AUDITORS' REPORT TO THE MEMBERS

1. We have audited the attached Balance Sheet of ACC Limited (formerly The Associated Cement Companies
Limited) as at December 31, 2006 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 in paragraph 3 above, we report that:
a) 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;
b) 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 the books;
c) the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in
agreement with the books of account;
d) 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;
e) on the basis of the written representations received from the directors, as on December 31, 2006, and
taken on record by the Board of Directors, we report that none of the directors of the Company are
disqualified as on December 31, 2006 from being appointed as a director, in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956;
f) in our opinion and to the best of our information and according to the explanations given to us, the said
accounts 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:
i) in the case of the Balance Sheet, of the state of affairs of the Company as at December 31, 2006;
ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that
date; and
iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

For K. S. Aiyar & Co. For S.R. Batliboi & Associates

Chartered Accountants Chartered Accountants

per Raghuvir M. Aiyar per Sudhir Soni

Partner Partner
Membership No.: 38128 Membership No.: 41870

Mumbai
February 1, 2007

84
ANNEXURE TO THE AUDITORS' REPORT
(Referred to in paragraph 3 of our Report of even date)
(i) (a) The Company has maintained proper records showing full particulars including quantitative details
and situation of fixed assets.

(b) A substantial portion of the fixed assets has been physically verified by the management during the
year and in our opinion the frequency of verification is reasonable having regard to the size of the
Company and the nature of its assets. No material discrepancies were noticed on such physical
verification.

(c) Fixed assets disposed off during the year were not substantial. According to the information and
explanations given to us, we are of the opinion that the disposal of fixed assets has not affected the
going concern status of the Company.

(ii) (a) The inventories have been physically verified during the year by the management. In our opinion, the
frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are reasonable and
adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company is
maintaining proper records of inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material and have been properly dealt with in the books
of account.

(iii) (a) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or
other parties covered in the register maintained under Section 301 of the Companies Act, 1956.
Accordingly, sub-clause (b), (c) and (d) are not applicable.

(b) As informed, the Company has not taken any loans, secured or unsecured from companies, firms or
other parties covered in the register maintained under Section 301 of the Companies Act, 1956.
Accordingly, sub-clause (f) and (g) are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal
control system commensurate with the size of the Company and the nature of its business for the
purchases of inventory and fixed assets and for the sale of goods and services. During the course of our
audit, no major weakness has been noticed in the internal control system in respect of these areas.

(v) (a) In our opinion and according to the information and explanations given to us, particulars of contracts or
arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register
required to be maintained under that Section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in
pursuance of such contracts or arrangements exceeding value of Rupees five lakhs have been entered
into during the financial year 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 provisions of Sections 58A, 58AA
or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptances of Deposit)
Rules 1975 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 account 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 not, however, made a detailed examination of the same.

(ix) (a) According to the records of the Company, Provident Fund, Investor Education and Protection Fund,
Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty,
cess and other material statutory dues applicable to it have been generally regularly deposited during
the year with the appropriate authorities except at certain locations where we are informed that the
Company has applied for exemption from the operations of the Employees' State Insurance Act.

85
 According to the information and explanations given to us, no undisputed amounts payable in respect
of Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income tax,
Wealth-tax, Service tax, Sales-tax, Custom duty, Excise duty, cess and other undisputed statutory dues
were outstanding, at the year end, for a period of more than six months from the date they became
payable.

(b) According to the records of the Company, Income tax, Sales tax, Wealth tax, Service tax, Custom duty,
Excise duty and cess which have not been deposited on account of any dispute, are as follows:
(Rs. Crore)

Forum where dispute is pending

Name of Year to which the Commiss- Appellate High Supreme Total

Statute amount relates ionarate authorities Court Court Amount
(Nature of Dues) & Tribunal

Sales Tax 1982-83 to 1989-90 0.30 1.07 0.34 - 1.71

(Tax / 1990-91 to 1999-00 5.06 22.12 176.63 - 203.81
Penalty/ 2000-01 to 2006 40.54 15.40 35.77 - 91.71
Interest)

Total 45.90 38.59 212.74 - 297.23

The Central 1982-83 to 1989-90 - - - 5.47 5.47

Excise Act 1990-91 to 1999-00 0.43 0.32 0.42 - 1.17
(Tax / 2000-01 to 2006 4.94 0.46 4.88 - 10.28
Penalty/
Interest)

Total 5.37 0.78 5.30 5.47 16.92

Income AY 2001-02 5.31 - - - 5.31

Tax Act AY 2004-05 12.11 - - - 12.11
(Tax /
Penalty /
Interest)

Total 17.42 - - - 17.42

Service 2004-05 0.76 - - - 0.76

Tax Act to 2006
(Tax /
Penalty /
Interest)

Total 0.76 - - - 0.76

Cess on 2003-04 4.81 - 14.44 - 19.25

Power to 2006
Generation

Total 4.81 - 14.44 - 19.25

(x) The Company does not have any accumulated losses at the end of the financial year and has not incurred
cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not
defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) Based on our examination of the records and the information and explanations given to us, 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 or a 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, the Company is not dealing in or trading in shares, securities, debentures and other
investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

86
(xv) According to the information and explanations given to us, the Company has given guarantee for loans
taken by others from bank or financial institutions, the terms and conditions whereof in our opinion are
not prima facie prejudicial to the interest of the Company.

(xvi) Based on information and explanations given to us by the management, the term loans have been
applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on an 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.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the
register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company has created securities or charge in respect of secured debentures issued and outstanding at
the year end.

(xx) The Company has not raised any money by way of public issue during the year. Therefore, the provision of
clause (xx) of the Order is not applicable to the Company.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the
financial statements and as per the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during the course of our audit.

For K. S. Aiyar & Co. For S.R. Batliboi & Associates

Chartered Accountants Chartered Accountants

per Raghuvir M. Aiyar per Sudhir Soni

Partner Partner
Membership No.: 38128 Membership No.: 41870

Mumbai
February 1, 2007

87
 BALANCE SHEET AS AT DECEMBER 31, 2006

Previous Period
Schedules Page Nos. Rs. Crore Rs. Crore Rs. Crore
I. SOURCES OF FUNDS :
1. SHAREHOLDERS' FUNDS :
(a) Share Capital .......................................................................................... A 93 187.76 185.54
(b) Reserves and Surplus ........................................................................... B 94 2,955.16 1,951.21
3,142.92 2,136.75
2. LOAN FUNDS :
(a) Secured Loans ........................................................................................ C 95 & 96 720.96 950.12
(b) Unsecured Loans .................................................................................. D 96 50.20 121.30
771.16 1,071.42
3. STOCKISTS' DEPOSITS (UNSECURED) ......................................................... 144.82 104.75
4. DEFERRED TAX LIABILITY (Net) ..................................................................... 320.72 300.38
(Refer Note - 17, Page 121)
5. TOTAL FUNDS ..................................................................................................... 4,379.62 3,613.30
II. APPLICATION OF FUNDS :
1. FIXED ASSETS : ................................................................................................... E 97
(a) Gross Block ............................................................................................. 4,816.25 4,628.64
(b) Less: Depreciation ................................................................................ 1,893.76 1,722.29
(c) Net Block ................................................................................................. 2,922.49 2,906.35
(d) Capital Work-in-Progress, etc............................................................. 473.42 215.68
3,395.91 3,122.03
2. INVESTMENTS .................................................................................................... F 98 to 100 503.54 293.75
3. CURRENT ASSETS, LOANS AND ADVANCES :
(a) Inventories .............................................................................................. G 101 624.13 600.95
(b) Sundry Debtors ..................................................................................... H 102 213.96 199.17
(c) Cash and Bank Balances .................................................................... I 103 620.17 102.79
(d) Other Current Assets ........................................................................... J 103 16.13 31.49
(e) Loans and Advances ............................................................................. K 104 531.85 486.76
2,006.24 1,421.16
4. LESS : CURRENT LIABILITIES AND PROVISIONS :
(a) Sundry Liabilities .................................................................................. L 105 1,024.73 913.28
(b) Provisions ................................................................................................ M 105 502.28 316.77
1,527.01 1,230.05
5. NET CURRENT ASSETS .................................................................................... 479.23 191.11
6. MISCELLANEOUS EXPENDITURE ................................................................ N 105 0.94 6.41
(to the extent not written off or adjusted)
7. TOTAL ASSETS (Net) .......................................................................................... 4,379.62 3,613.30
8. NOTES TO ACCOUNTS ..................................................................................... O 106 to 128

The schedules referred to above and notes to accounts form an integral part of the Balance Sheet
As per our report of even date For and on behalf of the Board,
For K.S. AIYAR & CO. N.S.SEKHSARIA PAUL HUGENTOBLER A.L.KAPUR

}
Chartered Accountants Chairman Deputy Chairman S.M.PALIA
NARESH CHANDRA
RAGHUVIR M.AIYAR M.L.NARULA SUMIT BANERJEE MARKUS AKERMANN
Partner Managing Director CEO Designate & Director D.K.MEHROTRA Directors
NIRMALYA KUMAR
For S.R. BATLIBOI & ASSOCIATES ONNE VAN DER WEIJDE A. ANJENEYAN SHAILESH HARIBHAKTI
Chartered Accountants Chief Financial Officer Company Secretary ANIL SINGHVI
SHIKHA SHARMA
SUDHIR SONI
Partner

Mumbai, February 1, 2007

88
PROFIT AND LOSS ACCOUNT FOR THE YEAR
ENDED DECEMBER 31, 2006
Previous Period
(9 Months)
Schedules Page Nos. Rs. Crore Rs. Crore Rs. Crore Rs. Crore
INCOME:
1. SALE OF PRODUCTS AND SERVICES (Gross) ................................................................................... 6,453.07 3,717.18
{including Sales Tax Incentives Rs. 56.64 Crore ( Previous Period - Rs. 17.29 Crore)}
LESS - EXCISE DUTY RECOVERED (including Education Cess).................................................... 649.59 496.48
SALE OF PRODUCTS AND SERVICES (Net) (Refer Note 33(A), Page 124)................................ 5,803.48 3,220.70
2. OTHER INCOME ....................................................................................................................................... 1 90 132.88 97.92
5,936.36 3,318.62
EXPENDITURE:
3. MANUFACTURING AND OTHER EXPENSES .................................................................................... 2 91 & 92 4,180.26 2,685.03
4. DEPRECIATION ......................................................................................................................................... 254.61 164.64
LESS: TRANSFER FROM CAPITAL RESERVE (Refer Note - 19, Page 122) ................................. 0.36 0.27
254.25 164.37
5. INTEREST .................................................................................................................................................... 3 92 52.03 63.76
4,486.54 2,913.16
PROFIT / (LOSS) BEFORE TAXATION AND EXCEPTIONAL ITEMS 1,449.82 405.46
EXCEPTIONAL ITEMS
6. PROFIT ON SALE OF INVESTMENTS IN ERSTWHILE SUBSIDIARY (Refer Note - 8, Page 117) 8.27 110.26
7. PROFIT ON SALE OF UNDERTAKING (Refer Note - 9, Page 117 & Note 16(e), Page 121) 16.31 174.05
8. WRITE BACK OF PROVISION FOR CONTINGENCIES (Refer Note - 14(c) , Page 120)........... 0.50 7.50
9. PROVISION FOR EMPLOYEE BENEFITS - PRIOR PERIOD (Refer Note - 10 (e), Page 119) .... - (13.15)
10 PROFIT ON SALE OF LAND .................................................................................................................. 144.60 -
PROFIT / (LOSS) AFTER EXCEPTIONAL ITEMS BEFORE TAX 1,619.50 684.12
11. PROFIT FROM CONTINUING OPERATIONS BEFORE TAXATION ................................................ 1,619.50 661.37
12. PROVISION FOR TAXATION
(i) CURRENT TAX {includes Rs. Nil on sale of Refractory Business -
(Previous Period Rs. 42.02 Crore)} ............................................................................................ (368.12) (51.95)
(ii) DEFERRED TAX (Refer Note - 17, Page 121) ........................................................................... 5.17 (74.33)
(iii) PRIOR PERIOD TAX EXPENSE ...................................................................................................... (18.86) -
(iv) FRINGE BENEFIT TAX .................................................................................................................... (5.85) (6.00)
(387.66) (132.28)
PROFIT / (LOSS) AFTER TAXATION FROM CONTINUING OPERATIONS [A] 1,231.84 529.09
13. PROFIT FROM DISCONTINUED OPERATION BEFORE TAXATION .............................................. - 22.75
14. PROVISION FOR TAXATION
(i) CURRENT TAX ................................................................................................................................. - (11.99)
(ii) DEFERRED TAX ............................................................................................................................... - 4.33
- (7.66)
PROFIT / (LOSS) AFTER TAXATION FROM DISCONTINUED OPERATION [B] - 15.09
PROFIT / (LOSS) AFTER TAXATION AND EXCEPTIONAL ITEMS (A + B) 1,231.84 544.18
15. BALANCE BROUGHT FORWARD FROM PREVIOUS PERIOD ....................................................... 462.72 134.90
16. CREDIT BALANCE OF PROFIT AND LOSS ACCOUNT OF ERSTWHILE
DAMODHAR CEMENT & SLAG LIMITED AS ON APRIL 1, 2005 (Refer Note - 7(B), Page 116) - 6.92
17. DEBIT BALANCE OF PROFIT AND LOSS ACCOUNT OF ERSTWHILE
BARGARH CEMENT LIMITED AS ON APRIL 1, 2005 (Refer Note - 7(A), Page 116).............. - 165.78
TARMAC (INDIA) LIMITED AS ON JANUARY 1, 2006 (Refer Note - 7(C), Page 116 & 117) 4.25
18. LESS: ADJUSTED FROM GENERAL RESERVE (Refer Note - 7 , Page 116 & 117).................... (4.25) - (165.78)
462.72 141.82
AMOUNT AVAILABLE FOR APPROPRIATION 1,694.56 686.00
APPROPRIATIONS:
19. PREVIOUS YEAR DIVIDEND .................................................................................................................. 1.72 0.32
20. GENERAL RESERVE .................................................................................................................................. 123.18 54.42
21. AMORTISATION RESERVE ..................................................................................................................... 0.40 0.23
22. PROPOSED DIVIDEND ............................................................................................................................ 280.92 147.61
23. TAX ON DISTRIBUTED PROFITS ........................................................................................................... 39.40 20.70
445.62 223.28
BALANCE CARRIED TO BALANCE SHEET 1,248.94 462.72
24. NOTES TO ACCOUNTS ........................................................................................................................... O 106 to 128
25. EARNINGS PER SHARE (Refer Note 5, Page 114)...........................................................................
BASIC EARNINGS PER SHARE .............................................................................................................. Rupees 66.02 30.02
DILUTED EARNINGS PER SHARE ........................................................................................................ Rupees 65.52 29.10
FACE VALUE PER SHARE ........................................................................................................................ Rupees 10.00 10.00
The schedules referred to above and notes to accounts form an integral part of the Profit & Loss Account
As per our report of even date For and on behalf of the Board,
For K.S. AIYAR & CO. N.S.SEKHSARIA PAUL HUGENTOBLER A.L.KAPUR

}
Chartered Accountants Chairman Deputy Chairman S.M.PALIA
NARESH CHANDRA
RAGHUVIR M.AIYAR M.L.NARULA SUMIT BANERJEE MARKUS AKERMANN
Partner Managing Director CEO Designate & Director D.K.MEHROTRA Directors
NIRMALYA KUMAR
For S.R. BATLIBOI & ASSOCIATES ONNE VAN DER WEIJDE A. ANJENEYAN SHAILESH HARIBHAKTI
Chartered Accountants Chief Financial Officer Company Secretary ANIL SINGHVI
SHIKHA SHARMA
SUDHIR SONI
Partner

Mumbai, February 1, 2007 89

 SCHEDULES FORMING PART OF THE
PROFIT AND LOSS ACCOUNT
SCHEDULE - 1, OTHER INCOME For the year Previous Period
Item 2, Page 89 ended December 31, 2006 (9 months)

Rs. Crore Rs. Crore Rs. Crore

1. DIVIDEND FROM INVESTMENTS

(a) Trade - Long Term............................................................................................................................... 6.44 12.97

{includes Rs. 5.00 Crore Dividend from Subsidiary Company -

(Previous Period - Rs. 12.13 Crore)}

(b) Others (Dividend from Mutual funds) ....................................................................................... 19.56 4.32

26.00 17.29

2. OTHER INCOME

(a) Sale of Stores, Materials, etc. ......................................................................................................... 14.77 6.33

(b) Excess Provisions made in Previous Years ................................................................................. 34.97 40.33

(c) Profit on Sale of Investments ........................................................................................................ 13.99 0.50

(d) Lease Rental Income ......................................................................................................................... 4.11 5.91

(e) Profit on Sale of Fixed Assets (Net) .............................................................................................. 1.36 7.87

(f) Miscellaneous Income ...................................................................................................................... 37.68 19.69

(includes Gain on Exchange (Net) - Rs. 1.60 Crore - Previous Period - Rs. Nil ) 106.88 80.63

