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You can view the entire text of Notes to accounts of the company for the latest year

BSE: 500410ISIN: INE012A01025INDUSTRY: Cement

BSE   ` 1437.95   Open: 1440.05   Today's Range 1433.80
1450.30
-2.00 ( -0.14 %) Prev Close: 1439.95 52 Week Range 1255.00
1852.25
Year End :2017-12 

Amendment to Ind AS 7:

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the Balance Sheet for liabilities arising from financing activities, to meet the disclosure requirement.

The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

Amendment to Ind AS 102:

The amendment to Ind AS 102 provides specific guidance for the measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes. However, this amendment is not applicable to the Company.

(i) The Company intends to dispose of plant and equipment in the next 12 months which it no longer intends to utilize. It was previously used in its manufacturing facility at plants. A selection of potential buyers is underway. No impairment loss was recognized on reclassification of the plant & equipment as held for sale and the Company expects the fair value less cost to sell to be higher than carrying amount.

(ii) The Company intends to dispose of Building (mainly residential flats) in the next 12 months which it no longer intends to utilize. These were previously used for residential purpose. A selection of potential buyers is underway. Impairment loss of Rs, 0.28 Crore (Previous year -Rs, Nil) is recognized in the Statement of Profit and Loss under other expenses.

*Pursuant to the Orders passed by the Special Court (TORTS) the Company has allotted Nil (Previous year - 41,907) equity shares out of the shares kept in abeyance of Rights Issue 1999.

ii) Terms / rights attached to equity shares

The Company has only one class of equity shares having par value of Rs, 10 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholder.

Companies referred above are subsidiaries of LafargeHolcim Ltd, Switzerland, the ultimate holding company.

v) There are no shares allotted as fully paid up by way of bonus shares or allotted as fully paid up pursuant to contract without payment being received in cash, or bought back during the period of five years immediately preceding the reporting date.

There are no securities which are convertible into equity shares.

Note: # The Company was a subsidiary of Holcim (India) Private Limited. Pursuant to the amalgamation of Holcim (India) Private Limited into Ambuja Cements Limited, effective August 12, 2016, the Company became a subsidiary of Ambuja Cements Limited.

The Description of the nature and purpose of each reserve within equity is as follows:

Capital Reserve: It represents the gains of capital nature which mainly includes the excess of value of net assets acquired over consideration paid by the Company for business amalgamation transaction in earlier years. Securities Premium Reserve: The amount received in excess of face value of the equity shares is recognized in Securities Premium Reserve. The reserve is utilised in accordance with the specific provision of the Companies Act, 2013.

General Reserve: The General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General reserve will not be reclassified subsequently to the statement of profit and loss. As per Companies Act 2013, transfer of profits to General Reserve is not mandatory. General Reserve is a free reserve available to the Company.

Retained Earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained Earnings is a free reserve available to the Company.

Other Comprehensive Income: Other Comprehensive Income includes re-measurement loss on defined benefit plans, net of taxes that will not be reclassified to profit and loss.

Provision for Site Restoration

Site restoration expenditure is incurred on an ongoing basis and until the closure of the site. The actual expenses may vary based on the nature of restoration and the estimate of restoration expenditure.

The tax rate used for reconciliation above is the corporate tax rate payable by corporate entities in India on taxable profits under Indian tax law.

Notes

1. Royalties on minerals expenses is net of Rs, 34.20 Crore (Previous year -Rs, Nil) related to provision for contribution towards District Mineral Foundation (DMF) under the Mines and Minerals (Development and Regulation) Amendment Act, 2015, written back on the basis of Supreme Court's favorable Judgment dated October 23, 2017.

2. (i) Does not include any item of expenditure with a value of more than 1% of turnover.

(ii) Miscellaneous expenses includes Grinding facility charges, Commission on sales, Information technology services, Travelling expenses, Other third party services, etc.

(iii) Miscellaneous expenses includes net loss of Rs, 4.23 Crore (Previous year - Rs, Nil) on foreign currency transaction and translation.

(iv) Miscellaneous expenses includes Loss on sale / write off of Property, Plant and Equipment (net) of Rs, 2.89 Crore (Previous year -Rs, Nil).

The amount required to be spent under Section 135 of the Companies Act, 2013 for the year is Rs, 18.73 Crore (Previous year - Rs, 21.47 Crore) i.e. 2% of average net profits for last three financial years, calculated as per section 198 of the Companies Act, 2013.

Impairment of Rs, 42.81 Crore for non-current investments in a subsidiary company was made in previous year considering inordinate delay in realizing its investments in coal blocks which were cancelled in 2015.

1. EARNINGS PER SHARE [EPS]

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity shareholders by weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

2. EMPLOYEE BENEFITS

a) Defined Contribution Plans - Amount recognized and included in note 33 "Contributions to Provident and other Funds" of Statement of profit and loss Rs, 17.94 Crore (Previousyear -Rs, 17.26 Crore)

b) Defined Benefit Plans - As per actuarial valuation on December 31, 2017

The company has defined benefit gratuity, additional gratuity, post employment medical benefit plans and Trust managed provident fund plan as given below:

i. Every employee who has completed minimum five years of service is entitled to gratuity at 15 days salary for each completed year of service in accordance with Payment of Gratuity Act, 1972. The scheme is funded with insurance companies in the form of qualifying insurance policies.

ii. Every employee who has joined before December 01, 2005 and separates from service of the Company on Superannuation or on medical grounds is entitled to additional gratuity. The scheme is Non-Funded.

iii. Benefits under Post Employment Medical Benefit plans are payable for actual domiciliary treatment/ hospitalization for employees and their specified relatives. The scheme is Non-Funded.

The plans in India typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk - As the plan assets include significant investments in quoted debt and equity instruments, the Company is exposed to the risk of impacts arising from fluctuation in interest rates and risks associated with equity market.

Interest risk - A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan's debt investments.

Longevity risk - The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.

Salary risk - The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability.

