ACC Ltd

TO THE MEMBERS OF ACC LIMITED

The Directors take pleasure in presenting the Seventy Sixth Annual Report together withthe Audited Accounts, for the year ended December 31, 2011. The Management Discussion andAnalysis has also been incorporated into this report.

1. FOREWORD

2011 was a challenging year for the national economy, industrial production slowed downand the overall performance of the cement sector was also below expectation.

The cement sector saw a demand growth of ~ 6% in 2011 over 2010, whereas the Companyended the year 2011 with a growth of ~11.5% in sales volumes. The successful ramp up ofexpansion projects at Wadi and Chanda during 2011, helped the Company with the much neededvolume and took the Company’s total sales to 23.73 million tonnes. The cement sectorwitnessed major escalations in cost of raw materials especially in respect of coal. Hikesin petroleum costs led to increased freight costs. Owing to increased input costs, thecement sector’s profitability margins declined.

In 2012, cement consumption is expected to be robust. Economic development willaccelerate as India plans to invest ~ USD 1 trillion in infrastructure in the twelfth FiveYear Plan period and the cement industry is well placed to meet this demand. However,prices are expected to remain under pressure across regions in view of steep escalationsin the cost of major inputs.

2. HIGHLIGHTS OF PERFORMANCE

• Cement despatches were 23.68 million tonnes during the year as compared to 21.17million tonnes during 2010;

• Consolidated income for the year under review was Rs. 10428 crore, an increaseof 21% as compared to Rs. 8619 crore in 2010;

• Consolidated profit before tax increased in 2011 to Rs. 1505 crore against Rs.1415 crore in 2010;

• Consolidated profit after tax was higher in 2011 at Rs. 1301 crore against Rs.1078 crore in 2010.

3. FINANCIAL RESULTS

4. DIVIDEND

Your Directors are pleased to recommend a final dividend of Rs. 17 per Equity share ofRs. 10 each. The Company had distributed an interim dividend of Rs. 11 per Equity share inAugust 2011. The total dividend for the year ended December 31, 2011 would accordingly beRs. 28 per Equity share as against the total dividend of Rs. 30.50 per Equity share forthe year ended December 31, 2010 which included the payment of one-time‘‘Special Dividend’’ of Rs. 7.50 for the Platinum Jubilee Year. Thetotal outgo for the current year amounts to Rs. 610.97 crore, including dividenddistribution tax of Rs. 85.28 crore, as against Rs. 667.73 crore, including dividenddistribution tax of Rs. 95.10 crore in the previous year.

5. ECONOMIC SCENARIO AND OUTLOOK

The year under review ended with softening of inflation and interest rates whichaugured well for better growth prospects of the economy. This trend would benefitinfrastructure, construction and real estate sectors which would in turn spur demandgrowth in the cement sector.

The economy is expected to grow at a healthy pace in the medium to long term due to itsstrong fundamentals and steady domestic consumption.

A normal monsoon, coupled with improving rural incomes and investments ininfrastructure should give a boost to cement demand in 2012.

6. CEMENT INDUSTRY OUTLOOK AND OPPORTUNITIES

During 2011, the Cement Industry added ~30 million tonnes of capacity taking itsinstalled capacity to 290 million tonnes. Subdued demand conditions led to capacityutilization falling below 80%. The demand for cement is expected to grow at 10% over 2011and capacity addition to increase at around 8% year-on-year. A lower utilization ratecoupled with increase in cost of raw materials and increasing logistics costs are likelyto keep overall prices under pressure in all regions. Pressure on costs will continue tomount mainly on account of increases in the cost of domestic coal and owing to thevolatility in costs of imported coal.

7. CEMENT BUSINESS – PERFORMANCE AT A GLANCE

* includes sale to ACC Concrete Ltd. and trading sales.

8. MODERNISATION

Operations of the state-of-the-art kiln at Wadi and the cement grinding plants atKudithini and Thondebhavi stabilized during the year. The new clinkering unit at Chanda inMaharashtra also stabilized its operations during the year. The cement mill at Chanda wassuccessfully commissioned during the year under review and commercial operations havecommenced in January 2012 after appropriate ramping up.

