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CORPORATE GOVERNANCE

The Directors present the Company’s report on Corporate Governance.

Company’s philosophy on Corporate Governance

ACC is respected in the Industry for its professional style of management and bestbusiness practices. Its core values are based on integrity, emphasis on productquality and transparency in its dealings with all stakeholders.

ACC believes that good governance generates goodwill among business partners,customers and investors, earns respect from society, brings about a consistentsustainable growth for the Company and generates competitive returns for theinvestors. Your Company is committed to the principles of good governance. Towardsthis objective, it has endowed a Chair for Business Ethics at the ManagementCentre for Human Values, Indian Institute of Management, Kolkata.

Board of Directors

Composition of the Board (as at March 31, 2005)

The Board of Directors consists of professionals drawn from diverse fields. Themajority of the Directors on the Board including the Chairman are Non-Executiveand Independent Directors.

The day-to-day management of the Company is conducted by the Managing Directorsubject to the supervision and control of the Board of Directors. He is assisted by aWholetime Director.

The brief profile of your Company’s Board of Directors is as under:

Mr Tarun Das Mr Tarun Das graduated in Economics/Commerce from Manchester University and(Chairman) was awarded an Honorary Doctorate in Science from the University of Warwick,

U.K. As Director General of the Confederation of Indian Industry (CII), he wasclosely involved with major policy making groups concerned with the Indian Industryand in promoting business co-operation internationally. After stepping down asDirector General, he continues his association with CII as Chief Mentor and hasinter alia taken on the task to set up CII Global Advisory Council to give internationalfocus to Indian companies in the global market. Mr Tarun Das has been conferredthe title C.B.E. by Her Majesty, The Queen of England for his contribution to Indo-British Partnership. He is the recipient of Robert Dean Blackwill Award conferred byUS India Business Council for his contribution to Indo-US economic co-operation.The Government of Singapore has also conferred on him the 2004 – SingaporeNational Award (Public Service Medal) for his contribution to strengthening economicties between India and Singapore.

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Mr N S Sekhsaria Mr Sekhsaria is a Bachelor of Chemical Engineering with Honours and Distinction(Deputy Chairman) securing second rank from the University of Bombay. He is the Managing Director

of Gujarat Ambuja Cements Limited.

Mr M L Narula B.Sc. Engineering (Electrical). Graduate from Punjab University and Fellow, Institute(Managing Director) of Engineers. Mr Narula joined ACC in 1963 and has a total experience of around

42 years with the Company in various senior positions including as a WholetimeDirector since April 1996.

Mr N A Soonawala B.Com, ACA. Mr Soonawala started his career as a Project Officer (Finance)with ICICI in 1958. During his tenure with ICICI, he was deputed in 1963 to theWorld Bank and International Finance Corporation (Washington) to studytheir methods of project appraisal and industrial financing and in 1965 through theWorld Bank, to assist development banks in Africa. He joined Tata Sons Limitedin 1968 and rose to the position of Finance Director from which he retired inJune 2000. He is at present Vice Chairman of Tata Sons Limited and Director onthe Boards of various Tata Companies and a Trustee of various Tata CharitableTrusts.

Mr Amitabha Ghosh Mr Amitabha Ghosh is a Chartered Accountant and Fellow, Indian Institute of(Nominee Director Bankers, having expertise in Finance and Banking spanning over five decades. Heof UTI) was Chairman & Managing Director of Allahabad Bank and Deputy Governor and

Governor of Reserve Bank of India. He was also Chairman of RBI Services Boardand Deposit Insurance & Credit Guarantee Corporation and Member of the Boardsof IDBI, Exim Bank, IRBI, National Institute of Bank Management and Institute ofBanking Personnel Relations. He is presently a Director on the Boards of a numberof reputed companies.

Mr O P Dubey M.A., LL.B. Mr Dubey retired as the Zonal Manager of Life Insurance Corporation(Representing LIC) of India (Eastern Zone) in the rank of Executive Director. Thereafter he

joined National Insurance Academy (NIA), Pune as Chair Professor (Life Insurance)and was engaged in training, research and consultancy work till November 2004when his term with NIA ended. He has attended several Management trainingprogrammes / seminars including the programme for Senior Executives at IIMAhmedabad, First International Underwriting Congress at Mexico and a seminararranged by LIMRA International at Hartfort, USA. He was a Member of theGoverning Board of National Insurance Academy (NIA) Pune during the periodJanuary 1999 to October 2001. He is a director on the Board of Oriental Carbonand Chemicals Limited.

Mr A L Kapur B.A., FCA, FICWA. Mr Kapur has been closely associated with the cement industryfor more than two decades. He was the President of Cement ManufacturersAssociation (CMA) and Chairman of the Board of Governors of the National Councilfor Cement & Building Materials (NCBM). Mr Kapur was also the Chairman of the

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Development Council for the Cement Industry for two years with effect from February15,1999. Presently he is a permanent invitee on the Managing Committee of CMA.He was a Wholetime Director of ACC during July 1985 to March 1989 and later hewas the Executive Director and Chief Executive Officer of Birla Corporation Limited.He is presently the Wholetime Director of Gujarat Ambuja Cements Limited.

Mr S M Palia B. Com., LL.B. CAIIB, CIIB (London). Mr Palia is a Development Banker by profession.He was with IDBI from 1964-1989 during which period he held various responsiblepositions including that of an Executive Director. He has also acted as an Advisorto Industrial Bank of Yemen, Saana (North Yemen) and Industrial Bank of Sudan,Khartoum (Sudan) under World Bank assistance programmes. He was also theManaging Director of Kerala Industrial & Technical Consultancy Organisation Limited,set up to provide consultancy service to micro enterprises and small and mediumenterprise. He is a Director on the Boards of leading companies including TISCOand a Trustee of various institutions viz. Rashtriya Gramin Vikas Nidhi, Guwahati,Bombay Community Public Trust and Godrej Memorial Trust.