VI Sensitivity Analysis:

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation recognized in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

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 Life Insurance Corporation (LIC) of India's Group Gratuity-cum-Life Assurance cash accumulation policy and HDFC Standard Life's Group Unit Linked Plan - For Defined Benefit Scheme. The Trust formed by the Company manages the investments of provident fund plan.

d) The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet date for the estimated term of the obligations.

e) 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.

g) Post employment defined benefit plan expenses are included under employee benefit expenses in the Statement of profit and loss.

h) Amount recognized as an expense under employee benefit expenses in the Statement of profit and loss in respect of other benefits is Rs, 9.07 Crore (Previous year -Rs, 12.31 Crore).

c) Provident Fund

Provident fund for certain eligible employees is managed by the Company through a trust "The Provident Fund of ACC Ltd.", in line with the Provident Fund and Miscellaneous Provisions Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of separation from the company or retirement, whichever is earlier. The benefits vests immediately on rendering of the services by the employee. The minimum interest rate payable by the trust to the beneficiaries every year is being notified by the Government. The company has an obligation to make good the shortfall, if any, between the return from the investments of the trust and the notified interest rate. The Company has obtained the actuarial valuation of interest rate obligation in respect of Provident Fund and there is no shortfall.

IX The Company expects to contribute Rs, 24.95 Crore (December 31, 2016 - Rs, 23 Crore; January 01, 2016 -Rs, 18.84 Crore) to trust managed provident fund in next year.

3. LEASES

Operating lease commitments — Company as lessee

The Company has entered into operating leases on certain assets (grinding facility, godowns, flats, office premises and other premises). The Company has the option, under some of its leases, to lease the assets for additional terms of three to five years.

Future lease rentals are determined on the basis of agreed terms. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases. 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.

Operating lease payment recognized in the Statement of profit and loss amounts to Rs, 139.79 Crore (Previous year -Rs, 132.92 Crore).

The Company has arrangement with an associate company whereby it sells clinker and purchases cement manufactured out of such clinker. The Company has evaluated such arrangement based on facts and circumstances existing at the date of transition to Ind AS and have identified them in the nature of lease as the company takes more than an insignificant amount of the cement that will be produced or generated by the asset during the term of the arrangement and the price for the output is neither contractually fixed per unit of output nor equal to the current market price per unit of output as of the time of delivery of the output. The Company has further assessed the other terms of the arrangement for classification as operating or finance lease and the arrangement classified as operating lease.

The Company has concluded that it is impracticable to separate the lease payments from other payments made under this arrangement reliably and hence all payments under the arrangement is considered as lease payments. Finance lease

The Company has entered into long-term leasing arrangements for land which has been assessed as finance lease since the present value of the minimum lease payments is substantially similar to the fair value of the leasehold land. These arrangements do not involve any material recurring payments, hence other disclosures are not given.

In respect of above matters, future cash outflows are determinable only on receipt of judgments pending

at various forums / authorities.

The Company does not expect any reimbursements in respect of the above contingent liabilities

a) The Company had filed writ / appeal petitions against the orders / notices of various authorities towards demand 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 Chattisgarh and on cement produced vis a vis consumption of limestone at its factory in Tamil Nadu. During the current year, the Chattisgarh High Court has decided this matter in favour of the Company by directing the Authorities to only demand Royalty based on quantity of Limestone actually mined and recorded through statutory documentation, and not based on any ratio.

The Company holds the view that the payment of royalty on limestone is correctly made by the Company based on the actual quantity of limestone extracted, and feels that similar relief can also be expected from the Judiciary and / or Authorities in the cases of Tamil Nadu Unit. In view of the demand being legally unjustifiable, and due to the decision of the Chattisgarh High Court, directly on this issue, the Company does not expect any liability in above matter.

b) In 2012, the Competition Commission of India ('CCI') issued an Order imposing penalty on certain cement manufacturers, including the Company, concerning alleged contravention of the provisions of the Competition Act, 2002, and imposed a penalty of Rs, 1,147.59 Crore on the Company. On Company's appeal, Competition Appellate Tribunal ('COMPAT'), initially stayed the penalty, and by its final order dated December 11, 2015, set aside the order of the

CCI, remanding the matter back to the CCI for fresh adjudication and for passing a fresh order. After hearing the matter, the CCI has, by its order dated August 31, 2016, imposed a penalty of Rs, 1,147.59 Crore on the Company. The Company has filed an appeal against the said Order with Competition Appellate Tribunal ('COMPAT'). Pending final disposal of the appeal, the COMPAT has stayed the penalty with a condition to deposit 10% of the penalty amount, which has been deposited and levy of interest of 12% p.a. in case the appeal is decided against the appellant. Interest amount on penalty as on December 31, 2017 is Rs, 183.74 Crore (up to December 31,2016 -Rs, 45.90 Crore).

The Competition Appellate Tribunal (COMPAT) has ceased to exist effective 26 May 2017. The appellate function under the Competition Act, 2002 (Competition Act) is now conferred to the National Company Law Appellate Tribunal (NCLAT). The matter is accordingly listed before the NCLAT. NCLAT has heard the arguments of all the appellant cement manufacturers and also of the respondent CCI. The decision has been reserved by NCLAT. Based on the advice of external legal counsel, the Company believes it has good grounds for successful appeal. Accordingly, no provision is considered necessary.

c) In a separate matter, pursuant to a reference filed by the Government of Haryana, The Competition Commission of India issued an Order dated January 19, 2017 imposing penalty on certain cement manufacturers, including the Company, concerning alleged contravention of the provisions of the Competition Act, 2002, and imposed a penalty of Rs, 35.32 Crore on the Company. On Company-s filing an appeal, Competition Appellate Tribunal (COMPAT) has stayed the penalty.

The Competition Appellate Tribunal (COMPAT) has ceased to exist effective 26 May 2017. The appellate function under the Competition Act, 2002 (Competition Act) is now conferred to the National Company Law Appellate Tribunal (NCLAT). Matter is now listed before NCLAT and is pending hearing.

Based on the advice of external legal counsel, the Company believes it has good grounds for successful appeal. Accordingly, no provision is considered necessary.

(B) Material demands and disputes relating to assets and liabilities considered as remote by the Company

a) The Company had availed sales tax incentives in respect of its new 1 MTPA Plant (Gagal II) under the Himachal Pradesh (HP) State Industrial Policy, 1991. The Company had accrued sales tax incentives aggregating Rs, 56 Crore. The Sales tax authorities introduced certain restrictive conditions after commissioning of the unit stipulating that incentive is available only for incremental amount over the base revenue and production of Gagal I prior to the commissioning of Gagal II. The Company contends that such restrictions are not applicable to the unit as Gagal II is a new unit, as decided by the HP Hon'ble High Court and confirmed by the Hon'ble Supreme Court while determining the eligibility for transport subsidy. The Department recovered Rs, 64 Crore (tax of Rs, 56 Crore and interest of Rs, 8 Crore) which is considered as recoverable.

