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ACC LTD.

19 July 2019 | 12:00

Industry >> Cement

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ISIN No INE012A01025 52Week High 1769 Book Value (Rs.) 560.83 Face Value 10.00
Bookclosure 12/03/2019 52Week Low 1262 EPS 80.97 P/E 19.07
Market Cap. 28987.78 Cr. P/BV 2.75 Div Yield (%) 0.91 Market Lot 1.00

DIRECTOR'S REPORT

You can view full text of the latest Director's Report for the company.
Year End :2018-12 

TO THE MEMBERS OF ACC LIMITED

The Directors are pleased to present the Eighty Third Annual Report of the Company together with the audited financial statements (Consolidated and Standalone) for the year ended December 31, 2018. The section on Management Discussion and Analysis (MD&A) forms a part of this report.

1. FINANCIAL RESULTS

Consolidated

Standalone

Rs. Crore

Rs. Crore

2018

2017

2018

2017

Revenue from Operations*

14,801.62

13,263.12

14,801.35

13,262.59

Other Income

142.66

128.86

138.50

131.65

Total Income

14,944.28

13,391.98

14,939.85

13,394.24

Profit before Tax

1,510.11

1,310.06

1,494.29

1,298.36

Tax Expenses**

(10.51)

385.55

(12.34)

382.91

Profit for the year

1,520.62

924.51

1,506.63

915.45

Attributable to:

Owners of the Company

1,520.47

924.41

1,506.63

915.45

Non-controlling interests

0.15

0.10

-

-

Other Comprehensive Income (OCI)

(4.84)

2.24

(4.85)

2.37

Total Comprehensive Income

1,515.78

926.75

1,501.78

917.82

Owners of the Company

1,515.63

926.65

1,501.78

917.82

Non-controlling interests

0.15

0.10

-

-

Opening Balance in retained earnings

5,526.05

4,983.63

5,541.33

5,007.74

Amount available for appropriations

7,041.68

5,910.28

7,043.11

5,925.56

Appropriations:

Interim Dividend paid for 2017

-

206.57

-

206.57

Final Dividend paid

- For 2017

281.68

-

281.68

-

- For 2016

-

112.67

-

112.67

Tax on Equity Dividend

57.90

64.99

57.90

64.99

Closing Balance in retained earnings

6,702.10

5,526.05

6,703.53

5,541.33

*Figures for Revenue from Operations are comparable numbers .i.e Excise Duty has been removed as the same does not form part of Revenue post GST implementation.

**Including write back of Rs.500.63 crore relating to tax provision of earlier years.

2. OVERVIEW OF COMPANY’S FINANCIAL PERFORMANCE

- Consolidated income, comprising of revenue from operations (net of excise) and other income, for the year was Rs. 14,944.28 crore, 12% higher as compared to Rs. 13,391.98 crore in 2017.

- Total consolidated revenue from operations (net of excise) increased to Rs. 14,801.62 crore from Rs. 13,263.12 crore in 2017.

- Other operating revenue for the year 2018 was Rs. 324.15 crore representing a decrease of 8 % over the previous year.

- Consolidated Profit Before Tax for the year was Rs. 1,510.11.crore as compared to Rs. 1,310.06 crore in 2017.

- Consolidated Profit After Tax for the year was Rs. 1,520.62 crore as compared to Rs. 924.51 crore in 2017.

- No material changes or commitments have occurred between the end of the financial year and the date of this Report which affect the financial statements of the Company in respect of the reporting year.

3. DIVIDEND

The Board of Directors has recommended payment of dividend of Rs. 14 /- per Equity Share of Rs. 10 face value aggregating to Rs. 316.94 crore (including tax on dividend).

The Dividend Distribution Policy of the Company is annexed to this Report as Annexure ‘A’ and is also uploaded on the Company’s website at http://www.acclimited.com/assets/new/new_ pdf/Dividend_Distribution_Policy.pdf

Unclaimed dividends pertaining to the 73rd Final dividend and the 74th Interim dividend respectively for the years 2010 and 2011 totaling to Rs. 4.08 crore have been transferred to the Investor Education and Protection Fund in accordance with Statutory requirements.

