for better building Annual Report 2010.pdf · Brief resume of Dr. Albert Scheuer who is proposed to...

Registered office

HeidelbergCement India LimitedP.O. Ammasandra, Distt. Tumkur, Taluk - Turuvekere,

Karnataka 572211

ANNUAL REPORT - 2009

INDIA Ltd.

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BOARD OF DIRECTORS

Mr. P.G. MankadChairman

Dr. Bernd Scheifele

Dr. Lorenz Naeger

Dr. Albert Scheuer

Mr. Amitabha Ghosh

Mr. S. Krishna Kumar

Mr. Ashish GuhaManaging Director

CHIEF FINANCIAL OFFICER

Mr. Anil Kumar Sharma

HEAD LEGAL & COMPANYSECRETARY

Mr. T.V. Ganesan

REGISTERED OFFICE

P.O. Ammasandra

District Tumkur,

Taluk-Turuvekere

Karnataka – 572 211

CORPORATE OFFICE

9th Floor, Tower ‘C’,

Infi nity Towers

DLF Cyber City, Phase-II

Gurgaon, Haryana – 122 002

PLANTS

Ammasandra (Karnataka)

Damoh (Madhya Pradesh)

Jhansi (U ar Pradesh)

Raigad (Maharashtra)

AUDITORS

M/s. S. R. Batliboi & Co.,

Chartered Accountants

REGISTRARS & SHARETRANSFER AGENTS

M/s. Alpha Systems Pvt. Ltd

30, Ramana Residency,

4th Cross, Sampige Road,

Malleswaram,

Bangalore – 560 003

CONTENTSPage No.

No ce ................................................................................... 1-3

Directors’ Report .................................................................. 4-12

Management Discussion and Analysis Report ...................... 13-15

Report on Corporate Governance ........................................ 16-23

Auditors’ Report ................................................................... 24-27

Balance Sheet ....................................................................... 28

Profi t and Loss Account ....................................................... 29

Schedules - A to S ................................................................. 30-35

Notes to Accounts ................................................................ 36-47

Cash Flow Statement ............................................................ 48

Balance Sheet Abstract and Company’sGeneral Business Profi le ........................................................ 49

1

HeidelbergCement India Limited

HeidelbergCement India LimitedRegd. Offi ce : P.O. Ammasandra, District Tumkur, Karnataka - 572 211

N O T I C E T O M E M B E R S

NOTICE is hereby given that the 51st Annual General Mee ng of the Members of the Company will be held at 9.00 A.M. on Tuesday, the 11th May 2010 at HeidelbergCement Employees Staff Club Auditorium, P.O. Ammasandra, District Tumkur, Karnataka – 572211, to transact the following business :

1. To receive, consider and adopt the Audited Accounts of the Company consis ng of the Balance Sheet as at 31st December 2009 and the Profi t and Loss Account for the fi nancial year ended on that date including notes thereto together with the Reports of the Directors and Auditors thereon.

2. To appoint a Director in place of Mr. S. Krishna Kumar who re res by rota on and being eligible, off ers himself for re-appointment.

3. To appoint a Director in place of Dr. Albert Scheuer who re res by rota on and being eligible, off ers himself for re-appointment.

4. To consider and if thought fi t to pass, with or without modifi ca on(s) the following as Ordinary Resolu on:

“RESOLVED that M/s. S.R. Batliboi & Co., Chartered Accountants, be and are hereby appointed as Auditors of the Company to hold offi ce from the conclusion of the 51st Annual General Mee ng un l the conclusion of the next Annual General Mee ng on such remunera on as may be agreed upon between the Board of Directors and the Auditors, in addi on to reimbursement of service tax and all out of pocket expenses in connec on with Audit of the accounts of the Company.”

5. To consider and if thought fi t to pass, with or without modifi ca on(s) the following as Ordinary Resolu on:

“RESOLVED that Dividend @ 9% per annum be and is hereby declared on 13,49,336 9% Cumula ve Redeemable Preference Shares of Rs. 100 each for the period from the date of allotment of the said Preference Shares i.e, 12th December 2006 ll the closure of the last fi nancial year i.e, 31st December 2009.”

Date : 24th February 2010Corporate Offi ce:9th Floor, Tower ‘C’, Infi nity Towers,DLF Cyber City, Phase – II,Gurgaon - 122002, Haryana.

By Order of the Board

Sd/- T.V. Ganesan

Head Legal & Company Secretary


2

NOTES :

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND ON A POLL, TO VOTE INSTEAD OF HIMSELF. SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE INSTRUMENT APPOINTING A PROXY HAS TO BE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING.

2. Explanatory Statement pursuant to Sec on 173(2) of the Companies Act 1956 in respect of Item No. 2, 3 & 5 is annexed.

3. Please note that pursuant to Sec on 192A of the Companies Act, 1956 read with Companies (Passing of the Resolu ons by Postal Ballot) Rules, 2001, the Company is seeking the consent of its members through Postal Ballot in respect of the following ma ers :-

(a) Borrowing funds in excess of the limit prescribed under sec on 293(1)(d) of the Companies Act, 1956.

(b) Crea on of charge / mortgage on the movable and immovable proper es of the Company in favour of the lenders to secure the loans obtained from them.

(c) Shi ing of Registered Offi ce from State of Karnataka to State of Haryana subject to the confi rma on of the Special Resolu on by Hon’ble Company Law Board.

The detailed Resolu ons and the Explanatory Statement are set out in the Postal Ballot No ce dated 24th February 2010, which has already been dispatched to the members. You are requested to mark your assent or dissent to the Resolu ons in the postal ballot form and send the same to the Company in the self addressed postage pre paid envelope enclosed with the postal ballot form. Duly completed postal ballot forms should reach the Company on or before the last date i.e, 3rd May 2010. The result of the postal ballot would be declared at the 51st AGM on 11th May 2010.

4. The Register of Members and the Share Transfer Books of the Company will remain closed from 7th May 2010 to 11th May 2010 (both days inclusive).

5. The share transfer instruments, complete in all respects, should be sent to the Registrars & Share Transfer Agents, M/s. Alpha Systems Pvt. Ltd., 30 Ramana Residency, 4th Cross, Sampige Road, Malleswaram, Bangalore - 560003 well in advance so as to reach the Registrars & Share Transfer Agents prior to book closure.

6. Members who con nue to hold the shares in physical form are requested to inform any change in their address, bank par culars, nominee etc., to the Registrars & Share Transfer Agents. Members holding shares in dematerialized form are requested to approach their Depository Par cipant for change of address, bank par culars, nominee etc.

(a) Members a ending the mee ng are requested to complete the enclosed a endance slip and deliver the same at the entrance of the mee ng hall. A endance at the Annual General Mee ng shall not be allowed without produc on of the a endance slip duly signed.

(b) Members are also requested to bring their copies of the Annual Report. No addi onal copies of the Annual Report will be distributed at the Mee ng.

Explanatory Statement pursuant to Sec on 173(2) of the Companies Act 1956 in respect of Item No. 2, 3 & 5.

Item No. 2:

Brief resume of Mr. S. Krishna Kumar who is proposed to be re-appointed as Director is given below:

Mr. S. Krishna Kumar aged 64 years a former member of the Indian Administra ve Service, holds a Masters degree in physics from Bangalore University and in Public Administra on from the Harvard University. He has specialized in areas of public policy and in the governance in sectors like agriculture, public fi nance, infrastructure and migra on. Mr. Kumar was the fi rst secretary in Ministry of Overseas Indian Aff airs of the Government of India. In that capacity he re-oriented the focus of migra on management and launched a number of new ini a ves. He has also concluded a number of infrastructure projects in Karnataka, including the pres gious Bangalore Interna onal Airport and the Hassan-Mangalore broad gauge rail line. Between 1992 and 1998, he has worked as an Interna onal consultant for the IMF in Sri Lanka and for the World Bank in Mauri us.

He has involved himself with the Public Aff airs Centre, Bangalore and the Centre for Development Studies, Thiruvananthapuram as a resource person and is special advisor in India to Interna onal Organiza on for Migra on, Geneva.

He is Chairman of the Board of Directors of Bhoruka Aluminium Limited and also a member of Audit Commi ee of the said company. He is a member of the Audit Commi ee of your Company.

3


Mr. Kumar does not hold any Equity Shares in the Company.

Except Mr. Kumar, none of the other directors may be deemed to be concerned or interested in the proposed resolu on. The Board of Directors recommends his appointment for approval of the members.

Item No. 3:

Brief resume of Dr. Albert Scheuer who is proposed to be re-appointed as Director is given below:

Dr. Albert Scheuer, aged 52 years, completed Degree in Mechanical Engineering / Process Technology from the Technical University of Clausthal, Germany in the year 1982. He has also completed Doctorate in Mechanical Engineering in the year 1987.

Dr. Scheuer started his professional career with the Research Ins tute of the German Cement Industry in 1983. A er joining HeidelbergCement group in 1992, he took on various posi ons at the Leimen Cement Plant and Heidelberg Technology Center. From 1998 to 2005, he was in charge of Technical support for European cement plants as Managing Director of Heidelberg Technology Center. Since 2005, he was responsible for HeidelbergCement’s ac vi es in China as Chief Opera ng Offi cer and in August 2007 he was appointed as Member of the Managing Board and Execu ve Vice President of Lehigh Cement. He also took ac ve part in the integra on of the opera ons of Hanson, North America with the HeidelbergCement Group. Since 1st April, 2008, he is in charge of Asia-Oceania Region of HeidelbergCement Group and also entrusted with the responsibility of worldwide coordina on of the ac vi es of Heidelberg Technology Center.

Dr. Scheuer is a Director / Member of Managing Board of the following companies :-

HeidelbergCement AG, HeidelbergCement Technology Center GmbH, Heidelberg Energie GmbH, Easy Point Industrial Ltd., Guangzhou HeidelbergCement Yuexiu Enterprise Management Consul ng Company Ltd., HeidelbergCement Asia Pte Ltd., HeidelbergCement Holding HK Ltd., Squareal Cement Ltd., Cochin Cements Ltd., Jidong Heidelberg (Fufeng) Cement Company Limited, PT Indocement Tunggal Prakarsa Tbk, , Jidong Heidelberg (Jingyang) Cement Company Limited, HeidelbergCement Bangladesh Ltd.

He is a member of Audit Commi ee of Cochin Cements Ltd.

Dr. Scheuer does not hold any Equity Shares in the Company.

Except Dr. Scheuer none of the other Directors may be deemed to be concerned or interested in the proposed Resolu on. The Board of Directors recommends his appointment for approval of the members.

Item No. 5

The Company had on 12th December 2006 issued 13,49,336 9% Cumula ve Redeemable Preference Shares of Rs. 100 each to Cementrum I B.V. Till the fi nancial year ended 31st December 2008, the Company had unabsorbed deprecia on and brought forward business losses of the earlier fi nancial years due to which dividend could not be paid on the aforesaid Preference Shares. During the fi nancial year ended 31st December 2009 the Company has fully absorbed all its unabsorbed deprecia on and brought forward business losses of the past fi nancial years.

The aforesaid preference Shares are cumula ve in nature and carry dividend at the fi xed rate of 9% p.a. Therefore as per the terms of issue of the aforesaid Preference Shares, it is obligatory to pay dividend at the agreed rate of 9% p.a. with eff ect from the date of allotment ll the fi nancial year ended 31st December 2009. Accordingly, the Board of Directors has recommended payment of dividend @ 9% p.a. from date of allotment i.e, 12th December 2006 ll 31st December 2009.

None of the Directors may be deemed to be concerned or interested in the proposed resolu on. The Board of Directors recommends the resolu on for approval of the members.

Date : 24th February 2010Corporate offi ce:9th Floor, Tower ‘C’, Infi nity Towers,DLF Cyber CityGurgaon - 122002, Haryana.

By Order of the Board

Sd/- T.V. Ganesan

Head Legal & Company Secretary


4

Directors’ ReportTO THE MEMBERS,

The Directors of your Company are pleased to present the 51st Annual Report together with the audited accounts of the Company for the fi nancial year ended 31st December 2009.

REVIEW OF OPERATIONS

The cement sales of the Company were 2.66 million tonnes during the fi nancial year ended 31st December 2009 against 2.42 million tonnes of the previous fi nancial year ended 31st December 2008.

Produc on and Sales fi gures of the Company are as under:

Financial year ended 31st December 2009


Produc on (in tonnes)

-Clinker 13,53,951 13,80,470

-Cement 26,59,472 24,17,622

-GGBS 7,198 20,353

Sales (in tonnes)

-Clinker 55,414 1,14,057

-Cement 26,54,767 24,19,441

-GGBS 5,376 21,694

Cement Industry is largely dependent on domes c demand and has a cluster market structure. The industry is cyclical in nature and to a great extent depends on the infrastructure spending by the Government. During the fi rst half of the fi nancial year 2009, the demand for cement was buoyant which resulted in strong growth in volume as well as improved price realisa on. The demand was fuelled by increased government spending on roads and infrastructure projects and also par al recovery in the housing sector which was under severe pressure during the year 2008 due to the general economic slowdown. Further, there was spurt in the demand in the clusters in which we operate, resul ng in higher turnover and be er profi t margin. However, the scenario changed during the second half of the year since not only did the demand recede to some extent but the supply also increased as the addi onal capaci es came on stream. This led to a temporary demand supply mismatch leading to fall in cement prices almost throughout India. Moreover the cement was also brought in from the distant markets into the markets in which we operate. Consequently, it was diffi cult to protect the margins during the second half. There were many pockets where the prices fell steeply, especially in southern India where the drop in prices was the maximum.

However, during the start of the fi rst quarter of the year 2010, the demand for cement has again improved due to increase in spending on infrastructure and housing projects, especially in northern, western and central India on account of signs of recovery shown in overall economic ac vity. In this backdrop your Directors hope that the demand for cement would con nue to be stable throughout the year.

Mycem brand is now well established in the market and has gained high degree of customer acceptance. Mycem now commands a premium which is result of elevated customer’s percep on about the brand. Focus on quality and service, have been key drivers for enhancing customer sa sfac on for Mycem.

The Company has improved its quality at every plant and it will be the constant endeavour of the Company to give its customers the best possible product.

FINANCIAL HIGHLIGHTS

The Company achieved gross sales of Rs. 1,04,023.92 lacs during the fi nancial year ended 31st December, 2009, against Rs. 88,697.67 lacs during the fi nancial year ended 31st December 2008 , thereby, registering annualized growth of 17 %. The net profi t of the Company during the fi nancial year ended 31st December 2009 was Rs. 13403.91 lacs as compared to the net profi t of Rs. 12,552.64 lacs during the fi nancial year ended 31st December 2008.

Your Directors are pleased to inform that during the 2nd quarter ended 30th June 2009, the Company fully absorbed all its unabsorbed deprecia on and brought forward business losses of the past fi nancial years, which stood at Rs. 37,098.37 lacs as on 31st December 2006.

5


The snapshot of your Company’s performance for the fi nancial year ended 31st December, 2009 vis-à-vis its performance in the previous year ended 31st December, 2008 is as under:-

(Rs. in lacs)

ParticularsFinancial year ended 31st December 2009


Working for the year resulted in an opera onal surplus of 20,495.46 13,310.34From which are subtracted :

- Finance Charges (439.90) (410.24) - Deprecia on / Amor za on (2,580.69) (2,137.23) (3,020.59) (2,547.47)Resul ng in a profi t/(loss) for the year of 17474.87 10,762.87To/From which are added / subtracted : - Deferred Tax Credit (1,646.90) 1,848.24 - Provision for Income Tax (2,408.60) - - Fringe Benefi t Tax (15.46) (4,070.96) (58.47) 1,789.77

Net Profi t / (Loss) 13,403.91 12,552.64Add: Amount transferred from Securi es Premium Account ---- 6,238.32Less: Proposed Dividend on 9% Cumula ve Redeemable Preference Shares (including Corporate Dividend Tax of Rs. 63.05 lacs). (434.03) -To which is added loss b/f from the previous year (8,192.13) (26,983.09)Profi t / (Loss) carried to Balance Sheet 4,777.75 (8,192.13)

Note : The fi gures for the year ended 31st December 2009 are not strictly comparable with the fi gures for the year ended 31st December 2008 since the fi gures of the year ended 31st December 2008 include the fi nancial performance of erstwhile Indorama Cement Ltd. and erstwhile HeidelbergCement India Pvt. Ltd. for the nine months period i.e, from 1st April 2008 to 31st December 2008 as the appointed date for the Scheme of Amalgama on through which these companies got amalgamated with your Company was w.e.f. 1st April 2008.

CAPACITY EXPANSION

The Company’s present installed capacity is 3.07 MTPA. In order to increase the cement produc on capacity, the Company has embarked upon the following expansion projects at the Damoh & Jhansi units:-

(i) Expansion of clinker manufacturing capacity from 1.2 MTPA to 3.1 MTPA at Narsingarh, District Damoh, Madhya Pradesh.