4 CONTINGENT LIABILITIES NOT PROVIDED FOR - (Contd.)

The HP Hon'ble High Court, had, in 2012, dismissed the Company's appeal. The Company believes the Hon'ble High Court's judgment was based on an erroneous understanding of certain facts and legal positions and that it also failed to consider certain key facts. The Company has been advised by legal experts that there is no change in the merits of the Company's case. Based on such advice, the Company filed a Special Leave Petition (SLP) before the Hon'ble Supreme Court, which is pending for hearing.

b) The Company was eligible for certain incentives in respect of its investment towards modernization and expansion of the Chaibasa Cement Unit pursuant to confirmation received under the State Industrial Policy of Jharkhand. Accordingly, the Company has made claims for refund of VAT paid for each financial year. However, no disbursals were made (except an amount of Rs, 7 Crore representing part of the One Time Lumpsum capital subsidy claim of Rs, 15 Crore) as the authorities have raised new conditions and restrictions, that were extraneous to the approvals and confirmations expressly received by the Company. The Company had filed two writ appeals before the Jharkhand Hon'ble High Court against these conditions, restrictions and disputes to the extent of the eligible claims which are now being sought to be effected/ raised by the Government.

The Division Bench of the Jharkhand Hon'ble High Court, while dealing with appeals by both the Company and the State Government, against a single bench order only partially allowing the Company's claim, in its order dated February 24, 2015, allowed the Company's appeal in totality while dismissing the Government's appeal, thereby confirming that the entire amount claimed by the Company is correct and hence payable immediately.

The Government of Jharkhand had filed an Special Leave petition (SLP) in the Hon'ble Supreme Court against the order of the division bench, which was admitted. In its interim order, the Supreme Court had, while not staying the Division Bench Order, had only stayed disbursement of 40% of the amount due Consequently, as of date, the Company received only Rs, 64 Crore out of total Rs, 235 Crore in part disbursement from the Government of Jharkhand.

The Company is pursuing the matter of disbursement of further amounts outstanding.

The Company is of the view and has been advised legally, that the merits are strongly in its favour and it expects that the SLP shall be rejected upholding the order of the Division bench of the Jharkhand Hon'ble High Court by the Apex Court.

c) The Company is eligible for incentives for one of its cement plants situated in Maharashtra, under a Package Scheme of Incentives of the Government of Maharashtra. The scheme inter alia, includes refund of royalty paid by the Company on extraction or procurement of various raw materials (minerals). The Department of Industries has disputed the Company's claim for refund of royalty on an erroneous technical interpretation of the sanction letter issued to the Company, that only the higher of the amount of (i) VAT refund and (ii) royalty refund claim amounts, each year, shall be considered. The Company maintains that such annual restriction is not applicable as long as the cumulative limit of claim does not exceed the amount of eligible investment. The Company has accrued an amount of Rs, 133 Crore (December 31,2016 -Rs, 133 Crore, January 01,2016 -Rs, 106 Crore) on this account. The Company has filed an appeal before the Bombay High Court challenging the stand of the Government, which is admitted and pending before the High Court for hearing on merit. The Company believes that the merits of the claim are strong.

d) The Company had set up a captive power plant ('Wadi TG 2') in the year 1995-96. This plant was sold to Tata Power Co. Ltd., in the year 1998-99 and was subsequently repurchased from it in the year 2004-05. The Company had purchased another captive power plant ('Wadi TG 3, set up by Tata Power Co. Ltd. in the year 2002-03) in 2004-05. Both these power plants were eligible for tax holiday under the provisions of Section 80-IA of the Income-tax Act, 1961. The Income tax department has disputed the Company's claim of deduction under Section 80-IA of the Act, on the ground that the conditions prescribed under the section are not fulfilled. In case of Wadi TG

2, in respect of the demand of Rs, 56.66 Crore (net of provision) (Previous Year -Rs, 56.66 Crore), the Company is in appeal before the ITAT and in case of Wadi TG 3 in respect of the demand of Rs, 115.62 Crore (Previous Year -Rs, 115.62 Crore), which was set aside by the ITAT, the Department is in appeal against the decision in favour of the Company. The Company believes that the merits of the claims are strong and will be allowed.

e) One of the Company's cement manufacturing plants located in Himachal Pradesh was eligible, under the State Industrial Policy for deferral of its sales tax liability arising on sale of cement manufactured at that plant. The Excise and Taxation department of the Government of Himachal Pradesh, disputed the eligibility of the Company to such deferment on the ground that the Company also manufactures an intermediate product, viz. Clinker, arising in the manufacture of cement, and such intermediate product was in the negative list. A demand of Rs, 82.37 Crore (Previous year -Rs, 82.37 Crore) was raised. The Company filed a writ petition before the Hon'ble High Court of Himachal Pradesh against the demand. The case has been admitted and the hearing is in process. The Company believes its case is strong and the demand shall not sustain under law.

f) Consequent upon the Hon'ble Supreme Court's judgment in Goa Foundation case, restricting the "deemed renewal" provision of captive mining leases to the first renewal period, the Company had received demand from District Mining Officer for Rs, 881 Crore as penalty for alleged illegal mining activities carried out by the Company during January 1991 to September 2014. The aforesaid demands were challenged by the Company and Writ Petition was filed with the Hon'ble High Court of Jharkhand. The petition has been admitted subject to a token deposit of Rs, 48 Crore which shall be refundable in case the matter is decided in the Company's favour.

In the view of Company and based on legal advice, that this demand does not have merit, and shall not stand the test of judicial scrutiny, considering that the said mining, leases pending State Government's approval, have been automatically extended up to March 31, 2030 by Mines and Minerals (Development and Regulation) (Amendment) Act, 2015 without any recourse being made available to the State Government.