4. SHARE CAPITAL

The Company’s paid-up Equity Share Capital continues to stand at Rs.187.79 crore as on December 31, 2018.

During the year, the Company has not issued any shares or convertible securities. The Company does not have any Scheme for issue of shares including sweat equity to the employees or Directors of the Company.

5. FINANCIAL LIQUIDITY

Cash and cash equivalent as at December 31, 2018 was Rs. 2,933.21 crore (Previous year Rs. 2,559.66 crore).

The Company’s working capital management is robust and involves a well-organized process which facilitates continuous monitoring and control over receivables, inventories and other parameters.

6. CREDIT RATING

As in the previous years, CRISIL has given the highest credit rating of CRISIL AAA/ STABLE for long term and CRISIL A1 for short term financial instruments of the Company. This reaffirms the high reputation and trust the Company has earned for its sound financial management and its ability to meet financial obligations.

7. DEPOSITS

The Company has not accepted any deposits falling under the ambit of Section 73 of the Companies Act, 2013 (hereinafter referred to as “The Act”) and the Rules framed thereunder during the year under review.

8. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the Notes to Financial Statements (Refer Note No. 47).

9. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company has over the years established a reputation for doing business with integrity and displays zero tolerance for any form of unethical behavior/’EthicalView Reporting Policy” (EVRP) is the vigil mechanism instituted by the Company to report concerns about unethical behavior in compliance with the requirements of the Act and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as SEBI Listing Regulations). The Audit Committee of the Board oversees the functioning of this policy. Protected disclosures can be made by a whistle blower through several channels to report actual or suspected frauds and violation of Company’s Code of Conduct and/or Ethics Policy. Details of the EthicalView Reporting Policy have been disclosed on its Company’s website -http://www.acclimited.com/assets/new/pdf/ ethicalview-reporting-policy.pdf

During the year, the Company reached out to employees through e-learning modules and face-to-face training sessions for creating greater awareness with respect to the Company’s’ Anti Bribery and Corruption Directive (ABCD) This has helped in achieving a high level of engagement and compliance among the employees.

10. SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES

10.1 SUBSIDIARIES

Bulk Cement Corporation (India) Limited (BCCI)

During the year under review, the revenue from operations of BCCI increased to Rs.18.76 crore in 2018 compared to Rs.17.27 crore in 2017. The Profit before tax before considering exceptional items for the year 2018 was Rs.3.39 crore as against Rs.2.88 crore in the year 2017.

ACC Mineral Resources Limited (AMRL)

ACC had entered into a Joint Venture with Madhya Pradesh State Mining Corporation Limited (MPSMC) for development of four coal blocks allotted to MPSMC by the Government of India through its wholly owned subsidiary ACC Mineral Resources Limited. Consequent upon the cancellation of the allocation of all coal blocks including the four coal blocks allotted to MPSMC by the Government of India as per the Orders of the Supreme Court passed in September 2014, AMRL does not have any business activity and correspondingly did not have any operating income during the period under review.

OTHER SUBSIDIARIES

The Company has three other Subsidiary Companies having limestone deposits, viz. Lucky Minmat Limited, National Limestone Company Private Limited and Singhania Minerals Private Limited. Singhania Minerals Private Limited is operational, while the other two companies are not operational.

10.2. MATERIAL SUBSIDIARIES

None of the subsidiaries mentioned in para 25.1 above is a material subsidiary as per the thresholds laid down under the SEBI Listing Regulations.

The Board of Directors of the Company has approved a Policy for determining material subsidiaries in line with the SEBI Listing Regulations. The Policy is also being revised effective from April,1, 2019 in line with the amendments made to the SEBI Listing Regulations. The Policy has been uploaded on the Company’s website at: http://www.acclimited.com/assets/new/pdf/CG/ Determiningmaterialsubsidiaries.pdf

10.3 JOINT VENTURE /ASSOCIATE COMPANIES

OneIndia BSC Private Limited is a Joint Venture Company with equal participation with Ambuja Cements Limited to provide back office services to the two Companies with respect to routine transactional processes.