(ii) Expansion of cement grinding capacity from 1 MTPA to 2 MTPA at Imlai, District Damoh, Madhya Pradesh.

(iii) Expansion of cement grinding capacity from 0.8 MTPA to 2.7 MTPA at Jhansi, U ar Pradesh.

The Company has already received requisite approvals, subject to fulfi llment of certain condi ons, from the Government Authori es for the aforesaid expansion projects. The work on the aforesaid expansion projects has already begun and it is expected that the commercial produc on would commence in the fi rst quarter of the year 2012. A er comple on of the aforesaid expansion, the total cement produc on capacity of the Company would double to 6 MTPA.

DIVIDEND

The Board of Directors hereby recommend dividend at the agreed rate of 9% per annum on the 13,49,336 9% Cumula ve Redeemable Preference Shares of Rs. 100 each from the date of allotment of the said preference shares i.e, 12th December 2006 ll the fi nancial year ended 31st December 2009. It may be noted that the Company could not pay any dividend on the said preference shares ll the fi nancial year ended 31st December 2008 due to the unabsorbed deprecia on and brought forward business losses of the earlier fi nancial years. The aforesaid preference shares are cumula ve in nature and carry dividend at the fi xed rate of 9% p.a. Therefore as per the terms of issue of the aforesaid preference shares it is obligatory for the Company to pay dividend @ 9% p.a. from 12th December 2006 ll 31st December 2009, aggrega ng to Rs. 370.98 lacs.

Further, in view of the requirement of funds for the aforesaid capacity expansion projects, your Directors have decided not to recommend any Dividend on the equity shares for the fi nancial year ended 31st December, 2009.


6

RE APPOINTMENT OF DIRECTORS

Dr. Albert Scheuer and Mr. S. Krishna Kumar, Directors of the Company re re by rota on at the ensuing Annual General Mee ng (AGM) of the Company. The re ring Directors being eligible have off ered themselves for re-elec on at the said AGM. The Board recommends the re-appointment of the aforesaid Directors.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirements of Sec on 217(2AA) of the Companies Act, 1956, the Directors, to the best of their knowledge and belief and according to the informa on and explana ons obtained by them, confi rm & declare that they have taken all reasonable steps, as are required, to ensure that :

(a) The applicable accoun ng standards have been followed in the prepara on of the annual accounts for the fi nancial year ended 31st December 2009 and no departures have been made there from;

(b) They have selected such accoun ng policies and applied them consistently and they have made judgments and es mates that are reasonable and prudent so as to give a true and fair view of the state of aff airs of your Company as at 31st December, 2009 and of the profi t of your Company for the year ended on that date;

(c) They have taken proper and suffi cient care for the maintenance of adequate accoun ng records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preven ng and detec ng frauds and other irregulari es; and

(d) The annual accounts for the fi nancial year ended 31st December, 2009 are prepared on a going concern basis.

AUDITORS

The Statutory Auditors M/s. S.R. Batliboi & Co., Chartered Accountants who were appointed at the last Annual General Mee ng held on 29th May, 2009 hold offi ce up to the conclusion of the ensuing AGM and are eligible for re-appointment. The said Auditors have confi rmed that their re-appointment, if made, shall be within the limit laid down under Sec on 224(1B) of the Companies Act, 1956. The Auditors’ observa ons in their Report and the relevant notes to the accounts are self-explanatory.

COST AUDIT

Pursuant to the direc ves of the Central Government, your Company has subject to the approval of the Central Government, appointed M/s. A. Nagaraja, Cost Accountants as Cost Auditors of the Company under Sec on 233B of the Companies Act, 1956 for the year 2010.

CORPORATE GOVERNANCE REPORT

In terms of Clause 49 of the Lis ng Agreement with the Stock Exchanges a report on Corporate Governance is included in the Annual Report. A Cer fi cate from a Prac sing Company Secretary on compliance of condi ons of Corporate Governance is also annexed to the Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to clause 49 of the Lis ng Agreement, Management Discussion and Analysis Report is given as addi on to this report.

HUMAN RESOURCES

During the year, 146 employees opted for Voluntary Re rement under the approved Voluntary Re rement Scheme (VRS) of the Company.

As always, the commitment of the team was instrumental in achievement of the results. Employees at all levels demonstrated a huge degree of commitment towards the general cost consciousness as a result of which despite infl a on, we were able to reduce our costs wherever possible.

It will be our constant endeavor to work as a team and deliver be er quality products consistently and at the same me keep a vigilant eye on costs.

The Board would like to thank the contribu on and commitment of all employees towards the success and growth of the Company.

7


HEALTH & SAFETY

Your Company places the highest value on ensuring the health and safety of its employees, contractors, third par es and visitors. In line with the Health & Safety Policy of the Company a detailed Safety Manual was prepared and circulated during the year under review. The manual provides detailed processes and prac ces to be followed in the day-to-day opera ons at the Company’s plants. In line with the Health & Safety Policy detailed procedures and work instruc ons have been drawn-up to assist in the smooth working of our Plants. The Company has also conducted various safety related training programmes and seminars to develop a safe working culture, by focusing on behaviours and a tudes, using a systema c approach.

CORPORATE SOCIAL RESPONSIBILITY CSR

The Company ac vely pursued the corporate social responsibility by focusing on key areas being Educa on, Healthcare and improvement of the surroundings.

We have specifically earmarked funds towards improvement in our surroundings and for provid-ing subsidised education in our schools. Water is scarce in some of the areas that we operate in and we have ensured that villagers are given treated water from our plants. In addition, the Company has also cleaned, deepened and renovated the old wells as well as ponds at Imlai and Narsingarh to ensure that adequate quantity of water is available to the villagers. Medical assistance is provided at our clinics and also through medical vans. With the help of our social clubs, we have initiated vari-ous training centres for women and unemployed youth.

We are also in constant touch with the respec ve district administra on to provide adequate services as and when required to the people at large.

PARTICULARS OF EMPLOYEES

Par culars of employees as required under Sec on 217(2A) of the Companies Act, 1956 read with the Companies (Par culars of Employees) Rules, 1975 as amended are given in the enclosed statement forming part of this Report as Annexure ‘A’.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The par culars rela ng to conserva on of energy, technology absorp on and foreign exchange earnings and outgo, as required under sec on 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Par culars in the Report of Board of Directors) Rules 1988, forming part of this Report are annexed as Annexure ‘B’.

MD / CHIEF FINANCIAL OFFICER’S CERTIFICATION

Pursuant to Clause 49 of the Lis ng Agreement, a cer fi cate furnished by Mr. Ashish Guha, Managing Director and Mr. Anil Kumar Sharma, Chief Financial Offi cer in respect of the fi nancial statements and the cash fl ow statement for the fi nancial year ended 31st December 2009 is annexed as Annexure ‘C’.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to acknowledge the con nued support and coopera on received from the State & Central Government Authori es and other regulatory agencies. Your Directors also express their sincere gra tude to the Shareholders, Bankers, Suppliers, Distributors, Dealers and valued customers for their con nuous commi ed support and coopera on.

For and on behalf of the Board

Sd/-Place : Gurgaon P.G. MankadDate : 24th February 2010 Chairman


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9


ANNEXURE “B” TO THE DIRECTORS’ REPORT

STATEMENT PURSUANT TO SECTION 217(1)(e) OF THE COMPANIES ACT, 1956 READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988

A CONSERVATION OF ENERGY

a) Energy conserva on and effi ciency measures taken: 1. Retrofi ng / replacement of cooler ESP fan Line – II & Raw mill vent fan line – I at Damoh Plant. 2. Installa on of Variable Frequency Drives (VFD) for speed control of major process fans like cooler ESP fans line – I

& II at Damoh Plant. 3. Installa on of high effi ciency root blowers for coal fi ring system by replacing primary air fan at Damoh Plant.

b) Addi onal Proposals for the year 2010: 1. Replacement of waste gas fan 2 with new high effi ciency fan at Ammasandra Plant. 2. Installa on of high effi ciency separator in CM-4 circuit at Ammasandra Plant. 3. Installa on of sta c grate in grate cooler of line – II at Damoh plant. 4. Replacement of air li s of silo feeding and kiln feed circuits with Belt bucket elevators in Line – I & II of Damoh

plant. 5. Replacement of kiln burners with new energy effi cient burners on Line I & II at Damoh Plants. 6. Replacement of cement silo feeding air li s with Belt bucket elevators in Cement mill – I & II at Imlai Grinding

unit.

c) Impact of the above measures for reduc on of energy consump on and consequent impact on cost of produc on :-

The measures stated in point (a) above have already brought some savings in cost of produc on. Measures stated in point (b) above are expected to reduce electrical and thermal energy consump on further.


10

I POWER AND FUEL CONSUMPTION

Units Total Amount Avg. Rate/unit

Current Period ended 31.12.2009

Previous Period ended 31.12.2008





(Lac Units) (Lac Rs) Rs./Unit1 Electricity a. Purchased 1642.36 1352.92 7528.44 6418.69 4.58 4.74 b. Own genera on i. Through Diesel Generators 78.86 185.67 - - 9.39 9.21 Units per Liter of diesel/furnace oil 3.19 3.50 - - - -

ii. Through Steam Turbine/Generator 388.75 645.19 - - 3.53 3.75 Units per Kg. of coal 0.98 0.89 - - - -

(Million K. Cal) (Rs./Million K. Cal)2 Coal In process ( Cement) 1091990 1137642 7404.59 8761.55 678.08 770.15 In Thermal Power Plant 193961 305148 1206.52 1956.79 622.04 641.26

(K. Ltrs) (Rs./ Ltr)3 Furnace Oil In Generators 2397 5614 502.40 1557.64 20.96 27.75

4 Diesel In Generators 283 51 93.50 16.70 33.23 32.97 In Kilns 94 80 9.62 31.65 35.39 39.68

5 Light Diesel 2006 703 621.58 261.01 30.99 37.14

(Cubic Mtrs)6 Blast Furance gas 253 295 214.88 227.59 0.85 0.77

II CONSUMPTION PER UNIT OF PRODUCTIONCurrent Period

Previous Period

Product - CementElectricity Units/t of Cement 83 89Diesel Oil Ltr/t of clinker 0.02 0.06Coal %/t of clinker 15.87 16.82Light Diesel oil ltr/mt - GGBS 6.05 2.48 - PSC 3.45 1.84

Blast Furance gas Nm3/t - GGBS 73.62 127.21 - PSC 43.56 76.33

11


TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION 1. Eff orts in brief, made towards technology absorp on, adapta on and innova on:-

a. Installa on of imported refractory bricks at our kiln, Narsingarh Line 1 and at Ammasandra to achieve be er life and for the clinker reac vity improvement.

b. Installa on of modifi ed high momentum burners at Ammasandra for quality upgrada on.

c. Automa on of the kiln and raw mill opera on were also done at Ammasandra to have be er control.

d. Installa on of improved fi ne coal and kiln feed feeding system for very accurate control of kiln system was done at Narsingarh Line 2.

e. Op misa on of the exis ng cooler opera ons at Ammasandra.

2. Benefi ts derived as a result of above eff orts:-

a. Because of automa on opera onal effi ciency has been improved.

b. The quality of the product has improved.

c. Equipment reliability and produc vity improved.

3. Informa on regarding Technology Imported during last 5 years.

Nil.

C. FOREIGN EXCHANGE EARININGS & OUTGO

Total foreign exchange used and earned:

Foreign exchange used

Lac Rs.

- Imports 3324.53

- Expenditure 1876.72

----------

5201.25

----------

Foreign exchange earning

FOB value of Exports realised in Rupees : 22.25


12

ANNEXURE C TO THE DIRECTORS’ REPORT

The Board of DirectorsHeidelbergCement India Limited

Dear Sirs,

Sub. : MD & CFO’s Cer fi ca on

(a) We have reviewed the fi nancial statements and the cash fl ow statement of the Company for the fi nancial year ended 31st December 2009 and that to the best of our knowledge and belief :

(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading.

(ii) these statements together present a true and fair view of the Company’s aff airs and are in compliance with the exis ng accoun ng standards, applicable laws and regula ons.

(b) There are, to the best of our knowledge and belief, no transac ons entered into by the Company during the year which are fraudulent, illegal or viola ve of the Company’s Code of Conduct.

(c) We accept responsibility for establishing and maintaining internal controls for fi nancial repor ng and that we have evaluated the eff ec veness of internal control systems of the Company pertaining to fi nancial repor ng and we have disclosed to the Auditors and the Audit Commi ee, defi ciencies in the design or opera on of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rec fy these defi ciencies.

(d) We have indicated to the Auditors and the Audit Commi ee :

(i) signifi cant changes in internal control over fi nancial repor ng during the year;

(ii) signifi cant changes in accoun ng policies during the year and that the same have been disclosed in the notes to the fi nancial statements; and

(iii) there are no instances of signifi cant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a signifi cant role in the Company’s internal control system over fi nancial repor ng.

Place : GurgaonDate : 24th February 2010

Sd/-Ashish Guha

Managing Director

Sd/- Anil Kumar Sharma

Chief Financial Offi cer

13


MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Industry structure and developments

The Indian cement industry’s capacity has increased to around 234 million tonnes per annum at the end of December 2009, as per the industry es mates. The data compiled by Cement Manufacturers’ Associa on (CMA) indicates that cement despatches were about 194 million tonnes during the period January to December 2009 exhibi ng a growth of 12 %. During the period January to December, 2009, Western Region recorded growth of 10 % in cement consump on, Southern region grew by 6 % and Northern Region achieved growth of over 12 %. Central and Eastern regions exhibited high growth rate of 22% and 23% respec vely.

Opportuni es and threats

Reserve Bank of India in its quarterly review of Monetary Policy in January 2010 has revised the GDP growth es mate for Financial Year 2010 to 7.50% from the earlier projec on of 6%. The Indian economy is fi rmly on a recovery path with industrial produc on clocking double-digit growth. Moreover with the stabilising export demand, improvement in cement despatches and strong growth in commercial vehicles sales, the overall economic outlook appears quite posi ve. Nonetheless, improvement in private sector demand would be crucial in maintaining the growth momentum. Although the domes c economy is in the revival mode, there s ll exist certain downside risks to growth. The setback to agriculture sector due to defi cient rainfall is expected to weigh on the overall GDP growth, which has also lead to increase in the prices of essen al commodi es.

In the fi rst half of the year 2010, it is expected that the demand of cement would stay fi rm due to strong demand from the housing and infrastructure sectors, which are key drivers for the cement industry.

Rise in input costs due to the high rate of infl a on is a serious threat for the industry since it may not be possible to propor onately increase the selling price of cement thus aff ec ng the profi t margin. Prices of commodi es such as steel, aluminium, copper and rubber have increased due to recovery in the global demand. Restricted availability of coal in the domes c market and restricted wagon availability are other major threats.

Outlook

The Indian cement industry is growing at the second highest pace in the world, next only to China. It is expected that with the new capaci es coming on stream there would be pressure on prices, thereby eroding margin to some extent and also leading to reduc on in capacity u lisa on. The industry is expected to increase capacity to about 250 – 265 MTPA from the current level of 234 MTPA by 2010 year end. Indian Cement Industry is expected to grow at 9 to 10% per annum.

The world economy is already showing signs of recovery and it is expected that the world economy would once again a ain high growth rate, which will further strengthen the Indian economy thereby giving boost to rapid industrialisa on and augmen ng the economic growth. In this backdrop, it would not be out of place to men on that both the Central and State Governments would gear up and play pivotal role in improving and upgrading the infrastructure across the Country, which would ul mately boost the demand for cement. Thus the Indian cement industry is expected to witness steady growth in demand in the coming years.

Company’s opera onal and fi nancial performance

The cement sales of the Company were 2.66 million tonnes during the fi nancial year ended 31st December 2009 against 2.42 million tonnes achieved during the fi nancial year ended 31st December 2008.

The Company achieved gross sales of Rs. 1,04,023.92 lacs during the fi nancial year ended 31st December 2009 against Rs. 88,697.67 lacs during the fi nancial year ended 31st December 2008, thereby, registering growth of 17.42%. The net profi t of the Company during the fi nancial year ended 31st December 2009 was Rs. 13,403.91 lacs as compared to Rs. 12,552.64 lacs during the fi nancial year ended 31st December 2008.


14

Unit-wise Performance

The company has four manufacturing units namely Ammasandra (Karnataka), Damoh (M.P.), Jhansi (U.P.) and Raigad (Maharashtra). The unit-wise performance is given below:-

2009 (Jan-Dec) 2008 (Jan-Dec) Change in %

Units Sales Qty. Gross Sales Value Sales Qty. Gross Sales Value Sales Qty. Gross Sales Value

(Lac MTs) (Lac Rs.) (Lac MTs) (Lac Rs.)