TOTAL .. 132.88 97.92

90
SCHEDULES FORMING PART OF THE
PROFIT AND LOSS ACCOUNT
SCHEDULE - 2, MANUFACTURING AND OTHER EXPENSES For the year Previous Period
Item 3, Page 89 ended December 31, 2006 (9 months)
Rs. Crore Rs. Crore Rs. Crore
1. PURCHASE OF CEMENT AND OTHER PRODUCTS ............................................................................... 53.42 45.30
2. RAW MATERIALS, BOUGHT-OUTS, COAL AND OIL FOR KILNS (Refer Note - 28, Page 123).... 1,216.55 873.04
3. PAYMENTS TO AND PROVISIONS FOR EMPLOYEES
(a) Salaries, Wages, Dearness Allowance And Bonus .................................................................. 243.46 142.39
(b) Contributions / Provisions to and for Provident and other Funds.................................... 34.49 21.36
(Refer Note - 10, Page 118 & 119)
(c) Workmen And Staff Welfare Expenses ...................................................................................... 40.07 21.09
318.02 184.84
4. PACKING MATERIALS .................................................................................................................................... 203.40 129.27
5. OPERATION AND OTHER EXPENSES
(a) Stores Consumed (Refer Note - 29, Page 123).......................................................................... 40.18 31.23
(b) Purchased Power and Fuel for Power Generation .................................................................. 430.98 299.52
(c) Repairs to Building ............................................................................................................................ 10.07 3.32
(d) Repairs to Machinery ........................................................................................................................ 181.59 99.43
(e) Repairs to Other Items ..................................................................................................................... 60.98 60.14
(f) Rent {after recoveries of Rs. 0.22 Crore - (Previous Period Rs. 0.11 Crore)} ..................... 3.55 1.99
(g) Rates and Taxes {includes Wealth Tax Rs. 0.30 Crore - (Previous Period Rs. 0.23 Crore)} 58.52 37.21
(h) Royalties ................................................................................................................................................ 80.86 58.22
(i) Insurance .............................................................................................................................................. 12.84 9.97
(j) Loading, Transportation and Other Charges ............................................................................ 137.62 90.20
(k) Discount, Rebates and Allowances .............................................................................................. 105.15 61.63
(l) Commission on Sales ....................................................................................................................... 15.26 16.09
(m) Other Expenses {includes Rs. Nil towards Loss on Exchange (Net)................................... 199.10 99.31
(Previous Period - Rs. 7.16 Crore)}
(n) Compensation under Voluntary Retirement Scheme ........................................................... 10.21 11.83
(o) Provision for Bad and Doubtful Debts ........................................................................................ 0.04 2.01
(p) Provision for Doubtful Advances .................................................................................................. 10.01 -
(q) Advertisement .................................................................................................................................... 44.23 33.60
1,401.19 915.70
(r) Share / Foreign Currency Convertible Bonds Issue Expenses ............................................ 0.16 0.12
Less : Amount adjusted against Securities Premium Account .......................................... 0.16 0.12
- -
1,401.19 915.70
6. OUTWARD FREIGHT CHARGES ON CEMENT ETC. ............................................................................... 845.77 524.70
7. EXCISE DUTIES (including Education Cess) {(includes for Clinker Rs. 78.73 Crore -................. 86.50 43.23
(Previous Period Rs. 23.97 Crore)}
8. PAYMENT TO AUDITORS
(a) Audit Fees ............................................................................................................................................. 1.15 0.90
(b) International Financial Reporting Standard Audit Fees ....................................................... 0.35 1.33
(c) Cost Audit Fees ................................................................................................................................... 0.02 0.02
(d) Fees for Taxation Matters ............................................................................................................... 0.34 0.33
{includes - Tax Audit Fees Rs. 0.18 Crore paid to other than Statutory Auditors -
(Previous Period Rs. 0.11 Crore paid to Statutory Auditors)}
(e) Fees for Other Services .................................................................................................................... 0.30 0.06
(f) Reimbursement of Expenses ......................................................................................................... 0.30 0.10
{includes Rs. 0.07 Crore reimbursed to other than Statutory Auditors
(Previous Period - Rs. Nil)}
2.46 2.74
Total Carried Over ......... 4,127.31 2,718.82

91
 SCHEDULES FORMING PART OF THE
PROFIT AND LOSS ACCOUNT
SCHEDULE - 2, MANUFACTURING AND OTHER EXPENSES - (contd.) For the year Previous Period
ended December 31, 2006 (9 months)
Rs. Crore Rs. Crore Rs. Crore
Total Brought Over ... 4,127.31 2,718.82
9. MISCELLANEOUS EXPENDITURE WRITTEN OFF
(a) Compensation under Voluntary Retirement Schemes ......................................................... 5.21 5.38
(b) Prepayment Premium to Financial Institutions ...................................................................... 0.69 0.85
(c) Preliminary Expenses ....................................................................................................................... 0.18 0.11
6.08 6.34
10. NET VALUE OF DISCARDED CAPITAL ASSETS AND COST OF DISMANTLING ............................. 17.62 5.13
11. STOCK TRANSFERRED ON COMMENCEMENT OF COMMERICIAL
PRODUCTION - CHAIBASA WORKS ......................................................................................................... - 7.33
12. VALUE OF STOCK TRANSFERRED ON SALE OF UNDERTAKING ..................................................... (1.05) (15.17)
13. REDUCTION/(ACCRETION) TO STOCK-IN-TRADE
AND WORK-IN-PROGRESS ADDED /(DEDUCTED) :-
(a) Closing Stocks -
(i) Stock- in-Trade ........................................................................................................................... 63.98 71.42
(ii) Work-in-Progress ...................................................................................................................... 149.72 167.47
213.70 238.89
(b) Opening Stocks -
(i) Stock - in-Trade ......................................................................................................................... 71.42 70.18
(ii) Work-in-Progress ...................................................................................................................... 172.58 131.29
(includes Rs. 5.11 Crore transfer from Raw Material)
244.00 201.47
30.30 (37.42)
TOTAL .. 4,180.26 2,685.03

SCHEDULE - 3, INTEREST For the year Previous Period

Item 5, Page 89 ended December 31, 2006 (9 months)
Rs. Crore Rs. Crore Rs. Crore
1. Cash Credit Accounts .................................................................................................................................. 1.14 2.77
2. Term Loans ...................................................................................................................................................... 29.52 20.18
3. Debentures ..................................................................................................................................................... 36.67 42.31
4. Others .............................................................................................................................................................. 13.57 6.05
80.90 71.31
Less - Adjustments for -
5. Interest Capitalised ...................................................................................................................................... 5.71 5.12
75.19 66.19
Less -
6. Interest Received ......................................................................................................................................... 23.16 2.43
{inclusive of Tax Deducted at Source - Rs 0.11 Crore (Previous Period - Rs 0.09 Crore)}

TOTAL .. 52.03 63.76

92
SCHEDULES FORMING PART OF THE BALANCE SHEET

SCHEDULE - A, SHARE CAPITAL As at

Item I - 1(a), Page 88 December 31, 2006 Previous Period
Rs. Crore Rs. Crore Rs. Crore
1. AUTHORISED -
22,50,00,000 Equity Shares of Rs. 10 each ........................................................................................ 225.00 225.00
10,00,00,000 Preference Shares of Rs. 10 each ................................................................................ 100.00 100.00
325.00 325.00
2. ISSUED -
18,83,26,009 Equity Shares of Rs. 10 each ......................................................................................... 188.33 185.56
(Previous Period - 18,55,56,138 Shares of Rs. 10 each)
3. SUBSCRIBED -
8,62,03,770 Equity Shares of Rs. 10 each, Fully Paid .................................................................... 86.20 84.26
(Previous Period 8,42,55,339 Shares of Rs. 10 each)
(includes 19,48,431 (Previous Period 51,38,435) Shares issued during
the year against conversion of 16,125 (Previous Period 42,525)
Foreign Currency Convertible Bonds (FCCBs) of US $ 1000 each)
Add : 3,84,060 Equity Shares of Rs.10 each Forfeited - Amount Paid ........... 0.20 0.20
(Previous Period 3,84,060 Shares of Rs. 10 each)
86.40 84.46
Share Application Money received but not allotted ............................................ 0.28 0.82
30,49,618 Equity Shares of Rs. 10 each Fully Paid allotted against exercise of Stock
Options under the Employees Stock option Scheme (ESOS)
2001, 2002, 2003 and 2004 ......................................................................................... 3.05 2.23
(Previous Period 22,28,178 Shares of Rs. 10 each)
60,72,640 Equity Shares of Rs. 10 each, fully paid for consideration
other than cash pursuant to contracts .................................................................. 6.07 6.07
9,19,52,080 Equity Shares of Rs. 10 each, fully paid by way of Bonus Shares
By utilisation of -
Securities Premium Account ........................................................................................ 54.27 54.27
Capital Reserve ................................................................................................................. 0.50 0.50
Plant Reinstatement Reserve ....................................................................................... 1.69 1.69
Development And Rehabilitation Reserve .............................................................. 0.27 0.27
General Reserve ................................................................................................................ 35.23 35.23
91.96 91.96
US$ 1.350 Million (Previous Period US$ 17.475 Million) Foreign Currency Convertible Bonds
carry an option of converting the bonds into Shares/GDS aggregating around 1,63,125
(Previous Period - 21,11,556) at the option of the Bondholders at any time till March 8, 2009.
Options in force as of December 31, 2006 under the Employees Stock Option Schemes -
3,56,368 Shares - (Previous Period - 11,77,808 Shares)
ESOS 2001 - Vested options exercisable @ Rs. 127/- per share till October 30, 2010 -
25,553 Shares - (Previous Period - 1,35,349 Shares)
ESOS 2002 - Vested options exercisable @ Rs. 140/- per share till September 18, 2007 -
34,990 Shares - (Previous Period - 1,41,184 Shares)
ESOS 2003 - Vested options exercisable @ Rs. 225/- per share till December 16, 2008 -
85,220 Shares - (Previous Period - 3,25,075 Shares)
ESOS 2004 - Vested options exercisable @ Rs. 314/- per share till December 15, 2009 -
2,10,605 Shares - (Previous Period - 5,76,200 Shares)
TOTAL .. 187.76 185.54

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SCHEDULE - B, RESERVES AND SURPLUS As at

Item I - 1(b), Page 88 December 31, 2006 Previous Period
Rs. Crore Rs. Crore Rs. Crore
1. CAPITAL RESERVE ................................................................................................................................................... 80.06 0.70
Add: Capital Subsidy received ..................................................................................................................... - 15.00
Add: Transferred on amalgamation of erstwhile Damodhar Cement and
Slag Limited (Refer Note - 7(B), Page 116) .................................................................................... - 2.94
Add: Difference on cancellation of investment in erstwhile Bargarh Cement
Limited on amalgamation (Refer Note - 7(A), Page 116) ......................................................... - 61.69
Add: Difference on cancellation of investment in erstwhile Tarmac (India)
Limited on amalgamation (Refer Note - 7(C), Page 116 & 117)............................................ 3.30 -
83.36 80.33
Less: Credited to Profit and Loss Account (Refer Note - 19, Page 122).......................................... 0.36 0.27
83.00 80.06
2. SECURITIES PREMIUM ........................................................................................................................................ 736.74 525.64
Add: (i) Received during the year .............................................................................................................. 89.00 196.45
(ii) Premium on redemption of Foreign Currency Convertible Bonds
no longer required (Refer Note 11 (i) (b), Page 120)............................................................. 5.60 14.77
831.34 736.86
Less: Share/Foreign Currency Convertible Bonds Issue Expenses................................................... 0.16 0.12

831.18 736.74
3. GENERAL RESERVE ................................................................................................................................................ 499.76 585.32
Add: Amount transferred from Profit and Loss Account ................................................................... 123.18 54.42
Add: Deferred Tax Asset on amalgamation of erstwhile Bargarh Cement
Limited (Refer Note - 7(A), Page 116).............................................................................................. - 54.76
Add: Deferred Tax Assets on amalgamation of erstwhile Tarmac (India)
Limited (Refer Note - 7(C), Page 116 & 117)................................................................................ 1.17 -
624.11 694.50
Less: Adjustment of debit balance of Profit and Loss Account of erstwhile
Bargarh Cement Limited on amalgamation (Refer Note -7(A), Page 116)......................... - 165.78
Less: Adjustment of debit balance of Profit and Loss Account of erstwhile
Tarmac (India) Limited on amalgamation (Refer Note - 7(C), Page 116 & 117)............... 4.25 -
Less: Difference on cancellation of Investment in erstwhile Damodhar
Cement & Slag Limited on amalgamation (Refer Note - 7(B), Page 116)........................... - 3.84
Less: Adjustment for employee benefits provision net of deferred tax........................................ - 25.12
(Refer Note 10, Page 118 & 119)
619.86 499.76
4. DEBENTURE REDEMPTION RESERVE ............................................................................................................... 166.63 166.63
5. AMORTISATION RESERVE .................................................................................................................................... 5.11 4.88
Add: Amount transferred from Profit and Loss Account .................................................................. 0.40 0.23
5.51 5.11
6. EMPLOYEES STOCK OPTION OUTSTANDING ................................................................................................ 0.04 0.19
7. PROFIT AND LOSS ACCOUNT ............................................................................................................................. 1,248.94 462.72
TOTAL .. 2,955.16 1,951.21

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SCHEDULE - C, SECURED LOANS As at

Item I - 2(a), Page 88 December 31, 2006 Previous Period
Rs. Crore Rs. Crore

1. PRIVATELY PLACED NON-CONVERTIBLE DEBENTURES

Secured by way of a mortgage on certain immovable properties and hypothecation
of all movable assets except book debts under the respective debenture trust deeds.

(a) 11.5% Series V Non-Convertible Debentures redeemable at par on

May 25, 2007 ................................................................................................................................................ 100.00 100.00

(b) 11.95% Series VII Non-Convertible Debentures redeemable at par on

February 7, 2006 .......................................................................................................................................... - 50.00
(Redeemed on due date)

(c) 9.80% Series VIII Non-Convertible Debentures redeemable at par on

May 3, 2007 ................................................................................................................................................... 75.00 75.00

(d) 9.50% Series IX Non-Convertible Debentures redeemable at par on

May 27, 2007................................................................................................................................................. 50.00 50.00

(e) 8.95% Series X Non-Convertible Debentures redeemable at par on

July 8, 2007..................................................................................................................................................... 50.00 50.00

(f) 8.95% Series XI Non-Convertible Debentures redeemable at par on

July 10, 2007.................................................................................................................................................. 25.00 25.00

(g) 7.95% Series XII Non-Convertible Debentures redeemable at par on

September 6, 2006...................................................................................................................................... - 50.00
(Redeemed on due date)

(h) 7.30% Series XIII Non-Convertible Debentures redeemable at par on

October 18, 2006 ......................................................................................................................................... - 50.00
(Redeemed on due date)

2. AMOUNTS DRAWN AGAINST CASH CREDIT ACCOUNTS WITH BANKS -........................................... 27.05 36.13
Secured by hypothecation of Stocks, Stores, Book Debts, etc.

Total Carried Over ... 327.05 486.13

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SCHEDULE - C, SECURED LOANS - (contd.) As at

Item I - 2(a), Page 88 December 31, 2006 Previous Period
Rs. Crore Rs. Crore
Total Brought Over ..... 327.05 486.13
3. RUPEE LOANS -

Secured by a mortgage on certain immovable properties and hypothecation

of all movable assets except book debts -
Banks ............................................................................................................................................................... 250.00 250.00

4. FOREIGN CURRENCY LOANS -

Secured by a mortgage on certain immovable properties and hypothecation of all movable

assets except book debts -
Banks ............................................................................................................................................................... 143.91 213.99

TOTAL .. 720.96 950.12

Note : The mortgages/charges indicated in 1, 3 and 4 above rank pari-passu inter-se and are subject to the prior charges in favour
of the Company's Bankers on specified movable assets for securing working capital requirements / guarantee facilities.