Mr Cyril S Shroff B. Com., LL.B. Mr Shroff is a Solicitor, High Court, Mumbai, Advocate on record,Supreme Court of India. He is the Managing Partner of the well known Law firm,Messrs Amarchand & Mangaldas & Suresh A Shroff & Co., and is a Director on theBoards of various leading companies.

Mr Naresh Chandra Mr Naresh Chandra is a post graduate in mathematics from Allahabad University.He was a distinguished member of the Indian Administrative Services (IAS) andformer Cabinet Secretary to the Government of India. He has held various importantpositions including that of Governor of the State of Gujarat and India’s Ambassadorto the United States of America. He has served on numerous important Committeesincluding as Chairman of Corporate Governance Committee instituted by theGovernment of India. He is a Director on the Boards of various leading companies.

Mr R K Vashishtha Mr Vashishtha is a post graduate in mathematics. He was Managing Director of Life(Representing LIC) Insurance Corporation of India and is a respected and well known figure in the field

of insurance. He is a Director on the Board of Corporation Bank.

Mr A K Jain Bachelor of Technology in Chemical Engineering, passed with honours from IIT,(Wholetime Director) Mumbai. Mr Jain joined ACC in 1969 and has a total experience of around 36

years. He has had an outstanding career in the Organisation with a rich and variedexperience of handling R & D, Refractories Business, Human Resources and CementMarketing functions at senior levels. He is presently incharge of the Company’sCement Marketing function, Ready Mixed Concrete and Refractories businesses.He is also a Director on the Boards of some of the subsidiary and associatecompanies of ACC. He participated in a programme “ Managing Global Opportunities”conducted by Harvard Business School and also Advanced Management Programmeorganised by All India Management Association(AIMA)

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The details in regard to the attendance of Directors at Board Meetings/ Annual GeneralMeeting held during the year as also the number of Directorship/s held by them inother companies and the position of membership of committee/s are given below:

Name of the Director Category No. of Attendance No. of other Committee/s position(as at March 31, Board at the Directorships as at March 31, 2005 **2005) Meetings AGM held held as at

attended on July 9, March 31,out of 7 2004 2005 *

Meetings Member Chairmanheld

Mr Tarun Das Non-Executive/ 7 Yes 4 2 3Independent

Mr. N.S. Sekhsaria Non-Executive/ 7 Yes 2 1 -Independent

Mr. M.L. Narula Executive 7 Yes 6 1 -

Mr. N.A. Soonawala Non-Executive/ 7 Yes 8 7 3Independent

Mr. Amitabha Ghosh Non-Executive/ 7 Yes 11 1 5Independent

Mr. O.P. Dubey Non-Executive/ 7 Yes 1 2 -Independent

Mr. A.L. Kapur Non-Executive/ 7 Yes 3 3 1Independent

Mr S M Palia Non-Executive/ 5 Yes 5 4 3Independent

Mr Cyril S Shroff Non-Executive/ 3 No 5 3 -Independent

Mr. Naresh Chandra Non Executive/ 6 Yes 7 8 2(appointed w.e.f. Independent (out of 6May 5, 2004) meetings)

Mr R K Vashishtha Non Executive/ 5 Yes 1 - -(appointed w.e.f. Independent (out of 6May 5, 2004) meetings)

Mr A K Jain Executive 7 Yes 5 1 1

* Excludes Directorships in private/foreign companies and companies incorporated under Section 25 ofthe Companies Act 1956

** Represents Membership/ Chairmanship of the Audit Committee, Compensation Committee andShareholders’/Investors’ Grievance Committee of ACC and other companies.

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Mr P K Sinor who was a Wholetime Director and Company Secretary retired fromthe Company’s services with effect from August 1, 2004. Details of attendance atthe Board Meetings/ Annual General Meeting held during the year, as also thenumber of Directorship/s and the position of Membership of Committee/s held byMr Sinor on the date of his retirement is as under:

No. of Board Attendance at the No. of other Committee/s position asMeetings AGM held on Directorships at August 1, 2004**Attended July 9, 2004 held as at

August 1, 2004* Member Chairman

3 Yes 4 2 1(out of 3

meetings)

* Excludes Directorships in private/foreign companies and companies incorporatedunder Section 25 of the Companies Act 1956

** Represents Membership/ Chairmanship of the Audit Committee andCompensation Committee of some of the Subsidiary Companies.

Pursuant to the Open Offer made inter alia by Holdcem Cements Private Limited,with Ambuja Cement India Limited (ACIL) and Gujarat Ambuja Cement Limited(GACL) as persons acting in concert, ACIL holds 34.69% of the Equity ShareCapital of ACC as on May 5, 2005. Mr N S Sekhsaria who is the Managing Directorof GACL and Mr A L Kapur, who is the Wholetime Director of GACL have accordinglyceased to be Independent Directors. Upon ACIL’s request, the ACC Board hasappointed Mr Markus Akermann, CEO, Holcim Limited and Mr Paul Hugentobler,Member of Executive Committee, Holcim Limited as Additional Directors of theCompany with effect from May 6, 2005.

Board’s Functioning & Procedure

The ACC Board plays a pivotal role in ensuring good governance. Its style offunctioning is democratic. The Members of the Board have always hadcomplete freedom to express their opinion and decisions are taken on the basis ofa consensus arrived at after detailed discussion. The Members are also free tobring up any matter for discussion at the Board Meetings with the permission of theChairman.