CEMENT

Ammasandra 1.81 6347.60 3.20 11270.66 -43.34 -43.68

Damoh 11.74 44088.74 10.38 34157.42 13.01 29.08

Jhansi 7.36 28859.31 7.03 23654.93 4.69 22.00

Raigad * 5.64 23262.34 3.58 15247.67 57.54 52.56

Sub Total 26.55 102557.99 24.19 84330.68 9.76 21.61

Clinker Sold

Ammasandra 0.29 689.97 1.14 3132.49 -74.56 -77.97

Damoh 0.26 584.29 - - - -

Sub Total 0.55 1274.26 1.14 3132.49 -51.75 -59.32

# GGBS Sold

Raigad 0.05 191.67 0.22 1234.50 -77.27 -84.47

Total 27.15 104023.92 25.55 88697.67 6.26 17.28

* The fi gures for the year ended 31st December 2009 in respect of Raigad unit are not strictly comparable with the fi gures for the year ended 31st December, 2008 since the FY 2008 fi gures of the said unit are only for nine months period i.e. from 1st April 2008 to 31st December 2008 since Indorama Cement Limited (Raigad unit) was amalgamated with the Company w.e.f. Appointed Date of 1st April 2008. # “GGBS” means Ground Granulated Blast Furnace Slag.

The Company witnessed growth in sales in the Central & Western regions due to robust demand from housing and infrastructure sectors. However in the southern region the Company’s sales were aff ected due to excess supplies coming in from other markets.

Product Performance

The Company’s brand “mycem” is now a well established one in the market and has gained tremendous customer acceptance. Mycem also commands a premium in the market segment which is the result of elevated customer’s percep on about the brand.

The Company’s commitment to its customers is uncompromising and every endeavor is made to create and maintain unmatched customer sa sfac on by delivering quality product at compe ve price. The Company has also introduced an effi cient and speedy customer support and logis cs system to further strengthen its dealer network and the customer base. The Company’s focus on quality and service are the key drivers for enhancing customer sa sfac on for mycem products.

The Company in its pursuit to reduce the logis cs costs has been focusing its eff orts to increase its market share in the vicinity of its plants.

15


Environment

To further the cause of environmental sustainability, steps have been taken and reviewed by the Management to watch the trend in consump on of power, fuel, paper, water etc. Energy conserva on measures have been taken to conserve the energy and to protect the environment. Apart from this, the Company has also taken certain ini a ves to reduce emissions.

Risks and Concerns

The Company’s plants are spread across four diff erent States and the Company is following plant-wide approach for risk management, which lays emphasis on iden fying and managing key opera onal and strategic risks. The risks associated with the business of the Company are reviewed periodically by the top management to take suitable measures for mi ga ng the same rela ng to Produc on, Opera on, Marke ng, Regulatory Aff airs, Finance, Informa on Technology and Human Resources. Necessary resources have been deployed in terms of technology, experienced people and processes to monitor, evaluate and manage the principal risks and cri cal nature of transac ons. While there is systema c risk iden fi ca on and mi ga on framework in place, there are certain business risks which are external to the Company. The Company has very li le or no control over these external risks. Some of these include a general downturn in market- demand condi ons due to eff ect of economic and poli cal condi ons, vola lity in interest rates, new regula ons and Government policies that may impact the businesses of the Company.

Internal Control Systems and their Adequacy

The Company has appointed Internal Auditors to look into the internal control system and their Reports are reviewed by the Management as well as by the Audit Commi ee. The controls are also documented and reviewed by the Internal Audit team of HeidelbergCement Group, Germany. The Internal control system is reviewed from me to me to know its adequacy and eff ec veness on an ongoing basis and sugges ons of the Internal Auditors are implemented. The exis ng audit and inspec on procedures are reviewed periodically to enhance their eff ec veness, usefulness and meliness. In addi on, HeidelbergCement Group requires, on a quarterly basis, a list of issues that are required to be reported under the Risk Management Guidelines.

Human Resources

Industrial rela ons remained cordial during the year and there was all round coopera on. Moreover, the commitment of the team was instrumental in achievement of the results. Employees at all levels across plant loca ons had put in their best eff orts for the progress of the Company and have also shown a huge degree of commitment towards the general cost consciousness and as a result the Company was able to reduce its costs. It will be our constant endeavor to work as a team in order to contribute to the growth and success of the Company. The Company had 1567 offi cers and workmen on its rolls as on 31st December, 2009.

Health & Safety

Your Company places the highest value on ensuring the health and safety of its employees, contractors, third par es, Suppliers and visitors. In line with the Health & Safety Policy of the company a detailed Safety Manual was prepared and circulated during the year. This manual provides detailed processes and prac ces to be followed in the day-to-day opera ons of the Company. In line with the Health & Safety Policy detailed Procedures and Work Instruc ons have been drawn-up to assist in the smooth working of our Plants. The Company has also conducted various safety related training programmes and seminars to develop a safe working culture, by focusing on behaviours and a tudes, using a systema c approach.

Corporate Social Responsibility (CSR)

The CSR is a key focus area for the Company and it a empts to deliver to its surroundings—in plants and markets, an awareness of the Company, which is friendly and helpful to the neighbourhood.

In this respect, we take ac ons by crea ng channels and products which help the vicinity to overcome its weaknesses.

Cau onary Statement

Statements in the Management Discussion and Analysis Report which describe the Company’s objec ves, projec ons, es mates, expecta ons or predic ons may be considered to be “forward-looking statements” within the meaning of applicable Securi es Laws and Regula ons. These statements are based on certain assump ons and expecta ons of future events. Actual results could however materially diff er from those expressed or implied. Important factors that could make a diff erence to the Company’s opera ons include global and Indian poli cal, economic & demand-supply condi ons, fi nished goods prices, raw materials cost & availability, cyclical demand and pricing in the Company’s principal markets, changes in Government regula ons, Policies, tax regimes, economic developments within India besides other factors such as li ga on and industrial rela ons as well as the ability to implement the strategies.


16

REPORT ON CORPORATE GOVERNANCE

Corporate Governance Philosophy

Your Company believes that sound ethical prac ces, transparency in opera ons and mely disclosures go a long way in enhancing long-term shareholder value while safeguarding the interest of all the stakeholders. It is this convic on that has led the Company to make strong corporate governance values intrinsic in all its opera ons. The Company is led by a dis nguished Board, which includes independent directors. The Board provides a strong oversight and strategic counsel. The Company has established systems and procedures to ensure that the Board of the Company is well-informed and well-equipped to fulfi ll its oversight responsibili es and to provide management the strategic direc on it needs to create long-term shareholder value.

BOARD OF DIRECTORS

Composi on of the Board

As on 31st December 2009, the Board of HeidelbergCement India Limited consists of 7 Directors viz., six Non-Execu ve Directors (out of which three are Independent Directors) and a Managing Director. The Chairman of the Board is a Non-Execu ve Director. The composi on of the Board is in conformity with Clause 49 of the Lis ng Agreement which s pulates that: (i) not less than 50% of the Board of Directors should comprise of Non-Execu ve Directors; and (ii) where the Chairman of the Board is a Non-Execu ve Director not related to the promoter group, at least one third of the Board should comprise of independent directors.

Number of Board Mee ngs

During the period 1.1.2009 to 31.12.2009, the Board of Directors met fi ve mes on 16th February, 2009, 27th March, 2009, 29th April, 2009, 29th July, 2009 and 29th October, 2009. The maximum me gap between any two consecu ve board mee ngs was less than four months.

Directors’ Attendance Record and Directorships held

COMPOSITION AND OTHER DETAILS OF THE BOARD OF DIRECTORS:

S.No. Name of the Director Category/ status of Directorship

No. of Board Meetings attended during the period 1.1.2009 to 31.12.2009

No. of Directorship (s) in other Public Limited Companies*

No. of Committee positions held in other Public Limited Companies**

No. of Equity Shares held in the Company

Sitting Fees paid (Rs.)

Chairman Member

1. Mr. P.G. Mankad, Chairman ~ Independent 5 12 1 6 –– 1,00,000

2. Dr. Bernd Scheifele Non-Execu ve 1 NIL – – – –

3. Dr. Lorenz Naeger Non-Execu ve NIL NIL – – – –

4. Mr. Amitabha Ghosh Independent 5 13 5 3 – 1,00,000

5. Mr. Shardul Shroff @ Independent NIL 6 – 4 – –

6. Mr. S. Krishna Kumar Independent 4 1 – 1 – 80,000

7. Dr. Albert Scheuer Non-Execu ve 3 1 – 1 – –

8. Mr. Ashish Guha Managing Director 5 2 – 1 – –

Dr. Bernd Scheifele, Dr. Lorenz Naeger, Dr. Albert Scheuer and Mr. Ashish Guha have been nominated on the Board of Directors of the Company by Cementrum I B.V., the sole promoter of the Company.

@ Mr. Shardul Shroff ceased to be Director of the Company w.e.f. 27th March 2009 consequent to acceptance of his resigna on by the Board of Directors.

* Private Limited Companies, Foreign Companies and companies under sec on 25 of the Companies Act, 1956 are excluded for this purpose.

** Only Audit Commi ee and Shareholders’ / Investors’ Grievance Commi ee have been considered for the purpose of the Commi ee posi ons as per lis ng agreement.

17


The Non-Execu ve Directors are paid si ng fees of Rs. 20,000 for a ending each mee ng of the Board of Directors as well as mee ngs of the Commi ees of the Board. The Company has not paid any remunera on or si ng fees to the Non-resident Directors namely, Dr. Bernd Scheifele, Dr. Lorenz Naeger and Dr. Albert Scheuer. The Company has not paid any si ng fees / remunera on to Mr. Ashish Guha, Managing Director.

The Company does not have any Stock Op on Scheme or Fixed / Performance Linked Incen ve Scheme for its Directors.

Code of Conduct for Directors and Senior Management Personnel

The Board had approved a Code of Conduct for Directors and Senior Management Personnel of the Company. The code has been displayed on the Company’s website viz., www.mycemco.com. The Board Members and Senior Management Personnel have affi rmed compliance with the aforesaid Code.

Directors with Materially Signifi cant Pecuniary Rela onships or Business Transac ons with the Company

The Company does not have any pecuniary rela onship with any of the Directors nor has entered into any transac on, material or otherwise, with them except the si ng fee and payment / reimbursement of travelling expenses.Board Level Commi ees

The Company has two Board Level Commi ees within the meaning of clause 49 of the Lis ng Agreement – Audit Commi ee and Share Transfer and Shareholders’ / Investors’ Grievance Commi ee. The Board of the Company takes all decisions with regard to cons tu ng, assigning, co-op ng, delega ng and fi xing the terms of reference of the Commi ees. Recommenda ons / decisions of the Commi ees are submi ed / informed to the Board for approval / informa on.

Audit Commi ee

The Audit Commi ee of the Company as on 31st December 2009, comprises of four members namely Mr. Amitabha Ghosh (Chairman of the Commi ee), Mr. P.G. Mankad, Mr. S. Krishna Kumar and Mr. Ashish Guha. During the period 1st January 2009 to 31st December 2009, the Audit Commi ee met fi ve mes on 16th February 2009, 27th March 2009, 29th April 2009, 29th July 2009 and 29th October 2009. The me gap between any two mee ngs of the Audit Commi ee was less than four months. The quorum for the mee ngs of the Audit Commi ee is one-third of the members of the Commi ee, subject to a minimum of two independent members present at the mee ng.

The a endance of the members at the mee ngs of the Audit Commi ee is given below :

S.No. Name of the Member No. of Mee ngs A ended Si ng Fees paid (Rs.)1 Mr. Amitabha Ghosh 5 1,00,0002 Mr. P.G. Mankad 5 1,00,0003 Mr. S. Krishna Kumar 4 80,0004 Mr. Ashish Guha 5 Nil

The terms of reference and the role of the Audit Commi ee is to overview the accoun ng systems, fi nancial repor ng and internal controls of the Company. The powers and role of the Audit Commi ee are as set out in the Lis ng Agreement and Sec on 292A of the Companies Act, 1956.

Company Secretary is the Secretary to the Commi ee. The Chief Financial Offi cer and the representa ve(s) of the Statutory Auditors are regularly invited to a end the mee ngs of the Audit Commi ee. Mr. Amitabha Ghosh, Chairman of the Audit Commi ee, possesses accoun ng and fi nancial management exper se and all members of the Commi ee have accoun ng and fi nancial knowledge.

Share Transfer and Shareholders’ / Investors’ Grievance Commi ee

The Share Transfer and Shareholders’ / Investors’ Grievance Commi ee of the Company comprises of three members namely Mr. P.G. Mankad (Chairman of the Commi ee), Mr. Amitabha Ghosh and Mr. Ashish Guha. During the year, the Commi ee met 20 mes to approve the share transfer requests and other related ma ers. The a endance of the members at the mee ngs of the Share Transfer and Shareholders’ / Investors’ Grievance Commi ee is given below :

S.No. Name of the Member No. of Mee ngs A ended Si ng Fees paid (Rs.)1 Mr. P.G. Mankad 18 3,60,0002 Mr. Amitabha Ghosh 7 1,40,0003 Mr. Ashish Guha 20 Nil


18

Mr. T.V. Ganesan, Head Legal & Company Secretary is the Compliance Offi cer of the Company. During the year, two complaints were received from the shareholders and both of them were resolved sa sfactorily. As on 31st December 2009, there was no pending investor complaint.

Share Allotment Commi eeThe Board of Directors at its mee ng held on 16th February 2009 had cons tuted a Share Allotment Commi ee comprising of three members namely, Mr. P.G. Mankad (Chairman of the Commi ee), Mr. Amitabha Ghosh and Mr. Ashish Guha. The aforesaid Commi ee met on 27th March 2009 and approved allotment of 6,86,03,351 fully paid equity shares of Rs. 10 each to the shareholders of erstwhile Indorama Cement Limited (IRCL) and HeidelbergCement India Pvt. Ltd. (HIPL) pursuant to the Scheme of Amalgama on of IRCL and HIPL into and with HeidelbergCement India Limited. Si ng fees aggrega ng to Rs. 40,000/- was paid to Mr. P.G. Mankad and Mr. Amitabha Ghosh for a ending the aforesaid mee ng.

Remunera on Commi eeThe Company does not have any Remunera on Commi ee.

SubsidiaryThe Company does not have any subsidiary company.

Management Discussion and AnalysisThis Annual Report has a detailed chapter on Management Discussion and Analysis.

Disclosures Wherever necessary, Senior Management makes disclosures to the Board rela ng to all the material fi nancial and commercial transac ons where they have a personal interest that may have a poten al confl ict with the interest of the Company at large. All the related party transac ons have been disclosed in the notes to the accounts of the Balance Sheet presented in the Annual Report. All the Directors have disclosed their interest in Form No. 24AA pursuant to Sec on 299 of the Companies Act, 1956 and as and when any changes in their interests take place, they are placed at the Board Mee ngs for taking the same on record.

The Senior Management and the Board of Directors of the Company review the adop on of the non-mandatory requirements under Clause 49 of the Lis ng Agreement, from me to me.

Disclosure of Accoun ng Treatment in prepara on of Financial Statements The Company has followed the accoun ng standards laid down by the Ins tute of Chartered Accountants of India (ICAI) in prepara on of its fi nancial statements.

Details of Non-compliance by the Company in the last three yearsYour Company has complied with all the requirements of the Lis ng Agreement with the Stock Exchanges, SEBI Regula ons and other Statutory Authori es. No penal es or strictures have been imposed on your Company by the Stock Exchanges or SEBI or any other Statutory Authority in connec on with viola on of Capital Market norms, rules, regula ons, etc. in the last three years.

Risk ManagementThe Board is apprised of the ma ers with regard to Risk Management & Assessment. The risk minimisa on procedures have been put in place and are reviewed from me to me to ensure that the execu ve management controls risk through means of a properly defi ned framework.

GENERAL SHAREHOLDERS INFORAMTION:

Re-appointment of DirectorsAt the ensuing 51st Annual General Mee ng (AGM) of the Company, Mr. S. Krishna Kumar and Dr. Albert Scheuer shall be re ring by rota on and being eligible they have off ered themselves for re-elec on by the shareholders at the said AGM. The brief par culars of the aforesaid Directors are given in the No ce of AGM.

Means of Communica on The quarterly and annual fi nancial results are generally published in English (Business Standard) and relevant vernacular newspaper (Udayavani). The results are also displayed on the Company’s website – www.mycemco.com.

Besides, as required under the lis ng agreement, the Quarterly / Annual Financial Results, Shareholding Pa ern, Annual Report etc., are uploaded on the Electronic Data Informa on Filing and Retrieval Website (EDIFAR) and can be accessed at www.sebiedifar.nic.in. Further, no presenta on has been made to the Ins tu onal Investors or Analysts during the year under review.