SCHEDULE - D, UNSECURED LOANS As at

Item I - 2(b), Page 88 December 31, 2006 Previous Period
Rs. Crore Rs. Crore

1. LONG TERM LOAN

(a) Financial Institution ................................................................................................................................... 14.80 8.57
{Payable to Karnataka Road Development Corporation Limited (KRDC)
in respect of Company's Share of loan availed by KRDC from HUDCO}

(b) Deferred Payment Liability - IDCOL ...................................................................................................... 12.97 12.97

{Amount payable within one year Rs. 1.62 Crore (Previous Period - Nil)}
(Refer Note - 21, Page 123)

2. FOREIGN CURRENCY CONVERTIBLE BONDS .............................................................................................. 5.98 78.73

(Refer Note - 11, Page 120)

3. DEFERRED SALES TAX LOANS ........................................................................................................................... 16.45 21.03

TOTAL .. 50.20 121.30

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SCHEDULE - E, FIXED ASSETS

Item II - 1, Page 88

GROSS BLOCK AT COST TOTAL NET BLOCK

FIXED ASSETS DEPRECIATION
As at Additions on Additions/ Deductions/ As at For the Upto As at As at
31-12-2005 Amalgamation Adjustments Adjustments 31-12-2006 year ended 31-12-2006 31-12-2006 31-12-2005
31-12-2006
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
Rs.Crore Rs.Crore Rs.Crore Rs.Crore Rs.Crore Rs.Crore Rs.Crore Rs.Crore Rs.Crore
1. Freehold Land 37.15 - 8.51 10.02 35.64 - - 35.64 37.15
2. Leasehold Land 26.41 0.85 - - 27.26 1.68 8.81 18.45 18.50
3. Buildings 374.08 2.08 21.96 4.68 393.44 13.47 92.88 300.56 292.33
4. Machinery, Plant and Kilns 3,239.14 12.82 206.08 81.00 3,377.04 191.84 1,385.51 1,991.53 1,993.11
5. Roads, Bridges and Fences 72.67 - 20.55 0.53 92.69 1.01 13.52 79.17 59.91
6. Water Works 27.00 - 0.44 1.11 26.33 2.86 18.52 7.81 10.29
7. Railway Sidings and
Tram -Lines 44.09 - 2.16 0.42 45.83 5.17 20.92 24.91 27.95
8. Rolling Stock 57.22 - 3.20 0.09 60.33 2.80 45.18 15.15 14.78
9. Furniture, Fixtures and
Equipments 62.62 0.46 7.10 8.26 61.92 1.00 23.93 37.99 33.83
10. Motor Cars, Trucks, etc. 31.75 0.18 2.90 10.78 24.05 2.86 14.24 9.81 11.37
11. Electric Installations 656.51 - 31.63 16.42 671.72 31.92 270.25 401.47 407.13
4,628.64 16.39 304.53 133.31 4,816.25 254.61 1,893.76 2,922.49
Previous Period 4,094.14 293.06 471.61 230.17 4,628.64 164.64 1,722.29 - 2,906.35
12. Capital Work - in - Progress
and Unallocated Capital 473.42 215.68
Expenditure

Notes :- (i) Cost of Shares Rs. 6,710 (Previous Period - Rs. 6,710) in various Co-operative Housing Societies, in respect of 20 residential flats (Previous
Period - 20) are included under Item No. 3 ' Buildings'.

( ii ) Freehold Land, Leasehold Land, Buildings, Machinery and other Fixed Assets includes (Gross Block) Rs. 0.35 Crore (Previous Period - Rs. 0.35
Crore), Rs. 0.09 Crore (Previous Period - Rs. 0.09 Crore), Rs. 28.14 Crore (Previous Period - Rs. 28.14 Crore), Rs. 173.97 Crore (Previous Period -
Rs. 173.97 Crore), Rs. 43.44 Crore (Previous Period - Rs. 43.44 Crore) respectively, in respect of which the transfer of title deeds to the name of
the Company is under process.

( iii ) Exchange rate differences (net) arising during the year on Foreign Currency Loans borrowed for the acquisition / construction of fixed assets
have been adjusted - Decrease of Rs. 0.49 Crore - (Previous Period - Increase of Rs. 4.45 Crore).

( iv ) Rolling Stock includes assets given on lease to Railways under "Own Your Wagon" Scheme of Rs. 28.48 Crore (Previous Period - Rs. 28.48 Crore).

(v) Leasehold Land, Machinery, Roads Bridges & Fences and Electrical Installations include Gross Block of Rs. 1.15 Crore (Previous Period - Rs. 1.15
Crore), Rs. 1.48 Crore (Previous Period - Rs. Nil), Rs. 24.14 Crore (Previous Period - Rs. 7.85 Crore), Rs. 11.20 Crore (Previous Period - Rs. 11.20
Crore ) and Net Block Rs. Nil (Previous Period - Rs. Nil), Rs. 1.46 Crore (Previous Period - Rs. Nil), Rs. 19.38 Crore (Previous Period - Rs. 4.75
Crore), Rs. 1.15 Crore (Previous Period - Rs. 2.06 Crore) respectively, in respect of expenditure incurred on capital assets, ownership of which
does not vest in the Company.

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SCHEDULE - F, INVESTMENTS - (at cost unless otherwise stated) As at

Item II- 2, Page 88 Face Value Numbers December 31, 2006 Previous Period
(Rs.) Rs. Crore Rs. Crore Rs. Crore
1. TRADE INVESTMENTS
(a) Equity Shares - Fully Paid (Quoted ):-
(i) TRF Limited ...................................................................................... 10 360,000 - 0.51
(sold during the year)
(ii) Alstom Projects India Limited ................................................... 10 21,107 - 0.82
(sold during the year)
(iii) Everest Industries Ltd. (erstwhile a subsidiary company) 10 1,176,648 1.76 4.04
(15,25,332 Shares sold during the year)
(b) Equity Shares - Fully Paid (Unquoted) :-
Almatis ACC Ltd. ............................................................................ 10 2,880,000 2.88 2.88
(c) Investment in Foreign Currency (Unquoted)
Iran and India Cement Engg. Consultant Co. PJS .......................... RLS 1,000 146,999 0.17 0.17
(Refer Note - 14 (b), Page 120)
4.81 8.42
2. SUBSIDIARY COMPANIES
(a) Equity Shares - Fully Paid (Unquoted):-
(i) ACC Machinery Co. Ltd. ............................................................... 100 400,000 4.99 4.99
(ii) ACC Nihon Castings Limited ...................................................... 10 39,932,384 33.25 33.25
(Refer Note 14(a) Page 120)
(iii) Bulk Cement Corporation (India) Limited ............................. 10 27,666,430 29.96 23.49
(Acquired 41,75,620 Shares during the year amounting
to Rs. 6.47 Crore)
(iv) The Cement Marketing Co. of India Ltd. ................................ 100 5,000 0.05 0.05
(v) Tarmac (India) Ltd. (formerly known as
Tarmac (India) Private Limited) ................................................. 10 15,883,526 - 12.43
(Acquired 1,84,046 Shares during the year amounting
to Rs. 0.15 Crore) (Amalgamated w.e.f. January 1, 2006)
(Refer Note 7(C), Page 116 & 117)
(b) Cumulative Redeemable Preference Shares -
Fully Paid - (Unquoted) :-
10 % ACC Nihon Castings Limited .................................................... 10 6,000,000 6.00 6.00
74.25 80.21
3. OTHER INVESTMENTS
(a) Government And Trustee Securities
*(i) Quoted .............................................................................................. - - -
(ii) Unquoted # ....................................................................................
5.13% H.P. Infrastructure Development Board Bonds
(37 Bonds amounting to Rs. 3.70 Crore
acquired during the year) 1,000,000 37 3.71 0.01
( # Includes securities of the face value of 3.71 0.01
Rs. 0.01 Crore - (Previous Period - Rs. 0 .01 Crore) -
Deposited with Govts and others as Security Deposits)
Total Carried Over .... 3.71 0.01

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SCHEDULE - F, INVESTMENTS - (contd.) As at

Face Value Numbers December 31, 2006 Previous Period
(Rs.) Rs. Crore Rs. Crore Rs. Crore
Total Brought Over .... 3.71 0.01
(b) Equity Shares - Fully Paid (Quoted):-
* The India Cements Ltd. .......................................................... 10 784 - -
* Dalmia Cement (Bharat) Ltd. ............................................... 2 1,865 - -
* Mysore Cement Ltd. ................................................................ 10 350 - -
* The Andhra Cement Company Ltd. .................................... 10 52 - -
* HDFC Bank Ltd. ......................................................................... 10 500 - -
* Shree Digvijay Cement Comany Ltd. ................................. 10 180 - -
* Panyam Cements & Mineral Industries Ltd. ................... 10 50 - -
* OCL India Limited ..................................................................... 2 240 - -
(c) Equity Shares - Fully Paid (Unquoted):-
* Kanoria Sugar & General Mfg. Company Ltd.
(Transfer from Quoted list) ................................................. 10 4 - -
* Bio- Tech Consortium India Ltd. .......................................... 10 50,000 - -
* Gujrat Composites Ltd. (Transfer from Quoted list) .... 10 60 - -
* Rohtas Industries Ltd. ............................................................. 10 220 - -
* The Jaipur Udyog Ltd. ............................................................ 10 120 - -
* The Sone Valley Portland Cement Company. Ltd. ......... 5 100 - -
* The Travancore Cement Company Ltd. ............................. 10 100 - -
* Ashoka Cement Ltd. ................................................................ 10 50 - -
* Digvijay Finlease Ltd. .............................................................. 10 90 - -
(d) Investment in Mutual Funds (Unquoted):-
DSP ML FTP Series 1 F Dividend .................................................... 10 200,000.000 20.02 -
ABN Amro Cash Fund - Institutional Plan - Daily Dividend.. 10 20,017,081.728 20.02 -
LIC Mutual Fund - Liquid - Dividend Plan .................................. 10 27,349,399.045 30.03 -
UTI Liquid Fund - Cash Plan - IP- Daily Dividend...................... 1,000 294,534.446 30.03 -
Principal Cash Management Fund .............................................. 10 30,023,674.128 30.02 -
Prudential ICICI Super Institutional Plan -Daily Dividend.... 10 30,016,632.523 30.02 -
Kotak Liquid - Institutional Premium - Daily Dividend ......... 10 24,546,822.000 30.02 -
ING Vysya Liquid Fund - Super IP - Daily Dividend ................. 10 30,018,525.052 30.03 -
Tata Liquid Fund- Ship- Daily Dividend ..................................... 1,000 269,359.538 30.02 -
Birla Cash Plus - Institutional Prem Plan -Daily Dividend ... 10 29,952,561.121 30.01 -
DWS Insta Cash Plus Fund ............................................................. 10 29,953,995.711 30.01 -
HDFC Cash Management Fund - Call Plan - Daily Dividend 10 28,787,741.893 30.02 -
HSBC Liquid Plus IP ........................................................................... 10 30,005,071.199 30.01 -
Reliance Liquid Fund-Call Plan - Daily Dividend ...................... 10 26,942,722.278 30.02 -
Standard Chartered Liquidity Manager ..................................... 10 30,024,101.785 30.03 -
Magnum Institutional Income- Savings Plan- Daily Dividend 10 19,947,384.936 20.01 -
Standard Chartered Liquidity Manager Plus ............................ 1,000 99,990.000 10.00 -
Reliance Liquidity Fund.................................................................... 10 15,005,353.948 - 15.01
LIC Mutual Fund - Liquid Fund ...................................................... 10 27,443,209.713 - 30.03
Prudential ICICI - Institutional Liquid Plan ............................... 10 30,019,578.789 - 30.02
Kotak Liquid - Institutional Premium......................................... 10 24,549,562.416 - 30.02
Tata Liquid - Super High Investment Fund ............................... 1,000 269,381.223 - 30.02
HSBC Cash Fund - Institutional Plus ........................................... 10 30,002,239.017 - 30.02
Birla Cash Plus - Institutional Premium ..................................... 10 29,961,913.132 - 30.02
UTI Liquid - Cash Plan Institutional ............................................. 1,000 295,327.175 - 30.02
SBI Magnum - Institutional Income ............................................ 10 19,937,714.266 - 20.00
464.03 245.17
543.09 333.80
Less : Provision (Refer Note - 14, page 120)............................... (39.55) (40.05)
TOTAL .. 503.54 293.75

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SCHEDULE - F, INVESTMENTS - (contd.)

Notes: (I) Aggregate Net Cost and Market Value of Company's Investments :-

As at December 31, 2006 As at December 31, 2005

Aggregate Market Aggregate Market
Net Cost Value Net Cost Value
Rs. Crore Rs. Crore Rs. Crore Rs. Crore
Quoted .......................................................................................... 1.76 13.59 5.37 67.28
Unquoted ..................................................................................... 541.33 328.43
Total Investments....................................................................... 543.09 333.80

(II) All investments are "Long Term" except item 3(d)

(III) * Denotes amount less than Rs. 50,000.

(IV) During the year the Company acquired and sold the following investments in Mutual Funds
MUTUAL FUNDS - LIQUID SCHEMES - GROWTH PLAN Face Value No. of Units Purchase Cost
Rs. Rs. Crore

ABN AMRO CASH FUND - INSTITUTIONAL PLAN - DAILY DIVIDEND 10 65,000,000 65.00

BIRLA CASH PLUS - INSTITUTIONAL PREM PLAN -DAILY DIVIDEND 10 146,000,000 146.00

CANLIQUID INSTITUTIONAL PLAN - DAILY DIVIDEND 10 65,000,000 65.00

CHOLA LIQUID FUND 10 93,000,000 93.00

DEUTSCHE INSTA CASH PLUS FUND 10 60,000,000 60.00

DSP ML LIQUIDITY FUND - DAILY DIVIDEND 10 125,000,000 125.00

DWS MONEY PLUS 10 40,000,000 40.00

HDFC CASH MANAGEMENT FUND - S PLAN - DAILY DIVIDEND 10 125,000,000 125.00

HSBC CASH FUND- INST. PLUS - DAILY DIVIDEND 10 102,000,000 102.00

ING VYSYA LIQUID FUND - IP - DAILY DIVIDEND 10 142,000,000 142.00

JM HIGH LIQUIDITY - SUPER IP - DAILY DIVIDEND 10 70,000,000 70.00

KOTAK LIQUID - INSTITUTIONAL PREMIUM - DAILY DIVIDEND 10 95,000,000 95.00

LIC MUTUAL FUND - LIQUID - DIVIDEND PLAN- FMP 10 132,000,000 132.00

MAGNUM INSTITUTIONAL INCOME- SAVINGS PLAN- DAILY DIVIDEND 10 173,000,000 173.00

PRINCIPAL CASH MANAGEMENT FUND 10 127,000,000 127.00

PRUDENTIAL ICICI SUPER INSTITUTIONAL PLAN -DAILY DIVIDEND 10 165,000,000 165.00

RELIANCE LIQUIDITY FUND - DAILY DIVIDEND 10 133,000,000 133.00

SAHARA LIQUID FUND 1,000 50,000 5.00

STANDARD CHARTERED MUTUAL FUND 1,000 1,060,000 106.00

SUNDARAM MONEY FUND SUPER INSTITUTIONAL DAILY DIVIDEND. 10 103,000,000 103.00

TATA LIQUID FUND- SHIP - DAILY DIVIDEND 1,000 1,000,000 100.00

UTI LIQUIID FUND - CASH PLAN - IP- DAILY DIVIDEND 1,000 1,500,000 150.00

2,322.00

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SCHEDULE - G, INVENTORIES - As Certified by the Management As at

Item II - 3(a), Page 88 December 31, 2006 Previous Period
Rs. Crore Rs. Crore Rs. Crore

1. LIMESTONE, GYPSUM AND OTHER RAW MATERIALS

(a) On Hand .......................................................................................................................................................... 67.40 62.39

(b) In Transit ........................................................................................................................................................ 7.59 1.79

74.99 64.18

2. COAL, BAGS, STORES, SPARES, ETC.

(a) Coal ................................................................................................................................................................... 124.91 111.01

(b) Bags .................................................................................................................................................................. 8.95 6.98

(c) Stores and Spares ........................................................................................................................................ 172.05 150.73

(d) In Transit .......................................................................................................................................................... 29.53 26.67

335.44 295.39

3. LOOSE PLANT AND TOOLS ................................................................................................................................ - 2.49

(Refer Note 2 (a), Page 109)

4. STOCK- IN- TRADE

Finished Goods .................................................................................................................................................... 63.98 71.42

5. WORK -IN -PROGRESS

Manufactured Products ................................................................................................................................... 149.72 167.47

TOTAL .. 624.13 600.95

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SCHEDULE - H, SUNDRY DEBTORS As at

Item II - 3(b), Page 88 December 31, 2006 Previous Period
Rs. Crore Rs. Crore Rs. Crore

1. SUNDRY DEBTORS ( SECURED AND CONSIDERED GOOD)

(a) Over Six Months ............................................................................................................................................. 0.15 0.59

(b) Others ................................................................................................................................................................ 23.69 17.18

23.84 17.77
2. SUNDRY DEBTORS (UNSECURED )

(a) Over Six Months -

(i) Sale of Products and Services -

Considered Good ................................................................................................................................ 4.66 14.25
Considered Doubtful ........................................................................................................................ 0.34 16.31
5.00 30.56

(ii) Railway, Insurance and Other Claims {includes Rs. 46.35 Crore due
from Central / State Governments (Previous Period - Rs. 51.30 Crore)}
Considered Good ................................................................................................................................ 70.96 55.06
Considered Doubtful ........................................................................................................................ - 12.40
70.96 67.46
75.96 98.02
Less: Provision made for Bad and Doubtful Debts ..................................................................................... 0.34 28.71
75.62 69.31

(b) Others - (Considered Good)

(i) Sale of Products and Services ........................................................................................................ 101.39 75.34

(ii) Railway, Insurance and Other Claims .......................................................................................... 13.11 36.75

114.50 112.09
190.12 181.40
TOTAL .. 213.96 199.17

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SCHEDULE - I, CASH AND BANK BALANCES As at

Item II - 3(c), Page 88 December 31, 2006 Previous Period
Rs. Crore Rs. Crore

1. CASH ON HAND ................................................................................................................................................... 2.48 0.70

{includes Cheques on Hand - Rs. 1.39 Crore (Previous Period - Rs. 0.21 Crore)}

2. CURRENT ACCOUNTS WITH BANKS

Scheduled Banks .................................................................................................................................................. 74.55 44.09

3. POST OFFICE SAVINGS BANK ACCOUNTS ................................................................................................... 0.01 0.01

