GUJARAT AMBUJA CEMENTS LTD.

Transcription

ANNUAL REPORT
2003-2004
6
Give a man orders and he will do the task reasonably well.
But let him set his own targets, give him freedom and authority
and his task becomes a personal mission: [I can .
CONTENTS
Chairmans Letter
4
Ten Year Performance and Return on Investment
6
Consolidated Financial Highlights and our Track Record
7
I Can Some Highlights
8
Directors Report and Management Discussions
14
Annexures to Directors Report :
i.
Conservation of Energy & Technology Absorption
36
ii.
Employees Particulars
39
Corporate Governance Report
40
Auditors Report
58
Financial Statements
62
Balance Sheet Abstract
90
Consolidated Accounts with Auditors Report
91
Information with regard to Subsidiary Companies
116
2
2
BOARD OF DIRECTORS
Suresh Neotia,
Chairman
Vinod Neotia
M. L. Bhakta
Nimesh Kampani
M. T. Patel
Harshavardhan Neotia
Nasser Munjee
Rajendra P. Chitale
A. L. Kapur,
Whole-time Director
P. B. Kulkarni,
A. V. Rao,
Whole-time Director
Whole-time Director (upto 31/1/2004)
Pulkit Sekhsaria,
Anil Singhvi,
Whole-time Director
Whole-time Director
B. L. Taparia,
Whole-time Director & Company Secretary
N. P. Ghuwalewala,
N. S. Sekhsaria,
Whole-time Director (w.e.f. 28/6/2004)
Managing Director
Corporate Office :
122, Maker Chambers III,
Nariman Point,
Mumbai 400 021.
3
3
CHAIRMAN'S LETTER
It has been an eventful 12 months for our country.
From a very low growth of just about 4% during 2002-03, our GDP has grown by over 8%
this year. Twice that of the previous year.
What's more, in future, we expect to sustain a 7-8% growth.
This has naturally attracted the attention of the world, which is amply manifested in the
country's foreign exchange reserves. These have grown by US$ 38 billion to about US$ 120 billion.
As a nation, we seem to be moving in the right direction, on a solid foundation.
Indian democracy, meanwhile, has proved its resilience once again. The smooth transition
of the Government, the hallmark of our democratic process, has further reinforced the fact that
though we may be an emerging economy, our democratic process is not just solid, but far
superior to most countries in the world.
With these fundamentals in place, there's no reason why we can't achieve our growth
targets. But, meaningful growth is only achieved when it touches the lives of all countrymen.
Any growth strategy therefore, will have to keep this as the primary objective.
The major challenge before us is the economic empowerment of our younger generation.
It is now clear that India has matured economically, and offers enough opportunities for
investment in infrastructure, housing and construction. To my mind, there are two sectors of the
economy, which have the potential to generate employment - Construction and Tourism.
Both sectors offer millions of young Indians enormous potential for growth.
While our country's abundant natural beauty holds huge potential for domestic and
international tourism, construction holds the key to building the infrastructure for higher
economic growth. Moreover, both can generate large amounts of foreign inflows through large
construction projects and tourist traffic respectively.
To sustain economic growth, we need to build a new India. It is my dream to see an India
in which every Indian will have a home and access to good infrastructure facilities.
Coming to the cement industry, despite a good economic growth during 2003-04, cement
grew by just over 5%. This was largely on account of lower construction growth in the economy.
We need to accelerate construction of our infrastructure. And I am confident that the
construction industry will, once again, be the driver of economic growth. Naturally, the Indian
"
cement industry will play a vital role in building a new India. An India that boasts of houses,
roads, ports, dams, irrigation canals and more.
I am very pleased to share with you our performance during the year. As a group, we have
sold 13.52 million tonnes of cement during the year, a growth of 5%. The company has earned
a consolidated operating profit of Rs.710 crores as against Rs.620 crores in the previous year,
an increase of 14%.
There has been a remarkable improvement in Profit After Tax of the group's consolidated
working from Rs.293 crores to Rs.362 crores, an increase of 24%.
As always, behind these impressive figures lies the unstinted commitment and passion
of our people. They have worked tirelessly during the year to further reduce costs and
increase productivity.
Your company has an impressive past, but more importantly, it has a very promising
future. What we have achieved in the past 17 years is no doubt laudable. But we can do even
better moving forward.
Cement is an exciting business and these times of growth make it even more exciting.
With our resources and experience, we have all the necessary tools to grow. But perhaps our
biggest and most valuable resource is our people. Their belief and commitment to the cement
business is what sets us apart and makes our growth more meaningful and profitable.
The future holds much excitement and many opportunities for us, and I am sure you would
agree with me that Ambuja has a great future for all of us to share.
With warm regards,
Suresh Neotia
9th August, 2004.
#
TEN YEAR PERFORMANCE
Rs. in crores
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Sales
370
633
795
973
1058
1117
1269
1384
1735
1968
Operating Profit
158
262
285
353
382
397
463
466
513
587
Cash Profit
131
207
217
245
274
553 *
329
369
425
509
Profit before Tax
101
148
135
136
151
456 *
200
231
253
384
Profit after Tax
100
148
132
131
151
428 *
186
187
222
337
1016
1381
1665
1882
1942
2122
2671
2900
3024
3782
471
784
885
974
1048
1403
1521
1618
1612
2013

461
461
461

726
618
887
1068
794
1182
1186
1322
1290
1270
Cash EPS (Rs.)
21
28
29
33
37
38 *
22
24
27
28
EPS (Rs.)
16
20
18
18
21
29 *
13
12
14
19
Dividend (%)
40
50
50
60
70
40 **
50
60
70
80
2
3.5
5
5
5
5.5
7
9
9
12.86
2.01
3.06
4.10
5.05
6.01
5.78
6.10
7.20
9.84
10.37
Gross Block
Net Worth
Foreign Currency
Convertible Bonds
Debt
Capacity - Million Tons
Production - Million Tons
Note :
*
Includes Extraordinary Income of Rs. 254 Crores (Net of taxes).
** On enlarged capital after issue of Bonus share in ratio of 1:1
RETURN ON AND APPRECIATION OF THE ORIGINAL INVESTMENT IN COMPANYS SHARES
With the proposed final dividend for this year, one share issued by the company in the year 1985 at Rs. 10/- has
earned a total dividend of Rs. 198.80. The said one share as of 28th July, 2004 has accreted to four shares of the
present market value of Rs. 1067/- approximately, an appreciation of 106 times of original investment.
6
$
CONSOLIDATED
FINANCIAL HIGHLIGHTS
Rs. in crores
2003-2004
2002-2003
2418
2179
710
620
90
103
Depreciation
208
206
Profit before Tax
454
311
Profit after Tax
362
293
Shareholders Funds
1743
1415
Debt
1440
1977
Gross Block (Including CWIP)
4443
3661
Investments
1086
1151
202
603
Sales
Operating Profit
Interest
Net Current Assets
OUR TRACK RECORD
(1987 - 2004)
Parameters
CAGR %
Capacity
20
Sales
29
Net Profit
35
Networth
30
Return to Shareholders
25
Weighted Average EBIDTA Margin (%)
33
CAGR = Compounded Annual Growth Rate
%
7
Cement pre-heater cyclones
are designed to save heat.
Ours saved something much more:
Over Rs.4 crores.
When our Darlaghat plant needed a new, larger pre-heater cyclone, our engineers
discovered they had problem.
Thanks to unfavourable terrain, installing a new cyclone would take over 40 days.
Keeping the plant shut for this long was unacceptable, as it could result in a loss of
production worth over Rs. 4 crores.
Our engineers decided they had to complete the task in much quicker time.
The question was, how?
After many brainstorming sessions, they were no closer to a solution. Till, that is, one
of the engineers came up with an audacious plan: "Since the new cyclone was of a larger
diameter, couldn't it be built around the existing one?' he asked. That way the old cyclone
could continue functioning till the new one was ready. And then be removed. The duration
of the plant shut down would be cut drastically. And production wouldn't suffer.
Recognizing the potential, our engineers embraced the idea whole-heartedly and
even managed to convince a shocked supplier to back the plan.
Just over 13 days later, they had achieved the impossible. The plant had a new cyclone
in record time. And in the bargain they had averted a potential Rs. 4 crore loss of revenue.
One of the more common sights
at our Gujarat plant these days:
Rare Siberian cranes.
One of our engineers, an avid bird watcher, was fascinated by the rare Siberian
cranes that migrated to India during the Siberian winter.
He wondered whether it was possible to offer these exotic creatures a temporary
sanctuary in Gujarat, before they continued on their migratory journey.
To do this, however, he would need to create the right kind of habitat.
One that offered the cranes ample food and the right environment.
It struck him that the leftover mining basins near the plant would make for an ideal
sanctuary. After all, they collected water and attracted both plant and insect life.
He promptly set about devising a plan to convert one such mining basin into a
habitat for the birds. Tender groundnut shoots were cultivated. And water-borne insect
life was encouraged.
After 3 years of continuous work, the thriving flora and fauna of the basin won over the
Siberian cranes. Last season over 2000 of these exotic birds made it their home.
"
When a gearbox at our plant
malfunctioned, our engineers
chose to replace it
with something rather unique:
A bit of fresh thinking.
When a gearbox at the coal mill in our Himachal Plant developed a fault, our engineers
faced a huge problem. Being the holiday season, our overseas suppliers were shut. And
it would take at least 15 days to repair the gearbox, with the available resources.
This was far too long a time to keep the coal mill shut.
There had to be another solution.
We had two cement mills, "Why couldn't one of them be converted to a temporary
coal mill? thought our engineers.
This was easier said than done. The feeding arrangements for the mills were 250 meters
apart. While one was vertical, the other was horizontal. More importantly, the coal mill was
specially equipped to handle flammable material. The cement mill wasn't.
None of this deterred our engineers. They set about preparing a master plan to
convert the mill. And worked relentlessly at carrying out the necessary modifications.
Within just 40 hours, the cement mill had been fitted to handle coal. And production
was back on track. An unprecedented achievement that saved over Rs.10 crores. And
proved that the most vital component of a plant isn't the machinery.
It's the people.
DIRECTORS' REPORT & MANAGEMENT DISCUSSIONS
Dear Members,
In the fiscal year 2003-04 the economy grew by an impressive 8.2%.
Significantly, the growth was spread across most sectors.
Cement demand, however, grew by a modest 5.8%, as against 8.7% in the
previous year.
The company's sales, including exports, were up 6% at 10.44 million tonnes during the
financial year 2003-04, as against 9.82 million tonnes in the previous year.
At the same time, the year saw cement prices improve in most markets. The prices
of cement in the markets where the company operates have, on an average, increased
by about 5%. Export prices increased more than the local prices and were better by 16%.
On the cost front, fuel prices increased substantially during the year.
Imported coal prices shot up as much as 70%. This impacted our Ambujanagar plant,
as its major coal requirement is sourced from abroad.
Diesel prices went up by about 17%. This in turn led to an increase in freight charges
as well.
On a more positive note, indigenous coal and furnace oil prices have remained almost
stable. Other costs have also remained within their normal bounds.
Our people responded to the rise in costs by pushing efficiency and production levels
even higher, while continuing with cost-cutting measures.
As a result, the company has earned a higher net profit of Rs.336.79 crores, as against
Rs.222.09 crores in the previous year.
"
FINANCIAL RESULTS
The highlights of the financial results for the Corporate Financial Year ended
30th June, 2004 are:
Current Year
Previous Year
(Rs. in crores)
(Rs. in crores)
Sales (net of excise duty)
1968.11
1742.25
587.52
512.84
78.43
87.94
Gross Profit
509.09
424.90
Less: Depreciation
168.61
171.34
Profit before Tax and prior period items
340.48
253.56
43.02
-
Profit before Tax
383.50
253.56
Provision for Tax
46.71
31.47
336.79
222.09
90.96
76.01
427.75
298.10
(125.20)
-
-
(15.50)
General Reserve
275.00
100.00
Dividend on Equity Shares (including interim)
142.07
108.71
18.34
13.93
160.41
122.64
117.54
90.96
427.75
298.10
Profit before Interest and Depreciation
Less: Interest
Prior Period adjustments
Profit after Tax
Add: Balance brought forward from previous year
Profit available for appropriation
Appropriations:
Debenture Redemption Reserve (Net)
Investment Allowance (utilised) Reserve
Corporate Dividend Tax
Balance carried forward
#
agriculture, water and measures for alleviating
DIVIDEND
The company had paid an interim
dividend of Rs.5 per share during the year. We
are pleased to recommend a final dividend of
Rs.3 per share. The aggregate dividend for
the year will amount to Rs.8 per share, as
against Rs.7 paid for the previous year.
rural poverty and improving rural infrastructure
development. This is likely to have a positive
impact on the development of the rural
economy and is essential for consistent
economic growth.
At the same time there are some
concerns. Of late, inflation has been on the
ECONOMY AND
rise. There are signals that oil prices may rise
BUSINESS ENVIRONMENT:
further. Coal costs have been hiked just
Primed for growth
recently. Interest rates seem to have bottomed
The Indian economy has been on an
upswing during the fiscal year 2003-04.
GDP has grown by 8.2%, better than in
the past several years. And there's been a
wide spread recovery across many sectors.
The industrial sector grew by 6.9%, as
against 5.8% in the year 2002-2003. The
services sector continued its upward march,
out and the possibility of it increasing cannot
be ruled out. These factors are likely to
increase inflation further and have some
negative impact on the business environment.
Even with these concerns, we believe that
all the business indicators are well in place for
the economy to achieve an overall growth of
about 6% in 2004-05.
posting a growth of 8.7%. Exports were up by
20.4% despite continuous rupee appreciation
A REVIEW OF OUR PERFORMANCE
vis-à-vis the US dollar. Foreign exchange
PRODUCTION: Up 5%
reserves swelled to about US$120 billion. And
We have produced 103.68 lakh tonnes of
the agricultural sector recorded a handsome
cement as against 98.40 lakh tonnes in the
9.1% growth. Interest rates remained soft, as a
previous year, an increase of 5%. The clinker
result, retail credit and housing finance
production for the year has also increased at
registered significant growth during 2003-04.
88.60 lakh tonnes as against 85.85 lakh
The
new
government's
recently
tonnes in the previous year.
announced union budget 2004-05 has many
The above production figures include
positives as far as the growth of the economy
production from the Rabriyawas plant [erstwhile
and the rural sector are concerned. Great
Ambuja Cement Rajasthan Ltd. (ACRL)] for one
emphasis has been laid on education,
month, since ACRL was merged in to the
$
company effective 1st June, 2004.
The plant-wise production during the year
was as follows: Cement
Clinker
(Qty. in lakh tonnes)
Ambujanagar
45.43
41.76
Darlaghat/Ropar/Bathinda
33.05
23.51
Maratha Cement Works
23.71
22.33
1.49
1.00
103.68
88.60
98.40
85.85
Rabriyawas (One month only)
Total
Previous Year
Despite flat demand growth, our
people's solid marketing and
distribution network, and strong
customer relationships helped
increase sales in Maharashtra.
MARKETING
Total sales, including exports, were
11%, at 81 lakh tonnes during the year. The
104.42 lakh tonnes as against 98.17 lakh
supply in Gujarat also increased with a
tonnes, an increase of 6% over the previous
greenfield cement plant in Kutch commencing
year. In value terms, our sales have gone up
production. We have sold 18.56 lakh tonnes
by 13% to Rs.1968 crores, from Rs.1742 crores
of cement as compared to 17.89 lakh tonnes
in the previous year. Out of the total sales, 83%
in the previous year. An increase of 4%.
were sold in the domestic markets and 17% in
Cement prices during the first half were
the international markets. The prices in both
down, but recovered well during the second
domestic as well as international markets were
half. Overall, year on year, prices were
better during the year, as compared to the
marginally up.
previous year.
The above sales include the sales of
1.59 lakh tonnes made from the Rabriyawas
unit of ACRL, which merged with the company
w.e.f. 1st June, 2004.
North India:
An enhanced presence in key markets
Our North India plants cater to the
markets of Punjab, Haryana, Rajasthan, Delhi,
Himachal Pradesh, Jammu & Kashmir, U.P.
Gujarat Market:
and Uttaranchal.
Sales up despite increased supply
The demand in Gujarat grew by about
The demand in the North India market
was up by 7%. Our people increased sales in
%
these markets by 11% at 34.55 lakh tonnes, as
against 31.09 lakh tonnes in the previous year.
In most markets, prices improved,
ranging from Rs.5/- to Rs.10/- per bag.
tonnes, to 16.47 lakh tonnes.
An outstanding achievement, given the flat
demand growth in Maharashtra during the year.
The prices increased by about Rs.12 per
bag on an average.
Maharashtra:
Other Markets
a) Mumbai: Sales Spurt
Mumbai has a presence of about 15
We strengthened our position in the
brands. This is the largest cement consuming
neighbouring Andhra Pradesh and Madhya
centre
Pradesh markets.
in
the
country
with
an
annual
consumption of about 4.5 million tonnes.
Demand here grew by 6% during the year.
During the year, we have sold 5.61 lakh
tonnes in these markets as against 4.96 lakh
Our people performed remarkably well in
tonnes in the previous year. Prices in these
the Mumbai market, increasing sales by 26%
markets were better by Rs.8-10 per bag on
at 11.57 lakh tonnes, as against 9.18 lakh
an average.
tonnes in the previous year.
EXPORTS:
Construction has picked up well in the
city, raising cement demand. And the trend is
likely to continue in the current year as well.
Cement prices in the Mumbai market
improved by Rs.7-8 per bag on an average.
Up in value terms, despite shipping
constraints
The cement demand in the international
markets has gone up. As a result, export
prices rose by about 16% this year.
b) Rest of Maharashtra: Sales up
Our export volumes during the year were
thanks to solid distribution and
lower by 6%. We exported 17.25 lakh tonnes,
marketing
as against 18.34 lakh tonnes in the previous
Our marketing team had built up a solid
year. Due to very high freight rates and tight
marketing and distribution network right from
availability of ships, our customers could not
the commissioning of our cement plant at
place ships on time. This resulted in a
Chandrapur, Maharashtra. Strong customer
reduction in our export volume.
relationships, backed up by a quality product
In spite of a drop in volume, our exports in
and services have helped our people increase
value terms were up by 4% to Rs.226.57 crores,
sales in Maharashtra by 4%, from 15.80 lakh
as against Rs.218.66 crores in the previous year.
&
We continue to be the largest exporters of
cement in India.
Rajasthan Ltd.) run on captive power plants,
our Darlaghat plant and the grinding units in
Punjab run on power supplied by the State
COSTS
Electricity Boards.
The major input costs during the year
were as under:
Our people have run and maintained the
captive power plants efficiently and, as a
result, the total power cost has come down
Raw Materials
by about 6%.
The cost of raw materials has gone up
by 5% over the previous year. This was
mainly on account of increased cost of fly
ash and some additives.
Freight: Costs up
The average freight cost of the company
went up by about 8% during the year over
the previous year. This was mainly due to
Coal: Prices up
an increase in diesel prices. The government
The cost of coal has gone up by 8%
had increased diesel prices on several
during the year over the previous year. This
occasions by an aggregate of 17% during
was mainly on account of a steep increase in
the year.
the international coal prices, which we import
for our Ambujanagar plant.
Interest: A substantial saving
Imported coal prices during the year went
We have taken advantage of falling
up by about 70% over the previous year. The
interest rates. The high interest cost loans
indigenous coal prices were almost stable
and debt instruments were either swapped
during the year, but were increased by 16%
for low interest instruments, or redeemed
in the month of June 2004.
out of surplus cash accruals. This, coupled
with efficient working capital management
Power: Costs down thanks to improved
brought down interest costs from Rs.87.94
efficiency
crores during the year, to Rs.78.43 crores in
We meet our power requirements mostly
the previous year. A saving of 11%.
from captive power plants with some supplies
from State Electricity Boards. While our
BULK CEMENT TERMINALS:
Ambujanagar, Maratha Cement Works and
Dedicated terminals and ships excel
Rabriyawas Unit (erstwhile Ambuja Cement
We have a fleet of seven ships for coastal
'
movement. These ships carry bulk cement
from Muldwarka to the cement terminals at
EXPANSION AND UPGRADATION:
Enhancing grinding capacity
Panvel and Surat. These ships, altogether,
have carried 16.04 lakh tonnes of cement as
against 14.23 lakh tonnes in the previous year,
an increase of 13%.
The cement market in Punjab is showing
impressive growth. Over the past several
years we have established our position in the
market through our grinding units at Ropar
Our cement terminal at Panvel has
crossed the 1 million tonne mark during the
year. The dispatches amounted to 10.11 lakh
tonnes, as against 8.48 lakh tonnes in the
previous year, an increase of 19%.
and Bathinda. Looking at the growth of
the market and the fact that there is a
further improvement in clinker production
at Darlaghat, we have recently installed a
cement mill of the capacity of 150 TPH.
The cement terminal at Surat has also
With this additional cement mill, our capacity
surpassed its previous record. It has clocked
at Ropar has gone up from 1.34 million
the highest ever dispatch of 6.28 lakh tonnes
tonnes, to 2.5 million tonnes.
during the year, as against 5.52 lakh tonnes
in the previous year - an increase of 14%.
Our port at Muldwarka has continued
Since the clinker production at our
Maratha Cement Works plant is stabilizing
at higher levels, we have set up a cement
to perform well. The port continued to
mill
handle its usual cargo of bulk cement,
augmenting capacity here as well. With
coal and furnace oil. This year, it was
this expansion, the capacity of this plant
slightly lower at 37.92 lakh tonnes, against
has gone up from 2 million tonnes, to 2.4
39.12 lakh tonnes in the previous year.
million tonnes.
of the capacity of 150 TPH for
This shortfall was caused mainly by
With the above increase in capacity and
lower exports due to constraints on the
the merger of ACRL with our company, our
availability of ships, and lower coal imports
expanded capacities are: -
as a fallout of a steep increase in coal
prices internationally.
Million Tonnes
Our cement terminals at Panvel, Surat and
Muldwarka have, over the years, enabled us to
continuously enhance our marketing strength
by providing freshly packed cement to our
Gujarat Units
4.50
Himachal/Punjab
4.16
Rajasthan
1.80
Maharashtra
2.40
12.86
customers, on tap.
We are also currently implementing an
expansion at our cement plant at Darlaghat
by installing a cement mill of 80 TPH,
which is expected to be commissioned by
September 2004.
The above increase in grinding capacity
will entail a capital expenditure of Rs.65 crores.
Captive power plants at Ambujanagar
Our people have pushed
effeciency levels at our captive
power plants ever higher.
As a result total power costs
have come down by over 6%.
and Ropar
Ambujanagar
The company is presently meeting its
power requirements from captive power
reduce power costs, we are installing a captive
plants based on liquid fuel. Due to an
thermal power plant with two 12 MW Steam
increase in HFO prices and increased
Turbo Generators with two boilers of 45 TPH
volatility in international prices, the cost of
capacity each. The first STG is scheduled for
generation of power is increasing. To remain
commissioning in the month of September
a cost-efficient cement producer, we have
2004, and the second by December 2004.
decided to install a thermal captive power
plant
of
the
capacity
of
60
MW
at
The estimated cost of the power plant
is Rs.75 crores.
Ambujanagar. This plant will be commissioned
in two phases: 30 MW will be in operation by
February 2006 and the remaining 30 MW
by December 2006. The aggregate cost is
estimated at Rs.190 crores.
NET WORTH UP BY RS.451 CRORES:
Foreign Currency Convertible Bonds
get converted
In January 2001, the company had raised
a sum of Rs.461 crores (US $ 99.3 million) by
Ropar
issuing 1% Foreign Currency Convertible
Presently, we are sourcing the entire power
Bonds (known as Rating Enhanced Equity
requirement for our Ropar grinding unit from the
Linked Securities) in the international markets.
State Electricity Board. In order to become self-
The conversion price of the share was fixed
sufficient in power requirements, as well as to
at Rs.222.34 per share. These Bonds were
convertible into GDRs/ shares of the company
of ACRL with the company as a part of
at the option of the bondholders, any time
the Rehabilitation Scheme. Accordingly,
during the maturity period, i.e. till 2006. The
ACRL has been merged with the company
company had a call option to redeem these
w.e.f. 1st June, 2004. As per the scheme, the
bonds after the expiry of 3 years from the date
shareholders of ACRL have been allotted 1
of issue.
fully paid up equity share in the company in
During the year, the company has
exchange of every 50 fully paid up equity
exercised the call option. It's a matter of
shares held in the ACRL. The record date for
pleasure to report that the bondholders have
the exchange of shares was 28th June, 2004.
shown tremendous confidence in the business
As a result of this, the share capital of
and management of the company and almost
the company has increased by 2.66 crores.
all of the bondholders (98%) have converted
With this merger, the company now
their Bonds into GDRs / shares of the company.
has a direct presence in the Rajasthan, Delhi
The remaining bondholders have been paid
and UP markets.
the accreted value of the bond.
With the conversion of Bonds, the net
SHARE CAPITAL
worth of the company has gone up by Rs.451
The equity share capital of the company has
crores and correspondingly debt has come
increased by Rs.24.10 crores during the year
down by Rs.451 crores adding further strength
as under: -
to the company's financials. The increase in
net worth is represented by equity share
(Rs. in Crores)
capital of Rs.20.28 crores and the security
Share Capital at the
premium of Rs.430.73 crores.
beginning of the year
155.30
Increase on account of:
MERGER OF AMBUJA CEMENT
i) Conversion of FCCBs
RAJASTHAN LTD. [ACRL]:
ii) Merger of erstwhile
20.28
Ambuja Cement
Establishing our presence in the entire
west-north corridor
Rajasthan Ltd.
2.66
iii) Exercise of stock options
The Board for Industrial and Financial
Reconstruction (BIFR) vide their order dated
7th January, 2004 and corrigendum dated 27th
and other outstanding
allotments Share Capital
as on 30.6.2004
May, 2004 approved the Scheme of Merger
1.16
24.10
179.40
BULK CEMENT TERMINAL
tonnes as against 15.04 lakh tonnes in the
IN SOUTH INDIA
previous year. Up by 11%. The sales in value
The company had planned to put up a
bulk cement terminal at Tuticorin in Tamilnadu
term (net of excise) went up by 10% from
Rs.368.74 crores, to Rs.407.03 crores.
in the year 1999. However, one of the local
authorities and a neighbour moved the court
to stall the project on untenable grounds.
The court has now passed an order in favour
of the company.
The improved production, coupled with
continuous cost reduction measures, has
resulted in a higher pre tax profit of Rs.66.93
crores, as against Rs.49.01 crores in the
previous year.
The Board of Directors, after detailed
discussions and deliberations, decided not to
proceed further on this project. Consequently,
a sum of Rs. 4.23 crores spent on this project
has been charged to Profit & Loss account.
The net profit after providing for deferred
tax has amounted to Rs.45.08 crores during
the
year.
In
the
previous
year,
after
recognising the credit of deferred tax asset
of Rs.71.69 crores, the net profit was
Rs.120.70 crores.
AMBUJA CEMENT EASTERN LTD.
[ACEL]:
CEYLON AMBUJA CEMENTS
PRIVATE LIMITED:
Profits up an impressive 40%
ACEL has once again performed extremely
A 21% rise in sales
well. While cement prices in eastern India
The company has sold 2.68 lakh tonnes
markets remained stable during the year, ACEL
of cement during the year, an increase of 9%.
has earned about 37% higher pre-tax profit as
In value terms, the sales were LKR 160.7
compared to the previous year. Its team has
crores as against LKR 132.5 crores, a growth
achieved new landmarks in production, sales,
of 21% over the previous year.
net profits and operating margins.
The company has made lower profit
They have pushed clinker and cement
before tax of LKR 5.9 crores as against
Clinker
a profit of LKR 6.7 crores in the previous
production was up at 11.69 lakh tonnes and
year, due to an overall increase in costs and
cement production was up at 16.28 lakh
other outgoing.
production
by
a
further
10%.
tonnes, as against 10.64 lakh tonnes and
It has also been accredited with ISO
14.83 lakh tonnes, respectively. Sale of clinker
9001:2000, by Certification International
and cement put together was at 16.63 lakh
(UK) Limited.
!
AMBUJA CEMENT INDIA LTD. (ACIL)
SOME RISKS AND CONCERNS
We hold 60% of the share capital in ACIL
Cement is a high volume, low value
and the foreign strategic investors hold the
product, where transport forms a major cost,
balance 40%. ACIL owns 13.84% shares in
both on raw material, as well as finished
Associated Cement Companies of India Ltd.
goods. Most of the costs concerning transport
(ACC) and 94.08% in Ambuja Cement Eastern
either by rail, or by road, are governed by
Ltd. During the year, the company has earned
government policies. Any increase in freight
a profit of Rs.7.80 crores, as against Rs.6.09
cost will affect the profitability of the company.
crores in the previous year.
Cement is intrinsically linked to the overall
growth of the economy and more importantly,
growth of the infrastructure sector, which
CEMENT OUTLOOK:
largely depends on the political stability and
Demand set to grow
The cement industry's performance in
2003-04 was modest at 5.8%, in comparison
to the high GDP growth of 8.2%. The reason
for low demand during the year was mainly
due to the extended monsoon which affected
The new government has pledged to
continue with reforms on infrastructure
as
well
as
or infrastructure growth, would have an
impact on the demand of cement.
Another major source of cement demand
comes from rural India, which mainly depends
on the monsoon. Failure of a monsoon or
construction activities.
sectors,
will. Any slowdown of the economic growth,
supporting
rural
development. The emphasis laid by the
new government in its budget proposals
on education, housing, water and roads
clearly demonstrate its intentions to boost
the Indian economy through long term
floods, both effect agriculture, which has an
adverse effect on the demand for cement.
One of the major input cost is coal.
The supply of indigenous coal is all under
the control of the central government. Any
increase in coal prices will affect the
bottomline of the company. The last increase
was of 16%, announced in June 2004.
measures.
As cement is intrinsically linked to the
overall growth of the economy and the
infrastructure sector, including the housing
INTERNAL CONTROL SYSTEMS:
Facilitating rapid growth
We
have
always
believed
that
sector, cement demand is likely to improve
transparency, systems and controls are
in the coming years.
important factors in the success and growth of
"
any organization. Towards this end, a Systems
and Audit Department was set up right from
the beginning. This department assumes great
significance given the size, scope and rapid
rate of growth of the company. Presently, it has
a strength of 37 officers, headed by a senior
chartered accountant. It operates from various
plants and other business locations, but is
centrally controlled from Ambujanagar.
The Systems and Audit Department
is responsible for implementing adequate
systems and controls for all the activities in the
Our team at Ambuja Cements
Eastern Limited has achieved new
landmarks in production, sales and
operating margins. Resulting in an
amazing 40% increase in profits.
company, close monitoring thereof and to
strengthen and modify the same from time to
compiled and reported to the Audit Committee
time to meet the changing requirements of the
of Directors on a quarterly basis or earlier,
company. Any deviations from the norms are
if so required.
first reported to the concerned operating
person for corrective actions and in case the
need arises, these are brought to the notice of
the concerned head of the unit, or the
department, as the case may be. This
department constantly looks into the areas
where there is a possibility of cost saving
or better controls, and submits its suggestions
to the concerned operating departments.
As a part of its regular exercise, the
This department provides strong support
to all the functional heads as well as the Audit
Committee of Directors. Continuous audit and
verification of the systems enables the
functional heads to plug shortcomings, if any,
sooner rather than later.
The Systems and Audit Department
interacts with the statutory auditors regularly.
We believe that we have a sound internal
control systems in our company.
Systems and Audit Department identifies key
risk areas and reports the same to the heads
HUMAN RESOURCES:
of the departments as well as the Audit
The key to our success
Committee of Directors for their due attention
and remedial steps.
The company enjoys excellent relations
with all its workmen at all its locations.
All major findings and suggestions are
The biggest strength of the company has
#
always been its people.
and more employees gaining from these
From the beginning, we have followed
programmes.
a progressive policy of taking keen interest
Finally, the Company endeavours to offer
in the well being and progress of our people.
them a just and fair compensation. As a step
The company follows a unique, home-
in this direction, the company has granted
grown philosophy of allowing people to set
Stock Options to its employees and the
their own targets and gives them the freedom
Whole-time Directors during the year, the fifth
to achieve them: 'I Can'. This philosophy has
in succession.
spread across all our employees and has been
All of this, we believe, has nurtured a
a constant source of motivation for our people.
strong sense of belonging among our people
To enhance their skills and enrich their
and is a driving force in the company's
experience, the company provides continuous
growth and performance.
training. These include workshops, courses,
overseas seminars and visits to cement plants
EMPLOYEE STOCK OPTION SCHEME
in India and abroad.
The company has granted Stock Options
The company, from time to time, engages
to
eligible
Whole-time
Directors
and
competent and reputed organisations to equip
employees for the fifth year in succession. The
our people with the requisite techniques and
particulars required to be disclosed pursuant
exercises for personality development and
to clause 12 of SEBI (Employees Stock
self-actualisation.
Option Scheme) Guidelines 1999 are given
A couple of years ago, our people had
in subsequent paragraphs.
introduced in-house conferences by different
disciplines. These conferences are gaining
a) ESOS 2003-2004
momentum and growing in stature. Operating
During the year 2003-2004, the company
managers of a discipline from all the locations
has granted 8,64,600 Stock Options (each
come together in a conference. It has become
option carrying entitlement for one share) on 21st
a useful forum for sharing experiences,
January, 2004 to eligible Whole-time Directors
ideas, innovations and developmental work
and employees, including some employees of
undertaken at different locations. Besides,
subsidiary companies, at an exercise price of
it brings people closer and helps them
Rs.310 per share. The market price of the shares
understand each other well.
on the date of grant was Rs.282.50 per share.
The results are encouraging, with more
These Stock Options will vest on expiry of one
$
year from the date of grant and can be exercised
has been granted Options in excess of 1% of the
during a period of five years from the date of
issued equity share capital of the company.
vesting. The exercise price was determined by
Mr. P.B. Kulkarni, Mr. A.L. Kapur and Mr. A. C.
averaging the two weeks' high and low price of
Singhvi have been granted Options of more than
company's shares on the National Stock
5% of the total Options granted during the year.
Exchange, immediately preceding the grant.
The company has adopted intrinsic value
method for the valuation and accounting of the
The Options granted to the eligible
Whole-time
Directors
being
the
senior
management personnel are as under:
aforesaid Stock Options as per SEBI guidelines
and accordingly has accounted Rs.0.49 lakh as
Mr. P.B. Kulkarni
50000
employee compensation cost for the year ended
Mr. A.L. Kapur
50000
Mr. A.C. Singhvi
50000
Mr. A.V. Rao
35000
Mr. B.L. Taparia
35000
30th June, 2004. The fair value of the options as
per "Black Scholes" model comes to Rs.67.44
per option. Had the company valued and
accounted the aforesaid options as per "Black
220000
Scholes" model, the net profit for the year would
have been lower by Rs.2.54 crores and diluted
earning per share would have been Rs.19.48
per share, instead of Rs.19.62 per share.
The other employees have been granted
644600 Options. The details of Options
granted to other employees are:
The "Black Scholes" model captures all the
variables with their respective appropriateness
Total number of Employees
which influence the fair value of stock options.
Total number of Options granted
644600
Max. number of Options granted
6000
Min. number of Options granted
50
Avg. number of Options granted
306
The significant assumptions to estimate the fair
value of options as per "Black Scholes" model are:
1. Risk free Interest Rate
2. Expected life of the option
3. Expected volatility
4. Expected dividend yield
4.87%
2109
3.5 years
38.77%
3.38%
None of the Options granted during the year
have vested till date. No employee or director
b) Cumulative disclosure
The particulars with regard to the Stock
Options as of 30th June, 2004 as required to be
disclosed under the SEBI's guidelines are
given below.
%
Cumulative position as on 30.6.2004
Nature of disclosure
Particulars
a. Options granted
3596850
b. The pricing formula
2003-2004
1999-2000
to
2002-2003
c. Options vested
2172625
d. Options exercised
1219765
e. The total number of shares arising
as a result of exercise of Options
1219965
f. Options lapsed / surrendered
327600
g. Variation of terms of Option
The Exercise price was
determined by averaging two
weeks' High and Low price of
the company's equity shares on
the National Stock Exchange,
immediately preceding the
grant.
The Exercise price was the
average of the daily closing price
of equity shares of the company
on the Stock Exchange, Mumbai
during the period of 30 (thirty)
days immediately preceding the
date on which the options were
granted.
-
h. Money realised by exercise of Options
Rs. 18.07 crores
i.
Total number of Options in force
2049485
j.
Details of Options granted to/
exercised by the Whole-time Directors
No. of Options granted
No. of Options
exercised
1. Mr. P.B. Kulkarni
2. Mr. A.L. Kapur
195000
180000
40000
16350
3. Mr. A.V. Rao
135000
57500
4. Mr. B.L. Taparia
135000
15500
5. Mr. A.C. Singhvi
210000
70000
855000
199350
k. Any employee other than
Whole-time Direcors, who received
a grant in any one year of options
amounting to 5% or more of Options
granted during that year.
l.
Employees who were granted Options,
during any one year, equal to or
exceeding 1% of the issued capital
of the company at the time of grant.
m. Diluted Earnings Per Share (EPS)
pursuant to issue of shares on exercise
of option calculated in accordance
with Accounting Standard AS-20.
NIL
NIL
Rs.19.62
&
CORPORATE SOCIAL RESPONSIBILITY:
Empowering communities
Way back in 1986, our people recognized
that our responsibility to society and the
environment didn't merely stop at complying
with stated norms and laws. In fact, it went far
beyond this and was an ever evolving
commitment.
By
definition,
running
an
efficient,
profitable cement company meant ensuring
that our surrounding communities and
environment grew and prospered along with
Our people's belief that true
progress can only come with
the growth of surrounding
communities has helped change
lives right at the grassroot levels.
us. After all, they facilitated our progress, as
much, if not more, than we did theirs.
It is this basic belief that has spurred our
people onto achieving ever higher efficiency
levels and conforming to the rigorous Swiss
either fund rural development projects the
conventional way. Or we could empower
the stakeholders to help themselves.
The latter route was far more difficult. It
needed more effort, time, energy and
Standards of pollution control.
Higher standards of efficiency have
commitment.
meant that we've been able to put natural
Our people chose the latter. They
resources, which form our raw materials, to the
decided to begin small. Their priorities were
best use. By consuming less energy and by
clear.
They
wanted
to
using alternate sources of fuel, we have been
development
models
that
able to conserve power and fuel for the nation.
sustainable and replicable. Models that would
And by rehabilitating used mines into green
involve the active participation of the people
spots and water reservoirs, we have been able
who they are meant for.
to give back a little to nature.
create
would
rural
be
To focus on this task, our people set
Our biggest responsibility, however, has
been to develop the people and the
communities around us.
up the Ambuja Cement Foundation (ACF) with
a handful of dedicated people.
One of their first tasks was around the arid
When we began taking the first steps
area near our Gujarat plants, where the priority
towards this, we had a choice. We could
naturally, was water. Our people realised that
'
the only economical and sustainable solution
organisations and local administrations have
was water harvesting. After a sustained effort
also extended funds for the programmes. ACF
at educating the locals they managed to
has come a long way from operating with a
persuade them to actively participate in some
meagre Rs.15 lakhs in its first year, to
water harvesting projects.
a sizeable Rs.5 crore outlay in 2003-04.
Our people's dedication, the success of
And from a handful of volunteers a
these projects, and the experience of the
decade ago, ACF has grown to include 65
participants convinced other villages to adopt
dedicated professionals working at the
water harvesting projects. Soon the projects
grassroots level.
were customised to the needs of individual
But perhaps the biggest inspiration for our
villages and replicated there. The techniques
people is the encouragement they receive
involved included check dams, salinity ingress
from the grassroots. This has led them to
checks and even sustainable agriculture.
undertake ever newer initiatives.
In about a decade, our people have
replicated
water
harvesting,
healthcare,
education and women development models
in about 500 villages across our plants
and grinding facilities in different parts of
the country.
Developing and implementing
programmes for women development is
one such initiative
With initial funding from NABARD and
ACF, our people set about encouraging
women to set up Self Help Groups (SHGs).
These models have built and enhanced
the capacity of the stakeholders to bring
about their own development. ACF has
worked alongside them providing technical
assistance, encouragement and initial funds.
As a result, today, we are known as enablers,
catalysts and partners.
They provided them with the technical
assistance and marketing skills required to
produce washing soaps, detergents and
other provisions for the local markets. Today,
there are 155 SHGs involving over 2000
members who pool their savings and provide
loans to their fellow members to begin a
A far cry from the way we were seen in
the beginning:
business venture.
One such group has formed a milk
As donors and fund providers
co-operative and has bought its own chilling
Initially, ACF depended solely on funds
plant. Today, this group has reached an annual
from the company to implement its rural
turnover of Rs.2 lakhs. A huge achievement,
programmes. In recent years, many donor
considering that only a couple of years ago,
!
these women were totally dependent on the
people decided to do something constructive
male members of society. Today, they have
and sustainable. They developed a simple
become a solid support to their families. Even
training module that equipped a jobless
the District Development Officer has now come
unskilled person with basic masonry skills.
forward to set up a larger chilling plant for
And thereby, a vocation that provided
this co-operative and expand its operations.
livelihood for a lifetime.
Thus was born the mason training
Ambuja Cement Foundation:
programme. An initiative by our technical
Recognised as a powerful tool for change
Thanks to efforts such as this, the Ambuja
Cement
Foundation
has
come
to
be
associated with real grassroots development
and understanding of the real social issues.
Several local administrations and fellow NGOs
have been seeking ACF's assistance and
advice in rural development programmes.
services engineers, the service arm of our
marketing team.
Through this month-long module, our
team trained 1000 people in rural parts of
Kutch and Gujarat.
Impressed by these efforts, CARE India
later adopted the mason training module in
their developmental activities. Today, the
While recognition has come from many
module is being adopted by SEWA, an
quarters, this year, our people received a great
organisation built by Self-employed women
morale booster when BUSINESS WORLD-
in Gujarat. Our people provide technical
FICCI-SEDF conferred the Corporate Social
support to both these organisations.
Responsibility Award on them for their
dedicated effort.
And what started out as a simple
expression of belief has today grown into an
Ultimate proof that you can build lives
endeavour that has enriched many, many lives.
by building confidence and capacity.
While the Ambuja Cement Foundation has
become a channel to direct our people's
commitment to society, it is not the only means
our people use to reach out to society.
CORPORATE GOVERNANCE
The company has complied with the
Corporate Governance Code as stipulated
under the listing agreement with the Stock
When the 2001 earthquake in Gujarat
Exchanges. A separate section on Corporate
demolished millions of houses and lives, the
Governance, along with a certificate from the
survivors in rural Kutch found themselves
auditors confirming the compliance is annexed
homeless and jobless. Our technical services
and forms part of the Directors' Report.
!
a true and fair view of the state of affairs of
DIRECTORS
Mr. Nimesh Kampani, Mr. Harshavardhan
the company as on 30th June 2004 and of the
Neotia, Mr. Pulkit Sekhsaria, Mr. Nasser
profit of the company for the year ended 30th
Munjee and Mr. P.B. Kulkarni, Directors of
June 2004;
the company retire by rotation and being
eligible, offer themselves for re-appointment.
The Board of Directors recommends their
re-appointment.
iii) proper and sufficient care has been
taken for the maintenance of adequate
accounting records in accordance with the
provisions of the Companies Act, 1956 for
Mr. A.V. Rao, Whole-time Director ceased
safeguarding the assets of the company and
to be Director with effect from 1st February
for preventing and detecting fraud and other
2004 upon completion of his 5 year term. The
irregularities; and
Board has placed on record its appreciation
for the valuable services rendered by Mr. Rao
during his tenure as Whole-time Director.
Mr. N.P. Ghuwalewala was appointed
as Whole-time Director w.e.f. 28th June, 2004
subject to the approval of the shareholders.
The Board of Directors recommends his
appointment by the shareholders.
Companies Act, 1956 as amended, the
Directors confirm that:
M/s. Dalal & Shah and M/s. S.R. Batliboi
& Associates, auditors of the company will
retire at the ensuing Annual General Meeting
re-appointment, if made, shall be within the
limits of Section 224 (1B) of the Companies
Act, 1956. The Board recommends their
re-appointment and to fix their remuneration.
i) in the preparation of the annual
accounts, the applicable accounting standards
followed
AUDITORS
the Auditors have confirmed that their
Pursuant to Section 217 (2AA) of the
been
prepared on a going concern basis.
and are eligible for re-appointment. Both
DIRECTORS' RESPONSIBILITY
have
iv) the annual accounts have been
along
with
proper
explanations relating to material departures;
ii) appropriate accounting policies have
been selected and applied consistently and
M/s. P. M. Nanabhoy & Co., Cost
Accountants, have been appointed Cost
Auditor of the company for the year 2004-2005.
TRANSFER TO INVESTOR EDUCATION
AND PROTECTION FUND
have made judgements and estimates that
The company has transferred a sum of
are reasonable and prudent, so as to give
Rs.17.71 lakhs to the Investor Education and
!
Protection Fund established by the Central
Government, in compliance with Section 205 C
of the Companies Act, 1956. The said amount
represents unclaimed dividend and unclaimed
interest on debentures, which have been with
the company for a period exceeding 7 years
from their respective due dates of payment.
ENERGY, TECHNOLOGY AND
FOREIGN EXCHANGE
Information on conservation of energy,
Our technical services team has
won us international acclaim
with their unique technique to
build concrete roads with high
volume fly ash.
technology absorption, foreign exchange
earnings and outgo required to be given
pursuant to Section 217 (1) (e) of the
particulars of its subsidiary companies
Companies
the
alongwith the Annual Report of the company
Companies (Disclosure of Particulars in the
required u/s 212 of the Companies Act, 1956.
Report of the Board of Directors) Rules, 1988
Therefore, the said Reports of the subsidiary
is annexed hereto (Annexure- I) and forms
companies
part of this report.
However,
Act,
1956
read
with
are
a
information
not
attached
statement
as
required
giving
vide
herewith.
certain
aforesaid
exemption letter dated 5th August 2004 is
PARTICULARS OF EMPLOYEES
given
placed along with the Consolidated Accounts.
pursuant to the provisions of Section 217 (2A)
The company shall provide the copy of
of the Companies Act, 1956 is enclosed
Annual Report and other documents of its
herewith, marked Annexure - II and forms
subsidiary companies as required u/s 212 of
part of this report.
the Act to the shareholders on their request,
Information
required
to
be
free of cost.
DLF Gujarat Ltd. presently a subsidiary
SUBSIDIARY COMPANIES
Department
of
Company
Affairs,
company, came to our fold when Ambuja
Government of India vide its letter dated
Cement Rajasthan Ltd. was acquired from DLF
5th August 2004 has exempted the company
Group in 1998. DLF Gujarat Ltd. does not have
from attaching the Annual Reports and other
any operations right from the time we took over
!!
in 1998. And this company does not intend to
Ahmedabad,
do any business operation. In view of this, DLF
complying with the SEBI's guidelines on
Gujarat has applied to the Registrar of
Voluntary Delisting. The Stock Exchange,
Companies, Ahmedabad (ROC) for striking off
Ahmedabad has confirmed the delisting
its name under the simplified exit scheme
during the year whereas the consents of other
under the provisions of the Companies Act,
two exchanges are awaited.
Kolkata
and
Delhi
after
1956. Upon receipt of the confirmation from
The company's equity shares shall
ROC, the company will be deemed to
continue to be listed on the Stock Exchange,
have wound up.
Mumbai and The National Stock Exchange of
India.
CONSOLIDATED FINANCIAL
STATEMENTS
AWARDS AND RECOGNITION :
As stipulated by Clause 32 of the Listing
Agreement with the Stock Exchanges, the
Consolidated Financial Statements have been
prepared by the company in accordance with
the requirements of Accounting Standard 21
"Consolidated Financial Statements" issued by
The Institute of Chartered Accountants of
India. The audited Consolidated Financial
Statements together with Auditors' Report
thereon form part of the Annual Report.
The consolidated net profit of the
company, it subsidiaries, associates and joint
ventures amounted to Rs.362.43 crores for the
year ended on 30th June, 2004 as compared
to Rs.336.79 crores of the company.
(a)
Business World - FICCI selected Best
Corporate Citizens in the country. At its Award
ceremony, our company was recognised as
Corporate Citizen-III. The award was honoured
by the hands of former President of India Mr. K.R. Narayanan.
(b)
Our
technical
services
team,
spearheaded by Shri J.P. Desai developed a
technique to build concrete road with high
volume Fly Ash. While solving the problem
of disposal of this highly polluting and
hazardous waste, the technique makes the
concrete roads very cost effective vis-à-vis
the bitumen roads.
In recognition of our efforts, The American
Concrete Institute (ACI) and Canada Centre
for Mineral and Energy Technology (CANMET),
LISTING ARRANGEMENT
The company with the approval of the
Government of Canada has conferred upon Mr.
shareholders, had applied for delisting of its
Desai the International Award for "Pioneering the
equity shares on the Stock Exchanges at
use of High Volume Fly Ash Concrete in India".
!"
(c)
Once again, CAPEXIL, an Export
ACKNOWLEDGEMENTS
Promotion Council sponsored by Ministry of
We would like to take this opportunity to
Commerce and Industry has accorded "Special
express our deep sense of gratitude to
Export Award" to the company to its outstanding
the Financial Institutions, International Finance
exports performance for the year 2002-03.
Corporation, Bankers, Central and State
(d)
Our mines continued to be adjudged
among best mines by the Directorate of Mines
in their respective regions for our efforts on
Government Departments and Local Authorities
for their continued guidance and support.
We
are
especially
the
Governments
development, safety, etc.
Himachal Pradesh, Punjab, Chattisgarh, West
The Institute of Cost and Works
Accountants of India, a professional body has
given National Award to 10 best corporates in the
country for the "Excellence in Cost Reduction"
for the year 2003. Ambuja Cement figures one
of these 10 most cost efficient corporates.
Gujarat,
to
aforestation, pollution controls, community
(e)
of
grateful
Maharashtra,
Bengal, Rajasthan, Tamil Nadu, Andhra
Pradesh and Kerala. We would also like
to express our gratitude to the Government
of Sri Lanka for its support on our Bulk
Cement Terminal.
At this point, we would like to place on
record our sincere appreciation for the total
commitment, dedication and hard work put
CAUTIONARY STATEMENT
Statements
Management
forming
part
of
the
Discussion
and
Analysis
covered in this report may be forward looking
in by every member of the Ambuja family.
To them goes the credit for the company's
achievements.
within the meaning of applicable securities
And to you our shareholders, we are
laws and regulations. Actual results may differ
deeply grateful for the confidence and faith
materially from those expressed in the
that you have always placed in us.
statement. Important factors that could
influence the company's operations include
For and on behalf of the Board,
demand and supply conditions, availability of
inputs and their prices both domestic and
global, changes in government regulations,
tax laws, monsoon, economic developments
(Suresh Neotia)
within the country and other factors such as
Chairman
litigation and industrial relations.
Delhi, 9th August, 2004
!#
ANNEXURE - I
DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS AND OUTGO AS REQUIRED UNDER COMPANIES (DISCLOSURE OF PARTICULARS IN REPORT OF
BOARD OF DIRECTORS) RULES, 1988.
A) CONSERVATION OF ENERGY
(a) Energy Conservation measures taken :
(i)
Replacement of existing baghouse fans with high efficiency fans at Ambujanagar.
(ii) Modification of inlet box of preheater fan and grid resistance regulator for preheater fan at Ambujanagar.
(iii) Installation of Expert System software package for kiln process optimization at Ambujanagar.
(iv) Modification of two cyclones in calciner string of preheater at Darlaghat.
(v) Replacement of kiln outlet seal at Darlaghat.
(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy :
(i)
Replacement of vent fans with high efficiency fans for both cement mills at Ambujanagar.
(ii) Installation of high efficiency burner at Ambujanagar.
(iii) Installation of high efficiency separator for one cement mill at Ambujanagar.
(iv) Modification of inlet box of preheater & pre calciner fans at Darlaghat.
(v) Modifications of three cyclones in kiln string of preheater at Darlaghat.
(vi) Installation of vortex finders in raw mill cyclones at Darlaghat.
Total investment on account of above (b) is estimated at Rs. 4.5 crores.
(c) Impact of the measures at (a) and (b) above for reduction of energy consumption and consequent
impact on the cost of production of goods :
Measures referred to in (a) above is expected to result in saving of Rs.1.90 crores per annum and (b) above is expected
to result in saving of Rs.1.25 crores per annum.
(d) Total energy consumption and energy consumption per unit of production :
Information is given in the prescribed Form - A annexed.
B) TECHNOLOGY ABSORPTION
Efforts made in technology absorption are given in prescribed Form - B annexed.
C) FOREIGN EXCHANGE EARNINGS AND OUTGO
(a) Activities relating to exports; initiatives taken to increase exports; development of new export markets
for products and services; and export plans :
The cement prices in our overseas markets have improved over the previous year. The company continued to give
thrust to exports keeping in mind the long term perspective. This year, the company has exported 17.25 lac tonnes of
cement as against 18.34 lac tonnes in the previous year. Lower exports were on account of substantial increase in
freight rate and poor availability of ships. In value terms, the exports during this year amounted to Rs. 206.07 crores
(FOB) as against Rs. 199.89 crores (FOB) in the previous year. The company proposes to continue its thrust on exports.
(b) Total Foreign Exchange used and earned :
Current Year
(Rs. in Crores)
Previous Year
(Rs. in Crores)
Used*
187.50
179.43
Earned
228.80
232.84
*
Excluding repayment of borrowings Rs. 241.72 crores; previous year Rs. 58.91 crores.
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36 RED
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36
36
FORM – A
(See Rule 2)
Form for disclosure of particulars with respect to Conservation of Energy
A. POWER & FUEL CONSUMPTION
1.
Current Year
2003-2004
Previous Year
2002-2003
Units (crores kwh)
24.61
24.04
Total Amount (Rs. in crores) *
71.29
71.13
2.90
2.96
Electricity :
(a) Purchased
Rate/Unit-kwh (Rs.)
(b) Own Generation
(i)
Through Liquid Fuel Generator
Net Units (crores kwh)
40.55
40.51
Unit (kwh) / Ltr. of LDO /Furnace oil
4.39
4.36
LDO /Furnace oil - Cost / Unit generated (Rs. / kwh)
1.91
2.07
(ii) Through Steam Turbine / Generator
Units (crores kwh)
23.62
20.20
Unit (kwh) / Tonne of Fuel (Coal)
915
898
Oil/Gas/Coal - Cost/Unit (Rs/kwh)
1.22
1.17
Quantity (Million K. Cal.)
6451807
6255570
Total Cost (Rs.in crores)
254.49
223.28
Average rate (Rs./Million K. Cal)
394.45
356.92
1486.65
1290.47
2.06
1.65
13875.30
12770.98
Quantity
Nil
Nil
Total Cost, Rate /Unit
Nil
Nil
Rate/Unit
Nil
Nil
Current
Year
Previous
Year
86
86
LDO/HSD (Ltr./T. of Clinker)
0.17
0.15
Coal & Other fuels (K.Cal./Kg.of Clinker)
728
729
2.
3.
Coal & Other Fuels :
Light Diesel Oil / High Speed Diesel / Furnace Oil :
Quantity (K.Ltrs)
Total Cost (Rs.in crores)
Average rate (Rs. / K. Ltr.)
4.
Others / Internal generation :
B. CONSUMPTION PER UNIT OF PRODUCTION
Electricity (Kwh/T. of Cement) **
*
GEB minimum fixed charges of Rs. 2.24 Crores have been included in above cost.
** Does not include Electricity consumed in residential colony which is 0.58 kwh / tonne of cement.
(Previous year 0.56 kwh/ tonne of cement)
Note : Current year's figures include the figures of Rabriyawas unit (erstwhile Ambuja Cement Rajasthan Ltd.) for the
month of June 2004.
37
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37 RED
FORM – B
(See Rule 2)
Form for disclosure of particulars with respect to Absorption
A. RESEARCH & DEVELOPMENT (R&D)
1.
2.
3.
4.
Specific areas in which R&D carried out by the Company :
a)
Evaluation of fly ash from different sources with specific target of increasing the fly ash addition in blended cements.
b)
Evaluation of lignite and other cost effective low grade fuel to enhance their usage.
c)
Microscopy studies for optimisation of clinker quality and pyro-process.
d)
Implementation of Standard Refractory Practices for all the Kilns for longer life.
e)
Minerological evaluation of fly ash, slag, and other raw materials by X-ray diffractometer to optimize and enhance
their usage.
Benefits derived as a result of above R&D :
a)
Capacity enhancement and conservation of Resources.
b)
Reduction in the fuel cost.
c)
Improved Clinker quality and Improved Productivity.
d)
Longer Refractory Life and shortening of downtime.
Future Plan of action :
a)
Further Increase in addition of Fly Ash in Blended Cements.
b)
Standardization of Refractory Quality to minimise Inventory level.
c)
Procurement of Image Analyser System for Microscope Upgradation.
d)
Optimisation of cement mill and separators.
Expenditure on R & D :
Current Year
(Rs in lacs)
Previous Year
(Rs in lacs)
Nil
10.07
a)
Capital expenditure
b)
Recurring expenditure
23.08
14.50
c)
Total expenditure
23.08
24.57
d)
Total R & D expenditure as a percentage of total turnover
0.01%
0.02%
B. TECHNOLOGY ABSORPTION, ADAPTION AND INNOVATION
1.
Efforts, in brief, made towards technology absorption, adaption and innovation:
The technology has been fully absorbed Company's personnel from operations, maintenance and developmental activities
were deputed for training through seminars and visits.
2.
Benefits derived as a result of the above efforts:
Improved quality, productivity,operational efficiencies and cost reduction primarily due to conservation of energy and
increased addition of fly ash.
3.
Information regarding technology imported during last 5 years:
Company has not imported any technology during last 5 years.
Note:
The Regional Training Centre at Ambujanagar, sponsored by World Bank and DANIDA (Danish International Development Agency)
for imparting advanced knowledge in all facets of cement technology to the personnel working in cement plants in Western
Region is fully operational.
BLACK
38 RED
38
ANNEXURE - II
PARTICULARS OF EMPLOYEES AS PER SECTION 217 (2A) OF THE COMPANIES ACT, 1956 READ WITH THE COMPANIES
(PARTICULARS OF EMPLOYEES) RULES,1975 AND FORMING PART OF THE DIRECTORS' REPORT FOR THE YEAR ENDED
30th JUNE, 2004
Name & Age (Years)
Designation/
Nature of Duties
Remuneration
(Rupees)
Qualifications
Experience
(years)
Date of
Commencement of
Employment
Last Employment
Last Designation
A) EMPLOYED THROUGHOUT THE FINANCIAL YEAR AND IN RECEIPT OF REMUNERATION AGGREGATING
RS. 24,00,000/- OR MORE PER ANNUM.
* Darak R. R. (48)
Jt. President (Finance)
2,620,272
B.Com., F.C.A.,
A.C.S.
25
16.10.1985
W.H. Brady & Co. Ltd.,
Chief Accountant-cumAsst. Secretary
Kapur A. L. (70)
Whole-time Director
9,865,727
B.A., F.C.A.,
F.I.C.W.A.
46
20.02.1999
Birla Corporation Ltd.,
Executive Director & CEO
Kulkarni P. B. (62)
Whole-time Director
10,601,324
B.E. (Mech.)
38
08.02.1983
Lakshmi Cement,
J.K. Cement Ltd.,
Chief Engineer
Sekhsaria Narotam (55)
Managing Director
45,931,181
B.E. (Chem.)
34
01.04.1983
Business
Sekhsaria Pulkit (33)
Whole-time Director
4,252,963
B.Com.
11
01.07.1993