The Board’s role, functions, responsibility and accountability are clearly defined. Inaddition to its primary role of setting corporate goals and monitoring corporateperformance, it directs and guides the activities of the Management towards the setgoals and seeks accountability with a view to ensure that the corporate philosophyand mission viz to create long term sustainable growth that translates itself intoprogress, prosperity and the fulfillment of stakeholders’ aspirations, is accomplished.

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It also sets standards of corporate behaviour and ensures ethical behaviour at alltimes and strict compliance with laws and regulations.

The items placed at the Meetings of the Board include the following:

• Managing Director’s monthly report on operations of all businesses includingprogress of ongoing projects;

• opportunities for expansion, modernization, new projects, merger, acquisitionand divestments;

• financial plans and budgets;

• strategic and business plans;

• corporate performance against strategic and business plans, includingbenchmarking ACC’s operational and other parameters vis-à-vis thecompetition;

• the unaudited quarterly/half yearly results and the audited annual accounts ofthe Company for consideration and adoption;

• finance statements such as cash flow, inventories, sundry debtors, and/or otherliabilities or claims of substantial nature;

• status of borrowings and exposure limits;

• delegation of powers to the Management;

• information on senior appointments below the Board level;

• Industrial Relations; wage agreements, human resource planning anddevelopment; report on major accidents, if any;

• Proposals for joint venture/collaborations;

• material communications from Government; and

• communication to the Stock Exchanges, the Shareholders and the Pressregarding Company’s performance, future plans and other decision/changes ofsignificant importance or of price sensitive nature.

All the items on the Agenda are accompanied by notes giving comprehensiveinformation on the related subject. The Agenda and the relevant notes aresent in advance separately to each Director to enable the Board to take informeddecisions.

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Details of Board Meetings held during the Financial Year and the number ofDirectors present

Serial Dates on which the Board Total Strength No. of DirectorsNo. Meetings were held of the Board present

1. May 5, 2004 11 10

2. July 9, 2004 13 12

3. July 22, 2004 13 11

4. October 27, 2004 12 12

5. December 16, 2004 12 11

6. January 20, 2005 12 12

7. March 30, 2005 12 10

Committees of the Board

Audit Committee – (Constituted in 1986)

The role and the powers of the Audit Committee are as per the provisions of theCompanies Act, 1956 and the guidelines set out in the Listing Agreement with theStock Exchanges. The Committee also acts as a link between the statutory andinternal auditors and the Board of Directors. It reviews the various reports placedbefore it by the Management Audit Department and addresses itself to the largerissues and examines and considers those facets that could be of vital concern tothe Company including adequacy of internal controls, reliability of financialstatements/other management information, adequacy of provisions for liabilities,and whether the audit tests are appropriate and scientifically carried out and thatthey were aligned with the realities of the business, adequacy of disclosures andcompliance with all relevant statutes. The Committee meets the statutory auditorsperiodically and reviews the quarterly/ half-yearly and annual Auditors’ Report onfinancial statements and discusses their findings and suggestions and seeksclarifications thereon.

As at March 31, 2005 the Audit Committee comprised of the following Directorswho were then Non-Executive and Independent Members. Mr A L Kapur was theChairman of the Committee.

Mr A L Kapur

Mr O P Dubey

Mr S M Palia

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Mr A L Kapur has resigned as Chairman of the Audit Committee with effect fromApril 12, 2005. He however continues to remain as a Member on the Committee.At the Audit Committee Meeting held on May 6, 2005, Mr Palia has been appointedas the Chairman of the Committee.

The dates on which the Audit Committee Meetings were held and the attendanceof the Members at the said Meetings are as under:

Serial Dates on which Audit Attendance record of the MembersNo. Committee Meetings Mr A L Mr O P Mr S M

were held Kapur Dubey Palia

1. May 5, 2004 Attended Attended Attended2. July 22, 2004 all all all3. October 26, 2004 Meetings Meetings Meetings4. January 19, 2005

All the Meetings were chaired by Mr A L Kapur, as the Chairman of the AuditCommittee. Mr P K Sinor, former Wholetime Director and Company Secretaryacted as the Secretary to the Committee for its Meetings held on May 5, 2004 andJuly 22, 2004. Mr A Anjeneyan who has been appointed as the Company Secretarywith effect from August 1, 2004, consequent upon the retirement of Mr Sinor, actedas the Secretary to the Committee for the subsequent Meetings. The representativesof the Statutory Auditors were present for the Meetings. The Managing/ WholetimeDirectors, the President Finance and Vice President-Management Audit also attendedthe aforesaid Meetings.

Shareholders’ / Investors’ Grievance Committee - (Constituted in 1962)

The Shareholders’/Investors’ Grievance Committee deals with various matters relatingto :-

• transfer / transmission of shares / debentures,

• issue of duplicate share certificate,

• issue and allotment of Rights / Bonus shares/ shares against Employee StockOptions,

• review of shares dematerialised and all other related matters,

• monitors expeditious redressal of investors’ grievances,

• all other matters related to shares/ debentures.

The Committee consists of the following Members:

Mr Tarun Das (Chairman)

Mr A L Kapur

Mr M L Narula

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The dates on which the Committee Meetings were held and the attendance of theMembers at the said Meetings are as under:

Serial Dates on which the Attendance record of the MembersNo. Shareholders’/Investors’ Mr Tarun Mr A L Mr M L

Grievance Committee Das Kapur NarulaMeetings were held

1. May 5, 2004 Attended Attended Attended

2. July 22, 2004 all all all

3. October 27, 2004 Meetings Meetings Meetings

4. December 16, 2004

5. January 20, 2005

6. March 30, 2005

Mr P K Sinor, Wholetime Director & Company Secretary was the ComplianceOfficer till July 31, 2004 Consequent upon his retirement, the Company has appointedMr. A Anjeneyan, Company Secretary, as the Compliance Officer.