19


General Mee ngs of Shareholders

The details of the General Mee ngs of the shareholders of the Company viz., Annual General Mee ng (AGM) and Extra-ordinary General Mee ng (EGM) held during the last 3 years are given below:

(a) Annual General Mee ngs :-

Financial Year ended Date & Time Venue

31.12.2008 29.05.2009, 9.00 A.M. HeidelbergCement Employees Staff Club Auditorium, P.O. Ammasandra, Taluk Turuvekere, District Tumkur, Karnataka – 572 211.

31.12.2007 24.06.2008, 1.30 P.M. Mysore Cements Employees Staff Club Auditorium, P.O. Ammasandra, Taluk Turuvekere, District Tumkur, Karnataka – 572 211.

31-12-2006 (9 months) 14-06-2007, 1.30 P.M. Mysore Cements Employees Staff Club Auditorium, P.O. Ammasandra, Taluk Turuvekere, District Tumkur, Karnataka – 572 211.

Mr. Amitabha Ghosh, Director of the Company and Chairman of the Audit Commi ee was present at the last AGM held on 29th May 2009.

(b) Other mee ngs of shareholders :-

Par culars Date & Time Venue

EGM 19-03-2009, 9.00 A.M. Mysore Cements Employees Staff Club Auditorium, P.O. Ammasandra, Taluk Turuvekere, District Tumkur, Karnataka – 572 211.

Mee ng convened by Hon’ble High Court of Karnataka for approving Scheme of Amalgama on.

06.08.2008, 9.30 A.M. Mysore Cements Employees Staff Club Auditorium, P.O. Ammasandra, Taluk Turuvekere, District Tumkur, Karnataka – 572 211.

No Special Resolution was passed at any of the last three AGMs. However, at the EGM held on 19th March 2009 the shareholders have passed a Special Resolution for increase of Authorised Share Capital by Rs. 9 crores i.e, from Rs. 271 crores to Rs. 280 crores.

Postal Ballot

During the year under review the Company has not passed any Resolution through Postal Ballot. Two separate Ordinary Resolu ons under sec on 293(1)(d) and 293(1)(a) of the Companies Act, 1956 are proposed to be passed through Postal Ballot in order to borrow funds upto Rs. 1,200 crores and for crea on of charge / mortgage on the assets of the Company for securing the aforesaid borrowings. A special resolu on for shi ing of Registered Offi ce from Ammsandra (Karnataka) to Gurgaon (Haryana), subject to confi rma on of the Hon’ble Company Law Board, is also proposed to be passed through postal ballot.

To enable the members to cast their votes by post on the aforesaid resolu ons, serially numbered Postal Ballot Forms along with self-addressed envelope for which the postage will be borne by the Company, are being sent separately to all the members. Members are requested to carefully read the instruc ons printed on the backside of the Postal Ballot Form before exercising their vote.

The result of the Postal Ballot will be announced at the 51st Annual General Mee ng to be held at 9.00 A.M. on Tuesday, 11th May 2010 at the Registered Offi ce of the Company. A er declara on, the results of the postal ballot shall also be posted on the Company’s website www.mycemco.com besides being communicated to Bombay Stock Exchange Limited and Na onal Stock Exchange of India Limited.

Annual General Mee ng

Date : 11th May 2010 Day : Tuesday Time : 9.00 A.M.Venue : HeidelbergCement Employees Staff Club Auditorium, P.O. Ammasandra , District Tumkur , Karnataka - 572211.


20

Financial Calendar for 2010

The Company follows the calendar year for the prepara on of its accounts. Proposed Board Mee ngs for taking on record quarterly fi nancial results for the accoun ng year 2010 are as under:

Approval of the fi nancial results for the quarter ending 31st March 2010, 30th June 2010 and 30th September 2010.

In the following month of the quarter ending.

Audited annual fi nancial results for the last quarter and the fi nancial year ending 31st December 2010.

Before 31st March 2011.

AGM for the fi nancial year ending 31st December 2010 : May / June 2011

Book Closure

Pursuant to Clause 16 of the lis ng agreement, the Register of Members and Share Transfer Books of the Company will remain closed from 7th May 2010 to 11th May 2010 (both days inclusive) for the purpose of registra on of transfer of equity shares in physical form.

Dividend

Preference Shares: Dividend @ 9% per annum on 13,49,336 9% Cumulative Redeemable Preference Shares of Rs. 100 each from the date of allotment of the said shares i.e, 12th December 2006 till 31st December 2009.

Equity Shares : Nil

Stock Exchanges where shares are listed Stock Code / Trading Symbol

Bombay Stock Exchange Ltd. (BSE) 500292Na onal Stock Exchange of India Ltd. (NSE) Heidelberg

There are no arrears of listing fees to be paid to the Stock Exchanges. During the year the Company had applied for voluntary delisting of its equity shares from Bangalore Stock Exchange Limited pursuant to Regulations 6 and 7 of the SEBI (Delisting of Equity Shares) Regulations, 2009. Bangalore Stock Exchange Limited has vide its letter dated 7th September 2009 confirmed that the equity shares of the Company have been delisted w.e.f. 7th September 2009.

Share Price Data

Share Price of HeidelbergCement India Ltd. at BSE & NSE during the fi nancial year ended 31st December 2009.

BSE NSE

Month High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)

January 18.77 13.45 18.85 13.40

February 17.00 13.66 17.00 13.75

March 20.70 14.10 20.75 14.10

April 28.50 18.65 29.50 18.60

May 40.90 23.90 40.95 23.90

June 49.70 34.90 50.85 34.35

July 47.30 32.60 47.25 32.40

August 47.75 39.10 47.80 39.25

September 48.55 42.25 49.80 42.05

October 47.00 35.10 46.20 35.00

November 43.20 33.10 43.15 34.20

December 46.80 40.10 46.60 40.25

21


Comparison of Share Price of HeidelbergCement India Ltd. with BSE Sensex

031st Dec. Jan Feb March April May June July Aug Sep Oct Nov Dec

50

100

150

200

250

300

350

January to December 2009

Rela

tive

valu

es to

100

BSE Sensex MCL Share Price

Shareholding Pa ern as on 31st December 2009

Category No. of Equity Shares % of Equity share holding No. of Preference Shares % of Preference Shares

Promoters 15,53,40,196 68.55 13,49,336 100.00

Mutual Funds & UTI 45,30,699 2.00

Financial Ins tu ons & Banks 14,605 0.01

Central /State Government 3,28,440 0.14

Insurance Companies 36,29,895 1.60

FIIs 34,61,643 1.53

NRIs & OCBs 15,16,670 0.67

Bodies Corporate 2,01,77,411 8.90

Trusts 8,88,688 0.39

Resident Individuals 3,67,24,869 16.21

Total 22,66,13,116 100.00 13,49,336 100.00

Distribu on Schedule of Equity Shares as on 31st December 2009

No. of equity shares of Rs. 10 each No. of share holders % of share holders No. of shares held % of share holding

1-500 56727 82.52 10121879 4.47

501-1000 6380 9.28 5468892 2.41

1001-2000 2787 4.05 4466506 1.97

2001-3000 919 1.34 2420776 1.07

3001-4000 386 0.56 1409355 0.62

4001-5000 435 0.63 2110891 0.93

5001-10000 571 0.83 4395950 1.94

10001 and above 542 0.79 196218867 86.59

Total 68747 100.00 226613116 100.00

Dematerialisa on of shares and liquidity

The Equity Shares of the Company are ac vely traded at BSE and NSE in dematerialised form. Over 98% of the Equity Shares of the Company have already been dematerialised. Interna onal Securi es Iden fi ca on Number (ISIN) for both the depositories, viz., NSDL and CDSL is INE578A01017. The shareholders who wish to get their shares dematerialised can submit the share cer fi cates together with the Demat Request Form to the Depository Par cipant with whom they have opened a demat account.


22

Share Transfer System

The shareholders who wish to transfer their shares held in physical form can lodge the duly completed request for registra on of transfer of shares with the Registrar & Share Transfer Agents viz., M/s. Alpha Systems Pvt. Ltd., Bangalore. The duly transferred Share Cer fi cates are normally returned to the shareholders within a period of 20 to 25 days from the date of lodgement.

Outstanding warrants and their implica ons on equity As on 31st December 2009, there are no outstanding GDRs, ADRs, conver ble warrants or any other instruments conver ble into equity shares, issued by the Company.

Addresses for correspondence Registered offi ce Corporate offi ceHeidelbergCement India Ltd. Mr. T.V. GanesanP.O. Ammasandra Head Legal & Company SecretaryDistrict Tumkur HeidelbergCement India Ltd.Karnataka - 572211 9th Floor, Tower ‘C ’, Infi nity TowersPhone Nos. : 08139-278656/57/58 DLF Cyber City, Phase IIFax No. : 08139-278375 Gurgaon, Haryana - 122002 Phone Nos. : 0124 – 4503700 Fax No. : 0124 – 4147698Registrar & Share Transfer Agents: E-mail-Ids : [email protected]/s. Alpha Systems Pvt. Ltd. [email protected](Unit: HeidelbergCement India Ltd.) [email protected], Ramana Residency,4th Cross, Sampige Road,Malleswaram, Bangalore - 560 003, KarnatakaPhone Nos. : 080-23460815 to 23460818 Fax No. : 080-23460819Email–Id : [email protected] and alfi [email protected]

Plant Loca ons

(a) HeidelbergCement India Ltd. (b) Diamond Cements P.O. Ammasandra (Unit of HeidelbergCement India Ltd.) Dis . Tumkur P.O. Narsingarh Karnataka - 572211 District Damoh Madhya Pradesh

(c) Diamond Cements (d) Diamond Cements (Unit of HeidelbergCement India Ltd.) (Unit of HeidelbergCement India Ltd.) Village Imlai Village Madora District Damoh District Jhansi Madhya Pradesh U ar Pradesh

(e) HeidelbergCement India Ltd. Village Khar Karavi, P.O. Gadab, Taluka Pen, District Raigad, Maharashtra – 402 107

Affi rma on of Compliance with the Code of Business Conduct for Directors and Senior Execu ves

I declare that the Company has received affi rma on of compliance with the “Code of Business Conduct for Directors and Senior Execu ves” laid down by the Board of Directors, from all the Directors and Senior Management Personnel of the Company, to whom the same is applicable, for the fi nancial year ended 31st December 2009.

Sd/-Place: Gurgaon Ashish Guha Date: 24th February 2010 Managing Director

23


CERTIFICATE OF COMPLIANCE WITH CLAUSE 49 OF LISTING AGREEMENT

To

The Members of HeidelbergCement India Ltd.

We have examined the compliance of condi ons of Corporate Governance by HeidelbergCement India Ltd. for the fi nancial year ended 31st December 2009, as s pulated in the Lis ng Agreement of the said Company with Bombay Stock Exchange Limited and Na onal Stock Exchange of India Limited.

The compliance of condi ons of Corporate Governance is the responsibility of the Management. Our examina on was limited to the procedures and implementa on thereof, adopted by the Company for ensuring the compliance of the condi ons of Corporate Governance. It is neither an audit nor an expression of opinion on the fi nancial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreements.

We state that two investor grievances were received during the year under review and the same were resolved to the sa sfac on of the investors.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the effi ciency or eff ec veness with which the Management has conducted the aff airs of the Company.

For Nityanand Singh & Co. Company Secretaries

Sd/- Nityanand Singh Place: New Delhi ProprietorDate : 24th February 2010 FCS No.2668 CP No.2388

Disclosure pursuant to Regula on 3 (1) (e) (i) of the SEBI(Substan al Acquisi on of Shares and Takeovers) Regula ons, 1997 of persons cons tu ng ‘Group’ include the following:-

Foreign promoters and persons ac ng in concert: Cementrum 1 B.V., HeidelbergCement AG., HeidelbergCement Asia Pte Ltd., CBR Interna onal Services S.A., Castle Cement Ltd., CBR Bal c B.V., CBR Portland B.V., Civil and Marine Slag Cement Ltd., Amvrosiyivske open Joint Stock Company, Bukhtarmipskaya Cement Company, Carpatcement Holding S.A., Cementa AB, Ceskomoravsky Cement, a.s, Duna-Drava Cement K , Ekocem Sp., ENCL Holding N.V., Gorazdze Cement S.A., Hanson Ltd., HC CAUCAS Holding, HeidelbergCement Central Europe East Holding B.V., HeidelbergCement Denmark A/S, HeidelbergCement Interna onal Holding Gmbh, HeidelbergCement Netherlands Holding B.V., HeidelbergCement Northern Europe AB, HeidelbergCement Norway AS, HeidelbergCement Sweden AS, HeidelbergCement UK Holding Ltd., Hu enzement Gmbh, Kunda Nordic Cement Corp., Nederlandse Cement Deelnemingsmaatschappij B.V., Norcem AS, Kryvyi Rih Cement, S.A. Cimenteries CBR, Teutonia Zementwerk AG, Tvornica Cementa Kakanj d.d., Civil and Marine Inc., HeidelbergCement Inc., Lehigh B.V., Lehigh Cement Company, Lehigh Cement Limited, Lehigh Southwest Cement Company, Permanente Cement Company, Butra HeidelbergCement Sdn. Bhd., Cimbenin S.A., Ciments du Togo S.A., Cochin Cements Ltd., Endocement Ltd., Ghacem Ltd., HeidelbergCement Bangladesh Ltd., Liberia Cement Corpora on Ltd., PT Indocement Tunggal Prakarsa Tbk, Scancem Interna onal ANS, Sierra Leone Cement Corp. Ltd., Societe des Ciments du Gabon, Tanzania Portland Cement Company Ltd., HC Trading B.V., HC Trading Malta Ltd. and HC Fuels Limited.


24

Auditors’ ReportTo The Members of HeidelbergCement India Limited (formerly Mysore Cements Limited)

1. We have audited the a ached Balance Sheet of HeidelbergCement India Limited (‘the Company’) as at December 31, 2009 and also the Profi t and Loss account and the cash fl ow statement for the year ended on that date annexed thereto. These fi nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these fi nancial statements based on our audit.

2. We conducted our audit in accordance with audi ng standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence suppor ng the amounts and disclosures in the fi nancial statements. An audit also includes assessing the accoun ng principles used and signifi cant es mates made by management, as well as evalua ng the overall fi nancial statement presenta on. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-sec on (4A) of Sec on 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the ma ers specifi ed in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

i. We have obtained all the informa on and explana ons, which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examina on of those books;

iii. The balance sheet, profi t and loss account and cash fl ow statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the balance sheet, profi t and loss account and cash fl ow statement dealt with by this report comply with the accoun ng standards referred to in sub-sec on (3C) of sec on 211 of the Companies Act, 1956.

v. On the basis of the wri en representa ons received from the directors, as on December 31, 2009, and taken on record by the Board of Directors, we report that none of the directors is disqualifi ed as on December 31, 2009 from being appointed as a director in terms of clause (g) of sub-sec on (1) of sec on 274 of the Companies Act, 1956.

vi. In our opinion and to the best of our informa on and according to the explana ons given to us, the said accounts give the informa on required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accoun ng principles generally accepted in India;

a) in the case of the balance sheet, of the state of aff airs of the Company as at December 31, 2009;

b) in the case of the profi t and loss account, of the profi t for the year ended on that date; and

c) in the case of cash fl ow statement, of the cash fl ows for the year ended on that date.

For S.R. BATLIBOI & CO. Chartered Accountants

Sd/-

per Manoj Gupta Partner Membership No.: 83906

Place: GurgaonDate: February 24, 2010

25


Annexure referred to in paragraph 3 of our report of even dateRe: HeidelbergCement India Limited (formerly Mysore Cements Limited) (‘the Company’)

(i) (a) The Company has maintained proper records showing full par culars, including quan ta ve details and situa on of fi xed assets.

(b) Fixed Assets have been physically verifi ed by the management during the year in accordance with a planned programme of verifying them in a phased manner so as to cover all assets once in two years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were no ced in respect of assets verifi ed during the year.

(c) There was no substan al disposal of fi xed assets during the year.

(ii) (a) The inventory of the Company have been physically verifi ed by the management during the year a er reasonable intervals.

(b) The procedures of physical verifi ca on of inventory followed by the management are reasonable and adequate in rela on to the size of the Company and the nature of its business

(c) The Company is maintaining proper records of inventory and no material discrepancies were no ced on physical verifi ca on.

(iii) (a) As informed, the Company has not granted any loan, secured or unsecured to companies, fi rms or other par es covered in the register maintained under sec on 301 of the Companies Act, 1956. Accordingly, paragraphs 4 (iii) (b), (c) and (d) of the Companies (Auditor’s Report) Order, 2003 (as amended), are not applicable.

(e) As informed, the Company has not taken any loans, secured or unsecured from companies, fi rms or other par es covered in the register maintained under sec on 301 of the Companies Act, 1956. Accordingly, paragraphs 4 (iii) (f) and (g) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not applicable.

(iv) In our opinion and according to the informa on and explana ons 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 purchase of inventory and fi xed assets and for sale of goods. During the course of our audit, no major weakness has been no ced in the internal control system in respect of these areas. During the course of our audit, we have not observed any con nuing failure to correct major weakness in internal control system of the company.