Singhvi A. C. (45)
Whole-time Director
10,139,481
B.Com., F.C.A.
22
21.01.1986
Century Enka Ltd.,
Manager Accounts
Taparia B. L. (54)
Whole-time Director &
Company Secretary
7,636,124
B.Com., LLB.,
F.C.S.
34
28.11.1983
Jain Spinners Ltd.,
Secretary & Finance Manager
B) EMPLOYED FOR A PART OF THE FINANCIAL YEAR AND IN RECEIPT OF REMUNERATION AGGREGATING
RS. 2,00,000/- OR MORE PER MONTH.
Ghuwalewala N. P. (60)
Whole-time Director
385,369
Rao A. V. (73)
Whole-time Director
7,746,748
B.Chem., M.Phil.
35
28.06.2004
Ambuja Cement Rajasthan Ltd.,
Managing Director
B.E. (Civil)
51
10.11.1990
Straw Products Ltd.,
Chief Engineer (Construction)
1) Remuneration includes Salary, Commission, contribution to Provident and other Funds and Perquisites (including medical, leave travel and leave encashment on
payment basis and monetary value of taxable Perquisites), etc.
2) All the abovesaid appointments are contractual except marked * and are terminable by notice on either side.
3) None of the employee is related to any Director of the Company except Mr. Narotam Sekhsaria and Mr. Pulkit Sekhsaria who are related to each other.
4) Remuneration to Mr. N. P. Ghuwalewala includes Rs. 3,46,099 paid by erstwhile Ambuja Cement Rajasthan Ltd. (merged with the Company w.e.f. 1st June, 2004)
for the period 1st June, 2004 to 27th June, 2004.
39
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39 RED
CORPORATE GOVERNANCE
The Directors' Report on the compliance of the Corporate Governance Code is given below.
1.
COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE
The company believes in transparency, empowerment, accountability, motivation, respect for law and fair business and corporate
practices with all its stakeholders. These practices being followed since inception have helped the company in its sustained
growth.
2.
BOARD OF DIRECTORS
2.1
Composition :
The Board of Directors consists of 15 members with 5 Independent Directors, a Managing Director, 6 Executive Directors
and 3 Non-Executive Directors. Mr. Suresh Neotia is the Non-Executive Chairman of the company and Mr. N.S. Sekhsaria
is the Managing Director. The Independent Directors on the Board are senior, competent and highly respected persons
from their respective fields. The Independent Directors take active part at the Board and Committee Meetings which
adds value in the decision making process of the Board of Directors.
Mr. A.V. Rao, Whole-time Director of the company ceased to be a Director of the company w.e.f. 1st February, 2004
after completing his 5 years tenure on 31st January, 2004.
Mr. N.P. Ghuwalewala was appointed as a Whole-time Director of the company w.e.f. 28th June, 2004. Mr. Ghuwalewala
was Managing Director of erstwhile Ambuja Cement Rajasthan Ltd. (ACRL), which has been merged with the company
w.e.f. 1st June, 2004. He is a Chemical Engineer having 35 years of experience, out of which 21 years of experience
is in the cement Industry. Mr. Ghuwalewala had made outstanding contribution towards improvement of production &
productivity, optimising the operational efficiencies and cost reduction measures in ACRL. In view of the merger of ACRL
and his vast experience in the cement Industry, the Board has appointed him as a Whole-time Director.
The composition of the Board of Directors is in conformity with the Corporate Governance Code. The composition
during the year ended 30th June, 2004 and the brief resume of each Director is given below:Name of the Directors
Brief resume
Category
1. Mr. Suresh Neotia
He is an Industrialist and joined the Board in 1985.
Non-Executive Chairman
He is a Commerce and Law Graduate. He is on the
Board of several large corporates.
2. Mr. Vinod Neotia
He is an Industrialist and joined the Board in 1982.
Non-Executive Director
He is a Commerce graduate.
3. Mr. M. L. Bhakta
He is a Law professional and joined the Board in 1985.
Non-Executive,
He is Graduate in Arts and Law. He is Senior Partner
Independent Director
of M/s. Kanga & Co., Advocates & Solicitors. He is on
the Board of several large corporates.
4. Mr. Nimesh N. Kampani
He is a Chartered Accountant and joined the Board in
Non-Executive,
1985. He is the Chairman of J.M. Morgan Stanley Pvt.
Ltd., one of the leading Merchant & Investment Banker
in the country. He is on the Board of several large
corporates.
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40 RED
40
Name of the Directors
Brief resume
Category
5. Mr. M. T. Patel
He is an Industrialist and joined the Board in 1985. He
Non-Executive,
is a Commerce Graduate. He is engaged in
manufacture of agro-based products and ceramic
products.
6. Mr. Harshavardhan Neotia
He joined the Board in 1995. After graduating in
Non-Executive Director
Commerce from Calcutta University, he did Owner
President Management Programme from Harvard
Business School, USA. He is the Managing Director
of company's subsidiary, Ambuja Cement Eastern
Limited. He is also Managing Director of Bengal
Ambuja Housing Development Ltd.
7. Mr. Nasser Munjee
He is M.Sc. (Economics) from the London School of
Non-Executive,
Economics and joined the Board in August, 2001. He
served HDFC for about 21 years. He held the position
of Managing Director of Infrastructure Development
Finance Co. Ltd. He is also on the Board of several
large corporates.
8. Mr. Rajendra P. Chitale
He is a Chartered Accountant and a partner of M.P.
Non-Executive,
Chitale & Co., a reputed firm of Chartered Accountants
in Mumbai. He joined the Board in July, 2002. He is on
the Board of National Stock Exchange of India Ltd.
among others.
9. Mr. A. L. Kapur
He is a Graduate in Arts, a Chartered Accountant and
Whole-time Director
Cost Accountant. He joined the Board in May, 1999.
He has over 46 years of experience in industry
occupying various senior positions including that of
CEO. He is closely associated with cement industry
for more than two decades. He is on the Board of The
Associated Cement Companies Ltd. among others.
10. Mr. P. B. Kulkarni
He is a Mechanical Engineer having 38 years of
Whole-time Director
experience. He joined the company in 1983 as Project
Manager. After working in different positions in the
company he was appointed as Whole-time Director in
February, 1999.
11. Mr. A. V. Rao
(upto 31st January, 2004)
He is a Civil Engineer having 51 years of experience.
Whole-time Director
He joined the company in 1990 as Chief of Civil
Projects. He was appointed as Whole-time Director in
February, 1999.
Mr. A.V. Rao ceased to be a Whole-time Director of the
company w.e.f. 1st February, 2004 upon completion
of his 5 years tenure.
41
BLACK
41 RED
Brief resume
Category
12. Mr. Pulkit Sekhsaria
He is a Commerce Graduate from the University of
Whole-time Director
Mumbai. He has completed Accelerated Development
Management Programme from the London Business
School and Global Advanced Management
Programme from the Indian School of Business and
The Wharton School, U.S.A. He has 11 years of
experience. He was appointed as Whole-time Director
in January, 1996.
13. Mr. Anil Singhvi
He is a Commerce Graduate and a Chartered
Whole-time Director
Accountant having 22 years of experience. He joined
the company in 1986 as Deputy Manager (Finance).
After working in different positions in the company, he
was appointed as Whole-time Director in May, 1999.
14. Mr. B. L. Taparia
He is a Commerce and Law graduate and a Fellow
Member of the Institute of Company Secretaries of
Company Secretary
India having 34 years of experience. He joined the
Company in 1983 as Deputy Company Secretary. After
working in different positions in the company, he was
appointed as Whole-time Director in May, 1999.
15. Mr. N.P. Ghuwalewala
(w.e.f. 28th June, 2004)
He is a Chemical Engineer having 35 years of
Whole-time Director
experience, out of which 21 years' experience is in
Cement Industry. He has held senior positions in
various large companies of repute. He was earlier
Managing Director of Ambuja Cement Rajasthan Ltd.
He has been appointed as Whole-time Director w.e.f.
28th June, 2004.
16. Mr. N. S. Sekhsaria
He is a Chemical Engineer from University of Mumbai,
Managing Director
securing 2nd Rank in the University. He was appointed
as Managing Director in 1982.
2.2
Meetings and attendance record of each Director :
During the year ended on June 30, 2004, the Board of Directors had 5 meetings. These were held on 31st July, 2003,
17th October, 2003, 16th January, 2004, 16th April, 2004 and 28th June, 2004.
Other than the Annual General Meeting, there was no General Meeting of the shareholders of the company held during
the year ended on 30th June, 2004.
The attendance record of the Directors at the Board Meetings during the year ended on 30th June, 2004, and at the
last Annual General Meeting (AGM) is as under :GUJARAT AMBUJA CEMENTS LTD.
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42 RED
42
2.3
Attendance at
Board Meetings
Attendance at
last AGM
Mr. Suresh Neotia, Chairman
5
Yes
Mr. Vinod Neotia
3
No
Mr. M. L. Bhakta
5
Yes
Mr. Nimesh Kampani
3
Yes
Mr. M. T. Patel
2
No
Mr. Harshavardhan Neotia
4
No
Mr. Nasser Munjee
3
Yes
Mr. Rajendra P. Chitale
5
Yes
Mr. A. L. Kapur, Whole-time Director
5
Yes
Mr. P. B. Kulkarni, Whole-time Director
3
Yes
Mr. A. V. Rao, Whole-time Director (upto 31st January, 2004)
3 out of 3
No
Mr N. P. Ghuwalewala,
Whole-time Director (w.e.f. 28th June, 2004)
1 out of 1
N.A.
Mr. Pulkit Sekhsaria, Whole-time Director
5
Yes
Mr. Anil Singhvi, Whole-time Director
5
No
Mr. B. L. Taparia,
Whole-time Director & Company Secretary
5
Yes
Mr. N. S. Sekhsaria, Managing Director
5
Yes
Other Directorships etc.:
The details of the Directorships, Chairmanships and the Committee memberships in other Companies (excluding Private
Limited Companies, Foreign Companies and Section 25 Companies) held by the Directors as on 30th June, 2004 are
given below:Name of the Directors
No. of other
Directorships
Chairman
of the
Board
Committee
Member
Mandatory
NonMandatory
Chairman
of the
Committee
(Mandatory)
Mr. Suresh Neotia, Chairman
6
1
1
2