{Maximum balance during the year Rs. 0.01 Crore
(Previous Period - Rs. 0.01 Crore)}
(The Pass Books are held as security by Excise and Railway authorities and
other parties)

4. REMITTANCES IN TRANSIT ................................................................................................................................ 75.94 55.80

5. TERM DEPOSIT WITH SCHEDULED BANK .................................................................................................... 1.34 1.29

6. FIXED DEPOSITS
Scheduled Banks {includes Rs. Nil (Previous Period - Rs. 0.90 Crore )
against margin money} ..................................................................................................................................... 465.85 0.90

TOTAL .. 620.17 102.79

SCHEDULE - J, OTHER CURRENT ASSETS As at

Item II - 3(d), Page 88 December 31, 2006 Previous Period
Rs. Crore Rs. Crore

1. ACCRUED INTEREST ............................................................................................................................................ 7.50 1.50

2. ASSETS HELD FOR DISPOSAL ............................................................................................................................ 8.63 29.99

(Refer Note - 16, Page 121)

TOTAL .. 16.13 31.49

103
 SCHEDULES FORMING PART OF THE BALANCE SHEET

SCHEDULE - K, LOANS AND ADVANCES - (Unsecured, Considered Good, unless otherwise stated) As at
Item II - 3(e), Page 88 December 31, 2006 Previous Period
Rs. Crore Rs. Crore Rs. Crore

1. ADVANCES AGAINST CAPITAL EXPENDITURE ............................................................................................... 85.00 75.27

2. BALANCES WITH EXCISE, CUSTOMS AND PORT TRUST AUTHORITIES

ON CURRENT ACCOUNTS ................................................................................................................................... 63.60 40.43

3. SUNDRY ADVANCES AND DEPOSITS, ETC.

(a) Advances to Suppliers
Considered Good ........................................................................................................................................... 102.85 66.83
Considered Doubtful .................................................................................................................................... - 0.72
102.85 67.55
Less - Provision made for Doubtful Advances ............................................................................................. - 0.72
102.85 66.83
(b) Sales Tax, Freight and Excise Duty ........................................................................................................... 2.24 2.00
(c) Advances and Deposits with Railways, Government Bodies and Others
Considered Good ........................................................................................................................................... 165.05 174.77
Considered Doubtful ..................................................................................................................................... 15.25 16.23
180.30 191.00
Less - Provision made for Doubtful Advances .............................................................................................. 15.25 16.23
165.05 174.77
(d) Prepaid Expenses ........................................................................................................................................... 6.02 8.61
(e) Loans And Advances To Employees
{Due by officers Rs. 0.61 Crore (Previous Period - Rs. 0.78 Crore). Maximum
Balance during the year Rs. 0.78 Crore (Previous Period - Rs. 0.86 Crore)} ................................. 20.49 20.70
296.65 272.91

4. ADVANCE PAYMENTS AGAINST TAXES............................................................................................................. 59.22 37.58

5. LOANS AND ADVANCES TO SUBSIDIARY COMPANIES

(a) Call Deposits (Refer Note - 31(a), Page 124).......................................................................................... 23.31 25.31

Less - Provision made for Doubtful Advances (Refer Note - 14(a), Page 120).................................... 10.00 -
13.31 25.31
(b) Other Dues ...................................................................................................................................................... 14.07 35.26
27.38 60.57

TOTAL .. 531.85 486.76

Note - Due by Wholetime Directors Rs. 0.59 Crore (Previous Period - Rs. 0.63 Crore).
Maximum balance during the year Rs. 0.63 Crore (Previous Period - Rs. 0.65 Crore)

104
SCHEDULES FORMING PART OF THE BALANCE SHEET

SCHEDULE - L, SUNDRY LIABILITIES As at

Item II - 4(a), Page 88 December 31, 2006 Previous Period
Rs. Crore Rs. Crore Rs. Crore

1. SUNDRY CREDITORS
(a) For Capital Expenditure ............................................................................................................................. 47.15 45.78
(b) For Goods Supplied ..................................................................................................................................... 120.05 103.78
(Refer Note - 25 , Page 123)
(c) For Advance Payments ............................................................................................................................... 121.34 88.70
(d) For Other Liabilities ..................................................................................................................................... 565.94 532.89
{includes Rs. 12.96 Crore due to Subsidiary Companies (Previous Period Rs. 0.85 Crore)}
854.48 771.15
2. EMPLOYEES ............................................................................................................................................................ 66.24 60.64
(Refer Note - 13, Page 120)
3. SUNDRY DEPOSITS .............................................................................................................................................. 62.76 36.23
4. SECURITY DEPOSITS FROM CONTRACTORS ................................................................................................ 17.23 14.92
5. INVESTOR EDUCATION AND PROTECTION FUND
(Appropriate amount shall be transferred to "Investor Education and Protection
Fund" if and when due).
(a) Unpaid Dividend .......................................................................................................................................... 10.61 7.99
(b) Unpaid Application Money ...................................................................................................................... 0.04 0.04
(c) Unpaid Matured Deposits ........................................................................................................................ 0.43 0.56
(d) Unpaid Matured Debentures .................................................................................................................. - 0.11
11.08 8.70
6. INTEREST ON SECURED LOANS ACCRUED BUT NOT DUE ..................................................................... 12.92 21.43
7. INTEREST ON UNSECURED LOANS ACCRUED BUT NOT DUE ............................................................... 0.02 0.21
TOTAL .. 1,024.73 913.28

SCHEDULE - M, PROVISIONS As at
Item II - 4(b), Page 88 December 31, 2006 Previous Period
Rs. Crore Rs. Crore
1. GRATUITY / PENSIONS ....................................................................................................................................... 69.61 63.44
2. PROVISION FOR LEAVE ENCASHMENT ......................................................................................................... 47.86 22.07
3. OTHER EMPLOYEE BENEFITS ............................................................................................................................ 18.82 18.08
4. PROPOSED DIVIDEND ....................................................................................................................................... 280.92 147.61
5. TAX ON DISTRIBUTED PROFIT ......................................................................................................................... 39.40 20.70
6. PROVISION FOR INCOME TAX .......................................................................................................................... 37.98 35.58
7. PROVISION FOR FRINGE BENEFIT TAX .......................................................................................................... 1.69 3.72
8. PROVISION FOR SITE RESTORATION EXPENSES ......................................................................................... 6.00 5.57
(Refer Note 15, Page 121)
TOTAL .. 502.28 316.77

SCHEDULE - N, MISCELLANEOUS EXPENDITURE As at

(To the extent not written off or adjusted) December 31, 2006 Previous Period
Item II - 6, Page 88
Rs. Crore Rs. Crore

1. COMPENSATION UNDER VOLUNTARY RETIREMENT SCHEME ............................................................. 0.78 5.38

2. PREPAYMENT PREMIUM TO FINANCIAL INSTITUTIONS ......................................................................... 0.16 0.85
3. PRELIMINARY EXPENSES ................................................................................................................................... - 0.18
TOTAL .. 0.94 6.41

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 SCHEDULES FORMING PART OF THE BALANCE SHEET

SCHEDULE - O, NOTES TO ACCOUNTS

1. (I) BASIS OF PREPARATION OF FINANCIAL STATEMENTS

(i) The financial statements have been prepared in compliance with all material aspects of the 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, except where impairment is made and revaluation is
carried out.

(iii) Accounting policies have been consistently applied by the Company and except for the changes in accounting policies referred below, are
consistent with those used in the previous period.

(II) SIGNIFICANT ACCOUNTING POLICIES

(A) 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.

(ii) Income from works contract, consultancy and other services rendered is accounted for on “Percentage of Completion” basis.

(iii) Sales include the amount of Sales tax / VAT refunds received / due in accordance with incentive schemes.

(B) Excise Duty

Excise Duties (including education cess) recovered are included in the Sale of Products (Gross). Excise Duties (including education cess) in
respect of finished goods are shown separately as an item of Manufacturing and Other Expenses and included in the valuation of finished
goods.

(C) Accounting of Claims and Subsidies

(i) Claims receivable are accounted at the time of lodgement depending on the certainty of receipt and claims payable are accounted at the
time of acceptance.

(ii) Claims raised by Government Authorities regarding taxes and duties, which are disputed by the Company, are accounted based on the
merits of each claim.

(iii) Subsidy receivable against an expense is deducted from such expense and subsidy/grant receivable against a specific fixed asset is
deducted from cost of the relevant fixed asset.

(iv) Investment subsidy not specifically related to a fixed asset is credited to Capital Reserve and retained till the requisite conditions are
fulfilled.

(D) Debenture/Share/Foreign Currency Convertible Bonds Issue Expenses and Premium on Redemption of Debentures /Foreign Currency
Convertible Bonds

Debenture/ Share / Foreign Currency Convertible Bonds issue expenses and premium payable on Debentures / Foreign Currency Convertible
Bonds are adjusted in the same year against the Securities Premium Account as permitted by Section 78(2) of the Companies Act, 1956.

(E) Fixed Assets

(i) Fixed assets are stated at cost of acquisition or construction including attributable interest and financial costs till such assets are ready
for its intended use, less accumulated depreciation, impairment losses and specific grants received, if any.

(ii) Depreciation is provided -

a) in respect of assets acquired upto July 31, 1968 on the written down value method at the rates prescribed in Schedule XIV of the
Companies Act, 1956;

b) in respect of assets acquired during the period August 1, 1968 to July 31, 1986 on the straight line method at the rates in force at the
time of acquisition of assets in accordance with Circular No. : 1/86 dated May 21, 1986 issued by the Department of Company
Affairs;

c) in respect of assets acquired on or after August 1, 1986 on the straight line method at the rates prescribed in Schedule XIV of the
Companies Act, 1956, on a pro-rata basis.

106
 (iii) Cost of leasehold land is amortised over the period of the lease.

(iv) In respect of quarry freehold land, amortisation reserve is created by amortising the cost over the number of years of the mining rights of
the quarries.

(v) Capital Assets whose ownership does not vest in the Company have been depreciated over the period of five years.

(vi) Machinery spares which can be used only in connection with a particular item of Fixed Assets and the use of which is irregular, are
capitalized at cost net of Cenvat and are depreciated over the remaining useful life of the related asset. The written down value of such
spares is charged to the Profit and Loss Account, on issue for consumption.

(Vii) Intangible Assets -

a) Manufacturing and technology rights purchased are amortised over the period of rights.

b) Software cost is amortised over a period of five years.

(F) Impairment of Assets

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal / external
factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its estimated recoverable amount. The
recoverable amount is greater of the asset's net selling price and value in use. In assessing the value in use, the estimated future cash flows are
discounted to the present value using the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying
amount of the assets over its remaining useful life. Previously recognized impairment loss is further provided or reversed depending on
changes in circumstances.

(G) Expenditure during construction period

In case of new projects and substantial expansion of existing factories, expenditure incurred, including trial production expenses net of
revenue earned, and attributable interest and financing costs, prior to commencement of commercial production are capitalised.

(H) Investments

Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in
the value of investments. Current investments are stated at cost or fair value whichever is lower. Cost is determined on a weighted average
basis.

(I) Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating
leases. Operating lease payments are recognised as an expense in the Profit and Loss Account on a straight-line basis over the lease term.

(J) Research and Development

Revenue expenditure on Research and Development is charged out in the year in which it is incurred. Expenditure which results in creation of
assets is included in Fixed Assets and depreciation is provided on such assets as applicable.

(K) Inventories

(i) Raw materials, Coal, Packing materials, Stores and spares, Stock-in-Trade and Work-in-Progress are valued at cost or net realisable value
whichever is lower.

(ii) Cost is determined on a weighted average basis.

(L) Foreign Currency Transactions

(i) Monetary items denominated in foreign currency are translated at the exchange rate prevailing on the last day of the accounting year. In
respect of items covered by forward exchange contracts, the premium or discount arising at the inception of such a forward exchange
contract is amortised as expense or income over the life of the contract. Any profit or loss arising on cancellation or renewal of such a
forward exchange contract is recognised as income or expense for the year. Foreign currency transactions are accounted at the rate
prevailing on the date of the transaction. Overseas contracts are considered as integral operations in terms of Accounting Standard 11
(Revised 2003) on “The Effects of Changes in Foreign Exchange Rates” and accordingly the transactions are accounted at average rate.

(ii) Non monetary items other than fixed assets, which are carried in terms of historical cost denominated in a foreign currency are reported
using the exchange rate at the date of the transaction.

107
 (iii) Gain or loss arising out of translation/conversion is taken credit for or charged to the Profit and Loss Account except exchange
differences arising due to repayment or restatement of liabilities incurred for the purpose of acquiring fixed assets in respect of
transactions in foreign currencies entered into prior to April 1, 2004 and in respect of any fixed asset that has been acquired from a
country outside India, in which case the exchange differences are adjusted in the carrying amount of the respective fixed assets.

(M) Employee Benefits

(i) Defined Contribution Plan

Company's contributions paid/payable during the year to Provident Fund, Officer's Superannuation Fund, ESIC and Labour Welfare Fund
are recognised in the Profit and Loss Account.

(ii) Defined Benefit Plan

Company's liabilities towards gratuity, additional gratuity, leave encashment, post retirement medical benefit schemes, medical
benefits under voluntary retirement scheme, long service award, monthly index premium to Directors and adhoc ex-gratia to Directors
are determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of
benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognised on a straight line
basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the
statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flows
using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government bonds where the
currency and terms of the Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

(iii) Short term compensated absences are provided for on the basis of estimates.

(N) Miscellaneous Expenditure

(i) Compensation payable under the Voluntary Retirement Scheme up to March 31, 2003 has been deferred, to be written off over a period
of five years.

(ii) Preliminary expenses are deferred over a period of five years.

(O) Employees Stock Option Scheme

The intrinsic value of option granted under Employees Stock Option Schemes has been deferred, to be written off over the vesting period.

(P) Taxation

Income tax expense comprises of current tax, deferred tax charge or credit and fringe benefit tax. Provision for current tax is made with
reference to taxable income computed for the accounting year, for which the financial statements are prepared by applying the tax rates as
applicable. Deferred tax charge reflects the impact of current year timing differences between taxable income and accounting income. The
deferred tax charge or credit is recognised using prevailing enacted or substantively enacted tax rates. Deferred tax assets are recognized only
to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets
can be realized. If the Company has unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognized only if there is
virtual certainty supported by convincing evidence that such deferred tax assets can be realized against future taxable profits. Deferred tax
assets / liabilities are reviewed as at each Balance Sheet date based on developments during the year and available case laws, to reassess
realisation / liabilities.

(Q) Contingencies / Provisions

Provision is recognised when the Company has a present obligation as a result of past event; it is probable that an outflow of resources
embodying economic benefit will be required to settle the obligation; in respect of which a reliable estimate can be made. Provisions are not
discounted to its present value and are determined based on best estimate of the expenditure required to settle the obligation at the Balance
Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate. A contingent liability is disclosed,
unless the possibility of an outflow of resources embodying the economic benefit is remote.

(R) Site Restoration

Costs for re-establishing the underground and surface area of a quarry / pit (e.g. refilling the quarry and re-establishing the overburden) after
exploitation and costs for the removal of machinery / installations after closure are called site restoration costs. The initial recognition of the
provision for site restoration costs comprises of the estimated costs for restoration caused by operations necessary before the raw materials
can be exploited. Actual expenses for restoration are charged directly against the provision. The present obligation is revised annually based
on technical estimates by internal or external specialists.

108
2. CHANGES IN ACCOUNTING POLICY

a) Hitherto, the Company was inventorising cost of loose tools. During the year, considering the materiality and the expected useful life, these are
charged off in the year of purchase. As a result of this change an amount of Rs. 3.02 Crore has been charged to the Profit & Loss Account.

b) The afforestation expenditure incurred for obtaining mining permits are considered as cost attributable to mining land and capitalised as against
the past practice of charging off such expenses in the year it was incurred. As a result of change in policy, profit for the year and fixed assets are
higher by Rs. 9.86 Crore.

3. SEGMENT REPORTING

The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products,
the differing risks and returns, the organisation structure and internal reporting system.

The Company's operations predominantly relate to manufacture of cement. Other business segments reported are ready mixed concrete and others.
Refractory business segment, which was operated and reported as a separate segment, was divested with effect from September 30, 2005. The
Company caters mainly to the needs of the domestic market. The export turnover is not significant in the context of total turnover. As such there are no
reportable Geographical Segments.

Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segments as
also amounts allocated on a reasonable basis.

The net expenses, which are not directly attributable to the Business Segment, are shown as unallocated corporate cost.

Assets and Liabilities that cannot be allocated between the segments are shown as a part of unallocated corporate assets and liabilities respectively.

Inter Segment Transfer Pricing Policy - The Cement supplied to ready mixed concrete activity is based on market price. All other inter segment transfers
are at cost.