(v) (a) According to the informa on and explana ons provided by the management, we are of the opinion that there are no contracts or arrangements referred to in sec on 301 of the Act that needs to be entered into the register maintained under sec on 301. Therefore, provision of clause 4(v) (b) of the Companies (Auditor’s Report) Order, 2003 (as amended) is not applicable to the Company.

(vi) In respect of deposits accepted, in our opinion and according to the informa on and explana ons given to us, direc ves issued by the Reserve Bank of India and the provisions of sec ons 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under, to the extent applicable, have been complied with. We are informed by the management that no order has been passed by the Company Law Board, Na onal Company Law Tribunal, Reserve Bank of India or any Court or any other Tribunal.

(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 sec on 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.

(ix) (a) The Company is regular in deposi ng with appropriate authori es undisputed statutory dues including provident fund, investor educa on and protec on fund, or employees’ state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it. Further, since the Central Government has ll date not prescribed the amount of cess payable under sec on 441 A of the Companies Act, 1956, we are not in a posi on to comment upon the regularity or otherwise of the company in deposi ng the same.

(b) According to the informa on and explana ons given to us, no undisputed amounts payable in respect of provident fund, investor educa on and protec on fund, employees’ state insurance, income-tax, wealth-tax, service tax,


26

sales-tax, customs 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.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of Statute Nature of dues Amount(Rs. in lacs)

Period to which the amount relates

Forum where dispute is pending

Central Sales Tax Act and Various State Sales Tax Act

Sales Tax 623.89 1998-99 to 2004-05 Supreme Court

7,007.62 1994-95 to 2007-08 High Court

25.97 1964-65, 1995-98 to 2002-03

Tribunal

45.07 1989-90 to 1992-93 and 2000-03

Deputy Commissioner (Appeals)

63.30 1984-85 Deputy Commissioner

0.11 2000-01 Addi onal Commissioner

57.00 1999-00 to 2002-03 Joint Commissioner

1.27 1997-98, 2002-03 and 2003-04

Assessing Offi cer, Sales Tax

5.84 2004-05 Trade Tax Department

Income Tax Act Income Tax 99.79 2003-04 Income Tax Commissioner (Appeals)

Central Excise Act Excise Duty and Cenvat

218.66 1995-96 to 2000-01 High Court

34.02 1992-93, 1996-97 and 1999-2000 to 2003-04

Central Excise and Service Tax Tribunal

1,593.74 2007-08 and 2008-09 Commissioner of Central Excise

Finance Act 1994 (Amended - 2009)

Service Tax 13.05 2004-05 and 2005-06 Commissioner of Central Excise

M.P. Irriga on Act Water Cess 8.77 1999-2000 High Court

(x) The Company has no accumulated losses at the end of the fi nancial year and it has not incurred cash losses in the current and immediately preceding fi nancial year.

(xi) Based on our audit procedures and as per the informa on and explana ons given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to bank and fi nancial ins tu on. The Company has no outstanding dues in respect of debenture holder.

(xii) According to the informa on and explana ons given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securi es.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefi t fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securi es, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not applicable to the Company.

27


(xv) According to the informa on and explana ons given to us, the Company has not given any guarantee for loans taken by others from bank or fi nancial ins tu ons.

(xvi) Based on informa on and explana ons given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the informa on and explana ons given to us and on an overall examina on 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 preferen al allotment of shares to par es or companies covered in the register maintained under sec on 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money through a public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of repor ng the true and fair view of the fi nancial statements and as per the informa on and explana ons given by the management, we report that no fraud on or by the Company has been no ced or reported during the course of our audit.

For S. R. BATLIBOI & CO. Chartered Accountants

Sd/-

per Manoj Gupta Partner Membership No.: 83906

Place: GurgaonDate: February 24, 2010


28

Balance Sheetas at December 31, 2009

Schedules December 31, 2009Rs. in Lacs

December 31, 2008Rs. in Lacs

SOURCES OF FUNDS Shareholders’ FundsShare Capital A 24,011.55 24,011.55 Reserves and Surplus B 49,610.31 45,173.95

Loan FundsSecured Loans C 200.00 1,000.00

Deferred Tax Liability (net) D 1,646.90 -

Total 75,468.76 70,185.50

APPLICATION OF FUNDS Fixed Assets EGross Block 91,318.66 85,158.46Less: Accumulated Deprecia on (59,960.68) (57,904.66)

Net Block 31,357.98 27,253.80Capital Work-in-Progress including capital advances 5,758.54 5,473.80

37,116.52 32,727.60

Intangible Assets ENet Block 267.87 144.20 Capital Work-in-Progress 121.47 108.48

389.34 252.68

Investments F 12.10 12.10 Current Assets, Loans and AdvancesInventories G 6,454.04 7,107.32 Sundry Debtors H 2,215.50 1,989.29 Cash and Bank Balances I 49,539.36 33,780.33 Other Current Assets J 371.42 391.10 Loans and Advances K 11,488.31 9,600.27

(I) 70,068.63 52,868.31

Less: Current Liabili es and ProvisionsCurrent Liabili es L 21,377.28 15,863.56 Provisions M 10,740.55 8,003.76

(II) 32,117.83 23,867.32 Net Current Assets (I-II) 37,950.80 29,000.99

Profi t and Loss Account - 8,192.13

Total 75,468.76 70,185.50 Notes to Accounts T

The schedules referred to above and notes to accounts form an integral part of the Balance Sheet

As per our report of even dateFor S R Batliboi & Co. For and on behalf of the Board of Directors

of HeidelbergCement India LimitedChartered Accountants

Sd/- Sd/- Sd/-P G Mankad Ashish GuhaChairman Managing Director

Per Manoj GuptaPartnerMembership No. 83906

Sd/- Sd/- Sd/- Sd/-Place: Gurgaon T.V. Ganesan Anil Kumar Sharma Amitabha Ghosh S.Krishna KumarDate: February 24, 2010 Head Legal & Company Secretary Chief Financial Offi cer Director Director

29

HeidelbergCement India LimitedProfi t and Loss Accountfor the Year ended December 31, 2009

Schedules December 31, 2009Rs. in Lacs

December 31, 2008 Rs. in Lacs

INCOME Gross Sales 104,023.92 88,697.67 Less: Excise Duty (10,384.63) (12,568.06)Net Sales 93,639.29 76,129.61 Other Income N 4,521.14 4,425.67 Total 98,160.43 80,555.28

EXPENDITURERaw Materials Consumed O 22,098.93 15,314.61 Decrease/ (Increase) in Inventories P (26.08) 655.83 Excise duty on (Decrease)/ Increase in Inventories 25.95 (92.24)Personnel Expenses Q 6,968.43 6,193.36 Opera ng and Other Expenses R 48,597.74 45,263.63 Deprecia on/amor za on 2,922.08 2,494.22 Less: Transferred from Revalua on Reserve 341.39 356.99 Net Deprecia on/amor za on 2,580.69 2,137.23 Financial Expenses S 439.90 410.24

Total 80,685.56 69,882.66 Profi t from Con nuing Opera on before Tax 17,474.87 10,672.62 Provision for TaxCurrent tax (2,408.60) - Deferred Tax Credit / (Charge) (1,646.90) 1,848.24 Fringe Benefi t Tax (15.46) (58.47)Total Tax Expenses (4,070.96) 1,789.77 Profi t from Con nuing Opera on (I) 13,403.91 12,462.39 Profi t from Discon nuing Opera on before Tax (Refer Note 20 of Schedule T) - 90.25 Provision for Tax - - Profi t from Discon nuing Opera on (II) - 90.25 Net Profi t for the Year a er tax (I+II) 13,403.91 12,552.64 Balance brought forward from last year (8,192.13) (26,983.09)Proposed Dividend (Refer Note No. 10 of Schedule T) 370.98 - Tax on Proposed Dividend 63.05 - Transfer from Securi es Premium Account - 6,238.32 Profi t/(Loss) carried to Balance Sheet 4,777.75 (8,192.13)Earnings Per Share (Refer Note No. 15 of Schedule T)Basic and Diluted [Nominal value of shares Rs. 10/- (Previous Year Rs. 10/-] 5.85 5.92

Notes to Accounts T

The schedules referred to above and notes to accounts form an integral part of the Profi t and Loss account

As per our report of even dateFor and on behalf of the Board of Directors of HeidelbergCement India Limited

For S R Batliboi & Co.Chartered Accountants





30

Schedulesto the Accounts

Schedule A: Share Capital



Authorised230,000,000 (Previous year: 221,000,000) equity shares of Rs.10/- each 23,000.00 22,100.00

5,000,000 (Previous year: 5,000,000) preference shares of Rs.100/- each 5,000.00 5,000.0028,000.00 27,100.00

Issued226,631,309 (Previous year: 158,027,958) equity shares of Rs.10/- each 22,663.13 15,802.80

1,349,336 (Previous Year: 1,349,336) 9% cumula ve redeemable preference shares of Rs.100/- each 1,349.34 1,349,.34

24,012.47 17,152.14

Subscribed and Paid-Up226,613,116 (Previous year: 158,009,765) equity shares of Rs.10/- each 22,661.31 15,800.98

18,193 (Previous year: 18,193) Amount paid-up on Shares Forfeited

0.90 0.90

1,349,336 (Previous Year: 1,349,336) 9% cumula ve redeemable preference shares of Rs.100/- each 1,349.34 1,349.34

24,011.55 17,151.22

Equity Share Suspense (Refer Note No. 3 of Schedule T) - 6,860.3324,011.55 24,011.55

i. Of the above 155,340,196 (Previous Year: 86,736,941) equity shares are held by Cementrum I B.V, the Holding

Company. The ultimate Holding Company is HeidelbergCement AG. ii. Equity Shares include 1,422,235 (Previous Year: 1,422,235) shares of Rs. 10 each allo ed as fully paid-up Bonus Shares

by capitalisa on of General Reserve. iii. 1,349,336 (Previous Year: 1,349,336) 9% Cumula ve Redeemable Preference Shares of Rs.100/- each were issued at par on

December 12, 2006 to Cementrum I B.V. As per the terms of issue, these shares are redeemable on December 11, 2011. These shares also carry a call/put op on at any me a er the expiry of 24 months from the date of allotment.

iv. Equity shares include 67,721,681 (Previous Year: Nil) equity shares of Rs. 10/- each issued as fully paid up to the shareholders of erstwhile Indorama Cement Ltd. and 881,670 (Previous Year: Nil) equity shares of Rs. 10/- each issued as fully paid to the shareholders of erstwhile HeidelbergCement India Pvt. Ltd. pursuant to the scheme of amalgama on for considera on other than cash.

Schedule B:Reserves and Surplus

Capital ReserveOpening Balance 5,496.92 0.05Add: Created on Amalgama on - 5,496.92 5,496.87 5,496.92

Capital Subsidy Reserve As per Last Accounts 64.25 64.25

Securi es Premium Opening Balance 37,071.23 43,309.55 Less: Transferred to Profi t and Loss Account

as per Scheme of Amalgama on - 37,071.23 6,238.32 37,071.23

Revalua on Reserve Opening Balance 2,291.55 2,666.79

Less: Adjustment on account of deprecia on on revalued amount of assets 341.39 356.99

Less: Adjustment on account of revalued assets sold / discarded - 1,950.16 18.25 2,291.55

Capital Redemp on Reserve As per Last Accounts 250.00 250.00

Profi t and Loss Account 4,777.75 - 49,610.31 45,173.95

31

HeidelbergCement India LimitedSchedulesto the Accounts

Schedule C: Secured Loans

December 31 ,2009Rs. in Lacs


Loans from Bank Term loans 100.00 500.00Other Loans Term loans 100.00 500.00

200.00 1,000.00

Term Loans from bank and Term Loan from other are secured by Joint Equitable Mortgage ranking pari-passu interse, by deposit of tle deeds of the Company’s immovable proper es situated at Village Khar Karavi, Dist. Raigad, Maharashtra and hypotheca on of all moveable assets (including Book Debts), both present & future of Raigad Unit of the Company.

Loans from bank and other loan aggrega ng to Rs.200 lacs (Previous year Rs.800 lacs) are repayable within one year.

Schedule D: Deferred Tax Liability (net)

Deferred Tax Liabili esDiff erences in deprecia on and other diff erences in block of fi xed assets as per tax books and fi nancial books 4,196.51 3,973.46Eff ect of expenditure allowed for tax purposes in the current year but will be debited to profi t and loss account in the following years 664.33 555.41Gross Deferred Tax Liabili es 4,860.84 4,528.87Deferred Tax AssetsCarry forward of losses 605.93 2,358.93Eff ect of expenditure debited to profi t and loss account in the current year but allowed for tax purposes in following years 2,485.10 1,943.83Provision for doub ul debts 122.91 226.11

Gross Deferred Tax Assets 3,213.94 4,528.87

Net Deferred Tax Liability* 1,646.90 -

* Refer Note No. 11 of Schedule T

Schedule E. Fixed AssetsRs. in Lacs

GROSS BLOCK DEPRECIATION NET BLOCK

As at01.01.2009

Acquired onAmalgama on

Addi ons/ Adjustments

Sales/Adjustments

As at31.12.2009

At01.01.2009

Acquired onAmalgama on

Sales/Adjustments

For theYear

At31.12.2009

As at31.12.2009

As at31.12.2008

Tangible Assets- (A)

Freehold Land 1,494.63 - 313.15 - 1,807.78 - - - - - 1,807.78 1,494.63

Leasehold Land 171.16 - - - 171.16 126.55 - - 9.21 135.76 35.40 44.61

Buildings 7,628.53 - 363.22 51.84 7,939.91 2,826.10 - 39.63 161.57 2,948.04 4,991.87 4,802.43

Railway Siding 1,241.21 - - - 1,241.21 898.81 - - 51.01 949.82 291.39 342.40

Plant and Machinery 72,979.08 - 6,290.77 814.43 78,455.42 53,239.46 - 708.39 2,479.31 55,010.38 23,445.04 19,739.62Furniture, Fi ngs and Equipments 897.15 - 109.31 22.38 984.08 392.39 - 18.29 121.43 495.53 488.55 504.76

Vehicles 746.70 - 35.52 63.12 719.10 421.35 - 53.96 53.76 421.15 297.95 325.35

Sub Total 85,158.46 - 7,111.97 951.77 91,318.66 57,904.66 - 820.27 2,876.29 59,960.68 31,357.98 27,253.80

Previous Year 67,942.16 14,963.99 3,055.80 803.49 85,158.46 50,407.92 5,768.22 734.56 2,463.08 57,904.66 27,253.80

Intangible Assets- (B)Acquired Computer 184.40 - 169.46 0.00 353.86 40.20 - - 45.79 85.99 267.87 144.20

So wareSub Total 184.40 - 169.46 - 353.86 40.20 - - 45.79 85.99 267.87 144.20

Previous Year 158.40 - 26.00 - 184.40 9.06 - - 31.14 40.20 144.20

TOTAL (A+B) 85,342.86 - 7,281.43 951.77 91,672.52 57,944.86 - 820.27 2,922.08 60,046.67 31,625.85 27,398.00

Previous Year 68,100.56 14,963.99 3,081.80 803.49 85,342.86 50,416.98 5,768.22 734.56 2,494.22 57,944.86 27,398.00

Notes:

(a) Certain Fixed Assets were revalued based on current replacement cost by approved valuers on 1.7.1981, 31.3.1990 and 31.3.1992. These had resulted in increase in book value of fi xed assets by Rs.26,330.06 lacs (gross) and accumulated deprecia on by Rs.4,752.78 lacs resul ng in net increase of Rs.21,577.28 lacs which were credited to Revalua on Reserve.

(b) Gross Block of Freehold Land, Building, Railway Siding and Plant and Machinery include Rs.288.68 lacs (Previous Year Rs.288.68 lacs), Rs.2,297.92 lacs (Previous Year Rs.2,302.85 lacs), Rs.175.66 lacs (Previous Year Rs.175.66 lacs) and Rs.16,140.68 lacs (Previous Year Rs.16,306.46 lacs) respec vely on account of revaula on. Further Accumulated Deprecia on of Building, Railway Siding and Plant and Machinery include Rs.1,256.64 lacs (Previous Year Rs.1,217.90 lacs), Rs.159.88 lacs (Previous Year Rs.152.86 lacs) and Rs.15,536.27 lacs (Previous Year Rs.15,411.34 lacs) respec vely on account of revaula on.

(c) Deprecia on for the year includes Rs.341.39 lacs (Previous year: Rs.356.99 lacs) in respect of increased value of Fixed Assets due to revalua on and an equivalent amount has been transferred from Revalua on Reserve. In the current year, Nil amount (Previous year: Rs.18.25 lacs) has been transferred/ withdrawn from the Revalua on Reserve to the Revalued Fixed Assets in respect to revalued Fixed Assets sold/discarded during the year.