Mr. Vinod Neotia
2

Mr. M. L. Bhakta
4

4

2
Mr. Nimesh Kampani
9
2
5
4
1
Mr. M. T. Patel
1

1

9

3
3

Mr. Nasser Munjee
12

8
2
1
5

5
1
1
Mr. A. L. Kapur,
Whole-time Director
3

3
2
2
43
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43 RED
No. of other
Directorships
Chairman
of the
Board
Committee
Member
Mandatory
NonMandatory
Chairman
of the
Committee
(Mandatory)
Mr. P. B. Kulkarni,
Whole-time Director
3

1

Mr. N. P. Ghuwalewala
Whole-time Director
(w.e.f 28th June,04)
2

Mr. Pulkit Sekhsaria,
Whole-time Director

Mr. Anil Singhvi,
Whole-time Director
4

4
2

Mr. B. L. Taparia,
Company Secretary
6

Mr. N. S. Sekhsaria,
Managing Director
2

1
1

Mr. A.V. Rao ceased to be Whole-time Director of the company prior to June 2004, hence his name is not appearing
in the above statement.
2.4
Remuneration of Directors :
The Managing Director is paid remuneration, including commission, as per the agreement entered into with the company.
The Whole-time Directors are paid remuneration as per their respective agreements entered into with the company.
They are also paid commission which is decided on year to year basis by the Board of Directors based on the
recommendation of Compensation and Remuneration committee within the limit sanctioned by the shareholders. The
said commission provided for the year 2003-2004 is of Rs. 217 lacs. The amount payable to each individual was decided
on the basis of their respective assignments.
The other non-executive Directors are paid sitting fees for attending the Board and Committee meetings. In addition,
the company has provided for payment of commission of Rs. 32 lacs, divisible equally among the non-executive Directors.
The details of remuneration and sitting fees paid or provided to each of the Directors during the year ended on 30th June,
2004 are given below:Name of the
Directors
Salary
(Note No.1)
Sitting
fees
Commission
Stock
Options
(Note No. 2)
Service
Contract
Notice
Period
Rs.
Rs.
Rs.
Mr. Suresh Neotia,
Chairman
Nil
25,000
4,00,000
Nil
N.A.
N.A.
Mr. Vinod Neotia
Nil
55,000
4,00,000
Nil
N.A.
N.A.
Mr. M. L. Bhakta
Nil
85,000
4,00,000
Nil
N.A.
N.A.
Mr. Nimesh Kampani
Nil
50,000
4,00,000
Nil
N.A.
N.A.
Mr. M. T. Patel
Nil
10,000
4,00,000
Nil
N.A.
N.A.
Nil
20,000
4,00,000
Nil
N.A.
N.A.
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44 RED
44
Name of the
Directors
Salary
(Note No.1)
Sitting
fees
Commission
Stock
Options
(Note No. 2)
Service
Contract
Notice
Period
Rs.
Rs.
Rs.
Mr. Nasser Munjee
Nil
30,000
4,00,000
Nil
N.A.
N.A.
Nil
50,000
4,00,000
Nil
N.A.
N.A.
Mr. A. L. Kapur,
Whole-time Director
48,65,727
Nil
50,00,000
50,000 **
5 years
6 months
Mr. P. B. Kulkarni,
Whole-time Director
56,01,324
Nil
50,00,000
50,000 **
5 years
6 months
Mr. A. V. Rao,
Whole-time Director
(up to 31st Janaury, 2004)
52,46,748
Nil
25,00,000
35,000
5 years
6 months
Mr. N.P. Ghuwalewala *
Whole-time Director
(w.e.f. 28th June, 2004)
3,71,125
Nil
Nil
-
5 years
6 months
Mr. Pulkit Sekhsaria,
Whole-time Director
30,52,963
Nil
12,00,000
Nil
5 years
6 months
Mr. Anil Singhvi,
Whole-time Director
51,39,481
Nil
50,00,000
50,000 **
5 years
6 months
Mr. B. L. Taparia,
Whole-time Director
& Company Secretary
46,36,124
Nil
30,00,000
35,000
5 years
6 months
Mr. N. S. Sekhsaria,
Managing Director
1,22,53,222
Nil
3,36,77,959
Nil
5 years
Nil
TOTAL
4,11,66,714
3,25,000
5,85,77,959
2,20,000
(*) Remuneration to Mr. N.P. Ghuwalewala includes Rs. 3,46,099/- from 1st June, 2004 to 27th June, 2004 in the capacity
of Managing Director of erstwhile ACRL merged with the company (w.e.f. 1st June, 2004)
Notes :
1.
Salary includes basic salary, allowances, contribution to Provident, Superannuation and Gratuity Funds and perquisites
(including monetary value of taxable perquisites), etc.
2.
Stock Options:
(**) Constitutes more than 5% of the stock options granted during the year.
Managing Director Mr. N. S. Sekhsaria and Whole-time Director Mr. Pulkit Sekhsaria have not been granted stock
options in compliance with SEBI guidelines.
All the other Whole-time Directors were granted stock options on 21st January, 2004 as stated against their names. They
are entitled to subscribe for one equity share for each option at an exercise price of Rs. 310/- per share. This exercise
price was determined at an average of two week's high and low price of company's shares on National Stock Exchange
immediately preceding the date of grant.
These stock options will vest with the option holders on the expiry of one year from the date of grant and can be
exercised within a period of 5 years from the date of vesting.
2.5
Re-appointment of Directors :
The Directors, Mr. Harshavardhan Neotia, Mr. Pulkit Sekhsaria, Mr. Nimesh Kampani, Mr. Nasser Munjee and
Mr. P. B. Kulkarni shall retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves
for re-appointment.
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The term of Whole-time Directors Mr. A. L. Kapur, Mr. B. L. Taparia and Mr. Anil Singhvi have expired on 30th April, 2004.
The term of other Whole-time Director Mr. P. B. Kulkarni has expired on 31st January, 2004. All these Whole-time Directors
have been re-appointed by the Board for a further period of 5 years subject to the approval of the shareholders. Mr. N. P.
Ghuwalewala has been appointed as Additional Director on whole-time basis w.e.f. 28th June, 2004 and he will hold
office only upto the date of ensuing Annual General Meeting. Being eligible, he has offered himself for re-appointment.
Resolutions for re-appointment of aforesaid Directors are included in the Notice for the shareholders approval.
The brief particulars of the aforesaid Directors have been provided in paragraph 2.1 above. The details of their other
directorships and committee memberships are as under:Name of the Directors
Details of other directorships / Committee memberships
(other than Private Limited and Section 25 Companies)
Ambuja Cement Eastern Ltd.
(Member - Managing Committee, Share Transfer Committee,
Investors Grievance Committee, Chairman- Share Allotment Committee)
Saregama India Ltd.
(Member - Audit Committee)
Energy Development Company Ltd.
(Member - Audit Committee)
Ambuja Cement India Ltd.
Bengal Ambuja Housing Development Ltd.
Bengal Ambuja Metro Development Ltd.
Ganapati Parks Ltd.
GGL Hotels & Resort Company Ltd.
Choicest Enterprises Ltd.
Mr. Pulkit Sekhsaria

Mr. Nimesh Kampani
Apollo Tyres Ltd.
Britannia Industries Ltd.
(Member - Audit Committee, Share Transfer &
Shareholders Investors Grievance Committee)
Escorts Ltd.
(Member - Loan & Guarantee Committee)
J.M. Financial Ltd.
J.M. Share & Stock Brokers Ltd.
(Member - Audit Committee, Share Transfer Committee)
Deepak Nitrite Ltd.
Kampani Consultants Ltd.
KSB Pumps Ltd.
(Chairman - Audit Committee)
Ranbaxy Laboratories Ltd.
(Member - Remuneration / Compensation Committee,
Management Committee, Finance Committee)
Mr. Nasser Munjee
Housing Development Finance Corporation Ltd.
Mahindra and Mahindra Financial Services Ltd.
Voltas Ltd.
Repro India Ltd.
HDFC Investments Ltd.
Cummins Ltd.
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Details of other directorships / Committee memberships
(other than Private Limited and Section 25 Companies)
KPIT Cummins Infosystems Ltd.
Unichem Laboratories Ltd.
Asea Brown Boveri Ltd.
Skanska Cementation India Ltd.
Ambit Corporate Finance Pte. Ltd.
Securities Trading Corporation of India Ltd.
Tata Infotech Ltd.
Mr. A. L. Kapur
(Member - Share Allotment Committee, Chairman - Audit Committee)
The Associated Cement Companies Ltd.
(Member - Shareholders Investors Grievance Committee,
Chairman - Audit Committee, Operations Review Committee)
Mr. P. B. Kulkarni
(Member - Management Committee)
Indo Nippon Special Cements Ltd.
DLF Gujarat Ltd.
Mr. B. L. Taparia
Cement Ambuja International Ltd.
(Mauritius)
GACL Finance Ltd.
GGL Hotels & Resorts Co. Ltd.
Ican Investments Ltd.
Ican Securities & Research Ltd.
Kakinada Cements Ltd.
Mr. Anil Singhvi
(Member - Management Committee, Audit Committee, Remuneration
& Compensation Committee, Investors Grievance Committee)
(Member - Audit Committee, Share Allotment Committee)
Cement Ambuja International Ltd.
(Mauritius)
GACL Finance Ltd.
Ican Securities & Research Ltd.
3.
AUDIT COMMITTEE
(i)
The Audit Committee was constituted by the Board in 1988. The Audit Committee comprises of the following members:1.
Mr. Nimesh Kampani, Chairman
2.
Mr. M. L. Bhakta
3.
4.
Mr. Vinod Neotia
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All the members of the Audit Committee are non-executive Directors and three of them are Independent Directors. They
possess sound knowledge of accounts, audit, finance etc. Mr. Nimesh Kampani is the Chairman of the Audit Committee.
Mr. N. S. Sekhsaria, Managing Director and Mr. Anil Singhvi, Whole-time Director are the permanent invitees of the
Committee. Mr. B. L. Taparia, Whole-time Director & Company Secretary acts as Secretary to the Committee.
The representatives of the Statutory Auditors have attended all the Audit Committee meetings during the year. The
representatives of the Cost Auditors have attended 2 out of 5 Audit Committee meetings during the year.
(ii)
The terms of reference of the Audit Committee are as per the guidelines set out in the listing agreement with the Stock
Exchanges read with Section 292A of the Companies Act. These broadly include approval of annual Internal Audit plan,
review of financial reporting systems, internal control systems, ensuring compliance with regulatory guidelines, discussions
on quarterly, half yearly and annual financial results, interaction with statutory, internal & cost auditors, recommendation
for appointment of statutory and cost auditors and their remuneration. The Audit Committee reviews the quarterly report
submitted by the company's Systems & Audit Department.
Head of Systems & Audit department attends all the Committee Meetings as far as possible and briefs the Committee
on all the points covered in the Report as well as the other issues which come up during discussions.
(iii)
4.
The Audit Committee during the year ended on 30th June, 2004 had five meetings. The attendance of each Committee
member was as under:Name of the Directors
Category
No. of Meetings attended
Mr. Nimesh Kampani, Chairman
Non-Executive,
Independent
3
Mr. M. L. Bhakta
Non-Executive,
Independent
5
Non-Executive,
Independent
5
Mr. Vinod Neotia
Non-Executive
3
COMPENSATION AND REMUNERATION COMMITTEE
The Compensation & Remuneration Committee comprises of following members:1.
Mr. M. L. Bhakta, Chairman
2.
Mr. Nimesh Kampani
3.
Mr. Nasser Munjee
The Committee during the year ended on 30th June, 2004 had four meetings. The attendance of the members was as under:Name of the Directors
Category
Mr. M. L. Bhakta, Chairman
Non-Executive,
Independent
4
Mr. Nimesh Kampani
Non-Executive,
Independent
3
Mr. Nasser Munjee
Non-Executive,
Independent
3
Mr. N. S. Sekhsaria, Managing Director, attended all the meetings as an invitee.
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The Committee is empowered to finalise the basic structure of the Employees Stock Option Scheme and recommend the
same to the Board for its approval as well as for the approval of the shareholders. After these approvals, the Committee
decides the eligibility of each category of employees, grant the options to them and supervise the implementation of the
Scheme.
The Committee also decides the revision in remuneration of the Whole-time Directors and payment of commission to them
within the sanction of the shareholders.
The remuneration to the Whole-time Directors and grant of stock options to them are decided on the basis of following broad
criteria:a)
Industry trend
b)
Remuneration package in other comparable Corporates.
c)
Job contents and key performance areas.
d)
Company's performance and individual's key performance areas.
5.
SHARE ALLOTMENT AND INVESTORS' GRIEVANCES COMMITTEE
The Board had constituted a Share Allotment Committee in the year 1993 to look into the aspect of allotment of shares kept
in abeyance, allotment of privately placed preference shares, debentures, bonds etc. During the year 1999-2000, this Committee,
in conformity with the Corporate Governance Code, was re-constituted and named as "Share Allotment and Investors' Grievances
Committee" responsible for the redressal of investors' complaints also in addition to the then existing functions. This Committee
is headed by Mr. Vinod Neotia, Non-Executive Director and consists of the following members:1)
Mr. V. K. Neotia, Chairman
2)
3)
Mr. A. L. Kapur
4)
Mr. B. L. Taparia
5)
Mr. Anil Singhvi
During the year ended on 30th June, 2004, this Committee had 15 meetings which were attended by the members as under:Name of the Member
Category
Mr. Vinod Neotia
Non-Executive
5
Whole-time Director
13
Mr. A. L. Kapur
Whole-time Director
14
Mr. B. L. Taparia
Whole-time Director
15
Mr. Anil Singhvi
Whole-time Director
12
Mr. B. L. Taparia, Whole-time Director & Company Secretary is designated as the Compliance Officer who is overseeing the
investors' grievances. The company has received 251 complaints during the year ended on 30th June, 2004. All the complaints
have been processed on time. None of the complaints are pending for a period exceeding 30 days. All the requests for
transfer of shares have been processed on time and there are no transfers pending for more than 30 days.
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6.
OTHER COMMITTEES OF DIRECTORS
In addition to the above referred Committees which are mandatory under the Corporate Governance Code and under the
SEBI's guidelines on Stock Options, the Board of Directors has constituted the following more Committees of Directors to
look into various business matters :Name of the Committee
Business
Members as on
30th June, 2004
Committee of Directors
Approval for various facilities granted by
Mr. M. L. Bhakta
(Bank Matters)
the Banks, execution of documents, opening
and closing of Accounts, changes in
Mr. A. L. Kapur
authorised signatories, giving operating
Mr. B. L. Taparia
instructions and all other banking matters.
Mr. Anil Singhvi
To authorise various executives of the
Mr. N. S. Sekhsaria
Management Committee
company for attending and executing
Mr. Nimesh Kampani
company's work as may be considered
Mr. P. B. Kulkarni
necessary and for that purpose to grant
Mr. A. L. Kapur
requisite "Power of Attorney".
Mr. B. L. Taparia
Mr. Anil Singhvi
Share Transfer Committee
To approve registration of transfer of shares/
Mr. B. L. Taparia
debentures/bonds, issue of duplicate/
Mr. P. B. Kulkarni
re-materialised shares, transmission of
Mr. A. L. Kapur
shares/ debentures/ bonds, consolidation
and splitting of certificates etc.
Mr. Anil Singhvi
7.
GENERAL BODY MEETINGS
(i)
Location and Time of General Body Meetings:
The company convenes Annual General Meeting generally within four months of the close of the Corporate Financial
Year. The details of Annual General Meetings held in last 3 years are as under:Year
Day, Date and Time
Venue
2000-2001
19th AGM held on Friday, 5th October, 2001 at 2.30 p.m.
Registered Office
2001-2002
20th AGM held on Friday, 11th October, 2002 at 9.00 a.m.
Registered Office
2002-2003
21st AGM held on Monday, 6th October, 2003 at 9.00 a.m.
Registered Office
In addition to Annual General Meeting, the company holds Extraordinary General Meetings of the shareholders as and
when need arises. There was no such meeting during the year ended on 30th June, 2004.
(ii)
Postal Ballot:
The company in compliance with the provisions of Section 192A of the Companies Act, 1956 read with Companies
(Passing of Resolutions by Postal Ballot) Rules 2001, at the previous Annual General Meeting, sought the voting from
the shareholders by Postal Ballot for passing a special resolution authorising Board to take all necessary steps for
delisting of company's equity shares from the Stock Exchanges at Ahmedabad, Delhi and Kolkata.
Mr. N. H. Parekh, Parekh & Company, Tax Consultant, Somnath Mandir Trust Building, Kodinar, Dist. Junagadh were
appointed as Scrutinizer to conduct the postal ballot process.
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The resolution was declared as passed through the postal ballot. The details of voting pattern was as under:No. of votes assenting the resolution
:
5,06,90,996
No. of votes dissenting the resolution
:
22,056
There is no resolution this year which is required to be voted by postal ballot in terms of the provisions of Section 192A
of the Companies Act, 1956 read with Companies (Passing of Resolutions by Postal Ballot) Rules 2001.
8.
DISCLOSURES
(i)
There are no materially significant transactions with the related parties viz. Promoters, Directors or the Management,
their Subsidiaries or relatives conflicting with company's interest. Suitable disclosure as required by the Accounting
Standard (AS18) has been made in the Annual Report.
(ii)
There are no pecuniary relationship or transactions of non-executive directors vis-ã-vis the company which has potential
conflict with the interests of the company at large.
(iii)
No penalties or strictures have been imposed on the company by Stock Exchange or SEBI or any statutory authority
on any matter related to capital markets during the last three years.
9.
MEANS OF COMMUNICATION
The quarterly, half-yearly and yearly financial results of the company are sent to the Stock Exchanges immediately after they
are approved by the Board. These are widely published in The Economic Times, The Financial Express and Jaihind.
These results are simultaneously posted on the website of the company at http/www.gujaratambuja.com and on the
Electronic Data Information Filing and Retrieval (EDIFAR) website maintained by SEBI in association with the National
Informatics Centre (NIC).
The official press releases and some other relevant information are also available on the same website.
10. GENERAL SHAREHOLDERS' INFORMATION
10.1 Registered Office :
P.O. Ambujanagar, Taluka Kodinar, District Junagadh, Gujarat - 362 715
10.2 Corporate Office & Address for Correspondence :
122, Maker Chambers III, Nariman Point, Mumbai - 400 021
10.3 Plant Locations :
Cement Plants
1.
P. O. Ambujanagar, Taluka Kodinar, District Junagadh, Gujarat - 362 715
2.
Village Suli, P. O. Darlaghat, District Solan, Himachal Pradesh - 171 102
3.
Maratha Cement Works, At Post - Upperwahi, Dist. Chandrapur, Maharashtra - 442 908
4.
Village Rabriyawas, Tehsil Jaitaran, Dist. Pali, Rajasthan - 306 709
(consequent upon merger of Ambuja Cement Rajasthan Ltd.)
5.
Village Daburji, District Roopnagar, Punjab - 140 001 (clinker grinding unit)
6.
P. O. & District Bathinda, Punjab - 150 001(clinker grinding unit)
Bulk Cement Terminals
1.
Muldwarka, Taluka Kodinar, District Junagadh, Gujarat - 362 715
2.
Survey No. 39/40, Magdalla Port Road, Village Gavier, Taluka-Choryasi, District Surat, Gujarat - 395 010
3.
Village Moha, Near Ulwa Reti Bunder, Post. Ulwa, District Raigad, Maharashtra - 410 306
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10.4 Share Transfer Agents :
Sharepro Services,
Satam Estate, 3rd Floor, Above Bank of Baroda,
Cardinal Gracious Road, Chakala,
Andheri (East), Mumbai 400 099.
Tel. No.: (022) 2821 5168 / 2834 7719
Or
Their Investor Relation Centre at 912, Raheja Centre, Free Press Journal Road,
Nariman Point, Mumbai - 400 021
Tel. No. : (022) 2282 5163 / 2284 4668.
Email - [email protected]
10.5 Annual General Meeting :
Date, Time and Venue
Day & Date : Monday, 18th October, 2004
Time
: 9.00 A.M.
Venue
: Registered Office - P.O. Ambujanagar, Taluka Kodinar,
District Junagadh, Gujarat - 362 715.
10.6 Book Closure :
20th August, 2004 to 30th August, 2004.
10.7 Dividend Payment Date :
Within seven working days from the date of Annual General Meeting.
10.8 Listing of Shares & Other Securities:
A. Equity Shares
The equity shares are at present listed at the following Stock Exchanges.
Name of the Stock Exchanges
(i)
Stock Code
The Stock Exchange, Mumbai
500425
Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 023
(ii)
National Stock Exchange of India Ltd.
3000425
Exchange Plaza, 5th floor, Plot No. C/1, G Block,
Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051
(iii)
The Calcutta Stock Exchange Association Ltd.
58
7, Lyons Range, Kolkata - 700 001
(iv)
The Delhi Stock Exchange Association Ltd.
07021
3 & 4 / 4B, Asaf Ali Road, New Delhi - 110 002
Pursuant to shareholders' approval at its meeting held on 6th October, 2003, the company had made applications
for delisting of company's shares from the Stock Exchanges at Ahmedabad, Delhi and Kolkata. The Stock Exchange
at Ahmedabad has given its approval for delisting of company's shares w.e.f. 8th July, 2004. The approvals from
Stock Exchanges at Delhi & Kolkata are awaited.
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B. Debentures
All the outstanding Debentures of the company (except Series 9 to 14) are listed at the wholesale debt segment
of the National Stock Exchange of India Ltd.
C. GDRs
The GDRs are listed at Luxembourg Stock Exchange, Societe de la Bourse de Luxembourg, Avenue de la Porte
Neuve L-2011 Luxembourg, B.P.165
10.9 Listing Fees :
Company has paid listing fees for the Financial Year 2004-2005 to the Stock Exchanges at Mumbai (BSE), National
Stock Exchange of India Ltd. (NSE) and the Delhi Stock Exchange Association Ltd. (DSE). However, listing fees to Stock
Exchange Kolkata has not been paid in view of the pending de-listing application with the said Stock Exchange.
10.10 Market price Data :
The high/ low market price of the shares during the year 2003-2004 at the Stock Exchange, Mumbai and at National
Stock Exchange of India Ltd. were as under:Month
July, 2003
August, 2003
September, 2003
October, 2003
November, 2003
December, 2003
January, 2004
February, 2004
March, 2004
April, 2004
May, 2004
June, 2004
Mumbai Stock Exchange
National Stock Exchange
High
Low
High
Low
231.90
240.00
244.90
255.00
295.00
315.00
334.90
323.00
326.90
341.50
347.00
303.00
195.10
217.00
198.50
221.00
254.10
272.50
273.25
271.15
276.00
297.00
250.00
253.50
231.90
239.40
244.85
255.00
295.00
314.85
335.00
322.75
326.40
341.85
347.30
307.80
191.20
216.00
199.00
220.50
255.65
272.10
270.10
271.10
277.10
297.00
251.60
231.00
10.11 Performance in comparison to broad based indices :
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10.12 Distribution of Shareholding :
The shareholding distribution of equity shares as on 30th June, 2004 is given below :No. of
Equity Shares
No. of
Shareholders
No. of
Shares
Percentage of
Shareholding
Less than 50
43782
656035
0.37
51 to 100
10553
971742
0.54
101 to 500
22718
6336575
3.53
501 to 1000
9430
6476304
3.61
1001 to 5000
4610
8781422
4.90
5001 to 10000
227
1577507
0.88
10001 to 50000
225
5079031
2.83
50001 to 100000
48
3581285
1.99
100001 to 500000
85
18993082
10.59
500001 & above
50
126946968
70.76
91728
179399951
100.00
TOTAL
10.13 Shareholding Pattern:
The shareholding of different categories of the shareholders as on 30th June, 2004 are given below: Category
No. of
shares
Body Corporates (24.87%)
44617618
International Finance
Corporation, Washington (1.49%)
2679952
Affinity Investments Ltd., Mauritius
(An associate of Warburg Pincus) (4.46%)
8000000
Foreign Investors (including FIIs) (21.32%)
38243899
OCB, NRIs (2.12%)
3803218
Mutual Funds, Banks & Institutions (24.33%)
43652198
GDR Holders (6.98%)
12523603
Others (14.43%)
25879463
TOTAL
179399951
10.14 Dematerialisation of shares :
95% of total Equity Share Capital is held in dematerialised form with NSDL and CDSL as on 30th June 2004.
10.15 Outstanding GDRs or Warrants or any Convertible Instrument, conversion dates and likely impact on equity :
(i)
The company had issued Foreign Currency Convertible bonds in the year 1993. All these bonds were converted into
Global Depository Receipts (GDRs) representing equity shares in the company.
In January, 2001, the company had further issued Foreign Currency Convertible Bonds of the aggregate value of
US$ 99.3 million. Most of these bonds have been converted into Global Depository Receipts (GDRs) representing
equity shares in the company. The remaining bondholders have been redeemed the accreted value of the bond as
per the terms of the said issue.
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The aforesaid GDRs from both the issues are listed on the Luxembourg Stock Exchange, Luxembourg. The underlying
shares representing the outstanding GDRs have already been included in equity share capital. Therefore, there will
be no further impact on the equity capital of the company.
(ii)
The company has issued warrants and has granted stock options from time to time in past. The outstanding position
of these convertible instruments as on 30th June, 2004 and their likely impact on the equity share capital is as under:Sr.
No.
1.
Issue
Particulars
Conversion
Rate per share
Share
Capital
(Rs. in crores)
Share
Premium
(Rs. in crores)
0.00
(Rs. 11,500)
0.03
Employees Stock Options
1150 Outstanding options granted under
ESOS 1999-2000, one stock option
convertible into two equity shares upto
31st January, 2005.
At an adjusted
price of Rs. 125
convertible into one equity share upto
12th November, 2009.
Rs. 138
0.37
4.76
18th October, 2007.
Rs. 150
0.29
4.11
23rd October, 2008.
Rs. 166
0.53
8.25
20th January, 2010.
Rs. 310
0.85
25.62
2.04
42.77
At an adjusted
price of Rs. 50
0.02
0.08
At an adjusted
price of Rs. 56.25
0.03
0.12
SUB-TOTAL (B)
0.05
0.20
GRAND TOTAL (A+B)
2.09
42.97
SUB-TOTAL (A)
2.
Likely Impact on
full conversion
Rights entitlement kept in abeyance out
of the Rights Issue of equity shares and
warrants to equity shareholders made in
the year 1992
19644 Right shares
25892 warrants
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(iii)
The diluted equity share capital of the company upon conversion of all the outstanding convertible instruments will
become Rs. 181.50 crores.
10.16 Share Transfer System :
Shares sent for transfer in physical form are registered and returned by our Registrars and Share Transfer Agents in
about 15 to 20 days of receipt of the documents, provided the documents are found in order. Shares under objection
are returned within two weeks. The Share Transfer Committee meets generally on a weekly basis to consider the
transfer proposals.
10.17 Financial Calendar 2004-2005 :
First quarterly results
:
October, 2004
Second quarterly/ Half yearly results
:
January, 2005
Third quarterly results
:
April, 2005
Annual results for the year ending
on 30th June, 2005
:
August, 2005
Annual General Meeting for the
year ending on 30th June, 2005
:
October, 2005
10.18 Dividend Policy :
The first issue of shares was made by the company in the year 1985-86 at Rs.10/- per share. Company is paying
dividend from its very first full year of operation. From a modest dividend of 11% in 1987-88, company has been
increasing dividend almost every year. This year, the Board has recommended a dividend of Rs. 8/- per share including
Rs. 5/- paid as interim dividend.
One share issued by the company in the year 1985 at Rs.10/- has received a total dividend of Rs.186.80 as of date
and considering the proposed final dividend for this year, it would amount to a total of Rs.198.80. The said one share
as of 28th July, 2004 has accreted to four shares of the present market value of Rs. 1067/- approximately, an appreciation
of 106 times of original investment. On the original investment of Rs. 10/-, the dividend received this year will be
Rs. 32/-.
The payout ratio for the year 2003 - 2004 is 48%. As a future policy for payment of dividend, company shall endeavour
to follow a pay-out ratio of atleast 35% in the normal circumstances.
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CERTIFICATE
To the Members of
Gujarat Ambuja Cements Limited
Mumbai.
We have examined the compliance of the conditions of Corporate Governance by GUJARAT AMBUJA CEMENTS LIMITED
for the year ended 30th June, 2004, as stipulated in Clause 49 of the Listing Agreement of the said Company, with the
stock exchanges.
The compliance of the conditions of Corporate Governance is the responsibility of the management. Our examination has
been limited to a review of the procedures and implementations thereof, adopted by the Company for ensuring compliance
with the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements
of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company
has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the above mentioned Listing
Agreement.
As required by the Guidance Note issued by the Institute of Chartered Accountants of India, we state that, based on the
records maintained by the Company and confirmation received from its Registrars and Share Transfer Agents no investor
grievances are pending for a period exceeding one month against the Company as at 30th June, 2004.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency
or effectiveness with which the management has conducted the affairs of the Company.
For DALAL & SHAH
Chartered Accountants
For S. R. BATLIBOI & ASSOCIATES
B. R. Shah
Partner
Membership No. 5806
Sudhir Soni
Partner
Membership No. 41870
Mumbai, July 28, 2004
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AUDITORS’ REPORT
To the Members of Gujarat Ambuja Cements Limited,
1.
We have audited the attached Balance Sheet of Gujarat Ambuja Cements Limited as at 30th June, 2004 and
also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto.
These financial statements are the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
2.
We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
3.
As required by the Companies (Auditor's Report) Order, 2003 ('the Order') issued by the Central Government
of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4.
Further to our comments in the Annexure referred to above, we report that:
i.
We have obtained all the information and explanations, which to the best of our knowledge and belief
were necessary for the purposes of our audit;
ii.
In our opinion, proper books of account as required by law have been kept by the Company so far as
appears from our examination of those books;
iii. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in
agreement with the books of account;
iv.
In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this
report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies
Act, 1956;
v.
On the basis of the written representations received from the directors, as on 30th June, 2004, and taken
on record by the Board of Directors, we report that none of the directors is disqualified as on 30th June,
2004 from being appointed as a director in terms of section 274(1)(g) of the Companies Act, 1956;
vi. In our opinion and to the best of our information and according to the explanations given to us, the said
accounts read together with the notes thereon, give the information required by the Companies Act, 1956,
in the manner so required and give a true and fair view in conformity with the accounting principles generally
accepted in India:
a)
in the case of the Balance Sheet, of the state of affairs of the Company as at 30th June, 2004;
b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and
c)
in the case of Cash Flow Statement, of the cash flows for the year ended on that date.
For DALAL & SHAH
B. R. Shah
Partner
(Membership No. 5806)
Sudhir Soni
Partner
Mumbai
July 28, 2004.
Mumbai
July 28, 2004.
BLACK
58 RED
58
ANNEXURE
Referred to in paragraph 3 of our report of even date
Re: Gujarat Ambuja Cements Limited
(i)
(a) The Company is maintaining proper records showing full particulars, including quantitative details and situation
of fixed assets.
(b) The Company has a program for physical verification of fixed assets on a rotational basis, which in our opinion
is reasonable having regard to the nature of the business. Accordingly, certain fixed assets have been physically
verified by the management during the year and no material discrepancies were noticed on such verification.
(c) During the year, there was no substantial disposal of fixed assets.
(ii)
(a) The management has conducted physical verification of inventory at reasonable intervals other than materials
lying with third parties, which have been substantially confirmed by them.
(b) The procedures for physical verification of inventory followed by the management are reasonable and adequate
in relation to the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical
verification as compared to book records.
(iii)
The Company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other
parties covered in the register maintained under Section 301 of the Companies Act, 1956.
(iv)
In our opinion and according to the information and explanations given to us, there are adequate internal control
procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory
and fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed
in the internal controls in respect of these areas.
(v)
(a) According to the information and explanations provided by the management, we are of the opinion that the
transactions that need to be entered into the register maintained under Section 301 have been so entered.
(b) In our opinion and according to the information and explanations given to us, the transactions with parties with
whom transactions exceeding value of Rupees five lakhs have been entered into during the financial year are
at prices which are reasonable having regard to the prevailing market prices at the relevant time.
(vi)
The Company has not accepted any deposits from the public to which the directives issued by the Reserve Bank
of India and the provisions of section 58 A of the Act and the rules framed thereunder apply.
(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the
Central Government for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956, and
are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have
however not made a detailed examination of the records with a view to determine whether they are accurate.
(ix)
(a) The Company is generally regular in depositing with appropriate authorities, undisputed statutory dues including
provident fund, investor education and protection fund, employees' state insurance, income-tax, sales-tax, wealth-tax,
custom duty, excise duty, cess and other material statutory dues applicable to it. According to the information
and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax,
customs duty and excise duty were outstanding, at the year end for a period of more than six months from the
date they became payable.
59
BLACK
59 RED
(b) According to the records of the Company, the disputed statutory dues on account of sales tax, income tax,
custom duty, wealth tax, excise duty and cess that have not been deposited on account of matters pending
before appropriate authorities are as follows:
Name of the
statute
Nature of dues
Amount due
(Rs. crores)
Period to which
the amount
relates
Sales tax
Dispute regarding sales
tax exemption
34.34
1995 - 1998
Sales tax set-off
0.12
1991 to 1995
Gujarat Sales Tax
Appellate Tribunal
Income tax
Act, 1961
Non-deduction of
tax at source
3.46
1999-2000
Income Tax
Appellate Tribunal
Central Excise
Act, 1964
Dispute on MODVAT/CENVAT
on capital goods
0.18
1996 and
2000-2001
Customs, Excise and
Service Tax Appellate
Tribunal
Dispute on MODVAT/CENVAT
on capital goods (*)
2.41
1995 to 97
Honourable
High Court
Dispute on availment
of MODVAT/CENVAT
2.31
1996-1997 and
2001 to 2002
Commissioner
(Appeals)
of MODVAT/CENVAT
0.06
2003
Assistant
Commissioner
0.32
1995 to 2004
Demand on export Cement
used for home consumption
0.15
2003-2004
Commissioner
(Appeals)
Demand on excise of
earthquake supply
0.01
2001-02
Commissioner
(Appeals)
Demand on excise of
earthquake supply
0.03
2001-02
Customs, Excise and
Service Tax Appellate
Tribunal
of MODVAT/CENVAT
Forum where dispute
is pending
Honourable
Supreme Court
Deputy Commissioner
(*) Includes Rs 2.19 crores where department is in appeal.
(x)
The Company has no accumulated losses at the end of the financial year and has not incurred any cash losses
in the current and immediately preceding financial year.
(xi)
Based on the information and explanations given by the management, we are of the opinion that the Company has
not defaulted in repayment of dues to financial institutions, banks or debentureholders.
(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures
and other securities.
(xiii) In our opinion, the Company is not a chit fund and nidhi/ mutual benefit fund/society. Therefore, the provisions of
clause 4(xiii) of the Order are not applicable to the Company.
(xiv) In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader
in securities. The Company has invested surplus funds in marketable securities and mutual funds. According to the
information and explanations given to us, proper records have been maintained of the transactions and contracts
and timely entries have been made therein. The marketable securities and mutual funds have been held by the
Company, in its own name.
(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans
taken by others from banks or financial institutions.
(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose
for which the loans were obtained.
BLACK
60 RED
60
(xvii) According to the information and explanations given to us and on overall examination of the balance sheet of the
Company, we report that no funds raised on short-term basis have been used for long-term investment. No long
term funds have been used to finance short term assets except working capital.
(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
(xix) According to the information and explanations given to us, the Company has created security for the debentures
issued.
(xx) The Company has not raised any money through a public issue during the year.
(xxi) According to the information and explanations given to us, we report that no fraud on or by the Company has been
noticed or reported during the year.
For DALAL & SHAH
B. R. Shah
Partner
Sudhir Soni
Partner
Mumbai
July 28, 2004.
Mumbai
July 28, 2004.
61
BLACK
61 RED
BALANCE SHEET
as at 30th June, 2004
Schedule
Rs. in Crores
As at
30.06.2004
Rs. in Crores
As at
30.06.2003
Rs. in Crores
SOURCES OF FUNDS
Shareholders' Funds
Share Capital ...................................................................
Share Application Money, pending allotment ......................
Employee Stock Option Outstanding (Refer Note 24) ..........
Reserves and Surplus ........................................................
Loan Funds
Secured Loans ..................................................................
Unsecured Loans :
99,300 1% Foreign Currency Convertible Bonds
(FCCB) of US$ 1,000 each (Refer Note 20) ........................
Others ..............................................................................
A
179.40
0.02
0.05
1,842.29
B
155.30
0.01
0.08
1,461.25
2,021.76
1,616.64
C
649.78
845.00
D