9. SUSTAINABLE DEVELOPMENT

9.1 Alternative Fuels and Raw Materials (AFR)

The Company continued in its endeavour to promote co-processing as an effective wastemanagement solution for a number of industries. Several new waste streams were addedduring the year under review including from industrial sectors such as petroleum, pulp& paper and packaging. The use of biomass as a renewable source of energy registered asignificant increase during the year. Special efforts were taken to serve the wastemanagement needs of society by co-processing segregated combustibles from municipal solidwaste (MSW) of a number of cities and townships in the proximity of our larger cementplants. The Holcim group’s global waste management brand, Geocycle, was unveiled inIndia. Consequently, all activities of the Company’s AFR Department relating topromotion and advocacy of waste management through co-processing in cement kilns wouldhereafter be carried out under the Geocycle banner.

9.2 Renewable Energy

ACC has been pursuing the scope of widening the usage of renewable energy inapplications where currently fossil based energy is being used.

a) Waste Heat Recovery System: The Company has under implementation, a projectat the Gagal plant to produce power through waste heat recovery. This waste heat recoverysystem is capable of generating ~45 million units of power per year of green energy,thereby reducing ~37,000 tonnes of CO2 per year.

b) Wind Energy: Wind power generation during the year under review from thetotal installed capacity of 19 MW was 38.89 million units. The wind power generated hasbeen used to substitute part of the fossil-based energy usage at Madukkarai, Lakheri,Thane Office and the Bulk Cement Terminal at Kalamboli.

c) Rain water harvesting: Rain water harvesting was taken up in barren andvacant land available in limestone mines, factory and colony areas across the Company.

d) Solar Energy: Solar energy is generated throughout the year from 27 KWcapacity of PV panels installed at ACC Corporate Office, Thane Office and at the ChandaControl room.

10. COMMUNITY DEVELOPMENT

The Company continued to engage with the local communities by encouraging their activeinvolvement in various development and welfare schemes. Community Advisory Panels at plantlocations enabled a participatory approach in setting priorities for their own developmentschemes. Local entrepreneurship was promoted through Self Help Groups (SHG) for creatingopportunities for sustainable livelihood among unemployed youth through skill development,vocational guidance, training in computer operation and applications, bridge education andscholarship programmes. Our plants also assisted local communities with projects in theareas of drinking water, water conservation and management, rain water harvesting, healthand family planning camps and insurance schemes for truck drivers associated with ourplants.

Our plants engaged with Village Support Groups and NGO’s to enhance the reach andeffectiveness of our schemes. The effectiveness of our programmes was assessed throughSocial Engagement Surveys carried out at different plant locations based on feedback fromstakeholders.

11. OCCUPATIONAL HEALTH & SAFETY (OH&S)

The Company strived to achieve ZERO HARM standards at the workplace through specificinitiatives and programmes addressing critical areas of operations. "SafetyChampions" were identified amongst line managers and given specific assignments."Visible Safety Leadership" programmes were held during the year to inculcatesafety leadership amongst line managers. Best safety practices were selected and sharedamong all plants. Third party audits and safety audit training programmes for InternalAuditors were conducted during the year. Hazard identification and risk assessmentworkshops have been enhanced to engage all categories of employees including contractworkers. Safety induction training for contract workers is now a regular practice at allsites.

12. HUMAN RESOURCES

During the year under review, efforts were on across the organization in promotingleadership, cross-functional collaboration, innovativeness and various improvementprojects. This led to a new journey of "institutionalizing excellence" embracingall core processes including manufacturing, marketing, logistics and other processes.People processes such as talent/career management, productivity improvement, communicationand providing quality of life to employees are being examined afresh. Employees continuedto receive adequate training inputs to ensure skills enhancement and job enrichment. AnEmployee Rewards and Recognition Scheme Rs.Gaurav’ was introduced during the year.

Industrial Relations at all Units were cordial. A four year wage settlement wasconcluded with the unions during the year under review.

13. FINANCE

Your Company’s cash and cash equivalent as at December 31, 2011 was Rs. 2832crore. The Company continues to focus on judicious management of its net working capital.Receivables, inventories and other working capital parameters are kept under strict checkthrough continuous monitoring. The Company’s debt program continues to enjoyRs.AAA’ rating from CRISIL. During the year under review, the consortium arrangementfor meeting working capital requirements was discontinued and the Company opted formultiple banking arrangements.

14. SHARE CAPITAL

The validity of the various Stock Option Schemes have since expired and all unexercisedStock Options have lapsed. Accordingly, no new equity shares have been issued during theyear. As required by SEBI (Depositories & Participants) Regulations, 1996, an audit ofthe Share Capital of the Company has been undertaken on a quarterly basis and theauditor’s certificate is submitted to BSE Limited and The National Stock Exchange ofIndia Limited.