Your Company also has a Joint Venture with Aakaash Manufacturing Company Private Limited, for manufacture and supply of ready mix concrete. As on December 31, 2018, the following is the list of Associate Companies:

- Alcon Cement Company Private Limited

- Asian Concretes and Cements Private Limited

11. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company for the year 2018 are prepared in compliance with the applicable provisions of the Act including Indian Accounting Standards specified under Section 133 of the Act. The audited consolidated financial statements together with the Auditors’ Report thereon form part of the Annual Report.

Pursuant to Section 129(3) of the Act, a Statement containing salient features of the financial statements of each of the Subsidiaries, Associates and Joint Venture Companies in the prescribed Form AOC-1 is attached.

The Financial Statements of the subsidiaries, associates and joint venture companies are available for inspection by the Members at the Registered Office of the Company pursuant to the provisions of Section 136 of the Act. The Company shall provide free of cost, a copy of the financial statements of its subsidiary companies to the Members upon their request. The statements are also available on the website of the Company at www.acclimited.com under the ‘Investors’ section.

12. DIRECTORS & KEY MANAGERIAL PERSONNEL

12.1 Changes in Directorate

The Independent Directors of the Company have been appointed by the shareholders at the Extra Ordinary General Meeting held on September 10, 2014 for a term of five years from their respective dates of appointment as per the requirements of the Act and the SEBI Listing Regulations. The appointments of Mr Shailesh Haribhakti, Mr Sushil Kumar Roongta, Mr Ashwin Dani and Mr Farrokh Kavarana were effective from July, 24, 2014 while those of Mr Arunkumar Gandhi and Ms Falguni Nayar were effective from April, 24, 2014.

Pursuant to the Company’s Succession policy applicable to the directors which provides that a person shall not be eligible for appointment as a director of the Company upon attaining the age of seventy five years. Mr Ashwin Dani, Mr Farrokh Kavarana and Mr Arunkumar Gandhi have attained or will attain the age of seventy five years during their current tenure of appointment and have expressed their inability to seek re-appointment from the conclusion of the forthcoming Annual General Meeting.

The Board of Directors has placed on record its sincere appreciation for the rich contribution made by Mr Ashwin Dani, Mr Farrokh Kavarana and Mr Arunkumar Gandhi during their tenure of association as Independent Directors.

Considering the above, it is proposed to appoint Mr Damodarannair Sundaram, Mr Sunil Mehta and Mr Vinayak Chatterjee as Independent Directors with effect from the conclusion of the forthcoming Annual General Meeting for a period of five consecutive years subject to their appointment being approved by the Members. All the above named persons have given their consent for the appointment and have confirmed that they are not in any way disqualified from being appointed as directors. They have also given their confirmation with regard to their independent status vis-a-vis the Company.

The persons identified for appointment are persons of pre-eminence and the Board feels that it would be enriched further by their induction as Independent Directors. Detailed profiles of the above named persons setting out their accomplishments are appended to the Explanatory Statement accompanying the Notice for the Annual General Meeting. The Company has received notices from a Member under Section 160 of the Act proposing their candidature for appointment as Directors and the Nomination and Remuneration Committee as also the Board of Directors have recommended their appointment.

Approval of the Members by ordinary resolutions for appointing the aforesaid persons as Independent Directors for a term of five consecutive years has been sought in the Notice convening the Annual General Meeting of the Company. (Please refer to Item Nos. 8, 9 and 10 of the Notice).

Mr Shailesh Haribhakti, Mr Sushil Kumar Roongta and Ms Falguni Nayar upon completion of their first term of appointment as Independent Directors during the current year are eligible for re-appointment for another term of five consecutive years subject to approval of the Members by special resolution. The said Directors have given their consent for re-appointment and have confirmed that they still retain their status as Independent Directors and that they do not suffer from any disqualifications for appointment. The proposal for their re-appointment is based on the evaluation of their performance carried out by the Board other than the persons evaluated.