32

Schedule F: Investments



Long Term Investments (At cost)Other than TradeA In Government Securi es Unquoted Six year Na onal Savings Cer fi cates 0.10 0.10

B Quoted 1,200,000 (Previous year 1,200,000) Fully Paid-up

Equity Shares of Rs.10 each of Cimmco Birla Limited 12.00 12.0012.10 12.10

Aggregate Value of: Quoted Investments 12.00 12.00 (Market value Rs.96.60 lacs, Previous year: Rs.122.40 lacs) Unquoted Investments 0.10 0.10

12.10 12.10Note: Cimmco Birla Limited is registered with the Board for Industrial and Financial Reconstruc on (BIFR). There was no regular trading on the stock exchanges during the current year. Therefore, market value is based on the last traded price available as on May 06, 2009 at Na onal Stock Exchnage (NSE).

Schedule G: Inventories (at lower of cost and NRV except scrap stock which is valued at NRV)

Raw Materials (including Stock in Transit Rs.5.81 lacs (Previous year: Rs. NIL)) 839.23 929.19Stores, Spare Parts and Packing Materials (including Stock in Transit Rs.82.74 lacs (Previous year: Rs.161.38 lacs)) 2,568.72 3,158.12Stock in Process 2,149.12 2,093.15Scrap Stock 61.29 177.12Finished Goods (including Stock in Transit Rs.78.93 lacs (Previous year: Rs.75.36 lacs)) 835.68 749.74

6,454.04 7,107.32

Schedule H: Sundry Debtors Unsecured

Debts outstanding for a period exceeding six months Considered good 192.46 314.28 Considered Doub ul 361.57 421.33Other Debts Considered good 2,023.04 1,675.01

2,577.07 2,410.62

Less: Provision for Doub ul Debts 361.57 421.332,215.50 1,989.29

Included in Debtors are: - Dues from Company under the Same Management:

Cochin Cements Limited - 110.17


33


Schedule I: Cash and Bank Balances



Cash on hand 4.17 4.01Balances with Scheduled Banks:On Current Accounts 1,254.48 1,432.92On Deposit Accounts 48,121.00 32,343.40Cheques in hand 159.71 -

49,539.36 33,780.33

Schedule J: Other Current Assets Interest accrued on deposits and others 370.60 391.10

Unamor sed Premium on Forward Contract 0.82 - 371.42 391.10

Schedule K: Loans & Advances

UnsecuredConsidered goodLoan to Fellow Subsidiary 315.13 404.40Advances recoverable in cash or in kind or for value to be received 1,144.06 934.95VAT credit (Input) receivable 9.52 15.22Balances with customs, excise, etc. 589.84 340.13Deposits with Government Departments and Others 8,631.87 6,921.99Advance Income Tax/ Tax Deducted at Source (Net of Provision Rs.2,408.60 lacs (Previous year: Rs.NIL)) 797.89 970.91Advance Fringe Benefi t Tax (Net of Provision Rs.15.46 lacs (Previous year: Rs.58.47 lacs)) - 12.67Considered Doub ulAdvances recoverable in cash or in kind or for value to be received 46.35 239.37Deposits with Government Departments and Others 0.52 4.52

11,535.18 9,844.16Less: Provision for Doub ul Advances 46.87 243.89

11,488.31 9,600.27Included in Loans and Advances are: - Dues from the Company under the Same Management:

Cochin Cements Limited 331.30 404.40(Maximum amount outstanding during the year Rs.1,066.72 lacs (Previous year: Rs. 404.40 lacs)

Schedule L: Current Liabili es

Sundry Creditorsa) Dues of Micro and Small Enterprises* 68.36 35.81b) Dues of Creditors other than Micro and Small Enterprises 11,830.97 9,506.50

Advance from Customers 1,997.38 1,112.07Trade and Other Deposits 4,998.17 3,261.40Book Overdra from Banks 313.31 80.31Interest Accrued but not due on Loans from Banks 1.16 3.49Other Liabili es 2,155.56 1,863.49Investor Educa on and Protec on Fund shall be credited by the following amounts, as and when due

a) Unclaimed Matured Deposits 0.04 0.31b) Interest Accrued on above 0.08 0.18

Forward Contract 12.25 - 21,377.28 15,863.56

* Refer Note No.17 of Schedule T


34

Schedule M: Provisions



Provision for Wealth Tax 1.16 1.04Provision for Leave Encashment 459.04 514.97Provision for Gratuity 1,092.89 870.47Provision for Li ga ons* 8,753.43 6,617.28Proposed Dividend 370.98 - Tax on Proposed Dividend 63.05 -

10,740.55 8,003.76* Refer Note No. 9 (b) of Schedule T

Schedule N: Other Income Interest (gross)

Bank Deposits (TDS Rs.407.87 lacs (Previous year: Rs.500.23 lacs))

2,596.14 2,277.19

Others (TDS Rs.19.17 lacs (Previous year: Rs.8.15 lacs)) 96.49 75.79Rent 24.72 28.08Sale of Cer fi ed Emission Rights - 1,175.62Scrap Sale 465.61 555.89Provision for Doub ul Debts wri en back 59.77 - Provisions/liabil es no longer required wri en back 1,179.77 68.02Miscellaneous Income 98.64 245.08

4,521.14 4,425.67

Schedule O: Raw Materials Consumed

Opening Inventories 929.19 486.52Add: Inventories acquired on Amalgama on - 331.12Add: Purchases and Lime stone raising cost 22,008.97 15,426.16

22,938.16 16,243.80Less: Closing Inventories 839.23 929.19

22,098.93 15,314.61

Schedule P: Decrease/ (Increase) in Inventories

Closing InventoriesFinished Goods 835.68 749.74Stock-in-Process 2,149.12 2,093.15Scrap 61.29 177.12

3,046.09 3,020.01Opening InventoriesFinished Goods 749.74 607.09Stock-in-Process 2,093.15 2,714.36Scrap 177.12 139.48

3,020.01 3,460.93Less: Inventory acquired on Amalgama onFinished Goods - 196.46Stock-in-Process - 18.47

- 214.93

Decrease/ (Increase) in Inventories (26.08) 655.85


35


Schedule Q: Personnel Expenses



Salaries, Wages, Bonus and Allowances 5,419.56 5,297.44Payments on account of Voluntary Re rement Scheme 594.84 356.35Contribu on to Provident Fund 343.97 342.39Gratuity Expenses 341.47 (28.56)Other Post Employment Funds 43.45 48.17Workmen & Staff Welfare Expenses 225.14 177.57

6,968.43 6,193.36

Schedule R: Opera ng and Other Expenses

Stores, Spare Parts and Packing Materials 6,688.60 6,595.38Power and Fuel 17,654.22 19,347.01Freight and Forwarding 11,357.24 9,593.79Rent 223.99 176.66Rates and Taxes 5,042.78 3,217.06Insurance 89.49 119.32Repairs and Maintenance- Plant and Machinery 823.63 921.01- Buildings 152.40 144.67- Others 86.33 80.23Commission on Sales 2,331.54 1455.34Other Selling Expenses 425.42 593.03Adver sements 672.31 306.82Travelling & Conveyance 281.86 283.56Communica on Cost 203.21 152.05Legal & Professional Fees 1,764.89 1223.63Directors’ Fees 11.00 7.64Auditor’s remunera on * 112.23 95.16Exchange Rate Diff erence (net) 20.97 111.49Provision for Doub ul Debts and Advances - 49.63Loss on Fixed Assets sold / discarded 44.51 37.21Provision for Wealth Tax 1.93 1.68Miscellaneous Expenses 609.19 751.29

48,597.74 45,263.66* Refer Note No. 16 of Schedule T

Schedule S: Financial Expenses

Interest- on Term Loans 80.51 120.24- on Others 184.03 118.31Bank Charges & Guarantee Commission 175.36 171.69

439.90 410.24


36

Schedule T: Notes to Accounts 1. NATURE OF OPERATIONS HeidelbergCement India Limited (hereina er referred to as “HCIL” or “the Company”) is a Company formed and registered

under the Companies Act, 1956. The name of the company has been changed from “Mysore Cements Limited” to “HeidelbergCement India Limited” w.e.f. April 16, 2009, consequent to the issue of fresh Cer fi cate of Incorpora on by the Registrar of Companies, Karnataka. The principal ac vity of HCIL is the manufacture of Portland cement at its four loca ons viz. Ammasandra (Karnataka), Damoh (Madhya Pradesh), Jhansi (U ar Pradesh) and Raigad (Maharashtra).

2. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Prepara on The fi nancial statements have been prepared to comply in all material respects with the No fi ed Accoun ng

Standard by the Companies Accoun ng Standards Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The fi nancial statements have been prepared under the historical cost conven on on an accrual basis except in case of assets for which provision for impairment is made and revalua on is carried out. The accoun ng policies are consistent with those used in the previous year.

(b) Use of Es mates The prepara on of fi nancial statements in conformity with generally accepted accoun ng principles requires

management to make es mates and assump ons that aff ect the reported amounts of assets and liabili es and disclosure of con ngent liabili es at the date of the fi nancial statements and the results of opera ons during the repor ng year. Although these es mates are based upon management’s best knowledge of current events and ac ons, actual results could diff er from these es mates.

(c) Fixed Assets Fixed assets are stated at cost or revalued amounts, as the case may be, less accumulated deprecia on and

impairment losses (if any). Cost comprises the purchase price and any a ributable cost of bringing the asset to its working condi on for its intended use. Borrowing costs rela ng to acquisi on of fi xed assets which takes substan al period of me to get ready for its intended use are also included to the extent they relate to the period ll such assets are ready to be put to use.

(d) Intangibles Costs incurred on acquisi on of intangible assets are capitalized and amor zed on a straight-line basis over their

technically assessed useful lives, as men oned below:

Intangible Assets Es mated Useful Lives (Years)IT So ware 5

(e) Deprecia on/ Amor sa on (i) Deprecia on is provided on Straight Line Method as per Schedule XIV of the Companies Act, 1956 on pro-rata

basis with reference to the month of addi on/ sale. The management of the Company is of the view that this deprecia on rate fairly represents the useful life of the assets. Some of the Plant and Machinery have been considered as con nuous process plant based on technical evalua on and reports.

(ii) Assets cos ng less than Rs.5,000 are fully depreciated in the year of purchase. (iii) In respect of the revalued assets, the diff erence between the deprecia on calculated on the revalued amount

and that calculated on the original cost is recouped from the Revalua on Reserve Account. (iv) Leasehold Land is amor zed over the period of ini al lease term ranging from 5 to 20 years. (f) Impairment The carrying amounts of assets are reviewed at each balance sheet date if there is any indica on of impairment based

on internal/ external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the es mated future cash fl ows are discounted to their present value at the weighted average cost of capital. For the purpose of accoun ng of impairment, due considera on is given to revalua on reserve, if any.

A er impairment, deprecia on is provided on the revised carrying amount of the assets over its remaining useful life. A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However

the carrying value a er reversal is not increased beyond the carrying value that would have prevailed by charging usual deprecia on if there was no impairment.

(g) Investments Investments that are readily realisable and intended to be held for not more than a year are classifi ed as current

investments. All other investments are classifi ed as long-term investments. Current investments are carried at

Notes to Accounts

37


lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminu on in value is made to recognise a decline other than temporary in the value of the investments.

(h) Inventories Inventories are valued as follows:

Raw materials, stores, spares and Packing materials

Lower of cost and net realisable value. However, materials and other items held for use in the produc on of inventories are not wri en down below cost if the fi nished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a weighted average basis and includes cost incurred in bringing the material to its present loca on and condi on.

Stock-in-process and Finished goods Lower of cost and net realisable value. Cost includes direct materials and labour and a propor on of manufacturing overheads based on normal opera ng capacity. Cost of fi nished goods includes excise duty. Cost is determined on a weighted average basis.

Scrap Net realizable value.

Net realisable value is the es mated selling price in the ordinary course of business, less es mated costs of comple on and es mated costs necessary to make the sale.

(i) Revenue Recogni on Revenue is recognized to the extent that it is probable that the economic benefi ts will fl ow to the Company and

the revenue can be reliably measured. Sale of Goods Revenue is recognised when the signifi cant risks and rewards of ownership of the goods is passed to the buyer.

Excise duty deducted from turnover (gross) is the amount that is included in the amount of turnover (gross) and not the en re amount of liability arose during the year. Sales are reported net of sales tax, incen ves and rebates.

Sale of Cer fi ed Emission Reduc on (CER) Revenue is recognised when there is reasonable assurance that the en ty will comply with the condi ons a ached

to it and units of CERs will be received. Unit of CERs are valued at market value at closing date. Interest Revenue is recognised on a me propor on basis taking into account the amount outstanding and the rate applicable. (j) Borrowing Costs Borrowing costs directly a ributable to the acquisi on, construc on or produc on of an asset that necessarily

takes a substan al period of me to get ready for its intended use or sale are capitalized as part of the cost of the respec ve asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an en ty incurs in connec on with the borrowing of funds.

(k) Leases Leases where the lessor eff ec vely retains substan ally all the risks and benefi ts of ownership of the leased item

are classifi ed as Opera ng Leases. Opera ng Lease payments are recognised as an expense in the Profi t & Loss Account on a straight line basis over the lease period.

(l) Foreign Currency Transac ons (i) Ini al Recogni on Foreign currency transac ons are recorded in the repor ng currency, by applying to the foreign currency amount

the exchange rate between the repor ng currency and the foreign currency at the date of the transac on. (ii) Conversion Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in

terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transac on; and non-monetary items which are carried at fair value or other similar valua on denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(iii) Exchange Diff erences Exchange diff erences arising on se lement of monetary items or on repor ng Company’s monetary items

at rates diff erent from those at which they were ini ally recorded during the year, or reported in previous fi nancial statements, are recognised as income or as expenses in the year in which they arise.

Notes to Accounts


38

(iv) Forward Exchange Contracts not intended for trading or specula on purposes The premium or discount arising at the incep on of forward exchange contracts (not for hedging fi rm

commitment/highly probable forecast transac ons) is amor sed as expense or income over the life of the contract. Exchange diff erences on such contracts are recognised in the statement of profi t and loss in the year in which the exchange rates change. Any profi t or loss arising on cancella on or renewal of forward exchange contract is recognised as income or as expense for the year.

(m) Employee Benefi ts (i) Superannua on Fund (being administered by Trusts) and Employees’ State Insurance Corpora on (ESIC)

are defi ned contribu on schemes and the contribu ons are charged to the Profi t and Loss Account of the year when the contribu ons to the respec ve funds are due. There are no other obliga ons other than the contribu on payable to the respec ve funds.

(ii) Re rement benefi ts in the form of Provident Fund contributed to Statutory Provident Fund is a defi ned contribu on scheme and the payments are charged to the Profi t and Loss Account of the year when the payments to the respec ve funds are due. There are no obliga ons other than contribu on payable to Provident Fund Authori es.

(iii) Re rement benefi ts in the form of Provident Fund contributed to Trust set up by the employer is a defi ned benefi t scheme and the payments are charged to the Profi t and Loss Account of the year when the payments to the Trust are due. Shor all in the funds, if any, is adequately provided for by the Company.

(iv) Gratuity liability (being administered by a Trust) is a defi ned benefi t obliga on and is provided for on the basis of an actuarial valua on done using projected unit credit method at the end of each fi nancial year.

(v) Short term compensated absences are provided for based on es mates. Long term compensated absences are provided for based on actuarial valua on using projected unit credit method at the end of each fi nancial year.

(vi) Actuarial gains/ losses are immediately taken to Profi t and Loss Account and are not deferred. (vii) Expenses incurred under Voluntary Re rement Scheme are charged to Profi t & Loss account immediately. (n) Income Taxes Tax expense comprises of current, deferred and fringe benefi t tax. Current income tax and fringe benefi t tax is

measured at the amount expected to be paid to the tax authori es in accordance with the Indian Income-tax Act, 1961. Deferred income taxes refl ect the impact of current year ming diff erences between taxable income and accoun ng income for the year and reversal of ming diff erences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substan vely enacted at the balance sheet date. Deferred tax assets and deferred tax liabili es are off set, if a legally enforceable right exists to set off current tax assets against current tax liabili es and the deferred tax assets and deferred tax liabili es relate to the taxes on income levied by same governing taxa on laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that suffi cient future taxable income will be available against which such deferred tax assets can be realised. In situa ons where the company has unabsorbed deprecia on or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profi ts.

At each balance sheet date, the Company re-assesses unrecognised deferred tax assets. It recognizes unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that suffi cient future taxable income will be available against which such deferred tax assets can be realised.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that suffi cient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that suffi cient future taxable income will be available.

(o) Segment Repor ng Policies Iden fi ca on of segments: The Company’s opera ng businesses are organized and managed according to the nature of products and

predominant source of the risk for the Company is business product, therefore business segment has been considered as primary segment. The analysis of geographical segments is based on the areas in which the Company operates.