5. RELATED PARTY DISCLOSURE

(A) Names of the Related parties where control Nature of Relationship exists:

1 LafargeHolcim Ltd, Switzerland Ultimate Holding Company

2 Holderind Investments Ltd, Mauritius Holding Company of Holcim (India) Private

Limited (upto August 11, 2016)

Holding Company of Ambuja Cements Limited (w.e.f. August 12, 2016)

3 Holcim (India) Private Limited (Refer Note - 49) Holding Company (Upto August 11, 2016)

4 Ambuja Cements Limited Fellow Subsidiary up to August 11, 2016 and

Holding Company (w.e.f. August 12, 2016)

5 Bulk Cement Corporation (India) Limited Subsidiary Company

6 ACC Mineral Resources Limited Subsidiary Company

7 Lucky Minmat Limited Subsidiary Company

8 National Limestone Company Private Limited Subsidiary Company

9 Singhania Minerals Private Limited Subsidiary Company

10 OneIndia BSC Private Limited Joint venture Company

11 Aakaash Manufacturing Company Private Limited Joint venture Company

(B) Others - With whom transactions have been taken place during the current and/or previous year

(a) Names of other Related parties Nature of Relationship

1 Alcon Cement Company Private Limited Associate Company

2 Asian Concretes and Cements Private Limited Associate Company

3 Lafarge India Private Limited Fellow Subsidiary (Upto October 04, 2016)

4 Holcim Technology (Singapore) Pte Ltd, Singapore Fellow Subsidiary

5 Siam City Cement (Lanka) Ltd, Sri Lanka Fellow Subsidiary (Upto August 10, 2016)

6 PT Holcim Indonesia Tbk, Indonesia Fellow Subsidiary

7 Holcim Services (South Asia) Limited Fellow Subsidiary

8 Holcim Cement (Bangladesh) Ltd, Bangladesh Fellow Subsidiary

9 Holcim Philippines Inc, Philippines Fellow Subsidiary

10 Holcim Group Services Ltd, Switzerland Fellow Subsidiary

11 Holcim Technology Ltd, Switzerland Fellow Subsidiary

12 LafargeHolcim Trading Pte Ltd, Singapore Fellow Subsidiary

13 LafargeHolcim Energy Solutions SAS, France Fellow Subsidiary

14 Holcim (Liban) S.A.L., Lebanon Fellow Subsidiary

15 Cementos Apasco SA de CV (LHMEX), Mexico Fellow Subsidiary

16 Dirk India Private Limited Fellow Subsidiary (w.e.f. August 12, 2016)

17 Counto Microfine Products Private Limited Joint venture of Ambuja Cements Limited

18 The Provident Fund of ACC Ltd Post-employment benefit plan

19 ACC Limited Employees Group Gratuity scheme Post-employment benefit plan

In accordance with the provisions of Ind AS 24 "Related Party Disclosures" and the Companies Act, 2013, following Personnel are considered as Key Management Personnel (KMP).

(b) Name of the Related Parties Nature of Relationship

1 Mr. Neeraj Akhoury Managing Director & CEO

(w.e.f February 04, 2017)

2 Mr. Harish Badami CEO & Managing Director

(upto February 03, 2017)

3 Mr. Sunil K. Nayak Chief Financial Officer

4 Mr. Surendra Mehta Company Secretary

(w.e.f April 21, 2017 upto September 25, 2017)

5 Mr. Kalidas Ramaswami Company Secretary (w.e.f. September 26, 2017)

6 Mr. Burjor D. Nariman Company Secretary upto March 31, 2017

7 Mr. N S Sekhsaria Chairman, Non Executive / Non Independent

Director

8 Mr. Jan Jenisch Deputy Chairman, Non Executive / Non

Independent Director (w.e.f. October 10, 2017)

9 Mr. Eric Olsen Deputy Chairman, Non Executive /

Non Independent Director (upto September 21, 2017)

10 Mr. Martin Kriegner Non Executive / Non Independent Director

(w.e.f. February 11, 2016)

11 Mr. Shailesh Haribhakti Independent Director

(b) Name of the Related Parties Nature of Relationship

12 Mr. Sushil Kumar Roongta Independent Director

13 Mr. Ashwin Dani Independent Director

14 Mr. Farrokh K Kavarana Independent Director

15 Mr. Vijay Kumar Sharma Non Independent Director

16 Mr. Arunkumar R Gandhi Independent Director

17 Ms. Falguni Nayar Independent Director

18 Mr. Christof Hassig Non Independent Director

19 Mr. Bernard Terver Non Independent Director

(upto February 11, 2016)

6. RELATED PARTY DISCLOSURE (contd.)

#The Board of Directors at its Meeting held on December 16, 2016 had accepted the resignation of Mr. Harish Badami w.e.f. February 04, 2017. The Board had approved the severance payment of Rs, 5.27 Crore pursuant to the approval of and by the authority conferred by the members of the Company.

The Company makes monthly contributions to provident fund managed by "The Provident Fund of ACC Ltd" for certain eligible employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. During the year, the Company contributed Rs, 22.35 Crore (Previous Year -Rs, 20.52 Crore).

The Company maintains gratuity trust for the purpose of administering the gratuity payment to its employees (ACC Limited Employees Group Gratuity scheme). During the year, the Company contributed Rs, 7.19 Crore (Previous Year -Rs, 16.78 Crore).

Terms and conditions of transactions with related parties

Sales and purchases:

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm's length transactions. For the year ended December 31, 2017, the Company has not recorded any loss allowances for trade receivables from related parties (Previous year -Nil).

Loans to subsidiaries:

The Company had given loans to subsidiaries for general corporate purposes. Outstanding balances at the year-end are unsecured and carry an interest rate of 9% (Previousyear - 9%) and repayable on demand.

Guarantees given on behalf of subsidiaries:

Guarantee given on behalf of Lucky Minmat Limited and Singhania Minerals Private Limited, wholly owned subsidiary companies is for the purpose of approval of mining plan.

7. SEGMENT REPORTING

For management purposes, the Company is organized into business units based on the nature of the products, the differing risks and returns. The organization structure and internal reporting system has two reportable segments, as follows:

(a) Cement - Cement is a product which is obtained as clinker resulting from mixing at suitable rates, grinding and firing raw material such as limestone, clay, iron ore, Fly ash, bauxite etc; and certain amount of setting regulator (generally gypsum) are ground together and set after mixing with water and gains strength. In general, it is used in construction activities.