619.90
461.37
444.91
619.90
906.28
Deferred Tax Liability, net (Refer Note 8(b)) .........................
1,269.68
370.71
1,751.28
305.30
TOTAL ........................................
3,662.15
3,673.22
APPLICATION OF FUNDS
Fixed Assets
Gross Block ......................................................................
Less: Depreciation .............................................................
E
3,658.07
1,284.14
2,957.93
1,012.04
Net Block ..........................................................................
Capital Work in Progress (Refer Note 26) ...........................
2,373.93
101.35
1,945.89
53.10
Advances against capital expenditure .................................
2,475.28
22.94
1,998.99
13.37
Investments ............................................................................
Current Assets, Loans and Advances
Inventories ........................................................................
Sundry Debtors .................................................................
Cash and Bank Balances ...................................................
Other Current Assets .........................................................
Loans and Advances .........................................................
Less: Current Liabilities and Provisions .........................
Liabilities ..................................................................
Provisions .................................................................
2,498.22
1,010.97
F
G
H
I
J
K
L
2,012.36
1,101.71
254.28
42.71
68.83
0.74
124.92
224.31
45.94
30.88
0.86
511.76
491.48
813.75
276.07
71.34
191.59
74.31
347.41
Net Current Assets ................................................................
Miscellaneous Expenditure
(to the extent not written off or adjusted) .....................................
265.90
547.85
8.89
11.30
3,662.15
3,673.22
M
TOTAL ........................................
Notes forming part of the Accounts ....................................................
144.07
S
As per our attached report of even date
For and on behalf of
DALAL & SHAH
B. R. Shah
Partner
Membership No. 5806
Mumbai, 28th July, 2004
S. R. BATLIBOI & ASSOCIATES
Sudhir Soni
Partner
For and on behalf of the Board
Suresh Neotia
N. S. Sekhsaria
Managing Director
Vinod Neotia
M. L. Bhakta
M. T. Patel
Rajendra P. Chitale
Nasser Munjee
B. L. Taparia
Company Secretary
A. L. Kapur
P. B. Kulkarni
Pulkit Sekhsaria
Anil Singhvi
N. P. Ghuwalewala
BLACK
62 RED
62
Chairman
}
}
Directors
Whole-time Directors
PROFIT AND LOSS ACCOUNT
for the year ended 30th June, 2004
Schedule
INCOME
Rs. in Crores
2002-2003
Rs. in Crores
2,305.18
337.07
Sales
...............................................................................
Less : Excise duty paid ...............................................................
Other Income ...........................................................................
2003-2004
Rs. in Crores
N
2,025.30
283.05
1968.11
50.49
1,742.25
36.30
2,018.60
1,778.55
EXPENDITURE
Manufacturing Expenses ............................................................
Variation in Stocks .....................................................................
Administrative, Selling and other Expenses .................................
Interest and Finance Charges, (net) ............................................
Depreciation and Amortization ..................................................
O
P
Q
R
888.51
(11.27)
553.84
78.43
168.61
Profit before tax and prior period items ......................................
Prior period items
Depreciation written back [Refer Note 23 (a)] .............................
Administrative, Selling and other Expenses [Refer Note 23 (b)] .....
1,678.12
1,524.99
340.48
253.56
60.07
(17.05)
Profit before Tax ........................................................................
Provision for Taxation [Refer Note 8 (a) (b)]
–
Current tax .......................................................................
–
Deferred tax .....................................................................
–
–
43.02
–
383.50
253.56
20.30
26.41
Profit after Tax ...........................................................................
Balance as per last Account .......................................................
Debit balance of Profit and Loss Account as on 1st June, 2004
of erstwhile Ambuja Cement Rajasthan Limited (ACRL) ................
Less: Adjusted from General Reserve [Refer Note 28 (b) (iii)] ........
19.75
11.72
46.71
31.47
336.79
90.96
222.09
76.01
320.90
320.90
Transferred from Debenture Redemption Reserve ........................
Transferred from Investment Allowance (Utilised) Reserve Account
Transferred to Debenture Redemption Reserve ............................
Transferred to General Reserve ..................................................
Interim Dividend
On Equity Shares ..............................................................
Corporate Dividend Tax on above .....................................
88.25
11.31
Proposed Final Dividend On Equity Shares .........................
53.82
7.03
Balance carried to Balance Sheet ...............................................
814.68
(4.39)
455.42
87.94
171.34
–
–

127.75

2.55
275.00
–
18.75
15.50
18.75
100.00
277.95
213.60
46.58
5.97
99.56
52.55
62.13
7.96
60.85
70.09
117.54
90.96
21.24
19.62
14.31
12.80
S
Earning Per Share - in Rs. (Refer Note 7)
Basic
...............................................................................
Diluted
...............................................................................
DALAL & SHAH
B. R. Shah
Partner
Membership No. 5806
Sudhir Soni
Partner
Suresh Neotia
N. S. Sekhsaria
Managing Director
Vinod Neotia
M. L. Bhakta
M. T. Patel
Rajendra P. Chitale
Nasser Munjee
B. L. Taparia
Company Secretary
A. L. Kapur
P. B. Kulkarni
Pulkit Sekhsaria
Anil Singhvi
N. P. Ghuwalewala
Chairman
}
}
Directors
63
BLACK
63 RED
CASH FLOW STATEMENT
Rs. in Crores
A)
2003-2004
Rs. in Crores
2002-2003
Rs. in Crores
383.50
253.56
CASH FLOW FROM OPERATING ACTIVITIES
PROFIT BEFORE TAX ........................................................................................
Adjustment for :
Depreciation & Amortization .....................................................................
168.61
171.34
Surplus on sale of assets ...........................................................................
(0.40)
(1.65)
Loss on assets discarded/sold ...................................................................
3.39
1.10
Provision for diminution in Investment .......................................................
1.62
–
Abandoned Capital Project .......................................................................
4.23
–
Part of deferred revenue expenditure, written off ........................................
0.70
1.00
Exchange rate difference ..........................................................................
(9.31)
(12.60)
Profit on sale of investments ......................................................................
(7.66)
(2.27)
Interest and Finance Charges ...................................................................
78.43
87.94
Dividend ..................................................................................................
(5.60)
(2.32)
Bad Debts, Sundry Debit Balances and Claims written off ...........................
1.01
0.72
Provision for doubtful debts and advances .................................................
6.93
0.18
Provision for doubtful debts and advances, written back .............................
(0.13)
(0.72)
Provision for wealth tax .............................................................................
0.27
0.27
Prior period items - Depreciation written back ............................................
(60.07)
OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES ............................
–
182.02
242.99
565.52
496.55
Adjustment for :
(11.30)
(161.51)
Inventories ...............................................................................................
17.34
(15.94)
Trade Payables .........................................................................................
42.69
29.79
Trade and other receivables ......................................................................
48.73
614.25
CASH GENERATED FROM OPERATIONS ..........................................................
348.89
Interest and Finance Charges paid ............................................................
(120.92)
(137.38)
Direct Taxes paid ......................................................................................
(28.74)
(20.54)
Miscellaneous Expenditure ........................................................................
(0.27)
(1.27)
Exchange rate difference ..........................................................................
9.92
12.60
NET CASH FROM OPERATING ACTIVITIES ........................................................
B)
(147.66)
(140.01)
(146.59)
474.24
202.30
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets ...................................................................................
(256.72)
(136.49)
Sale of Fixed Assets ..........................................................................................
3.55
4.44
Investments (Purchases), Loans & Advances .......................................................
(2,224.20)
(1,196.37)
Sale of Investments ..........................................................................................
2,193.66
1,220.95
Interest received ...............................................................................................
35.91
42.75
Dividend and Income from Units received .........................................................
5.60
2.32
NET CASH USED IN INVESTING ACTIVITIES .....................................................
(242.20)
(62.40)
Carried forward ..................................
232.04
139.90
BLACK
64 RED
64
Rs. in Crores
2003-2004
Rs. in Crores
2002-2003
Rs. in Crores
232.04
139.90
CASH FLOW STATEMENT (Contd.)
Brought forward ..................................
C)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issue of Share Capital including Share premium .........................
16.35
1.73
Repayment / Conversion of 1% FCCB ...............................................................
(9.25)
–
Premium on redemption of Debentures and Share Issue expenses ......................
(11.36)
(38.64)
Total proceeds from borrowings (Net of Repayments) .........................................
(38.33)
(31.88)
Subsidy received ..............................................................................................

0.02
Dividend paid ..................................................................................................
(168.63)
(90.98)
NET CASH FROM FINANCING ACTIVITIES .......................................................
(211.22)
(159.75)
NET INCREASE /(DECREASE) IN CASH AND CASH EQUIVALENTS .....................
20.82
(19.85)
CASH AND CASH EQUIVALENTS AS AT 01.07.2003 (Opening Balance) ...........
30.88
50.73
ADD : CASH AND BANK BALANCES TAKEN OVER ON
AMALGAMATION OF ERSTWHILE ACRL ...........................................................
17.13
–
CASH AND CASH EQUIVALENTS AS AT 30.06.2004 (Closing Balance) .............
68.83
30.88
DALAL & SHAH
B. R. Shah
Partner
Membership No. 5806
Sudhir Soni
Partner
Suresh Neotia
N. S. Sekhsaria
Managing Director
Vinod Neotia
M. L. Bhakta
M. T. Patel
Rajendra P. Chitale
Nasser Munjee
B. L. Taparia
Company Secretary
A. L. Kapur
P. B. Kulkarni
Pulkit Sekhsaria
Anil Singhvi
N. P. Ghuwalewala
Chairman
}
}
Directors
65
BLACK
65 RED
SCHEDULES 'A' TO 'S'
annexed to and forming part of the Balance Sheet as at and
Profit and Loss account for the year ended 30th June, 2004
Rs. in Crores
SCHEDULE ‘A’ – SHARE CAPITAL
Authorised :
25,00,00,000 Equity Shares of Rs. 10 each ..........................................................
15,00,00,000 Preference Shares of Rs. 10 each ...................................................
As at
30.06.2004
Rs. in Crores
250.00
150.00
As at
30.06.2003
Rs. in Crores
250.00
150.00
400.00
400.00
Issued :
17,94,45,487 (15,54,55,060) Equity Shares of Rs. 10 each ..................................
179.45
155.46
Subscribed :
17,93,99,951 (15,53,17,771) Equity Shares of Rs. 10 each fully called up ............
Less: Allotment and Call money in arrears (other than Directors) .....
179.40

155.32
0.02
TOTAL .................................................................
179.40
155.30
Notes:
Out of above Equity Shares :
1) 10,45,64,748 (10,45,35,395) Shares of Rs. 10 each, have been issued as fully
paid up Bonus Shares by way of capitalisation of Security Premium Account and
Capital Redemption Reserve Account.
2) 49,42,448 (49,11,248) Shares have been issued against exercise of Tradeable
Warrants attached to 18.5% Secured Redeemable Non-Convertible Debentures.
3) 1,24,94,190 Shares have been issued on conversion of 15,997 3.5% Foreign
Currency Convertible Bonds of US $ 5,000 each.
4) 2,02,84,938 Shares have been issued on conversion of 97,200 1% Foreign
Currency Convertible Bonds of US $ 1,000 each.
5) 26,62,474 Equity Shares have been allotted during the year to the Shareholders
of the amalgamating company Ambuja Cement Rajasthan Limited pursuant to
the scheme of amalgamation as approved by the Board for Industrial and Financial
Reconstruction (BIFR) without payment being received in cash (Refer Note 28).
6) Outstanding Employee stock option exercisable into 20,50,635 Equity Shares;
(previous year 22,39,700 Equity Shares) (Refer Note 24).
SCHEDULE ‘B’ – RESERVES AND SURPLUS
Subsidies :
(a) Cash Subsidies from Government and other authorities :
As per last Account ..........................................................................................
Add : Transferred on amalgamation of erstwhile ACRL ......................................
Add : Received during the year .........................................................................
(b) Grant-in aid Subsidy from DANIDA ..................................................................
1.10
0.20

1.08
–
0.02
1.30
1.10
0.12
0.12
1.42
1.22
Capital Reserve :
Excess of Share Capital of erstwhile Ambuja Cement Rajasthan Limited over
amount credited by the Company to Share Capital
[Refer Note 28 (b) (iv)] ...........................................................................................
130.46
–
Capital Redemption Reserve Account ..................................................................
100.00
100.00
Security Premium Account :
As per last Account ...............................................................................................
Additions during the year :
Transferred on amalgamation of erstwhile ACRL [Refer Note 28 (b) (ii)] ...................
476.28
C/f ..................................
BLACK
66 RED
9.33
–
485.61
495.25
231.88
Carried forward ..................................
495.25
66
101.22
Rs. in Crores
As at
30.06.2004
Rs. in Crores
As at
30.06.2003
Rs. in Crores
231.88
101.22
SCHEDULE ‘B’ – RESERVES AND SURPLUS (Contd.)
Brought forward ..................................
B/f ..................................
485.61
495.25
On Issue of Share Capital on conversion of FCCB (Refer Note 20) ..........................
Against issue of warrants, forfeited ........................................................................
Others
.......................................................................................................
430.73

15.23
–
18.00
1.67
931.57
514.92
1.38
0.03
11.36

–
–
38.43
0.21
Deductions during the year :
Public Issue expenses of erstwhile ACRL [Refer Note 28 (d)] .....................................
Issue of Bonus Shares ...........................................................................................
Premium paid on pre-mature redemption of Debentures .......................................
Share, Debenture and Bond Issue Expenses ...........................................................
12.77
38.64
918.80
Investment Allowance (Utilised) Reserve Account :
Less: Transferred to Profit and Loss Account on completion of statutory period ..........
476.28

15.50
15.50

–
Debenture Redemption Reserve :
Less: Transferred to Profit and Loss Account ............................................................
258.50
127.75
258.50
18.75
Add: Set aside this year .........................................................................................
130.75
2.55
239.75
18.75
133.30
258.50
Modvat/Cenvat Credit on Capital Goods Reserve :
Add: (i) Modvat availed by erstwhile ACRL (Refer Note 28 (d)) .................................
(ii) Availed during the year .............................................................................
81.47
16.51
10.59
79.22
–
2.46
Less: Claims withdrawn relating to earlier years and other adjustments ...................
108.57
0.23
81.68
0.21
108.34
Contingency Reserve :
Less: Transferred to General Reserve ......................................................................
81.47
53.09
53.09
53.09
–
–
General Reserve :
Less: Adjustment of debit balance of Profit & Loss account of erstwhile ACRL on
amalgamation [Refer Note 28 (b) (iii)] ............................................................
Loss on cancellation of Investment in erstwhile ACRL on amalgamation
[Refer Note 28 (c)] ................................................................................................
Deferred tax liability (net) in respect of amalgamated company ACRL
[Refer Note 8 (c)] ..................................................................................................
Adjustment on account of alignment of accounting policies [Refer Note 28 (d)] ........
Deferred tax liability relating to transitional period ..................................................
Add:
Transferred from Contingency Reserve ...................................................................
Set aside this year .................................................................................................
53.09
399.73
370.55
320.90
–
33.35
–
38.99
2.15

–
–
70.82
4.34
299.73
53.09
275.00
–
100.00
Surplus as per Profit and Loss Account ...............................................................
332.43
117.54
399.73
90.96
TOTAL .................................................................
1,842.29
1,461.25
67
BLACK
67 RED
Rs. in Crores
As at
30.06.2004
Rs. in Crores
As at
30.06.2003
Rs. in Crores
SCHEDULE ‘C’ – SECURED LOANS
(a)
Secured Redeemable Non-Convertible Debentures (Refer Note below) ....................
529.78
695.00
(b)
Term Loans :
From Banks (Secured by way of first pari passu charge by equitable mortgage of all
immovable properties both present and future situated at Darlaghat, in the state of
Himachal Pradesh) ...............................................................................................
From Bank (Secured by hypothecation of inventories and book debts) .....................
120.00

150.00
–
TOTAL ......................................................................
649.78
845.00
(c)
Note:
Secured Redeemable Non-Convertible Debentures comprise of :
10,00,000
(50,00,000) 13.50% Secured Redeemable Non-Convertible Debentures
of Rs. 100 each - Series '9' (Redeemable at par on 26.01.2004) ..............
10.00
50.00
Less: – (40,00,000) Debentures pre-maturely redeemed and cancelled ...

40.00
Less: 10,00,000 (–) redeemed during the year ........................................
10.00
–

10.00
– (20,00,000) 13.50% Secured Redeemable Non-Convertible Debentures
of Rs.100 each - Series '10' (Redeemable at par on 05.03.2004,
redeemed during the year) ....................................................................

20.00
– (5,00,000) 13.50% Secured Redeemable Non-Convertible Debentures
of Rs.100 each - Series '11' (Redeemable at par on 29.03.2004,
redeemed during the year) ....................................................................

5.00
25,00,000 12.00% Secured Redeemable Non-Convertible Debentures of
Rs. 100 each - Series '13' (Redeemable at par in 3 equal annual
instalments on 30.11.2004, 30.11.2005 and 30.11.2006) ....................
25.00
25.00
50,00,000 (70,00,000) 12.30% Secured Redeemable Non-Convertible Debentures
of Rs. 100 each - Series '14' (Redeemable at par on 10.10.2005) ............
50.00
Less: – (20,00,000) Debentures pre-maturely redeemed and cancelled ...

70.00
20.00
50.00
55 (100) 11.75% Secured Redeemable Non-Convertible Debentures of
Rs. 1,00,00,000 each - Series '15' (Redeemable at par on 12.12.2005)
Less: 5 (45) Debentures pre-maturely redeemed and cancelled ..........
55.00
100.00
5.00
45.00
50.00
55 10.65% Secured Redeemable Non-Convertible Debentures of
55.00
55.00
55.00
Less: 15 (–) Debentures pre-maturely redeemed and cancelled ...........
15.00
–
Less: 40 (–) redeemed during the year ...............................................
40.00
–

55.00
Rs. 1,00,00,000 each - Series '17' (Redeemable at par in 2 equal
annual instalments on 27.04.2005 and 27.04.2006) ........................
100.00
145.00
Less: 17 (45) Debentures pre-maturely redeemed and cancelled ........
17.00
45.00
83.00
100.00
Rs. 1,00,00,000 each - Series '18' (Redeemable at par on 11.07.2008
with a put/call option on 11.07.2006) ...................................................
20.00
50.00
Less: 5 (30) Debentures pre-maturely redeemed and cancelled ...............
5.00
30.00
Carried forward ...........................................
BLACK
50.00
68 RED
68
15.00
20.00
223.00
340.00
Rs. in Crores
As at
30.06.2004
Rs. in Crores
As at
30.06.2003
Rs. in Crores
223.00
340.00
SCHEDULE ‘C’ – SECURED LOANS (Contd.)
Brought forward ..................................
with a put/call option on 16.08.2006) ..............................................
20.00
50.00
5.00
30.00
15.00
20.00
95.00
100.00
30.00
5.00
65.00
95.00
25.00
25.00
100.00
100.00
Less: 10 (20) Debentures pre-maturely redeemed and cancelled ........
30.00
50.00
10.00
20.00
20.00
Less: 10 (–) Debentures pre-maturely redeemed and cancelled ...........
25.00
Less: – (40) Debentures pre-maturely redeemed and cancelled ...........
Less: – (25) Debentures pre-maturely redeemed and cancelled ...........
101,714 (–) Zero Coupon Convertible Debentures of Rs. 1,000 each
[Redeemable at par in three equal annual instalments commencing
from 30.03.2004 (Transferred on amalgamation of erstwhile ACRL)] ..
–
15.00
25.00
25.00
25.00
10.00
50.00

– (25) 6.35% Secured Redeemable Non-Convertible Debentures of
with a put/call option on 10.04.2003 & 10th of every month thereafter)
25.00
10.00
with a put/call option on 14.05.2005) ..............................................
30.00
40.00
10.00
10.00
25.00
25.00

25.00

25.00
–
–
6.78
–
529.78
695.00
Series No. 9 to 11, 13 to 15 and 22 to 24 are secured by way of first pari passu charge by mortgage of immovable properties of the three cement
plants of the Company situated at Ambujanagar, in the state of Gujarat, as covered under respective Trust Deeds.
Series No. 16 to 19, 21 and 25 to 28 are secured by way of first pari passu charge by mortgage of immovable properties of the Company situated
at Upparwahi, in the state of Maharashtra, as covered under the respective Trust Deeds.
Security has not been created in respect of Debenture series No. 29, as the same has been redeemed on put/call option date i.e. 10-04-2003.
1,01,714 (–) privately placed Zero Coupon Convertible Debentures are secured by way of mortgage and first charge on all immovable properties
of the Company situated at Rabriyawas, in the state of Rajasthan, as covered under the respective Trust Deeds. In terms of order of Honourable Board
for Industrial and Financial Reconstruction (BIFR), debentureholders have agreed to accept repayment of principal as per terms of agreement with
erstwhile ACRL.
69
BLACK
69 RED
Rs. in Crores
As at
30.06.2004
Rs. in Crores
As at
30.06.2003
Rs. in Crores
15.06
434.61
16.71
100.82
SCHEDULE ‘D’ – UNSECURED LOANS
Sales Tax Deferment Loan under Sales Tax Incentive Scheme of
Government of Gujarat ...........................................................................................
Foreign Currency Term Loan from Banks ..................................................................
Short Term Loan from Banks :
Foreign Currency Loans ...................................................................................
Indian Rupee Loans .........................................................................................
22.34
63.26
137.47
105.00
Buyers' Import Credit ...............................................................................................
Due to a Subsidiary Company, for Ships acquired under
Bare Boat Charter-cum-Demise arrangement ...........................................................
Commercial paper (Maximum amount outstanding during the year Rs. 100 crores;
previous year Rs. 150 crores) ...................................................................................
TOTAL .................................................................
85.60
62.57
242.47
46.33
22.06
28.58

10.00
619.90
444.91
SCHEDULE ‘E’ – FIXED ASSETS
Rs. in Crores
DESCRIPTION
GROSS BLOCK (at Cost)
DEPRECIATION / AMORTISATION
As at Addition on
30.06.2003 amalgamation
Additions
(f)
Deductions/
Transfers (f)
As at
30.06.2004
0.56
5.42
6.65
1.38

0.36
81.62
16.06
38.24

443.61
13.97
24.10
0.20
162.21
7.93
0.61
0.02
8.30
(0.38)
31.14

0.02
NET BLOCK
Upto Addition on
For the
year
Deductions/
Transfers (f)
Upto
30.06.2004
As at
30.06.2004
As at
30.06.2003
–
2.36

0.39

0.31

0.02

3.04
81.62
13.02
74.41
7.26
373.74
95.57
2,630.21
214.67
40.60
23.34
752.71
99.70
6.67

157.17
4.26
7.60
3.90
132.30
10.53
0.10

7.68
41.90
54.77
27.24
1,034.50
72.59
318.97
68.33
1,595.71
142.08
271.41
72.05
1,279.98
92.69

31.16
6.65

1.48

8.13
23.03
24.49
Tangible Assets :
Freehold Land (a) ............
Leasehold Land (b) ..........
Buildings, Roads
and Water Works (c) ........
Marine Structures (g) .......
Plant and Machinery (e) ...
Electrical Installations ......
Railway Sidings
and Locomotives (d) ........
Furniture, Fixtures and
Office Equipments ...........
Ships (j) ..........................
Vehicles ..........................
Power Lines (h) ................
Sub Total ........................
Intangible Assets :
Water Drawing Rights ......
Computer Software .........
Sub Total ........................
TOTAL ............................
49.62
116.74
17.95
19.82
2,951.78
3.16

1.48
0.58
507.02
2.35

2.46
0.01
207.31
2.02
0.38
2.50
0.46
14.27
53.11
116.36
19.39
19.95
3,651.84
27.87
44.80
9.14
3.97
1,011.14
1.58

0.71
0.11
170.89
2.96
5.80
2.62
0.52
168.02
1.79
13.85
2.06

67.40
30.62
36.75
10.41
4.60
1,282.65
22.49
79.61
8.98
15.35
2,369.19
21.75
71.94
8.81
15.85
1,940.64
6.15
–
6.15
2,957.93

507.02

0.08
0.08
207.39

14.27
6.15
0.08
6.23
3,658.07
0.90
–
0.90
1,012.04

170.89
0.58
0.01
0.59
168.61

67.40
1.48
0.01
1.49
1,284.14
4.67
0.07
4.74
2,373.93
5.25
–
5.25
1,945.89
Previous year's Total .........
2,855.43
–
113.50
11.00
2,957.93
847.81
–
171.34
7.11
1,012.04
1,945.89
74.41
9.62
312.01
95.39
2,032.69 (i)
192.39
Notes:
(a) Includes Rs. 0.09 crore (30.06.2003 - Rs. 0.09 crore) being value of land jointly owned with other parties.
(b) Includes Rs. 4.08 crores (30.06.2003 - Rs. 4.44 crores) being the value of land for which lease deeds are pending execution.
(c)
Includes :
i)
Premises on ownership basis of Rs. 25.26 crores (30.06.2003-Rs. 23.89 crores) and cost of shares in Co-operative Societies Rs. 0.01 crore
(30.06.2003 - Rs. 0.01 crore).
ii)
Rs. 6.13 crores (30.06.2003 - Rs. 2.08 crores) being cost of roads constructed by the Company, ownership of which vests with the
Government / Local Authorities and Rs. 0.37crore (30.06.2003 - Rs. 0.25 crore) being the amortization thereof upto 30th June, 2004.
(d)
Includes Rs. 1.77 crores (30.06.2003 - Rs. 1.77 crores) being cost of Railway siding constructed by the Company, ownership of which vests with
the Government / Railway Authorities and Rs. 0.17 crore (30.06.2003 - Rs. 0.08 crore) being the amortization thereof upto 30th June, 2004
and included in Depreciation.
(e)
Includes Rs. 11.91 crores (30.06.2003 - Rs. 10.56 crores) being cost of bulkers used as Material Handling Equipment, which are being depreciated
under the "Written Down Value Method" at the rate applicable to vehicles.
Includes deductions of Rs. 0.60 crores (30.06.2003 - Rs. 2.26 crores) due to decrease in rupee liability on account of revalorisation of foreign
currency loans due to exchange rate fluctuations.
(f)
(g)
Cost incurred by the Company, ownership of which vests with the State Maritime Boards.
(h)
Cost incurred by the Company, ownership of which vests with the State Electricity Boards.
(i)
Includes Rs. 16.51 crores adjustment on account of modvat/cenvat credit [Refer Note 28 (d)].
(j)
Includes Rs. 41.89 crores for ships acquired under bare boat charter cum demise arrangement.
BLACK
70 RED
70
Rs. in Crores
As at
30.06.2004
Rs. in Crores
As at
30.06.2003
Rs. in Crores
SCHEDULE ‘F’ – INVESTMENTS (at cost)
Long Term Investments:
In Government & Trust Securities :
Quoted :
– (24,18,570) Master Shares of Rs. 10 each of Unit Trust of India .....
Unquoted :
National Savings Certificate (Rs. 25,000) ......................................
Indira Vikas Patra of the Face Value Rs. 6,00,000 .........................

4.13

–
0.06
In Fully Paid Shares, Debentures and Bonds, other than Trade
Quoted:
In Equity Shares:

0.06

4.19
– (100) Equity Shares of Rs.10 each in Bank of Baroda (Rs. 8,500/-)

– (12,81,62,369) Equity Shares of Rs. 10 each in Ambuja Cement
Rajasthan Limited [Refer Note 28 (c)] ............................................

161.51
– (5,75,680) Equity Shares of Rs. 10 each in
The Industrial Development Bank of India .....................................

4.68
3,22,310 (–) Equity Shares of Rs. 10 each in Oil and Natural Gas
Corporation Limited ....................................................................
23.20
–
9,87,933 (11,08,200) Equity Shares of Rs. 10 each in Priyadarshini
Cement Limited ...........................................................................
2.36
2.65
– (52,292) Equity Shares of Rs. 10 each in
Revathi CP Equipment Limited ......................................................