During the year, 149 complaints were received from shareholders, all of which havebeen attended/resolved as of date. No investor grievances remained unattended/pending for more than thirty days as on March 31, 2005. The Company had 50share transfers pending as on March 31, 2005. These were transfers lodged afterMarch 23, 2005.

Compensation Committee — (Constituted in 1993)

The terms of reference of the Compensation Committee, inter alia consists ofreviewing the overall compensation policy, service agreements and otheremployment conditions of the Managing/ Wholetime Directors with a view to retainingand motivating the best managerial talents. In determining the remuneration packageof the Managing / Wholetime Directors, it evaluates the remuneration paid bycomparable organisations and thereafter makes its recommendations to the ACCBoard in this regard. It also reviews the performance of the Managing/WholetimeDirectors and recommends to the ACC Board the quantum of annual increments/performance incentives. The Compensation Committee is also empowered toformulate the scheme for and grant Stock Options to the employees includingManaging/Wholetime Directors and to monitor the implementation thereof.

The Committee comprises of the following Members:-

Mr Tarun Das (Chairman)

Mr N S Sekhsaria

Mr N A Soonawala

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The dates on which the Compensation Committee Meetings were held and theattendance of the Members at the said Meetings are as under:

Serial Dates on which Attendance record of the MembersNo. Compensation Mr Tarun Mr N S Mr N A

Committee Meetings Das Sekhsaria Soonawalawere held

1. May 3, 2004 Participated Attended Attendedin thedeliberationsthroughtele-conferencing

2. July 22, 2004 Attended Attended Attended

3. December 16, 2004 Attended Attended Attended

Operations Review Committee – Constituted in December 2003 (Non MandatoryCommittee)

In addition to the aforesaid Committees, the ACC Board has constituted theOperations Review Committee. This Committee was formed to have detaileddiscussion and evaluation of reports of technical nature concerning the businessand operations of various Units.

The Committee comprises of the following Directors:

Mr A L Kapur (Chairman)

Mr O P Dubey

Mr S M Palia

Mr M L Narula

The dates on which the Operations Review Committee Meetings were held and theattendance of the Members at the said Meetings are as under:

Serial Dates on which Attendance record of the MembersNo. Operations Review Mr A L Mr O P Mr S M Mr M L

Committee Meetings Kapur Dubey Palia Narulawere held

1. July 1, 2004 Attended Attended Attended Attended

2. September 29, 2004 Attended Attended Attended Attended

3. November 25, 2004 Attended Attended Leave of AttendedAbsence

4. March 30, 2005 Attended Attended Leave of AttendedAbsence

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Minutes of Meetings

The Minutes of the Meetings of the Board and the various Committees are sent toall Directors. The Minutes of the Board Meetings of Subsidiaries are also sent to allACC Board Directors and the circulated Minutes are also tabled at Board Meetings.

Remuneration Policy

Subject to the approval of the Board and of the Company in General Meeting andsuch other approvals as may be necessary, the Managing/Wholetime Directors arepaid remuneration as per the Agreements entered into between them and theCompany. The remuneration structure of the Managing/Wholetime Directorscomprises of salary, performance incentive, perquisites and allowances, contributionsto Provident Fund, Superannuation/Annuity Fund and Gratuity. The main featuresof the Agreements executed by the Company with the Managing/Wholetime Directorsare as under:

Name Mr M L Narula Mr A K Jain Mr P K SinorManaging Director Wholetime Director Wholetime Director &

Company Secretary

Period of Appointment/ From: December 1, 2002 Three years w.e.f From: August 4, 2002Reappointment: To: October 31, 2005 January 25, 2005 To: July 31, 2004

Salary Grade: Rs 1,00,000 – Rs 2,50,000 Rs 75,000 – Rs 2,00,000(with effect fromApril 1, 2004)

Performance Incentive: Upto an amount equivalent to a maximum of twenty four months of theirrespective salary in a particular financial year as may be decided by theBoard of Directors or the Compensation Committee at the end of eachfinancial year, subject to the overall ceilings stipulated in Sections 198 &309 of the Companies Act, 1956.

Perquisites: Upto 125% of their respective annual salary.

Minimum Remuneration: Where in any financial year the Company has no profits or its profits areinadequate, the Company will pay remuneration by way of salary andperquisites as specified above, subject to all requisite approvals beingobtained.

Notice Period & The Agreement may be terminated by either party giving the other partySeverance fees: three months notice in writing of such termination or the Company paying

three months salary in lieu of the notice.

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The details of the salary and perquisites (including contributions to Provident Fund/Superannuation Fund) paid/payable to the Managing/ Wholetime Directors for thefinancial year ended March 31, 2005 and the number of stock options granted tothem is as under : -

Name Mr M L Narula, Mr A K Jain Mr P K SinorManaging Director Wholetime Director Wholetime Director &

Company Secretary(upto July 31, 2004)

Salary (per annum) (Rs.) 21,00,000 13,80,000 5,60,000

Perquisites (per annum)(Rs) 18,64,535 11,96,772 7,47,961

Performance Incentive(Rs) 40,00,000 24,00,000 7,00,000

Contribution to Provident Fund/Superannuation Fund (Rs) 5,67,000 3,72,600 1,51,200

Total (Rs.) 85,31,535 53,49,372 21,59,161

Number of Stock Options 40,000 25,000 Nil(ESOS 2004)

The Exercise price of Stock Options has been determined at Rs.314/-per share being the latest available closing price as on 15.12.2004on NSE prior to the date of the grant of options on 16.12.2004.