The Company has received notices under Section 160 of the Act, from a Member proposing the re-appointment of Mr Shailesh Haribhakti, Mr Sushil Kumar Roongta and Ms Falguni Nayar as Independent Directors of the Company. Approval of the Members by special resolutions for appointing the aforesaid persons as Independent Directors for a further term of five consecutive years has been sought in the Notice convening the Annual General Meeting of the Company. (Please refer to Item Nos. 5, 6 and 7 of the Notice).

12.2 Directors liable to retirement by rotation

The Independent Directors hold office for a fixed period of five years from the date of their appointment and are not liable to retire by rotation. Out of the remaining 5 Non-Executive/ Non-Independent Directors, in accordance with the provisions of the Act and the Articles of Association of the Company, Mr N. S Sekhsaria and Mr Christof Hassig being longest in office retire by rotation and being eligible, offer their candidature for re-appointment as Directors.

12.3 Board Effectiveness

a. Familiarization Program for the Independent Directors

The Company has over the years developed a robust familiarization process for the newly appointed Directors with respect to their roles and responsibilities, way ahead of the prescription of the regulatory provisions. The process has been aligned with the requirements under the Act and other related Regulations. This process inter-alia includes providing an overview of the Cement Industry, the Company’s business model, the risks and opportunities etc.

Details of the Familiarization Programme are explained in the Corporate Governance Report and are also available on the Company’s website at http:// www.acclimited.com/assets/new/pdf/ CG/Familiarization-Programme-for-Independent-Directors.pdf

b. Board Evaluation

The Board has carried out its annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration, Risk Management and Compliance Committees as mandated under the Act and SEBI Listing Regulations. The criteria applied in the evaluation process are explained in the Corporate Governance Report.

12.4 Key Managerial Personnel

The following are the Key Managerial Personnel of the Company in terms of the provisions of the Act read with The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as on December 31, 2018:

- Mr Neeraj Akhoury, Managing Director & Chief Executive Officer

- Mr Sunil Nayak, Chief Financial Officer

- Mr Ramaswami Kalidas, Company Secretary & Head Compliance

12.6 Remuneration Policy and Criteria for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior leadership positions

The Company has in place a policy for remuneration of Directors, Key Managerial Personnel and Members of the Executive Committee (ExCo) as well as a well-defined criteria for the selection of candidates for appointment to the said positions which has been approved by the Board. The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to the executive and non-executive Directors (by way of sitting fees and commission), Key Managerial Personnel and ExCo. The criteria for selection of candidates for the above positions cover the various factors and attributes which are considered by the Nomination & Remuneration Committee and the Board of Directors while making a selection of the candidates. The above policy alongwith the criteria for selection is available at the website of the Company at http://www.acclimited.com/ assets/new/pdf/CG/Policy remuneration selection for appointment.pdf

13. MEETINGS

13.1 Board Meetings

During the year six Board Meetings were convened and held, the details of which are given in the Corporate Governance Report.

13.2 Audit Committee

The Audit Committee comprises five members. The Chairman of the Committee is an Independent Director. The Committee met six times during the year. Details of the role and responsibilities of the Audit Committee, the particulars of meetings held and attendance of the Members at such Meetings are given in the Corporate Governance Report.

13.3 CSR Committee

The CSR Committee comprises of four members of which three are Independent Directors. The Chairman of the Committee is an Independent Director. The Committee met thrice during the reporting period. Details of the role and functioning of the Committee are given in the Corporate Governance Report.

15. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Company has developed a Related Party Transactions Manual and Standard Operating Procedures for the purpose of identification and monitoring Related Party transactions.

All transactions with Related Parties are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee and the Board is obtained for the transactions which are foreseeable and of a repetitive nature. The transactions entered into pursuant to the approvals so granted are subjected to audit and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors on a quarterly basis. The statement is supported by a certificate from the CEO & MD and the CFO.

The policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the Company’s website and can be seen at the link http://www.acclimited. com/assets/new/pdf/CG/PolicyonRPT.pdf All transactions entered into with related parties during the year were on arm’s length basis and were in the ordinary course of business. The details of the material related party transactions entered into during the year as per the policy on Related Party Transactions approved by the Board have been reported in Form AOC 2 annexed to the Directors’ Report as Annexure ‘C’.

None of the Directors and the Key Managerial Personnel has any pecuniary relationships or transactions vis-a-vis the Company.

16. TRANSFER OF EQUITY SHARES UNPAID/UNCLAIMED DIVIDEND TO THE INVESTOR EDUCATION AND PROTECTION FUND

In line with the statutory requirements, the Company has transferred to the credit of the Investor Education and Protection Fund set up by the Government of India, equity shares in respect of which dividend had remained unpaid/ unclaimed for a period of seven consecutive years within the time lines laid down by the MCA. Unpaid/unclaimed dividend for seven years of more has also been transferred to the IEPF pursuant to the requirements under the Act.

17. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

Complaint filed under the Competition Act by the Builders Association of India against cement manufacturers - Appeal before the Supreme Court of India

As reported in detail in reports of earlier years, a penalty of Rs.1,147.59 crore was levied on the Company by the Competition Commission of India based on a complaint filed by the Builders’ Association of India for alleged violation of the provisions of the Competition Act.

The National Company Law Appellate Tribunal (NCLAT) vide its judgment dated 25th July 2018, has dismissed the appeal of the Company upholding the levy of penalty of Rs.1147.59 crore as imposed by the Competition Commission of India vide its Order dated 31st August 2016. The NCLAT initially vide its Order dated 7th November 2016 had stayed the operation of the CCI’s Order subject to deposit of 10% of the penalty amount.

The Company has preferred an appeal before the Hon’ble Supreme Court against the above Order of NCLAT. The Hon’ble Supreme Court vide its Order dated 5th October 2018, has admitted the Company’s civil appeal and ordered for continuance of the interim orders passed by NCLAT towards stay on the demand subject to deposit of 10% of the penalty amount. The matter is still subjudice.

As at December 31, 2018, the penalty amount of Rs.1147.59 crore and interest thereon has been disclosed as a contingent liability in the Notes to Financial Statements.(Refer Note -40(A)(a)).

CCI’s Order on Complaint filed by Director, Supplies & Disposals, State of Haryana in 2013

The Director, Supplies & Disposals, State of Haryana had filed a complaint before CCI alleging collusion and bid rigging by cement manufacturers in violation of Section 3(1) and 3(3)(d) of the Competition Act. In January 2017, the Competition Commission of India (CCI) passed an Order against seven cement manufacturers including the Company imposing a penalty calculated at the rate of 0.3% of the average turnover of the last three years viz. 2012-13 to 2014-15. In respect of the Company, the amount of penalty works out to Rs.35.32 crore.

An Appeal is pending before NCLAT in the said matter against the Orders of the Competition Commission of India.

As at December 31, 2018, the penalty amount of Rs.35.32 crore is disclosed as a contingent liability in the Notes to Financial Statements.(Refer Note 40(A)(b)).

Reference is drawn to the ‘Emphasis of Matter’ by the Auditors in their reports on the above matters.

18. AUDITORS

18.1 Statutory Auditor

M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (ICAI Firm Registration Number 1 17366W/W-100018) were appointed as Statutory Auditor of the Company at the 81st Annual General Meeting held on March 29, 2017 to hold office from the conclusion of the said Meeting till the conclusion of the 86th Annual General Meeting to be held in 2022 subject to ratification of their appointment by the Members at every intervening Annual General Meeting held thereafter. The requirement of seeking ratification of the members for continuance of their appointment has been withdrawn consequent upon the changes made by the Companies (Amendment)Act, 2017 with effect from May 07, 2018.Hence the resolution seeking ratification of the members for their appointment is not being placed at the ensuing Annual General Meeting.