1.92
25.56
170.76
Unquoted:
In Fully Paid Equity Shares :
24,75,000 Equity Shares of Rs. 10 each in
Bengal Ambuja Housing Development Limited .............................
2.48
2.48
Bengal Ambuja Metro Development Limited .................................
0.49
0.49
Gujarat Goldcoin Ceramics Limited .............................................
1.00
1.00
ICAN Securities and Research Limited ..........................................
1.44
1.44
5.41
5.41
In Subsidiary Companies:
In Fully Paid Equity Shares :
Unquoted:
28,61,20,000 Equity Shares of Rs. 10 each in Ambuja Cement India Limited .......
857.16
857.16
2,70,000 Ordinary Shares of US $ 10 each in
Cement Ambuja International Limited ..........................................
9.65
9.65
16,20,000 (–) Ordinary Shares of Rs. 10 each in DLF Gujarat Limited ............
1.62
–
Less : Provision for Diminution in value of Investment ....................
1.62
–

–
5,04,13,840 Ordinary Shares of LKR 10 each in
Ceylon Ambuja Cements (Private) Limited .....................................
29.54
29.54
1,59,89,950 Equity Shares of Rs. 10 each in
GGL Hotel and Resort Company Limited ......................................
15.99
15.99
Indo-Nippon Special Cements Limited ..........................................
0.30
0.30
C/f ..................................
912.64
912.64
30.97
Carried forward ..................................
180.36
71
BLACK
71 RED
Rs. in Crores
As at
30.06.2004
Rs. in Crores
As at
30.06.2003
Rs. in Crores
30.97
SCHEDULE ‘F’ – INVESTMENTS (at cost) (Contd.)
Brought forward ..................................
B/f ..................................
912.64
180.36
912.64
38,55,600 Ordinary Shares of LKR 10 each in
Midigama Cements (Private) Limited ............................................
2.34
2.34
5,000 Equity Shares of Rs. 100 each in GACL Finance Limited ................
6.37
6.37
In Public Sector Bonds :
Unquoted:
296 (–) 5.13% taxable redeemable bonds of Rs. 10,00,000 each of
Himachal Pradesh Infrastructure Development Bonds
[Refer Note 2 (b)] ........................................................................
921.35
921.35
29.60
–
Current Investments :
In Units of Mutual Funds :
Unquoted:
34,70,013.302 (–) Birla Cash Plus - Growth option units of Rs. 10 each of
Birla Sun Life Mutual Fund ...........................................................
6.00
–
29,68,886.074 (–) Grindlays Cash Fund - Growth Option units of Rs. 10 each of
Standard Chartered Mutual Fund .................................................
3.00
–
46,27,487.274 (–) HSBC Cash Fund - Growth Option units of Rs. 10 each of
HSBC Mutual Funds ....................................................................
5.00
–
37,96,691.406 (–) Prudential ICICI Liquid Fund Growth Option units of Rs. 10 each
of Prudential ICICI Mutual Fund ...................................................
6.00
–
28,417 (–) Master Shares of Rs. 10 each of Unit Trust of India ...................
0.05
–
32,07,575.009 (–) Reliance Liquid Fund Growth Option units of Rs. 10 each of
Reliance Mutual Fund ..................................................................
5.00
–
34,17,781.006 (–) Tata Liquid Super High Investment Fund, Growth Option units of
Rs. 10 each of Tata Mutual Fund ..................................................
4.00
–
Book Value as on
29.05
–
1,010.97
1,101.71
Market Value as on
30.06.2004
Rs. in Crores
30.06.2003
Rs. in Crores
30.06.2004
Rs. in Crores
30.06.2003
Rs. in Crores
25.56
985.41
174.89
926.82
21.21
60.58
1,010.97
1,101.71
Face Value
Rs.
Nos.
Purchase Cost
Rs. in Crores
Datamatics Technologies Limited ..............................................................
10
19,300
0.21
Aggregate amount of Quoted Investments ............................
Aggregate amount of Unquoted Investments .........................
Note: The following investments were purchased and sold during the year :
Name
a)
Equity Shares of other companies :
Dredging Corporation of India Limited ......................................................
10
14,314
0.57
Oil and Natural Gas Corporation Limited .................................................
10
400,000
30.00
Power Trading Corporation Limited ...........................................................
10
192,400
0.31
Reliance Industries Limited ........................................................................
10
30,000
1.31
BLACK
72 RED
72
SCHEDULE ‘F’ – INVESTMENTS (at cost) (Contd.)
Face Value
Rs.
Nos.
Purchase Cost
Rs. in Crores
Birla Cash Plus .........................................................................................
10
180,100,687.486
295.77
DSP Merrill Lynch Liquidity Fund ................................................................
10
115,260,081.116
173.52
DSP Merrill Lynch Floating Fund ................................................................
10
1,942,021.093
2.00
Deutsche Insta Cash Fund ........................................................................
10
27,205,661.307
28.50
Grindlays Cash Fund ...............................................................................
10 220,803,620.247
248.77
HDFC Cash Management Fund ................................................................
10
201,688,756.524
259.02
HSBC Cash Fund .....................................................................................
10
109,475,495.810
116.25
JM High Liquid Fund ................................................................................
10 158,557,917.969
165.25
Kotak Mahindra Liquid Fund .....................................................................
10
12,913,298.086
16.00
Prudential ICICI Liquid Fund .....................................................................
10
210,441,527.949
320.07
Principal Cash Management Liquid Fund ..................................................
10
9,661,929.133
10.00
Reliance Liquid Fund ................................................................................
10
78,371,240.242
117.01
SBI Magnum Insta Cash Fund ...................................................................
10
10,713,905.539
15.00
Sundaram Money Fund ............................................................................
10
17,587,283.797
23.00
Tata Liquid High Investment Fund .............................................................
10
140,699,302.215
161.00
Tata Short Term Bond Fund .......................................................................
10
2,763,550.610
3.00
Templeton India Treasury Management Fund .............................................
1,000
1,535,408.828
239.50
Rs. in Crores
As at
30.06.2004
Rs. in Crores
As at
30.06.2003
Rs. in Crores
160.18
153.96
Name
b)
Units of Mutual Fund :
SCHEDULE ‘G’ – INVENTORIES
(At cost or net realisable value whichever is lower, unless otherwise stated)
(As certified and valued by the Management)
Coal, Fuel, Packing Materials, Stores and Spare parts
(including in transit - Rs. 8.27 crores; 30.06.2003 - Rs. 6.90 crores) ..........................
Stock-in-trade :
Raw materials (including in transit - Rs. 0.05 crore; 30.06.2003 - Rs. 0.28 crore) .......
Materials-in-process ................................................................................................
Finished goods .......................................................................................................
18.14
51.86
23.95
9.43
29.00
31.81
Construction Scrap, at estimated realisable value ......................................................
Scrapped assets awaiting disposal, at estimated realisable value ...............................
93.95
0.15

70.24
–
0.11
TOTAL .................................................................
254.28
224.31
3.06
5.14
0.29
0.29
SCHEDULE 'H' – SUNDRY DEBTORS (Unsecured)
Over six months :
Good
.......................................................................................................
Doubtful .......................................................................................................
Less : Provision ................................................................................................
6.03
6.03

–
Others, Good ..................................................................................................
3.06
39.65
5.14
40.80
TOTAL .................................................................
42.71
45.94
73
BLACK
73 RED
As at
30.06.2004
Rs. in Crores
As at
30.06.2003
Rs. in Crores
Cash on hand .......................................................................................................
0.27
0.22
Cheques on hand with Banks as Collecting Agency in terms of an arrangement .........
19.64
8.43
Rs. in Crores
SCHEDULE ‘I’ – CASH AND BANK BALANCES
Bank Balances :
With Scheduled Banks :
In Current Account ...........................................................................................
48.61
In Fixed Deposits [Deposit Receipts of Rs. 0.14 crore (30.06.2003 - Rs. 0.11
crore) deposited with Government Departments as Security Deposit and
Rs. 0.15 crore (30.06.2003 - Rs. 0.15 crore) deposited with banks as security
deposit for guarantees (including accrued interest Rs. 0.02 crore (30.06.2003
- Rs. 0.01 crore))] ............................................................................................
0.31
TOTAL .................................................................
21.96
0.27
48.92
22.23
68.83
30.88
0.26
0.05
SCHEDULE ‘J’ – OTHER CURRENT ASSETS
Interest Receivable on Investments ............................................................................
Other Interest receivable ..........................................................................................
0.48
0.81
TOTAL .................................................................
0.74
0.86
SCHEDULE ‘K’ – LOANS AND ADVANCES
(Good, unless otherwise stated)
Secured :
Loan to Ambuja Cement Eastern Limited, a subsidiary company,
to be secured against Fixed Assets, documents to be executed ............................
13.45
Less: Unexpired Finance Charges .....................................................................
1.16
15.42
2.12
12.29
13.30
1.10
1.25
Unsecured :
Loan to a subsidiary company ..........................................................................
Other Loans :
Ambuja Cement Rajasthan Limited ...................................................................
Others
.......................................................................................................

379.00
8.93
12.36
8.93
391.36
Advances recoverable in cash or in kind or for value to be received (including
due from a subsidiary company Rs. 1.76 crores; 30.06.2003 Rs. 0.26 crore)
Good
.......................................................................................................
48.62
69.86
Doubtful .......................................................................................................
Less : Provision ................................................................................................
6.09
6.09
0.52
0.52

–
48.62
69.86
Deposits [including National Savings Certificates and 5 1/2 Year Kisan Vikas Patra
Rs. 0.01 crore and Rs. 2,000/- respectively, deposited with Government Departments
as Security (30.06.2003 - Rs. 0.01 crore and Rs. 2,000/- respectively)] ......................
Balance with Central Excise, Customs, Port Trusts, etc. ...............................................
Tax paid in advance, net of provisions ......................................................................
18.63
9.93
25.42
14.37
4.44
17.18
TOTAL .................................................................
124.92
511.76
BLACK
74 RED
74
Rs. in Crores
As at
30.06.2004
Rs. in Crores
As at
30.06.2003
Rs. in Crores
SCHEDULE ‘L’ – CURRENT LIABILITIES AND PROVISIONS
LIABILITIES
Sundry Creditors :
Due to Small Scale Industrial Undertakings (Refer note 27) ................................
0.03
0.06
Others (including due to a subsidiary company
Rs. 1.65 crores; 30.06.2003 Rs. Nil) ................................................................
215.59
135.83
215.62
135.89
Investor Education and Protection Fund shall be credited by the following
(See note below) * :
Unclaimed Dividends .......................................................................................
5.53
Unclaimed Application Money on Securities (Rs. 14,900/-) ................................

Unclaimed Matured Debentures .......................................................................
0.33
Unclaimed Matured Deposits (Rs. 45,000/-) .....................................................

Unclaimed Interest ...........................................................................................
0.02
Security Deposits ..............................................................................................
4.51
0.35
0.07
5.88
4.93
35.56
27.21
19.01
23.56
276.07
191.59
Provision for leave encashment ................................................................................
6.48
3.78
Provision for gratuity ................................................................................................
3.50
–
Provision for wealth tax, net of payments ..................................................................
0.51
0.44
Provision for Corporate Dividend Tax ........................................................................
7.03
7.96
Interest accrued but not due on loans ...............................................................
PROVISIONS :
53.82
62.13
71.34
74.31
347.41
265.90
Project Development and Feasibility Report Expenses etc. ...................................
1.29
2.28
Quarry / Mines Development Expenses .............................................................
2.98
2.26
Unexpired premium on pre payment of term loans ............................................
4.62
6.76
TOTAL .................................................................
8.89
11.30
Proposed Dividend ..................................................................................................
TOTAL .................................................................
* Note:
Amounts to be transferred to said fund shall be determined
on the respective due dates. Amount due as on 30.06.2004
Rs. Nil; 30.06.2003 Rs. 0.02 crores.
SCHEDULE ‘M’ – MISCELLANEOUS EXPENDITURE
(to the extent not written off or adjusted)
75
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Rs. in Crores
2003-2004
Rs. in Crores
2002-2003
Rs. in Crores
0.90
1.15
SCHEDULE ‘N’ – OTHER INCOME
Insurance Claims ....................................................................................................
Dividend (Gross; Tax deducted Rs. Nil; 30.06.2003 - Rs. 0.13 crore)
From Investments in Subsidiary Companies .......................................................
From Long term investments .............................................................................
From Current investments ................................................................................
2.49
3.05
0.06
Miscellaneous Income (Gross; Tax deducted Rs. 0.01 crore;
30.06.2003 - Rs. 0.01 crore) ...................................................................................
Exchange Rate Difference (net) .................................................................................
Surplus on Sale of Assets .........................................................................................
Profit / (Loss) on Sale of Investments (net)
On Long term Investments ...............................................................................
On Current Investments ...................................................................................
1.04
1.28
–
5.60
2.32
21.42
9.31
0.40
10.97
12.60
1.65
(3.20)
10.86
(1.64)
3.91
Sundry Credit Balances Appropriated .......................................................................
Provisions no longer required ...................................................................................
7.66
1.28
3.92
2.27
0.58
4.76
TOTAL .................................................................
50.49
36.30
SCHEDULE ‘O’ – MANUFACTURING EXPENSES
Raw Materials Consumed :
Clinker Purchased ............................................................................................
Others
.......................................................................................................
33.80
84.39
29.53
70.92
118.19
63.24
49.58
73.66
82.36
463.63
1.08
Freight and Handling Charges on Material transferred to other Units ........................
Royalty and Cess .....................................................................................................
Stores and Spares Consumed ..................................................................................
Packing Materials Consumed ...................................................................................
Power and Fuel .......................................................................................................
Production and Operation Charges ..........................................................................
Repairs and Maintenance :
Buildings .......................................................................................................
Machinery .......................................................................................................
Others
.......................................................................................................
6.75
21.02
3.02
100.45
57.97
43.36
72.22
77.33
430.60
0.92
4.75
16.64
2.91
Excise duty paid / provided on closing stock and others .............................................
30.79
5.98
24.30
7.53
TOTAL .................................................................
888.51
814.68
SCHEDULE ‘P’ – VARIATION IN STOCKS
CLOSING STOCKS :
Materials-in-process ........................................................................................
Finished goods ................................................................................................
51.86
23.95
29.00
31.81
75.81
OPENING STOCKS :
Finished goods ................................................................................................
Stock of Amalgamating Company as on 01.06.2004
pursuant to the scheme of Amalgamation
Finished goods ................................................................................................
Limestone .......................................................................................................
29.00
31.81
25.59
29.28
60.81
54.87
8.54
4.27
0.10
–
–
–
12.91
Carried forward ..................................
BLACK
76 RED
76
60.81
–
73.72
54.87
(2.09)
(5.94)
Rs. in Crores
2003-2004
Rs. in Crores
2002-2003
Rs. in Crores
(2.09)
(5.94)
SCHEDULE ‘P’ – VARIATION IN STOCKS (Contd.)
Brought forward ..................................
LIMESTONE
Closing Stock ..................................................................................................
10.72
Opening Stock ................................................................................................
1.54
(Increase) / Decrease in Stocks .........................................................................
1.54
3.09
(9.18)
1.55
(11.27)
(4.39)
SCHEDULE ‘Q’ – ADMINISTRATIVE, SELLING AND OTHER EXPENSES
Employees' Remuneration and Benefits :
Salaries, Wages, Bonus, Allowances, etc. ..........................................................
69.05
54.34
Contribution to Provident and other Funds ........................................................
9.45
6.39
Welfare Expenses .............................................................................................
Less: Recovery from subsidiary and associate companies ...................................
Add: Employee compensation expenses under Employee
Stock Option Scheme ...............................................................................
4.34
4.11
82.84
64.84
1.47
1.40
81.37
63.44
(0.02)
0.02
81.35
63.46
.......................................................................................................
3.99
3.54
Rates and Taxes .......................................................................................................
0.51
0.60
Insurance
.......................................................................................................
9.07
8.62
Advertisement and Publicity ......................................................................................
24.42
24.17
Freight and Forwarding charges [including Rs. 24.64 crores
on Exports (Previous year - Rs. 22.27 crores)] ............................................................
312.90
275.42
.......................................................................................................
11.76
9.70
Turnover Tax, Additional Tax and Purchase Tax ..........................................................
2.48
2.96
Selling and Distribution Expenses .............................................................................
21.46
9.39
Miscellaneous Expenses ...........................................................................................
56.78
47.34
Directors' Fees and Expenses ....................................................................................
0.05
0.09
Commission to Directors, including Managing Director and
Wholetime Directors (Refer note 10) .........................................................................
5.86
4.34
Loss on Assets sold, scrapped or discarded and written off ........................................
3.39
1.10
Abandoned Capital Project (Refer Note 29) ..............................................................
4.23
–
Donations
.......................................................................................................
4.56
2.61
Bad Debts, Sundry Debit Balances and Claims written off ..........................................
1.01
0.72
Provision for doubtful debts and advances ................................................................
6.80
–
Provision for diminution in value of investment ..........................................................
1.62
–
Part of Deferred Revenue expenditure, written off ......................................................
0.70
1.00
Expenses relating to Previous Years ...........................................................................
0.63
0.09
Rent
Commission
Wealth Tax
.......................................................................................................
0.27
0.27
TOTAL .................................................................
553.84
455.42
77
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Rs. in Crores
2003-2004
Rs. in Crores
2002-2003
Rs. in Crores
SCHEDULE ‘R’ – INTEREST AND FINANCE CHARGES, etc.
Interest : (Refer Note 25)
On Debentures and Bonds (Net of surplus on
Interest Swap Rs. 0.05 crore; Previous year - Rs. 4.37 crores) .............................
60.49
83.93
On Fixed Loans (Including net deficit on Interest of Swap Rs. 1.47 crores;
Previous year net of surplus - Rs. 2.12 crores) ....................................................
28.72
22.99
9.05
5.52
Others
.......................................................................................................
98.26
Less: Interest Received : (Gross; Tax deducted Rs. 6.97 crores;
30.06.2003 - Rs. 6.60 crores)
On Government Securities ........................................................................
On Debentures and Bonds .......................................................................
Others .....................................................................................................
0.02
0.25
35.52
112.44
0.01
–
38.67
35.79
38.68
.......................................................................................................
62.47
73.76
Premium on prepayment of term Loan (Refer Note 21) ..............................................
3.06
–
Interest, (net)
Unexpired Premium on prepayment of term loans amortized .....................................
2.78
3.90
Finance Charges .....................................................................................................
68.31
10.12
77.66
10.28
TOTAL .................................................................
78.43
87.94
SCHEDULE ‘S’ – NOTES FORMING PART OF THE ACCOUNTS
1.
(A)
Basis of preparation of Financial Statements :
(i) The financial statements have been prepared in compliance with all material aspects of the mandatory Accounting Standards issued
by the Institute of Chartered Accountants of India (ICAI) and the relevant provisions of the Companies Act, 1956.
(ii) Financial statements are based on historical cost and are prepared on accrual basis.
(B) Significant Accounting Policies :
(a) Fixed Assets:
(i) Fixed Assets are stated at their original cost of acquisition/installation, net of accumulated depreciation/amortization, except freehold
land which is carried at cost. Modvat/Cenvat Credit on capital goods availed on fixed assets purchased is credited to the Modvat/
Cenvat Credit on Capital Goods Reserve. However, the same is netted off from the cost of fixed assets for the purpose of computation
of depreciation.
(ii) Capital work in progress is stated at the amount expended upto the date of Balance Sheet.
(iii) Machinery spares which can be used only in connection with a particular item of fixed asset and the use of which is irregular are
capitalised, at cost net of Modvat/Cenvat. [refer Note 23 (a)].
(iv) Expenditure during construction period (including financing cost relating to borrowed funds for construction or acquisition of fixed
assets) incurred on projects under implementation are treated as Pre-operative expenses, pending allocation to the assets, and are
included under "Capital Work in Progress". These expenses are apportioned to fixed assets on commencement of commercial production.
(b) Depreciation and Amortization :
(i) Premium on leasehold land is amortized over the period of lease.
(ii) Depreciation on all assets, other than Vehicles, is provided on the "Straight Line Method" in accordance with the provisions of Section
205(2)(b) of the Companies Act, 1956, and on Vehicles on the "Written Down Value Method" in accordance with the provisions of
Section 205(2)(a) of the Companies Act, 1956, in the manner and at the rates specified in Schedule XIV to the Companies Act, 1956.
Continuous process plants, are identified based on a technical assessment and depreciated at the specified rate as per Schedule XIV
of the Companies Act, 1956. Cost of fixed assets for the purpose of computation of depreciation is taken net of Modvat/Cenvat
credits. Depreciation on additions to fixed assets is provided on a pro-rata basis from the month of acquisition or installation, and
in the case of a new project, the same is provided on a pro-rata basis from the date of commencement of commercial production.
Depreciation on assets sold, discarded, demolished or scrapped, is provided upto the month in which the said asset is sold, discarded,
demolished or scrapped.
(iii) Machinery spares which are capitalised are depreciated over the useful life of the related fixed asset. The written down value of such
spares is charged to the Profit and Loss Account, on issue for consumption. (refer Note 23(a)).
(iv) The cost of fixed assets, constructed by the Company, but ownership of which belongs to Government/Local Authorities, is amortized
at the rate of depreciation specified in Schedule XIV to the Companies Act, 1956.
(v) Expenditure on Power Lines, ownership of which belongs to the State Electricity Boards, is amortized over the period as permitted in
the Electricity Supply Act, 1948.
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78
SCHEDULE ‘S’ – NOTES FORMING PART OF THE ACCOUNTS (Contd.)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(vi) Expenditure to acquire Water Drawing Rights from Government/Local Authorities/other parties, is amortized over the period of rights
to use the facilities.
(vii) Expenditure on Marine Structures, ownership of which belongs to the Maritime Boards, is amortized over the period of agreement.
Investments :
Investments that are intended to be held for more than a year, from the date of acquisition, are classified as long term investments and are
carried at cost. However, provision for diminution in value of investments is made to recognise a decline, other than temporary, in the value
of the investments. Current investments are valued at cost or market value, whichever is lower.
Inventories :
(i) Coal, Fuel, Packing Materials and Stores & Spare Parts are valued at cost on FIFO basis or net realisable value, whichever is lower.
(ii) Raw Materials are valued at cost or net realisable value whichever is lower. Cost is arrived at on FIFO basis. Limestone, Marl and
Shale raised in own mines are valued at cost.
(iii) Materials-in-process are valued at cost or net realisable value, whichever is lower. (*)
(iv) Finished Goods are valued at cost or net realisable value, whichever is lower, including excise duty.(*)
(v) Trial Run Inventories are valued at cost or net realisable value, whichever is lower.(*)
(vi) Goods in transit are stated at costs upto the date of Balance Sheet.
(*) Cost is arrived at on full absorption basis as per Accounting Standard AS 2 - "Valuation of Inventories".
Inter Unit Transfers :
Inter-unit transfers of independently marketable products for further processing are included under the respective heads of account, at
market value, to reflect the true working of the respective units. Any unrealised profit on unsold stock is eliminated while valuing the
inventories.
Foreign Currency Conversion :
Foreign currency transactions are recorded at the rates of exchange prevailing on the date of transaction. Monetary foreign currency assets
and liabilities outstanding at the close of the financial year are revalorised at the contracted rate or at exchange rates prevailing on the
balance sheet date. The gain or loss due to decrease/increase in rupee liability on account of fluctuations in the rate of exchange is
adjusted to the cost of the respective fixed assets, if it relates to acquisition of fixed assets, and is charged to Profit & Loss Account in other
cases.
Sales :
(i) Domestic sales are accounted on despatch of products to customers and Export sales are accounted on the basis of dates of Bill of
Lading. Sales are disclosed net of sales tax, discounts and returns, as applicable.
(ii) Benefit on account of entitlement to import goods free of duty under the "Duty Entitlement Pass Book under Duty Exemption Scheme"
is accounted in the year of export.
Research & Development Expenditure :
Expenditure, both revenue and capital, incurred relating to "Research and Development" activities are accounted under the normal account
heads of revenue expenses and fixed assets, as the case may be.
Retirement Benefits:
(i) Contribution to Provident Fund and Pension Schemes are charged to the Profit and Loss Account when due.
(ii) Payment for present liability of future payment of gratuity is made to an approved Gratuity Fund, which fully covers the said liability
under Cash Accumulation Policy of Life Insurance Corporation of India (LIC). The additional liability arising out of the difference
between the actuarial valuation and the fund balance with the LIC, if any, is accrued at the year end.
(iii) Contribution in respect of employees covered under Superannuation Scheme of the Company is made to an approved Superannuation
Fund, which fully covers the same under policy of Life Insurance Corporation of India.
(iv) Provision for accrued leave encashment is made on the basis of an actuarial valuation.
(j)
Miscellaneous Expenditure :
Expenses included under the head 'Miscellaneous Expenditure' are amortized over the period of estimated future benefits.
(k)
Discount on Equity Shares, under the Employee Stock Option Scheme, is amortized in accordance with Securities and Exchange Board of
India (SEBI) Guidelines.
(l)
Borrowing Costs and Share Issue Expenses :
(i) Share issue expenses for specific projects and borrowing cost attributable to acquisition and construction of assets are capitalised as
part of the cost of such assets upto the date when such assets are ready for intended use.
(ii) Expenses on other issue of Shares, Debentures and Bonds as well as Premium on Redemption of Debentures are adjusted to Security
Premium Account in accordance with Section 78 of the Companies Act, 1956.
(iii) Borrowing cost such as discount or premium and ancillary costs in connection with arrangement of borrowings excluding debenture
and bonds, are amortised over the period of borrowings.
(iv) Other borrowing costs are charged as expense in the year in which these are incurred.
(m) Taxation :
Provision for current tax is made with reference to taxable income computed for the accounting year, for which the financial statements are
prepared, i.e. July - June by applying the tax rates as applicable.
Deferred tax charge or credit on timing difference is recognised using tax rates and tax laws enacted or substantively enacted at the
Balance Sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that sufficient future taxable income
will be available against which these assets can be realised in future and in respect of carry forward of losses and unabsorbed depreciation,
deferred tax assets are recognised only if there is virtual certainty of realisation.
Deferred tax assets/liabilities are reviewed at each Balance Sheet date.
79
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30.06.2004
Rs. in Crores
2.
a)
30.06.2003
Rs. in Crores
Contingent liabilities not provided for in respect of :
(i)
Amount outstanding in respect of Indemnities given by the Company to
Banks for loans given to third parties, for Company's business ............
0.14
0.14
(ii)
Claims against the Company not acknowledged as debts ..................
38.58
21.41
27.56
27.12
High Court of Himachal Pradesh, against which the
Department has filed a Special Leave Petition in the
Honourable Supreme Court, pending final decision in the
said matter .......................................................................
34.35
34.35
Others ..............................................................................
0.13
1.14
(c)
Disputed Excise demands - matters under appeal .......................
5.55
4.51
(d)
Disputed Customs demands - matters under appeal ...................

3.21
(e)
Disputed liability of RTO Tax on Mining Machinery ......................
0.62
0.80
5.51
5.51
(iii) Tax matters :
(a)
Disputed liability in respect of Income-tax demands (including
interest) - matters under appeal .................................................
(b)
Disputed Sales-tax demands (including interest and penalty) – matters
under appeal:
(i)
(ii)
Matter decided in favour of the Company by the Honourable
(iv) Disputed liabilities relating to Railway Freight on Cement - matter once
decided in favour of the Company by the Honourable High Court of
Gujarat was remanded back by the Honourable Supreme Court
pursuant to an SLP filed by the railways. ............................................
(v)
b)
Disputed liabilities relating to Coal claims - matter pending in the
Honourable High Court:
(a)
Railway freight on Coal .............................................................
1.45
1.45
(b)
Penal freight on Excess Weight of Coal .......................................
0.24
0.24
(c)
Interest on Royalty on Coal ........................................................

1.25
(d)
Interest on Premium on Coal .....................................................
3.29
3.29
(vi) Disputed liability relating to Workmen Compensation for reinstatement
and back wages – matter pending in the Honourable High Court
of Gujarat ........................................................................................
0.11
0.11
77.18
68.02
The Honourable High Court of Himachal Pradesh has passed an order in
favour of the Company for its claim in respect of power subsidy in the form of
Power Tariff Freeze (PTF) and Peak Load Exemption Charges (PLEC).
Against this, Government of Himachal Pradesh on 1st May, 2004 has issued
296 5.13% H P Infrastructure Development Bonds of face value of Rs.10 lacs
each, having a value of Rs. 29.60 crores redeemable after 10 years and
balance of Rs. 0.08 crore is refunded to the Company.
The Government of Himachal Pradesh has filed Special Leave Petition in the
Honourable Supreme Court, against the decision of the Honourable High
Court of Himachal Pradesh, which is yet to come up for hearing. The Company
has given an undertaking to refund Rs. 29.68 crores paid by the State
Government together with interest thereon upto the date of final judgement in
time bound manner, in the event that the matter is decided against the
Company.
c)
3.
The Government of Rajasthan has granted 75% exemption from Sales Tax in
respect of Rabriyawas unit (erstwhile Ambuja Cement Rajasthan Ltd.). However,
the eligibility of exemption in excess of 25% has been contested by the State
Government in a similar matter of another Company and the matter is pending
before the Honourable Supreme Court. The Company has given an
undertaking to the Government of Rajasthan that the Company will deposit
the differential amount of Sales Tax which is Rs. 35.16 crores, in case the
Supreme Court’s decision goes against in the matter referred above.
Estimated amount of Contracts remaining to be executed on Capital Account
and not provided for (net of advances) .............................................................
BLACK
80 RED
80
4.
2003-2004
Rs. in Crores
2002-2003
Rs. in Crores
1,741.54
226.57
1,523.59
218.66
1,968.11
1,742.25
Segment reporting :
The Company has only one business segment 'Cement' as primary segment.
The secondary segment is geographical, which is given as under:
(a) Revenue
Sales (net of Excise Duty)
Domestic (within India) ........................................................................
Export .................................................................................................
(b)
5.
All the Assets of the Company, except the debtors for export and other
receivable, amounting to Rs. 5.72 crores (30.06.2003 - Rs.13.60 crores),
are within India.
Related Party Disclosures :
(a) List of Related Parties and relationships
Party
A. Ambuja Cement India Ltd. ...........................................................
Cement Ambuja International Ltd. ................................................
Ceylon Ambuja Cements (P) Ltd. ..................................................
GACL Finance Ltd. ......................................................................
GGL Hotel and Resort Company Ltd. ...........................................
DLF Gujarat Ltd. ..........................................................................
Indo Nippon Special Cements Ltd. ...............................................
B.
Ambuja Cement Eastern Ltd. ........................................................
Midigama Cements P. Ltd. ............................................................
Sub-Subsidiary
Sub-Subsidiary
C.
Ambuja Cement Rajasthan Ltd. ....................................................
ICAN Securities and Research Ltd. ................................................
Bengal Ambuja Housing Development Ltd. ...................................
Bengal Ambuja Metro Development Ltd. .......................................
Associate (Upto 31.05.2004)
Associate
Joint Venture
Joint Venture
D.
Key Management Personnel
Mr. N. S. Sekhsaria ......................................................................
Mr. P. N. Sekhsaria .......................................................................
Mr. A. L. Kapur ............................................................................
Mr. P. B. Kulkarni .........................................................................
Mr. A. V. Rao ...............................................................................
Mr. A. C. Singhvi .........................................................................
Mr. B. L. Taparia ..........................................................................
Mr. N. P. Ghuwalewala .................................................................
Managing Director
Whole-time Director
Whole-time Director
Whole-time Director
Whole-time Director (Upto 31.01.2004)
Whole-time Director
Whole-time Director and Company Secretary
Whole-time Director (From 28.06.2004)
Relatives of Key Management Personnel
Mr. Ajay Kapur ............................................................................
Mr. Milind Kulkarni ......................................................................
Son of Mr. A. L. Kapur
Son of Mr. P. B. Kulkarni
E.
F.
Enterprises over which significant influence exercised by Directors
Sakambari Holdings Pvt. Ltd. .......................................................
(b)
Relation
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Company owned by Mr. A. L. Kapur - Whole-time Director
Disclosures required for related parties transactions
Rs. in Crores
Transactions
I. Transactions during
the year/period
Purchase of Goods .............
Sale of Goods ....................
Purchase of Fixed Assets .....
Sale of Fixed Assets ............
Subsidiaries
SubSubsidiaries
Associates
Joint
Ventures
Key
Management
Personnel
Relatives of
Key
Management
Personnel
Enterprises over
which significant
influence
exercised by
Key Mgmt. Pers.
–
(0.26)
54.03
(45.82)
1.69
(–)
–
(–)
0.03
(0.11)
0.07
(1.25)
0.33
(–)
0.01
(0.23)
28.62
(24.20)
0.02
(0.11)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(0.05)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
81
BLACK
81 RED
Rs. in Crores
Transactions
Subsidiaries
SubSubsidiaries
Associates
Joint
Ventures
Key
Management
Personnel
Relatives of
Key
Management
Personnel
Enterprises over
which significant
influence
exercised by
Key Mgmt. Pers.
0.03
(0.08)
–
(–)
0.25
(0.28)
0.02
(0.02)
1.23
(1.07)
Rs.6182
(0.01)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
Interest received .................
0.12
(0.13)
0.96
(1.32)
31.83
(29.46)
0.13
(0.51)
–
(–)
–
(–)
–
(–)
Interest paid .......................
0.88
(4.00)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
Remuneration ....................
–
(–)
–
(–)
–
(–)
–
(–)
9.21
(6.96)
0.18
(0.12)
–
(–)
Dividends received .............
2.49
(1.05)
–
(–)
0.43
(0.36)
2.52
(0.50)
–
(–)
–
(–)
–
(–)
Royalty received .................
1.76
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
Other recoveries .................
0.29
(0.04)
0.09
(0.07)
3.08
(0.33)
–
(–)
–
(–)
–
(–)
–
(–)
Others ...............................
Rs.33439
(0.15)
–
(0.02)
–
(–)
–
(0.01)
–
(–)
–
(Rs.3000)
0.11
(0.10)
1.62
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
Loans received ...................
–
(43.58)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
Loans given .......................
–
(–)
–
(–)
10.00
(192.50)
–
(6.00)
–
(–)
–
(–)
–
(–)
Loans given repaid .............
1.38
(–)
–
(–)
10.00
(–)
3.50
(2.50)
–
(–)
–
(–)
–
(–)
22.06
(28.58)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
Loans given Outstanding ....
1.10
(1.25)
12.29
(13.30)
–
(379.00)
–
(3.50)
–
(–)
–
(–)
–
(–)
Amounts receivable ............
1.76
(0.27)
–
(–)
–
(–)
–
(0.13)
–
(–)
–
(–)
–
(–)
Amounts payable ...............
1.65
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
Deposits outstanding (Rent) .
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(0.20)
–
(15.00)
–
(–)
–
(18.00)
–
(–)
–
(–)
–
(–)
–
(–)
Rendering of Services .........
Receiving of Services ...........
Equity contributions
during the year ..................
II. Amounts Outstanding
at Balance Sheet date
Loans taken Outstanding ....
Guarantees and Collaterals
outstanding ........................
III. Notes :
1. Related Party relationship is as identified by the Company on the basis of available information and accepted by the Auditors as Correct.
2. No amount has been written off or written back during the year in respect of debts due from or to related parties.
3. Figures for the previous year have been given in brackets.
BLACK
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82
Details of material related party transactions [included under (b) above] :
(Rs. in Crores)
Subsidiary
Ceylon Ambuja
Cements (P) Ltd.
–
(–)
Purchase of Goods .............
Cement Ambuja DLF Gujarat Ltd.
International Ltd.
–
–
(–)
(–)
Ambuja Cement
Rajasthan Ltd.
28.62
(24.20)
Sale of Goods ....................
54.03
(45.82)
–
(–)
–
(–)
–
(–)
Interest received .................
–
(–)
–
(–)
–
(–)
31.83
(29.46)
Dividend received ...............
–
(–)
1.76
(–)
2.49
(1.05)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(43.58)
–
(–)
–
(–)
1.62
(–)
–
(–)
–
(–)
–
(–)
–
(–)
–
(–)
10.00
(192.50)
10.00
(–)
Royalty received .................
Equity contributions
during the year ..................
Loans received ...................
Loans given .......................
Loans given repaid .............
6.
Associates
Future obligation under a Bare Boat Charter cum Demise arrangement of ships for a period of 5 years are as under :
Rs. in crores
Minimum Payment outstanding
30.06.2004
30.06.2003
Due within 1 year
Due later than 1 year but not later than 5 years
7.
7.08
18.31
7.16
25.68
Present Value of Minimum Payment
30.06.2004
30.06.2003
6.19
15.87
6.26
22.31
2003-2004
Rs. in Crores
2002-2003
Rs. in Crores
336.79
18.50
222.09
–
355.29
222.09
3.75
1.35
5.49
2.02
2.40
3.47
357.69
225.56
Nos.
Nos.
162,467,785
155,250,601
4,797,384
–
167,265,169
155,250,601
176,955,713
155,347,124
4,797,384
–
181,753,097
155,347,124
Earning per Share (EPS) :
(i)
Profit attributable to Equity Shareholders for Basic EPS
Profit after tax .........................................................................................................
Add: Profit of erstwhile ACRL upto 31st May, 2004 ...................................................
Adjustments for the purpose of Diluted EPS :
Interest on Foreign Currency Convertible Bonds ........................................................
Less : Tax on above .................................................................................................
(ii)
Profit attributable to Equity Shareholders for Diluted EPS ...........................................
(iii) Weighted average number of Equity Shares for Basic EPS
Number of Equity Shares as on date of GACL ..........................................................
Number of equivalent Equity Shares of GACL as on 31st May, 2004
for erstwhile ACRL ...................................................................................................
(iv) Weighted average number of Equity Shares for Diluted EPS
Number of equivalent Equity Shares of GACL as on 31st May, 2004
Carried forward ..................................
83
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2003-2004
Nos.
2002-2003
Nos.
181,753,097
155,347,124
Add: Potential Equity Shares on conversion of Foreign Currency Convertible Bonds .....