The Non-Executive Directors do not draw any remuneration from the Companyexcept Sitting Fees which were paid at the rate of Rs 20,000/- for each meeting ofthe Board/Committee of the Board attended by them. The total amount of sittingfees paid during the year was Rs 20,80,000/- .

Disclosures

• The particulars of transactions between the Company and its related parties asper the Accounting Standard is set out at page number 92 & 93 of the AnnualReport. However, these transactions are not likely to have any conflict with theCompany’s interest.

No strictures/penalties have been imposed on the Company by theStock Exchanges or the Securities and Exchange Board of India (SEBI) or anystatutory authority on any matters related to capital markets during the lastthree years.

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Trading in the Company’s shares by Directors and designated Employees

As per the amended SEBI (Prevention of Insider Trading) Regulations 1992, theCompany is required to have a Compliance Officer who is responsible for settingforth policies, procedures, monitoring adherence to the rules for the preservation ofprice sensitive information, pre-clearance of trade, monitoring of trades andimplementation of the Code of Conduct under the overall supervision of the Board.Mr P K Sinor former Wholetime Director & Company Secretary was the Complianceofficer till July 31, 2004. Consequent upon his retirement, the Board has appointedMr. A Anjeneyan, Company Secretary as the Compliance Officer. The Companyhas also adopted a Code of Conduct for Prevention of Insider Trading as well as aCode of Corporate Disclosure Practices. All the Directors on the Board as well asSenior Level Employees at all locations of the Company are governed by thisCode.

Means of Communication

• The unaudited quarterly/ half yearly results are announced within one month ofthe end of the quarter/ half year and the audited annual results within threemonths from the end of the last quarter as stipulated under the Listing Agreementwith the Stock Exchanges. For the financial year 2004-2005, the audited annualresults were announced on May 6, 2005. As the Company publishes the auditedannual results within the stipulated period of three months as required by theListing Agreement with the Stock Exchanges, the unaudited results for the lastquarter of the financial year are not published.

The aforesaid financial results are taken on record by the Board of Directorsand are communicated to the Stock Exchanges where the Company’s securitiesare listed. Once the Stock Exchanges have been intimated, these results aregiven by way of a Press Release to various news agencies/analysts and arealso published within 48 hours in two leading daily newspapers- one in Englishand one in Marathi.

• The Company also informs by way of a press release all price sensitive mattersor such other matters which in its opinion are material and of relevance to theshareholders.

• The quarterly/half yearly and the annual results as well the press releases ofthe Company are put on the Company’s Website: www.acclimited.com.

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• All data required to be filed electronically as EDIFAR document pursuant toClause 51 of the Listing Agreement with the Stock Exchange, Mumbai such asquarterly financial results, shareholding pattern, quarterly report on CorporateGovernance are being regularly filed on the EDIFAR website viz,www.sebiedifar.nic.in in addition to the filing of the same in hard copy with theStock Exchanges.

General Information for Shareholders

Investor Services

The Company has an in-house Share Department located at its Registered Officewhich handles all matters relating to the shares of the Company including transfer/transmission of shares, dematerialisation of shares, payment of dividends,sub division / consolidation of share certificates and investor grievances.

Address for Correspondence

Shareholders desiring to communicate with the Company on any matter relating tothe shares/debentures of the Company may either visit in person or write quotingtheir Folio/ Demat Account Number at the following address:

The Associated Cement Companies LimitedShare Department“Cement House”121, Maharshi Karve Road,Mumbai 400020

Telephone Nos : 56654291; 56654304; 56654469;

56654473; 56654225; 56654360

Fax No : 022- 56317458

Communication may also be sent by e-mail at the following addresses:

For transfer/ subdivision/demat : sujata@acccement.com

For loss of shares/dividend/ general inquiries : cakrishnan@acccement.com

For investor grievance remaining unattended : rpadmanabhan@acccement.com

Shareholders who hold shares in dematerialised form should correspond with theDepository participant with whom they have opened Demat Account/s.

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Market Information

Listing on Stock Exchanges

The Company’s shares are listed on the following Stock Exchanges and the ListingFees have been paid to the Exchanges:

The Stock Exchange, MumbaiPhiroze Jeejeebhoy Towers,Dalal StreetMumbai 400001

National Stock Exchange of India LimitedExchange Plaza,Bandra-Kurla Complex,Bandra (East),Mumbai 400051

The Calcutta Stock Exchange Association Limited7, Lyons Range,Kolkata 700001

At the Extra-Ordinary General Meeting of the Company held on March 1, 2004, theMembers had inter alia passed a Resolution for voluntary de-listing of the Company’sEquity shares from all the Stock Exchanges excluding the Stock Exchange, Mumbai(BSE) and the National Stock Exchange of India Limited, Mumbai (NSE).Pursuant thereto the Company’s shares have been de-listed from the StockExchanges at Ahmedabad, Bangalore, Chennai, Cochin and New Delhi. Applicationfor Voluntary de-listing filed with the Calcutta Stock Exchange is pending with theExchange.

Scrip Code 500410 on BSEACC on NSE

ISIN Number for NSDL and CDSL – INE012A01025for Dematerialised shares

The Privately placed Non-Convertible Debentures are listed on the National StockExchange of India Limited (Wholesale Debt Market Segment).