109
SEGMENT INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2006
INFORMATION ABOUT PRIMARY BUSINESS SEGMENTS (Rs. Crore)
Continuing Operations Discontinued
Operation
Cement Ready Mixed Others Unallocated Total Refractory Total
Concrete Operations

REVENUE (Net)
External sales
Domestic 5,393.73 299.84 36.11 0.32 5,730.00 - 5,730.00
(2,818.43) (171.27) (54.70) (0.21) (3,044.61) (112.80) (3,157.41)
Export 11.12 - 62.30 0.06 73.48 - 73.48
(3.62) (-) (42.25) (-) (45.87) (17.42) (63.29)
Total Sales 5,404.85 299.84 98.41 0.38 5,803.48 - 5,803.48
(2,822.05) (171.27) (96.95) (0.21) (3,090.48) (130.22) (3,220.70)
Add: Inter Segmental Sales 90.08 0.60 21.19 - 111.87 - 111.87
(41.83) (0.15) (13.67) (-) (55.65) (5.90) (61.55)
Total Segment Revenue 5,494.93 300.44 119.60 0.38 5,915.35 - 5,915.35
(2,863.88) (171.42) (110.62) (0.21) (3,146.13) (136.12) (3,282.25)
RESULT (Profit before interest and
corporate expenses)
Segment Result 1,564.96 2.66 29.21 -19.78 1,577.05 - 1,577.05
(441.28) (10.43) (32.14) (-16.56) (467.29) (24.58) (491.87)
Unallocated Corporate Expense (Net of Income) 102.60 - 102.60
(39.94) (-) (39.94)
Operating Profit 1,474.45 - 1,474.45
(427.35) (24.58) (451.93)
Interest Expense 75.19 - 75.19
(64.36) (1.83) (66.19)
Interest Income (includes dividends) 49.16 - 49.16
(19.72) (-) (19.72)
Exceptional Items -
Profit on sale of investments in erstwhile subsidiary 8.27 - 8.27
(Refer Note 8, page 117) (110.26) (-) (110.26)
Profit on sale of Undertaking 16.31 - 16.31
(Refer Note 9, page 117& Note 16 (e), page 121) (174.05) (-) (174.05)
Provision for Employee Benefits- prior period - - -
(Refer Note 10(e), page 119) (-13.15) (-) (-13.15)
Write back of provision for contingencies 0.50 - 0.50
(Refer Note 14 (c), page 120) (7.50) (-) (7.50)
Profit on Sale of Land 146.00 - 146.00
(-) (-) (-)
Income Taxes -
Current Tax 368.12 - 368.12
(51.95) (11.99) (63.94)
Deferred Tax -5.17 - -5.17
(74.33) (-4.33) (70.00)
Prior period Tax expense 18.86 - 18.86
(-) (-) (-)
Fringe Benefit Tax 5.85 - 5.85
(6.00) (-) (6.00)
NET PROFIT 1,231.84 - 1,231.84
(529.09) (15.09) (544.18)
Figures in brackets pertain to Previous Period

110
 (Rs. Crore)
Continuing Operations Discontinued
Operation
Cement Ready Mixed Others Unallocated Total Refractory Total
Concrete Operations

OTHER INFORMATION
Segmental Assets 4,553.84 112.70 43.26 47.93 4,757.73 - 4,757.73
(4,246.23) (77.11) (65.83) (36.10) (4,425.27) (-) (4,425.27)
Unallocated Corporate Assets 585.20
(80.34)
Total Assets 5342.93
(4,505.61)
Segmental Liabilities 1,105.94 33.11 34.59 21.93 1,195.57 - 1,195.57
(963.24) (25.21) (38.23) (19.81) (1,046.49) (-) (1,046.49)
Unallocated Corporate Liabilities 436.59
(249.01)
Total Liabilities 1632.16
(1,295.50)
Capital Expenditure 523.46 7.44 4.92 26.41 562.23 - 562.23
(296.95) (4.54) (1.16) (13.77) (316.42) (-) (316.42)
Depreciation 245.23 5.78 1.26 1.98 254.25 - 254.25
(155.74) (5.50) (1.42) (0.26) (162.92) (1.45) (164.37)
Non -Cash expenses other than depreciation 27.31 0.51 1.66 11.41 40.89 - 40.89
(9.39) (0.40) (1.19) (0.19) (11.17) (0.93) (12.10)
Total Assets exclude:
Investments 503.54
(293.75)
Advance Income Tax 59.22
(37.58)
Miscellaneous Expenditure (to the extent not 0.94
written - off or adjusted) (6.41)
Total Liabilities exclude:
Secured Loans 720.96
(950.12)
Unsecured Loans 50.20
(121.30)
Deferred Tax 320.72
(300.38)
Income Tax Provision 37.98
(35.58)
Provision for Fringe Benefit Tax 1.69
(3.72)

Pursuant to the scheme of amalgamation of erstwhile Tarmac (India) Ltd., the assets and liabilities as at January 1, 2006 have been incorporated in the
financial statements of the Company .
During previous period pursuant to the scheme of amalgamation of erstwhile Bargarh Cement Limited and Damodhar Cement & Slag Limited, their Assets
and Liabilities as at April 1, 2005 have been incorporated in the financial statements of the Company.
During the previous period Company has divested its Refractory Business and profit on sale of undertaking amounting Rs. 174.05 Crore had been shown
under exceptional items.
Previous period Cement segment results include Rs. 7.26 Crore being write back of property tax at Kymore Cement Works and Rs. 6.98 Crore for
Sindri Haullage & Taullage charges.
Figures in brackets pertain to Previous Period

111
4. RELATED PARTIES DISCLOSURES :
(A) Particulars of Subsidiary/ Associate Companies :
Name of the Related Party Nature of Relationship
(i) ACC Machinery Company Limited Subsidiary Company
(ii) ACC Nihon Castings Limited Subsidiary Company
(iii) Bulk Cement Corporation (India) Limited Subsidiary Company
(iv) The Cement Marketing Company of India Limited Subsidiary Company
(v) Tarmac (India) Limited Subsidiary Company - Amalgamated with Parent Company
with effect from January 01, 2006
(vi) Everest Industries Limited Subsidiary Company upto October 14, 2005
(vii) Almatis ACC Limited Associate Company
(viii) Ambuja Cement India Private Limited Promoter Group Company with effect from May 6, 2005
(formerly known as Ambuja Cement India Limited)
(ix) Holdcem Cements Private Limited Promoter Group Company with effect from May 6, 2005
(x) Holderind Investments Limited Promoter Group Company with effect from May 6, 2005
(xi) Gujarat Ambuja Cement Limited (GACL) Promoter Group Company with effect from April 30, 2006
(xii) Ambuja Cement Eastern Limited Promoter Group Company - Amalgamated with GACL
with effect from January 1, 2006
(xiii) Holcim India (P) Limited Promoter Group Company with effect from May 6, 2005
(xiv) Holcim Services (Asia) Limited Promoter Group Company with effect from May 6, 2005
(xv) Holcim(Bangladesh) Limited Promoter Group Company with effect from May 6, 2005
(xvi) Holcim Group Support Limited Promoter Group Company with effect from May 6, 2005
(xvii) Holcim Singapore Limited Promoter Group Company with effect from May 6, 2005

(B) Key Management Personnel:

Name of the Related Party Nature of Relationship
(i) Mr. M.L.Narula Managing Director
(ii) Mr.A.K.Jain Wholetime Director
(iii) Mr. D.S.Ghai Business Head - North
(iv) Mr. Arvind Pathak Business Head-South West
(v) Mr. Ramit Budharaja Business Head-East
(vi) Mr. Paramjit Pabby Head-HR & Mgmt.Dev.
(vii) Mr.J.Dutta Gupta Head-Commercial services
(viii) Mr.Beat Malacarne Chief Financial Officer(upto April 30,2006)
(ix) Mr.Onne Van Der Weijde Chief Financial Officer(from May 01,2006)
(x) Mr.Felix Hoechner Chief Information Officer
(xi) Mr. N. H. Italia President Finance (Upto June 30, 2006)
(xii) Mr.A.Anjeneyan Company Secretary

(C) Transactions with Subsidiary Companies For the year ended Previous Period
December 31, 2006 (9 Months)
Rs. Crore Rs. Crore
(i) Purchase of Finished/ Unfinished goods 18.84 6.02
ACC Nihon Castings Limited 5.14 5.29
ACC Machinery Company Limited 13.70 0.69
Others - 0.04
(ii) Sale of Finished / Unfinished goods 5.32 15.25
ACC Nihon Castings Limited 5.28 2.38
Everest Industries Limited - 12.55
Others 0.04 0.32

112
(C) Transactions with Subsidiary Companies For the year ended Previous Period
December 31, 2006 (9 Months)
Rs. Crore Rs. Crore
(iii) Reimbursement of Expenses/Cost of Material/Stores Paid 0.13 5.58
ACC Machinery Company Limited 0.08 4.53
Bulk Cement Corporation (India) Limited - 0.87
Others 0.05 0.18
(iv) Reimbursement of Expenses/Cost of Material/Stores Received 0.61 -
Bulk Cement Corporation (India) Limited 0.57 -
Others 0.04 -
(v) Rendering of Services 0.75 0.23
ACC Machinery Company Limited 0.15 -
Bulk Cement Corporation (India) Limited 0.60 0.16
Everest Industries Limited - 0.07
(vi) Receiving of Services 15.56 11.34
ACC Machinery Company Limited 0.08 -
Bulk Cement Corporation (India) Limited 15.48 11.08
Others - 0.26
(vii) Interest on Inter Corporate Deposit / Other Advances received during the year 1.66 1.28
ACC Nihon Castings Limited 1.63 1.21
Others 0.03 0.07
(viii) Dividends Received 5.00 12.13
ACC Machinery Company Limited 5.00 2.00
Everest Industries Limited - 10.13
(ix) Purchase of Fixed Assets 26.44 8.42
ACC Machinery Company Limited 26.44 8.42
(x) Inter Corporate Deposits / Other Advances given during the year - 3.63
ACC Nihon Castings Limited - 1.13
Bulk Cement Corporation (India) Limited - 2.50
(xi) Inter Corporate Deposits Liquidated during the year 2.00 0.50
Bulk Cement Corporation (India) Limited 2.00 0.50
(xii) Inter Corporate Deposits as at the end of the year 23.31 25.31
ACC Nihon Castings Limited 23.31 23.31
Others - 2.00
(xiii) Bank Guarantees/Collateral Securities/Indemnities outstanding as at the year end 37.00 40.25
(xiv) Provision against investment - ACC Nihon Castings Ltd. 39.00 39.00
(xv) Provision against advances - ACC Nihon Castings Ltd. 10.00 -
(xvi) Outstanding balance included in Current Assets 14.07 35.26
(xvii) Outstanding balance included in Current Liabilities 12.96 1.15

(D) Transactions with Associate Company

For the year ended Previous Period
December 31, 2006 (9 Months)
Rs. Crore Rs. Crore
(i) Purchase of Finished / Unfinished goods / Stores and Spares - 1.42
(ii) Rendering of Services - 0.02
(iii) Dividend Received 0.92 0.72

(E) Details of Transactions relating to Promoters Group Companies Unit of Measurement Value of Transaction
(i) Dividend paid
Ambuja Cement India Private Limited Rs. Crore 49.57
(–)

113
 (E) Details of Transactions relating to Promoters Group Companies (Contd...) Unit of Measurement Value of Transaction

(ii) Sale of Clinker

Gujarat Ambuja Cements Limited Rs. Crore 19.42
(–)
Ambuja Cement Eastern Limited Rs. Crore 20.01
(0.97)
Holcim (Bangladesh) Limited Rs. Crore 0.37
(0.50)
(iii) Sale of Stores & Spares
Gujarat Ambuja Cements Limited Rs. Crore 4.58
(–)
(iv) Services Rendered
Ambuja Cement Eastern Limited Rs. Crore 0.27
(–)
(v) Purchase of Gypsum
Holcim ( Singapore) Limited Rs. Crore 17.50
(–)
(vi) Reimbursement of Expenses
Gujarat Ambuja Cements Limited Rs. Crore 0.14
(–)
Holcim India Limited Rs. Crore 0.70
(–)
Ambuja Cement India Private Limited Rs. Crore 0.64
(–)
(vii) Training/Technical Know how/Market Surve
Holcim Group Support Limited Rs. Crore 15.69
(–)
Holcim Services (Asia) Limited Rs. Crore 0.63
(–)
(F) Details of Transactions relating to persons referred to in item (B) above Unit of Measurement Value of Transaction
(i) Remuneration Rs. Crore 5.08
(2.99)
(ii) Loans given during the year Rs. Crore -
(0.13)
(iii) Loan amounts due as at the end of the year Rs. Crore 0.67
(0.70)
Figures in brackets pertain to Previous Period

5. EARNINGS PER SHARE - [EPS]

Year ended Nine Months ended
December 31, 2006 December 31, 2005
Rs. Crore Rs. Crore
I. (A) Profit Computation for Basic Earnings Per Share of Rs.10 each
Net Profit as per Profit and Loss Account available for Equity Shareholders ....................... 1,231.84 544.18
Adjustment for the purpose of Diluted EPS :-
Interest on Foreign Currency Convertible Bonds ........................................................................... 0.15 0.96
Less : Tax on above ................................................................................................................................... 0.04 0.20
0.11 0.76
(B) Profit for Diluted Earnings Per Share of Rs.10 each .................................................................... 1,231.95 544.94
II. Weighted average number of equity shares for Earnings Per Share computation
A) For Basic Earnings Per Share ................................................................................................................. 18,65,92,843 18,12,43,140
B) For Diluted Earnings Per Share:
No. of shares for Basic EPS as per II A ................................................................................................ 18,65,92,843 18,12,43,140
Add: Weighted Average outstanding Option / Shares deemed to be issued
for no consideration ................................................................................................................................. 14,40,810 59,97,660
No. of Shares for Diluted Earnings Per Share ............................................................................................... 18,80,33,653 18,72,40,800
III. Earnings Per Share (Weighted Average)
Basic .................................................................................................................................................Rupees 66.02 30.02*
Diluted ............................................................................................................................................Rupees 65.52 29.10*
* Not annualised
114
6. MANAGERIAL REMUNERATION (excluding contribution to gratuity fund, provision for leave encashment on retirement and other defined benefits since
the same is provided on an actuarial basis for the Company as a whole) paid / payable to Directors
Year ended Nine Months ended
December 31, 2006 December 31, 2005
Rs. Crore Rs. Crore
Managing /Wholetime Directors
Salaries ................................................................................................................................................................... 0.45 0.30
Perquisites ............................................................................................................................................................. 0.34 0.14
Contributions to Provident and Superannuation Funds ....................................................................... 0.12 0.08
Incentive/Commission ...................................................................................................................................... * 1.89 0.75
2.80 1.27
* Including commission to Non Executive Directors ............................................................................... 0.95 NA
Directors other than the Managing/Wholetime Directors - Sitting Fees ....................................... 0.19 0.15
# 2.99 # 1.42
# includes subject to Shareholders' approval ............................................................................................ 0.07 0.05

Computation of Net Profit under Section 349 of the Companies Act, 1956 Year ended Nine Months ended
December 31, 2006 December 31, 2005
Rs. Crore Rs. Crore
Profit/(Loss) before tax and exceptional items as per Profit and Loss Account ............................ 1,449.82 405.46
Add -
Provision for depreciation as per Profit and Loss Account .................................................................... 254.25 164.37
Wealth Tax ............................................................................................................................................................. 0.30 0.23
Tax on Yanbu operations .................................................................................................................................. 1.46 1.15
Assets written off as per Profit and Loss Account ................................................................................... 17.62 5.13
Remuneration to Directors .............................................................................................................................. 2.99 1.42
Provision for Doubtful Debts .......................................................................................................................... 0.04 2.01
Provision for Doubtful Advances ................................................................................................................... 10.01 -
Compensation under Voluntary Retirement Scheme ............................................................................. 15.42 17.21
1,751.91 596.98
Less-
Depreciation under Section 350 of the Companies Act, 1956 ............................................................ 254.25 164.37
Provision for employee benefits prior period ............................................................................................ - 13.15
Adjustment for employee retirement benefit provision in General Reserve ................................. - 37.86
Profit on Sale of Assets (Net) .......................................................................................................................... 1.36 7.87
Profit on Sale of Investments / Capital Items ........................................................................................... 13.99 0.50
Provision for doubtful debts written off / written back from earlier year's provision ................ 28.37 5.16
Assets written off under Section 350 of the Companies Act, 1956 .................................................. 17.62 5.13
Pro-rata Premium on Redemption of Debentures and Equity Shares and
Debenture issue expenses ............................................................................................................................... (5.60) (14.77)
309.99 219.27
Profit as per Section 349 of the Companies Act, 1956 ........................................................................... 1,441.92 377.71
Performance Incentive / Commission payable to Managing / Wholetime Directors
as per Section 198 and 309 of the Companies Act, 1956 ...................................................................... 143.28 37.25
Restricted as per Service agreement in case of Wholetime Directors .............................................. 0.93 0.80
Maximum permissible commission to Non-Executive Directors under Section 198
of the Companies Act, 1956 @ 1% ................................................................................................................ 14.42 NA

115
7. Amalgamation of wholly owned Subsidiary Companies

A) Bargarh Cement Limited (BCL)

a) During the previous period pursuant to the scheme of amalgamation ('the Scheme') of the erstwhile Bargarh Cement Limited (BCL) with the
Company as approved in the Extra-ordinary General Meeting held on September 8, 2005 and subsequently sanctioned by the High Court of
Orissa, Cuttack on December 2, 2005 and the High Court at Mumbai on November 22, 2005, entire business and all assets and liabilities of BCL,
a Company engaged in cement manufacturing were transferred and vested in the Company effective from April 1, 2005. Accordingly, the
Scheme was given effect to in the previous period financial statements.

b) The amalgamation was accounted for under the “Pooling of Interest” method as prescribed by the Accounting Standard 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 April 1, 2005 were incorporated in the financial statements of previous period of the Company.