20,654,400
Add: Potential Equity Shares on exercise of option of ESOS ........................................
591,114
218,248
Brought forward ..................................
(v)
Add: Potential equity shares on exercise of Rights and Warrants kept in abeyance out
of the Rights issue in 1992 ...............................................................................
13,334
–
Weighted average number of shares for Diluted EPS .................................................
182,357,545
176,219,772
2003-2004
Rs.
2002-2003
Rs.
10.00
10.00
Basic ..............................................................................................................
21.24
14.31
Diluted ............................................................................................................
19.62
12.80
30.06.2004
Rs. in Crores
30.06.2003
Rs. in Crores
414.80
2.09
307.57
0.69
Total ...............................................................................................................
416.89
308.26
Deferred Tax Assets, on account of :
Expenditure allowable on actual payment .........................................................
Unencashed Leave ..........................................................................................
Gratuity ..........................................................................................................
Brought forward business loss and unabsorbed depreciation .............................
Others ............................................................................................................
0.16
2.23
1.26
37.90
4.63
0.94
1.26
–
–
0.76
Nominal Value of Shares .........................................................................................
(vi) Earning per Share :
8.
Tax Provisions :
(a) Current Tax
In the absence of taxable income for the year, provision for tax has been made in
accordance with the provisions of Section 115JB of the Income-tax Act, 1961.
(b)
(c)
9.
Deferred Tax
(i) Deferred Tax Liability has been accounted in accordance with Accounting Standard
22 (AS-22) - "Accounting for Taxes on Income" issued by the ICAI.
(ii) Break up of Deferred Tax Assets & Liabilities is as under:
Deferred Tax Liabilities, on account of :
Depreciation ...................................................................................................
Deferred Revenue Expenditure .........................................................................
Total ...............................................................................................................
46.18
2.96
Net Deferred Tax (Asset) / Liability ....................................................................
370.71
305.30
Pursuant to amalgamation of erstwhile ACRL, the Company has reviewed the unrecognised deferred tax asset/liability of erstwhile ACRL
as at the balance sheet date. Accordingly, a net deferred tax liability of Rs. 38.99 crores has been adjusted against the General Reserve,
after considering the estimated amount of brought forward loss and unabsorbed depreciation which will be available for adjustment
against future taxable income, in excess of the fiscal incentives which would otherwise have been available to the Company.
The Company has the following Joint Ventures and its proportionate share in the Assets, Liabilities, Income, and Expenditure of the Joint Venture
companies is given below :
30.06.2004
(i)
Name of the Joint Venture Company
(ii)
Percentage of Holding ..........................................
30.06.2003
Bengal Ambuja
Bengal Ambuja
Housing
Metro
Development Ltd. Development Ltd.
Bengal Ambuja
Bengal Ambuja
Housing
Metro
Development Ltd. Development Ltd.
49.99%
49.99%
49.99%
49.99%
Rs. in Crores
Rs. in Crores
Rs. in Crores
Rs. in Crores
(iii) Assets ..................................................................
68.18
47.72
51.21
18.58
(iv) Liabilities .............................................................
18.10
65.70
47.23
48.72
Income ................................................................
6.03
0.15
43.23
–
(vi) Expenditure .........................................................
0.82
0.10
40.87
0.14
(v)
BLACK
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84
Rs. in Crores
10. A)
i)
2003-2004
Rs. in Crores
Managerial Remuneration :
Computation of Managing Director's, Whole-time Directors'
and Directors' Commission :
336.79
Profit as per Profit and Loss Account ..........................................................
4.30
4.91
0.32
168.61
1.62
0.27
20.30
26.41
Add: Managing Director's Remuneration (including perquisite) ....................
Whole-time Director's Remuneration (including perquisite) ..................
Directors' Commission ......................................................................
Depreciation ....................................................................................
Provision for Diminutions in value of investment .................................
Provision for Wealth Tax ....................................................................
Provision for Current Tax ...................................................................
Provision for Deferred Tax .................................................................
226.74
563.53
168.61
0.11
7.66
Less: Depreciation under Section 350 of the Companies Act, 1956 .............
Excess of Sale price over the cost of assets sold ..................................
Profit on sale of Investment, net .........................................................
176.38
ii)
Profit on which Commission is payable .....................................................
Eligible Remuneration to the Managing and Whole-time Directors
in terms of Section 309 of the Companies Act, 1956, 10% on
Rs. 387.15 Crores ....................................................................................
Less: Remuneration to the Managing and Whole-time Directors
(excluding commission) .....................................................................
387.15
Balance available for payment of Commission ..........................................
35.05
38.72
3.67
Commission
a) Commission to be paid to the Managing Director as determined
by Board of Directors ........................................................................
b) Commission to be paid to Whole-time Directors as decided by the
Compensation and Remuneration committee of Directors ...................
3.37
2.17
5.54
c)
Commission to other Directors :
Eligible Commission to other Directors in terms of Section 309 of the
Companies Act, 1956, Rs. 3.87 Crores (1% of Rs. 387.15 crores)
Commission to be paid as determined by the Board of Directors ........
0.32
5.86
B)
2003-2004
Rs. in Crores
2002-2003
Rs. in Crores
2.48
5.54
0.53
2.14
4.02
0.49
1.07
0.62
9.62
7.27
The Profit & Loss Account includes payments to and provisions for remuneration
payable to the Managing Director and Whole-time Directors as under :
Salaries & Allowances ..............................................................................
Commission to the Managing Director & Whole-time Directors ..................
Contribution to Provident & Other Funds ...................................................
Perquisites (including estimated monetary value Rs. 0.41 crore;
Previous year - Rs. 0.31 crore) ..................................................................
Notes :
1) Includes remuneration to Whole-time Director Mr. A. V. Rao upto
31st January, 2004.
2) Remuneration to Whole-time Directors included in above in respect of
Whole-time Director Mr. P. B. Kulkarni for the period from 1st February, 2004
to 30th June, 2004; Mr. A. L. Kapur, Mr. B. L. Taparia and Mr. A. C. Singhvi
for the period from 1st May, 2004 to 30th June, 2004 and Shri N. P.
Ghuwalewala for the period from 28th June, 2004 to 30th June, 2004 is
subject to approval of members.
3) Remuneration includes gratuity to the extent of contribution and leave
encashment on payment basis.
85
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11. Payment to Auditors :
(a) Statutory Auditors
(i) As Auditors (including Service Tax) .....................................................
(ii) In other capacity
– Certification Work ..........................................................................
(iii) For Expenses ....................................................................................
(b)
Cost Auditors
(i) As Auditors (including Service Tax) .....................................................
(ii) For Expenses - (Rs.12,054; Previous Year - Rs.19,904) .......................
2003-2004
MT
Rs. in Crores
12. Licensed & Installed Capacity, Production, Stocks and Turnover :
Class of Goods - Cement
(i) Licensed Capacity (see Note "a") .....................................
700,000
(ii) Installed Capacity (see Note "b") ..................................... 12,860,000
(iii) Production ..................................................................... 10,368,171
(iv) Stocks :
Opening ........................................................................
217,315
Transferred on amalgamation from erstwhile ACRL ..........
33,261
Closing .........................................................................
173,849
(v) Turnover (see Note "c")
Cement ......................................................................... 10,442,166
Clinker ..........................................................................

2003-2004
Rs. in Crores
2002-2003
Rs. in Crores
0.40
0.32
0.39
0.07
0.18
0.04
0.86
0.54
0.02
0.02
0.02
0.02
2002-2003
MT
Rs. in Crores
700,000
9,000,000
9,840,315
31.81
4.27
23.95
192,811
–
217,315
29.28
–
31.81
2,305.18

9,813,860
2,657
2,024.93
0.37
2,305.18
2,732
(vi) Shortages, Samples and Handling Loss, etc. ....................
2,025.30
1,951
Notes:
(a) The Company's product is exempt from Licensing
requirements under the New Industrial Policy, in terms of
Notification no. S.O.477(E) dated 25th July, 1991.
(b) As certified by the management and, being a technical matter,
accepted by the Auditors as correct.
(c) Includes Self Consumption of 26,889 MT for Capital and
Revenue jobs (Previous Year 19,387 MT).
13. Raw Materials consumed – Indigenous :
(i) Limestone and clay :
Raised by the Company .................................................. 12,818,529
Purchased ......................................................................
9,355
Transportation and Handling Charges ............................

(ii) Gypsum ........................................................................
513,205
(iii) Silica .............................................................................
172,535
(iv) Iron ore .........................................................................
61,541
(v) Clinker - Purchased ........................................................
195,993
(vi) Others ...........................................................................
0.22
23.33
34.57
4.13
2.92
33.80
19.22
12,541,344
–
–
491,218
160,315
64,172
174,741
118.19
Total
–
16.97
32.96
3.69
3.38
29.53
13.92
100.45
Rs. in Crores
Percentage
Rs. in Crores
Percentage
14. Imported & Indigenous Spares Consumed :
(i) Imported .......................................................................
(ii) Indigenous ....................................................................
15.50
29.55
34.41
65.59
17.39
26.76
39.39
60.61
TOTAL .......................................
45.05
100.00
44.15
100.00
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86
2003-2004
Rs. in Crores
2002-2003
Rs. in Crores
15. CIF Value of imports :
(i)
Capital Goods .........................................................................................
18.80
1.11
(ii)
Spares .....................................................................................................
13.56
15.88
16. Expenditure in Foreign currency :
(i)
Technical fees (Net of tax) (Capitalised Rs. Nil;
Previous Year Rs. 0.12 crore) ....................................................................
0.95
0.60
(ii)
Interest ....................................................................................................
18.44
15.55
(iii) Travelling Expenses ..................................................................................
0.59
0.82
(iv) Ship Charter Hire, Port Dues, etc. ..............................................................
23.00
20.50
8.22
7.84
(v)
Other matters ..........................................................................................
17. Remittances in Foreign Currency :
On account of dividend to non-resident shareholders
Interim Dividend
No. of shareholders .................................................................................

143
No. of Equity Shares .................................................................................

8,221,444
Amount remitted, net of tax (Rs. in crores) .................................................

2.60
Year to which it pertains ...........................................................................

2001-2002
Final Dividend
136
143
8,212,922
8,221,394
3.29
1.39
2002-2003
2001-2002
Interim Dividend
130
141
8,200,022
8,220,194
4.10
2.47
2003-2004
2002-2003
18. Earnings in Foreign Exchange :
(i)
F.O.B. Value of Exports .............................................................................
206.07
199.89
(ii)
Dividend ..................................................................................................
2.49
1.05
(iii) Interest - SWAP ........................................................................................

8.38
(iv) Other Income ..........................................................................................
7.77
2.00
226.57
218.66
19. Total Exports during the year :
Exports in foreign currency (including freight
Rs. 20.50 crores; Previous Year - Rs. 18.77 crores) ............................................
20. The Company has exercised the Call Option to convert / redeem all the outstanding 1% Foreign Currency Convertible Bonds. Consequently,
the bonds aggregating to Rs. 451.01 crores (net of exchange gain of Rs. 0.61 crore) have been converted into 2,02,84,938 equity shares at
the conversion price of Rs. 222.336 per share. Upon said conversion, the Equity Share Capital and Security Premium account have increased
by Rs. 20.28 crores and Rs. 430.73 crores respectively. The bonds aggregating Rs. 9.25 crores (net of exchange gain of Rs. 0.50 crore) which
were not opted for conversion, have been repaid.
21. In compliance with Accounting Standard-26, 'Intangible Assets', which became mandatory for accounting periods commencing on or after
April 1, 2003, the Company has changed its accounting treatment in respect of premium paid on premature repayment of term loans. Such
expenses incurred during the year, which were hitherto amortised over the balance period of the loan, have been charged to the Profit and Loss
account. As a result of this change, interest and finance charges (Schedule ‘R’), are higher by Rs. 2.79 crores and the profit for the year is lower
to the same extent.
22. Ex-gratia to employees which was hitherto accounted on payment basis, has, this year, been accounted on accrual basis. As a result of this
change, charge for the year of such expense is higher by Rs.5.98 crores and profit for the year is lower to the same extent.
87
BLACK
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23. Prior period items :
(a)
During the year, the Company has reclassified and rectified the rate of depreciation on certain fixed assets. Further the Company has
identified and capitalised machinery spares aggregating Rs.15.40 crores in accordance with Accounting Standard Interpretation - 2
"Accounting for Machinery Spares". As a result of these changes, net excess depreciation provided in earlier years aggregating Rs. 60.07 crores
has been written back during the year ended 30th June, 2004. The net depreciation charge for the year ended 30th June, 2004, is lower
by Rs.10.76 crores.
(b)
(i)
Certain expenses on Sales Promotion relating to earlier years aggregating to Rs.15.27 crores have been accounted and shown as
prior period items.
(ii)
Certain staff costs, hitherto accounted on payment basis have, this year, been accounted on accrual basis. Accordingly, Employees'
Remuneration and Benefits (Schedule 'Q') includes Rs. 6.73 crores on accrual basis. The amount of such expenses outstanding as on
30th June, 2003 aggregating Rs.1.78 crores has been shown as a prior period items.
24. Employee Stock Option Schemes :
The Company has granted 35,96,850 (30.06.2003 - 27,32,250) Stock Options to its employees (including certain employees of the subsidiary
companies) and Whole-time Directors (other than those excluded under the SEBI guidelines on Stock Options). Out of the above Stock Options,
3,27,600 (30.06.2003 - 3,16,950) have been surrendered/lapsed and 12,19,765 (30.06.2003 - 1,76,950) have been exercised. 20,49,185
(30.06.2003 - 22,38,350) Stock Options are outstanding as on 30th June, 2004, which if fully exercised will result in issue of 20,50,635
(30.06.2003 - 22,39,700) Equity Shares. The amount of Rs. 0.05 crore (30.06.2003 - Rs. 0.08 crore) represents the discount on the above said
options outstanding.
25. Borrowing Cost is net of capitalisation - Rs. 4.83 crores (Previous Year - Rs. Nil).
26. Capital Work in Progress includes (a) Machinery in transit - Rs. 0.25 crore (30.06.2003 - Rs. 2.46 crores) and (b) expenditure during construction
for project - Rs. 5.43 crores (30.06.2003 - Rs. 1.19 crores).
27. Disclosure of Sundry Creditors under Current Liabilities is based on the information available with the Company regarding the status of the
suppliers as defined under the "Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993". Amounts overdue
as on 30th June, 2004, to Small Scale and/or Ancillary Industrial (SSI) suppliers on account of principal amount together with interest, aggregate
to Rs. Nil (Previous Year - Rs. Nil).
There are no Small Scale Parties in respect of whom amount is outstanding for more than 30 days.
28. Amalgamation of Ambuja Cement Rajasthan Limited (ACRL):
(a)
Pursuant to the Scheme of Amalgamation sanctioned by the Board for Industrial & Financial Reconstruction (BIFR) dated 7th January, 2004
and corrigendum dated 27th May, 2004 respectively, the entire business and all assets and liabilities of erstwhile Ambuja Cement Rajasthan
Ltd. (ACRL), a Company engaged in cement manufacturing, has with effect from 1st June, 2004, stood transferred and vest in the Company.
Accordingly, the said assets, liabilities and transactions have been incorporated in these financial statements.
(b)
The amalgamation has been accounted for under the “pooling of interest” method as prescribed by the Accounting Standard AS-14
“Accounting for Amalgamations” issued by the Institute of Chartered Accountants of India. Accordingly the accounting treatment has been
given as under :
(i)
The assets and liabilities as at 1st June, 2004 have been incorporated in the financial statements of the Company.
(ii)
Security Premium appearing in the books of ACRL amounting to Rs. 9.33 crores has been credited to Security Premium Account of
the Company.
(iii) Debit balance in the Profit and Loss Account of ACRL amounting to Rs. 320.90 crores as at 1st June, 2004 has been adjusted from
the General Reserves of the Company.
(iv) Shareholders holding 133,123,714 Shares of Rs.10/- each fully paid up in Ambuja Cement Rajasthan Ltd. have been allotted one
equity share of Rs. 10/- each fully paid up of Gujarat Ambuja Cements Ltd. for every 50 equity shares of erstwhile ACRL and the
difference of Rs. 130.46 crores between the amount of such shares issued and the share capital held by such shareholders is credited
to capital reserve.
(c)
128,162,369 equity shares of Rs.10/- each fully paid up in Ambuja Cement Rajasthan Ltd. held as investment by the Company stand
cancelled and the difference between book value and face value of such shares amounting to Rs. 33.35 crores has been debited to general
reserve.
(d)
In accordance with AS - 14, accounting policies of erstwhile ACRL have been aligned. Accordingly, miscellaneous expenditure representing
public issue expenses of Rs. 1.38 crores and machinery spares issued for consumption of Rs. 2.15 crores have been adjusted to Security
Premium Account and General Reserve respectively, and Modvat/Cenvat credit availed on Capital Goods upto 31st May, 2004 amounting
to Rs. 16.51 crores credited to the concerned assets by erstwhile ACRL has, now, been credited to Modvat/Cenvat on Capital Goods
Reserve by debiting the same to concerned asset.
BLACK
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88
(e)
Figures for the current year includes figures for the erstwhile ACRL for the period from 1st June, 2004 to 30th June, 2004. Current year
figures are, accordingly not comparable with those of the previous year.
29. In the year 1999, the Company had started work to set up a Bulk Cement Terminal at Tuticorin in the state of Tamilnadu. However, one of the
local authority and a neighbour moved the Honourable Court to stall the project on untenable grounds. During the year the Honourable Court
has passed the orders in favour of the Company. However, Board of Directors, after detailed deliberations on all the aspects namely the project
cost, the current market scenario, the logistics and other relevant factors, has decided not to proceed with the project in the interest of the
Company. Consequently, net expenditure of Rs. 4.23 crores, incurred on this project has been charged to Profit & Loss account.
30. Disclosure in respect of Loans and Advances in the nature of Loans pursuant to Clause 32 of the Listing Agreement :
As at 30.06.2004
Outstanding
balance
As at 30.06.2003
Rs. in Crores
Maximum
balance
during the year
Rs. in Crores
Rs. in Crores
Maximum
balance
during the year
Rs. in Crores
12.29
1.10
13.30
1.25
13.30
1.25
13.95
1.25

389.00
379.00
379.00

–
–
Loans and Advances in the nature of loans given
to Subsidiaries and Associates, etc.
(a) Loans to Subsidiaries :
Ambuja Cement Eastern Ltd. (see Note 1) ................
GACL Finance Ltd. (see Note 2) ..............................
(b) Loans to Associates :
Ambuja Cement Rajasthan Ltd. ...............................
(merged w.e.f. 1st June, 2004)
(B) Investment by loanee in the shares of the
Company and its Subsidiary Companies .........................
Notes:
(1) Repayment stipulated over nine years.
(2) No stipulation as to repayment.
Outstanding
balance
(A)
31. Figures less than Rs. 50,000/- have been shown at actuals, wherever statutorily required to be disclosed, as the figures have been rounded off
to the nearest lac.
32. Figures of the previous year have been regrouped wherever necessary.
Signatures to Schedules 'A' to 'S'
DALAL & SHAH
B. R. Shah
Partner
Membership No. 5806
Sudhir Soni
Partner
Suresh Neotia
N. S. Sekhsaria
Managing Director
Vinod Neotia
M. L. Bhakta
M. T. Patel
Rajendra P. Chitale
Nasser Munjee
B. L. Taparia
Company Secretary
A. L. Kapur
P. B. Kulkarni
Pulkit Sekhsaria
Anil Singhvi
N. P. Ghuwalewala
Chairman
}
}
Directors
89
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BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL
BUSINESS PROFILE
I.
Registration Details
Registration No.
4717
Balance Sheet Date
II.
04
Capital Raised during the Year (Amount in Rs. Thousand)
Public Issue
–
Bonus Issue (Abeyance Cases)
Right Issue (Abeyance Cases)
294
Conversion of Foreign Currency
Convertible Bonds
III.
State Code
30.06.2004
624
Private Placement
202,849
–
ESOS
10,430
On Amalgamation
26,625
Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousand)
Total Liabilities
36,621,479
Total Assets
36,621,479
Reserves & Surplus
18,422,852
Sources of Funds
Paid-up Capital
1,794,000
Share Application Money
221
Employee Stock Option Outstanding
534
Secured Loans
6,497,809
Deferred Tax Liabilities
3,707,017
Unsecured Loans
6,199,047
Application of Funds
Net Fixed Assets
24,982,161
Net Current Assets
1,440,674
Accumulated Losses
IV.
10,109,702
Misc. Expenditure
88,943
Total Expenditure
16,894,002
–
Performance of Company (Amount in Rs. Thousand)
Turnover (Net of Excise duty)
19,681,082
Profit before tax
3,834,854
Earning per Share in Rs.
V.
Investments
Profit after Tax
21.24
3,367,796
Dividend Rate %
80%
Generic Name of Principal Product of the Company
Item Code No. (ITC Code)
Product Description
252329.01
Other Grey Portland Cement
Suresh Neotia
N. S. Sekhsaria
Managing Director
}
B. L. Taparia
Company Secretary
A. L. Kapur
P. B. Kulkarni
Pulkit Sekhsaria
Anil Singhvi
N. P. Ghuwalewala
}
BLACK
90 RED
Chairman
Vinod Neotia
M. L. Bhakta
M. T. Patel
Rajendra P. Chitale
Nasser Munjee
90
Directors
AUDITORS' REPORT
TO THE BOARD OF DIRECTORS, GUJARAT AMBUJA CEMENTS LIMITED
ON THE CONSOLIDATED FINANCIAL STATEMENTS
We have audited the attached consolidated Balance Sheet
of Gujarat Ambuja Cements Limited and its subsidiaries,
('the Group'), as at 30th June 2004, and also the
consolidated Profit and Loss Account and the
consolidated Cash Flow statement for the year ended
on that date annexed thereto. These financial statements
are the responsibility of the Gujarat Ambuja Cements
Limited's management and have been prepared by the
management on the basis of separate financial statements
and other financial information regarding components.
Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with the auditing
standards generally accepted in India. Those Standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the financial
statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles
used and significant estimates made by management,
as well as evaluating the overall financial statement
presentation. We believe that our audit provides a
reasonable basis for our opinion.
The financial statements of one of the subsidiaries whose
financial statements reflect total assets of Rs. 1,434 crores
as at 30th June 2004, total revenues of Rs. 8 crores and
the related Cash Flows for the year then ended, has been
audited by one of us as a sole auditor. The financial
statements of another subsidiary whose financial
statements reflect total assets of Rs. 432 crores as at
30th June 2004, total revenues of Rs. 412 crores and
the related Cash Flows for the year then ended, have
been audited by one of us as a joint auditor with another
audit firm. Further, we did not audit the financial statements
of other subsidiaries, joint ventures and associates whose
financial statements reflect total assets of Rs. 360 crores
as at 30th June 2004, total revenues of Rs. 114 crores
and the related cash flows for the year then ended. The
financial statements and other financial information of
these subsidiaries, joint ventures and associates have
been audited/reviewed by other auditors whose reports
have been furnished to us, and our opinion is based
solely on the reports of other auditors.
We report that the consolidated financial statements have
been prepared by the Gujarat Ambuja Cements Limited's
management in accordance with the requirements of
Accounting Standards (AS) 21, Consolidated financial
statements, Accounting Standards (AS) 23, Accounting
for Investments in Associates in Consolidated Financial
Statements and Accounting Standard (AS) 27, Financial
Reporting of Interests in Joint Ventures issued by the
Institute of Chartered Accountants of India.
Based on our audit and on consideration of reports of
other auditors on separate financial statements and on
the other financial information of the components, and
to the best of our information and according to the
explanations given to us, we are of the opinion that the
attached consolidated financial statements give a true
and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the consolidated Balance Sheet, of
the state of affairs of the Group as at 30th June 2004;
(b) in the case of the consolidated Profit and Loss
Account, of the profit for the year ended on that date;
and
(c) in the case of the consolidated Cash Flow Statement,
of the Cash Flows for the year ended on that date.
For DALAL & SHAH
B. R. Shah
Sudhir Soni
Partner
Partner
Mumbai, July 28, 2004
'
BLACK
91 RED
CONSOLIDATED BALANCE SHEET
as at 30th June, 2004
Schedule
Rs. in Crores
As at
30.06.2004
Rs. in Crores
As at
30.06.2003
Rs. in Crores
SOURCES OF FUNDS
Shareholders Funds
Share Capital ...................................................................
Share Application Money, pending allotment ......................
Employee Stock Option Outstanding (Refer Note 13) ..........
Reserves and Surplus ........................................................
Minority Interest ........................................................................
Loan Funds
Secured Loans ..................................................................
Unsecured Loans :
99,300 1% Foreign Currency Convertible Bonds (FCCB)
of US$ 1,000 each (Refer Note 9 ) .....................................
Others ..............................................................................
A
179.40
0.02
0.05
1,563.51
B
155.30
0.01
0.08
1,259.31
1,742.98
637.55
1,414.70
515.07
C
796.35
1,037.80
D

644.01
461.37
477.84
644.01
939.21
320.88
0.01
Deferred Tax Liability, net (Refer Note 8 (b)) ................................
Share of Joint Venture ...............................................................
TOTAL ........................................
1,440.36
1,977.01
233.61
0.03
320.89
233.64
4,141.78
4,140.42
APPLICATION OF FUNDS
Fixed Assets ...........................................................................
Gross Block ......................................................................
Less: Depreciation .............................................................
E
4,293.14
1,600.51
3,587.00
1,290.87
Net Block ..........................................................................
Capital Work in Progress (Refer Note 18) ...........................
2,692.63
127.12
2,296.13
60.56
Advances against capital expenditure .................................
2,819.75
23.21
2,356.69
13.72
Investments ............................................................................
F
Current Assets, Loans and Advances
Inventories ........................................................................
Sundry Debtors .................................................................
Cash and Bank Balances ...................................................
Other Current Assets .........................................................
Loans and Advances .........................................................
G
H
I
J
K
Less: Current Liabilities and Provisions .........................
Liabilities ..................................................................
Provisions .................................................................
2,842.96
1,085.57
L
385.05
69.42
134.05
2.37
139.77
307.91
82.97
86.09
2.04
518.06
730.66
997.07
453.41
75.54
317.09
76.92
528.95
394.01
Net Current Assets ................................................................
Miscellaneous Expenditure
(to the extent not written off or adjusted) .....................................
201.71
603.06
11.54
15.56
4,141.78
4,140.42
M
TOTAL ........................................
2,370.41
1,151.39
S
DALAL & SHAH
B. R. Shah
Partner
Sudhir Soni
Partner
BLACK
92 RED
N. S. Sekhsaria
Managing Director
B. L. Taparia
Company Secretary
'
Anil Singhvi
Whole-time Director
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Schedule
INCOME
Rs. in Crores
2003-2004
Rs. in Crores
2002-2003
Rs. in Crores
Sales/Operating Income
Sales ...............................................................................
Sales - Share in Joint Venture .............................................
2,802.04
2.19
2,466.98
40.45
Less: Excise duty paid ........................................................
2,804.23
401.25
2,507.43
338.31
Services ............................................................................
2,402.98
14.80
2,417.78
59.19
0.06
2,169.12
9.79
2,178.91
49.69
0.97
2,477.03
2,229.57
Other Income ...........................................................................
Share in Associates ...................................................................
EXPENDITURE
Manufacturing and Operating Expenses .....................................
Variation in Stocks .....................................................................
Administrative, Selling and Other Expenses ................................
Interest and Finance Charges, (net) ............................................
Depreciation and Amortization ..................................................
Depreciation- Share in Joint Venture ..........................................
N
O
P
Q
R
1,129.24
(51.80)
689.72
90.06
208.05
0.19
Profit before Tax and before prior period items ...........................
Prior period Items
Depreciation written back [Refer Note 12 (a)] .....................
Administrative, Selling and Other Expenses ........................
1,032.54
1.37
575.34
103.11
205.72
0.18
2,065.46
1,918.26
411.57
311.31
60.07
(17.54)
–
–
[Refer Note 12 (b)] ............................................................
42.53
–
Profit before Tax ........................................................................
Provision For Taxation [Refer Note 8 (a) (b)]
– Current Tax ....................................................................
– Current Tax- Share in Joint Venture ..................................
– Deferred Tax ..................................................................
– Deferred Tax -Share in Joint Venture ................................
454.10
311.31
20.45
0.10
48.27
(0.02)
22.69
0.62
(59.97)
0.44
68.80
(36.22)
Net Profit before Minority Interest ...............................................
Less: Minority Interest for the year ..............................................
385.30
22.87
347.53
54.34
Net Profit ...............................................................................
Balance as per last Account .......................................................
Balance of Profit and Loss of Joint Venture ..................................
Debit Balance of Profit and Loss Account as on 1st June 2004
of erstwhile Ambuja Cement Rajasthan Limited (ACRL) ................
Less: Adjusted from General Reserve [Refer Note 15 (b) (iii)] ........
362.43
107.27
6.42
293.19
12.61
5.01
320.90
320.90
Transferred from Debenture Redemption Reserve ........................
Transferred from Investment Allowance (Utilised) Reserve Account
Transferred to Debenture Redemption Reserve ............................
Transferred to General Reserve ..................................................
Transferred to General Reserve- Share in Joint Venture ...............
Dividend on Cumulative Preference Shares
(Including Rs. 0.90 crores of prior years) ....................................
Interim Dividend:
On Equity Shares ..............................................................
Share in Joint Venture- Corporate Dividend Tax ..................
88.25
11.31
0.26
Proposed Final Dividend:
On Equity Shares ..............................................................
Share in Joint Venture Equity Shares ...................................
Share in Joint Venture- Corporate Dividend Tax ..................
53.82
7.03

0.06

127.75

2.55
275.00
0.20
–
29.58
15.50
18.75
100.00
0.25
1.35
–
46.58
5.97
–
99.82
Balance carried to Balance Sheet ...............................................
Earnings Per Share - in Rs. (Refer Note 7):
Basic ...............................................................................
Diluted .............................................................................
–
–
52.55
62.13
7.96
0.49
0.07
60.91
70.65
164.04
113.69
22.77
21.02
18.89
16.86
S
DALAL & SHAH
B. R. Shah
Partner
Sudhir Soni
Partner
N. S. Sekhsaria
Managing Director
B. L. Taparia
Company Secretary
Anil Singhvi
Whole-time Director
'!
BLACK
93 RED
CONSOLIDATED CASH FLOW STATEMENT
Rs. in Crores
A)
2003-2004
Rs. in Crores
2002-2003
Rs. in Crores
454.10
311.31
CASH FLOW FROM OPERATING ACTIVITIES
NET PROFIT BEFORE TAX ............................................................................
Adjustment for :
Share in Joint Venture ..........................................................................

(3.46)
Share in Associate ...............................................................................
(0.06)
(0.97)
Depreciation & Amortization ................................................................
208.24
205.72
Surplus on sale of assets ......................................................................
(0.72)
(1.83)
Loss on assets discarded/sold ..............................................................
4.29
1.81
Part of deferred revenue expenditure, written off ...................................
2.21
2.45
Advertisement Expenditure written off ...................................................
1.15
–
Project and Preoperative Expenses written off ........................................

0.71
Abandoned Capital Project ..................................................................
4.23
–
(12.76)
Exchange rate difference .....................................................................
(9.66)
Profit on sale of investments .................................................................
(9.47)
(2.27)
Interest and Finance Charges ..............................................................
90.06
102.10
Dividend .............................................................................................
(8.61)
(8.72)
Provision for Doubtful Advances ...........................................................
6.93
0.36
Bad Debts, Sundry Debit Balance Claims W/off ....................................
1.11
1.49
Provision for Doubtful debts and advances, written back .......................
(0.13)
(0.72)
Provision for Wealth tax .......................................................................
0.27
0.27
Provision for Diminution in value of Investment .....................................
1.74
–
Prior period Item-Depreciation Written Back .........................................
(60.07)
–
OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES .......................
231.51
284.18
685.61
595.49
Adjustment for :
Trade and other receivables .................................................................
(8.90)
(157.22)
Inventories ..........................................................................................
(29.83)
(23.26)
Trade Payables ....................................................................................
98.53
CASH GENERATED FROM OPERATIONS .....................................................
(147.30)
745.41
448.19
Interest and Finance Charges paid .......................................................
(138.35)
(147.15)
Direct Taxes paid .................................................................................
(28.37)
(23.38)
Miscellaneous Expenditure ...................................................................
(1.32)
(11.93)
Exchange rate difference .....................................................................
9.07
NET CASH FROM OPERATING ACTIVITIES ...................................................
B)
33.18
59.80
10.83
(158.97)
(171.63)
586.44
276.56
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets ..............................................................................
(284.58)
Sale of Fixed Assets .....................................................................................
4.49
7.27
Investments (Purchases), Loans & Advances ..................................................
(2,248.53)
(1,212.03)
(136.43)
Sale of Investments .....................................................................................
2,193.66
1,220.95
Interest received ..........................................................................................
37.84
44.20
Dividend and Income from Units received ....................................................
8.61
NET CASH USED IN INVESTING ACTIVITIES ................................................
Carried forward ..................................
BLACK
94 RED
'"
8.72
(288.51)
(67.32)
297.93
209.24
Rs. in Crores
2003-2004
Rs. in Crores
2002-2003
Rs. in Crores
297.93
209.24
CASH FLOW STATEMENT (Contd.)
Brought forward ..................................
C)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issue of Share Capital including Share premium ....................
16.34
1.73
Repayment/ Conversion of 1% FCCB ...........................................................
(9.25)
–
Premium on redemption of Debentures and Shares Issue expenses ...............
(11.36)
(41.46)
Total proceeds from borrowings (Net of Repayments) ....................................
(93.38)
(72.25)
Subsidy received .........................................................................................