Segment Policies: The Company prepares its segment informa on in conformity with the accoun ng policies adopted for preparing

and presen ng the fi nancial statements of the Company as a whole.

Notes to Accounts

39


(p) Provisions A provision is recognised when an enterprise has a present obliga on as a result of past event and it is probable

that an ou low of resources will be required to se le the obliga on, in respect of which a reliable es mate can be made. Provisions are not discounted to its present value and are determined based on best es mate required to se le the obliga on at the balance sheet date. These are reviewed at each balance sheet date and are adjusted to refl ect the current best es mates.

(q) Earnings per Share Basic earnings per share are calculated by dividing the net profi t or loss for the period a ributable to equity

shareholders a er deduc ng preference dividends and a ributable taxes by the weighted average number of equity shares outstanding during the period.

For the purpose of calcula ng diluted earnings per share, the net profi t or loss for the period a ributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the eff ects of all dilu ve poten al equity shares, if any.

(r) Cash and Cash Equivalents Cash and cash equivalents in the cash fl ow statement comprise cash at bank and in hand and short-term investments

with an original maturity of three months or less.

3. Amalgama on of Indorama Cement Limited and HeidelbergCement India Private Limited with the Company During the previous year, Indorama Cement Limited (hereina er referred as IRCL) and HeidelbergCement India Private

Limited (hereina er referred as HIPL) were amalgamated with the Company as per the Scheme of Amalgama on sanc oned by the Hon’ble Bombay High Court vide Order dated September 5, 2008, the Hon’ble High Court of Punjab & Haryana vide Order dated November 14, 2008 and Hon’ble High Court of Karnataka vide Order dated January 9, 2009. The Scheme became opera ve with eff ect from the Appointed Date April 1, 2008.

Pursuant to this Scheme of Amalgama on, 67,721,681 equity shares of Rs.10 each fully paid were issued to the shareholders of IRCL in the ra o of 1.3544 equity shares of the Company for every 1 share held in erstwhile IRCL and 881,670 equity shares of Rs.10 each fully paid were issued to the shareholders of HIPL in the ra o of 0.1469 equity shares of the Company for every 1 share held in erstwhile HIPL.

The same was included in Equity Share Suspense Account as at December 31, 2008. The above shares have been allo ed on March 27, 2009 and accordingly, the amount has been transferred from ‘Equity Share Suspense’ to ‘Equity Share Capital’.

4. During the year, 146 (Previous year 95) employees have opted for Voluntary Re rement Scheme (VRS). The Company has incurred Rs. 594.84 lacs (Previous year: Rs. 356.35 lacs) for the se lement of the VRS liability and charged off the same to Profi t & Loss account.

5. Segmental Informa on: (a) Business Segment The Company primarily deals in only one business segment i.e, “Cement”. (b) Geographical Segment The Company primarily operates into two geographical segments i.e. within India and outside India which are

based on the loca on of the customers. Geographical Segment (Rs. in lacs)

Par culars 2009 2008

Segment Revenue

Within India 93,032.75 74,963.35

Outside India 606.54 1,166.26

Total 93,639.29 76,129.61

Segment Debtors

Within India 2215.50 1,989.29

Outside India - -

Total 2,215.50 1,989.29

Notes: All the assets including addi ons made in the current year are located in India.

Notes to Accounts


40

6. Related Party Disclosure (a) Names of related par es:

Names of related par es where control exists irrespec ve of whether transac ons have occurred or not :Ul mate Holding Company HeidelbergCement AGHolding Company Cementrum I B.V.Names of other related par es with whom transac ons have taken place during the year:Fellow Subsidiaries HeidelbergCement Technology Centre

Scancem Interna onal HeidelbergCement Asia Pte LtdPT Indocement Tunggal Prakash TBKHC Fuels LimitedCochin Cements LimitedHC Trading Malta Limited

(b) Transac ons with related par es (Rs. in lacs)

Par culars Enterprises where controls exists

Fellow Subsidiary Total

2009 2008 2009 2008 2009 2008Transac ons with HeidelbergCement AG:

- Corporate Guarantee Charges 42.98 59.18 - - 42.98 59.18- Assignment Cost paid 9.72 23.77 - - 9.72 23.77- WAN Charges paid 79.24 40.75 - - 79.24 40.75- Expenses Recovered - 6.57 - - - 6.57- Guarantees Outstanding 11,100 14,600 - - 11,100 14,600

Transac ons with HeidelbergCement Technology Centre: - Consultancy Charges paid - - - 60.37 - 60.37- Expenses Recovered - - 2.29 - 2.29 -- Travel Expenses paid - - - 7.87 - 7.87

Transac ons with Cochin Cements Limited: - Expenses Recovered - - 34.22 20.61 34.22 20.61- Expenses Reimbursed - - - 17.90 - 17.90- Sale - - - 165.63 - 165.63- Loan Given - - 750.00 365.00 750.00 365.00- Loan Given – Repaid - - 835.00 300.00 835.00 300.00- Interest Income - - 41.15 28.47 41.15 28.47

Transac ons with HeidelbergCement Asia Pte Limited: - Technical Know How Fee paid - - 1,590.87 981.22 1,590.87 981.22

Transac ons with PT Indocement Tunggal Prakash TBK - ERP Development Charges paid - - 128.91 95.00 128.91 95.00- Purchase of Refractories - - 89.19 - 89.19

Transac ons with HC Fuels Limited - Sale of Cer fi ed Emission Rights - - - 1,266.32 - 1,266.32- Service Fee paid - - - 17.28 - 17.28

Transac ons with Scancem Interna onal - Expenses Reimbursed - - 22.71 25.46 22.71 25.46

Transac ons with HC Trading Malta Limited- Purchase of Material - - 1097.49 - 1097.49 -- Sale of GGBS - - 22.25 - 22.25 -

Balance outstanding at the year end Receivable

- Cochin Cements Limited - - 16.17 110.83 16.17 110.83Payable

- HeidelbergCement AG 95.09 187.71 - - 95.09 187.71- HeidelbergCement Technology centre - - 26.65 25.07 26.65 25.07- PT Indocement Tunggal Prakash TBK - - 104.42 45.59 104.42 45.59- Scancem Interna onal - - 3.36 4.71 3.36 4.71- HeidelbergCement Asia Pte Limited - - 299.47 440.43 299.47 440.43

Loan Given- Cochin Cements Limited - - 315.13 404.40 315.13 404.40

Notes to Accounts

41


7. The Company has taken various residen al, offi ce and warehouse premises under opera ng lease agreements. These are generally cancellable and are renewable by mutual consent on mutually agreed terms except for one offi ce premises which is taken on a non-cancellable lease. The Company has recognized Rs.219.03 lacs (Previous year: Rs.147.09 lacs) in respect of cancellable opera ng leases and Rs.36.56 lacs (Previous year: Rs.73.12 lacs) in respect of non-cancellable opera ng leases.

(Rs. in Lacs)S. No. Par culars 2009 2008

Opera ng Lease (Non Cancellable)The total of future minimum lease payments under non- cancellable opera ng leases for each of the following periods:

(i) Not later than one year; 34.07 36.56(ii) Later than one year and not later than fi ve years; 68.14 -(iii) Later than fi ve years; - -

Out of the total rent recognised, Rs.31.60 lacs (Previous year Rs.43.55 lacs) rela ng to residen al accommoda on provided to the employees has been shown under Personnel Expenses.

8. Capital Commitments Es mated amount of contracts remaining to be executed on capital account and not provided for (net of advances)

Rs.5,135.52 lacs (Previous year: Rs.6,162.83 lacs). 9. Con ngencies (a) Con ngent Liabili es not provided for (Rs. in lacs)

Par culars December 31, 2009 December 31, 2008A. Disputed Statutory claims / levies:

Excise Duty 257.93 257.93Sales Tax/ Trade Tax 7,657.25 6,320.54Entry TaxService Tax

593.9713.05

484.43-

Diff eren al Royalty on Limestone 12,098.38 10,506.25B. Claims against the Company not acknowledged as Debts

Claims by various Suppliers of goods and Services 248.81 759.32Electricity charges 532.77 746.35Claims by customers and others 593.51 287.62

C. Show cause no ces for levyExcise Duty 638.67 499.68Service Tax 11.09 39.62Sales Tax 54.00 54.00

D. The Ministry of Tex les has deleted cement from the list of commodi es to be packed in jute bags under the Jute Packaging Materials (Compulsory Use in Packing Commodi es) Act, 1987 from 1.7.1997.

Not quan fi able Not quan fi able

Grand Total 22,699.43 19,955.74 In respect of above cases based on the favorable decisions in similar cases/ legal opinions taken by the Company/

discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the ac on will succeed and accordingly no provision for any liability has been made in these fi nancial statements.

(b) Provision for Li ga on (Rs. in lacs)Par culars Balance as

at January 1, 2009

Addi ons during the

period

Amounts reversed during

the period

Balance as at December 31,

2009Trade Tax U ranchal, Jhansi (UP) 217.26 - - 217.26Turnover Tax, Jhansi (UP) 5.84 - - 5.84VAT, Raigad (Maharashtra) 681.22 - 681.22 -Entry Tax, Jhansi (UP)-Cement 2,009.04 667.26 - 2,676.30Entry Tax, Jhansi (UP)-Clinker 443.35 250.02 - 693.37M.P.Commercial Tax, Damoh (MP) 0.53 - - 0.53Haryana Sales Tax, Damoh (MP) 0.79 - - 0.79Provision taken for Cess on Cap ve Power, Damoh (MP)

867.52 - - 867.52

Notes to Accounts


42

Par culars Balance as at January 1,

2009

Addi ons during the

period

Amounts reversed during

the period

Balance as at December 31,

20099% Entry Tax on HSD & LDO, Damoh (MP) 357.82 - - 357.82Railway Demurrage, Damoh (MP) 7.98 - - 7.98UP- Entry Tax (Cement), Damoh (MP) 1,024.48 349.15 - 1,373.63Service Tax (GTO), Damoh & Jhansi 34.62 - - 34.62Power Defi cit Bill –MPSEB, Damoh (MP) 138.42 3.68 - 142.10Entry Tax on R.M, Damoh (MP) 492.16 149.94 - 642.10Entry Tax on HDEP Bags(3%), Damoh (MP) 70.78 23.86 - 94.64Entry Tax on Limestone (9%), Damoh (MP) 38.75 - - 38.75Entry Tax on Limestone (Diff eren al), Damoh (MP) - 1,014.92 - 1,014.92Bihar Sales Tax, Damoh (MP) - 38.69 - 38.69Rural Infrastructure and Road development tax, Damoh (MP)

226.72 67.29 - 294.01

Service Tax on outward freight, Raigad (Maharashtra)

- 107.95 - 107.95

Environment protec on fees, Ammasandra - 144.61 - 144.61TOTAL 6,617.28 2,817.37 681.22 8,753.43

In all the above cases provisions have been made for demand made by various authori es. All these cases are under li ga on and are pending with various authori es; expected ming of resul ng ou low of economic benefi ts cannot be specifi ed.

10. During the year, the Company has proposed dividend on 9% cumula ve redeemable preference shares for the period December 12, 2006 to December 31, 2009 amoun ng to Rs.370.98 lacs including Rs.121.44 lacs for the current year.

11. The Company follows Accoun ng Standard (AS-22) “Accoun ng for taxes on Income”, as no fi ed by Companies Accoun ng Standards Rules, 2006. The Company had deferred tax asset (net) amoun ng to Rs.1,805.79 lacs with carry forward losses and unabsorbed deprecia on as a major component as on December 31, 2008. Since there was no convincing evidence which demonstrates virtual certainty of realiza on of such deferred tax asset in the near future, the Company had prudently decided not to recognize deferred tax asset on such ming diff erences in previous year.

In the current year, the Company has recognized net deferred tax liability amoun ng to Rs.1,646.90 lacs consis ng of deferred tax liabili es of Rs.4,860.84 lacs and deferred tax assets of Rs.3,213.84 lacs. The Company has recognised the above deferred tax assets as it is virtually certain that the reversal of ming diff erence on account of deprecia on would result in suffi cient taxable income against which such deferred tax assets can be realized.

12. Deriva ve instruments and Unhedged Foreign Currency Exposure Forward contract outstanding as at Balance Sheet Date

Par culars Currency 2009 2008 PurposeForward Exchange contract Euro 1,250,000 - Hedge for making payment to creditor

Unhedged Foreign Currency Exposure

Par culars Currency 2009 2008Amount in

Foreign currencyExchange

RateRs. in lacs Amount in

Foreign currencyExchange

RateRs. in

lacs

Payables USD 877,683.77 46.40 407.25 1,043,137.13 48.18 502.58Euro 714,599.99 66.43 596.42 313,333.87 67.91 212.79

Advances to Supplier

USD 95,686.81 46.40 44.40 - - -Euro - - - 546,000.00 67.91 370.79

13. Excise duty on sales amoun ng to Rs.10,384.63 lacs has been reduced from sales and excise duty on increase/decrease in stock amoun ng to Rs. 25.95 has been considered as (income)/expense in profi t & loss account.

14. Gratuity and other employment benefi t plans The Company has three post employment funded plans, namely Gratuity, Superannua on and Provident Fund. Gratuity being administered by a Trust is computed as 15 days salary, for every completed year of service or part

thereof in excess of 6 months and is payable on re rement/termina on/resigna on. The benefi t vests on the employee comple ng 5 years of service. The Gratuity plan for the Company is a defi ned benefi t scheme where annual contribu ons

Notes to Accounts

43


as demanded by the insurer are deposited to a Gratuity Trust Fund established to provide gratuity benefi ts. The Trust Fund has taken a Scheme of Insurance, whereby these contribu ons are transferred to the insurer. The Company makes provision of such gratuity asset/ liability in the books of accounts on the basis of actuarial valua on as per the Projected unit credit method. Plan assets also include investments and bank balances used to deposit premiums un l due to the insurance company.

Re rement benefi ts in the form of Superannua on Fund (being administered by Trusts) are funded defi ned contribu on schemes and the contribu ons are charged to the Profi t and Loss Account of the year when the contribu ons to the respec ve funds are due. There are no other obliga ons other than the contribu on payable.

The Provident Fund being administered by a Trust is a defi ned benefi t scheme whereby the Company deposits an amount determined as a fi xed percentage of basic pay to the fund every month. The benefi t vests upon commencement of employment. The interest credited to the accounts of the employees is adjusted on an annual basis to confi rm to the interest rate declared by the Government for the Employees Provident Fund. The Guidance Note on implemen ng AS-15, Employee Benefi ts (Revised 2005) issued by the Accoun ng Standard Board (ASB) states that provident funds set up by employers, which requires interest shor all to be met by the employer, needs to be treated as defi ned benefi t plan. Based on cer fi cate issued by the Actuary, there is no defi cit in the fund.

The following tables summarize the components of net benefi t expense recognised in the Profi t and Loss Account and the amounts recognised in the balance sheet for the Gratuity.

Profi t and Loss Account Net employee benefi t expense (recognised in Employee Cost) (Rs. in Lacs)

Par culars Gratuity2009 2008

Current service cost 101.30 108.39Interest cost on benefi t obliga on 110.14 124.23Expected return on plan assets (49.29) (52.30)Net actuarial (gain)/ loss recognised in the year 179.32 (208.88)Past service cost - -Net benefi t expense 341.47 (28.56)Actual Return on plan assets 5.54 92.72

Balance Sheet

Details of Provision for gratuity (Rs. in lacs)


Defi ned benefi t obliga on 1,605.26 1,546.00Fair value of plan assets (512.37) (675.53)

1,092.89 870.47Less: Unrecognised past service cost - -Plan liability 1,092.89 870.47

Changes in the present value of the defi ned benefi t obliga on are as follows: (Rs. in lacs)


Opening defi ned benefi t obliga on On Amalgama on

1,546.00-

1,689.7842.21

Current service cost 101.30 108.39Interest cost on benefi t obliga on 110.14 124.23Actuarial (gain)/ loss recognised in the year 135.56 (170.21)Benefi ts paid (287.74) (248.40)Closing defi ned benefi t obliga on 1,605.26 1,546.00

Notes to Accounts


44

Changes in the fair value of plan assets are as follows: (Rs. in lacs)


Opening fair value of plan assets On Amalgama on

675.53-

695.3919.54

Expected return 49.29 52.30Contribu on by employer 119.03 118.03Actuarial gain/(loss) recognised in the year (43.74) 38.67Benefi ts paid (287.74) (248.40)Closing fair value of plan assets 512.37 675.53

The Company expects to contribute Rs.119.50 lacs to gratuity in 2010.