(ii) Debit balance in the Profit and Loss Account of BCL amounting to Rs.165.78 Crore as at April 1, 2005 was adjusted to the General
Reserves of the Company.

(iii) Opening Deferred Tax Asset amounting to Rs.54.76 Crore on account of amalgamation of erstwhile BCL with the Company was adjusted
to the General Reserve of the Company in the previous period.

(iv) 26,50,00,000 Equity Shares of Rs.10 each fully paid in BCL held as investment by the Company stand cancelled and the difference
between the book value and face value of such shares amounting to Rs.61.69 Crore was adjusted to the Capital Reserve of the Company.

B) Damodhar Cement & Slag Limited (DCSL)

a) During the previous period, pursuant to the scheme of amalgamation ('the Scheme') of the erstwhile Damodhar Cement & Slag Limited (DCSL)
with the Company as approved in the Extra-ordinary General Meeting held on November 28, 2005 and subsequently sanctioned by the High
Court of Kolkata on January 4, 2006 and the High Court at Mumbai on January 20, 2006, entire business and all assets and liabilities of DCSL, a
Company engaged in cement manufacturing were transferred and vested in the Company effective from April 1, 2005. Accordingly, the
Scheme was given effect to in the previous period financial statements.

b) The Amalgamation was accounted for under the “Pooling of Interest” method as prescribed by the Accounting Standard 14 “Accounting for
Amalgamations” issued by the Institute of Chartered Accountants of India. Accordingly, the accounting treatment was given as under:

(i) The assets and liabilities as at April 1, 2005 were incorporated in the financial statements of previous period of the Company.

(ii) Capital Reserve and credit balance in the Profit and Loss Account of DCSL amounting to Rs.2.94 Crore and Rs.6.92 Crore respectively as at
April 1, 2005 were credited to the Capital Reserve and Profit and Loss Appropriation Account of the Company.

(iii) The net Deferred Tax Liability in the books of DCSL amounting to Rs.2.42 Crore as at April 1, 2005 was added to the Deferred Tax Liability
of the Company.

(iv) 1,46,59,400 Equity Shares of Rs.4.50 each fully paid and 2,09,70,000 Equity Shares of Rs.10 each fully paid in DCSL held as investment by
the Company stand cancelled and the difference between the book value and face value of such shares amounting to Rs.3.84 Crore was
adjusted to the General Reserves of the Company.

C) Tarmac (India) Limited (Formerly known as Tarmac (India) Private Limited)

a) Pursuant to the scheme of amalgamation ('the Scheme') of the erstwhile Tarmac (India) Limited with the Company as approved in the
Extra-ordinary General Meeting held on June 8, 2006 and subsequently sanctioned by the High Court of Mumbai on August 10, 2006, entire
business and all assets and liabilities of Tarmac (India) Limited, a Company engaged in Ready Mixed Concrete manufacturing were transferred
and vested in the Company effective from January 1, 2006. Accordingly, the Scheme has been given effect to in these financial statements.

b) The amalgamation has been accounted for under the “Pooling of Interest” method as prescribed by the Accounting Standard 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 January 1, 2006 have been incorporated in the financial statements of the Company at their carrying
values in the books of Tarmac (India) Limited.

(ii) Debit balance in the Profit and Loss Account of Tarmac (India) Limited amounting to Rs.4.25 Crore as at January 1, 2006 has been
adjusted to the General Reserve of the Company.

(iii) Opening Deferred Tax Asset amounting to Rs. 1.17 Crore on account of amalgamation of erstwhile Tarmac (India) Ltd with the Company
has been adjusted to the General Reserve of the Company.

116
 (iv) 1,58,83,526 Equity Shares of Rs.10 each fully paid in Tarmac (India) Limited held as investment by the Company stand cancelled and the
difference between the book value and the face value of such shares amounting to Rs.3.30 Crore has been adjusted to the Capital
Reserve of the Company

In view of this amalgamation the figures for the year ended December 31, 2006 are not strictly comparable to the previous period.

8. During the previous period, the Company divested 74,00,020 Equity Shares representing 50% stake in Everest Industries Limited (EIL) under a Share
Purchase Agreement dated October 14, 2005. The Company received the consideration amounting to Rs.99.16 Crore and accounted for Rs.88.10 Crore as
profit arising from divestment accordingly during the previous period.

During the year, with a view to motivate the erstwhile employees of ACC group working for EIL, the Company has sold 14,80,000 shares to “Everest Staff
Welfare Trust”. The Company has received sales consideration amounting to Rs. 9.92 Crore and accounted for Rs. 7.70 Crore as profit on sale of
investments.

9. During the previous period, the Board of Directors of the Company had at its meeting held on July 13, 2005 subject to the approval of the shareholders of
the Company approved the sale of the Refractory Business. Thereafter the shareholders of the Company had in terms of Section 192A and Section
293(1)(a) of the Companies Act, 1956 approved this sale through Postal Ballot. The Company had entered into a Business Transfer Agreement with Ace
Refractories Ltd for the sale of its Refractory Business comprising of Katni Refractory Works located in Katni District, Madhya Pradesh and Nagpur
Refractory located in Butibori, Nagpur District, Maharashtra together with all other assets of this undertaking for a consideration of Rs.257.48 Crore
effective from as of September 30, 2005. On account of this, profit of Rs.174.05 Crore was recognised in the Profit and Loss Account of the Company
during the previous period. Previous period includes revenue amounting to Rs. 131.39 Crore and expenditure amounting to Rs. 108.64 Crore pertaining
to the Refractory Business.

117
10. EMPLOYEE DEFINED BENEFITS:
(a) Defined Benefit Plans / Long Term Compensated Absences - As per Acturial Valuation on December 31, 2006
Gratuity Leave Post Pension
Encashment Employment Plan
Medical
Funded Others benefits
(PEMB)
Rs. Crore Rs. Crore Rs. Crore Rs. Crore Rs. Crore
I Expense recognised in the Statement of Profit & Loss Account
for the year ended December 31, 2006
1 Current Service cost 3.97 1.46 4.76 0.32 0.09
3.04 1.01 3.47 0.13 0.11
2 Interest Cost 5.23 2.10 1.47 0.88 0.47
4.05 1.41 1.06 0.69 0.47
3 Employee Contributions - - - (1.71) -
- - - - -
4 Expected return on plan assets (4.30) - - - -
(2.71) - - - -
5 Actuarial (Gains) / Losses 10.72 0.31 8.17 3.05 (0.41)
1.32 (3.59) 2.19 (0.71) 1.11
6 Past service cost - - 3.70 - -
- - - - -
7 Settlement cost 3.59 - - - -
- - - - -
8 Total expense 19.21 3.87 18.10 2.54 0.15
5.70 (1.17) 6.72 0.11 1.69
II Net Asset/(Liability) recognised in the Balance Sheet as at
December 31, 2006
1 Present value of Defined Benefit Obligation as at December 31, 2006 (86.31) (31.07) (35.21) (14.84) (8.24)
(74.82) (28.84) (22.07) (13.37) (8.49)
2 Fair value of plan assets as at December 31, 2006 57.30 - - - -
48.71 - - - -
3 Funded status [Surplus/(Deficit)] (29.01) - - - -
(26.11) - - - -
4 Net asset/(liability) as at December 31, 2006 (29.01) (31.07) (35.21) (14.84) (8.24)
(26.11) (28.84) (22.07) (13.37) (8.49)
III Change in Obligation during the Year ended December 31, 2006
1 Present value of Defined Benefit Obligation at the beginning of the year 74.82 28.84 22.07 13.37 8.49
66.70 33.38 18.51 13.96 7.09
2 Current Service cost 3.97 1.46 4.76 0.32 0.09
3.04 1.01 3.47 0.13 0.11
3 Interest Cost 5.23 2.10 1.47 0.88 0.47
4.05 1.41 1.06 0.69 0.47
4 Settlement cost 3.59 - - - -
- - - - -
5 Past service cost - - 3.70 - -
- - - - -
6 Employee Contributions - - - (1.71) -
- - - - -
7 Actuarial (Gains) / Losses 8.95 0.31 8.17 3.05 (0.41)
1.32 (3.59) 2.19 (0.71) 1.11
8 Benefits Payments (10.25) (1.64) (4.96) (1.07) (0.40)
(0.29) (3.37) (3.16) (0.70) (0.29)
9 Present value of Defined Benefit Obligation at the end of the year 86.31 31.07 35.21 14.84 8.24
74.82 28.84 22.07 13.37 8.49
IV Change in Assets during the Year ended December 31, 2006
1 Plan assets at the beginning of the year 48.71 - - - -
46.00 - - - -
2 Assets acquired on amalgamation in previous year 4.75 - - - -
- - - - -
3 Settlements (3.59) - - - -
- - - - -
4 Expected return on plan assets 4.30 - - - -
2.71 - - - -
5 Contributions by employers 4.90 - - - -
0.29 - - - -

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 Gratuity Leave Post Pension
Encashment Employment Plan
Medical
Funded Others benefits
(PEMB)
Rs. Crore Rs. Crore Rs. Crore Rs. Crore Rs. Crore
6 Actual benefits paid - - - - -
(0.29) - - - -
7 Actuarial gains /(losses ) (1.77) - - - -
- - - - -
8 Plan assets at the end of the year 57.30 - - - -
48.71 - - - -
9 Actual return on plan assets 2.53 - - - -
- - - - -
V The major categories of plan assets as a percentage of total plan
Qualifying Insurance policy 100%
VI Effect of One percentage point change in the assumed Medical One percentage point increase One percentage point decrease
Inflation rate in Medical Inflation rate in Medical Inflation rate
Increase/(Decrease) on aggregate service and interest cost of
Post Employment Medical benefits 0.08 (0.08)
Increase/(Decrease) on Present value of Defined Benefit
Obligation as at December 31, 2006 0.43 (0.37)

VII Actuarial Assumptions: As at December 31, 2006

1 Discount Rate 7.5% p.a.
2 Expected rate of return on plan assets 8% p.a.
3 Mortality pre-retirement Indian assured lives Mortality (1994-96) (modified) ultimate.
4 Mortality post-retirement Mortality for annuitants LIC (1996-98) ultimate.
5 Turnover rate 7.5% for Post Employment Medical Benefits; 5% for others.
6 Medical premium inflation 4% p.a.

(Figures in italics pertain to previous period)

Amounts recognized as an expense and included in the Schedule 2
Item 3 (a) “Salaries, Wages, Dearness Allowance and Bonus” are Rs. 11.51 Crore for gratuity, Rs. 18.10 Crore for leave encashment, Rs. 0.51 Crore for
post employment medical benefits and Rs. 0.15 Crore for pension.
Item 3 (b) “Contributions / Provisions to and for Provident and Other Funds” is Rs. 11.57 Crore for gratuity.
Item 3 (c) “Workmen and Staff Welfare Expenses” is Rs. 1.90 Crore for post employment medical benefits.
Item 5 (m) “Other expenses” is Rs. 0.13 Crore for post employment medical benefits.
(b) Defined Contribution Plans-
Amount recognised as an expense and included in the Schedule 2 item 3(b) “Contributions / Provision to and for Provident and other Funds” of Profit
and Loss Account Rs. 21.54 Crore
(c) Basis used to determine expected rate of return on assets:
The expected return on plan assets is based on market expectation, at the beginning of the period, for returns over the entire life of the related
obligation. The Gratuity Scheme is invested in a Group Gratuity-cum-Life Assurance cash accumulation policy offered by Life Insurance Corporation
(LIC) of India. The investment return earned on the policy comprises bonuses declared by LIC having regard to LIC's investment earnings. The
information on the allocation of the fund into major asset classes and expected return on each major class are not readily available. We understand
that LIC's overall portfolio of assets is well diversified and as such, the long-term return on the policy is expected to be higher than the rate of return
on Central Government bonds. Historically too, the returns declared by LIC on such policies have been higher than Government bond yields. As such,
the expected return on assets assumption is taken by adding a margin of 0.5% on the current market yield on the Central Government bonds (of
term consistent with the term of the liabilities)

(d) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors,
such as supply and demand in the employment market.

(e) During the previous period, Post Retirement Medical Benefit Schemes and other employee benefits aggregating to Rs. 13.15 Crore were recognised
on actuarial basis and shown in profit and loss account as a prior period item.

119
11. (i) The Company had issued 60,000, 1% Foreign Currency Convertible Bonds (FCCBs) of US $ 1000 each aggregating US$60 Million at par. The bonds are
redeemable on March 19, 2009 at a redemption premium of 1.5% per annum so as to give the bondholders a yield to maturity of 2.5% per annum.
These bonds are convertible into GDSs/Shares at an initial conversion price of Rs.374.42 per share with a fixed rate of exchange on conversion of
Rs.45.2425 equivalent to US$ 1 at the option of bondholders at any time on or after April 28, 2004 and prior to the close of business on March 8, 2009.
During the year, conversion option in respect of 16,125 (previous period 42,525) bonds was exercised by the bondholders and pursuant to this
19,48,431 (previous period 51,38,435) number of Equity Shares of Rs.10 each were allotted. This exercise of conversion option and the consequent
allotment of shares resulted in the following:

(a) The Share Capital of the Company increased by Rs.1.94 Crore (Previous Period - Rs. 5.14 Crore) and the Securities Premium Account was
credited by Rs.69.91 Crore (Previous Period - Rs. 183.26 Crore).

(b) Out of Rs.20.69 Crore provided from Securities Premium Account, a sum of Rs.5.60 Crore (Previous Period - Rs. 14.77 Crore) being the premium
on redemption of bonds has been written-back during the year on account of conversion of FCCBs.

(ii) The outstanding bonds as at December 31, 2006 when fully converted would result in issue of additional 1,63,125 (Previous Period - 21,11,556)
Equity Shares of Rs.10 each. The Company, subject to fulfillment of certain conditions and obtaining requisite approvals, has an option to redeem
the balance bonds in whole but not in part at any time on or after March 19, 2007 and prior to March 19, 2009 at its early redemption amount
together with accrued and unpaid interest.

12. OPERATING LEASE

a) Future Lease Rental payments

December 31, 2006 December 31, 2005

Rs. Crore Rs. Crore

(i) Not later than one year 8.39 1.23

(ii) Later than one year and not later than five years 18.74 2.43

(iii) Later than five years Nil Nil

b) Lease payment recognised in the Profit & Loss Account Rs. 3.87 Crore (Previous Period - Rs. 0.16 Crore)

c) General description of the leasing arrangement:

i) Leased Assets: Dumpers, Cranes and Tippers, Car, Locomotives, Computers and other related equipments.

ii) Future lease rental payments are determined on the basis of quarterly lease payment as per the agreement.

iii) At the expiry of the lease term, the Company has an option either to return the asset or extend the term by giving notice in writing atleast 90
days prior to the expiry of the agreement. If notice is not given within the above mentioned period, the lease term will be automatically
extended for a further period of twelve months.
13. Provision for Employees include Rs.6.24 Crore (Previous Period - Rs. 8.95 Crore) being the estimated net present value of future monthly payments of
pension under the Voluntary Retirement Scheme. The amount payable within one year under the scheme aggregates Rs.1.86 Crore (Previous
Period - Rs.2.39 Crore).
14. PROVISIONS - Refer “Schedules F & K”
(a) The Company has an investment of Rs.39.25 Crore in equity and cumulative redeemable preference shares, and a sum of Rs.37.38 Crore (Previous
period - Rs.33.41 Crore) is due from ACC-Nihon Castings Limited (ANCL) on account of advances. Further, the Company has given guarantees on
behalf of ANCL to Financial Institutions for loans granted to ANCL and the contingent liability under these guarantees is Rs.16.00 Crore (Previous
period - Rs.7.35 Crore) as at December 31, 2006. The net worth of ANCL has been substantially eroded and the Company is potentially sick under the
Sick Industrial Companies (Special Provisions) Act, 1985.
In order to meet the adverse impact if any in respect of the above, as a measure of prudence, the Company has made a cumulative provision
amounting to Rs. 39.00 Crore (Previous Period - Rs. 39.00 Crore) towards diminution in value of investments and Rs. 10.00 Crore (Previous
Period - Rs. Nil) towards doubtful advances.
(b) Further, as a measure of abundant caution, a sum of Rs.0.17 Crore on account of investment in shares of The Iran and India Cement Engineering
Consultants Co. PJS (IICEC) was provided for by the Company in an earlier year.
(c) i) A cumulative provision of Rs.0.50 Crore on account of investment in Alstom Projects India Limited made in earlier years has been written-back
in the books in the current year on realisation of the book value of the investment.
ii) The Company had Invested Rs 7.50 Crore in ACC Rio Tinto Exploration Limited. The Company had discontinued its active association with ACC
Rio Tinto Exploration Limited. A cumulative provision of Rs 7.50 Crore made in earlier years had been written back in the books in the previous
periodon realisation of the book value of the investments.
120
15. During the current year, the Company has made an additional provision for site restoration expenses amounting to Rs. 0.43 Crore resulting in total
cumulative provision of Rs. 6.00 Crore (Previous Period - Rs. 5.57 Crore).