0.02
Dividend paid .............................................................................................
(169.45)
(90.98)
NET CASH FROM FINANCING ACTIVITIES ..................................................
(267.10)
NET INCREASE IN CASH AND CASH EQUIVALENTS ....................................
30.83
6.30
CASH AND CASH EQUIVALENTS as at 01.07.2003 (Opening Balance) ........
85.83
79.53
CASH AND CASH EQUIVALENTS as at 01.07.2003 -Share in Joint Venture ..
0.26
–
(202.94)
ADD: CASH AND BANK BALANCES TAKEN OVER ON
AMALGAMATION WITH ERSTWHILE ACRL .........................................
17.13
–
CASH AND CASH EQUIVALENTS as at 30.06.2004 (Closing Balance) ..........
134.05
85.83
(Note: The cash flows for the prior year does not include cash flows for
Joint Ventures as the information on the opening balance are not available.)
DALAL & SHAH
B. R. Shah
Partner
Sudhir Soni
Partner
N. S. Sekhsaria
Managing Director
B. L. Taparia
Company Secretary
Anil Singhvi
Whole-time Director
'#
BLACK
95 RED
SCHEDULES ‘A’ TO ‘S’
annexed to and forming part of the Consolidated Balance Sheet as at and
Consolidated Profit and Loss Account for the year ended 30th June, 2004.
Rs. in Crores
SCHEDULE ‘A’ – SHARE CAPITAL
Authorised :
25,00,00,000 Equity Shares of Rs. 10 each ..........................................................
15,00,00,000 Preference Shares of Rs. 10 each ...................................................
As at
30.06.2004
Rs. in Crores
250.00
150.00
As at
30.06.2003
Rs. in Crores
250.00
150.00
400.00
400.00
Issued :
17,94,45,487 (15,54,55,060) Equity Shares of Rs. 10 each ..................................
179.45
155.46
Subscribed :
17,93,99,951 (15,53,17,771) Equity Shares of Rs. 10 each fully called up ............
Less: Allotment and Call money in arrears (other than Directors) .....
179.40

155.32
0.02
TOTAL .................................................................
179.40
155.30
Notes :
Out of above Equity Shares :
1) 10,45,64,748 (10,45,35,395) Shares of Rs. 10 each, have been issued as fully
paid up Bonus Shares by way of capitalisation of Security Premium Account and
Capital Redemption Reserve Account.
2) 49,42,448 (49,11,248) Shares have been issued against exercise of Tradeable
Warrants attached to 18.5% Secured Redeemable Non-Convertible Debentures.
Currency Convertible Bonds of US $ 5000 each.
Currency Convertible Bonds of US $ 1000 each.
5) 26,62,474 Equity Shares have been alloted during the year to the shareholders of
the amalgamating company Ambuja Cement Rajasthan Limited pursuant to the
scheme of amalgamation as approved by the Board for Industrial and Financial
Reconstruction (BIFR) without payment being received in cash [Refer Note 15(b)(iii)]
6) Outstanding Employee stock option excerciable into 20,50,335 equity shares;
(Previous Year 22,39,700).
SCHEDULE ‘B’ – RESERVES AND SURPLUS
Subsidies :
(a) Cash Subsidies from Government and other authorities :
As per last Account .....................................................................................
Add: Transferred on amalgamation of erstwhile ACRL ...................................
Add: Received during the year .....................................................................
(b)
Grant-in-aid Subsidy from DANIDA .............................................................
1.33
0.20

1.31
–
0.02
1.53
1.33
0.12
0.12
1.65
Capital Reserve :
(a) Excess of Share Capital of erstwhile Ambuja Cement Rajasthan Limited over
amount credited by the company to share capital [Refer Note 15 (b) (iv)] .......
(b) Capital Reserve on Consolidation ................................................................
130.46
0.03
1.45
–
0.03
130.49
100.00
0.03
100.00
Capital Redemption Reserve Account .............................................................
Security Premium Account :
As per last Account .....................................................................................
473.46
495.25
Addition during the year:
Transferred on amalgamation of erstwhile ACRL [Refer Note 15 (b)(ii)] ...
On Issue of Share Capital on conversion of FCCB (Refer Note 9) ...........
Against issue of warrants, forfeited .......................................................
Others ................................................................................................
9.33
430.73

15.23
–
–
18.00
1.67
C/f .............................
928.75
514.92
232.14
Carried forward .............................
BLACK
96 RED
'$
101.48
Rs. in Crores
As at
30.06.2004
Rs. in Crores
As at
30.06.2003
Rs. in Crores
232.14
SCHEDULE ‘B’ – RESERVES AND SURPLUS (Contd.)
Brought forward .............................
B/f .............................
928.75
101.48
514.92
Deduction during the year:
Public Issue Expenses of erstwhile ACRL [Refer Note 15 (d)] ...................
Issue of Bonus Shares ..........................................................................
Premium paid on pre-mature redemption of Debentures .......................
Share, Debenture and Bond Issue Expenses ..........................................
1.38
0.03
11.36

–
–
38.43
3.03
12.77
41.46
915.98
Investment Allowance (Utilised) Reserve Account:
As per last Account .........................................................................................
Less: Transferred to Profit and Loss Account on Completion of Statutory Period ...
473.46

15.50
15.50

–
Debenture Redemption Reserve :
Less: Transferred to Profit and Loss Account ......................................................
258.50
127.75
269.33
29.58
Add: Set aside this year ...................................................................................
130.75
2.55
239.75
18.75
133.30
258.50
Modvat/Cenvat Credit availed on Capital Goods Reserve :
(Refer Note 19 )
81.47
79.22
Add: (i) Modvat availed by erstwhile ACRL [Refer Note 15 (d)] ...........................
(ii) Availed during the year .......................................................................
16.51
10.59
–
2.46
Less: Claims withdrawn relating to earlier years and other adjustments ..............
108.57
0.23
81.68
0.21
108.34
Contingency Reserve
Less: Transfer to General Reserve .....................................................................
81.47
53.09
53.09
53.09
–

General Reserve :
As per last Account .............................................................................................
Less: Adjustment of debit balance of Profit & Loss account of erstwhile ACRL on
amalgamation [Refer Note 15 (b) (iii)] ..........................................................
Loss on cancellation of Investment in erstwhile Ambuja Cement Rajasthan
Limited on amalgamation [Refer Note 15 (c)] ...............................................
Deferred Tax Liability (net) in respect of amalgamated company ACRL
[Refer Note 8 (c)] ........................................................................................
Adjustment on account of alignment of accounting policies ...........................
[Refer Note 15 (d)]
Unrealised profit on sale of shares in earlier year transferred from
Minority Interest ..........................................................................................
Deferred Tax liability relating to transitional period .......................................
Add: Transferred from contingency Reserve ..........................................................
Share in Associate ......................................................................................
Set Aside this year .......................................................................................
53.09
179.09
148.22
320.90
–
33.35
–
38.99
2.15
–
–
99.64

–
70.82
(315.94)
53.09

275.00
77.40
–
1.69
100.00
12.15
(3.96)
0.12
Exchange Fluctuation Reserve on consolidation of overseas subsidiaries ................
Reserve Fund in terms of Section 45-IC(1) of Reserve Bank of India Act, 1934 .......
179.09
(2.79)
0.12
Surplus as per Profit and Loss Account ..........................................................
164.04
113.69
Share in Joint Venture .........................................................................................
1,562.11
1.40
1,258.11
1.20
TOTAL ............................................................
1,563.51
1,259.31
'%
BLACK
97 RED
As at
30.06.2004
Rs. in Crores
As at
30.06.2003
Rs. in Crores
529.78
695.00
25.17
220.72
1.38
10.05
28.85
290.65
4.28
10.00
Add: Share in Joint Venture (Refer Note 5 below) ..........................................
787.10
9.25
1,028.78
9.02
TOTAL ............................................................
796.35
1,037.80
Rs. in Crores
SCHEDULE ‘C’ – SECURED LOANS
(a)
(b)
(c)
(d)
Secured Redeemable Non-Convertible Debentures and Bonds
(Refer Note 1 below) ...................................................................................
Term Loans :
From Financial Institutions (Refer Note 2(a) below) ........................................
From Banks (Refer Note 2(b) below) .............................................................
From Banks (Refer Note 3 below) ................................................................
Others (Refer Note 4 below) ........................................................................
Notes:
1.
Secured Redeemable Non-Convertible Debentures and Bonds comprise of :
10,00,000 (50,00,000) 13.50% Secured Redeemable Non-Convertible
Debentures of Rs. 100 each - Series'9' (Redeemable at
par on 26.01.2004) ..........................................................
Less: (40,00,000) Debentures pre-maturely redeemed
and cancelled. ..................................................................
Less:10,00,000 (–) Debentures redeemed during the year ...
– (20,00,000) 13.50% Secured Redeemable Non-Convertible
Debentures of Rs.100 each - Series'10' (Redeemable at par
on 05.03.2004, redeemed during the year) .......................
– (5,00,000) 13.50% Secured Redeemable Non-Convertible
Debentures of Rs.100 each - Series'11' (Redeemable at par
on 29.03.2004, redeemed during the year) .......................
25,00,000 12.00% Secured Redeemable Non-Convertible Debentures
of Rs.100 each - Series'13' (Redeemable at par in 3 equal
annual Instalments on 30.11.2004, 30.11.2005 and
30.11.2006) .....................................................................
50,00,000 (70,00,000)12.30% Secured Redeemable Non-Convertible
Debentures of Rs.100 each -Series'14' (Redeemable at par
on 10.10.2005) ................................................................
Less: – (20,00,000) Debentures pre-maturely redeemed
and cancelled. ..................................................................
10.00
50.00

10.00
40.00

10.00

20.00

5.00
25.00
25.00
50.00
70.00

20.00
50.00
55 (100) 11.75% Secured Redeemable Non-Convertible
Debentures of Rs.1,00,00,000 each - Series'15' (Redeemable
at par on 12.12.2005) ......................................................
Less: 5 (45) Debentures pre-maturely redeemed
and cancelled. ..................................................................
55.00
100.00
5.00
45.00
50.00
55 10.65% Secured Redeemable Non-Convertible Debentures
of Rs.1,00,00,000 each - Series'16' (Redeemable at par
on 27.04.2004) ................................................................
Less: 15 (–) Debentures pre-maturely redeemed
and cancelled. ..................................................................
during the year. .................................................................
55.00
15.00
–
40.00
–
100.00
BLACK
98 RED
'&
55.00
145.00
17.00
Carried forward ..................................
55.00
55.00

100 (145) 11.00% Secured Redeemable Non-Convertible
Debentures of Rs.1,00,00,000 each - Series'17' (Redeemable
at par in 2 equal annual Instalments on 27.04.2005 and
27.04.2006) .....................................................................
and cancelled. ..................................................................
50.00
45.00
83.00
100.00
208.00
320.00
Rs. in Crores
As at
30.06.2004
Rs. in Crores
As at
30.06.2003
Rs. in Crores
208.00
320.00
Brought forward ..................................
20 (50) 9.75% Secured Redeemable Non- Convertible Debentures
of Rs. 1,00,00,000 each Series - '18' (Redeemable at par on
11.07.2008 with a put/call option on 11.07.2006) .................
and cancelled ........................................................................
20.00
50.00
5.00
30.00
15.00
20 (50) 9.60% Secured Redeemable Non-Convertible Debentures
and cancelled ........................................................................
20.00
20.00
50.00
5.00
30.00
15.00
of Rs. 1,00,00,000 each Series - '21' (Redeemable at par
on 10.01.2007) .....................................................................
and cancelled ........................................................................
20.00
95.00
100.00
30.00
Rs. 1,00,00,000 each Series - '22' (Redeemable at par
on 18.01.2007) .....................................................................
on 08.02.2005) .....................................................................
on 08.02.2007) .....................................................................
and cancelled ........................................................................
5.00
65.00
95.00
25.00
25.00
100.00
100.00
30.00
50.00
10.00
20.00
20.00
on 10.05.2006) .....................................................................
and cancelled ........................................................................
25.00
25.00
10.00
Rs. 1,00,00,000 each Series - '26' (Redeemable at par on
10 (50) 8.10 % Secured Redeemable Non-Convertible Debentures
on 23.07.2007) .....................................................................
Less: – (40) Debentures pre-maturely redeemed
and cancelled ........................................................................
on 26.12.2005) .....................................................................
– (25) 6.35% Secured Redeemable Non-Convertible Debentures
26.02.2004 with a put/call option on 10.04.2003 & 10th of
every month thereafter) ...........................................................
Less: – (25) Debentures pre-maturely redeemed
and cancelled. .......................................................................
101,714 (–) Zero Coupon Convertible Debentures of Rs. 1,000 each.
[Redeemable at par in three equal annual installments
commencing form 30.03.2004 (Transferred on amalgamation
of Ambuja Cement Rajasthan Limited)] ....................................
30.00
–
15.00
25.00
25.00
25.00
10.00
50.00

40.00
10.00
10.00
25.00
25.00

25.00

–
6.78
–
529.78
695.00
''
BLACK
99 RED
Series No. 9 to 11, 13 to 15 and 22 to 24 are secured by way of first pari passu charge by mortgage of immovable properties of the three cement
plants of Gujarat Ambuja Cements Limited, situated at Ambujanagar, in the state of Gujarat, as covered under respective Trust Deeds.
Series No. 16 to 19 , 21 and 25 to 28 are secured by way of first pari passu charge by mortgage of immovable properties of Gujarat Ambuja
Cements Limited situated at Upparwahi, in the state of Maharashtra, as covered under respective Trust Deeds.
Security has not been created in respect of Debenture series No. 29, as the same has been redeemed on put/call option date i.e. 10-4-2003.
1,01,714 (–) privately placed Zero Coupon Convertible Debentures are secured by way of mortgage and first charge on all immovable properties
of Gujarat Ambuja Cements Limited situated at Rabriyawas, in the state of Rajasthan, as covererd under the respective Trust Deeds, in term of
order of Honourable Board for Industrial and Financial Reconstruction (BIFR). Debentureholders have agreed to accept repayment of principal
as per terms of agreement of erstwhile ACRL.
2.
3.
From Financial Institutions :
(a)
Rs. 25.17 crores (30.06.2003 - Rs. 28.85 crores), secured by mortgage of immovable properties, of Ambuja Cement Eastern Limited, both
present and future, and by hypothecation of all movable assets of said company, save and except specifically demarcated land and
housing colony and book debts, but including movable machinery spares, tools and accessories, both present and future, subject to prior
charges, created in favour of said unit's bankers on specified movables for working capital requirements. The Charges shall rank pari
passu in favour of the financial institution and Banks. *
(b)
i)
Rs.120 crores (30.06.2003 - Rs. 150.00 crores), secured by way of first pari passu charge by equitable mortgage of all immovable
properties, both present and future, situated at Darlaghat in the State of Himachal Pradesh.
ii)
Rs. 2.27 crores (30.06.2003 - Rs. 2.61 crores), secured by mortgage of all immovable properties of Ambuja Cement Eastern Limited,
both present and future, and hypothecation of all movable assets of the said Company, except specifically demarcated land and
housing colony and book debts. The charge shall rank pari passu in favour of the financial institution and banks. *
iii)
Rs. 17.72 crores (30.06.2003 - Rs. 23.04 crores), secured by a statutory first mortgage of Ship M.V. AMBUJA BHAVANI and
M.V. AMBUJA LAXMI, together with Bare boats and appurtenances.
iv)
Rs. 65.00 crores (30.06.2003 - Rs. 100.00 crores), to be secured by mortgage of all immovable properties both present and future
of Sankrail plant in the state of West Bengal.
v)
Rs. 15.73 crores (30.06.2003 - Rs. 15.00 crores), be secured by hypothecation of all moveable properties of GGL Hotel and Resort
Company Ltd and mortagage of immovable properties in respect of 18 Times Share Units, 5 Pakhiralaya units and 14 plots.
From Banks:
Rs. 1.38 crores (30.06.2003 - Rs. 4.28 crores), secured by hypothecation of inventories and book debts of Ambuja Cement Eastern Limited,
both present and future, and by a second charge by way of joint mortgage / hypothecation of all the assets of the Company, both present and
future.
4.
From Others
5.
From Banks:
Rs. 10.05 crores (30.06.2003 - Rs.10.00 crores) , secured by pledge of investment in mutual fund of a Body Corporate.
Rs. 9.25 Crores (30.06.2003 - Rs. 9.02 Crores ), secured by mortgage of 82070 sq. ft. of super built up area alongwith undivided proportionate
share of 6.73 acres of leasehold land.
*
The loans shall be repayable/redeemable at par in 7 annual instalments, commencing from 31st March 2001, without interest, pursuant
to the Rehabilitation scheme sanctioned by BIFR on 5th November, 1997. The instalment due as on 31st March, 2004, has been paid/
redeemed during the year.
Rs. in Crores
As at
30.06.2004
Rs. in Crores
As at
30.06.2003
Rs. in Crores
46.26
9.60
434.61
40.44
7.64
100.82
SCHEDULE ‘D’ – UNSECURED LOANS
Sales Tax Deferment Loan under Sales Tax Incentive Scheme of various States .......
Deferred Entry Tax Loan ......................................................................................
Foreign Currency Term Loan from Banks .............................................................
Short Term Loan from Banks :
Foreign Currency Loans ..............................................................................
Indian Rupee Loans ....................................................................................
22.34
63.26
137.47
125.00
85.60
62.57
262.47
46.33

5.37
10.00
6.23
Add: Share in Joint Venture .................................................................................
644.01

473.93
3.91
TOTAL ............................................................
644.01
477.84
Buyers' Import Credit ..........................................................................................
Commercial paper (Maximum amount outstanding during the year
Rs. 100 crores; Previous year Rs. 150 crores) .......................................................
From Companies ...............................................................................................
BLACK
100 RED
SCHEDULE ‘E’ – FIXED ASSETS
Rs. in Crores
DESCRIPTION
GROSS BLOCK (at Cost)
Tangible Assets:
Freehold Land (a) ............
Leasehold Land (b) ..........
Buildings , Roads and
Water Works (c) ...............
Marine Structures (g) .......
Plant and Machinery (e) ...
Electrical Installations ......
Railway Sidings and
Locomotives (d) ...............
Furniture, Fixtures and
Office Equipments ...........
Ships (j) ...........................
Vehicles ..........................
Power Lines (h) ................
Leaseout Plant and
Machinery ......................
Sub Total ........................
Intangible Asseets:
Goodwill on
Consolidation .................
Water Drawing Rights ......
Computer Software .........
Sub Total ........................
DEPRECIATION / AMORTISATION
As at
Addition on
Additions
(f)
Deductions/
Transfers (f)
As at
30.06.2004
0.56
5.42
6.88
1.38

0.36
113.92
25.98
38.24

443.61
13.97
24.36
0.20
169.39
8.14
0.61
0.02
11.12
(0.30)
58.97

0.02
64.86
113.73
20.45
19.82
3.16

1.48
0.58
6.43
3,503.06
75.03
6.16
–
106.48
19.54
401.44
95.39
2,381.20 (k)
214.75
NET BLOCK
As at Addition on
For the
year
Deductions/
Transfers (f)
Upto
30.06.2004
As at
30.06.2004
As at
30.06.2003
–
3.33

0.39

0.80

0.02

4.50
113.92
21.48
106.48
16.21
463.43
95.57
2,983.08
237.16
51.72
23.34
949.56
110.44
6.67

157.17
4.26
9.67
3.90
157.60
11.60
0.10

9.46
41.91
67.96
27.24
1,254.87
84.39
395.47
68.33
1,728.21
152.77
349.72
72.05
1,431.64
104.31

58.99
16.74

2.80

19.54
39.45
42.23
3.64

2.73
0.01
2.31
0.38
2.82
0.46
69.35
113.35
21.84
19.95
34.93
42.90
10.29
3.97
1.58

0.71
0.11
4.39
5.50
2.87
0.52
1.85
13.85
2.25

39.05
34.55
11.62
4.60
30.30
78.80
10.22
15.35
29.93
70.83
10.16
15.85

507.02

216.75

17.78
6.43
4,209.05
1.94
1,249.16

170.89
0.31
199.96

69.44
2.25
1,550.57
4.18
2,658.48
4.49
2,253.90

0.08

75.03
6.16
0.08
39.93
0.90
–

7.50
0.58
0.01

47.43 (i)
1.48
0.01
27.60
4.68
0.07
35.10
5.26
–
81.19

0.08

81.27
40.83

8.09

48.92
32.35
40.36
3,584.25
507.02
216.83
17.78
4,290.32
1,289.99
170.89
208.05
69.44
1,599.49
2,690.83
2,294.26
Share in Joint Venture ......
2.75

0.17
0.10
2.82
0.88

0.19
0.05
1.02
1.80
1.87
TOTAL ............................
3,587.00
507.02
217.00
17.88
4,293.14
1,290.87
170.89
208.24
69.49
1,600.51
2,692.63
2,296.13
Previous year's Total .........
3,466.66
–
134.47
14.13
3,587.00
1,094.03
–
205.90
9.06
1,290.87
2,296.13
Excluding Joint Venture
– Previous Year ................
3,463.89
–
134.35
13.99
3,584.25
1,093.27
–
205.72
9.00
1,289.99
2,294.26
Notes :
1. (a)
(b)
(c)
2.
Includes Rs. 0.09 crore (30.06.2003 - Rs. 0.09 crore), being value of land jointly owned with other parties.
Includes Rs. 4.08 crores (30.06.2003 - Rs. 4.44 crores), being the value of land for which lease deeds are pending execution.
Includes :
i)
Premises on ownership basis of Rs. 25.26 crores (30.06.2003-Rs. 23.89 crores) and cost of shares in Co-operative Societies Rs. 0.01
crore (30.06.2003 - Rs. 0.01 crore)
ii)
Rs. 6.13 crores (30.06.2003 - Rs. 2.08 crores), being cost of roads constructed by the Company, ownership of which vests with
the Government / Local Authorities and Rs. 0.37 crore. (30.06.2003 - Rs. 0.25 crore), being the amortization thereof upto 30th June,
2004.
iii)
Building yet to be registered in name of Company of Rs.0.18 Crore (30.06.2003- 0.18 crore).
(d)
Includes Rs.1.77 crores (30.06.2003 - Rs. 1.77 crores), being cost of Railway siding constructed by the Company, ownership of which vests
with the Government/Railway Authorities and Rs. 0.17 crore (30.06.2003 - Rs 0.08 crore), being the amortization thereof upto 30th June,
2004 included in Depreciation.
(e)
Includes :
i)
Rs. 11.91 crores (30.06.2003 - Rs. 10.56 crores), being cost of bulkers used as Material Handling Equipment, which are being
depreciated under the "Written Down Value Method" at the rate applicable to vehicles.
ii)
Rs. 6.43 crores (30.06.2003 - Rs. 6.43 crores) Railway Wagons given on lease to the Railways under "Own Your Wagon Scheme".
(f)
Include deduction of Rs. 0.60 crores (30.06.2003 - Rs. 2.26 crores) due to decrease in rupee liability on account of revalorisation of
foreign currency loans due to exchange fluctuations.
(g)
Cost incurred by the Company, ownership of which vests with the State Maritime Boards.
(h)
Cost incurred by the Company, ownership of which vests with the State Electricity Boards.
(i)
Goodwill arising out of acquisition of equity stake in subsidiary companies is amortized over a period of 10 years from the date of acquisition.
(j)
Includes Rs. 41.89 crores adjustment for ship acquired under bare boat charter cum demise arrangement.
(k)
Includes Rs. 16.51 Crores adjustments on account of Modvat/Cenvat credit [Refer Note 15 (d)].
Refer Note 19 and 20 in schedule 'S' to the Accounts.
BLACK
101 RED
As at
30.06.2004
Rs. in Crores
As at
30.06.2003
Rs. in Crores
..................................................................................................

4.13
Unquoted ................................................................................................

0.06
Rs. in Crores
SCHEDULE ‘F’ – INVESTMENTS (at cost)
Long Term Investments:
In Government & Trust Securities:
Quoted
In Fully Paid Shares, Debentures and Bonds, other than Trade :
Quoted:
In Equity Shares:
– (12,81,62,369) Equity Shares of Rs. 10 each in
Ambuja Cement Rajasthan Limited ....................................

161.51
2,46,70,000 Equity Shares of Rs. 10 each in
Associated Cement Companies Limited ..............................
928.19
928.19
Others ..............................................................................
25.57
9.25
953.76
1,098.95
Unquoted:
Equity Shares :
In Subsidiary :
DLF Gujarat Limited [See Note 1 (b) (iii)] ..............................................
1.62
–
Less: Provision for Diminution in value of Investment .............................
1.62
–

–
ICAN Securities & Research Limited ......................................................
1.44
1.44
Group Share of Profit as on 30.06.2004 ..............................................
2.72
2.66
4.16
4.10
In Others ..................................................................................................
1.60
1.60
In Public Sector Bonds .................................................................................
29.60
In Associates :
–
35.36
5.70
989.12
1,108.84
70.30
15.03
Current Investment:
Unquoted:
In Units of Mutual Fund ...............................................................................
Other Investments:
In Immovable Property - Premises ................................................................
0.17
0.17
1,059.59
1,124.04
Share in Joint Venture
Unquoted
In Units of Mutual Funds .............................................................................
22.11
23.83
In Equity Shares ..........................................................................................
0.65
0.30
In Preference Shares ...................................................................................
3.22
3.22
TOTAL ............................................................
Aggregate amount of Quoted Investments ............................
Aggregate amount of Unquoted Investments .........................
102 RED
27.35
1,151.39
Book value
Book value
Market value
Market value
as on
30.06.2004
Rs. in Crores
as on
30.06.2003
Rs. in Crores
as on
30.06.2004
Rs. in Crores
as on
30.06.2003
Rs. in Crores
953.76
131.64
1,103.08
48.14
618.23
419.46
1,085.40
1,151.22
BLACK
25.98
1,085.57
Rs. in Crores
As at
30.06.2004
Rs. in Crores
As at
30.06.2003
Rs. in Crores
187.84
174.78
SCHEDULE ‘G’ – INVENTORIES
(At cost or net realisable value whichever is lower, unless otherwise stated)
(As certified and valued by the Management)
Coal, Fuel, Packing Materials, Stores and Spare parts
(including in transit - Rs.8.27 crores; 30.06.2003 - Rs. 7.46 crores) ......................
Stock-in-trade :
Raw Materials (including in transit - Rs. 0.05 Crore ;
30.06.2003- Rs 0.28 crore) ........................................................................
19.77
Food & Beverages, Stores & Supplies including linen ....................................
0.24
0.42
Materials-in-process ...................................................................................
64.27
36.02
10.95
Work-in-progress ........................................................................................
4.37
6.45
Finished goods ...........................................................................................
35.01
42.13
Equity Shares ..............................................................................................
0.57
0.89
124.23
96.86
Construction Scrap, at estimated realisable value .................................................
0.15
–
Scrapped assets awaiting disposal, at estimated realisable value ..........................
0.07
0.44
312.29
272.08
72.76
35.83
TOTAL ............................................................
385.05
307.91
3.62
5.67
SCHEDULE ‘H’ – SUNDRY DEBTORS (Unsecured)
Over six months:
Good
..................................................................................................
Doubtful
..................................................................................................
11.96
9.16
Less: Provision .............................................................................................
11.96
9.16
–
–
3.62
5.67
Other, Good (Includes Rs. 0.51 crore; 30.06.2003 - Rs. 0.30 crore due
from companies under same management) .........................................................
65.80
77.30
TOTAL ............................................................
69.42
82.97
0.51
23.58
0.39
11.19
SCHEDULE ‘I’ – CASH AND BANK BALANCES
Cash on hand ..................................................................................................
Cheques on hand with Banks as Collecting Agency in terms of an arrangement ....
Bank Balances:
With Scheduled Banks :
In Current Account ......................................................................................
In Fixed Deposits
[Deposit Receipts of Rs. 0.14 Crore (30.06.2003; Rs. 0.11 crore) deposited
with Government Department as security Deposit and Rs. 0.38 crore
(30.06.2003; Rs. 0.38 crore) deposited with banks as security deposit for
guarantees (including accrued interest Rs. 0.02 crore ;
30.06.2003 - Rs. 0.11 crore )] ....................................................................
64.69
33.90
44.41
40.35
109.10
74.25
133.19
0.86
85.83
0.26
TOTAL ............................................................
134.05
86.09
!
BLACK
103 RED
As at
30.06.2004
Rs. in Crores
As at
30.06.2003
Rs. in Crores
Interest Receivable on Investments ...............................................................
Other Interest receivable .............................................................................
Sundry Receivables .....................................................................................
0.26
1.73
0.25
0.41
1.07
0.38
Share in Joint Venture .................................................................................
2.24
0.13
1.86
0.18
TOTAL ............................................................
2.37
2.04
Rs. in Crores
SCHEDULE ‘J’ – OTHER CURRENT ASSETS
SCHEDULE ‘K’ – LOANS AND ADVANCES
(Good, unless otherwise stated)
Other Loans :
Ambuja Cement Rajasthan Limited ..............................................................
Others
..................................................................................................

8.95
379.00
12.38
8.95
391.38
Advances recoverable in cash or kind or for value to be received
Good
..................................................................................................
56.92
79.73
Doubtful ..................................................................................................
Less : Provision ...........................................................................................
6.43
6.43
1.00
1.00

–
56.92
79.73
Deposits [including National Savings Certificates and 5 1/2 Year
Kisan Vikas Patra Rs. 0.01 crore , and Rs. 2000/-, respectively, deposited
with Government Departments as Security (30.06.2003 - Rs. 0.01 crore
and Rs. 2,000/- respectively)] ..............................................................................
23.90
19.55
Balance with Central Excise, Customs, Port Trusts, etc. ..........................................
Tax Paid in Advance, net of Provisions ..................................................................
10.97
25.99
4.89
18.36
Share in Joint Venture * ......................................................................................
126.73
13.04
513.91
4.15
TOTAL ............................................................
139.77
518.06
(* Include Rs. 3.41 crores towards advances given for procurement of land)
SCHEDULE ‘L’ – CURRENT LIABILITIES AND PROVISIONS
LIABILITIES :
Sundry Creditors :
Due to Small Scale Industrial Undertakings ..................................................
Others
..................................................................................................
0.07
268.27
0.10
186.91
268.34
Investor Education and Protection Fund shall be credited by the
following (See note below ) *:
Unclaimed Dividends ..................................................................................
Unclaimed Application money on securities .................................................
Unclaimed Matured Debentures ..................................................................
Unclaimed Matured Deposits (Rs. 45,000/-) .................................................
Unclaimed Interest on above .......................................................................
5.53

0.33

0.02
187.01
4.51
0.06
0.35
0.07
Security Deposits ................................................................................................
Advances from Customers ..................................................................................
Interest accrued but not due on loans ..................................................................
5.88
52.97
9.68
25.18
4.99
39.37
8.56
32.97
362.05
91.36
272.90
44.19
453.41
317.09
453.41
317.09
Carried forward .............................
BLACK
104 RED
"
Rs. in Crores
As at
30.06.2004
Rs. in Crores
As at
30.06.2003
Rs. in Crores
SCHEDULE ‘L’ – CURRENT LIABILITIES AND PROVISIONS (Contd.)
Brought forward .............................
453.41
317.09
PROVISIONS :
Provision for leave encashment ...........................................................................
7.27
4.33
Provision for gratuity ...........................................................................................
3.50
–
Provision for Wealth Tax, less Payments ................................................................
0.52
0.45
Proposed Dividend .............................................................................................
55.17
62.13
7.03
7.96
73.49
74.87
2.05
2.05
75.54
76.92
TOTAL ............................................................
528.95
394.01
Project Development and Feasibility Report Expenses, etc. ....................................
1.29
2.28
Quarry/Mines Development Expenses .................................................................
2.98
2.26
Unexpired premium on pre payment of terms loans .............................................
4.62
6.76
Other Expenditure ..............................................................................................
2.65
4.11
11.54

15.41
0.15
TOTAL ............................................................
11.54
15.56
2003-2004
Rs. in Crores
2002-2003
Rs. in Crores
1.29
1.61
Provision for Corporate Dividend Tax ...................................................................
* Note:
Amounts to be transferred to said fund shall be determined on the respective
due dates.
Amount due as on 30.06.2004; Rs. NIL (30.06.2003; Rs. 0.08 crore).
SCHEDULE ‘M’ – MISCELLANEOUS EXPENDITURE
(to the extent not written off or adjusted)
SCHEDULE 'N' – OTHER INCOME
Insurance Claims ...............................................................................................
Dividend (Gross; Tax deducted NIL; Previous year - Rs. 0.91 crore)
From Long Term Investments .......................................................................
From Short Term Investments .......................................................................
6.70
0.57
Miscellaneous Income (Gross: Tax deducted Rs. 0.01 crore;
Previous year Rs. 0.03 crore) ...............................................................................
Exchange Rate Difference (net) ............................................................................
Surplus on Sale of Assets ....................................................................................
Profit/(Loss) on Sale of Investments (net)
On Long term Investments ..........................................................................
On Current Investments ..............................................................................
8.72
–
7.27
8.72
23.00
9.66
0.72
13.38
12.76
1.83
(3.20)
10.87
(1.64)
3.91
Sundry Credit Balances Appropriated ..................................................................
Provisions no longer required ..............................................................................
7.67
1.28
4.71
2.27
0.58
5.98
55.60
3.59
47.13
2.56
TOTAL ............................................................
59.19
49.69
#
BLACK
105 RED
Rs. in Crores
2003-2004
Rs. in Crores
2002-2003
Rs. in Crores
SCHEDULE ‘O’ – MANUFACTURING AND OPERATING EXPENSES
Raw Materials Consumed :
Clinker Purchased .......................................................................................
Food and Beverage ....................................................................................
Others
..................................................................................................
33.80
1.00
109.27
31.19
1.49
92.46
144.07
104.89
56.57
92.55
102.16
550.06
2.35
1.08
Freight and Handling Charges on Material transferred to other Units ....................
Royalty and Cess ................................................................................................
Stores and Spares Consumed .............................................................................
Packing Materials Consumed ..............................................................................
Power and Fuel ..................................................................................................
Land Development and Construction Expenses ....................................................
Production and Operation Charges .....................................................................
Repairs and Maintenance :
Buildings ..................................................................................................
Machinery ..................................................................................................
Others
..................................................................................................
8.03
25.83
3.79
125.14
97.56
49.84
85.95
95.75
511.12
2.84
0.92
5.81
22.14
4.07
Excise duty paid/provided on closing stock and others ..........................................
37.65
7.89
32.02
7.90
1,099.27
29.97
1,009.04
23.50
TOTAL ............................................................
1,129.24
1,032.54
SCHEDULE ‘P’ – VARIATION IN STOCKS
CLOSING STOCKS
Work-in-progress ........................................................................................
Finished goods ...........................................................................................
Equity Shares ..............................................................................................
64.27
4.37
35.01
0.57
36.02
6.45
42.13
0.89
104.22
OPENING STOCKS
Work-in-progress ........................................................................................
Finished goods ...........................................................................................
Equity Shares ..............................................................................................
Stock of Amalgamating Company as on 01.06.2004 pursuant to
the scheme of Amalgamation
Material-in-process .....................................................................................
Finished goods ...........................................................................................
Limestone ..................................................................................................
LIMESTONE
Closing Stock .............................................................................................
Opening Stock ...........................................................................................
85.49
36.02
6.45
42.13
0.89
32.62
4.09
37.02
0.89
85.49
74.62
8.54
4.27
0.10
–
–
–
12.91
–
98.40
74.62
(5.82)
(10.87)
10.72
1.54
1.54
3.09
(9.18)
1.55
(15.00)
(36.80)
(9.32)
10.69
(Increase)/Decrease in Stocks ..............................................................................
(51.80)
1.37
BLACK
106 RED
$
Rs. in Crores
2003-2004
Rs. in Crores
2002-2003
Rs. in Crores
SCHEDULE 'Q' – ADMINISTRATIVE, SELLING AND OTHER EXPENSES
Employees' Remuneration and Benefits :
Salaries, Wages, Bonus, Allowances, etc. .....................................................
Contribution to Provident and other Funds ...................................................
Welfare Expenses ........................................................................................
Add: Employee compensation expenses under
Employee Stock Option Scheme ...........................................................
83.25
11.16
6.60
64.25
7.94
8.69
101.01
80.88
(0.02)
0.02
100.99
5.86
2.07
10.81
29.46
80.90
5.43
2.13
10.37
29.30
377.45
11.76
2.48
42.04
69.89
0.07
335.65
20.08
2.96
9.52
61.70
0.10
5.86
4.29
4.23
4.56
1.11
6.93
1.62
2.15