The principal assump ons used in determining gratuity for the Company’s plans are shown below:

Par culars 2009 2008Discount rate 8.0% 7.5%Expected rate of return on assets 8.0% 7.5%Withdrawal 5.0% 5.0%

Note: The es mates of future salary increases considered in actuarial valua on, take account of infl a on, seniority, promo on

and other relevant factors, such as supply and demand in the employment market. The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:

Par culars 2009%

2008%

Investments with insurer 99.16 98.96Investments in government bonds 0.76 0.55Bank balance 0.08 0.49Total 100.00 100.00

The principal plan asset consists of a scheme of insurance taken by the Trust, which is a qualifying insurance policy. Amounts for the current and previous years are as follows: (Rs. in lacs)

Par culars Gratuity2009 2008 2007 2006

Defi ned benefi t obliga on (1,605.26) (1,546.00) (1,689.78) (2,044.59)Plan assets 512.37 675.53 695.39 1,102.74Surplus / (defi cit) (1,092.89) (870.47) (994.39) (941.85)Experience loss/(gain) on plan liabili es 185.47 (181.18) (342.68) (27.65)Experience loss/(gain) on plan assets 43.75 (40.52) 11.97 -

Note: The Company adopted AS-15 (Revised 2005) Employee Benefi ts, during the year ended December 31, 2006. Since

similar valua ons for previous year ended December 31, 2005 is not available with the Company, therefore, disclosures as required by paragraph 120(n) of AS-15 (Revised 2005) have not been furnished in respect of that year.

Contribu on to Defi ned Contribu on Plans (Rs. in lacs)

Par culars 2009 2008Provident Fund 266.25 217.97Other Post Employment Funds 43.45 48.17Total 309.70 266.14

15. Earnings Per Share (EPS) (Amount in Rs.)

Par culars 2009 2008Net profi t as per profi t and loss account 1,340,391,000 1,255,264,000Less: Preference dividend and tax thereon 14,207,943 14,207,943Net profi t for calcula on of basic/diluted EPS 1,326,183,057 1,241,056,057Weighted average number of equity shares in calcula ng basic/diluted EPS [Nominal value of shares Rs.10 (Previous Year Rs.10]

226,613,116 209,462,279

Earnings per share 5.85 5.92

Notes to Accounts

45


16. Auditors’ Remunera on (Rs. in lacs)

Par culars 2009 2008As auditor - Statutory Audit and Limited Review 82.00 67.50 - Tax Audit 7.00 7.00 - Group Repor ng 19.50 16.33As advisor, or in any other capacity - -Reimbursement of expenses 3.73 4.33Total 112.23 95.16

17. Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006 as per the informa on available with the Company in response to the enquiries from all exis ng suppliers with whom Company deals.

(Rs. in lacs)S. No. Particulars 2009 2008(i) the principal amount and the interest due thereon remaining unpaid to any supplier

- Principal amount - Interest thereon

68.36--

35.81--

(ii) the amount of interest paid by the buyer in terms of section 16, along with the amounts of the payment made to the supplier beyond the appointed day

- -

(iii) the amount of interest due and payable for the year of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act

- -

(iv) the amount of interest accrued and remaining unpaid - -(v) The amount of further interest remaining due and payable even in the succeeding years,

until such date when the interest dues above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of this Act

- -

18. Supplementary Statutory Informa on 18.1 Earnings in foreign currency (accrual basis) (Rs. in lacs)

Particulars 2009 2008Exports at F.O.B. Value 22.25 1,166.26Sale of Certified Emission Rights - 1,266.32Total 22.25 2432.58

18.2 Expenditure in foreign currency (on accrual basis) (Rs. in lacs)

Par culars 2009 2008Know-how 1,590.87 981.22Professional Fee - 23.71Consultation Fee 131.20 157.84Corporate Guarantee Charges 42.98 59.18Others 111.67 100.86Total 1,876.72 1,322.81

18.3 Value of imports calculated on CIF basis (Rs. in lacs)

Par culars 2009 2008Raw Materials 1,391.41 -Components and spare parts 216.42 168.05Capital goods 1,716.70 334.89Total 3,324.53 502.94

19. Addi onal informa on pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956

19.1 Licensed & Installed CapacityClass of Goods Unit Licensed Capacity Installed Capacity

2009 2008Cement Tonnes

(Annual)Licensed capacity is not applicable in view of the Company’s product having been de-licensed as per the licensing policy of the Government of India.

3,067,000* 3,067,000*

*As per the technical assessment made by the management

Notes to Accounts


46

19.2 Details of Produc on, Sales and Stocks of Finished Goods Classes of Goods Opening Stock Acquired on

AmalgamationProduction Sales Closing Stocks

Qty(MT)

Value(Rs. in lacs)

Qty(MT)

Value(Rs. in lacs)

Qty(MT)

Qty(MT)

Value(Rs. in lacs)

Qty(MT)

Value(Rs. in lacs)

Cement 33,774 692.70 - - 2,657,365 2,654,767 102,558.00 36,372 801.15(31,614) (605.36) (5,688) (147.02) (2,415,913) (2,419,441) (84,330.69) (33,774) (692.70)

Ground 2,918 57.04 - - 5,026 5,376 191.66 2,568 34.53Granulated Blast Furnace Slag (GGBS) (-) (-) (4,259) (49.44) (20,353) (21,694) (1,234.50) (2,918) (57.04)

Notes: 1. Figures in brackets are for previous year. 2. Sales exclude clinker sale of 55,479 MT (Previous year 1,14,057 MT) amoun ng to Rs.1,274.26 lacs (Previous year:

Rs.3,132.48 lacs). 3. Produc on of Cement is net of 3,309 MT (Previous year 1,709 MT) used for internal consump on. 4. Produc on of GGBS is net of 95,393 MT (Previous year 71,058 MT) used as internal consump on for manufacturing

of cement. 5. Sales value is inclusive of excise duty.

19.3 Consump on of raw materials

Particulars Quantity (MT) Value (Rs. in lacs)2009 2008 2009 2008

Limestone 1,957,013 1,977,717 2,054.79 2,416.78Pozzolona 597,737 509,480 2,386.82 1,835.56Slag 317,569 406,031 2,041.48 1,972.36Gypsum 137,227 131,313 2,914.66 2,364.98Clinker Purchased 344,335 153,938 10,046.87 4,612.16Others* - - 2,654.31 2,112.77Total - - 22,098.93 15,314.61

* It is not prac cable to furnish quan ta ve informa on in view of the large number of items which diff er in size and nature, each being less than 10% in value of the total.

19.4 Imported and indigenous raw materials consumed:

Particulars Percentage of total consumption Value (Rs. in lacs)2009 2008 2009 2008

Imported 9.00 - 1,988.27 -Indigenous 91.00 100.00 20,110.65 15,314.61Total 100.00 100.00 22,098.92 15,314.61

19.5 Imported and indigenous stores and spares consumed:

Particulars Percentage of total consumption Value (Rs. in lacs)2009 2008 2009 2008

Stores and SparesImported 1.39 0.19 176.46 12.53Indigenous 98.61 99.81 6512.14 6,582.85Total 100.00 100.00 6,688.60 6,595.38

20. Discon nuing Opera ons (a) With the acquisi on of management control by HeidelbergCement Group in August 2006, the Company decided

to discon nue the opera ons of Sponge iron plant and Steel mel ng shop situated at Ammasandra (Karnataka). Sponge iron plant was a separate segment while steel mel ng shop was included in others segment as per the No fi ed Accoun ng Standard -17, “Segment Repor ng” by Companies Accoun ng Standards Rules, 2006. This is in line with Company’s strategy to focus its ac vi es on cement and to abandon / dispose unrelated ac vi es. During the previous year, the company had disposed en re assets of both divisions having carrying value of Rs.178.41 lacs (rela ng to Sponge iron plant - Rs120.44 lacs and Steel mel ng plant - Rs.57.97 lacs) at Rs.268.66 lacs and had recognised profi t of Rs.90.25 lacs on disposal of these assets.

Notes to Accounts

47


(b) Revenue and expenses of con nuing and discon nuing opera ons are as follows:Continuing Operations Discontinuing Operations TOTAL

Cement Sponge Iron Steel Melting 2009 2008 2009 2008 2009 2008 2009 2008INCOME Gross Sales 104,023.92 88,697.67 - - - - 104,023.92 88,697.67Less: Excise Duty (10,384.63) (12,568.06) - - - - (10,384.63) (12,568.06)Net Sales 93,639.29 76,129.61 - - - - 93,639.29 76,129.61Other Income 4,521.14 4,425.67 - 43.22 - 47.03 4,521.14 4,515.92Total 98,160.43 80,555.28 - 43.22 - 47.03 98,160.43 80,645.53EXPENDITURERaw Materials Consumed 22,098.93 15,314.61 - - - - 22,098.93 15,314.61Decrease/ (Increase) in Inventories (26.08) 655.83 - - - - (26.08) 655.83(Decrease)/ Increase of Excise duty on Inventories

25.95 (92.24) - - - - 25.95 (92.24)

Personnel Expenses 6,968.43 6,193.36 - - - - 6,968.43 6,193.36Operating and Other Expenses 48,597.74 45,263.63 - - - - 48,597.74 45,263.63Depreciation/amortization 2,922.08 2,494.22 - - - - 2,922.08 2,494.22Less: Transferred from revaluation reserve 341.39 356.99 - - - - 341.39 356.99Net Depreciation/amortization 2,580.69 2,137.23 - - - - 2,580.69 2,137.23Interest and Financial Charges 439.90 410.24 - - - - 439.90 410.24Total 80,685.56 69,882.66 - - - - 80,685.56 69,882.66 Profit before Tax 17,474.87 10,672.62 - 43.22 - 47.03 17,474.87 10,762.87Provision for tax Income Tax (Prior Year) (2,408.60) - - - - - (2,408.60) -Deferred tax credit/(charge) (1,646.90) 1,848.24 - - - - (1,646.90) 1,848.24Fringe Benefit Tax (15.46) (58.47) - - - - (15.46) (58.47)Total Tax Expenses (4,070.96) 1,789.77 - - - - (4,070.96) 1,789.77Profit after tax 13,403.91 12,462.39 - 43.22 - 47.03 13,403.91 12,552.64

(c) Net Cash fl ows a ributable to the opera ng, inves ng and fi nancing ac vi es of the discon nuing opera ons are as follows:Particulars Sponge Iron Steel Melting Shop

2009 2008 2009 2008Operating Activities - - - -Investing Activities - 163.66 - 105.00Financing Activities - - - -Net Cash Inflows/ (Outflows) - 163.66 - 105.00

21. Previous Year Compara ves Previous year includes fi gures of the erstwhile Indorama Cement Limited and HeidelbergCement India Private Limited

for the period April 1, 2008 to December 31, 2008. The current year’s fi gures are, accordingly, not comparable to those of previous year.

Previous year’s fi gures have been regrouped where necessary to conform to this year’s classifi ca on.

As per our report of even date For and on behalf of the Board of DirectorsFor S. R. BATLIBOI & CO of HeidelbergCement India LimitedChartered Accountants

Notes to Accounts





48

Cash Flow Statement for the Year ended December 31, 2009

December 31, 2009 Rs. in Lacs


A. Cash fl ow from opera ng ac vi esNet profi t before tax 17,474.87 10,762.87Adjusted for:

Deprecia on 2,580.69 2,137.23Loss on Fixed Assets sold / discarded 44.51 (53.04)Provision for Wealth Tax 1.93 1.68Interest income (2,692.63) (2,352.98)Provision for Doub ul debts and Advances - 49.63Provision for Doub ul Debts and Advances no longer required wri en back (59.77) -Provisions/liabili es no longer required wri en back (1,179.77) (68.02)Interest and fi nancial charges 264.54 238.55

Opera ng profi t before working capital changes 16,434.37 10,715.92 Movements in working capital :

Decrease / Increase in sundry debtors (166.45) 1,273.74 (Increase) / Decrease in inventories 653.28 (31.05)Decrease / (Increase) in loans and advances (2,163.82) (612.76)Increase in current liabili es and provisions 8,947.10 4,688.87 Cash generated from opera ons 23,704.48 16,034.72 Direct taxes paid (2,240.18) (770.47)

Net cash from opera ng ac vi es 21,464.30 15,264.25

B. Cash fl ows from inves ng ac vi esPurchase of fi xed assets (7,579.16) (7,711.81)Proceeds from sale of fi xed assets 86.99 282.13Loans repaid by/(given to) Fellow Subsidiary 89.27 (69.40)Deposits (with maturity more than three months) (19,754.60) (1,962.20)Interest received 2,713.13 2,093.62

Net cash used in inves ng ac vi es (24,444.37) (7,367.66)

C. Cash fl ows from fi nancing ac vi esRepayment of long-term borrowings (800.00) (600.00)Interest and Finance Charges paid (215.51) (226.11)

Net cash used in fi nancing ac vi es (1,015.51) (826.11)Net increase/(decrease) in cash and cash equivalents (A+B+C) (3,995.58) 7,070.48 Cash and cash equivalents at the beginning of the year 20,213.93 9,623.36 Add: Aquired on Amalgama on - 3,520.09Cash and cash equivalents at the end of the year 16,218.35 20,213.93

Components of cash and cash equivalentsCash and cheques on hand 163.88 4.01 With banks- on current accounts 1,254.48 1,432.92 - on deposit accounts 48,121.00 32,343.40 Cash & Bank Balances as per Schedule I 49,539.36 33,780.33 Less: Fixed deposits not considered as cash equivalents (33,321.01) (13,566.40)

Cash & Cash Equivalents in Cash Flow Statement 16,218.35 20,213.93

As per our report of even date For and on behalf of the Board of DirectorsFor S R Batliboi & Co. of HeidelbergCement India LimitedChartered Accountants




49


Information Pursuant to Part IV of Schedule VI to the Companies Act, 1956 of HeidelbergCement India Limited as at 31.12.2009

I. Registra on DetailsRegistra on No. 0 0 1 3 1 8 State Code 0 0 8

Company Iden fi ca on No. (CIN) L 2 6 9 4 2 K A 1 9 5 8 F L C 0 0 1 3 1 8

Balance Sheet Date 3 1 - 1 2 - 2 0 0 9Date Month Year

II. Capital Raised during the Year (Amount in Rs. Thousands)

Public Issue Rights IssueN I L N I L

Bonus Issue Private PlacementN I L N I L

- EquityN I L

- PreferenceN I L

III. Posi on of Mobilisa on and Deployment (Amount in Rs. Thousands)

Total Liabili es Total Assets7 5 4 6 8 7 6 7 5 4 6 8 7 6

Sources of FundsPaid-up Capital Reserves and Surplus

2 4 0 1 1 5 5 4 9 6 1 0 3 1Secured Loans Unsecured Loans

2 0 0 0 0 N I LDeferred Tax Liability

1 6 4 6 9 0

Applica on of FundsNet Fixed Assets Investments

3 7 5 0 5 8 6 1 2 1 0Net Current Assets Misc. Expenditure3 7 9 5 0 8 0 N I L

Accumulated Losses Deferred Tax AssetsN I L N I L

IV. Performance of Company (Amount in Rs. Thousands)

Turnover Total Expenditure1 0 4 0 2 3 9 2 8 0 6 8 5 5 6

Profi t/(Loss) before Tax Profi t/(Loss) a er Tax1 7 4 7 4 8 7 1 3 4 0 3 9 1

Earning Per Share a er Extraordinary Item Rs. Dividend Rate % - Equity Shares

5 . 8 5 N I LPreference Shares

9 %

V. Generic Names of Three Principal Products / Services of Company( as per monetary terms )

Item Code No. (ITC Code)

2 5 2 3 2 9

Product Descrip on P O R T L A N D C E M E N T

HeidelbergCement India Limited(Formerly Mysore Cements Limited)

Regd. Offi ce: P.O. Ammasandra, District Tumkur, Karnataka – 572 211

ATTENDANCE SLIPPLEASE SIGN THIS ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL

I hereby record my presence at the 51st Annual General Mee ng of the Company held onTuesday, the 11th May 2010 at 9.00A.M. at HeidelbergCement Employees Staff Club Auditorium, P.O. Ammasandra, District Tumkur, Karnataka- 572 211

Folio No.: Name of the Member

DP-ID & Client-ID:

No. of Shares: Signature of the Member or Proxy

HeidelbergCement India Limited(Formerly Mysore Cements Limited)

Regd. Offi ce: P.O. Ammasandra, District Tumkur, Karnataka – 572 211

PROXY

Folio No.: No. of Shares:

DP-ID & Client-ID:

I/We………………………………………………………………………………………………………………………………………………………………………………….....of……………………………..………….………………………….. being a Member/Members of HeidelbergCement India Limited, do hereby appoint………………………………………………………………………………………………………. of ………………………….…………….............................or failing him……………………………………………… of ………………………………………………………..as my/our proxy in my/our absence to a end and vote for me/us and on my/our behalf at the 51st Annual General Mee ng of the Company to be held on Tuesday, the 11th May 2010 at 9.00 A.M.

Date: ………………………..

Note : The duly fi lled & signed Proxy form must be deposited at the Registered Offi ce of the Company not less than 48 hours before the me for holding the mee ng.

Affi xRevenue

Stamp

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