(b) Ready mix concrete - Ready-mix concrete is concrete that is manufactured in a batch plant, according to a set engineered mix design. In general, it is used in construction activities.

No operating segments have been aggregated to form the above reportable operating segments.

The Chief Operating Decision Maker ("CODM") monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. However, the Company's financing (including finance costs and finance income) and income taxes are managed on a Company basis and are not allocated to operating segments.

Transfer prices between operating segments are on an arm's length basis in a manner similar to transactions with third parties.

8. In assessing the carrying amounts of Investments (net of impairment loss) in companies which are currently not in operation, the Company considered various factors as detailed below and concluded that no further impairment is necessary.

(i) The Company has invested Rs, 38.10 Crore (As at December 31, 2016 - Rs,38.10 Crore; As at January 01, 2016 - Rs,38.10 Crore) in equity shares of Lucky Minmat Limited (LML), a wholly owned subsidiary company. LML is engaged in the extraction of limestone. The Company has through an independent external valuer has determined the value in use of investment based on discounted future cash flow approach. In making the said projections, reliance has been placed on current market analysis, estimates of future prices of mineable resources (Limestone), mining leases and assumptions relating to operational performance.

(ii) The Company has invested Rs, 14.02 Crore (As at December 31, 2016 - Rs, 14.02 Crore; As at January 01, 2016 -Rs, 14.02 Crore) in equity shares of National Limestone Company Private Limited (NLCPL) a wholly owned subsidiary company. NLCPL is engaged in the extraction of limestone. The Company has through an independent external valuer has determined the value in use of investment based on discounted future cash flow approach. In making the said projections, reliance has been placed on current market analysis, estimates of future prices of mineable resources (Limestone), mining leases and assumptions relating to operational performance.

(iii) The Company has invested Rs, 63.99 Crore (As at December 31, 2016 - Rs, 63.99 Crore; As at January 01, 2016 -Rs, 106.80 Crore) in ACC Mineral Resources Limited (AMRL), a wholly-owned subsidiary. AMRL, through its joint operations had secured development and mining rights for four coal blocks allotted to Madhya Pradesh State Mining Corporation Ltd. These allocations stand cancelled pursuant to the order of the Supreme Court ruling that allocation of various coal blocks, including these, was arbitrary and illegal. The Government of India has commenced auctioning process for all such blocks in a phased manner. The auctioning for Bicharpur, being one of the four blocks, was completed, with the block being awarded to the successful bidder on March 23,2015. AMRL has filed its claim to Ministry of Coal for compensation in respect of Bicharpur coal block pursuant to judgment issued by Delhi Hon'ble High Court dated March 09, 2017. In respect of other three blocks, auctioning dates yet been announced. During the previous year, the Company has made the impairment provision of Rs, 42.81 Crore.

9.

(i) The Company has arrangements with an associate company whereby it sells clinker and purchases cement manufactured out of such clinker. While the transactions are considered as individual sale/ purchase transactions for determination of taxable turnover and tax under VAT / GST laws, considering the accounting treatment prescribed under various accounting guidance, revenue for sale of such clinker of Rs, 22.84 Crore (Previous year -Rs,20.35 Crore) has not been recognized as a part of the turnover but has been adjusted against cost of purchase of cement so converted.

(ii) The Company has arrangement with a Joint venture company whereby it purchases Ready Mix Concrete and sells that to external customers. While the transactions are considered as individual sale/ purchase transactions for determination of taxable turnover and tax under VAT / GST laws, considering the Joint venture essentially operates as a risk bearing licensed manufacturer of Ready Mix Concrete in relation to the Company's local sales, this arrangement is considered in nature of royalty arrangement and revenue for sale of such Ready mix concrete to customer Rs, 83.61 Crore (Previous year - Rs, 87.65 Crore) has not been recognized as a part of the turnover but has been adjusted against cost of purchase of Ready mix concrete.

10.

The Company was a subsidiary of Holcim (India) Private Limited. Pursuant to the amalgamation of Holcim (India)

Private Limited into Ambuja Cements Limited, effective August 12, 2016, the Company became a subsidiary of

Ambuja Cements Limited.

(b) Details of Investments made are given in Note 4.

(c) Guarantee given on behalf of Lucky Minmat Limited and Singhania Minerals Private Limited, wholly owned subsidiary companies, of Rs, 0.16 Crore (Previous Year -' 0.16 Crore)are for the purpose of approval of mining plan.

(d) The loanees have not made any investments in the shares of the Company.

(e) The above loans are repayable on demand and carries rate of interest at 9% p.a. (Previous year - 9% p.a.)

11. CAPITALISATION OF EXPENDITURE

During the year, the Company has capitalized the following expenses of revenue nature to the cost of Property, Plant and Equipment / Capital work-in-progress (CWIP). Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the company.

12. FAIR VALUES

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments: Level 1: inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

Level 2: inputs other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and

Level 3: inputs that are unobservable for the asset or liability.

Set out below, is a comparison by category of the carrying amounts and fair value of the Company's financial . instruments.

Management assessed the carrying values of Other Cash and cash equivalents, Bank balances other than cash and cash equivalents, trade receivables, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The following methods and assumptions were used to estimate the fair values:

Quoted bid prices in an active market - Unadjusted Quoted price in principle market in which equity instrument is actively traded.

Investments in liquid and short-term mutual funds, which are classified as FVTPL are measured using net asset values at the reporting date multiplied by the quantity held. Fair value of certificate of deposits is determined based on the indicative quotes of price and yields prevailing in the market at the reporting date.

Under Discounted cash flow method, future cash flows are discounted by using rates which reflect market risks. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate and credit risk. The probabilities of the various estimates within the range can be reasonably assessed and are used in management's estimate of fair value.

13. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Financial Risk Evaluation and Management is an ongoing process within the Company. The Company has a robust risk management framework to identify, monitor, mitigate and minimize risks arising from financial instruments.

The Company is exposed to market, credit and liquidity risks. The Board of Directors ('Board') oversee the management of these risks through its Risk Management Committee. The Company's Risk Management Policy has been formulated by the Risk Management Committee and approved by the Board. The Policy articulates on the Company's approach to address uncertainties in its Endeavour to achieve its stated and implicit objectives. It also prescribes the roles and responsibilities of the Company's management, the structure for managing risks and the framework for risk management. The framework seeks to identify, assess and mitigate risks in order to minimize potential adverse effects on the Company's financial performance. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company's policy that no trading in derivatives for speculative purposes shall be undertaken. The Board of Directors reviews and agrees on policies for managing each of these risks, which are summarized below. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.