0.83
0.27
4.34
1.81
–
2.61
1.49
0.36
–
2.45
0.71
0.12
0.27
684.73
4.99
572.30
3.04
TOTAL ............................................................
689.72
575.34
Rent
..................................................................................................
Rates and Taxes ..................................................................................................
Insurance
..................................................................................................
Advertisement and Publicity .................................................................................
Freight and Forwarding charges [Including Rs. 24.64 crores on Exports
(Previous Year - Rs. 22.27 crores)] .......................................................................
Commission
..................................................................................................
Turnover Tax, Additional Tax and Purchase Tax .....................................................
Selling and Distribution Expenses ........................................................................
Miscellaneous Expenses ......................................................................................
Directors' Fees and Expenses ...............................................................................
Commission to Directors, including Managing Director
and Wholetime Directors ....................................................................................
Loss on Assets sold, scrapped or discarded and written off ...................................
Abandoned Capital Project (Refer Note 16 ) ........................................................
Donations
..................................................................................................
Bad Debts, Sundry Debit Balances and Claims written off .....................................
Provision for doubtful debts and advances ...........................................................
Provision for diminution in value of Investment .....................................................
Part of Deferred Revenue expenditure, written off .................................................
Project and Preoperative Expenses written off .......................................................
Expenses relating to Previous Years ......................................................................
Wealth Tax
..................................................................................................
SCHEDULE ‘R’ – INTEREST AND FINANCE CHARGES, etc.
Interest : (Refer Note 17 )
On Debentures and Bonds (Net of surplus on Interest
Swap Rs. 0.05 crores; Previous Year - Rs. 4.37 crores) ..................................
On Fixed Loans (Including Net defecit on Interest of swap
Rs. 1.47 Crores; Previous year - Rs. 4.01 crore) ............................................
Others
..................................................................................................
68.82
95.59
30.86
11.02
21.84
8.36
110.70
Less: Interest Received : (Gross; Tax deducted Rs. 7.38 crores ;
Previous Year Rs. 7.01 crores )
On Government Securities ...................................................................
On Debentures and Bonds ..................................................................
Others ................................................................................................
125.79
0.02
0.25
37.89
0.01
–
40.60
38.16
40.61
Interest (net)
..................................................................................................
Premium on prepayment of term loans (Refer Note 10 ) .......................................
Unexpired Premium on prepayment of term loan amortized .................................
72.54
3.06
2.78
85.18
–
3.90
Finance Charges ................................................................................................
78.38
11.01
89.08
13.02
89.39
0.67
102.10
1.01
TOTAL ............................................................
90.06
103.11
%
BLACK
107 RED
SCHEDULE ‘S’ – CONSOLIDATED NOTES FORMING PART OF THE ACCOUNTS
1.
Significant Accounting Policies :
(a) System of Accounting :
(i) The financial statements of Gujarat Ambuja Cements Limited ('the Company'), its Subsidiary Companies, Associates and Joint Ventures,
(the Group) have been prepared in compliance with the mandatory Accounting Standards issued by the Institute of Chartered Accountants
of India (ICAI) and the relevant provisions of the Companies Act, 1956.
(ii) The financial statements are based on historical cost convention and are prepared on accrual basis.
(b)
Principles of Consolidation:
(i) The consolidated financial statements of the Group have been prepared on the following basis:
•
The consolidated financial statements of the Group are prepared in accordance with Accounting Standard - 21 "Consolidated
Financial Statements", Accounting Standard - 23 "Accounting for Investments in Associates in Consolidated Financial Statements"
and Accounting Standard - 27 "Financial Reporting of Interests in Joint Ventures" issued by ICAI.
•
The financial statements of the Company and its Subsidiary Companies have been consolidated on a line-by-line basis by
adding together the book value of like items of assets, liabilities, income and expenses, after eliminating intra-group balances
and intra-group transactions resulting in unrealised profits or unrealised cash losses.
•
The Financial Statements of the Company and its Joint Ventures have been consolidated using the proportionate consolidation
method.
•
Investments in the Associates have been accounted as per the equity method as prescribed in Accounting Standard - 23.
•
In cases where the financial year of Subsidiary Companies, Associates and Joint Ventures is different from that of the Company,
the financial statements of the said companies have been drawn up so as to be aligned with the financial year of the Company.
•
The consolidated financial statements have been prepared using uniform accounting policies for like transactions and other
events in similar circumstances and are presented, to the extent possible, in the same manner as the Company's separate
financial statements.
•
The excess of cost of investment in the Subsidiary companies is recognised in the financial statements as goodwill and the
goodwill is amortized over a period of 10 years commencing from the date from which it arises. The excess of Company's
portion of equity of the Subsidiary over the cost of the investment therein is treated as Capital Reserve.
•
Financial statements of overseas Group companies are translated into Indian Rupees as under:
(a) Assets and Liabilities at the rate prevailing at the end of the year.
(b) Revenue and Expenditure at the yearly average exchange rates prevailing during the year.
•
The resulting translation adjustment is shown under "Exchange Fluctuation Reserve on Consolidation of Overseas Subsidiaries".
(ii) Companies considered in the consolidated financial statements are :
Name of the Company
Country of
Parent's ultimate
Financial
Incorporation
holding as on
Year
30.06.2004
ends on
Subsidiary:
Cement Ambuja International Limited .............................................
Mauritius
100.00%
30.06.2004
Ceylon Ambuja Cements (Private) Limited ........................................
Sri Lanka
100.00%
31.03.2004
GACL Finance Limited ....................................................................
India
100.00%
31.03.2004
Indo Nippon Special Cements Limited .............................................
India
100.00%
30.06.2004
GGL Hotel and Resort Company Limited .........................................
India
79.95%
31.03.2004
Ambuja Cement India Limited .........................................................
India
60.00%
30.06.2004
DLF Gujarat Limited (DLF) (Refer Note (iii) Below) .............................
India
100.00%
31.03.2004
Sub subsidiary :
Midigama Cements (Private) Limited ...............................................
Ambuja Cement Eastern Limited .....................................................
Sri Lanka
India
99.99%
56.45%
31.03.2004
30.06.2004
Joint Ventures
Bengal Ambuja Housing Development Limited .................................
Bengal Ambuja Metro Development Limited ....................................
India
India
49.99%
49.99%
31.03.2004
31.03.2004
India
47.98%
31.03.2004
Associates
ICAN Securities & Reaserch Limited .................................................
Ambuja Cement Rajasthan Limited (ACRL)
(Upto 31.05.04)
(iii) During the year the Company has acquired 16,20,017 equity shares of Rs. 10 each of DLF Gujarat Limited (DLF). By virtue of this
acquisition DLF has become a wholly owned subsidiary. DLF has applied to the Registrar of Companies for striking off its name under
the Simplified Exit Scheme read with the provisions of section 560 of Companies Act, 1956. As DLF has become defunct and is in
process of being dissolved, the Company has accounted for its investment in DLF under Accounting Standard-13 "Accounting for
Investments" and provided for diminution in value of Investment. Since the Investment is temporary in nature, DLF has not been
consolidated.
(iv) Other Significant Accounting policies :
These are set out in the notes to accounts under "Statement of Accounting Policies" of the Financial Statements of the Company .
Further to those policies, the accounting policy adopted by subsidaries and joint ventures are as follows :
BLACK
108 RED
&
SCHEDULE ‘S’ – CONSOLIDATED NOTES FORMING PART OF THE ACCOUNTS (Contd.)
(a)
(b)
Inventory
In respect of Joint Venture, construction materials are valued at cost, determined on basis of weighted average. Cost comprises
of direct cost relating to specific projects and appropriate share of allocable direct cost.
Revenue Recognition
(i) Dividend Income is recognised when right to receive payment is established by the Balance Sheet date.
(ii) GGL Hotel and Resort Company Limited follows completed contract method of accounting in respect of its construction
activities upto 30th June, 2003. Under this method, profit in respect of unit sold is recognised only when the work in respect
of the relevant unit is completed and possession is handed over.
(iii) For land including developed land, revenue is recognised upon booking/agreement and receipt of substantial part of
consideration.
(iv) In respect of Hotel and Restaurant Division, sales and services are stated net of discount and taxes.
(v) Non-Interest Bearing Refundable Deposit for The Ffort Holiday Klub (TFHK) the Company’s time share scheme is refundable
after completion of specific number of years (presently after 25 years) from the date of respective membership under
unsecured loan. Setting aside for repayment, the estimated present value of such deposit (grouped under unsecured loan),
the balance is recognised as income in the year the full membership deposit is received.
Non-refundable deposit received towards membership of The Ffort Holiday Klub (TFHK) and Magna Charta club is considered
as income upon receipt of the full amount of consideration towards such membership.
Rs. in Crores
2.
(a)
Contingent liabilities not provided for in respect of :
(i) Amount outstanding in respect of Guarantees given by
GGL Hotel and Resort Company Limited to third parties for
loans given to Ganpati Park Ltd. ............................................................
(ii) Amount outstanding in respect of Indemnities given by the
Company to Banks for loans given to third parties,
for Company's business .........................................................................
(iii) Claims against the Company not acknowledged as debts .......................
(iv) Tax matters :
(a) Disputed liability in respect of Income-tax demands
(including interest) - matters under appeal ......................................
(b) Disputed Sales-tax demands (including interest and penalty) matters under appeal :
(i) Matter decided in favour of the Company by the Honourable
High Court of Himachal Pradesh, against which the Department
has filed a Special Leave Petition in the Honourable Supreme
Court pending final decision in the said matter ........................
(ii) Others ...................................................................................
(c) Disputed Excise demands - matters under appeal ............................
(d) Disputed Customs demands - matters under appeal ........................
(e) Disputed liabilities of RTO Tax on Mining Machinery ........................
(v) Disputed liabilities relating to Railway Freight on Cement - matter
decided in favour of the Company by the Honourable High Court of
Gujarat was remanded back by the Honourable Supreme Court
pursuant to an SLP filed by the railways ..................................................
(vi) Disputed liabilities relating to Coal claims- matters pending in the
Honourable High Court:
(a) Penal Freight on Excess Weight of coal ............................................
(b) Interest on Royalty on Coal .............................................................
(c) Interest on Premium on Coal ..........................................................
(d) Railway Freight on coal ..................................................................
.............................................................................................
(vii) Claim Relating to Royalty on Lime stone matter pending in the High Court ...........................................................
(viii) Disputed liability relating to Workmen Compensation for
reinstatement and back wages - matter pending in the
Honourable High Court of Gujarat. ........................................................
(b)
30.06.2004
Rs. in Crores
30.06.2003
Rs. in Crores
4.93
7.25
0.14
42.37
0.14
25.16
27.56
27.12
34.35
2.71
5.97

0.62
34.35
4.14
5.76
3.21
0.80
5.51
5.51
0.24

3.29
1.45
0.24
1.80
3.29
1.45
4.98
6.78
4.77
4.77
0.11
0.11
The Honourable High Court of Himachal Pradesh has passed an order in favour
of the Company for its claim in respect of power subsidy in the form of Power
Tariff Freeze (PTF) and Peak Load Exemption Charges (PLEC).
Against this, Government of Himachal Pradesh on 1st May 2004 has issued 296,
5.13% H P Infrastructure Development Bonds of face value of Rs.10 lacs each,
having a value of Rs. 29.60 crores redeemable after 10 years and balance of
Rs. 0.08 crore is refunded to the company.
'
BLACK
109 RED
30.06.2004
Rs. in Crores
30.06.2003
Rs. in Crores
111.97
73.51
2003-2004
Rs. in Crores
2002-2003
Rs. in Crores
2,146.07
14.80
2.19
1,816.28
9.79
40.59
2,163.06
1,866.66
The Government of Himachal Pradesh has filed Special Leave Petition in the Honourable Supreme
Court, against the decision of the Honourable High Court of Himachal Pradesh, which is yet to
come up for hearing. The Company has given an undertaking to refund Rs. 29.68 crores paid
by the State Government together with interest thereon upto the date of final judgement in time
bound manner, in the event that the matter is decided against the Company.
(c)
The Government of Rajasthan has granted 75% exemption from Sales Tax in respect of Rabriyawas
unit (erstwhile Ambuja Cement Rajashtan Ltd.). However, the eligibility of exemption in excess of
25% has been contested by the State Government in a similar matter of another Company and
the matter is pending before the Honourable Supreme Court. The Company has given an
undertaking to the Government of Rajasthan, that the Company will deposit the differential
amount of Sales Tax which is Rs. 35.16 crores, in case the Supreme Court’s decision goes against
in the matter referred above.
3.
Estimated amount of Contracts remaining to be executed on Capital Account and not provided
for (net of advances) ....................................................................................................................
4
Pursuant to an agreement dated 30th May 1996 (the Agreement ) between Bengal Ambuja Housing
Development limited and West Bengal Housing Board (WBHB), the Company had obtained permissive
possession of a piece of land (the land) contained in a part of Plot No.1028, Mauza Rajapur in West
Bengal for development of a housing complex thereon which was completed in the previous year.
According to the aforesaid agreement in the event of any change in the provisional consideration for
the aforesaid land amounting to Rs. 4.67 crores (accounted for in earlier year), due to any subsequent
decision of the competent Government Authority, the said provisional consideration would be
appropriately adjusted excluding the amount on account of payment of interest due to delayed payment,
if any, made by WBHB.
Erstwhile landowners have filed reference case before the court Concerned Special L.A. Judge, Alipore
demanding additional compensation aggregate amount of which is not ascertainable. Bengal Ambuja
Housing Development Limited has been made a party in this case. The matter is subjudice.
5.
Segment reporting :
The Company and its Subsidiaries have mainly one business segment 'Cement' as primary Segment.
The secondary segment is geographical, which is given as under:
(a)
Revenue
Sales & Services: (Net of Excise Duty)
Within India :
Cement ....................................................................................................................
Services ....................................................................................................................
Other (Including Share in Joint Venture) .........................................................................
Sub Total ....................................................................................................................
Outside India
Cement
....................................................................................................................
254.72
312.25
....................................................................................................................
2,417.78
2,178.91
Assets
Within India :
Cement ....................................................................................................................
3,284.57
196.66
2,635.68
142.26
Total
(b)
Sub Total ....................................................................................................................
3,481.23
2,777.94
Outside India :
Cement ....................................................................................................................
Other
....................................................................................................................
27.35
11.45
26.94
9.44
Sub Total ....................................................................................................................
38.80
36.38
....................................................................................................................
3,520.03
2,814.32
Cost incurred during the year to acquire tangible and intangible fixed assets
Within India :
Cement (Including addition due to merger) ....................................................................
723.50
0.41
123.51
10.42
Sub Total ....................................................................................................................
723.91
133.93
Total
Outside India :
Cement ....................................................................................................................
Total
....................................................................................................................
BLACK
110 RED
0.11
0.55
724.02
134.48
6.
Related Party Disclosures :
a) List of Related Parties and relationships
Party
Relation
A.
Associate (Upto 31.05.2004)
B.
Ambuja Cement Rajasthan Ltd.
ICAN Securities and Research Ltd.
Associate
Bengal Ambuja Housing Development Ltd.
Joint Venture
Bengal Ambuja Metro Development Ltd.
Joint Venture
Key Management Personnel
Mr. N. S. Sekhsaria
Managing Director
Mr. P. N. Sekhsaria
Whole-time Director
Mr. A. L. Kapur
Whole-time Director
Mr. P. B. Kulkarni
Whole-time Director
Mr. A. V. Rao
Whole-time Director (Upto 31.01.2004)
Mr. A. C. Singhvi
Whole-time Director
Mr. B. L. Taparia
Whole-time Director and Company Secretary
Whole-time Director (From 28.06.2004)
Managing Director
Mr. Ajay Jhunjhunwala
Company Secretary cum Manager
Mr. Jaismin Pant
Manager
GGL Hotel and Resort Company Limited
C.
D.
Relatives of Key Management Personnel
Mr. Ajay Kapur
Son of Mr. A. L. Kapur
Mr. Milind Kulkarni
Son of Mr. P. B. Kulkarni
Enterprises over which significant
influence exercised by Directors
Sakambari Holdings Pvt. Ltd.
b)
Company owned by Mr. A. L. Kapur - Whole-time Director
Disclosures required for related parties transactions during the Period July 2003 to June 2004
(Rs. in Crores)
Transactions
I.
Associates
Joint
Ventures
Key
Management
Personnel
14.31
(12.10)
–
–
0.01
(0.05)
–
–
0.61
(0.55)
–
–
15.91
(14.73)
–
–
–
–
–
5.00
(96.23)
–
–
2.14
(0.98)
–
(0.60)
–
–
–
–
–
–
0.06
(0.26)
0.04
(0.31)
–
2.03
(3.05)
–
(3.60)
–
–
–
–
–
–
–
(0.02)
–
–
–
–
–
–
–
–
–
–
–
–
–
Relatives
Enterprises over
of Key
which significant
Management
influence exercised
Personnel by Key Management
Personnel
Transactions during the year/period
Purchase of Goods ..................................
Sale of Goods - Cement ..........................
Sale of Goods - Others ............................
Sale of Fixed Assets .................................
Rendering of Services ..............................
Receiving of Services ................................
Interest received ......................................
Interest paid ............................................
Redemption of Debentures/Bonds ............
Loans received ........................................
Loans given ............................................
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
BLACK
111 RED
(Rs. in Crores)
Transactions
Associates
Joint
Ventures
Key
Management
Personnel
Loans given repaid ..........................................
5.00
Rent paid ........................................................
–
–
–
–
1.75
(1.25)
–
(0.12)
–
–
–
–
–
–
4.90
(3.69)
–
–
–
–
0.09
(0.06)
–
–
–
–
–
–
0.28
(0.10)
–
1.26
(0.25)
0.81
–
0.12
(0.13)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.05
(0.10)
Remuneration .................................................
Management contracts including for
deputation of employees - paid .......................
Equity contributions during the year .................
Dividends received ..........................................
Other recoveries .............................................
Others ............................................................
II.
Amounts Outstanding at Balance Sheet date
Loan taken Outstanding ..................................
Loans given Outstanding .................................
Amounts Payable ............................................
Amounts receivable .........................................
Deposits outstanding (Rent) .............................
Guarantees and collaterals outstanding ...........
–
–
0.21
(0.18)
1.59
(0.16)
–
–
–
Relatives
Enterprises over
of Key
which significant
Management
influence exercised
Personnel by Key Management
Personnel
–
–
–
–
–
–
0.18
(0.48)
–
(1.75)
–
–
0.22
(0.21)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(9.00)
–
–
–
–
–
–
–
–
–
–
–
–
–
(0.10)
–
–
–
(189.46)
–
Notes :
1.
Related Party relationship is as identified by the Company on the basis of available information with them and accepted by the Auditors
as correct.
2.
No amount has been written off or written back during the year in respect of debts due from or to related parties.
3.
Figures of Previous Year have been given in brackets.
Details of material related party transactions [included under (b) above] :
Joint Ventures
Purchase of Goods .................................................
Sale of Goods ........................................................
Rendering of Services ..............................................
Interest received ......................................................
Dividend received ...................................................
Other Recoveries ....................................................
Loan Received ........................................................
Loans given ............................................................
Loans given repaid .................................................
Bengal Ambuja
Housing
Development
Limited
Bengal Ambuja
Metro
Development
Limited
Ambuja Cement
Rajasthan
Limited
–
–
0.92
(0.98)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1.01
(0.25)
0.81
14.31
(12.10)
–
–
0.61
(0.53)
15.91
(14.73)
–
–
1.54
1.24
–
–
–
–
–
0.79
–
(3.60)
–
1.75
(1.25)
–
–
5.00
(96.23)
5.00
–
BLACK
112 RED
Associates
7.
2003-2004
Rs. in Crores
2002-2003
Rs. in Crores
Earnings per Share (EPS) :
(i) Profit attributable to Equity Shareholders for Basic EPS
Profit after tax .........................................................................................................
Less: Minority Interest ...............................................................................................
385.30
22.87
347.53
54.34
Add: Profit of erstwhile ACRL upto 31st May 2004 .....................................................
362.43
18.50
293.19
–
380.93
293.19
3.75
1.35
5.49
2.02
Adjustments for the purpose of Diluted EPS :
Interest on Convertible Foreign Currency Bonds ................................................
Less: Tax on above ..................................................................................................
(ii)
Profit attributable to Equity Shareholder for Diluted EPS .............................................
(iii) Weighted average number of shares for Basic EPS
Number of equivalent Equity Shares of GACL as on 31st May 2004
(iv) Weighted average number of shares for Diluted EPS
Number of equivalent Equity Shares of GACL as on 31st May 2004
Add: Potential Equity Shares on conversion of foreign Currency Convertible Bonds .....
Add: Potential Equity Shares on exercise of options of ESOS .......................................
3.47
296.66
Nos.
162,467,785
155,221,248
4,797,384
–
167,265,169
155,221,248
176,955,713
155,347,124
4,797,384
–
181,753,097

591,114
155,347,124
20,654,400
218,248
Add: Potential Equity Shares on exercise of Rights & Warrants kept in abeyance
out of the rights Issue in 1992 ..........................................................................
13,334
Weighted average number of shares for Diluted EPS .................................................
182,357,545
176,219,772
Rs.
10.00
Rs.
10.00
22.77
21.02
18.89
16.83
30.06.2004
Rs. in Crores
30.06.2003
Rs. in Crores
Tax Provisions :
(a) Current Tax
(i) In the absence of taxable income in respect of the Parent Company, for the year,
provision has been made in accordance with the provisions of Section 115JB of the
Income-tax Act, 1961.
(ii) Provision for Income Tax for Subsidiary Companies was accounted for based on
the Taxable Income with reference to "Accounting Year" i.e July to June except for
one Subsidiary and Joint Venture for which it is based on taxable income as computed
with reference to the "Previous Year" as defined under the Income tax Act,1961
i.e April to March.
(b) Deferred Tax
(i) Deferred Tax Liability has been accounted in accordance with Accounting Standard
22 (AS-22) - "Accounting for Taxes on Income" issued by the Institute of Chartered
Accountants of India.
(ii) Break up of Deferred Tax Assets & Liabilities is as under:
Deferred Tax Liabilities, on account of :
Depreciation ...................................................................................................
Deferred Revenue Expenditure .........................................................................
450.68
1.41
344.31
0.85
(iv) Nominal Value of Shares .........................................................................................
(v) Earnings Per Share :
Basic ......................................................................................................................
Diluted ...................................................................................................................
8.
2.40
383.33
Nos.
TOTAL ......................................................................
452.09
345.16
Deferred Tax Assets, on account of :
Expenditure allowable in Income Tax on actual payment ....................................
Unencashed Leave ..........................................................................................
Gratuity ..........................................................................................................
0.16
2.49
1.26
0.94
1.26
–
Carried forward .................................................
3.91
2.20
!
BLACK
113 RED
2003-2004
Rs. in Crores
2002-2003
Rs. in Crores
3.91
2.20
Brought forward business loss and unabsorbed depreciation .............................
Others ............................................................................................................
120.46
6.84
105.18
4.17
Brought forward .............................
TOTAL ......................................................................
131.21
111.55
Deferred Tax Liability, net .................................................................................
320.88
233.61
Add: Share in Joint Venture (Refer Note 1(iv)) ....................................................
0.01
0.03
Net Deferred Tax ( Assets) / Liability ..................................................................
320.89
233.64
(iii) In case of some Subsidiaries there are deferred tax assets net off deferred tax liability due to carried forward losses and unabsorbed
depreciation under the Income-tax Act, 1961. As a matter of prudence, the said deferred tax assets have not been recognised.
(c)
9.
Pursuant to amalgamation of erstwhile ACRL, the Company has reviewed the unrecognised deferred tax assset/liability of erstwhile ACRL
as at the Balance Sheet date. Accordingly, the net deferred tax liability of Rs. 38.99 crores has been adjusted against General Reserve, after
considering the estimated amount of brought forward loss and unabsorbed depreciation which will be available for adjustment against
future taxable income, in excess of the fiscal incentives which would otherwise have been available to the Company.
The Company has exercised the Call option to convert/redeem all outstanding 1% Foreign Currency Convertible Bonds. Consequently, the
bonds aggregating to Rs. 451.01 crores (net of exchange gain of Rs. 0.61 crore) have been converted into 2,02,84,938 equity shares at the
conversion price of Rs. 222.336 per share. Upon said conversion, the Equity Share capital and Security Premium Account have increased by
Rs. 20.28 crores and Rs. 430.73 crores respectively.The bonds aggregating Rs. 9.25 crores (net of exchange gain of Rs.0.50 crore) which are
not opted for conversion, have been repaid.
10. In compliance with Accounting Standard-26, “Intangible Assets’, which became mandatory for accounting periods commencing on or after
April 1, 2003, the Company has changed its accounting treatment in respect of premium paid on premature repayment of term loans. Such
expenses incurred during the year, which were hitherto amortised over the balance period of the loan, have been charged to the Profit and Loss
account. As a result of this change, interest and finance charges (Schedule ‘R’), are higher by Rs. 2.79 crores and the profit for the year is lower
to the same extent.
11. Ex-gratia to employees which was hitherto accounted on payment basis, has, this year, been accounted on accrual basis. As a result of this
change, charge for the year of such expense is higher by Rs. 5.98 crores and profit for the year is lower to the same extent.
12. Prior period items :
(a)
During the year, the Company has reclassified and rectified the rate of depreciation on certain block of fixed assets. Further the Company
has identified and capitalised machinery spares aggregating Rs.19.11 crores in accordance with Accounting Standard Interpretation - 2
"Accounting for Machinery Spares". As a result of these changes, net excess depreciation provided in earlier years aggregating Rs. 60.07
crores has been written back during the year ended 30th June, 2004. The net depreciation charge for the year ended 30th June, 2004,
is lower by Rs. 8.89 crores.
(b)
(i)
Certain expenses on Sales Promotion relating to earlier years aggregating to Rs.15.27 crores have been accounted and shown as
prior period items.
(ii)
Certain staff costs, hitherto accounted on payment basis have, this year, been accounted on accrual basis. Accordingly, Employees'
Remuneration and Benefits (Schedule 'Q') includes Rs. 7.26 crores on accrual basis. The amount of such expenses outstanding as on
30th June, 2003 aggregating Rs. 2.27 crores has been shown as a prior year item.
13. Employee Stock Option Schemes :
The Company has granted 35,96,850 (30.06.2003 - 27,32,250) Stock Options to its employees (including certain employees of the Subsidiary
companies) and Whole-time Directors (other than those excluded under the SEBI guidelines on Stock Options). Out of the above Stock Options,
3,27,600 (30.06.2003 - 3,16,950 ) have been surrendered/lapsed and 12,19,765 (30.06.2003 - 1,76,950 ) have been exercised. 20,49,185
(30.06.2003 - 22,38,350) Stock Options are outstanding as on 30th June, 2004, which if fully exercised will result in issue of 20,50,635
(30.06.2003 - 22,39,700) Equity Shares. The amount Rs. 0.05 crore (30.06.2003 - Rs. 0.08 crore) represents the discount on the above said
options outstanding.
14. In terms of the amendments made under the West Bengal Sales Tax Act,1994, the Government of West Bengal has imposed turnover tax with
effect from 5th August, 2003 on cement manufactured and sold within the State.The matter is contested by the Company and an appeal has
been filed before the West Bengal Sales Tax Appellate Tribunal. Pending disposal of the matter, Turnover Tax amounting to Rs. 7.91 crores till
30th June, 2004 has been paid 'under protest'.
15. Amalgamation of Ambuja Cement Rajasthan Limited (ACRL):
(a)
Pursuant to the Scheme of Amalgamation sanctioned by the Board for Industrial & Financial Reconstruction (BIFR) dated 7th January, 2004
and corrigendum dated 27th May, 2004 respectively, the entire business and all assets and liabilities of erstwhile Ambuja Cement Rajasthan
Ltd. (ACRL), a Company engaged in cement manufacturing, has with effect from 1st June, 2004, stood transferred and vest in the Company.
Accordingly, the said assets, liabilities and transactions have been incorporated in these financial statements.
(b)
The amalgamation has been accounted for under the “pooling of interest” method as prescribed by the Accounting Standard AS-14
“Accounting for Amalgamations” issued by the Institute of Chartered Accountants of India. Accordingly the accounting treatment has been
given as under :
BLACK
114 RED
"
(i)
The assets and liabilities as at 1st June, 2004 have been incorporated in the financial statements of the Company.
(ii) Security Premium appearing in the books of ACRL amounting to Rs. 9.33 crores has been credited to Security Premium Account of
the Company.
(iii) Debit balance in the Profit and Loss Account of ACRL amounting to Rs. 320.90 crores as at 1st June, 2004 has been adjusted from
the General Reserves of the Company.
(iv) Shareholders holding 133,123,714 Shares of Rs.10/- each fully paid up in Ambuja Cement Rajasthan Ltd. have been allotted one
equity share of Rs.10/- each fully paid up of Gujarat Ambuja Cements Ltd. for every 50 equity shares of erstwhile ACRL and the
difference of Rs.130.46 crores between the amount of such shares issued and the share capital held by such shareholders is credited
to capital reserve.
(c)
128,162,369 equity shares of Rs.10/- each fully paid up in Ambuja Cement Rajasthan Ltd. held as investment by Company stand cancelled
and the difference between book value and face value of such shares amounting to Rs. 33.35 crores has been debited to general reserve.
(d)
In accordance with AS - 14, accounting policies of ACRL have been aligned. Accordingly, miscellaneous expenditure representing public
issue expenses of Rs.1.38 crores and machinery spare issued for consumption of Rs. 2.15 crores have been adjusted to Security Premium
Account and General Reserve respectively, and Modvat/Cenvat credit availed on Capital Goods upto 31st May 2004 amounting to Rs. 16.51
crores credited to the concerned assets by erstwhile ACRL has, now, been credited to Modvat/Cenvat on Capital Goods Reserve by debiting
the same to concerned asset.
(e)
Figures for the current year includes figures for the erstwhile ACRL for the period from 1st June, 2004 to 30th June, 2004. Current year
figures are, accordingly not comparable with those of the previous year.
(f)
In view of above, investments in the Associate was accounted as per Accounting Standard 13 - "Accounting for Investemnts"
16. In the year 1999 the Company had started work to set up a Bulk Cement Terminal at Tuticorin in the state of Tamilnadu. However, one of the
local authority and a neighbour moved the Honourable Court to stall the project on untenable grounds. During the year the Honourable Court
has passed the orders in favour of the Company. However, Board of Directors, after detailed deliberations on all the aspects namely the project
cost, the current market scenario, the logistics and other relevant factors, has decided not to proceed with the project in the interest of the
Company. Consequently, net expenditure of Rs. 4.23 crores, incurred on this project has been charged to Profit & Loss account.
17. Borrowing Cost is net of capitalisation Rs. 4.83 crores (Previous Year - Nil).
18. Capital Work in Progress includes (a) Machinery in Transit Rs. 0.25 crore (30.06.2003 - Rs. 2.46 crores) ; (b) expenditure during construction
for project Rs. 7.21 crores (30.06.2003 - Rs. 2.53 crores) .
19. In the case of the parent company, modvat/cenvat credit is credited to Capital Reserve Account, although the same is adjusted against the cost
of the respective assets for the purpose of computing depreciation. However, in respect of its Subsidiary companies, modvat/cenvat credit is
adjusted against the cost of the assets.
20. In case of one of the subsidiary on basis of reveiw and reassessment of intrinsic machine configuration and capabilities plant and machinary
items at the Company's grinding unit at Sankrail, West Bengal, which hitherto being depreciated on the basis of "Continuous Process", are now
being depreciated at shift rate on the Straight Line Method at the rates specified in Schedule XIV of the Companies Act, 1956. As a consequence
of the above, depreciation charged for the current year is higher by Rs. 2.71 crores and the net profit for the year is lower by Rs.1.71 crores (net
of provision for taxation Rs. 0.95 crore).
21. Figures pertaining to the Subsidiary companies have been reclassified wherever necessary to bring them in line with the parent company's
financial statement.
22. Figures less than Rs. 50,000/- have been shown at actual, wherever statutorily required to be disclosed, as the figures have been rounded off
to the nearest lac.
23. Figures of the previous year have been regrouped wherever necessary.
Signatures to Schedules 'A' to 'S'
DALAL & SHAH
B. R. Shah
Partner
Sudhir Soni
Partner
N. S. Sekhsaria
Managing Director
B. L. Taparia
Company Secretary
Anil Singhvi
Whole-time Director
#
BLACK
115 RED
INFORMATION WITH REGARD TO SUBSIDIARY COMPANIES
(As per exemption letter dated 5th August , 2004 of the Department of Company Affairs
u/s. 212 of the Companies Act, 1956.)
(Rs. in Crores)
Name of Subsidiary
Company
Ambuja
Cement
Eastern
Limited
Financial Year ends on 30.06.2004
Ambuja
Cement
India
Limited
DLF
Gujarat
Limited
GACL
Finance
Limited
30.06.2004
31.03.2004
31.03.2004
GGL Hotel
and Resort
Company
Limited
Indo
Nippon
Special
Cements
Limited
31.03.2004 30.06.2004
Cement
Ambuja
International
Limited
Ceylon
Ambuja
Cements
(Private)
Limited
Midigama
Cements
(Private)
Limited
30.06.2004
31.03.2004
31.03.2004
Share Capital
193.30
476.87
1.62
0.05
25.00
0.30
9.65
30.15
5.00
Reserves & Surplus
(Net of debit balance
of Profit & Loss Account
and Miscellaneous
Expenditure to the
extent not written off)
12.28
957.37
(1.62)
(0.15)
(11.68)
0.23
5.99
(8.92)
(1.41)
Total Assets
(Fixed Assets +
Investments +
Current Assets)
431.54
1434.25
–
1.01
52.80
0.57
33.51
22.73
3.59
Total Liabilities
(Debts + Current
Liabilities & Provisions)
225.96
0.01
–
1.10
39.48
0.04
17.87
1.49
–
Investments
(excluding investments in
subsidiary companies)
41.25
928.19
–
0.17
0.61
–
–
–
–
Turnover
407.03
–
–
–
16.36
–
0.90
76.25
–
Profit before Taxation
66.94
7.94
–
(0.02)
0.91
–
0.33
2.80
0.01
Provision for Taxation
21.86
0.14
–
–
–
–
0.01
–
–
Profit after Taxation
45.08
7.80
–
(0.02)
0.91
–
0.32
2.80
0.01
Proposed Dividend
–
–
–
–
–
–
–
–
–
BLACK
116 RED
$