18.2 Cost Auditor

M/s D C Dave & Co., Cost Accountants (Firm Registration No 3061 1), have been appointed as Cost Auditor of the Company for the year 2018 under Section 148 of the Act read with The Companies (Cost Records and Audit) Amendment Rules 2014.

M/s D C Dave & Co have confirmed that they are free from any disqualifications as specified under the Act. They have further confirmed their independent status.

The remuneration payable to the Cost Auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, Resolution seeking Members’ ratification for the remuneration payable to M/s D C Dave & Co, Cost Auditor is included at item No.11 of the Notice convening the Annual General Meeting.

18.3 Secretarial Auditor

M/s. Pramod S Shah & Associates, a firm of Company Secretaries in Practice, have been appointed to undertake the Secretarial Audit of the Company pursuant to the provisions of Section 204of the Act, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the SEBI Listing Regulations as amended. The Report of the Secretarial Auditor is annexed to the Board’s Report as Annexure ‘D.

19. AWARDS

During the year under review, your Company received numerous awards and accolades which were conferred by reputable organizations and distinguished bodies for achievements in diverse fields such as Health & Safety, Manufacturing and Environment Management, Corporate Governance, etc.

Corporate Excellence

- CII-ITC Sustainability Awards 2018 -Received the highest recognition for ‘Outstanding Accomplishment’, under Corporate Excellence category.

Business and Financial Reporting Excellence

- Institute of Chartered Accountants of India (ICAI) - Awarded a plaque ‘Commended Annual Report in Category VII - Manufacturing and Trading Sector (Turnover equal to Rs.3000 crore or more)’ for Excellence in Financial Reporting.

Corporate Social Responsibility

- The Government of Odisha awarded ACC the ‘Most Innovative CSR Project’ for VidyaUtkarsh, at the Make in Odisha Conclave 2018 in Bhubaneswar, in recognition towards creating a social, environmental and economic value for its host Communities in Odisha.

- Indywood CSR Excellence Award 2018 in the category of Best CSR practices in Promoting Biodiversity.

- Lakheri plant was awarded the CSR Health Impact Award - Bronze, for the Women and Child Health Initiative category.

- ’Golden Peacock Award for Corporate Social Responsibility’ at the 12th International Conference on Corporate Social Responsibility (CSR) held in Bengaluru.

Environment & Sustainability

- 5 Star rating by the Ministry of Mines for Sustainable Development to Govari Limestone Mines in Chanda, Mehgaon and Bamangawan Mines in Kymore and Jamul Limestone Mines.

- Gagal Plant won ‘Sustainability 4.0 2018 award’ instituted by Frost & Sullivan and The Energy and Resources Institute (TERI) for continious improvement in the field of Sustainable Development in the category ‘Leaders Award-Large Business Process Sector’. Sustainability 4.0 awards is designed to honour the efforts made by the companies who actively integrate sustainability principles into their business culture.

- The Company was awarded the GreenPro certification for ACC Suraksha Power, ACC Concrete Xtra Strong, ACC HPC Long Life, ACC Gold Water Shield and ACC F2R Superfast products by the Confederation of Indian Industries (CII) at the 14th Green Cementech conference.

- Thondebhavi Plant was recognised as an Energy Efficient Unit by the Confederation of Indian Industry (CII) at the 19th National Award function for Excellence in Energy Management 2018.

- Kymore, Jamul and Wadi Plants were recognised as ‘Excellent Energy Efficient Unit’ by the Confederation of India Industry (CII) at the 19th National Award function for Excellence in Energy Management 2018.

- Jamul Plant was awarded 1st Runner-Up in Large Scale Category at the Confederation of Indian Industry (CII) Energy Conservation (encon) Awards function 2018.