16. Due to unviable nature of operations, the following businesses / surplus assets have been considered for divestment. These are disclosed separately as
“Assets Held for Disposal'' under Other Current Assets at lower of cost and estimated realizable value, which includes the following:

Name of the unit Amount written-off As at As at

in earlier years December 31, 2006 December 31, 2005
Rs. Crore Rs. Crore Rs. Crore

(a) Dylyn Demonstration Centre * 14.00 Nil 0.95

(b) Synthetic Ferric Oxide plant * 40.71 Nil 3.20

(c) Agro-tech Business 3.43 3.28 3.28

(d) Advanced Microwave Material Centre * 16.00 Nil 5.21

(e) Mancherial Cement Works * Nil Nil 15.87

(f) Bhupendra Nil 0.68 NA

TOTAL 74.14 3.96 28.51

* These have been sold during the year.

17. (a) Provision for current tax represents estimated tax charge based on the aggregate profits of the Company for the quarter ended March 31, 2006 and
nine months ended December 31, 2006. Ultimately, the tax liability of the Company would be determined on the basis of its results for the fiscal year
ending March 31, 2007.

(b) The Company has been recognizing in the financial statements the deferred tax assets/liabilities, in accordance with Accounting Standard 22
“Accounting for Taxes on Income” issued by the Institute of Chartered Accountants of India. During the year, the company has credited the Profit and
Loss Account with the deferred tax assets of Rs. 5.17 Crore (Previous Period- Charge of Rs. 70.00 Crore) net of deferred tax liability of Rs. 26.68 Crore
(Previous Period - Rs. Nil) pertaining to earlier years, consequent to the developments during the year.

The position of Deferred Tax Assets and Liabilities after adjustment against reserves in respect of net Deferred Tax Asset of Tarmac (India) Limited is
as follows:

As at December 31, 2006 As at December 31, 2005

Rs. Crore Rs. Crore
Deferred Tax Liabilities: -
Depreciation differences .......................................................................................................................... 417.77 387.19
Others ............................................................................................................................................................ 9.18 3.75
426.95 390.94
Deferred Tax Assets: -
Employee Benefit ....................................................................................................................................... 54.55 35.75
Effect of expenditure debited to Profit and Loss Account in current year but
allowed for tax purpose in the following years ............................................................................... 36.18 32.08
Others ............................................................................................................................................................ 15.50 22.73
106.23 90.56
Net Deferred Tax Assets / (Liabilities) ….............................................................................................. (320.72) (300.38)

18. CONTINGENT LIABILITIES NOT PROVIDED FOR -

(A) Indemnity given to Banks for the guarantee/s executed by them on behalf of TRF Limited to the extent of Rs.0.36 Crore (Previous Period - Rs.0.36
Crore).

(B) Indemnity, Guarantee/s and Letter of Comfort given to Commissioner of Customs for fulfillment of export obligations on behalf of Everest
Industries Ltd. to the extent of Rs.3.90 Crore (Previous Period - Rs.3.90 Crore).

(C) Indemnity, Guarantee/s and Letter of Comfort given to Banks/Financial Institutions and Government Bodies for the grant of term loan and for
other facilities on behalf of subsidiary companies including amount referred to in Note 14(a) above to the extent of Rs. 37.00 Crore (Previous
Period - Rs.28.35 Crore).

(D) Indemnity, Guarantee/s given to Banks/Financial Institutions, Government Bodies and others Rs. 6.54 Crore (Previous Period - Rs. 2.87 Crore).

121
 (E) As a signatory to the Memorandum of Association of The Cement Allocation and Co-ordinating Organisation, a company limited by
guarantee Rs.0.01 Crore (Previous Period - Rs.0.01 Crore).

(F) Sales Tax, Excise Duties & Other Dues Rs.32.04 Crore (Previous Period - Rs. 19.47 Crore).

(G) Claims against the Company not admitted as debt Rs.13.79 Crore (Previous Period - Rs. 10.45 Crore).

(H) Income Tax Rs.7.15 Crore (Previous Period - Rs.7.15 Crore).

In respect of items (F) to (H), future cash outflows in respect of contingent liabilities are determinable only on receipt of judgements pending at
various forums / authorities.

(I) The Company had filed a Writ Petition against the order of the Madhya Pradesh State Mining Department demanding Rs. 82.37 Crore (Previous
Period - Rs. 69.57 Crore) towards payment of additional Royalty on Limestone based on the ratio of 1.6 tonnes of Limestone to 1 tonne of Cement
produced at its factories in Madhya Pradesh and Chattisgarh.

The Supreme Court upheld the constitutional validity of a state law passed in 1981, which abolished appeals (LPAs) in the High Court. In view of the
Supreme Court judgement, the High Court has dismissed the appeal filed by the Company in respect of Kymore Cement Works, Madhya Pradesh.
The Company has filed a Special Leave Petitions in the Supreme Court. In the case of Jamul Cement Works, Chattisgarh, the matter is pending
before the High Court of Bilaspur, Chattisgarh.

Recently the Madhya Pradesh legislature has enacted the Madhya Pradesh High Court Act, 2005 restoring appeals in the High Court. In view of this
the Supreme Court has remanded the Special Leave Petition to the High Court and the High Court has allowed the Company's restoration
application for revival of the appeal at the last hearing.

The Company holds the view that the payment of Royalty on Limestone is based on the actual quantity of Limestone extracted from the mining
area. The independent report obtained from the National Council of Building Materials supports the Company's view. In view of the demand, being
legally unsustainable, the Company does not expect any liability in the matter.
In an earlier year, the Company had received a demand notice for Rs.6.11 Crore (Previous Period - Rs.6.11 Crore) from Director of Geology and
Mining towards Royalty on Limestone based on Cement produced vis-à-vis consumption of Limestone at its Madukkarai Cement Works. The
demand notice has not provided any details and has not been preceded by any show cause notice or personal hearing. The Company has filed a
writ petition in the High Court of Madras, Chennai and a stay order has been granted.
(J) The Company was entitled to receive Transport Subsidy against actual expenditure on freight incurred in respect of its new 1 MTPA plant at Gagal,
which went into commercial production w.e.f. September 15, 1994 for a period of five years. Accordingly, the Company accrued the subsidy claim
(including subsidy on clinker) aggregating Rs. 80.65 Crore (Previous Period - Rs. 80.65 Crore) for a period up to September 1999. As against this, the
Company had received part disbursement and balance of Rs. 46.35 Crore (Previous Period - Rs.46.35 Crore) is shown as receivable under “Sundry
Debtors - Schedule H”. The Company had received a demand notice from the Government of Himachal Pradesh asking for refund of Rs.31.19 Crore
during the earlier year stating that 1 MTPA plant at Gagal is not a new unit but a case of expansion of an existing unit, thereby, not eligible for
subsidy under Transport Subsidy Scheme, 1971.
The High Court of Shimla has declared Gagal II as eligible for Transport Subsidy in its judgement dated August 19, 2003 and the arrears due to the
Company have been ordered to be paid within three months without interest.
Pursuant to the above judgement, the Company made demand on the Government for payment of the arrears and vigorously followed up the
matter. Even though the time limit specified by the High Court of Shimla for making refund of outstanding amounts expired on
November 19, 2003, the Central Government and the State Government opted to file appeal against the order of the single judge before the
Division Bench.
The appeal has been admitted and order of the single bench judge has been stayed. The matter is pending for final hearing before the Division
Bench.
(K) The Company is entitled to receive Sales tax incentive with respect to its investment in Gagal II under the State Industrial Policy, 1991. The
Company has accrued Sales tax incentives aggregating to Rs.56.00 Crore (Previous Period - Rs. 56.00 Crore) over a period of nine years. However,
the Sales tax authorities of the State, interalia, have stipulated that the incentive is admissible only for the incremental amount over the base
revenue. The Company is still pursuing the claim with the Government, as it has not received any disbursement so far. The Company is confident of
recovery of the amount paid under protest, however as a measure of abundant caution a sum of Rs. 32.26 Crore (Previous Period - Rs. 32.26 Crore)
has been provided by the Company in earlier years.
19. Interest liability in respect of loans taken by erstwhile Damodhar Cement & Slag Limited from Financial Institutions had been waived during the
financial year 1996-97 pursuant to the Revival/Rehabilitation Scheme sanctioned by BIFR in August 1996. This included a sum of Rs. 6.47 Crore
representing interest capitalised in earlier years, which was transferred to Capital Reserve during the aforesaid financial year. As in the previous periods,
depreciation on the said amount has been transferred from Capital Reserve to Profit and Loss Account over the remaining life of the respective assets
which for the current year worked out to Rs. 0.36 Crore.

122
20. M/s. Fuller India Limited (FIL), who was the main supplier of equipments for the expansion and modernization project of erstwhile IDCOL Cement
Limited, filed a petition in the Orissa High Court submitting a claim of Rs.3.86 Crore and erstwhile Bargarh Cement Limited lodged a counter claim of
Rs.192.32 Crore against FIL before the Orissa Arbitration Tribunal. The matter is under adjudication.

21. Deferred Payment Liability included in “Unsecured Loans - Schedule D” comprises of Rs.12.97 Crore (Previous Period - Rs. 12.97 Crore) payable to the
Industrial Development Corporation of Orissa Limited (IDCOL) on account of their dues payable by the erstwhile Bargarh Cement Ltd in eight equal
annual installments without interest or penalty. The first installment is due for payment on December 22, 2007.

22. (a) Mining lease rights in respect of Behera Banjipali and Damapala Mines are in the name of Industrial Development Corporation of Orissa Limited
(IDCOL) and await transfer to the Company. Investment in fixed assets and other assets valued at Rs.0.20 Crore continues to appear in the books of
the Company pending such transfer. Hence, cost of maintenance including dead rent is paid by the Company pending formal transfer of the
mining rights.

(b) The Assets and Liabilities of IDCOL mines have been merged in the account as the Assets and Liabilities have been created by the erstwhile Bargarh
Cement Limited (BCL). As per Article clause 5.5.4(x) of the Share Purchase Agreement, the Government of Orissa will transfer the mining lease of
Damapala Mines (IDCOL mines) and grant of mining lease of Jampali mines in favour of the Company subject to the availability of mineable
limestone reserves with a view to expand the capacity and cost of maintenance including dead rent is paid by the Company pending formal
transfer of mining rights.

23. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs.285.53 Crore (Previous
Period- Rs.233.69 Crore) and commitments for the acquisition of intangible assets (net of advances) is Rs. 3.04 Crore. (Previous Period - Rs.11.65 Crore).

24. Revenue expenditure on Research and Development amounting to Rs. 10.02 Crore (Previous Period - Rs.7.27 Crore) has been charged to Profit and Loss
Account and capital expenditure relating to Research and Development amounting to Rs.0.55 Crore (Previous Period - Rs.0.52 Crore) has been included in
“Fixed Assets - Schedule E”.

25. (a) There are no Small Scale Industries, to whom the Company owes dues, which are outstanding for more than 30 days at the Balance Sheet date,
computed on unit wise basis. The above information and that given in “Sundry Liabilities - Schedule L” regarding Small Scale Industrial
Undertaking has been determined to the extent such parties have been identified on the basis of information available with the Company. This
has been relied upon by the auditors.

(b) There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days at the Balance
Sheet date, computed on unit wise basis. The above information and that given in “Sundry Liabilities - Schedule L” regarding Micro, Small and
Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company.
This has been relied upon by the auditors.

26. A charge has been created on stocks, stores etc. in favour of Banks in consideration of guarantees and letters of credit issued/to be issued to the limit of
Rs.260 Crore (Previous Period - Rs. 260 Crore).

27. The Declarations filed under the Urban Land (Ceiling & Regulations) Act, 1976, in respect of the Company's holdings of vacant land in certain States in
excess of the ceiling prescribed under the Act and the applications for exemption filed under Section 20 of the Act to retain these lands are under
consideration of the concerned Authorities at Hyderabad, Andhra Pradesh in respect of Sanatnagar Land.

28. Raw Materials etc. (Item 2 of Schedule 2 Page 91) includes consumption of Coal and Oil for Kilns, etc. Rs.541.68 Crore (Previous Period - Rs. 370.34 Crore)

29. Stores consumed etc. (Item 5(a) of Schedule 2, Page 91) is after deduction of Rs. 150.19 Crore charged to Raw Materials and other relevant heads
(Previous Period - Rs.91.97 Crore).

30. Particulars of unhedged foreign currency exposure as at Balance Sheet date

Particulars Amount

FCCB Rs 5.98 Crore ( US $ 0.135 Crore @ Closing rate of 1 USD = Rs. 44.28)
{Previous Period Rs. 78.73 Crore (US $ 1.75 Crore @ Closing rate of 1 USD = Rs. 45.05)}

Foreign Currency Loan Rs. 143.91 Crore (US $ 3.25 Crore @ Closing rate of 1 USD = Rs. 44.28)
{Previous Period Rs. 213.99 Crore (US $ 4.75 Crore @ Closing rate of 1 USD = Rs. 45.05)}

Export Debtors Rs. 12.37 Crore ( US $ 0.28 Crore @ Closing rate of 1 USD = Rs. 44.17)
{Previous Period Rs. 15.91 Crore (US $ 0.35 Crore @ Closing rate of 1 USD = Rs. 45.13)}

Rs. 2.93 Crore (SR 0.25 Crore @ Closing rate of 1 SR = Rs. 11.79)
{Previous Period Rs. 2.97 Crore (SR 0.24 Crore @ Closing rate of 1 SR = Rs. 12.06)}

123
31. Loans and Advances, in the nature of loans -

a) To Subsidiaries -

Particulars As at Maximum As at Maximum

December 31, 2006 Balance December 31, 2005 Balance
during the year during previous
period

Rs. Crore Rs. Crore Rs. Crore Rs. Crore

Inter Corporate Deposits:

ACC-Nihon Castings Limited ................................................. 23.31 23.31 23.31 23.31

Bulk Cement Corporation (India) Limited ......................... Nil 4.00 2.00 2.50

b) To Others ......................................................................................... Nil Nil Nil Nil

(Excludes loans or advances in the nature of loans other than for purchase of shares).

32. The name of the Company has been changed from The Associated Cement Companies Ltd. to ACC Limited with effect from September 1, 2006.

33. ADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PARAGRAPHS 3 & 4 OF PART II OF SCHEDULE VI TO THE COMPANIES ACT, 1956 :-

(A) Sales by class of goods (Net) - Unit For the Year ended Nine Months ended
December 31, 2006 December 31, 2005
Quantity Rs. Crore Quantity Rs. Crore
(i) Cement .......................................................................................... Lakh Tonnes 183.57 5,310.69 126.29 2,783.23

(ii) Clinker ............................................................................................ " 3.17 56.49 1.13 18.55

(iii) Refractories and Refractory Products ................................. " - - 0.62 108.27

(iv) Ready Mixed Concrete ............................................................. Lakh Cu Mtrs. 10.59 284.51 7.01 162.73
[including jobs executed on works contract]

(v) Consultancy Services ............................................................... - - 76.57 - 58.08

(vi) Erection, Fabrication & Contracts ....................................... - - 21.87 - 38.30

(vii) Miscellaneous ............................................................................ - - 0.06 - 0.65

(viii) Purchased Cement & other products ............................... Lakh Tonnes 1.01 37.97 0.74 42.35

(ix) Purchase of Ready Mixed Concrete ................................... Lakh Cu Mtrs. 0.60 15.32 0.34 8.54
5,803.48 3,220.70

124
(B) Details of raw materials consumed Unit For the Year ended Nine Months ended
December 31, 2006 December 31, 2005
Quantity Rs. Crore Quantity Rs. Crore

(i) Limestone ................................................................................... Lakh Tonnes 177.47 75.72 128.69 52.70

(ii) Slag ............................................................................................... " 17.51 76.05 11.07 46.79

(iii) Gypsum ...................................................................................... " 9.82 150.21 6.64 91.24

(iv) Fly Ash ......................................................................................... " 29.92 94.84 19.52 59.02

(v) Others .......................................................................................... - - 278.05 - 252.95

674.87 502.70

(C) Licensed and installed capacity, actual

production and opening and closing stocks-
* Installed/Rated Actual Production
Unit December 31, December 31, For the Nine Months
2006 2005 Year ended ended
December 31, December 31,
2006 2005

(i) Cement ..................................................................................... Lakh Tonnes 199.09 190.25 187.33 129.31

(ii) Refractories and Refractory Products** ......................... " - - - 0.66

(iii) Ready Mixed Concrete ........................................................ Lakh Cu. Mtrs. 18.07 14.76 10.59 7.35

(iv) Microwave Ferrite & Dielectric ......................................... Kgs - 5,000.00 77.64 519.00

Licensed Capacity per annum not indicated due to the abolition of Industrial Licences as per Notification No. 477 (E) dated July 25, 1991
issued under The Industries (Development and Regulation ) Act, 1951.
* As Certified by the Management and accepted by the Auditors.
** Divested in the previous period.