15. FIXED DEPOSITS

Despite efforts to identify and repay unclaimed deposits, the total amount of fixeddeposits matured and remaining unclaimed as on December 31, 2011 was Rs. 0.07 crore.

PRIVATE LIMITED, LUCKY MINMAT LIMITED AND NATIONAL LIMESTONE COMPANY PRIVATE LIMITED

During the year under review, your Company made an application to the Honorable HighCourt of Judicature at Bombay for approval to a Scheme of Amalgamation of three of theCompany’s wholly owned subsidiaries viz. Encore Cement and Additives Private Limited,Lucky Minmat Limited and National Limestone Company Private Limited. The amalgamationprocess is currently in progress. The amalgamation of the said three subsidiaries wouldenable the Company to utilize the resources of the said subsidiaries to further augmentits cement business and would also go towards reducing the overheads and other commonexpenses.

17.1 ACC Concrete Limited (ACCCL)

The sales volumes of ACC Concrete Limited (ACCCL) were in line with the previous year.Despite this, sales revenue increased by 12.9%. The market in the Company’s mainserviceable areas grew by 3% from 19 million cubic metres to 19.7 million cubic metreswith the total Ready Mixed Concrete (RMX) market growing by ~7%. However, this growth waswitnessed in the first half year with the latter part of the year showing signs ofstagnation. During the year under review, the Company continued to focus on consolidatingits position by increasing volumes from its existing plants and through on-site projectsand franchised operations.

Operational EBITDA losses were reduced to Rs. 5.05 crore in 2011 from a level of Rs.7.88 crore in 2010 through systematic management of costs and productivity improvement.

During the year under review, the Company increased its Authorised, Subscribed andPaid-Up Share Capital from Rs. 200 crore to Rs. 250 crore by the issue and allotment of5,00,00,000 Equity Shares of the face value of Rs. 10 each for cash at par to ACC Limited.

The outlook for the construction sector in 2012 still remains moderate and RMX volumesare expected to come from infrastructure, industrial and retail sectors, while demand fromcommercial and residential sectors is expected to be low.

The Company is making vigorous efforts to extend its customer focus by providing atotal solution concept and leveraging the cement sales network.

17.2 Bulk Cement Corporation (India) Limited (BCCI)

During the year under review, BCCI handled a cement volume of 9.34 lakh tonnes ascompared to 9.18 lakh tonnes achieved in 2010. The profit after tax for the year 2011 isRs. 68.35 lakhs as against Rs. 38.83 lakhs in the year 2010.

17.3 Audited Statements of Accounts of the Company’s Subsidiaries

As required under Section 212 of the Companies Act, 1956, the audited statements ofaccount, along with the report of the Board of Directors relating to the Company’ssubsidiaries; ACC Concrete Limited, ACC Mineral Resources Limited, Bulk Cement Corporation(India) Limited, Encore Cement and Additives Private Limited, Lucky Minmat Limited andNational Limestone Company Private Limited, together with the respective Auditors’Reports thereon for the year ended December 31, 2011 are annexed.

18. DIRECTORS

The Board has appointed Mr Ashwin Dani as an Additional Director of the Company witheffect from December 15, 2011. Mr Dani holds office upto the date of the forthcomingAnnual General Meeting (AGM) of the Company and his candidature for appointment as aDirector has been included in the Notice convening the forthcoming AGM of the Company.

Mr D K Mehrotra who was on the Board of Directors since October 14, 2005, resigned asDirector of the Company with effect from July 28, 2011. The Board has placed on record itswarm appreciation of the valuable services rendered by Mr Mehrotra during his tenure as aDirector of the Company.

In accordance with the provisions of the Companies Act, 1956, and in terms of theMemorandum and Articles of Association of the Company, Mr Paul Hugentobler, Mr S M Palia,Mr Markus Akermann and Mr M L Narula retire by rotation and are eligible forreappointment.

Mr Markus Akermann has, however, expressed his desire not to seek re-election at theAGM. The Board has placed on record its warm appreciation of the valuable servicesrendered by Mr Akermann during his tenure as Director of the Company since May 2005.

It is proposed to appoint Mr Bernard Fontana, Chief Executive Officer, Holcim Limited,as a Director of the Company in place of Mr Akermann. The relevant Resolution for theappointment of Mr Fontana has been included in the Notice convening the forthcoming AGM ofthe Company.