The Company’s Foreign Currency Convertible Bonds (FCCB) and Global DepositoryReceipts (GDR) have been listed on the London Stock Exchange. The Equityshares underlying the GDRs are listed on the Stock Exchange Mumbai (BSE) andthe National Stock Exchange of India (NSE).

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ACC Share Price vis a vis BSE Sensex April’04 – March’05

Months BSE ACC Share Price No. of shares TurnoverSensex traded during Rs.

Close the month (Crores)High Low Close

Rs. Rs. Rs.April 2004 5,655.09 291.00 255.20 279.95 1,56,68,997 426.38

May 2004 4,759.62 296.40 218.00 237.00 2,40,10,773 642.99

June 2004 4,795.46 254.85 223.00 242.00 1,52,73,732 362.03

July 2004 5,170.32 249.25 226.25 239.60 1,58,45,117 374.48

August 2004 5,192.08 271.25 240.00 269.25 1,94,58,052 503.67

September 2004 5,583.61 278.90 250.00 266.90 1,17,07,790 317.93

October 2004 5,672.27 280.40 247.00 256.20 86,18,682 230.85

November 2004 6,234.29 294.00 253.20 286.80 62,86,865 172.47

December 2004 6,602.69 340.90 282.00 338.70 1,48,53,962 464.22

January 2005 6,555.94 370.50 327.95 357.35 2,53,13,696 888.65

February 2005 6,713.86 385.00 352.15 367.00 94,66,887 349.10

March 2005 6,492.82 377.90 354.55 360.45 69,55,714 253.67

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Share Transfer System and other related matters

i) Share transfers

The share transfers in physical form are presently processed and the sharecertificates are generally returned within a period of 15 days from the date ofreceipt.

ii) Nomination facility for shareholding

As per the provisions of the amended Companies Act 1956, facility for makingnomination is available for shareholders in respect of the shares held by them.Nomination forms can be obtained from the Share Department of the Company.

iii) Payment of dividend through Electronic Clearing Service

The Securities and Exchange Board of India (SEBI) has made it mandatory forall companies to use the bank account details furnished by the depositories fordepositing dividends through Electronic Clearing Service(ECS) to the investorswherever ECS and Bank details are available. In the absence of ECS facilitythe Company is required to print the Bank account details if available onpayment instruments for distribution of dividend and /or cash benefits etc. tothe shareholders.

iv) Unclaimed Dividends

The Company is required to transfer dividends which have remained unpaid /unclaimed for a period of seven years to the Investor Education & ProtectionFund established by the Government. The Company will accordingly be requiredto transfer in the year 2005-2006, the dividend for the year ended March 31,1998 which has remained unclaimed/unpaid.

The Company had in December 2004 sent an intimation to those shareholderswhose dividend warrants were unencashed giving the details of the warrantsand the amounts. In response to this intimation a number of shareholdersresponded and demand drafts were issued in lieu of the unclaimed amounts.Those shareholders who have not yet responded are requested to immediatelyreturn the outdated warrants to the Company or write to the Company in casethe warrants are lost/misplaced so that the Company can issue Demand Draftsfor the unclaimed amount of the dividend.

v) Correspondence regarding change of Address etc.

Shareholders are requested to ensure that any correspondence for change ofaddress, change in Bank Mandates etc. should be signed by the first namedshareholder. The Company is now also requesting for supporting documentssuch as proof of residence, proof of identification whenever a letter requestingfor change of address is received.

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This is being done in the interest of shareholders as we have come acrosscases where attempts are made to fraudulently change the registered addressof shareholders by unscrupulous parties. Shareholders are requested to kindlyco-operate and submit the necessary documents/evidence while sending theletters for change of address. Shareholders who hold shares in dematerialisedform should correspond with the Depository participant with whom they haveopened Demat Account/s.

vi) Subdivision of shares

The Company had subdivided the face value of its shares from Rs.100/- to facevalue of Rs.10/- in 1999. The Rs.100/- face value shares are no longer tradablein the Stock Exchanges. Despite reminders, a number of shareholders had notsubmitted their old certificates of Rs.100/- face value to get new certificates ofRs.10/- face value shares. Another reminder was sent in February 2005 tothese shareholders. A large number of shareholders responded to this reminder.Those shareholders who are yet to get their shares subdivided are requestedto do so.

vii) Pending Investors’ Grievances

Any Shareholder whose grievance has not been resolved to his satisfactionmay kindly write to the Company Secretary at the Registered Office with acopy of the earlier correspondence.

Distribution of shareholding (as on March 31, 2005)

No. of Equity No. of Percentage of No. of Equity Percentage ofShares shareholders shareholders Shares held shareholding

1 to 50 43,573 38.95 10,35,017 0.58

51 to 100 19,892 17.78 16,61,920 0.93

101 to 200 17,199 15.37 25,70,237 1.44

201 to 500 15,874 14.19 52,64,701 2.95

501 to 1000 7,702 6.88 55,85,532 3.13

1001 to 5000 6,471 5.78 1,32,19,741 7.40

5001 to 10000 635 0.57 44,24,838 2.48

10001 & above 534 0.48 14,47,71,625 81.09

TOTAL 1,11,880 100.00 17,85,33,611 100.00

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Distribution of shareholding as on May 5, 2005 consequent upon theacquisition of shares by Ambuja Cement India Limited (ACIL) pursuant to theOpen Offer made by Holdcem Cements Private Limited with ACIL and othersacting in concert (based on Beneficial Owners List received from theDepositories as on April 29, 2005)

No. of Equity No. of Percentage of No. of Equity Percentage ofShares shareholders shareholders Shares held shareholding