(i) Credit risk

Credit risk is the risk that the counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits placed with banks and financial institutions and other financial instruments.

Financial assets other than trade receivables

Credit risk from balances with banks and financial institutions is managed by the Company's Treasury department in accordance with it's policy. Surplus funds are parked only within approved investment categories with well defined limits. Investment category is periodically reviewed by the Company's Board of Directors.

Credit risk arising from short term liquid funds, other balances with banks and other cash equivalents is limited and no collaterals are held against these because the counterparties are banks and recognized financial institutions with high credit ratings assigned by the credit rating agencies.

14. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (contd.)

Trade receivables

Customer credit risk is managed as per the Company's established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit or other forms of collaterals. The requirement for impairment is analysed at each reporting date on an individual basis for major customers. The management is also monitoring the receivables levels by having frequent interactions with responsible persons for highlighting potential instances where receivables might become overdue.

Trade receivables consist of a large number of customers spread across India with no significant concentration of credit risk. Ongoing credit evaluation is performed on the financial condition of accounts receivable. The Company has adopted a policy of only dealing in creditworthy counterparties and obtaining collateral i.e. security deposit. No single customer accounted for 10% or more of the Company's net sales. Therefore, the Company does not expect any material risk on account of nonperformance by any of its counterparties.

Expected credit loss assessment

For trade receivables, as a practical expedient, the Company compute credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates. Accordingly, the Company creates provision for past due receivables beyond 180 days ranging between 80%-100% after considering the underlying collaterals.

The following table summarizes the change in the loss allowances measured using simplified approach model expected credit loss assessment:

15. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (contd.)

(ii) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due. The Company's treasury team is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company's liquidity position through rolling forecasts on the basis of expected cash flows.

The table summarizes the details regarding the remaining contractual maturities of financial liabilities at the reporting date based on the contracted undiscounted cash payments.

#Borrowing consist of short term loan taken from a wholly owned subsidiary. Amount included in the above maturity analysis assumes interest outflows based on the year end benchmark interest rates, the actual interest rates may differ based on the changes in the benchmark interest rates.

*Other financial liabilities includes deposits received from customers amounting to ' 459.30 Crore (December 31, 2016 - Rs, 435.50 Crore; January 01 2016 - Rs, 446.07 Crore). These deposits do not have a contractual re-payment term but are repayable on demand. Since, the Company does not have an unconditional right to defer the payment, these deposits have been classified under current financial liabilities. For including these amounts in the above mentioned maturity analysis, the Company has assumed that these deposits, including interest thereon, will be repayable at the end of the next reporting period. The actual maturity period for the deposit amount and the interest thereon can differ based on the date on which these deposits are settled to the customers.

(iii) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risk: interest rate risks, currency risk and other price risk, such as equity price risks and commodity risk. Financial instruments affected by market risk include loans and borrowings, investments, deposits, trade payables.

Foreign currency risk

Foreign currency risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to change in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates primarily relate to import of raw materials, fuels and capital items.

Based on sensitivity analysis, the Company has well defined forex exposure threshold limit approved by Board of Directors, beyond which all forex exposure are fully hedged. Currently our foreign currency risk exposure is below threshold limit hence not hedged.

Foreign currency sensitivity

The following tables demonstrate the sensitivity into a reasonably possible change in exchange rates, with all other variables held constant. A positive number below indicates an increase in profit where the ' strengthens 5% against the relevant currency. For a 5% weakening of the ' against the relevant currency, there would be a comparable impact on the profit and the balances below would be negative.

5% represent management assessment of reasonably possible change in foreign currency exchange rate.

16. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (contd.)

Market Risk- Price risk

Other price risk is the risk that the fair value of financial instruments will fluctuate due to change in marked traded prices. Other price risk is arises from the financial assets such as investments in equity instruments and bonds.

The Company is exposed to equity price risks arising from equity investment in Shiva Cement Limited. Company's equity investments were held for strategic rather than trading purposes. During the current year, the Company has sold investment in Shiva Cement Limited.

Equity price sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to equity price risks at the end of the reporting period.

If equity prices of Shiva Cement Limited had been 5% higher/ lower, the Profit before tax for the year ended December 31, 2017 would have been increased / decreased by ' Nil (Previous Year -' 1.42 Crore) as a result of the changes in fair value of equity investments measured at FVTPL.

Market Risk- Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Company's exposure to the interest rate risk arises primarily from their loans and borrowings. Since the Company has insignificant interest bearing borrowings, the exposure to risk of changes in market interest rates is minimal. The Company has not used any interest rate derivatives.

The Company has taken interest bearing security deposit from dealers. If interest rate had been 0.50% higher/lower the Profit for the year ended December 31, 2017 would decrease / increase by Rs, 2.30 Crore (Previous year -Rs,2.28 Crore).

Unrepresentativeness of Sensitivity analysis

In management's opinion the sensitivity analysis is unrepresentative of the above inherent risks because the exposure at the end of the reporting periods does not reflect the exposure during the year.

17. CAPITAL MANAGEMENT

The Company's objectives when managing capital are to (a) maximize shareholder value and provide benefits to other stakeholders and (b) maintain an optimal capital structure to reduce the cost of capital.

For the purposes of the Company's capital management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders.

As stated in the below table, the Company is a Zero debt company with no long-term borrowings. The Company is not subject to any externally imposed capital requirements.

18. FIRST-TIME ADOPTION OF IND AS

The effect of the Company's transition to Ind AS is summarized as follows:

(i) Transition election

(ii) Reconciliations of Balance Sheet

(iii) Reconciliation of Equity

(iv) Reconciliation of Total Comprehensive Income for the year ended December 31, 2016

(v) Effect of adoption of Ind AS on the Statement of Cash Flow for the year ended December 31, 2016

(i) Transition election

These financial statements, for the year ended December 31, 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended December 31, 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act, 2013, read together with rule 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP).

Accordingly, the Company has prepared the comparative period data as at and for the year ended December 31, 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company's opening balance sheet was prepared as at January 01, 2016, the Company's date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Previous GAAP financial statements as at and for the year ended December 31, 2016, including the opening Balance Sheet as at January 01, 2016.