ADEQUACY

The Internal Control System of the Company is well structured and is commensurate withthe size, scale and complexity of its operations. It is being constantly assessed andstrengthened with new / revised standard operating procedures, tighter internal andinformation technology (IT) controls. The major initiative in 2011 was the implementationof the Governance, Risk and Compliance Module (GRC) which would go a long way in enhancingthe IT Governance framework with tighter access controls. The Internal Audit Department,based on risk assessment, continued to perform regular internal audits and checks toensure that internal control systems were properly in place and that responsibilities werebeing discharged effectively. The Audit Committee of the Board also reviews the adequacyand efficacy of the internal control systems and gives its suggestions for strengtheningthem wherever required.

20. BUSINESS RISK MANAGEMENT

Your Company has robust Business Risk Management (BRM) practices to identify, evaluatebusiness risks and opportunities. The business risks and opportunities so identified areintegrated into the business plan and a detailed action plan to mitigate the identifiedbusiness risks is thereafter drawn up and its implementation monitored.

The key business risks identified by the Company and its mitigation plans are as under:

Fuel Risks:

Availability of fuel at reasonable rates is one of the main concerns of the Company asit uses large quantities of coal annually to meet its kiln and captive power generationrequirements. The year 2011 witnessed a steep hike in the price of coal which adverselyimpacted the profitability of the Company. During the current year, coal prices areexpected to further rise sharply. This, coupled with limited production of fuel in thecountry, is expected to result in higher input costs for a fuel intensive industry likecement. Further, the availability of linkage coal is gradually dwindling. The Company istrying to mitigate its fuel risk by increased usage of alternative fuels and optimizationof coal mix. It has initiated steps and is in the process of developing its own coalblocks which would partly go to meet its coal requirements.

Project Risks:

The Cement Industry is capital intensive in nature. Its Compound Annual Growth Rate(CAGR) for the next five years is expected to be ~10%. In the execution of large projectswhich are highly capital intensive in nature, there could be exposure to time and costoverruns. To mitigate these risks, the Company has strengthened its project managementteam as well as its project accounting and governance framework. Whilst the Companycontinues to draw on Holcim’s expertise, a separate organizational structure atproject sites with defined roles and accountability will be put in place for largeprojects.

Competition Risks:

The Cement Industry is becoming intensely competitive with the foray of new entrantsand some of the existing players adopting inorganic growth strategies. To mitigate thisrisk, the Company is leveraging its newly created capacities to increase market share,enhance brand equity and visibility, enlarge product portfolio and service offerings. Itwould also leverage on its infrastructure, commercial and institutional sales team tooffer better value to large customers.

People Risks:

With the industry growing at a fast pace and demand for experienced and trainedmanpower outstripping supply, the ability to retain existing talent and attract newprofessional talent assumes crucial importance. The Company is creating long term plan forRs.Cadre Building’ in different streams, and has initiated a process for potentialidentification and talent management.

21. AWARDS

During the year under review, your Company received many awards and felicitationsconferred by reputable organizations for achievements in different areas such as Safety,Manufacturing Excellence and Environment Management.

22. ENHANCING SHAREHOLDERS VALUE

We are happy to report that the Company’s has received ISO 9001:2008 Certificationfrom Det Norske Veritas AS Certification Services (DNV) for the processes of theSecretarial & Compliance Division, Share Department an ISD support. The ISO 9001:2008certification certifies the robustness of quality management processes.

Your Company believes that its Members are among its most important stakeholders.Accordingly, your Company’s operations are committed to the pursuit of achieving thehigh levels of operating performance and cost competitiveness, consolidating and buildingfor growth, enhancing the productive asset and resource base and nurturing overallcorporate reputation. The Company is also committed in creating value for its otherstakeholders by ensuring that its corporate actions positively impact the socio-economicand environmental dimensions for the society for a sustainable growth and development.

23. DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by them, your Directors make the following statement in terms ofSection 217(2AA) of the Companies Act, 1956: •?that in the preparation of the annualaccounts for the year ended December 31, 2011, the applicable accounting standards havebeen followed along with proper explanation relating to material departures, if any;•?that such accounting policies as mentioned in Note 1 of the Notes to the Accountshave been selected and have been applied consistently and judgement and estimates havebeen made that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as on December 31, 2011, and of the profit of the Company forthe year ended on that date; •?that proper and sufficient care has been taken for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act, 1956, for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; •?the annual accounts have been prepared ona going concern basis.