1 to 50 41,541 39.51 98,4671 0.55

51 to 100 18,564 17.65 15,50,858 0.86

101 to 200 16,080 15.29 24,04,120 1.35

201 to 500 14,899 14.17 49,38,946 2.77

501 to 1000 7,184 6.83 52,07,055 2.92

1001 to 5000 5,935 5.64 1,20,17,165 6.73

5001 to 10000 560 0.53 38,70,776 2.17

10001 & above 402 0.38 14,76,31,472 82.65

TOTAL 1,05,165 100.00 17,86,05,063 100.00

Categories of Shareholding as on March 31, 2005 and after the acquisition ofshares by Ambuja Cement India Limited (ACIL) pursuant to the Open Offermade by Holdcem Cements Private Limited with ACIL and others acting inconcert (based on Beneficial Owners List received from the Depositories ason April 29, 2005)

Category No. of Equity Percentage of No. of Equity Percentage ofShares held Shareholding Shares held Shareholding

as on as on May 5, as on May 5,March 31, 2005 after the 2005

2005 Open Offer

A Promoter’sHolding

AmbujaCementIndiaLimited* 0 0.00 6,19,61,901 34.69

Sub - Total (A) 0 0.00 6,19,61,901 34.69

*Prior to it becoming a Promoter, Ambuja Cement India Limited held 2,46,70,000equity shares representing 13.81% of the total paid-up equity share capital. Hence,as on March 31, 2005, the aforesaid holding is included under the category of‘Others’ at B(ii)(a) viz. ‘Private Corporate Bodies’.

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B Non -PromotersHolding

(i) InstitutionalInvestors

a) Mutual Fundsand UTISchemes 2,09,06,645 11.71 1,23,10,955 6.89

b) Banks,FinancialInstitutions,InsuranceCompanies(Central/State Gov.Institutions/Non-Govern-mentInstitutions) 3,84,98,233 21.56 2,80,09,400 15.68

c) ForeignInstitutionalInvestors(FIIs) 3,97,69,045 22.28 3,01,27,488 16.87

Sub - Total B (i) 9,91,73,923 55.55 7,04,47,843 39.44

(ii) Othersa) Private

CorporateBodies 3,40,32,636 19.06 41,94,812 2.35

b) NRI’s/OCB’s/ForeignNationals 12,30,967 0.69 12,27,117 0.69

c) SharesunderlyingGDRs 62,61,242 3.51 62,06,242 3.48

d) Indian Public 3,78,34,843 21.19 3,45,67,148 19.35

Sub -Total B (ii) 7,93,59,688 44.45 4,61,95,319 25.87

GRAND TOTAL 17,85,33,611 100.00 17,86,05,063 100.00(Sub - Totals A + B (i) + B (ii) )

Category No. of Equity Percentage of No. of Equity Percentage ofShares held Shareholding Shares held Shareholding

as on as on May 5, as on May 5,March 31, 2005 after the 2005

2005 Open Offer

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Dematerialisation of shares and Liquidity

91.2% of the Equity Shares of the Company have been dematerialised as at March31, 2005. The Company has entered into agreements with both National SecuritiesDepository Ltd. (NSDL) and Central Depository Services Ltd. (CDSL) wherebyshareholders have an option to dematerialise their shares with either of thedepositories.

Outstanding GDS /Warrants or any Convertible Instruments, conversion dateand likely impact on equity.

(i) 5,656,000 Global Depositary Shares (GDS) issued at a price of US$ 6.19(equivalent to Rs 280.05) per GDS at about 1% premium on closing shareprice of Rs.277.35 on March 8, 2004 on the Stock Exchange, Mumbai (BSE),representing 5,656,000 Ordinary Shares. The Company had granted to thesole arrangers of the GDS Issue viz. Citigroup Global Markets Inc. an option tosubscribe upto 806,000 GDS (each GDS comprising one Equity Share ofRs. 10 each) @ US$ 6.19 per GDS. The option was exercised on April 7, 2004.As on March 31, 2005 the number of GDS outstanding are 6,261,242.

(ii) The Company had issued 60,000, 1% Foreign Currency Convertible Bonds ofUS $ 1000 each aggregating US$ 60 Million at par. The bonds are redeemableon March 19, 2009 at a redemption premium of 1.5% per annum so as to givethe bondholders a yield to maturity of 2.5% per annum. These bonds areconvertible into GDS / shares at a initial conversion price of Rs 374.42 pershare with a fixed rate of exchange on conversion of Rs 45.2425 = US $ 1.00at the option of bondholders at any time on or after April 28, 2004 and prior tothe close of business on March 8, 2009. If all the bonds are converted intoGDS / shares, then the Share Capital of the Company will increase by around72,50,000 Equity Shares of Rs.10 each. The Company, subject to fulfillment ofcertain conditions and obtaining requisite approvals, has an option to redeemthese bonds in whole but not in part at any time on or after March 19, 2007 andprior to March 19, 2009 at its early redemption amount together with accruedand unpaid interest. As on March 31 2005 none of the FCCB’s have beenconverted into GDS/ shares.

Location and time of General Meetings held in last three years :

Year AGM/EGM Location Date Time

2003-2004 AGM Birla Matushri Sabhagar, July 9, 2004 3.30 p.m.19, Sir Vithaldas Thackersey Marg,Mumbai 400 020

2003-2004 EGM Birla Matushri Sabhagar, March 1, 2004 3.00 p.m.19, Sir Vithaldas Thackersey Marg,Mumbai 400 020

2002-2003 AGM Birla Matushri Sabhagar, July 9, 2003 3.30 p.m.19, Sir Vithaldas Thackersey Marg,Mumbai 400 020.