125
 Opening Stocks as at Closing Stocks as at
January 1, 2006 April 1, 2005 December 31, 2006 December 31, 2005
Unit Quantity Rs. Crore Quantity Rs. Crore Quantity Rs. Crore Quantity Rs. Crore

(i) Cement ..................................... Tonnes 362,634 71.27 325,199 56.72 329,781 63.98 362,634 71.27

(ii) Refractories and

Refractory Products ............. " - - 2,252 9.02 - - - -

(iii) Miscellaneous ....................... " 8 0.07 5 0.05 - - 8 0.07

(iv) Purchased Cement and

Other Products ..................... " 82 0.08 15,769 4.39 - - 82 0.08

71.42 70.18 63.98 71.42

(D) Purchase of Cement and Other Products

For the Year ended Nine Months ended
December 31, 2006 December 31, 2005
Unit Quantity Rs. Crore Quantity Rs. Crore

(i) Cement and Other Products .............................................. Lakh Tonnes 1.01 37.82 0.97 38.09

(ii) Ready Mixed Concrete ........................................................... Lakh Cu Mtrs. 0.60 15.60 0.34 7.21

53.42 45.30

(E) Value of imports calculated on C.I.F. basis -

For the Year ended Nine Months ended
December 31, 2006 December 31, 2005
Rs. Crore Rs. Crore

(i) Raw Materials .......................................................................................................................................... 17.55 5.74

(ii) Components and Spare Parts ............................................................................................................. 28.62 14.11

(iii) Coal ............................................................................................................................................................. 14.35 -

(iv) Capital Goods .......................................................................................................................................... 19.66 16.07

80.18 35.92

126
(F) Expenditure in foreign currencies-
For the Year ended Nine Months ended
December 31, 2006 December 31, 2005
Rs. Crore Rs. Crore

(i) Interest (including payments in Rupees to a Financial Institution on

foreign currency loans) ....................................................................................................................... 12.95 9.52

(ii) Expenses on foreign contracts ......................................................................................................... 19.85 18.79

(iii) Travelling Expenses .............................................................................................................................. 3.65 2.60

(iv) Books, Publications and Membership Fees paid ....................................................................... 0.02 0.02

(v) Postage, Telegrams, Telex and other expenses .......................................................................... 0.10 0.10

(vi) Technical Know-how paid (net of taxes) ..................................................................................... 7.54 -

(vii) Loss on Exchange ................................................................................................................................. 0.48 11.16

(viii) Consultants' Fees (net of recoveries) .............................................................................................. 8.70 2.19

(ix) Training, Seminar Expenses etc. ..................................................................................................... 6.12 -

59.41 44.38

Note - Excludes Rs. 0.16 Crore - Previous Period - Rs . 0.12 Crore (Net) Shares / Foreign Currency Convertible Bonds issue expenses adjusted
against Securities Premium Account.

(G) Value of imported and indigenous raw materials, components and spare parts consumed -

Raw Materials Components and Spare Parts

For the Year ended Nine Months ended For the Year ended Nine Months ended
December 31, 2006 December 31, 2005 December 31, 2006 December 31, 2005

Rs. Crore % Rs. Crore % Rs. Crore % Rs. Crore %

(i) Imported 20.29 3.01 6.86 1.36 23.39 8.99 20.14 10.64

(ii) Indigenous 654.58 96.99 495.84 98.64 236.74 91.01 169.11 89.36

674.87 100.00 502.70 100.00 260.13 100.00 189.25 100.00

127
(H) Earnings in foreign exchange-
For the Year ended Nine Months ended
December 31, 2006 December 31, 2005
Rs. Crore Rs. Crore

(i) Export of Cement, Refractory Products and Spares on F.O.B. basis ....................................... - 18.05

(ii) Earnings on contract services ............................................................................................................ 62.30 41.58

(iii) Consultancy Services ............................................................................................................................. - 0.09

(iv) Sale of Publications ................................................................................................................................ 0.01 -

(v) Gain on Exchange .................................................................................................................................. 2.08 -

(vi) Others ......................................................................................................................................................... 4.79 2.03

69.18 61.75

(I) Remittances in foreign currencies -

For the Year ended Nine Months ended
December 31, 2006 December 31, 2005

On account of dividend to non-resident shareholders

(i) No. of shareholder .................................................................................................................................. 1 1

(ii) No. of Equity Shares ............................................................................................................................... 546,175 3,308,242

(iii) Amount remitted (Rs. Crore) ............................................................................................................. 0.44 2.32

(iv) Year to which it pertains ...................................................................................................................... Apr - Dec 2005 2004-05

34. The current accounting period is for twelve months ended December 31, 2006, whereas previous accounting period was for the nine months
ended December 31, 2005. Figures for the current year are, therefore, not comparable with corresponding figures of the previous period.
35. Previous period's figures have been regrouped/restated wherever necessary to make them comparable with current year's figures.

128
ADDITIONAL INFORMATION PURSUANT TO PART IV OF
SCHEDULE VI TO THE COMPANIES ACT, 1956
Balance Sheet Abstract and Company's General Business Profile
I. REGISTRATION DETAILS
Registration No. 1 1 2 5 1 5 State Code 1 1

Balance Sheet Date 3 1 1 2 2 0 0 6

Date Month Year

II. CAPITAL RAISED DURING THE YEAR (AMOUNT IN RS. THOUSANDS)

Conversion of Foreign Currency
Public Issue Convertible Bonds into Equity shares
N I L 1 9 4 8 4
Right Issue Bonus Issue
N I L N I L
Private Placement ESOS
N I L 8 1 8 6

III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (AMOUNT IN RS. THOUSANDS)

Total Liabilities Total Assets
5 9 0 6 6 3 0 0 5 9 0 6 6 3 0 0

SOURCES OF FUNDS
Paid-up Capital Reserves & Surplus
1 8 7 7 6 4 6 2 9 5 5 1 5 6 2
Secured Loans Unsecured Loans @
7 2 0 9 6 3 2 1 9 5 0 1 8 0
@ (incl. Stockists' Deposit Rs 14,48,241 thousands)
APPLICATION OF FUNDS
Net Fixed Assets Investments
3 3 9 5 9 1 2 4 5 0 3 5 3 7 2
Net Current Assets Misc. Expenditure
4 7 9 2 3 4 9 9 3 5 3
Accumulated losses
N I L
IV. PERFORMANCE OF COMPANY (AMOUNT IN RS. THOUSANDS)
Turnover Total Expenditure
6 7 5 5 6 3 2 6 5 1 3 6 1 3 3 9
(includes income from Divestment Rs.16,96,800 thousands)
Profit/(Loss) before Tax Profit /(Loss) After Tax
1 6 1 9 4 9 8 7 1 2 3 1 8 3 8 7
Earning per Share (Rs.) Dividend Rate (%)
6 6 . 0 2 1 5 0

V. GENERIC NAME OF PRINCIPAL PRODUCT OF COMPANY (AS PER MONETARY TERMS)

Item Code No. (ITC Code) Product Description
2 5 2 3 0 0 C E M E N T

3 8 2 4 . 2 0 R E A D Y M I X E D C O N C R E T E

– C O N S U L T A N C Y S E R V I C E

129
 CASH FLOW STATEMENT FOR THE YEAR ENDED
DECEMBER 31, 2006
For the year ended Previous Period
December 31, 2006
Rs. Crore Rs. Crore
A. Cash flow from operating activities
1 Net Profit / ( Loss ) before Tax and Exceptional Items .......................................................................................................................................................... 1,449.82 405.46
Adjustments for :
2 Depreciation ....................................................................................................................................................................................................................................... 254.25 164.37
3 Unrealised Foreign Exchange (Gain)/Loss - Net ..................................................................................................................................................................... (2.38) 6.75
4 Profit on Sale of Fixed Assets- Net ............................................................................................................................................................................................. (1.36) (7.87)
5 Dividend Income - Gross ................................................................................................................................................................................................................. (26.00) (17.29)
6 Interest Income .................................................................................................................................................................................................................................. (23.16) (2.43)
7 Interest Expense ................................................................................................................................................................................................................................ 75.19 66.19
8 Transfer from Securities Premium Account ............................................................................................................................................................................. (0.16) (0.12)
9 Voluntary Retirement Scheme ..................................................................................................................................................................................................... 10.21 11.83
10 Share Issue Expenses - GDS and FCCB ....................................................................................................................................................................................... 0.16 0.12
11 Stores Write off ................................................................................................................................................................................................................................. 6.74 3.03
12 Net Value of Discarded Capital Assets and Cost of Dismantling ..................................................................................................................................... 17.62 5.13
13 Miscellaneous Expenditure written off ..................................................................................................................................................................................... 6.08 6.34
14 Profit on Sale of Investment .......................................................................................................................................................................................................... (13.99) (0.50)
15 Provision for site restoration ......................................................................................................................................................................................................... 0.43 5.57
16 Provision for Gratuity, Leave Encashment, Pensions and other Benefits ....................................................................................................................... 32.71 8.84
17 Provision for Doubtful advance (net) ......................................................................................................................................................................................... 8.30 (2.36)
18 Provision for Bad and Doubtful Debts (Net of adjustment) ............................................................................................................................................... 0.04 (5.34)
19 Net value of Critical spares written off ..................................................................................................................................................................................... 6.95 -
20 Wealth Tax provision (net) ............................................................................................................................................................................................................. 0.30 (4.02)
Operating cash flow before working capital changes ....................................................................................................................................................................... 1,801.75 643.70
Adjustments for :
21 Trade receivables ............................................................................................................................................................................................................................... (15.66) (10.57)
22 Inventories ........................................................................................................................................................................................................................................... (61.14) (64.63)
23 Assets Held for Disposal ................................................................................................................................................................................................................. 1.27 0.07
24 Other receivables .............................................................................................................................................................................................................................. (24.85) (12.58)
25 Trade payables .................................................................................................................................................................................................................................... 132.25 143.84
1,833.62 699.83
26 Compensation under Voluntary Retirement Scheme ........................................................................................................................................................... (24.21) (9.72)
Cash generated from operations .............................................................................................................................................................................................................. 1,809.41 690.11
27 Direct Taxes - Refund / (Paid) - (Net) .......................................................................................................................................................................................... (387.73) (46.27)
Net Cash flow from operating activities ................................................................................................................................................................................................ 1,421.68 643.84
B. Cash flow from investing activities
28 Loans to Companies and Public Bodies ..................................................................................................................................................................................... 2.00 (3.13)
29 Purchase of Fixed Assets ................................................................................................................................................................................................................ (536.61) (334.76)
30 Sale of Fixed Assets .......................................................................................................................................................................................................................... 167.36 10.26
31 Sale of Refractory Business (Total consideration is in cash and cash equivalent) ...................................................................................................... - 257.48
32 Sale of Mancherial Cement Works (Total consideration is in cash and cash equivalent) ........................................................................................ 37.30 -
33 Purchase of Investments {includes Rs 6.47 Crore towards investment in equity ...................................................................................................... (2,788.94) (1,458.09)
of a subsidiary Company -(Previous Period - Rs.12.43) - including investments in
Mutual Funds Rs 2782.32 Crore - (Previous Period - Rs. 1441.16 Crore)}
34 Sale/Redemption of Investments -{Includes realisation from sale of investment in ............................................................................................... 2,593.03 1,327.03
Mutual funds Rs. 2567.53 Crore - (Previous Period Rs. 1196.50 Crore), Rs Nil
(Previous Period - 123.03 Crore) towards sale of Investment in erstwhile subsidiary.}
(Total consideration is in cash and cash equivalent)
35 Interest Received ............................................................................................................................................................................................................................... 17.16 2.69
36 Dividend Received ............................................................................................................................................................................................................................ 26.00 17.29
Net cash used in investing activities ....................................................................................................................................................................................................... (482.70) (181.23)
C. Cash flow from financing activities
37 Interest Paid (includes amount capitalised Rs 5.71 Crore- Previous Period Rs 5.12 Crore) .................................................................................... (89.60) (80.57)
38 Proceeds from / for issue of Share Capital (Net of Share Issue Expense) ..................................................................................................................... 19.04 14.36
39 Proceeds from/(Repayment of) Short term Borrowings - Net ......................................................................................................................................... (9.08) (62.52)
40 Proceeds from Long term Borrowings ...................................................................................................................................................................................... 47.65 61.61
41 Repayment of Long term Borrowings ........................................................................................................................................................................................ (224.02) (209.25)
42 Dividend paid ..................................................................................................................................................................................................................................... (146.71) (125.14)
43 Dividend tax paid ............................................................................................................................................................................................................................. (20.70) (17.53)
Net cash used in financing activities- ..................................................................................................................................................................................................... (423.42) (419.04)
Net increase/(decrease) in cash and cash equivalents ..................................................................................................................................................................... 515.56 43.57
Cash and cash equivalents - Opening Balance ................................................................................................................................................................................ 102.79 57.32
- Taken over on Amalgamation ........................................................................................................................................................ 1.82 2.85
- Transfer on sale of Refractory Business ...................................................................................................................................... - (0.95)
- Closing Balance .................................................................................................................................................................................. 620.17 102.79

Notes : 1. All figures in brackets are outflow

2. Direct Taxes paid are treated as arising from Operating Activities and are not bifurcated between Investing and Financing activities.
3. Cash and Cash Equivalent is Cash and Bank Balances as per Balance Sheet.
4. The amalgamation of erstwhile Tarmac (India) Limited. with the Company is a non cash transaction.(Refer to Note 7 of Schedule O)
5. Cash and cash equivalents includes Rs. 1.82 Crore of erstwhile Tarmac (India) Limited (Previous Period - Rs. 2.85 Crore of erstwhile Bargarh Cement Ltd. and Damodhar Cement and Slag Ltd.)
taken over on amalgamation.
6. Cash flow in respect of ordinary activities attributable to discontinued operation:
Operating activities – Rs Nil {Previous Period – Rs 7.78 Crore}
Investing activities – Rs Nil {Previous Period – Rs (2.96) Crore}
Financing activities – Rs Nil {Previous Period – Rs (4.89) Crore}
7. Previous Period 's figures are not comparable due to Note no. 4 above

Per our report of even date For and on behalf of the Board,
For K.S. AIYAR & CO. N.S.SEKHSARIA PAUL HUGENTOBLER A.L.KAPUR

}
Chartered Accountants Chairman Deputy Chairman S.M.PALIA
NARESH CHANDRA
RAGHUVIR M.AIYAR M.L.NARULA SUMIT BANERJEE MARKUS AKERMANN
Partner Managing Director CEO Designate & Director D.K.MEHROTRA Directors
NIRMALYA KUMAR
For S.R. BATLIBOI & ASSOCIATES ONNE VAN DER WEIJDE A. ANJENEYAN SHAILESH HARIBHAKTI
Chartered Accountants Chief Financial Officer Company Secretary ANIL SINGHVI
SHIKHA SHARMA
SUDHIR SONI
Partner

Mumbai, February 1, 2007

130
STATEMENT PURSUANT TO SECTION 212 OF
THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY COMPANIES
ACC Machinery The Cement Marketing ACC-Nihon Bulk Cement Corporation
Company Limited Company of India Limited Castings Limited (India) Limited

(A) The “Financial Year” of the

Subsidiary Companies December 31, 2006 December 31, 2006 December 31, 2006 December 31, 2006

(B) Shares of the Subsidiary held by

ACC Limited on the above dates:
(a) Number and face value 4,00,000 Shares of 5,000 Shares of Rs. 100 each 3,99,32,384 Shares of 2,76,66,430 Shares of
Rs. 100 each fully paid up full paid up Rs. 10/-each and Rs. 10/- each fully paid up
60,00,000 10%
cumulative Redeemable
Preference Shares of
Rs. 10 each fully paid up

(b) Extent of holding 100% 100% 100% 82.24%

(C) The net aggregate of Profits/Loss

of the Subsidiary Companies so
far as it concerns the members
of ACC Limited -

(a) Not dealt with in the

accounts of ACC Limited
for the year ended December
31, 2006 amounted to -

(i) for the Subsidiaries'

financial year ended as in
(A) above Rs. 849.48 Lakhs Rs. 0.45 Lakhs Rs. (253.50) Lakhs Rs. 221.43 Lakhs

(ii) for the previous financial

years of the Subsidiaries
since they became the
Holding Company's
subsidiaries Rs. 1,095.85 Lakhs Rs. 0.47 Lakhs Rs. (4,269.59) Lakhs Rs. 542.95 Lakhs

(b) Dealt with in the accounts of

ACC Limited for the year
ended December31, 2006
amounted to

(i) for the Subsidiaries' financial

year ended as in (A) above Rs. 500.00 Lakhs – – –

(ii) for the previous financial

years of the Subsidiaries
since they became the
Holding Company's
subsidiaries Rs. 285.73 Lakhs – – –

For and on behalf of the Board,

N.S.SEKHSARIA PAUL HUGENTOBLER A.L.KAPUR

}
Chairman Deputy Chairman S.M.PALIA
NARESH CHANDRA
M.L.NARULA SUMIT BANERJEE MARKUS AKERMANN
Managing Director CEO Designate & Director D.K.MEHROTRA Directors
NIRMALYA KUMAR
ONNE VAN DER WEIJDE A. ANJENEYAN SHAILESH HARIBHAKTI
Chief Financial Officer Company Secretary ANIL SINGHVI
SHIKHA SHARMA

Mumbai, February 1, 2007

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