrar of Companies, Gujarat under
the Companies Act, 2013, and accordingly a provision of Rs, 0.10
crores, being Company's investment in KCL, has been recorded as
diminution in value of investment.
12. During the year, the company has subscribed for Rs, 2.50 crores in
equity shares of One India BSC Private Limited (OIBPL). OIBPL is a
joint venture company, with an equal equity participation with ACC
Limited, a fellow subsidiary Company, created with aim to provide
business shared services.
13. During the year, the Company has made provision of Rs, 52.08
crores towards contribution to District Mineral Foundation and National
Mineral Exploration Trust as per The Mines and Mineral (Development and
Regulation) Amendment Act, 2015.
14. Figures below Rs, 50,000 have not been disclosed.
15. Figures of the previous year have been regrouped / rearranged
wherever necessary to conform to the current year's presentation.