Overall principle

The Company has prepared the opening Balance Sheet as per Ind AS as of January 01, 2016 (the transition date) by,

- Recognizing all assets and liabilities whose recognition is required by Ind AS,

- not recognizing items of assets or liabilities which are not permitted by Ind AS,

- by reclassifying items from Previous GAAP to Ind AS as required under Ind AS, and

- applying Ind AS in measurement of recognized assets and liabilities.

However, this principle is subject to certain optional exemptions and mandatory exceptions availed by the Company as detailed below. Since, the financial statements are the first financial statements, the first time adoption - optional exemptions and mandatory exceptions have been explained in detail.

Exemptions applied

Ind AS 101 "First-time adoption of Indian Accounting Standards" allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

1 Business Combinations

Ind AS 103 "Business Combinations" has not been applied to acquisitions of subsidiaries, which are considered businesses under Ind AS that occurred before January 01, 2016. Use of this exemption means that the Previous GAAP carrying amounts of assets and liabilities, that are required to be recognized under Ind AS, is their deemed cost at the date of the acquisition. After the date of the acquisition, measurement is in accordance with respective Ind AS. The Company recognizes all assets acquired and liabilities assumed in a past business combination, except (i) certain financial assets and liabilities that were derecognized and that fall under the derecognition exception, and

(ii) assets (including goodwill) and liabilities that were not recognized in the acquirer's Balance Sheet under its previous GAAP and that would not qualify for recognition under Ind AS in the individual balance sheet of the acquiree. Assets and liabilities that do not qualify for recognition under Ind AS are excluded from the opening Ind AS balance sheet. The Company did not recognize or exclude any previously excluded or recognized amounts as a result of Ind AS recognition requirements.

2 Investments in subsidiaries, joint ventures and associates

The Company has elected to continue with the carrying value of all of its investments in subsidiaries, joint ventures and associates recognized as of January 01, 2016 (transition date) measured as per the previous GAAP as its deemed cost as at the date of transition.

3 Leases

Appendix C to Ind AS 17 "Leases" requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used Ind AS 101 exemption and assessed all arrangements for embedded leases based on conditions prevailing as at Ind AS transition date.

4 Deemed cost of property, plant and equipment and intangible assets

As per Ind AS 101, a first-time adopter has an option, inter alia, to use carrying values of property, plant and equipment and intangible assets as on the date of transition to Ind AS, if there has been no change in its functional currency on the date of transition. The Company has accordingly elected to continue with the carrying values under previous GAAP for all the items of property, plant and equipment and intangible assets.

Exceptions

1 Estimates

The estimates at January 01, 2016 are consistent with those made for the same dates in accordance with Previous GAAP (after adjustments to reflect differences if any, in accounting policies) apart from the following items where application of Previous GAAP did not require estimation:

- Impairment of financial assets based on expected credit loss model

- Fair value of unquoted equity instruments

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at January 01, 2016.

2 Derecognition of financial assets and financial liabilities

The Company has applied the derecognition requirements for financial assets and financial liabilities in Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS.

Footnotes to the reconciliation to Balance Sheet, Equity, Total Comprehensive Income and

Statement of cash flows as at January 01, 2016 and December 31, 2016

Classifications

1 Mining Leasehold land

Mining leasehold land which is controlled by an entity as a result of past events and from which future economic benefits are expected to flow to the company has been assessed as intangible assets under Ind AS 38 "Intangible assets". Consequent to this change, the carrying value of mining lease hold of Rs, 24.06 Crore (January 01,2016 -Rs,25.71 Crore)is classified as other intangible assets from tangible assets.

2 Non-current Asset held for sale

Under the previous GAAP, the Company recorded freehold non-mining land of Rs, 31.00 Crore and buildings of Rs, 3.46 Crore (January 01,2016 - Rs,31.00 Crore and Rs,3.46 Crore respectively) as "Fixed assets held for sale" under other current assets which are stated at the lower of their net book value and net realisable value.

Under Ind AS, non-current assets to be disposed of are classified as held for sale when the asset is available for immediate sale and the sale is highly probable. Since the sale of land and building is not highly probable these are reclassified to Property, plant and equipment as at transition date. Remaining balance of Fixed assets held for sale of Rs, 12.03 Crore (January 01,2016 -Rs, 12.83 Crore) is shown separately under the head "Non-current assets classified as held for sale"

3 Government grants

As per Previous GAAP, government grants in the nature of promoters' contribution were credited to capital reserve and treated as a part of shareholders' funds. Under Ind AS 20 'Government Grants' the grant received in the form of capital subsidy is recognized as deferred income on the date of receipt of grant and recognized as income in the Statement of Profit and Loss on a systematic basis over the useful life of related asset.

The Company had recognized a grant amounting to ' 15.07 Crore in capital reserve under Previous GAAP. As at transition date, useful life of related asset is already finished and there are no unfulfilled conditions attached to the existing grant therefore, the entire capital subsidy of ' 15.07 Crore is reclassified to retained earnings as on transition date under Ind AS. This is the reclassification within equity therefore overall there is no impact on equity.

4 Grossing up of Delcredere

Under Previous GAAP, delcredere balances were netted off from trade receivables. Under Ind AS, trade receivables are a financial asset and criteria for derecognition of financial asset are not met as per guidance under Ind AS 109 'Financial Instruments'. The Company has applied the derecognition requirements for financial assets prospectively for transactions occurring on or after the date of transition to Ind AS.

Accordingly, trade receivables have been grossed up by Rs, 68.37 Crore with corresponding increase in other financial liabilities (current) as on December 31, 2016.

5 Deferred tax - MAT credit entitlement

Under Previous GAAP, MAT credit was recognized under current tax and asset was disclosed under Long-term loans and advances. In accordance with Ind AS 12 'Income taxes', MAT credit of Rs, 117.55 Crore as at December 31, 2016 (January 01 2016 - Rs,Nil) is reclassified under the head Deferred tax liabilities (Net) and MAT credit of Rs, 117.55 Crore is reclassified from current tax to deferred tax expenses.