24. AUDIT

Messrs S R Batliboi & Associates, Chartered Accountants, who are the StatutoryAuditors of the Company and who hold office upto the date of the Annual General Meeting,have expressed their inability to continue as Auditors of the Company. Messrs S R Batliboi& Associates, Chartered Accountants, have been the Auditors of the Company since 2005,first as Joint Auditors and thereafter as the Auditors of the Company. The Board hasplaced on record its appreciation of the services rendered by the Auditors.

The Members are requested to appoint Messrs S R Batliboi & Co., CharteredAccountants, as Auditors of the Company for the current year and to authorize theDirectors to fix their remuneration as per Item 6 of the Notice concerning the AnnualGeneral Meeting of the Company.

Messrs S R Batliboi & Co. have confirmed their eligibility under Section 224(1B) ofthe Companies Act, 1956, for appointment as Auditors.

Members’ attention is invited to the observation made by the Auditors to point(xxi) of their Rs.CARO Report’ issued pursuant to the Companies (Auditor’sReport) Order, 2003 (CARO Report) which is self explanatory.

As per the requirement of the Central Government and in pursuance of Section 233 B ofthe Companies Act, 1956, your Company carries out an audit of cost records relating tocement each year. Subject to approval of the Central Government, your Directors haveappointed Messrs N I Mehta & Co., Cost Auditors, to audit the cost accounts of theCompany for the financial year 2011.

25. 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.

26. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company prepared in accordance withrelevant Accounting Standards viz. AS 21, AS 23 and AS 27 issued by the Institute ofChartered Accountants of India forms part of this Annual Report.

27. ENERGY TECHNOLOGY AND FOREIGN EXCHANGE

The information on conservation of energy, technology absorption and foreign exchangeearnings and outgo stipulated under Sec 217(1)(e) of the Companies Act 1956, are given inAnnexure Rs.A’ to the Directors’ Report.

28. 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, is givenin Annexure Rs.B’ to the Directors’ Report.

29. ACKNOWLEDGEMENTS

Your Directors are thankful to the various Central and State Government Departments andAgencies for their continued help and cooperation. The Directors are grateful to thevarious stakeholders –customers, members, banks, dealers, vendors and other businesspartners for the excellent support received from them during the year. Your Directors wishto place on record their sincere appreciation to all employees for their commitment andcontinued contribution to the Company.

30. 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.

For and on behalf of the Board of Directors

N S Sekhsaria

Chairman

Mumbai

February 09, 2012

ANNEXURE ‘A’ TO DIRECTORS’ REPORT

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) Energy conservation and efficiency measures undertaken in various areas of thecement plants:

• Conversion of Separator Dust Collector fan in Raw Mill 1 & 2 from HT to LTand installing LT Variable Voltage Variable Frequency Drive (VVVFD) at Gagal plant;

• Replacement of Waste Gas Fans with High Efficiency Fans for Line K-3 at Wadiplant;

• Installation of higher capacity Fuller-Kinyon (FK) pump for transferringthe dry flyash into the bin of cement mills at Gagal plant;

• By carrying out optimization of Cement Mill #3 at Bargarh, the output rate wasincreased from 90 to 107 TPH. Eliminating FK pump and installation of mechanical conveyingsystem for transportation of Pozzolona Portland Cement was also carried out at Bargarhplant;

• Thermal imaging of kiln and pre heater was carried out to identify major thermalloss areas and subsequent rectification was carried out at Madukkarai plant;

• Optimization of VRM and ball mill circuit and taking the ball mill dustcollector product as final product at Gagal plant;

• Computational Fluid Dynamics (CFD) studies were carried out to improve flowdistribution and to reduce pressure drop of VRM cyclones at Chaibasa and Bargarh plantsand Pre-heater cyclones at Lakheri and Gagal plants;

• Variable Voltage Variable Frequency Drives (VVVFD) were installed for Raw Mills4 & 5 drives at Wadi plant; Kiln and Cement Mill drives at Jamul; PositiveDisplacement (PD) blower at Lakheri;

• 3 nos. Filter drums & Cake Besta Feeder DC drives were replaced with newgeneration AC motor and drive, and 4 nos. Vacuum pump’s motor RPM were optimized forFiltration Department of Madukkarai plant;