2001-2002 AGM Birla Matushri Sabhagar, July 3, 2002 3.30 p.m.19, Sir Vithaldas Thackersey Marg,Mumbai 400 020.

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Details of Special Resolution passed at the last three AGMs/ EGM

At the 68th Annual General Meeting held on July 9, 2004, three Special Resolutionswere passed, one pertained to Amendment to the Articles of Association, thesecond Special Resolution pertained to Employee Stock Option Scheme (ESOS2004-05) and the third Special Resolution pertained to reappointment of Auditors.The Resolutions pertaining to the Amendment to the Articles of Association andthe reappointment of Auditors were put to vote by show of hands and were passedwith the requisite majority. However as regards the Special Resolution pertaining toGrant of Employee Stock Options, at the insistence of certain shareholders, a pollwas taken on the said Resolution and 99.95% of the votes were cast in favour ofthe said Resolution.

At the Extra-Ordinary General Meeting held on March 1, 2004, two SpecialResolutions were passed, one pertaining to raising of additional long term resourcesfor the Company and the other pertaining to the voluntary de-listing of the Company’sEquity shares from all the Stock Exchanges excluding the Stock Exchange Mumbaiand the National Stock Exchange of India Limited. The Resolutions were put tovote by show of hands and were passed with the requisite majority.

At the 67th Annual General Meeting held on July 9, 2003, the Special Resolutionspassed pertained to the Employees’ Stock Option Scheme(ESOS), extension of theESOS to employees of the Company’s Subsidiaries and reappointment of Auditors.The Resolutions were put to vote by show of hands and were passed with therequisite majority.

At the 66th Annual General Meeting held on July 3, 2002, two Special Resolutionswere passed, one pertained to the Employees’ Stock Option Scheme (ESOS), andthe second pertained to extension of the ESOS to employees of the Company’sSubsidiaries. The Resolutions were put to vote by show of hands and were passedwith the requisite majority.

Details of Resolution passed last year through postal ballot, the persons whoconducted the postal ballot exercise and details of the voting pattern.

Pursuant to Section 192 A(2) of the Companies Act, 1956 read with the Companies(Passing of the Resolution by Postal Ballot) Rules 2001 a Notice dated January 10,2005 was sent to shareholders seeking their approval through postal ballot to theOrdinary Resolution for sale of the Company’s unit viz., Mancherial Cement Workssituated in Adilabad District in the State of Andhra Pradesh. The Company hadappointed Ms. Shirin K. Bharucha, as the scrutinizer for conducting the PostalBallot process in a fair and transparent manner. Accordingly the Postal Ballot wasconducted by the scrutinizer and a Report submitted to the Chairman. The resultsof the voting conducted through Postal Ballot are as under :-

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Number of valid Postal Ballot forms received 7,937

Votes in favour of the Resolution 6,88,53,605

Votes against the Resolution 71,616

Number of invalid Postal Ballot forms received 390

Percentage of votes cast in favour of the Resolution 99.62

The Ordinary Resolution as per Notice dated January 10, 2005 for sale of Company’sunit viz., Mancherial Cement Works was accordingly passed with the requisitemajority.

Financial Calendar :

Board Meeting for consideration of Accounts May 6, 2005for the year ended March 31, 2005 andrecommendation of dividend

Posting of Annual Reports On or before June 17, 2005

Book Closure Dates July 1, 2005 to July 13, 2005(Both days inclusive)

Last date for receipt of Proxy Forms July 11, 2005 before 3.30 pm.

Date, Time & Venue of the 69th Annual July 13, 2005 at 3.30 pm.General Meeting Birla Matushri Sabhagar,

19, Sir Vithaldas Thackersey Marg,Mumbai 400 020

Dividend Payment date July 26, 2005

Probable date of dispatch of warrants July 23, 2005

Board Meeting for consideration of unaudited Within one month from the end ofresults for the first three quarters of the the quarter as stipulated under thecurrent financial year viz-April 1, 2005 to Listing Agreement with the StockMarch 31, 2006. Exchange.

Audited results for the current Financial Year Within three months from the endending March 31, 2006. of the last quarter as stipulated

under the Listing Agreement withthe Stock Exchange.

For and on behalf of the Board

Tarun DasChairman

Mumbai: May 6, 2005

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AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE

The Members,The Associated Cement Companies Limited.

We have examined the compliance of conditions of Corporate Governance byThe Associated Cement Companies Limited, for the year ended March 31, 2005,as stipulated in Clause 49 of the Listing Agreement of the said Company withStock Exchange(s).

The compliance of conditions of Corporate Governance is the responsibility of theManagement. Our examination was limited to procedures and implementation thereof,adopted by the Company for ensuring the compliance of the conditions of CorporateGovernance. It is neither an audit nor an expression of opinion on the financialstatements of the Company.

In our opinion and to the best of our information and according to the explanationsgiven to us and the representations made by the Directors and the Management,we certify that the Company has complied with the conditions of CorporateGovernance as stipulated in the above mentioned Listing Agreement.

As required by the Guidance Note issued by the Institute of Chartered Accountantsof India, we have to state that as per the records maintained by the Company,there were no investor grievances remaining unattended/pending for a periodexceeding one month as on March 31, 2005.

We further state that such compliance is neither an assurance as to the futureviability of the Company nor the efficiency or effectiveness with which theManagement has conducted the affairs of the Company.

For A.F.FERGUSON & CO. For K.S.AIYAR & CO.Chartered Accountants Chartered Accountants

B. P. SHROFF RAGHUVIR M. AIYARPartner PartnerMembership No.: 34382 Membership No.: 38128

Mumbai: May 6, 2005