6 Excise duty

Under Previous GAAP, sale of goods was presented as net of excise duty. Under Ind AS, sale of goods is presented inclusive of excise duty. Excise duty expenses is separately presented on the face of the Statement of Profit and Loss. Thus sale of goods under Ind AS has increased by Rs, 1,529.38 Crore with a separate disclosure of excise duty expenses on the face of the Statement of Profit and Loss. Further to above, excise duty expense includes excise duty of Rs, 4.29 Crore on variation of opening and closing stock recognized under other expenses which has now been regrouped.

7 Cash discount

Under Previous GAAP, cash discount provided to customers was shown as an expense. Under Ind AS, cash discounts are netted off from Revenue. Accordingly, revenue from operations has reduced by Rs, 76.68 Crore with corresponding reduction in other expenses.

8 Gross vs Net presentation

The Company has entered into an arrangement with a Joint venture, Aakaash Manufacturing Company Private Limited (Aakaash) for sale of cement and purchase of Ready Mix Concrete. The Company purchases Ready Mix Concrete from Aakaash and subsequently sells this to customers with a pre-agreed margin. Under Previous GAAP, the Company recorded purchase and sale separately. Aakaash essentially operates as a risk bearing licensed manufacturer of Ready Mix Concrete in relation to the Company's local sales in Goa region. This is considered as royalty arrangement. Under Ind AS, the Company has recorded the net amount as royalty income. As a result, revenue from operations and purchase of stock-in-trade has reduced by Rs, 87.65 Crore.

9 Remeasurements of defined benefits plan

Under Previous GAAP the Company recognized actuarial gains and losses in the Statement of Profit and Loss. Under Ind AS, all actuarial gains and losses are recognized in the other comprehensive income. Further to the above, the deferred tax impact on above transaction has also been regrouped from Statement of Profit and Loss to other comprehensive income as per guidance under Ind AS 12 'Income taxes'.

Accordingly, actuarial losses of Rs, 18.80 Crore and Rs, 5.11 Crore have been reclassified to other comprehensive income from employee benefits and other expenses respectively. Tax thereon Rs, 8.28 Crore has been reclassified from deferred tax expenses to other comprehensive income.

10 Classification of Net interest cost as finance cost

Under Previous GAAP, the Company presents net interest cost on employee benefits on account of actuarial valuation under Employee Benefit Expenses. The Company has exercised the option of presenting such net interest cost under Finance costs on transition to Ind AS. Accordingly, employee benefit expenses and other expenses have reduced by Rs, 4.91 Crore and Rs, 3.53 Crore respectively, with corresponding increase in finance costs.

11 Other adjustments

To comply with the Companies (Accounting Standard) Rules, 2006, certain account balances have been regrouped as per the format prescribed under Division II of Schedule III to the Companies Act, 2013.

Measurements 12 Capitalization of Spares

Under Previous GAAP, the Company capitalizes spares to Property, Plant and Equipment (Rs,PP&ERs,) on date of acquisition and net block was charged off to the Statement of Profit and Loss account on issue for consumption. Under Ind AS, these spares meet the definition of Property, Plant and Equipment. Accordingly, spares of Rs, 28.11 Crore charged off to the Statement of Profit and Loss during the year ended December 31, 2016 are restated resulting in increase of PP&E and decrease in consumption of stores and spare parts (other expenses).

13 Fair valuation of investments

Under Previous GAAP, investments in equity instruments and mutual funds were classified as non-current investments and current investments respectively. Non-current investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value through profit or loss, as determined by the Company in accordance with the principles of Ind AS 109 "Financial Instruments".

14 Security deposits

Under Previous GAAP, interest free lease security deposits are recorded at it's transaction value. Under Ind AS 109 "Financial Instruments", all financial assets are required to be initially recognized at fair value.

The Company has fair valued security deposit under Ind AS at its initial recognition. Difference between the fair value and transaction value of the security deposit has been recognized as prepayment lease rental which has been amortized over it's lease term as rent expense grouped under 'other expenses'. The discounted value of the security deposits is increased over the period of lease term by recognizing the notional interest income grouped under 'other income'.

Consequent to this change, the amount of security deposit decreased by Rs, 10.81 Crore (January 01,2016 -Rs, 13.93 Crore). Prepayment lease rental of Rs, 3.72 Crore (January 01,2016 -Rs,3.72 Crore) is included in other current assets and Rs, 6.49 Crore (January 01,2016 -Rs, 10.21 Crore) is included in other noncurrent assets.

Accordingly rental expenses of Rs, 3.72 Crore and notional interest income of Rs, 3.12 Crore is recognized in the Statement of Profit and Loss for the year ended December 31, 2016.

15 Proposed dividend and Tax thereon

Under Previous GAAP, dividends proposed by the board of directors after Balance Sheet date but before the approval of the financial statements were considered as adjusting events. However under Ind AS, such dividends are recognized when the same are approved by the shareholders in the general meeting.

Accordingly, the proposed dividend (including dividend distribution tax) as at December 31, 2016 of Rs, 135.61 Crore (January01,2016 -Rs, 135.58Crore)recognized under Previous GAAP was reduced from current provisions with a corresponding impact in the retained earnings.

16 Site restoration expenses

Under Ind AS, Company has made provision for constructive obligation and included under 'provision for site restoration' in accordance with Ind AS 37 'Provisions, Contingent Liabilities and Contingent Assets'. Further, non-current provisions are discounted and recognized at present value of future expected expenditure.

Accordingly, a net increase in the site restoration liability of Rs, 8.36 Crore recognized in the opening retained earnings as on transition date.

The unwinding of the discount of Rs, 1.32 Crore is recognized as a finance cost in the Statement of Profit and Loss for the year ended December 31, 2016 with corresponding increase in site restoration liability.

18 Other comprehensive income

Under Ind AS, all items of income and expense are recognized in the period and included in Statement of Profit and Loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in the Statement of Profit and loss but are shown in the Statement of Profit and Loss as "other comprehensive income" includes remeasurements of defined benefit plans, net of taxes. The concept of other comprehensive income did not exist under Previous GAAP.

Proposed dividends on equity shares are subject to approval at the annual general meeting and are not recognized as a liability (including Dividend distribution tax thereon) as at December 31.

19. The Ind AS opening balance sheet and financial statements for the year ended December 31, 2016 have been audited by S R B C & CO LLP, the predecessor auditor.

20. Figures for the previous year have been regrouped / reclassified wherever necessary to conform to the current year's presentation.