- Thondebhavi Plant won the 1st Prize in Energy Excellence in Grinding Unit category at the Quality Circle Forum of India (QCFI), Hyderabad Chapter awards, in collaboration with Cement Manufacturers Association (CMA), National Council for Cement and Building Materials (NCCBM) and Cement Sustainability Initiative.

- Jamul Plant won the 1st Prize in Energy Excellence in Integrated Unit category at the Quality Circle Forum of India (QCFI), Hyderabad Chapter awards, in collaboration with Cement Manufacturers Association (CMA), National Council for Cement and Building Materials (NCCBM) and Cement Sustainability Initiative.

- Wadi Plant won the 1st Prize in Alternate Fuels and Raw Materials Excellence and 2nd Prize in Environment Excellence at the Quality Circle Forum of India (QCFI), Hyderabad Chapter awards, in collaboration with Cement Manufacturers Association (CMA), National Council for Cement and Building Materials (NCCBM) and Cement Sustainability Initiative.

- ACC was conferred with the prestigious ‘Yes Bank Natural Capital Award 2018’ in the’Eco-Corporate category under Manufacturing Sector’ for its sustainability initiatives.

Manufacturing

- At the Mines Environment and Mineral Conservation Week (MEMCW) celebrated in Dehradun, Gagal Plant won the 1st Prize in Overall Performance, Mineral Conservation, Scientific Development of Mines, Sustainable Development and Afforestation and the 2nd prize in Air and Water Monitoring.

Communication

- Awarded Silver Prize in the Environmental Communications category for Sustainable Development Report 2017 at the 58th ABCI Annual Awards.

- Awarded Bronze Prize in the Social Responsibility Communications category for Muskaan - an animated film on female infanticide at the 58th ABCI Annual Awards.

- Awarded Bronze Prize in the External Magazines category for the Indian Concrete Journal at the 58th ABCI Annual Awards.

Corporate Governance

- ACC won the Golden Peacock Award for Excellence in Corporate Governance for the year 2018 at the 18th Annual London Global Convention on Corporate Governance & Sustainability and Global Business Meet in London.

- Awarded a Certificate of Recognition for Excellence in Corporate Governance by the Institute of Company Secretaries of India (ICSI).

Corporate

- Awarded the title of the ‘Third Fastest Growing Company - Large Category 201718’ (Cement Category) at the Third Indian Cement Review Awards, held at the 10th Cement Expo.

Health &Safety

- Chaibasa Plant won the award for ‘OSH Innovation Award-Employee Awareness-Reactive’ for the implementation of In-Cab assessment for drivers and counselling on critical driving behaviours during an assessment on harsh acceleration, harsh brakes, over speeding and harsh manoeuvres.

- Lakheri Plant won the award for ‘OSH Innovation Award-Employee Awareness-Proactive’ for the implementation of Proactive analysis of GPS data and counselling through Driver Management Centres, which resulted in a lower incidence of road accidents and an increase in the percentage of safe kilometres at the Occupational Safety and Health (OSH) India Awards 2018.

- ACC was adjudged winner of ‘Innovation in OSH-Safety implementation-Proactive’ for its implementation of In-Cab camera in truck - a tool used to identify behavioural aspects of truck drivers of truck drivers in response to highly dynamic traffic conditions at the Occupational Safety and Health (OSH) India Awards 2018.

- Thondebhavi Plant received the prestigious Greentech Safety Award 2018 in the ‘Gold Category,’ in the Cement sector for ‘Outstanding Achievements in Safety Management,’ at the 17th Annual Greentech Safety Award.

- Jamul Plant won the ‘Rio Tinto Health & Safety Award - for Opencast Mines’ (20172018) for their exemplary performance in implementation of safety management systems and safe work culture.