• Compressed Air pipe lines were modified & interconnected to a common headerfor cement mill section to reduce the number of operating compressors at Jamul;

• 3 nos. Air cooled condenser fans and auxilliary cooling tower fan were replacedwith FRP fan blade assembly for 15 MW CPP at Madukkarai plant;

• Boiler Feed Pump for 15 MW CPP was replaced at Tikaria plant;

• Microprocessor based multi-step capacity controllers were installed at Jamul andTikaria plants for various reciprocating compressors to optimize the operating pressurewithin a narrow band;

• Detailed Energy Audit was conducted at Thondebhavi plant, and detailedcompressed air audit was conducted for Jamul plant. Study to measure fan efficiency wasconducted at Jamul, Madukkarai, Chaibasa, Wadi and Bargarh plants;

• Energy Monitoring System was installed at Wadi and Chanda plant;

• 330 ton Shredding machine was installed for increased use of biomass in Hot AirGenerator at Sindri Plant;

• Capacitor banks have been added to the system across ACC plants to improve plantpower factor;

• Replacement of conventional lamps with Compact Fluorescent Lamps for plant andcolony lighting was done across ACC plants.

Green power –

• The Wind Farm installed at Rajasthan generated 13.73 million units of greenenergy during 2011, as compared to 13.69 million units generated during 2010;

• The Wind Farm installed at Tamil Nadu generated 21.55 million units of greenenergy during 2011, as compared to 21.96 million units generated during 2010:

• The Wind Farm installed at Maharashtra generated 3.61 million units of greenenergy during 2011. The units of green energy generated since the inception of thewindfarm in April 2010 and upto December 2010 was 3.05 million units.

Alternative fuels –

In 2011, the Company co-processed different types of alternative fuels totaling 29860tonnes.

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

• At Gagal, 7.3 MW Waste Heat Recovery Power Generation is under execution and isexpected to go on stream by end of 2012, generating approx 45.48 million units of powerper annum.

(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. During the year 2011, electrical energyreduced by 2.07 % and thermal energy reduced by 1.15 % over 2010.

Power and Fuel Consumption

* Does not include other fuel / alternative fuels used in kiln.

Consumption per unit of production

@ Source : Publication of Confederation of Indian Industries * Excludes non-processpower consumption.

(B) TECHNOLOGY ABSORPTION

Research & Development (R&D)

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

a) Improving quality of blended cement through innovative processing utilizingindustrial by-products for improved quality performance of ACC Plants

b) Conservation of resources through maximizing the use of low-grade limestone forcement manufacture

c) emissions Development of application oriented cements with decreased CO2

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

e) Productivity research for increased efficiency in use of resources

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

g) Characterization of industrial wastes and looking into possibilities of environmentfriendly co-processing of wastes in cement manufacture, leading to thermal substitutionand conservation of natural resources

h) Development and use of cement grinding aid and accelerators for PPC & PSC forimproved performance in concrete and reduced clinker factor in blended cements

i) Development of cements tailored for specific market clusters and applicationsegments

j) Quality Benchmarking exercise for different market clusters of ACC products

2. Benefits derived as a result of above R&D

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

b) Increased absorption of blending materials like fly ash and slag in blended cements

c) Effective replacement of the costlier natural gypsum by a cheaper by-product phosphogypsum without affecting the quality of cement

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

e) Launch of special high performance products like F2R, Concrete+, Coastal+ forspecific market segments / market climatic conditions

f) Effective use of SPC at each stage of cement manufacture for improving consistencyof operations and consistency in product quality

g) Fuel efficiency

3. Future plan of action

a) Exploratory research works on the above specific areas

b) Focus on development of products aimed at enhancing use of cement in variousapplications and development of application oriented cement based cementitious material

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 cost of manufacture

Annexure ‘B’ to Directors’ Report (Para 28)

Employed for Full Year

Employed for Part of the Financial Year

NOTES :-

(I) Gross Remuneration shown above is subject to tax and comprises salary, allowances,incentive, monetary value of perquisites and Company’s contribution to Provident Fundand Officer’s Superannuation Fund.

(II) In addition to the above remuneration, employees are entitled to Gratuity inaccordance with the Company’s rules.

(III) All the employees have adequate experience to discharge the responsibilityassigned to them.

(IV) The nature of employment in all cases is contractual.

For and on behalf of the Board of Directors

N. S. Sekhsaria

Chairman

Mumbai

February 09, 2012