20. ENHANCING SHAREHOLDERS VALUE

Our commitment is to create and return value to shareholders. Accordingly, your Company is committed to achieving high levels of operating performance, cost competitiveness, enhancing the productive asset and resource base and striving for excellence in all areas of operations. Your Company firmly believes that its success in the market place and good reputation are among the primary determinants of value to the shareholder. Our close relationship with customers and an understanding of their challenges drive the development of new products and services. With our expertise and know-how, we aim to offer our customers solutions that enhance their projects and build trust in our partnerships. Beyond these solutions, our market growth activities are focused on creating new channels to serve our customers more effectively. Innovation is present not only in our products and services, but also in the way we execute growth opportunities. Anticipating customer needs early and being able to address them effectively requires a strong commercial backbone. At ACC, we are developing this strength by institutionalizing sound commercial processes and building world-class commercial capabilities across our marketing and sales.

Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the economic, societal and environmental dimensions of the Triple Bottom Line.

21. CORPORATE GOVERNANCE

The Annual Report contains a separate section on the Company’s corporate governance practices, together with a certificate from the Company’s Auditors confirming compliance, as per SEBI Listing Regulations.

22. BUSINESS RESPONSIBILITY REPORTING

A separate section on Business Responsibility forms part of this Annual Report as required under Regulation 34(2)(f) of SEBI Listing Regulations.

23. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated in Section 134(3)(m) of the Act read with Rule, 8 of The Companies (Accounts) Rules, 2014 is provided in Annexure ‘E’ to the Directors’ Report.

24. PARTICULARS OF EMPLOYEES

Disclosure pertaining to the remuneration and other details as required under Section 197(12) of the Act, and the Rules framed thereunder is enclosed as Annexure ‘F’ to the Board’s Report.

The information in respect of employees of the Company required pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the aforesaid Annexure which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

25. ANNUAL RETURN

The Annual Return of the Company has been placed on the website of the Company and can be accessed at http://www.acclimited.com/newsite/ annualreport2018/Form_MGT_7.pdf

26. COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors affirms that the Company has complied with the applicable Secretarial Standards issued by the Institute of Companies Secretaries of India (SS1 and SS2) respectively relating to Meetings of the Board and its Committees which have mandatory application.

27. DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134 of the Act:

a) that in the preparation of the annual financial statements for the year ended December 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in Note 2 of the Notes to the Accounts have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on December 31, 2018, and of the profit of the Company for the year ended on that date;

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

e) that proper internal financial controls laid down by the Directors were followed by the Company and such internal financial controls are adequate and were operating effectively; and

f) that proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems were adequate and were operating effectively.

28. INTEGRATED REPORTING

The Company being one of the top 500 companies in the Country in terms of market capitalization, as part of its voluntary initiatives, has drawn up its first Integrated Report which encompasses both financial and non-financial information to enable the Members to take well-informed decisions and have a better understanding of the Company’s long term perspective. The Report also touches upon aspects such as Organisation’s strategy, governance framework, performance and prospects of value creation based on the six forms of capital viz. financial capital, manufactured capital, intellectual capital, human capital, social and relationship capital and nature capital. The Integrated Report for the year 2018 has also been hosted on the Company’s website www. acclimited.com.

The Annual Report also carries a detailed section containing the “Business Responsibility Report”. Since 2007, the Company has been publishing an annual Corporate Sustainable Development Report conforming to the guidelines of the Global Reporting Initiative. From the year 2014, these reports are based on the GRI G4 guidelines in accordance with the “Comprehensive” option and have been externally assured.

29. ACKNOWLEDGEMENTS

The Directors acknowledge the support received by the Company from the Central and State Government Ministries and Departments, shareholders, customers, business associates, bankers, employees, trade unions and all other stakeholders.

30. CAUTIONARY STATEMENT

The Board’s Report and Management Discussion & Analysis may contain certain statements describing the Company’s objectives, expectations or forecasts that appear to be forward-looking within the meaning of applicable securities laws and regulations while actual outcomes may differ materially from what is expressed herein.

The Company is not obliged to update any such forward-looking statements. Some important factors that could influence the Company’s operations comprise economic developments, pricing and demand and supply conditions in global and domestic markets, changes in government regulations, tax laws, litigation and industrial relations.

For and on behalf of the Board of Directors

N S Sekhsaria

Chairman

Mumbai

February 05, 2019